Document:

Prepared by MerrillDirect

 

YAHOO! INC.

1995 STOCK PLAN

(MAY 1999 AMENDMENT)

 

 1.  Purposes of the Plan.  The purposes of this 1995 Stock Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Subsidiaries and to promote the success of the Company's
business.  Options granted under the
Plan may be incentive stock options (as defined under Section 422 of the
Code) or nonstatutory stock options, as determined by the Administrator at the
time of grant of an option and subject to the applicable provisions of Section
422 of the Code, as amended, and the regulations promulgated thereunder.  Stock purchase rights may also be granted
under the Plan. 

 2.  Definitions.  As used herein, the following definitions
shall apply: 

          (a)      "Administrator" means the Board or any
of its Committees appointed pursuant to Section 4 of the Plan. 

          (b)      "Affiliate" shall mean an entity
(including a partnership or limited liability company) in which the Company,
directly or indirectly through any subsidiary, owns an equity interest, but
which entity is not a Subsidiary. 

          (c)      "Applicable Laws" has the meaning set
forth in Section 4(a) below. 

          (d)      "Board" means the Board of Directors
of the Company. 

          (e)      "Code" means the Internal Revenue Code
of 1986, as amended. 

          (f)      "Committee" means the Committee
appointed by the Board of Directors in accordance with Section 4(a) of the
Plan. 

          (g)      "Common Stock" means the Common Stock
of the Company. 

          (h)      "Company" means Yahoo! Inc., a
California corporation. 

          (i)       "Consultant" means any person,
including a Director, who is engaged by the Company or any Parent, Subsidiary
or Affiliate to render services and is compensated for such services. 

          (j)       "Continuous Status as an Employee or Consultant"
means the absence of any interruption or termination of service as an Employee
or Consultant.  Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of:  (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise pursuant to Company policy adopted
from time to time; or (iv) in the case of transfers between locations of
the Company or between the Company, its Subsidiaries or their respective
successors.  For purposes of this Plan,
a change in status from an Employee to a Consultant or from a Consultant to an
Employee will not constitute an interruption of Continuous Status as an
Employee or Consultant. 

          (k)      "Director" means a member of the
Board. 

          (l)       "Employee" means any person, including
Named Executives, Officers and Directors, employed by the Company or any
Parent, Subsidiary or Affiliate of the Company, with the status of employment
determined based upon such minimum number of hours or periods worked as shall
be determined by the Administrator in its discretion, subject to any
requirements of the Code.  The payment
of a director's fee by the Company to a Director shall not be sufficient to
constitute "employment" of the Director by the Company. 

          (m)     "Exchange Act" means the Securities
Exchange Act of 1934, as amended. 

          (n)      "Fair Market Value" means, as of any
date, the fair market value of Common Stock determined as follows: 

          (i)       If
the Common Stock is listed on any established stock exchange or a national
market system including without limitation the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation
("Nasdaq") System, its Fair Market Value shall be the closing sales
price for such stock as quoted on such system on the date of determination (if
for a given day no sales were reported, the closing bid on that day shall be
used), as such price is reported in The Wall Street Journal or such other
source as the Administrator deems reliable; 

          (ii)      If
the Common Stock is quoted on the Nasdaq System (but not on the National Market
thereof) or regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the
bid and asked prices for the Common Stock on the date of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or 

          (iii)     In
the absence of an established market for the Common Stock, the Fair Market
Value thereof shall be determined in good faith by the Administrator. 

          (o)      "Incentive Stock Option" means an
Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code, as designated in the applicable written option
agreement. 

          (p)      "Named Executive" means any individual
who, on the last day of the Company's fiscal year, is the chief executive
officer of the Company (or is acting in such capacity) or among the four
highest compensated officers of the Company (other than the chief executive
officer).  Such officer status shall be
determined pursuant to the executive compensation disclosure rules under
the Exchange Act. 

          (q)      "Nonstatutory Stock Option" means an
Option not intended to qualify as an Incentive Stock Option, as designated in
the applicable written option agreement. 

          (r)      "Option" means a stock option granted
pursuant to the Plan. 

