EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT, dated as of February 7, 2005 (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 Chris Soder (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and Executive entered into an employment arrangement dated May 1, 2002, March 13, 2001 and January 4, 2000 (collectively, the “Original Employment Arrangements”)

 

WHEREAS, the Company desires that Executive continue to be employed as the Executive Vice President, Lodging and Vacation Packages of the Company;

 

WHEREAS, the Company and Executive desire to replace and supercede the Original Employment Arrangements in their entirety and enter into this agreement (the “Agreement”) providing for the terms of his 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 commence on the Effective Date and end on the second anniversary of the Effective Date (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 the 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 Executive Vice President, Lodging and Vacation Packages of the Company.   Executive shall also serve, if requested by the Chief Executive Officer of the Company, 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 Company’s Board of Directors (the “Compensation Committee”) with regard to retention or forfeiture of director’s fees.

 

(b)                                 Executive shall report directly to the Chief Executive Officer of the Company 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 of Directors (the “Board”) or the Chief Executive Officer of the Company.

 

(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 industry boards or committees.  Notwithstanding the foregoing, the Executive shall only serve on corporate boards of directors if approved in advance by the Chief Executive Officer of the Company.

 

3.                                       Base Salary.  During the Employment Term, the Company shall pay Executive a base salary at the annual rate of not less than $300,000.  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)                                  Other Compensation.  The Company may, upon recommendation of the Compensation Committee, award to the Executive such other bonuses and compensation as it deems appropriate and reasonable.

 

5.                                       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 four (4) weeks paid vacation per calendar year.  The Executive shall also be entitled to such periods of sick leave as is customarily provided by the Company for its senior executive employees.

 

6.                                       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.

 

7.                                       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 the Executive;

 

(ii)                    the termination of the Executive’s employment by the Company due to the Executive’s Disability pursuant to Section 7(b) hereof;

 

(iii)                 the termination of the Executive’s employment by the Executive for Good Reason pursuant to Section 7(c) hereof;

 

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

 

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

 

(vi)                the termination of the Executive’s employment by the Company for Cause pursuant to Section 7(e).

 

(b)                                 Disability.  If by reason of the same or related physical or mental illness or incapacity, the 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.  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.

 

2

 

(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 7(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, the Executive from officer positions with the Company specified herein without election to a higher position or removal of the 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 the 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 12 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.

 

(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 7(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 7(c)(i) or (ii) or the date may be five (5) days after the giving of such notice.

 

(e)                                  Cause.  Subject to the notification provisions of Section 7(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 or a more senior officer of the Company, 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 or the more senior officer (whichever is applicable); (iii) substantial and continuing willful refusal by the 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 the Executive by the Board or a more senior officer of the Company which specifically identifies the manner in which it is believed that the Executive has substantially and continually refused to attempt to perform his duties hereunder; or (iv) the 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

 

3

 

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 7(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.

 

8.                                       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 the 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 6 (collectively “Accrued Amounts”), which amounts shall be promptly paid in a lump sum to Executive’s estate; (ii) any other amounts or benefits owing to the 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 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 when bonuses for such period are paid to the other executives.

 

(b)                                 Disability.  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 were an active employee of the Company.

 

(c)      &nbs