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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

IN RE YAHOO! INC. SECURITIES 

LITIGATION

THIS DOCUMENT RELATES TO:

ALL ACTIONS

Case No. 5:17-CV-00373-LHK

Hon. Lucy H. Koh

NOTICE OF PROPOSED CLASS-ACTION SETTLEMENT 

If you purchased Yahoo! Inc. securities between April 30, 2013 

and December 14, 2016, you could get a payment from a class action settlement.

A federal court authorized this notice. This is not a solicitation from a lawyer. 

This is not a notice that you have been sued.

 The proposed Settlement, if approved by the Court, will provide $80 million (approximately 

$0.12 per share) to pay claims from investors who bought Yahoo! Inc. securities between 

April 30, 2013 and December 14, 2016, both dates inclusive. 

 The Settlement resolves a lawsuit concerning whether Yahoo! Inc. (“Yahoo” or the 

“Company”) and certain of its officers made false and misleading statements or materially 

misleading omissions concerning the adequacy of the Company’s user data security and the 

existence of data security breaches. Yahoo and “Individual Defendants” Marissa Mayer, 

Ronald Bell, and Alexander Stamos (together with Yahoo, the “Defendants”) deny all 

allegations of misconduct. The two sides disagree on whether the investors could have won 

at trial, and if so, how much money they could have won. 

 Court-appointed attorneys for investors will ask the Court for up to $20 million in attorneys’ 

fees (25% of the Settlement) and up to $750,000 in reimbursement for expenses for their 

work litigating the case and negotiating the Settlement. They will also ask for an award to 

the three class representatives, not to exceed $275,000 in total, for their reasonable costs and 

expenses. If approved by the Court, these amounts (totaling approximately $0.03 per share) 

will be paid from the Settlement Fund. 

 The estimated average recovery, after deducting attorneys’ fees and expenses, administrative 

costs, and Class Representative awards of reasonable costs and expenses (if approved by the 

Court), is $0.09 per share. 

 The Court has not yet approved the Settlement. Payments will be made only if the Court 

approves the Settlement and after any appeals are resolved. Please be patient. 

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certified, one court is empowered to resolve all of the issues for all class members, except for 

those class members who exclude themselves from the class. 

4. Why Is There a Settlement?

The Court did not decide in favor of the Plaintiffs or Defendants. Instead, both sides 

agreed to a Settlement under the terms set forth in the Stipulation and Agreement of Settlement 

(the “Stipulation”). This permits the parties to avoid the cost, delay, and uncertainty of a trial, 

and permits eligible Settlement Class Members who submit valid claims to receive some 

compensation sooner, rather than engaging in years of further litigation—including motions for 

summary judgment, trial, and appeals—with the possibility of no recovery at all. 

Both the Plaintiffs and the Defendants have taken into account the uncertainty and risks 

inherent in any litigation, especially in complex cases such as the Action. The Settling Parties 

disagree on both liability and damages, and do not agree on the average amount of damages per 

share, if any, that would be recoverable if Plaintiffs were to prevail at trial on each claim. Among 

their many other disagreements are: (1) whether Defendants violated the securities laws or 

otherwise engaged in wrongdoing; (2) whether the misrepresentations and omissions alleged by 

the Plaintiffs were material, false, misleading, or otherwise actionable; (3) whether and to what 

extent the alleged misrepresentations and omissions influenced Yahoo’s stock price and/or 

caused Settlement Class Members’ alleged damages; and (4) the method for determining the 

amount of damages, if any, suffered by the Settlement Class Members. 

The Plaintiffs and their attorneys believe the Settlement is best for all Settlement Class 

Members. However, by settling the Action at this point, Plaintiffs are not admitting that the 

Complaint or the Action lacked merit or that the Settlement Class’s ultimate recovery would not 

have been greater than the Settlement Consideration. Neither the Stipulation, nor any of its terms 

or provisions, nor any of the negotiations or proceedings connected with it, shall be construed as 

an admission or concession by the Plaintiffs or the Settlement Class Members that any of their 

claims are without merit, or that any defenses asserted by the Defendants have any merit, or that 

damages recoverable in the Action would not have exceeded the Settlement Fund. 

