Form 8-K Priceline Group Inc. For: Apr 27
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E-mailSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 27, 2016
The Priceline Group Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-36691 | 06-1528493 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
800 Connecticut Avenue, Norwalk, Connecticut | 06854 | |
(Address of principal office) | (zip code) | |
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4c under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On April 27, 2016, the Board of Directors (the “Board”) of The Priceline Group Inc. (the “Company”) appointed former CEO and current Chairman Jeffery H. Boyd as Interim Chief Executive Officer and President, effective immediately, while the Board conducts a search to name a successor. The appointment followed the resignation of Darren Huston as President and Chief Executive Officer and as a Director. The Board has established a committee, to be chaired by Mr. James M. Guyette, Lead Independent Director, to identify Chief Executive Officer candidates.
The Company also announced that current Booking.com President and Chief Operating Officer Gillian Tans has been named as Chief Executive Officer of Booking.com, a Priceline Group subsidiary, replacing Mr. Huston who also served as Chief Executive Officer of that business unit.
Mr. Huston resigned following an investigation overseen by independent members of the Board of Directors of the facts and circumstances surrounding a personal relationship that Mr. Huston had with an employee of the Company who was not under his direct supervision. The investigation determined that Mr. Huston had acted contrary to the Company’s Code of Conduct and had engaged in activities inconsistent with the Board’s expectations for executive conduct, which Mr. Huston acknowledged and for which he expressed regret.
In connection with Mr. Huston’s resignation, the Company and Mr. Huston entered into a separation letter, dated April 27, 2016. Under the terms of the letter, the Company and Mr. Huston have agreed, among other things, to the following:
• | Mr. Huston will not receive any severance payments; |
• | Mr. Huston will receive pro rata vesting based on time served of his outstanding equity awards (as contemplated by his employment agreement for certain terminations, except that the performance multiplier for his 2015 performance share units is reduced from the multiplier provided for by the terms of the equity agreement based on the Company’s historical financial performance to 1); |
• | The Company will pay for the cost of reasonable relocation expenses to North America (as contemplated by his employment agreement for certain terminations); and |
• | Mr. Huston will continue to be bound by the non-compete, non-solicitation and proprietary information covenants contained in his employment agreement. |
The foregoing summary of the separation letter is qualified in its entirety by reference to the letter itself, which is attached to this Current Report as Exhibit 99.2 and which is incorporated by reference in its entirety into this Item 5.02.
Item 7.01. Regulation FD Disclosure
A copy of the press release announcing the matters referenced in Item 5.02 is furnished with this Current Report on Form 8-K as Exhibit 99.1.
The information furnished herewith pursuant to Item 7.01 of this Current Report on Form 8-K shall not be deemed to be “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit
99.1 Press Release dated April 28, 2016
99.2 Separation Letter, dated April 27, 2016, between Mr. Huston and The Priceline Group
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PRICELINE.COM INCORPORATED | ||
By: | /s/ Peter J. Millones | |
Name: Peter J. Millones | ||
Title: Executive Vice President, General Counsel and Secretary | ||
Date: April 28, 2016
EXHIBIT INDEX
Exhibit
99.1 Press Release dated April 28, 2016
99.2 Separation Letter, dated April 27, 2016, between Mr. Huston and The Priceline Group
Exhibit 99.1
PRICELINE GROUP CEO DARREN HUSTON RESIGNS; CHAIRMAN JEFFERY H. BOYD APPOINTED
INTERIM CEO
INTERIM CEO
Gillian Tans named Chief Executive Officer of Booking.com
NORWALK, Conn., April 28, 2016 -- The Priceline Group (Nasdaq: PCLN) (the "Company," the "Group," "we," "our" or "us") announced today that Darren Huston has resigned from the Company, effective immediately. The Company has appointed former CEO and current Chairman Jeffery H. Boyd as Interim Chief Executive Officer and President of The Priceline Group while the Board conducts a search to name a successor.
Mr. Boyd is a 16-year veteran of The Priceline Group, previously serving as President and Chief Executive Officer from 2002 to 2013, during which time he led the Company through a period of significant global expansion and growth in stockholder value.
The Company also announced that current Booking.com President and Chief Operating Officer Gillian Tans has been named Chief Executive Officer of Booking.com, a Priceline Group subsidiary, replacing Mr. Huston who also served as CEO of this business unit. Ms. Tans has been a leader at the company since 2002, most recently serving as Booking.com’s President since January 2015 and Chief Operating Officer since September 2011, responsible for leading the development and execution of Booking.com’s business strategy and directly overseeing all aspects of the brand’s operations.
