Exhibit 10.6
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(“Agreement”), dated as of January 7, 2008 (the
“Effective Date”), is entered into by and between
Douglas R. Lebda (“Employee”) and IAC/InterActiveCorp
(“IAC” or the “Company”). All
capitalized terms used herein without definition shall have the
meaning assigned to them in the Prior Agreement (as defined
below).
WHEREAS, Employee is currently
serving as President and Chief Operating Officer of the
Company;
WHEREAS, the Company has announced a
plan to separate into five publicly traded companies (the
“Spin-Offs”), one of which is intended to comprise the
businesses operated within the Company’s LendingTree and Real
Estate financial reporting segments, which currently include
LendingTree, RealEstate.com, Domania, GetSmart, Home Loan Center
and iNest (collectively, “LendingTree”);
WHEREAS, the Company wishes, in
anticipation of the Spin-Off of LendingTree (the “LT
Spin-Off”), to appoint Employee to the position of Chairman
and Chief Executive Officer of LendingTree, in addition to his
continuing in his current position as President and Chief Operating
Officer of the Company for a transitional period, and Employee is
willing to commit himself to continue to serve the Company and its
subsidiaries and affiliates, on the terms and conditions herein
provided;
WHEREAS, Employee, the Company and
LendingTree are parties to an Employment Agreement (the
“Prior Agreement”), dated as of December 14, 2005,
which generally became effective as of the effective date (as that
term is defined in the Prior Agreement), which the parties intend
will be superseded hereby;
WHEREAS, in order to effect the
foregoing, the Company and Employee wish to enter into an
employment agreement on the terms and conditions set forth
below;
NOW, THEREFORE, in consideration of
the mutual agreements hereinafter set forth, Employee and the
Company have agreed and do hereby agree as follows:
1A.
EMPLOYMENT
. The Company agrees to employ
Employee as Chairman and Chief Executive Officer of LendingTree as
of the Effective Date and Employee accepts and agrees to such
employment; provided that it is intended that this position be held
at the parent entity operating the LendingTree businesses upon
closing of the LT Spin-Off (the “LT Parent”).
During Employee’s employment with the Company, Employee shall
perform all services and acts necessary or advisable to fulfill the
duties and responsibilities as are commensurate and consistent with
Employee’s position and shall render such services on the
terms set forth herein. During Employee’s employment
with the Company prior to the LT Spin-Off, Employee shall report to
the Chief Executive Officer of the Company and subsequent to the LT
Spin-Off, Employee shall report to the Board of Directors of LT
Parent (in each case, hereinafter referred to as the
“Reporting Officer”). Employee shall have such
powers and duties with respect to the
Company as may reasonably be assigned to
Employee by the Reporting Officer, to the extent consistent with
Employee’s position and status. Employee agrees to
devote all of Employee’s working time, attention and efforts
to the Company and to perform the duties of Employee’s
position in accordance with the Company’s policies as in
effect from time to time. Notwithstanding the foregoing,
Employee shall remain as President and Chief Operating Officer of
the Company until the earlier of the LT Spin-Off or such date as is
determined by the Chief Executive Officer of IAC.
Notwithstanding anything to the
contrary above, Employee may serve as a corporate board member for
Eastman Kodak and another entity previously identified to IAC
(collectively, the “Current Boards”) and such other
organizations (not to exceed four (4) in the aggregate) as are
approved in advance by the Reporting Officer, provided said service
does not (a) interfere with Employee’s ability to
perform his duties for the Company as contemplated hereunder, and
(b) compete with, or present an actual or apparent conflict of
interest for, the Company or LendingTree, which shall be determined
by the General Counsel of IAC in the case of IAC and the Board of
Directors of LendingTree in the case of LendingTree, in each case,
in his (or its) sole, good faith judgment. IAC acknowledges
that as of the Effective Date, Employee is serving, or has agreed
to serve, as a corporate board member on the Current Boards, and
that IAC will only claim that clause (a) or (b) of the
preceding sentence is implicated if there are changed circumstances
after the Effective Date and prior to the LT Spin-Off; provided
that the requirement for changed circumstances after the Effective
Date shall not be a prerequisite for the Board of Directors of LT
Parent to claim that circumstances meeting clause (a) or
(b) of the preceding sentence have been met.
2A.
TERM OF AGREEMENT
. The term
(“Term”) of this Agreement shall commence on the
Effective Date and shall continue through the fifth anniversary of
the Effective Date, unless sooner terminated in accordance with the
provisions of Section 1 of the Standard Terms and Conditions
attached hereto; provided , that certain terms and
conditions herein may specify a greater period of
effectiveness. Employee and the Company will enter into good
faith negotiations to extend the Term no later than six months
prior to the end of the Term, provided , that Employee has
provided written notice to the Company between eight and six months
prior to the end of the Term which sets forth his interest in
entering into such negotiations.