          (s)      "Optioned Stock" means the Common
Stock subject to an Option or a Stock Purchase Right. 

          (t)       "Optionee" means an Employee or
Consultant who receives an Option or a Stock Purchase Right. 

          (u)      "Parent" means a "parent
corporation", whether now or hereafter existing, as defined in Section
424(e) of the Code, or any successor provision. 

          (v)      "Plan" means this 1995 Stock Plan. 

          (w)     "Reporting Person" means an Officer,
Director, or greater than ten percent shareholder of the Company within the
meaning of Rule 16a–2 under the Exchange Act, who is required to
file reports pursuant to Rule 16a–3 under the Exchange Act. 

          (x)      "Restricted Stock" means shares of
Common Stock acquired pursuant to a grant of a Stock Purchase Right under
Section 11 below. 

          (y)      "Rule 16b–3" means Rule 16b–3
promulgated under the Exchange Act, as the same may be amended from time to
time, or any successor provision. 

          (z)      "Share" means a share of the Common
Stock, as adjusted in accordance with Section 13 of the Plan. 

          (aa)    "Stock Exchange" means any stock
exchange or consolidated stock price reporting system on which prices for the
Common Stock are quoted at any given time. 

          (bb)    "Stock Purchase Right" means the right
to purchase Common Stock pursuant to Section 11 below. 

          (cc)    "Subsidiary" means a "subsidiary
corporation," whether now or hereafter existing, as defined in
Section 424(f) of the Code, or any successor provision. 

 3.  Stock Subject to the Plan.  Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 126,000,000 shares of Common Stock.  The Shares may be authorized, but unissued, or reacquired Common
Stock.  If an Option should expire or
become unexercisable for any reason without having been exercised in full, the
unpurchased Shares that were subject thereto shall, unless the Plan shall have
been terminated, become available for future grant under the Plan. In addition,
any Shares of Common Stock which are retained by the Company upon exercise of
an Option or Stock Purchase Right in order to satisfy the exercise or purchase
price for such Option or Stock Purchase Right or any withholding taxes due with
respect to such exercise shall be treated as not issued and shall continue to
be available under the Plan. 

 4.  Administration of the Plan.  

          (a)  Multiple Administrative Bodies.  If permitted by Rule 16b–3 and by
the legal requirements relating to the administration of incentive stock option
plans, if any, of applicable securities laws and the Code (collectively the
"Applicable Laws"), grants under the Plan may be made by different
bodies with respect to Directors, Officers who are not Directors and Employees
or Consultants who are not Reporting Persons. 

          (b)  Administration With Respect to Reporting
Persons.  With respect to
grants of Options or Stock Purchase Rights to Employees or Consultants who are
Reporting Persons, grants under the Plan shall be made by (A) the Board,
if the Board may make grants under the Plan in compliance with Rule 16b–3,
or (B) a Committee designated by the Board to make grants under the Plan,
which committee shall be constituted in such a manner as to permit grants under
the Plan to comply with Rule 16b–3, to qualify grants of Options to
Named Executives as performance–based compensation under Section 162(m)
of the Code and otherwise so as to satisfy the Applicable Laws. 

          (c)  Administration With Respect to Other
Persons.  With respect to grants
of Options or Stock Purchase Rights to Employees or Consultants who are not
Reporting Persons, the Plan shall be administered by (A) the Board or
(B) a Committee designated by the Board, which committee shall be
constituted in such a manner as to satisfy the Applicable Laws. 

          (d)  General.  If a Committee has been appointed pursuant
to subsection (ii) or (iii) of this Section 4(a), such Committee
shall continue to serve in its designated capacity until otherwise directed by
the Board.  From time to time the Board
may increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws, and, in the case of a Committee appointed
under subsection (ii), to the extent permitted by Rule 16b–3,
and to the extent required under Section 162(m) of the Code to qualify
grants of Options to Named Executives as performance–based compensation. 

