Document:

Exhibit
10.2

 

Execution
Copy

 

AMENDED
AND RESTATED

EMPLOYMENT AGREEMENT

 

AMENDED AND
RESTATED EMPLOYMENT AGREEMENT, dated as of
                
    , 2008 (the “Effective Date”),
by and between Priceline.com Incorporated, a Delaware corporation, with its principal
office at 800 Connecticut Avenue, Norwalk, Connecticut 06854 (the “Company”), and Jeffery H. Boyd (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS,
the Company and Executive entered into an employment arrangement, dated February 7,
2005 (the “Prior Employment Agreement”);

 

WHEREAS,
the Company desires that Executive continue to be employed as President and
Chief Executive Officer of the Company, and the Company and Executive desire to
amend the Prior Employment Agreement to account for the effect of Section 409A
of the Internal Revenue Code (“Section 409A
of the Code”) on the agreement; and

 

WHEREAS,
the Company and Executive desire to replace and supersede the Prior Employment
Agreement in its entirety and enter into this Amended and Restated Employment
Agreement (the “Agreement”) providing for the
terms of Executive’s employment by the Company.

 

NOW,
THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
parties agree as follows:

 

1.             Term of Employment.  Except for earlier termination as provided in
Section 8 hereof, Executive’s employment under this Agreement shall
continue on the same basis as set forth in the Prior Employment Agreement and,
as a result, shall end on February 7, 2009 (the “Initial
Employment Term”), provided that the Initial Employment Term shall
be automatically extended for additional terms of successive one (1) year
periods (each, an “Additional Employment Term”)
unless the Company or Executive gives written notice to the other at least
ninety (90) days prior to the expiration of the Initial Employment Term or
then-current Additional Employment Term that Executive’s employment shall not
be so extended.  The Initial Employment
Term and each Additional Employment Term shall be referred to herein as the “Employment Term.”

 

2.             Positions.  (a)        Executive
shall serve as President and Chief Executive Officer of the Company.  Executive shall also serve, if requested by
the Board of Directors of the Company (the “Board”), as an
executive officer and director of subsidiaries and a director of Affiliates of
the Company and shall comply with the policy of the Compensation Committee of
the Board (the “Compensation Committee”) with
regard to retention or forfeiture of director’s fees.  Executive shall serve during the Employment
Term as a member of the Board.  Upon
termination of Executive’s employment with the Company, Executive shall resign
from the Board and any committees thereof (and, if applicable, from the board
of directors (and any committees thereof) of any subsidiary or Affiliate of the
Company) to the extent Executive is then serving thereon.

 

(b)           Executive shall report
directly to the Board and shall have such duties and authority, consistent with
his then position, as shall be assigned to him from time to time by the Board.

 

(c)           During the Employment
Term, Executive shall devote substantially all of his business time and efforts
to the performance of his duties hereunder; provided, however,
that Executive shall be allowed, to the extent that such activities do not
materially interfere with the performance of his duties and responsibilities
hereunder, to manage his personal financial and legal affairs and to serve on

 

 

corporate, civic,
charitable and industry boards or committees. 
Notwithstanding the foregoing, Executive shall only serve on corporate
boards of directors if approved in advance by the Board.

 

3.             Base Salary.
During the Employment Term, the Company shall pay Executive a base salary at
the annual rate of not less than $550,000. 
Base salary shall be payable in accordance with the usual payroll
practices of the Company.  Executive’s
base salary shall be subject to annual review by the Board or the Compensation
Committee during the Employment Term and may be increased, but not decreased,
from time to time by the Board or the Compensation Committee.  The base salary as determined as aforesaid
from time to time shall constitute “Base Salary”
for purposes of this Agreement.

 

4.             Incentive
Compensation.  (a)  Bonus.  Executive shall be eligible to participate in
any annual bonus plan the Company may implement at any time during Executive’s
Employment Term for senior executives at a level commensurate with his
position.

 

(b)           Long Term Compensation.  For each fiscal year or portion thereof
during the Employment Term, Executive shall be eligible to participate in any
long-term incentive compensation plan generally made available to senior
executives of the Company at a level commensurate with his position in accordance
with and subject to the terms of such plan.

 

(c)           May 25, 2001
Stock Option Grant.  On May 25,
2001, Executive was granted by the Company, pursuant to the Company’s 1999
Omnibus Plan, as amended (the “1999 Plan”)
stock options to purchase 266,666 (after giving effect to the Company’s June 2003
one-for-six reverse stock split) shares of the Company’s issued and outstanding
common stock (the “Common Stock”),
at an exercise price per share of $30.66 (the “May 2001
Stock Options”).  As of the
date hereof, the May 2001 Stock Options are fully vested and
exercisable.  The May 2001 Stock
Options shall expire on the earlier of (i) May, 25, 2011 or (ii)(A) eighteen
(18) months after any termination of employment if such termination is as of
the result of Executive’s death, Termination for Disability, Termination
without Cause, Termination for Good Reason or non-extension of the Employment
Term in accordance with Section 1 hereof as a result of notice from the
Company, and (B) ninety (90) days after such termination if such
termination is a result of Executive’s Termination for Cause, voluntary
Termination by Executive without Good Reason, or non-extension of the
Employment Term in accordance with Section 1 hereof as a result of notice
by Executive.

 

(d)           Other
Compensation.  The Company may, upon
recommendation of the Compensation Committee, award to Executive such other
bonuses and compensation as it deems appropriate and reasonable.

 

5.             [Intentionally Deleted.]

 

6.             Employee Benefits
and Vacation.  (a)  During the
Employment Term, Executive shall be entitled to participate in all benefit
plans and arrangements and fringe benefits and perquisite programs generally
provided to comparable senior executives of the Company.

 

(b)           During the Employment Term, Executive shall
be entitled to vacation each year in accordance with the Company’s policies in
effect from time to time, but in no event less than five (5) weeks paid
vacation per calendar year.  Executive
shall also be entitled to such periods of sick leave as is customarily provided
by the Company for its senior executive employees.

 

7.             Business Expenses.  The Company shall reimburse Executive for the
travel, entertainment and other business expenses incurred by Executive in the
performance of his duties hereunder, in accordance with the Company’s policies
as in effect from time to time; provided,
however, that such expenses must
be paid no later than the last day of the calendar year following the calendar
year in which such expenses were incurred
and further provided that in no
event will the amount of expenses so reimbursed in one taxable year affect the
amount of expenses eligible for reimbursement in any other taxable year.

 

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8.             Termination.  (a)  The employment of Executive under
this Agreement shall terminate upon the earliest to occur of any of the
following events:

 

      (i)      the death of Executive;

 

     (ii)                   the
termination of Executive’s employment by the Company due to Executive’s
Disability pursuant to Section 8(b) hereof;

 

    (iii)      the termination of Executive’s
employment by Executive for Good Reason pursuant to Section 8(c) hereof;

 

    (iv)      the termination of Executive’s
employment by the Company without Cause;

 

     (v)      the termination of
employment by Executive without Good Reason upon sixty (60) days prior written
notice; or

 

    (vi)      the termination of Executive’s
employment by the Company for Cause pursuant to Section 8(e).

 

(b)           Disability.  If by reason of the same or related physical
or mental illness or incapacity, Executive is unable to carry out his
material duties pursuant to this Agreement for more than six (6) consecutive
months, the Company may terminate Executive’s employment for disability (“Disability”).  Such termination shall be upon thirty (30)
days written notice by a Notice of Disability Termination, at any time
thereafter while Executive consecutively continues to be unable to carry out
his duties as a result of the same or related physical or mental illness or
incapacity.  A Termination for Disability
hereunder shall not be effective if Executive returns to the full-time
performance of his material duties within such thirty (30) day period.

