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Exhibit 10.4

EXECUTION COPY

EMPLOYEE MATTERS AGREEMENT

by and between

IAC/INTERACTIVECORP

and

EXPEDIA, INC.

Dated as of August 9, 2005

TABLE OF CONTENTS

ARTICLE I	DEFINITIONS
1.1	Affiliate
1.2	Agreement
1.3	Ancillary Agreements
1.4	Approved Leave of Absence
1.5	ASO Contract
1.6	Auditing Party
1.7	Award
1.8	Benefit Plan
1.9	Close of the Effective Date
1.10	COBRA
1.11	Code
1.12	Committee
1.13	Covered Employees
1.14	Current Term
1.15	Effective Date
1.16	Effective Time
1.17	Effective Time Year
1.18	ERISA
1.19	Expedia
1.20	Expedia Common Stock
1.21	Expedia Employee
1.22	Expedia Entities
1.23	Expedia Executive Benefit Plans
1.24	Expedia Flexible Benefit Plan
1.25	Expedia Long-Term Incentive Plan
1.26	Expedia Ratio
1.27	Expedia Retirement Savings Plan
1.28	Expedia Retirement Savings Plan Trust
1.29	Expedia Stock Value
1.30	Former Expedia Employee
1.31	Former IAC Employee
1.32	Group Insurance Policies
1.33	Health and Welfare Plans
1.34	HIPAA
1.35	HMO
1.36	HMO Agreements
1.37	IAC
1.38	IAC Common Stock
1.39	IAC Compensation/Benefits Committee
1.40	IAC Employee
1.41	IAC Entities

1.42	IAC Executive Benefit Plans
1.43	IAC Executive Deferred Compensation Plan
1.44	IAC Flexible Benefit Plans
1.45	IAC Incentive Plans
1.46	IAC Long-Term Incentive Plans
1.47	IAC Post-Separation Stock Value
1.48	IAC Ratio
1.49	IAC Retirement Savings Plan
1.50	IAC Severance Pay Program
1.51	IAC Stock Value
1.52	Immediately after the Effective Date
1.53	Liabilities
1.54	Medical Plan
1.55	NASDAQ
1.56	Non-parties
1.57	Option
1.58	Participating Company
1.59	Person
1.60	Restricted Stock
1.61	Restricted Stock Unit
1.62	Reverse Stock Split
1.63	Separated Businesses
1.64	Separation
1.65	Separation Agreement
1.66	Subsidiaries
1.67	Tax Sharing Agreement
1.68	Transferred Account Balances
1.69	U.S.
1.70	VEBA

ARTICLE II	GENERAL PRINCIPLES
2.1	Employment of Expedia Employees
2.2	Assumption and Retention of Liabilities; Related Assets
2.3	Expedia Participation in IAC Benefit Plans
2.4	Terms of Participation by Expedia Employees in Expedia Benefit Plans
2.5	Commercially Reasonable Efforts
2.6	Regulatory Compliance
2.7	Approval by IAC as Sole Stockholder

ARTICLE III	SAVINGS PLANS
3.1	Savings Plan
3.2	Stock Considerations

ARTICLE IV	HEALTH AND WELFARE PLANS
4.1	General
	(a) Establishment of Expedia Health and Welfare Plans
	(b) Retention of Sponsorship and Liabilities

4.2	Vendor Contracts
	(a) Third-Party ASO Contracts, Group Insurance Policies and HMOs
	(b) Effect of Change in Rates
4.3	Flexible Benefit Plan
4.4	Workers’ Compensation Liabilities
4.5	Payroll Taxes and Reporting of Compensation
4.6	COBRA and HIPAA Compliance
4.7	VEBA

ARTICLE V	EXECUTIVE BENEFITS AND OTHER BENEFITS
5.1	Assumption of Obligations
5.2	IAC Incentive Plans
	(a) Expedia Bonus Awards
	(b) IAC Bonus Awards
5.3	IAC Long-Term Incentive Plans
	(a) Vested Old IAC Options
	(b) Unvested Old IAC Options Held by IAC Employees and Former IAC Employees other than Barry Diller
	(c) Unvested Old IAC Options Held by Expedia Employees and Former Expedia Employees other than Barry Diller
	(d) Unvested Old IAC Options Held by Mr. Diller
	(e) IAC Restricted Stock Units Held by IAC Employees and Former IAC Employees
	(f) IAC Restricted Stock Units Held by Expedia Employees and Former Expedia Employees
	(g) IAC Restricted Stock
	(h) Foreign Grants/Awards
	(i) Miscellaneous Option and Other Award Terms
	(j) Waiting Period for Exercisability of Options and Grant of Options and Awards
	(k) Restrictive Covenants
5.4	Registration Requirements
5.5	IAC Executive Deferred Compensation Plans
5.6	Severance

ARTICLE VI	GENERAL AND ADMINISTRATIVE
6.1	Sharing of Participant Information
6.2	Reasonable Efforts/Cooperation
6.3	No Third-Party Beneficiaries
6.4	Audit Rights With Respect to Information Provided
6.5	Fiduciary Matters
6.6	Consent of Third Parties

ARTICLE VII	MISCELLANEOUS
7.1	Effect If Effective Time Does Not Occur
7.2	Relationship of Parties
7.3	Affiliates

iii

7.4	Notices
7.5	Incorporation of Separation Agreement Provisions

EMPLOYEE MATTERS AGREEMENT

This Employee Matters Agreement (this “Agreement”), dated as of August 9, 2005, with effect as of the Effective Time, is entered into by and between IAC/InterActiveCorp, a Delaware corporation (“IAC”), and Expedia, Inc., a Delaware corporation (“Expedia”).

RECITALS:

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

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

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

ARTICLE I
DEFINITIONS

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

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

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

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

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

1.5 “ASO Contract” has the meaning set forth in Section 4.2(a).

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

1.7 “Award” when immediately preceded by “IAC,” means IAC Restricted Stock and IAC Restricted Stock Units and, when immediately preceded by “Expedia,” means Expedia Restricted Stock and Restricted Stock Units.