<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(AMENDMENT NO. 1)
Expedia, Inc.
------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
--------------------------------------
(Title of Class of Securities)
30212510
(CUSIP Number)
Carla S. Newell
c/o Technology Crossover Ventures
575 High Street, Suite 400
Palo Alto, California 94301
(650) 614-8200
--------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
COPY TO:
Ora T. Fisher
Latham & Watkins
135 Commonwealth Drive
Menlo Park, California 94025
(650) 463-2600
August 25, 2000
--------------------------------------------------------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this statement because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
<PAGE> 2
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TCV IV, L.P.
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 3,608,978 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 3,608,978 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,608,978 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
7.5%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 3
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TCV IV STRATEGIC PARTNERS, L.P.
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 134,574 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 134,574 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
134,574 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
.3%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 4
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TECHNOLOGY CROSSOVER MANAGEMENT IV, L.L.C.
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 3,743,552 SHARES OF COMMON STOCK (A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 3,743,552 SHARES OF COMMON STOCK (A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,743,552 SHARES OF COMMON STOCK (A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
7.8%
---------------------------------------------------------------------
(14) Type of Reporting Person
OO
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 5
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TCV III (GP)
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 3,654 SHARES OF COMMON STOCK(A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 3,235 SHARES OF COMMON STOCK (EXCLUDES 419
ESCROWED SHARES)(A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,654 SHARES OF COMMON STOCK(A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 0.1%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 6
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TCV III, L.P.
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 17,358 SHARES OF COMMON STOCK(A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 15,368 SHARES OF COMMON STOCK (EXCLUDES 1,990
ESCROWED SHARES)(A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
17,358 SHARES OF COMMON STOCK(A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 0.1%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 7
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TCV III (Q), L.P.
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 461,346 SHARES OF COMMON STOCK(A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 408,452 SHARES OF COMMON STOCK (EXCLUDES
52,894 ESCROWED SHARES)(A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
461,346 SHARES OF COMMON STOCK(A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
1.0%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 8
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TCV III STRATEGIC PARTNERS, L.P.
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 20,892 SHARES OF COMMON STOCK(A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 18,497 SHARES OF COMMON STOCK (EXCLUDES 2,395
ESCROWED SHARES)(A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
20,892 SHARES OF COMMON STOCK(A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
LESS THAN 0.1%
---------------------------------------------------------------------
(14) Type of Reporting Person
PN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 9
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
TECHNOLOGY CROSSOVER MANAGEMENT III, L.L.C.
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of 503,250 SHARES OF COMMON STOCK(A)
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by -0- SHARES OF COMMON STOCK
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 445,552 SHARES OF COMMON STOCK (EXCLUDES
57,698 ESCROWED SHARES)(A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
503,250 SHARES OF COMMON STOCK(A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
1.0%
---------------------------------------------------------------------
(14) Type of Reporting Person
OO
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 10
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
JAY C. HOAG
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of -0- SHARES OF COMMON STOCK
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by 4,246,802 SHARES OF COMMON STOCK (A)
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 4,189,104 SHARES OF COMMON STOCK (EXCLUDES
57,698 ESCROWED SHARES)(A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
4,246,802 SHARES OF COMMON STOCK(A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
8.8%
---------------------------------------------------------------------
(14) Type of Reporting Person
IN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 11
SCHEDULE 13D
-------------------- --------------------
CUSIP No. 30212510
-------------------- --------------------
(1) Name of Reporting Person
RICHARD H. KIMBALL
---------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of a Group (a) [ ]
(b) [X]
---------------------------------------------------------------------
(3) SEC Use Only
---------------------------------------------------------------------
(4) Source of Funds
AF, OO
---------------------------------------------------------------------
(5) Check Box if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e) [ ]
---------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
---------------------------------------------------------------------
(7) Sole Voting Power
Number of -0- SHARES OF COMMON STOCK
Shares --------------------------------------------------------
Beneficially (8) Shared Voting Power
Owned by 4,246,802 SHARES OF COMMON STOCK (A)
Each --------------------------------------------------------
Reporting (9) Sole Dispositive Power
Person With 4,189,104 SHARES OF COMMON STOCK (EXCLUDES
57,698 ESCROWED SHARES)(A)
--------------------------------------------------------
(10) Shared Dispositive Power
-0- SHARES OF COMMON STOCK
--------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
4,246,802 SHARES OF COMMON STOCK(A)
---------------------------------------------------------------------
(12) Check Box if Aggregate Amount in Row (11) Excludes Certain
Shares [ ]
---------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
8.8%
---------------------------------------------------------------------
(14) Type of Reporting Person
IN
---------------------------------------------------------------------
---------------
(A) Please see Item 5.
