Yahoo CEO Employment Agreement with Terry Semel

Yahoo CEO Employment Agreement with Terry Semel

April 16, 2001

Mr. Terry Semel
c/o T.A.G. Partners LLC
9460 Wilshire Blvd.
Suite 600
Beverly Hills, CA 90212

Dear Mr. Semel:

             On behalf of Yahoo! Inc. (“Yahoo”), I am pleased to offer you employment with Yahoo commencing on April 16, 2001.  You will become the Chief Executive Officer of Yahoo, effective May 1, 2001.  We will also recommend to the Board of Directors of Yahoo (the “Board of Directors”) that you be appointed to serve as a member of the Board of Directors and as the Chairman of the Board of Directors, effective on May 1, 2001.  The terms of your employment are set forth as follows:

1.          Salary.

             Your starting salary will be $25,834 per month ($310,000 annually), paid semi-monthly and subject to discretionary increases through annual reviews.

2.          Duties and Responsibilities.

             Until May 1, 2001 your duties will be to provide strategic planning and advice for Yahoo.  Beginning May 1, 2001, as Chief Executive Officer, you will be the most senior officer of Yahoo and, as Chairman and Chief Executive Officer, you shall have the duties and responsibilities that are customary to such offices and positions in a Delaware corporation, including general supervision, direction, and control of the business and officers of Yahoo, subject to the control of the Board of Directors and its committees (to the extent the Board of Directors has delegated authority to such committees).  You shall have the right to appoint subordinate officers in accordance with the bylaws of Yahoo and Delaware law.  All other executive officers and employees of Yahoo and its subsidiaries shall report directly to you or through such personnel as you shall designate. You shall report directly and solely to the Board of Directors.  You agree to serve without additional remuneration as Chairman and Chief Executive Officer or in such other executive or director capacity as required by local law or statute for one or more direct or indirect subsidiaries of Yahoo as the Board of Directors may from time to time request and as to which you consent (which consent won’t be unreasonably withheld), subject to appropriate authorization by the subsidiary or subsidiaries involved and any limitations under applicable law.

3.          Obligations.

             During the period of your employment under this letter agreement, you shall devote your full business efforts and time to Yahoo.  This obligation, however, shall not preclude you from engaging in appropriate civic, charitable or religious activities or from devoting a reasonable amount of time to private investments or from serving on the boards of directors of companies, including closely held companies which are controlled by you, all of which you have informed Yahoo in writing prior to the execution of this letter agreement, and with respect to which Yahoo has agreed, as long as these activities or services do not materially interfere or conflict with your responsibilities to, or your ability to perform your duties of employment by, Yahoo under this letter agreement.  You agree not to accept a position on any other board of directors of a for-profit entity unless approved in advance by the Board of Directors.

4.          Stock Options.

             (a)         Initial Grants.  As part of your compensation, effective immediately following and contingent upon the full execution and delivery of this letter agreement and upon effectiveness of your employment with Yahoo, the Compensation Committee of the Board of Directors has initially granted you a total of four stock options to purchase an aggregate of 10 million shares of Yahoo’s Common Stock under Yahoo’s 1995 Stock Option Plan, as amended, (the “Plan”) and pursuant to the terms of the stock option agreement for such options (“Stock Option Agreement”) as follows:

The first option will become exercisable as to 2.5 million shares on the first anniversary of the date of grant.  Thereafter, the options on the remaining 7.5 million shares will become exercisable in equal monthly installments (of 208,333 shares) in order of exercise price, beginning with the lowest exercise price and continuing until all four options have become fully exercisable.  Accordingly, as of the second anniversary of the date of grant, the first option will be fully exercisable; the second option will become fully exercisable in equal monthly installments during the third year; and the third and fourth options will become exercisable during the fourth year.   The Stock Option Agreement for the options described above will provide that such options (to the extent vested and exercisable) may be exercised for a period of 3 years after the date of any termination of your employment, but in no event later than the 10-year expiration dates of such options.

             (b)        Subsequent Grants.  In addition to the initial grant of options described above, you will be eligible for annual grants to purchase Yahoo Common Stock as determined by the Compensation Committee of the Board of Directors.

5.          Benefits.

             Additionally, you will be eligible to participate in the regular Yahoo health insurance benefits, vacation, and other employee benefit plans, programs and policies established by Yahoo generally for its employees or senior management.

6.          Relocation Expenses.

             You will use all reasonable efforts to establish your principal residence in the San Francisco Bay Area within 6 months after you have accepted this offer, but in no event will you establish such principal residence later than 9 months from the date of this letter agreement.  Yahoo will pay or reimburse you for all expenses reasonably incurred by you in connection with the relocation of your residence and your family to the San Francisco Bay Area including, for example, the cost of packing and moving household goods, traveling expenses, and interim living expenses during a transition period in an amount not to exceed $50,000.

7.          Business Expenses.