TripAdvisor 2012 Annual Report Download

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2012 Annual Report
and
Notice of 2013 Annual Meeting and
Proxy Statement

Table of contents

  • Page 1
    2012 Annual Report and Notice of 2013 Annual Meeting and Proxy Statement

  • Page 2

  • Page 3
    ... in 2012 to more than 44 million and provides a solid foundation for our robust email marketing campaigns. Our social initiatives are wonderful ways to increase brand awareness, acquire TripAdvisor members, and make our travel content richer, more helpful and more personalized. • We are mobile. We...

  • Page 4
    ...users come from outside the United States. Visitors that use our site to research a hotel grew in the low-30 percent range during 2012. With TripAdvisor traffic representing roughly 10% of the total online travel category according to comScore, we see big growth opportunities ahead on a global scale...

  • Page 5
    ... new ways to amplify our brand on an international scale to bring more of these travelers to our site. We believe we have engaged just a fraction of the global travel market online, and we remain firmly within an investment cycle focused on capturing worldwide market share. What's next. Three main...

  • Page 6
    ...vacation. Thank you to all TripAdvisor, Inc. employees within our growing family of 20 travel brands - your hard work allows us to turn huge goals into reality. Finally, a special thanks to our site visitors from around the world, and, most of all, to the reviewers and contributors who make our site...

  • Page 7
    2012 Annual Report on Form 10-K

  • Page 8

  • Page 9
    ... reflect the versions in the Company's Annual Report on Form 10-K/A dated on April 30, 2013. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 OR...

  • Page 10
    ... Market Risk ...Item 8. Item 9. Financial Statements and Supplementary Data ...Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ... Item 9A. Controls and Procedures ...Item 9B. Other Information ...PART III ...Item 10. Directors, Executive Officers and Corporate...

  • Page 11
    ... websites and to cost-effectively convert these visitors into repeat users or contributors, our advertising revenue could decline. If we are not able to successfully expand our social integration and member acquisition efforts with social media, including Facebook, Twitter and other social sharing...

  • Page 12
    ...in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors...

  • Page 13
    ... and opinions. Beyond travel-related content, our websites also include links to the websites of our customers, including travel advertisers, allowing travelers to directly book their travel arrangements. In addition to the flagship TripAdvisor brand, we now manage and operate 20 other travel brands...

  • Page 14
    ... itinerary-based, multi-site searches for flights, hotels, cruises, vacations, and car rentals. June 2008 Travel-oriented community website featuring user-contributed travel guides for locations worldwide. March 2008 Provides up-to-date airline deals that have been researched and verified by a team...

  • Page 15
    ... to online channels, mirroring the trend in consumer media consumption generally. For travel specifically, IDC estimates that annual expenditures for global mobile internet travel advertising in 2013 will be close to $15 billion. Given the size of the travel market, we believe that travel providers...

  • Page 16
    ... growth of our business, this type of travel planning has been embraced by travelers. For example, in July 2006, we hosted more than 5 million user reviews and opinions with respect to approximately 220,000 hotels and attractions. Currently, TripAdvisor-branded websites provide consumers with over...

  • Page 17
    ...can share their reviews and ratings with their friends and publish their activity to their timelines. Users can also update their travel map and rate new experiences on Facebook. Metasearch. We have offered a flight metasearch product since 2009 expanding internationally to 19 points of sale in 2012...

  • Page 18
    ... lodging properties and allows subscribers to list a website URL, email address and phone number on TripAdvisor-branded websites as well as to post special offers for travelers. Our Vacation Rentals product allows individual vacation property owners and property managers to pay a subscription fee...

  • Page 19
    ... Partners We also syndicate our click-based advertising to third-party websites. The largest such syndication relationship is with Yahoo! Travel Guides, pursuant to which we provide "show prices" advertising on the Yahoo! Travel Guides' hotel pages. Marketing and Promotions Our marketing programs...

  • Page 20
    ... user bases such as Google (for example, via Google + Local and Google Hotel Finder) have begun to, and other networks or platforms, like Facebook, could choose to, compete more directly with us by attracting and accumulating user-generated travel reviews and opinions or may pursue the acquisition...

  • Page 21
    ...number of keywords and markets. Competition for Advertisers We compete with search engines, such as Google, Bing, and Yahoo!, online media companies and ad networks, as well as offline advertising sources, such as television and print media, for travel supplier, online travel agency and other travel...

  • Page 22
    ... all employees, including all executive officers, senior financial officers and directors, on our corporate website at www.tripadvisor.com. Our code of business conduct and ethics complies with Item 406 of SEC Regulation S-K and the rules of NASDAQ. We intend to disclose any changes to the code that...

  • Page 23
    ... our click-based advertising partners, predominantly online travel agencies and direct suppliers in the hotel and airline product categories, and include their data and content in our search results. The loss of existing relationships with our partners, or an inability to continue to add new ones...

  • Page 24
    ...to suppliers directly, or to other favored partners, there could be a material adverse impact on our business and financial performance. For example, during 2011, Google completed its acquisition of flight search technology company ITA Software and separately made changes to its hotel search results...

  • Page 25
    ... in our revenue over a relatively short period of time. For example, for the year ended December 31, 2012, our two most significant advertising customers accounted for a combined 48% of total revenue. Changes we make to our user experience and business model may not yield the benefits we expect...

  • Page 26
    ... competition to the extent that competitors pursue a strategy to maximize the creation of commercially valuable online content at significant scale. For example, if any of the large search engines, online travel agencies or other companies chose to compete more directly with us in the travel review...

  • Page 27
    ... and our partner relationships. Competition and consolidation could result in higher traffic acquisition costs, reduced margins on our advertising services, loss of market share, reduced customer traffic to our websites and reduced advertising by travel companies on our websites. For example, Google...

  • Page 28
    ... our business, financial condition and results of operations. Our success depends on attracting a large number of users to our websites, and retaining such users, and providing leads and clicks to advertisers. In order to attract and retain users, we must remain a valuable source of travel advice...

  • Page 29
    ... U.K.-based Holiday Lettings businesses, as well through various partnerships. The online vacation rental market is relatively new and is rapidly evolving, and limited data is currently available regarding the market and industry. Our vacation rental services may not succeed, and, even if successful...