          (e)  Powers of the Administrator.  Subject to the provisions of the Plan and in
the case of a Committee, the specific duties delegated by the Board to such
Committee, and subject to the approval of any relevant authorities, including
the approval, if required, of any Stock Exchange, the Administrator shall have
the authority, in its discretion:

          (i)       to
determine the Fair Market Value of the Common Stock, in accordance with
Section 2(m) of the Plan; 

          (ii)      to select the Consultants and Employees to
whom Options and Stock Purchase Rights may from time to time be granted
hereunder; 

          (iii)     to
determine whether and to what extent Options and Stock Purchase Rights or any
combination thereof are granted hereunder; 

          (iv)     to
determine the number of shares of Common Stock to be covered by each such award
granted hereunder; 

          (v)      to
approve forms of agreement for use under the Plan; 

          (vi)     to
determine the terms and conditions, not inconsistent with the terms of the
Plan, of any award granted hereunder, including, but not limited to, the share
price and any restriction or limitation, the vesting of any Option or the
acceleration of vesting or waiver of a forfeiture restructure, based in each
case on such factors as the Administrator shall determine, in its sole
discretion; 

          (vii)    to determine whether and under what
circumstances an Option may be settled in cash under Section 10(g) instead
of Common Stock; 

          (viii)    to
reduce the exercise price of any Option to the then current Fair Market Value
if the Fair Market Value of the Common Stock covered by such Option shall have
declined since the date the Option was granted; 

          (ix)     to
determine the terms and restrictions applicable to Stock Purchase Rights and
the Restricted Stock purchased by exercising such Stock Purchase Rights; and 

          (x)      to
construe and interpret the terms of the Plan and awards granted pursuant to the
Plan; 

          (xi)     in
order to fulfill the purposes of the Plan and without amending the Plan, to
modify grants of Options or Stock Purchase Rights to participants who are
foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs. 

          (f)  Effect of Administrator's Decision.  All decisions, determinations and
interpretations of the Administrator shall be final and binding on all holders
of Options or Stock Purchase Rights. 

 5.  Eligibility.  

          (a)  Recipients of Grants.  Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Employees and Consultants; provided, however, that no
person subject to the reporting requirements of Section 16 of the Exchange
Act may receive an option or stock purchase right unless such person is
employed by or a consultant to the Company or any Parent or Subsidiary.
Incentive Stock Options may be granted only to Employees, provided, however,
that Employees of an Affiliate shall be not be eligible to receive Incentive
Stock Options.  An Employee or
Consultant who has been granted an Option or Stock Purchase Right may, if he or
she is otherwise eligible, be granted additional Options or Stock Purchase
Rights. 

          (b)  Type of Option.  Each Option shall be designated in the
written option agreement as either an Incentive Stock Option or a Nonstatutory
Stock Option.  However, notwithstanding
such designations, to the extent that the aggregate Fair Market Value of Shares
with respect to which Options designated as Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year (under
all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such
excess Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 5(b), Incentive
Stock Options shall be taken into account in the order in which they were
granted, and the Fair Market Value of the Shares subject to an Incentive Stock
Option shall be determined as of the date of the grant of such Option. 

          (c)  No Employment Rights.  The Plan shall not confer upon any Optionee
any right with respect to continuation of employment or consulting relationship
with the Company, nor shall it interfere in any way with such Optionee's right
or the Company's right to terminate his or her employment or consulting
relationship at any time, with or without cause. 

 6.  Term of Plan.  The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the shareholders of the Company as described in Section 20 of the Plan.  It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 16 of the Plan.

 7.  Term of Option.  The term of each Option shall be the term
stated in the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement and provided further that, in
the case of an Incentive Stock Option granted to an Optionee who, at the time
the Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Option shall be five (5) years from the date
of grant thereof or such shorter term as may be provided in the written option
agreement. 

 8.  Limitation on Grants to Employees.  Subject to adjustment as provided in this
Plan, the maximum number of Shares which may be subject to Options granted to
any one Employee under this Plan for any fiscal year of the Company shall be
6,000,000. 

 9.  Option Exercise Price and Consideration.  

          (a)  Exercise Price.  The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be such price as is
determined by the Board and set forth in the applicable agreement, but shall be
subject to the following: 

        (i)       In
the case of an Incentive Stock Option that is: 

          (A)     granted
to an Employee who, at the time of the grant of such Incentive Stock Option,
owns stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant. 

