Business Context and Reporting Period
This Form 8-K filing by Expedia, Inc. (now Expedia Group, Inc.) is dated March 7, 2016. The report discloses a corporate governance event involving the amendment of an executive employment agreement and the granting of new equity awards.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. The document focuses exclusively on executive compensation arrangements.
Material Changes
On March 7, 2016, the Compensation Committee approved a third amendment to the employment agreement of Mark Okerstrom, Executive Vice President of Operations and Chief Financial Officer. Key changes include:
- Term Extension: The agreement term was extended from an expiration date of March 7, 2017, to March 7, 2019.
- Severance Provisions: In the event of termination without cause or resignation for good reason, Mr. Okerstrom is eligible for pro rata discretionary bonuses, acceleration of equity vesting for the 12-month period following termination, an 18-month exercise window for vested options, and continued base salary and COBRA coverage for the longer of the agreement term or 12 months.
- Restrictive Covenants: Non-compete and non-solicitation restrictions remain in effect for 18 months post-termination.
Guidance, Outlook, and Unusual Items
The filing details new equity grants approved in connection with the employment amendment:
- Cliff Vest Options: 225,000 stock options vesting 50% on the third and fifth anniversaries of the grant date.
- Performance Options: 175,000 stock options subject to a stock price goal of $180 (a 70.8% increase from the grant date closing price), measured over a six or twelve-month period preceding September 30, 2021.
- Terms: The exercise price for all options is $105.39, with a seven-year term. Full vesting occurs upon a Change in Control.
No financial guidance, outlook, or risk factors regarding the company's operations are provided in this specific filing.
Investor Verification Checklist
- Verify the total number of options granted (400,000) and the specific vesting schedules (cliff vs. performance-based).
- Confirm the stock price performance target of $180 and the measurement period ending September 30, 2021.
- Review the full text of the Amended Employment Agreement (Exhibit 10.1) for detailed definitions of "good reason" and "without cause."
- Check subsequent filings to determine if the performance stock price goal was achieved.