Defendants deny all charges of wrongdoing or liability arising out of any of the conduct, 

statements, acts or omissions alleged, or that could have been alleged, by Plaintiffs. Nonetheless, 

Defendants have concluded that further defense of the Action would be protracted and 

expensive, and that it is desirable that the Action be fully and finally settled upon the terms and 

conditions set forth in the Stipulation in order to limit further expense and avoid the burden of 

protracted litigation. Defendants entered into the Stipulation without in any way admitting to or 

acknowledging any fault, liability, or wrongdoing of any kind. There has been no adverse 

determination by any court against Defendants or anyone else on the merits of the claims 

asserted in the Complaint. Neither the Stipulation, nor any of its terms or provisions, nor any of 

the negotiations or proceedings connected with it, shall be construed as an admission or 

concession by Defendants of the merit or truth of any of the allegations or wrongdoing of any 

kind on their part nor shall they be offered as evidence in the Action or in any pending or future 

civil, criminal, or administrative action against Defendants, except as expressly set forth in the 

Stipulation. 

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The “90-day look back” provision of the Private Securities Litigation Reform Act of 

1995 (“PSLRA”) is incorporated into the calculation of the Recognized Loss for Yahoo common 

stock. The limitations on the calculation of the Recognized Loss imposed by the PSLRA are 

applied such that losses on Yahoo common stock purchased during the Settlement Class Period 

and held as of the close of the 90-day period subsequent to the Settlement Class Period (the “90-

Day Lookback Period”) cannot exceed the difference between the purchase price paid for such 

stock and the average price of Yahoo common stock during the 90-Day Lookback Period. The 

Recognized Loss on Yahoo common stock purchased during the Settlement Class Period and 

sold during the 90-Day Lookback Period cannot exceed the difference between the purchase 

price paid for such stock and the rolling average price of Yahoo common stock during the 

portion of the 90-Day Lookback Period elapsed as of the date of sale. 

In the calculations below, all purchase and sale prices shall exclude any fees, taxes and 

commissions. If a Recognized Loss amount is calculated to be a negative number, that 

Recognized Loss shall be set to zero. 

Calculation of Recognized Loss Per Share of Yahoo Common Stock 

For each share of Yahoo common stock purchased or otherwise acquired during the 

Settlement Class Period (i.e., April 30, 2013 through December 14, 2016, inclusive), the 

Recognized Loss per share shall be calculated as follows: 

i. For each share of Yahoo common stock purchased during the Settlement Class Period 

that was sold prior to May 19, 2015, the Recognized Loss per share is $0. 

ii. For each share of Yahoo common stock purchased during the Settlement Class Period 

that was subsequently sold during the period May 19, 2015 through December 14, 

2016, inclusive, the Recognized Loss per share is the amount of per-share price 

inflation on the date of purchase as appears in Table 1 above, minus the amount of 

per-share price inflation on the date of sale as appears in Table 1 above. 

iii. For each share of Yahoo common stock purchased during the Settlement Class Period 

that was subsequently sold during the period December 15, 2016 through March 14, 

2017, inclusive (i.e., the 90-Day Lookback Period), the Recognized Loss per share is 

the lesser of: 

a. the amount of per-share price inflation on the date of purchase as appears 

in Table 1 above; or 

b. the purchase price minus the “90-Day Lookback Value” on the date of sale 

provided in Table 2 below. 

iv. For each share of Yahoo common stock purchased during the Settlement Class Period 

and still held as of the close of trading on March 14, 2017, the Recognized Loss per 

share is the lesser of:

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a. the amount of per-share price inflation on the date of purchase as appears 

in Table 1 above; or

b. the purchase price minus the average closing price for Yahoo common 

stock during the 90-Day Lookback Period, which is $43.17. 