 

(c)           Termination for Good Reason.  A Termination for Good Reason means a
termination by Executive 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 in Section 8(d) hereof).  For purposes of this Agreement, “Good Reason” shall mean the occurrence or failure to cause
the occurrence, as the case may be, without Executive’s express written
consent, of any of the following circumstances: 
(i) any material diminution of Executive’s positions, duties or
responsibilities hereunder (except in each case in connection with the
termination of Executive’s employment for Cause or Disability or as a result of
Executive’s death, or temporarily as a result of Executive’s illness or other
absence), or, the assignment to Executive of duties or responsibilities that
are inconsistent with Executive’s then position; (ii) removal of, or the
non-reelection of, Executive from officer positions with the Company specified
herein without election to a higher position or removal of Executive from any
of his then officer positions; (iii) 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 Executive’s residence at the time of
relocation; (iv) a failure by the Company (A) to continue any bonus
plan, program or arrangement in which Executive is entitled to participate (the
“Bonus Plans”), provided that any such
Bonus Plans may be modified at the Company’s discretion from time to time but
shall be deemed terminated if (x) any such plan does not remain
substantially in the form in effect prior to such modification and (y) if
plans providing Executive with substantially similar benefits are not
substituted therefor (“Substitute Plans”),
or (B) to continue Executive as a participant in the Bonus Plans and
Substitute Plans on at least the same basis as to potential amount of the bonus
as Executive participated in prior to any change in such plans or awards, in
accordance with the Bonus Plans and the Substitute Plans; (v) any material
breach by the Company of any provision of this Agreement, including, without
limitation, Section 13 hereof; or (vi) failure of any successor to
the Company (whether direct or indirect and whether by merger, acquisition,
consolidation or otherwise) to assume in a writing delivered to Executive upon
the assignee becoming such, the obligations of the Company hereunder.

 

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(d)           Notice of Termination for Good Reason.  A Notice of Termination for Good Reason shall
mean a notice that shall indicate the specific termination provision in Section 8(c) relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for Termination for Good Reason.  The failure by Executive 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 right of Executive
hereunder or preclude Executive from asserting such fact or circumstance in
enforcing his 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, provided that in the case of
the events set forth in Sections 8(c)(i) or (ii), the date may be five (5) days
after the giving of such notice.

 

(e)           Cause.  Subject to the notification provisions of Section 8(f) below,
Executive’s employment hereunder may be terminated by the Company for
Cause.  For purposes of this Agreement,
the term “Cause” shall be limited to (i) willful misconduct by Executive
with regard to the Company which has a material adverse effect on the Company; (ii) the
willful refusal of Executive to attempt to follow the proper written direction
of the Board, provided that the foregoing refusal shall not be “Cause” if
Executive in good faith believes that such direction is illegal, unethical or
immoral and promptly so notifies the Board; (iii) substantial and
continuing willful refusal by Executive to attempt to perform the duties
required of him 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 Executive by the Board which
specifically identifies the manner in which it is believed that Executive has
substantially and continually refused to attempt to perform his duties hereunder;
or (iv) Executive 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 Executive’s part shall be considered “willful” unless done
or omitted to be done, by him not in good faith and without reasonable belief
that his action or omission was in the best interests of the Company.  A notice by the Company of a non-renewal of
the Employment Term pursuant to Section 1 hereof shall be deemed an
involuntary termination of Executive by the Company without Cause as of the end
of the then Employment Term, but Executive may terminate at any time after the
receipt of such notice and shall be treated as if he was terminated without Cause
as of such date.

 

(f)            Notice of Termination for Cause.  A Notice of Termination for Cause shall mean
a notice that shall indicate the specific termination provision in Section 8(e) relied
upon and shall set forth in reasonable detail the facts and circumstances which
provide for a basis for Termination for Cause. 
Further, a Notification for Cause shall be required to include a copy of
a resolution duly adopted by at least two-thirds (2/3) of the entire membership
of the Board at a meeting of the Board which was called for the purpose of
considering such termination and which Executive and his representative had the
right to attend and address the Board, finding that, in the good faith of the
Board, Executive engaged in conduct set forth in the definition of Cause herein
and specifying the particulars thereof in reasonable detail.  The date of termination for a Termination for
Cause shall be the date indicated in the Notice of Termination.  Any purported Termination for Cause which is
held by a court not to have been based on the grounds set forth in this
Agreement or not to have followed the procedures set forth in this Agreement
shall be deemed a Termination by the Company without Cause.

 

9.             Consequences of
Termination of Employment.

 

(a)           Death.  If,
Executive’s employment is terminated by reason of Executive’s death, the
employment period under this Agreement shall terminate without further
obligations to Executive’s legal representatives under this Agreement except
for:  (i) 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 payable pursuant to Section 7
(collectively 

 

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“Accrued Amounts”), which amounts shall
be promptly paid in a lump sum to Executive’s estate; (ii) any other amounts or
benefits owing to Executive under the then applicable employee benefit plans,
long term incentive plans or equity plans and programs of the Company which
shall be paid or treated in accordance with Section 4(c) hereof with regard to
the May 2001 Stock Options and otherwise in accordance with the terms of such
plans and programs; (iii) continuation, for twelve (12) months following the
date of death, of Executive’s health benefits for Executive’s dependents at the
same level and cost as if Executive was an employee of the Company; and (iv) if
a bonus plan is in place, the product of (x) the target annual bonus for the
fiscal year of Executive’s death, multiplied by (y) a fraction, the numerator
of which is the number of days of the current fiscal year during which
Executive was employed by the Company, and the denominator of which is 365,
which bonus shall be paid in a lump sum when bonuses for such period are paid
to the Company’s other executives, but, in any event, in the fiscal year
following the fiscal year in which such bonus is earned.

 

(b)           Disability.  Subject to Section 9(f), if Executive’s
employment is terminated by reason of Executive’s Disability, Executive shall
be entitled to receive the payments and benefits to which his representatives
would be entitled in the event of a termination of employment by reason of his
death plus Executive shall be entitled to continuation, for twelve (12) months
following such termination of employment, of group life and disability
insurance benefits as if Executive was an active employee of the Company.

 

(c)           Termination by Executive for Good Reason
or Termination by the Company without Cause.  Subject to Sections 9(f) and 9(g), if
Executive terminates his employment hereunder for Good Reason during the
Employment Term or Executive’s employment with the Company is terminated by the
Company without Cause, then:

 

                                                (i)            if
such termination does not occur during the Protection Period (as defined in Section 9(c)(ii) below),
Executive shall be entitled to receive, (A) in equal installments paid in
accordance with the Company’s normal payroll practices commencing with the
first pay period after such termination over a period of twenty-four (24)
months after such termination (except as provided below), an amount equal to
two (2) times the sum of his 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) (the “Non-Protection Period Severance Amount”); (B) any
Accrued Amounts at the date of termination; (C) any other amounts or
benefits owing to Executive 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 Section 4(c) hereof with regard to the May 2001
Stock Options and otherwise in accordance with the terms of such plans and
programs, except that (1) the portion of each outstanding option to
acquire shares of Common Stock held by Executive that would have otherwise
vested with the passage of time during the one-year period immediately
following Executive’s termination of employment had Executive remained employed
with the Company during such one-year period shall be treated as immediately
vested as of the date of such termination, (2) each outstanding vested
option to acquire shares of Common Stock held by Executive as of the date of
such termination (taking into account the additional vesting described in the
preceding clause (1)) shall remain exercisable until the earlier of (x) the
expiration of such option’s original term or (y) 18 months following the
date of termination and (3) with respect to each outstanding grant of
shares of restricted Common Stock (which, for purposes of clarity, are
considered to include restricted stock units, performance share units, and
other similar equity grants) held by Executive, such grant shall be deemed to
be vested with respect to a number of shares determined as the product of (I) the
total number of shares subject to such grant and (II) the quotient
obtained by dividing (aa) the number of days in the relevant restricted period
that Executive was employed with the Company (assuming for such purpose that
Executive remained employed with the Company for the one-year period
immediately following Executive’s termination of employment) by (bb) the number
of days in the relevant restricted 

 

5

 

period, but only to the extent that the application of this clause (3)
would result in more shares being vested than would otherwise be vested under
the terms of such plans and programs and applicable award agreements; (D)
continuation, for two years following such termination of employment, of group
health, life and disability insurance benefits as if Executive were an employee
of the Company, subject to the terms set forth in Section 9(c)(iii); and (E) if
a bonus plan is in place, the product of (x) the target annual bonus for the
fiscal year of Executive’s termination, multiplied by (y) a fraction, the
numerator of which is the number of days of the current fiscal year during
which Executive was employed by the Company, and the denominator of which is
365, which bonus shall be paid in a lump sum when bonuses for such period are
paid to the Company’s other executives, but, in any event, in the fiscal year
following the fiscal year in which such bonus is earned;

 

