EXHIBIT 10.15
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of February 7, 2002
is entered into by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Employee") and Expedia,
Inc., a Washington corporation (the "Company").
WHEREAS, Employee is currently serving as the Chief Financial Officer
of the Company;
WHEREAS, USA Networks, Inc. ("USAi"), the Company, Taipei, Inc., and
Microsoft Corporation have entered into an Agreement and Plan of
Recapitalization and Merger dated as of July 15, 2001 as amended August 21, 2001
(the "Transaction Agreement"), which contemplates the merger of the Company with
and into Taipei, Inc. to be effective as of the Effective Time (as defined in
the Transaction Agreement);
WHEREAS, the Board of Directors of the Company (the "Board") desires
to provide for the employment of Employee from and after the date upon which the
Effective Time occurs (the "Effective Date"), and Employee is willing to commit
himself to serve the Company and its subsidiaries and affiliates, on the terms
and conditions herein provided;
WHEREAS, the Company and Employee are parties to a Term Sheet dated as
of July 15, 2001 as amended as of August 22, 2001 (the "Term Sheet"), that
contemplates the execution by and between the parties prior to the Effective
Time of a long-form employment agreement consistent with the terms thereof;
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 continue to employ Employee as Senior
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Vice President, Chief Financial Officer of the Company, commencing upon the
Effective Date, and Employee accepts and agrees to such employment. 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, Employee shall report directly and exclusively to the Company's Chief
Executive Officer. Employee shall have such powers and duties with respect to
the Company as may reasonably be assigned to Employee by the Company's Chief
Executive 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. Employee's principal
place of employment shall be the Company's offices located in the Seattle,
Washington metropolitan area.
2A. TERM OF AGREEMENT. The term ("Term") of this Agreement shall commence upon
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the Effective Date and continue for a period of three years, unless sooner
terminated in accordance with the provisions of Section 1 of the Standard Terms
and Conditions attached hereto. Effective as of the date hereof, this Agreement
shall replace and supercede the Term Sheet, and the Term Sheet shall be of no
further force and effect.
3A. COMPENSATION.
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(a) BASE SALARY. During the Term, the Company shall pay Employee an
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annual base salary of $175,000 (the "Base Salary"), payable in equal biweekly
installments or in accordance with the Company's payroll practice as in effect
from time to time. For all purposes under this Agreement, the term "Base Salary"
shall refer to Base Salary as in effect from time to time.
(b) BONUS. During the Term, Employee shall be eligible to receive an
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annual bonus equal to 100% of his Base Salary, payable 50% in cash and 50% in
options to purchase shares of the Company's common stock, par value $.01 per
share (the "Common Stock") under a USAi company-wide policy in a manner
consistent with similarly situated executives of USAi and its subsidiaries,
based on the achievement of agreed-upon Company budget goals.
(c) EQUITY AWARDS. (i) In consideration of Employee's entering into this
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Agreement and as an inducement to continue in the employ of the Company,
Employee shall be granted on the Effective Date under the Company's 2001 Stock
Option Plan a non-qualified stock option (the "Option") to purchase 50,000
shares of the Company's Common Stock, subject to the approval of the
Compensation Committee of the Board (the "Compensation Committee"). The exercise
price per share of the Option shall be the closing sales price of the Common
Stock (or the closing bid, if no sales are reported) on the NASDAQ Stock Market
on the last market trading day prior to the date of grant. Such Option shall
vest and become exercisable in four equal installments on each of the first,
second, third and fourth anniversaries of the date of grant. The Option shall
have a scheduled ten-year term.
(ii) The Company shall grant to Employee on the Effective Date 10,000
restricted shares (the "Restricted Stock Grant") of the Company's Common Stock.
All restrictions with respect to the Restricted Stock Grant shall lapse on the
third anniversary of the Effective Date, provided that Employee remains in the
employ of the Company through such date.
(iii) Upon a Change in Control of the Company, all Company options and
other Company equity compensation granted to Employee on or prior to August 2,
2001 shall vest immediately, and all options shall remain exercisable for one
year following the Change in Control notwithstanding any subsequent termination
of employment which otherwise would have provided for a shorter exercise period
following termination of Employee's employment.
(iv) Except as specifically set forth herein, each of the Option and
the Restricted Stock Grant will be governed by the applicable plan under which
each grant is made and the award agreement relating thereto.
