Exhibit 10.7

 

Form of Terms and Conditions for Growth Share Awards
(effective February 16, 2007)

 

Overview

 

These Terms and Conditions apply to Growth Share Awards, which are grants of
performance-based restricted stock units made pursuant to Section 7 of the
IAC/InterActiveCorp 2005 Stock and Annual Incentive Plan (the “Plan”). You were
notified of your Growth Share Award by way of an award notice (the “Award
Notice”).

 

ALL CAPITALIZED TERMS USED HEREIN, TO THE EXTENT NOT DEFINED, SHALL HAVE THE
MEANINGS SET FORTH IN PLAN.

 

Continuous Service

 

Subject to the exceptions discussed under “Termination of Employment,” in order
for your Growth Share Award to vest, you must be continuously employed by IAC or
any of its Subsidiaries or Affiliates (excluding Expedia, Inc. and its
subsidiaries) through the third anniversary of the relevant award date (the
“Continuous Service Requirement”). Nothing in your Award Notice, these Terms and
Conditions or the Plan shall confer upon you any right to continue in the employ
or service of IAC or any of its Subsidiaries or Affiliates or interfere in any
way with their rights to terminate your employment or service at any time.

 

Pro Forma Adjusted Earnings Per Share Performance Hurdles

 

Assuming satisfaction of the Continuous Service Requirement, the actual number
of RSUs covered by your Growth Share Award that will vest is dependent upon the
achievement by IAC of certain levels of Pro Forma Adjusted Earnings Per Share
(“PFAEPS”) in a specified year, with the actual number of RSUs vesting ranging
from 0 to 200% of the Target RSU number specified in your Award Notice. [Insert
Applicable Exhibit Reference] to these Terms and Conditions defines PFAEPS, as
well as explains how the achievement by IAC of various levels of PFAEPS
performance impacts the number of RSUs that you will ultimately receive (the
“Performance Hurdles”).

 

Vesting

 

The vesting date for Growth Share Awards will be the later of (i) the third
anniversary of the relevant award date (the “Third Anniversary”) or (ii) the
date on which IAC’s Compensation and Human Resources Committee (the “Committee”)
certifies to the level of PFAEPS that IAC achieved for the relevant year
specified in the relevant award notice (the “Measurement Year”), which date
shall be as soon a reasonably possible following the date on which IAC releases
its earnings for the Measurement Year (the “Growth Award Vesting Date”).

 

If the Continuous Service Requirement is satisfied prior to the Growth Award
Vesting Date, no subsequent termination of employment for any reason (other than
by IAC or its Subsidiaries for Cause, as described below) shall affect the
ultimate vesting of your Growth Share Award.

 

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Termination of Employment

 

Upon the termination of your employment by IAC or any of its Subsidiaries or
Affiliates after the first anniversary of the relevant award date but prior to
the Third Anniversary (i) by IAC or any of its Subsidiaries or Affiliates
without Cause, (ii) due to your death or Disability, (iii) by you for Good
Reason (as defined below) or (iv) as a result of the sale, other disposition or
other Disaffiliation (as defined in Section 1(p) of the Plan) of the IAC
business or division by which you are employed (collectively, a “Qualifying
Termination”), you shall retain eligibility to receive, for each completed
twelve-month period (measured successively) of continued employment following
the relevant award date, one-third of your maximum Growth Share Award, with 50%
of such RSUs becoming your new Target RSU number. The remaining RSUs covered by
your Growth Share Award shall be forfeited and canceled in their entirety on the
date of your termination of employment. On the Growth Award Vesting Date, such
portion of the RSUs that remain outstanding shall vest as determined by IAC’s
achieved level of PFAEPS in the Measurement Year. All RSUs that do not vest at
such time shall be forfeited and canceled in their entirety.