  • Page 30
    ... or is not available on favorable terms, we may be unable to issue or repurchase equity, develop new or enhanced existing services, complete acquisitions or otherwise take advantage of business opportunities, any of which could have a material adverse effect on our business, financial condition and...

  • Page 31
    ... some directors of Expedia and TripAdvisor own both Expedia capital stock and our capital stock. In addition, Liberty Interactive Corporation controls the vote of approximately 56.6% of the combined voting power of our outstanding capital stock and also owns a significant number of shares of Expedia...

  • Page 32
    ... federal income tax purposes, we could be subject to significant tax liabilities. As a condition to the completion of the Spin-Off, Expedia obtained a private letter ruling from the Internal Revenue Service, or the IRS, along with an opinion of counsel, satisfactory to the Expedia Board of Directors...

  • Page 33
    In addition, a sale or disposition of the stock of Expedia or our stock by certain persons that own 5% or more of any class of our stock could disqualify the tax free status of the Spin-Off. Liberty Interactive Corporation and its affiliates own stock of TripAdvisor representing 56.6% by vote and 21...

  • Page 34
    ... and financial performance could be adversely affected by unfavorable changes in or interpretations of existing laws, rules and regulations or the promulgation of new laws, rules and regulations applicable to us and our business, including those relating to the Internet and online commerce, Internet...

  • Page 35
    ... changes could decrease demand for products and services, limit marketing methods and capabilities, increase costs and/or subject us to additional liabilities. For example, there is, and will likely continue to be, an increasing number of laws and regulations pertaining to the Internet and online...

  • Page 36
    ... and brand licenses will be available on commercially reasonable terms, if at all. We are subject to foreign exchange risk. We conduct a significant and growing portion of our business outside the United States. As a result, we face exposure to movements in currency exchange rates, particularly...

  • Page 37
    ... acquire personal or confidential information from users of our websites and mobile applications. There are numerous laws regarding privacy and the storing, sharing, use, processing, disclosure and protection of personal information and other consumer data, the scope of which are changing, subject...

  • Page 38
    ...acquired company to achieve anticipated traffic, revenues, earnings or cash flows or to retain key management or employees; Failure to generate adequate returns on acquisitions and investments; Entrance into markets in which we have no direct prior experience and increased complexity in our business...

  • Page 39
    ... Stock Market Listing Rules exempt "controlled companies," or companies of which more than 50% of the voting power is held by an individual, a group or another company, from certain corporate governance requirements, including those requirements that A majority of the Board of Directors consist...

  • Page 40
    ... in order to function effectively as a public company. For example, we must document and test our internal control procedures, our management will need to assess and report on our internal control over financial reporting and our registered public accounting firm will need to issue an opinion on...

  • Page 41
    ... that are opposed by our then-current Board of Directors, including a merger, tender offer or proxy contest involving our company. Any delay or prevention of a change of control transaction or changes in our Board of Directors could cause the market price of our common stock to decline. Item 1B...

  • Page 42
    ..., 2011 under the trading symbol "TRIP." Before then, there was no public market for our common stock. On February 8, 2013, the closing price of our common stock reported on NASDAQ was $47.02 per share. The following table sets forth, for the periods indicated, the high and low sale prices per share...

  • Page 43
    ... Index") and (iv) the Research Data Group ("RDG") Internet Composite Index. The RDG Internet Composite Index is an index of stocks representing the Internet industry, including Internet software and service companies and e-commerce companies. The stock price performance shown on the graph below is...

  • Page 44
    ... authorize the repurchase of any shares during the year ended December 31, 2012. In February 2013, we announced that our Board of Directors authorized the repurchase of $250 million of our shares of common stock under a share repurchase program. We intend to use available cash and future cash from...

  • Page 45
    ..." of this Annual Report on Form 10-K. Historical results are not necessarily indicative of the results to be expected in any future period. 2012 (in thousands, except per share data) Year Ended December 31, 2011 2010 2009 2008 Consolidated and Combined Statements of Operations Data: Revenue ...$559...

  • Page 46
    ... internal use software and website development, amortization of intangible assets, stock-based compensation and non-recurring expenses incurred to affect the Spin-Off from Expedia during the year ended December 31, 2011. See a discussion of "Adjusted EBITDA" in Item 7 "Management's Discussion...

  • Page 47
    ... and opinions, as measured by our own log files. Beyond travel-related content, our websites also include links to the websites of our customers, including travel advertisers, allowing travelers to directly book their travel arrangements. In addition to the flagship TripAdvisor brand, we now manage...

  • Page 48
    ... our current hotel and accommodation listings on TripAdvisor branded sites. We continue to expand our sales force and improve features to grow our subscriber base. Current Trends Affecting Our Business Increasing Competition. The travel review industry and, more generally, the business of collecting...

  • Page 49
    ... are still developing. Improvement of our mobile offerings is a key company priority which we believe is necessary to help us maintain and grow our user base and engagement over the long term and we will continue to invest and innovate in this growing platform. Click-Based Advertising Revenue. In...

  • Page 50
    ... on our current relationship with Expedia and recent material transactions, refer to "Note 16-Related Party Transactions" in the notes to our consolidated and combined financial statements. Segment We have one reportable segment. The segment is determined based on how our chief operating decision...

  • Page 51
    ... share data) Year ended December 31, 2012 2011 2010 % Change 2012 vs. 2011 2011 vs. 2010 Revenue ...$559,215 $426,045 $313,525 Related-party revenue from Expedia ...203,751 211,018 171,110 Total revenue ...Costs and expenses: Cost of revenue (exclusive of amortization) (1) ...Selling and marketing...

  • Page 52
    ... and website development, amortization of intangible assets, stock-based compensation and non-recurring expenses incurred to effect the Spin-Off from Expedia during the year ended December 31, 2011. Adjusted EBITDA is the primary metric by which management evaluates the performance of its business...

  • Page 53
    ... includes references to the number of unique Internet protocol, or IP, addresses that visit TripAdvisor-branded sites each month. This metric is one of the metrics used by us to analyze revenue and is measured using internally developed analytical tools. Each unique IP address is only counted the...

  • Page 54
    ...-based advertising revenue was an increase of 29% in monthly visits from unique IP addresses to the TripAdvisor branded sites during the year ended December 31, 2011, compared to the same period for 2010 and, to a lesser extent, an increase in the average cost per click rates in 2011. Subscription...

