Exhibit 10.11

 

 

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(February 2014)

   

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Yahoo 2014 Executive Incentive Plan

 

 

I. Introduction

A. Applicability

 

  1. The Employees eligible to participate in the Yahoo! Inc. 2014 Executive
Incentive Plan (the “Executive Incentive Plan” or this “Plan”) are Marissa A.
Mayer, Ken Goldman, David Filo, and Ronald S. Bell, as well as any other
employee who is designated by the Board of Directors (the “Board”) of Yahoo!
Inc. (“Yahoo” or the “Company”) as an “Executive Officer” (as defined in Rule
3b-7 under the Securities Exchange Act of 1934) and specifically designated as a
Plan participant by the Compensation and Leadership Development Committee of the
Board (the “Compensation Committee,” and any such other employee a “New
Participant”). Any employee eligible to Participate in this Plan is referred to
as a “Participant.”

 

  2. The Compensation Committee reserves the right to amend, modify or terminate
this Plan, in whole or in part, at any time, in its sole discretion including,
without limitation, to comply with applicable local law, rules and regulations;
provided that any such amendment will be consistent with the intent that each
Participant’s bonus opportunity qualify (except as otherwise provided by Section
III.E) as performance-based compensation under Section 162(m) of the U.S.
Internal Revenue Code of 1986, as amended (the “Code”). The Compensation
Committee may remove any individual from participation in this Plan at any time.
All exceptions, adjustments, additions, or modifications to this Plan require
the approval of the Compensation Committee.

B. Objectives of the Executive Incentive Plan

 

  •   To enhance the Company’s competitiveness and the Company’s ability to
attract, motivate and retain top talent;

 

  •   To recognize the role of senior leadership in the success of the Company;

 

  •   To reward annual financial and individual performance that complements the
Company’s longer-term strategic focus; and

 

  •   To encourage collaboration and teamwork across the Company.

II. Executive Incentive Plan Elements

A. Target Awards

A target cash bonus award (“Target Award”) has been established for each
Participant by the Compensation Committee. Target Awards are typically expressed
as a percentage of a Participant’s annual base salary rate as of the last day of
the applicable year, where such salary rate does not include other forms of
compensation (such as, without limitation, expense reimbursements,
superannuation, bonus payments, long-term incentives, overtime compensation, and
other variable compensation). Target Awards may also be a specified fixed dollar
(or local currency) amount. Target Awards may be reviewed and revised in the
sole discretion of the Compensation Committee.

This Plan and Target Awards do not constitute a guarantee of or entitlement to a
bonus payment. A Participant’s actual bonus payment may vary from his or her
Target Award.

 

 

(February 2014)

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Yahoo 2014 Executive Incentive Plan

 

 

B. Executive Incentive Plan Bonus Formula

Following the end of 2014, a “Company Performance Factor” (based on the
Company’s financial and operational performance during 2014) and an “Individual
Performance Factor” (evaluating the individual’s performance during the year)
will be determined by the Compensation Committee. A Participant’s Executive
Incentive Plan bonus for 2014, subject to the other terms and conditions of this
Plan, will equal the Participant’s Target Award for 2014 multiplied by the
Company Performance Factor and multiplied by the Participant’s Individual
Performance Factor; provided, however, that each Participant’s Plan bonus shall
not exceed 200% of his or her Target Award.

The metrics used to determine the financial performance of the Company in
determining the Company Performance Factor will be GAAP Revenue and Mobile
Revenue (each as defined below) for 2014. The Compensation Committee will also
assess and determine (a) operational performance of the Company in determining
the Company Performance Factor, and (b) individual performance in determining a
Participant’s Individual Performance Factor.

“GAAP Revenue” as to a particular period means the Company’s worldwide revenue
for that period as determined by the Company in accordance with GAAP and
reflected in its reporting of financial results. “Mobile revenue” as to a
particular period means the Company’s revenue recognized in accordance with
GAAP, that arises from (a) search and display ads shown on users’ mobile
devices, or (b) leads, listings and fees generated from usage of mobile devices.
Mobile devices include tablets, smart phones and other portable devices except
laptops. GAAP Revenue and Mobile Revenue will be subject to the adjustment
provisions set forth in Section III.C. “GAAP” means U.S. generally accepted
accounting principles.

Notwithstanding the foregoing provisions, the Compensation Committee retains
discretion (a) to reduce or eliminate the amount of any Executive Incentive Plan
bonus otherwise payable, or (b) subject to Section II.C to below, to increase
the amount of any Executive Incentive Plan bonus otherwise payable.

Any Executive Incentive Plan bonus payable to a Participant under this Plan
shall not be considered as “salary” in any circumstance and shall not be
included in calculations for overtime pay, retirement benefits, severance, or
any other benefits under any applicable plan, policy, agreement or applicable
law.