For purposes of this Agreement, a "Change in Control" of the Company shall
mean the first to occur of any of the following events:
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(A) The acquisition by any individual entity or group, within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act, other than USAi,
▇▇▇▇▇ ▇▇▇▇▇▇, Liberty Media Corporation, Vivendi Universal S.A. and
their respective affiliates (a "Person"), directly or indirectly, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of equity securities of the Company
representing more than 50% of the voting power of the then outstanding
equity securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (i), the
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following acquisitions shall not constitute a Change in Control: (1)
any acquisition by the Company, (2) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (3) any acquisition
by any corporation pursuant to a transaction which complies with
clauses (1), (2) and (3) of subsection (C); or
(B) Individuals who, immediately following the Effective Date, constitute
the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any
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individual becoming a director subsequent to such date, whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or
(C) The consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the
Company or the purchase of assets or stock of another entity (a
"Business Combination"), in each case, unless immediately following
such Business Combination, (1) all or substantially all of the
individuals and entities who were the beneficial owners of the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then outstanding combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportion as their ownership
immediately prior to such Business Combination of the Outstanding
Company Voting Securities, (2) no Person (excluding USAi, ▇▇▇▇▇
▇▇▇▇▇▇, Liberty Media Corporation, Vivendi Universal S.A. and their
affiliates, any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, more than a majority of the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership of the
Company existed prior to the Business
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Combination and (3) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the initial
agreement, or action of the Board, providing for such Business
Combination; or
(D) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company; or
(E) A "Change in Control" of USAi (as defined under USAi's 2000 Stock and
Annual Incentive Plan, as amended from time to time); or
(F) Occurrence of the events specified as a Change in Control under
Section 1(c) of the Standard Terms and Conditions.
Notwithstanding paragraphs (A) through (E) above, in no event shall a Change in
Control occur under paragraphs (A) through (E) above (i) if USAi (or ▇▇▇▇▇
▇▇▇▇▇▇) maintains a direct or indirect Controlling Interest in the Company or in
an entity that maintains a Controlling Interest in the Company, or (ii) as a
result of Liberty Media Corporation or Vivendi Universal S.A. obtaining a direct
or indirect Controlling Interest in USAi (a "Liberty/Vivendi Event"). A
"Controlling Interest" in an entity shall be defined as (A) beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of (i)
more than 50% of the outstanding equity securities of the entity or (ii) equity
securities representing more than 50% of the voting power of the outstanding
equity securities of the entity or (B) voting control of more than 50% of the
voting power of the entity
(d) BENEFITS. From the Effective Date through the date of termination of
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Employee's employment with the Company for any reason, except as specifically
provided herein, Employee shall be entitled to participate in 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 executives of the Company and USAi and
its subsidiaries, provided that such participation shall not duplicate any of
the compensation and benefits specifically provided herein. Without limiting the
generality of the foregoing, Employee shall be entitled to the following
benefits:
(i) Reimbursement for Business Expenses. During the Term, the
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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 executives of the
Company and in accordance with the Company's policies as in effect
from time to time.
(ii) Vacation. During the Term, Employee shall be entitled to a
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number of weeks of paid vacation per year equal to those provided to
similarly situated executives of USAi and its subsidiaries, in
accordance with the plans, policies, programs and practices of the
Company applicable to similarly situated executives of the Company
generally.
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4A. NOTICES. All notices and other communications under this Agreement
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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 have been duly given
three days after mailing or immediately upon duly acknowledged hand delivery, as
applicable, to the respective persons named below:
If to USAi: USA Networks, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Company: Expedia, Inc.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
With a copy to
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to Employee: At the most recent address of Employee
on record at the Company
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
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thus created between the parties hereto shall be governed by and construed under
and in accordance
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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 Delaware, or, if not maintainable therein, then in
an appropriate Delaware 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
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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.
7A. TERMINATION OF PRIOR AGREEMENTS. Except as specifically provided otherwise
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herein, this Agreement constitutes the entire agreement between the parties, and
as of the Effective Date, terminates and supersedes any and all prior agreements
and understandings (whether written or oral) between the parties with respect to
the subject matter of this Agreement and, as of the date hereof, this Agreement
shall replace and supercede the Term Sheet. Employee acknowledges and agrees
that neither the Company nor anyone acting on its behalf has made, and is not
making, and in executing this Agreement, the Employee has not relied upon, any
representations, promises or inducements except to the extent the same is
expressly set forth in this Agreement. Employee hereby represents and warrants
that by entering into this Agreement, Employee will not rescind or otherwise
breach any agreement or other legal obligation with any other person or entity.