                (ii)           if such termination
occurs during the period commencing on the date of a Change in Control (as
defined in Section 11(a)) and ending on the third anniversary of such
Change in Control (the “Protection Period”),
Executive shall be entitled to receive, (A) a lump sum cash payment to be
paid on the fifth day after such termination in an amount equal to  three (3) times the sum of his 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) (the “Protection Period Severance Amount”); (B) any Accrued Amounts at the
date of termination; (C) any other amounts or benefits owing to Executive
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, except that (1) each outstanding
option to acquire shares of Common Stock held by Executive as of the date of
such termination shall become immediately fully vested and remain exercisable
until the earlier of (x) the expiration of such option’s original term or (y) 36
months following the date of termination and (2) each outstanding share of
restricted Common Stock (which, for
purposes of clarity, are considered to include restricted stock units,
performance share units, and other similar equity grants) held by
Executive shall be immediately fully vested as of the date of such termination;
(D) continuation, for three  years following such termination of
employment, of group health, life and disability insurance benefits as if
Executive were an employee of the Company, subject to the terms set forth in Section 9(c)(iii); and (E) if
a bonus plan is in place, the product of (x) the target annual bonus for
the fiscal year of Executive’s termination, multiplied by (y) a fraction,
the numerator of which is the number of days of the current fiscal year during
which Executive was employed by the Company, and the denominator of which is
365, which bonus shall be paid in a
lump sum when bonuses for such period are paid to the Company’s other
executives, but, in any event, in the fiscal year following the fiscal year in
which such bonus is earned; and

 

                                (iii)          with respect to the continuation of group
health benefits to Executive pursuant to Section 9(c)(i)(D) or Section 9(c)(ii)(D),
Executive shall pay the full cost for such group health coverage on an
after-tax basis for each month that Executive elects to retain such coverage by
payment of the monthly cost of such coverage as determined for purposes of
health care continuation under Section 4980B of the Internal Revenue Code
of 1986, as amended (the “COBRA Premium”).  Within five (5) business days of the
date of Executive’s termination of employment, the Company shall make a payment
to Executive equal to the number of full and partial months remaining in the
calendar year in which Executive’s employment is terminated, multiplied by the
difference between the COBRA Premium for such year and the monthly amount that
Executive was required to pay for group health coverage immediately prior to
his termination of employment.  On each January 2
thereafter until the end of the applicable period under Section 9(c)(i)(D) or
Section 9(c)(ii)(D), if Executive has maintained group health coverage
through the last day of the preceding calendar year, the Company shall make a
payment to Executive equal to the difference between the COBRA Premium and the
monthly amount that Executive was required to pay for group health coverage
immediately prior to his termination of employment, multiplied by 12, or, if
the period of coverage is for less than a year, by the number of full 

 

6

 

and partial months remaining
in the year until the end of the applicable period under Section 9(c)(i)(D) or
Section 9(c)(ii)(D). 
Notwithstanding the foregoing, the first 18 months following the
date of  Executive’s termination of
employment shall be considered to be the period during which Executive shall be
eligible for continuation coverage under Section 4980B of the Internal
Revenue Code of 1986, as amended (the “Code”).

 

(d)           Termination with Cause or Voluntary
Resignation without Good Reason.  If,
Executive’s employment hereunder is terminated (i) by the Company for
Cause or (ii) by Executive without Good Reason, Executive shall be
entitled to receive only his Base Salary through the date of termination, and
any unreimbursed business expenses payable pursuant to Section 7 and, if
such termination is by Executive without Good Reason, any bonus that has been
declared or earned but not yet paid for a completed fiscal year.  Executive’s rights under all benefits plans
and equity grants shall be determined in accordance with the Company’s plans,
programs and grants, except as provided in Section 4(c) hereof with
respect to the May 2001 Stock Options.

 

(e)           Determination of
Earned Bonus.  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 Committee and/or the Board, as
applicable, has reviewed the Company’s performance and Executive’s performance
in respect of such year  and has
determined the amount of the bonus, if any, to be payable to Executive in
respect of such year’s performance; provided,
however, that if Executive is
still employed by the Company as of December 31 of any year, Executive
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 would otherwise have been payable to Executive had Executive
remained employed through the relevant payment date for such bonus) unless
Executive’s employment is subsequently terminated by the Company for Cause or
by Executive without Good Reason.

 

(f)            Separation from
Service.  Notwithstanding anything in this Agreement to
the contrary, if Executive is a “specified employee” (within the meaning of Section 409A
of the Code) and any payment made pursuant to this Section 9 is considered
to be a “deferral of compensation” (as such phrase is defined for purposes of Section 409A
of the Code) that is payable upon Executive’s “separation from service” (within
the meaning of Section 409A of the Code), then the payment date for such
payment shall be the date that is the first day of the seventh month after the
date of Executive’s “separation from service” with the Company (determined in
accordance with Section 409A of the Code). 
In addition, if the event triggering Executive’s right to benefits or
payments hereunder is Executive’s termination of employment, but such
termination of employment does not constitute a “separation from service” with
the Company within the meaning of Section 409A of the Code, then the
benefits or payments hereunder payable by reason of such termination of
employment that are considered to be a “deferral of compensation” under Section 409A
of the Code shall not be paid upon such termination of employment, but instead,
shall remain an obligation of the Company to Executive and shall be paid or
provided to Executive upon the first to occur of the following events: (i) Executive’s
“separation from service” (within the meaning of Section 409A of the Code)
(any amount payable upon such “separation from service” being subject to the
first sentence of this Section 9(f)); (ii) Executive’s disability
(within the meaning of Section 409A of the Code); (iii) a “change of
control” of the Company (within the meaning of Section 409A of the Code);
or (iv) Executive’s death.

 

(g)           Special Payment Provisions for Section 9(c)(ii)(A). 
Subject to Section 9(f), if (i) during the final twelve (12)
months of the Protection Period, Executive terminates his employment hereunder
for Good Reason or Executive’s employment with the Company is terminated by the
Company without Cause, or (ii) the Change in Control that begins the
Protection Period is not a “change in control” within the meaning of Section 409A
of the Code, Executive shall be entitled to receive the Protection Period
Severance Amount as described in Section 9(c)(ii)(A), but only in
accordance with the following payment schedule: (A) the portion of the
Protection Period Severance Amount equal to the Non-Protection Period Severance
Amount shall be paid in equal installments in accordance with the 

 

7

 

Company’s normal payroll practices, commencing with the first pay
period after such termination, over a period of twenty-four (24) months after
such termination and (B) the remaining portion of the Protection Period
Severance Amount shall be paid in a lump sum in cash on the fifth day after
such termination.

 

10.           No Mitigation; No
Set-Off.  In the event of any
termination of employment hereunder, Executive shall be under no obligation to
seek other employment and there shall be no offset against any amounts due
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain.  The amounts payable hereunder shall not be
subject to setoff, counterclaim, recoupment, defense or other right which the
Company may have against Executive or others, except upon obtaining by the
Company of a final unappealable judgment against Executive.

 

11.           Change in Control.  (a)  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 Effective 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 Effective 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
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 

 

8

 

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 to a percentage equal to or
greater than 35, 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).

 

(b)           For purposes of this Agreement, 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
proportions as their ownership of shares of Common Stock or (5) Executive
or any group of persons including Executive (or any entity controlled by
Executive or any group of persons including Executive).

 

(c)           For purposes of this Agreement, if (i) Executive’s
employment is terminated prior to a Change in Control by the Company without
Cause or by Executive for Good Reason, (ii) such termination of employment
(or the event giving rise to Executive’s termination of employment for Good
Reason) occurred at the request of a third party who had indicated an intention
or taken steps reasonably 

 

9

 

calculated
to effect a Change in Control and (z) a Change in Control involving such
third party (or a party competing with such third party to effectuate a Change
in Control) does occur, then such termination shall be treated as having
occurred during the Protection Period, Executive’s payments and benefits shall
be treated as being payable under Section 9(c)(ii), rather than under Section 9(c)(i),
and the Protection Period Severance Amount shall be paid as follows:

 

                (i)            Subject
to Section 9(f), if the Change in Control described in this Section 11(c) is
a “change in control” within the meaning of Section 409A of the Code, the
Protection Period Severance Amount, reduced by any amounts previously paid to
Executive pursuant to Section 9(c)(i), shall be paid in a lump sum in cash
on the fifth day after such Change in Control.