<PAGE> 12
Item 1. Security and Issuer.
This statement relates to shares of common stock, par value $0.01
per share (the "Common Stock"), of Expedia, Inc., a Washington corporation
("Expedia" or the "Company"). The Company's principal executive offices are
located at 13810 SE Eastgate Way, Suite 400, Bellevue, Washington 98005.
Item 2. Identity and Background.
(a)-(c), (f). This statement is being filed by (1) TCV IV, L.P.,
a Delaware limited partnership ("TCV IV"), (2) TCV IV Strategic Partners, L.P.,
a Delaware limited partnership ("Strategic Partners IV"), (3) Technology
Crossover Management IV, L.L.C., a Delaware limited liability company
("Management IV"), (4) TCV III (GP), a Delaware general partnership ("TCV III
(GP)"), (5) TCV III, L.P., a Delaware limited partnership ("TCV III"), (6) TCV
III (Q), L.P., a Delaware limited partnership ("TCV III (Q)"), (7) TCV III
Strategic Partners, L.P., a Delaware limited partnership ("Strategic Partners
III"), (8) Technology Crossover Management III, a Delaware limited liability
company ("Management III"), (9) Jay C. Hoag ("Mr. Hoag") and (10) Richard H.
Kimball ("Mr. Kimball"). TCV IV, Strategic Partners IV, Management IV, TCV III
(GP), TCV III, TCV III (Q), Strategic Partners III, Management III, Mr. Hoag and
Mr. Kimball are sometimes collectively referred to herein as the "Reporting
Persons." The agreement among the Reporting Persons relating to the joint filing
of this statement is attached hereto as Exhibit 1 and is incorporated by
reference herein.
TCV IV, Strategic Partners IV, Management IV, TCV III (GP), TCV
III, TCV III (Q), Strategic Partners III and Management III are each principally
engaged in the business of investing in securities of the Company and other
companies. Management IV is the general partner of TCV IV and Strategic Partners
IV. Management III is the general partner of TCV III (GP), TCV III, TCV III (Q)
and Strategic Partners III. The address of the principal business and office of
each of TCV IV, Strategic Partners IV, Management IV, TCV III (GP), TCV III, TCV
III (Q), Strategic Partners III and Management III is 575 High Street, Suite
400, Palo Alto, California 94301.
Mr. Hoag and Mr. Kimball are the managing members of Management
IV and Management III. Mr. Hoag and Mr. Kimball are each United States citizens,
and the present principal occupation or employment of each is as a managing
member of Management IV, Management III and related entities. The business
address of each of Mr. Hoag and Mr. Kimball is 575 High Street, Suite 400, Palo
Alto, California 94301.
(d), (e). During the last five years, none of TCV IV, Strategic
Partners IV, Management IV, TCV III (GP), TCV III, TCV III (Q), Strategic
Partners III, Management III, Mr. Hoag or Mr. Kimball has (1) been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(2) been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
TCV IV and Strategic Partners IV purchased the following shares
of the Company's Common Stock in the open market (the "Market Shares"):
<TABLE>
<CAPTION>
Name of Investor Date Shares Acquired Price per Share
---------------------- ------ --------------- ----------------
<S> <C> <C> <C>
TCV IV 8/3/00 17,353 $15.8056
Strategic Partners IV 8/3/00 647 $15.8056
TCV IV 8/7/00 14,461 $16.0000
Strategic Partners IV 8/7/00 539 $16.0000
TCV IV 8/8/00 4,820 $15.8750
</TABLE>
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
Strategic Partners IV 8/8/00 180 $15.8750
TCV IV 8/11/00 19,281 $15.1563
Strategic Partners IV 8/11/00 719 $15.1563
TCV IV 8/14/00 28,922 $15.5625
Strategic Partners IV 8/14/00 1,078 $15.5625
TCV IV 8/15/00 21,209 $15.7557
Strategic Partners IV 8/15/00 791 $15.7557
TCV IV 8/17/00 4,820 $15.9375
Strategic Partners IV 8/17/00 180 $15.9375
TCV IV 8/18/00 4,820 $15.9375
Strategic Partners IV 8/18/00 180 $15.9375
TCV IV 8/23/00 2,410 $15.8750
Strategic Partners IV 8/23/00 90 $15.8750
TCV IV 8/25/00 7,231 $15.9375
Strategic Partners IV 8/25/00 269 $15.9375
</TABLE>
The source of funds for the acquisition of the Market Shares by
TCV IV and Strategic Partners IV was from capital contributions from their
respective partners.
