Exhibit 10.1

 

October 19, 2005

 

Daniel Finnegan

c/o priceline.com Incorporated

800 Connecticut Avenue

Norwalk, CT 06854

 

Dear Dan;

 

Congratulations on your promotion to Senior Vice President, Controller and Chief
Accounting Officer. In connection with your promotion and as consideration for
your execution of the Non-Competition and Non-Solicitation Agreement attached as
Exhibit A, we would like to provide you with the following severance agreement
(the “Agreement”).

 

If (i) you terminate your employment with priceline.com Incorporated (the
“Company”) for Good Reason (as defined below) or (ii) your employment with the
Company is terminated by the Company without Cause (as defined below), you shall
be entitled to receive, (A) over a period of twelve (12) months after such
termination an amount equal to one (1) times the sum of your base salary and
target bonus, if any, for the year in which such termination occurs (provided,
however, in the event that the base salary or target bonus, if any, has been
decreased in the twelve (12) months prior to the termination, the amount to be
used shall be the highest base salary and target bonus, if any, during such
twelve (12) month period); (B) any Accrued Amounts (as defined below) at the
date of termination; (C) any other amounts or benefits owing to you under the
then applicable employee benefit, long term incentive or equity plans and
programs of the Company, which shall be paid or treated in accordance with the
terms of such plans and programs; (D) continuation for twelve (12) months
following such termination of employment of group health, life and disability
insurance benefits as if you were an employee of the Company; and (E) if a bonus
plan is in place, the product of (x) the target annual bonus for the fiscal year
of your termination, multiplied by (y) a fraction, the numerator of which is the
number of days of the current fiscal year during which you were employed by the
Company, and the denominator of which is 365, which bonus shall be paid when
bonuses for such period are paid to the other executives.

 

A termination for Good Reason means a termination by you by written notice given
within ninety (90) days after the occurrence of the Good Reason event, unless
such circumstances are fully corrected prior to the date of termination
specified in the Notice of Termination for Good Reason (as defined below).

 

A “Notice of Termination for Good Reason” shall mean a notice that shall
indicate the specific termination provision specified in the definition of Good
Reason below relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination for Good Reason.  Your
failure to set forth in the Notice of Termination for Good Reason any facts or
circumstances which contribute to the showing of Good Reason shall not waive any
of your rights hereunder or preclude you from asserting such fact or
circumstance in enforcing your rights hereunder.  The Notice of Termination for
Good Reason shall provide for a date of termination not less than ten (10) nor
more than sixty (60) days after the date such Notice of Termination for Good
Reason is given.

 

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“Accrued Amounts” shall mean any compensation earned but not yet paid, including
and without limitation, any bonus if declared or earned but not yet paid for a
completed fiscal year, any amount of base salary earned but unpaid, any accrued
vacation pay payable pursuant to the Company’s policies, and any unreimbursed
business expenses.

 

“Cause,” as used in this Agreement, shall be limited to (i) willful misconduct
by you with regard to the Company which has a material adverse effect on the
Company; (ii) your willful refusal to attempt to follow the proper written
direction of the Board of Directors (the “Board”), the Chief Executive Officer,
or the Chief Financial Officer of the Company, provided that the foregoing
refusal shall not be “Cause” if you in good faith believe that such direction is
illegal, unethical or immoral and promptly so notify the Board, the Chief
Executive Officer, or the Chief Financial Officer of the Company (whichever is
applicable); (iii) substantial and continuing willful refusal by you to attempt
to perform the duties required of you hereunder (other than any such failure
resulting from incapacity due to physical or mental illness) after a written
demand for substantial performance is delivered to you by the Board, Chief
Executive Officer, or the Chief Financial Officer of the Company which
specifically identifies the manner in which it is believed that you have
substantially and continually refused to attempt to perform your duties
hereunder; or (iv) your being convicted of a felony (other than a felony
involving a traffic violation or as a result of vicarious liability).  For
purposes of this paragraph, no act, or failure to act, on your part shall be
considered “willful” unless done or omitted to be done, by you not in good faith
and without reasonable belief that your action or omission was in the best
interest of the Company.

