Exhibit 10.1

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN PORTIONS OF
THE DOCUMENT.  CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SPEARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.

 

PRICELINE.COM INCORPORATED 1999 OMNIBUS PLAN

 

PERFORMANCE SHARE UNIT AGREEMENT

 

THIS PERFORMANCE SHARE UNIT AGREEMENT (“Agreement”) is made as of the 5th day of
March, 2008 by and between priceline.com Incorporated, a Delaware corporation,
with its principal United States office at 800 Connecticut Avenue, Norwalk,
Connecticut 06854, and                                        (the
“Participant”).

 

WITNESSETH:

 

Pursuant to terms of the priceline.com Incorporated 1999 Omnibus Plan (the
“Plan”), the Board of Directors of the Company (the “Board”) has authorized this
Agreement.  The Participant has been granted as of March 5, 2008 (the “Grant
Date”) the number of performance share units (the “Performance Share Units”) set
forth below.  Unless otherwise indicated, any capitalized term used herein, but
not defined herein, shall have the meaning ascribed to such term in the Plan. 
The Performance Share Units comprising this award may be recorded in an unfunded
Performance Share Unit account in the Participant’s name maintained by the
Company.  The Participant will have no rights as a stockholder of the Company by
virtue of any Performance Share Unit awarded to the Participant until shares of
Stock (as defined below), if any, are issued to the Participant as described in
this Agreement.

 

1.                                       Definitions

 

(a)           “Adjusted Consolidated EBITDA” shall mean priceline.com
Incorporated’s consolidated operating income before interest, taxes,
depreciation and amortization (including amortization of acquisition related
intangibles) determined in accordance with U.S. GAAP, adjusted to exclude the
impact of stock-based compensation expense.  The Committee shall have the
authority to make equitable adjustments to Adjusted Consolidated EBITDA in
recognition of unusual or non-recurring events affecting the financial results
of priceline.com Incorporated, or in response to changes in laws or regulations,
or to account for items of gain, loss or expense determined to be extraordinary
or unusual in nature or infrequent in occurrence, or related to the acquisition
of a business or the disposition of a business or a segment of a business, or
related to a change in accounting principles.  All adjustments made to Adjusted
Consolidated EBITDA will be consistent with adjustments made to priceline.com
Incorporated’s publicly disclosed “pro forma” EBITDA, except for those
adjustments made in connection with an acquisition of a business or the
disposition of a business or a segment of a business, which, in the Committee’s
discretion, may not be consistent with adjustments made to priceline.com
Incorporated’s publicly disclosed “pro forma” EBITDA.

 

(b)           “Change in Control” shall have the meaning given such term under
Section 3(i).

 

(c)           “Change in Control Period” shall mean the period commencing on the
effective date of the Change in Control and ending on the date immediately prior
to the date which is six (6) months after the effective date of the Change in
Control.

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

--------------------------------------------------------------------------------

 

(d)           “Code” shall mean the U.S. Internal Revenue Code of 1986, as
amended.

 

(e)           “Company” shall mean priceline.com Incorporated, any of its
subsidiaries or affiliates.

 

(f)            “Continuous Service” shall mean the Participant’s service with
the Company or any Subsidiary or Affiliate whether as an employee, director or
consultant, which is not interrupted or terminated.

 

(g)           “Cumulative Adjusted Consolidated EBITDA” shall mean the Adjusted
Consolidated EBITDA during the Performance Period, calculated on a cumulative
basis, net of any losses.

 

(h)           “Determination Date” shall mean March 1, 2011.

 

(i)            “Disability” shall mean that (i) the Participant is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than twelve
(12) months or (ii) the Participant is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three
(3) months under an accident and health plan covering employees of the Company.

 

(j)            “Good Reason” shall mean (i) a material diminution in the
Participant’s authority, duties or responsibilities, (ii) relocation of the
Company’s executive office in Connecticut to a location more than thirty-five
(35) miles from its current location or more than thirty-five (35) miles further
from the Participant’s residence at the time of relocation, or (iii) any
material breach of an employment agreement, if any, that is in effect at any
time between the Participant and the Company.

