Thompson Leaves Yahoo! With No Severance

As many lawyers and corporate governance experts expected, Scott Thompson left Yahoo! (NASDAQ: YHOO) without any severance benefits. It was widely believed that the misleading parts of his resume and the fact that these appeared in SEC documents violated both federal rules and the Yahoo! code of ethics.

In a document filed by with the SEC, Yahoo! reported

Yahoo! and Mr. Thompson agreed to terminate all other agreements between them, including Mr. Thompson’s offer letter, all outstanding but not fully vested equity awards and Yahoo!’s other plans and arrangements for the benefit of employees, with no severance compensation. However, in accordance with the terms of his offer letter, Mr. Thompson retained the make-whole cash bonus previously paid to him under his offer letter and the make-whole restricted stock units that had been granted to him pursuant to his offer letter and that had already vested.

The filing also finalized the agreement between Yahoo! and Third Point, a holder of over 5% of the company’s shares, to add members of Third Point’s board slate:

On May 13, 2012, Yahoo! Inc. (“Yahoo!”) entered into a settlement agreement (the “Settlement Agreement”) with Third Point LLC (“Third Point”), Daniel S. Loeb, Michael J. Wolf, Harry J. Wilson and Jeffrey A. Zucker and certain other affiliates of Third Point (collectively, the “Third Point Group”) to settle the proxy contest pertaining to the election of directors to Yahoo!’s Board of Directors (the “Board”) at Yahoo!’s 2012 annual meeting of stockholders (the “2012 Annual Meeting”).

Douglas A. McIntyre