          (B)     granted
to any other Employee, the per Share exercise price shall be no less than 100%
of the Fair Market Value per Share on the date of grant. 

        (ii)      In
the case of a Nonstatutory Stock Option that is: 

          (A)     granted
to a person who, at the time of grant of such Option, is a Named Executive of
the Company, the per Share exercise price shall be no less than 100% of the
Fair Market Value per Share on the date of grant; and 

          (B)     granted
to any person other than a Named Executive, the per Share exercise price shall
be no less than 85% of the Fair Market Value per Share on the date of grant. 

          (b)  Permissible Consideration.  The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment, shall
be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash, (2) check, (3) promissory note, (4) other Shares
that (x) in the case of Shares acquired upon exercise of an Option, have been
owned by the Optionee for more than six months on the date of surrender or such
other period as may be required to avoid a charge to the Company's earnings,
and (y) have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which such Option shall be
exercised, (5) authorization for the Company to retain from the total
number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised,
(6) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price and any applicable
income or employment taxes, (7) any combination of the foregoing methods
of payment, or (9) such other consideration and method of payment for the
issuance of Shares to the extent permitted under Applicable Laws.  In making its determination as to the type
of consideration to accept, the Administrator shall consider if acceptance of
such consideration may be reasonably expected to benefit the Company. 

 10.  Exercise of Option.  

          (a)  Procedure for Exercise; Rights as a
Shareholder.  Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, and reflected in the written option
agreement, which may include vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee. 

      An Option may not be exercised for a
fraction of a Share. 

          An Option shall be deemed to be
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the Option by the person entitled to exercise the
Option and the Company has received full payment for the Shares with respect to
which the Option is exercised.  Full
payment may, as authorized by the Board, consist of any consideration and
method of payment allowable under Section 9(b) of the Plan. Until the
issuance (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company) of the stock certificate
evidencing such Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock, not
withstanding the exercise of the Option. 
The Company shall issue (or cause to be issued) such stock certificate
promptly upon exercise of the Option. 
No adjustment will be made for a dividend or other right for which the
record date is prior to the date the stock certificate is issued, except as
provided in Section 13 of the Plan. 

          Exercise of an Option in any manner
shall result in a decrease in the number of Shares that thereafter may be
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised. 

 (b)  Termination of Employment or Consulting
Relationship.  Subject to
Section 10(c), in the event of termination of an Optionee's Continuous
Status as an Employee or Consultant with the Company, such Optionee may, but
only within three (3) months (or such other period of time not less than
thirty (30) days and not more than twelve (12) months as is determined by the
Administrator, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option and not exceeding three (3)
months) after the date of such termination (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), exercise his or her Option to the extent that the Optionee was
entitled to exercise it at the date of such termination.  To the extent that Optionee was not entitled
to exercise the Option at the date of such termination, or if Optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate.  No termination
shall be deemed to occur and this Section 10(b) shall not apply if (I) the
Optionee is a Consultant who becomes an Employee; or (ii) the Optionee is
an Employee who becomes a Consultant. 

 (c)  Disability of Optionee.  Notwithstanding Section 10(b) above, in
the event of termination of an Optionee's Continuous Status as an Employee or
Consultant as a result of his or her total and permanent disability (within the
meaning of Section 22(e)(3) of the Code), Optionee may, but only within
twelve (12) months from the date of such termination (but in no event later
than the expiration date of the term of such Option as set forth in the Option
Agreement), exercise the Option to the extent otherwise entitled to exercise it
at the date of such termination.  To the
extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. 

 (d)  Death of Optionee.  In the event of the death of an Optionee
during the period of Continuous Status as an Employee or Consultant, or within
thirty (30) days following the termination of the Optionee's Continuous Status
as an Employee or Consultant, the Option may be exercised, at any time within
twelve (12) months following the date of death (but in no event later than the
expiration date of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee was entitled to exercise the Option at the date of death or, if
earlier, the date of termination of the Continuous Status as an Employee or
Consultant.  To the extent that Optionee
was not entitled to exercise the Option at the date of death or termination, as
the case may be, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate. 