  • Page 55
    ...are closely correlated or directly related to revenue generation, including ad serving fees, flight search fees, credit card fees and data center costs. Year ended December 31, % Change 2012 2011 2010 2012 vs. 2011 2011 vs. 2010 ($ in millions) Cost of revenue ...% of revenue ...2012 vs. 2011 $ 12...

  • Page 56
    ... costs related to additional headcount and professional service fees to support our operations as a standalone public company in 2012. We also incurred increased professional service fees primarily related to legal and tax initiatives. In addition, in connection with the Spin-Off, we assumed Expedia...

  • Page 57
    ...Related-Party Shared Services Fee Prior to the Spin-Off, our related-party shared services fee was comprised of allocations from Expedia for accounting, legal, tax, corporate development, treasury, financial reporting, real estate management and included an allocation of employee compensation within...

  • Page 58
    ... to increased headcount and personnel costs to support business growth, including related stock based compensation, key initiatives, international expansion and operations as a standalone public company, and increased traffic acquisition costs to drive higher revenue. 2011 vs. 2010 Operating income...

  • Page 59
    ... of December 31, 2012 approximately $311 million of our cash, cash equivalents and short and long-term marketable securities are held by our international subsidiaries, primarily in the United Kingdom, and are related to earnings we intend to reinvest permanently outside the United States. Should we...

  • Page 60
    ... interest at LIBOR plus 175 basis points, or the Eurocurrency Spread, or the alternate base rate ("ABR") plus 75 basis points, and undrawn amounts are currently subject to a commitment fee of 30 basis points. As of December 31, 2012 we are using a one-month interest period Eurocurrency Spread which...

  • Page 61
    ..., by and among TripAdvisor, TripAdvisor Holdings, LLC, and TripAdvisor LLC, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Europe Limited, as London agent, dated as of December 20, 2011, is incorporated by reference in this Annual Report on Form 10...

  • Page 62
    .... (4) In connection with the Spin-Off, we assumed Expedia's obligation to fund a charitable foundation. The Board of Directors of the charitable foundation is currently comprised of Stephen Kaufer- President and Chief Executive Officer, Julie M.B. Bradley-Chief Financial Officer and Seth J. Kalvert...

  • Page 63
    ...our term loan facility borrowing in conjunction with the Spin-Off of $400 million in 2011. This was offset by proceeds from the exercise of our stock options and warrants of $231 million, net of payment of minimum withholding taxes related to the settlement of equity awards of $7 million in 2012. In...

  • Page 64
    ...and Expedia prior to Spin-Off of $30 million and, in October 2011, an acquisition of a common control subsidiary in China from Expedia for $28 million, net of cash acquired, partially offset by a decrease of $27 million in cash paid for business acquisitions and a maturity of a short term investment...

  • Page 65
    ... to access capital, (c) changes in the online travel industry, (d) changes in the level of competition, (e) comparison of our current financial performance to historical and budgeted results, (f) changes in excess market capitalization over book value based on our current common stock price and...

  • Page 66
    ...price is fixed or determinable, and collectability is reasonably assured. Click-based Advertising. Revenue is derived primarily from click-through fees charged to our travel partners for traveler leads sent to the travel partners' website. We record revenue from click-through fees after the traveler...

  • Page 67
    ... to the Spin-Off We adopted the TripAdvisor, Inc. 2011 Stock and Annual Incentive Plan, or the 2011 Incentive Plan, as of December 21, 2011, under which we may grant restricted stock, restricted stock awards, RSUs, stock options and other stock-based awards to our directors, officers, employees and...

  • Page 68
    ... options granted under the 2011 Incentive Plan to date, have been calculated using a Black-Scholes Merton option-pricing model ("Black-Scholes model"). The Black-Scholes model incorporates assumptions to value stock-based awards, which includes the risk-free rate of return, volatility, expected term...

  • Page 69
    ...an impact on our consolidated and combined financial statements. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Market Risk Management We are exposed to certain market risks, including changes in interest rates and foreign currency exchange rates that could adversely affect our...

  • Page 70
    ... impact from changes in interest rates for the years ended December 31, 2012, 2011 or 2010. Foreign Currency Exchange Rates We conduct business in certain international markets, primarily the European Union, the United Kingdom, Singapore and China. Because we operate in international markets, we...

  • Page 71
    ... and combined statements of operations and have recorded foreign exchange losses of $3.2 million, 1.0 million and $1.6 million for the years ended December 31, 2012, 2011 and 2010, respectively, in Other, net. We currently manage our exposure to foreign currency risk through internally established...

  • Page 72
    Item 8. Consolidated and Combined Financial Statements and Supplementary Data Index to Consolidated and Combined Financial Statements: Report of Independent Registered Public Accounting Firm ...Consolidated and Combined Statements of Operations for the years ended December 31, 2012, 2011 and 2010 ...

  • Page 73
    ..., in accordance with the standards of the Public Company Accounting Oversight Board (United States), TripAdvisor, Inc.'s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring...

  • Page 74
    ... 31, 2012 2011 2010 Revenue ...Related-party revenue from Expedia ...Total revenue ...Costs and expenses: Cost of revenue (exclusive of amortization) (1) ...Selling and marketing (2) ...Technology and content (2) ...General and administrative (2) ...Related-party shared services fee ...Depreciation...

  • Page 75
    ...,429 (519) $195,910 $177,791 (781) - (781) 177,010 (114) $176,896 $138,954 1,520 - 1,520 140,474 (178) $140,296 (1) Net of unrealized tax benefits of $72 for the year ended December 31, 2012. The accompanying notes are an integral part of these consolidated and combined financial statements. 65

  • Page 76
    TRIPADVISOR, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) December 31, 2012 2011 ASSETS Current assets: Cash and cash equivalents ...Short-term marketable securities (note 5) ...Accounts receivable, net of allowance of $2,818 and $5,370 at December 31, 2012 and ...

  • Page 77
    ... 175,308 Net income attributable to TripAdvisor, Inc. after the Spin-Off Currency translation adjustments Tax benefits on equity awards 1,453 Stock- based compensation expensepre-Spin-Off 16,260 Acquisition of common control subsidiary from Expedia (40,564) Adjustment to the fair value of redeemable...

