Document:

exv4w4

Exhibit 4.4

(FACE OF NOTE)

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM IN ACCORDANCE WITH THE PROVISIONS
OF THE INDENTURE AND THE TERMS OF THE SECURITIES, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

AT&T INC.

7.000% Global Notes due 2040

COMMON CODE 00206R AU6

ISIN NO. XS0426513387

No. I-1

     AT&T Inc., a corporation duly organized and existing under the laws of the State of Delaware
(herein called “AT&T”, which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to The Bank
of New York Depository (Nominees)
Limited, or registered assigns, the principal sum of sterling appearing on the attached Schedule of
Increases and Decreases on April 30, 2040 (the “Maturity Date”), and to pay interest on said
principal sum from April 30, 2009 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, annually in arrears on April 30 in each year, commencing on
April 30, 2010 (each an “Interest Payment Date”) and on the Maturity Date, at the interest rate of
7.000% per annum, until the principal hereof is paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record Date for such
interest, which shall be the close of business on April 15 (the “Regular Record Date”) next
preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Notes not less than 15 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on

 

 

which the Notes may be listed, and upon such notice as may be required by such exchange, all
as more fully provided in said Indenture.

     Any money that AT&T deposits with the Trustee or any Paying Agent for the payment of principal
or any interest on this Note that remains unclaimed for two years after the date upon which the
principal and interest are due and payable, will be repaid to AT&T upon AT&T’s request unless
otherwise required by mandatory provisions of any applicable unclaimed property law. After that
time, unless otherwise required by mandatory provisions of any unclaimed property law, the Holder
of this Note will be able to seek any payment to which such Holder may be entitled to collect only
from AT&T.

     If the Notes are issued in definitive form, payment of the principal and interest on this Note
due at the Maturity Date or upon redemption will be made at the Maturity Date or upon redemption,
as the case may be, upon presentation of this Note, in immediately available funds, at the office
of The Bank of New York Mellon, the Paying and Transfer Agent and Registrar for the Notes,
currently located at 101 Barclay Street, New York, New York 10286.

     Payment of interest on this Note due on an Interest Payment Date, other than interest at
maturity or upon redemption, may be paid by check mailed to the address of the Holder entitled
thereto as such address shall appear in the Note register. Notwithstanding the foregoing, (1) the
Depository as Holder of the Notes or (2) a Holder of more than £5,000,000 in aggregate principal
amount of Notes in definitive form is entitled to require the Paying Agent to make payments of
interest, other than interest due at maturity or upon redemption, by wire transfer of immediately
available funds into an account maintained by the Holder, by sending appropriate wire transfer
instructions as long as the Paying Agent receives the instructions not less than ten days prior to
the applicable Interest Payment Date. The principal and interest payable in sterling on any of the
Notes at maturity, or upon redemption, will be paid by wire transfer of immediately available funds
against presentation of a Note at the office of the Paying Agent.

     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.

     Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

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     IN WITNESS WHEREOF, AT&T INC. has caused this instrument to be signed in its corporate name,
manually or by facsimile, by its duly authorized officers and has caused its corporate seal to be
imprinted hereon.

	 	 	 	 	 	 	 
	Dated: April 30, 2009	 	AT&T INC.	 	 
	 
	 	 	 	 	 	 
	[SEAL]
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Richard G. Lindner
 

Richard G. Lindner
	 	 
	 

	 	 	 	Senior Executive Vice President and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jonathan P. Klug	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Jonathan P. Klug	 	 
	 

	 	 	 	Senior Vice President and Treasurer	 	 

Trustee’s Certificate of Authentication

This is one of the 7.000% Global Notes due 2040

of the series designated herein referred to

in the within-mentioned Indenture.