 (e)  Extension of Exercise Period.  Notwithstanding the limitations set forth in
Sections 10(b), (c) and (d) above, the Administrator has full power
and authority to extend the period of time for which any Option granted under
the Plan is to remain exercisable following termination of an Optionee's
Continuous Status as an Employee or Consultant from the limited period set
forth in the written option agreement to such greater period of time as the
Administrator shall deem appropriate; provided, however, that in no event shall
such Option be exercisable after the specified expiration date of the Option
term. 

 (f)  Rule 16b–3.  Options granted to Reporting Persons shall
comply with Rule 16b–3 and shall contain such additional conditions
or restrictions as may be required thereunder to qualify for the maximum
exemption for Plan transactions. 

 (g)  Buyout Provisions.  The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made. 

 11.  Stock Purchase Rights.  

 (a)  Rights to Purchase.  Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. 
After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing of the terms,
conditions and restrictions related to the offer, including the number of
Shares that such person shall be entitled to purchase, the price to be paid
(which price shall not be less than 85% of the Fair Market Value of the Shares
as of the date of the offer), and the time within which such person must accept
such offer, which shall in no event exceed thirty (30) days from the date upon
which the Administrator made the determination to grant the Stock Purchase
Right.  The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by
the Administrator.  Shares purchased
pursuant to the grant of a Stock Purchase Right shall be referred to herein as
"Restricted Stock." 

 (b)  Repurchase Option.  Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
disability).  The purchase price for
Shares repurchased pursuant to the Restricted Stock purchase agreement shall be
the original purchase price paid the purchaser and may be paid by cancellation
of any indebtedness of the Purchaser to the Company.  The repurchase option shall lapse at such rate as the
Administrator may determine. 

 (c)  Other Provisions.  The Restricted Stock purchase agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.  In addition, the provisions of Restricted
Stock purchase agreements need not be the same with respect to each purchaser. 

 (d)  Rights as a Shareholder.  Once the Stock Purchase Right is exercised,
the purchaser shall have the rights equivalent to those of a shareholder, and
shall be a shareholder when his or her purchase is entered upon the records of
the duly authorized transfer agent of the Company.  No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Stock Purchase Right is exercised,
except as provided in Section 13 of the Plan. 

 12.  Stock Withholding to Satisfy Withholding Tax
Obligations.  At the
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph.  When an
Optionee incurs tax liability in connection with an Option or Stock Purchase
Right, which tax liability is subject to tax withholding under applicable tax
laws, and the Optionee is obligated to pay the Company an amount required to be
withheld under applicable tax laws, the Optionee may satisfy the withholding
tax obligation by one or some combination of the following methods: (a) by
cash payment, or (b) out of Optionee's current compensation, (c) if
permitted by the Administrator, in its discretion, by surrendering to the
Company Shares that (I) in the case of Shares previously acquired from the
Company, have been owned by the Optionee for more than six months on the date
of surrender, and (ii) have a fair market value on the date of surrender
equal to or less than Optionee's marginal tax rate times the ordinary income
recognized, or (d) by electing to have the Company withhold from the
Shares to be issued upon exercise of the Option, or the Shares to be issued in
connection with the Stock Purchase Right, if any, that number of Shares having
a fair market value equal to the amount required to be withheld.  For this purpose, the fair market value of
the Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date"). 

          Any
surrender by a Reporting Person of previously owned Shares to satisfy tax
withholding obligations arising upon exercise of this Option must comply with
the applicable provisions of Rule 16b–3. 

          All elections by an Optionee to have
Shares withheld to satisfy tax withholding obligations shall be made in writing
in a form acceptable to the Administrator and shall be subject to the following
restrictions: 

 

          (a)      the
election must be made on or prior to the applicable Tax Date; 

          (b)      once made, the election shall be
irrevocable as to the particular Shares of the Option or Stock Purchase Right
as to which the election is made; and 

          (c)      all
elections shall be subject to the consent or disapproval of the Administrator. 