  • Page 78
    ... 31, 2011 Net income attributable to TripAdvisor, Inc. Currency translation adjustments Unrealized loss on marketable securities, net of tax Tax benefits on equity awards Issuance of common stock related to exercise of options and warrants and vesting of RSUs Minimum withholding taxes on net share...

  • Page 79
    ... assets ...Accounts payable ...Taxes payable ...Accrued expenses and other liabilities ...Deferred revenue ...Net cash provided by operating activities ...Investing activities: Acquisitions, net of cash acquired ...Capital expenditures, including internal-use software and website development costs...

  • Page 80
    ...costs in the consolidated and combined statements of operations. On December 20, 2011, following the close of trading on the NASDAQ Global Select Market ("NASDAQ"), the Spin-Off was completed, and TripAdvisor began trading as independent public company on December 21, 2011. Expedia effected the Spin...

  • Page 81
    ...tripadvisor.com in the United States and localized versions of the website in 29 countries, including in China under the brand daodao.com. Beyond travel-related content, TripAdvisor websites also include links to the websites of our travel advertisers allowing travelers to directly book their travel...

  • Page 82
    ... are received in advance of our performance as required by the underlying agreements. Cost of Revenue Cost of revenue consists of expenses that are closely correlated or directly related to revenue generation, including ad serving fees, flight search fees, credit card fees and data center costs. 72

  • Page 83
    ...and Marketing Sales and marketing expenses primarily consist of direct costs, including search engine marketing, or SEM, other traffic acquisition costs, syndication costs and affiliate program commissions, brand advertising and public relations. In addition, our indirect sales and marketing expense...

  • Page 84
    ... data. Level 3-Valuations are based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. Derivative Financial Instruments Our goal in managing our foreign exchange...

  • Page 85
    ... resulting in added functionality, in which case the costs are capitalized. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is three to five years for computer equipment, capitalized software and website development and furniture and...

  • Page 86
    ... to access capital, (c) changes in the online travel industry, (d) changes in the level of competition, (e) comparison of our current financial performance to historical and budgeted results, (f) changes in excess market capitalization over book value based on our current common stock price and...

  • Page 87
    ... costs from search engines and Internet portals, other online and offline advertising expense, promotions and public relations to promote our brands. We expense the costs associated with advertisements in the period in which the advertisement takes place. For the years ended December 31, 2012, 2011...

  • Page 88
    ... to the Spin-Off We adopted the TripAdvisor, Inc. 2011 Stock and Annual Incentive Plan, or the 2011 Incentive Plan, as of December 21, 2011, under which we may grant restricted stock, restricted stock awards, RSUs, stock options and other stock-based awards to our directors, officers, employees and...

  • Page 89
    ...We are highly dependent on our advertising and media relationship with Expedia, (see "Note 16- Related Party Transactions"), which accounted for approximately 27%, 33% and 35% of our total revenue in 2012, 2011 and 2010, respectively. In addition, another customer accounted for approximately 21%, 16...

  • Page 90
    ... earnings per share using (i) the number of shares of common stock and Class B common stock outstanding immediately following the Spin-Off, (ii) the weighted average of any additional shares issued and outstanding shares outstanding following the Spin-Off date through December 31, 2011, and (iii...

  • Page 91
    ... December 31, 2011, based on the number of days they were outstanding. For the year ended December 31, 2010, we computed diluted earnings per share using (i) the number of shares of common stock and Class B common stock outstanding immediately following the Spin-Off, as no TripAdvisor equity awards...

  • Page 92
    ... and combined financial statements. NOTE 3: ACQUISITIONS During the years ended December 31, 2012, 2011, and 2010, we acquired a number of companies including various online travel media content companies. The following table summarizes the allocation of the purchase price for those years: 2012 2011...

  • Page 93
    ... Based Awards prior to the Spin-Off from Expedia Prior to the Spin-Off, we participated in the Amended and Restated Expedia, Inc. 2005 Stock and Annual Incentive Plan, under which we, through Expedia, granted RSUs, stock options, and other stock-based awards to our directors, officers, employees...

  • Page 94
    ... of TripAdvisor common stock that may be granted pursuant to stock options intended to be incentive stock options within the meaning of Section 422 of the Code is 7,000,000 shares. 2012 Stock Option Activity The exercise price for all stock options granted by us to date has been equal to the market...

  • Page 95
    ...the exercise price of outstanding, in-the-money options. Our closing stock price as reported on NASDAQ as of December 31, 2012 was $41.92. The fair value of stock option grants under the 2011 Incentive Plan has been estimated at the date of grant using the Black-Scholes option pricing model with the...

  • Page 96
    ...of RSU activity on our common stock: Weighted Average GrantRSUs Date Fair Outstanding Value Per Share (In thousands) Unvested RSUs outstanding as of January 1, 2012 ...Granted ...Vested and released (1) ...Cancelled ...Unvested RSUs outstanding as of December 31, 2012 (2) ... 926 85 548 17 446 $21...

  • Page 97
    ... 31, 2011 (in thousands): December 31, 2012 Cash and Short-Term Long-Term Amortized Unrealized Unrealized Fair Cash Marketable Marketable Cost Gains Losses Value Equivalents Securities Securities Cash ...$141,460 Level 1: Money market funds ...215,052 Subtotal ...Level 2: U.S. agency securities...

  • Page 98
    ... measured using Level 2 fair value inputs, as we use a pricing model that takes into account the contract terms as well as current foreign currency exchange rates in active markets. Concentration of Credit Risk Counterparties to currency exchange derivatives consist of major international financial...

  • Page 99
    ... the years ended December 31, 2012, 2011 and 2010, we recorded amortization of capitalized software and website development costs of $12.8 million, $12.4 million and $8.1 million, respectively, which is included in depreciation expense on our consolidated and combined statement of operations. During...

  • Page 100
    Intangible assets, which were acquired in business combinations and recorded at fair value on the date of purchase, consist of the following for the years ended December 31: 2012 2011 (In thousands) Intangible assets with definite lives ...Less: accumulated amortization ...Intangible assets with ...

  • Page 101
    ... interest at LIBOR plus 175 basis points, or the Eurocurrency Spread, or the alternate base rate ("ABR") plus 75 basis points, and undrawn amounts are currently subject to a commitment fee of 30 basis points. As of December 31, 2012 we are using a one-month interest period Eurocurrency Spread which...