 

By way of example, assume that you are granted a Growth Share Award of 1,500
Target RSUs and are terminated without Cause by IAC fourteen (14) months after
the relevant award date. At that time, your new Target RSU number shall be 500
(one-third of your original number) and you shall continue to be eligible to
receive 1,000 RSUs if the Maximum Hurdle is achieved, which number will be
reflected on Smith Barney’s website, www.benefitaccess.com. If on the PFAEPS
Certification Date (as defined below) the Committee determines that the target
level of PFAEPS for the Measurement Year has been achieved, you would vest at
that time in 500 RSUs.

 

“Good Reason” shall mean, without your prior written consent: (A) a reduction in
your rate of annual base salary or (B) a relocation of your principal place of
business more than 35 miles from the city in which your principal place of
business was located immediately prior to the relocation. Notwithstanding the
foregoing, if you have a valid and effective employment agreement at the time of
your termination that defines “Good Reason,” the definition in such agreement
shall apply to your Growth Share Award. In order for any termination of
employment to be for Good Reason, you must provide notice of the circumstances
giving rise to a Good Reason termination to your supervisor and then, if such
circumstances are not remedied within thirty (30) days of such notice, you must
resign your employment within sixty (60) days of such notice.

 

Upon the termination of your employment by IAC or any of its Subsidiaries or
Affiliates prior to the Third Anniversary for any reason other than a Qualifying
Termination, your Growth Share Award shall be forfeited and canceled in its
entirety effective immediately upon such termination of employment.

 

If your employment is terminated by IAC or any of its Subsidiaries or Affiliates
for Cause, or if following any termination of employment between you and IAC or
any of its Subsidiaries or Affiliates for any reason IAC determines that during
the two years prior to such termination there was an event or circumstance that
would have been grounds for termination for Cause, all outstanding Growth Share
Awards held by you shall be forfeited and canceled in their entirety upon such
termination, and IAC may cause you, immediately upon notice, either to return
the shares or cash issued upon the settlement of RSUs that vested during the
two-year

 

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period after the events or circumstances giving rise to or constituting grounds
for termination for Cause or to pay IAC an amount equal to the aggregate amount,
if any, that you had previously realized in respect of any and all shares issued
upon settlement of RSUs that vested during the two-year period after the events
or circumstances giving rise to or constituting grounds for such termination for
Cause (i.e., the value of the RSUs upon vesting), in each case, including any
dividend equivalents or other distributions received in respect of any such
RSUs. This remedy shall be without prejudice to, or waiver of, any other
remedies IAC or its Subsidiaries or Affiliates may have in such event.

 

Determination of PFAEPS Performance

 

As soon as reasonably possible following the date on which IAC releases its
earnings for the Measurement Year, the Committee shall certify as to the level
of PFAEPS that IAC achieved for the Measurement Year, and the resulting
percentage of Target RSUs that will vest (the “PFAEPS Certification Date”).

 

Committee Discretion to Adjust Performance Hurdles

 

Decrease of Performance Hurdles. Through the PFAEPS Certification Date, the
Committee shall retain discretion to decrease Performance Hurdles (or otherwise
make adjustments that increase the likelihood of Performance Hurdles being
achieved) at any time. Furthermore, the Committee shall, within 90 days of the
discovery of all relevant material facts relating to a Material Reduction Event
(as defined below) by the Committee, decrease Performance Hurdles (or otherwise
make adjustments that increase the likelihood of Performance Hurdles being
achieved), such that, in the Committee’s good faith and sole judgment, the
likelihood of achievement of the various Performance Hurdles as adjusted is no
less likely than prior to the Material Reduction Event.

 

A “Material Reduction Event” means a discrete event which is likely to
materially decrease PFAEPS during the Measurement Year in a manner the Committee
determines, in its good faith and sole judgment, is not properly reflective of
growth in IAC’s performance in the Measurement Year over IAC’s fiscal year that
began three years prior to the commencement of the Measurement Year (e.g., if
the Measurement Year is 2009, then the relevant growth period is 2009 over
2006). For purposes of a Material Reduction Event, materiality shall be judged
by the Committee without regard to the likelihood of achievement of any
particular Performance Hurdles.