 

Before a termination by a Participant will constitute termination for Good
Reason, the Participant must give the Company a Notice of Good Reason within
ninety (90) calendar days following the occurrence of the event that constitutes
Good Reason.  Failure to provide such Notice of Good Reason within such 90-day
period shall be conclusive proof that the Participant shall not have Good Reason
to terminate employment.

 

Good Reason shall exist only if (A) the Employer fails to remedy the event or
events constituting Good Reason within thirty (30) calendar days after receipt
of the Notice of Good Reason from the Participant and (B) the Participant
terminates his or her employment within sixty (60) days after the end of the
period set forth in clause (A) above.  If the Participant determines that Good
Reason for termination exists and timely files a Notice of Good Reason, such
determination shall be presumed to be true and the Company will have the burden
of proving that Good Reason does not exist.

 

(k)           “Notice of Good Reason” means a written notice by the Participant
to the Company which sets forth in reasonable detail the specific reason for a
termination of employment for Good Reason and the facts and circumstances
claimed to provide a basis for

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

2

--------------------------------------------------------------------------------

 

such termination and is provided to the Company in accordance with the terms set
forth in Section 1(j) hereof.

 

(l)            “Performance Period” shall mean the period commencing on
January 1, 2008 and ending on December 31, 2010.

 

(m)          “Plan Year” shall mean the calendar year.

 

(n)           “Stock” shall mean shares of common stock, par value $0.008, of
the Company.

 

(o)           “Target Amount” shall have the meaning given such term under
Section 2.

 

(p)           “Vesting Factor” means the factor by which to multiply the Target
Amount determined in accordance with the following table:

 

If the Cumulative Adjusted Consolidated
EBITDA for the Performance Period is:

 

Then the Vesting Factor or Vesting
Factor Range is:

 

[***]

 

0x

 

[***]

 

0x to 1x

 

[***]

 

1x

 

[***]

 

1x to 2x

 

[***]

 

2x

 

 

Notwithstanding any other provision of this Agreement to the contrary, the
Committee, in its sole discretion, may adjust the terms of the table set forth
above in connection with the acquisition of a business or the disposition of a
business or a segment of a business.

 

2.                                       The Grant

 

Subject to the terms and conditions set forth herein, the Participant is granted
                     (                    ) Performance Share Units as of the
Grant Date (the “Target Amount”).

 

3.                                       Vesting; Effect of Termination of
Continuous Service; Change in Control

 

(a)           Vesting at End of Performance Period.  If the Participant remains
in Continuous Service through and including the Determination Date, then the
Participant shall be entitled to receive a number of shares of Stock determined
by multiplying the Target Amount by the Applicable Vesting Factor.  The
“Applicable Vesting Factor” shall be equal to either (i) the sole Vesting Factor
that corresponds to the actual Cumulative Adjusted Consolidated EBITDA set forth
in the table in Section 1(p) above in the event there is no Vesting Factor
Range, or (ii) the sum of (A) the lowest Vesting Factor in the applicable
Vesting Factor Range that corresponds to the actual Cumulative Adjusted
Consolidated EBITDA set forth in the table in Section 1(p) above, plus (B) the
ProRata Vesting Factor Increase.  The “ProRata Vesting Factor Increase” is the
quotient of (1) the excess of the actual Cumulative Adjusted Consolidated EBITDA
over the lowest Cumulative Adjusted Consolidated EBITDA in the range of numbers
in which the actual

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

3

--------------------------------------------------------------------------------

 

Cumulative Adjusted Consolidated EBITDA falls (set forth in the table in
Section 1(p) above), divided by (2) the result of a fraction, the numerator of
which is the difference between the lowest and highest Cumulative Adjusted
Consolidated EBITDA in the range of numbers in which the actual Cumulative
Adjusted Consolidated EBITDA falls (set forth in the table in
Section 1(p) above), and the denominator of which is the difference between the
lowest and highest applicable Vesting Factor in the applicable Vesting Factor
Range (set forth in the table in Section 1(p) above).  All shares of Stock to be
issued to the Participant under this Section 3(a), if any, shall be issued to
the Participant as soon as practicable after the Determination Date but in no
event later than March 15, 2011.  If the Participant becomes entitled to any
shares of Stock under this Section 3(a), he or she shall not be entitled to
receive any shares of Stock under any other subsection of this Section 3.

