How is director compensation changing?

Non-employee directors will no longer receive stock options; instead, they will receive an annual grant of 2,000 shares of restricted common stock that vest over four years. The Chairperson of the Board will also receive 2,000 restricted shares annually.

What is the structure of the 2006 Bonus Plan?

The 2006 Bonus Plan is primarily tied to the company's 2006 financial performance, specifically "pro forma" net income per share growth for U.S. employees and EBITDA targets for Priceline Europe employees. A portion of the bonus pool can also be funded based on the achievement of certain non-financial goals, at the Compensation Committee's discretion.

How will 'performance shares' be awarded to employees?

Employees eligible for performance shares will receive a target number of shares on or about the third anniversary of the grant date. The actual number issued will depend on priceline.com's average "pro forma" net income per share growth rate over three years, compared to a peer group. The shares can be adjusted upward by up to 200% of the target, but will not be issued if priceline.com's growth rate is less than 75% of the peer group's.

What are the key terms of Peter Millones' employment agreement?

The agreement has an initial two-year term with automatic one-year extensions. It guarantees a minimum annual salary of $275,000 and eligibility for bonus and long-term compensation plans. In case of termination without cause or for good reason, Mr. Millones is entitled to severance equal to two times his base salary and target bonus, a pro-rata bonus, and continued health, life, and disability benefits for one year (or two years if triggered by a change in control). The agreement also addresses potential Section 409A tax implications and provides for excise tax gross-ups if severance is considered an "excess parachute payment".

BKNG 8-K: Material Agreements

Summary

This 8-K filing from priceline.com Incorporated (now Booking Holdings Inc.) on February 7, 2006, details significant changes in director compensation and the adoption of new employee incentive programs. Notably, stock options for non-employee directors have been replaced with restricted stock awards that vest over four years, with provisions for accelerated vesting under certain conditions like a change in control. The company also introduced a 2006 Bonus Plan for senior executives and employees, primarily tied to "pro forma" net income per share growth and EBITDA targets for European operations, with a portion also allocated for non-financial goals. Furthermore, priceline.com authorized the issuance of "performance shares" for 2006, which will vest based on the company's "pro forma" net income per share growth relative to a peer group over a three-year period. These performance shares also include accelerated vesting provisions upon a change in control. Finally, the filing discloses an employment agreement with Executive Vice President Peter Millones, outlining a two-year term, a minimum salary, and severance packages in case of termination without cause or for good reason, including double salary and bonus, continued benefits, and potential excise tax gross-ups.

Key Highlights

1Non-employee directors will now receive annual grants of 2,000 restricted shares vesting over four years, replacing stock options.
2The Chairperson of the Board will also receive 2,000 restricted shares annually.
3A 2006 Bonus Plan has been established, primarily linking cash bonuses for executives and employees to "pro forma" net income per share growth and non-financial goals.
4"Performance shares" will be issued to employees, vesting over three years based on "pro forma" net income per share growth compared to a peer group.
5Vesting of restricted stock and performance shares can accelerate in the event of a change in control.
6An employment agreement was executed with Peter Millones, Executive Vice President, General Counsel and Secretary, with a two-year term and specific severance provisions.
7Severance for Mr. Millones includes two times base salary and target bonus, pro-rata bonus, and extended benefit continuation, with special provisions for change in control scenarios and Section 409A compliance.

Booking Holdings Inc. 8-K Report, Material Agreement (Feb 8, 2006)

Summary

Key Highlights

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