Employment Agreement - priceline.com Inc. and Daniel H. Schulman
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of June 14, 1999, by and between,
Priceline.com Incorporated, a Delaware corporation, with its principal United
States office at Five High Ridge Park, Stamford, Connecticut 06905-11325 (the
"Company"), and Daniel H. Schulman, residing at 27 Valleyview Road, Warren, New
Jersey 07059 ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive as President
and Chief Operating Officer of the Company;
WHEREAS, the Company and Executive desire to enter into this
agreement (the "Agreement") as to 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 9 hereof, Executive's employment under this Agreement shall
be for an approximately five (5) year term (the "Initial Employment Term")
commencing on June 14, 1999 (the "Commencement Date") and ending on June 30,
2004. Subject to Section 9 hereof, the Initial Employment Term shall be
automatically extended for additional terms of successive one (1) year periods
(the "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
then Initial Employment Term or Additional Employment Term of the termination of
Executive's employment hereunder at the end of such Employment Term. The Initial
Employment Term and the Additional Employment Term shall be referred to herein
as the "Employment Term."
2. POSITIONS. (a) Commencing July 1, 1999, Executive shall serve
as the President and Chief Operating Officer of the Company. Prior thereto
Executive shall be an employee but not an officer of the Company. The Company
will also nominate Executive during the Employment Term as a member of the Board
of Directors of the Company (the "Board"). Executive shall also serve, if
requested by the Board, or the Chief Executive Officer, as an executive officer
and director of subsidiaries and a director of associated companies of the
Company and shall comply with the policy of the Compensation Committee of the
Company's Board (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 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 Board.
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
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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) EQUITY. (i) OPTIONS. Executive is being granted
simultaneously herewith a stock option (the "Option") under the Priceline.com
Incorporated 1999 Omnibus Plan (the "Plan") to purchase three million
(3,000,000) shares of the Company's issued and outstanding common stock (the
"Common Stock"). The Option shall terminate on the tenth (10) anniversary of the
date of grant or, if earlier, eighteen (18) months after a termination of
Executive's employment with the Company. The exercise price with respect to each
share of Common Stock subject to the Option shall be $76.875. The Option will
become exercisable as to one sixth (1/6) of the Option upon the Commencement
Date, as to one sixth (1/6) of the Option on December 31, 1999, as to one-third
(1/3) of the Option on December 31, 2000 and as to the final one-third (1/3) of
the Option on December 31, 2001, provided that Executive is employed by the
Company on such vesting date. Vesting shall be accelerated as follows: (i) upon
a Termination without Cause or a Termination for Good Reason, the Option will
immediately vest (to the extent not then vested) as follows: two million
(2,000,000) shares if the termination takes place prior to the first anniversary
of the Commencement Date; two million five hundred thousand (2,500,000) shares
if the termination takes place within on or after the first anniversary of the
Commencement Date and prior to the second anniversary of the Commencement Date;
and three million (3,000,000) shares if the termination takes place thereafter;
or (ii) upon death or Termination for a Disability, the Option will immediately
vest as to fifty percent (50%) of Executive's then unvested shares; and (iii) in
the event of a Change in Control the Option will vest (to the extent not then
vested): two million (2,000,000) shares if the Change in Control takes place
prior to the first anniversary of the Commencement Date; two million five
hundred thousand (2,500,000) shares if the Change in Control takes place on or
after the first anniversary of the Commencement Date and prior to the second
anniversary of the Commencement Date; and three million (3,000,000) shares if
the Change in Control takes place thereafter; provided that the remaining shares
unvested shall vest (to the extent not otherwise vested prior thereto by the
other terms hereof) six (6) months after the Change in Control if the Executive
is then employed by the Company or, if earlier, upon a Termination without
Cause, Termination for Good Reason, death, Termination for Disability or the
Option not being continued or assumed upon the Change in Control.
(d) 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. LOAN. The Company shall lend Executive six million dollars
($6,000,000) (the "Loan") on the Commencement Date or as soon thereafter as
practical. The Loan shall accrue interest annually at the applicable Federal
rate, pursuant to Section 1274(d) of the Internal Revenue Code, as amended, and
shall be a full recourse loan. The Loan shall mature five (5) years after the
date of the Loan at which time the interest and principal will become payable.
Executive shall be required to make prepayments of the principal and accrued
interest in an amount equal to twenty-five percent (25%) of Executive's pre-tax
profits over ten million dollars ($10,000,000) from the exercise of the Option
prior to
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five (5) years from the Commencement Date. Notwithstanding any provision to the
contrary, any outstanding principal and interest on the Loan shall be forgiven
upon a Change in Control, death, Termination for Disability, Termination without
Cause, or Termination for Good Reason or at the end of the five (5) year term
(if Executive has not been terminated for Cause or resigned without Good Reason
prior thereto).
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 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.
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.
8. MOVING EXPENSES. The Company shall reimburse Executive for
all reasonable expenses and costs associated with establishing and maintaining a
temporary residence near the Company's office in Stamford, Connecticut on a
fully grossed up basis such that on an after tax basis Executive shall have no
after tax cost for the establishment and maintenance of such residence. In the
event that within one (1) year after the Commencement Date the Executive elects
to relocate to the area of the Company's office, the Company shall pay all
moving and relevant expenses incurred by Executive in relocating on a fully
grossed up basis such that Executive shall have no after tax cost for such
relocation.
