Exhibit
10.3


 


YAHOO!
INC.


 


1996
DIRECTORS’ STOCK PLAN


 


NOTICE OF
RESTRICTED STOCK UNIT GRANT


 


C/o Yahoo! Inc.


701 First Avenue


Sunnyvale, CA 94089


 


You have been granted an award
of Restricted Stock Units by Yahoo! Inc. (the “Company”) as follows:


 


	
  Date of Grant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Number of
  Restricted

  	
   

  	
   

  
	
  Stock Units Granted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting
  Schedule:

  	
   

  	
  [The Restricted Stock Units
  shall vest and become non-forfeitable in accordance with the following
  schedule: 25% of the Restricted Stock Units shall vest and become
  nonforfeitable at the end of each three-month period following the Date of
  Grant, such that the Restricted Stock Units will be fully vested on the first
  anniversary of the Date of Grant.]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [The Restricted Stock Units
  shall be fully vested as of the Date of Grant.]

  



 


By your signature and the signature of the Company’s
representative below, you and the Company agree that the Restricted Stock Units
are granted under and governed by the terms and conditions of the 1996
Directors’ Stock Plan and the Restricted Stock Unit Award Agreement, both of which
are attached and made a part of this document.


 


	
  GRANTEE:

  	
   

  	
  YAHOO! INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   Chairman & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
   

  
						



 

















 


YAHOO!
INC.


 


DIRECTOR RESTRICTED
STOCK UNIT AWARD AGREEMENT


 


 


1.             Grant of Restricted Stock Unit Award. The
Board of Directors of the Company hereby grants to the Grantee named in the
Notice of Restricted Stock Unit Grant attached as Part I of this Agreement (the
“Grantee”), an award (the “Award”) of Restricted Stock Units, as
set forth in the Notice of Restricted Stock Unit Grant, subject to the terms
and conditions of the 1996 Directors’ Stock Option Plan, as amended (the “Plan”),
which is incorporated herein by reference. (Capitalized terms not defined herein
shall have the meanings ascribed to such terms in the Plan.)  In the event of a conflict between the terms
and conditions of the Plan and the terms and conditions of this Restricted
Stock Unit Award Agreement (this “Agreement”), the terms and conditions
of the Plan shall prevail.


 


2.             Limitations on Rights Associated with Restricted
Stock Units; Dividend Equivalent Rights. The Restricted Stock
Units are bookkeeping entries only. The Grantee shall have no rights as a
stockholder of the Company, no dividend rights and no voting rights with
respect to the Restricted Stock Units. Notwithstanding the foregoing, as of any
date the Company pays an ordinary cash dividend on its Common Stock, the
Grantee shall automatically be granted a number of additional Restricted Stock
Units in respect of any then-outstanding and unpaid Restricted Stock Units
granted hereunder as provided in Section 10(c) of the Plan. Any such additional
Restricted Stock Units shall be subject to the same vesting, payment and other
terms, conditions and restrictions as the original Restricted Stock Units to
which they relate.


 


3.             Transfer Restrictions. Restricted
Stock Units and any interest therein, may not be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution. Any attempt to dispose of any Restricted Stock Units
in contravention of the above restriction shall be null and void and without
effect.


 


4.             Lapse of Restrictions. The Restricted Stock Units
shall vest and become nonforfeitable in accordance with the Vesting Schedule
set out in the Notice of Restricted Stock Unit Grant and the applicable
provisions of the Plan and this Agreement.


 


5.             Timing and Manner of Payment of Restricted
Stock Units. Subject to Sections 6 and 8 below, as
soon as practicable after the earlier of (i) the date the Grantee’s service as
a member of the Board terminates for any reason, or (ii) the third anniversary
of the Date of Grant set forth in the Notice of Restricted Stock Unit Grant (the
“Payment Date”), any Restricted Stock Units subject to the Award that
have vested and become non-forfeitable pursuant to Section 4 shall be paid by
the Company delivering to the Grantee, a number of Shares equal to the number
of such Restricted Stock Units being paid. The Company shall issue the Shares as
provided in Section 10(d) of the Plan. Notwithstanding the foregoing, the
Company shall have no obligation to issue Shares in payment of the Restricted
Stock Units unless such issuance and such payment shall comply with all
relevant provisions of law and the requirements of any Stock Exchange.