C. Bonus Limit

Subject to Section III.E, each Participant’s Executive Incentive Plan bonus for
2014 is (notwithstanding anything to the contrary above) subject to the
limitations of this Section C. The intent of this Section C is to structure
Executive Incentive Plan bonus opportunities to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code (“Section
162(m)”). Accordingly, this Plan will be construed and interpreted consistent
with that intent. The Participants’ Executive Incentive Plan bonus opportunities
are structured as performance-based awards under Appendix A to the Yahoo! Inc.
1995 Stock Plan, as amended (the “1995 Plan”). Any determination contemplated by
this Plan for the applicable year will be made by the Compensation Committee,
and no Executive Incentive Plan bonus may be paid unless and until the
Compensation Committee certifies, by resolution or other appropriate action in
writing, that the bonus is not more than the Participant’s maximum bonus
determined pursuant to this Section C and that any other material terms
applicable to the bonus were in fact satisfied.

 

 

(February 2014)

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Yahoo 2014 Executive Incentive Plan

 

 

The maximum aggregate bonus pool for 2014 under this Plan will equal 3% of
Yahoo! Inc.’s Adjusted EBITDA for 2014 (the “Section 162(m) Bonus Pool Limit”).
“Adjusted EBITDA” is calculated as income from operations before depreciation,
amortization and stock-based compensation expense, subject to adjustment as
provided below. The Compensation Committee established each Participant’s
maximum Executive Incentive Plan bonus for 2014 as follows (in each case
expressed as a portion of the Section 162(m) Bonus Pool Limit for that year):
Marissa A. Mayer—one-half; Ken Goldman—one-sixth; Ronald S. Bell—one-sixth; and
David Filo—one-sixth. (For example, if the Compensation Committee allocated
one-sixth of the Section 162(m) Bonus Pool Limit to a particular Participant,
the Participant’s maximum Executive Incentive Plan bonus will equal one-sixth of
3% of Yahoo! Inc.’s Adjusted EBITDA.) Notwithstanding the foregoing, in all
cases each Participant’s maximum Executive Incentive Plan bonus for 2014 will be
subject to the limit of Section A.3 of the 1995 Plan and any other maximum bonus
amount established by the Compensation Committee for that Participant, in each
case if lower than the amount determined pursuant to this Section C. The
Compensation Committee has discretion to reduce (but not increase) the maximum
amount of a Participant’s bonus determined pursuant to this Section C. For
purposes of clarity, if the Compensation Committee exercises its discretion to
reduce the maximum amount of any Executive Incentive Plan bonus (or any
Executive Incentive Plan bonus is otherwise not paid at the maximum amount), the
amount of the difference may not be allocated to any other Participant.

For purposes of calculating Adjusted EBITDA, GAAP Revenue, and Mobile Revenue
for 2014, Adjusted EBITDA, GAAP Revenue and Mobile Revenue for 2014 shall be
adjusted (without duplication) for the following items to the extent such items
were not included in the Financial Plan:

 

  (a) increased or decreased to eliminate the financial statement impact of
acquisitions with a GAAP purchase price of $500 million or more and costs
associated with such acquisitions;

 

  (b) increased or decreased to eliminate the financial statement impact of
divestitures with a GAAP sale price of $500 million or more and costs associated
with such divestitures;

 

  (c) increased or decreased to eliminate the financial statement impact of any
new changes in accounting standards announced during the year that are required
to be applied during the year in accordance with GAAP;

 

  (d) increased or decreased to eliminate the financial statement impact of
restructuring charges that are required to be expensed (or reversed) under GAAP;

 

  (e) increased or decreased to eliminate the financial statement impact of
goodwill and intangible asset impairment charges that are required to be
recorded under GAAP; and

 

  (f) increased or decreased to eliminate the financial statement impact of
legal settlements that have an impact on revenues or expenses under GAAP.

“Financial Plan” means Yahoo! Inc.’s financial plan for 2014 reviewed by the
Board of Directors.

 

 

(February 2014)

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Yahoo 2014 Executive Incentive Plan

 

 

III. TERMS AND CONDITIONS

A. Executive Incentive Plan Effective Period

This Plan covers the period from January 1, 2014 to December 31, 2014. This Plan
supersedes all previous executive cash incentive plans, management incentive
plans (MIP), Yahoo Incentive Plans for Excellence and Execution (YIPEE), or
leadership bonus plans and agreements and all other previous or contemporaneous
oral or written statements by the Company on this subject.

B. Date for Incentive Payments

Executive Incentive Plan bonuses paid under this Plan are not earned until paid
and in all events remain subject to Section III.J. It is a condition for
Executive Incentive Plan eligibility that Participants must be employed, and to
the extent permitted by applicable law, not under notice of termination given by
the Company or the Participant (if applicable), on the payment date of the
Executive Incentive Plan bonuses (except as otherwise provided below in Section
G). Payment will not occur until after financial results for 2014 are determined
by the Company and the year end review process for 2014 is completed.

C. Form and Timing of Payment

If the conditions for payment described above are met, the Executive Incentive
Plan bonus will be payable in a lump sum cash payment (in local currency),
subject to required payroll deductions and tax withholdings no later than
March 15, 2015 (except that, in the case of any Participants not on the United
States payroll of the Company at the start of the applicable year and who are
not added to the United States payroll of the Company during the applicable
year, payment will occur not later than March 31, 2015).