Table 2

Sale / 

Disposition 

Date

90-Day 

Lookback 

Value

Sale / 

Disposition 

Date

90-Day 

Lookback 

Value

Sale / 

Disposition 

Date

90-Day 

Lookback 

Value

12/15/2016 $38.41 1/17/2017 $40.00 2/14/2017 $41.95

12/16/2016 $38.51 1/18/2017 $40.09 2/15/2017 $42.04

12/19/2016 $38.48 1/19/2017 $40.18 2/16/2017 $42.11

12/20/2016 $38.65 1/20/2017 $40.26 2/17/2017 $42.18

12/21/2016 $38.75 1/23/2017 $40.34 2/21/2017 $42.25

12/22/2016 $38.71 1/24/2017 $40.48 2/22/2017 $42.33

12/23/2016 $38.70 1/25/2017 $40.64 2/23/2017 $42.40

12/27/2016 $38.73 1/26/2017 $40.78 2/24/2017 $42.47

12/28/2016 $38.73 1/27/2017 $40.91 2/27/2017 $42.53

12/29/2016 $38.72 1/30/2017 $41.01 2/28/2017 $42.59

12/30/2016 $38.72 1/31/2017 $41.11 3/1/2017 $42.67

1/3/2017 $38.73 2/1/2017 $41.19 3/2/2017 $42.73

1/4/2017 $38.83 2/2/2017 $41.27 3/3/2017 $42.79

1/5/2017 $39.01 2/3/2017 $41.34 3/6/2017 $42.84

1/6/2017 $39.16 2/6/2017 $41.43 3/7/2017 $42.89

1/9/2017 $39.30 2/7/2017 $41.51 3/8/2017 $42.95

1/10/2017 $39.47 2/8/2017 $41.61 3/9/2017 $43.00

1/11/2017 $39.65 2/9/2017 $41.70 3/10/2017 $43.05

1/12/2017 $39.78 2/10/2017 $41.78 3/13/2017 $43.11

1/13/2017 $39.90 2/13/2017 $41.87 3/14/2017 $43.17

Calculation of Recognized Loss for Call Options on Yahoo Common Stock 

For each Call Option purchased or otherwise acquired during the Settlement Class Period 

(i.e., April 30, 2013 through December 14, 2016, inclusive), the Recognized Loss per Call 

Option shall be calculated as follows: 

i. For each Call Option not held at the opening of trading on one or more of the 

Corrective Disclosure Dates as defined above, the Recognized Loss per Call Option is 

$0.00.

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ii. For each Call Option held at the opening of trading on one or more of the Corrective 

Disclosure Dates as defined above, 

a. that was subsequently sold during the Settlement Class Period, the 

Recognized Loss per Call Option is the purchase price minus the sale 

price. 

b. that was subsequently exercised during the Settlement Class Period, the 

Recognized Loss per Call Option is the purchase price minus the intrinsic 

value of the option on the date of exercise, where the intrinsic value shall 

be the greater of: (i) $0.00 or (ii) the closing price of Yahoo common 

stock on the date of exercise minus the strike price of the option. 

c. that expired unexercised during the Settlement Class Period, the 

Recognized Loss per Call Option is equal to the purchase price. 

d. that was still held as of the close of trading on December 14, 2016, the 

Recognized Loss per Call Option is the purchase price minus the intrinsic 

value of the option as of the close of trading on December 14, 2016, where 

the intrinsic value shall be the greater of: (i) $0.00 or (ii) $40.91 minus the 

strike price of the option. 

No loss shall be recognized based on a sale or writing of any Call Option that was 

subsequently repurchased, exercised or expired. 

