Exhibit 10.1
Execution version
AGREEMENT
     This Agreement dated July 21, 2008 (this “Agreement”), is by and among the
persons and entities listed on Schedule A (collectively, the “Icahn Group”, and
individually a “member” of the Icahn Group) and Yahoo! Inc. (the “Company”).
     WHEREAS, the Icahn Group and other participants have (i) given notice to
the Company in accordance with the Company’s bylaws that they intend to nominate
certain individuals for election as directors of the Company at the Company’s
2008 annual meeting of stockholders (the “2008 Annual Meeting”), and (ii) filed
and mailed a proxy statement with the Securities and Exchange Commission (the
“SEC”) relating to the solicitation of proxies for the 2008 Annual Meeting; and
     WHEREAS, each of the Company and the Icahn Group has determined that it is
in its best interests to enter into this Agreement and to terminate the pending
proxy contest for the election of directors at the 2008 Annual Meeting.
     NOW, THEREFORE, in consideration of and reliance upon the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
     1. Board Composition. (a) The Company agrees that, as soon as practicable
following the date of the Company’s 2008 annual meeting of stockholders (the
“2008 Annual Meeting”),

  (i)   but no later than one business day following the completion of the 2008
Annual Meeting:     (1)   the Board of Directors of the Company (the “Board”),
at a duly convened meeting, will adopt a resolution, in accordance with the
Bylaws of the Company, to increase the size of the Board from nine (9) to eleven
(11) directors;     (2)   the Board shall obtain the resignation from the Board
of Robert Kotick;

1

--------------------------------------------------------------------------------

 

  (3)   the Board at a duly convened meeting, will take all necessary action to
appoint Carl Icahn (the “Icahn Associates Nominee”) to serve as a director of
the Company until no earlier than the 2009 annual meeting of stockholders (the
“2009 Annual Meeting”) and his successors is duly elected and qualified, subject
to the terms of this Agreement;

              (ii)    but no later than the later of August 15, 2008 and one
business day following completion of the 2008 Annual Meeting, the Board at a
duly convened meeting, will take all necessary action to appoint two individuals
(the “Designated Nominees”, and collectively with the Icahn Associates Nominee,
the “Designees”) to serve as directors of the Company until no earlier than the
2009 Annual Meeting and their successors are duly elected and qualified, subject
to the terms of this Agreement. The Designated Nominees shall be selected at the
Board’s sole discretion, upon the recommendation of the Company’s Nominating and
Corporate Governance Committee (the “Committee”), from the list of individuals
set forth on Exhibit A hereto, each of whom, with the exception of Jonathan
Miller, was on the slate of directors nominated by the Icahn Group.
          (b) If, at any time after the date hereof and prior to the 2009 Annual
Meeting, the Board forms a committee of the Board to evaluate, negotiate or
approve an extraordinary transaction involving a possible change in control of
the Company, the sale of all or substantially all or a material portion of the
assets of the Company or a sale of all or substantially all of the Company’s
search assets, or any other material transaction out of the ordinary course of
business, the Board will offer to appoint the Icahn Associates Nominee to serve
on any such committee. The Icahn Associates Nominee shall be permitted to serve
on any such committee until the 2009 Annual Meeting, and thereafter shall serve
on, and may be removed from, any such committee at the discretion of the Board.
Without limiting the foregoing, the Company also agrees that from no later than
and after the 2008 Annual Meeting, all proposals received by the Company or
developed by the Company, including by its officers, which would constitute an
extraordinary transaction of the type described in the first sentence of this
Section 1 (b), will be discussed, including a discussion of the strategy to be
followed by the Company with respect thereto, with the whole board, including
the Icahn Associate Nominee, and the whole board will be kept apprised, on a
current basis, of the state of such proposal, and the views of the members of
the board will be solicited and considered, except that this sentence shall not
apply with respect to any proposal that is delegated to a committee of the
Board.
          (c) Notwithstanding the foregoing, if at any time after the date
hereof, the Icahn Group, together with all Affiliates (as such terms are
hereinafter defined) of the members of the Icahn Group (such Affiliates,
collectively and individually, the “Icahn Affiliates”), ceases collectively to
beneficially own at least 30 million shares of Common Stock, (i) the Icahn Group
shall cause the Icahn Associates Nominee to promptly tender his resignation from
the Board and any committee of the Board on which he then sits. No member of the
Icahn Group or any Icahn Affiliate shall provide notice of intent to nominate
any director for election at the 2009 Annual

2

--------------------------------------------------------------------------------

 

Meeting while the Icahn Associate Nominee is a director of the Company,
provided, however, that after the date hereof, the Board will not (x) amend the
Bylaws of the Company to move up the last date for giving notice of intent to
nominate any director for election at the 2009 Annual Meeting or (y) first
publicly announce the date of the 2009 Annual Meeting prior to 90 days before
the date of the 2009 Annual Meeting. In addition, the parties hereto agree that
the 2009 Annual Meeting shall not be held prior to June 15, 2009. In furtherance
of this Section 1(c), the Icahn Associates Nominee, upon his appointment to the
Board, shall execute an irrevocable resignation as director in the form attached
hereto as Exhibit B. For purposes of this Agreement: the term “Affiliate” shall
have the meaning set forth in Rule 12b-2 promulgated by the SEC under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”); and the terms
“person” or “persons” shall mean any individual, corporation (including
not-for-profit), general or limited partnership, limited liability or unlimited
liability company, joint venture, estate, trust, association, organization or
other entity of any kind or nature.
          (d) The Company confirms that the Board has no current intention to
increase the size of the Board above eleven (11) directors other than
potentially in connection with an extraordinary transaction of the type
described in the first sentence of Section 1(b).
     2. Proxy Contest and Other Matters.
          (a) Icahn Partners LP, Icahn Partners Master Fund LP, Icahn Partners
Master Fund II L.P., Icahn Partners Master Fund III L.P. and High River Limited
Partnership hereby irrevocably withdraw their letter dated May 15, 2008 (as
amended by their letters dated June 6, 2008 and June 9, 2008) providing notice
to the Company of their intention to nominate certain individuals for election
as directors of the Company at the 2008 Annual Meeting (the “Stockholder
Nomination”).
          (b) The Icahn Group and Icahn Affiliates shall immediately cease all
efforts, direct or indirect, in furtherance of the Stockholder Nomination and
any related solicitation and shall not vote, deliver or otherwise use any
proxies heretofore obtained in connection with the Stockholder Nomination. No
member of the Icahn Group or any Icahn Affiliate shall (i) solicit proxies or
participate or engage in a proxy contest with respect to the election of
directors or any other proposal to be considered at the 2008 Annual Meeting or
present any other proposal for consideration at the 2008 Annual Meeting, or
(ii) encourage any other person to solicit proxies or participate or engage in a
proxy contest with respect to the election of directors or any other proposal to
be considered at the 2008 Annual Meeting or present any other proposal for
consideration at the 2008 Annual Meeting. The Icahn Group and the Icahn
Affiliates shall modify or disable any websites they maintain in order to comply
with this Section 2(b). At the same time, the Company shall immediately cease
all direct or indirect negative solicitation efforts relating to the 2008 Annual
Meeting concerning Mr. Icahn, his affiliates, the Icahn Group, or members of the
slate of nominees of the Icahn Group.