 

                (ii)           If
the Change in Control described in this Section 11(c) is not a “change
in control” within the meaning of Section 409A of the Code, the Protection
Period Severance Amount shall be paid to Executive as follows : (A) the
portion of the Protection Period Severance Amount equal to the Non-Protection
Period Severance Amount, reduced by any amounts previously paid to Executive
pursuant to Section 9(c)(i), shall be paid in equal installments in
accordance with the Company’s normal payroll practices, commencing with the
first pay period after the Change in Control described in this Section 11(c),
over the period from the commencement of such Change in Control through the
second anniversary of Executive’s termination of employment and (B) the
remaining portion of the Protection Period Severance Amount shall be paid in a
lump sum in cash on the fifth day after such Change in Control.

 

12.           Confidential
Information.  (a)  Executive
acknowledges that as a result of his employment by the Company, Executive will
obtain Confidential Information as to the Company and its Affiliates and the
Company and its Affiliates will suffer substantial damage, which would be
difficult to ascertain, if Executive should use such Confidential Information
and that because of the nature of the information that will be known to
Executive it is necessary for the Company and its Affiliates to be protected by
the confidentiality restrictions set forth herein.  For purposes of this Agreement, “Confidential Information” means information, observations
and data concerning the business or affairs of the Company and its subsidiaries
and Affiliates, including, without limitation, all business information
(whether or not in written form) which relates to the Company, its subsidiaries
or Affiliates, or their customers, suppliers or contractors or any other third
parties in respect of which the Company or its subsidiaries or Affiliates has a
business relationship or owes a duty of confidentiality, or their respective
businesses or products, and which is not known to the public generally other
than as a result of Executive’s breach of this Agreement, including but not
limited to:  technical information or
reports; trade secrets; unwritten knowledge and “know-how”; operating
instructions; training manuals; customer lists; customer buying records and
habits; product sales records and documents, and product development, marketing
and sales strategies; market surveys; marketing plans; profitability analyses;
product cost; long-range plans; information relating to pricing, competitive
strategies and new product development; information relating to any forms of
compensation or other personnel-related information; contracts; and supplier
lists.  Confidential Information will not
include (i) such information known to Executive prior to Executive’s
involvement with the Company or its subsidiaries or Affiliates or information
obtained from a third party (other than pursuant to a breach by Executive of
this Agreement) or (ii) contact information contained in Executive’s
personal rolodex or electronic address book.

 

(b)           During and for a period of five (5) years
after the Employment Term, Executive shall not use for his own benefit or
disclose Confidential Information obtained by Executive during his employment
by the Company and its Affiliates and not (i) otherwise public knowledge
or known within the applicable industry or (ii) in connection with
performance of his duties hereunder as he deems in good faith to be necessary
or desirable.  Executive shall not,
without prior written consent of the Company, 

 

10

 

unless compelled pursuant
to the order of a court or other governmental or legal body having jurisdiction
over such matter, communicate or divulge any such Confidential Information to
anyone other than the Company and those designated by it.  In the event Executive is compelled by order
of a court or other governmental or legal body to communicate or divulge any
such Confidential Information to anyone other than the foregoing, he shall
promptly notify the Company of any such order so it may seek a protective
order.

 

(c)           Upon termination of his employment with the
Company and its Affiliates, or at any time as the Company may request,
Executive will promptly deliver to the Company, as requested, all documents
(whether prepared by the Company, an Affiliate, Executive or a third party)
relating to the Company, an Affiliate or any of their businesses or property
which he may possess or have under his direction or control other than
documents provided to Executive in his capacity as a participant in any employee
benefit plan, policy or program of the Company or any agreement by and between
Executive and the Company with regard to Executive’s employment or severance.

 

(d)           (i)            In
the event of a breach or potential breach of this Section 12 and/or Section 15
by Executive, Executive acknowledges that the Company and its Affiliates will
or could be caused irreparable injury and that money damages may not be an
adequate remedy and agree that the Company and its Affiliates shall be entitled
to injunctive relief (in addition to its other remedies at law) to have the
provisions of this Section 12 and/or Section 15 enforced.  It is hereby acknowledged that the provisions
of this Section 12 and Section 15 are for the benefit of the Company
and all of the Affiliates of the Company and each such entity may enforce the
provisions of this Section 12 and/or Section 15 and only the
applicable entity can waive the rights hereunder with respect to its
Confidential Information and employees.

 

(ii)           In the event of a
breach or potential breach of Section 15(c)(ii) by the Company, the
Company acknowledges that Executive will or could be caused irreparable injury
and that money damages may not be an adequate remedy and agree that Executive
shall be entitled to injunctive relief (in addition to its other remedies at
law) to have the provisions of Section 15(c)(ii) enforced.

 

13.           Indemnification.
The Company shall indemnify and hold harmless Executive to the fullest extent
permitted by law for any action or inaction of Executive while serving as an
officer and director of the Company or, at the Company’s request, as an officer
or director of any other entity or as a fiduciary of any benefit plan.  The Company shall cover Executive under
directors and officers’ liability insurance both during and, while potential
liability exists, after the Employment Term in the same amount and to the same
extent as the Company covers its other officers and directors.

 

14.           Legal Fees.

 

(a)           The Company shall pay Executive’s reasonable
legal fees and costs associated with entering into this Agreement.  All payments by the Company of the legal fees
of Executive under this Section 14(a) shall be for expenses incurred
during Executive’s lifetime and shall be made within ninety (90) days following
the date Executive submits evidence of the incurrence of such expenses, and in
all events prior to the last day of the calendar year following the calendar
year in which Executive incurs the expense. 
In no event will the amount of expenses reimbursed or paid in one year affect
the amount of expenses eligible for reimbursement, or payment to, or for
Executive in any other taxable year.

 

(b)           All disputes and controversies arising under
or in connection with this Agreement, other than the seeking of injunctive or
other equitable relief pursuant to Section 12 hereof, shall be settled by
arbitration conducted before a panel of three (3) arbitrators sitting in
New York City, New York, or such other location agreed by the parties hereto,
in accordance with the rules for expedited

 

11

 

resolution of commercial
disputes of the American Arbitration Association then in effect.  The determination of the majority of the
arbitrators shall be final and binding on the parties.  Judgment may be entered on the award of the
arbitrator in any court having proper jurisdiction.  The Company shall promptly pay all expenses
of such arbitration, including the fees and expenses of the counsel of
Executive.  If the arbitrators determine
that Executive’s position was overall frivolous or otherwise taken in bad
faith, the arbitrators may determine that Executive be required to reimburse
the Company for his own legal fees.  All
reimbursements or payments by the Company of the legal fees of Executive under
this Section 14(b) shall be for expenses incurred during Executive’s
lifetime and shall be made within ninety (90) days following the date Executive
submits evidence of the incurrence of such expenses, and in all events prior to
the last day of the calendar year following the calendar year in which
Executive incurs the expense.  In no
event will the amount of expenses reimbursed or paid in one year affect the
amount of expenses eligible for reimbursement, or payment to, or for Executive
in any other taxable year.

 

(c)           In the event after a Change in Control either
party files for arbitration to resolve any dispute as to whether a termination
is for Cause or Good Reason, until such dispute is determined by the
arbitrators, Executive shall continue to be treated economically and benefit
wise in the manner asserted by him in the arbitration effective as of the date
of the filing of the arbitration, subject to Executive promptly refunding any
amounts paid to him, paying the cost of any benefits provided to him and paying
to the Company the profits in any stock option or other equity awards exercised
or otherwise realized by him during the pendency of the arbitration which he is
ultimately held not to be entitled to; provided the arbitrators may terminate
such payments and benefits in the event that they determine at any point that
Executive is intentionally delaying conclusion of the arbitration.