 

“Good Reason,” as used in this Agreement, shall mean the occurrence or failure
to cause the occurrence, as the case may be, without your express written
consent, of any of the following circumstances:  (i) any material diminution of
your positions, duties or responsibilities (except in connection with the
termination of your employment for Cause or as a result of your death, or
temporarily as a result of your illness or other absence); (ii) a 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 your residence at the time of relocation; (iii) any material
breach by the Company of any provision of this Agreement; or (iv) failure of any
successor of the Company (whether direct or indirect and whether by merger,
acquisition, consolidation or otherwise) to assume in a writing delivered to you
upon the assignee becoming such, the obligations of the Company hereunder.

 

For purposes of this Agreement, a bonus in respect of services performed in a
fiscal year shall not be considered to be earned until after the Compensation
Committee of the Board (the “Committee”) and/or the Board, as applicable, has
reviewed the Company’s performance and your performance in respect of such year
and has determined the amount of the bonus, if any, to be payable to you in
respect of such year’s performance; provided, however, that if you are still
employed by the Company as of December 31 of any year, you shall be considered
to have earned the bonus in respect of services performed in such year (to the
extent that the Committee and/or the Board determine that such bonus

 

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would otherwise have been payable to you had you remained employed through the
relevant payment date for such bonus) unless your employment is subsequently
terminated by the Company for Cause or by you without Good Reason.

 

Notwithstanding any other provision contained in this Agreement to the contrary,
the parties shall, in good faith, take any and all reasonable actions necessary
to amend this Agreement to the extent necessary to comply with the requirements
under Section 409A of the Internal Revenue Code of 1986, as amended, in order to
ensure that any amounts paid or payable hereunder are not subject to any
additional income taxes thereunder while maintaining to the maximum extent
practicable the original intent of this Agreement.

 

Finally, when you joined the Company, you received a grant of 40,000
non-qualified stock options to purchase the Company’s common stock, par value,
$0.008 per share  (the “New Hire Stock Options”), and, in connection with your
promotion to Senior Vice President, Controller and Chief Accounting Officer, you
received a grant of 35,000 non-qualified stock options to purchase the Company’s
common stock, par value, $0.008 per share (the “Promotion Stock Options” and,
together with the New Hire Stock Options, the “Options”), each option grant with
the terms and conditions set forth in the Company’s 1999 Omnibus Plan, as
amended.  The New Hire Stock Options shall continue to have, and the Promotion
Stock Options shall have, the following accelerated vesting provisions: upon the
occurrence of a Change in Control (as defined below), the Options will become
fully exercisable and vested on the date that is six (6) months from the date of
the Change in Control; provided that you are (a) employed by the Company on the
date of the Change in Control and (b) employed by the Company on the date that
is six (6) months from the date of the Change in Control.  In the event that you
are terminated by the Company without Cause (as defined above) within six
(6) months following a Change in Control, the Options will become fully
exercisable and vested and will remain exercisable until the date that is six
(6) months after such termination, on which date they shall expire.  “Change in
Control” has the meaning assigned to it in priceline.com’s 1999 Omnibus Plan, as
amended; provided, however, that the beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended from time to
time) or acquisition of the Company’s securities by Hutchison Whampoa Limited
and/or Cheung Kong (Holdings) Limited shall not give rise to a Change in
Control.

 

This Agreement replaces and supersedes the terms of the offer of employment,
dated April 14, 2004, in its entirety.

 

Thank you for your hard work and dedication to the Company.

 

Warm regards,

Acknowledged and Agreed:

 

 

/s/ Robert J. Mylod Jr.

 

/s/ Daniel Finnegan

 

Robert J. Mylod Jr.

Daniel Finnegan

 

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Exhibit A

 

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

This Non-Competition and Non-Solicitation Agreement (the “Agreement”) is dated
October 19, 2005 by and between priceline.com Incorporated, a Delaware
corporation (the “Company”), and Daniel Finnegan (the “Employee”).

