Summary
Expedia, Inc. (EXPE) filed a Form 8-K on December 20, 2005, to report the adoption and ratification of the Expedia Executive Deferred Compensation Plan, effective August 9, 2005. This plan allows a select group of management and highly compensated employees to defer a portion of their cash bonuses, up to 90%. The deferred amounts are credited to individual accounts and are subject to investment gains or losses based on employee-selected investment alternatives. Distributions of deferred compensation, referred to as Plan Benefits, will be paid to participants on dates they elect, generally no sooner than three years after deferral, upon termination of employment, or upon reaching age 65. There are provisions for earlier payment in the event of an "unforeseen emergency" or a change in control of the Company. Benefits will be paid as a lump sum or in installments over 10 or 15 years, with beneficiaries receiving any remaining amounts upon the participant's death. Importantly, these Plan Benefits are unsecured general obligations of Expedia, ranking pari passu with other unsecured and unsubordinated indebtedness.
Key Highlights
- 1Expedia established an Executive Deferred Compensation Plan effective August 9, 2005.
- 2The plan allows eligible employees to defer up to 90% of their cash bonuses.
- 3Deferred amounts will be invested and subject to market performance.
- 4Payment of benefits can be elected for specific dates, termination of employment, or retirement at age 65.
- 5Early distribution is possible due to unforeseen emergencies or a change in control.
- 6Plan benefits are unsecured general obligations of Expedia, ranking with other unsubordinated debt.
- 7The company retains the right to amend or terminate the plan at any time.