Document:

Exhibit 10.3

 

FORM OF

 

EMPLOYEE MATTERS AGREEMENT

 

BY AND
AMONG

 

IAC/INTERACTIVECORP

 

TICKETMASTER,

 

INTERVAL LEISURE GROUP,
INC.,

 

HSN, INC.,

 

AND

 

TREE.COM, INC.

 

Dated as of [      ], 2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  GENERAL PRINCIPLES

  	
  10

  
	
  2.1

  	
  Employment

  	
  10

  
	
  2.2

  	
  Assumption and Retention of Liabilities; Related
  Assets

  	
  10

  
	
  2.3

  	
  SpinCo Participation in IAC Benefit Plans

  	
  12

  
	
  2.4

  	
  Terms of Participation by SpinCo Employees in SpinCo
  Benefit Plans

  	
  12

  
	
  2.5

  	
  Commercially Reasonable Efforts

  	
  13

  
	
  2.6

  	
  Regulatory Compliance

  	
  13

  
	
  2.7

  	
  Approval by IAC as Sole Stockholder

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  SAVINGS PLANS

  	
  13

  
	
  3.1

  	
  Savings Plans

  	
  13

  
	
  3.2

  	
  SpinCo Savings Plans

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  HEALTH AND WELFARE PLANS

  	
  15

  
	
  4.1

  	
  Transition Period

  	
  15

  
	
  4.2

  	
  Establishment of Health and Welfare Plans

  	
  16

  
	
  4.3

  	
  Retention of Sponsorship and Liabilities

  	
  17

  
	
  4.4

  	
  Vendor Contracts

  	
  17

  
	
  4.5

  	
  Flexible Benefit Plan

  	
  18

  
	
  4.6

  	
  Workers’ Compensation Liabilities

  	
  18

  
	
  4.7

  	
  Payroll Taxes and Reporting of Compensation

  	
  19

  
	
  4.8

  	
  COBRA and HIPAA Compliance

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  EXECUTIVE BENEFITS AND OTHER BENEFITS

  	
  20

  
	
  5.1

  	
  Assumption of Obligations

  	
  20

  
	
  5.2

  	
  IAC Incentive Plans

  	
  21

  
	
  5.3

  	
  IAC Long-Term Incentive Plans

  	
  22

  
	
  5.4

  	
  Registration Requirements

  	
  38

  
	
  5.5

  	
  Executive Deferred Compensation Plans

  	
  39

  
	
  5.6

  	
  Severance

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  GENERAL AND ADMINISTRATIVE

  	
  41

  
	
  6.1

  	
  Sharing of Participant Information

  	
  41

  
	
  6.2

  	
  Reasonable Efforts/Cooperation

  	
  41

  
	
  6.3

  	
  No Third-Party Beneficiaries

  	
  41

  
	
  6.4

  	
  Audit Rights With Respect to Information Provided

  	
  42

  
	
  6.5

  	
  Fiduciary Matters

  	
  42

  
	
  6.6

  	
  Consent of Third Parties

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  MISCELLANEOUS

  	
  43

  
	
  7.1

  	
  Effect If Effective Time Does Not Occur

  	
  43

  
	
  7.2

  	
  Relationship of Parties

  	
  43

  
	
  7.3

  	
  Affiliates

  	
  43

  
	
  7.4

  	
  Notices

  	
  43

  
	
  7.5

  	
  Incorporation of Separation Agreement Provisions

  	
  44

  

 

i

 

EMPLOYEE MATTERS AGREEMENT

 

This Employee Matters Agreement (this “Agreement”),
dated as of [      ], 2008, with effect as of the Effective Time, is entered
into by and among IAC/InterActiveCorp, a Delaware corporation (“IAC”),
Ticketmaster, a Delaware corporation and a wholly owned subsidiary of IAC (“TM”),
Interval Leisure Group, Inc., a Delaware corporation and a wholly owned
subsidiary of IAC (“Interval”), HSN, Inc., a Delaware corporation
and a wholly owned subsidiary of IAC (“HSN”) and Tree.com, Inc., a
Delaware corporation and a wholly owned subsidiary of IAC (“Tree,”
together with TM, Interval, HSN and Tree, 
the “SpinCos,” the SpinCos and IAC, collectively, the “Parties”).

 

RECITALS:

 

WHEREAS, IAC, TM, Interval, HSN and Tree have
entered into a Separation Agreement pursuant to which the Parties have set out
the terms on which, and the conditions subject to which, they wish to implement
the Separation (as defined in the Separation Agreement) (such agreement, as
amended, restated or modified from time to time, the “Separation Agreement”).

 

WHEREAS, in connection therewith, IAC, TM, Interval,
HSN and Tree have agreed to enter into this Agreement to allocate between them
assets, liabilities and responsibilities with respect to certain employee
compensation, pension and benefit plans, programs and arrangements and certain
employment matters.

 

NOW THEREFORE, in consideration of the mutual
agreements, covenants and other provisions set forth in this Agreement, the
Parties hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Unless otherwise defined in this Agreement,
capitalized words and expressions and variations thereof used in this Agreement
or in its Appendices have the meanings set forth below.  Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Separation
Agreement.

 

“Adjustment Ratio” means (a) the IAC
Stock Value divided by (b) the sum of (i) 0.5 of the IAC
Post-Separation Stock Value plus (ii) 0.2 of the Ticketmaster Stock Value
(or if IAC does not distribute shares of TM Common Stock on the Distribution
Date, zero) plus (iii) 0.2 of the Interval Stock Value (or if IAC does not
distribute shares of Interval Common Stock on the Distribution Date, zero) plus
(iv) 0.2 of the HSN Stock Value (or if IAC does not distribute shares of
HSN Common Stock on the Distribution Date, zero) plus (v) 0.03333 of the
Tree Stock Value (or if IAC does not distribute shares of Tree Common Stock on
the Distribution Date, zero).

 

“Active HSN Participants” has the meaning set
forth in Section 5.5(c).

 

“Affiliate” has the meaning given that term
in the Separation Agreement.

 

“Agreement” means this Employee Matters
Agreement, including all the Schedules hereto.

 

 

“Ancillary Agreements” has the meaning given
that term in the Separation Agreement.

 

“Approved Leave of Absence” means an absence
from active service (a) due to an individual’s inability to perform his or
her regular job duties by reason of illness or injury and resulting in eligibility
to receive benefits pursuant to the terms of the IAC Short-Term Disability Plan
or the IAC Long-Term Disability Plan, or (b) pursuant to an approved leave
policy with a guaranteed right of reinstatement.

 

“ASO Contract” has the meaning set forth in Section 4.4(a).

 

“Auditing Party” has the meaning set forth in
Section 6.4(b).

 

“Award” (a) when immediately preceded by
“IAC,” means IAC Restricted Stock and IAC Restricted Stock Units, (b) when
immediately preceded by “TM,” means TM Restricted Stock and TM Restricted Stock
Units, (c) when immediately preceded by “Interval,” means Interval
Restricted Stock and Interval Restricted Stock Units, (d) when immediately
preceded by “HSN,” means HSN Restricted Stock and HSN Restricted Stock Units
and (e) when immediately preceded by Tree means Tree Restricted Stock and
Tree Restricted Stock Units.

 

“Benefit Plan” means, with respect to an
entity or any of its Subsidiaries, (a) each “employee welfare benefit plan”
(as defined in Section 3(1) of ERISA) and all other employee benefits
arrangements, policies or payroll practices (including, without limitation,
severance pay, sick leave, vacation pay, salary continuation, disability,
retirement, deferred compensation, bonus, stock option or other equity-based
compensation, hospitalization, medical insurance or life insurance) sponsored
or maintained by such entity or by any of its Subsidiaries (or to which such
entity or any of its Subsidiaries contributes or is required to contribute) and
(b) all “employee pension benefit plans” (as defined in Section 3(2) of
ERISA), occupational pension plan or arrangement or other pension arrangements
sponsored, maintained or contributed to by such entity or any of its
Subsidiaries (or to which such entity or any of its Subsidiaries contributes or
is required to contribute).  For the
avoidance of doubt, “Benefit Plans” includes Health and Welfare Plans.  When immediately preceded by “IAC,”
Benefit Plan means any Benefit Plan sponsored, maintained or contributed to by
IAC or any IAC Entity.  When immediately
preceded by “TM,” Benefit Plan means any Benefit Plan sponsored, maintained or
contributed to by TM or any TM Entity. 
When immediately preceded by “Interval,” Benefit Plan means any Benefit
Plan sponsored, maintained or contributed to by Interval or any Interval
Entity.  When immediately preceded by “HSN,”
Benefit Plan means any Benefit Plan sponsored, maintained or contributed to by
HSN or any HSN Entity.  When immediately
preceded by “Tree,” Benefit Plan means any Benefit Plan sponsored, maintained
or contributed to by Tree or any Tree Entity.

 

“Cliff Vest” with respect to any Award means
the lump-sum vesting of 100% of such Award following the passage of a
multi-year period after the date of grant. 
The terms “Cliff Vesting” and “Cliff Vested” shall have
correlative meanings.

 

“Close of the Distribution Date” means
11:59:59 P.M., Eastern Standard Time or Eastern Daylight Time (whichever
shall then be in effect), on the Distribution Date.

 

“COBRA” means the continuation coverage
requirements for “group health plans” under Title X of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and as codified in Code § 4980B
and ERISA §§ 601 through 608.

 

2

 

“Code” means the Internal Revenue Code of
1986, as amended, or any successor federal income tax law.  Reference to a specific Code provision also
includes any proposed, temporary or final regulation in force under that
provision.

 

“Committee” has the meaning set forth in Section 5.3(a).

 

“Distribution Date” means the first date on
which one or more of the Distributions (as defined in the Separation Agreement)
occurs.

 

“Effective Time Year” means the calendar year
during which the Effective Time occurs.

 

“Effective Time” has the meaning given that
term in the Separation Agreement.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended. 
Reference to a specific provision of ERISA also includes any proposed,
temporary or final regulation in force under that provision.

 

“FICA” has the meaning set forth in Section 5.3(g)(ii)(A).

 

“FICA Amount” has the meaning set forth in Section 5.3(g)(ii)(A).

 

 “Former
HSN Employee” means any individual who as of the Effective Time is a former
employee of the IAC Group, the TM Group, the Interval Group, the HSN Group or
the Tree Group, and whose last employment with any such group, was with an HSN
Entity.

 

“Former IAC Employee” means any individual
who as of the Effective Time is a former employee of the IAC Group, the TM Group,
the Interval Group, the HSN Group or the Tree Group, and whose last employment
with any such group, was with an IAC Entity.

 

“Former Interval Employee” means any
individual who as of the Effective Time is a former employee of the IAC Group,
the TM Group, the Interval Group, the HSN Group or the Tree Group, and whose
last employment with any such group, was with an Interval Entity.

 

“Former SpinCo Employee” means a Former TM
Employee, Former Interval Employee, Former HSN Employee and/or Former Tree Employee
as the context requires.

 

“Former TM Employee” means any individual who
as of the Effective Time is a former employee of the IAC Group, the TM Group,
the Interval Group, the HSN Group or the Tree Group, and whose last employment
with any such group, was with a TM Entity.

 

“Former Tree Employee” means any individual
who as of the Effective Time is a former employee of the IAC Group, the TM
Group, the Interval Group, the HSN Group or the Tree Group, and whose last
employment with any such group, was with a Tree Entity.

 

“Group Insurance Policies” has the meaning
set forth in Section 4.4(a).

 

“Growth Share Awards” has the meaning set
forth in Section 5.3(g).

 

“H&W Transition Period” has the meaning
set forth in Section 4.1(a).

 

“Health and Welfare Plans” means any plan,
fund or program which was established or is maintained for the purpose of
providing for its participants or their beneficiaries, 

 

3

 

through the purchase of
insurance or otherwise, medical, dental, surgical or hospital care or benefits,
or benefits in the event of sickness, accident, disability, death or
unemployment, or vacation benefits, apprenticeship or other training programs
or day care centers, scholarship funds, or prepaid legal services, including
any such plan, fund or program as defined in Section 3(1) of
ERISA.  When immediately preceded by “IAC,”
Health and Welfare Plans means each Health and Welfare Plan that is an IAC
Benefit Plan.  When immediately preceded
by “TM,” Health and Welfare Plans means each Health and Welfare Plan that is a
TM Benefit Plan.  When immediately
preceded by “Interval,” Health and Welfare Plans means each Health and Welfare
Plan that is an Interval Benefit Plan. When immediately preceded by “HSN,”
Health and Welfare Plans means each Health and Welfare Plan that is an HSN
Benefit Plan. When immediately preceded by “Tree,” Health and Welfare Plans
means each Health and Welfare Plan that is a Tree Benefit Plan.

 

“HIPAA” means the health insurance
portability and accountability requirements for “group health plans” under the
Health Insurance Portability and Accountability Act of 1996, as amended.

 

“HMO Agreements” has the meaning set forth in
Section 4.4(a).

 

“HMO” means a health maintenance organization
that provides benefits under the IAC Medical Plans, the TM Medical Plans, the
Interval Medical Plans, the HSN Medical Plans or the Tree Medical Plans.

 

“HSN” has the meaning set forth in the
Preamble of this Agreement.

 

“HSN Common Stock” means common stock, par value
$0.01 per share, of HSN.

 

“HSN Deferred Compensation Plan” has the
meaning set forth in Section 5.5(c).

 

“HSN Employee” means any individual who,
immediately prior to the Effective Time, is either actively employed by, or
then on Approved Leave of Absence from, an HSN Entity.

 

“HSN Entities” has the meaning given that
term in the Separation Agreement.

 

“HSN Executive Benefit Plans” means the
executive benefit and nonqualified plans, programs, and arrangements
established, sponsored, maintained, or agreed upon, by any HSN Entity for the
benefit of employees and former employees of any HSN Entity before the Close of
the Distribution Date.

 

“HSN Factor” means the product obtained by
multiplying (a) 0.2 and (b) the Adjustment Ratio.

 

“HSN Long-Term Incentive Plan” means the
long-term incentive plan or program to be established by HSN, effective
immediately prior to the Distribution Date.

 

“HSN Ratio” means the quotient obtained by
dividing the IAC Stock Value by the HSN Stock Value.

 

“HSN Retirement Savings Plan” means the 401(k) and
profit sharing plan to be established by HSN pursuant to Section 3.1 of
this Agreement, as in effect as of the time relevant to the applicable
provision of this Agreement.

 

4

 

“HSN Retirement Savings Plan Trust” means a
trust relating to the HSN Retirement Savings Plan intended to qualify under Section 401(a) and
be exempt under Section 501(a) of the Code.

 

“HSN Stock Value” means the closing per-share
price of HSN Common Stock in the “when issued market” as listed on the NASDAQ
as of 4:00 P.M. Eastern Standard Time in the last completed trading
session immediately preceding the Effective Time.

 

“IAC” has the meaning set forth in the
Preamble of this Agreement.

 

“IAC Common Stock” means shares of common
stock, $0.001 par value per share, of IAC.

 

“IAC Employee” means any individual who,
immediately prior to the Close of the Distribution Date, is either actively
employed by, or then on Approved Leave of Absence from, any IAC Entity.

 

“IAC Entities” means the members of the IAC
Group, as defined in the Separation Agreement, and their respective
Subsidiaries and Affiliates, excluding any business or operations (whether
current or historical, regardless of whether discontinued or sold) that are
included in the TM Group, the Interval Group, the HSN Group or the Tree Group.

 

“IAC Executive Benefit Plans” means the
executive benefit and nonqualified plans, programs, and arrangements
established, sponsored, maintained, or agreed upon, by any IAC Entity for the benefit of
employees and former employees of any IAC Entity before the Close of the
Distribution Date.

 

“IAC Deferred Compensation Plan” has the
meaning set forth in Section 5.5(a).

 

 “IAC
Factor” means the product obtained by multiplying (a) 0.5 and (b) the
Adjustment Ratio.

 

“IAC Flexible Benefit Plan” has the meaning
set forth in Section 4.5.

 

“IAC Incentive Plans” means any of the annual
or short term incentive plans of IAC, all as in effect as of the time relevant
to the applicable provisions of this Agreement.

 

“IAC Long-Term Incentive Plans” means any of
the Silver King Communications, Inc. 1995 Stock Incentive Plan, HSN, Inc.
1997 Stock and Annual Incentive Plan, USA Interactive Amended and Restated 2000
Annual Stock and Incentive Plan, IAC/InterActiveCorp 2005 Stock and Annual
Incentive Plan, Home Shopping Network, Inc. 1996 Stock Option Plan for
Employees, Equity and Bonus Compensation Agreement with Barry Diller, TM, Inc.
1999 Amended and Restated Stock Option Plan, the Hotels Reservations Network, Inc.
2000 Stock Plan, Ticketmaster Online-Citysearch, Inc. 1996 Stock Option
Plan, Ticketmaster Online-Citysearch, Inc. 1998 Stock Option Plan,
Ticketmaster 1999 Stock Plan, and Ticketweb, Inc. 2000 Stock Plan,
Styleclick, Inc. 1995 Stock Option Plan, Servicemagic, Inc. Amended
and Restated 1999 Stock Option Plan, Precision Response Corporation Amended and
Restated 1996 Incentive Stock Plan, TM, Inc. Amended and Restated 2001
Stock Plan, 1998 Stock Option Plan of LendingTree, Inc., Amended and
Restated Stock Incentive Plan of LendingTree, Inc., the Silver King
Communications, Inc. Directors Stock Option Plan, Hotwire, Inc. 2000
Equity Incentive Plan and any other stock incentive plan of IAC, all as in
effect as of the time relevant to the 

 

5

 

applicable provisions of
this Agreement.

 

“IAC Post-Separation Stock Value” means the
closing per-share price of IAC Common Stock trading in the “ex-distribution
market” as listed on the NASDAQ as of 4:00 P.M. Eastern Standard Time in
the last completed trading session immediately preceding the Effective Time.

 

“IAC Rabbi Trust” has the meaning set forth
in Section 5.5(a).

 

“IAC Ratio” means the quotient obtained by
dividing the IAC Stock Value by the IAC Post-Separation Stock Value.

 

“IAC Retirement Savings Plan” means the
InterActiveCorp Retirement Savings Plan as in effect as of the time relevant to
the applicable provision of this Agreement.

 

 “IAC Stock
Value” means the closing per share price of IAC Common Stock trading “regular
way with due bills” as listed on the NASDAQ as of 4:00 P.M., Eastern
Standard Time in the last completed trading session immediately preceding the
Effective Time.

 

“Immediately after the Distribution Date”
means on the first moment of the day after the Distribution Date.

 

“Interval” has the meaning set forth in the
Preamble of this Agreement.

 

“Interval Common Stock” means common stock,
par value $0.01 per share, of Interval.

 

“Interval Employee” means any individual who,
immediately prior to the Effective Time, is either actively employed by, or
then on Approved Leave of Absence from, an Interval Entity.

 

“Interval Entities” has the meaning given
that term in the Separation Agreement.

 

“Interval Executive Benefit Plans” means the
executive benefit and nonqualified plans, programs, and arrangements
established, sponsored, maintained, or agreed upon, by any Interval Entity for
the benefit of employees and former employees of any Interval Entity before the
Close of the Distribution Date.

 

“Interval Factor” means the product obtained
by multiplying (a) 0.2 and (b) the Adjustment Ratio.

 

“Interval Long-Term Incentive Plan” means the
long-term incentive plan or program to be established by Interval, effective
immediately prior to the Distribution Date.

 

“Interval Ratio” means the quotient obtained
by dividing the IAC Stock Value by the Interval Stock Value.

 

“Interval Retirement Savings Plan Trust”
means a trust relating to the Interval Retirement Savings Plan intended to
qualify under Section 401(a) and be exempt under Section 501(a) of
the Code.

 

6

 

“Interval Retirement Savings Plan” means the
401(k) and profit sharing plan to be established by Interval pursuant to Section 3.1
of this Agreement, as in effect as of the time relevant to the applicable
provision of this Agreement.

 

“Interval Stock Value” means the closing
per-share price of Interval Common Stock in the “when issued market” as listed
on the NASDAQ as of 4:00 P.M. Eastern Standard Time in the last completed
trading session immediately preceding the Effective Time.

 

“Liability” has the meaning given that term
in the Separation Agreement.

 

“Medical Plan” when immediately preceded by “IAC,”
means the Benefit Plan under which medical benefits are provided to IAC
Employees established and maintained by IAC. 
When immediately preceded by TM, Medical Plan means the Benefit Plan
under which medical benefits are provided to TM Employees to be established by
TM pursuant to Article IV.  When immediately
preceded by Interval, Medical Plan means the Benefit Plan under which medical
benefits are provided to Interval Employees to be established by Interval
pursuant to Article IV. When immediately preceded by HSN, Medical Plan
means the Benefit Plan under which medical benefits are provided to HSN
Employees to be established by HSN pursuant to Article IV. When
immediately preceded by Tree, Medical Plan means the Benefit Plan under which
medical benefits are provided to Tree Employees to be established by Tree
pursuant to Article IV.

 

“NASDAQ” means the National Association of
Securities Dealers Inc. Automated Quotation System.

 

“Net RSU Shares” has the meaning set forth in
Section 5.3(l).

 

“Non-parties” has the meaning set forth in Section 6.4(c).