Pursuant to the terms of a Common Stock Purchase Agreement dated
June 25, 2000 (the "Purchase Agreement") by and among Expedia, on the one hand,
and TCV IV and Strategic Partners IV (the "Investors"), on the other hand,
Expedia agreed to issue and sell, and TCV IV and Strategic Partners IV agreed to
purchase, 2,903,042 and 108,251 shares, respectively, of the Company's Common
Stock (the "Shares"), at a price of $16.604167 per share of Common Stock.
Pursuant to the Purchase Agreement, Expedia also agreed to issue to TCV IV and
Strategic Partners IV warrants (each, a "Warrant" and collectively, the
"Warrants"), at a price of $.01 per underlying share to purchase 580,609 and
21,650 shares (the "Warrant Shares"), respectively, of Common Stock at a per
share exercise price of $16.604167. In consideration for the Shares and
Warrants, TCV IV and Strategic Partners IV paid the Company $48,208,400.27 and
$1,797,634.18, respectively, upon the closing date for the transaction, August
25, 2000 (the "Closing Date").
The source of funds for the acquisition of the Shares and
Warrants by TCV IV and Strategic Partners IV was from capital contributions from
their respective partners.
The Purchase Agreement is attached hereto as Exhibit 2 and is
incorporated by reference herein.
Pursuant to the terms of an Agreement and Plan of Reorganization
dated January 30, 2000 (the "Merger Agreement") by and among Expedia,
VacationSub, Inc. (a wholly-owned subsidiary of Expedia), VacationSpot.com,
Inc., Steven D. Murch and Greg Slyngstad, Expedia agreed to issue .1548 shares
of Common Stock for each share of preferred stock and common stock of
VacationSpot.com, Inc. upon the closing of a merger between VacationSub, Inc.
and VacationSpot,com, Inc. As a result of the VacationSpot.com merger, which
closed March 17, 2000, TCV III (GP), TCV III, TCV III (Q) and Strategic Partners
III became entitled to receive 3,654, 17,358, 461,346 and 20,892 shares of
Common Stock, respectively, or an aggregate of 503,250 shares (the "Merger
Shares"), in exchange for an aggregate of 3,250,000 shares of preferred stock of
VacationSpot.com, Inc. A portion of the Merger Shares (the "Escrowed Shares")
were pledged to ChaseMellon Shareholder Services, LLC, as custodian, to secure
the indemnification obligations of the VacationSpot.com, Inc. stockholders
pursuant to an Escrow Agreement dated March 17, 2000 (the "Escrow Agreement")
among Expedia, ChaseMellon Shareholder Services, LLC, VacationSpot.com, Inc.,
the stockholders of VacationSpot.com, Inc. and Carla S. Newell as the
representative of the stockholders.
The source of funds for the acquisition of the Merger Shares by
TCV III (GP), TCV III, TCV III (Q) and Strategic Partners III was the shares of
preferred stock of VacationSpot.com, Inc. held by each such Reporting Person.
The Merger Agreement and the Escrow Agreement are attached hereto
<PAGE> 14
as Exhibit 5 and Exhibit 6, respectively, and are incorporated by reference
herein.
Item 4. Purpose of Transaction.
Purchase Agreement
The Investors agreed to purchase, and the Company agreed to sell,
the Shares and Warrants pursuant to the Purchase Agreement. As a condition to
the closing of the transaction, Expedia agreed to nominate Mr. Hoag or cause him
to be nominated to Expedia's Board of Directors for as long as TCV IV and
Strategic Partners IV continue to own 2,000,000 of the Shares or shares acquired
upon exercise of the Warrants. Mr. Hoag became a director effective as of the
Closing Date.
