IAC - InterActiveCorp (IACI)

in equal installments on December 31, 2006,  December 31, 2007 and December 31, 2008 (each, a “Vesting Date”), based on Employee’s continued employment with the Company and its subsidiaries and subject to performance conditions (the “First Performance Conditions”) set by the Company’s compensation committee (subject to full and immediate vesting in the event of a termination of employment by the Company without Cause, or a termination of employment by Employee for Good Reason, and subject to pro rated vesting in the event of Death or Disability based on the amount of continued service between the date hereof and the end of the Term). If Employee remains in employment to a Vesting Date but the shares of Company Common Stock that are otherwise scheduled to vest on that date do not vest because of a failure to satisfy the First Performance Conditions for that Vesting Date, those shares of Company Common Stock shall not be forfeited but shall instead remain unvested, subject to later vesting if and to the extent waiver of the First Performance Conditions is required pursuant to Section 3A(c)(i)(C)(3) below. Employee shall have the same rights with respect to the Exchange Stock as other holders of Company Common Stock; provided that any dividends that are declared and payable with respect to the Exchange Shares before such shares have become vested shall not be paid to Employee but shall instead be converted into additional Exchange Shares (based on the fair market value of Company Common Stock on the date on which the dividend would otherwise have been paid) and shall be transferred to Employee subject to the same vesting conditions as are applicable to the Exchange Shares with respect to which such dividends were payable. The exchange of such Shares for such shares of Company Common Stock (such shares, the “Exchange Stock”) is intended to constitute a “reorganization” within the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”) and this Agreement is intended to constitute a “plan of reorganization” within the meaning of Section 354 of the Code. The Company agrees to comply with the record-keeping and filing rules of Treasury Regulation section 1.368-3 (and any similar rules of any relevant state or local taxing jurisdiction) with respect to such exchange. In addition, the Company agrees that if such exchange shall, in whole or in part, fail to qualify as a reorganization solely by reason of (i) the treatment of such exchange by the Company (or its subsidiaries or affiliates), in whole or in part, as other than a reorganization in Tax returns filed with the Internal Revenue Service or (ii) the failure by the Company (or its subsidiaries or affiliates) to comply with U.S. federal filing or reporting requirements to obtain reorganization treatment for such exchange, the Company will indemnify and hold harmless the Employee, on an after-tax basis, against all U.S. federal, state and local income taxes to which Employee may be subject, with respect to those shares of Company Common Stock so exchanged but not so qualifying, in consequence of such failure. It is agreed and understood that if the IRS alleges that the transaction is taxable by virtue of any reason other than (i) or (ii) in the preceding sentence, the Company shall not be obligated to contest such determination and shall be entitled to file an amended return or otherwise settle the issue with the IRS and shall have no indemnity obligation hereunder. Additionally, at the time of any disposition of the Exchange Stock by Employee following an indemnification under this section, Employee will pay to Company any realized tax savings resulting from the increased basis associated with the alternative tax treatment giving rise to the indemnification.

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(B)  40% of the Shares, which have vested prior to the Effective Date, will remain unchanged by this Agreement, and 10% of the Shares will vest in equal installments on August 8, 2006, August 8, 2007 and February 8, 2008, based on Employee’s continued employment with the Company and its subsidiaries and will continue to be subject to the terms of the Shares Agreement (including any accelerated vesting provisions).

(C)  25% of the Shares (the “Target Shares”) will vest in equal installments on August 8, 2006, August 8, 2007 and February 8, 2008, based on Employee’s continued employment with the Company and its subsidiaries (subject to full and immediate vesting in the event of a termination of employment by the Company without Cause, or a termination of employment by Employee for Good Reason, and subject to pro rated vesting in the event of Death or Disability based on the amount of continued service between the date hereof and February 8, 2008). Additionally, the following terms shall apply to the Target Shares:

(1)  If Employee remains employed by the Company past December 31, 2007, the value of his vested Target Shares will be appraised as of December 31, 2008 (the “Valuation Date”) pursuant to the procedures set forth in Sections 4.2(a)(ii) and (a)(iv) of the Shares Agreement. In the event Employee’s employment terminates prior to the Fifth Anniversary Fiscal Year (as defined in the Shares Agreement), the Valuation Date for the Target Shares shall be the December 31st of the fiscal year of LendingTree in which such termination of employment occurs; provided, that if such termination of employment occurs on or after June 30th in any given fiscal year, the Valuation Date shall be six months and one day following such termination of employment, and the payment described in (3) above shall occur on or about 90 days following such Valuation Date.  The valuation required by this paragraph shall occur regardless of whether any put has been exercised under the Shares Agreement, provided that if a put is exercised under the Shares Agreement, then the appraisal for purposes of the Target Shares shall be the appraisal associated with the put under the Shares Agreement.

(2)  Employee acknowledges that by virtue of his position in the Company, he may come into possession of information relating to the value of LendingTree that is not publicly available or otherwise available to employees of LendingTree, including, without limitation, opinions of other members of Company management, valuations of LendingTree undertaken for internal corporate purposes and valuations of other companies for internal corporate purposes. Employee recognizes that some of this information could be prejudicial to the Company in the valuation/appraisal process contemplated by this Agreement and the Shares Agreement, and hereby agrees that he will not share, directly or indirectly, any such information with the appraiser or any employees of LendingTree other than, with respect to employees of LendingTree, as is necessary in connection with the discharge of his duties to the Company.