  • Page 102
    ...pay dividends and distributions or repurchase our capital stock, make investments, loans or advances, prepay certain subordinated indebtedness, make certain acquisitions, engage in certain transactions with affiliates, amend material agreements governing certain subordinated indebtedness, and change...

  • Page 103
    ... and deferred tax expense has been computed using our stand-alone effective rate. As of December 31, 2012, our current income tax receivable and income tax payable balances represent amounts that we will receive and pay, respectively, to the Internal Revenue Service and other tax authorities. 93

  • Page 104
    ..., we may file as part of a unitary combined group with Expedia for certain state tax returns for 2012. Our deferred tax assets and deferred tax liabilities as of December 31, 2012 and 2011 are as follows: December 31, 2012 2011 (In thousands) Deferred tax assets: Stock-based compensation ...Net...

  • Page 105
    ... December 31, 2012 2011 2010 (In thousands) Income tax expense at the federal statutory rate of 35% ...Foreign rate differential ...State income taxes, net of effect of federal tax benefit ...Unrecognized tax benefits and related interest ...Non-deductible transaction costs ...Change in valuation...

  • Page 106
    ... NOTE 10: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following: December 31, 2012 2011 (In thousands) Accrued salary, bonus, and related benefits ...Accrued marketing costs (1) ...Accrued charitable foundation payments (2) ...Other...

  • Page 107
    ... 21 other locations across North America, Europe and Asia Pacific, primarily for our international management teams, sales offices, and subsidiary headquarters, pursuant to leases with expiration dates through June 2023. The following table presents our estimated future minimum rental payments under...

  • Page 108
    ... from Expedia TripAdvisor Retirement Savings Plan Effective November 1, 2011, our U.S. employees were generally eligible to participate in a new retirement and savings plan, the TripAdvisor Retirement Savings Plan (the "401(k) Plan"), that qualifies under Section 401(k) of the Internal Revenue Code...

  • Page 109
    ... an annual rate equal to the weighted average prime or base lending rate of a financial institution selected in accordance with the terms of the Plan and applicable law. Upon termination of service as a director of TripAdvisor, a director will receive (i) with respect to share units, such number of...

  • Page 110
    ...and 12,799,999 shares of Class B common stock outstanding immediately following the Spin-Off. Preferred Stock In addition to common stock, we are authorized to issue up to 100 million preferred shares, with $ 0.001 par value per share, with terms determined by our Board of Directors, without further...

  • Page 111
    ... of TripAdvisor from Expedia to Expedia's shareholders based upon a ratio of one share of the respective class of TripAdvisor common stock for each share of the respective class of Expedia common stock and the number of Expedia common and Class B common shares outstanding as of December 20, 2011...

  • Page 112
    ... expenses included a related-party shared services fee, of $9.2 million and $7.9 million for the years ended December 31, 2011 and 2010, respectively, which was comprised of allocations from Expedia for accounting, legal, tax, corporate development, financial reporting, treasury and real estate...

  • Page 113
    ... by the holders of Expedia common stock of 25% of the members of Expedia's Board of Directors and matters as to which Delaware law requires a separate class vote). As a result, from the completion of the Spin-Off until December 11, 2012, TripAdvisor and Expedia were related parties since they...

  • Page 114
    ... shares of common stock or shares of Class B common stock with respect to which it has the power to vote, in favor of Mr. Diller to serve as a director on the Company's Board of Directors, and use its reasonable best efforts to ensure that the unvested options to acquire, and restricted stock units...

  • Page 115
    ... a combination of subscription-based offerings, transaction revenue from selling room nights on our transactional sites SniqueAway and Tingo, and other revenue including content licensing. 2012 Year ended December 31, 2011 2010 ($ in thousands) Click-based advertising ...Display-based advertising...

  • Page 116
    ...geographic area, the United States, the United Kingdom and all other countries, based on the geographic location of our websites for the years ended December 31, 2012, 2011 and 2010: Year Ended December 31, 2012 2011 2010 (In thousands) Revenue United States ...United Kingdom ...All other countries...

  • Page 117
    ... comparisons should not be relied upon as an indication of future performance. March 31 Three Months Ended June 30 September 30 (In thousands) December 31 Year ended December 31, 2012 Revenue ...Operating income ...Net income ...Net income attributable to TripAdvisor, Inc...Basic earnings per share...

  • Page 118
    TripAdvisor, Inc For the Years Ended December 31, 2012, 2011 and 2010 Schedule II Valuation and Qualifying Accounts The following table presents the changes in our valuation and qualifying accounts: Balance at Beginning of Year Charges (recoveries) to Earnings Deductions (In thousands) Balance at ...

  • Page 119
    ... financial reporting was effective. Management has reviewed its assessment with the Audit Committee. Ernst & Young, LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2012, as stated in their report...

  • Page 120
    ... our opinion, TripAdvisor, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the...

  • Page 121
    ... herein by reference to our 2013 Proxy Statement, which proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the close of our fiscal year ended December 31, 2012. Item 14. Principal Accounting Fees and Services The information required under this...

  • Page 122
    ... Statement Schedules (a). The following are filed as part of this Annual Report on Form 10-K: 1. Consolidated and Combined Financial Statements: The consolidated and combined financial statements and report of independent registered public accounting firm required by this item are included in...

  • Page 123
    ... Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TripAdvisor, Inc. By:/s/ STEPHEN KAUFER Stephen Kaufer Chief Executive Officer February 15, 2013 POWER OF ATTORNEY We, the undersigned officers and directors...

  • Page 124
    ... for Non-Employee Directors Specimen TripAdvisor, Inc. Common Stock Certificate Governance Agreement, by and among TripAdvisor, Inc., Liberty Interactive Corporation and Barry Diller, dated as of December 20, 2011 Tax Sharing Agreement by and between TripAdvisor, Inc. and Expedia, Inc., dated as of...

  • Page 125
    ...Park LLC and TripAdvisor LLC, dated as of June 15, 2009 Subsidiaries of the Registrant Consent of Independent Registered Public Accounting Firm Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of the Chief Financial Officer pursuant...

  • Page 126

  • Page 127
    Notice of 2013 Annual Meeting and Proxy Statement

  • Page 128

  • Page 129
    ... registered public accounting firm for 2013, (3) to approve the TripAdvisor, Inc. 2011 Stock and Annual Incentive Plan, as amended, and (4) to consider and act upon any other business that may properly come before the meeting and any adjournments thereof. The Board of Directors recommends a vote...