3

--------------------------------------------------------------------------------

 

          (c) The Icahn Group irrevocably withdraws its demand for a stockholder
list and other materials pursuant to Section 220 of the Delaware General
Corporation Law or otherwise, and shall promptly return to the Company all
materials and summaries or duplicates thereof that have been delivered to the
Icahn Group or its representatives prior to the date hereof.
          (d) Each member of the Icahn Group shall cause in the case of all
shares owned of record and shall instruct the record owner, in the case of all
shares of Common Stock beneficially owned but not owned of record, directly or
indirectly, by it, or by any Icahn Affiliate, as of the record date for the 2008
Annual Meeting, to be present for quorum purposes and to be voted, at the 2008
Annual Meeting or at any adjournments or postponements thereof, for all of the
directors nominated by the Board for election at the 2008 Annual Meeting.
     3. Standstill. So long as the Icahn Associates Nominee is a member of the
Board, no member of the Icahn Group nor any Icahn Affiliate shall:
          (a) solicit proxies or written consents of stockholders, or any other
person with the right to vote or power to give or withhold consent in respect of
the Voting Securities (as defined below), or conduct, encourage, participate or
engage in any other type of referendum (binding or non-binding) with respect to,
or from the holders of Voting Securities or any other person with the right to
vote or power to give or withhold consent in respect of the Voting Securities,
make, or in any way participate or engage in (other than by voting its shares of
Voting Securities in a manner that does not violate this Agreement), any
“solicitation” of any proxy, consent or other authority to vote any Voting
Securities, with respect to any matter, or become a participant in any contested
solicitation with respect to the Company, including without limitation relating
to the removal or the election of directors;
          (b) form or join in a partnership, limited partnership, syndicate or
other group, including without limitation a group as defined under Section 13(d)
of the Exchange Act, with respect to the Common Stock, or otherwise support or
participate in any effort by a third party with respect to the matters set forth
in Section 3(a), or deposit any shares of Common Stock in a voting trust or
subject any shares of Common Stock to any voting agreement, other than solely
with other members of the Icahn Group or other Icahn Affiliates with respect to
the shares of Common Stock now or hereafter owned by them or pursuant to this
Agreement;
          (c) without the prior approval of the Board contained in a written
resolution of the Board, (x) either directly or indirectly for itself or its
affiliates, or in conjunction with any other person or entity in which it is or
proposes to be either a principal, partner or financing source or is acting or
proposes to act as broker or agent for compensation, effect or seek, offer or
propose (whether publicly or otherwise) to effect, or cause or participate in,
or (y) except as set forth in the next sentence, in any way knowingly support,
assist or facilitate any other person to effect or seek, offer or propose to
effect, or cause or participate in, any (i) tender offer or exchange offer,
merger, acquisition or other business combination involving the Company or any
of its subsidiaries or affiliates; (ii) any form of business combination or
acquisition or other

4

--------------------------------------------------------------------------------

 

transaction relating to a material amount of assets or securities of the Company
or any of its subsidiaries or affiliates or (iii) any form of restructuring,
recapitalization or similar transaction with respect to the Company or any of
its subsidiaries or affiliates. Notwithstanding the foregoing, nothing in this
Section 3(c) shall prohibit any member of the Icahn Group or any Icahn Affiliate
from engaging in private discussions with third parties regarding a potential
transaction to be proposed by such third party or presenting any potential
transaction to the Board on a private basis, in each case, in circumstances that
would not reasonably be expected to require public disclosure by the Company or
any member of the Icahn Group or any Icahn Affiliate, in each case at or around
the time the proposal is made;
          (d) [Intentionally omitted]
          (e) make, or cause to be made, any statement or announcement that
relates to and constitutes an ad hominem attack on, or relates to and otherwise
disparages, the Company, its officers or its directors or any person who has
served as an officer or director of the Company on or following the date of this
Agreement: (i) in any document or report filed with or furnished to the SEC or
any other governmental agency, (ii) in any press release or other publicly
available format, or (iii) to any journalist or member of the media (including
without limitation, in a television, radio, newspaper or magazine interview).
          The term “Voting Securities,” as used herein shall mean the common
stock, par value $0.001 per share, of the Company (the “Common Stock”) and any
other securities of the Company entitled to vote in the election of directors,
or securities convertible into, or exercisable or exchangeable for Common Stock
or other securities, whether or not subject to the passage of time or other
contingencies.
     4. Public Announcement. The Company shall announce this Agreement and the
material terms hereof by means of a press release in the form attached hereto as
Exhibit C (the “Press Release”) as soon as practicable on or after the date
hereof. Neither the Company nor the Icahn Group shall make any public
announcement or statement that is inconsistent with or contrary to the
statements made in the Press Release, except as required by law or the rules of
any stock exchange or with the prior written consent of the other party.
     5. Confidentiality Agreement. The Company hereby agrees that commencing on
or promptly after the date hereof, as soon as it is in receipt from the Icahn
Associates Nominee of a confidentiality agreement in the form attached hereto as
Exhibit D1, it will share with the Icahn Associates Nominee, all information
that it shares with all directors and that thereafter, the Icahn Associates
Nominee is permitted to and may provide confidential information, other than
confidential information that may be privileged, to Icahn Capital LP in
accordance with the terms of the Confidentiality Agreement attached hereto as
Exhibit D2.

5

--------------------------------------------------------------------------------

 

     6. Discussions with the Board. The Company acknowledges that Carl Icahn has
had and desires to continue to have conversations with members of the Board. The
Company and the Board will not take any actions to limit such dialogue or
restrict members of the Board (or suggest that members of the Board not do so)
from speaking to Mr. Icahn (but subject to the Confidentiality Agreement and the
provisions of Section 3(e)) if they are willing to do so.
     7. Release.
          (a) The Icahn Group hereby agrees for the benefit of the Company, and
each controlling person, officer, director, stockholder, agent, Affiliate,
employee, partner, attorney, heir, assign, executor, administrator, predecessor
and successor, past and present, of the Company (the Company and each such
person being a “Company Released Person”) as follows:
          (i) The Icahn Group, for themselves and for their members, officers,
directors, assigns, agents and successors, past and present, hereby agree and
confirm that, effective from and after the date of this Agreement, they hereby
acknowledge full and complete satisfaction of, and covenant not to sue, and
forever fully release and discharge each Company Released Person of, and hold
each Company Released Person harmless from, any and all rights, claims,
warranties, demands, debts, obligations, liabilities, costs, attorneys’ fees,
expenses, suits, losses and causes of action (“Claims”) of any nature
whatsoever, whether known or unknown, suspected or unsuspected, arising in
respect of or in connection with, the nomination and election of directors at
the 2008 Annual Meeting, occurring any time or period of time on or prior to the
date of the execution of this Agreement (including the future effects of such
transactions, occurrences, conditions, acts or omissions).
          (ii) The undersigned understand and agree that the Claims released by
the Icahn Group above include not only those Claims presently known but also
include all unknown or unanticipated claims, rights, demands, actions,
obligations, liabilities, and causes of action of every kind and character that
would otherwise come within the scope of the Claims as described above. The
Icahn Group understands that they may hereafter discover facts different from or
in addition to what they now believe to be true, which if known, could have
materially affected this Release of Claims, but they nevertheless waive any
claims or rights based on different or additional facts. The Icahn Group
knowingly and voluntarily waive any and all rights or benefits that they may now
have, or in the future may have, under the terms of Section 1542 of the
California Civil Code, which provides as follows:
     “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”
          (b) The Icahn Group agrees that so long as any the Icahn Associate
Nominee is a member of the Board, (i) no member of the Icahn Group nor any Icahn
Affiliate shall,