3A.
COMPENSATION
.
(a)
BASE
SALARY . During the Term, the
Company shall pay Employee an annual base salary of $750,000 (the
“Base Salary”), payable in equal biweekly installments
or in such other installments as may be in accordance with the
Company’s payroll practice as in effect from time to
time. The Base Salary shall be reviewed by the Company, if
requested by Employee in writing, no less frequently than annually
in a manner consistent with similarly situated executives of the
Company and may be increased but not decreased. For all
purposes under this Agreement, the term “Base Salary”
shall refer to Base Salary as in effect from time to
time.
(b)
DISCRETIONARY
BONUS . During the Term,
Employee shall be eligible to receive discretionary annual bonuses
in a manner consistent with similarly situated executives of the
Company.
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(c)
EQUITY
COMPENSATION .
(i)
Grant of
LendingTree Equity Incentives . At the time of the
LT Spin-Off (which shall be the grant, or transfer, date), Employee
shall be granted the following equity awards, with the vesting of
each of the awards dependent on the continued service of Employee
through the vesting term:
(A)
Restricted stock
of the LT Parent (“LT Restricted Stock”) in an amount
equal to 2% of the fully diluted common equity of LT Parent
immediately after the consummation of the LT Spin-Off (after giving
effect to the grant of LT Restricted Stock and the LT Options (as
defined below), but not taking into account any common units of
LendingTree, LLC outstanding under the Shares Agreement immediately
after the consummation of the LT Spin-Off (whether held by Employee
or others)) (the “Diluted LT Common Shares”). The
LT Restricted Stock will vest in equal annual installments on the
first five anniversaries of the Effective Date; provided
that no vesting date may occur prior to the closing of the LT
Spin-Off. The LT Restricted Stock will be governed by a new
LendingTree stock plan to be established by the LT Parent Board of
Directors (or a committee thereof) (the “LT Stock
Plan”) and a related agreement. In the event of any
conflict or ambiguity between this Agreement and the LT Stock Plan
or agreement, this Agreement shall control. For purposes of
clarity, Diluted LT Common Shares will include, without limitation,
any shares in LT Parent that Employee receives in the LT Spin-Off
in respect of his IAC shares (i) held as of the Effective Date
which were received in exchange for 25% of his LendingTree
management equity shares (ii) to be received in exchange for
another 25% of his LendingTree management equity shares held as of
the Effective Date.
(B)
Four separate
awards of stock options (the “LT Options”), each award
giving Employee the right to acquire 2-1/2% of the Diluted LT
Common Shares, with per share exercise prices for each award
calculated as follows:
(1)
First Award - $250,000,000 divided
by number of Diluted LT Common Shares;
(2)
Second Award - $300,000,000
divided by number of Diluted LT Common Shares;
(3)
Third Award - $400,000,000 divided
by number of Diluted LT Common Shares; and
(4)
Fourth Award - $450,000,000 divided
by number of Diluted LT Common Shares.
Notwithstanding the foregoing, if
any calculation above results in a per share exercise price that is
lower than the initial trading price of Parent Common Stock
immediately following the LT Spin-Off (the “Initial LT
Price”), such exercise price(s) shall be equal to the
Initial LT Price and the per share exercise price of the Fourth
Award shall be adjusted by reducing the $450,000,000 in the
calculation under (B)(4) above by $1.00 for each
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dollar that the Initial LT Price
multiplied by the Diluted LT Common Shares exceeds
$250,000,000. The LT Options will be governed by the LT Stock
Plan and a related agreement and shall each vest in full on the
fifth anniversary of the Effective Date. In the event of any
conflict or ambiguity between this Agreement and the LT Stock Plan
or agreement, this Agreement shall control.
(ii)
The
Shares .
Section 3(c)(i) of the Prior Agreement shall remain in
full force and effect, except that the shares of Exchange Stock
shall vest in full and the Target Shares shall be exchanged for
300,000 shares of IAC Common Stock, and all other provisions in the
Prior Agreement relating to the Exchange Stock and the Target
Shares shall no longer be in effect (A) immediately prior to
the LT Spin-Off, provided Employee remains employed by the Company
at such time, (B) if earlier than (A), immediately prior to
the Company’s disposition (either through spin-off or other
means) of the last of its Ticketing, HSN and Interval businesses,
provided that all three of such businesses have been so disposed of
(such third disposition, the “Threshold Disposition”),
provided Employee remains employed by the Company at such time,
(C) upon Employee’s termination of employment in
accordance with either Section 3A(e) of the Agreement or
Section 1(g) of the Standard Terms and Conditions
attached hereto, or (D) upon any Qualifying Termination (as
defined in Section 1(d) of the Standard Terms and
Conditions).