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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 on February 7, 2002.
EXPEDIA, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President, Human
Resources
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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STANDARD TERMS AND CONDITIONS
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1. TERMINATION OF EMPLOYEE'S EMPLOYMENT.
(a) DEATH. In the event Employee's employment hereunder is terminated by
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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, Employee's Base Salary from the date of Employee's death through the
end of the month in which Employee's death occurs and any Accrued Obligations
(as defined in paragraph 1(f) below). In addition, Employee's beneficiary or
beneficiaries shall be entitled to amounts that are vested benefits or that
Employee is otherwise entitled to receive under any plan of, or any other
contract or agreement with, the Company at Employee's death in accordance with
the terms of such plan, contract or agreement, as such terms may be amended from
time to time, as such terms may be amended from time to time.
(b) DISABILITY. If, as a result of Employee's incapacity due to physical
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or mental illness ("Disability"), Employee shall have been absent from the
full-time performance of Employee's duties with the Company for a period of four
consecutive months and, within 30 days after written notice is provided to
Employee by the Company (in accordance with Section 4A hereof), Employee shall
not have returned to the full-time performance of Employee's duties, Employee's
employment under this Agreement may be terminated by the Company for Disability.
During any period prior to such termination during which Employee is absent from
the full-time performance of Employee's duties with the Company due to
Disability, the Company shall continue to pay Employee's Base Salary at the rate
in effect at the commencement of such period of Disability, offset by any
amounts payable to Employee under any disability insurance plan or policy
provided by the Company. Upon termination of Employee's employment due to
Disability, the Company shall pay Employee within 30 days of such termination
(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 of
employment occurs in a lump sum in cash, offset by any amounts payable to
Employee under any disability insurance plan or policy provided by the Company
with respect to such month; and (ii) any Accrued Obligations (as defined in
paragraph 1(f) below). In addition, Employee or Employee's beneficiary or
beneficiaries shall be entitled to amounts that are vested benefits or that
Employee is otherwise entitled to receive under any plan of, or any other
contract or agreement with, the Company at Employee's termination of employment
due to Disability in accordance with the terms of such plan, contract or
agreement, as such terms may be amended from time to time, as such terms may be
amended from time to time.
(c) TERMINATION FOR CAUSE; RESIGNATION BY EMPLOYEE WITHOUT GOOD REASON.
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The Company may terminate Employee's employment under this Agreement for Cause
at any time prior to the expiration of the Term, and Employee may resign without
Good Reason under this Agreement at any time prior to the expiration of the
Term. As used herein, "Cause" shall mean: (i) the plea of guilty or nolo
contendere to, or conviction for, the commission of a felony offense by
Employee; provided, however, that after indictment, the Company may suspend
Employee from the rendition of services, but without limiting or modifying in
any other way the Company's obligations under this Agreement; (ii) a material
breach by Employee of a fiduciary duty owed to the Company; (iii) a material
breach by Employee of any of the covenants made by Employee in Section 2 below;
or (iv) the willful or gross neglect by Employee of the material duties required
by this Agreement that, if curable, is not cured by Employee within 30 days
after Employee is provided with written notice thereof. As used herein, "Good
Reason" shall mean the occurrence of any of the following without Employee's
written consent: (i) a material adverse change in Employee's title, duties or
reporting responsibilities from those in effect on the Effective Date, (ii) a
reduction in Employee's Annual Base Salary or target bonus percentage as in
effect from time to time, except that a reduction in target bonus level
percentage pursuant to an across-the-board reduction applicable to executives of
the Company generally as set by the Company's Compensation Committee shall not
constitute Good Reason under this Agreement, (iii) a relocation of Employee's
principal place of business more than 25 miles from the Seattle, Washington
metropolitan area, or (iv) (A) if a corporation that is a publicly-traded
affiliate of USAi either (1) becomes the owner, whether directly or indirectly,
of a majority of the combined voting power of the then Outstanding Company
Voting Securities or (2) controls the ability to elect a majority of the
directors of the Company (each, a "Controlling Affiliate Corporation"), the
occurrence of such event shall constitute a Change in Control and Good Reason
unless Employee is offered the position as Chief Financial Officer of the
Controlling Affiliate Corporation or (B) if the Company ceases to be a publicly
traded entity, the occurrence of such event shall constitute Good Reason, unless
Employee is offered the position as Chief Financial Officer of the "Controlling
Corporation" of the Company (i.e., the entity owning the highest percentage of
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the then Outstanding Company Voting Securities) and the Controlling Corporation
is publicly-traded; provided, that this clause (iv) shall be inapplicable with
respect to a merger, consolidation, recapitalization or other extraordinary
business combination relating to the capital stock or assets of USAi; provided,
further, that a Liberty/Vivendi Event shall not constitute Good Reason under
this clause (iv). Notwithstanding the foregoing, the acquisition by USAi of
additional shares of stock of the Company, including the acquisition of
additional shares which would make the Company a wholly-owned and non-publicly
traded subsidiary of USAi, shall not constitute a Change in Control or Good
Reason or a breach under this Agreement, provided, that, if the Company becomes
a wholly-owned and non-publicly traded subsidiary of USAi, (i) Employee shall
remain as Chief Financial Officer of the Company or its successor and (ii)
Employee's Company stock options shall vest or be converted into USAi stock
options. In the event of Employee's termination for Cause or resignation without
Good Reason, this Agreement shall terminate without further obligation by the
Company, except for the payment of any Accrued Obligations (as defined in
paragraph 1(f) below).
