<PAGE>

================================================================================
                            SCHEDULE 14A INFORMATION

           Proxy Statement Pursuant to Section 14(a) of the Securities
                              Exchange Act of 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:
[_]  Preliminary Proxy Statement            [_] Confidential, for Use of the
                                            Commission Only (as permitted by
                                            Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[_]  Definitive Additional Materials
[_]  Soliciting Material under Rule 14a-12

                           priceline.com Incorporated
    ------------------------------------------------------------------------
                (Name of Registrant as Specified In Its Charter)

    ------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box): 
[X] No fee required.

[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1)  Title of each class of securities to which transaction applies: ___________

(2)  Aggregate number of securities to which transaction applies: ______________

(3)  Per unit price or other underlying value of transaction computed pursuant
     to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
     calculated and state how it was determined):

     _________________________________

(4)  Proposed maximum aggregate value of transaction: __________________________

(5)  Total fee paid: _______________________________

[_]  Fee paid previously with preliminary materials.

[_]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously. Identify the previous filing by registration statement number,
     or the Form or Schedule and the date of its filing.

(1)  Amount Previously Paid: _________________________________

(2)  Form, Schedule or Registration Statement No. ______________________________

(3)  Filing Party: _________________________________

(4)  Date Filed: ___________________________________

================================================================================

<PAGE>

priceline.com(sm)

                                                                  April 23, 2001

Dear Stockholder:

         You are cordially invited to attend the 2001 Annual Meeting of
Stockholders (the "Annual Meeting") of priceline.com Incorporated (the
"Company") to be held at 2:00 p.m. on Monday, May 21, 2001 at the Doubletree
Club Hotel, 789 Connecticut Avenue, Norwalk, Connecticut 06854.

         At the Annual Meeting, stockholders will be asked to (i) elect ten
Directors; (ii) approve amendments to the Company's 1999 Omnibus Plan (the "1999
Omnibus Plan") increasing the number of shares available under the plan and
increasing the number of options granted annually to non-employee directors
under the plan; and (iii) ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors. The accompanying Notice of 2001 Annual Meeting
of Stockholders and Proxy Statement describe the matters to be presented at the
Annual Meeting.

         The Board of Directors unanimously recommends that stockholders vote in
favor of the election of the nominated Directors, in favor of the amendments to
the Company's 1999 Omnibus Plan and to ratify the appointment of Deloitte &
Touche LLP as the Company's independent auditors.

         Whether or not you plan to attend the Annual Meeting, please mark,
sign, date and return your proxy card in the enclosed envelope as soon as
possible. Your stock will be voted in accordance with the instructions you have
given in your proxy card. You may attend the Annual Meeting and vote in person
even if you have previously returned your proxy card.


                                               Sincerely,

                                               /s/ Richard S. Braddock

                                               Richard S. Braddock
                                               Chairman of the Board


                                    IMPORTANT

         A proxy card is enclosed. We urge you to complete and mail the card
promptly in the enclosed envelope, which requires no postage if mailed in the
United States. Any stockholder attending the Annual Meeting may personally vote
on all matters that are considered, in which event the signed and mailed proxy
will be revoked.

                    IT IS IMPORTANT THAT YOU VOTE YOUR STOCK

<PAGE>

                           PRICELINE.COM INCORPORATED
                             800 CONNECTICUT AVENUE
                           NORWALK, CONNECTICUT 06854


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                       TO BE HELD ON MONDAY, MAY 21, 2001

To the Stockholders of priceline.com Incorporated:

         We hereby notify you that the Annual Meeting of Stockholders of
priceline.com Incorporated (the "Company") will be held on Monday, May 21, 2001
at 2:00 p.m. local time at the Doubletree Club Hotel, 789 Connecticut Avenue,
Norwalk, Connecticut 06854 for the following purposes:

         1. To elect ten Directors to hold office until the next annual meeting
of stockholders or until their respective successors are elected and qualified.