 

(b)           Termination for Cause.  If, prior to the Determination Date, the
Participant’s Continuous Service is (i) terminated by the Company for Cause or
(ii) voluntarily terminated by the Participant other than on account of Good
Reason, death or Disability, then the Participant shall receive no shares of
Stock under this Agreement.

 

(c)           Pre-2009 Termination Without a Change in Control.  Subject to
Section 3(e), if, on or prior to December 31, 2008, the Participant’s Continuous
Service is terminated by the Company other than for Cause or by the Participant
on account of Good Reason, death or Disability, then the Participant (or the
Participant’s designated beneficiary in the event of the Participant’s death)
shall receive a number of shares of Stock equal to the Target Amount, multiplied
by a fraction, the numerator of which is the number of full months completed
since January 1, 2008 as of the date of such termination, and the denominator of
which is 36.  Subject to Section 3(k), all shares of Stock to be issued to the
Participant under this Section 3(c), if any, shall be issued to the Participant
(or the Participant’s designated beneficiary in the event of the Participant’s
death) as soon as practicable after the Participant’s Continuous Service is
terminated but in no event later than March 15 of the calendar year following
the calendar year in which the Participant’s Continuous Service is terminated.

 

(d)           Post-2008 Termination Without a Change in Control.  Subject to
Section 3(f), if, after December 31, 2008, but prior to the Determination Date
and prior to a Change in Control, the Participant’s Continuous Service is
terminated by the Company other than for Cause or by the Participant on account
of Good Reason, death or Disability, then the Participant’s Performance Share
Unit number shall be determined (or that of the Participant’s designated
beneficiary in the event of the Participant’s death) in accordance with
Exhibit 1, and the Participant shall at the time of such termination be vested
in a number of shares of Stock determined by the product of (i) such Performance
Share Unit number, multiplied by (ii) a fraction, the numerator of which is the
lesser of 36 or the number of full months completed since January 1, 2008 as of
the date of such termination, and the denominator of which is 36.  Subject to
Section 3(k), all shares of Stock to be issued to the Participant under this
Section 3(d), if any, shall be issued to the Participant (or the Participant’s
designated beneficiary in the event of the Participant’s death) as soon as
practicable after the Participant’s Continuous Service is terminated but in no
event later than March 15 of the calendar year following the calendar year in
which the Participant’s Continuous Service is terminated (or, if the
Participant’s Continuous Service is terminated on or after January 1, 2011,
March 15, 2011).  If the Participant becomes

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

4

--------------------------------------------------------------------------------

 

entitled to any shares of Stock under this Section 3(d), he or she shall not be
entitled to receive any shares of Stock under any other subsection of this
Section 3.

 

(e)           Pre-2009 Change in Control Without Termination.  If there is a
Change in Control on or prior to December 31, 2008, and the Participant remains
in Continuous Service through the date which is six (6) months after the
effective date of the Change in Control (“Six-Month Date”), then the Participant
shall be vested in a number of shares of Stock equal to the Target Amount,
multiplied by a fraction, the numerator of which is the number of full months
completed since January 1, 2008 as of the Six-Month Date, and the denominator of
which is 36.  Subject to Section 3(k), all shares of Stock to be issued to the
Participant under this Section 3(e), if any, shall be issued to the Participant
as soon as practicable after the Six-Month Date but in no event later than
March 15 of the calendar year following the calendar year in which the Six-Month
Date occurs; provided, however, that if the Change in Control triggering the
right to payment under this Section 3(e) does not constitute a permitted
distribution event under Section 409A(a)(2) of the Code, then notwithstanding
anything in this Section 3(e) to the contrary, issuance of the shares of Stock
will be made, to the extent necessary to comply with Section 409A of the Code,
to the Participant on (or within 60 days after) the earlier of (i) the
Participant’s “separation from service” with the Company (determined in
accordance with Section 409A of the Code); (ii) the Determination Date; or
(iii) the Participant’s death.