 

For example, the spin-off of a significant IAC business to IAC shareholders
would most likely constitute a Material Reduction Event, as the Performance
Hurdles would assume a contribution from the spun-off business, whereas the sale
of an IAC business might not constitute a Material Reduction Event, as PFAEPS in
the Measurement Year would continue to benefit from the re-investment of the
sale proceeds.  Nonetheless, under certain circumstances the sale of a business
might constitute a Material Reduction Event, such as when the sale occurs during
or at the end of the Measurement Year, resulting in the exclusion from PFAEPS of
prior earnings during the Measurement Year from the sold business, even though
PFAEPS did not get the benefit of the earnings from the sale proceeds for the
entire period.  In any event, such transactions would not constitute Material
Reduction Events unless the Committee determined, in its good faith and sole
judgment, that they were material.

 

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Increase of Performance Hurdles. Through the PFAEPS Certification Date, the
Committee may, within 90 days of the discovery of all relevant material facts
relating to a Material Accretion Event (as defined below) by the Committee,
increase Performance Hurdles (or otherwise make adjustments that decrease the
likelihood of Performance Hurdles being achieved). Any such adjustment shall be
made such that, in the Committee’s good faith and sole judgment, the likelihood
of achievement of the various Performance Hurdles is no less likely than prior
to the Material Accretion Event.

 

A “Material Accretion Event” means a discrete event which is likely to
materially increase PFAEPS during the Measurement Year in a manner the Committee
determines, in its good faith and sole judgment, is not properly reflective of
growth in IAC’s performance in the Measurement Year over IAC’s fiscal year that
began three years prior to the commencement of the Measurement Year (e.g., if
the Measurement Year is 2009, then the relevant growth period is 2009 over
2006). It is understood that the effects of accretive acquisitions and share
repurchases will, except in extraordinary circumstances (as determined in the
good faith and sole judgment of the Committee), generally be considered
reflective of growth in IAC’s financial performance. For purposes of a Material
Accretion Event, materiality shall be judged by the Committee without regard to
the likelihood of achievement of any particular Performance Hurdles.

 

For example, if IAC reversed a significant reserve during the Measurement Year,
and such reversal materially increased PFAEPS, then such reversal would likely
constitute a Material Accretion Event, given that such reversal simply
represents a shifting of Adjusted Net Income (as defined in [Insert Applicable
Exhibit Reference]) from a prior period into the Measurement Year.

 

Similarly, in the event the definition of Adjusted Net Income were changed to
exclude an expense formerly included in the definition, such change, if
material, would likely represent a Material Accretion Event.

 

Examples of extraordinary circumstances under which share repurchases might
constitute a Material Accretion Event include repurchase activity in excess of
pre-award date levels, circumstances under which IAC has taken on a significant
negative net cash position or other similar situations.

 

However, an accretive cash acquisition of a company would not constitute a
Material Accretion Event, unless the Committee determined that the impact on
PFAEPS during the Measurement Year was not representative of the value added to
IAC by such acquisition.

 

Determinations of the Committee regarding any adjustment (downward or upward) to
Performance Hurdles through the PFAEPS Certification Date will be final and
conclusive. Discretion, both positive and negative, need not be applied
uniformly by the Committee to all outstanding Growth Shares, but no Growth
Shares can be treated less favorably than the majority of Growth Shares subject
to the same set of Performance Hurdles.

