Priceline 2010 Annual Report Download - page 32

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With respect to the grant to Messrs. Finnegan and Millones, the PSUs will vest and be earned at the end
of the three year performance period if the consolidated non-GAAP EBITDA hurdles below are accomplished:
If consolidated non-
GAAP EBITDA for the
three-year period ending
December 31, 2012 is:
Then, the number of shares
that will be issued is:
Consolidated non-GAAP EBITDA
target for the three-year period endin
g
December 31, 2012 expressed as a
multiple of consolidated non-GAAP
EBITDA for the three-year period
ending December 31, 2009 (reflects
upper limit of each applicable tier of
consolidated non-GAAP EBITDA):
Less than $2,434.8 million 1x the “target” grant 2.1x
Between $2,434.8 million
and $2,593.7 million 1x to 2x the “target” grant 2.3x
Over $2,593.7 million 2x the “target” grant Greater than 2.3x
PSUs granted to Mr. Koolen tied to Booking.com’s 2010 through 2012 performance. In 2010, Mr.
Koolen was granted PSUs that were tied to the performance of Booking.com. The PSUs are forfeitable if the
minimum performance thresholds are not achieved during the three year time frame (2010 through 2012) by
Booking.com or in the event of a voluntary termination. These PSUs are based on the achievement by
Booking.com of non-GAAP EBITDA targets over the three year period. The calculation of non-GAAP EBITDA
is substantially similar to the calculation described above. If the minimum performance thresholds established
by the Committee are not met, the PSUs will not vest or be earned. The number of shares that could be issued at
the end of the three-year performance period ranges from zero to three times the “target” grant, depending on
Booking.com’s performance over that period.
If Booking.com non-GAAP EBITDA for the three-year period
ending December 31, 2012 is:
Then, the number of shares that
will be issued is:
Less than approximately 1.7x Booking.com non-GAAP EBITDA for
the three-year period ending December 31, 2009 0
Between approximately 1.7x and 1.9x Booking.com non-GAAP
EBITDA for the three-year period ending December 31, 2009 0x to 1x the “target” grant
Between approximately 1.9x and 2.2x Booking.com non-GAAP
EBITDA for the three-year period ending December 31, 2009 1x the “target” grant
Between approximately 2.2x and 2.4x Booking.com non-GAAP
EBITDA for the three-year period ending December 31, 2009 1x to 2x the “target” grant
Between approximately 2.4x and 2.5x Booking.com non-GAAP
EBITDA for the three-year period ending December 31, 2009 2x to 3x the “target” grant
Greater than 2.5x Booking.com non-GAAP EBITDA for the three-
year period ending December 31, 2009 Greater than 3x the “target” grant
The Committee estimated at the time of adoption – based on information available in early 2010 and the
public forecasts of the Company’s significant competitors – that the three year performance thresholds set forth
above, and the forfeiture thresholds with respect to Messrs. Boyd, Mylod and Koolen, represented significant
growth hurdles. If “target” consolidated non-GAAP EBITDA thresholds (in the case of the named executive
officers other than Mr. Koolen) or Booking.com non-GAAP EBITDA thresholds (in the case of Mr. Koolen)
were achieved, which would result in a “target” grant for executives (i.e, 1x), based on analyst estimates at the
time, it would represent leading growth as compared to the Company’s significant competitors. Accordingly, the
Committee believed that if priceline.com were to achieve the non-GAAP EBITDA hurdles above, the
stockholders of the Company would be rewarded. The Committee believed that the three-year performance
period focuses executives on longer-term performance and serves as a significant retention device.