 

“Option” when immediately preceded by “IAC,”
means an option (either nonqualified or incentive) to purchase shares of IAC
Common Stock pursuant to an IAC Long-Term Incentive Plan.  When immediately preceded by “TM,” Option
means an option (either nonqualified or incentive) to purchase shares of TM
Common Stock following the Effective Time pursuant to the TM Long-Term
Incentive Plan.  When immediately
preceded by “Interval,” Option means an option (either nonqualified or
incentive) to purchase shares of Interval Common Stock following the Effective
Time pursuant to the Interval Long-Term Incentive Plan.  When immediately preceded by “HSN,” Option
means an option (either nonqualified or incentive) to purchase shares of HSN
Common Stock following the Effective Time pursuant to the HSN Long-Term
Incentive Plan.  When immediately
preceded by “Tree,” Option means an option (either nonqualified or incentive)
to purchase shares of Tree Common Stock following the Effective Time pursuant
to the Tree Long-Term Incentive Plan.

 

“Participating Company” means (a) IAC
and (b) any other Person (other than an individual) that participates in a
plan sponsored by any IAC Entity.

 

“Parties” has the meaning set forth in the
Preamble of this Agreement.

 

“Person” has the meaning given that term in
the Separation Agreement.

 

“PV IAC Restricted Stock Units” has the
meaning set forth in Section 5.3(g).

 

“Restricted Stock” (a) when immediately
preceded by “IAC,” means shares of IAC Common Stock that are subject to
restrictions on transferability and a risk of forfeiture and 

 

7

 

are issued under an IAC
Benefit Plan, (b) when immediately preceded by “TM,” means shares of TM
Common Stock that are subject to restrictions on transferability and a risk of
forfeiture and are issued under a TM Benefit Plan, (c) when immediately
preceded by “Interval,” means shares of Interval Common Stock that are subject
to restrictions on transferability and a risk of forfeiture and are issued
under an Interval Benefit Plan, (d) when immediately preceded by “HSN,”
means shares of HSN Common Stock that are subject to restrictions on
transferability and a risk of forfeiture and are issued under an HSN Benefit
Plan and (e) when immediately preceded by “Tree,” means shares of Tree
Common Stock that are subject to restrictions on transferability and a risk of
forfeiture and are issued under a Tree Benefit Plan.

 

“Restricted Stock Unit” (a) when
immediately preceded by “IAC,” means units issued under an IAC Benefit Plan representing
a general unsecured promise by IAC to pay the value of shares of IAC Common
Stock in cash or shares of IAC Common Stock, (b) when immediately preceded
by “TM,” means units issued under the TM Long-Term Incentive Plan representing
a general unsecured promise by TM to pay the value of shares of TM Common Stock
in cash or shares of TM Common Stock, (c) when immediately preceded by “Interval,”
means units issued under the Interval Long-Term Incentive Plan representing a
general unsecured promise by Interval to pay the value of shares of Interval
Common Stock in cash or shares of Interval Common Stock, (d) when
immediately preceded by “HSN,” means units issued under the HSN Long-Term
Incentive Plan representing a general unsecured promise by HSN to pay the value
of shares of HSN Common Stock in cash or shares of HSN Common Stock, (e) when
immediately preceded by “Tree,” means units issued under the Tree Long-Term
Incentive Plan representing a general unsecured promise by Tree to pay the
value of shares of Tree Common Stock in cash or shares of Tree Common Stock.

 

“Separation” has the meaning given that term
in the Separation Agreement.

 

“Separation Agreement” has the meaning set
forth in the recitals to this Agreement.

 

“SpinCos” has the meaning set forth in the
Preamble of this Agreement.

 

“SpinCo Employee” means a TM Employee,
Interval Employee, HSN Employee and/or Tree Employee as the context requires.

 

“TM” has the meaning set forth in the
Preamble of this Agreement.

 

“TM Common Stock” means common stock, par
value $0.01 per share, of TM.

 

“TM Deferred Compensation Plan” has the
meaning set forth in Section 5.5(a).

 

“TM Employee” means any individual who,
immediately prior to the Effective Time, is either actively employed by, or
then on Approved Leave of Absence from, a TM Entity.

 

“TM Entities” has the meaning given that term
in the Separation Agreement.

 

“TM Executive Benefit Plans” means the
executive benefit and nonqualified plans, programs, and arrangements
established, sponsored, maintained, or agreed upon, by any TM Entity for the
benefit of employees and former employees of any TM Entity before the Close of
the Distribution Date.

 

“TM Factor” means the product obtained by
multiplying (a) 0.2 and (b) the Adjustment Ratio.

 

8

 

“TM Long-Term Incentive Plan” means the
long-term incentive plan or program to be established by TM, effective
immediately prior to the Distribution Date.

 

“TM Participants” has the meaning set forth
in Section 5.5(a).

 

“TM Rabbi Trust” has the meaning set forth in
Section 5.5(a).

 

“TM Ratio” means the quotient obtained by
dividing the IAC Stock Value by the TM Stock Value.

 

“TM Retirement Savings Plan” means the 401(k) and
profit sharing plan to be established by TM pursuant to Section 3.1 of
this Agreement, as in effect as of the time relevant to the applicable
provision of this Agreement.

 

“TM Retirement Savings Plan Trust” means a
trust relating to the TM Retirement Savings Plan intended to qualify under Section 401(a) and
be exempt under Section 501(a) of the Code.

 

“TM Stock Value” means the closing per-share
price of TM Common Stock in the “when issued market” as listed on the NASDAQ as
of 4:00 P.M. Eastern Standard Time in the last completed trading session
immediately preceding the Effective Time.

 

“Tree” has the meaning set forth in the
Preamble of this Agreement.

 

“Tree Common Stock” means common stock, par
value $0.01 per share, of Tree.

 

“Tree Deferred Compensation Plan” has the
meaning set forth in Section 5.5(d).

 

“Tree Employee” means any individual who,
immediately prior to the Effective Time, is either actively employed by, or
then on Approved Leave of Absence from, a Tree Entity.

 

“Tree Entities” has the meaning given that
term in the Separation Agreement.

 

“Tree Executive Benefit Plans” means the
executive benefit and nonqualified plans, programs, and arrangements
established, sponsored, maintained, or agreed upon, by any Tree Entity for the
benefit of employees and former employees of any Tree Entity before the Close
of the Distribution Date.

 

“Tree Factor” means the product obtained by
multiplying (a) 0.03333 and (b) the Adjustment Ratio.

 

“Tree Long-Term Incentive Plan” means the
long-term incentive plan or program to be established by Tree, effective
immediately prior to the Distribution Date.

 

“Tree Participants” has the meaning set forth
in Section 5.5(d).

 

“Tree Rabbi Trust” has the meaning set forth
in Section 5.5(d).

 

“Tree Ratio” means the quotient obtained by
dividing the IAC Stock Value by the Tree Stock Value.

 

9

 

“Tree Retirement Savings Plan” means the 401(k) and
profit sharing plan to be established by Tree pursuant to Section 3.1 of
this Agreement, as in effect as of the time relevant to the applicable
provision of this Agreement.

 

“Tree Retirement Savings Plan Trust” means a
trust relating to the Tree Retirement Savings Plan intended to qualify under Section 401(a) and
be exempt under Section 501(a) of the Code.

 

“Tree Stock Value” means the closing
per-share price of Tree Common Stock in the “when issued market” as listed on
the NASDAQ as of 4:00 P.M. Eastern Standard Time in the last completed
trading session immediately preceding the Effective Time.

 

“U.S.” means the 50 United States of America
and the District of Columbia.

 

ARTICLE II

GENERAL PRINCIPLES

 

2.1           Employment.

 

(a)           All TM Employees shall continue to be employees of
TM or another TM Entity, as the case may be, immediately after the Effective
Time.

 

(b)           All Interval Employees shall continue to be
employees of Interval or another Interval Entity, as the case may be,
immediately after the Effective Time.

 

(c)           All HSN Employees shall continue to be employees of
HSN or another HSN Entity, as the case may be, immediately after the Effective
Time.

 

(d)           All Tree Employees shall continue to be employees of
Tree or another Tree Entity, as the case may be, immediately after the
Effective Time.

 

2.2           Assumption and
Retention of Liabilities; Related Assets.

 

(a)           As of the Distribution Date, except as expressly
provided in this Agreement, the IAC Entities shall assume or retain and IAC
hereby agrees to pay, perform, fulfill and discharge, in due course in
full (i) all Liabilities under all IAC Benefit Plans with respect to all
IAC Employees, Former IAC Employees and their dependents and beneficiaries, (ii) all
Liabilities with respect to the employment or termination of employment of all
IAC Employees, Former IAC Employees and their dependents and beneficiaries, and
other service providers (including any individual who is, or was, an
independent contractor, temporary employee, temporary service worker,
consultant, freelancer, agency employee, leased employee, on-call worker,
incidental worker, or nonpayroll worker of any IAC Entity or in any other
employment, non-employment, or retainer arrangement, or relationship with any
IAC Entity), in each case to the extent arising in connection with or as a
result of employment with or the performance of services to any IAC Entity, and (iii) any
other Liabilities expressly assigned to IAC under this Agreement.  All assets held in trust to fund the IAC
Benefit Plans and all insurance policies funding the IAC Benefit Plans shall be
IAC Assets (as defined in the Separation Agreement), except to the extent
specifically provided otherwise in this Agreement.

 

(b)           From and after the Distribution Date, except as
expressly provided in this Agreement, TM and the TM Entities shall assume or retain, as
applicable, and TM  hereby agrees to pay,
perform, fulfill and discharge, in due course in full, (i) all Liabilities

 

10

 

under all TM Benefit Plans, (ii) all Liabilities
with respect to the employment or termination of employment of all TM
Employees, Former TM Employees and their dependents and beneficiaries, and
other service providers (including any individual who is, or was, an
independent contractor, temporary employee, temporary service worker,
consultant, freelancer, agency employee, leased employee, on-call worker,
incidental worker, or nonpayroll worker of TM or any TM Entity or in any other
employment, non-employment, or retainer arrangement, or relationship with TM or
a TM Entity), in each case to the extent arising in connection with or as a
result of employment with or the performance of services to any TM Entity and (iii) any
other Liabilities expressly assigned to TM or any TM Entity under this
Agreement.

 

(c)           From and after the Distribution Date, except as
expressly provided in this Agreement, Interval and the Interval Entities shall
assume or retain, as applicable, and Interval hereby agrees to pay, perform,
fulfill and discharge, in due course in full, (i) all Liabilities under
all Interval Benefit Plans, (ii) all Liabilities with respect to the
employment or termination of employment of all Interval Employees, Former
Interval Employees and their dependents and beneficiaries, and other service
providers (including any individual who is, or was, an independent contractor,
temporary employee, temporary service worker, consultant, freelancer, agency
employee, leased employee, on-call worker, incidental worker, or nonpayroll
worker of Interval or any Interval Entity or in any other employment,
non-employment, or retainer arrangement, or relationship with Interval or an
Interval Entity), in each case to the extent arising in connection with or as a
result of employment with or the performance of services to any Interval Entity
and (iii) any other Liabilities expressly assigned to Interval or any
Interval Entity under this Agreement.

 

(d)           From and after the Distribution Date, except as
expressly provided in this Agreement, HSN and the HSN Entities shall assume or retain, as
applicable, and HSN hereby agrees to pay, perform, fulfill and discharge, in
due course in full, (i) all Liabilities under all HSN Benefit Plans, (ii) all
Liabilities with respect to the employment or termination of employment of all
HSN Employees, Former HSN Employees and their dependents and beneficiaries, and
other service providers (including any individual who is, or was, an
independent contractor, temporary employee, temporary service worker,
consultant, freelancer, agency employee, leased employee, on-call worker,
incidental worker, or nonpayroll worker of HSN or any HSN Entity or in any
other employment, non-employment, or retainer arrangement, or relationship with
HSN or an HSN Entity), in each case to the extent arising in connection with or
as a result of employment with or the performance of services to any HSN Entity
and (iii) any other Liabilities expressly assigned to HSN or any HSN
Entity under this Agreement.

 

(e)           From and after the Distribution Date, except as
expressly provided in this Agreement, Tree and the Tree Entities shall assume
or retain, as applicable, and Tree hereby agrees to pay, perform, fulfill and
discharge, in due course in full, (i) all Liabilities under all Tree
Benefit Plans, (ii) all Liabilities with respect to the employment or
termination of employment of all Tree Employees, Former Tree Employees and
their dependents and beneficiaries, and other service providers (including any
individual who is, or was, an independent contractor, temporary employee,
temporary service worker, consultant, freelancer, agency employee, leased
employee, on-call worker, incidental worker, or nonpayroll worker of Tree or
any Tree Entity or in any other employment, non-employment, or retainer
arrangement, or relationship with Tree or a Tree Entity), in each case to the
extent arising in connection with or as a result of employment with or the
performance of services to any Tree Entity and (iii) any other Liabilities
expressly assigned to Tree or any Tree Entity under this Agreement.

 

11

 

2.3           SpinCo
Participation in IAC Benefit Plans.

 

(a)           Except as expressly provided in this Agreement,
effective as of the Close of the Distribution Date, TM and each other TM Entity
shall cease to be a Participating Company in any IAC Benefit Plan, and IAC and
TM shall take all necessary action before the Distribution Date to effectuate
such cessation as a Participating Company.

 

(b)           Except as expressly provided in this Agreement,
effective as of the Close of the Distribution Date, Interval and each other
Interval Entity shall cease to be a Participating Company in any IAC Benefit
Plan, and IAC and Interval shall take all necessary action before the
Distribution Date to effectuate such cessation as a Participating Company.

 

(c)           Except as expressly provided in this Agreement,
effective as of the Close of the Distribution Date, HSN and each other HSN
Entity shall cease to be a Participating Company in any IAC Benefit Plan, and
IAC and HSN shall take all necessary action before the Distribution Date to
effectuate such cessation as a Participating Company.

 

(d)           Except as expressly provided in this Agreement,
effective as of the Close of the Distribution Date, Tree and each other Tree
Entity shall cease to be a Participating Company in any IAC Benefit Plan, and
IAC and Tree shall take all necessary action before the Distribution Date to
effectuate such cessation as a Participating Company.

 

2.4           Terms of
Participation by SpinCo Employees in SpinCo Benefit Plans.

 

(a)           IAC and TM shall agree on methods and procedures,
including, without limitation, amending the respective Benefit Plan documents,
to prevent TM Employees from receiving duplicative benefits from the IAC
Benefit Plans and the TM Benefit Plans. 
With respect to TM Employees, each TM Benefit Plan shall provide that
all service, all compensation and all other benefit-affecting determinations
that, as of December 31, 2008 were recognized under the corresponding IAC
Benefit Plan shall, as of January 1, 2009 receive full recognition, credit
and validity and be taken into account under such TM Benefit Plan to the same
extent as if such items occurred under such TM Benefit Plan, except to the extent
that duplication of benefits would result or for benefit accrual to the extent
that TM adopts a final average pay defined benefit pension plan.

 

(b)           IAC and Interval shall agree on methods and
procedures, including, without limitation, amending the respective Benefit Plan
documents, to prevent Interval Employees from receiving duplicative benefits
from the IAC Benefit Plans and the Interval Benefit Plans.  With respect to Interval Employees, each
Interval Benefit Plan shall provide that all service, all compensation and all
other benefit-affecting determinations that, as of December 31, 2008 were
recognized under the corresponding IAC Benefit Plan shall, as of January 1,
2009 receive full recognition, credit and validity and be taken into account
under such Interval Benefit Plan to the same extent as if such items occurred
under such Interval Benefit Plan, except to the extent that duplication of
benefits would result or for benefit accrual to the extent that Interval adopts
a final average pay defined benefit pension plan.

 

(c)           IAC
and HSN shall agree on methods and procedures, including, without limitation,
amending the respective Benefit Plan documents, to prevent HSN Employees from
receiving duplicative benefits from the IAC Benefit Plans and the HSN Benefit
Plans.  With respect to HSN Employees,
each HSN Benefit Plan shall provide that all service, all compensation and all
other benefit-affecting determinations that, as of  December 31, 2008 were
recognized under the corresponding IAC Benefit Plan shall, as of January 1,
2009 receive full recognition, credit and validity and be taken into account
under

 

12

 

such HSN Benefit Plan to the same extent as if such
items occurred under such HSN Benefit Plan, except to the extent that
duplication of benefits would result or for benefit accrual to the extent that
HSN adopts a final average pay defined benefit pension plan.

 

(d)           IAC and Tree shall agree on methods and procedures,
including, without limitation, amending the respective Benefit Plan documents,
to prevent Tree Employees from receiving duplicative benefits from the IAC
Benefit Plans and the Tree Benefit Plans. 
With respect to Tree Employees, each Tree Benefit Plan shall provide
that all service, all compensation and all other benefit-affecting
determinations that, as of December 31, 2008 were recognized under the
corresponding IAC Benefit Plan shall, as of January 1, 2009 receive full
recognition, credit and validity and be taken into account under such Tree
Benefit Plan to the same extent as if such items occurred under such Tree
Benefit Plan, except to the extent that duplication of benefits would result or
for benefit accrual to the extent that Tree adopts a final average pay defined
benefit pension plan.

 

2.5           Commercially
Reasonable Efforts.  IAC, TM,
Interval, HSN and Tree shall use commercially reasonable efforts to (a) enter
into any necessary agreements to accomplish the assumptions and transfers
contemplated by this Agreement; and (b) provide for the maintenance of the
necessary participant records, the appointment of the trustees and the
engagement of recordkeepers, investment managers, providers, insurers, etc.

 

2.6           Regulatory
Compliance.  IAC, TM,
Interval, HSN and Tree shall, in connection with the actions taken pursuant to
this Agreement, cooperate in making any and all appropriate filings required
under the Code, ERISA and any applicable securities laws, implementing all
appropriate communications with participants, transferring appropriate records
and taking all such other actions as may be necessary and appropriate to
implement the provisions of this Agreement in a timely manner.

 

2.7           Approval by IAC
as Sole Stockholder.  Prior to
the Effective Time, IAC shall cause (a) TM to adopt the TM 2008 Long-Term
Incentive Plan, (b) Interval to adopt the Interval 2008 Long-Term
Incentive Plan, (c) HSN to adopt the HSN 2008 Long-Term Incentive Plan and
(d) Tree to adopt the Tree 2008 Long-Term Incentive Plan.

 

ARTICLE III

SAVINGS PLANS

 

3.1           Savings Plan Transition
Period.  From the Distribution Date and
continuing until December 31, 2008, each of TM, Interval, HSN and Tree
shall adopt and maintain the IAC Retirement Savings Plan for the benefit of TM
Employees and Former TM Employees, Interval Employees and Former Interval
Employees, HSN Employees and Former HSN Employees and Tree Employees and Former
Tree Employees, respectively, and IAC shall consent to such adoption and
maintenance, in accordance with the terms of the IAC Retirement Savings Plan.  Each of the Parties agrees that, following
the Distribution Date and prior to December 31, 2008, the trustee of the
IAC Retirement Savings Plan shall sell all shares of IAC Common Stock, TM
Common Stock, Interval Common Stock, HSN Common Stock and Tree Common Stock
held in the accounts of IAC Employees and Former IAC Employees, TM Employees
and Former TM Employees, Interval Employees and Former Interval Employees, HSN
Employees and Former HSN Employees and Tree Employees and Former Tree Employees
(provided that IAC may in its sole discretion instruct the trustee of the IAC
Retirement Savings Plan not to sell the shares of IAC Common Stock held by IAC
Employees and Former IAC Employees).  On
and after the Distribution Date and until the completion of the sales contemplated
by the immediately preceding sentence, shares of IAC Common Stock shall be held
in an IAC Common Stock Fund, shares of TM Common Stock

 

13

 

shall be held in a TM Common Stock Fund, shares of
Interval Common Stock shall be held in an Interval Common Stock Fund, shares of
HSN Common Stock shall be held in an HSN Common Stock Fund and shares of Tree
Common Stock shall be held in a Tree Common Stock Fund, in each case, under the
IAC Retirement Savings Plan.  Following
the Distribution Date, IAC Employees and Former IAC Employees, TM Employees and
Former TM Employees, Interval Employees and Former Interval Employees and Tree
Employees and Former Tree Employees shall not be permitted to acquire shares of
IAC Common Stock, TM Common Stock, Interval Common Stock, HSN Common Stock or
Tree Common Stock in the IAC Common Stock Fund, the TM Common Stock Fund, the
Interval Common Stock Fund, the HSN Common Stock Fund or the Tree Common Stock
Fund, as applicable, under the IAC Retirement Savings Plan (provided that IAC
may in its sole discretion instruct the trustee of the IAC Retirement Savings
Plan to permit IAC Employees and Former IAC Employees to acquire additional
shares of IAC Common Stock in the IAC Common Stock Fund).

 

3.2           SpinCo Savings
Plans

 

(a)           Effective as of January 1, 2009, TM shall
establish the TM Retirement Savings Plan and the TM Retirement Savings Plan
Trust.  As soon as practical following
the establishment of the TM Retirement Savings Plan and the TM Retirement
Savings Plan Trust, IAC shall cause the accounts of the TM Employees and Former
TM Employees in the IAC Retirement Savings Plan to be transferred to the TM
Retirement Savings Plan and the TM Retirement Savings Plan Trust in cash or
such other assets as mutually agreed by IAC and TM, and TM shall cause the TM
Retirement Savings Plan to assume and be solely responsible for all Liabilities
under the TM Retirement Savings Plan to or relating to TM Employees and Former
TM Employees whose accounts are transferred from the IAC Retirement Savings
Plan.  IAC and TM agree to cooperate in
making all appropriate filings and taking all reasonable actions required to
implement the provisions of this Section 3.2; provided that TM
acknowledges that it will be responsible for complying with any requirements
and applying for any determination letters with respect to the TM Retirement
Savings Plan.