  • Page 130

  • Page 131
    ... of outstanding shares of TripAdvisor capital stock at the close of business on May 1, 2013 are entitled to notice of and to vote at the Annual Meeting and any at adjournments or postponements thereof. In accordance with the rules of the Securities and Exchange Commission, we will send a Notice of...

  • Page 132
    ..., 2013 TABLE OF CONTENTS Page Procedural Matters ...Proposal 1: Election of Directors ...Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm ...Proposal 3: Approval of the 2011 Stock and Annual Incentive Plan, as amended ...Audit Committee Report ...Compensation...

  • Page 133
    ... Rights General. The Board of Directors established the close of business on May 1, 2013 as the record date for determining the holders of TripAdvisor stock entitled to notice of and to vote at the Annual Meeting. On the record date, 130,571,035 shares of common stock and 12,799,999 shares of Class...

  • Page 134
    ... of the seven director nominees, (ii) the ratification of the appointment of TripAdvisor's independent registered public accounting firm, and (iii) the approval of the 2011 Plan, the presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the total votes entitled to be...

  • Page 135
    ... take the time to vote via the Internet, by telephone or by returning your marked, signed and dated proxy card so that your shares will be represented at the Annual Meeting. Revocation of Proxies Any proxy given pursuant to this solicitation may be revoked by the person giving it any time before...

  • Page 136
    ... the instructions provided on the Notice of Internet Availability of Proxy Materials and proxy card to submit a new proxy by telephone or via the Internet. Registered holders may also request a new proxy card by calling 1-800-579-1639. Other Business The Board of Directors does not presently intend...

  • Page 137
    ... currently two directors. The Board has designated Messrs. Wiesenthal and Philips as nominees for the positions on the Board to be elected by the holders of TripAdvisor common stock voting as a separate class. Pursuant to a Governance Agreement among TripAdvisor and Liberty, dated December 20, 2011...

  • Page 138
    ... large public companies and risk management principles. Stephen Kaufer co-founded TripAdvisor in February 2000 and has been the President and Chief Executive Officer of TripAdvisor since that date. Mr. Kaufer has been a director of TripAdvisor since the completion of the Spin-Off from Expedia. Prior...

  • Page 139
    ... other public company boards. Jeremy Philips has been a director of TripAdvisor since the completion of the Spin-Off from Expedia. Mr. Philips served as the Chief Executive Officer of Photon Group Limited, a holding company listed on the Australian Securities Exchange, from June 2010 to January 2012...

  • Page 140
    ... has been a director of TripAdvisor since the completion of the Spin-Off from Expedia. In January 2011, Ms. Singh Cassidy founded, and currently serves as Chairman of Joyus, a video commerce website. Ms. Singh Cassidy previously served as Chief Executive Officer and Chairman of the Board of Polyvore...

  • Page 141
    ... online social networking and e-commerce company, and was an associate at Debevoise & Plimpton, LLP, a New York law firm. Mr. Kalvert holds an A.B. degree from Brown University and a J.D. degree from Columbia Law School. Board of Directors Director Independence Under the NASDAQ Stock Market Listing...

  • Page 142
    ...TripAdvisor's strategic goals and vision, coupled with the benefit of a full-time Chief Executive Officer dedicated to focusing on the day-to-day management and continued growth of the Company and its operating businesses. We believe that it is in the best interests of our stockholders for the Board...

  • Page 143
    ...Governance" section of TripAdvisor's corporate website at ir.tripadvisor.com. The Audit Committee is appointed by the Board of Directors to assist the Board with a variety of matters discussed in detail in the Audit Committee charter, including monitoring (i) the integrity of our financial reporting...

  • Page 144
    ...Chief Financial Officer, Chief Accounting Officer and Treasurer, the Senior Vice President, General Counsel and Secretary, the Vice President of Tax, the Corporate Controller, the Senior Corporate Counsel and from Ernst & Young LLP. The Audit Committee makes regular reports to the Board of Directors...

  • Page 145
    ...evidence of the sender's stock ownership and clearly state whether the intended recipients are all members of the Board of Directors or certain specified directors. The Secretary will then review such correspondence and forward it to the Board of Directors, or to the specified director(s), if deemed...

  • Page 146
    ... TripAdvisor's independent registered public accounting firm for 2013. This proposal requires the affirmative vote of a majority of the voting power of the shares of TripAdvisor capital stock, present in person or represented by proxy, and entitled to vote thereon, voting together as a single class...

  • Page 147
    ...Registered Public Accounting Firm The following table sets forth aggregate fees for professional services rendered by Ernst & Young LLP for the years ended December 31, 2012 and 2011. 2012 2011 Audit Fees(1) ...Audit-Related Fees(2) ...Total Audit and Audit-Related Fees ...Tax Fees(3) ...Other Fees...

  • Page 148
    ...of the Internal Revenue Code of 1986, as amended (the "Code"), on TripAdvisor's tax deduction with respect to compensation paid to certain executive officers. Summary of Material Features of the 2011 Plan The material features of the 2011 Plan are: • The maximum number of shares of common stock to...

  • Page 149
    ... the reporting and other provisions of Section 16 of the Exchange Act and not subject to Section 162(m) of the Code, subject to certain limitations and guidelines. Eligibility. Persons eligible to participate in the 2011 Plan are the directors, officers, employees, and consultants of TripAdvisor and...

  • Page 150
    ... annual limit on incentive stock options. Incentive stock options may only be granted to employees of TripAdvisor and its subsidiaries. Non-qualified options may be granted to any persons eligible to receive incentive options and to non-employee directors and consultants. The option exercise price...

  • Page 151
    ... 409A of the Code), stock exchange rules or accounting rules. In addition, no such amendment shall be made without stockholder approval to the extent such approval is required by applicable law or the listing standards of NASDAQ. Effective Date of 2011 Plan. The Board of Directors originally adopted...

  • Page 152
    ...and groups during 2012: each named executive officer; all current executive officers, as a group; all current directors who are not executive officers, as a group; and all employees who are not executive officers, as a group. Options Average Exercise Price ($) Number (#) Restricted Stock Units Name...