 

15.           Non-Competition/Non-Solicitation/Non-Disparagement.

 

(a)           Acknowledgments.   Executive 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. 
Executive acknowledges that Executive is and shall become familiar with
the Company’s Confidential Information (as defined below), including trade
secrets, and that Executive’s services are of special, unique and extraordinary
value to the Company, its subsidiaries and Affiliates.  Executive 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 damaged by the disclosure of
Confidential Information and the loss or deterioration of its business
strategies, employee and customer relationships and goodwill.  Executive 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, Executive), 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, Executive agrees and
acknowledges that the potential harm to the Company of the non-enforcement of Section 15(b) and
(c) (including (c)(ii) as it relates to a breach by Executive of such
provision) outweighs any potential harm to Executive of its enforcement by
injunction or otherwise.  Executive
acknowledges that he has carefully read this Agreement and has given careful
consideration to the restraints imposed upon Executive 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.  Executive expressly acknowledges and agrees
that each and every restraint imposed by this Agreement is reasonable with respect
to subject matter, time period and geographical area.  Executive further acknowledges that although
Executive’s compliance with the covenants contained in Section 15(b) and
(c)(i) may prevent Executive from earning a livelihood in a business
similar to the 

 

12

 

business
of the Company, Executive’s experience and capabilities are such that Executive
has other opportunities to earn a livelihood and adequate means of support for
Executive and Executive’s dependents.

 

(b)           Noncompetition.  (i)  Executive agrees that Executive shall not, while an employee
of the Company, and for the one-year period following termination of Executive’s
employment with the Company for any reason, directly or indirectly, without the
prior written consent of the Company, (A) engage in any activities, in any
capacity, for or on behalf of any of the following companies or their
successors (the “Competitive Activities”):  (1) any travel businesses of InterActive
Corporation, provided that the restriction in this clause (1) shall cease
to apply upon the completion of the spin-off of Expedia from InterActive
Corporation; (2) Expedia, Hotels.com & Hotwire; (3) Sabre
Group; (4) Lastminute.com plc; (5) 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; (6) 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 (7) 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 Effective Date, the Company’s
mortgage business, are not to be covered by this clause (B)), to purchase any
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; 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)           Notwithstanding anything to the contrary contained
in this Agreement, the restrictions in Section 15(b)(i) will not be
deemed breached as a result of (A) Executive’s passive ownership of less
than an aggregate of 5% of any class of securities of a person or entity
engaged, directly or indirectly, in Competitive Activities; provided, however,
that such stock is listed on a national securities exchange or is quoted on the
National Market System of NASDAQ or (B) Executive’s engaging in activities
for a person or entity that directly or indirectly has an ownership interest in
any of the companies or businesses listed or described in Section 15(b)(i)(A)(1) through
(7) provided that the services performed by Executive in the course of
such activities are not in any way connected with the activities of such
companies or businesses.

 

(iii)          If a final and non-appealable judicial determination
is made that any of the provisions of this Section 15 constitutes an unreasonable
or otherwise unenforceable restriction against Executive, the provisions of
this Section 15 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 15
is determined not to be specifically enforceable, the Company will nevertheless
be entitled to seek to recover monetary damages as a result of Executive’s
breach of such provision.

 

(c)           Non-Solicitation/Non-Disparagement.  While
an employee of the Company, and for the one-year period following termination
of Executive’s employment with the Company for any reason,  (i) Executive shall not (whether for
Executive’s own account or on behalf of any person, corporation, partnership,
or other business entity, and whether directly or indirectly) (A) solicit,
recruit or hire any employees of the Company or any of its subsidiaries or
Affiliates or any persons who within one year of such solicitation, recruitment
or hiring have worked for the Company or any of its subsidiaries or 

 

13

 

Affiliates; (B) solicit or encourage any
employee of 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, however,
that neither (1) the general advertisement for employees or the general
solicitation of employees by a recruiter or (2) Executive’s being named as
an employment reference for a current or former employee of the Company and
responding to ordinary course inquiries made of Executive by prospective
employers of such employee in connection with such reference, shall be deemed a
violation of this clause (i) and (ii) neither Executive nor the
Company shall publicly or with the intent to become public make any statements,
written or oral, which disparage or defame the goodwill or reputation of, in
Executive’s case, the Company formally or, its directors or senior officers or,
in the Company’s case, Executive.

 

16.           Certain Additional
Payments by the Company.

 

(a)           Subject
to Section 9(f), anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment, award,
benefit or distribution (or any acceleration of any payment, award, benefit or
distribution) by the Company (or any of its Affiliates) or any entity which
effectuates a Change in Control (or any of its Affiliates) to or for the
benefit of Executive (whether pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 16) (the “Payments”)
would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties
are incurred by Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then
the Company shall pay to Executive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by
Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the sum
of (x) the Excise Tax imposed upon the Payments and (y) the
product of any deductions disallowed because of the inclusion of the Gross-Up
Payment in Executive’s adjusted gross income and the highest applicable
marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made.

 

For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to (i) pay federal income taxes at the highest
actual marginal rates of federal income taxation applicable to Executive for
the calendar year in which the Gross-Up Payment is to be made, and (ii) pay
applicable state and local income taxes at the highest actual marginal rate of
taxation applicable to Executive for the calendar year in which the Gross-Up
Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes.  Notwithstanding the foregoing provisions of
this Section 16(a), if it shall be determined that Executive is entitled
to a Gross-Up Payment, but that the Payments would not be subject to the Excise
Tax if the Payments were reduced by an amount that is less than 5% of the
portion of the Payments that would be treated as “parachute payments” under Section 280G
of the Code, then the amounts payable to Executive under this Agreement shall
be reduced (but not below zero) to the maximum amount that could be paid to
Executive without giving rise to the Excise Tax (the “Safe Harbor
Cap”), and no Gross-Up Payment shall be made to Executive.  The reduction of the amounts payable
hereunder, if applicable, shall be made by reducing first the payments under Section 16,
unless an alternative method of reduction is elected by Executive.  For purposes of reducing the Payments to the
Safe Harbor Cap, only amounts payable under this Agreement (and no other
Payments) shall be reduced.  If the
reduction of the amounts payable hereunder would not result in a reduction of
the Payments to the Safe Harbor Cap, no amounts payable under this Agreement
shall be reduced pursuant to this provision.

 

14

 

(b)           Subject to the
provisions of Section 16(a), all determinations required to be made under
this Section 16, including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment, the reduction of the Payments to
the Safe Harbor Cap and the assumptions to be utilized in arriving at such
determinations, shall be made by the public accounting firm that is retained by
the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and Executive within fifteen
(15) business days of the receipt of notice from the Company or Executive
that there has been a Payment, or such earlier time as is requested by the
Company (collectively, the “Determination”).  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive may appoint another nationally recognized
public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).  All fees and expenses of the Accounting Firm
shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance
of the services hereunder.  If the Accounting
Firm determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion to such effect, and to the effect that failure
to report the Excise Tax, if any, on Executive’s applicable federal income tax
return will not result in the imposition of a negligence or similar
penalty.  In the event the Accounting
Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it
shall furnish Executive with a written opinion to such effect.  The Determination by the Accounting Firm
shall be binding upon the Company and Executive.

 

(c)  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the Determination,
it is possible that Gross-Up Payments which will not have been made by the
Company should have been made (“Underpayment”)
or Gross-Up Payments are made by the Company which should not have been made (“Overpayment”), consistent with the calculations required to
be made hereunder.  In the event that
Executive thereafter is required to make payment of any Excise Tax or
additional Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code)
shall be promptly paid by the Company to or for the benefit of Executive.  In the event the amount of the Gross-Up
Payment exceeds the amount necessary to reimburse Executive for his Excise Tax,
the Accounting Firm shall determine the amount of the Overpayment that has been
made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of
the Code) shall be promptly paid by Executive (to the extent he has received a
refund if the applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company; provided,
however, that such repayment
obligation shall not apply to the extent it would be treated as a prohibited
personal loan from the Company to Executive for purposes of the Sarbanes-Oxley
Act of 2002.  Executive shall cooperate,
to the extent his expenses are reimbursed by the Company, with any reasonable
requests by the Company in connection with any contests or disputes with the
Internal Revenue Service in connection with the Excise Tax.  Notwithstanding any other provision of this Section 16
to the contrary, all taxes and expenses described in this Section 16 shall
be paid or reimbursed within fifteen (15) days after the determination thereof
pursuant to the terms of this Section 16 or after Executive submits
evidence of the incurrence of such taxes and/or expenses.  Executive shall be required to submit all
requests for reimbursements no later than ninety (90) days prior to the last
day of the calendar year following the calendar year in which the applicable
taxes are remitted or, in the case of reimbursement of expenses incurred due to
a tax audit or litigation with respect to which there is no remittance of
taxes, the last day of the calendar year following the calendar year in which
the audit is completed or there is a final and nonappealable settlement or
other resolution of the litigation in accordance with Treasury Regulation Section 1.409A-3(i)(v).  Any expenses, including interest and
penalties assessed on the taxes described in this Section 16, incurred by
Executive shall be reimbursed promptly after Executive submits evidence of the
incurrence of such expenses, which reimbursement in no event will be later than
the last day of the calendar year following the calendar year in which
Executive incurs the expense.

