Business Context and Reporting Period
This Form 8-K Current Report was filed by Expedia, Inc. on October 25, 2006, covering events occurring on October 25 and October 31, 2006. The filing discloses the entry into material definitive employment and equity agreements with two senior executives: Michael B. Adler (Executive Vice President and Chief Financial Officer) and Burke F. Norton (Executive Vice President, General Counsel, and Secretary).
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation terms.
- Michael B. Adler Compensation:
- Annual Base Salary: $375,000
- Signing Bonus: $250,000 (subject to forfeiture conditions)
- Restricted Stock Units (RSUs): 84,832 (First Award) and 53,020 (Second Award)
- Burke F. Norton Compensation:
- Annual Base Salary: $375,000
- Signing Bonus: $250,000 (subject to forfeiture conditions)
- Restricted Stock Units (RSUs): 62,235 (Tranche Vesting) and 31,117 (Cliff Vesting)
Material Changes Versus Prior Period
This filing memorializes arrangements previously disclosed in an April 6, 2006 Form 8-K regarding Mr. Adler's appointment. The primary material change is the formalization of these terms into definitive agreements and the new appointment and agreement for Mr. Norton on October 25, 2006.
Guidance, Outlook, and Risks
The filing contains no financial guidance, outlook, or management commentary regarding business performance. Key contractual terms and contingencies include:
- Severance: Both executives are entitled to base salary through the longer of the agreement term or 12 months if terminated without Cause or if they resign for Good Reason.
- Non-Compete: Both executives are restricted from competing with or soliciting employees for 24 months post-termination.
- Equity Vesting: RSU awards are contingent on performance goals. Accelerated vesting occurs upon termination without Cause/Good Reason (partial) or a Change in Control (full).
- Forfeiture: Signing bonuses are subject to forfeiture if employment ends for Cause or without Good Reason prior to specific dates (May 16, 2007 for Adler; October 25, 2007 for Norton).
Investor Verification Checklist
- Verify the total number of RSUs granted to Mr. Adler (137,852) and Mr. Norton (93,352) against the company's stock plan limits.
- Confirm the specific "Performance Goals" established by the Compensation Committee required for RSU vesting.
- Review the April 6, 2006 Form 8-K to compare previously disclosed terms with the finalized agreements in this filing.
- Assess the potential cash impact of the $500,000 total in signing bonuses and the liability for potential severance payments.