         2. To approve amendments to the priceline.com Incorporated 1999 Omnibus
Plan increasing the number of shares of the Company's common stock, par value
$0.008 per share, with respect to which awards may be granted to 35,375,000
shares from 25,375,000 shares and increasing the number of options granted to
non-employee directors each year to 20,000 options from 10,000 options.

         3. To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for our fiscal year ending December 31, 2001.

         4. To transact such other business as may properly come before the
meeting or any adjournment or postponement of the meeting.

         These business items are more fully described in the Proxy Statement
accompanying this Notice.

         The Board of Directors has fixed the close of business on April 10,
2001, as the record date for identifying those stockholders entitled to notice
of, and to vote at, this Annual Meeting and at any adjournment or postponement
of this meeting.


                                             By Order of the Board of Directors

                                             /s/ Jeffery H. Boyd

                                             Jeffery H. Boyd
                                             Secretary

Norwalk, Connecticut

A
pril 23, 2001

         All Stockholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, please complete, date, sign and
return the enclosed proxy as promptly as possible to ensure your representation
at the meeting. A return envelope (which is postage prepaid if mailed in the
United States) is enclosed for that purpose. Even if you have given your proxy,
you may still vote in person if you attend the meeting. Please note, however,
that if your shares are held of record by a broker, bank or other nominee and
you wish to vote at the meeting, you must obtain from the record holder a proxy
issued in your name.

<PAGE>

                           PRICELINE.COM INCORPORATED

                                 PROXY STATEMENT

                                TABLE OF CONTENTS

PROXY STATEMENT...............................................................1

         General..............................................................2

         Solicitation.........................................................2

         Voting Rights and Outstanding Shares; Approval.......................2

         Revocability of Proxies..............................................3

         Stockholder Proposals................................................3


PROPOSAL 1:  ELECTION OF DIRECTORS............................................3

         Board Committees and Meetings........................................6

P
ROPOSAL 2:  AMENDMENTS TO THE PRICELINE.COM INCORPORATED 1999 OMNIBUS PLAN...6

         Summary of priceline.com Incorporated 1999 Omnibus Plan..............7

P
ROPOSAL 3:  RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS................11

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................12

         Section 16(a) Beneficial Ownership Reporting Compliance..............14

DIRECTOR AND EXECUTIVE COMPENSATION...........................................15

         Compensation of Directors............................................15

         Compensation of Executive Officers...................................15

         Summary Compensation Table...........................................15

         Option Grants in Last Fiscal Year....................................17

         Aggregated Option Exercise in 2000 and Year-End Option Values........18

         Other................................................................18

COMPENSATION ARRANGEMENTS.....................................................18

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION...................20

REPORT OF THE COMPENSATION COMMITTE OF THE BOARD OF DIRECTORS
         ON EXECUTIVE COMPENSATION............................................21

PERFORMANCE MEASUREMENT COMPARISON............................................24

CERTAIN TRANSACTIONS..........................................................24

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS.......................29

AUDITOR INDEPENDENCE..........................................................30

OTHER MATTERS.................................................................31

APPENDIX A....................................................................32

APPENDIX B....................................................................34

APPENDIX C....................................................................46

<PAGE>

                           PRICELINE.COM INCORPORATED
                             800 CONNECTICUT AVENUE
                           NORWALK, CONNECTICUT 06854

                                 PROXY STATEMENT
                       FOR ANNUAL MEETING OF STOCKHOLDERS

                       TO BE HELD ON MONDAY, MAY 21, 2001

                 INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

         The enclosed proxy is solicited on behalf of the Board of Directors of
priceline.com Incorporated ("we" or "priceline.com" or the "Company") for use at
the Annual Meeting of Stockholders to be held on Monday, May 21, 2001, at 2:00
p.m. local time (the "Annual Meeting"), or at any adjournment or postponement of
this meeting, for the purposes set forth in this proxy statement and in the
accompanying Notice of Annual Meeting. The Annual Meeting will be held at the
Doubletree Club Hotel, 789 Connecticut Avenue, Norwalk, Connecticut 06854. We
intend to mail this proxy statement and accompanying proxy card on or about
April 23, 2001, to all stockholders entitled to vote at the Annual Meeting.

