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.


 





















 


“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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