Mr. Huston resigned following an investigation overseen by independent members of the Board of Directors of the facts and circumstances surrounding a personal relationship that Mr. Huston had with an employee of the Company who was not under his direct supervision. The investigation determined that Mr. Huston had acted contrary to the Company’s Code of Conduct and had engaged in activities inconsistent with the Board’s expectations for executive conduct, which Mr. Huston acknowledged and for which he expressed regret.
James M. Guyette, Lead Independent Director, said, “I am satisfied with the Board’s thorough review of this issue. The performance of the business under Darren has been strong, and the Company is very well-positioned to continue executing on its strategy for growth. Jeff is deeply familiar with the Company’s strategy and leadership team, which consists of highly accomplished entrepreneurs and seasoned professional executives with long-tenure in the business. We are confident the Company is in strong hands while we conduct a search for a new CEO.”
An independent committee of the Board of Directors overseen by Mr. Guyette will work to identify Chief Executive Officer successor candidates.
Mr. Boyd said, “The culture of our brands and the quality of our leadership have been critical to the Group's success over the years. I commend Gillian on her promotion to CEO of Booking.com and I am confident she will do a great job leading the business. The outstanding leadership of our independent
Exhibit 99.1
brands – Booking.com, priceline.com, KAYAK, Agoda, Rentalcars.com and OpenTable – have an excellent track record of executing on what I believe is a winning strategy. The Board and I continue to see tremendous potential to build the Group's global platform and create value for our stockholders.”
Prior to serving as President and Chief Executive Officer of the Company, Mr. Boyd was the Company’s President and Co-Chief Executive Officer from August 2002 to November 2002 and Chief Operating Officer from November 2000 to August 2002. He previously served as the Company’s Executive Vice President, General Counsel and Secretary from January 2000 to October 2000.
The Company will announce Q2 earnings on May 4th 2016, as previously scheduled.
About The Priceline Group
The Priceline Group (NASDAQ: PCLN) is the world leader in online travel and related services, provided to customers and partners in over 220 countries and territories through six primary brands - Booking.com, priceline.com, KAYAK, agoda.com, Rentalcars.com, and OpenTable. The Priceline Group's mission is to help people experience the world. For more information, visit pricelinegroup.com, and follow us on Twitter @PricelineGroup.
For Press Information: Leslie Cafferty (203) 299-8128 [email protected]
For Investor Relations: Matthew Tynan (203) 299-8487 [email protected]
Exhibit 99.2
April 27, 2016
Darren R. Huston
At the Address on File
with the Company
with the Company
Dear Darren:
This letter memorializes the terms of your resignation from The Priceline Group Inc. (“Priceline”). The Board of Directors of Priceline (the “Board”) appreciates and recognizes your service over the past five years and the professional manner in which you have handled this matter.
1. Resignation
The Board accepts your resignation as President and Chief Executive Officer, Director and employee of Priceline and of its affiliate Booking.com Holding B.V. (“Booking.com”), effective today. By accepting this letter, you confirm your resignation as set forth above and your resignation from all other positions you may hold as a director, officer or employee of Priceline and any of its subsidiaries and affiliates (together, the “Group”), which is also accepted and effective today. If any other documentation is necessary to properly effectuate your resignations, you agree to cooperate reasonably and promptly in executing and delivering it at our request.
2. Outstanding Equity Awards
In connection with your resignation, you will forfeit a portion of your outstanding unvested Priceline equity-based awards. Subject to the terms and conditions of this letter, however, you will retain a prorated amount of those awards that reflects the number of days during the relevant vesting or performance period that you were employed at Priceline. The attached schedule (the “Schedule”) details the agreed vesting of your awards. Priceline will withhold shares underlying your vested equity awards in satisfaction of tax withholding obligations. Priceline will issue the shares underlying the vested equity awards provided for in this Section 2 within 10 business days of full execution of this Agreement, and will pay the relocation expense amount in Section 3 (below) within y business days of receipt of appropriate documentation evidencing such expenses.
Mr. Darren R. Huston Page 2
3. Accrued Compensation/Benefits and Relocation
You are also entitled to (a) your unpaid base salary through the end of your employment, (b) compensation for any accrued vacation that you have not taken through the end of your employment, (c) any accrued expense reimbursements through the end of your employment and (d) any vested pension benefits that are required, or to which you are entitled, under any plan, contract or arrangement of the Group, each of the preceding will be paid at the time, and in accordance with, their existing terms and, together, constitute your “Accrued Compensation/Rights”. Subject to the terms and conditions of this letter, you will also be entitled to receive: (i) the cost of reasonable relocation expenses to North America; and (ii) Group paid tax advice and tax preparation services for the 2016 tax year pursuant to the Company’s guidelines for executives entitled to receive such advice and services.