          In the event the election to have
Shares withheld is made by an Optionee and the Tax Date is deferred under
Section 83 of the Code because no election is filed under Section 83(b) of
the Code, the Optionee shall receive the full number of Shares with respect to
which the Option or Stock Purchase Right is exercised but such Optionee shall
be unconditionally obligated to tender back to the Company the proper number of
Shares on the Tax Date. 

 13.  Adjustments Upon Changes in Capitalization,
Corporate Transactions.  

          (a)  Changes in Capitalization.  Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option or Stock Purchase Right, and the number of shares of
Common Stock that have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or that have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, the maximum number of Shares of Common Stock for which Options
may be granted to any Employee under Section 8 of the Plan and the price per
share of Common Stock covered by each such outstanding Option or Stock Purchase
Right, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination, recapitalization or reclassification
of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration."  Such adjustment
shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive.  Except as
expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option or Stock
Purchase Right. 

          (b)  Corporate Transactions.  In the event of the proposed dissolution or
liquidation of the Company, the Option will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Administrator.  The Administrator may,
in the exercise of its sole discretion in such instances, declare that any
Option shall terminate as of a date fixed by the Administrator and give each
Optionee the right to exercise his or her Option as to all or any part of the
Optioned Stock, including Shares as to which the Option would not otherwise be
exercisable.  In the event of a proposed
sale of all or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, the Option shall be assumed or an
equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Administrator
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to some or all of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable.  If the Administrator makes an Option exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee that the Option shall be exercisable for a period of
thirty (30) days from the date of such notice, and the Option will terminate
upon the expiration of such period. 

 14.  Non–transferability of Options and
Stock Purchase Rights. 
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or
by the laws of descent or distribution; provided, however, that the
Administrator may in its discretion grant transferable Nonstatutory Stock
Options pursuant to option agreements specifying (i) the manner in which
such Nonstatutory Stock Options are transferable and (ii) that any such
transfer shall be subject to the Applicable Laws.  Options and Stock Purchase Rights may be exercised or purchased
during the lifetime of the Optionee or Stock Purchase Rights Holder only by the
Optionee, Stock Purchase Rights Holder or a transferee permitted by this
Section 14. 

 15.  Time of Granting Options and Stock Purchase
Rights.  The date of grant of
an Option or Stock Purchase Right shall, for all purposes, be the date on which
the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other date as is determined by the Board.  Notice of the determination shall be given
to each Employee or Consultant to whom an Option or Stock Purchase Right is so
granted within a reasonable time after the date of such grant. 

 16.  Amendment and Termination of the Plan.  

          (a)  Amendment and Termination.  The Board may amend or terminate the Plan
from time to time in such respects as the Board may deem advisable; provided
that, the following revisions or amendments shall require approval of the
shareholders of the Company in the manner described in Section 20 of the
Plan: 

          (i)       any
increase in the number of Shares subject to the Plan, other than an adjustment
under Section 14 of the Plan; 

          (ii)      any
change in the designation of the class of persons eligible to be granted
Options; or 

          (iii)     any
change in the limitation on grants to employees as described in Section 8
of the Plan or other changes which would require shareholder approval to
qualify options granted hereunder as performance–based compensation under
Section 162(m) of the Code. 

          (b)  Shareholder Approval.  If any amendment requiring shareholder
approval under Section 16(a) of the Plan is made subsequent to the first
registration of any class of equity securities by the Company under Section 12
of the Exchange Act, such shareholder approval shall be solicited as described
in Section 20 of the Plan. 

          (c)  Effect of Amendment or Termination.  Any such amendment or termination of the
Plan shall not affect Options already granted and such Options shall remain in
full force and effect as if this Plan had not been amended or terminated,
unless mutually agreed otherwise between the Optionee and the Board, which
agreement must be in writing and signed by the Optionee and the Company. 

 17.  Conditions Upon Issuance of Shares.  Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of
any Stock Exchange.  As a condition to
the exercise of an Option, the Company may require the person exercising such
Option to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by law. 

 18.  Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.  The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have been obtained. 

 19.  Agreements.  Options and Stock Purchase Rights shall be
evidenced by written agreements in such form as the Administrator shall approve
from time to time. 