SOLICITATION

         We will pay for the entire cost of proxy solicitations, including
preparation, assembly, printing and mailing of proxy solicitation materials. We
will provide copies of solicitation materials to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of priceline.com common
stock (the "Common Stock") beneficially owned by others to forward these
materials to the beneficial owners of Common Stock. We may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials. Directors, officers or other regular employees of ours
may also solicit proxies by telephone, telegram or in-person. We will not
additionally compensate directors, officers or other regular employees for these
services.

VOTING RIGHTS AND OUTSTANDING SHARES; APPROVAL

         Only stockholders of record at the close of business on April 10, 2001
will be entitled to notice of and to vote at the Annual Meeting. At the close of
business on April 10, 2001, 200,843,204 shares of Common Stock were outstanding
and entitled to vote. Each holder of record of Common Stock on that date will be
entitled to one vote for each share held on all matters to be voted upon at the
Annual Meeting.

         The inspector of election appointed for the meeting will tabulate all
votes and will separately tabulate affirmative and negative votes, abstentions
and broker non-votes. Abstentions will have the same effect as negative votes.
Broker non-votes are counted towards a quorum, but are not counted for any
purpose in determining whether a matter has been approved. A majority of the
outstanding shares of Common Stock, present in person or represented by proxy,
constitutes a quorum for the transaction of business at the Annual Meeting.

         The nominees for election to the Board of Directors who receive the
greatest number of votes cast for the election of Directors by the shares of
Common Stock present, in person or by proxy, and entitled to vote at the Annual
Meeting shall be elected Directors. Holders of Common Stock are not allowed to
cumulate their votes in the election of Directors. To approve the proposed
amendments to the priceline.com Incorporated 1999 Omnibus Plan, a majority of
the outstanding shares of Common Stock present, in person or by proxy, and
entitled to vote at the Annual Meeting will be required to vote in favor of the
proposed amendment. The affirmative vote of the holders of a majority of the
shares present, in person or represented by proxy, and entitled to vote at the
Annual Meeting will be required to ratify the selection of Deloitte & Touche
L
LP. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE BOARD'S NOMINEES,
FOR THE PROPOSED AMENDMENTS TO THE 1999 OMNIBUS PLAN AND FOR RATIFICATION OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS.


                                       2

<PAGE>

REVOCABILITY OF PROXIES

         Any person giving a proxy in response to this solicitation has the
power to revoke it at any time before it is voted. Proxies may be revoked by any
of the following actions:

         o        filing a written notice of revocation with our Secretary at
                  our principal executive office (800 Connecticut Avenue,
                  Norwalk, Connecticut 06854);

         o        filing with our Secretary at our principal executive office
                  (800 Connecticut Avenue, Norwalk, Connecticut 06854) a
                  properly executed proxy showing a later date; or

         o        attending the meeting and voting in person (attendance at the
                  meeting will not, by itself, revoke a proxy). Please note that
                  if your shares are held of record by a broker, bank or other
                  nominee and you wish to vote at the meeting, you must obtain
                  from the record holder a proxy issued in your name.

STOCKHOLDER PROPOSALS

         The deadline for submitting a stockholder proposal to be included in
our proxy statement for our 2002 annual meeting of stockholders pursuant to Rule
14a-8 of the Securities and Exchange Commission is December 21, 2001. However,
we advise you to review our Bylaws, which contain additional requirements
regarding advance notice of stockholder proposals and director nominations.


