8-KLeadership ChangesExhibits & Filings

Expedia Group, Inc. 8-K Report, Executive Changes (Mar 9, 2016)

Filed March 9, 2016For Securities:EXPE

Summary

Expedia, Inc. (EXPE) filed a Form 8-K on March 9, 2016, to report on the amendment to the employment agreement for Mark Okerstrom, Executive Vice President of Operations and Chief Financial Officer. The amended agreement extends his term by three years, now expiring March 7, 2019, and outlines severance provisions in case of termination without cause or resignation for good reason. Key to investors is the compensation package associated with this amendment, which includes significant long-term equity awards. These awards consist of both time-based (cliff vesting) and performance-based stock options, with a substantial stock price goal for the performance options. The details of these grants, including vesting schedules and provisions for change in control, provide insight into the company's strategy for retaining key executive talent and aligning their interests with shareholder value.

Key Highlights

  • 1Amended employment agreement for CFO Mark Okerstrom, extending term to March 7, 2019.
  • 2Severance package includes pro rata bonus, equity acceleration (12 months), extended stock option exercise period, and continued base salary/COBRA payments.
  • 3Awarded 225,000 stock options with cliff vesting on the third and fifth anniversaries of grant.
  • 4Awarded 175,000 performance-based stock options contingent on achieving a $180 stock price target.
  • 5Exercise price for all stock options is $105.39, with a seven-year term.
  • 6Equity awards vest fully in case of a Change in Control.
  • 7Restrictive covenants (non-compete and non-solicitation) extend for 18 months post-termination.

Frequently Asked Questions

This 8-K filing primarily serves to announce the amendment to the employment agreement for Expedia's CFO, Mark Okerstrom, and detail new equity awards granted to him. It ensures transparency regarding executive compensation and employment terms.

The main changes are an extension of his employment term by three years to March 7, 2019, and the addition of specific severance benefits in case of termination without cause or resignation for good reason. These benefits include potential pro-rata bonuses, accelerated equity vesting, and continued salary and benefits.

Mr. Okerstrom received two types of stock options: 225,000 'Cliff Vest Options' that vest 50% on the third and fifth anniversaries of the grant date, and 175,000 'Performance Options' that vest upon achieving a stock price target of $180. All options have an exercise price of $105.39 and a seven-year term.

In the event of a Change in Control, as defined by the company's stock plan, all of Mr. Okerstrom's awarded stock options (both Cliff Vest and Performance Options) will vest immediately and in full.