 

(f)            Post-2008 Change in Control Without Termination.  If there is a
Change in Control after December 31, 2008, but prior to the Determination Date,
and the Participant remains in Continuous Service through the Six-Month Date,
then the Participant’s Performance Share Unit number shall be determined in
accordance with Exhibit 1, and the Participant shall, on such Six-Month Date, be
vested in a number of shares of Stock determined by the product of (i) such
Performance Share Unit number, multiplied by (ii) a fraction, the numerator of
which is the lesser of 36 and the number of full months completed since
January 1, 2008 as of the date of the Six-Month Date, and the denominator of
which is 36.  Thereafter, the Participant shall become vested as of the
Determination Date in a number of shares of Stock equal to the product of the
Target Amount, multiplied by the fraction resulting from one (1) minus the
fraction set forth in Section 3(f)(ii) of this paragraph, provided that, in the
event that the Participant’s Continuous Service is terminated prior to the
Determination Date by the Company other than for Cause or by the Participant on
account of Good Reason, death or Disability, the Participant shall be vested in
a number of shares of Stock equal to the Target Amount, multiplied by a
fraction, the numerator of which is the number of full months that have been
completed during the period commencing on the Six-Month Date and ending on the
date of such termination, and the denominator of which is the number of full
months during the period commencing on the Six-Month Date and ending
December 31, 2010.  All shares of Stock to be issued to the Participant under
this Section 3(f), if any, shall be issued to the Participant (A) subject to
Section 3(k), as soon as practicable after the Participant’s Continuous Service
is terminated, or (B) as soon as practicable after the Determination Date, but
in either such case, in no event later than March 15, 2011, whichever occurs
earlier.  If the Participant becomes entitled to any shares of Stock or cash
under this Section 3(f), he or she shall not be entitled to receive any shares
of Stock under any other subsection of this Section 3.

 

(g)           Termination During a Pre-2009 Change in Control Period.  If there
is a Change in Control on or prior to December 31, 2008, and the Participant’s
Continuous Service is terminated

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

5

--------------------------------------------------------------------------------

 

by the Company other than for Cause or by the Participant on account of Good
Reason, death or Disability during the Change in Control Period, then the
Participant (or the Participant’s designated beneficiary in the event of the
Participant’s death) shall receive a number of shares of Stock equal to the
Target Amount, multiplied by a fraction, the numerator of which is the number of
full months completed since January 1, 2008 as of the date of such termination,
and the denominator of which is 36.  Subject to Section 3(k), all shares of
Stock to be issued to the Participant under this Section 3(g), if any, shall be
issued to the Participant (or the Participant’s designated beneficiary in the
event of the Participant’s death) as soon as practicable after the Participant’s
Continuous Service is terminated but in no event later than March 15 of the
calendar year following the calendar year in which the Participant’s Continuous
Service is terminated.

 

(h)           Termination During a Post-2008 Change in Control Period.  If there
is a Change in Control after December 31, 2008, but prior to the Determination
Date, and the Participant’s Continuous Service is terminated during the Change
in Control Period by the Company other than for Cause or by the Participant on
account of Good Reason, death or Disability, then the Participant’s Performance
Share Unit number (or that of the Participant’s designated beneficiary in the
event of the Participant’s death) shall be determined in accordance with
Exhibit 1, and the Participant shall be vested at the time of such termination
in the sum of (i) a number of shares of Stock determined by multiplying such
Performance Share Unit number by a fraction, the numerator of which is the
lesser of 36 and the number of full months completed since January 1, 2008 as of
the date of such Change in Control, and the denominator of which is 36, and
(ii) a number of shares of Stock equal to the product of the Target Amount,
multiplied by the fraction resulting from one (1) minus the fraction set forth
in Section 3(h)(i) of this paragraph.  Subject to Section 3(k), all shares of
Stock to be issued to the Participant under this Section 3(h) as a result of the
Participant’s termination of Continuous Service after the effective date of the
Change in Control, if any, shall be issued to the Participant (or the
Participant’s designated beneficiary in the event of the Participant’s death) as
soon as practicable after the Participant’s Continuous Service is terminated but
in no event later than March 15 of the calendar year following the calendar year
in which the Participant’s Continuous Service is terminated.  If the Participant
becomes entitled to any shares of Stock under this Section 3(h), he or she shall
not be entitled to receive any shares of Stock under any other subsection of
this Section 3.