(d) TERMINATION BY THE COMPANY OTHER THAN FOR DEATH, DISABILITY OR CAUSE;
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RESIGNATION BY EMPLOYEE FOR GOOD REASON. The Company may terminate Employee's
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employment under this Agreement without Cause at any time prior to the
expiration of the Term , and Employee may resign for Good Reason under this
Agreement at any time prior to the expiration of the Term. If Employee's
employment is terminated by the Company for any reason other than Employee's
death or Disability or for Cause, or if Employee resigns for Good Reason, then,
subject to the provisions of Section 1(e) below: (i) the Company shall pay
Employee the Base Salary from the date of termination of Employee's employment
through the end of the scheduled Term (the "Severance Period") pursuant to the
Company's normal payroll practices; and (ii) the Company shall pay Employee
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within 30 days of the date of such termination in a lump sum in cash any Accrued
Obligations (as defined in Section 1(f) below). In addition, Employee shall
automatically and immediately vest in all of his then-outstanding options and
other equity-based compensation awards granted on or prior to August 2, 2001,
and such options shall remain exercisable for one year following Employee's date
of termination of employment. The payment to Employee of the severance benefits
described in this Section 1(d) shall be subject to Employee's execution and
non-revocation of a general release of the Company and its affiliates in a form
substantially similar to that used for similarly situated executives of the
Company and its subsidiaries, a copy of the form of which is attached as Exhibit
A.
(e) MITIGATION; OFFSET. In the event of termination of Employee's
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employment prior to the end of the Term, in no event shall Employee be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable under this Section 1. If Employee obtains other employment
during the Severance Period, the amount of any payment or benefit provided for
under this Section 1 which has been paid to Employee shall be refunded to the
Company by Employee in an amount equal to any compensation earned by Employee as
a result of employment with or services provided to another employer during the
Severance Period, and all future amounts payable by the Company to Employee
during the Severance Period shall be offset by the amount earned by Employee
from another employer. Anything to the contrary notwithstanding and for the sake
of clarity, in no event shall Employee be compelled to disgorge any accelerated
vesting of equity-based securities that occurs upon his termination of
employment without Cause (other than for death or Disability) or his resignation
for Good Reason, unless with respect to future grants such a disgorgement
provision is applicable to similarly situated executives of USAi and its
subsidiaries. For purposes of this Section 1(e), Employee shall have an
obligation to inform promptly the Company regarding Employee's employment status
during the Severance Period.
(f) ACCRUED OBLIGATIONS. As used in this Agreement, "Accrued Obligations"
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shall mean the sum of (i) any portion of Employee's accrued but unpaid Base
Salary through the date of death or termination of employment for any reason, as
the case may be; and (ii) any compensation previously earned but deferred by
Employee (together with any interest or earnings thereon) that has not yet been
paid.