 

15

 

17.           Miscellaneous.

 

(a)           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
reference to principles of conflict of laws.

 

(b)           Entire
Agreement/Amendments.  This Agreement
and the instruments contemplated herein contain the entire understanding of the
parties with respect to the employment of Executive by the Company from and
after the Effective Date and supersedes any prior agreements between the
Company and Executive, including the Prior Employment Agreement.  There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties with
respect to the subject matter herein other than those expressly set forth
herein and therein.  This Agreement may
not be altered, modified, or amended except by written instrument signed by the
parties hereto.

 

(c)           No Waiver.  The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party’s rights or deprive such party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement.  Any such waiver must be in
writing and signed by Executive or an authorized officer of the Company, as the
case may be.

 

(d)           Assignment.  This Agreement shall not be assignable by
Executive.  This Agreement shall be
assignable by the Company only to an acquirer of all or substantially all of
the assets of the Company, provided such acquirer promptly assumes all of the
obligations hereunder of the Company in a writing delivered to Executive and
otherwise complies with the provisions hereof with regard to such assumption.

 

(e)           Successors; Binding
Agreement; Third Party Beneficiaries. 
This Agreement shall inure to the benefit of and be binding upon the
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees, legatees and permitted assignees of the parties
hereto.

 

(f)            Communications.  For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given (i) when faxed or delivered,
or (ii) two (2) business days after being mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the initial page of
this Agreement, provided that all notices to the Company shall be directed to
the attention of the Secretary of the Company, or to such other address as any
party may have furnished to the other in writing in accordance herewith.  Notice of change of address shall be
effective only upon receipt.

 

(g)           Withholding Taxes.  The Company may withhold from any and all
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.

 

(h)           Survivorship.  The respective rights and obligations of the
parties hereunder, including, without limitation, Section 12 and Section 15
hereof, shall survive any termination of Executive’s employment to the extent
necessary to the agreed preservation of such rights and obligations.

 

(i)            Counterparts.  This Agreement may be signed in counterparts
(including via facsimile), each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

 

16

 

(j)            Headings.  The headings of the sections
contained in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of this
Agreement.

 

(k)           Section 409A of the Code.  Each
payment or reimbursement and the provision of each benefit under this Agreement
shall be considered a separate payment and not one of a series of payments for
purposes of Section 409A of the Code. 
Furthermore, in the event that any payment made hereunder is subject to
payment during a specified time frame (e.g.,
within 90 days of a termination of employment) as opposed to payment on a
specific payment date (e.g., January 1,
2010), the Company, in its sole discretion, shall determine the exact date upon
which such payment will be made during the specified payment period.  To
the extent applicable, it is intended that this Agreement comply with the
provisions of Section 409A of the Code so that the income inclusion
provisions of Section 409A(a)(1) do not apply to Executive.  This Agreement shall be administered in a
manner consistent with this intent. 
Reference to Section 409A of the Code is to Section 409A of
the Internal Revenue Code of 1986, as amended, and will also include any
regulations, or any other formal guidance, promulgated with respect to such Section by
the U.S. Department of the Treasury or the Internal Revenue Service.

 

[Signatures on the following page]

 

17

 

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

 

 

	
   

  	
  priceline.com Incorporated

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Jeffrey E. Epstein

  
	
   

  	
   

  	
  Chairman – Compensation Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Jeffery H. Boyd

  

 

18Exhibit
10.3

 

[BAND
17]

 

PRICELINE.COM
INCORPORATED 1999 OMNIBUS PLAN

 

PERFORMANCE SHARE UNIT AGREEMENT

(AS AMENDED AND RESTATED EFFECTIVE               
    , 2008)

 

THIS PERFORMANCE SHARE UNIT AGREEMENT (this “Agreement”),
which was originally entered into on the 5th day of March, 2007 (the “Grant
Date”) 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                                   
(the “Participant”), is amended and restated effective               
    , 2008.

 

W I T
N E S S E T H:

 

WHEREAS, the
Company and Participant are currently parties to a Performance Share Unit
Agreement, dated March 5, 2007 (the “Prior Agreement”), pursuant to which Participant was granted the
number of performance share units (the “Performance Share Units”) set
forth below;

 

WHEREAS, the
Company and Participant desire to amend the Prior Agreement to account for the
effect of Section 409A of the Internal Revenue Code (“Section 409A”)
on the agreement; and

 

WHEREAS, the
Company and Participant desire to replace and supersede the Prior Agreement in
its entirety and enter into this Agreement,
effective as of               
    , 2008.

 

NOW, THEREFORE,
in consideration of the premises and mutual covenants contained herein and for
other good and valuable consideration, the parties agree as follows:

 

1.             Definitions.  Unless otherwise indicated, any capitalized
term used herein, but not defined herein, shall have the meaning ascribed to
such term in the priceline.com Incorporated 1999 Omnibus Plan, as amended (the “Plan”).

 

(a)           “Cause” shall mean (i) if
the Participant is employed pursuant to an employment agreement which defines “cause”
in such agreement, “cause” as defined in such agreement and (ii) if the
Participant is not described in (i) it shall mean “cause” as defined in
the Plan.

 

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

 

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

 

 

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

 

(e)           “Cumulative EPS Range”
shall have the meaning set forth in the schedules contained in Section 1(m) and
Appendix A.

 

(f)            “Determination Date”
shall mean March 5, 2010.

 

(g)           “Disability” shall have
the meaning given such term under the Plan.

 

(h)           “EPS” shall mean the
Company’s consolidated pro forma net income applicable to common stockholders
per diluted share as publicly disclosed annually or quarterly, as applicable,
in connection with the Company’s annual and quarterly earnings
announcements.  In the event the Company
changes the way EPS is calculated, EPS shall mean the publicly disclosed annual
non-GAAP financial measure which is intended to replace (or which is
substantially similar to) the EPS prior to such change.

 

(i)            “Good Reason” shall
have the meaning set forth in the Participant’s employment agreement, if any,
in force at the time of the Participant’s termination of employment, and, if
none, then no shares of Performance Share Unit granted under this Agreement
shall be vested on account of a termination of employment by the Participant
other than on account of death or Disability.

 

(j)            “Performance Period”
shall mean the period commencing on January 1, 2007 and ending on December 31,
2009.

 

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

 

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

 

(m)          “Vesting Percentage”
means the percentage determined in accordance with the following table,
provided that, notwithstanding any other provision hereof, in the event the EPS
for 2009 is less than $2.00, the Vesting Percentage shall be deemed to be zero:

 

	
  If the Cumulative EPS Range for the

  three-year period ending December

  31, 2009, is:

  	
   

  	
  Then the Vesting Percentage range is:

  
	
  Less than $8.00

  	
   

  	
  0%

  
	
   

  	
   

  	
   

  
	
  Between $8.00 and $8.88

  	
   

  	
  75% to 100%

  
	
   

  	
   

  	
   

  
	
  Between $8.88 and $10.89

  	
   

  	
  100% to 200%

  
	
   

  	
   

  	
   

  
	
  More than $10.49

  	
   

  	
  200%

  

 

2

 

2.             The
Grant

 

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

 

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

 

(a)           If the Participant
remains in Continuous Service through and including the Determination Date,
then the Participant shall be entitled to receive a number of shares of Stock
determined by multiplying the number of Performance Share Units granted
hereunder by the Applicable Vesting Percentage. 
The Applicable Vesting Percentage shall be equal to the sum of the
lowest Vesting Percentage in the applicable Vesting Percentage Range set forth
in the schedule above, plus the ProRata Vesting Percentage Point Increase.  The “ProRata Vesting Percentage Point
Increase” is the quotient of (i) the excess of the actual Cumulative EPS
over the lowest Cumulative EPS in the applicable Cumulative EPS Range, divided
by (ii) the result of a fraction, the numerator of which is the difference
between the lowest and highest Cumulative EPS within such applicable Cumulative
EPS Range, and the denominator of which is the difference between the lowest
and highest applicable Vesting Percentages in the applicable Vesting Percentage
Range.  All shares of Stock to be issued
to the Participant under this Section 3(a), if any, shall be issued to the
Participant as soon as practicable after the Determination Date but in no event
later than March 15, 2010.  If the
Participant becomes entitled to any shares of Stock under this Section 3(a),
he shall not be entitled to receive any shares of Stock under any other
subsection of this Section 3.