  • Page 153
    ... vote of a majority of the voting power of the shares of TripAdvisor capital stock, present in person or represented by proxy, and entitled to vote thereon, voting together as a single class. THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE APPROVAL OF THE 2011 STOCK AND ANNUAL...

  • Page 154
    ... 31, 2012 regarding shares of common stock that may be issued under TripAdvisor's equity compensation plans consisting of the 2011 Plan and the NonEmployee Director Deferred Compensation Plan. Equity Compensation Plan Information Number of securities Number of remaining available securities to...

  • Page 155
    ...the Board of Directors. Management has the primary responsibility for the financial statements, the reporting process and maintaining an effective system of internal control over financial reporting. The Company's independent registered public accounting firm is engaged to audit and express opinions...

  • Page 156
    ..., Chief Financial Officer, Chief Accounting Officer and Treasurer Senior Vice President, General Counsel and Secretary Mr. Diller resigned as our Chairman and Senior Executive effective December 11, 2012 and resigned as a member of the Board of Directors effective April 23, 2013. TripAdvisor has...

  • Page 157
    ...annual compensation package of each named executive officer. The Role of Shareholder Say-on-Pay Votes TripAdvisor provides its stockholders with the opportunity to cast an advisory vote to approve the compensation of the named executive officers. In evaluating our 2012 executive compensation program...

  • Page 158
    ... and Senior Executive effective December 11, 2012 and resigned as a member of the Board of Directors effective April 23, 2013. Cash Bonuses Cash bonuses are granted to recognize and reward an individual's annual contribution to Company performance. Mr. Kaufer has a target cash bonus equal to 100% of...

  • Page 159
    ... closing price of TripAdvisor's common stock on March 22, 2012, which was $33.25, taking into account any Share Change or Corporate Transaction (each as defined in the 2011 Plan). In general these performance goals reflect the minimally acceptable Company performance that must be achieved in order...

  • Page 160
    ... officers also participate in employee benefits programs available to all domestic employees generally, including the TripAdvisor Retirement Savings Plan. Under this plan, TripAdvisor matches 50% of each dollar a participant contributes, up to the first 6% of eligible compensation, subject to tax...

  • Page 161
    ... reimbursement of up to $750 a year for leisure travel that is arranged using one of the TripAdvisor Media Group family of products and provides all employees, including named executive officers, an annual holiday bonus in the form of a gift card as well as a tax gross-up payment on the value of the...

  • Page 162
    ... stock options (including stock options accelerated pursuant to the terms of the executive's employment agreement) or, if earlier, through the scheduled expiration date of the options. In return, each executive has agreed to be restricted from competing with TripAdvisor or soliciting its employees...

  • Page 163
    ... or Maffei was an officer or employee of TripAdvisor, formerly an officer of TripAdvisor, or an executive officer of an entity for which an executive officer of TripAdvisor served as a member of the compensation committee or as a director during the one-year period ended December 31, 2012. 31

  • Page 164
    ... and discussed that Analysis with management. Based on this review and discussions with management, the Compensation Committees recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company's 2013 Proxy Statement. Members of the Compensation Committee...

  • Page 165
    ... table includes all compensation received from Expedia for services performed in 2011 for those named executive officers who devoted substantially all of their efforts to TripAdvisor's businesses prior to December 20, 2011. Bonus ($)(1) Stock Awards ($)(2) Option Awards ($)(2) All Other Compensation...

  • Page 166
    ... of TripAdvisor's common stock on the NASDAQ Stock Market on the grant date. Stock option awards were valued at the date of grant using the Black-Scholes pricing model. The Black-Scholes model incorporates various assumptions including expected volatility, expected term, risk-free interest rates and...

  • Page 167
    ... a member of the Board on April 23, 2013. The compensation Mr. Diller received as a non-employee director in 2012 is included in the table titled "2012 Non-Employee Director Compensation" below. 2012 Grants of Plan-Based Awards During fiscal year 2012, the Section 16 Committee approved stock option...

  • Page 168
    ... holdings of stock options and RSUs by the named executive officers as of December 31, 2012. The market value of the RSUs is based on the closing price of TripAdvisor common stock on the NASDAQ Stock Market on December 31, 2012 the last trading day of the year, which was $41.92. Option Awards Number...

  • Page 169
    ... Control Provisions of TripAdvisor's 2011 Stock and Annual Incentive Plan and Award Agreements Thereunder In the event of a "change in control" (as defined in the 2011 Plan) of TripAdvisor, (i) any stock options outstanding held by our named executive officers as of the date of the change in control...

  • Page 170
    ... stock options (including stock options accelerated pursuant to the terms of the executive's employment agreement) or, if earlier, through the scheduled expiration date of the options. In return, each executive has agreed to be restricted from competing with TripAdvisor or soliciting its employees...

  • Page 171
    ... of benefits above as the definitions for "change in control," "cause" and "good reason" may vary. The amounts shown in the table assume that the triggering event was effective as of December 31, 2012 and that the price of TripAdvisor common stock on which certain of the calculations are based was...

  • Page 172
    ...an annual rate equal to the average "bank prime loan" rate for such year identified in the U.S. Federal Reserve Statistical Release. Upon termination of service as a director of TripAdvisor, a director will receive (1) with respect to share units, such number of shares of TripAdvisor common stock as...

  • Page 173
    ... the closing price of TripAdvisor common stock on the NASDAQ Stock Market on the grant date. (3) On December 15, 2012, each of the directors listed in the table above received an award of 3,599 RSUs with a grant date fair value of $149,970. (4) TripAdvisor has not granted any options for service as...

  • Page 174
    ... goals. Mr. Khosrowshahi has agreed not to compete with TripAdvisor during his service as a director of TripAdvisor, and for a period of 24 months thereafter. In connection with the purchase of Liberty's purchase of 4,799,848 shares of our common stock from Mr. Diller and The Diller-von Furstenberg...

  • Page 175
    ...executive officers and directors of TripAdvisor, as a group. Unless otherwise indicated, beneficial owners listed in the table may be contacted at TripAdvisor's corporate headquarters at 141 Needham Street, Newton, Massachusetts 02464. Shares of TripAdvisor Class B common stock may, at the option of...

  • Page 176
    ...of Class B Common Stock owned by Liberty. Excludes shares beneficially owned by the executive officers and directors of Liberty, as to which Liberty disclaims beneficial ownership. (2) Based solely on information filed on a Schedule 13G/A with the SEC on April 10, 2013 by FMR LLC, the parent holding...

