Yahoo 2011 Annual Report Download - page 115

The Agreement provides that Mr. Thompson will receive an annual base salary of $1,000,000, subject to annual
review, and will be eligible to receive an annual bonus under the Company’s annual Executive Incentive Plan
with a target incentive of 200% of annual base salary. The actual amount of the annual bonus will be determined
by the Compensation and Leadership Development Committee of the Board (the “Compensation Committee”)
based upon the Company’s financial performance and, if applicable under the Company’s Executive Incentive
Plan for the relevant year, Mr. Thompson’s performance for that year. However, Mr. Thompson’s annual bonus
for 2012 will not be less than 50% of his target amount for that year.
Pursuant to the Agreement, on January 27, 2012, the Compensation Committee granted Mr. Thompson an award
of restricted stock units under the 1995 Stock Plan with an aggregate value of $6.5 million on the date of grant
(the “Make-Whole RSUs”). The Make-Whole RSUs are scheduled to vest as to a number of stock units with a
grant date value of $5.5 million on March 15, 2012 and with respect to the remaining stock units subject to the
grant on March 15, 2013. On February 10, 2012, Mr. Thompson received a make-whole cash bonus of $1.5
million (the “Make-Whole Cash Bonus”). The Make-Whole RSUs and the Make-Whole Cash Bonus are
intended to compensate Mr. Thompson for the forfeiture of the value of his cash bonus and equity awards from
his previous employer. The Make-Whole Cash Bonus and the Make-Whole RSUs vesting in 2012 are subject to
certain clawback provisions in the event that Mr. Thompson terminates his employment without good reason
during the first year of employment with the Company.
Pursuant to the Agreement, on February 27, 2012, Mr. Thompson was granted stock options and restricted stock
units with an aggregate value of $16 million, including inducement awards with a value of $5 million and annual
grants with a value of $11 million. Half of the value was awarded in the form of stock options and half in the
form of restricted stock units, with the award values converted into options or units, respectively, based on
customary Company equity award conversion policies. Each of these equity awards is scheduled to vest in equal
annual installments over three years and was granted on the same terms as the annual grants for 2012 made to the
Company’s senior executives generally. In addition, Mr. Thompson’s restricted stock unit awards as well as the
Make-Whole RSUs carry specified dividend equivalent rights, and any shares of Company common stock
acquired by Mr. Thompson upon vesting of his inducement restricted stock units generally must be held by him
for at least two years following his acquisition of the shares.
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