                                   PROPOSAL 1

                              ELECTION OF DIRECTORS

         In accordance with the Company's Bylaws, the Board has fixed the number
of Directors constituting the entire Board at ten. The Board of Directors has
proposed that the following ten nominees be elected at the Annual Meeting, each
of whom will hold office until his or her successor has been elected and
qualified: RICHARD S. BRADDOCK, DANIEL H. SCHULMAN, PAUL A. ALLAIRE, RALPH M.
BAHNA, PAUL J. BLACKNEY, WILLIAM E. FORD, MARSHALL LOEB, N.J. NICHOLAS, JR.,
NANCY B. PERETSMAN AND IAN F. WADE. Unless otherwise instructed, it is the
intention of the persons named as proxies on the accompanying proxy card to vote
shares represented by properly executed proxies for such nominees. Although the
Board of Directors anticipates that the ten nominees will be available to serve
as Directors of the Company, if any of them should be unwilling or unable to
serve, it is intended that the proxies will be voted for the election of such
substitute nominee or nominees as may be designated by the Board of Directors.
If elected at the Annual Meeting, each of the nominees would serve until the
2002 annual meeting and until his or her successor is elected and has qualified,
or until his or her earlier death, resignation or removal. Each person nominated
for election has agreed to serve if elected. Management has no reason to believe
that any nominee will be unable to serve.

         The nominees for election to the Board of Directors who receive the
greatest number of votes cast for the election of Directors by the shares of
Common Stock present, in person or by proxy, shall be elected Directors. Holders
of Common Stock are not allowed to cumulate their votes in the election of
D
irectors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE BELOW-NAMED
NOMINEES.

         Set forth below is biographical information for each person nominated
to serve as a Director of the Company.

         RICHARD S. BRADDOCK, age 59, has served as Chairman of the Board of
Directors of priceline.com since August 1998 and was Chief Executive Officer of
priceline.com from August 1998 to May 2000. From December 1997 to January 1999,
he served as the non-executive Chairman of True North Communications, Inc., an
advertising company. From September 1996 to August 1997, he served as a special
advisor to General Atlantic Partners, LLC, a private equity fund. Mr. Braddock
was a principal of Clayton, Dubilier & Rice, a private equity fund, from June
1994 through September 1995. He also served as Chief Executive Officer of Medco
Containment Services during 1993. From 1973 to 1992, Mr. Braddock held a variety
of positions at Citicorp and its principal subsidiary, Citibank, N.A., including
President and Chief Operating Officer. Mr. Braddock also 


                                       3

<PAGE>

serves as a director of Synapse Group, Inc., a direct marketing firm; Eastman
Kodak Company, an imaging products company; and Cadbury Schweppes plc, a global
beverage and confectionery manufacturer.

         DANIEL H. SCHULMAN, age 43, has been the President and Chief Executive
Officer of priceline.com since May 2000. Mr. Schulman was President and Chief
Operating Officer of priceline.com from July 1999 to May 2000. He has served as
a Director of priceline.com since July 1999. From December 1998 to July 1999,
Mr. Schulman was President of the AT&T Consumer Markets Division of AT&T Corp.,
a telecommunications services company, and was appointed to the AT&T Operations
Group, the company's most senior executive body. From March 1997 to November
1998, Mr. Schulman was President of AT&T WorldNetsm Service. From December 1995
to February 1997, he was Vice President, Business Services Marketing of the AT&T
Business Markets Division. Mr. Schulman also serves as director of iVillage, an
Internet company focused on building an online community of women; Net2Phone,
Inc., a provider of Internet protocol telecommunications services; and Symantec,
an Internet security software company.

         PAUL A. ALLAIRE, age 62, has served as a Director of priceline.com
since February 1999. Mr. Allaire has been Chief Executive Officer of Xerox
Corporation, a company offering document processing services and products, since
May 2000, a job he previously held from 1990 to May 1999. Since 1991, he has
been the Chairman of the Board of Directors and the Chairman of the Executive
Committee of Xerox Corporation. Mr. Allaire serves as a director of various
affiliates of Xerox. Mr. Allaire also serves as a director of Lucent
Technologies Inc., a global communications systems and software company; Sara
Lee Corporation, a global consumer packaged goods company; and Glaxo SmithKline,
a healthcare company. Mr. Allaire is a member of the Business Council and is a
member of the board of directors of the Council on Foreign Relations, and the
Council on Competitiveness and is Chairman of the Board of the Ford Foundation.