Registration Rights Agreement
Pursuant to the Purchase Agreement, the Company, TCV IV and
Strategic Partners IV agreed to enter into a Registration Rights Agreement dated
the Closing Date.
Pursuant to the Registration Rights Agreement, the Company has
agreed to register the Shares of Common Stock issuable upon conversion of the
Shares and upon exercise of the Warrants, subject to certain exceptions. The
Company is obligated to pay all expenses incurred in connection with such
registrations (other than brokers' fees, underwriting discounts and commissions,
investment banking fees applicable to the Investors' securities and Investors'
legal fees, which will be borne by the Investors). The Company has agreed to
indemnify the Investors and related persons against certain liabilities under
the securities laws in connection with the sale of securities under such
registrations.
A copy of the Registration Rights Agreement is attached hereto as
Exhibit 4 and is incorporated by reference herein.
Warrants
The Warrants represent the right to purchase shares of the
Company's Common Stock at an exercise price of $16.604167 per share. Payment of
the exercise price may be made in cash, or through the surrender of Common Stock
underlying Warrants with a fair market value equal to the exercise price of the
Warrants being exercised (otherwise known as net exercise). The exercise price
and the number of shares issuable upon exercise of the Warrants is subject to
anti-dilution adjustment under certain circumstances as set forth in the
Warrants.
A copy of the form of Warrant issued to the Investors is attached
hereto as Exhibit 3 and is incorporated by reference herein.
The Reporting Persons acquired the Market Shares, Shares,
Warrants and Merger Shares for investment purposes. Depending on the factors
discussed herein, the Reporting Persons may, from time to time, exercise all or
a portion of the Warrants and may acquire additional shares of Common Stock
and/or retain and/or sell all or a portion of the Market Shares, Shares, Merger
Shares, Warrants and/or Common Stock issued upon exercise of the Warrants in the
open market or in privately negotiated transactions. Any actions the Reporting
Persons might undertake will be dependent upon the Reporting Persons' review of
numerous factors, including, among other things, the price levels of the Common
Stock; general market and economic conditions; ongoing evaluation of the
Company's business, financial condition, operations and prospects; the relative
attractiveness of alternative business and investment opportunities; and other
future developments.
Except as set forth above, the Reporting Persons have no present
plans or intentions which would result in or relate to any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
<PAGE> 15
Item 5. Interest in Securities of the Issuer.
(a), (b). As of the close of business on August 25, 2000, TCV IV,
Strategic Partners IV, TCV III (GP), TCV III, TCV III (Q) and Strategic Partners
III direct ownership of Common Stock is as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
Name of Investor Number of Total Shares Percentage of
Outstanding Shares (Including Warrants and Outstanding Shares
Escrowed Shares) (Including Warrants and
Escrowed Shares)(a)
------------------------------------------------------------------------------------
<S> <C> <C>
TCV IV 3,608,978 7.5%
------------------------------------------------------------------------------------
Strategic Partners IV 134,574 0.3%
------------------------------------------------------------------------------------
TCV III (GP) 3,654 less than 0.1%
------------------------------------------------------------------------------------
TCV III 17,358 less than 0.1%
------------------------------------------------------------------------------------
TCV III (Q) 461,346 1.0%
------------------------------------------------------------------------------------
Strategic Partners III 20,892 less than 0.1%
------------------------------------------------------------------------------------
</TABLE>
(a) All percentages in this table are based on the 44,489,000
shares of Common Stock of the Company outstanding, as reported in the Company's
424(b)(3) prospectus filed with the Securities and Exchange Commission on August
4, 2000 and also reflect the issuance of the Shares and assume the issuance of
the Warrant Shares.
Each of TCV IV and Strategic Partners IV has the sole power to
dispose or direct the disposition of the Market Shares, Shares and Warrants
which it holds directly and the Warrant Shares acquirable upon exercise of the
Warrants. Each of TCV IV and Strategic Partners IV has the sole power to direct
the vote of its respective Market Shares and Shares, and will have the power to
vote or direct the vote of the Warrant Shares upon exercise of the Warrants.