THE BANK OF NEW YORK MELLON, as Trustee

	 	 	 	 	 
	By:

	 	/s/ Mary Miselis
 

Authorized Signatory
	 	 

 

 

REVERSE OF NOTE

     This Note is one of a duly authorized issue of debt securities of AT&T issued under and
pursuant to an Indenture, dated as of November 1, 1994, between AT&T and The Bank of New York
Mellon, as Trustee (the “Trustee,” which term includes any successor Trustee under the Indenture),
to which indenture and all indentures supplemental thereto (collectively, the “Indenture”)
reference is hereby made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, AT&T and the Holders of the Notes and of the terms
upon which the Notes are, and are to be, authenticated and delivered. The Notes will be issued in
fully registered form only and in denominations of £50,000 and integral multiples of £50,000 in
excess thereof. This Note is one of the series designated on the face hereof initially limited in
aggregate principal amount to £1,100,000,000.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of AT&T and the rights of the Holders of the Notes
under the Indenture at any time by AT&T and the Trustee with the consent of the Holders of a
majority in principal amount of the Notes at the time outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount of the Notes at the
time outstanding to waive compliance by AT&T with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of AT&T, which is absolute and unconditional, to pay the principal
of and interest on this Note at the times, place and rate, and in the coin or currency, herein
prescribed.

     Principal and interest payments in respect of the Notes are payable by AT&T in sterling, but
holders of beneficial interests in Global Notes held through The Depository Trust Company (“DTC”),
other than Euroclear and Clearstream, will receive payments in U.S. dollars unless they elect to
receive payments in sterling. If a Holder through DTC has not made such an election, payments to
the Holder will be converted to U.S. dollars by the exchange agent. All costs of conversion will be
borne by the Holder by deduction from the payments. The U.S. dollar amount of any payment in
respect of principal or interest received by a Holder not electing payment in sterling will be the
amount of sterling otherwise payable exchanged into U.S. dollars at the sterling/ U.S.$ rate of
exchange prevailing as at 11:00 a.m. (New York City time) on the day which is two Business Days
prior to the relevant payment date, less any costs incurred by the exchange agent for the
conversion (to be shared pro rata among the holders of beneficial interests in the Global Notes
accepting U.S. dollar payments in proportion to their respective holdings), all in accordance with
the Indenture and the Notes.

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     If an exchange rate bid quotation is not available, the Trustee will obtain a bid quotation
from a leading foreign exchange bank in The City of New York, which may be the Trustee or selected
by the Trustee for that purpose after consultation with AT&T. If no bid quotation from a leading
foreign exchange bank is available, payment will be made in sterling to the account or accounts
specified by DTC to the Trustee unless sterling is unavailable due to the imposition of exchange
controls or other circumstances beyond AT&T’s control. If payment in respect of the Notes is
required to be made in a currency other than U.S. dollars and such currency is unavailable to AT&T
due to the imposition of exchange controls or other circumstances beyond AT&T’s control or is no
longer used by the government of the relevant country or for the settlement or transactions by
public institutions of or within the international banking community, then all payments in respect
of the Notes will be made in U.S. dollars until such currency is again available to AT&T or so
used. The amount payable on any date in such currency will be converted into U.S. dollars on the
basis of the most recently available market exchange rate for such currency. Any payment in
respect of the Notes so made in U.S. dollars will not constitute an event of default under the
Indenture.

     The holder of a beneficial interest in the Global Notes held through a participant of DTC
(other than Euroclear or Clearstream) may elect to receive payment or payments under a Global Note
in sterling by notifying the DTC participant through which its Notes are held on or prior to the
applicable Regular Record Date of (1) the investor’s election to receive all or a portion of the
payment in sterling and (2) wire transfer instructions to a sterling account located outside of the
United States. DTC must be notified of an election and wire transfer instructions (1) on or prior
to the third New York Business Day (as defined below) after the Record Date for any payment of
interest and (2) on or prior to the fifth New York Business Day prior to the date for any payment
of principal. DTC will notify the Trustee of an election and wire transfer instructions (1) on or
prior to 5:00 p.m., New York City time, on the fifth New York Business Day after the Record Date
for any payment of interest and (2) on or prior 5:00 p.m., New York City time, on the third New
York Business Day prior to the date for any payment of principal. If complete instructions are
forwarded to and received by DTC through DTC participants and forwarded by DTC to the Trustee and
received on or prior to such dates, such investor will receive payment in sterling outside DTC;
otherwise, only U.S. dollar payments will be made by the Trustee to DTC. All costs of conversion
will be borne by holders of beneficial interests in the Global Notes receiving U.S. dollars by
deduction from those payments.

     Interest will be computed on the basis of the actual number of days in the period for which
interest is being calculated and the actual number of days from and including the last date on
which interest was paid on the Notes (or April 30, 2009 if no interest has been paid on the Notes),
to but excluding the next scheduled interest payment date. This payment convention is referred to
as ACTUAL/ACTUAL (ICMA) as defined in the rulebook of the International Capital Market Association.