D. Adjustments to Target Awards

The Compensation Committee in its sole discretion can approve adjustments to
Target Awards for Participants during 2014. Any such changes will be
communicated to the Participant in writing.

E. New Participants; Changes in Position; Other Prorations

If an employee is designated by the Board as an Executive Officer during 2014
(due to being newly hired, promoted, or otherwise), the Compensation Committee
may select the employee for participation in this Plan by notifying the employee
that he or she has been designated as a Participant under this Plan. Unless
otherwise provided by the Compensation Committee at the time a New Participant
is selected for participation in this Plan (in which case the Compensation
Committee shall also, at such time, specify the applicable Section 162(m)
limitation(s) applicable to the New Participant), any New Participant’s
Executive Incentive Plan bonus for 2014 will not be subject to the limitations
of Section II.C and, accordingly, will not qualify as performance-based
compensation within the meaning of Section 162(m).

 

 

(February 2014)

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Yahoo 2014 Executive Incentive Plan

 

 

The following rules shall also apply except as otherwise determined by the
Compensation Committee with respect to a particular Participant:

 

  ¡   If a Participant’s Target Award as to the year changes during the year, or
if a New Participant is added during the year, his/her annual Target Award
amount shall be prorated based on the number of days each amount was in effect
during the year.

 

  ¡   If a Participant transfers mid-year from an Executive Incentive
Plan-eligible position to one that is not Executive Incentive Plan eligible (for
example, if a Participant ceases to be designated as an Executive Officer by the
Board but remains employed by the Company), the Compensation Committee, in its
sole discretion, shall award the employee an Executive Incentive Plan bonus
based on a prorated Executive Incentive Plan Target Award. Any such payment will
be paid at the same time as other Executive Incentive Plan payments are paid.

The Compensation Committee has the sole discretion to prorate, reduce, offset,
or eliminate Executive Incentive Plan bonuses to account for advances or payouts
to employees under other bonus plans in effect during the same year, or for
other reasons as it deems appropriate.

F. Leaves of Absence

To the extent permitted by applicable law, the amount of the Executive Incentive
Plan bonus may be prorated for Participants who have been on an approved leave
of absence of more than 90 days during the year.

G. Terminations of Employment

To the extent permitted by applicable law, and except as otherwise approved by
the Compensation Committee or expressly set forth in a written agreement between
the Participant and the Company, Participants whose employment is voluntarily or
involuntarily terminated (with or without cause) by the Participant or the
Company or are under notice of termination given by either party (if applicable)
prior to the payment date of the Executive Incentive Plan bonus will not be
eligible for and shall not receive any Executive Incentive Plan bonus.

Participants whose employment terminates due to the employee’s total disability
during 2014 will be eligible for a prorated Executive Incentive Plan bonus,
based on the date of termination, and paid at the time other Executive Incentive
Plan bonuses are paid under this Plan, to the extent permitted by applicable
law. If a Participant dies during 2014, the Executive Incentive Plan bonus will
be prorated based on the date of death and paid to the estate of the deceased
Participant, at the time other Executive Incentive Plan bonuses are paid.

H. Executive Incentive Plan Interpretation

This Plan shall be interpreted by the Compensation Committee. The Compensation
Committee has the sole discretion to interpret or construe ambiguous, unclear or
implied (but omitted) terms and shall resolve any and all questions regarding
interpretation and/or administration.

 

 

(February 2014)

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Yahoo 2014 Executive Incentive Plan

 

 

Participants who have issues regarding payments or the administration of this
Plan may file a claim in writing to the Compensation Committee, c/o the
Secretary of the Company, within 90 days of the date on which the Participant
first knew (or should have known) of the facts on which the claim is based. The
Compensation Committee or its designee(s) shall consider the claim and notify
the Participant in writing of the determination and resolution of the issue.
Claims that are not pursued through this procedure shall be treated as having
been irrevocably waived. The determination of the Compensation Committee or its
designee(s) as to any complaint or dispute will be final and binding and shall
be upheld unless arbitrary or capricious or made in bad faith.

The provisions of this Plan are severable and if any provision is held to be
unenforceable by any court of competent jurisdiction then such unenforceability
shall not affect the enforceability of the remaining provisions of this Plan.

This Plan shall be construed and interpreted consistent with, and so as to avoid
the imputation of any tax, penalty or interest under, Section 409A of the Code.

I. Employment At-Will (U.S. Employees only)

The employment of all Participants in the United States is “at will” and is
terminable by either the Participant or Yahoo! at any time, with or without
advance notice and with or without cause. This Plan shall not be construed to
create a contract of employment for a specified period of time between Yahoo!
and any U.S. Participant.

J. Recoupment

Notwithstanding any other provision herein, the recoupment or “clawback”
policies adopted by the Compensation Committee and applicable to incentive
awards, as such policies are in effect from time to time, shall apply to this
Plan and any bonuses paid or payable under this Plan.

 

 

(February 2014)

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