Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On September 14, 2022, Expedia Group, Inc. (the "Company") notified The Nasdaq
Stock Market LLC ("Nasdaq") of the resignation of Julie Whalen from the
Company's audit committee. Ms. Whalen's resignation from the Company's audit
committee was in connection with her appointment as Chief Financial Officer of
the Company, which is discussed in Item 5.02(c) below. Ms. Whalen will continue
to serve as a non-independent member of the Company's Board of Directors (the
"Board"). Upon Ms. Whalen's resignation from the audit committee, the audit
committee had two independent members. The Company previously reported the
resignation of Susan Athey from the Board, effective June 21, 2022, in a Current
Report on Form 8-K filed with the Securities and Exchange Commission on June 21,
2022. As a result of these changes, five of the 10 members of the Board remain
independent under Nasdaq Marketplace Rules.
Also on September 14, 2022, the Company received notice from Nasdaq confirming
that the Company was no longer in compliance with Nasdaq Marketplace Rule
5605(b)(1), which requires that a majority of the Board be "independent
directors" as defined in Nasdaq Marketplace Rule 5605(a)(2) (the "Majority
Independent Board Requirement") and Nasdaq Marketplace Rule 5605(c)(2), which
requires the Company to have an audit committee composed of at least three
"independent directors" as defined in Nasdaq Marketplace Rule 5605(a)(2) (the
"Audit Committee Composition Requirement"). The Company intends to appoint an
additional independent director and fill the vacancy on the audit committee as
expeditiously as possible. In the meantime, the Company will rely on the cure
period set forth in Nasdaq Marketplace Rule 5605(b)(1), with respect to the
Majority Independent Board Requirement and the cure period set forth in Nasdaq
Marketplace Rule 5605(c)(4), with respect to the Audit Committee Composition
Requirement, which each give the Company until the earlier of its next annual
meeting of stockholders or September 13, 2023 (or, if the next annual meeting of
stockholders is held before March 13, 2023, then not later than March 13, 2023)
to satisfy the applicable Nasdaq requirement.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Eric Hart Resignation - Transition and Services Agreement
On September 12, 2022, the Compensation Committee of the Board (the
"Compensation Committee") approved a Transition and Services Agreement (the
"Transition Agreement") for Eric Hart, the Company's Chief Financial Officer and
Chief Strategy Officer, and on September 14, 2022, Expedia, Inc., a subsidiary
of the Company ("Expedia") and Mr. Hart entered into the Transition Agreement.
Pursuant to the Transition Agreement, Mr. Hart will remain as the Company's
Chief Financial Officer and Chief Strategy Officer until September 26, 2022 and,
to enable an orderly transfer of his duties to his successor, will remain
employed by Expedia until October 1, 2022 (the "Separation Date"). Mr. Hart's
separation did not result from any disagreement with the Company on any matter
relating to the Company's or Expedia's operations, policies or practices,
including accounting principles and practices. On the Separation Date, subject
to his execution of a release, Mr. Hart will become entitled to the payments,
rights and benefits associated with a non-cause termination under his employment
agreement with Expedia (filed as Exhibit 10.62 to the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission on February 14,
2020), plus the accelerated vesting of an additional 2,597 Company restricted
stock units.
Pursuant to the Transition Agreement, Mr. Hart has also agreed to continue to
serve as a member of the Supervisory Board of Directors of Trivago N.V. a
publicly-traded, majority-owned subsidiary of the Company (the "Trivago Board")
and the Board of Directors of Global Business Travel Group, Inc., a
publicly-traded, minority investee of the Company (the "GBT Board"), in each
case, until the expiration of his current director term. In consideration of his
service on the Trivago Board after the Separation Date, and subject to approval
by the Trivago Board and Trivago stockholders, Mr. Hart is expected to receive
(i) an annual director fee in the amount of $250,000 and (ii) an option to
purchase shares of Trivago common stock with an aggregate value of $1,000,000
(as determined by the Trivago Board) (the "Trivago Award"), subject to Mr.
Hart's continued service through January 15, 2023. The Trivago award is expected
to vest quarterly over a period not greater than three years, subject to Mr.
Hart's continued service as a member of the Trivago Board, and to vest in full
upon the occurrence of a change in control of Trivago. In connection with his
service on the GBT Board after the Separation Date, and subject to approval by
the GBT Board, Mr. Hart will be eligible to receive such cash fees and/or equity
or equity-based incentives as provided to other non-employee directors of the
GBT Board generally under the GBT Non-Employee Director Compensation Policy from
time to time.
(c) Julie Whalen Appointment - Employment Agreement
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On September 13, 2022, Julie Whalen was appointed by the Company as the
Company's Executive Vice President and Chief Financial Officer, effective as of
September 26, 2022. As of the date of this Current Report on Form 8-K, neither
Ms. Whalen nor any of her immediate family members is a party, either directly
or indirectly, to any transaction that would be required to be reported under
Item 404(a) of Regulation S-K promulgated under the Securities Act of 1933, as
amended, nor is Ms. Whalen a party to any understanding or arrangement pursuant
to which she was selected as an officer.