6

--------------------------------------------------------------------------------

 

without the consent of the Company, instigate, solicit, assist, intervene in, or
otherwise voluntarily participate in any litigation or arbitration in which the
Company or any of its officers or directors are named as parties; provided that
the foregoing shall not prevent any member of the Icahn Group or any Icahn
Affiliate from responding to a validly issued legal process and (ii) the Icahn
Group agrees to give the Company at least five business days notice of the
receipt of any legal process requesting information regarding the Company or any
of its officers or directors.
          (c) The Company hereby agrees for the benefit of the Icahn Group, and
each controlling person, officer, director, stockholder, agent, Affiliate,
employee, partner, attorney, heir, assign, executor, administrator, predecessor
and successor, past and present, thereof, as well as each of the Icahn Nominees
(the Icahn Group and each such person being an “Icahn Released Person”) as
follows:
          (i) The Company, for itself and for its Affiliates, officers,
directors, assigns, agents and successors, past and present, hereby agrees and
confirms that, effective from and after the date of this Agreement, it hereby
acknowledges full and complete satisfaction of, and covenants not to sue, and
forever fully releases and discharges each Icahn Released Person of, and holds
each Icahn Released Person harmless from, any and all Claims of any nature
whatsoever, whether known or unknown, suspected or unsuspected, arising in
respect of or in connection with, the nomination and election of directors at
the 2008 Annual Meeting, occurring any time or period of time on or prior to the
date of the execution of this Agreement (including the future effects of such
transactions, occurrences, conditions, acts or omissions).
          (ii) The undersigned understand and agree that the Claims released by
the Company above include not only those Claims presently known but also include
all unknown or unanticipated claims, rights, demands, actions, obligations,
liabilities, and causes of action of every kind and character that would
otherwise come within the scope of the Claims as described above. The Company
understands that it may hereafter discover facts different from or in addition
to what it now believes to be true, which if known, could have materially
affected this Release of Claims, but it nevertheless waives any claims or rights
based on different or additional facts. The Company knowingly and voluntarily
waives any and all rights or benefits that it may now have, or in the future may
have, under the terms of Section 1542 of the California Civil Code, which
provides as follows:
          “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”
     8. Miscellaneous. The parties hereto shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement exclusively in the Court of Chancery
or other federal or state courts of the State of

7

--------------------------------------------------------------------------------

 

Delaware, in addition to any other remedy to which they are entitled at law or
in equity. Furthermore, each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of the Court of Chancery or other federal or state
courts of the State of Delaware in the event any dispute arises out of this
Agreement or the transactions contemplated by this Agreement, (b) agrees that it
shall not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (c) agrees that it shall not bring
any action relating to this Agreement or the transactions contemplated by this
Agreement in any court other than the Court of Chancery or other federal or
state courts of the State of Delaware, and each of the parties irrevocably
waives the right to trial by jury, (d) agrees to waive any bonding requirement
under any applicable law, in the case any other party seeks to enforce the terms
by way of equitable relief and (e) each of the parties irrevocably consents to
service of process by a reputable overnight mail delivery service, signature
requested, to the address of such parties’ principal place of business or as
otherwise provided by applicable law. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING WITHOUT LIMITATION VALIDITY, INTERPRETATION AND EFFECT, BY
THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
PRINCIPLES OF SUCH STATE.
     9. No Waiver. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
     10. Entire Agreement. This Agreement and the Confidentiality Agreement
contain the entire understanding of the parties with respect to the subject
matter hereof and may be amended only by an agreement in writing executed by the
parties hereto.
     11. Notices. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in regard hereto
shall be in writing and shall be deemed validly given, made or served, if
(a) given by telecopy and email, when such telecopy and email is transmitted to
the telecopy number set forth below and sent to the email address set forth
below and the appropriate confirmation is received or (b) if given by any other
means, when actually received during normal business hours at the address
specified in this subsection:

     
if to the Company:
  Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: General Counsel
Facsimile: (408) 349-3301

8

--------------------------------------------------------------------------------

 

     
 
  With a copy to (which shall not constitute notice):
 
   
 
  Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 1100
Palo Alto, California 94301
Facsimile: (650) 470-4500
Attention: Kenton J. King
                  Marc R. Packer
 
   
if to the Icahn Group:
  c/o Icahn Associates Corp.
767 Fifth Avenue, 47th Floor
New York, NY 10153
Attention: Carl C. Icahn
Facsimile: (212) 750-5807
 
   
 
  With a copy to (which shall not constitute notice):
 
   
 
  General Counsel
Icahn Capital LP
767 Fifth Avenue, 47th Floor
New York, NY 10153
Facsimile: (212) 688-1158
Attention: General Counsel
Attention: Keith Cozza

     12. Severability. If at any time subsequent to the date hereof, any
provision of this Agreement shall be held by any court of competent jurisdiction
to be illegal, void or unenforceable, such provision shall be of no force and
effect, but the illegality or unenforceability of such provision shall have no
effect upon the legality or enforceability of any other provision of this
Agreement.
     13. Counterparts. This Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
     14. Successors and Assigns. This Agreement shall not be assignable by any
of the parties to this Agreement. This Agreement, however, shall be binding on
successors of the parties hereto.

9

--------------------------------------------------------------------------------

 

     15. No Third Party Beneficiaries. This Agreement is solely for the benefit
of the parties hereto and the Designees and is not enforceable by any other
persons.
     16. Fees and Expenses. Neither the Company, on the one hand, nor the Icahn
Group, on the other hand, will be responsible for any fees or expenses of the
other in connection with this Agreement or in connection with the proxy
solicitation relating to the 2008 Annual Meeting.
     17. Interpretation and Construction. Each of the parties hereto
acknowledges that it has been represented by counsel of its choice throughout
all negotiations that have preceded the execution of this Agreement, and that it
has executed the same with the advice of said independent counsel. Each party
and its counsel cooperated and participated in the drafting and preparation of
this Agreement and the documents referred to herein, and any and all drafts
relating thereto exchanged among the parties shall be deemed the work product of
all of the parties and may not be construed against any party by reason of its
drafting or preparation. Accordingly, any rule of law or any legal decision that
would require interpretation of any ambiguities in this Agreement against any
party that drafted or prepared it is of no application and is hereby expressly
waived by each of the parties hereto, and any controversy over interpretations
of this Agreement shall be decided without regards to events of drafting or
preparation. The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
[Signature Page Follows]

10

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
or caused the same to be executed by its duly authorized representative as of
the date first above written.