2. CONFIDENTIAL INFORMATION; NON-SOLICITATION; AND PROPRIETARY RIGHTS.
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(a) CONFIDENTIALITY. Employee acknowledges that, while employed by the
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Company, Employee will occupy a position of trust and confidence. Employee shall
not, except as may be required to perform Employee's duties hereunder or as
required by applicable law, disclose to others, use, copy, transmit, reproduce,
summarize, quote or make commercial, whether directly or indirectly, any
Confidential Information regarding the Company or any of its subsidiaries or
affiliates. Employee will also take reasonable steps to safeguard such
Confidential Information and prevent its loss, theft, or inadvertent disclosure
to third persons. This Section 2 shall apply to Confidential Information
acquired by Employee whether prior or subsequent to the execution of this
Agreement. "Confidential Information" shall mean information about the Company
or any of its subsidiaries or affiliates, and their clients and
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customers that is not disclosed by the Company or any of its subsidiaries or
affiliates for financial reporting purposes and that was learned by Employee in
the course of employment by the Company or any of its subsidiaries or
affiliates, including (without limitation) any proprietary knowledge, trade
secrets, data, formulae, information and client and customer lists and all
papers, resumes, and records (including computer records) of the documents
containing such Confidential Information. Employee acknowledges that such
Confidential Information is specialized, unique in nature and of great value to
the Company and its subsidiaries or affiliates, and that such information gives
the Company and its subsidiaries or affiliates a competitive advantage. Employee
agrees to deliver or return to the Company, at the Company's request at any time
or upon termination or expiration of Employee's employment or as soon thereafter
as possible, all documents, computer tapes and disks, records, lists, data,
drawings, prints, notes and written information (and all copies thereof)
furnished by the Company and its subsidiaries or affiliates or prepared by
Employee in the course of Employee's employment by the Company and its
subsidiaries or affiliates. As used in this Agreement, "affiliates" shall mean
any company controlled by, controlling or under common control with the Company.
(b) NON-COMPETITION. During the Term and for a period of 24 months
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beyond Employee's date of termination of employment for any reason (the
"Restricted Period"), Employee shall not, directly or indirectly, engage in or
become associated with a Competitive Activity. For purposes of this Section
2(b): (i) a "Competitive Activity" means any business or other endeavor, in any
county of any state of the United States or a comparable jurisdiction in Canada
or any other country, of a kind being conducted by the Company or any of its
subsidiaries or affiliates in such jurisdiction as of the Effective Date or at
any time thereafter; and (ii) Employee shall be considered to have become
"associated with a Competitive Activity" if Employee becomes directly or
indirectly involved as an owner, principal, employee, officer, director,
independent contractor, representative, stockholder, financial backer, agent,
partner, advisor, lender, or in any other individual or representative capacity
with any individual, partnership, corporation or other organization that is
engaged in a Competitive Activity. Notwithstanding the foregoing, Employee may
make and retain investments during the Restricted Period, for investment
purposes only, in less than five percent (5%) of the outstanding capital stock
of any publicly-traded corporation engaged in a Competitive Activity if stock of
such corporation is either listed on a national stock exchange or on the NASDAQ
National Market System if Employee is not otherwise affiliated with such
corporation.
(c) NON-SOLICITATION OF EMPLOYEES. During the Restricted Period,
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Employee shall not, without the prior written consent of the Company, directly
or indirectly, recruit or solicit the employment or services of (whether as an
employee, officer, director, agent, consultant or independent contractor), any
employee, officer, director, agent, consultant or independent contractor of the
Company or any of its subsidiaries or affiliates (except for employment or
hiring by the Company or any of its subsidiaries or affiliates); provided,
however that a general solicitation of the public for employment shall not
constitute a solicitation hereunder so long as such general solicitation is not
designed to target, or does not have the effect of targeting, any employee,
officer, director, agent, consultant or independent contractor of the Company or
any of its subsidiaries or affiliates.
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(d) NON-SOLICITATION OF CUSTOMERS. During the Restricted Period,
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Employee shall not, without the prior written consent of the Company, directly
or indirectly, solicit Business of, attempt to do Business with, do Business
with any Customers of the Company or any of its subsidiaries or affiliates, or
encourage (regardless of who initiates the contact) any such Customers to use
the services of any competitor of the Company or any of its subsidiaries or
affiliates. For purposes of this Section, (i) "Business" means any business or
other endeavor of a kind being conducted by the Company or any of its
subsidiaries or affiliates as of the Effective Date or at any time during the
Restricted Period and (ii) "Customer" means an individual or entity with whom
the Company has done Business during, or within the 18 months preceding, the
Restricted Period.
