Chief Information Information Officer -- Employment Agreement - Ronald Rose

EMPLOYMENT AGREEMENT


BY AND BETWEEN


PRICELINE.COM INCORPORATED


AND


RONALD ROSE


DECEMBER 20, 2000


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Exhibit 10.64


EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT, dated as of December 20, 2000 (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 Ronald Rose ("Executive").


W I T N E S S E T H:


WHEREAS, the Company desires that Executive be employed as the Chief Information 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 8 hereof, Executive's employment under this Agreement shall be for a two (2) year term (the "Initial Employment Term") commencing on December 20, 2000 (the "Commencement Date") and ending on December 20, 2002. Subject to Section 8 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) Executive shall serve as the Chief Information Officer of the Company. Executive shall also serve, if requested by the Chief Executive Officer or the Chief Operating Officer of the Company, 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 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 or the Chief Operating 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"), the Chief Executive Officer or the Chief Operating 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 or the Chief Operating Officer of the Company.


3. Base Salary. Commencing on the Effective Date and continuing during the remainder of 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) Stock Options.


(i) Option Grant. On December 20, 2000 (the "Date of Grant"), the
Company shall grant a Non-Qualified Option (as such term is
defined in the Priceline.com Incorporated 1999 Omnibus Plan
(the "Plan"))(the "Option") under the Plan to Executive to
purchase eight hundred thousand (800,000) shares of the
Company's common stock (the "Common Stock"). The exercise
price with respect to each share of Common Stock subject to
the Option shall be the Fair Market Value (as such term is
defined in the Plan) of the Common Stock on the Date of Grant.


(ii) Option Vesting. The Option shall vest and become exercisable
as to fifty percent (50%) of the Option on June 20, 2001 (the
"First Vesting Date"). The Option shall vest and become
exercisable as to the remaining fifty percent (50%) of the
Option pro rata on the 20th of each month over the eighteen
month period immediately following the First Vesting Date,
provided that Executive is employed by the Company on each
such vesting date. For avoidance of doubt, there shall be no
proportionate or partial vesting in the periods prior to each
vesting date and vesting shall occur only on the appropriate
vesting date pursuant to this Section 4(c)(ii). Vesting and
exercisability shall be accelerated as follows: (A) upon a
Termination without Cause or a Termination for Good Reason,
the Option will immediately vest and become exercisable (to
the extent not then vested) as follows: 50% of the Option if
the termination takes place prior to the First Vesting Date;
83.33% of the Option if the termination takes place on or
after the First Vesting Date and prior to the first
anniversary of the First Vesting Date; and 100% of the Option
if the termination takes place thereafter; or (B) upon death
or Termination for a Disability, the Option will immediately
vest as to 50% of Executive's then unvested shares; and (C)
upon the occurrence of a Change in Control while Executive is
employed by the Company, the Option will fully vest and become
exercisable in full (x) six (6) months after the Change in
Control if Executive is then employed by the Company, or (y)
if earlier, at, after or in connection with or in anticipation
of the Change in Control, upon a Termination without Cause,
Termination for Good Reason, Termination as a result of death
or Termination for Disability or (z) immediately prior to the
Change in Control, in the event that the Option is not
continued, assumed or substituted for upon a Change in
Control. For this purpose, the Option will not be considered
substituted for unless the terms and conditions of the
substitute Option are no less favorable to Executive than
those of the Option.


(iii) Termination. Upon Executive's Termination for Cause or
Termination without Good Reason, the unvested portion of the
Option shall be immediately forfeited and canceled. Upon
termination of Executive's employment with the Company, the


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portion of the Option that is not, and does not become, vested
in accordance with the terms hereof shall be immediately
forfeited and canceled. The vested portion of the Option shall
expire on the earlier of (i) the tenth (10th) anniversary of
the Date of Grant, or (ii)(A) eighteen (18) months after any
termination if the 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) Restricted Stock. (i) Issue Date. On the Effective Date, the Company shall issue and Executive shall receive five hundred thousand (500,000) shares of Restricted Stock, as such term is defined in the Plan (the "Restricted Stock"). If required by law, as consideration for receipt of the Restricted Stock, the Executive shall pay to the Company $4,000, which represents the par value ($0.008) per share of Restricted Stock.


(ii) Vesting Dates. Fifty percent (50%) of the Restricted Stock
shall vest on June 20, 2001 and the remaining fifty percent
(50%) of the Restricted Stock (the "Second Tranche") shall
vest on the second anniversary of the Effective Date. In the
event that the Company has positive Adjusted Net Income (as
defined below) for any twelve month period ending on the last
day of a calendar quarter, the Second Tranche of the
Restricted Stock shall immediately vest. Upon satisfaction of
the vesting requirements set forth in this Section 4(d)(ii),
the restrictions on the vested Restricted Stock, as set forth
in Section 4 of the Plan, shall lapse. Adjusted Net Income
means the net income (loss) of the Company and its
subsidiaries, on a consolidated basis, determined in
accordance with GAAP, plus, to the extent deducted in
computing net income (loss), (a) supplier warrant costs, (b)
option payroll taxes, (c) stock compensation costs, (d)
restructuring and other one-time charges and (e) preferred
stock dividends.


(iii) Accelerated Vesting. Vesting of the Restricted Stock shall be
accelerated as follows: (A) upon a Termination without Cause
or a Termination for Good Reason, the Restricted Stock will
immediately vest (to the extent not then vested) as follows:
50% of the Restricted Stock if the termination takes place
prior to June 20, 2001; 83.33% of the Restricted Stock if the
termination takes place on or after June 20, 2001 and prior to
June 20, 2002; and 100% of the Restricted Stock if the
termination takes place thereafter; or (B) upon death or
Termination for a Disability, the Restricted Stock will
immediately vest as to 50% of Executive's then unvested
shares; and (C) upon the occurrence of a Change in Control
while Executive is employed by the Company, 100% of the
Restricted Stock will fully vest (x) six (6) months after the
Change in Control if Executive is then employed by the
Company, or (y) if earlier, at, after or in connection with or
in anticipation of the Change in Control, upon a Termination
without Cause, Termination for Good Reason, Termination as a
result of death or Termination for Disability, or (z)
immediately prior to a Change in Control, if the Restricted
Stock is not continued, assumed or substituted for upon a
Change in Control.


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(iv) Termination. In the event of Executive's Termination for Cause
or Termination without Good Reason, the unvested portion of
the Restricted Stock shall be immediately forfeited and
canceled. Upon termination of Executive's employment with the
Company, the portion of the Restricted Stock that is not, and
does not become, vested in accordance with the terms hereof
shall be immediately forfeited.


(e) 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;


(ii) 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 upon thirty (30) days prior written notice;


(v) the termination of employment by the Executive without
Good Reason upon thirty (30) days prior written notice; or


(iii) 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.


(c) Termination for Good Reason. A Termination for Good Reason means ...