Management IV is the sole general partner of each of TCV IV and
Strategic Partners IV and in such capacity may be deemed to have the sole power
to dispose or direct the disposition of the Market Shares, Shares, Warrants and
Warrant Shares which TCV IV and Strategic Partners IV would hold upon exercise
of such Warrants, and to direct the vote of the Market Shares and Shares and
Warrant Shares upon exercise of the Warrants. Management IV disclaims beneficial
ownership of the securities owned by TCV IV and Strategic Partners IV except to
the extent of its pecuniary interest therein.
Messrs. Hoag and Kimball are the managing members of Management
IV. Under the operating agreement of Management IV, each of Messrs. Hoag and
Kimball have the independent power to cause the funds managed by Management IV
to buy and sell securities of publicly traded portfolio companies, however, in
general, they must act by unanimous consent with respect to all other matters,
including directing the voting of such securities. As a result, each of Messrs.
Hoag and Kimball may be deemed to have the sole power to dispose or direct the
disposition of the Market Shares, Shares and Warrants held by TCV IV and
Strategic Partners IV, and Warrant Shares which TCV IV and Strategic Partners IV
would own upon exercise of such Warrants, and may be deemed to have the shared
power to vote or direct the vote of the Market Shares and Shares and Warrant
Shares upon exercise of such Warrants. Messrs. Hoag and Kimball disclaim
beneficial ownership of the
<PAGE> 16
securities owned by TCV IV and Strategic Partners IV except to the extent of
their pecuniary interest therein.
Each of TCV III (GP), TCV III, TCV III (Q) and Strategic Partners
III has the sole power to dispose or direct the disposition of the Merger Shares
(other than the Escrowed Shares) and to direct the vote of the Merger Shares.
Upon the release of the Escrowed Shares, and subject thereto, each of TCV III
(GP), TCV III, TCV III (Q) and Strategic Partners III will have the sole power
to dispose or direct the disposition of any such Merger Shares released from the
escrow.
Management III is the sole general partner of each of TCV III
(GP), TCV III, TCV III (Q) and Strategic Partners III and in such capacity may
be deemed to have the sole power to dispose or direct the disposition of the
Merger Shares held by such entities (other than such shares as are pledged under
the Escrow Agreement) and to direct the vote of the Merger Shares. Upon the
release of the Escrowed Shares, and subject thereto, Management III may be
deemed to have the sole power to dispose or direct the disposition of any such
Merger Shares released from the escrow. Management III disclaims beneficial
ownership of the securities owned by TCV III (GP), TCV III, TCV III (Q) and
Strategic Partners III except to the extent of its pecuniary interest therein.
Messrs. Hoag and Kimball are the managing members of Management
III. Under the operating agreement of Management III, each of Messrs. Hoag and
Kimball have the independent power to cause the funds managed by Management III
to buy and sell securities of publicly traded portfolio companies, however, in
general, they must act by unanimous consent with respect to all other matters,
including directing the voting of such securities. As a result, each of Messrs.
Hoag and Kimball may be deemed to each have the sole power to dispose or direct
the disposition of the Merger Shares held by TCV III (GP), TCV III, TCV III (Q)
and Strategic Partners III (other than the Escrowed Shares) and the shared power
to direct the vote of the Merger Shares. Upon the release of the Escrowed
Shares, and subject thereto, each of Messrs. Hoag and Kimball may be deemed to
have the sole power to dispose or direct the disposition of any such Merger
Shares released from the escrow. Messrs. Hoag and Kimball disclaim beneficial
ownership of the securities owned by TCV III (GP), TCV III, TCV III (Q) and
Strategic Partners III except to the extent of their pecuniary interest therein.
The Reporting Persons may be deemed to be acting as a group in
relation to their respective holdings in Expedia but do not affirm the existence
of any such group.
Except as set forth in this Item 5(a) - (b), each of the
Reporting Persons disclaims beneficial ownership of any Common Stock owned
beneficially or of record by any other Reporting Person.
(c). Except as set forth herein, none of the Reporting Persons
has effected any transaction in the Common Stock during the past 60 days.
(d). Not applicable.
