EXPEDIA, INC. RESTRICTED STOCK
UNIT AGREEMENT
This Agreement , dated as of the award date (the
“Award Date”), designated on the Summary of Award
referenced below, as amended as of December 31, 2008 and
amended and restated as of April 8, 2009, between Expedia,
Inc., a Delaware corporation (the “Corporation”), and
Dara Khosrowshahi (the “Eligible Individual”)
designated as receiving an award of restricted stock units (the
“Restricted Stock Units”) by the Compensation/Benefits
Committee of the Board of Directors of the Corporation (or such
other Committee as the Board may from time to time designate) (the
“Committee”).
All capitalized
terms used herein, to the extent not defined, shall have the
meanings set forth in the Corporation’s 2005 Stock and Annual
Incentive Plan (the “Plan”).
1. Award
and Vesting of Restricted Stock Units
(a) Subject
to the provisions of this Agreement and to the provisions of the
Plan, the Corporation hereby grants to the Eligible Individual
800,000 restricted stock units (the “Restricted Stock
Units”) pursuant to Section 7 of the Plan. Reference is
made to the “Summary of Award” that can be found on the
Smith Barney Benefit Access System at www.benefitaccess.com. Your
Summary of Award, which sets forth the number of Restricted Stock
Units granted to you by the Corporation and the Award Date (among
other information), is hereby incorporated by reference into, and
shall be read as part and parcel of, this Agreement.
(b) Subject
to the terms and conditions of this Agreement and the provisions of
the Plan, the Restricted Stock Units shall vest and no longer be
subject to any restriction (such period during which restrictions
apply is the “Restriction Period”) in the event both
(i) one of the two performance goals approved by the Committee
(the “Performance Goals”) and relating to EBITA or the
Corporation’s stock price is achieved and (ii) the OIBA
Target (as defined below) is achieved (collectively, the
“Combined Goals”):
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Percentage of Total Grant
Vesting
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Upon the
attainment by the Corporation of the Combined Goals (as further
referenced below); provided, however, that, at the election of the
Corporation, such vesting shall be conditioned on the Eligible
Individual agreeing to remain employed as the Chief Executive
Officer of the Corporation for an additional two years following
satisfaction of the Combined Goals on no less favorable terms to
the Eligible Individual than the terms of employment as in effect
at the time of such agreement
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75
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%
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On the one year
anniversary of the attainment of the Combined Goals, provided the
Eligible Employee has not voluntarily terminated his employment
with the Corporation and has not been terminated by the Corporation
for Cause
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25
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%
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“OIBA
Target” as used herein means that certain Corporation
operating income before amortization (“OIBA”) target
approved by the Committee with respect to the vesting of Restricted
Stock Units awarded to the Eligible Individual under this
Agreement. The “Modified OIBA Target” as used herein
means that certain OIBA target approved by the Committee with
respect to any fiscal year in which the Eligible Individual’s
employment is terminated by the Company without Cause.
(c) Notwithstanding
the provisions of Paragraph 1(b), if the Eligible Individual incurs
a Termination of Employment by the Corporation without Cause during
a fiscal year in which the Modified OIBA Target is met and prior to
such Termination of Employment one of the Performance Goals has
been met, then 75% of the Restricted Stock Units will vest (and the
Restriction Period shall lapse for such Restricted Stock Units) as
soon as practicable following the determination by the Committee
within sixty (60) days following the end of the applicable
fiscal year that the Modified OIBA Target and one of the
Performance Goals have been met and all remaining unvested
Restricted Stock Units shall be forfeited by the Eligible
Individual. If the Committee determines that either (x) the
Modified OIBA Target has not been met, or (y) both of the
Performance Goals have not been met, then all the Restricted Stock
Units will be forfeited immediately, provided, however, that the
Committee shall have the discretion to waive, in whole or in part,
any or all remaining restrictions with respect to any or all of
such Eligible Individual’s Restricted Stock Units.