 20.  Shareholder Approval.  

          (a)      Continuance
of the Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months before or after the date the Plan is adopted.  Such shareholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law
and the rules of any stock exchange upon which the Shares are listed. 

          (b)      In
the event that the Company registers any class of equity securities pursuant to
Section 12 of the Exchange Act, any required approval of the shareholders
of the Company obtained after such registration shall be solicited
substantially in accordance with Section 14(a) of the Exchange Act and the
rules and regulations promulgated thereunder. 

          (c)      If
any required approval by the shareholders of the Plan itself or of any
amendment thereto is solicited at any time otherwise than in the manner
described in Section 20(b) hereof, then the Company shall, at or prior to
the first annual meeting of shareholders held subsequent to the later of (1)
the first registration of any class of equity securities of the Com– pany
under Section 12 of the Exchange Act or (2) the granting of an Option
hereunder to an officer or director after such registration, do the following: 

          (i)       furnish
in writing to the holders entitled to vote for the Plan substantially the same
information that would be required (if proxies to be voted with respect to
approval or disapproval of the Plan or amendment were then being solicited) by
the rules and regulations in effect under Section 14(a) of the
Exchange Act at the time such information is furnished; and

          (ii)      file
with, or mail for filing to, the Securities and Exchange Commission four copies
of the written information referred to in subsection (i) hereof not later
than the date on which such information is first sent or given to shareholders.

 21.  Information to Optionees.  The Company shall provide to each Optionee,
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
shareholders of the Company.Prepared by MerrillDirect

 

March
19, 2001

Greg
Coleman

Dear
Greg:

On
behalf of Yahoo! Inc., I am pleased to offer you the position of Executive Vice
President, North American Operations reporting to Jeff Mallett, President and
COO.  Your primary responsibilities, the
positions which will report to you, and the committee with respect to which you
will be a member are described in the attached Position Plan Summary.  Your starting salary will be $62,500 per
month ($750,000.00 annually), paid semi-monthly and subject to increase during
an annual review. You will be eligible for an annual bonus of up to $750,000.00
based upon achieving the annual revenue goals for our North American
business;  provided, however, you will
be entitled to a minimum bonus for 2001 of $525,000 (70% of target).
Additionally, you will be eligible to participate in the regular Yahoo! health
insurance benefits and other employee benefit plans established by the company
generally for its employees.  (In
addition to our standard two weeks of vacation in year one, you are eligible to
take one additional week with pay.)

You
will receive a sign-on bonus in the amount of $1,250,000.00 if you start your
employment on or before April 20, 2001 and we are able to announce your
decision to join on or before April 11, 2001. 
This will be payable in the first regular payroll period 30 days after
your employment start date and is subject to applicable tax withholding.  An amount equal to $250,000 of this bonus,
prorated for service completed, will become due and payable to the Company on
your last day of employment if you voluntarily choose to leave the Company for
any reason during the first year of employment, other than as a result of (a) a
material breach of this agreement by the Company,  or (b)  a change in   the position to which you report  if, as a result of such change, you directly
report to a position that does not in turn report directly to the Chief
Executive Officer or if the scope of your responsibilities or your title is diminished  .  

As
a part of the Yahoo! team, we strongly believe that ownership of the Company by
our employees is an important factor to our success.  Therefore, as part of your compensation, management has
recommended that the Board of Directors grant you an option to purchase 300,000
shares of Yahoo! Inc.’s Common Stock under Yahoo! Inc.’s 1995 Stock Option
Plan. We have every expectation that this grant will be officially approved and
priced within two weeks of your start date. 
The exercise price for this option will be the fair market value of
Yahoo! Common Stock on the date of grant as determined by the Board of
Directors. Options under the Yahoo! plan vest as to 1/4 of the shares after one
year of employment, and in equal monthly installments over the 36 following
months.

