Document:

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

 

2

 

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

  
				

 

3

 

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.

 

4

 

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.

 

5

 

(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.

 

6

 

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

 

7

 

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

  
						

 

8Exhibit 10.2

 

PRICELINE.COM INCORPORATED 1999 OMNIBUS PLAN

RESTRICTED STOCK AGREEMENT

 

THIS RESTRICTED STOCK AGREEMENT (“Agreement”) made as
of the 19th day of October 2005 by and between priceline.com Incorporated,
a Delaware corporation, with its principal United States office at 800
Connecticut Avenue, Norwalk, Connecticut 06854 (the “Company”), and Daniel J.
Finnegan (the “Participant”).

 

W I T N E S S E T H:

 

Pursuant to terms of the priceline.com Incorporated
1999 Omnibus Plan (the “Plan”), the Board of Directors of the Company has
authorized this Agreement.  The
Participant has been granted on October 19, 2005 (the “Grant Date”),
subject to execution of this Agreement, the number of restricted shares of
Company Stock (the “Restricted Stock”) 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.

 

1.                                       The
Grant

 

(a)                                  Subject
to the terms and conditions set forth herein, the Participant is granted ten
thousand (10,000) shares of Restricted Stock.

 

(b)                                 Subject
to Section 2 hereof, four thousand (4,000) shares of the Restricted Stock
granted under this Agreement shall vest on each of October 19, 2006 and
2007 and one thousand (1,000) shares of the Restricted Stock granted under this
Agreement shall vest on each of October 19, 2008 and 2009, if on each such
vesting date, the Participant has been in Continuous Service through such
date.  For avoidance of doubt, there
shall be no proportionate or partial vesting in the periods prior to each
vesting date and vesting shall occur only on the applicable vesting dates
pursuant to this Section 1(b).  Upon
satisfaction of the vesting requirements set forth in this Section 1(b),
the restrictions on the vested Restricted Stock, as set forth in Section 2
of this Agreement, shall lapse.  For
purposes of this Agreement, “Continuous Service” shall mean the Participant’s
service with the Company or any Subsidiary or Affiliate whether as an employee,
director or consultant, is not interrupted or terminated.

 

2.                                       Effect
of Termination of Continuous Service; Change in Control

 

(a)                                  Subject
to Section 2(b) below, upon the Participant’s termination of
Continuous Service, the unvested portion of the Restricted Stock granted under
this Agreement shall be immediately forfeited and canceled.

 

(b)                                 In
the event of a Change in Control, the Participant shall be fully vested in all
Restricted Stock granted under this Agreement, if  (i) the Participant was in Continuous
Service immediately prior to the Change in Control and (ii) the
Participant remains in Continuous Service through the date which is six (6) months
after the effective date of the Change in Control.  In the event that the Participant’s
Continuous Service is terminated (other than for Cause) by the Company in
anticipation of a Change in Control or within six (6) months after the

 

 

effective date of a Change in Control, then the
Participant shall be fully vested in all Restricted Stock granted under this
Agreement.  The determination of whether
the Participant’s Continuous Service is terminated by the Company in
anticipation of a Change in Control shall be made by the Company, in its sole
discretion.

 

(c)                                  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 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

 

2

 

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, (I) 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 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, a Change in Control of the
Company shall then be deemed to occur and (II) the acquisition following the
Effective Date of Company Voting Securities by Hutchison Whampoa Limited,
Cheung Kong (Holdings) Limited or any of their Affiliates shall be deemed not
to result in a Change in Control until such time as Hutchison Whampoa Limited,
Cheung Kong (Holdings) Limited or any of their Affiliates become the Beneficial
Owners in the aggregate of 50% or more of the combined voting power of Company
Voting Securities (and for this purpose the preceding clause (I) shall not
apply).

 

(d)                                 For
the purposes of Section 2(c), 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 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

 

3

 

proportions as their ownership of shares of Common
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.