4. Cooperation
You agree to make yourself reasonably available to the Group to respond to requests by the Group for information concerning any litigation, regulatory inquiry or investigation, involving facts or events relating to the Group that may be within your knowledge. You agree to cooperate fully with the Group in connection with any and all future litigation or regulatory proceedings brought by or against the Group to the extent the Group reasonably deems your cooperation necessary or desirable. You will be entitled to reimbursement of reasonable out-of-pocket expenses (not including counsel fees) incurred in connection with fulfilling your obligations under the prior two sentences.
5. Continuing Covenants
You and we affirm the obligations set forth in Sections 13 (Confidentiality), 14 (Non-Competition), 16 (Return of Property), 17 (Intellectual Property and Industrial Property Rights) and 18 (Indemnification) (the “Continuing Covenants”) of the Second Amended and Restated Employment Contract, dated March 5, 2015, among Priceline, Booking.com and you (the “Employment Agreement”), which will continue to apply in accordance with their terms following your resignation (except to the extent expressly modified by this letter). Notwithstanding your commitment to return Group property and information as required by Section 16.1 of the Employment Agreement, the Group agrees that you may retain a copy of your contacts directories from your Group-provided Macintosh laptop computer and from your Group mobile telephone. You agree to return those devices to the Group.
6. Conditions to Benefits; No Other Benefits
You acknowledge and agree that, except as set forth in Sections 2, 3 and 5 of this letter, you are not entitled to any severance or other payments or benefits under the Employment Agreement or otherwise in connection with your resignation and/or the termination of employment with the Group (including, for avoidance of doubt, under the provisions of Section 11.2 of the Employment Agreement). The benefits set forth in Sections 2 and 3 of this letter (other than the provision of your Accrued Compensation/Rights) are contingent in all respects on (1) your not making any claim (including filing any action, complaint or arbitration or
Mr. Darren R. Huston Page 3
commencing any other judicial or arbitral proceedings) inconsistent with this Section 6, (2) continued compliance with the Continuing Covenants in all material respects and (3), with respect to Section 2, your compliance with the relevant award agreement (except to the extent modified by this letter).
7. No Reliance
You acknowledge that you have been advised to consult with, and have consulted with, an attorney of your choice before signing this letter. You further acknowledge that you have fully read this letter, understand its contents and agree to its terms and conditions of your own free will, knowingly and voluntarily, and without any duress or coercion. You and Priceline acknowledge that each has made an independent investigation of any relevant facts and is not relying on any statement or representation of the other in entering into this Agreement, other than those set forth herein. Each party acknowledges that it may later discover facts different from or in addition to those which it knew or believed to be true now and agrees that, in such event, this letter shall nevertheless remain effective in all respects, notwithstanding such different or additional facts or the discovery of those facts.
8. Miscellaneous
This letter will be governed by the laws of The Netherlands. Any dispute, claim, or legal action arising under this resignation letter agreement or otherwise relating to your relationship with the Company, shall be resolved by final, binding and confidential arbitration conducted by the American Arbitration Association (“AAA”) in New York, New York, pursuant to the AAA’s rules for resolution of commercial disputes; provided that neither party shall be precluded from seeking injunctive relief in any court of appropriate jurisdiction.
* * *
If you agree that this letter correctly memorializes our understandings, please sign and return this letter, which will become a binding agreement on our receipt. The Board wishes success in your future endeavors.
Very truly yours,
THE PRICELINE GROUP INC.
By: /s/ Peter J. Millones
BOOKING.COM HOLDING B.V.
By: /s/ Rutger Prakke
Accepted and Agreed:
/s/ Darren R. Huston
Darren R. Huston
Darren R. Huston
Date: April 27, 2016
Mr. Darren R. Huston Page 4
SCHEDULE
Equity-Based Award | Description of Vesting | Number of Shares |
2013 Priceline RSU Award | Vesting with respect to a pro-rata portion of the award, based on the number of days during the applicable vesting period that you were employed with the Group. | 4,479 pro rata shares |
Priceline PSU Award granted in 2014 | Vesting with respect to a pro-rata portion of the award, based on the number of days during the applicable performance period that you were employed with the Group and an applicable performance multiplier equal to 2. | 16,189 pro rata shares |
Priceline PSU Award granted in 2015 | Vesting with respect to a pro-rata portion of the award, based on the number of days during the applicable performance period that you were employed with the Group and an applicable performance multiplier equal to 1. | 4,967 pro rata shares |
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