8-KLeadership Changes

Expedia Group, Inc. 8-K Report, Executive Changes (May 15, 2009)

Filed May 15, 2009For Securities:EXPE

Summary

Expedia, Inc. (EXPE) has filed an 8-K to disclose an Amended and Restated Employment Agreement with its Executive Vice President and Chief Financial Officer, Michael B. Adler. This agreement, effective May 15, 2009, establishes a three-year term and outlines compensation, severance, and restrictive covenants for Mr. Adler. The filing is significant as it details the executive's financial package and the terms under which his employment can be terminated and what benefits would follow. Key aspects for investors include a guaranteed increase in base salary to at least $450,000 starting January 1, 2010, and a target annual bonus of 75% of base salary. The severance package provides considerable protection to Mr. Adler, including continued base salary for up to twelve months (offset by other employment) and accelerated vesting of equity, subject to his compliance with restrictive covenants. These covenants include non-competition and non-solicitation clauses for a significant period post-termination.

Key Highlights

  • 1Expedia entered into an Amended and Restated Employment Agreement with CFO Michael B. Adler, effective May 15, 2009.
  • 2The agreement has a term of three years.
  • 3Mr. Adler's base salary will increase from $375,000 to not less than $450,000 annually, effective January 1, 2010.
  • 4Mr. Adler is eligible for annual discretionary bonuses with a target of 75% of his base salary.
  • 5Significant severance provisions are in place upon termination without Cause or for Good Reason, including continued base salary and accelerated equity vesting.
  • 6Severance payments are subject to offset by other earned income.
  • 7Restrictive covenants include non-competition and non-solicitation for up to 24 months post-termination or the remaining employment term, whichever is longer.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose the terms of an Amended and Restated Employment Agreement between Expedia, Inc. and its Executive Vice President and Chief Financial Officer, Michael B. Adler. This includes details on his compensation, benefits, and severance arrangements.

Mr. Adler's annual base salary will increase from $375,000 to at least $450,000 starting January 1, 2010. He will also be eligible for annual discretionary bonuses, targeting 75% of his base salary.

If Mr. Adler's employment is terminated by the Company without Cause or by him for Good Reason (and subject to a release and compliance with restrictive covenants), he is entitled to continued base salary payments for up to twelve months (offset by other employment), potential pro-rata bonus, accelerated vesting of equity awards that would have vested within twelve months post-termination, and an extended period (18 months) to exercise vested stock options.

Mr. Adler has agreed not to compete with Expedia or solicit its employees and business partners for a period of up to 24 months following termination or the remainder of his employment term, whichever is longer. He also agreed not to use or disclose confidential information.