Ms. Whalen has been a director of Expedia Group since June 2019. She served as
the Executive Vice President and Chief Financial Officer of Williams-Sonoma,
Inc., a global specialty retailer, from March 2012 through September 2022, where
she was responsible for overseeing Williams-Sonoma's global financial
departments including controllership, corporate financial planning and analysis,
tax, treasury, investor relations, risk management and internal audit and has
shared accountability of the brand finance functions. She joined Williams-Sonoma
in 2001 in the corporate financial planning organization and progressed through
positions of increasing responsibility from Vice President, Corporate Controller
to Senior Vice President and Treasurer. Ms. Whalen began her career in public
accounting with KPMG Peat Marwick LLP. Ms. Whalen is a Certified Public
Accountant and holds both a B.S. in accounting and a J.D. from Pepperdine
University.
In addition, on September 12, 2022, the Compensation Committee approved the
terms of an Employment Agreement with Ms. Whalen (the "Employment Agreement")
and on September 13, 2022, Expedia entered into the Employment Agreement with
Ms. Whalen. Pursuant to the Employment Agreement, Ms. Whalen will serve as the
Company's Executive Vice President and Chief Financial Officer, effective as of
September 26, 2022 (the "Effective Date"), with the following material terms.
Unless otherwise specified, capitalized terms used below without definition have
the meanings set forth in the Employment Agreement.
Term
Ms. Whalen's employment under the Employment Agreement is at-will and will
continue until terminated at any time by any party in accordance with the terms
of the Employment Agreement.
Salary
Ms. Whalen will receive an initial annual base salary of $950,000.
Equity Incentive Compensation
As soon as practicable following the Effective Date, subject to Compensation
Committee approval and Ms. Whalen's continued employment with Expedia through
the applicable grant date, the Company will grant an award of restricted stock
units to Ms. Whalen, with an aggregate dollar-denominated value of $17,500,000
(calculated using the 30-day average closing price of Company common stock as of
the last day of the month prior to the Effective Date) (the "Initial Equity
Award"). The Initial Equity Award shall vest in full on the fourth anniversary
of the Effective Date, subject to Ms. Whalen's continued employment with Expedia
through such date.
In addition to the Initial Equity Award, beginning in the 2023 calendar year and
in each subsequent calendar year during Ms. Whalen's employment thereafter, the
Company will recommend to the Compensation Committee that Ms. Whalen be granted
an annual equity-based compensation award as determined by the Compensation
Committee from time to time. Any such award will consist of a number of
restricted stock units, which is expected to include performance-based
restricted stock units, with an aggregate value targeted at $6,000,000 per
calendar year, calculated using the then-standard conversion methodology for
annual equity grants to similarly-situated senior executives, subject to Ms.
Whalen's continued employment with Expedia through the applicable grant date
(the "Annual Equity Awards"). Except as set forth below with regard to the
Initial Equity Award and any performance-based Annual Equity Award granted to
Ms. Whalen in the 2024 calendar year (the "2024 Annual PSU Award"), the
additional terms and conditions of the Initial Equity Award and any Annual
Equity Awards (including the vesting schedule and, if applicable, the
performance conditions) will, in each case, be on the same terms and conditions
as those generally applicable to similarly situated senior executives determined
by the Compensation Committee in accordance with the provisions of the Company's
Fifth Amended and Restated 2005 Stock and Annual Incentive Plan.
Severance
Upon a termination of Ms. Whalen's employment by Expedia without Cause (other
than by reason of Ms. Whalen's death or Disability) or by Ms. Whalen for Good
Reason, subject to her execution and non-revocation of a separation agreement
and release and continued compliance with the restrictive covenants described
below:
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•the Company will continue to pay Ms. Whalen's base salary for 12 months (the
"Continuation Period"), subject to offset if Ms. Whalen obtains other employment
during the Continuation Period;
•the Company will pay Ms. Whalen a lump sum amount equal to the cost of COBRA
health insurance coverage for a period of 12 months;
•except as described below with respect to the Initial Equity Award and the 2024
Annual PSU Award, all equity holdings that otherwise would have vested during
the 12-month period following Ms. Whalen's termination of employment will vest
on an accelerated basis, provided that (i) equity awards that vest less
frequently than annually will be treated as though such awards vested annually
and (ii) any such awards that are subject to performance conditions shall remain
subject to the satisfaction of such performance conditions over the applicable
performance period;
. . .
Item 7.01 Regulation FD Disclosure.
A copy of the Company's press release announcing that Mr. Hart would be
separating from his roles as the Company's Chief Financial Officer and Chief
Strategy Officer and that Ms. Whalen would be succeeding him as the Company's
Chief Financial Officer is furnished with this Current Report on Form 8-K as
Exhibit 99.1.
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The information furnished herewith pursuant to this Item 7.01 of this Current
Report on Form 8-K shall not be deemed to be "filed" for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, and shall not be
incorporated by reference into any registration statement or other document
under the Securities Act of 1933, as amended or the Exchange Act, except as
shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
10.1 Transition and Services Agreement between Eric Hart and Expedia, Inc.,
dated September 14, 2022.
10.2 Employment Agreement between Julie Whalen and Expedia, Inc., dated
September 13, 2022.
99.1 Press Release of Expedia Group, Inc., dated September 14, 2022.
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