(iii)
Treatment of
IAC Equity Awards . All IAC restricted
stock units held by Employee on the Effective Date shall vest, to
the extent not previously vested, with Growth Shares granted in
February 2007 vesting at the target level,
(A) immediately prior to the closing of the LT Spin-Off,
provided Employee remains employed by the Company at such time,
(B) if earlier than (A), immediately prior to the closing of
the Threshold Disposition, provided Employee remains employed by
the Company at such time, (C) upon Employee’s
termination of employment in accordance with either
Section 3A(e) of the Agreement or
Section 1(g) of the Standard Terms and Conditions
attached hereto, or (D) upon any Qualifying
Termination.
(d)
BENEFITS
. During
the Term, Employee shall be eligible to participate in any welfare,
health, life insurance, pension benefit and incentive plans,
programs, policies and practices as may be adopted from time to
time by the Company on the same basis as that provided to similarly
situated employees of the Company generally. Without limiting
the generality of the foregoing, Employee shall be eligible for the
following benefits:
(i)
Reimbursement
for Business Expenses . During the Term, the
Company shall reimburse Employee for all reasonable and necessary
expenses incurred by Employee in performing Employee’s duties
for the Company, on the same basis as similarly situated employees
of the Company generally and in accordance with the Company’s
policies as in effect from time to time.
(ii)
Vacation
. During
the Term, Employee shall be eligible for paid vacation in
accordance with the plans, policies, programs and practices of the
Company applicable to similarly situated employees of the Company
generally. Any accrued vacation under the Company’s
plans, policies, programs and practices shall be rolled over and
continue to be available to Employee upon his becoming subject to
LendingTree’s plans, policies, programs and practices
regarding vacation.
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(iii)
Payment of
and/or Reimbursement for Certain Relocation Expenses
. The
Company shall pay on Executive’s behalf (or reimburse
Executive for) actual, reasonable and documented expenses relating
to his relocation to Charlotte, North Carolina, if such occurs, up
to an aggregate dollar amount of $400,000 (including tax
gross-ups), on the same basis as similarly situated employees and
in accordance with Company policy (the “Relocation
Expenses”). As required by Company policy and as a
condition to the payment of and/or reimbursement the Relocation
Expenses, Executive agrees to repay the Company for 100%, 75%, 50%
and 25% of such expenses upon a termination of Executive’s
employment for Cause (as defined in Section 1(c) of the
Standard Terms and Conditions) or if Executive voluntarily
terminates his employment with the Company (except for Good Reason
as defined in accordance with the provisions of
Section 1(d) of the Standard Terms and Conditions or
termination pursuant to Section 1(g) of the Standard
Terms and Conditions) during months 0 through 4, 5 through 9, 10
through 14 and 15 through 18, respectively, of the
Term.
(e)
SALE OF
LENDINGTREE . In the event that
during the Term and prior to the LT Spin-Off, the Company sells a
controlling interest in LendingTree (i.e., a majority of the
outstanding voting power over or substantially all of the assets of
the LendingTree businesses), Employee shall have the right to
terminate his employment with the Company within thirty days of
notice of such sale, and upon the later of such termination and the
closing of such sale, the Company shall pay Employee an amount
equal to 1% of the consideration received by the Company. The
payment shall be in the same form as the consideration received by
the Company; provided that the Company may, at its option,
elect to pay Employee entirely in cash in respect of the 1%
interest. If Employee exercises his termination right under
this Section 3A(e), subject to Employee’s execution and
non-revocation of a general release of the Company and its
affiliates substantially in the form attached hereto as
Exhibit A and Employee’s compliance with Sections
2(a) through 2(e), upon payment by the Company of the Accrued
Obligations, payment to Employee of the 1% of the consideration
described above in this section and the vesting of equity as
provided in Sections 3A(c)(ii) and (iii), the Company shall
have no further obligations to Employee hereunder.