 

3.                                       Nontransferability
of Grant

 

Except as otherwise provided herein or in the Plan, no
unvested Restricted Stock shall be assigned, negotiated, pledged, or
hypothecated in any way or be subject to execution, attachment or similar
process.  Prior to the vesting of any
Restricted Stock, no transfer of the Participant’s rights with respect to such
Restricted Stock, whether voluntary or involuntary, by operation of law or
otherwise, shall be permitted. 
Immediately upon any attempt to transfer such rights, such Restricted
Stock, and all of the rights related thereto, shall be forfeited by the
Participant.

 

4.                                       Dividend
and Distribution Rights

 

The Committee in its discretion may require any
dividends or distribution paid on the Restricted Stock be held in escrow until all
restrictions on such Restricted Stock have lapsed.

 

5.                                       Stock;
Adjustment Upon Certain Events.

 

(a)                                  Stock
to be issued under this Agreement 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 Restricted Stock 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.

 

6.                                       Determinations

 

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

 

7.                                       Other
Conditions

 

The transfer of any shares of Restricted Stock shall
be effective only at such time as counsel to the Company shall have determined
that the issuance and delivery of such shares of

 

4

 

Restricted
Stock are in compliance with all applicable laws, regulations of governmental
authority and the requirements of any securities exchange on which Stock is
traded.

 

8.                                       Notification
of Election Under Section 83(b) of the Code

 

If the Participant shall, in connection with the grant
of Restricted Stock under this Agreement, make the election permitted under Section 83(b) of
the Internal Revenue Code (i.e.,
an election to include in gross income in the year of transfer the amounts
specified in Section 83(b) of the Internal Revenue Code), then the
Participant shall notify the Company of such election within 10 days of filing
notice of the election with the Internal Revenue Service.

 

9.                                       Withholding
Taxes

 

The
Participant shall be liable for any and all U.S. federal, state or local taxes
of any kind required by law to be withheld with respect to the vesting of
Restricted Stock.  When the Restricted
Stock vests, the Participant shall surrender to the Company a sufficient number
of whole shares of Stock as necessary to cover all applicable required
withholding taxes and social security contributions related to such
vesting.  The Company will provide the
Participant with a cash refund for any fraction of surrendered shares of Stock
not necessary for required withholding taxes and social security
contributions.  Instead of requiring the
Participant to surrender shares as described above, the Company may, in its
discretion, (a) require the Participant to remit to the Company on the date on which the
Restricted Stock vests cash in an amount sufficient to satisfy all
applicable required withholding taxes and social security contributions related
to such vesting, or (b) deduct from his regular salary payroll cash, on a
payroll date following the date on which the Restricted Stock vests, in an
amount sufficient to satisfy such obligations.

 

In
lieu of surrendering shares of Stock to cover all applicable required
withholding taxes and social security contributions, the Participant may, by
providing notice to the Company within 30 days of the Grant Date (a) elect
to remit to the Company on the date on which the Restricted Stock vests cash in
an amount sufficient to satisfy such obligations, or (b) request the
Company to deduct from his regular salary payroll cash, on a payroll date
following the date on which the Restricted Stock vests, in an amount sufficient
to satisfy such obligations, which request the Committee may choose to honor in
its sole discretion.  Notwithstanding the
foregoing, if the Participant makes an election under Section 8 above, the
Participant shall remit to the Company in cash an amount sufficient to satisfy
any withholding obligations at the time the notice described in Section 8
is delivered to the Company.

 

10.                                 Distribution
of Restricted Stock

 

Upon
the vesting of any Restricted Stock pursuant to the terms hereof, the
restrictions of Sections 2 and 3 shall lapse with respect to such vested
Restricted Stock.  Reasonably promptly
after any Restricted Stock vests, the Company shall cause to be delivered to
the Participant a certificate evidencing such Stock.

 

5

 

11.                                 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.

 

(b)                                 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.

 

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

 

(d)                                 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.

 

(e)                                  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.

 

(f)                                    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.

 

(g)                                 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.

 

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

 

(i)                                     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.

 

6

 

(j)                                     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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Mylod Jr.

  	
   

  
	
   

  	
   

  	
  Robert J. Mylod Jr.

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Participant

  
	
   

  	
   

  
	
   

  	
  /s/ Daniel J. Finnegan

  	
   

  
	
   

  	
  Daniel J. Finnegan

  

 

7

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