EX-10.3



 Exhibit 10.3 

EXPEDIA, INC. STOCK OPTION AGREEMENT 

THIS AGREEMENT (this “Agreement”), dated March 31, 2015, is entered into by and between Expedia,
Inc., a Delaware corporation (the “Corporation”) and Dara Khosrowshahi (the “Participant”). All capitalized terms used herein, to the extent not defined, shall have the meanings set forth in the
Corporation’s Second Amended and Restated 2005 Stock and Annual Incentive Plan (as amended from time to time, the “Plan”). Reference is made to the Employment Agreement (“Employment Agreement”)
entered into by and between the Participant and the Corporation, dated March 31, 2015.  
  

	1.	Award of Stock Option 

 Subject to the provisions of this Agreement
and the Plan, the Corporation hereby grants to the Participant on March 31, 2015 (the “Grant Date”) an option to purchase 1,100,000 Shares, at the exercise price of $95.00 per Share (the “Stock
Option”). The Stock Option shall be a Nonqualified Stock Option. Unless earlier terminated pursuant to the terms of this Agreement, the Stock Option shall expire on the seventh anniversary of the Grant Date. 

 

	2.	Vesting 

 Subject to (a) the terms and conditions of this Agreement and the
provisions of the Plan, and (b) the Participant’s continuous employment by the Corporation or one of its Subsidiaries or Affiliates through the applicable vesting date, the Stock Option shall vest and become exercisable on
September 30, 2020 if the average closing price of a Share during (x) the period commencing October 1, 2019 through September 30, 2020, or (y) the period commencing April 1, 2020 through September 30, 2020 equals
or exceeds $170 (subject to equitable adjustment in the case of an adjustment pursuant to Section 3(d) of the Plan, the “Stock Price Goal”). 
  

	3.	Termination of Employment;Change in Control. 

 (a) Termination of
Employment. Except as set forth below, Section 5(i) of the Plan shall govern the treatment of the Stock Option upon Participant’s Termination of Employment. For the avoidance of doubt, Section 5(i)(iv) of the Plan shall not govern
the treatment of Participant’s Stock Option upon Participant’s Termination of Employment for Good Reason or without Cause; the treatment of the Stock Option under such circumstances shall be governed by Section 3(a)(i)-(iii) of
this Agreement. 
 (i) For purposes of this Agreement, the terms “Cause” and “Good Reason”
shall have the meanings ascribed to such terms set forth in the Employment Agreement, except that Good Reason shall, in addition to the definition in the Employment Agreement, include the occurrence of the following circumstances: (A) Barry
Diller no longer serves as Chairman and Senior Executive Officer of the Corporation (or comparable positions of board and executive leadership) and (B) (I) Barry Diller beneficially owns (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) equity securities of the Corporation representing less than 35% of the voting power of the Outstanding Company Voting Securities (as defined in the Plan) or (II) Barry Diller beneficially owns equity securities of the
Corporation representing at least 35% of the voting power of the Outstanding Company Voting Securities and another stockholder beneficially owns equity securities of the Corporation representing a greater percentage of the voting power of the
Outstanding Company Securities (the occurrence of the foregoing circumstances, a “BD Change”); provided that in no event shall the Participant’s resignation due to a BD Change be for “Good Reason” unless
(x) the BD 







 
Change shall have occurred and the Participant provides the Corporation with written notice thereof within 30 days after the Participant has knowledge of the occurrence or existence of the BD
Change, and (y) the Participant resigns within 90 days after the date of delivery of the notice referred to in clause (x) above. 

(ii) In the event of Participant’s Termination of Employment prior to September 30 2020 by the Participant for Good Reason or by the
Corporation without Cause, other than by reason of death or Disability, subject to (A) Participant’s compliance with the restrictive covenants set forth in Section 2 of the Employment Agreement, and (B) Participant signing and
not revoking a separation agreement and release of claims in favor of the Corporation and its affiliates in a form that is satisfactory to the Corporation that becomes effective no later than sixty (60) days following Participant’s
employment termination date or such earlier date required by the release agreement, the Stock Option shall remain outstanding, and, if the Stock Price Goal is satisfied, the Stock Option shall vest on September 30, 2020 as to 16,667 Shares for
each full month from and after March 31, 2015 through the one-year anniversary of Participant’s Termination of Employment (subject to a maximum of 1,100,000 Shares) and the unvested portion of the Stock Option shall be forfeited and
canceled. 
 (iii) In the event of Participant’s Termination of Employment by the Participant for Good Reason or by the Corporation
without Cause, other than by reason of death or Disability, the vested portion of the Stock Option (including any portion that vests pursuant to this Section 3) shall remain exercisable until March 31, 2022. 