Calculation of Recognized Loss for Put Options on Yahoo Common Stock 

For each Put Option sold during the Settlement Class Period (i.e., April 30, 2013 through 

December 14, 2016, inclusive), the Recognized Loss per Put Option shall be calculated as 

follows: 

i. For each Put Option not open (not outstanding) at the opening of trading on one or 

more of the Corrective Disclosure Dates as defined above, the Recognized Loss per 

Put Option is $0.00. 

ii. For each Put Option open (outstanding) at the opening of trading on one or more of 

the Corrective Disclosure Dates as defined above, 

a. that was subsequently purchased during the Settlement Class Period, the 

Recognized Loss per Put Option is the purchase price minus the sale price. 

b. that was subsequently exercised (assigned) during the Settlement Class 

Period, the Recognized Loss per Put Option is the intrinsic value of the 

Put Option on the date of exercise minus the sale price, where the intrinsic 

value shall be the greater of: (i) $0.00 or (ii) the strike price of the option 

minus the closing price of Yahoo common stock on the date of exercise. 

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c. that expired unexercised during the Settlement Class Period, the 

Recognized Loss per Put Option $0.00. 

d. that was still open (outstanding) as of the close of trading on December 

14, 2016, the Recognized Loss per Put Option is the intrinsic value of the 

option as of the close of trading on December 14, 2016 minus the sale 

price, where the intrinsic value shall be the greater of: (i) $0.00 or (ii) the 

strike price of the option minus $40.91. 

No loss shall be recognized based on a purchase of any Put Option that was subsequently 

sold, exercised or expired.

INSTRUCTIONS APPLICABLE TO ALL CLAIMANTS 

The payment you receive will reflect your proportionate share of the Net Settlement 

Fund. Such payment will depend on the number of eligible securities that participate in the 

Settlement, and when those securities were purchased and sold. The number of claimants who 

send in claims varies widely from case to case. 

A purchase or sale of Yahoo securities shall be deemed to have occurred on the 

“contract” or “trade” date as opposed to the “settlement” or “payment” date. 

Acquisition by Gift, Inheritance, or Operation of Law: If a Settlement Class Member 

acquired Yahoo securities during the Settlement Class Period by way of gift, inheritance or 

operation of law, such a claim will be computed by using the date and price of the original 

purchase and not the date and price of transfer. To the extent that Yahoo common stock or a Call 

Option was originally purchased prior to commencement of the Settlement Class Period, the 

Recognized Loss for that acquisition shall be deemed to be zero ($0.00). To the extent that a Put 

Option was originally sold prior to commencement of the Settlement Class Period, the 

Recognized Loss for that sale shall be deemed to be zero ($0.00). 

Notwithstanding any of the above, receipt of Yahoo common securities during the 

Settlement Class Period in exchange for securities of any other corporation or entity shall not be 

deemed a purchase or sale of Yahoo securities. 

The first-in-first-out (“FIFO”) basis will be applied to purchases and sales. Sales will be 

matched in chronological order, by trade date, first against Yahoo securities held as of the close 

of trading on April 29, 2013 (the last day before the Settlement Class Period begins) and then 

against the purchases of Yahoo securities during the Class Period. 

The date of covering a “short sale” is deemed to be the date of purchase of shares. The 

date of a “short sale” is deemed to be the date of sale of shares. In accordance with the Plan of 

Allocation, however, the Recognized Loss on “short sales” is zero. In the event that a claimant 

has an opening short position in Yahoo common stock, the earliest Settlement Class Period 

purchases shall be matched against such opening short position and not be entitled to a recovery 

until that short position is fully covered. 

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With respect to Yahoo common stock purchased or sold through the exercise of an 

option, the purchase/sale date of the stock shall be the exercise date of the option and the 

purchase/sale price of the stock shall be the closing price of Yahoo common stock on the date of 

exercise. Any Recognized Loss arising from purchases of Yahoo common stock acquired during 

the Settlement Class Period through the exercise of an option on Yahoo common stock5

 shall be 

computed as provided for other purchases of Yahoo common stock in the Plan of Allocation. 