            YAHOO! INC.
      By:   /s/ Michael J. Callahan         Name:   Michael J. Callahan       
Title:   Executive Vice President, General Counsel and Secretary        Icahn
Partners LP
      By:   /s/ Keith A. Meister         Name:   Keith A. Meister       
Title:   Authorized Signatory        Icahn Partners Master Fund LP
      By:   /s/ Keith A. Meister         Name:   Keith A. Meister       
Title:   Authorized Signatory        Icahn Partners Master Fund II L.P.
      By:   /s/ Keith A. Meister         Name:   Keith A. Meister       
Title:   Authorized Signatory        Icahn Partners Master Fund III L.P.
      By:   /s/ Keith A. Meister         Name:   Keith A. Meister       
Title:   Authorized Signatory        High River Limited Partnership      By:  
Hopper Investments LLC, its general partner       By:   Barberry Corp., its sole
member         By:   /s/ Carl C. Icahn         Name:   Carl C. Icahn       
Title:   President        /s/ Carl C. Icahn       Carl C. Icahn           

[Signature Page to Settlement Agreement]

 

--------------------------------------------------------------------------------

 

SCHEDULE A
 
Icahn Partners LP
Icahn Partners Master Fund LP
Icahn Partners Master Fund II L.P.
Icahn Partners Master Fund III L.P.
High River Limited Partnership
Carl C. Icahn

 

--------------------------------------------------------------------------------

 

EXHIBIT A
Lucian A. Bebchuk
Frank J. Biondi, Jr.
John H. Chapple
Mark Cuban
Adam Dell
Edward H. Meyer
Jonathan Miller
Brian S. Posner
Keith Meister

A-1

--------------------------------------------------------------------------------

 

EXHIBIT B
[Form of Irrevocable Resignation]
[Date]
Attention: Chairman of the Board of Directors
Reference is made to the Agreement, dated as of July 21, 2008 (the “Agreement”),
by and among Yahoo! Inc. (the “Company”) and the Icahn Group (as defined
therein). Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Agreement.
In accordance with Section 1(c) of the Agreement I hereby tender my conditional
resignation as a director of the Board, provided that this resignation shall be
effective upon the Board’s acceptance of this resignation, and only in the event
that at any time the Icahn Group, together with the Icahn Affiliates, fail to
collectively beneficially own at least 30,000,000 shares of Common Stock. I
hereby acknowledge that this conditional resignation as a director of the Board
is as a result of the terms and conditions of the Agreement.
This resignation may not be withdrawn by me at any time during which it is
effective.

            Very truly yours,
            Director           

B-1

--------------------------------------------------------------------------------

 

EXHIBIT C
PRESS RELEASE
YAHOO! ANNOUNCES SETTLEMENT WITH CARL ICAHN
SUNNYVALE, Calif., July 21, 2008— Yahoo! Inc. (Nasdaq:YHOO), a leading global
Internet company, announced today that it has reached an agreement with Carl
Icahn to settle their pending proxy contest related to the Company’s 2008 annual
meeting of stockholders.
Under the terms of the settlement agreement, eight members of Yahoo!’s current
Board of Directors will stand for re-election at the 2008 annual meeting: Roy
Bostock, Ronald Burkle, Eric Hippeau, Vyomesh Joshi, Arthur Kern, Mary Agnes
Wilderotter, Gary Wilson and Jerry Yang. In view of the settlement agreement
with Mr. Icahn, and the termination of the proxy contest, Robert Kotick has
decided not to stand for re-election to the Board at the 2008 annual meeting.
Following the 2008 annual meeting, the Yahoo! Board will be expanded to 11
members. Carl Icahn will be appointed to the Board and the remaining two seats
will be filled by the Board upon the recommendation of the Board’s Nominating
and Governance Committee from a list of nine candidates recommended by
Mr. Icahn, which includes the eight remaining members of the Icahn slate of
nominees and Jonathan Miller, currently a partner in Velocity Interactive Group
and former Chairman and CEO of AOL.
As part of the settlement agreement, Mr. Icahn, who owns an aggregate of
68,786,320 shares, or 4.98% of Yahoo! common stock, has agreed to withdraw his
nominees for consideration at the annual meeting and to vote his Yahoo! shares
in support of the Board’s nominees.
“We are gratified to have reached this agreement, which serves the best
interests of all Yahoo! stockholders,” said Yahoo! Chairman Roy Bostock. “We
look forward to working productively with Carl and the new members of the Board
on continuing to improve the Company’s performance and enhancing stockholder
value. Yahoo! is a world-class company with an extremely bright future, and
collaborating together, I believe we can help the Company achieve its ambitious
goals.”
“This agreement will not only allow Yahoo! to put the distraction of the proxy
contest behind us, it will allow the Company to continue pursuing its strategy
of being the starting point for Internet users and a must buy for advertisers,”
said Yahoo! Co-founder and Chief Executive Officer Jerry Yang. “No other company
in the Internet space has our unique combination of global brand, talented
employees, innovative technologies and exceptional assets, attributes that will
help us take advantage of the large and growing opportunity ahead of us. I look
forward to working together with our new colleagues on the Board to make that
happen.”

C-1

--------------------------------------------------------------------------------

 