(e) PROPRIETARY RIGHTS; ASSIGNMENT. All Employee Developments
------------------------------
shall be made for hire by Employee for the Company or any of its subsidiaries or
affiliates. "Employee Developments" means any idea, discovery, invention,
design, method, technique, improvement, enhancement, development, computer
program, machine, algorithm or other work or authorship that (i) relates to the
business or operations of the Company or any of its subsidiaries or affiliates,
or (ii) results from or is suggested by any undertaking assigned to the Employee
or work performed by the Employee for or on behalf of the Company or any of its
subsidiaries or affiliates, whether created alone or with others, during or
after working hours. All Confidential Information and all Employee Developments
shall remain the sole property of the Company or any of its subsidiaries or
affiliates. The Employee shall acquire no proprietary interest in any
Confidential Information or Employee Developments developed or acquired during
the Term. To the extent the Employee may, by operation of law or otherwise,
acquire any right, title or interest in or to any Confidential Information or
Employee Development, the Employee hereby assigns to the Company all such
proprietary rights. The Employee shall, both during and after the Term, upon the
Company's request, promptly execute and deliver to the Company all such
assignments, certificates and instruments, and shall promptly perform such other
acts, as the Company may from time to time in its discretion deem necessary or
desirable to evidence, establish, maintain, perfect, enforce or defend the
Company's rights in Confidential Information and Employee Developments.
(f) COMPLIANCE WITH POLICIES AND PROCEDURES. During the Term,
---------------------------------------
Employee shall adhere to the policies and standards of professionalism set forth
in the Company's Policies and Procedures as they may exist from time to time.
(g) REMEDIES FOR BREACH. Employee expressly agrees and understands
-------------------
that Employee will notify the Company in writing of any alleged breach of this
Agreement by the Company, and the Company will have 30 days from receipt of
Employee's notice to cure any such breach.
Employee expressly agrees and understands that the remedy at law for
any breach by Employee of this Section 2 will be inadequate and that damages
flowing from such breach are not usually susceptible to being measured in
monetary terms. Accordingly, it is acknowledged that upon Employee's violation
of any provision of this Section 2, in addition to any remedy of law available
to the Company, the Company shall be entitled to obtain from any court of
competent jurisdiction immediate injunctive relief and obtain a temporary order
restraining any threatened or further breach as well as an equitable accounting
of all profits or benefits arising
5
out of such violation. Nothing in this Section 2 shall be deemed to limit the
Company's remedies at law or in equity for any breach by Employee of any of the
provisions of this Section 2, which may be pursued by or available to the
Company.
The Company expressly agrees and understands that the Company will
notify Employee in writing of any alleged breach of this Agreement by Employee,
and Employee will have 30 days from receipt of the Company's notice to cure any
such breach, if such breach is curable.
(h) SURVIVAL OF PROVISIONS. The obligations contained in this
----------------------
Section 2 shall, to the extent provided in this Section 2, survive the
termination or expiration of Employee's employment with the Company and, as
applicable, shall be fully enforceable thereafter in accordance with the terms
of this Agreement. If it is determined by a court of competent jurisdiction in
any state that any restriction in this Section 2 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.
3. TERMINATION OF PRIOR AGREEMENTS. Except as specifically provided
-------------------------------
otherwise herein, this Agreement constitutes the entire agreement between the
parties, and as of the Effective Date, terminates and supersedes any and all
prior agreements and understandings (whether written or oral) between the
parties with respect to the subject matter of this Agreement and, as of the date
hereof, this Agreement shall replace and supercede the Term Sheet. Employee
acknowledges and agrees that neither the Company nor anyone acting on its behalf
has made, and is not making, and in executing this Agreement, the Employee has
not relied upon, any representations, promises or inducements except to the
extent the same is expressly set forth in this Agreement. Employee hereby
represents and warrants that by entering into this Agreement, Employee will not
rescind or otherwise breach any agreement or other legal obligation with any
other person or entity.
4. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its nature
----------------------
and none of the parties hereto shall, without the consent of the others, assign
or transfer this Agreement or any rights or obligations hereunder; provided that
the Company may assign this Agreement to any of its affiliates; provided further
that, in the event of the merger, consolidation, transfer, or sale of all or
substantially all of the assets of the Company with or to any other individual
or entity, this Agreement shall, subject to the provisions hereof, be binding
upon and inure to the benefit of such successor and such successor shall
discharge and perform all the promises, covenants, duties, and obligations of
the Company hereunder, and all references herein to the "Company" shall refer to
such successor.