 

SETTLEMENT

 

Subject to your satisfaction of the tax obligations described immediately below
under “Taxes and Withholding,” as soon as practicable after the Growth Award
Vesting Date your RSUs shall be settled. For each RSU settled, IAC shall (i) if
you are employed within the United States, issue one share of Common Stock for
each RSU vesting or (ii) if you are employed outside the United States, pay, or
cause to be paid, to you an amount of cash equal to the Fair Market Value of one
share of Common Stock for each RSU vesting. Notwithstanding the

 

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foregoing, IAC shall be entitled to hold the shares or cash issuable to you upon
settlement of all RSUs that have vested until IAC or the agent selected by IAC
to administer the Plan (the “Agent”) has received from you (i) a duly executed
Form W-9 or W-8, as applicable or (ii) payment for any federal, state, local or
foreign taxes of any kind required by law to be withheld with respect to such
RSUs.

 

TAXES AND WITHHOLDING

 

No later than the date as of which an amount in respect of any RSUs first
becomes includible in your gross income for federal, state, local or foreign
income or employment or other tax purposes, IAC or its Subsidiaries and/or
Affiliates shall, unless prohibited by law, have the right to deduct any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount due to you, including deducting such amount
from the delivery of shares or cash issued upon settlement of the RSUs that
gives rise to the withholding requirement. In the event shares are deducted to
cover tax withholdings, the number of shares withheld shall generally have a
Fair Market Value equal to the aggregate amount of IAC’s withholding obligation.
If the event that any such deduction and/or withholding is prohibited by law,
you shall, prior to or contemporaneously with the vesting or your RSUs, pay to
IAC, or make arrangements satisfactory to IAC regarding the payment of, any
federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount.

 

Adjustment in the Event of Change in Stock; Change in Control

 

In the event of (i) a stock dividend, stock split, reverse stock split, share
combination, or recapitalization or similar event affecting the capital
structure of IAC (each, a “Share Change”), or (ii) a merger, consolidation,
acquisition of property or shares, separation, spin-off, reorganization, stock
rights offering, liquidation, Disaffiliation, or similar event affecting IAC or
any of its Subsidiaries (each, a “Corporate Transaction”), the Committee or the
Board will make such substitutions or adjustments, if any, as it, in its good
faith and sole discretion, deems appropriate and equitable to the number of RSUs
and the number and kind of shares of Common Stock underlying the RSUs. The
determination of the Committee regarding any such adjustment will be final and
conclusive and need not be the same for all RSU award recipients (including, but
not limited to, recipients of Growth Share Awards).

 

In the event you cease to be employed by either IAC or any of its Subsidiaries
or Affiliates within the two year period following a Change in Control as a
result of (i) a termination by IAC or any of its Subsidiaries or Affiliates
without Cause, (ii) your death or Disability or (iii) a resignation by you for
Good Reason (as defined in Section 10 of the Plan), 100% of the Target RSUs set
forth in your Award Notice shall automatically vest upon such termination of
employment. Notwithstanding the foregoing, if at the time of the Change in
Control the Committee believes, in its good faith and sole judgment, that it is
substantially likely that in the absence of the Change in Control a greater
portion of the RSUs would have vested than the Target RSUs, then at such time
the Committee shall make a determination to vest additional shares accordingly
upon any such future terminations of employment. Any such determination by the
Committee shall be final and conclusive and shall be the same for all Growth
Share Awards. For the avoidance of doubt, the Change in Control provision shall
only apply in the case of a Change in Control of IAC and in no event shall apply
to a Subsidiary or Affiliate of IAC.

 

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NON-TRANSFERABILITY OF THE RSUS

 

Until such time as your RSUs are ultimately settled, they shall not be
transferable by you by means of sale, assignment, exchange, encumbrance, pledge,
hedge or otherwise.

 

No Rights as a Stockholder

 

Except as otherwise specifically provided in under the Plan, unless and until
your RSUs are settled, you shall not be entitled to any rights of a stockholder
with respect to the RSUs. Notwithstanding the foregoing, if IAC declares and
pays dividends on the Common Stock prior to the Growth Award Vesting Date for a
particular Growth Share Award, you will be credited with additional amounts for
each RSU underlying such Growth Share Award equal to the dividend that would
have been paid with respect to such RSU as if it had been an actual share of
Common Stock, which amount shall remain subject to restrictions (and as
determined by the Committee may be reinvested in RSUs or may be held in kind as
restricted property) and shall vest concurrently with the vesting of the RSUs
upon which such dividend equivalent amounts were paid. Notwithstanding the
foregoing, dividends and distributions other than regular quarterly cash
dividends, if any, may result in an adjustment pursuant to the “Adjustment in
the Event of Change in Stock; Change in Control” section above.