9. 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 9(b)
hereof;
(iii) the termination of the Executive's employment by the
Executive for Good Reason pursuant to Section 9(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 9(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
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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 9(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 nonreelection 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 14 hereof; (vi) Executive's removal from or failure
to be elected or reelected to the Board; or (vii) 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 9(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 9(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 9(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
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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 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 9(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 (_) 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.
10. 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 7 (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
Section 4(c) hereof with regard to the Option and otherwise in accordance with
the terms of such plans and programs; (iii) continuation of Executive's health
benefits for Executive's dependents at the same level and cost as if Executive
was an employee of the Company for twelve (12) months; 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, to the extent not
duplicative of the foregoing, Executive shall be entitled to continuation of the
benefits (including
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without limitation to health, life, disability and pension) as if Executive had
been an employee of the Company for twelve (12) months.
(c) TERMINATION BY EXECUTIVE FOR GOOD REASON OR TERMINATION BY
THE COMPANY WITHOUT CAUSE. If (i) Executive terminates his employment hereunder
for Good Reason during the Employment Term or (ii) Executive's employment with
the Company is terminated by the Company without Cause, Executive shall be
entitled to receive, (A) over a period of twelve (12) months after such
termination 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); (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 Option and otherwise in accordance with the terms of such
plans and programs; (D) continuation of the benefits (including without
limitation to health, life, disability and pension) as if Executive was an
employee of the Company for twelve (12) months, provided that, if such
termination is after a Change in Control, the period of benefit continuation
shall be twenty-four (24) months; and (E) 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.
(d) TERMINATION WITH CAUSE OR VOLUNTARY RESIGNATION WITHOUT GOOD
REASON OR RETIREMENT. If, Executive's employment hereunder is terminated (i) by
the Company for Cause or (ii) by Executive without Good Reason, the 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 Option.
11. 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 the Executive or others, except upon obtaining by the
Company of a final unappealable judgment against Executive.
12. 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 (not including in the
securities beneficially owned by such person any securities
acquired directly from the Company or its Affiliates) representing
twenty-five percent (25%) or more of the combined voting power of
the Company's then outstanding voting securities;
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(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the Commencement Date, constitute the Board
and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent
solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination
for election by the Company's stockholders was approved or
recommended by a vote of the at least two-thirds (_) of the
directors then still in office who either were directors on the
Commencement Date or whose appointment, election or nomination for
election was previously so approved or recommended;
(iii) there is a consummated merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with
any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving or parent entity) more than fifty
percent (50%) of the combined voting power of the voting
securities of the Company or such surviving or parent equity
outstanding immediately after such merger or consolidation or (B)
a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no Person,
directly or indirectly, acquired twenty-five percent (25%) or more
of the combined voting power of the Company's then outstanding
securities (not including in the securities beneficially owned by
such person any securities acquired directly from the Company or
its Affiliates); or
(iv) the stock holders of the Company approve a plan of
complete liquidation of the Company or there is consummated on
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets (or any transaction
having a similar effect), other than a sale or disposition by the
Company of all or substantially all of the Company's assets to an
entity, at least fifty percent (50%) of the combined voting power
of the voting securities of which are owned by stockholders of the
Company in substantially the same proportions as their ownership
of the Company immediately prior to such sale.
(b) For purposes of this Section 12, 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, (2) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company, (3) an
underwriter temporarily holding securities pursuant to an offering
of such securities or (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
of the Company.
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13. 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.
(b) During and after the Employment Term, Executive shall not use
for his own benefit or disclose confidential information, knowledge or data
relating to the Company and its affiliates, and their respective businesses,
including any confidential information as to customers of the Company and its
affiliates 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, 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 information, knowledge or data 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 information, knowledge or data 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) In the event of a breach or potential breach of this Section
13, Executive acknowledges that the Company and its affiliates will 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 13 enforced. It is hereby acknowledged that the provisions of this
Section 13 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 13 and
only the applicable entity can waive the rights hereunder with respect to its
confidential information and employees.
14. 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 the 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.
15. LEGAL FEES.
(a) The Company shall pay the Executive's reasonable legal fees
and costs associated with entering into this Agreement.
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(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 13 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 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. All expenses of such
arbitration, including the fees and expenses of the counsel of the Executive,
shall be borne by the Company unless the arbitrators determine that Executive's
position was overall frivolous or otherwise taken in bad faith, in which case
the arbitrators may determine that Executive shall bear his own legal fees.
(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, the 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 the 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 the Executive is
intentionally delaying conclusion of the arbitration.
16 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
Commencement Date and supersedes any prior agreements between the Company and
Executive. 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 the Executive and otherwise complies with the provisions hereof
with regard to such assumption.
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(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 14 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,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
(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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Priceline.com Incorporated
By: /s/ Paul E. Francis
------------------------------
Name: Paul E. Francis
Title: Chief Financial Officer
/s/ Daniel H. Schulman
-------------------------------
Daniel H. Schulman
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