Mr. Icahn said, “I am very pleased that this settlement will allow me to work in
partnership with Yahoo!’s Board and management team to help the Company achieve
its full potential. While I continue to believe that the sale of the whole
Company or the sale of its Search business in the right transaction must be
given full consideration, I share the view that Yahoo!’s valuable collection of
assets positions it well to continue expanding its online leadership and
enhancing returns to stockholders. I believe this is a good outcome and that we
will have a strong working relationship going forward. Additionally, I am happy
that the board has agreed in the settlement agreement that any meaningful
transaction, including the strategy in dealing with that transaction, will be
fully discussed with the entire board before any final decision is made.”
In response to Mr. Kotick’s decision to step down from the Board, Mr. Bostock
said, “I would like to personally thank Bobby for his dedicated service to
Yahoo! these past 5 years. Bobby has been a valuable resource to our Board and
the Company and we are grateful for his contributions. He wanted to help see the
Company through this recent chapter, but made it clear to me that once the proxy
contest was resolved, he was eager to focus his efforts on his work as CEO of
the newly merged Activision Blizzard and his other business and civic pursuits.”
The Company intends to file the full text of the settlement agreement later
today with the Securities and Exchange Commission, and will also file and mail
to its stockholders, supplemental proxy material.
Forward-Looking Statements
This press release (including without limitation the statements and information
in the quotations in this press release) contains forward-looking statements
that involve risks and uncertainties concerning Yahoo!’s strategic and
operational plans. Actual results may differ materially from those described in
this release due to a number of risks and uncertainties. The potential risks and
uncertainties include, among others, the expected benefits of the commercial
agreement with Google may not be realized, including as a result of actions
taken by United States or foreign regulatory authorities and the response or
acceptance of the agreement by publishers, advertisers, users and employees; the
implementation and results of Yahoo!’s ongoing strategic initiatives; the impact
of organizational changes; Yahoo!’s ability to compete with new or existing
competitors; reduction in spending by, or loss of, marketing services customers;
the demand by customers for Yahoo!’s premium services; acceptance by users of
new products and services; risks related to joint ventures and the integration
of acquisitions; risks related to Yahoo!’s international operations; failure to
manage growth and diversification; adverse results in litigation, including
intellectual property infringement claims; Yahoo!’s ability to protect its
intellectual property and the value of its brands; dependence on key personnel;
dependence on third parties for technology, services, content and distribution;
general economic conditions and changes in economic conditions; potential
continuing uncertainty arising in connection with Microsoft’s various proposals
to acquire all or part of Yahoo! ; the possibility that Microsoft or another
person may in the future make other proposals, or take other actions which may
create uncertainty for our employees, publishers, advertisers and other business
partners; and the possibility of significant costs of defense, indemnification
and liability resulting from stockholder litigation relating to such proposals.
More information about potential factors that could affect Yahoo!’s business and
financial results is included under the captions “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in Yahoo!’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2007, as amended, and the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2008, which are on file with the Securities and Exchange
Commission (“SEC”) and available at the SEC’s website at www.sec.gov. All

C-2

--------------------------------------------------------------------------------

 

information in this release is as of July 21, 2008, unless otherwise noted, and
Yahoo! does not intend, and undertakes no duty, to update or otherwise revise
the information contained in this letter.
About Yahoo! Inc.
Yahoo! Inc. is a leading global Internet brand and one of the most trafficked
Internet destinations worldwide. Yahoo! is focused on powering its communities
of users, advertisers, publishers, and developers by creating indispensable
experiences built on trust. Yahoo! is headquartered in Sunnyvale, California.
Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of
Yahoo! Inc. All other names are trademarks and/or registered trademarks of their
respective owners.
Yahoo! Inc.
Brad Williams, 408-349-7069 (Media)
bhw@yahoo-inc.com
Marta Nichols, 408-349-3527 (Investors)
mnichols@yahoo-inc.com
or
The Abernathy MacGregor Group for Yahoo! Inc.
Adam Miller, 212-371-5999 (Media)
alm@abmac.com
Winnie Lerner, 212-371-5999 (Media)
wal@abmac.com

C-3

--------------------------------------------------------------------------------

 

EXHIBIT D1
YAHOO! INC.
701 First Avenue
Sunnyvale, CA 94089
July [•], 2008
To: Carl Icahn
     This letter agreement shall become effective on the date hereof. It results
from an Agreement (the “Agreement”), dated as of July 21, 2008, by and among
Yahoo! Inc. (the “Company”) and the Icahn Group (as defined therein). Among
other things, pursuant to the terms of said Agreement, you, as the Icahn
Associate Nominee (as defined in the Agreement), will be appointed to the Board
of Directors of the Company (the “Board”). The Company may, in its sole
discretion, furnish to you, prior to your appointment to the Board, information
that it shares with its directors. You acknowledge that this information is
proprietary to the Company and may include trade secrets or other business
information the disclosure of which could harm the Company. In consideration
for, and as a condition of, non-public information being furnished to you (and,
subject to the restrictions in paragraph 2, your agents, representatives,
attorneys and advisors, collectively, “Representatives”), you agree to treat any
and all information concerning or relating to the Company or any of its
subsidiaries or affiliates that is furnished to you or your Representatives
(regardless of the manner in which it is furnished, including without limitation
in written or electronic format or orally, gathered by visual inspection or
otherwise) by you, or by or on behalf of the Company, together with any notes,
analyses, reports, models, compilations, studies, interpretations, documents or
records containing, referring, relating to, based upon or derived from such
information, in whole or in part (collectively, “Confidential Information”), in
accordance with the provisions of this letter agreement, and to take or abstain
from taking the other actions hereinafter set forth.
     1. The term “Confidential Information” does not include information that
(i) is or has become generally available to the public other than as a result of
a direct or indirect disclosure by you or your Representatives in violation of
this letter agreement or in violation of any contractual, legal or fiduciary
obligation to or of the Company or by Icahn Capital LP, (ii) was within your or
any of your Representatives’ possession on a non-confidential basis prior to its
being furnished to you by or on behalf of the Company or its Representative, or
by or on behalf of the Company or its Representatives or (iii) is received from
a source other than the Company or any of its Representatives; provided, that in
the case of each of (ii) and (iii) above, the source of such information was
not, to your reasonable knowledge to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary obligation of confidentiality to
the Company or any of its subsidiaries with respect to such information at the
time the same was disclosed.

D-1-1

--------------------------------------------------------------------------------

 

     2. You hereby agree that you and your Representatives will (a) keep the
Confidential Information strictly confidential and (b) not disclose any of the
Confidential Information in any manner whatsoever without the prior written
consent of the Company; provided, however, that you may disclose any of such
information to: (A) your Representatives (i) who need to know such information
for the sole purpose of advising you on your investment in the Company and
(ii) who are informed by you in advance of the confidential nature of such
information and who agree to comply with the use and confidentiality obligations
contained in this letter agreement as if they are a party hereto and are under a
legal obligation to comply with the restrictions set forth herein; provided,
further, that you will be responsible for any violation of this letter agreement
by your Representatives as if they were parties hereto and you agree to take all
reasonable measures (including, but not limited to, court proceedings) to cause
your Representative to comply with such obligations provided that you will not
be so responsible with respect to any such Representative who has executed a
copy of this letter agreement as an Additional Signatory and delivered such
signed copy to the Company and (B) Icahn Capital LP subject to compliance by
Icahn Capital LP with the letter agreement, dated the date hereof, by and
between the Company and the Icahn Capital LP. It is understood and agreed that
you shall not take any action or fail to take any action with the purpose or
effect of waiving attorney client privilege, disclose to you or your
Representatives any Legal Advice (as defined below) that may be included in the
Confidential Information with respect to which such disclosure would constitute
waiver of the Company’s attorney client privilege or attorney work-product;
provided, however, that you may provide such disclosure if you have not taken
any action or failed to take any action that has the purpose or effect of
waiving attorney client privilege with respect to any portion of such Legal
Advice and if reputable outside legal counsel experienced in the area and
reasonably acceptable to the Company provides the Company with a written opinion
that such disclosure will not waive the Company’s attorney client privilege with
respect to such Legal Advice. “Legal Advice” as used herein shall be solely and
exclusively limited to the legal advice provided by legal counsel and shall not
include factual information or the formulation or analysis of business strategy.
     3. In the event that you or any of your Representatives are required by
applicable subpoena, legal process or other legal requirement to disclose any of
the Confidential Information, you will promptly notify (except where such notice
would be legally prohibited) the Company in writing by facsimile and certified
mail and provide reasonable cooperation so that the Company may seek a
protective order or other appropriate remedy. Nothing herein shall be deemed to
prevent you or your Representatives, as the case may be, from honoring a
subpoena, legal process or other legal requirement that require discovery,
disclosure or production of the Confidential Information if (a) you produce or
disclose only that portion of the Confidential Information which your outside
legal counsel advises you is legally required to be so produced or disclosed; or
(b) the Company consents in writing to having the Confidential Information
produced or disclosed pursuant to the subpoena, legal process or other legal
requirement. In no event will you or any of your Representatives oppose any
action by the Company to obtain a protective order, motion to quash or other
relief to prevent the disclosure of the Confidential Information or to obtain
reliable assurance that confidential treatment will be afforded the Confidential
Information. It is understood that there shall be no “legal requirement”
requiring you to disclose any Confidential Information solely by virtue of the
fact that, absent such disclosure, you would be prohibited from purchasing,
selling, or engaging in derivative or other