 

(b)           Effective as of January 1, 2009, Interval shall
establish the Interval Retirement Savings Plan and the Interval Retirement
Savings Plan Trust.  As soon as practical
following the establishment of the Interval Retirement Savings Plan and the
Interval Retirement Savings Plan Trust, IAC shall cause the accounts of the
Interval Employees and Former Interval Employees in the IAC Retirement Savings
Plan to be transferred to the Interval Retirement Savings Plan and the Interval
Retirement Savings Plan Trust in cash or such other assets as mutually agreed
by IAC and Interval, and Interval shall cause the Interval Retirement Savings
Plan to assume and be solely responsible for all Liabilities under the Interval
Retirement Savings Plan to or relating to Interval Employees and Former
Interval Employees whose accounts are transferred from the IAC Retirement
Savings Plan.  IAC and Interval agree to
cooperate in making all appropriate filings and taking all reasonable actions
required to implement the provisions of this Section 3.2; provided
that Interval acknowledges that it will be responsible for complying with any
requirements and applying for any determination letters with respect to the
Interval Retirement Savings Plan.

 

(c)           Effective as of January 1, 2009, HSN shall
establish the HSN Retirement Savings Plan and the HSN Retirement Savings Plan
Trust.  As soon as practical following
the establishment of the HSN Retirement Savings Plan and the HSN Retirement
Savings Plan Trust, IAC shall cause the accounts of the HSN Employees and
Former HSN Employees in the IAC Retirement Savings Plan to be transferred to
the HSN Retirement Savings Plan and the HSN Retirement Savings Plan Trust in
cash or such other assets as mutually agreed by IAC and HSN, and HSN shall
cause the HSN Retirement Savings Plan to

 

14

 

assume and be solely responsible for all Liabilities
under the HSN Retirement Savings Plan to or relating to HSN Employees and
Former HSN Employees whose accounts are transferred from the IAC Retirement
Savings Plan.  IAC and HSN agree to
cooperate in making all appropriate filings and taking all reasonable actions
required to implement the provisions of this Section 3.2; provided
that HSN acknowledges that it will be responsible for complying with any
requirements and applying for any determination letters with respect to the HSN
Retirement Savings Plan.

 

(d)           Effective as of January 1, 2009, Tree shall
establish the Tree Retirement Savings Plan and the Tree Retirement Savings Plan
Trust.  As soon as practical following
the establishment of the Tree Retirement Savings Plan and the Tree Retirement
Savings Plan Trust, IAC shall cause the accounts of the Tree Employees and
Former Tree Employees in the IAC Retirement Savings Plan to be transferred to
the Tree Retirement Savings Plan and the Tree Retirement Savings Plan Trust in
cash or such other assets as mutually agreed by IAC and Tree, and Tree shall
cause the Tree Retirement Savings Plan to assume and be solely responsible for
all Liabilities under the Tree Retirement Savings Plan to or relating to Tree
Employees and Former Tree Employees whose accounts are transferred from the IAC
Retirement Savings Plan.  IAC and Tree
agree to cooperate in making all appropriate filings and taking all reasonable
actions required to implement the provisions of this Section 3.2; provided
that Tree acknowledges that it will be responsible for complying with any
requirements and applying for any determination letters with respect to the
Tree Retirement Savings Plan.

 

ARTICLE IV

HEALTH AND WELFARE PLANS

 

4.1           Transition
Period.

 

(a)           IAC will cause the IAC Health and Welfare Plans in
effect on the Distribution Date to provide coverage to TM Employees and Former
TM Employees, Interval Employees and Former Interval Employees, HSN Employees
and Former HSN Employees and Tree Employees and Former Tree Employees (and, in
each case, their beneficiaries and dependents) from and after the Distribution
Date until December 31, 2008 (such period, the “H&W Transition
Period”) on the same basis as immediately prior to the date of the
Distribution Date and in accordance with the terms of IAC’s Health and Welfare
Plans.  Following the Distribution Date,
each SpinCo shall pay to IAC fees in respect of IAC covering such SpinCo’s
SpinCo Employees and SpinCo Former Employees under the IAC Health and Welfare
Plans, such fees to be based on the per-employee budgeted rates set forth on Exhibit A to this
Agreement.  The fees contemplated by this
Section 4.1 shall be payable in advance each month (i.e.,
not later than the first day of any month during which coverage applies) during
the H&W Transition Period and shall be based on the prior month’s
enrollment, with appropriate, subsequent adjustments in each succeeding month
to reflect actual enrollment; provided, however, that the fees
relating to the period from and including the first day of the month during
which the Distribution Date occurs through the end of the month during which
the Distribution Date occurs shall be payable no later than the fifth business
day following the Distribution Date.  In
the event that any SpinCo fails to pay in a timely manner the fees contemplated
by this Section 4.1(a), IAC shall have no obligation to provide the
coverage contemplated by this Section 4.1(a) to such SpinCo’s SpinCo
Employees and SpinCo Former Employees.

 

(b)           Following the H&W Transition Period, but not
later than May 15, 2009, IAC shall calculate in good faith the total costs
and expenses of the IAC Health and Welfare Plans for 2008 (including without
limitation claims paid and administration fees and IAC’s

 

15

 

good faith estimate of claims incurred in 2008 but
not reported by March 31, 2009 (such estimate to be prepared based on
historical claims reporting patterns and history)) (the “2008 H&W
Expenses”), and IAC promptly shall provide to each of the SpinCos the 2008
H&W Expenses following such calculation. 
To the extent 2008 H&W Expenses (i) exceed the aggregate fees
paid by IAC and the SpinCos in respect of coverage during 2008 of IAC Employees
and Former Employees and SpinCo Employees and Former SpinCo Employees (the “2008
H&W Fees”), each of the SpinCos shall be required to pay to IAC by wire
transfer such SpinCo’s ratable portion (calculated on the basis of the number
of such SpinCo’s SpinCo Employees relative to the total number of IAC Employees
and SpinCo Employees taken together) of the fees deficit, and (ii) is less
than the 2008 H&W Fees, IAC shall pay to each of the SpinCos such SpinCo’s
ratable portion (calculated on the basis of the number of such SpinCo’s SpinCo
Employees relative to the total number of IAC Employees and SpinCo Employees
taken together) of the excess fees collected, any such payments pursuant to
clause (i) or clause (ii) to be made no later than July 15, 2009.  Any calculations made by IAC pursuant to this
Section 4.1(b) shall be final and binding upon the SpinCos.  For purposes of this Section 4.1(b), any
calculation based on a number of employees shall be based on [      ].

 

4.2           Establishment
of Health and Welfare Plans.

 

(a)           Effective as of January 1, 2009, TM shall adopt
Health and Welfare Plans for the benefit of TM Employees and Former TM
Employees, and TM shall be responsible for all Liabilities relating to, arising
out of or resulting from health and welfare coverage or claims
incurred by or on behalf of TM Employees and Former TM Employees or their
covered dependents under the TM Health and Welfare Plans prior to, on or after January 1,
2009.

 

(b)           Effective as of January 1, 2009, Interval shall
adopt Health and Welfare Plans for the benefit of Interval Employees and Former
Interval Employees, and Interval shall be responsible for all Liabilities
relating to, arising out of or resulting from health and welfare coverage
or claims incurred by or on behalf of Interval Employees and Former Interval
Employees or their covered dependents under the Interval Health and Welfare
Plans prior to, on or after January 1, 2009.

 

(c)           Effective as of January 1, 2009, HSN shall
adopt Health and Welfare Plans for the benefit of HSN Employees and Former HSN
Employees, and HSN shall be responsible for all Liabilities relating to,
arising out of or resulting from health and welfare coverage or claims
incurred by or on behalf of HSN Employees and Former HSN Employees or their
covered dependents under the HSN Health and Welfare Plans prior to, on or after
January 1, 2009.

 

(d)           Effective as of January 1, 2009, Tree shall
adopt Health and Welfare Plans for the benefit of Tree Employees and Former
Tree Employees, and Tree shall be responsible for all Liabilities relating to,
arising out of or resulting from health and welfare coverage or claims
incurred by or on behalf of Tree Employees and Former Tree Employees or their
covered dependents under the Tree Health and Welfare Plans prior to, on or
after January 1, 2009.

 

(e)           Notwithstanding anything to the contrary in this Section 4.2,
with respect to any TM Employee, Interval Employee, HSN Employee or Tree
Employee who becomes disabled under the terms of the IAC Health and Welfare
Plans and becomes entitled to receive

 

16

 

long-term or short-term disability benefits prior to
January 1, 2009, such TM Employee, Interval Employee, HSN Employee or Tree
Employee shall continue to receive long-term or short-term disability benefits
under the IAC Health and Welfare Plans on and after January 1, 2009 in
accordance with the terms of the IAC Health and Welfare Plans.

 

4.3           Retention of
Sponsorship and Liabilities.  Following the Distribution Date, IAC shall
retain:

 

(a)           sponsorship of all IAC Health and Welfare Plans and
any trust or other funding arrangement established or maintained with respect
to such plans, including any “voluntary employee’s beneficiary association,” or
any assets held as of the Distribution Date with respect to such plans;
and

 

(b)           all Liabilities relating to, arising out of, or
resulting from health and welfare coverage or claims incurred by or on behalf
of IAC Employees or Former IAC Employees or their covered dependents under the IAC
Health and Welfare Plans prior to, on or after the Distribution Date.

 

Other than as contemplated by Section 4.1 with
respect to the H&W Transition Period, IAC shall not assume any Liability
relating to health and welfare claims incurred by or on behalf of SpinCo
Employees or Former SpinCo Employees or their respective covered dependents
prior to, on or after the Distribution Date, and such claims shall be satisfied
pursuant to Section 4.2.  For
purposes of Sections 4.2 and 4.3 of this Agreement, a claim or Liability (1) for
medical, dental, vision and/or prescription drug benefits shall be deemed to be
incurred upon the rendering of health services giving rise to the obligation to
pay such benefits; (2) for life insurance and accidental death and
dismemberment and business travel accident insurance benefits and workers’
compensation benefits shall be deemed to be incurred upon the occurrence of the
event giving rise to the entitlement to such benefits; (3) for salary
continuation or other disability benefits shall be deemed to be incurred upon
the effective date of an individual’s disability giving rise to the entitlement
to such benefits under the applicable disability policy; and (4) for a
period of continuous hospitalization shall be deemed to be incurred on the date
of admission to the hospital.

 

4.4           Vendor Contracts.

 

(a)           IAC and TM shall use commercially reasonable efforts
to obligate the third party administrator of each administrative-services-only
contract with a third-party administrator that relates to any of the IAC Health
and Welfare Plans (an “ASO Contract”), each group insurance policy that
relates to any of the IAC Health and Welfare Plans (“Group Insurance
Policies”) and each agreement with a Health Maintenance Organization that
provides medical services under the IAC Health and Welfare Plans (“HMO Agreements”),
in each case, in existence as of the date of this Agreement that is applicable
to TM Employees, to enter into a separate ASO Contract, Group Insurance Policy
and HMO Agreement, as applicable, with TM providing for substantially similar
terms and conditions as are contained in the ASO Contracts, Group Insurance
Policies and HMO Agreements, as applicable, to which IAC is a party.  Such terms and conditions shall include the
financial and termination provisions, performance standards, methodology, auditing
policies, quality measures and reporting requirements.

 

(b)           IAC and Interval shall use commercially reasonable
efforts to obligate the third party administrator of each
administrative-services-only contract with an ASO Contract, each Group
Insurance Policy and each HMO Agreement, in each case, in existence as of the
date of this Agreement that is applicable to Interval Employees, to enter into
a separate ASO Contract, Group Insurance Policy and HMO Agreement, as
applicable, with Interval providing for substantially similar terms and
conditions as are contained in the ASO

 

17

 

Contracts, Group Insurance Policies and HMO
Agreements, as applicable, to which IAC is a party.  Such terms and conditions shall include the
financial and termination provisions, performance standards, methodology,
auditing policies, quality measures and reporting requirements.

 

(c)           IAC and HSN shall use commercially reasonable
efforts to obligate the third party administrator of each
administrative-services-only contract with an ASO Contract, each Group
Insurance Policy and each HMO Agreement, in each case, in existence as of the
date of this Agreement that is applicable to HSN Employees, to enter into a
separate ASO Contract, Group Insurance Policy and HMO Agreement, as applicable,
with HSN providing for substantially similar terms and conditions as are
contained in the ASO Contracts, Group Insurance Policies and HMO Agreements, as
applicable, to which IAC is a party. 
Such terms and conditions shall include the financial and termination
provisions, performance standards, methodology, auditing policies, quality
measures and reporting requirements.

 

(d)           IAC and Tree shall use commercially reasonable
efforts to obligate the third party administrator of each
administrative-services-only contract with an ASO Contract, each Group
Insurance Policy and each HMO Agreement, in each case, in existence as of the
date of this Agreement that is applicable to Tree Employees, to enter into a
separate ASO Contract, Group Insurance Policy and HMO Agreement, as applicable,
with Tree providing for substantially similar terms and conditions as are
contained in the ASO Contracts, Group Insurance Policies and HMO Agreements, as
applicable, to which IAC is a party. 
Such terms and conditions shall include the financial and termination
provisions, performance standards, methodology, auditing policies, quality
measures and reporting requirements.

 

4.5           Flexible
Benefit Plan.  IAC will
continue to maintain on behalf of TM Employees, Interval Employees, HSN
Employees and Tree Employees the health care reimbursement program, the transit
and parking reimbursement program and the dependent care reimbursement program
of the IAC Flexible Benefit Plan (all of such accounts, “IAC Flexible
Benefit Plan”) for claims incurred with respect to 2008 elections under the
IAC Flexible Benefit Plan (all such claims must be submitted no later than April 15,
2009) on the same basis as immediately prior to the Distribution Date and in accordance
with the terms of the IAC Flexible Benefit Plan.  Following the Distribution Date, each SpinCo
shall pay to IAC the amounts claimed by such SpinCo’s SpinCo Employees under
the IAC Flexible Benefit Plan in addition to such SpinCo’s share of the administrative
cost of the IAC Flexible Benefit Plan (based on IAC historical allocations),
such amounts to be paid by each SpinCo on a one-month lagging basis (i.e., claims made and administrative costs
incurred during a particular month shall be billed in the immediately
succeeding month); provided, that each SpinCo shall remit payment to IAC
no later than the fifth business day following delivery by IAC of an invoice to
such SpinCo.  SpinCo Employees shall not
participate in the IAC Flexible Benefit Plan with respect to any plan year
after the 2008 plan year.

 

4.6           Workers’
Compensation Liabilities.

 

(a)           Except as provided below, all workers’ compensation
Liabilities relating to, arising out of, or resulting from any claim by an IAC
Employee, Former IAC Employee, SpinCo Employee or Former SpinCo Employee that
results from an accident occurring, or from an occupational disease which
becomes manifest, before the Distribution Date shall be retained by IAC.

 

18

 

(b)           All workers’ compensation Liabilities relating to,
arising out of, or resulting from any claim by an IAC Employee or Former IAC
Employee that results from an accident occurring, or from an occupational
disease which becomes manifest, on or after the Distribution Date shall be
retained by IAC.

 

(c)           All workers’ compensation Liabilities relating to,
arising out of, or resulting from any claim by a TM Employee or Former TM
Employee that results from an accident occurring, or from an occupational
disease which becomes manifest, on or after the Distribution Date shall be
retained by TM.

 

(d)           All workers’ compensation Liabilities relating to,
arising out of, or resulting from any claim by an Interval Employee or Former
Interval Employee that results from an accident occurring, or from an
occupational disease which becomes manifest, on or after the Distribution Date
shall be retained by Interval.

 

(e)           All workers’ compensation Liabilities relating to,
arising out of, or resulting from any claim by an HSN Employee or Former HSN
Employee that results from an accident occurring, or from an occupational
disease which becomes manifest, on or after the Distribution Date shall be
retained by HSN.

 

(f)            All workers’ compensation Liabilities relating to,
arising out of, or resulting from any claim by a Tree Employee or Former Tree
Employee that results from an accident occurring, or from an occupational
disease which becomes manifest, on or after the Distribution Date shall be
retained by Tree.

 

For
purposes of this Agreement, a compensable injury shall be deemed to be
sustained upon the occurrence of the event giving rise to eligibility for
workers’ compensation benefits or at the time that an occupational disease
becomes manifest, as the case may be. 
The Parties shall cooperate with respect to any notification to
appropriate governmental agencies of the Effective Time and the issuance of
new, or the transfer of existing, workers’ compensation insurance policies and
claims handling contracts.

 

4.7           Payroll Taxes
and Reporting of Compensation.  Each of IAC, TM, Interval, HSN and Tree
shall, and shall cause each of its respective Subsidiaries to, take such action
as may be reasonably necessary or appropriate in order to minimize Liabilities
related to payroll taxes after the Distribution Date.  Each of IAC, TM, Interval, HSN and Tree
shall, and shall cause each if its respective Subsidiaries to, respectively,
bear its responsibility for payroll tax obligations and for the proper
reporting to the appropriate governmental authorities of compensation earned by
their respective employees after the Close of the Distribution Date, including
compensation related to the exercise of Options and the vesting and/or
settlement of Restricted Stock Units.

 

4.8           COBRA and HIPAA
Compliance.

 

(a)           IAC shall be responsible for administering
compliance with the health care continuation requirements of COBRA, the
certificate of creditable coverage requirements of HIPAA, and the corresponding
provisions of the IAC Health and Welfare Plans with respect to IAC Employees
and Former IAC Employees and their covered dependents who incur a COBRA
qualifying event or loss of coverage under the IAC Health and Welfare Plans at
any time before, on or after the Effective Time.

 

(b)           Until December 31, 2008, IAC shall be responsible
for administering compliance with the health care continuation requirements of
COBRA, the certificate of

 

19

 

creditable coverage requirements of HIPAA, and the
corresponding provisions of the IAC Health and Welfare Plans with respect to
SpinCo Employees and Former SpinCo Employees and their covered dependents who
incur a COBRA qualifying event or loss of coverage under the IAC Health and
Welfare Plans at any time through December 31, 2008.

 

(c)           On and after January 1, 2009, TM or another TM
Entity shall be responsible for administering compliance with the health care
continuation requirements of COBRA, the certificate of creditable coverage
requirements of HIPAA, and the corresponding provisions of the TM Health and
Welfare Plans and/or the IAC Health and Welfare Plans with respect to TM
Employees and Former TM Employees and their covered dependents who incur a
COBRA qualifying event or loss of coverage under the TM Health and Welfare
Plans and/or the IAC Health and Welfare Plans at any time before, on or after
the Effective Time.

 

(d)           On and after January 1, 2009, Interval or
another Interval Entity shall be responsible for administering compliance with
the health care continuation requirements of COBRA, the certificate of
creditable coverage requirements of HIPAA, and the corresponding provisions of
the Interval Health and Welfare Plans and/or the IAC Health and Welfare Plans
with respect to Interval Employees and Former Interval Employees and their
covered dependents who incur a COBRA qualifying event or loss of coverage under
the Interval Health and Welfare Plans and/or the IAC Health and Welfare Plans
at any time before, on or after the Effective Time.

 

(e)           On and after January 1, 2009, HSN or another
HSN Entity shall be responsible for administering compliance with the health
care continuation requirements of COBRA, the certificate of creditable coverage
requirements of HIPAA, and the corresponding provisions of the HSN Health and
Welfare Plans and/or the IAC Health and Welfare Plans with respect to HSN
Employees and Former HSN Employees and their covered dependents who incur a
COBRA qualifying event or loss of coverage under the HSN Health and Welfare
Plans and/or the IAC Health and Welfare Plans at any time before, on or after
the Effective Time.

 

(f)            On and after January 1, 2009, Tree or another
Tree Entity shall be responsible for administering compliance with the health
care continuation requirements of COBRA, the certificate of creditable coverage
requirements of HIPAA, and the corresponding provisions of the Tree Health and
Welfare Plans and/or the IAC Health and Welfare Plans with respect to Tree
Employees and Former Tree Employees and their covered dependents who incur a
COBRA qualifying event or loss of coverage under the Tree Health and Welfare
Plans and/or the IAC Health and Welfare Plans at any time before, on or after
the Effective Time.

 

The
Parties hereto agree that the consummation of the transactions contemplated by
this Agreement and the Separation Agreement shall not constitute a COBRA
qualifying event for any purpose of COBRA.

 

ARTICLE
V

EXECUTIVE BENEFITS AND OTHER BENEFITS

 

5.1           Assumption of
Obligations.

 

(a)           Except as provided in this Agreement, effective as
of the Effective Time, TM shall assume and be solely responsible for all
Liabilities to or relating to TM Employees and Former TM Employees under all
IAC Executive Benefit Plans and TM Executive Benefit Plans.

 

20

 

(b)           Except as provided in
this Agreement, effective as of the Effective Time, Interval shall assume and
be solely responsible for all Liabilities to or relating to Interval Employees
and Former Interval Employees under all IAC Executive Benefit Plans and Interval
Executive Benefit Plans.