 

The parties, intending to be legally bound, agree as follows:

 

1.                                      ACKNOWLEDGEMENTS

 

(a)                                  The Employee acknowledges that the Company
has expended and shall continue to expend substantial amounts of time, money and
effort to develop business strategies, employee and customer relationships and
goodwill and build an effective organization.  The Employee acknowledges that
the Employee is and shall become familiar with the Company’s confidential
information, including trade secrets, and that the Employee’s services are of
special, unique and extraordinary value to the Company, its subsidiaries and
Affiliates (as defined below).  The Employee acknowledges that the Company has a
legitimate business interest and right in protecting its confidential
information, business strategies, employee and customer relationships and
goodwill, and that the Company would be seriously and irreparably damaged by the
disclosure of confidential information and the loss or deterioration of its
business strategies, employee and customer relationships and goodwill.  For
purposes of this Agreement, “Affiliate” means, with respect to any specified
person or entity, any other person or entity that directly or indirectly,
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, such specified person or entity; and “Control” (including,
with correlative meanings, the terms “Controlled by” and “under common Control
with”), as used with respect to any person or entity, means the direct or
indirect possession of the power to direct or cause the direction of the
management or policies of such person or entity, whether through the ownership
of voting securities, by contract or otherwise.

 

(b)                                 The Employee acknowledges (i) that the
business of the Company, its subsidiaries and Affiliates will be global in scope
and without geographical limitation and (ii) notwithstanding the jurisdiction of
formation or principal office of the Company, its subsidiaries and Affiliates,
or any of their respective executives or employees (including, without
limitation, the Employee), it is expected that the Company and its subsidiaries
and Affiliates will have business activities and have valuable business
relationships within its industry throughout the world.  In addition, the
Employee agrees and acknowledges that the potential harm to the Company of the
non-enforcement of Section 2, 3 or 4 outweighs any potential harm to the
Employee of its enforcement by injunction or otherwise.

 

(c)                                  The Employee acknowledges that he has
carefully read this Agreement and has given careful consideration to the
restraints imposed upon the Employee by this Agreement, and is in full accord as
to their necessity for the reasonable and proper protection of the confidential
information, business strategies, employee and customer relationships and
goodwill of the Company and its subsidiaries and Affiliates now existing or to
be developed in the future.  The Employee expressly acknowledges and agrees
that, especially given the nature and scope of the Company’s business, each and
every restraint imposed by this Agreement is reasonable with respect to subject
matter, time period and geographical area.  The Employee further acknowledges
that although the Employee’s compliance with the covenants contained in Sections
2, 3 and 4 may prevent the Employee from earning a livelihood in a business
similar to the business of the Company, the Employee’s experience and
capabilities are such that the Employee has, and will likely continue to have,
other opportunities to earn a comparable livelihood and means of support for the
Employee and the Employee’s dependents.

 

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2.                                      NON-COMPETITION AND NON-SOLICITATION

 

(a)                                  The Employee agrees that the Employee shall
not, while an employee of the Company, and for the duration of the Restriction
Period (as defined below), directly or indirectly, without the prior written
consent of the Company:

 

(i)                                     (A)                              engage
in any activities, in any capacity, for or on behalf of or invest in any of the
following companies or their successors:  (i) any travel businesses of
InterActive Corporation; (ii) Expedia, Hotels.com & Hotwire; (iii) Sabre Group
and Travelocity; (iv) Lastminute.com plc; (v) the following companies or
divisions owned or controlled by Cendant’s Travel Distribution Services (a
subsidiary of Cendant Corporation):  Orbitz, CheapTickets, Lodging.com, the Neat
Group and Galileo; (vi) the following on-line travel aggregators: SideStep, Inc.
(owner and operator of the website SideStep.com), Mobissimo, Inc. (owner and
operator of the website Mobissimo.com), Cheapflights Limited (owner and operator
of the website Cheapflights.com), Farechase, Kayak.com, or any substantially
similar on-line travel search business; and (vii) on-line travel search
businesses of Yahoo!, MSN, AOL or Google;

 

(B)                                solicit or attempt to solicit any customer or
client or actively sought prospective customer or client of the Company or any
of its subsidiaries or Affiliates, with respect to the businesses actively
operated by the Company or any of its subsidiaries or Affiliates (it being
intended that businesses owned but not operated by the Company or any of its
subsidiaries or Affiliates, such as, as of the date hereof, the Company’s
mortgage business, are not to be covered by this clause (B)), to purchase any
travel related goods or services of the type sold by the Company or any of its
subsidiaries or Affiliates from anyone other than the Company or any of its
subsidiaries or Affiliates; provided, however, that the general advertisement
(which shall include, but not be limited to, acting on behalf of an advertising
agency or advertising network) for goods or services, other than on behalf of an
entity identified in Section 2(a)(i)(A) (i) through (vii) above, shall not
violate the terms of this Section 2(a)(i)(B); or