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     Optional Redemption by AT&T

     The Notes will be redeemable, as a whole or in part, at AT&T’s option, at any time on at least
30 days’, but not more than 60 days’, prior notice mailed to the registered address of each Holder
of the Notes. The redemption price will be equal to the greater of (1) 100% of the principal
amount of the Notes to be redeemed or (2) the sum of the present values of the Remaining Scheduled
Payments discounted to the redemption date, on an annual basis (actual/actual (ICMA)), at a rate
equal to the Treasury Rate and 25 basis points. In either case, accrued interest will be payable
to the redemption date.

     “Treasury Rate” means the price, expressed as a percentage (rounded to three decimal places,
0.0005 being rounded upwards), at which the gross redemption yield (as calculated by the Trustee)
on the Notes, if they were to be purchased at such price on the third dealing day prior to the date
fixed for redemption, would be equal to the gross redemption yield on such dealing day of the
Reference Bond on the basis of the middle market price of the Reference Bond prevailing at 11:00
a.m. (London time) on such dealing day as determined by the Trustee.

     “Reference Bond” means, in relation to any Treasury Rate calculation, at the discretion of the
Trustee, a United Kingdom government bond whose maturity is closest to the maturity of the Notes,
or if the Trustee in its discretion considers that such similar bond is not in issue, such other
United Kingdom government bond as the Trustee may, with the advice of three brokers of, and/or
market makers in, United Kingdom government bonds selected by the Trustee, determine to be
appropriate for determining the Treasury Rate.

     “Remaining Scheduled Payments” means, with respect to each Note to be redeemed, the remaining
scheduled payments of principal of and interest on the Note that would be due after the related
redemption date but for the redemption. If that redemption date is not an interest payment date
with respect to a Note, the amount of the next succeeding scheduled interest payment on the Note
will be reduced by the amount of interest accrued on the Note to the redemption date.

     On and after the redemption date, interest will cease to accrue on the Notes or any portion of
the Notes called for redemption, unless AT&T defaults in the payment of the redemption price and
accrued interest. On or before the redemption date, AT&T will deposit with a Paying Agent or the
Trustee money sufficient to pay the redemption price of and accrued interest on the Notes to be
redeemed on that date. If less than all of the Notes of any series are to be redeemed, the Notes
to be redeemed shall be selected by the Trustee by lot or by such other method as the Trustee in
its sole discretion deems to be fair and appropriate.

     Payment Without Withholding

     All payments in respect of the Notes by or on behalf of AT&T shall be made without withholding
or deduction for, or on account of, any present or future taxes, duties, assessments or
governmental charges of whatever nature (“Taxes”) imposed, collected, withheld, assessed or
levied by or on behalf of the Relevant Jurisdiction (as defined herein), unless the
withholding or

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deduction of the Taxes is required by law. In that event, AT&T will pay such
additional amounts to a Holder who is a United States Alien (as defined herein) as may be necessary
in order that the net amounts received by the Holder after the withholding or deduction shall equal
the respective amounts which would have been receivable in respect of the Notes in the absence of
the withholding or deduction; except that no such additional amounts shall be payable in relation
to any payment in respect of any Note:

(a) where such withholding or deduction would not have been so imposed but for:

(i) in the case of payment by AT&T, the existence of any present or former
connection between the Holder (or between a fiduciary, settlor, shareholder,
beneficiary or member of the Holder, if such Holder is an estate, a trust, a
corporation or a partnership) and the United States, including, without limitation,
such Holder (or such fiduciary, settlor, shareholder, beneficiary or member) being
or having been a citizen or resident or treated as a resident thereof, or being or
having been engaged in trade or business or presence therein, or having or having
had a permanent establishment therein;

(ii) in the case of payment by AT&T, the present or former status of the Holder as a
personal holding company, a foreign personal holding company, a passive foreign
investment company, or a controlled foreign corporation for United States federal
income tax purposes or a corporation which accumulates earnings to avoid United
States federal income tax;

(iii) in the case of payment by AT&T, the past or present or future status of the
Holder as the actual or constructive owner of 10% or more of either the total
combined voting power of all classes of stock of AT&T entitled to vote if AT&T was
treated as a corporation, or the capital or profits interest in AT&T, if AT&T is
treated as a partnership for United States federal income tax purposes or as a bank
receiving interest described in Section 881(c) (3) (A) of the Internal Revenue Code
of 1986, as amended; or