(d) Notwithstanding
the provisions of Paragraph 1(b), in the event the Eligible
Individual incurs a Termination of Employment by the Corporation
for Cause, or the Eligible Individual voluntarily incurs a
Termination of Employment within two years after any event or
circumstance that would have been grounds for a Termination of
Employment for Cause, the Eligible Individual’s Restricted
Stock Units (whether or not vested) shall be forfeited and canceled
in their entirety upon such Termination of Employment, and the
Corporation may cause the Eligible Individual, immediately upon
notice from the Corporation, either to return the shares or cash
issued upon settlement of Restricted Stock Units that vested during
the two-year period after the events or circumstances giving rise
to or constituting grounds for such Termination of Employment for
Cause or to pay to the Corporation an amount equal to the aggregate
amount, if any, that the Eligible Individual had previously
realized in respect of any and all shares issued upon settlement of
Restricted Stock Units that vested during the two-year period after
the events or circumstances giving rise to or constituting grounds
for such Termination of Employment for Cause (i.e., the value of
the Restricted Stock Units upon vesting), in each case including
any dividend equivalents or other distributions received in respect
of any such Restricted Stock Units.
(e) In the
event the Eligible Individual incurs a Termination of Employment
during the Restriction Period for any reason other than as set
forth in Paragraph 1(c) or Paragraph 5 (with respect to a
Change of Control), all remaining unvested Restricted Stock Units
shall be forfeited by the Eligible Individual and canceled in their
entirety effective immediately upon such termination.
(f) For
purposes of this Agreement, employment with the Corporation shall
include employment with the Corporation’s Affiliates and its
successors. Nothing in this Agreement or the Plan shall confer upon
the Eligible Individual any right to continue in the employ of the
Corporation or any of its Affiliates or interfere in any way with
the right of the Corporation or any such Affiliates to terminate
the Eligible Individual’s employment at any time.
As soon as
practicable (but in no event later than five business days) after
any Restricted Stock Units have vested and are no longer subject to
the Restriction Period, such Restricted Stock Units shall be
settled. Subject to Paragraph 8 (pertaining to the withholding
of taxes), for each Restricted Stock Unit settled pursuant to this
Paragraph 2, the Corporation shall (i) if the Eligible
Individual is employed within the United States, issue one share of
Common Stock for each vested Restricted Stock Unit and cause to be
delivered to the Eligible Individual one or more unlegended,
freely-transferable stock certificates in respect of such shares
issued upon settlement of the vested Restricted Stock Units or
(ii) if the Eligible Individual is employed outside the United
States, pay, or cause to be paid, to the Eligible Individual an
amount of cash equal to the Fair Market Value of one share of
Common Stock for each vested Restricted Stock Unit settled at such
time. Notwithstanding the foregoing, the Corporation shall be
entitled to hold the shares or cash issuable upon settlement of
Restricted Stock Units that have vested until the Corporation or
the agent selected by the Corporation to manage the Plan under
which the Restricted Stock Units have been issued (the
“Agent”) shall have received from the Eligible
Individual a duly executed Form W-9 or W-8, as
applicable.
3.
Non-Transferability of the
Restricted Stock Units
During the
Restriction Period and until such time as the Restricted Stock
Units are ultimately settled as provided in Paragraph 2 above,
the Restricted Stock Units shall not be transferable by the
Eligible Individual by means of sale, assignment, exchange,
encumbrance, pledge, hedge or otherwise.
4.
Rights as a
Stockholder
Except as
otherwise specifically provided in this Agreement, during the
Restriction Period the Eligible Individual shall not be entitled to
any rights of a stockholder with respect to the Restricted Stock
Units. Notwithstanding the foregoing, if the Corporation declares
and pays dividends on the Common Stock during the Restriction
Period, the Eligible Individual will be credited with additional
amounts for each Restricted Stock Unit equal to the dividend that
would have been paid with respect to such Restricted Stock Unit if
it had been an actual share of Common Stock, which amount shall
remain subject to restrictions (and as determined by the Committee,
may be reinvested in Restricted Stock Units or may be held in kind
as restricted cash or property) and shall vest concurrently with
the vesting of the Restricted Stock Units upon which such dividend
equivalent amounts were paid. Notwithstanding the foregoing,
dividends and distributions other than regular quarterly cash
dividends, if any, may result in an adjustment pursuant to
Paragraph 5, rather than under this
Paragraph 4.
5.
Adjustments in the Event of
Change in Stock; Change in Control
(a) Subject
to the provisions of Paragraph 5(b), in the event of
(i) a stock dividend, stock split, reverse stock
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