 

(C)                                assist any person or entity in any way to do,
or attempt to do, anything prohibited by (A) or (B) above; or

 

(ii)                                  (A)                              solicit,
recruit or hire to work for you or any organization with which you are
connected, any employees of the Company or any of its subsidiaries or Affiliates
or any persons who, within one (1) year of such solicitation, recruitment or
hire, have worked for the Company or any of its subsidiaries or Affiliates;

 

(B)                                solicit or encourage any employee of the
Company or any of its subsidiaries or Affiliates to leave the services of the
Company or any of its subsidiaries or Affiliates; and

 

(C)                                intentionally interfere with the relationship
of the Company or any of its subsidiaries or Affiliates with any person who or
which is employed by or otherwise engaged to perform services for the Company or
any of its subsidiaries or Affiliates; provided, that neither (1) the general
advertisement for employees or the general solicitation of employees by a
recruiter nor (2) the Employee’s being named as an employment reference for a
current or former employee of the Company and responding to ordinary course
inquiries made of the Employee by prospective employers of such employee in
connection with such reference, shall be deemed a violation of this clause (ii).

 

The “Restriction Period” means the one-year period following the cessation of
the Employee’s employment with the Company for any reason.  The Restriction
Period shall be tolled during (and shall be deemed automatically extended by)
any period in which the Employee is in violation of the provisions of this
Section 2.

 

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(b)                                 Notwithstanding anything to the contrary
contained in this Agreement, the foregoing covenant will not be deemed breached
as a result of the Employee’s passive ownership of less than an aggregate of 5%
of any class of securities of any entity listed in Section 2(a)(i)(A); provided,
however, that such stock is listed on a national securities exchange or is
quoted on the National Market System of NASDAQ.

 

(c)                                  If a final and non-appealable judicial
determination is made that any of the provisions of this Section 2 constitutes
an unreasonable or otherwise unenforceable restriction against the Employee, the
provisions of this Section 2 will not be rendered void but will be deemed to be
modified to the minimum extent necessary to remain in force and effect for the
longest period and largest geographic area that would not constitute such an
unreasonable or unenforceable restriction.  Moreover, notwithstanding the fact
that any provision of this Section 2 is determined not to be enforceable in
equity, the Company will nevertheless be entitled to recover monetary damages as
a result of the Employee’s breach of such provision.

 

3.                                      INTENTIONALLY OMMITTED

 

4.                                      NONDISPARAGEMENT

 

While an employee of the Company, and for the one-year period following
cessation of the Employee’s employment with the Company for any reason, the
Employee shall not publicly or, in a manner that is intended to become public,
make any statements, written or oral, which disparage or defame the goodwill or
reputation of the Company, or its directors or senior officers.

 

5.                                      NOTIFICATION OF SUBSEQUENT EMPLOYER

 

The Employee hereby agrees that prior to accepting employment with any other
person or entity during any period during which the Employee remains subject to
any of the covenants set forth in Section 2, the Employee shall provide such
prospective employer with written notice of such provisions of this Agreement,
with a copy of such notice delivered simultaneously to the Company.

 

6.                                      REMEDIES AND INJUNCTIVE RELIEF

 

The Employee acknowledges that a violation by the Employee of any of the
covenants contained in Section 2, 3 or 4 would cause irreparable damage to the
Company in an amount that would be material but not readily ascertainable, and
that any remedy at law (including the payment of damages) would be inadequate. 
Accordingly, the Employee agrees that, notwithstanding any provision of this
Agreement to the contrary, the Company shall be entitled (without the necessity
of showing economic loss or other actual damage) to injunctive relief (including
temporary restraining orders, preliminary injunctions and/or permanent
injunctions) in any court of competent jurisdiction for any actual or threatened
breach of any of the covenants set forth in Section 2, 3 or 4 in addition to any
other legal or equitable remedies it may have.  The preceding sentence shall not
be construed as a waiver of the rights that the Company may have for damages
under this Agreement or otherwise, and all of the Company’s rights shall be
unrestricted.

