TripAdvisor 2012 Annual Report Download - page 162

For purposes of allowing TripAdvisor to deduct employee compensation in accordance with Section 162(m)
of the Code, the Compensation Committees made all annual bonuses to the named executive officers in 2012
subject to the satisfaction of performance goals described under “Compensation Program Elements – Cash
Bonuses” above.
Change in Control
Under the 2011 Plan, certain executive officers (including all the named executive officers) are entitled to
accelerated vesting of equity awards in the event of a change in control of TripAdvisor. The change in control
definition in the 2011 Plan does not include the acquisition of voting control by Liberty (a “Liberty Change of
Control”). The Compensation Committees believe that accelerated vesting of equity awards in connection with
change in control transactions would provide an incentive for these executives to continue to help execute
successfully such a transaction from its early stages until closing.
Also, certain of our executive officers are entitled to accelerated vesting of equity awards in the event of a
change of control under their employment agreements. For a description and quantification of these change in
control benefits, please see the section below titled “Executive Compensation — Potential Payments Upon
Termination or Change in Control.”
Severance
The Company has entered into employment agreements with terms of two years with Ms. Bradley and
Mr. Kalvert, pursuant to which, in the event that either executive terminates his or her employment for good
reason or is terminated by TripAdvisor without cause:
• TripAdvisor will continue to pay the executive’s base salary through the longer of the end of the term of
the executive’s employment agreement and 12 months (in all cases provided that such payments will be
offset by any amount earned from another employer during such time period);
• TripAdvisor will consider in good faith the payment of discretionary bonuses on a pro rata basis for the
year in which termination of employment occurs;
• TripAdvisor will pay COBRA health insurance coverage, through the longer of the end of the term of the
executive’s employment agreement and 12 months;
• all equity held by the named executive officer that otherwise would have vested during the 12-month
period following termination of employment, will accelerate (provided that equity awards that vest less
frequently than annually shall be treated as though such awards vested annually); and
• the executive will have 18 months following such date of termination to exercise any vested 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 through the longer of (i) the completion of the term of the employment agreement and (ii) 12 months
after the termination of employment. These agreements are intended to attract and retain qualified executives
who may have other employment alternatives that may appear to them to be less risky absent these agreements.
The restrictive covenants contained in these agreements also serve to protect the interest of TripAdvisor.
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