5. WITHHOLDING. The Company shall make such deductions and withhold such
-----------
amounts from each payment and benefit made or provided to Employee hereunder,
as may be required from time to time by applicable law, governmental regulation
or order.
6. HEADING REFERENCES. Section headings in this Agreement are included
------------------
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose. References to "this Agreement" or the use of
the term "hereof" shall refer to these
6
Standard Terms and Conditions and the Employment Agreement attached hereto,
taken as a whole.
7. WAIVER; MODIFICATION. Failure to insist upon strict compliance with
--------------------
any of the terms, covenants, or conditions hereof shall not be deemed a waiver
of such term, covenant, or condition, nor shall any waiver or relinquishment of,
or failure to insist upon strict compliance with, any right or power hereunder
at any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.
8. SEVERABILITY. In the event that a court of competent jurisdiction
------------
determines that any portion of this Agreement is in violation of any law or
public policy, only the portions of this Agreement that violate such law or
public policy shall be stricken. All portions of this Agreement that do not
violate any statute or public policy shall continue in full force and effect.
Further, any court order striking any portion of this Agreement shall modify the
stricken terms as narrowly as possible to give as much effect as possible to the
intentions of the parties under this Agreement.
9. INDEMNIFICATION. The Company shall indemnify and hold Employee
---------------
harmless for acts and omissions in Employee's capacity as an officer, director
or employee of the Company to the maximum extent permitted under applicable law,
and shall provide Employee with directors' and officers' insurance to the extent
provided to executive officers of the Company; provided, however, that neither
the Company, nor any of its subsidiaries or affiliates shall indemnify Employee
for any losses incurred by Employee as a result of acts described in Section
1(c) of this Agreement.
10. 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 Agreement to which these Standard Terms and Conditions are
attached is incorporated herein by reference, deemed a part of these Standard
Terms and Conditions and is a binding and enforceable part of these Standard
Terms and Conditions. References to "Standard Terms and Conditions" or the use
of the term "hereof" shall refer to the Standard Terms and Conditions and the
Agreement to which these Standard Terms and Conditions are attached, taken as a
whole.
7
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 on February 7, 2002.
EXPEDIA, INC.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
________________________________
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President, Human
Resources
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
8
EXHIBIT A
FORM OF RELEASE AGREEMENT
This Release Agreement ("Release") is entered into as of this ______ day
of ________, 200_, hereinafter "Execution Date", by and between ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ (hereinafter "Employee"), and Expedia, Inc., its successors and assigns
(hereinafter, the Company"). The Employee and the Company are sometimes
collectively referred to as the "Parties".
1. The Employee's employment with the Company is terminated
effective [Month, Day, Year] (hereinafter "Termination Date").
The Parties have agreed to avoid and resolve any alleged
existing or potential disagreements between them arising out
of or connected with the Employee's employment with the
Company including the termination thereof. The Company
expressly disclaims any wrongdoing or any liability to the
Employee.
2. The Company agrees to provide the Employee the severance
benefits provided for in his/her Employment Agreement with the
Company, dated as of February 7, 2002, after he/she executes
this Release [FOR 40+ and does not revoke it as permitted in
Section 9 below, the expiration of such revocation period
being the "Effective Date")].
3. Employee represents that he/she has not filed, and will not file,
any complaints, lawsuits, administrative complaints or charges
relating to her employment with, or resignation from, the Company
[; provided, however, that nothing contained in this Section 3
shall prohibit you from bringing a claim to challenge the validity
of the ADEA Release in Section 9 herein]. Employee agrees to
release the Company, its subsidiaries, affiliates, their
respective Boards of Directors, officers, employees, agents,
representatives and assigns (collectively, the "Released
Parties"), from any and all claims, charges, complaints, causes of
action or demands of whatever kind or nature that Employee now has
or has ever had against the Released Parties, whether known or
unknown, arising from or relating to Employee's employment with or
discharge from the Company, including but not limited to: wrongful
or tortious termination; constructive discharge; implied or
express employment contracts and/or estoppel; discrimination
and/or retaliation under any federal, state or local statute or
regulation, specifically including any claims Employee may have
under the Fair Labor Standards Act, the Americans with
Disabilities Act, Title VII of the Civil Rights Act of 1964 as
amended, and the Family and Medical Leave Act; the discrimination
or other employment laws of the State of Washington; any claims
brought under any federal or state statute or regulation for
non-payment of wages or other compensation, including stock grants
or stock options; and libel, slander, or breach of contract other
than the breach of this Release. This Release specifically
excludes claims, charges, complaints, causes of action or demand
that post-date the Termination Date [or the Effective Date,
whichever is later,] and that are based on factual allegations
that do not arise from or relate to Employee's present employment
with or
9
resignation from the Company.
