EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between Thomas J. Reddin ("Employee") and Forest Merger Corp., a Delaware corporation (the "Company"), dated as of May 5, 2003 (the "Agreement Date"), and, except for the provisions of Section 2 of the Standard Terms and Conditions, which shall be effective as of the Agreement Date, this Agreement is effective as of the Effective Date (as defined below). In the event that the Merger Agreement (as defined below) is terminated, this Agreement shall be void ab initio and of no further force and effect, and the Prior Agreements (as defined below) shall become immediately effective and binding in full on the parties as if Employee's rights under the same had never been waived by this Agreement. All capitalized terms used but not defined herein shall have the meaning set forth in the Merger Agreement.

        WHEREAS, Employee is currently serving as President and Chief Operating Officer of LendingTree, Inc. ("LendingTree");

        WHEREAS, the Company has entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among USA Interactive ("USAi"), the Company and LendingTree, dated as of May 5, 2003, pursuant to which the Company will merge with and into LendingTree with LendingTree as the surviving corporation in the Merger (the "Merger") to be effective as of the Effective Time (as defined in the Merger Agreement);

        WHEREAS, USAi and the Board of Directors of the Company (the "Board") desire to provide for the continued employment of Employee from and after the date upon which the Effective Time occurs (the "Effective Date"), and Employee is willing to commit himself to continue to serve the Company and its subsidiaries and affiliates, on the terms and conditions herein provided;

        WHEREAS, LendingTree and Employee are parties to an Employment Continuity Agreement, dated March 3, 2003, between LendingTree and Employee and the Employment Agreement, dated November 26, 1999, between LendingTree and Employee (collectively, the "Prior Agreements");

        WHEREAS, in order to effect the foregoing, the Company and Employee wish to enter into an employment agreement on the terms and conditions set forth below;

        NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, Employee and the Company have agreed and do hereby agree as follows:

        1A.    EMPLOYMENT.    The Company agrees to employ Employee as President and Chief Operating Officer of the Company and Employee accepts and agrees to such employment. During Employee's employment with the Company, Employee shall perform all services and acts necessary or advisable to fulfill the duties and responsibilities as are commensurate and consistent with Employee's position and shall render such services on the terms set forth herein. During Employee's employment with the Company, Employee shall report to the Chief Executive Officer of the Company or such other person as from time to time may be designated by USAi (the "Reporting Officer"). Employee shall have such powers and duties with respect to the Company as may reasonably be assigned to Employee by the Reporting Officer, to the extent consistent with Employee's position and status. Employee agrees to devote all of Employee's working time, attention and efforts to the Company and to perform the duties of Employee's position in accordance with the Company's policies as in effect from time to time. Employee's principal place of employment shall be the Company's offices in Charlotte, North Carolina.

        2A.    TERM OF AGREEMENT.    The term ("Term") of this Agreement shall commence on the Effective Date and shall continue for a period of five (5) years, unless sooner terminated in accordance with the provisions of Section 1 of the Standard Terms and Conditions attached hereto; provided that Employee and the Company will enter into good faith negotiations to extend the Term no later than six months prior to the end of the Term, provided, further, that Employee has provided written notice to the Company between eight and six months prior to the end of the Term which sets forth his interest in entering into such negotiations.

        3A.    COMPENSATION.

        (a)    BASE SALARY. During the Term, the Company shall pay Employee an annual base salary of $325,000 (the "Base Salary"), payable in equal biweekly installments or in such other installments as may be in accordance with the Company's payroll practice as in effect from time to time. The Base Salary shall be reviewed by USAi, if requested by Employee in writing, no less frequently than annually in a manner consistent with similarly situated executives of USAi's subsidiaries and may be increased but not decreased. For all purposes under this Agreement, the term "Base Salary" shall refer to Base Salary as in effect from time to time.

        (b)    DISCRETIONARY BONUS. During the Term, Employee shall be eligible to receive discretionary annual bonuses in a manner consistent with similarly situated executives of USAi's subsidiaries after taking into consideration Employee's total incentive compensation opportunities.

        (c)    EQUITY COMPENSATION.

        (i)    Existing Options. All of Employee's stock options outstanding and unexercised as of the date hereof that are outstanding as of the Effective Date shall be converted on the Effective Date into options to purchase shares of USAi's common stock in accordance with the Merger Agreement. On the Effective Date, Employee shall become fully vested in any and all stock option awards granted to Employee under LendingTree's 1997 Stock Option Plan, 1998 Stock Option Plan, 1999 Stock Incentive Plan, Amended and Restated 1999 Stock Incentive Plan, 2001 Stock Incentive Plan, Amended and Restated 2001 Stock Incentive Plan, and any similar plan or other arrangement of LendingTree which have not become exercisable as of the Effective Date, and such stock option awards shall remain exercisable until the last date on which the original option was scheduled to expire, without regard to whether the termination of employment would have provided for a shorter exercise period following termination of Employee's employment.


 

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