 

(c)           Except as provided in
this Agreement, effective as of the Effective Time, HSN shall assume and be
solely responsible for all Liabilities to or relating to HSN Employees and
Former HSN Employees under all IAC Executive Benefit Plans and HSN Executive
Benefit Plans.

 

(d)           Except as provided in
this Agreement, effective as of the Effective Time, Tree shall assume and be
solely responsible for all Liabilities to or relating to Tree Employees and
Former Tree Employees under all IAC Executive Benefit Plans and Tree Executive
Benefit Plans.

 

The Parties hereto agree that
none of the transactions contemplated by the Separation Agreement or any of the
Ancillary Agreements, including, without limitation, this Agreement, constitutes
a “change in control,” “change of control” or similar term, as applicable,
within the meaning of any Benefit Plan or any IAC Long-Term Incentive Plan.

 

5.2           IAC Incentive Plans.

 

(a)           SpinCo Bonus Awards.

 

(i)            TM shall be responsible for determining all
bonus awards that would otherwise be payable under the IAC Incentive Plans to
TM Employees for the Effective Time Year. 
TM shall also determine for TM Employees (A) the extent to which
established performance criteria (as interpreted by TM, in its sole discretion)
have been met, and (B) the payment level for each TM Employee.  TM shall assume all Liabilities with respect
to any such bonus awards payable to TM Employees for the Effective Time Year
and thereafter.

 

(ii)           Interval shall be responsible for determining
all bonus awards that would otherwise be payable under the IAC Incentive Plans
to Interval Employees for the Effective Time Year.  Interval shall also determine for Interval
Employees (A) the extent to which established performance criteria (as
interpreted by Interval, in its sole discretion) have been met, and (B) the
payment level for each Interval Employee. 
Interval shall assume all Liabilities with respect to any such bonus
awards payable to Interval Employees for the Effective Time Year and thereafter.

 

(iii)          HSN shall be responsible for determining all
bonus awards that would otherwise be payable under the IAC Incentive Plans to
HSN Employees for the Effective Time Year. 
HSN shall also determine for HSN Employees (A) the extent to which
established performance criteria (as interpreted by HSN, in its sole
discretion) have been met, and (B) the payment level for each HSN
Employee.  HSN shall assume all
Liabilities with respect to any such bonus awards payable to HSN Employees for
the Effective Time Year and thereafter.

 

(iv)          Tree shall be responsible for determining all
bonus awards that would otherwise be payable under the IAC Incentive Plans to
Tree Employees for the Effective Time Year. 
Tree shall also determine for Tree Employees (A) the extent to
which established performance criteria (as interpreted by Tree, in its sole
discretion) have been met, and (B) the payment level for each Tree
Employee.  Tree shall

 

21

 

assume all Liabilities with respect to any such bonus awards payable to
Tree Employees for the Effective Time Year and thereafter.

 

(b)           IAC Bonus Awards.  IAC shall retain all Liabilities with respect
to any bonus awards payable under the IAC Incentive Plans to IAC Employees for the Effective Time Year and
thereafter.

 

5.3           IAC Long-Term Incentive Plans.  IAC and each of the SpinCos shall use
commercially reasonable efforts to take all actions necessary or appropriate so
that each outstanding Option and Award granted under any IAC Long-Term
Incentive Plan held by any individual shall be adjusted as set forth in this Article V.  Following the Separation, with respect to any
award adjusted under this Section 5.3, any reference to a “change in
control,” “change of control” or similar definition in an award agreement,
employment agreement or IAC Long-Term Incentive Plan applicable to such award (1) with
respect to post-Separation equity awards denominated in shares of IAC Common
Stock, shall be deemed to refer to a “change in control,” “change of control”
or similar definition as set forth in the applicable award agreement,
employment agreement or IAC Long-Term Incentive Plan, (2) with respect to
post-Separation equity awards denominated in shares of TM Common Stock, shall
be deemed to refer to a “Change in Control” as defined in the TM Long-Term
Incentive Plan, (3) with respect to post-Separation equity awards
denominated in shares of Interval Common Stock, shall be deemed to refer to a “Change
in Control” as defined in the Interval Long-Term Incentive Plan, (4) with
respect to post-Separation equity awards denominated in shares of HSN Common
Stock, shall be deemed to refer to a “Change in Control” as defined in the HSN
Long-Term Incentive Plan, and (5) with respect to post-Separation equity
awards denominated in shares of Tree Common Stock, shall be deemed to refer to
a “Change in Control” as defined in the Tree Long-Term Incentive Plan.

 

(a)           IAC Options Granted
Prior to January 1, 2008.  As
determined by the Compensation and Human Resources Committee of the IAC Board
of Directors (the “Committee”) pursuant
to its authority under the applicable IAC Long-Term Incentive Plan, each IAC
Option granted prior to January 1, 2008, whether vested or unvested, that
is outstanding as of the Effective Time shall be converted at the Effective
Time into an IAC Option, a TM Option, an Interval Option, an HSN Option and a
Tree Option and shall otherwise be subject to the same terms and conditions
(including with respect to vesting) after the Effective Time as the terms and
conditions applicable to such IAC Option immediately prior to the Effective
Time,  subject to the following adjustments
which shall apply from and after the Effective Time:

 

(i)            (A) the number of shares of IAC Common
Stock subject to such IAC Option, rounded down to the nearest whole share,
shall be equal to the product obtained by multiplying (1) the number of
shares of IAC Common Stock subject to such IAC Option immediately prior to the
Effective Time by (2) the IAC Factor, and (B) the per share exercise
price of such IAC Option, rounded up to the nearest whole cent, shall be equal
to the quotient obtained by dividing (1) the per share exercise price of
such IAC Option immediately prior to the Effective Time by (2) the IAC
Ratio;

 

(ii)           (A) the number of shares of TM Common
Stock subject to such TM Option, rounded down to the nearest whole share, shall
be equal to the product obtained by multiplying (1) the number of shares
of IAC Common Stock subject to such IAC Option immediately prior to the Effective
Time by (2) the TM Factor, and (B) the per share exercise

 

22

 

price of such TM Option, rounded up to the nearest whole cent, shall be
equal to the quotient obtained by dividing (1) the per share exercise
price of such IAC Option immediately prior to the Effective Time by (2) the
TM Ratio (this clause (ii) shall not apply if IAC does not distribute
shares of TM Common Stock on the Distribution Date);

 

(iii)          (A) the number of shares of Interval
Common Stock subject to such Interval Option, rounded down to the nearest whole
share, shall be equal to the product obtained by multiplying (1) the
number of shares of IAC Common Stock subject to such IAC Option immediately
prior to the Effective Time by (2) the Interval Factor, and (B) the
per share exercise price of such Interval Option, rounded up to the nearest
whole cent, shall be equal to the quotient obtained by dividing (1) the
per share exercise price of such IAC Option immediately prior to the Effective Time
by (2) the Interval Ratio (this clause (iii) shall not apply if IAC
does not distribute shares of Interval Common Stock on the Distribution Date);

 

(iv)          (A) the number of shares of HSN Common
Stock subject to such HSN Option, rounded down to the nearest whole share,
shall be equal to the product obtained by multiplying (1) the number of
shares of IAC Common Stock subject to such IAC Option immediately prior to the
Effective Time by (2) the HSN Factor, and (B) the per share exercise
price of such HSN Option, rounded up to the nearest whole cent, shall be equal
to the quotient obtained by dividing (1) the per share exercise price of
such IAC Option immediately prior to the Effective Time by (2) the HSN
Ratio (this clause (iv) shall not apply if IAC does not distribute shares
of HSN Common Stock on the Distribution Date); and

 

(v)           (A) the number of shares of Tree Common
Stock subject to such Tree Option, rounded down to the nearest whole share,
shall be equal to the product obtained by multiplying (1) the number of
shares of IAC Common Stock subject to such IAC Option immediately prior to the
Effective Time by (2) the Tree Factor, and (B) the per share exercise
price of such Tree Option, rounded up to the nearest whole cent, shall be equal
to the quotient obtained by dividing (1) the per share exercise price of
such IAC Option immediately prior to the Effective Time by (2) the Tree
Ratio (this clause (v) shall not apply if IAC does not distribute shares
of Tree Common Stock on the Distribution Date);

 

provided, however,
the exercise price, the number of shares of IAC Common Stock, TM Common Stock,
Interval Common Stock, HSN Common Stock and Tree Common Stock subject to such
options and the terms and conditions of exercise of such options shall be
determined in a manner consistent with the requirements of Section 409A of
the Code; provided, further,
that, in the case of any IAC Option to which Section 421 of the Code
applies by reason of its qualification under Section 422 of the Code as of
immediately prior to the Effective Time, the exercise price, the number of
shares of IAC Common Stock, TM Common Stock, Interval Common Stock, HSN Common
Stock and Tree Common Stock subject to such option and the terms and conditions
of exercise of such option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code.

 

(b)           IAC Options Held by
IAC Employees and Former IAC Employees Granted on or after January 1, 2008.  As determined by the Committee pursuant to its authority under the applicable
IAC Long-Term Incentive Plan, each IAC Option held by an IAC Employee or a
Former IAC Employee granted on or after January 1, 2008, whether vested or
unvested, that is outstanding as of the Effective Time shall be subject to the
same terms and conditions (including with respect to vesting) after the
Effective Time as the terms and conditions applicable to such IAC Option
immediately prior to the Effective Time, subject to the following adjustments
which shall apply from and after the Effective Time:  

 

23

 

(i) the number of shares of IAC Common Stock subject
to such IAC Option, rounded down to the nearest whole share, shall be equal to
the product of (A) the number of shares of IAC Common Stock subject to such
IAC Option immediately prior to the Effective Time and (B) the IAC Ratio
and (ii) the per share exercise price of such IAC Option, rounded up to
the nearest whole cent, shall be equal to the quotient obtained by dividing (A) the
per share exercise price of such IAC Option immediately prior to the Effective
Time by (B) the IAC Ratio; provided, however, the exercise price, the number of shares of
IAC Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 409A of the Code; provided, further, that, in the case of any IAC Option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code as of immediately prior to the Effective Time, the exercise price,
the number of shares of IAC Common Stock subject to such option and the terms
and conditions of exercise of such option shall be determined in a manner
consistent with the requirements of Section 424(a) of the Code.

 

(c)           IAC Options Held by
TM Employees and Former TM Employees Granted on or after January 1, 2008.  As determined by the Committee pursuant to its authority under the applicable
IAC Long-Term Incentive Plan, each IAC Option held by a TM Employee or Former
TM Employee granted on or after January 1, 2008, whether vested or
unvested, that is outstanding as of the Effective Time shall be converted at
the Effective Time into a TM Option and shall otherwise be subject to the same
terms and conditions (including with respect to vesting) after the Effective
Time as the terms and conditions applicable to such IAC Option immediately
prior to the Effective Time, subject to the following adjustments which shall
apply from and after the Effective Time: 
(i) the number of shares of TM Common Stock subject to such Option,
rounded down to the nearest whole share, shall be equal to the product of (A) the
number of shares of IAC Common Stock subject to such IAC Option immediately
prior to  the Effective Time and (B) the
TM Ratio and (ii) the per share exercise price of such TM Option, rounded
up to the nearest whole cent, shall be equal to the quotient obtained by
dividing (A) the per share exercise price of such IAC Option immediately
prior to the Effective Time by (B) the TM Ratio; provided, however, the exercise price, the number of shares of
TM Common Stock subject to such option and the terms and conditions of exercise
of such option shall be determined in a manner consistent with the requirements
of Section 409A of the Code; provided, further, that, in the case of any IAC Option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code as of the Effective Time, the exercise price, the number of shares
of TM Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code.  This clause (c) shall not apply
if IAC does not distribute shares of TM Common Stock on the Distribution Date.

 

(d)           IAC Options Held by
Interval Employees and Former Interval Employees Granted on or after January 1,
2008.  As determined by the Committee
pursuant to its authority under the
applicable IAC Long-Term Incentive Plan, each IAC Option held by an Interval
Employee or Former Interval Employee granted on or after January 1, 2008,
whether vested or unvested, that is outstanding as of the Effective Time shall
be converted at the Effective Time into an Interval Option and shall otherwise
be subject to the same terms and conditions (including with respect to vesting)
after the Effective Time as the terms and conditions applicable to such IAC
Option immediately prior to the Effective Time, subject to the following
adjustments which shall apply from and after the Effective Time: (i) the
number of shares of Interval Common Stock subject to such Option, rounded down
to the nearest whole share, shall be equal to the product of (A) the
number of shares of IAC Common Stock subject to such IAC Option immediately
prior to  the Effective Time and (B) the
Interval Ratio and (ii) the per share exercise price of such Interval
Option, rounded up

 

24

 

to the nearest whole cent, shall be equal to the
quotient obtained by dividing (A) the per share exercise price of such IAC
Option immediately prior to the Effective Time by (B) the Interval Ratio; provided, however, the exercise price, the number of shares of
Interval Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 409A of the Code; provided, further, that, in the case of any IAC Option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code as of the Effective Time, the exercise price, the number of shares
of Interval Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code.  This clause (d) shall not apply
if IAC does not distribute shares of Interval Common Stock on the Distribution
Date.

 

(e)           IAC Options Held by
HSN Employees and Former HSN Employees Granted on or after January 1, 2008.  As determined by the Committee pursuant to its authority under the applicable
IAC Long-Term Incentive Plan, each IAC Option held by a HSN Employee or Former
HSN Employee granted on or after January 1, 2008, whether vested or
unvested, that is outstanding as of the Effective Time shall be converted at
the Effective Time into a HSN Option and shall otherwise be subject to the same
terms and conditions (including with respect to vesting) after the Effective
Time as the terms and conditions applicable to such IAC Option immediately
prior to the Effective Time, subject to the following adjustments which shall
apply from and after the Effective Time: 
(i) the number of shares of HSN Common Stock subject to such
Option, rounded down to the nearest whole share, shall be equal to the product
of (A) the number of shares of IAC Common Stock subject to such IAC Option
immediately prior to  the Effective Time and (B) the
HSN Ratio and (ii) the per share exercise price of such HSN Option,
rounded up to the nearest whole cent, shall be equal to the quotient obtained
by dividing (A) the per share exercise price of such IAC Option
immediately prior to the Effective Time by (B) the HSN Ratio; provided, however, the exercise price, the number of shares of
HSN Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 409A of the Code; provided, further, that, in the case of any IAC Option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code as of the Effective Time, the exercise price, the number of shares
of HSN Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code.  This clause (e) shall not apply
if IAC does not distribute shares of HSN Common Stock on the Distribution Date.

 

(f)            IAC Options Held by
Tree Employees and Former Tree Employees Granted on or after January 1,
2008.  As determined by the Committee
pursuant to its authority under the
applicable IAC Long-Term Incentive Plan, each IAC Option held by a Tree
Employee or Former Tree Employee granted on or after January 1, 2008,
whether vested or unvested, that is outstanding as of the Effective Time shall
be converted at the Effective Time into a Tree Option and shall otherwise be
subject to the same terms and conditions (including with respect to vesting)
after the Effective Time as the terms and conditions applicable to such IAC
Option immediately prior to the Effective Time, subject to the following
adjustments which shall apply from and after the Effective Time:  (i) the number of shares of Tree Common
Stock subject to such Option, rounded down to the nearest whole share, shall be
equal to the product of (A) the number of shares of IAC Common Stock
subject to such IAC Option immediately prior to  the Effective Time and (B) the
Tree Ratio and (ii) the per share exercise price of such Tree Option,
rounded up to the nearest whole cent, shall be equal to the quotient obtained
by dividing (A) the per share exercise price of such IAC Option
immediately prior to the Effective Time by (B) the Tree

 

25

 

Ratio; provided, however, the exercise price, the number of shares of
Tree Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 409A of the Code; provided, further, that, in the case of any IAC Option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code as of the Effective Time, the exercise price, the number of shares
of Tree Common Stock subject to such option and the terms and conditions of
exercise of such option shall be determined in a manner consistent with the
requirements of Section 424(a) of the Code.  This clause (f) shall not apply
if IAC does not distribute shares of Tree Common Stock on the Distribution
Date.

 

(g)           IAC Restricted Stock Units.

 

(i)            Conversion of Growth Share Awards.  IAC has awarded IAC Restricted Stock Units
that may vest from 0% to 200% of the IAC Restricted Stock Units granted
depending upon performance of IAC (the “Growth Share Awards”).  As determined by the Committee pursuant to
its authority under the applicable IAC Long-Term Incentive Plan, prior to the Effective Time and prior to any other action
contemplated by this Section 5.3(g), the Growth Share Awards shall be
amended such that the number of IAC Restricted Stock Units subject to each
Growth Share Award shall be fixed at 100% (target) of the IAC Restricted Stock
Units subject to the initial Growth Share Awards (there will be no upward or
downward variability and the balance of the IAC Restricted Stock Units subject
to the initial Growth Share Award shall be forfeited), the vesting of such IAC
Restricted Stock Units shall cease to be subject to satisfaction of performance
goals (subject to the last sentence of this Section 5.3(g)(i)), the IAC
Restricted Stock Units shall Cliff Vest on the three-year anniversary of the
initial grant date of such Growth Share Award and the IAC Restricted Stock
Units subject to each Growth Share Award shall otherwise remain subject to the
same terms and conditions, subject to any further adjustments described in this
Section 5.3(g).  The vesting of
Growth Share Awards intended to satisfy the performance-based compensation
exception under Section 162(m) of the Code will remain subject to
applicable performance goals adopted for purposes of Section 162(m) of
the Code.

 

(ii)           Accelerated Vesting and Settlement of
Certain IAC Restricted Stock Units. 
As determined by the Committee pursuant to its authority under the
applicable IAC Long-Term Incentive Plan, (I) all IAC Restricted Stock
Units (x) awarded prior to August 8, 2005 or (y) awarded on or
after August 8, 2005, but prior to January 1, 2008, and scheduled to
vest on or before February 28, 2009, and (II) all PV IAC Restricted
Stock Units (as defined below) held by award holders with respect to whom the
Committee determines to provide for accelerated vesting on the Distribution
Date (clauses (I) and (II) together, “Accelerated RSUs”):

 

(A)          subject to the proviso below, with respect to
the Accelerated RSUs listed on Schedule
[      ],  such Accelerated RSUs will vest on the Distribution Date
and be settled on January 2, 2009, such that on January 2, 2009, for
each share of IAC Common Stock underlying any such award immediately prior to
the Effective Time, the holder of such award shall be entitled to receive
(subject to application of Section 5.3(g)(x) below):  (1) a number of shares of IAC Common
Stock, rounded up to the nearest whole share, equal to the number of shares of
IAC Common Stock to which the holder would be entitled if the holder held the
shares of IAC Common Stock underlying such IAC Restricted Stock Units
immediately prior to the Effective Time (“Delayed IAC Common Stock”); (2) a
number of shares of TM Common Stock, rounded up to the nearest whole share,
equal to the number of

 

26

 

shares of TM Common Stock to which the holder would be entitled if the
holder held the shares of IAC Common Stock underlying such IAC Restricted Stock
Units immediately prior to the Effective Time (“Delayed TM Common Stock”)
(this clause (2) shall not apply if IAC does not distribute shares of TM
Common Stock on the Distribution Date); (3) a number of shares of Interval
Common Stock, rounded up to the nearest whole share, equal to the number of
shares of Interval Common Stock to which the holder would be entitled if the
holder held the shares of IAC Common Stock underlying such IAC Restricted Stock
Units immediately prior to the Effective Time (“Delayed Interval Common
Stock”) (this clause (3) shall not apply if IAC does not distribute
shares of Interval Common Stock on the Distribution Date); (4) a number of
shares of HSN Common Stock, rounded up to the nearest whole share, equal to the
number of shares of HSN Common Stock to which the holder would be entitled if
the holder held the shares of IAC Common Stock underlying such IAC Restricted
Stock Units immediately prior to the Effective Time (“Delayed HSN Common
Stock”) (this clause (4) shall not apply if IAC does not distribute
shares of HSN Common Stock on the Distribution Date); and (5) a number of
shares of Tree Common Stock, rounded up to the nearest whole share, equal to
the number of shares of Tree Common Stock to which the holder would be entitled
if the holder held the shares of IAC Common Stock underlying such IAC
Restricted Stock Units immediately prior to the Effective Time (“Delayed
Tree Common Stock,” and together with Delayed IAC Common Stock, Delayed TM
Common Stock, Delayed Interval Common Stock and Delayed HSN Common Stock, “Delayed
Common Stock”) (this clause (5) shall not apply if IAC does not
distribute shares of Tree Common Stock on the Distribution Date); provided,
however, that immediately prior to the Effective Time, with respect to
each individual holding IAC Restricted Stock Units subject to this Section 5.3(g)(ii),
IAC shall settle a number of IAC Restricted Stock Units (and withhold the
corresponding number of shares of IAC Common Stock underlying such IAC Restricted
Stock Units) sufficient to satisfy (x) any tax payable by such holder
under the Federal Insurance Contributions Act (“FICA”) by virtue of the
operation of this Section 5.3(b)(ii) (the “FICA Amount”), and (y) applicable
income tax on wages imposed under Section 3401 of the Code or the
corresponding withholding provisions of applicable state, local or foreign tax
laws as a result of the payment of the FICA Amount, and to pay the additional income
tax at source on wages attributable to the pyramiding Code Section 3401
wages and taxes; provided, further, however, that any
fractional amounts remaining after payment of the foregoing shall be converted
into cash and shall accrue interest at the applicable federal rate provided for
in Section 7872(f)(2)(A) of the Code and shall be payable by IAC on January 2,
2009;

 

(B)           with respect to any holder whose Accelerated
RSUs are not subject to Tax in the United States and are not subject to Section 409A
of the Code, such holder’s Accelerated RSUs will vest immediately prior to the
Effective Time and be settled in cash in accordance with IAC’s customary
practices applicable to such Exempt Holder; and

 

(C)           with respect to all other Accelerated RSUs
not addressed in clause (A) or clause (B) above, such Accelerated RSUs
will vest immediately prior to the Effective Time and be settled as soon as
reasonably practicable following the Effective Time, such that for each share
of IAC Common Stock underlying any such award immediately prior to the
Effective Time (less a number of shares of IAC Common Stock withheld to satisfy
any tax withholding obligations with respect to the vesting and settlement of
such IAC Restricted Stock Units, such withholding based on the value of a share
of IAC Common Stock trading “regular way with due bills”),

 

27

 

IAC will deliver or cause to be delivered:  (1) a number of shares of IAC Common
Stock, rounded up to the nearest whole share, equal to the number of shares of
IAC Common Stock to which the holder would be entitled if the holder held the
shares of IAC Common Stock underlying such IAC Restricted Stock Units
immediately prior to the Effective Time; (2) a number of shares of TM
Common Stock, rounded up to the nearest whole share, equal to the number of
shares of TM Common Stock to which the holder would be entitled if the holder
held the shares of IAC Common Stock underlying such IAC Restricted Stock Units
immediately prior to the Effective Time (this clause (2) shall not apply
if IAC does not distribute shares of TM Common Stock on the Distribution Date);
(3) a number of shares of Interval Common Stock, rounded up to the nearest
whole share, equal to the number of shares of Interval Common Stock to which
the holder would be entitled if the holder held the shares of IAC Common Stock
underlying such IAC Restricted Stock Units immediately prior to the Effective
Time (this clause (3) shall not apply if IAC does not distribute shares of
Interval Common Stock on the Distribution Date); (4) a number of shares of
HSN Common Stock, rounded up to the nearest whole share, equal to the number of
shares of HSN Common Stock to which the holder would be entitled if the holder
held the shares of IAC Common Stock underlying such IAC Restricted Stock Units
immediately prior to the Effective Time (this clause (4) shall not apply
if IAC does not distribute shares of HSN Common Stock on the Distribution
Date); and (5) a number of shares of Tree Common Stock, rounded up to the
nearest whole share, equal to the number of shares of Tree Common Stock to
which the holder would be entitled if the holder held the shares of IAC Common
Stock underlying such IAC Restricted Stock Units immediately prior to the
Effective Time (this clause (5) shall not apply if IAC does not distribute
shares of Tree Common Stock on the Distribution Date).