(iv) the failure by the Holder to comply with any certification, identification or
other reporting requirements concerning the nationality, residence, identity or
connection with the United States (in the case of payment by AT&T) of such Holder,
if compliance is required by statute or by regulation as a precondition to exemption
from such withholding or deduction;

(b) in the case of payment by AT&T to any United States Alien, if such person is a fiduciary
or partnership or other than the sole beneficial owner of any such payment, to the extent
that a beneficiary or settlor with respect to such fiduciary, a member of such partnership
or the beneficial owner would not have been entitled to the additional amounts had such
beneficiary, settlor, member or beneficial owner been the bearer of
such Note. As used herein, “United States Alien” means any person who, for United

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States
federal income tax purposes, is a foreign corporation, a non-resident alien individual, a
non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or
more of the members of which is, for United States federal income tax purposes, a foreign
corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign
estate or trust;

(c) to the extent that the withholding or deduction is as a result of the imposition of any
gift, inheritance, estate, sales, transfer, personal property or any similar tax, assessment
or other governmental charge;

(d) to, or to a third party on behalf of, a Holder who is liable for the Taxes in respect of
the Note by reason of his having any or some present or former connection, including but not
limited to fiscal residency, fiscal deemed residency and substantial interest shareholdings,
with the Relevant Jurisdiction, other than the mere holding of the Note;

(e) presented for payment more than 30 days after the Relevant Date except to the extent
that a Holder would have been entitled to additional amounts on presenting the relevant Note
for payment on the last day of the period of 30 days assuming that day to have been an
Interest Payment Date;

(f) any tax, assessment or other governmental charge required to be withheld by any paying
agent from any payment of principal or of interest on any Note, if such payment can be made
without withholding by any other paying agent;

(g) any tax, assessment or governmental charge that is imposed or withheld solely because
the beneficial owner or any other person failed to comply with certification, identification
or information reporting requirements concerning the nationality, residence, identity or
connection with the United States of the holder or beneficial owner of AT&T’s Notes, if
compliance is required by statute, by regulation of the United States Treasury Department or
by an applicable income tax treaty to which the United States is a party as a precondition
to exemption from such tax, assessment or other governmental charge;

(h) any tax, assessment or governmental charge that is imposed or withheld solely because of
a change in law, regulation, or administrative or judicial interpretation that becomes
effective after the day on which the payment becomes due or is duly provided for, whichever
occurs later; or

(i) any combination of (a), (b), (c), (d), (e), (f), (g) or (h) immediately above.

     Redemption for Taxation Reasons

     If (a) as a result of any change in, or amendment to, the laws or regulations of a Relevant
Jurisdiction, or any change in the official interpretation of the laws or regulations of a Relevant
Jurisdiction, which change or amendment becomes effective after April 24, 2009, on the next

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Interest Payment Date AT&T would be required to pay additional amounts as provided or referred to
above under “Payment Without Withholding” and (b) the requirement cannot be avoided by AT&T’s
taking reasonable measures available to it, AT&T may at its option, having given not less than 30
nor more than 60 calendar days’ notice to the Holders (which notice shall be irrevocable), redeem
all the Notes, but not some only, at any time at their principal amount together with interest
accrued to, but excluding, the date of redemption provided that no such notice of redemption shall
be given earlier than 90 days prior to the earliest date on which AT&T would be obliged to pay such
additional amounts were a payment in respect of the Notes then due. Prior to the publication of any
notice of redemption pursuant to this paragraph, AT&T shall deliver to the Trustee a certificate
signed by two executive officers of AT&T stating that the requirement referred to in (a) above will
apply on the next Interest Payment Date and setting forth a statement of facts showing that the
conditions precedent to the right of AT&T so to redeem have occurred, cannot be avoided by AT&T
taking reasonable measures available to it and an opinion of independent legal advisers of
recognized international standing to the effect that AT&T has or will become obliged to pay such
additional amounts as a result of the change or amendment, in each case to be held by the Trustee
and made available for viewing at the offices of the Trustee on request by any Holder.

