Exhibit 10.20: Morse Employment
Letter
[Yahoo! Letterhead]
June 5, 2009
Timothy Morse
[address]
Dear Tim:
On behalf of Yahoo! Inc.
(“Yahoo!” or the “Company”), I am pleased
to offer you the position of Chief Financial Officer, reporting to
Yahoo!’s Chief Executive Officer, Carol Bartz. Your
appointment is subject to approval by the Company’s Board of
Directors and your compensation package as outlined herein is
subject to approval of the Compensation Committee of the Board of
Directors (“Compensation Committee”). For purposes of
this letter, your first day of work at Yahoo! will be considered
your “Employment Start Date”.
Base Salary.
Your starting annual base salary
will be $41,666.67 per month ($500,000 annually), less applicable
taxes and withholdings, paid semi-monthly and subject to annual
review.
Executive Incentive
Plan. If your Employment
Start Date is on or before October 1, 2009, you also will be
eligible to participate in the Executive Incentive Plan (EIP), with
a target incentive of 100% of your annual base salary less
applicable taxes, deductions, and withholdings. Target incentives
do not constitute a promise of payment. Your actual EIP payout will
depend on Yahoo! financial performance and management’s
assessment of your individual performance, and it is subject to,
and governed by, the terms and requirements of the EIP document.
Eligibility for participation in the EIP is subject to annual
review.
Sign-On Bonus.
You also will receive a sign-on
bonus of $500,000, less applicable taxes and withholdings, to be
paid within 30 days of your Employment Start Date. If during the
first twelve (12) months following your Employment Start Date
you voluntarily resign from your employment with Yahoo! or your
employment with Yahoo! is terminated by Yahoo! with Cause
1 , then this sign-on bonus will become due and
payable by you to Yahoo! on your last day of employment.
Stock Options.
As a part of the Yahoo! team, we
strongly believe that ownership of the Company by Yahoos is an
important factor to our success. Therefore, as part of your
compensation, management will recommend that the Compensation
Committee grant you an option to purchase 400,000 shares
of
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1
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For purposes of this letter,
“Cause” shall mean termination of your employment with
the Company based upon the occurrence of one or more of the
following which, with respect to clauses (1), (2) and
(3) below, if curable, you have not cured within fourteen
(14) days after you receive written notice from the Company
specifying with reasonable particularity such
occurrence: (1) your refusal or material failure to
perform your job duties and responsibilities (other than by reason
of your serious physical or mental illness, injury or medical
condition), (2) your failure or refusal to comply in any
material respect with material Company policies or lawful
directives, (3) your material breach of any contract or
agreement between you and the Company (including but not limited to
this letter agreement and any Employee Confidentiality and
Assignment of Inventions Agreement or similar agreement between you
and the Company), or your material breach of any statutory duty,
fiduciary duty or any other obligation that you owe to the Company,
(4) your commission of an act of fraud, theft, embezzlement or
other unlawful act against the Company or involving its property or
assets or your engaging in unprofessional, unethical or other
intentional acts that materially discredit the Company or are
materially detrimental to the reputation, character or standing of
the Company, or (5) your indictment or conviction or nolo
contendre or guilty plea with respect to any felony or crime of
moral turpitude. Following notice and cure as provided in the
preceding sentence, upon any additional one-time occurrence of one
or more of the events enumerated in that sentence, the Company may
terminate your employment for Cause without notice and opportunity
to cure. However, should the Company choose to offer you
another opportunity to cure, it shall not be deemed a waiver of its
rights under this provision.
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Yahoo! Inc.’s common stock (the
“Option”). The exercise price for the Option will be
the fair market value of Yahoo! common stock on the date of grant
as determined by the Compensation Committee. The Option will be
subject to the terms and conditions of Yahoo! Inc.’s 1995
Stock Plan, as amended, and the applicable notice of stock option
grant and stock option agreement (which will include the stock
option vesting schedule), and vesting of the Option is contingent
on your continued employment with Yahoo! through each vesting date.
Subject to approval by the Compensation Committee, twenty-five
percent (25%) of the shares subject to the Option will vest on
the first anniversary of your Employment Start Date. Thereafter,
one-eighth of the shares subject to the Option shall vest and
become exercisable every six months, such that the Option will be
fully vested on the fourth anniversary of the Employment Start
Date.
Restricted Stock
Units. In addition,
management will also recommend that the Compensation Committee
grant you an award of 150,000 Restricted Stock Units
(“RSUs”), subject to the terms and conditions of the
Yahoo! Inc. 1995 Stock Plan, as amended, and the applicable
restricted stock unit award agreement. Subject to the approval of
the Compensation Committee, the RSUs will vest on the third
anniversary of the date of grant, provided that you have been
continuously employed with Yahoo! through such date. If, however,
during the first twelve (12) months after your Employment
Start Date your employment with Yahoo! is terminated by Yahoo!
without Cause (as defined above), then 50,000 RSUs will vest (and
the balance shall terminate) as of the date your employment with
Yahoo! terminates, and payment of the vested RSUs will be satisfied
promptly and in no event later than 2 1 / 2
months following the date your
employment with Yahoo! terminates. If your employment with Yahoo!
is terminated by Yahoo! without Cause (as defined above) after the
one (1) year anniversary of your Employment Start Date and
prior to the third anniversary of the grant date of the RSUs, then
you will receive pro-rata accelerated vesting of 4,166.66 RSUs for
each full month worked at Yahoo! after the grant date of the RSUs
(and the balance shall terminate) as of the date your employment
with Yahoo! terminates, and payment of the vested RSUs will be
satisfied promptly and in no event later than 2
1
/ 2 months
following the date your employment with Yahoo! terminates. Any
fractional shares will be rounded down to the nearest whole share.
Following the