 

(i)            For purposes of this Agreement, the term “Change in Control”
shall mean the occurrence of any one of the following events:

 

(i)            any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing thirty-five percent (35%)
or more of the combined voting power of the Company’s then outstanding
securities eligible to vote for the election of the Board (the “Company Voting
Securities”); provided, however, that the event described in this paragraph
(i) shall not be deemed to be a Change in Control if such event results from the
acquisition of Company Voting Securities pursuant to a Non-Qualifying
Transaction (as defined in paragraph (iii) below);

 

(ii)           individuals who, on the Grant Date, constitute the Board (the
“Incumbent Directors”) cease for any reason to constitute at least a majority of
the Board; provided, however, that any person becoming a director subsequent to
the Grant Date, whose

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

6

--------------------------------------------------------------------------------

 

election or nomination for election was approved (either by a specific vote or
by approval of the proxy statement of the Company in which such person is named
as a nominee for director, without written objection to such nomination) by a
vote of at least two-thirds of the directors who were, as of the date of such
approval, Incumbent Directors, shall be an Incumbent Director; provided,
further, that no individual initially appointed, elected or nominated as a
director of the Company as a result of an actual or threatened election contest
with respect to the election or removal of directors or as a result of any other
actual or threatened solicitation of proxies or consents by or on behalf of any
person other than the Board shall be deemed to be an Incumbent Director;

 

(iii)          the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving (A) the Company or
(B) any of its wholly owned subsidiaries pursuant to which, in the case of this
clause (B), Company Voting Securities are issued or issuable (any event
described in the immediately preceding clause (A) or (B), a “Reorganization”) or
the sale or other disposition of all or substantially all of the assets of the
Company to an entity that is not an Affiliate of the Company (a “Sale”), unless
immediately following such Reorganization or Sale:  (1) more than 50% of the
total voting power (in respect of the election of directors, or similar
officials in the case of an entity other than a corporation) of (x) the Company
(or, if the Company ceases to exist, the entity resulting from such
Reorganization), or, in the case of a Sale, the entity which has acquired all or
substantially all of the assets of the Company (in either case, the “Surviving
Entity”), or (y) if applicable, the ultimate parent entity that directly or
indirectly has Beneficial Ownership of more than 50% of the total voting power
(in respect of the election of directors, or similar officials in the case of an
entity other than a corporation) of the Surviving Entity (the “Parent Entity”),
is represented by Company Voting Securities that were outstanding immediately
prior to such Reorganization or Sale (or, if applicable, is represented by
shares into which such Company Voting Securities were converted pursuant to such
Reorganization or Sale), (2) no Person is or becomes the Beneficial Owner,
directly or indirectly, of 35% or more of the total voting power (in respect of
the election of directors, or similar officials in the case of an entity other
than a corporation) of the outstanding voting securities of the Parent Entity
(or, if there is no Parent Entity, the Surviving Entity) and (3) at least a
majority of the members of the board of directors (or similar officials in the
case of an entity other than a corporation) of the Parent Entity (or, if there
is no Parent Entity, the Surviving Entity) following the consummation of the
Reorganization or Sale were, at the time of the approval by the Board of the
execution of the initial agreement providing for such Reorganization or Sale,
Incumbent Directors (any Reorganization or Sale which satisfies all of the
criteria specified in (1), (2) and (3) above being deemed to be a
“Non-Qualifying Transaction”); or

 

(iv)          the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, if any Person becomes the Beneficial Owner,
directly or indirectly, of 35% or more of the combined voting power of Company
Voting Securities solely as a result of the acquisition of Company Voting
Securities by the Company which reduces the number of Company Voting Securities
outstanding, such increased amount shall be deemed not

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

7

--------------------------------------------------------------------------------

 

to result in a Change in Control; provided, however, that if such Person
subsequently becomes the Beneficial Owner, directly or indirectly, of additional
Company Voting Securities that increases the percentage of outstanding Company
Voting Securities Beneficially Owned by such Person to a percentage equal to or
greater than 35, a Change in Control of the Company shall then be deemed to
occur.

 

(j)            For the purposes of Section 3(i) (and with respect to
Section 3(j)(i), for purposes of Section 1(f)), the following terms shall have
the following meanings:

 

(i)            “Affiliate” shall mean an affiliate of the Company, as defined in
Rule 12b-2 promulgated under Section 12 of the U.S. Securities Exchange Act of
1934, as amended from time to time (the “Exchange Act”);

 

(ii)           “Beneficial Owner” shall have the meaning set forth in Rule 13d-3
under the Exchange Act;

 

(iii)          “Person” shall have the meaning set forth in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (1) the Company or any of its
subsidiaries, (2) a trustee or other fiduciary holding securities under an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any of its subsidiaries, (3) an underwriter temporarily holding securities
pursuant to an offering of such securities, (4) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of shares of Stock or (5) the Participant or any
group of persons including the Participant, or any entity controlled by the
Participant or any group of persons including the Participant; provided the
Participant is an executive officer, director or more than 10% owner of Stock.

 

(k)           Notwithstanding anything in this Agreement to the contrary, if the
Participant is a “specified employee” (within the meaning of Section 409A of the
Code) and the issuance of the shares of Stock pursuant to Sections 3(c), 3(d),
3(g), or 3(h), clause (i) of the proviso in Section 3(e), or clause (A) of the
next to last sentence of Section 3(f) is considered to be a “deferral of
compensation” (as such phrase is defined for purposes of Section 409A of the
Code), then the Participant’s date of issuance of the shares of Stock shall be
the date that is the first day of the seventh month after the date of the
Participant’s “separation from service” with the Company (determined in
accordance with Section 409A of the Code).

 

(l)            For purposes of calculations made under this Section 3, results
shall be rounded to the nearest 100th using the common rounding method (i.e.,
increase the last digit by 1 if the next digit is 5 or more).

 

4.                                       Nontransferability of Grant

 

Except as otherwise provided herein or in the Plan, no Performance Share Units
shall be assigned, negotiated, pledged, or hypothecated in any way or be subject
to execution, attachment or similar process.  No transfer of the Participant’s
rights with respect to such Performance Share Units, whether voluntary or
involuntary, by operation of law or otherwise, shall be permitted.

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

8

--------------------------------------------------------------------------------

 

Immediately upon any attempt to transfer such rights, such Performance Share
Units, and all of the rights related thereto, shall be forfeited by the
Participant.

 

5.                                       Distribution and Voting Rights

 

Performance Share Units shall have no distribution, dividend or voting rights.

 

6.                                       Stock; Adjustment Upon Certain Events

 

(a)           Stock to be issued under this Agreement, if any, shall be made
available, at the discretion of the Board, either from authorized but unissued
Stock, from issued Stock reacquired by the Company or from Stock purchased by
the Company on the open market specifically for this purpose.

 

(b)           The existence of this Agreement and the Performance Share Units
granted hereunder shall not affect in any way the right or power of the Board or
the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company or any
affiliate, any issue of bonds, debentures, preferred or prior preference stocks
ahead of or affecting the Stock, the authorization or issuance of additional
shares of Stock, the dissolution or liquidation of the Company or any affiliate
or sale or transfer of all or part of the assets or business of the Company or
any affiliate, or any other corporate act or proceeding.

 

(c)           If an acquiring entity does not agree to the continuation and
future vesting of the Performance Share Units hereunder and other conditions
that apply in the event of a Change in Control, then the number of Performance
Share Units granted hereunder shall be fully vested upon a Change in Control.

 

(d)           In the event of any dividend or other distribution (whether in the
form of cash, Stock, or other property), recapitalization, Stock split, reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase,
or share exchange, or other similar corporate  transaction or event that affects
the Stock such that an adjustment is required in order to prevent dilution or
enlargement of the rights of holders of Performance Share Units under the Plan,
then the Committee shall make such equitable changes or adjustments to any or
all of (i) the number and kind of shares of Stock or other property (including
cash) that may thereafter be issued in connection with the Performance Share
Units granted under the Plan, (ii) the number and kind of shares of Stock or
other property (including cash) issued or issuable in respect of outstanding
Performance Share Units, (iii) performance targets, and (iv) any individual
limitations applicable to the Performance Share Units granted under the Plan.

 

7.                                       Determinations

 

The Committee (by proper delegation or otherwise) shall determine the extent to
which an award has been earned, if at all, in accordance with Section 3 of this
Agreement on or prior to the Determination Date.  Such determination and all
other determinations, interpretations or other actions made or taken pursuant to
the provisions of this Agreement by the Committee or the Board in good faith
shall be final, conclusive and binding for all purposes and upon all

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

9

--------------------------------------------------------------------------------

 

persons, including, without limitation, the Participant and the Company, and
their respective heirs, executors, administrators, personal representatives and
other successors in interest.

 

8.                                       Other Conditions

 

The transfer of any Stock under this Agreement, if any, shall be effective only
at such time as counsel to the Company shall have determined that the issuance
and delivery of such Stock is in compliance with all applicable laws,
regulations of governmental authority and the requirements of any securities
exchange on which Stock is traded.

 

9.                                       Withholding Taxes

 

The Participant shall be liable for any and all taxes and contributions of any
kind required by law to be withheld with respect to the delivery of any shares
of Stock under this Agreement.  The Participant agrees that the Participant’s
employer may, in its discretion, (a) require the Participant to remit to the
Company on the date on which the Participant becomes the owner of shares of
Stock under this Agreement cash in an amount sufficient to satisfy all
applicable required withholding taxes and social security contributions related
to such vesting, (b) deduct from his or her regular salary payroll cash, on a
payroll date coincident with or following the date on which the Participant
becomes the owner of shares of Stock under this Agreement, in an amount
sufficient to satisfy such obligations, or (c) withhold from the total number of
shares of Stock the Participant is to receive on a determination date a number
of shares that has a total value equal to the amount necessary to satisfy any
and all such withholding tax obligations.

 

10.                                 Distribution of Stock

 

Subject to Section 8, the Company shall cause the Participant to be the record
owner of any shares of Stock to which the Participant becomes entitled to
receive under this Agreement in accordance with the payment terms described in
Section 3.

 

11.                                 Incorporation of the Plan

 

The Plan, as it exists on the date of this Agreement and as amended from time to
time, is hereby incorporated by reference and made a part hereof, and the
Performance Share Units and this Agreement shall be subject to all terms and
conditions of the Plan.  In the event of any conflict between the provisions of
this Agreement and the provisions of the Plan, the terms of the Plan shall
control, except as expressly stated otherwise.

 

12.                                 Miscellaneous

 

(a)           This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, personal legal representatives,
successors, trustees, administrators, distributees, devisees and legatees.  The
Company shall assign to, and require, any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree in
writing to perform this Agreement.  Notwithstanding the foregoing, this
Agreement may not be assigned by the Participant.

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

10

--------------------------------------------------------------------------------

 

(b)           The Participant acknowledges that the Company intends for the
information contained in Section 1(p) and Exhibit 1 hereof to remain
confidential.  Notwithstanding any other provision hereof, the Participant’s
entitlement to any award or payment hereunder is contingent upon the Participant
maintaining the confidentiality of the information contained in Section 1(p) and
Exhibit 1.  The Participant agrees that he or she shall not disclose or cause
the disclosure of such information and shall hold such information confidential.

 

(c)           No modification or waiver of any of the provisions of this
Agreement shall be effective unless in writing and signed by the party against
whom it is sought to be enforced.  To the extent applicable, it is intended that
this Agreement comply with the provisions of Section 409A of the Code, so that
the income inclusion provisions of Section 409A(a)(1) of the Code do not apply
to the Participant.  This Agreement shall be administered in a manner consistent
with this intent.  References to Section 409A of the Code will also include any
regulations or any other formal guidance promulgated with respect to such
Section by the U.S. Department of the Treasury or the Internal Revenue Service.

 

(d)           This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one agreement.

 

(e)           The failure of any party hereto at any time to require performance
by another party of any provision of this Agreement shall not affect the right
of such party to require performance of that provision, and any waiver by any
party of any breach of any provision of this Agreement shall not be construed as
a waiver of any continuing or succeeding breach of such provision, a waiver of
the provision itself, or a waiver of any right under this Agreement.

 

(f)            The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall in no way restrict or modify any of
the terms or provisions hereof.

 

(g)           The Company shall pay all fees and expenses necessarily incurred
by the Company in connection with this Agreement and will from time to time use
its reasonable efforts to comply with all laws and regulations which, in the
opinion of counsel to the Company, are applicable thereto.

 

(h)           All notices, consents, requests, approvals, instructions and other
communications provided for herein shall be in writing and validly given or made
when delivered, or on the second succeeding business day after being mailed by
registered or certified mail, whichever is earlier, to the persons entitled or
required to receive the same, at the addresses set forth at the heading of this
Agreement or to such other address as either party may designate by like
notice.  Notices to the Company shall be addressed to its principal office,
attention of the Company’s General Counsel.

 

(i)            The Plan and this Agreement constitute the entire Agreement and
understanding between the parties with respect to the matters described herein
and supersede all prior and contemporaneous agreements and understandings, oral
and written, between the parties with respect to such subject matter.

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

11

--------------------------------------------------------------------------------

 

(j)            This Agreement shall be governed and construed and the legal
relationships of the parties determined in accordance with the laws of the state
of Delaware without reference to principles of conflict of laws.

 

(k)           The Company represents and warrants that it is duly authorized by
its Board and/or the Committee (and by any other person or body whose
authorization is required) to enter into this Agreement, that there is no
agreement or other legal restriction which would prevent it from entering into,
and carrying out its obligations under, this Agreement, and that the officer
signing this Agreement is duly authorized and empowered to sign this Agreement
on behalf of the Company.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

PRICELINE.COM INCORPORATED

 

 

Jeffery Boyd
Chief Executive Officer

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

12

--------------------------------------------------------------------------------

 

Exhibit 1

 

The Performance Share Unit number shall be determined in accordance with the
following chart if, prior to January 1, 2011, the Six-Month Date occurs or the
Participant’s Continuous Service terminates.  If the Six-Month Date occurs or
the Participant’s Continuous Service terminates on or after January 1, 2011, the
Performance Share Unit number shall be determined in accordance with the table
in Section 1(p) hereof.  Upon any date of determination before January 1, 2011
as set forth in the Agreement, the Participant’s Performance Share Unit number
shall be determined as of the most recently completed fiscal quarter for the
period commencing January 1, 2008.  Such Performance Share Unit number shall be
equal to the product of (1) the Target Amount, multiplied by either (2)(a) the
sole Mid-Period Vesting Factor under the column with the heading “Mid-Period
Vesting Factor Ranges” in the chart below corresponding to the actual Cumulative
Adjusted Consolidated EBITDA per applicable quarter for which the determination
is made or (b) the sum of (i) the lowest Mid-Period Vesting Factor in the
applicable Mid-Period Vesting Factor Range corresponding to the actual
Cumulative Adjusted Consolidated EBITDA per applicable quarter for which the
determination is made, plus (ii) the ProRata Mid-Period Vesting Factor Increase.

 

All amounts are in millions of U.S. dollars.

 

Cumulative
Adjusted Consolidated EBITDA
per
specified
quarter

 

4th fiscal
quarter
completed since
l/l/08

 

5th fiscal
quarter
completed since
1/l/08

 

6th fiscal
quarter
completed
since
1/1/08

 

7th fiscal
quarter
completed
since
1/1/08

 

8th fiscal
quarter
completed
since
l/l/08

 

9th fiscal
quarter
completed
since
1/1/08

 

10th fiscal
quarter
completed
since
1/1/08

 

11th fiscal
quarter
completed
since
1/1/08

 

Mid-Period Vesting
Factor Ranges
(Earned
shares as a
factor of the
Target
Amount)

 

Less than

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

Equals Zero

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equal to or greater than

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

Equals Zero to 1x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

But less than

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equal to or greater than

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

Equals 1x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

But less than

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equal to or greater than

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

Equals 1x to 2x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

But less than

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equal to or greater than

 

[***]

 

[***]

 

[***]

 

[***]

 

 

[***]

 

[***]

 

[***]

 

[***]

 

Equals 2x

 

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

13

--------------------------------------------------------------------------------

 

The “ProRata Mid-Period Vesting Factor Increase” means the quotient of (1) the
excess of the actual Cumulative Adjusted Consolidated EBITDA over the lowest
Cumulative Adjusted Consolidated EBITDA within the specified range per the
applicable quarter for which the determination is made, divided by (2) the
result of a fraction, the numerator of which is the difference between the
lowest and highest Cumulative Adjusted Consolidated EBITDA within such specified
range per the applicable quarter for which the determination is made, and the
denominator of which is the difference between the lowest and highest specified
Mid-Period Vesting Factor for such quarter.

 

EXAMPLES

 

[***]

 

--------------------------------------------------------------------------------

[***] = CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION; REDACTED PORTION
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

 

14

--------------------------------------------------------------------------------