     “Relevant Date” means the date on which the payment first becomes due but, if the full amount
of the money payable has not been received by the Trustee on or before the due date, it means the
date which is seven days after the date on which, the full amount of the money having been so
received, notice to that effect shall have been duly given to the Holders by AT&T.

     “Relevant Jurisdiction” means the State of Delaware and the United States or any political
subdivision or any authority thereof or therein having power to tax or any other jurisdiction or
any political subdivision or any authority thereof or therein having power to tax to which AT&T
becomes subject in respect of payments made by it of principal and interest on the Notes.

     Any reference in the terms of the Notes to any amounts in respect of the Notes shall be deemed
also to refer to any additional amounts which may be payable herein.

     Registrar and Paying Agent

     AT&T shall maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange (“Registrar”) and an office
or agency where Notes may be presented for payment or for exchange (“Paying Agent”). AT&T has
initially appointed the Trustee, The Bank of New York Mellon, as its Registrar and Paying Agent.
AT&T may vary or terminate the appointment of any of its paying or transfer agencies, and may
appoint additional paying or transfer agencies.

     Further Issues

     AT&T reserves the right from time to time, without notice to or the consent of the Holders of
the Notes, to create and issue further notes ranking equally and ratably with the Notes

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in all
respects, or in all respects except for the payment of interest accruing prior to the issue date or
except for the first payment of interest following the issue date of those further notes. Any
further notes will have the same terms as to status, redemption or otherwise as the Notes. Any
further notes shall be issued pursuant to a resolution of the board of directors of AT&T, a
supplement to the Indenture, or under an officers’ certificate pursuant to the Indenture.

     Notes in Definitive Form

     If (1) an Event of Default has occurred with regard to the Notes represented by this Note and
has not been cured or waived in accordance with the Indenture, or (2) the Depository is at any time
unwilling or unable to continue as depository and a successor depository is not appointed by AT&T
within 90 days, AT&T may issue notes in definitive form in exchange for this Note. In either
instance, an owner of a beneficial interest in the Notes will be entitled to the physical delivery
in definitive form in exchange for this Note, equal in principal amount to such beneficial interest
and to have such Notes registered in its name.

     Notes so issued in definitive form will be issued as registered notes in minimum denominations
of £50,000 and integral multiples of £50,000, unless otherwise specified by AT&T.

     Notes so issued in definitive form may be transferred by presentation for registration to the
Registrar at its New York office and must be duly endorsed by the Holder or the Holder’s attorney
duly authorized in writing, or accompanied by a written instrument or instruments of transfer in
form satisfactory to AT&T or the Trustee duly executed by the Holder or his attorney duly
authorized in writing.

     AT&T may require payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any exchange or registration of transfer of definitive
Notes.

     Default

     In case an Event of Default, as defined in the Indenture, shall have occurred and be
continuing, the principal hereof may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

     Miscellaneous

     For purposes of the Notes, the term “Business Day” means any day other than a Saturday or
Sunday or a day on which banking institutions in The City of New York or the City of London
are authorized or required by law or executive order to close. The term “New York Business
Day” means any day other than a Saturday or Sunday or a day on which banking institutions in The
City of New York are authorized or required by law or executive order to close.

10

 

     No director, officer, employee or stockholder, as such, of AT&T shall have any liability for
any obligations of AT&T under this Note, the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. Each Holder by accepting this Note waives and
releases all such liability. The waiver and release are part of the consideration for the issue of
this Note.

     The Notes are the unsecured and unsubordinated obligations of AT&T and will rank pari
passu with all other evidences of indebtedness issued in accordance with the Indenture.

     Notices to Holders of the Notes will be published in authorized newspapers in The City of New
York and in London. AT&T is deemed to have given the notice on the date of each publication or, if
published more than once, on the date of the first publication.

     Prior to due presentment of this Note for registration of transfer, AT&T, the Trustee and any
agent of AT&T or the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither AT&T, the Trustee
nor any such agent shall be affected by notice to the contrary.

     All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture. 

     The Indenture and this Note shall be governed by and construed in accordance with the laws of
the State of New York.