 

7.                                      CONSIDERATION

 

In consideration for the Employee’s agreement to comply with this Agreement and
covenants herein, the adequacy of which is hereby acknowledged by the Employee,
the Company has offered the Employee continued employment with the Company and a
severance agreement.

 

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8.                                      MISCELLANEOUS

 

(a)                                  Notices.  All notices, consents, waivers,
and other communications under this Agreement must be in writing and will be
deemed given to a party when (i) delivered to the appropriate address by hand or
by nationally recognized overnight courier service (costs prepaid, with written
confirmation of receipt); (ii) sent by facsimile with written confirmation of
transmission by the transmitting equipment, provided that a copy is sent by
certified mail, return receipt requested; or (iii) received or rejected by the
addressee, if sent by certified mail, return receipt requested; in each case to
the following addresses or facsimile numbers and marked to the attention of the
individual (by name or title) designated below (or to such other address,
facsimile number, or individual as a party may designate by notice to the other
parties):

 

(i)

if to the Company, to:

 

 

 

priceline.com Incorporated

 

800 Connecticut Avenue

 

Norwalk, CT 06854

 

Att: Peter J. Millones, Executive Vice President and General Counsel

 

Fax: 203-299-8915

 

 

(ii)

if to Employee, to Employee’s address on the books and records of the Company
from time to time

 

or such other addresses as the parties may have furnished to each other pursuant
to the provisions of this Section.

 

(b)                                 Entire Agreement and Modification.  This
Agreement supersedes all prior agreements between the parties with respect to
its subject matter, and constitutes a complete and exclusive statement of the
terms of the agreement between the parties with respect to its subject matter.
This Agreement may not be amended, supplemented or otherwise modified except by
a written agreement executed by the parties.

 

(c)                                  Construction.  In this Agreement, the word
“including” indicates examples of a foregoing general statement and not a
limitation on that general statement.  No provision of this Agreement will be
interpreted for or against any party because that party or its legal
representative drafted the provision.

 

(d)                                 Assignments.  The Company may assign this
Agreement or any of its rights and duties hereunder, without Employee’s consent,
to any subsidiary or affiliate of the Company or any person or entity which
acquires all or substantially all of the assets or business of the Company or
any of the Company’s divisions.  This Agreement is personal to Employee and may
not be assigned by Employee.  Subject to the foregoing, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of
Employee’s heirs, executors, and administrators and the Company’s successors and
permitted assigns.

 

(e)                                  Waiver.  The parties’ rights hereunder are
cumulative and not alternative.  Neither the failure nor any delay by any party
in exercising any right, power, or privilege hereunder will operate as a waiver
of such right, power, or privilege, and no single or partial exercise of any
such right, power, or privilege will preclude any other or further exercise of
such right, power, or privilege or the exercise of any other right, power, or
privilege.  To the maximum extent permitted by applicable law:  (i) no claim or
right arising out of this Agreement can be discharged by a party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing signed
by the other party; (ii) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (iii) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided

 

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herein.  The Employee will not assert that the Company’s failure or refusal to
enforce or delay in enforcing against any of its other employees or former
employees any agreement containing obligations identical or similar to those
contained in this Agreement constitutes a waiver of the Company’s rights
hereunder.

 

(f)                                    Governing Law; Jurisdiction; Service of
Process.  This Agreement will be governed by and construed under the laws of
Connecticut without regard to conflicts of laws principles that would require
the application of any other law.  Any action or proceeding arising out of or
relating to this Agreement may be brought in the courts of the State of
Connecticut, County of Fairfield, or, if there is a basis for jurisdiction, in
the United States District Court for Connecticut.  Each of the parties
irrevocably submits to the jurisdiction of such courts in any such action or
proceeding and waives any objection it may now or hereafter have to venue or
convenience of forum.  Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.

 

(g)                                 Counterparts.  This Agreement may be
executed in one or more counterparts.

 

The parties have executed this Agreement on the date first written above.

 

 

 

priceline.com Incorporated

 

 

 

 

 

 

 

 

By:

/s/ Robert J. Mylod Jr.

 

 

 

 

Robert J. Mylod Jr.

 

 

Its:

Chief Financial Officer

 

 

 

 

 

 

 

 

/s/ Daniel Finnegan

 

 

 

Daniel Finnegan

 

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