 

OTHER RESTRICTIONS

 

The RSUs shall be subject to the requirement that, if at any time the Committee
shall determine that (i) the listing, registration or qualification of the
shares of Common Stock subject or related thereto upon any securities exchange
or under any state or federal law, or (ii) the consent or approval of any
government regulatory body is necessary or desirable as a condition of, or in
connection with, the delivery of shares, then in any such event, the award of
RSUs shall not be effective unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee.

 

CONFLICTS AND INTERPRETATION

 

In the event of any conflict between these Terms and Conditions and the Plan,
the Plan shall control. In the event of any ambiguity in these Terms and
Conditions, or any matters as to which these Terms and Conditions are silent,
the Plan shall govern. In the event of any conflict between the Award Notice (or
any other information posted on IAC’s extranet or given to you directly or
indirectly through the Agent (including information posted on
www.benefitaccess.com)) and IAC’s books and records, or (ii) ambiguity in the
Award Notice (or any other information posted on IAC’s extranet or given to you
directly or indirectly through the Agent (including information posted on
www.benefitaccess.com), IAC’s books and records shall control.

 

AMENDMENT

 

IAC may modify, amend or waive the terms of your RSUs, prospectively or
retroactively, but no such modification, amendment or waiver shall materially
impair your rights without your consent, except as required by applicable law,
NASDAQ or stock exchange rules, tax rules or accounting rules.

 

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Data Protection

 

The acceptance of your RSUs constitutes your authorization of the release from
time to time to IAC or any of its Subsidiaries or Affiliates and to the Agent
(together, the “Relevant Companies”) of any and all personal or professional
data that is necessary or desirable for the administration of your RSUs and/or
the Plan (the “Relevant Information”). Without limiting the above, this
authorization permits your employing company to collect, process, register and
transfer to the Relevant Companies all Relevant Information (including any
professional and personal data that may be useful or necessary for the purposes
of the administration of your RSUs and/or the Plan and/or to implement or
structure any further grants of equity awards (if any)). The acceptance of your
RSUs also constitutes your authorization of the transfer of the Relevant
Information to any jurisdiction in which IAC, your employing company or the
Agent considers appropriate. You shall have access to, and the right to change,
the Relevant Information, which will only be used in accordance with applicable
law.

 

Section 409A of the Code

 

Growth Share Awards are not intended to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended, and the rules and regulations issued thereunder (“Section
409A”).  Accordingly, if any amounts or benefits payable in respect of your
Growth Share Award are (i) payable upon a termination of employment and (ii) if
you are a “Specified Employee” (as defined under Section 409A) as of the date of
your termination of employment, then such amounts or benefits (if any) shall be
paid or provided to you in a single lump sum on the first business day after the
date that is six months following your termination of employment.

 

In no event shall IAC be required to pay you any “gross-up” or other payment
with respect to any taxes or penalties imposed under Section 409A with respect
to any amounts or benefits paid to you in respect of your Growth Share Award.

 

Notification of Changes

 

Any changes to these Terms and Conditions, including [Include Applicable Exhibit
References] hereto, shall either be posted on IAC’s extranet and
www.benefitaccess.com or communicated (either directly by IAC or indirectly
through any of its Subsidiaries, Affiliates or the Agent) to you electronically
via e-mail (or otherwise in writing) promptly after such change becomes
effective. You are therefore urged to periodically check these Terms and
Conditions, especially any exhibits, to determine whether any changes have been
made.

 

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