(e). Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Item 4 above summarizes certain provisions of the Purchase
Agreement, the Registration Rights Agreement and the Warrants. A copy of the
Purchase Agreement is attached hereto as Exhibit 2 and is incorporated by
reference herein. A copy of the form of Warrant is attached hereto as Exhibit 3
and is incorporated by reference herein. A copy of the Registration Rights
Agreement is attached hereto as Exhibit 4 and is incorporated by reference
herein.
Merger Agreement
Pursuant to the Merger Agreement, upon the closing of the merger
<PAGE> 17
of VacationSub, Inc. (a wholly-owned subsidiary of Expedia) and
VacationSpot.com, Inc., effective March 17, 2000, Expedia issued the Merger
Shares to TCV III (GP), TCV III, TCV III (Q) and Strategic Partners III in
exchange for their shares of preferred stock of VacationSpot.com, Inc. Expedia
is obligated to file a registration statement with the Securities and Exchange
Commission to register the Merger Shares under certain circumstances. A copy of
the Merger Agreement is attached hereto as Exhibit 5 and incorporated herein by
reference. Expedia's obligation to so register the Merger Shares contained in
the Merger Agreement is also incorporated into each Investment Agreement dated
March 17, 2000 ("Investment Agreement") between Expedia and each stockholder of
VacationSpot.com, Inc. A form of the Investment Agreement is attached hereto as
Exhibit 7 and incorporated herein by reference.
Escrow Agreement
Pursuant to the Escrow Agreement, the former stockholders of
VacationSpot.com, Inc. pledged the Escrowed Shares to ChaseMellon Shareholder
Services, LLC, to secure claims by Expedia for indemnification under the Merger
Agreement. While the Escrowed Shares remain in escrow, TCV III (GP), TCV III,
TCV III (Q) and Strategic Partners III retain their right to vote the Escrowed
Shares, but they do not have the power to dispose of such Merger Shares. A copy
of the Escrow Agreement is attached hereto as Exhibit 6 and incorporated herein
by reference.
Except as set forth herein, none of the Reporting Persons has any
contracts, arrangements, understandings or relationships (legal or otherwise)
with any person with respect to any securities of Expedia, including but not
limited to any contracts, arrangements, understandings or relationships
concerning the transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or losses, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 Joint Filing Agreement (incorporated by reference
from Exhibit 1 to the Schedule 13D relating to the
common stock of Expedia filed on July 5, 2000).
Exhibit 2 Common Stock Purchase Agreement, dated June 25,
2000, among Expedia, Inc., TCV IV, L.P. and TCV IV
Strategic Partners, L.P. (incorporated by reference
from Exhibit 2 to the Schedule 13D relating to the
common stock of Expedia filed on July 5, 2000).
Exhibit 3 Form of Warrant to Purchase Common Stock of
Expedia, Inc., to be issued to TCV IV, L.P. and TCV
IV Strategic Partners, L.P. on the Closing Date
(incorporated by reference from Exhibit 3 to the
Schedule 13D relating to the common stock of
Expedia filed on July 5, 2000).
Exhibit 4 Registration Rights Agreement, to be dated the
Closing Date, among Expedia, Inc., TCV IV, L.P. and
TCV IV Strategic Partners, L.P. (incorporated by
reference from Exhibit 4 to the Schedule 13D
relating to the common stock of Expedia filed on
July 5, 2000).
Exhibit 5 Agreement and Plan of Reorganization by and among
Expedia, Inc., VacationSub, Inc., VacationSpot.com,
Inc., Steven D. Murch and Greg Slyngstad dated
January 30, 2000 (incorporated by reference from
Exhibit 2.2 of Expedia's Form 8-K dated March 17,
2000).
Exhibit 6 Escrow Agreement among Expedia, ChaseMellon
Shareholder Services, LLC, Carla S. Newell, TCV III
<PAGE> 18
(GP), TCV III, TCV III (Q), Strategic Partners III
and the other parties thereto, dated March 17, 2000
(incorporated by reference from Exhibit 6 to the
Schedule 13D relating to the common stock of
Expedia filed on July 5, 2000).
Exhibit 7 Form of Investment Agreement between Expedia, Inc.
and a stockholder of VacationSpot.com, Inc.
(incorporated by reference from Exhibit 7 to the
Schedule 13D relating to the common stock of
Expedia filed on July 5, 2000).