D-1-2

--------------------------------------------------------------------------------

 

transactions with respect to, the Common Stock of the Company (including, for
the avoidance of doubt, any agreement or understanding with respect to the
voting or the granting or withholding of consent with respect to any Common
Stock of the Company or otherwise proposing or making an offer to do any of the
foregoing). Before filing any document with the SEC or other governmental or
regulatory body in which you intend to include Confidential Information that you
believe is legally required to be included in such a filing, you will obtain the
advice of outside counsel to the effect that the Confidential Information is
legally required to be included in such filing.
     4. You acknowledge that (a) none of the Company or any of its
Representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of any Confidential Information, and (b) none of
the Company or any of its Representatives shall have any liability to you or to
any of your Representatives relating to or resulting from the use of the
Confidential Information or any errors therein or omissions therefrom. You and
your Representatives shall not directly or indirectly initiate contact or
communication with any executive or employee of the Company other than the Chief
Executive Officer, Chief Financial Officer, President or General Counsel of the
Company concerning Confidential Information, or to seek any information in
connection therewith from any such person other than the Chief Executive
Officer, Chief Financial Officer, President or General Counsel of the Company
without the prior written consent of the Company.
     5. All Confidential Information shall remain the property of the Company.
Neither you nor any of your Representatives shall by virtue of any disclosure of
and/or your use of any Confidential Information acquire any rights with respect
thereto, all of which rights (including all intellectual property rights) shall
remain exclusively with the Company. At any time upon the request of the Company
for any reason, you will promptly return to the Company all hard copies of the
Confidential Information and permanently erase or delete all electronic copies
of the Confidential Information in your or any of your Representative’s
possession or control. Notwithstanding the return or erasure or deletion of
Confidential Information, you and your Representatives will continue to be bound
by the obligations contained herein.
     6. You acknowledge, and will advise your Representatives, that the
Confidential Information may constitute material non-public information under
applicable federal and state securities laws, and that you shall not, and you
shall use your reasonable best efforts to ensure that your Representatives,
while such information constitutes material non-public information, do not,
trade or engage in any derivative or other transaction, on the basis of such
information in violation of such laws.
     7. You hereby represent and warrant to the Company that this letter
agreement has been duly authorized, executed and delivered by you, and is a
valid and binding obligation, enforceable against you in accordance with its
terms.

D-1-3

--------------------------------------------------------------------------------

 

     8. It is understood and agreed that no failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right, power or privilege
hereunder.
     9. You acknowledge that the value of the Confidential Information to the
Company is unique and substantial, but may be impractical or difficult to assess
in monetary terms. In the event of an actual or threatened violation of this
letter agreement, in addition to any and all other remedies which may be
available to the Company, you expressly consent to the Company’s seeking the
enforcement of this letter agreement by injunctive relief or specific
performance, without proof of actual damages or posting of a bond.
     10. Each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the Court of Chancery or other federal or state courts
of the State of Delaware in the event any dispute arises out of this letter
agreement or the transactions contemplated by this letter agreement, (b) agrees
that it shall not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it shall not
bring any action relating to this letter agreement or the transactions
contemplated by this letter agreement in any court other than the Court of
Chancery or other federal or state courts of the State of Delaware, and each of
the parties irrevocably waives the right to trial by jury, and (d) each of the
parties irrevocably consents to service of process by a reputable overnight
delivery service, signature requested, to the address of such parties’ principal
place of business or as otherwise provided by applicable law. THIS LETTER
AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION
AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO
THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.
     11. This letter agreement contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and may be amended only by
an agreement in writing executed by the parties hereto.
     12. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
telecopy and email, when such telecopy is transmitted to the telecopy number set
forth below and sent to the email address set forth below and the appropriate
confirmation is received or (b) if given by any other means, when actually
received during normal business hours at the address specified in this
subsection:

          if to the Company:   Yahoo! Inc.     701 First Avenue     Sunnyvale,
CA 94089

D-1-4

--------------------------------------------------------------------------------

 

              Attention: General Counsel     Facsimile: (408) 349-3301
 
            With a copy to (which shall not constitute notice):
 
            Skadden, Arps, Slate, Meagher & Flom LLP     525 University Avenue,
Suite 1100     Palo Alto, California 94301     Facsimile: (650) 470-4500    
Attention: Kenton J. King
 
      Marc R. Packer
 
        if to Carl Icahn:          c/o Icahn Associates Corp.     767 Fifth
Avenue, 47th Floor     New York, NY 10153     Attention: Carl C. Icahn    
Facsimile: (212) 750-5807
 
            With a copy to (which shall not constitute notice):
 
            General Counsel     Icahn Capital LP     767 Fifth Avenue, 47th
Floor     New York, NY 10153
 
  Facsimile:   (212) 688-1158
 
  Attention:   General Counsel

     13. If at any time subsequent to the date hereof, any provision of this
letter agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon the legality or enforceability of any other provision of this letter
agreement.
     14. This letter agreement may be executed in two or more counterparts which
together shall constitute a single agreement.
     15. This letter agreement and the rights and obligations herein may not be
assigned or otherwise transferred, in whole or in part, by you without the
express written consent of the Company.
     16. This letter agreement shall expire two years from the date on which you
cease to be a director of the Company.