         RALPH M. BAHNA, age 58, has served as a Director of priceline.com since
July 1998. Since 1992, Mr. Bahna has been the President of Masterworks
Development Corp., a company he founded to develop an international group of
hotels named Club QuartersTM . Club Quarters are private, city-center facilities
designed for the business travelers of member organizations. Since 1993, Mr.
Bahna has served as the Chairman of Club QuartersTM. From 1980 to 1989, Mr.
Bahna served as the Chief Executive Officer of Cunard Lines, Ltd., and the
Cunard Group of Companies. Prior to Cunard, Mr. Bahna was employed by Trans
World Airlines, Inc., where he developed and launched its highly successful
Ambassador Service.

         PAUL J. BLACKNEY, age 54, has served as a Director of priceline.com
since July 1998. Since October 1999, Mr. Blackney has served as the President
and Chief Executive Officer of Worldspan LP, a global travel distribution
system. Mr. Blackney also served as Senior Vice President of Publishing and
Business Services for The American Medical Association. From January 1998 to
January 2000, he served as the Chairman of XTRA On-Line Corporation, a business
to business desktop booking system. From September 1993 to September 1998, Mr.
Blackney was the Chairman and President of Galileo Japan. From September 1993 to
September 1997, Mr. Blackney served as President and Chief Executive Officer of
Apollo Travel Services Partnership, an airline central reservation system, and
from March 1990 to September 1993, he served as Senior Vice President of
Operations at Covia, an airline central reservation system.

         WILLIAM E. FORD, age 39, has served as a Director of priceline.com
since July 1998. He is a Managing Member of General Atlantic Partners, LLC, a
private equity investment firm focused on Internet and information technology
investments on a global basis, and has been with General Atlantic since 1991.
Mr. Ford also serves as a director of E*TRADE Group, Inc., an online investing
services company; Chordiant Software, Inc., a customer relationship management
software company; Wit Sound View Group, Inc., a technology focused investment
bank; and several private information technology companies, including Synapse
Group, Inc. and Walker Digital, LLC.

         MARSHALL LOEB, age 71, has served as a Director of priceline.com since
July 1998. He is a columnist for, and member of the Advisory Board of, CBS
MarketWatch.com, an on-line financial news and analysis service. From 1996 to
1999, Mr. Loeb was the Editor of the COLUMBIA JOURNALISM REVIEW. He served as
the Managing Editor of Fortune magazine from 1986 to 1994 and as the Managing
Editor of Money magazine from 1980 to 1984. Mr. Loeb also is a broadcast
commentator for the CBS Radio Network and he appears as a commentator on the
MarketWatch weekly television program. He also has served as the Business
Editor, Nation Editor and Economics Editor of TIME magazine. Mr. Loeb is a
member of the Board of Overseers of the Stern School of Business at New York
University and a member of the Advisory Board of Bagehot Fellows Program at
Columbia University. He is also the author of 14 books, most recently 52 WEEKS
TO FINANCIAL FITNESS.


                                       4

<PAGE>

         N. J. NICHOLAS, JR., age 61, has served as a Director of priceline.com
since July 1998. Mr. Nicholas is a private investor and from 1990 to 1992 was
the co-Chief Executive Officer of Time Warner Inc. From 1986 to 1990, he was
President of Time Inc. Mr. Nicholas also is a director of DB Capital Partners,
an affiliate of Deutsche Bank; Boston Scientific Corporation, a developer,
manufacturer and marketer of medical devices; and Xerox Corporation, a document
processing company. He also serves on the boards of several privately owned
companies, including Synapse Group, Inc., and is Chairman of the Advisory Board
of the Columbia University Graduate School of Journalism.