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SCHEDULE OF INCREASES OR DECREASES

     The initial principal amount of this Global Note is £1,100,000,000. The following increases
or decreases in this Global Note have been made:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Signature of
	 	 	Amount of	 	Amount of	 	Principal amount	 	authorized
	 	 	decrease in	 	increase in	 	of this Global	 	signatory of
	 	 	Principal	 	Principal	 	Note following	 	Trustee or
	Date of	 	Amount of this	 	Amount of this	 	such decrease or	 	Securities
	Exchange	 	Global Note	 	Global Note	 	increase	 	Custodian
	 
	 	 	 	 	 	 	 	 

12exv10w2

Exhibit 10.2

EXPEDIA, INC. STOCK OPTION AGREEMENT

     THIS AGREEMENT (this “Agreement”), dated as of the Grant Date specified on the Summary of
Award (as defined below), by and between Expedia, Inc., a Delaware corporation (the “Corporation”),
and the undersigned employee of the Corporation, Affiliate or Subsidiary (the “Eligible
Individual”).

     All capitalized terms used herein, to the extent not defined, shall have the meanings set
forth in the Corporation’s Amended and Restated 2005 Stock and Annual Incentive Plan (as amended
from time to time, the “Plan”). Reference is made to the Summary of Award (the “Summary of Award”)
issued to the Eligible Individual, which may be found on the Smith Barney Benefit Access System at
www.benefitaccess.com (or any successor system selected by the Corporation). This Agreement
relates to the option to purchase shares of Common Stock described in the Summary of Award (the
“Stock Option”).

1. Award of Stock Option

     Subject to the provisions of this Agreement, the Summary of Award and the Plan, the
Corporation hereby grants the Stock Option to the Eligible Individual pursuant to Section 6 of the
Plan. The Summary of Award sets forth the number of shares of Common Stock covered by the Stock
Option, the per share exercise price of the Stock Option and the Grant Date of the Stock Option.
Nothing in this Agreement, the Summary of Award or the Plan shall confer upon the Eligible
Individual any right to continue in the employ or service of the Corporation or any of its
Subsidiaries or Affiliates or interfere in any way with their rights to terminate the Eligible
Individual’s employment or service at any time. The Stock Option shall be a Nonqualified Option.
Unless earlier terminated pursuant to the terms of this Agreement or the Plan, the Stock Option
shall expire on the seven year anniversary of the Grant Date.

2. Vesting

     Subject to (a) the terms and conditions of this Agreement, the Summary of Award and the
provisions of the Plan, and (b) the Eligible Individual’s continuous employment by the Corporation
or one of its Subsidiaries or Affiliates through the applicable vesting date, the Stock Option
shall vest and become exercisable as follows:

	 	 	 	 	 
	Vesting Date	 	Percentage of Stock Option Vesting
	On the first anniversary of the Grant Date
	 	 	25	%
	 
	On the second anniversary of the Grant Date
	 	 	25	%
	 
	On the third anniversary of the Grant Date
	 	 	25	%
	 
	On the fourth anniversary of the Grant Date
	 	 	25	%

 

 

3. Termination of Employment by the Corporation for Cause 

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

4. Taxes and Withholding

     No later than the date as of which an amount in respect of the Stock Option first becomes
includible in the Eligible Individual’s gross income for federal, state, local or foreign income or
employment or other tax purposes, the Eligible Individual shall pay to the Corporation or make
arrangements satisfactory to the Committee regarding payment of any federal, state, local or
foreign taxes of any kind required by law to be withheld with respect to such amount and the
Corporation shall, to the extent permitted or required by law, have the right to deduct from any
payment of any kind otherwise due to the Eligible Individual (either directly or indirectly through
its agent), federal, state, local and foreign taxes of any kind required by law to be withheld.
Notwithstanding the foregoing, the Corporation shall be entitled to hold the shares of Common Stock
issuable to the Eligible Individual upon exercise of the Eligible Individual’s Stock Option until
the Corporation or the agent selected by the Corporation to manage the Plan under which the Stock
Option has been issued (the “Agent”) has received from the Eligible Individual (i) a duly executed
Form W-9 or W-8, as applicable and (ii) payment for any federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to any portion of such Stock Option.

5. Conflicts and Interpretation

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

 

 

6. Data Protection

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

7. Amendment

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

8. Notification of Changes

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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

	 	 	 	 	 
	 	EXPEDIA, INC.

 	 
	 	/s/ Burke F. Norton
 	 
	 	Name:  	Burke F. Norton 	 
	 	Title:  	Executive Vice President,
General Counsel & Secretary 	 
	 
	 	ELIGIBLE INDIVIDUAL

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