 

(iii)          Treatment of Certain Cliff Vesting IAC
Restricted Stock Unit Awards Scheduled to Vest After February 28, 2009.  As determined by the Committee pursuant to
its authority under the applicable IAC Long-Term Incentive Plan, for each Cliff
Vesting IAC Restricted Stock Unit Award granted prior to January 1, 2008
and scheduled to vest after February 28, 2009 (including the Growth Share
Awards), with respect to such number of IAC Restricted Stock Units (rounded up
to the nearest whole share) (the “PV IAC Restricted Stock Units”) that
would have vested on or before February 28, 2009 if the award had been an
annual installment vesting award (e.g., 60% of a
5-year cliff-vesting award granted on February 1 of 2006), for all award
holders (other than award holders with respect to whom the Committee determines
to provide for accelerated vesting as contemplated by clause (ii) above),
the PV IAC Restricted Stock Units held as of immediately prior to the Effective
Time shall be converted at the Effective Time into:

 

(A)          IAC Restricted Stock Units, and shall
otherwise be subject to the same terms and conditions (including with respect
to vesting) after the Effective Time as the terms and conditions applicable to
such PV IAC Restricted Stock Unit immediately prior to the Effective Time,
subject to the following adjustment which shall apply from and after the
Effective Time:  the number of shares of
IAC Common Stock covered by such IAC Restricted Stock Units held by the
participant, as applicable, rounded up to the nearest whole share, shall be
equal to the number of shares of IAC Common Stock to which the holder of the PV
IAC Restricted Stock Units would be entitled had the PV IAC Restricted Stock
Units represented actual shares of IAC Common Stock immediately prior to the
Effective Time;

 

28

 

(B)           TM Restricted Stock Units, and shall
otherwise be subject to the same terms and conditions (including with respect
to vesting) after the Effective Time as the terms and conditions applicable to
such PV IAC Restricted Stock Units immediately prior to the Effective Time,
subject to the following adjustment which shall apply from and after the
Effective Time:  the number of shares of
TM Common Stock covered by such TM Restricted Stock Units held by the
participant, as applicable, rounded up to the nearest whole share, shall be
equal to the number of shares of TM Common Stock to which the holder of the PV
IAC Restricted Stock Units would be entitled had the PV IAC Restricted Stock
Units represented actual shares of IAC Common Stock immediately prior to the
Effective Time (this clause (B) shall not apply if IAC does not distribute
shares of TM Common Stock on the Distribution Date);

 

(C)           Interval Restricted Stock Units, and shall
otherwise be subject to the same terms and conditions (including with respect
to vesting) after the Effective Time as the terms and conditions applicable to
such PV IAC Restricted Stock Units immediately prior to the Effective Time,
subject to the following adjustment which shall apply from and after the
Effective Time:  the number of shares of
Interval Common Stock covered by such Interval Restricted Stock Units held by
the participant, as applicable, rounded up to the nearest whole share, shall be
equal to the number of shares of Interval Common Stock to which the holder of
the PV IAC Restricted Stock Units would be entitled had the PV IAC Restricted
Stock Units represented actual shares of IAC Common Stock immediately prior to
the Effective Time (this clause (C) shall not apply if IAC does not
distribute shares of Interval Common Stock on the Distribution Date);

 

(D)          HSN Restricted Stock Units, and shall
otherwise be subject to the same terms and conditions (including with respect
to vesting) after the Effective Time as the terms and conditions applicable to
such PV IAC Restricted Stock Units immediately prior to the Effective Time,
subject to the following adjustment which shall apply from and after the Effective
Time:  the number of shares of HSN Common
Stock covered by such HSN Restricted Stock Units held by the participant, as
applicable, rounded up to the nearest whole share, shall be equal to the number
of shares of HSN Common Stock to which the holder of the PV IAC Restricted
Stock Units would be entitled had the PV IAC Restricted Stock Units represented
actual shares of IAC Common Stock immediately prior to the Effective Time (this
clause (D) shall not apply if IAC does not distribute shares of HSN Common
Stock on the Distribution Date); and

 

(E)           Tree Restricted Stock Units, and shall
otherwise be subject to the same terms and conditions (including with respect
to vesting) after the Effective Time as the terms and conditions applicable to
such PV IAC Restricted Stock Units immediately prior to the Effective Time,
subject to the following adjustment which shall apply from and after the
Effective Time: the number of shares of Tree Common Stock covered by such Tree
Restricted Stock Units held by the participant, as applicable, rounded up to
the nearest whole share, shall be equal to the number of shares of Tree Common
Stock to which the holder of the PV IAC Restricted Stock Units would be
entitled had the PV IAC Restricted Stock Units represented actual shares of IAC
Common Stock immediately prior to the Effective Time (this clause (E) shall
not apply if IAC does not distribute shares of Tree Common Stock on the
Distribution Date).

 

29

 

(iv)          Other IAC Restricted Stock Units Held by
IAC Employees and Former IAC Employees. 
As determined by the Committee pursuant
to its authority under the applicable IAC Long-Term Incentive Plan, the IAC
Restricted Stock Units held by an IAC Employee or a Former IAC Employee (other
than those IAC Restricted Stock Units converted pursuant to Section 5.3(g)(ii) or
Section 5.3(g)(iii)) shall be subject to the same terms and conditions
(including with respect to vesting) after the Effective Time as the terms and
conditions applicable to such IAC Restricted Stock Units immediately prior to
the Effective Time, subject to the following adjustment which shall
apply from and after the Effective Time:  the number of shares of IAC Common Stock
covered by such IAC Restricted Stock Units, rounded up to the nearest whole
share, shall be equal to the product of (A) the number of shares of IAC
Common Stock covered by such IAC Restricted Stock Units immediately prior to
the Effective Time and (B) the IAC Ratio.

 

(v)           Other IAC Restricted Stock Units Held by
TM Employees and Former TM Employees. 
As determined by the Committee pursuant to its authority under the
applicable IAC Long-Term Incentive Plan,
the IAC Restricted Stock Units held by a TM Employee or a Former TM Employee as
of the Effective Time (other than those IAC Restricted Stock Units converted
pursuant to Section 5.3(g)(ii) or Section 5.3(g)(iii)) shall be
converted at the Effective Time into TM Restricted Stock Units, and shall
otherwise be subject to the same terms and conditions (including with respect
to vesting) after the Effective Time as the terms and conditions applicable to
such IAC Restricted Stock Units immediately prior to the Effective Time,
subject to the following adjustment which shall apply from and after the
Effective Time:  the number of shares of TM Common Stock
covered by such TM Restricted Stock Units held by the participant, as
applicable, rounded up to the nearest whole share, shall be equal to the
product of (A) the number of shares of IAC Common Stock covered by such
IAC Restricted Stock Units immediately prior to the Effective Time and (B) the
TM Ratio.  This clause (v) shall
not apply if IAC does not distribute shares of TM Common Stock on the
Distribution Date.

 

(vi)          Other IAC Restricted Stock Units Held by
Interval Employees and Former Interval Employees.  As determined by the Committee pursuant to
its authority under the applicable IAC Long-Term Incentive Plan, the IAC Restricted Stock Units held by an
Interval Employee or a Former Interval Employee as of the Effective Time (other
than those IAC Restricted Stock Units converted pursuant to Section 5.3(g)(ii) or
Section 5.3(g)(iii)) shall be converted at the Effective Time into
Interval Restricted Stock Units, and shall otherwise be subject to the same
terms and conditions (including with respect to vesting) after the Effective
Time as the terms and conditions applicable to such IAC Restricted Stock Units
immediately prior to the Effective Time, subject to the following
adjustment which shall apply from and after the Effective Time:  the
number of shares of Interval Common Stock covered by such Interval Restricted
Stock Units held by the participant, as applicable, rounded up to the nearest
whole share, shall be equal to the product of (A) the number of shares of
IAC Common Stock covered by such IAC Restricted Stock Units immediately prior
to the Effective Time and (B) the Interval Ratio.  This clause (vi) shall not apply
if IAC does not distribute shares of Interval Common Stock on the Distribution
Date.

 

(vii)         Other IAC Restricted Stock Units Held by
HSN Employees and Former HSN Employees. As determined by the Committee
pursuant to its authority under the applicable IAC Long-Term Incentive Plan, the IAC Restricted Stock Units held by a HSN
Employee or a Former HSN Employee as of the Effective Time (other

 

30

 

than
those IAC Restricted Stock Units converted pursuant to Section 5.3(g)(ii) or
Section 5.3(g)(iii)) shall be converted at the Effective Time into HSN
Restricted Stock Units, and shall otherwise be subject to the same terms and
conditions (including with respect to vesting) after the Effective Time as the
terms and conditions applicable to such IAC Restricted Stock Units immediately
prior to the Effective Time, subject to the following adjustment which
shall apply from and after the Effective Time:  the number of shares of HSN
Common Stock covered by such HSN Restricted Stock Units held by the
participant, as applicable, rounded up to the nearest whole share, shall be
equal to the product of (A) the number of shares of IAC Common Stock
covered by such IAC Restricted Stock Units immediately prior to the Effective
Time and (B) the HSN Ratio.  This
clause (vii) shall not apply if IAC does not distribute shares of HSN
Common Stock at the Effective Time.

 

(viii)        Other IAC Restricted Stock Units Held by
Tree Employees and Former Tree Employees. 
As determined by the Committee pursuant to its authority under the
applicable IAC Long-Term Incentive Plan,
the IAC Restricted Stock Units held by a Tree Employee or a Former Tree
Employee as of the Effective Time (other than those IAC Restricted Stock Units
converted pursuant to Section 5.3(g)(ii) or Section 5.3(g)(iii))
shall be converted at the Effective Time into Tree Restricted Stock Units, and
shall otherwise be subject to the same terms and conditions (including with
respect to vesting) after the Effective Time as the terms and conditions
applicable to such IAC Restricted Stock Units immediately prior to the
Effective Time, subject to the following adjustment which shall apply
from and after the Effective Time:  the number of shares of Tree Common Stock
covered by such Tree Restricted Stock Units held by the participant, as
applicable, rounded up to the nearest whole share, shall be equal to the
product of (A) the number of shares of IAC Common Stock covered by such
IAC Restricted Stock Units immediately prior to the Effective Time and (B) the
Tree Ratio.  This clause (viii) shall
not apply if IAC does not distribute shares of Tree Common Stock at the
Effective Time.

 

(ix)           IAC Restricted Stock Units Held by
Specified Individuals.  As determined
by the Committee pursuant to its authority under the applicable IAC Long-Term
Incentive Plan, notwithstanding anything
to the contrary set forth in this Section 5.3(g), the IAC Restricted Stock
Units set forth on Exhibit B
to this Agreement shall be treated in the manner set forth on Exhibit B to this
Agreement.

 

(x)            Settlement of Delayed Common Stock;
Delayed Common Stock Diversification Arrangement.  Each holder’s Delayed Common Stock will be
recorded in a book entry account administered by Deloitte LLP and each such
book entry account will be subdivided among each Party’s Delayed Common Stock
and further subdivided between stock settled accounts and cash settled
accounts.  Each holder of Delayed Common
Stock will have the ability to elect to convert any of such holder’s Delayed
Common Stock to a cash settled account on not more than three occasions with
respect to each Party’s Delayed Common Stock based on (1) the closing
trading price of the applicable Delayed Common Stock on the date of the holder’s
election if the holder makes an election during trading hours or (2) the
closing trading price of the applicable Delayed Common Stock during the next trading
session immediately following the holder’s election if the holder makes an
election outside of trading hours (elections shall be made solely with respect
to whole shares of Delayed Common Stock) (or based on such other methodology as
IAC shall determine in its sole discretion and communicate to holders of
Delayed Common Stock).  Elections with
respect to this diversification arrangement shall be irrevocable.  Cash settled accounts will accrue interest at
2.5% per annum.  Individuals will not be
entitled to

 

31

 

move amounts from cash settled accounts into stock settled
accounts.  Accounts will be frozen during
the ten  days immediately following
the Separation and from November 30, 2008 through January 2,
2009.  On January 2, 2009, each
Party will settle all cash and stock denominated accounts relating to such
Party’s Delayed Common Stock using shares of such Party’s common stock with
respect to stock denominated accounts and U.S. dollars with respect to cash
denominated accounts and such settlement obligation shall be a Liability solely
of such Party and no other Party to this Agreement.  IAC shall have sole discretion to modify the
diversification arrangement.

 

(h)           IAC Restricted Stock.  Shares of IAC Restricted Stock that are
outstanding immediately prior to the Effective
Time shall be treated in the Separation in the same manner as other outstanding
shares of IAC Common Stock are treated in the Separation and will otherwise be
subject to the same terms and conditions (including vesting conditions)
applicable to such shares of IAC Restricted Stock immediately prior to the
Separation.

 

(i)            Foreign
Grants/Awards.  To the extent that
the IAC Awards or any of the IAC Options are granted to non-U.S. employees under
any domestic or foreign equity-based
incentive program sponsored by an IAC Entity, IAC, TM, Interval, HSN and Tree
shall use their commercially reasonable efforts to preserve, at and after the
Effective Time, the value and tax treatment accorded to such IAC Options and
such IAC Awards granted to non-U.S. employees under any domestic or foreign
equity-based incentive program sponsored by an IAC Entity.

 

(j)            Miscellaneous
Option and Other Award Terms.

 

(i)            After the Distribution Date, (A) IAC
Options and IAC Awards adjusted pursuant to Section 5.3, regardless of by
whom held, shall be settled by IAC pursuant to the terms of the applicable IAC
Long-Term Incentive Plan, (B) TM Options and TM Awards, regardless of by
whom held, shall be settled by TM pursuant to the terms of the TM Long-Term
Incentive Plan, (C) Interval Options and Interval Awards, regardless of by
whom held, shall be settled by Interval pursuant to the terms of the Interval
Long-Term Incentive Plan, (D) HSN Options and HSN Awards, regardless of by
whom held, shall be settled by HSN pursuant to the terms of the HSN Long-Term
Incentive Plan, and (E) Tree Options and Tree Awards, regardless of by
whom held, shall be settled by Tree pursuant to the terms of the Tree Long-Term
Incentive Plan.

 

(ii)           Accordingly, it is intended that, (A) to
the extent of the issuance of such TM Options and TM Awards in connection with
the adjustment provisions of this Section 5.3, the TM Long-Term Incentive
Plan shall be considered a successor to each of the IAC Long-Term Incentive
Plans and to have assumed the obligations of the applicable IAC Long-Term
Incentive Plan to make the adjustment of the IAC Options and IAC Awards as set
forth in this Section 5.3, (B) to the extent of the issuance of such
Interval Options and Interval Awards in connection with the adjustment
provisions of this Section 5.3, the Interval Long-Term Incentive Plan
shall be considered a successor to each of the IAC Long-Term Incentive Plans
and to have assumed the obligations of the applicable IAC Long-Term Incentive
Plan to make the adjustment of the IAC Options and IAC Awards as set forth in
this Section 5.3, (C) to the extent of the issuance of such HSN
Options and HSN Awards in connection with the adjustment provisions of this Section 5.3,
the HSN Long-Term Incentive Plan shall be considered a successor to each of the
IAC Long-Term

 

32

 

Incentive Plans and to have assumed the obligations of the applicable
IAC Long-Term Incentive Plan to make the adjustment of the IAC Options and IAC
Awards as set forth in this Section 5.3 and (D) to the extent of the
issuance of such Tree Options and Tree Awards in connection with the adjustment
provisions of this Section 5.3, the Tree Long-Term Incentive Plan shall be
considered a successor to each of the IAC Long-Term Incentive Plans and to have
assumed the obligations of the applicable IAC Long-Term Incentive Plan to make
the adjustment of the IAC Options and IAC Awards as set forth in this Section 5.3.

 

(iii)          (A) The Effective Time shall not
constitute a termination of employment for any TM Employees for purposes of any
IAC Option or IAC Award, any Interval Option or Interval Award, any HSN Option
or HSN Award or any Tree Option or Tree Award and, except as otherwise provided
in this Agreement, with respect to grants adjusted pursuant to this Section 5.3,
employment with TM shall be treated as employment with IAC with respect to IAC
Options or IAC Awards held by TM Employees, employment with TM shall be treated
as employment with Interval with respect to Interval Options or Interval Awards
held by TM Employees, employment with TM shall be treated as employment with
HSN with respect to HSN Options and HSN Awards held by TM Employees and
employment with TM shall be treated as employment with Tree with respect to
Tree Options and Tree Awards held by TM Employees.

 

(B)           The Effective Time shall not constitute a
termination of employment for any Interval Employees for purposes of any IAC
Option or IAC Award, any TM Option or TM Award, any HSN Option or HSN Award or
any Tree Option or Tree Award and, except as otherwise provided in this
Agreement, with respect to grants adjusted pursuant to this Section 5.3,
employment with Interval shall be treated as employment with IAC with respect
to IAC Options or IAC Awards held by Interval Employees, employment with
Interval shall be treated as employment with TM with respect to TM Options or
TM Awards held by Interval Employees, employment with Interval shall be treated
as employment with HSN with respect to HSN Options and HSN Awards held by
Interval Employees and employment with Interval shall be treated as employment
with Tree with respect to Tree Options and Tree Awards held by Interval
Employees.

 

(C)           The Effective Time shall not constitute a
termination of employment for any HSN Employees for purposes of any IAC Option
or IAC Award, any TM Option or TM Award, any Interval Option or Interval Award
or any Tree Option or Tree Award and, except as otherwise provided in this
Agreement, with respect to grants adjusted pursuant to this Section 5.3,
employment with HSN shall be treated as employment with IAC with respect to IAC
Options or IAC Awards held by HSN Employees, employment with HSN shall be
treated as employment with TM with respect to TM Options or TM Awards held by
HSN Employees, employment with HSN shall be treated as employment with Interval
with respect to Interval Options and Interval Awards held by HSN Employees and
employment with HSN shall be treated as employment with Tree with respect to
Tree Options and Tree Awards held by HSN Employees.

 

(D)          The Effective Time shall not constitute a
termination of employment for any Tree Employees for purposes of any IAC Option
or IAC Award, any TM Option or TM Award, any Interval Option or Interval Award
or any Tree Option or Tree Award and, except as otherwise provided in this
Agreement, with

 

33

 

respect to grants adjusted pursuant to this Section 5.3, employment
with Tree shall be treated as employment with IAC with respect to IAC Options
or IAC Awards held by Tree Employees, employment with Tree shall be treated as
employment with TM with respect to TM Options or TM Awards held by Tree
Employees, employment with Tree shall be treated as employment with Interval
with respect to Interval Options and Interval Awards held by Tree Employees and
employment with Tree shall be treated as employment with HSN with respect to
HSN Options and HSN Awards held by Tree Employees.

 

(E)           Except as otherwise provided in this
Agreement, with respect to grants adjusted pursuant to this Section 5.3,
employment with IAC shall be treated as employment with TM with respect to TM
Options or TM Awards held by IAC Employees, employment with IAC shall be
treated as employment with Interval with respect to Interval Options and
Interval Awards held by IAC Employees, employment with IAC shall be treated as
employment with HSN with respect to HSN Options and HSN Awards held by IAC
Employees and employment with IAC shall be treated as employment with Tree with
respect to Tree Options and Tree Awards held by IAC Employees.

 

(k)           Waiting Period for
Exercisability of Options and Grant of Options and Awards.  The IAC Options, TM Options, Interval
Options, HSN Options and Tree Options shall not be exercisable during a period beginning on a date prior to the
Distribution Date determined by IAC in its sole discretion, and continuing
until the IAC Post-Separation Stock Value, the TM Stock Value, the Interval
Stock Value, the HSN Stock Value and the Tree Stock Value are determined after
the Effective Time, or such longer period as IAC, with respect to IAC Options,
TM, with respect to TM Options, Interval, with respect to Interval Options,
HSN, with respect to HSN Options and Tree, with respect to Tree Options,
determines necessary to implement the provisions of this Section 5.3.  The IAC Restricted Stock Units, TM Restricted
Stock Units, Interval Restricted Stock Units, HSN Restricted Stock Units and
Tree Restricted Stock Units shall not be settled during a period beginning on a
date prior to the Distribution Date determined by IAC in its sole discretion,
and continuing until the IAC Post-Separation Stock Value, the TM Stock Value,
the Interval Stock Value, the HSN Stock Value and the Tree Stock Value are
determined immediately after the Effective Time, or such longer period as IAC,
with respect to IAC Restricted Stock Units, TM, with respect to TM Restricted
Stock Units, Interval, with respect to Interval Restricted Stock Units, HSN,
with respect to HSN Stock Units and Tree, with respect to Tree Stock Units,
determines necessary to implement the provisions of this Section 5.3.

 

(l)            Exercise of IAC Options after Distribution
Record Date and prior to the Distribution Date; IAC RSUs that Vest after
Distribution Record Date and prior to the Distribution Date.

 

(i)            In the event that any holder exercises an
IAC Option after the first Distribution Record Date (as defined in the
Separation Agreement) and prior to the third Business Day immediately preceding
the Distribution Date (option exercises will not be permitted during the three
Business Days immediately preceding the Distribution Date), IAC will coordinate
with Smith Barney to ensure that such holder exercises such IAC Option with
respect to shares of IAC Common Stock trading “regular way with due bills.”

 

(ii)           With respect to any individual that holds
IAC Restricted Stock Units that vest after the first Distribution Record Date
(as defined in the Separation

 

34

 

Agreement) and prior to the Distribution Date, (1) IAC will
deliver (or cause to be delivered) to such holder shares of IAC Common Stock in
settlement of such IAC Restricted Stock Units due to such holder upon vesting,
giving effect to the withholding of shares of IAC Common Stock to satisfy any
tax withholding obligations with respect to the settlement of such IAC Restricted
Stock Units, such withholding based on the value of a share of IAC Common Stock
trading “regular way with due bills” (the number of shares, net of shares
withheld to satisfy the tax withholding obligations, the “Net RSU
Shares”) and (2) as soon as reasonably practicable
following the Distribution Date, IAC will be obligated to deliver to such
holder (x) the number of shares of SpinCo Common Stock with respect to
each SpinCo (and any cash in lieu of fractional shares) that such holder would
be entitled to receive if the holder owned the number of Net RSU Shares on the
first Distribution Record Date (as defined in the Separation Agreement).

 

(m)          Obligation to Deliver Shares. 
Except as provided in Section 5.3(l):

 

(i)            The obligation to deliver shares of IAC
Common Stock upon the exercise of IAC Stock Options or the settlement of IAC
Restricted Stock Units shall be a Liability of IAC.

 

(ii)           The obligation to deliver shares of TM
Common Stock upon the exercise of TM Stock Options or the settlement of TM Restricted
Stock Units shall be a Liability of TM.

 

(iii)          The obligation to deliver shares of HSN
Common Stock upon the exercise of HSN Stock Options or the settlement of HSN
Restricted Stock Units shall be a Liability of HSN.

 

(iv)          The obligation to deliver shares of Interval
Common Stock upon the exercise of Interval Stock Options or the settlement of
Interval Restricted Stock Units shall be a Liability of Interval.

 

(v)           The obligation to deliver shares of Tree
Common Stock upon the exercise of Tree Stock Options or the settlement of Tree
Restricted Stock Units shall be a Liability of Tree.

 

(n)           Equity and Bonus
Compensation Agreement with Barry Diller. 
For the avoidance of doubt, Section 5 of the Equity and Bonus
Compensation Agreement with Barry Diller shall be binding on IAC and each
SpinCo to the extent that any payment or distribution by such Party to or for
the benefit of Mr. Diller would be subject to the excise tax imposed by Section 4999
of the Code or any interest or penalties are incurred by Mr. Diller with
respect to such excise tax.

 

(o)           Abandonment.  In the event that on or prior to the
Distribution Date IAC abandons a Distribution (as defined in the Separation
Agreement) with respect to one or more SpinCos, the adjustments set forth in
this Section 5.3 will apply as described above except that there will be
no conversion of IAC equity awards into equity awards of a SpinCo the shares of
common stock of which IAC does not distribute and SpinCo Employees and Former
SpinCo Employees of any such SpinCo will be treated as IAC Employees and Former
IAC Employees, respectively, for purposes of such adjustments.

 

35

 

(p)           Restrictive
Covenants.

 

(i)            Following the Distribution Date, TM shall
use commercially reasonable efforts to monitor the TM Employees and Former TM
Employees to determine whether any such TM Employees or Former TM Employees
have breached any of the restrictive covenants
in the agreements evidencing the terms of their IAC Options and IAC Awards.  As soon as practicable following TM’s
reasonable belief that a TM Employee or Former TM Employee has breached any
such covenant, TM shall provide IAC in writing with the name and address of
such employee or former employee and a description of the breach that such
employee or former employee is believed to have committed.  Notwithstanding the foregoing or anything in
any agreement evidencing the terms of any IAC Options and IAC Awards or
otherwise to the contrary, it shall not be a violation of any IAC non-competition
or non-solicitation of clients or customers covenant for a TM Employee to
engage in acts on behalf of TM or a TM Entity that are otherwise prohibited by
the terms of such non-competition or non-solicitation of clients or customers
covenants and it shall not be a violation of any TM non-competition or
non-solicitation of clients or customers covenant for an IAC Employee to engage
in acts on behalf of IAC or an IAC Entity that are otherwise prohibited by the
terms of such non-competition or non-solicitation of clients or customers
covenants.  In addition, following the
Effective Time, the restrictive covenants (including without limitation any
proprietary rights agreements or confidential information covenants) to which
any TM Employee or Former TM Employee are party shall run in favor of TM (and,
to the extent relating to IAC, shall run in favor of IAC to the same extent
that they ran in favor of IAC immediately prior to the Effective Time; provided,
that the Effective Time shall be treated as a termination of employment from
IAC for purposes of the duration of IAC’s ability to enforce the restrictive
covenant) and the restrictive covenants to which any IAC Employee or Former IAC
Employee are party shall run in favor of IAC. 
Any employment agreement between IAC and a TM Employee or Former TM
Employee shall as of the Effective Time be assigned by IAC to TM and assumed by
TM.

 

(ii)           Following the Distribution Date, Interval
shall use commercially reasonable efforts to monitor the Interval Employees and
Former Interval Employees to determine whether any such Interval Employees or
Former Interval Employees have breached any of the restrictive covenants in the agreements evidencing the
terms of their IAC Options and IAC Awards. 
As soon as practicable following Interval’s reasonable belief that an
Interval Employee or Former Interval Employee has breached any such covenant,
Interval shall provide IAC in writing with the name and address of such
employee or former employee and a description of the breach that such employee
or former employee is believed to have committed.  Notwithstanding the foregoing or anything in
any agreement evidencing the terms of any IAC Options and IAC Awards or
otherwise to the contrary, it shall not be a violation of any IAC non-competition
or non-solicitation of clients or customers covenant for an Interval Employee
to engage in acts on behalf of Interval or an Interval Entity that are
otherwise prohibited by the terms of such non-competition or non-solicitation
of clients or customers covenants and it shall not be a violation of any
Interval non-competition or non-solicitation of clients or customers covenant
for an IAC Employee to engage in acts on behalf of IAC or an IAC Entity that
are otherwise prohibited by the terms of such non-competition or
non-solicitation of clients or customers covenants.  In addition, following the Effective Time,
the restrictive covenants (including without limitation any proprietary rights
agreements or confidential information covenants) to which any Interval
Employee or Former Interval Employee are party shall run in favor of Interval
(and, to the extent relating to IAC, shall run in favor of IAC to the same
extent that they ran in favor of IAC

 

36

 

immediately
prior to the Effective Time; provided, that the Effective Time shall be
treated as a termination of employment from IAC for purposes of the duration of
IAC’s ability to enforce the restrictive covenant) and the restrictive
covenants to which any IAC Employee or Former IAC Employee are party shall run
in favor of IAC.  Any employment
agreement between IAC and an Interval Employee or Former Interval Employee
shall as of the Effective Time be assigned by IAC to Interval and assumed by
Interval.

 

(iii)          Following the Distribution Date, HSN shall
use commercially reasonable efforts to monitor the HSN Employees and Former HSN
Employees to determine whether any such HSN Employees or Former HSN Employees
have breached any of the restrictive covenants
in the agreements evidencing the terms of their IAC Options and IAC
Awards.  As soon as practicable following
HSN’s reasonable belief that an HSN Employee or Former HSN Employee has
breached any such covenant, HSN shall provide IAC in writing with the name and
address of such employee or former employee and a description of the breach
that such employee or former employee is believed to have committed.  Notwithstanding the foregoing or anything in
any agreement evidencing the terms of any IAC Options and IAC Awards or
otherwise to the contrary, it shall not be a violation of any IAC
non-competition or non-solicitation of clients or customers covenant for an HSN
Employee to engage in acts on behalf of HSN or an HSN Entity that are otherwise
prohibited by the terms of such non-competition or non-solicitation of clients
or customers covenants and it shall not be a violation of any HSN
non-competition or non-solicitation of clients or customers covenant for an IAC
Employee to engage in acts on behalf of IAC or an IAC Entity that are otherwise
prohibited by the terms of such non-competition or non-solicitation of clients
or customers covenants.  In addition,
following the Effective Time, the restrictive covenants (including without limitation
any proprietary rights agreements or confidential information covenants) to
which any HSN Employee or Former HSN Employee are party shall run in favor of
HSN (and, to the extent relating to IAC, shall run in favor of IAC to the same
extent that they ran in favor of IAC immediately prior to the Effective Time; provided,
that the Effective Time shall be treated as a termination of employment from
IAC for purposes of the duration of IAC’s ability to enforce the restrictive
covenant) and the restrictive covenants to which any IAC Employee or Former IAC
Employee are party shall run in favor of IAC. 
Any employment agreement between IAC and an HSN Employee or Former HSN
Employee shall as of the Effective Time be assigned by IAC to HSN and assumed
by HSN.

 

(iv)          Following the Distribution Date, Tree shall
use commercially reasonable efforts to monitor the Tree Employees and Former
Tree Employees to determine whether any such Tree Employees or Former Tree
Employees have breached any of the restrictive covenants in the agreements evidencing the terms of their IAC Options
and IAC Awards.  As soon as practicable
following Tree’s reasonable belief that a Tree Employee or Former Tree Employee
has breached any such covenant, Tree shall provide IAC in writing with the name
and address of such employee or former employee and the name and a description
of the breach that such employee or former employee is believed to have
committed.  Notwithstanding the foregoing
or anything in any agreement evidencing the terms of any IAC Options and IAC
Awards or otherwise to the contrary, it shall not be a violation of any IAC
non-competition or

 

37

 

non-solicitation
of clients or customers covenant for a Tree Employee to engage in acts on
behalf of Tree or a Tree Entity that are otherwise prohibited by the terms of
such non-competition or non-solicitation of clients or customers covenants and
it shall not be a violation of any Tree non-competition or non-solicitation of
clients or customers covenant for an IAC Employee to engage in acts on behalf
of IAC or an IAC Entity that are otherwise prohibited by the terms of such
non-competition or non-solicitation of clients or customers covenants.  In addition, following the Effective Time, the
restrictive covenants (including without limitation any proprietary rights
agreements or confidential information covenants) to which any Tree Employee or
Former Tree Employee are party shall run in favor of Tree (and, to the extent
relating to IAC, shall run in favor of IAC to the same extent that they ran in
favor of IAC immediately prior to the Effective Time; provided, that the
Effective Time shall be treated as a termination of employment from IAC for
purposes of the duration of IAC’s ability to enforce the restrictive covenant)
and the restrictive covenants to which any IAC Employee or Former IAC Employee
are party shall run in favor of IAC.  Any
employment agreement between IAC and a Tree Employee or Former Tree Employee
shall as of the Effective Time be assigned by IAC to Tree and assumed by Tree.

 

5.4           Registration Requirements.

 

(a)           As soon as possible
following the time as of which the Registration Statement (as defined in the
Separation Agreement) is declared effective by the Securities and Exchange
Commission but in any case before the Distribution Date, TM agrees that it
shall file a Form S-8 Registration Statement and a Form S-3
Registration Statement with respect to and cause to be registered pursuant to
the Securities Act of 1933, as amended, the shares of TM Common Stock authorized
for issuance under the TM Long-Term Incentive Plan as required pursuant to such
Act and any applicable rules or regulations thereunder, with such
registration to be effective prior to the Distribution Date.

 

(b)           As soon as possible
following the time as of which the Registration Statement (as defined in the
Separation Agreement) is declared effective by the Securities and Exchange
Commission but in any case before the Distribution Date, Interval agrees that
it shall file a Form S-8 Registration Statement and a Form S-3
Registration Statement with respect to and cause to be registered pursuant to
the Securities Act of 1933, as amended, the shares of Interval Common Stock
authorized for issuance under the Interval Long-Term Incentive Plan as required
pursuant to such Act and any applicable rules or regulations thereunder,
with such registration to be effective prior to the Distribution Date.

 

(c)           As soon as possible
following the time as of which the Registration Statement (as defined in the
Separation Agreement) is declared effective by the Securities and Exchange
Commission but in any case before the Distribution Date, HSN agrees that it
shall file a Form S-8 Registration Statement and a Form S-3
Registration Statement with respect to and cause to be registered pursuant to
the Securities Act of 1933, as amended, the shares of HSN Common Stock
authorized for issuance under the HSN Long-Term Incentive Plan as required
pursuant to such Act and any applicable rules or regulations thereunder,
with such registration to be effective prior to the Distribution Date.

 

(d)           As soon as possible
following the time as of which the Registration Statement (as defined in the
Separation Agreement) is declared effective by the Securities and Exchange
Commission but in any case before the Distribution Date, Tree agrees that it
shall file a Form S-8 Registration Statement and a Form S-3
Registration Statement with respect to and cause to be registered pursuant to
the Securities Act of 1933, as amended, the shares of Tree Common Stock
authorized for issuance under the Tree Long-Term Incentive Plan as required
pursuant to such Act and any applicable rules or regulations thereunder,
with such registration to be effective prior to the Distribution Date.

 

38

 

(e)           IAC agrees that,
following the Distribution Date, it shall use reasonable efforts to continue to
maintain a Form S-8 Registration Statement with respect to and cause to be
registered pursuant to the Securities Act of 1933, as amended, the shares of
IAC Common Stock authorized for issuance under the IAC Long-Term Incentive
Plans as required pursuant to such Act and any applicable rules or
regulations thereunder.

 

5.5           Executive Deferred Compensation Plans.

 

(a)           Effective as of the
Distribution Date, TM shall establish a deferred compensation plan (the “TM
Deferred Compensation Plan”) and a related rabbi trust (the “TM Rabbi
Trust”), each of which is substantially identical to the
IAC/InterActiveCorp Executive Deferred Compensation Plan (“IAC Deferred
Compensation Plan”) and the related rabbi trust for the IAC Deferred
Compensation Plan (the “IAC Rabbi Trust”), to provide benefits to TM
Employees and Former TM Employees from and after the Distribution Date who were
participants in the IAC Deferred Compensation Plan as of immediately prior to
the Distribution Date (“TM Participants”).  All benefits under the IAC Deferred
Compensation Plan with respect to TM Participants shall be assumed by TM and
paid under the TM Deferred Compensation Plan. 
Effective on the Distribution Date or as soon as administratively
practicable after the Distribution Date, IAC shall cause the trustee of the IAC
Rabbi Trust to transfer an amount of assets from the IAC Rabbi Trust to the TM
Rabbi Trust equal to the account balances of TM Participants as of the date of
such transfer to fund the benefits of TM Participants under the TM Deferred
Compensation Plan.

 

(b)           Effective as of the
Distribution Date, each Interval Employee and Former Interval Employee shall be
deemed to have elected to receive a lump sum distribution of his or her accrued
benefits under the IAC Deferred Compensation Plan in 2009 and shall be paid
such benefits by IAC in 2009 in accordance with the terms of such plans.

 

(c)           Effective as of the
Distribution Date, HSN shall establish a deferred compensation plan (the “HSN
Deferred Compensation Plan”) that is substantially identical to the IAC
Deferred Compensation Plan as of immediately prior to the Distribution Date to
provide benefits to HSN Employees from and after the Distribution Date who were
participants in the IAC Deferred Compensation Plan as of immediately prior to
the Distribution Date and had made effective elections to defer compensation
earned in 2008 (“Active HSN Participants”).  Each Active HSN Participant and each other
HSN Employee and Former HSN Employee shall be deemed to have elected to receive
a lump sum distribution of his or her accrued benefits under the IAC Deferred
Compensation Plan and HSN Deferred Compensation Plan in 2009 and shall be paid
such benefits in 2009 in accordance with the terms of such plans.  IAC shall be liable for any benefits accrued
under the IAC Deferred Compensation Plan by any Active HSN Participant, other
HSN Employee and Former HSN Employee prior to the Distribution Date and HSN
shall be liable for any benefits accrued by Active HSN Participants after the
Distribution Date.  No portion of the IAC
Rabbi Trust shall be transferred to HSN or any rabbi trust established by HSN
or shall be used to pay the benefits of Active HSN Participants accrued after
the Distribution Date.

 

(d)           Effective as of the
Distribution Date, Tree shall establish a deferred compensation plan (the “Tree
Deferred Compensation Plan”) and a related rabbi trust (the “Tree Rabbi
Trust”) (each of which is substantially identical to the IAC Deferred
Compensation Plan and IAC Rabbi Trust) to provide benefits to Tree Employees
and Former Tree Employees from and after the Distribution Date who were
participants in the IAC Deferred Compensation Plan as of immediately prior to
the Distribution Date (“Tree Participants”).  All benefits under the IAC Deferred
Compensation Plan with respect to Tree

 

39

 

Participants shall be assumed by Tree and
paid under the Tree Deferred Compensation Plan. 
Effective on the Distribution Date or as soon as administratively
practicable after the Distribution Date, IAC shall cause the trustee of the IAC
Rabbi Trust to transfer an amount of assets from the IAC Rabbi Trust to the
Tree Rabbi Trust equal to the account balances of Tree Participants as of the
date of such transfer to fund the benefits of Tree Participants under the Tree
Deferred Compensation Plan.

 

5.6           Severance.

 

(a)           A TM Employee shall not
be deemed to have terminated employment for purposes of determining eligibility
for severance benefits in connection with or in anticipation of the
consummation of the transactions contemplated by the Separation Agreement.  TM shall be solely responsible for all
Liabilities in respect of all costs arising out of payments and benefits
relating to the termination or alleged termination of any TM Employee or Former
TM Employee’s employment that occurs prior to, as a result of, in connection
with or following the consummation of the
transactions contemplated by the Separation Agreement, including any amounts
required to be paid (including any payroll or other taxes), and the costs of
providing benefits, under any applicable severance, separation, redundancy,
termination or similar plan, program, practice, contract, agreement, law or
regulation (such benefits to include any medical or other welfare benefits,
outplacement benefits, accrued vacation, and taxes).

 

(b)           An Interval Employee
shall not be deemed to have terminated employment for purposes of determining
eligibility for severance benefits in connection with or in anticipation of the
consummation of the transactions contemplated by the Separation Agreement.  Interval shall be solely responsible for all
Liabilities in respect of all costs arising out of payments and benefits
relating to the termination or alleged termination of any Interval Employee or
Former Interval Employee’s employment that occurs prior to, as a result of, in
connection with or following the consummation of the transactions contemplated by the Separation Agreement, including any
amounts required to be paid (including any payroll or other taxes), and the
costs of providing benefits, under any applicable severance, separation,
redundancy, termination or similar plan, program, practice, contract,
agreement, law or regulation (such benefits to include any medical or other
welfare benefits, outplacement benefits, accrued vacation, and taxes).

 

(c)           An HSN Employee shall
not be deemed to have terminated employment for purposes of determining
eligibility for severance benefits in connection with or in anticipation of the
consummation of the transactions contemplated by the Separation Agreement.  HSN shall be solely responsible for all
Liabilities in respect of all costs arising out of payments and benefits
relating to the termination or alleged termination of any HSN Employee or
Former HSN Employee’s employment that occurs prior to, as a result of, in
connection with or following the consummation of the transactions contemplated by the Separation Agreement, including any
amounts required to be paid (including any payroll or other taxes), and the
costs of providing benefits, under any applicable severance, separation,
redundancy, termination or similar plan, program, practice, contract,
agreement, law or regulation (such benefits to include any medical or other
welfare benefits, outplacement benefits, accrued vacation, and taxes).

 

(d)           A Tree Employee shall
not be deemed to have terminated employment for purposes of determining
eligibility for severance benefits in connection with or in anticipation of the
consummation of the transactions contemplated by the Separation Agreement.  Tree shall be solely responsible for all
Liabilities in respect of all costs arising out of payments and benefits
relating to the termination or alleged termination of any Tree

 

40

 

Employee or Former Tree Employee’s employment
that occurs prior to, as a result of, in connection with or following the consummation
of the transactions
contemplated by the Separation Agreement, including any amounts required to be
paid (including any payroll or other taxes), and the costs of providing
benefits, under any applicable severance, separation, redundancy, termination
or similar plan, program, practice, contract, agreement, law or regulation
(such benefits to include any medical or other welfare benefits, outplacement
benefits, accrued vacation, and taxes).

 

ARTICLE VI

GENERAL AND ADMINISTRATIVE

 

6.1           Sharing of Participant
Information.  IAC and each of the
SpinCos shall share with one another, and IAC shall cause each other IAC Entity
to share, TM shall cause each other TM Entity to share, Interval shall cause
each other Interval Entity to share, HSN shall cause each other HSN Entity to
share and Tree shall cause each other Tree Entity to share with one another and
their respective agents and vendors (without obtaining releases) all
participant information necessary for the efficient and accurate administration
of each of the IAC Benefit Plans, the TM Benefit Plans, the Interval Benefit
Plans, the HSN Benefit Plans and the Tree Benefit Plans.  IAC, TM, Interval, HSN, Tree and their
respective authorized agents shall, subject to applicable laws, be given
reasonable and timely access to, and may make copies of, all information
relating to the subjects of this Agreement in the custody of such other Party,
to the extent necessary for such administration.  Until December 31, 2008, all participant
information shall be provided in the manner and medium applicable to
Participating Companies in IAC Benefit Plans generally, and thereafter until December 31,
2009, all participant information shall be provided in a manner and medium as
may be agreed to by IAC, TM, Interval, HSN and/or Tree, as applicable.

 

6.2           Reasonable Efforts/Cooperation.  Each of the Parties hereto will use its
commercially reasonable efforts to promptly take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement.  Each of
the Parties hereto shall cooperate fully on any issue relating to the
transactions contemplated by this Agreement for which the other Party seeks a
determination letter or private letter ruling from the Internal Revenue
Service, an advisory opinion from the Department of Labor or any other filing
(including, but not limited to, securities filings (remedial or otherwise)),
consent or approval with respect to or by a governmental agency or authority in
any jurisdiction in the United States or abroad.

 

6.3           No Third-Party Beneficiaries.  This Agreement is solely for the benefit of
the Parties and is not intended to confer upon any other Persons any rights or
remedies hereunder.  Except as expressly
provided in this Agreement, nothing in this Agreement shall preclude IAC or any
other IAC Entity, at any time after the Close of the Distribution Date, from
amending, merging, modifying, terminating, eliminating, reducing, or otherwise
altering in any respect any IAC Benefit Plan, any benefit under any Benefit
Plan or any trust, insurance policy or funding vehicle related to any IAC
Benefit Plan.  Except as expressly provided
in this Agreement, nothing in this Agreement shall preclude TM or any other TM
Entity, at any time after the Close of the Distribution Date, from amending,
merging, modifying, terminating, eliminating, reducing, or otherwise altering
in any respect any TM Benefit Plan, any

 

41

 

benefit under any Benefit Plan or any trust,
insurance policy or funding vehicle related to any TM Benefit Plan.  Except as expressly provided in this
Agreement, nothing in this Agreement shall preclude Interval or any other
Interval Entity, at any time after the Close of the Distribution Date, from
amending, merging, modifying, terminating, eliminating, reducing, or otherwise
altering in any respect any Interval Benefit Plan, any benefit under any
Benefit Plan or any trust, insurance policy or funding vehicle related to any
Interval Benefit Plan.  Except as
expressly provided in this Agreement, nothing in this Agreement shall preclude
HSN or any other HSN Entity, at any time after the Close of the Distribution
Date, from amending, merging, modifying, terminating, eliminating, reducing, or
otherwise altering in any respect any HSN Benefit Plan, any benefit under any
Benefit Plan or any trust, insurance policy or funding vehicle related to any
HSN Benefit Plan.  Except as expressly
provided in this Agreement, nothing in this Agreement shall preclude Tree or
any other Tree Entity, at any time after the Close of the Distribution Date,
from amending, merging, modifying, terminating, eliminating, reducing, or
otherwise altering in any respect any Tree Benefit Plan, any benefit under any
Benefit Plan or any trust, insurance policy or funding vehicle related to any
Tree Benefit Plan.

 

6.4           Audit Rights With Respect to Information
Provided.

 

(a)           Each Party, and its
duly authorized representatives, shall have the right to conduct reasonable
audits with respect to all information required to be provided to it by any
other Party under this Agreement.

 

(b)           The Party conducting an
audit pursuant to this Section 6.4(a) (the “Auditing
Party”) may
adopt reasonable procedures and guidelines for conducting audits and the
selection of audit representatives under this Section 6.4.  The Auditing Party shall have the right to
make copies of any records at its expense, subject to any restrictions imposed
by applicable laws and to any confidentiality provisions set forth in the
Separation Agreement, which are incorporated by reference herein.  The Party being audited shall provide the
Auditing Party’s representatives with reasonable access during normal business
hours to its operations, computer systems and paper and electronic files, and
provide workspace to its representatives. 
After any audit is completed, the Party being audited shall have the
right to review a draft of the audit findings and to comment on those findings
in writing within thirty business days after receiving such draft.

 

(c)           The Auditing Party’s
audit rights under this Section 6.4 shall include the right to audit, or
participate in an audit facilitated by the Party being audited, of any Subsidiaries and Affiliates of the Party
being audited and to require the other Party to request any benefit providers
and third parties with whom the Party being audited has a relationship, or
agents of such Party, to agree to such an audit to the extent any such Persons
are affected by or addressed in this Agreement (collectively, the “Non-parties”).  The
Party being audited shall, upon written request from the Auditing Party,
provide an individual (at the Auditing Party’s expense) to supervise any audit
of a Non-party.  The Auditing Party shall
be responsible for supplying, at the Auditing Party’s expense, additional
personnel sufficient to complete the audit in a reasonably timely manner.  The responsibility of the Party being audited
shall be limited to providing, at the Auditing Party’s expense, a single
individual at each audited site for purposes of facilitating the audit.

 

6.5           Fiduciary Matters.  It is acknowledged that actions required to
be taken pursuant to this Agreement may be subject to fiduciary duties or
standards of conduct under ERISA or other applicable law, and no Party shall be
deemed to be in violation of this Agreement if it fails to comply with any
provisions hereof based upon its good faith determination that to do so would
violate such a fiduciary duty or standard. 
Each Party shall be responsible for taking such actions as are deemed
necessary and appropriate to comply with its own fiduciary responsibilities and
shall fully release and indemnify the other Party for any Liabilities caused by
the failure to satisfy any such responsibility.

 

42

 

6.6           Consent of Third Parties.  If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor) and such consent
is withheld, the Parties hereto shall use commercially reasonable efforts to
implement the applicable provisions of this Agreement to the full extent
practicable.  If any provision of this
Agreement cannot be implemented due to the failure of such third party to
consent, the Parties hereto shall negotiate in good faith to implement the
provision in a mutually satisfactory manner. 
The phrase “commercially reasonable efforts” as used herein shall not be
construed to require any Party to incur any non-routine or unreasonable expense
or Liability or to waive any right.

 

ARTICLE VII

MISCELLANEOUS

 

7.1           Effect If Effective Time Does Not Occur.  If the Separation Agreement is terminated
prior to the Distribution Date, then this Agreement shall terminate and all
actions and events that are, under this Agreement, to be taken or occur
effective immediately prior to or as of the Close of the Distribution Date, or
Immediately after the Distribution Date, or otherwise in connection with the
Separation Transactions, shall not be taken or occur except to the extent
specifically agreed by the Parties.

 

7.2           Relationship of Parties.  Nothing in this Agreement shall be deemed or
construed by the Parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the Parties, it being
understood and agreed that no provision contained herein, and no act of the
Parties, shall be deemed to create any relationship between the Parties other
than the relationship set forth herein.

 

7.3           Affiliates.  Each of IAC, TM, Interval, HSN and Tree shall
cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth in this Agreement to be performed by
another IAC Entity, TM Entity, Interval Entity, HSN Entity or Tree Entity,
respectively.

 

7.4           Notices.  All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed given to
a Party when (a) delivered to the appropriate address by hand or by nationally recognized overnight
courier service (costs prepaid); (b) sent by facsimile with confirmation
of transmission by the transmitting equipment; or (c) received or rejected
by the addressee, if sent by certified mail, return receipt requested, in each
case to the following addresses and facsimile numbers and marked to the
attention of the person (by name or title) designated below (or to such other
address, facsimile number or person as a Party may designate by notice to the
other Parties):

 

(a)           if to IAC:

 

IAC/InterActiveCorp

555 West 18th Street

New York, NY 10011

Attention:  General Counsel

Facsimile No.:  (212) 314-7379

 

(b)           if to TM:

 

Ticketmaster

8800 West Sunset Blvd

West Hollywood, CA 90069

Attention:  General Counsel

Facsimile No.:  [      ]

 

43

 

(c)           if to Interval:

 

Interval Leisure Group, Inc.

6262 Sunset Drive

Miami, FL 33143

Attention:  General Counsel

Facsimile No.:  [      ]

 

(d)           if to HSN:

 

HSN, Inc.

1 HSN Drive

St. Petersburg, FL 33729

Attention:  General Counsel

Facsimile No.:  [      ]

 

(e)           if to Tree:

 

Tree.com, Inc.

11115 Rushmore Drive

Charlotte, NC 28277

Attention:  General Counsel

Facsimile No.:  [      ]

 

7.5           Abandonment.  IAC may in its sole discretion abandon one or
more of the Distributions (as defined in the Separation Agreement) prior to the
Distribution Date, and, by notice to the other SpinCos, shall have the right to
terminate this Agreement to the extent of the rights and obligations provided
between the SpinCo(s) the Distribution of which shall have been abandoned,
on the one hand, and the other SpinCos and IAC, on the other hand.  In the event that one or more of the
Distributions (as defined in the Separation Agreement) shall not be effected on
the Distribution Date, (a) any provisions contained in this Agreement
regarding the rights or obligations of a SpinCo the Distribution of which shall
have been abandoned shall have no effect, (b) such SpinCo shall continue
to be treated as a member of the IAC Group (as defined in the Separation
Agreement) and (c) such SpinCo’s SpinCo Employees and Former SpinCo
Employees shall be treated as IAC Employees and Former IAC Employees,
respectively, for purposes of this Agreement.

 

7.6           Incorporation of Separation Agreement
Provisions.  The following provisions
of the Separation Agreement are hereby incorporated herein by reference, and
unless otherwise expressly specified herein, such provisions shall apply as if
fully set forth herein mutatis mutandis (references in this Section 7.6 to
an “Article” or “Section” shall mean Articles or Sections of the Separation
Agreement, and references in the material incorporated herein by reference
shall be references to the Separation Agreement):  Article VI (relating to Mutual Releases;
Indemnification); Article VIII (relating to Exchange of Information;
Confidentiality); Article IX (relating to Dispute Resolution); Article X
(relating to Further Assurances); Article XII (relating to Sole Discretion
of IAC; Termination) and Article XIV (relating to Miscellaneous).

 

44

 

IN WITNESS WHEREOF, the Parties have caused
this Employee Matters Agreement to be duly executed as of the day and year
first above written.

 

	
   

  	
  IAC/INTERACTIVECORP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Gregory R. Blatt

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TICKETMASTER

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERVAL LEISURE GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSN, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TREE.COM, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

45

 

Exhibit AExhibit 10.5

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between Bob Harris (“Executive”)
and LendingTree, LLC, a Delaware limited liability company (the “Company”), and
is effective as of June 30th, 2008 (the “Effective Date”).

 

WHEREAS, the
Company desires to establish its right to the services of Executive, in the
capacity described below, on the terms and conditions hereinafter set forth,
and Executive is willing to accept such employment on such terms and conditions.

 

NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth, Executive
and the Company have agreed and do hereby agree as follows:

 

1.             EMPLOYMENT. 
During the Term (as defined below), the Company shall employ Executive,
and Executive shall be employed, as President, LendingTree Exchange of the
Company.  During Executive’s employment
with the Company, Executive shall do and perform all services and acts
necessary or advisable to fulfill the duties and responsibilities as are commensurate
and consistent with Executive’s position and shall render such services on the
terms set forth herein.  During Executive’s
employment with the Company, Executive shall report directly to the Chief
Executive Officer of the Company (hereinafter referred to as the “Reporting
Officer”).  Executive shall have such
powers and duties with respect to LendingTree as may reasonably be assigned to Executive
by the Reporting Officer, to the extent consistent with Executive’s position.  Executive agrees to devote all of Executive’s
working time, attention and efforts to LendingTree and to perform the duties of
Executive’s position in accordance with Company policies applicable to all
employees of the Company and its subsidiaries and/or affiliates, as well as
LendingTree policies (or the policies of such other businesses for which
Executive has direct or indirect responsibility under this Agreement) as in
effect from time to time.  Executive’s
principal place of employment shall be the principal offices of LendingTree, located
in Charlotte, North Carolina; provided, however, that travel to the Company’s other
offices in Jacksonville or Irvine may occasionally be required.  Executive acknowledges that the Company may,
in its sole discretion from time to time, change the Executive’s
responsibilities or his or her direct / indirect reports without any effect
hereunder.

 

2.             TERM.  The
term of this Agreement, which shall commence on the Effective Date, shall continue
until and including June 30, 2011 (the “Term”) unless terminated earlier
as set forth in the Standard Terms and Conditions; provided, that certain provisions
herein may specify a greater period of effectiveness.

 

3.             COMPENSATION.

 

(a)           BASE SALARY.  During the period that Executive is employed
with the Company hereunder, the Company shall pay Executive an annual base
salary of $325,000 (the “Base Salary”), payable in equal biweekly installments (or,
if different, in accordance with the Company’s payroll practice as in effect
from time to time), or such higher salary as shall be agreed to in writing by
Executive and the Company from time to time. 
For all purposes under 

 

 

this Agreement, the term “Base Salary” shall refer to the Base Salary
as in effect from time to time.

 

(b)           EQUITY INCENTIVES.  During the period that Executive is employed
with the Company hereunder, Executive shall be eligible to receive a
discretionary equity incentives, including but not limited to restricted stock
unit awards and/or stock options, which incentives shall be granted to Executive
at the time the Company normally grants such incentives generally and otherwise
in accordance with applicable policies, practices, terms, and conditions
(including but not limited to vesting requirements), and provided further, that
Executive is employed by the Company on the date such incentives are awarded.

 

(c)           DISCRETIONARY BONUS.  During the period that Executive is employed
with the Company hereunder, Executive shall be eligible to receive a
discretionary annual bonus in an amount determined by the Reporting Officer,
which bonus shall be payable to Executive at the time the Company pays year-end
bonuses generally and otherwise in accordance with applicable policies and
practices, provided, that Executive is employed by Company on the date such
bonuses are paid.

 

(d)           BENEFITS.  From the Effective Date through the date of
termination of Executive’s employment with the Company for any reason,
Executive shall be entitled to participate in any welfare, health and life
insurance and pension benefit programs as may be adopted from time to time by
the Company on the same basis as that provided to similarly situated employees
of the Company.  Without limiting the
generality of the foregoing, Executive shall be entitled to the following
benefits:

 

(i)            Reimbursement
for Business Expenses.  During the
period that Executive is employed with the Company hereunder, the Company shall
reimburse Executive for all reasonable, necessary and documented expenses
incurred by Executive in performing Executive’s duties for the Company, on the
same basis as similarly situated employees and in accordance with applicable
policies as in effect from time to time.

 

(ii)           Vacation
and other Paid Time Off.  During the
period that Executive is employed with the Company hereunder, Executive shall
be entitled to paid vacation and other paid time off each year, in accordance
with applicable plans, policies, programs and practices applicable to similarly
situated employees generally.

 

4.             NOTICES. 
All notices and other communications under this Agreement shall be in
writing and shall be given by first-class mail, certified or registered with
return receipt requested, or by hand delivery, or by overnight delivery by a
nationally recognized carrier, in each case to the applicable address set forth
below, and any such notice is deemed effectively given when received by the
recipient (of if receipt is refused by the recipient, when so refused):

 

	
  If to the
  Company:

  	
   

  	
  LendingTree,
  LLC

  
	
   

  	
   

  	
  11115
  Rushmore Drive

  
	
   

  	
   

  	
  Charlotte,
  NC 28277

  
	
   

  	
   

  	
  Attention:
  Senior Vice President, Human Resources

  

 

2

 

	
  If to
  Executive:

  	
   

  	
  At the
  most recent address for Executive on file at the Company.

  

 

Either party may change such party’s address for
notices by notice duly given pursuant hereto.

 

5.             GOVERNING LAW; JURISDICTION.  This Agreement and the legal relations thus
created between the parties hereto (including, without limitation, any dispute
arising out of or related to this Agreement) shall be governed by and construed
under and in accordance with the internal laws of the State of North Carolina without
reference to its principles of conflicts of laws.  Any such dispute will be heard exclusively and
determined before an appropriate federal court located in the State of North Carolina
in the Western District, or, if not maintainable therein, then in an
appropriate state court located in Mecklenburg County, North Carolina, and each
party hereto submits itself and its property to the exclusive jurisdiction of
the foregoing courts with respect to such disputes.  Each party hereto (i) agrees that
service of process may be made by mailing a copy of any relevant document to
the address of the party set forth above, (ii) waives to the fullest
extent permitted by law any objection which it may now or hereafter have to the
courts referred to above on the grounds of inconvenient forum or otherwise as
regards any dispute between the parties hereto arising out of or related to
this Agreement, (iii) waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of venue in the
courts referred to above as regards any dispute between the parties hereto
arising out of or related to this Agreement and (iv) agrees that a
judgment or order of any court referred to above in connection with any dispute
between the parties hereto arising out of or related to this Agreement is
conclusive and binding on it and may be enforced against it in the courts of
any other jurisdiction.

 

6.             COUNTERPARTS. 
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.

 

7.             STANDARD TERMS AND CONDITIONS.  Executive expressly understands and
acknowledges that the Executive Standard Terms and Conditions attached hereto
are incorporated herein by reference, deemed a part of this Agreement and are
binding and enforceable provisions of this Agreement.  References to “this Agreement” or the use of
the term “hereof” shall refer to this Agreement and the Executive Standard
Terms and Conditions attached hereto, taken as a whole.

 

8.             SECTION 409A
OF THE INTERNAL REVENUE CODE.  This
Agreement is not intended to constitute a “nonqualified deferred compensation
plan” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended, and the rules and regulations issued thereunder (“Section 409A”). 
Notwithstanding the foregoing, if this Agreement or any benefit paid to Executive
hereunder is subject to Section 409A and if the Executive is a “Specified Employee” (as defined under Section 409A)
as of the date of Executive’s termination of employment hereunder, then the
payment of benefits, if any, scheduled to be paid by the Company to Executive
hereunder during the first six (6) month period beginning on the date of a
termination of employment hereunder shall be delayed during such six (6) month
period and shall commence immediately following the end of such six (6) month
period (and, if applicable, the

 

3

 

period in which such payments
were scheduled to be made if not for such delay shall be extended accordingly). 
In no event shall the Company be required to pay Executive any “gross-up” or
other payment with respect to any taxes or penalties imposed under Section 409A
with respect to any benefit paid to Executive hereunder.

 

IN WITNESS
WHEREOF, the Company has caused this Agreement to be executed and delivered by
its duly authorized officer and Executive has executed and delivered this
Agreement as of June 30th, 2008.

 

	
   

  	
  LendingTree,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Claudette
  Hampton

  
	
   

  	
  By:
  Claudette Hampton

  
	
   

  	
  Title:
  Senior Vice President, Human Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Bob
  Harris

  
	
   

  	
  Bob Harris

  

 

4

 

EXECUTIVE STANDARD TERMS AND CONDITIONS

 

1A.          TERMINATION OF EXECUTIVE’S EMPLOYMENT.

 

(a)           DEATH.  In the event Executive’s employment hereunder
is terminated by reason of Executive’s death, the Company shall pay Executive’s
designated beneficiary or beneficiaries, within thirty (30) days of Executive’s
death in a lump sum in cash, (i) Executive’s Base Salary through the end
of the month in which death occurs and (ii) any Other Accrued Obligations
(as defined in Section 1A(e) below).

 

(b)           DISABILITY.  If, as a result of Executive’s incapacity due
to physical or mental illness (“Disability”), Executive shall have been absent
from the full-time performance of Executive’s duties with the Company for a
period of four (4) consecutive months and, within thirty (30) days after
written notice is provided to Executive by the Company (in accordance with Section 4
of the Employment Agreement), Executive shall not have returned to the
full-time performance of Executive’s duties, Executive’s employment under this
Agreement may be terminated by the Company for Disability.  During any period prior to such termination
during which Executive is absent from the full-time performance of Executive’s
duties with the Company due to Disability, the Company shall continue to pay Executive’s
Base Salary at the rate in effect at the commencement of such period of
Disability, offset by any amounts payable to Executive under any disability
insurance plan or policy provided by the Company.  Upon termination of Executive’s employment due
to Disability, the Company shall pay Executive within thirty (30) days of such
termination (i) Executive’s Base Salary through the end of the month in which
termination occurs in a lump sum in cash, offset by any amounts payable to Executive
under any disability insurance plan or policy provided by the Company; and (ii) any
Other Accrued Obligations (as defined in paragraph 1(e) below).

 

(c)           TERMINATION FOR CAUSE.  Upon the termination of Executive’s
employment by the Company for Cause (as defined below), the Company shall have
no further obligation hereunder, except for the payment of any Other Accrued
Obligations (as defined in paragraph 1(e) below).  As used herein, “Cause” shall mean:  (i) the Executive’s plea of guilty or
nolo contendere to, or conviction for, the commission of (A) a felony
offense, or (B) a misdemeanor offense involving any breach of trust or
fiduciary duty by Executive; provided, however, that after
indictment, the Company may suspend Executive from the rendition of services,
but without limiting or modifying in any other way the Company’s obligations
under this Agreement; (ii) a material breach by Executive of a fiduciary
duty owed to the Company; (iii) a material breach by Executive of any of
the covenants made by Executive in Section 2A hereof; (iv) the willful or
gross neglect by Executive of the material duties required by this Agreement;
or (v) a material violation by Executive of any Company policy pertaining
to ethics, wrongdoing or conflicts of interest.

 

(d)           TERMINATION OR BREACH BY THE
COMPANY OTHER THAN FOR DEATH, DISABILITY OR CAUSE OR RESIGNATION BY EXECUTIVE
UPON A CHANGE IN CONTROL.  If (i) Executive’s
employment hereunder is terminated by the Company or the Company commits a material
breach of this Agreement prior to the expiration of the Term for 

 

 

any reason other than Executive’s death or Disability or for Cause, or (ii) Executive
resigns within ninety (90) days following the consummation of any Change in
Control of the Company, then the Company shall pay Executive the following:

 

(i) Within thirty (30) days following
such termination, breach, or resignation, an amount equal to all Other Accrued
Obligations (as defined herein); and

 

(ii) An amount equal to
one (1) year’s Base Salary, payable in equal installments on the Company’s
regularly scheduled paydays over the one (1) year period following the
date of such termination, breach, or resignation (the “Severance Period”).

 

If Executive obtains other employment or is otherwise compensated for
services provided during this Severance Period, the Company’s obligation to
make future payments to Executive under these subparagraph (d)(ii) and
shall be offset against any compensation earned by Employee as a result of
employment with or services provided to a third party.  Executive agrees to inform the Company
promptly of his or her employment status and any amounts so earned during the
Severance Period.  Executive’s right to
the payments under these subparagraphs (d)(ii) shall be subject to
Executive’s execution and non-revocation of a general release of the Company
and its affiliates, in a form substantially similar to that used for similarly
situated executives of the Company and its affiliates, and Executive’s
compliance with the restrictive covenants set forth in Section 2A of these
Standard Terms and Conditions.  Executive
acknowledges and agrees that the payments described in this Section 1A(d) constitutes
good and valuable consideration for such release.

 

For purposes of this Agreement, a “Change in Control” means

 

(i)            the
acquisition, by any means, by any individual entity or group, within the
meaning of Section 13 (d)(3) or 14 (d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), other than
IAC/InterActiveCorp, Barry Diller, Liberty Media Corporation, and their
respective affiliates (a “Person”), directly or indirectly, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of equity securities of LendingTree, LLC representing more than 50% of the
voting power of the then outstanding equity securities of LendingTree, LLC
entitled to vote generally in the election of directors or managing members (as
applicable) of the entity (the “Outstanding Voting Securities”); provided, however, that
for purposes of this subsection (i), the following acquisitions shall not
constitute a Change in Control: (1) any acquisition by any employee
benefit plan (or trust related to such employee benefit plan) sponsored or
maintained by LendingTree, LLC or any corporation controlled by LendingTree,
LLC or (2) any acquisition by any Person pursuant to a transaction which
complies with clauses (A) and (B) of subsection (ii) of this
definition; or

 

(ii)           the
consummation of a reorganization, merger or consolidation or sale or other disposition,
directly or indirectly of all or substantially all of the assets of
LendingTree, LLC or the purchase of assets or stock or another entity (a “Business
Combination”) in each case, unless immediately following such Business
Combination, (A) all or substantially all of the individuals and entities
who were the beneficial owners 

 

2A

 

of the Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the then
outstanding combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, managing members or
other required persons (as applicable) of the entity resulting from such
Business Combination (including, without limitation, an entity which as a
result of such transaction owns LendingTree, LLC or all or substantially all of
the assets of LendingTree, LLC either directly or through one or more
subsidiaries) in substantially the same proportion as their ownership
immediately prior to such Business Combination of the outstanding voting securities,
and (B) no person (excluding IACInteractiveCorp, Barry Diller, Liberty
Media Corporation and their respective affiliates, any employee benefit plan
(or related trust) of LendingTree, LLC or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, more than a
majority of the combined voting power of the then Outstanding Voting Securities
of such entity except to the extent that such ownership of LendingTree, LLC
existed prior to the Business Combination; or

 

(iii)          the
approval by the members, stockholders or other required persons (as applicable)
of LendingTree, LLC of a complete liquidation or dissolution of LendingTree,
LLC.

 

(e)           OTHER ACCRUED OBLIGATIONS.  As used in this Agreement, “Other Accrued
Obligations” shall mean the sum of (i) any portion of Executive’s accrued
but unpaid Base Salary or Bonus through the date of death or termination of
employment for any reason, as the case may be; (ii) any compensation
previously earned but deferred by Executive (together with any interest or
earnings thereon) that has not yet been paid and that is not otherwise to be
paid at a later date pursuant to the executive deferred compensation plan of
the Company, if any, and (iii) any reimbursements that Executive is entitled
to receive under Section 3(d) of the Agreement.

 

2A.                             CONFIDENTIAL
INFORMATION; NON-COMPETITION; NON-SOLICITATION; AND PROPRIETARY RIGHTS.

 

(f)            CONFIDENTIALITY.  Executive acknowledges that, while employed
by the Company, Executive will occupy a position of trust and confidence.  The Company, its subsidiaries and/or
affiliates shall provide Executive with “Confidential Information” as referred
to below.  Executive shall not, except as
may be required to perform Executive’s duties hereunder or as required by
applicable law, without limitation in time, communicate, divulge, disseminate,
disclose to others or otherwise use, whether directly or indirectly, any
Confidential Information regarding the Company and/or any of its subsidiaries and/or
affiliates.

 

“Confidential Information” shall mean
information about the Company or any of its subsidiaries or affiliates, and
their respective businesses, employees, consultants, contractors, clients and
customers that is not disclosed by the Company or any of its subsidiaries or
affiliates for financial reporting purposes or otherwise generally made
available to the public (other than by Executive’s breach of the terms hereof) and
that was learned or developed by Executive in the course of employment by the
Company or any of its subsidiaries or affiliates, including 

 

3A

 

(without limitation) any proprietary knowledge, trade secrets, data,
formulae, information and client and customer lists and all papers, resumes,
and records (including computer records) of the documents containing such
Confidential Information.  Executive
acknowledges that such Confidential Information is specialized, unique in
nature and of great value to the Company and its subsidiaries or affiliates,
and that such information gives the Company and its subsidiaries or affiliates
a competitive advantage.  Executive
agrees to deliver or return to the Company, at the Company’s request at any
time or upon termination or expiration of Executive’s employment or as soon
thereafter as possible, all documents, computer tapes and disks, records,
lists, data, drawings, prints, notes and written information (and all copies
thereof) furnished by the Company and its subsidiaries or affiliates or
prepared by Executive in the course of Executive’s employment by the Company
and its subsidiaries or affiliates.  As
used in this Agreement, “subsidiaries” and “affiliates” shall mean any company
controlled by, controlling or under common control with the Company.  For purposes of this Agreement, “Confidential
Information” shall not include any information that is now or hereafter becomes
known to the public or otherwise is in the public domain other than through
Executive’s fault, breach, disclosure, or other act of Executive.

 

(g)           NON-COMPETITION.  In consideration of this Agreement, and other
good and valuable consideration provided hereunder, the receipt and sufficiency
of which are hereby acknowledged by Executive, Executive hereby agrees and
covenants that, during Executive’s employment hereunder and for a period of twelve
(12) months thereafter (the “Restricted Period”), Executive shall not, without
the prior written consent of the Company, directly or indirectly, engage in or
become associated with a Competitive Activity.

 

For purposes of this Section 2A(b), (i) a
“Competitive Activity” means any business or other endeavor involving Similar
Products if such business or endeavor is in a country (including the United
States) in which the Company (or any of its businesses) provides or planned to
provide during Executive’s employment hereunder such Similar Products; (ii) “Similar
Products” means any products or services that are the same (or substantially
the same) as any of the (A) types of products or services that the online loan
origination, online loan brokerage, or online real estate brokerage businesses of
LendingTree and/or the Company or (B) significant types of products or
services that any other business for which Executive has direct or indirect
responsibility hereunder, in each case, provides, has provided or planned to
provide during Executive’s employment hereunder; and (iii) Executive shall
be considered to have become “associated with a Competitive Activity” if
Executive becomes directly or indirectly involved as an owner, principal,
employee, officer, director, independent contractor, representative,
stockholder, financial backer, agent, partner, member, advisor, lender,
consultant or in any other individual or representative capacity with any
individual, partnership, corporation or other organization that is engaged in a
Competitive Activity.

 

Notwithstanding the foregoing, Executive may
make and retain investments during the Restricted Period, for investment
purposes only, in less than five percent (5%) of the outstanding capital stock
of any publicly-traded corporation engaged in a Competitive Activity if the
stock of such corporation is either listed on a national stock exchange or on
the NASDAQ National Market System if Executive is not otherwise affiliated with
such corporation.   Executive
acknowledges that Executive’s covenants under this Section 2A(b) are
a material inducement to 

 

4A

 

the Company’s entering into this Agreement.

 

(h)           NON-SOLICITATION OF EMPLOYEES.  Executive recognizes that he or she will
possess Confidential Information about other employees, consultants and
contractors of the Company and its subsidiaries or affiliates relating to their
education, experience, skills, abilities, compensation and benefits, and
inter-personal relationships with suppliers to and customers of the Company and
its subsidiaries or affiliates.  Executive
recognizes that the information he or she will possess about these other
employees, consultants and contractors is not generally known, is of
substantial value to the Company and its subsidiaries or affiliates in
developing their respective businesses and in securing and retaining customers,
and will be acquired by Executive because of Executive’s business position with
the Company.  Executive agrees that,
during Executive’s employment hereunder and for a period of twelve (12) months
thereafter, (i) Executive will not, directly or indirectly, hire or
solicit or recruit any person then employed by the Company and/or any of its
subsidiaries and/or affiliates with whom Executive has had direct contact
during his or her employment hereunder, in all cases, for the purpose of being
employed by Executive or by any business, individual, partnership, firm,
corporation or other entity on whose behalf Executive is acting as an agent,
representative or employee; and (ii) Executive will not convey any such
Confidential Information or trade secrets about employees of the Company or any
of its subsidiaries or affiliates to any other person except within the scope
of Executive’s duties hereunder. 
Notwithstanding the foregoing, the restrictions set forth immediately
above shall, in the case of employees with whom Executive had a direct working
relationship prior to his or her employment with the Company, its subsidiaries
and/or affiliates, (i) upon a termination of Executive’s employment by the
Company for any reason other than for Cause, shall apply for a period of nine (9) months
following such termination, or (ii) if Executive terminates his or her employment
hereunder, apply for a period of twelve (12) months following such termination.

 

(i)            NON-SOLICITATION OF CUSTOMERS.  During Executive’s employment hereunder and
for a period of twelve (12) months thereafter, Executive shall not solicit any Customers
of LendingTree or encourage (regardless of who initiates the contact) any such Customers
to use the facilities or services of any competitor of LendingTree.  For the purposes of this subsection, “Customers”
means any persons or entities that purchased products or services from the
Company within twelve (12) calendar months of the termination of Executive’s
employment.

 

(j)            PROPRIETARY RIGHTS; ASSIGNMENT.  All Employee Developments (defined below)
shall be considered works made for hire by Executive for the Company or, as
applicable, its subsidiaries or affiliates, and Executive agrees that all
rights of any kind in any Employee Developments belong exclusively to the
Company.  In order to permit the Company
to exploit such Employee Developments, Executive shall promptly and fully
report all such Employee Developments to the Company.  Except in furtherance of his or her obligations
as an employee of the Company, Executive shall not use or reproduce any portion
of any record associated with any Employee Development without prior written
consent of the Company or, as applicable, its subsidiaries or affiliates.  Executive agrees that in the event actions of
Executive are required to ensure that such rights belong to the Company under
applicable laws, Executive will cooperate and take whatever such actions are
reasonably requested by the Company, whether during or after the Term, and without
the need for separate or additional compensation.  

 

5A

 

“Employee Developments” means any idea, know-how, discovery, invention,
design, method, technique, improvement, enhancement, development, computer program,
machine, algorithm or other work of authorship, whether developed, conceived or
reduced to practice during or following the period of employment, that (i) concerns
or relates to the actual or anticipated business, research or development
activities, or operations of LendingTree (or any other Company business for
which Executive has direct or indirect responsibility during his or her employment
hereunder), or (ii) results from or is suggested by any undertaking
assigned to Executive or work performed by Executive for or on behalf of the
Company or any of its subsidiaries or affiliates, whether created alone or with
others, during or after working hours, or (iii) uses, incorporates or is
based on Company equipment, supplies, facilities, trade secrets or inventions
of any form or type.  All Confidential
Information and all Employee Developments are and shall remain the sole
property of the Company or any of its subsidiaries or affiliates.  Executive shall acquire no proprietary
interest in any Confidential Information or Employee Developments developed or
acquired during the Term.  To the extent
Executive may, by operation of law or otherwise, acquire any right, title or
interest in or to any Confidential Information or Employee Development,
Executive hereby assigns and covenants to assign to the Company all such
proprietary rights without the need for a separate writing or additional
compensation.  Executive shall, both
during and after the Term, upon the Company’s request, promptly execute,
acknowledge, and deliver to the Company all such assignments, confirmations of
assignment, certificates, and instruments, and shall promptly perform such
other acts, as the Company may from time to time in its discretion deem
necessary or desirable to evidence, establish, maintain, perfect, enforce or
defend the Company’s rights in Confidential Information and Employee
Developments.

 

(k)           COMPLIANCE WITH POLICIES AND
PROCEDURES.  During the period that Executive
is employed with the Company hereunder, Executive shall adhere to the policies
and standards of professionalism set forth in the Company’s Policies and
Procedures applicable to all employees of the Company and its subsidiaries
and/or affiliates, as well as LendingTree policies (or the policies of such
other businesses for which Executive has direct or indirect responsibility
under this Agreement) as they may exist from time to time.

 

(l)            SURVIVAL OF PROVISIONS.  The obligations contained in this Section 2A
shall, to the extent provided in this Section 2A, survive the termination
or expiration of Executive’s employment with the Company and, as applicable,
shall be fully enforceable thereafter in accordance with the terms of this
Agreement.  If it is determined by a
court of competent jurisdiction that any restriction in this Section 2A is
excessive in duration or scope or is unreasonable or unenforceable under applicable
law, it is the intention of the parties that such restriction may be modified
or amended by the court to render it enforceable to the maximum extent permitted
by applicable law.

 

3A.          TERMINATION OF PRIOR AGREEMENTS.  This Agreement constitutes the entire
agreement between the parties and, as of the Effective Date, terminates and
supersedes any and all prior agreements and understandings (whether written or
oral) between the parties with respect to the subject matter of this
Agreement.  Executive acknowledges and
agrees that neither the Company nor anyone acting on its behalf has made, and
is not making, and in executing this Agreement, Executive has not relied upon,
any representations, promises or inducements except 

 

6A

 

to the extent the same is
expressly set forth in this Agreement.  Executive
hereby represents and warrants that by entering into this Agreement, Executive
will not rescind or otherwise breach an employment agreement or other agreement
with Executive’s current employer prior to the natural expiration date of such
agreement.  Notwithstanding the
foregoing, nothing in this Agreement shall alter the Executive’s rights to (i) any
grant of RSUs or other equity interests, or the vesting rights or conditions of
termination and/or expiration thereof, granted in any prior agreement
(including, without limitation, the rights granted to Executive under that
certain Restricted Shares Grant and Shareholders’ Agreement dated as of May 5,
2003, as amended from time to time, and the rights granted under Section 1(d) to
the Standard Terms and Conditions attached to the Employment Agreement dated May 14,
2007), or (ii) the payment of any cash bonus, whether guaranteed or
discretionary, attributable to the Company’s 2007 fiscal year and awarded in
any prior agreement.

 

4A.          ASSIGNMENT; SUCCESSORS.  Without limiting the provisions of Section 2A(d) of
this Agreement, the parties agree that this Agreement is personal in its nature
and that none of the parties hereto shall, without the consent of the others,
assign or transfer this Agreement or any rights or obligations hereunder;
provided, that the Company may assign this Agreement to, or allow any of its
obligations to be fulfilled by, or take actions through, any affiliate of the
Company and, in the event of the merger, consolidation, transfer, or sale of
all or substantially all of the assets of the Company (a “Transaction”) with or
to any other individual or entity, this Agreement shall, subject to the
provisions hereof, be binding upon and inure to the benefit of such successor
and such successor shall discharge and perform all the promises, covenants,
duties, and obligations of the Company hereunder, and in the event of any such
assignment or Transaction, all references herein to the “Company” shall refer
to the Company’s assignee or successor hereunder.  Further, it is the intent of the parties that
this Agreement shall survive the spin-off of LendingTree, LLC and shall be
automatically assigned to, assumed by, and binding upon the new parent company
of LendingTree (referred to herein as “Tree.com”) following the spin-off.  Following the spin-off, all references herein
to “Company” or “LendingTree” shall thereafter refer to Tree.com.

 

5A.          WITHHOLDING. 
The Company shall make such deductions and withhold such amounts from
each payment and benefit made or provided to Executive hereunder, as may be
required from time to time by applicable law, governmental regulation or order.

 

6A.          HEADING REFERENCES. 
Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.  References to “this
Agreement” or the use of the term “hereof” shall refer to these Standard Terms
and Conditions and the Employment Agreement attached hereto, taken as a whole.

 

7A.          REMEDIES FOR BREACH. 
Executive expressly agrees and understands that Executive will notify
the Company in writing of any alleged breach of this Agreement by the Company,
and the Company will have thirty (30) days from receipt of Executive’s notice
to cure any such breach.  Executive
expressly agrees and understands that in the event of any termination of
Executive’s employment by the Company during the Term, the Company’s
contractual 

 

7A

 

obligations to Executive shall
be fulfilled through compliance with its obligations under Section 1A of
the Standard Terms and Conditions.

 

Executive expressly agrees and understands
that the remedy at law for any breach by Executive of Section 2A of the
Standard Terms and Conditions will be inadequate and that damages flowing from
such breach are not usually susceptible to being measured in monetary
terms.  Accordingly, it is acknowledged
that, upon Executive’s violation of any provision of such Section 2A, the
Company shall be entitled to obtain from any court of competent jurisdiction
immediate injunctive relief and obtain a temporary order restraining any
threatened or further breach as well as an equitable accounting of all profits
or benefits arising out of such violation. 
Nothing shall be deemed to limit the Company’s remedies at law or in
equity for any breach by Executive of any of the provisions of this Agreement,
including Section 2A, which may be pursued by or available to the Company.

 

8A.          WAIVER; MODIFICATION.  Failure to insist upon strict compliance with
any of the terms, covenants, or conditions hereof shall not be deemed a waiver
of such term, covenant, or condition, nor shall any waiver or relinquishment
of, or failure to insist upon strict compliance with, any right or power
hereunder at any one or more times be deemed a waiver or relinquishment of such
right or power at any other time or times. 
This Agreement shall not be modified in any respect except by a writing
executed by each party hereto.

 

9A.          SEVERABILITY. 
In the event that a court of competent jurisdiction determines that any
portion of this Agreement is in violation of any law or public policy, only the
portions of this Agreement that violate such law or public policy shall be
stricken.  All portions of this Agreement
that do not violate any statute or public policy shall continue in full force
and effect.  Further, any court order
striking any portion of this Agreement shall modify the stricken terms as
narrowly as possible to give as much effect as possible to the intentions of
the parties under this Agreement.

 

10A.        INDEMNIFICATION. 
The Company shall indemnify and hold Executive harmless for acts and
omissions in Executive’s capacity as an officer, director or employee of the
Company to the maximum extent permitted under applicable law; provided, however,
that neither the Company, nor any of its subsidiaries or affiliates shall
indemnify Executive for any losses incurred by Executive as a result of acts
described in Section 1A(c) of this Standard Terms and Conditions.

 

8A

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