 

















 


6.             Deferral of Payment of Restricted Stock Units.
Notwithstanding the first sentence of Section 5, the Grantee may
irrevocably elect, on the form attached hereto as Exhibit A (or such
other form as may be prescribed by the Board from time to time) (the “Deferral
Election Form”), that the Restricted Stock Units shall be paid on or as
soon as practicable after any date specified by the Grantee on the Deferral
Election Form; provided, however, that such election must be made at least
twelve (12) months before the original Payment Date and the date elected by the
Grantee must be at least five (5) years after the original Payment Date. In the
event of any such election, the new payment date timely elected by the Grantee
shall be the new “Payment Date” with respect to the Restricted Stock Units
covered by the election.


 


7.             Termination of Service. In the event of the termination
of the Grantee’s Continuous Service as a Director for any reason prior to the
lapsing of the restrictions in accordance with Section 4 hereof with respect to
any of the Restricted Stock Units granted hereunder, such portion of the
Restricted Stock Units held by Grantee shall be automatically forfeited by the
Grantee as of the date of termination. Neither the Grantee nor any of the
Grantee’s successors, heirs, assigns or personal representatives shall have any
rights or interests in any Restricted Stock Units that are so forfeited.


 


8.             Corporate Transaction. Notwithstanding
any other provision herein, in the event of a Corporate Transaction, any
Restricted Stock Units that are then outstanding shall become fully vested and
may be paid to the Grantee immediately prior to the effectiveness of the Corporate
Transaction as provided in Section 13(b) of the Plan.


 


9.             Tax Consequences. Set forth below
is a brief summary of certain federal and California tax consequences relating
to the Restricted Stock Units under the law in effect as of the date of grant. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. THE GRANTEE SHOULD CONSULT HIS OR HER OWN TAX ADVISER FOR MORE
INFORMATION ON THE TAX CONSEQUENCES OF THE RESTRICTED STOCK UNITS.


 


(a)           Payment of the Restricted Stock Units. Upon
any payment of the Restricted Stock Units (including any additional Restricted
Stock Units granted in respect of dividend equivalent rights), the Grantee may
incur ordinary federal and California income tax liability at the time of
payment. The Grantee will be treated as having received compensation income
(taxable at ordinary income tax rates) equal to the Fair Market Value of the
Shares received in payment of the Restricted Stock Units.


 


(b)           Disposition of Shares. If the Grantee
holds the Shares received in payment of the Restricted Stock Units for more
than one year, gain realized on disposition of the Shares will be treated as
long-term capital gain for federal and California income tax purposes.


 


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left blank]


 


2

















 


By your signature and the signature of the Company’s
representative below, you and the Company agree that this Award is granted
under and governed by the terms and conditions of the Plan and this Agreement. You
acknowledge and agree that you have reviewed the Plan and this Agreement in
their entirety, have had an opportunity to obtain the advice of counsel prior
to executing this Agreement and fully understand all provisions of the Plan and
this Agreement. You hereby agree to accept as binding, conclusive and final all
decisions or interpretations of the Board upon any questions relating to the
Plan and this Agreement.


 


	
  GRANTEE:

  	
   

  	
  YAHOO! INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
   

  
						



 


3

















 


EXHIBIT A


 


DEFERRAL
ELECTION FORM


 


	
  To:

  	
  Yahoo! Inc.

  
	
   

  	
   

  
	
  Attn:

  	
  Stock Option
  Administrator

  
	
   

  	
   

  
	
  Subject:

  	
  Notice of Intention to
  Defer Payment of Restricted Stock Units

  



 


I, the undersigned, hereby make
the following irrevocable election with respect to the Restricted Stock Units
granted to me under the 1996 Directors’ Stock Plan on                     ,
200   .


 


o            I elect not to
defer the payment of my Restricted Stock Units. I understand that my Restricted
Stock Units will be paid to me on or as soon as practicable after the earlier
of (i) the date my services as a director terminate, or (ii) the third
anniversary of the date my Restricted Stock Units were granted.


 


o            I elect to defer the payment of my Restricted
Stock Units until                         ,
20     . [The date you select must
be at least eight years after the date the Restricted Stock Units were
granted.]


 


Authorization/Signature


 


My signature below certifies
that I wish to make the irrevocable deferral elections indicated above, and
that I authorize Yahoo! Inc. to defer payment of my Restricted Stock Units to
implement these elections. I understand that, notwithstanding my election, my
Restricted Stock Units may be paid to me early in the event of a Corporate
Transaction. I understand that I must complete a new election form to defer
payment of Restricted Stock Units granted in any subsequent year.


 


 


	
  Signature:

  	
   

  	
   

  	
  Date: