Exhibit 10.1

priceline.com Incorporated

Annual Bonus Plan

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TABLE OF CONTENTS

 

 

 

Page

Section 1 - Establishment Of the Plan

 

1

1.01

 

Purpose

 

1

1.02

 

Effective Date

 

1

 

 

 

 

 

Section 2 - Definitions

 

1

2.01

 

Bonus

 

1

2.02

 

Bonus Classification

 

1

2.03

 

Bonus Formula

 

1

2.04

 

Board

 

1

2.05

 

CEO

 

1

2.06

 

Committee

 

2

2.07

 

Corporation

 

2

2.08

 

Eligible Employee

 

2

2.09

 

Entitled Employee

 

2

2.10

 

Performance Measure

 

2

2.11

 

Performance Period

 

2

2.12

 

Plan

 

2

 

 

 

 

 

Section 3 - Participation

 

3

3.01

 

Participation Requirements

 

3

 

 

 

 

 

Section 4 - Bonus

 

3

4.01

 

Eligibility

 

3

4.02

 

Determination of Bonuses

 

3

4.03

 

Limitation of Bonuses and General Discretion

 

3

4.04

 

Bonus Payments

 

4

 

 

 

 

 

Section 5 - Administration of the Plan

 

4

5.01

 

Administration

 

4

5.02

 

Right to Receive Payment

 

4

 

 

 

 

 

Section 6 - Provisions

 

4

6.01

 

Amendment or Termination

 

4

6.02

 

Effect of Amendment or Termination

 

5

6.03

 

No Enlargement of Contractual Rights

 

5

6.04

 

Interpretation

 

5

6.05

 

Withholding of Taxes

 

5

6.06

 

Binding on Successors

 

5

6.07

 

Currency

 

5

 

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SECTION 1  —  Establishment Of the Plan

1.01  Purpose

This Plan is established for the purpose of rewarding employees on an annual
basis for their efforts and contributions in the attainment of certain
performance measures that contribute materially to the success of the business
interests of priceline.com Incorporated.

1.02  Effective Date

Subject to Section 7.02 (Amendment or Termination), this Plan shall be effective
on and after January 30, 2007.

SECTION 2  —  Definitions

The following terms, when capitalized, shall be defined as follows:

2.01  Bonus

“Bonus” means, as to an Eligible Employee, a cash payment determined pursuant to
the Bonus Formula, as determined in Section 4.

2.02  Bonus Classification

“Bonus Classification” means, for any Performance Period, a classification of
employees to which the Committee assigns a Bonus Formula.

2.03  Bonus Formula

“Bonus Formula” means, as to any Performance Period, the formula established by
the Committee with respect to the CEO, and by the CEO or the Committee with
respect to other Entitled Employees, to determine the amounts available for
Bonuses and the Bonus amounts, if any, to be paid to Entitled Employees based
upon such compensation as the Committee may determine and the level of
achievement of targeted goals for the selected Performance Measures.  The
formula may differ from Entitled Employee to Entitled Employee or from Bonus
Classification to Bonus Classification.

2.04  Board

“Board” means the Board of Directors of priceline.com Incorporated.

2.05  CEO

“CEO” means the Chief Executive Officer of priceline.com Incorporated.

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2.06  Committee

“Committee” means the Compensation Committee of the Board.

2.07  Corporation

“Corporation” means priceline.com Incorporated and its direct and indirect
subsidiaries.

2.08  Eligible Employee

“Eligible Employee” means an employee who has satisfied the eligibility
requirements set out in Section 4.01 (Eligibility).

2.09  Entitled Employee

“Entitled Employee” means the CEO and any Eligible Employee who is recommended
by the CEO and approved by the Committee to participate in this Plan.

2.10  Performance Measure

“Performance Measure” means, for any Performance Period, any performance
criteria as specified and approved by the Committee.  The performance criteria
may be applied either individually, alternatively, or in any combination and
measured on an absolute basis or relative to a pre-established target as may be
specified and approved by the Committee.  The performance criteria may include
the following measures, among others:  return on invested capital, net operating
profit (before or after tax), operating profit margin, gross margin, operating
profit, earnings before income taxes, earnings before interest, income taxes,
depreciation and amortization (“EBITDA”), “pro forma” EBITDA, “pro forma” net
income per share (on a United States Generally Accepted Accounting Principles
(“GAAP”) or non-GAAP basis), growth in any of the foregoing measures, stock
price, return on equity or average shareholders’ equity, total shareholder
return, growth in shareholder value relative to a moving average of a selected
index, return on capital, return on assets or net assets, return on investment,
economic value added, market shares, overhead or other expense reduction, credit
rating, strategic plan development and implementation, succession plan
development and implementation, improvement in workforce, diversity, customer
indicators, improvements in productivity, attainment of objective operating
goals and employee metrics.

2.11  Performance Period

“Performance Period” means the period of time designated by the Committee during
which the Performance Measures are measured for purposes of determining a Bonus.

2.12  Plan

“Plan” means this Annual Bonus Plan, as amended from time to time.

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SECTION 3  —  Participation

3.01  Participation Requirements

Participation in the Plan is limited to Eligible Employees.

SECTION 4  —  Bonus

4.01  Eligibility

An employee of the Corporation who is employed for at least three months during
a year, and who is in the employ of the Corporation at the time Bonus amounts
are paid shall become an Eligible Employee.  The Committee may determine that
employees not meeting the above criteria are Eligible Employee’s in their sole
discretion.

4.02  Determination of Bonuses

Within 60 days after the end of the year, the Committee shall designate and
approve the following:

(a)                                  Performance Period;

(b)                                 Positions or names of employees, including
the CEO, who will be Entitled Employees for the Performance Period;

(c)                                  Targeted goals for selected Performance
Measures during the Performance Period; and

(d)                                 Applicable Bonus Formula for the CEO and
each Entitled Employee, which may be for an individual or a group of Entitled
Employees.

4.03  Limitation of Bonuses and General Discretion

(a)                                  The Bonus for any Entitled Employee may
exceed or be below the amount calculated in accordance with this Section 4 as
determined by the Committee in their sole discretion.

(b)                                 An Entitled Employee who, whether
voluntarily or involuntarily, is terminated, demoted, transferred or otherwise
ceases to be an Entitled Employee at any time prior to the payment of Bonuses
for any Performance Period in accordance with Section 4.03 (Bonus Payments)
shall not be eligible to receive a partial or full Bonus award with respect to
such Performance Period, unless otherwise specifically determined by the
Committee.

(c)                                  An Entitled Employee who was, during a
year, promoted to a position included in a Bonus Classification established by
the Committee, shall have his or her Bonus prorated in accordance with the
period of time he or she held such position.

(d)                                 An Entitled Employee who was, during a year,
promoted from one Bonus Classification to another Bonus Classification, shall
have his or her Bonus prorated in accordance with the period of time he or she
was in each Bonus Classification.

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(e)                                  Notwithstanding the Bonus Classifications
established by the Committee, the Committee may, designate an Eligible Employee
for inclusion in one of such Bonus Classifications when, but for such
designation, the Eligible Employee would not otherwise be included in such Bonus
Classification.

4.04  Bonus Payments

The Committee shall, within 60 days after the end of a Performance Period,
determine and approve in their sole and absolute discretion the amount of
Bonuses, if any, for each Entitled Employee for any given Performance Period. 
The Bonuses shall be paid to Entitled Employees at the direction of the
Committee, provided that such payments shall be paid no later than 2-1/2 months
after the end of the calendar year in which such Bonuses are earned.

SECTION 5  —  Administration of the Plan

5.01  Administration

The Committee (or its delegates) shall be responsible for the general
administration and interpretation of this Plan and for carrying out its
provisions, including the authority to construe and interpret the terms of this
Plan, determine the manner and time of payment of any Bonuses, prescribe forms
and procedures for purposes of Plan participation and distribution of Bonuses
and adopt rules, regulations and to take such action as it deems necessary or
desirable for the proper administration of this Plan.  The Committee (or its
delegates) may employ attorneys, consultants, accountants, agents, and other
individuals, any of whom may be an employee, and the Committee, the Corporation,
and its officers and directors shall be entitled to rely upon the advice,
opinions, or valuations of any such individuals. All actions taken and all
interpretations and determinations made by the Committee shall be made in the
Committee’s sole discretion and shall be final and binding upon the
participants, the Corporation, and all other interested individuals. To the
extent applicable, the Plan shall be administered with respect to individuals
subject to the laws of the U.S. so as to avoid the application of penalties
pursuant to Section 409A of the Internal Revenue Code.

5.02  Right to Receive Payment

This Plan does not constitute a promise to pay and nothing in this Plan shall be
construed to create a trust or to establish or evidence any Entitled Employees’
claim of any right to payment of a Bonus. Each Bonus under this Plan shall be
paid solely from general assets of the Corporation.  This Plan is unfunded and
unsecured.

SECTION 6  —  Provisions

6.01  Amendment or Termination

Subject to Section 6.02 (Effect of Amendment or Termination), this Plan may be
amended in whole or in part from time to time or terminated by the Corporation. 
Any amendment or termination shall be binding on the Corporation, Entitled
Employees, Eligible Employees and their respective beneficiaries.

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6.02  Effect of Amendment or Termination

Notwithstanding Section 6.01 (Amendment or Termination), no amendment or
termination of any provision of this Plan shall directly or indirectly deprive
any Entitled Employee or beneficiary of all or any portion of a Bonus payable
with respect to any Performance Period ending prior to the date of the amendment
or termination.

6.03  No Enlargement of Contractual Rights

This Plan shall not give any Entitled Employee or Eligible Employee the right to
be retained in the service of the Corporation nor shall it interfere with the
right of the Corporation to terminate the employment of the Entitled Employee or
Eligible Employee.  Participation in this Plan shall not give any Entitled
Employee or Eligible Employee any right or claim to any benefit, except to the
extent provided in this Plan.

6.04  Interpretation

This Plan shall be interpreted pursuant to the laws of the State of
Connecticut.  Section headings are for convenience only and shall not be
considered provisions of the Plan.  Words in the singular shall include the
plural, and vice versa, unless qualified by the context.

6.05  Withholding of Taxes

The Corporation shall withhold all applicable taxes from any amounts paid
pursuant to this Plan.

6.06  Binding on Successors

This Plan shall be binding on any successor or successors of priceline.com
Incorporated whether by merger, consolidation or otherwise.

6.07  Currency

The benefits payable pursuant to this Plan shall be paid in the same currency as
the Entitled Employee receives his or her regular wages or salary.

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