Payment according to the Plan of Allocation will be deemed conclusive against all 

Authorized Claimants. A Recognized Loss will be calculated as defined herein and cannot be 

less than zero. The Settlement Administrator shall allocate to each Authorized Claimant a pro 

rata share of the Net Settlement Fund based on his, her, or its total Recognized Losses for all 

Yahoo common stock and Call Options he/she/it purchased during the Settlement Class Period 

and Put Options he/she/it sold during the Settlement Class Period, as compared to the total 

Recognized Losses of all Authorized Claimants (see the Plan of Allocation above for additional 

details). No distribution will be made to Authorized Claimants who would otherwise receive a 

distribution of less than $10.00. Cumulative payments of all claims associated with Call Options 

and Put Options on Yahoo common stock will be limited to 2% of the Net Settlement 

Fund.6

Thus, if the cumulative Recognized Loss amounts for Call and Put Option claims exceeds 

2% of all Recognized Losses, then the Recognized Loss for Call and Put Option claims will be 

reduced proportionately until they collectively equal 2% of all Recognized Losses. In the 

unlikely event that the Net Settlement Fund, allocated as such, is sufficient to pay 100% of the 

Yahoo common stock claims, any excess amount will be used to pay the balance on the 

remaining Call and Put Option claims. 

Settlement Class Members who do not submit acceptable Proofs of Claim will not share 

in the Settlement proceeds. The Settlement and the Judgment and Order of Final Approval 

dismissing this Action will nevertheless bind Settlement Class Members who do not submit a 

request for exclusion and/or submit an acceptable Proof of Claim. 

Please contact the Settlement Administrator or Lead Counsel if you disagree with any 

determinations made by the Settlement Administrator regarding your Proof of Claim. If you are 

unsatisfied with the determinations, you may ask the Court, which retains jurisdiction over all 

Settlement Class Members and the claims-administration process, to decide the issue by 

submitting a written request. 

The Defendants, their respective counsel, and all other Released Persons will have no 

responsibility or liability whatsoever for the investment of the Settlement Fund, the distribution 

of the Net Settlement Fund, the Plan of Allocation, or the payment of any claim. Plaintiffs and 

Lead Counsel, likewise, will have no liability for their reasonable efforts to execute, administer, 

and distribute the Settlement. 

 

5

 Including (1) purchases of Yahoo common stock as the result of the exercise of a call option, 

and (2) purchases of Yahoo common stock by the seller of a put option as a result of the buyer of 

such put option exercising that put option. 

6 Call and Put Options account for less than 2% of the combined dollar trading volume of Yahoo 

common stock and Call and Put Options during the Settlement Class Period. 

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Distributions will be made to Authorized Claimants after all claims have been processed 

and after the Court has finally approved the Settlement. If any funds remain in the Net 

Settlement Fund by reason of uncashed distribution checks or otherwise, then, after the 

Settlement Administrator has made reasonable and diligent efforts to have Settlement Class 

Members who are entitled to participate in the distribution of the Net Settlement Fund cash their 

distributions, any balance remaining in the Net Settlement Fund after at least six (6) months after 

the initial distribution of such funds will be used in the following fashion: (a) first, to pay any 

amounts mistakenly omitted from the initial disbursement; (b) second, to pay any additional 

settlement administration fees, costs, and expenses, including those of Lead Counsel as may be 

approved by the Court; and (c) finally, to make a second distribution to claimants who cashed 

their checks from the initial distribution and who would receive at least $10.00, after payment of 

the estimated costs, expenses, or fees to be incurred in administering the Net Settlement Fund 

and in making this second distribution, if such second distribution is economically feasible. 

These redistributions shall be repeated, if economically feasible, until the balance remaining in 

the Net Settlement Fund is de minimis and such remaining balance will then be distributed to a 

non-sectarian, not-for-profit organization identified by Lead Counsel. 

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