         NANCY B. PERETSMAN, age 47, has served as a Director of priceline.com
since February 1999. Since June 1995, she has been a Managing Director and
Executive Vice President of Allen & Company Incorporated, an investment bank.
Prior to joining Allen & Company Incorporated, Ms. Peretsman had been an
investment banker since 1983 at Salomon Brothers Inc., where she was a Managing
Director since 1990. Ms. Peretsman serves on the Board of Directors for Charter
Communications and for several private companies in which Allen & Company has an
investment. She is Vice Chairman of the Board of The New School. Ms. Peretsman
served for fourteen years on the Board of Trustees of Princeton University and
is currently an Emerita Trustee.

         IAN F. WADE, age 61, has served as a Director of priceline.com since
February 2001. Since March 1982, Mr. Wade has been Group Managing Director of
Hutchison Whampoa Limited's A.S. Watson & Co., Limited. Mr. Wade sits on the
boards of directors of a number of privately held companies and institutions,
including the Board of the Community Chest of Hong Kong and the Hong Kong Red
Cross Advisory Committee. Mr. Wade joined the priceline.com Board of Directors
in connection with the sale of shares of priceline.com Common Stock to Hutchison
Whampoa Limited.

         Set forth below is biographical information for each executive officer
of the Company (each an "executive officer"), other than executive officers who
are nominated to serve as Directors of the Company and whose biographical
information is set forth above.

         JEFFERY H. BOYD, age 44, has been Chief Operating Officer and Secretary
of priceline.com since November 2000. He previously served as Executive Vice
President, General Counsel and Secretary of priceline.com from January 2000 to
November 2000. From 1994 to 1995, Mr. Boyd served as the Assistant General
Counsel of Lord Abbett & Co., an investment advisory firm. In 1995, Mr. Boyd
joined Oxford Health Plans, Inc. as its Executive Vice President, General
Counsel and Secretary, where he served in such capacities through December 1999.

         THOMAS P. D'ANGELO, age 41, has been Senior Vice President, Finance and
Controller of priceline.com since October 1997. From April 1993 to October 1997,
he was Chief Financial Officer of Direct Travel, Inc., a corporate travel
agency. Mr. D'Angelo has spent the last 20 years in the travel industry holding
various financial management positions with travel management companies.

         W. MICHAEL MCCADDEN, age 42, has been Executive Vice President and
Chief Marketing Officer of priceline.com since January 2000. From November 1998
to October 1999, Mr. McCadden served as the Executive Vice President of Gap,
Inc. Direct, where he managed all Gap, Inc. non-store businesses, including the
online stores of Gap, Old Navy and Banana Republic, and the Banana Republic
Catalog. From August 1996 to November 1998, he was the Executive Vice President
of Gap Global Marketing with responsibility for domestic and international
marketing, advertising, public relations, packaging and strategy development.
From 1994 to 1996, Mr. McCadden was Director of Global Advertising and Public
Relations for Calvin Klein Cosmetics Company. Mr. McCadden also worked for Coach
Leatherwear, Lever Brothers/Chesebrough-Pond's and The Gillette Company.

         ROBERT MYLOD, age 34, has been the Chief Financial Officer of
priceline.com since November 2000. From May 2000 to October 2000, Mr. Mylod was
acting Chief Financial Officer for WebHouse Club, Inc. From January 1999 to
October 2000, Mr. Mylod held several different positions within priceline.com's
finance department. Prior to joining priceline.com, Mr. Mylod was a Principal at
Stonington Partners, a private equity investment firm that manages over $1
billion of institutional capital dedicated to venture capital investments and
leveraged buyouts.

         TREY O. URBAHN, age 43, has been President of Airlines of priceline.com
since May 2000. Mr. Urbahn was Senior Vice President of Revenue Management of
priceline.com from September 1998 to May 2000. From 


                                       5

<PAGE>

1997 to 1998, Mr. Urbahn was a Senior Partner at the Airline Planning Group in
Arlington, Virginia and Ft. Lauderdale, Florida. From 1994 to 1996, Mr. Urbahn
was Executive Director of Marketing Planning at Alamo Rent A Car, a national
rental car company, and also Director of Revenue Development at US Airways
Group, Inc., a holding company whose primary operating subsidiary is US Airways,
Inc.

