Plaintiffs seek annulment of Yahoo severance plan

vote upon a finding of breach of fiduciary duty is the most appropriate remedy," the motion reads.

Microsoft announced its unsolicited offer to buy Yahoo on Feb. 1 -- a $44.6 billion cash-and-stock deal that offered shareholders a 62 percent premium over Yahoo's stock price the day before. Yahoo's board rejected that offer, saying it undervalued the company, and Microsoft later increased it to $47.5 billion, but Microsoft eventually walked away from the negotiations on May 3 after the two sides failed to agree on a price.

After Microsoft withdrew its offer, several large Yahoo institutional investors publicly criticized Yang and the board for, in their view, not negotiating in good faith and failing to look out for shareholders' best interests.

Yang and other Yahoo executives responded by saying that they were open to negotiating further but that Microsoft unexpectedly walked away without ever putting its last offer in writing.

Microsoft has indicated it is no longer interested in acquiring all of Yahoo, although the companies have acknowledged holding ongoing talks for a more limited deal or partnership.