D-1-5

--------------------------------------------------------------------------------

 

     17. No licenses or rights under any patent, copyright, trademark, or trade
secret are granted or are to be implied by this letter agreements.
     18. Each of the parties hereto acknowledges that it has been represented by
counsel of its choice throughout all negotiations that have preceded the
execution of this agreement, and that it has executed the same with the advice
of said independent counsel. Each party and its counsel cooperated and
participated in the drafting and preparation of this agreement and the documents
referred to herein, and any and all drafts relating thereto exchanged among the
parties shall be deemed the work product of all of the parties and may not be
construed against any party by reason of its drafting or preparation.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this agreement against any party that
drafted or prepared it is of no application and is hereby expressly waived by
each of the parties hereto, and any controversy over interpretations of this
agreement shall be decided without regards to events of drafting or preparation.
The section headings contained in this agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this agreement.

D-1-6

--------------------------------------------------------------------------------

 

     Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned, whereupon this letter agreement
shall become a binding agreement between you and the Company.

            Very truly yours,

YAHOO! INC.
      By:           Name:           Title:        

Accepted and agreed as of the date first written above:

              Carl C. Icahn   

D-1-7

--------------------------------------------------------------------------------

 

EXHIBIT D2
YAHOO! INC.
701 First Avenue
Sunnyvale, CA 94089
July [•], 2008
To: [Insert Applicable Icahn Entity]
Ladies and Gentlemen:
     This letter agreement shall become effective on the date hereof. It results
from an Agreement, dated as of July 21, 2008, by and among Yahoo! Inc. (the
“Company”) and the Icahn Group (as defined therein). Among other things,
pursuant to the terms of said Agreement, the Icahn Associates Nominee, as
defined in the Agreement will be appointed to the Board of Directors of the
Company (the “Board”). The Company understands and agrees that, subject to the
terms of, and in accordance with, this letter agreement, Icahn Associates
Nominee may, if and to the extent he desires to do so, disclose information he
obtains while a member of the Board to you and your Representatives (as
hereinafter defined) and may discuss such information with any and all such
persons subject to the terms and conditions of this letter agreement. As a
result, you may receive certain non-public information regarding the Company.
You acknowledge that this information is proprietary to the Company and may
include trade secrets or other business information the disclosure of which
could harm the Company. In consideration for, and as a condition of, non-public
information being furnished to you (and, subject to the restrictions in
paragraph 2, your agents, representatives, attorneys, advisors, directors,
officers, members, partners and employees, collectively, “Representatives”), you
agree to treat any and all information concerning or relating to the Company or
any of its subsidiaries or affiliates that is furnished to you or your
Representatives (regardless of the manner in which it is furnished, including
without limitation in written or electronic format or orally, gathered by visual
inspection or otherwise) by the Icahn Associates Nominee, or by or on behalf of
the Company, together with any notes, analyses, reports, models, compilations,
studies, interpretations, documents or records containing, referring, relating
to, based upon or derived from such information, in whole or in part
(collectively, “Confidential Information”), in accordance with the provisions of
this letter agreement, and to take or abstain from taking the other actions
hereinafter set forth.
     1. The term “Confidential Information” does not include information that
(i) is or has become generally available to the public other than as a result of
a direct or indirect disclosure by you or your Representatives in violation of
this letter agreement or by the Icahn Associates Nominee in violation of any
contractual, legal or fiduciary obligation to or of the Company, (ii) was within
your or any of your Representatives’ possession on a non-confidential basis
prior to its being furnished to the Icahn Associates Nominee by or on behalf of
the

D-2-1

--------------------------------------------------------------------------------

 

Company or its Representative or to you by the Icahn Associates Nominee, or by
or on behalf of the Company or its Representatives or (iii) is received from a
source other than the Icahn Associates Nominee, the Company or any of its
Representatives; provided, that in the case of each of (ii) and (iii) above, the
source of such information was not, to your reasonable knowledge, be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any of its subsidiaries with
respect to such information at the time the same was disclosed.
     2. You hereby agree that you and your Representatives will (a) keep the
Confidential Information strictly confidential and (b) not disclose any of the
Confidential Information in any manner whatsoever without the prior written
consent of the Company; provided, however, that you may disclose any of such
information to your Representatives (i) who need to know such information for
the sole purpose of advising you on your investment in the Company and (ii) who
are informed by you in advance of the confidential nature of such information
and who agree to comply with the use and confidentiality obligations contained
in this letter agreement as if they are a party hereto and are under a legal
obligation to comply with the restrictions set forth herein; provided, further,
that you will be responsible for any violation of this letter agreement by your
Representatives as if they were parties hereto and you agree to take all
reasonable measures (including, but not limited to, court proceedings) to cause
your Representative to comply with such obligations provided that you will not
be so responsible with respect to any such Representative who has executed a
copy of this letter agreement as an Additional Signatory and delivered such
signed copy to the Company. It is understood and agreed that the Icahn
Associates Nominee shall not take any action or fail to take any action with the
purpose or effect of waiving attorney client privilege, disclose to you or your
Representatives any Legal Advice (as defined below) that may be included in the
Confidential Information with respect to which such disclosure would constitute
waiver of the Company’s attorney client privilege or attorney work-product;
provided, however, that the Icahn Associates Nominee may provide such disclosure
if such Icahn Associates Nominee has not taken any action or failed to take any
action that has the purpose or effect of waiving attorney client privilege with
respect to any portion of such Legal Advice and if reputable outside legal
counsel experienced in the area and reasonably acceptable to the Company
provides the Company with a written opinion that such disclosure will not waive
the Company’s attorney client privilege with respect to such Legal Advice.
“Legal Advice” as used herein shall be solely and exclusively limited to the
legal advice provided by legal counsel and shall not include factual information
or the formulation or analysis of business strategy.
     3. In the event that you or any of your Representatives are required by
applicable subpoena, legal process or other legal requirement to disclose any of
the Confidential Information, you will promptly notify (except where such notice
would be legally prohibited) the Company in writing by facsimile and certified
mail and provide reasonable cooperation so that the Company may seek a
protective order or other appropriate remedy. Nothing herein shall be deemed to
prevent you or your Representatives, as the case may be, from honoring a
subpoena, legal process or other legal requirement that require discovery,
disclosure or production of the Confidential Information if (a) you produce or
disclose only that portion of the Confidential Information which your outside
legal counsel advises you is legally required to be so produced