  • Page 177
    ...in the best interests of TripAdvisor and our stockholders. Related Person Transactions Expedia Related-party revenue from Expedia of $203.8 million, $211.0 million and $171.1 million for the years ended December 31, 2012, 2011 and 2010, respectively, primarily consists of click-based advertising and...

  • Page 178
    ... by the holders of Expedia common stock of 25% of the members of Expedia's Board of Directors and matters as to which Delaware law requires a separate class vote). As a result, from the completion of the Spin-Off until December 11, 2012, TripAdvisor and Expedia were related parties since they...

  • Page 179
    ... 23, 2013, Mr. Diller tendered his resignation from our Board of Directors and is now employed by the Company as a special advisor to our Chief Executive Officer. As of the record date, Liberty beneficially owned 18,159,752 shares of our common stock and 12,799,999 shares of our Class B common stock...

  • Page 180
    ... of TripAdvisor common stock of 25% of the members of TripAdvisor's Board of Directors and matters as to which Delaware law requires a separate class vote). WHERE YOU CAN FIND MORE INFORMATION AND INCORPORATION BY REFERENCE TripAdvisor files annual, quarterly and current reports, proxy statements...

  • Page 181
    Appendix A TRIPADVISOR, INC. 2011 STOCK AND ANNUAL INCENTIVE PLAN SECTION 1. PURPOSE; DEFINITIONS The purposes of this Plan are to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and/or consultants and to provide the Company and its ...

  • Page 182
    ..., and any successor thereto. (v) "Expedia" means Expedia, Inc., a Delaware corporation. (w) "Fair Market Value" means, unless otherwise determined by the Committee, the closing price of a share of Common Stock on the Applicable Exchange on the date of measurement, or if Shares were not traded on the...

  • Page 183
    ... in terms of stock price appreciation and/or dividend growth), cost saving levels, marketing- spending efficiency, core noninterest income, change in working capital, return on capital, and/or stock price, with respect to the Company or any subsidiary, division or department of the Company that...

  • Page 184
    ... or division, as the case may be, and the Participant does not immediately thereafter become an employee of (or service provider for), or member of the board of directors of, the Company or another Subsidiary or Affiliate. Temporary absences from employment because of illness, vacation or leave...

  • Page 185
    ...members then in office, except that the Committee may, except to the extent prohibited by applicable law or the listing standards of the Applicable Exchange... number of Shares that may be granted pursuant to Options intended to be Incentive Stock Options shall be 7,000,000 Shares. Shares subject...

  • Page 186
    ... and (D) the exercise price of outstanding Options and Stock Appreciation Rights. (iii) In the case of Corporate Transactions, the adjustments contemplated by clause (i) of this paragraph (d) may include, without limitation, (A) the cancellation of outstanding Awards in exchange for payments of cash...

  • Page 187
    ...Adjusted Awards, in accordance with the terms of the Employee Matters Agreement; provided, however, that Incentive Stock Options may be granted only to employees of the Company and its subsidiaries or parent corporation (within the meaning of Section 424(f) of the Code) and, with respect to Adjusted...

  • Page 188
    ...Fair Market Value of a share of the Common Stock on the applicable Grant Date. In no event may any Option or Free-Standing SAR granted under this Plan be amended, other than pursuant to Section 3(d), to decrease the exercise price thereof, be cancelled in conjunction with the grant of any new Option...

  • Page 189
    ... of an Option until the exercise price therefor has been fully paid and applicable taxes have been withheld. The applicable Participant shall have all of the rights of a stockholder of the Company holding the class or series of Common Stock that is subject to the Option or Stock Appreciation Right...

  • Page 190
    ...certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the TripAdvisor, Inc. 2011 Stock and Annual Incentive Plan and an Award Agreement. Copies of such Plan and Agreement are on file at the offices of TripAdvisor, Inc." The Committee...

  • Page 191
    ... Employee Matters Agreement: (a) Nature of Awards. Restricted Stock Units are Awards denominated in Shares that will be settled, subject to the terms and conditions of the Restricted Stock Units, in an amount in cash, Shares or both, based upon the Fair Market Value of a specified number of Shares...

  • Page 192
    ... of Senior Vice President of the Company or above as of immediately prior to the Change in Control, and with respect to all other Participants solely to the extent provided in the applicable Award Agreement: (i) any Options and Stock Appreciation Rights outstanding which are not then exercisable and...

  • Page 193
    ... of the Outstanding Company Voting Securities, (B) no Person (excluding Barry Diller, Liberty Media Corporation, and their respective Affiliates, any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) will beneficially own, directly or...

  • Page 194
    ... of annual base salary from the rate of annual base salary in effect for such Participant immediately prior to the Change in Control, (B) a relocation of the Participant's principal place of business more than 35 miles from the city in which such Participant's principal place of business was located...

  • Page 195
    ... Section 409A of the Code), stock exchange rules or accounting rules. In addition, no such amendment shall be made without the approval of the Company's stockholders to the extent such approval is required by applicable law or the listing standards of the Applicable Exchange. (d) Amendment of Awards...

  • Page 196
    ... of all of the following conditions: (i) listing or approval for listing upon notice of issuance, of such Shares on the Applicable Exchange; (ii) any registration or other qualification of such Shares of the Company under any state or federal law or regulation, or the maintaining in effect...

  • Page 197
    ...The terms and conditions governing any Awards that the Committee determines will be subject to Section 409A of the Code, including any rules for elective or mandatory deferral of the delivery of cash or Shares pursuant thereto and any rules regarding treatment of such Awards in the event of a Change...

  • Page 198
    .... 2011 STOCK AND ANNUAL INCENTIVE PLAN A. The TripAdvisor, Inc. 2011 Stock and Annual Incentive Plan (the "Plan") is hereby amended as follows: 1. Section 3(a) of the Plan is hereby amended by deleting the first sentence thereof and substituting therefor the following: "The maximum number of Shares...

  • Page 199
    ...President, Vacation Rentals Adam Medros Vice President, Global Product Barbara Messing Chief Marketing Officer Bryan Saltzburg General Manager, New Initiatives Corporate and Stockholder Information Headquarters TripAdvisor, Inc. 141 Needham Street Newton, Massachusetts 02464 Exchange Listing and...

  • Page 200