You
have indicated that you will not move your family to the Bay Area until
sometime in the summer, 2002.  At that
time, assuming we both feel good about your performance and continued
potential, we will provide the following relocation assistance:

A.      Home
Sale/Home Purchase Assistance: We will pay all the required, non-recurring
closing costs on the sale of your current home through our “market value sale”
program.  We will also pay closing costs
on the purchase of a new home in the Bay Area equal to 2% of the purchase price
up to a cap of $40,000.00.

B.       Shipment
of household goods (not to exceed $30,000.00).

C.      Family
travel to destination (reimbursement up to $7,500.00).

D.      A
mortgage subsidy of no less than 3/2/1 to help offset any increase in mortgage
payments in the first three years following your move.  (This program pays 3 percentage points of
interest in year one, 2 points in year two and 1 point in the third year  while providing you the ability to declare
the full interest  payment as a tax
write-off.) 

In
the meantime, the Company will provide you with a two bedroom furnished
Corporate Apartment in the Bay Area for up to 15 months.

If
you voluntarily choose to leave the company for any reason, other than a
material breach of this agreement by the Company, during the first twelve
months following your relocation, a prorated portion of the monies given to you
for relocation expenses will become due and payable to the Company on your last
day of employment (based on 1/12th for each month your termination
precedes 12 months of Yahoo! Inc. service), and by your signature below you
agree that such amount shall be deducted from any compensation payable to you
at that time.

As
an employee of Yahoo!, it is likely that you will become knowledgeable about
confidential and or proprietary information related to the operations, products
and services of the company and its clients. 
To protect the interests of both the company and its clients, all
employees are required to read and sign a PROPRIETARY INFORMATION AND
ASSIGNMENT OF INVENTIONS AGREEMENT prior to beginning employment.  A copy of this agreement is enclosed.  Please sign it and return it along with your
signed copy of this letter.

Please
understand that this letter does not constitute a contract of employment for
any specific period of time, but will create an “employment at will”
relationship that may be terminated at any time by you or Yahoo!, with or
without cause. Your signature at the end of this letter confirms that no
promises or agreements that are contrary to our at-will relationship have been
committed to you during any of your pre-employment discussions with Yahoo!, and
that this letter and the attached Position Plan Summary contain our complete
agreement regarding the terms and conditions of your employment.

You
will be paid your full year bonus of $750,000.00 in lieu of severance in the
unlikely event that your employment is terminated during the first twelve
months of employment so long as (a), in the event of a termination initiated by
the Company, such termination is not related to serious misconduct and (b), in
the event of a termination initiated by you, there is either (i)  a material breach of this agreement by the
Company, or (ii) a change in the 
position to which you report if, as a result of such change, you
directly report to a position that does not in turn report directly to the
Chief Executive Officer or if the scope of your responsibilities or your title
is reduced.

Our
signature on this letter also confirms our mutual agreement to binding
arbitration, as defined under the California Arbitration Act, under the rules
of the American Arbitration Association, should there be any dispute related to
the termination of our employment relationship or the terms of your employment
relationship with Yahoo!.

Please
understand that other than the relocation benefits outlined above, the terms
and conditions outlined in this letter apply to your first year of employment
with Yahoo only.  To accept this offer,
please sign this letter in the space provided below and return it and a signed
Proprietary Agreement to Kai Swavely in the envelope provided no later than
March 16, 2001. A second copy of each document has been provided for you to
keep for your records.  In order for Yahoo!
to comply with the Immigration Reform and Control Act, we ask that you bring
appropriate verification of authorization to work in the United States with you
on your first day of employment.

We
look forward to your joining us and hope that you find your employment with
Yahoo! enjoyable and professionally rewarding.

	
  Very truly yours,

  
	
  /s/ KIRK FROGGATT

  

  

  
	
  Kirk Froggatt
  
	
  Vice President, Human Resources
  

I
accept this offer of employment with Yahoo! Inc. and agree to the terms and
conditions outlined in this letter.

	
  /s/ 
  GREGORY COLEMAN

  

  	 
  	
  3/19/01

  

  
	
  Signature
  	 
  	
  Date
  
	 
  	 
  	 
  
	 
  	 
  	 
  
	

  

  Planned Start Date
  	 
  	 
  
	
  (Contingent upon completion of a
  satisfactory background investigation.)

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