D-2-2

--------------------------------------------------------------------------------

 

or disclosed; or (b) the Company consents in writing to having the Confidential
Information produced or disclosed pursuant to the subpoena, legal process or
other legal requirement. In no event will you or any of your Representatives
oppose any action by the Company to obtain a protective order, motion to quash
or other relief to prevent the disclosure of the Confidential Information or to
obtain reliable assurance that confidential treatment will be afforded the
Confidential Information. It is understood that there shall be no “legal
requirement” requiring you to disclose any Confidential Information solely by
virtue of the fact that, absent such disclosure, you would be prohibited from
purchasing, selling, or engaging in derivative or other transactions with
respect to, the Common Stock of the Company (including, for the avoidance of
doubt, any agreement or understanding with respect to the voting or the granting
or withholding of consent with respect to any Common Stock of the Company or
otherwise proposing or making an offer to do any of the foregoing). Before
filing any document with the SEC or other governmental or regulatory body in
which you intend to include Confidential Information that you believe is legally
required to be included in such a filing, you will obtain the advice of outside
counsel to the effect that the Confidential Information is legally required to
be included in such filing.
     4. You acknowledge that (a) none of the Company or any of its
Representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of any Confidential Information, and (b) none of
the Company or any of its Representatives shall have any liability to you or to
any of your Representatives relating to or resulting from the use of the
Confidential Information or any errors therein or omissions therefrom. You and
your Representatives shall not directly or indirectly initiate contact or
communication with any executive or employee of the Company other than the Chief
Executive Officer, Chief Financial Officer, President or General Counsel of the
Company concerning Confidential Information, or to seek any information in
connection therewith from any such person other than the Chief Executive
Officer, Chief Financial Officer, President or General Counsel of the Company
without the prior written consent of the Company.
     5. All Confidential Information shall remain the property of the Company.
Neither you nor any of your Representatives shall by virtue of any disclosure of
and/or your use of any Confidential Information acquire any rights with respect
thereto, all of which rights (including all intellectual property rights) shall
remain exclusively with the Company. At any time upon the request of the Company
for any reason, you will promptly return to the Company all hard copies of the
Confidential Information and permanently erase or delete all electronic copies
of the Confidential Information in your or any of your Representative’s
possession or control. Notwithstanding the return or erasure or deletion of
Confidential Information, you and your Representatives will continue to be bound
by the obligations contained herein.
     6. You acknowledge, and will advise your Representatives, that the
Confidential Information may constitute material non-public information under
applicable federal and state securities laws, and that you shall not, and you
shall use your reasonable best efforts to ensure that your Representatives while
such information constitutes material non—public information do

D-2-3

--------------------------------------------------------------------------------

 

not, trade or engage in any derivative or other transaction, on the basis of
such information in violation of such laws.
     7. You hereby represent and warrant to the Company that this letter
agreement has been duly authorized, executed and delivered by you, and is a
valid and binding obligation, enforceable against you in accordance with its
terms.
     8. It is understood and agreed that no failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
future exercise thereof or the exercise of any other right, power or privilege
hereunder.
     9. You acknowledge that the value of the Confidential Information to the
Company is unique and substantial, but may be impractical or difficult to assess
in monetary terms. In the event of an actual or threatened violation of this
letter agreement, in addition to any and all other remedies which may be
available to the Company, you expressly consent to the Company’s seeking the
enforcement of this letter agreement by injunctive relief or specific
performance, without proof of actual damages or posting of a bond.
     10. Each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the Court of Chancery or other federal or state courts
of the State of Delaware in the event any dispute arises out of this letter
agreement or the transactions contemplated by this letter agreement, (b) agrees
that it shall not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it shall not
bring any action relating to this letter agreement or the transactions
contemplated by this letter agreement in any court other than the Court of
Chancery or other federal or state courts of the State of Delaware, and each of
the parties irrevocably waives the right to trial by jury, and (d) each of the
parties irrevocably consents to service of process by a reputable overnight
delivery service, signature requested, to the address of such parties’ principal
place of business or as otherwise provided by applicable law. THIS LETTER
AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION
AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO
THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.
     11. This letter agreement contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and may be amended only by
an agreement in writing executed by the parties hereto.
     12. All notices, consents, requests, instructions, approvals and other
communications provided for herein and all legal process in regard hereto shall
be in writing and shall be deemed validly given, made or served, if (a) given by
telecopy and email, when such telecopy is

D-2-4

--------------------------------------------------------------------------------

 

transmitted to the telecopy number set forth below and sent to the email address
set forth below and the appropriate confirmation is received or (b) if given by
any other means, when actually received during normal business hours at the
address specified in this subsection:

     
if to the Company:
  Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Attention: General Counsel
Facsimile: (408) 349-3301
 
   
 
  With a copy to (which shall not constitute notice):
 
   
 
  Skadden, Arps, Slate, Meagher & Flom LLP
525 University Avenue, Suite 1100
Palo Alto, California 94301
Facsimile: (650) 470-4500
Attention: Kenton J. King
                 Marc R. Packer
 
   
if to the Icahn Group:
  c/o Icahn Associates Corp.
767 Fifth Avenue, 47th Floor
New York, NY 10153
Attention: Carl C. Icahn
Facsimile: (212) 750-5807
 
   
 
  With a copy to (which shall not constitute notice):
 
   
 
  General Counsel
Icahn Capital LP
767 Fifth Avenue, 47th Floor
New York, NY 10153
Facsimile: (212) 688-1158
Attention: General Counsel
Attention: Keith Cozza

     13. If at any time subsequent to the date hereof, any provision of this
letter agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon the legality or enforceability of any other provision of this letter
agreement.

D-2-5

--------------------------------------------------------------------------------

 

     14. This letter agreement may be executed in two or more counterparts which
together shall constitute a single agreement.
     15. This letter agreement and the rights and obligations herein may not be
assigned or otherwise transferred, in whole or in part, by you without the
express written consent of the Company.
     16. This letter agreement shall expire two years from the date on which the
Icahn Associates Nominee ceases to be a director of the Company.
     17. No licenses or rights under any patent, copyright, trademark, or trade
secret are granted or are to be implied by this letter agreements.
     18. Each of the parties hereto acknowledges that it has been represented by
counsel of its choice throughout all negotiations that have preceded the
execution of this agreement, and that it has executed the same with the advice
of said independent counsel. Each party and its counsel cooperated and
participated in the drafting and preparation of this agreement and the documents
referred to herein, and any and all drafts relating thereto exchanged among the
parties shall be deemed the work product of all of the parties and may not be
construed against any party by reason of its drafting or preparation.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this agreement against any party that
drafted or prepared it is of no application and is hereby expressly waived by
each of the parties hereto, and any controversy over interpretations of this
agreement shall be decided without regards to events of drafting or preparation.
The section headings contained in this agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this agreement.

D-2-6

--------------------------------------------------------------------------------

 

     Please confirm your agreement with the foregoing by signing and returning
one copy of this letter to the undersigned, whereupon this letter agreement
shall become a binding agreement between you and the Company.

            Very truly yours,

YAHOO! INC.
      By:           Name:           Title:        

[Signature Page to Confidentiality Agreement]

 

--------------------------------------------------------------------------------

 

Accepted and agreed as of the date first written above:

            Icahn Partners LP
      By:           Name:           Title:           Icahn Partners Master Fund
LP
      By:           Name:           Title:           Icahn Partners Master Fund
II L.P.
      By:           Name:           Title:           Icahn Partners Master Fund
III L.P.
      By:           Name:           Title:           High River Limited
Partnership
By: Hopper Investments LLC, its general partner
By: Barberry Corp., its sole member
      By:           Name:           Title:                       Carl C. Icahn 
         

[Signature Page to Confidentiality Agreement]