(f)
INVESTOR IN
LENDINGTREE . In the event that
during the Term and prior to the LT Spin-Off a third party makes a
minority investment in Lending Tree, the Company shall provide
notice to Employee of the intended investment along with the terms
and conditions of such investment. Within ten (10) days
of such notice, Employee may, by written notice to the Company,
elect to co-invest in LendingTree for up to 5% of the Lending Tree
equity (plus up to an additional 5% with the consent of the
third-party investor) on the same economic terms as the other
investor, and with other terms reasonable and customary for a
minority investment of this nature. Notwithstanding the
foregoing, if all or a portion of the consideration to be delivered
by the third party for its investment in LendingTree is not in cash
or marketable securities, whether it be unmarketable securities,
other property, or contractual commitments, the Company shall value
such consideration in good faith and adjust the purchase price for
purposes of determining the amount the Employee will pay for his
co-investment.
4A.
NOTICES . All notices and other communications
under this Agreement shall be in writing and shall be given by
first-class mail, certified or registered with return receipt
requested or hand delivery acknowledged in writing by the recipient
personally, and shall be deemed to
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have been duly given three days after mailing or
immediately upon duly acknowledged hand delivery, as applicable, to
the respective persons named below:
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If to the Company:
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IAC/InterActiveCorp
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555 West 18 th Street
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New York, NY 10011
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Attention: General Counsel
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Or, if after the LT Spin-Off, then
to the General Counsel of LT Parent.
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If to Employee:
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At the most recent address on file at the
Company.
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Either party may change such party’s
address for notices by notice duly given pursuant
hereto.
5A.
GOVERNING LAW;
JURISDICTION . This
Agreement and the legal relations thus created between the parties
hereto shall be governed by and construed under and in accordance
with the laws of the State of Delaware without reference to the
principles of conflicts of laws. Any and all disputes between
the parties which may arise pursuant to this Agreement will be
heard and determined solely before an appropriate federal court in
the State of New York, or, if not maintainable therein, then in an
appropriate New York state court. The parties acknowledge
that such courts have jurisdiction to interpret and enforce the
provisions of this Agreement, and the parties consent to, and waive
any and all objections that they may have as to, personal
jurisdiction and/or venue in such courts.
6A.
COUNTERPARTS
. This Agreement may be
executed in several counterparts, each of which shall be deemed to
be an original but all of which together will constitute one and
the same instrument. Employee expressly understands and
acknowledges that the Standard Terms and Conditions attached hereto
are incorporated herein by reference, deemed a part of this
Agreement and are binding and enforceable provisions of this
Agreement. References to “this Agreement” or the
use of the term “hereof” shall refer to this Agreement
and the Standard Terms and Conditions attached hereto, taken as a
whole.
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IN WITNESS WHEREOF, the Company has
caused this Agreement to be executed and delivered by its duly
authorized officer and Employee has executed and delivered this
Agreement as of the date set forth above.
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IAC/INTERACTIVECORP
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By: /s/ Greg Blatt
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Name: Greg Blatt
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Title:
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By: /s/ Douglas R. Lebda
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Name: Douglas R. Lebda
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Title:
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STANDARD TERMS AND
CONDITIONS
1.
TERMINATION OF
EMPLOYEE’S EMPLOYMENT .
(a)
DEATH . Upon termination of
Employee’s employment prior to the expiration of the Term by
reason of Employee’s death, the Company shall pay
Employee’s designated beneficiary or beneficiaries, within 30
days of Employee’s death in a lump sum in cash,
(i) Employee’s Base Salary from the date of
Employee’s death through the end of the month in which
Employee’s death occurs and (ii) any Accrued Obligations
(as defined in paragraph 1(f) below).
(b)
DISABILITY
. Upon
termination of Employee’s employment prior to expiration of
the Term by reason of Employee’s Disability, the Company
shall pay Employee, within 30 days of such termination in a lump
sum in cash, (i) Employee’s Base Salary from the date of
Employee’s termination of employment due to Disability
through the end of the month in which such termination occurs,
offset by any amounts payable to Employee under any disability
insurance plan or policy provided by the Company and (ii) any
Accrued Obligations (as defined in paragraph
1(f) below). “Disability” shall mean a
condition, resulting from bodily injury or disease, that renders,
and for a six consecutive month period has rendered, Employee
unable to perform substantially the duties pertaining to his
employment with the Company. A return to work of less than 14
consecutive days will not be considered an interruption in
Employee’s six consecutive months of disability.
Disability will be determined by the Company on the basis of
medical evidence satisfactory to the Company.
(c)
TERMINATION
FOR CAUSE; RESIGNATION BY EMPLOYEE WITHOUT GOOD REASON
. The
Company may terminate Employee’s employment under this
Agreement with or without Cause at any time. Upon termination
of Employee’s employment prior to expiration of the Term by
the Company for Cause or upon Employee’s resignation without
Good Reason, this Agreement shall terminate without further
obligation by the Company, except for the payment of any
Accru
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