Exhibit 8 Statement Appointing Designated Filer and
Authorized Signatories dated February 22, 2000.
Exhibit 9 Statement Appointing Designated Filer and
Authorized Signatories dated June 1, 2000
(incorporated by reference from Exhibit F to the
Schedule 13G relating to the common stock of
eLoyalty Corporation filed on June 5, 2000).
<PAGE> 19
SIGNATURE
After reasonable inquiry and to the best of each of the
undersigned's knowledge and belief, each of the undersigned certifies that the
information set forth in this statement is true, complete and correct.
Dated: August 31, 2000
TCV IV, L.P.
By: /s/ Carla S. Newell
---------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV IV STRATEGIC PARTNERS, L.P.
By: /s/ Carla S. Newell
---------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TECHNOLOGY CROSSOVER
MANAGEMENT IV, L.L.C.
By: /s/ Carla S. Newell
---------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV III (GP)
By: /s/ Carla S. Newell
---------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV III, L.P.
By: /s/ Carla S. Newell
---------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TCV III (Q), L.P.
By: /s/ Carla S. Newell
---------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
<PAGE> 20
TCV III STRATEGIC PARTNERS, L.P.
By: /s/ Carla S. Newell
------------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
TECHNOLOGY CROSSOVER
MANAGEMENT III, L.L.C.
By: /s/ Carla S. Newell
------------------------------------------
Name: Carla S. Newell
Its: Authorized Signatory
JAY C. HOAG
/s/ Carla S. Newell
------------------------------------------
By: Carla S. Newell, Authorized Signatory
RICHARD H. KIMBALL
/s/ Carla S. Newell
------------------------------------------
By: Carla S. Newell, Authorized Signatory
<PAGE> 21
EXHIBIT INDEX
Exhibit 1 Joint Filing Agreement (incorporated by reference from Exhibit 1
to the Schedule 13D relating to the common stock of Expedia filed
on July 5, 2000).
Exhibit 2 Common Stock Purchase Agreement, dated June 25, 2000, among
Expedia, Inc., TCV IV, L.P. and TCV IV Strategic Partners, L.P.
(incorporated by reference from Exhibit 2 to the Schedule 13D
relating to the common stock of Expedia filed on July 5, 2000).
Exhibit 3 Form of Warrant to Purchase Common Stock of Expedia, Inc., to be
issued to TCV IV, L.P. and TCV IV Strategic Partners, L.P. on the
Closing Date (incorporated by reference from Exhibit 3 to the
Schedule 13D relating to the common stock of Expedia filed on July
5, 2000).
Exhibit 4 Registration Rights Agreement, to be dated the Closing Date, among
Expedia, Inc., TCV IV, L.P. and TCV IV Strategic Partners, L.P.
(incorporated by reference from Exhibit 4 to the Schedule 13D
relating to the common stock of Expedia filed on July 5, 2000).
Exhibit 5 Agreement and Plan of Reorganization by and among Expedia, Inc.,
VacationSub, Inc., VacationSpot.com, Inc., Steven D. Murch and
Greg Slyngstad dated January 30, 2000 (incorporated by reference
from Exhibit 2.2 of Expedia's Form 8-K dated March 17, 2000).
Exhibit 6 Escrow Agreement among Expedia, ChaseMellon Shareholder Services,
LLC, Carla S. Newell, TCV III (GP), TCV III, TCV III (Q),
Strategic Partners III and the other parties thereto, dated March
17, 2000 (incorporated by reference from Exhibit 6 to the Schedule
13D relating to the common stock of Expedia filed on July 5,
2000).
Exhibit 7 Form of Investment Agreement between Expedia, Inc. and a
stockholder of VacationSpot.com, Inc. (incorporated by reference
from Exhibit 7 to the Schedule 13D relating to the common stock of
Expedia filed on July 5, 2000).
Exhibit 8 Statement Appointing Designated Filer and Authorized Signatories
dated February 22, 2000.
Exhibit 9 Statement Appointing Designated Filer and Authorized Signatories
dated June 1, 2000 (incorporated by reference from Exhibit F to
the Schedule 13G relating to the common stock of eLoyalty
Corporation filed on June 5, 2000).