4. Employee agrees to keep the fact that this Release exists and
the terms of this Release in strict confidence except to his/her
immediate family and his/her financial and legal advisors on a
need-to-know basis.
5. Employee acknowledges and affirms that he/she has previously
executed an Employment Agreement (attached) dated February 7,
2002, and that the terms and conditions of such agreement that
survive the employment relationship are not affected by this
Release. Employee represents that he/she has returned all property
belonging to the Company.
6. Employee warrants that no promise or inducement has been offered
for this Release other than as set forth herein and that this
Release is executed without reliance upon any other promises or
representations, oral or written. Any modification of this Release
must be made in writing and be signed by Employee and the Company.
7. Employee will direct all employment verification inquires to
[HR Rep]. In response to inquiries regarding Employee's employment
with the Company, the Company by and through its speaking agent(s)
agrees to provide only the following information: Employee's date
of hire, the date her employment ended and rates of pay.
8. If any provision of this Release or compliance by Employee or the
Company with any provision of the Release constitutes a violation
of any law, or is or becomes unenforceable or void, then such
provision, to the extent only that it is in violation of law,
unenforceable or void, will be deemed modified to the extent
necessary so that it is no longer in violation of law,
unenforceable or void, and such provision will be enforced to the
fullest extent permitted by law. If such modification is not
possible, said provision, to the extent that it is in violation of
law, unenforceable or void, will be deemed severable from the
remaining provisions of this Release, which provisions will remain
binding on both Employee and the Company. This Release is governed
by, and construed and interpreted in accordance with the laws of
the State of Washington, without regard to principles of conflicts
of law. Employee consents to venue and personal jurisdiction in
the State of Washington for disputes arising under this Release.
This Release represents the entire understanding with the Parties
with respect to subject matter herein, no oral representations
have been made or relied upon by the Parties.
9. [FOR EMPLOYEES OVER 40 ONLY -- In further recognition of the
above, Employee hereby releases and discharges the Released
Parties from any and all claims, actions and causes of action that
he/she may have against the Released Parties, as of the date of
the execution of this Release, arising under the Age
Discrimination in Employment Act of 1967, as amended ("ADEA"), and
the applicable rules and regulations promulgated thereunder. The
Employee acknowledges and understands that ADEA is a federal
statute that prohibits discrimination on the basis of age in
employment, benefits and benefit plans.
10
Employee specifically agrees and acknowledges that: (A) the
release in this Section 9 was granted in exchange for the receipt
of consideration that exceeds the amount to which he/she would
otherwise be entitled to receive upon termination of his/her
employment; (B) his/her waiver of rights under this Release is
knowing and voluntary as required under the Older Workers Benefit
Protection Act; (B) that he/she has read and understands the terms
of this Release; (C) he/she has hereby been advised in writing by
the Company to consult with an attorney prior to executing this
Release; (D) the Company has given him/her a period of up to
twenty-one (21) days within which to consider this Release, which
period shall be waived by the Employee's voluntary execution prior
to the expiration of the twenty-one day period; and (E) following
his/her execution of this Release he/she has seven (7) days in
which to revoke his/her release as set forth in this Section 9
only and that, if he/she chooses not to so revoke, the Release in
this Section 9 shall then become effective and enforceable and the
payment listed above shall then be made to his/her in accordance
with the terms of this Release. To cancel this Release, Employee
understands that he/she must give a written revocation to the
General Counsel of the Company at ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, either by hand delivery or
certified mail within the seven-day period. If he/she rescinds the
Release, it will not become effective or enforceable and he/she
will not be entitled to any benefits from the Company.]
10. EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE/SHE HAS CAREFULLY READ
AND VOLUNTARILY SIGNED THIS RELEASE, THAT HE/SHE HAS HAD AN
OPPORTUNITY TO CONSULT WITH AN ATTORNEY OF HIS/HER CHOICE, AND
THAT HE/SHE SIGNS THIS RELEASE WITH THE INTENT OF RELEASING
EXPEDIA AND ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ANY
AND ALL CLAIMS.
ACCEPTED AND AGREED TO:
__________________________________ ________________________________
Expedia, Inc. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Dated:____________________________ Dated:__________________________
11
