exv10w1





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;




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	 	(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



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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.




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          (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



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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.



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     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,



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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



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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






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	 	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.



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     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]





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     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]