 

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

 

(c)           Subject to Section 3(e),
if, on or prior to December 31, 2007, the Participant’s Continuous Service
is terminated by the Company other than for Cause or by the Participant, as
applicable, on account of Good Reason, death or Disability, then the
Participant shall receive a number of shares of Stock equal to the number of
Performance Share Units granted hereunder, multiplied by a fraction, the
numerator of which is the number of full months completed since the date hereof
as of the date of such termination, and the denominator of which is 36.  Subject to Section 3(k), all shares of
Stock to be issued to the Participant under this Section 3(c), if any,
shall be issued to the Participant (or the Participant’s designated beneficiary
in the event of the Participant’s death) within 10 days after the Participant’s
Continuous Service is terminated, but in no event later than March 15 of
the calendar year following the calendar year in which the Participant’s
Continuous Service is terminated.

 

(d)           Subject to Section 3(f),
if, after December 31, 2007, but prior to the Determination Date and prior
to a Change in Control, the Participant’s Continuous Service is terminated by
the Company other than for Cause or by the Participant, as applicable, on
account of Good Reason, death or Disability, then the Participant’s Performance
Share Unit number shall be determined (or that of the Participant’s designated
beneficiary in the event of the Participant’s death) in accordance with Appendix
A, and the Participant shall at the time of such termination 

 

2

 

be vested in a number of
shares of Stock determined by the product of (i) such Performance Share
Unit number, multiplied by (ii) a fraction, the numerator of which is the
number of full months completed since the date hereof as of the date of such
termination, and the denominator of which is 36.  Subject to Section 3(k), all shares of
Stock to be issued to the Participant under this Section 3(d), if any,
shall be issued to the Participant (or the Participant’s designated beneficiary
in the event of the Participant’s death) within 10 days after the Participant’s
Continuous Service is terminated, but in no event later than March 15 of
the calendar year following the calendar year in which the Participant’s
Continuous Service is terminated.  If the
Participant becomes entitled to any shares of Stock under this Section 3(d),
he shall not be entitled to receive any shares of Stock under any other
subsection of this Section 3.

 

(e)           If there is a Change in
Control on or prior to December 31, 2007, and the Participant remains in
Continuous Service through the date which is six (6) months after the
effective date of the Change in Control (“Six-Month Date”), then the
Participant shall be vested in a number of shares of Stock equal to the number
of Performance Share Units granted hereunder, multiplied by a fraction, the
numerator of which is the number of full months that have elapsed since the
date hereof as of the date of such termination, and the denominator of which is
36.  Subject to Section 3(k), all
shares of Stock to be issued to the Participant under this Section 3(e),
if any, shall be issued to the Participant within 10 days after the Six-Month
Date but in no event later than March 15 of the calendar year following
the calendar year in which the Six-Month Date occurs; provided, however,
that if the Change in Control triggering the right to payment under this Section 3(e) does
not constitute a permitted distribution event under Section 409A(a)(2) of
the Code, then notwithstanding anything in this Section 3(e) to the
contrary, issuance of the shares of Stock will be made, to the extent necessary
to comply with Section 409A of the Code, to the Participant on (or within
10 days after) the earliest of (i) the Participant’s “separation from
service” with the Company (determined in accordance with Section 409A of
the Code); (ii) the Determination Date; or (iii) the Participant’s
death.

 

(f)            If there is a Change
in Control after December 31, 2007, but prior to the Determination Date,
and the Participant remains in Continuous Service through the Six-Month Date,
then the Participant’s Performance Share Unit number shall be determined (or
that of the Participant’s designated beneficiary in the event of the
Participant’s death) in accordance with Appendix A, and the Participant
shall on such Six-Month Date be vested in a number of shares of Stock
determined by the product of (i) such Performance Share Unit number,
multiplied by (ii) a fraction, the numerator of which is the number of
full months completed since the date hereof as of the date of such termination,
and the denominator of which is 36. 
Thereafter, the Participant shall become vested as of the Determination
Date in a number of shares of Stock equal to the product of the number of
Performance Share Units granted hereunder, multiplied by the fraction resulting
from one (1) minus the fraction set forth in Section 3(f)(ii) of
this paragraph, provided that, in the event that the Participant’s employment
is terminated prior to the Determination Date by the Company other than for
Cause or by the Participant, as applicable, on account of Good Reason, death or
Disability, the Participant shall be vested in a number of shares of Stock
equal to the number of Remaining Performance Share Units, multiplied by a
fraction, the numerator of which is the number of full months that have elapsed
for the period commencing on the Six-Month Date and ending on the date of such
termination, and the denominator of which is the number of full months for the
period commencing on the Six-Month Date and ending on the Determination
Date.  Notwithstanding any provision
hereof, to the extent 

 

2

 

that cash is substituted
for all or part of any Performance Share Unit incident to the Change in
Control, then each such Performance Share Unit shall to that extent be
immediately vested upon the Change in Control. 
All shares of Stock (or any cash substituted therefore) to be issued to
the Participant under this Section 3(f), if any, shall be issued to the
Participant (A) subject to Section 3(k), within 10 days after the
Participant’s Continuous Service is terminated, or (B) within 10 days
after the Determination Date, but in either such case, no later than March 15,
2010, whichever occurs earlier.  If the
Participant becomes entitled to any shares of Stock or cash under this Section 3(f),
he shall not be entitled to receive any shares of Stock under any other
subsection of this Section 3.

 

(g)           If there is a Change in
Control on or prior to December 31, 2007, and the Participant’s Continuous
Service is terminated by the Company other than for Cause or by the
Participant, as applicable, on account of Good Reason, death or Disability
during the Change in Control Period, then the Participant shall receive a
number of shares of Stock equal to the number of Performance Share Units
granted hereunder, multiplied by a fraction, the numerator of which is the
number of full months completed since the date hereof as of the date of such
termination, and the denominator of which is 36.  Subject to Section 3(k), all shares of
Stock to be issued to the Participant under this Section 3(g), if any, as
a result of the termination of the Participant’s Continuous Service that occurs
during the six-month period prior to the effective date of the Change in
Control shall be issued to the Participant (or the Participant’s designated
beneficiary in the event of the Participant’s death) within 10 days after the
effective date of the Change in Control but in no event later than March 15
of the calendar year following the calendar year in which the Change in Control
occurs; provided, however, that if the Change in Control
triggering the right to payment under this Section 3(g) does not
constitute a permitted distribution event under Section 409A(a)(2) of
the Code, then notwithstanding anything in this Section 3(g) to the
contrary, issuance of the shares of Stock will be made, to the extent necessary
to comply with Section 409A of the Code, to the Participant on (or within
10 days after) the earlier of (i) the Determination Date or (ii) the
Participant’s death.  Notwithstanding
anything herein to the contrary, subject to Section 3(k), all shares of
Stock to be issued to the Participant under this Section 3(g), if any, as
a result of the termination of the Participant’s Continuous Service that occurs
during the six-month period following the effective date of the Change in
Control shall be issued to the Participant (or the Participant’s designated
beneficiary in the event of the Participant’s death) within 10 days after the
Participant’s Continuous Service is terminated but in no event later than March 15
of the calendar year following the calendar year in which the Participant’s
Continuous Service is terminated.