(b) Change in Control. In the event of (i) a Change in Control or (ii) the acquisition for cash by Liberty Interactive
Corporation or any of its Affiliates of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 100% of the Outstanding Company Voting Securities, the Stock Option immediately shall vest in full. 

 

	4.	Terms of Employment; Termination of Employment by the Corporation for Cause  


(a) Nothing in this Agreement or the Plan shall confer upon the Participant any right to continue in the employ or service of the Corporation
or any of its Subsidiaries or Affiliates or interfere in any way with their rights to terminate the Participant’s employment or service at any time. 

(b) In the event the Participant exercises any portion of the Stock Option within two years prior to the Participant’s Termination of
Employment for Cause, the Participant agrees that the Corporation shall be entitled to recover from the Participant, at any time within two years following such exercise, and the shall pay over to the Corporation, the excess of (i) the
aggregate Fair Market Value of the Common Stock subject to such exercise on the date of exercise over (ii) the aggregate exercise price of the Common Stock subject to such exercise on the date of exercise. 

 

	5.	Taxes and Withholding 

 No later than the date as of which an amount in respect of
the Stock Option first becomes includible in the Participant’s gross income for federal, state, local or foreign income or employment or other tax purposes, the Participant shall pay to the Corporation or make arrangements satisfactory to the
Committee regarding payment of any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount and the Corporation shall, to the extent permitted or required by law, have the right to deduct from any
payment of any kind otherwise due to the Participant (either directly or indirectly through its agent), federal, state, local and foreign taxes of any kind required by law to be withheld. Notwithstanding the foregoing, the Corporation shall be
entitled to hold the shares of Common Stock issuable to the Participant upon exercise of the Participant’s Stock 

  
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Option until the Corporation or the agent selected by the Corporation to manage the Plan under which the Stock Option has been issued (the “Agent”) has received from the
Participant (i) a duly executed Form W-9 or W-8, as applicable and (ii) payment for any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to any portion of such Stock Option. 

 

	6.	Conflicts and Interpretation 

 Applicable terms of the Plan are expressly
incorporated by reference into this Agreement. In the event of any conflict between this Agreement and the Plan, the Plan shall control. In the event of any ambiguity in this Agreement, or any matters as to which this Agreement is silent, the Plan
shall govern including, without limitation, the provisions thereof pursuant to which the Committee has the power, among others, to (i) interpret the Plan, (ii) prescribe, amend and rescind rules and regulations relating to the Plan and
(iii) make all other determinations deemed necessary or advisable for the administration of the Plan. In the event of any (x) conflict between any information posted on the Morgan Stanley Benefit Access System or successor system) and this
Agreement, the Plan and/or the books and records of the Corporation or (y) ambiguity in any information posted on the Morgan Stanley Benefit Access System or successor system, this Agreement, the Plan and/or the books and records of the
Corporation, as applicable, shall control. 
  

	7.	Data Protection 

 The Participant authorizes the release from time to time to the
Corporation (and 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 the Plan
and/or this Agreement (the “Relevant Information”). Without limiting the above, the Participant permits his or her 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 the Plan and/or this Agreement and/or to implement or structure any further grants of equity awards (if any)). The
Participant hereby authorizes the Relevant Information to be transferred to any jurisdiction that the Corporation, his or her employing company or the Agent considers appropriate. The Participant shall have access to, and the right to change, the
Relevant Information. Relevant Information will only be used in accordance with applicable law. 
  

	8.	Amendment 

 The Committee may unilaterally amend the Stock Option, prospectively
or retroactively, but no such amendment shall, without the Participant’s consent, materially impair the rights of the Participant with respect to the Stock Option, except such an amendment made to cause the Stock Option to comply with
applicable law, stock exchange rules or accounting rules. 
  

	9.	Notification of Changes 

 Any changes to this Agreement shall be communicated
(either directly by the Corporation or indirectly through any of its Subsidiaries, Affiliates or the Agent) to the Participant electronically via email (or otherwise in writing) promptly after such change becomes effective. 

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 IN WITNESS WHEREOF, as of the Grant Date, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer, and the Participant has hereunto set the Participant’s hand. Electronic acceptance of this Agreement pursuant to the Corporation’s instructions to the Participant (including through an
online acceptance process managed by the Agent) shall constitute execution of the Agreement by the Participant. 
  

			
	EXPEDIA, INC.
	
	  /s/ Robert J. Dzielak

	Name:		Robert J. Dzielak
	Title:		 Executive Vice President,
 General
Counsel & Secretary

	
	Dara Khosrowshahi, Participant
	
	  /s/ Dara Khosrowshahi




  
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