 

(h)           If there is a Change in
Control after December 31, 2007, but prior to the Determination Date, and
the Participant’s Continuous Service is terminated during the Change in Control
Period by the Company other than for Cause or by the Participant, as
applicable, on account of Good Reason, death or Disability, then the
Participant’s Performance Share Unit number shall be determined in accordance
with Appendix A, and the Participant shall be vested at the time of such
termination in the sum of (i) a number of shares of Stock determined by
multiplying such Performance Share Unit number by a fraction, the numerator of
which is the number of full months completed since the date hereof as of the
date of such Change in Control, and the denominator of which is 36, and (ii) a
number of shares of Stock equal to the product of the number of Performance
Share Units granted hereunder, multiplied by the fraction resulting from one (1) minus
the fraction set forth in Section 3(h)(i) of this paragraph.  Subject to Section 

 

2

 

3(k) all shares of
Stock to be issued to the Participant under this Section 3(h), if any, as
a result of the Participant’s termination of Continuous Service during the
six-month period prior to the effective date of the Change in Control shall be
issued to the Participant (or the Participant’s designated beneficiary in the
event of the Participant’s death) within 10 days of the effective date of the
Change in Control, but in no event later than March 15 of the calendar
year following the calendar year in which the effective date of the Change in
Control occurs; provided, however, that if the Change in Control
triggering the right to payment under this Section 3(h) does not
constitute a permitted distribution event under Section 409A(a)(2) of
the Code, then notwithstanding anything in this Section 3(h) to the
contrary, issuance of the shares of Stock will be made, to the extent necessary
to comply with Section 409A of the Code, to the Participant on (or within
10 days after) the earlier of (i) the Determination Date or (ii) the
Participant’s death.  Notwithstanding
anything herein to the contrary, subject to Section 3(k), all shares of Stock
to be issued to the Participant under this Section 3(h), if any, as a
result of the Participant’s termination of Continuous Service after the
effective date of the Change in Control shall be issued to the Participant (or
the Participant’s designated beneficiary in the event of the Participant’s
death) within 10 days after the Participant’s Continuous Service is terminated
but in no event later than March 15 of the calendar year following the
calendar year in which the Participant’s Continuous Service is terminated.  If the Participant becomes entitled to any
shares of Stock under this Section 3(h), he shall not be entitled to
receive any shares of Stock under any other subsection of this Section 3.

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

(j)            For the purposes of Section 3(i) (and
with respect to Section 3(i)(i), for purposes of Section 1(b)), 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”);

 

2

 

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

 

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

 

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

 

4.             Nontransferability
of Grant

 

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

 

5.             Distribution
and Voting Rights

 

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

 

6.             Stock;
Adjustment Upon Certain Events

 

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

 

(b)           The existence of this
Agreement and the Performance Share Units granted hereunder shall not affect in
any way the right or power of the Board or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other
change in the Company’s capital structure or its business, any merger or
consolidation of the Company 

 

2

 

or any affiliate, any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Stock, the authorization or issuance of additional shares of
Stock, the dissolution or liquidation of the Company or any affiliate or sale
or transfer of all or part of the assets or business of the Company or any
affiliate, or any other corporate act or proceeding.

 

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

 

7.             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.

 

8.             Other
Conditions

 

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

 

9.             Withholding
Taxes

 

The Participant shall be liable for any and
all U.S. federal, state or local taxes of any kind required by law to be
withheld with respect to the delivery of any shares of Stock under this
Agreement.  The Company shall withhold from the total number of shares of Stock the
Participant is to receive on a settlement date a number of shares that has a
total value equal to the amount necessary to satisfy any and all such
withholding tax obligations.  The
value of any fraction of retained shares not necessary for required withholding
shall be applied to the Participant’s federal income tax withholding by the
Company generally.  Instead of
withholding 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 Participant
becomes the owner of shares of Stock under this Agreement cash in an amount
sufficient to satisfy all applicable required withholding taxes and social security
contributions related to such vesting, or (b) deduct from his regular
salary payroll cash, on a payroll date following the date on which the
Participant becomes the owner of shares of Stock under this Agreement, in an
amount sufficient to satisfy such obligations. 
The option described in clause (b) of the preceding sentence shall
not be available if the Participant is an
officer subject to Section 16 of the Exchange Act as amended and/or Rule 144 promulgated under the
Securities Act of 1933 as amended.

 

2

 

10.           Distribution
of Stock

 

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

 

11.           Incorporation
of the Plan

 

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

 

12.           Electronic
Delivery

 

The Company may, in its sole discretion,
deliver any documents related to the Performance Share Units and the
Participant’s participation in the Plan, or future awards that may be granted
under the Plan, by electronic means or to request the Participant’s consent to
participate in the Plan by electronic means. 
The Participant hereby consents to receive such documents by electronic
delivery and, if requested, agrees to participate in the Plan through an
on-line or electronic system established and maintained by the Company or
another third party designated by the Company.

 

13.           Miscellaneous

 

(a)           The Performance Share
Units comprising this award may be recorded in an unfunded Performance Share
Unit account in the Participant’s name maintained by the Company.  The Participant will have no rights as a
stockholder of the Company by virtue of any Performance Share Unit awarded to
him until shares of Stock, if any, are issued to the Participant as described
in this Agreement.

 

(b)           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.

 

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

 

2

 

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

 

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

 

(f)            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.

 

(g)           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.

 

(h)           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.

 

(i)            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.

 

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

 

(k)           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.

 

(l)            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.

 

2

 

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

 

PRICELINE.COM INCORPORATED

 

Jeffery Boyd

Chief Executive Officer

 

PARTICIPANT

 

 

Appendix A

 

The Performance Share Unit number shall be determined
in accordance with the following chart. 
Upon any date of determination as set forth in the Agreement, the
Participant’s Performance Share Unit number shall be determined as of the most
recently completed fiscal quarter for the period commencing January 1,
2007.  Such Performance Share Unit number
shall be equal to the product of (1) the number of Performance Share Units
granted hereunder, multiplied by (2) the sum of (a) the lowest
Percentage of Target in the applicable Percentage of Target Range, plus (b) the
ProRata Target Percentage Point Increase.

 

	
  Cumulative

  EPS Ranges

  per specified

  quarter

  	
   

  	
  4th fiscal quarter

  completed since

  1/1/07

  	
   

  	
  5th fiscal quarter

  completed since

  1/1/07

  	
   

  	
  6th fiscal quarter

  completed since

  1/1/07

  	
   

  	
  7th fiscal

  quarter

  completed 

  since 1/1/07

  	
   

  	
  8th fiscal quarter

  completed since

  1/1/07

  	
   

  	
  9th fiscal quarter

  completed since

  1/1/07

  	
   

  	
  10th fiscal

  quarter

  completed

  since 1/1/07

  	
   

  	
  11th fiscal

  quarter

  completed

  since 1/1/07

  	
   

  	
  Percentage of Target

  ranges (Earned Shares

  as% of Target)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than

  	
   

  	
  $

  	
  2.50

  	
   

  	
  $

  	
  2.90

  	
   

  	
  $

  	
  3.69

  	
   

  	
  $

  	
  4.36

  	
   

  	
  $

  	
  5.03

  	
   

  	
  $

  	
  5.77

  	
   

  	
  $

  	
  6.51

  	
   

  	
  $

  	
  7.25

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Between

  	
   

  	
  2.50 and 2.75

  	
   

  	
  2.90 and 3.15

  	
   

  	
  3.69 and 4.10

  	
   

  	
  4.36 and 4.84

  	
   

  	
  5.03 and 5.59

  	
   

  	
  5.77 and 6.41

  	
   

  	
  6.51 and 7.23

  	
   

  	
  7.25 and 8.05

  	
   

  	
  75% to 100%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (pro rata)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Between

  	
   

  	
  2.75 and 3.50

  	
   

  	
  3.15 and 3.90

  	
   

  	
  4.10 and 5.10

  	
   

  	
  4.84 and 6.01

  	
   

  	
  5.59 and 6.93

  	
   

  	
  6.41 and 7.92

  	
   

  	
  7.23 and 8.91

  	
   

  	
  8.05 and 9.89

  	
   

  	
  100% to 200%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (pro rata)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  More than

  	
   

  	
  3.50

  	
   

  	
  3.90

  	
   

  	
  5.1

  	
   

  	
  6.01

  	
   

  	
  6.93

  	
   

  	
  7.92

  	
   

  	
  8.91

  	
   

  	
  9.89

  	
   

  	
  200%

  	
   

  
																												

 

The “ProRata Percentage Point Increase” means the
quotient of (1) the increase in the Cumulative EPS within the specified
range per the applicable quarter for which the determination is made, divided
by (2) the result of a fraction, the numerator of which is the difference
between the lowest and highest Cumulative ESP within such specified range per
the applicable quarter for which the determination is made, and the denominator
of which is the difference between the lowest and highest specified Percentage
of Target for such quarter.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]