         RONALD V. ROSE, age 49, has been the Chief Information Officer of
priceline.com since March 1999. From September 1995 to March 1999, Mr. Rose
served in various capacities with Standard & Poor's, a financial services
company, including Chief Technology Officer of Retail Markets. While at Standard
& Poor's, Mr. Rose led the development of many Internet initiatives within the
Financial Information Services area and chaired the Internet Architecture
Council.

BOARD COMMITTEES AND MEETINGS

         During 2000, the Board of Directors held nine meetings. The Board has
an Audit Committee, a Compensation Committee and an Independent Committee.

         The Audit Committee of the Board consists of Messrs. William E. Ford,
Paul J. Blackney, Paul A. Allaire and Ms. Nancy B. Peretsman, none of whom are
employees of priceline.com or its affiliates and related companies. The Audit
Committee reviews priceline.com's financial statements and accounting practices,
makes recommendations to the Board regarding the selection of independent
auditors and reviews the results and scope of the audit and other services
provided by priceline.com's independent auditors. Mr. Ford is Chairman of the
Audit Committee. The Audit Committee met four times in 2000.

         The Compensation Committee of the Board consists of Messrs. N.J.
Nicholas, Jr., Marshall Loeb, Ralph M. Bahna and Paul A. Allaire, none of whom
are employees of priceline.com or its affiliates and related companies. The
Compensation Committee makes recommendations to the Board concerning salaries
and incentive compensation for priceline.com's officers and employees and
administers priceline.com's employee benefit plans. Mr. Nicholas is Chairman of
the Compensation Committee. The Compensation Committee met six times in 2000.

         The Independent Committee of the Board consists of Messrs. Paul J.
Blackney, Paul A. Allaire and Ralph M. Bahna, none of whom are employees of
priceline.com or its affiliates and related companies. The Independent Committee
reviews and approves or ratifies material transactions between priceline.com and
any companies or entities in which a director or officer of priceline.com has a
material interest. Mr. Blackney is Chairman of the Independent Committee. The
Independent Committee was established in February 2000. The Independent
Committee met three times in 2000.

         During 2000, each Board member attended 75% or more of the meetings
held by the Board and each committee member attended 75% or more of the meetings
held by the committees on which he or she served.


                                   PROPOSAL 2

         AMENDMENTS TO THE PRICELINE.COM INCORPORATED 1999 OMNIBUS PLAN

         In February 1999, the Company established the priceline.com
Incorporated 1999 Omnibus Plan (the "1999 Omnibus Plan" or the "Plan"), pursuant
to which awards are made to certain officers, other employees, consultants and
directors of the Company from time to time. The maximum number of shares of
Common Stock originally reserved for the grant or settlement of awards under the
1999 Omnibus Plan was 9,375,000, subject to adjustment pursuant to the terms of
the Plan. On April 24, 2000, at the Company's 2000 Annual Meeting, the Plan was
amended to, among other things, increase the maximum number of shares of Common
Stock reserved for the grant or settlement of awards under the Plan from
9,375,000 to 25,375,000. Of such number, as of March 31, 2001, options covering
16,170,829 shares of Common Stock were outstanding under the Plan and 7,570,000
shares of restricted Common Stock were issued and outstanding under the Plan.

         The Board of Directors proposes that the 1999 Omnibus Plan be amended
as follows: to (1) increase the maximum number of shares of Common Stock
reserved for the grant or settlement of awards under the Plan from 25,375,000 to
35,375,000, subject to adjustment pursuant to the terms of the Plan, and (2)
increase the number of 


                                       6

<PAGE>

shares of Common Stock subject to the annual stock options granted to
non-employee directors from 10,000 each to 20,000 each, subject to adjustment
pursuant to the terms of the Plan.

         To approve the proposed amendments to the 1999 Omnibus Plan, a majority
of the outstanding shares of Common Stock present, in person or by proxy, must
vote in favor of the proposed amendments. The Board of Directors believes that
providing directors, officers and employees with equity incentives such as stock
options will contribute substantially to the Company's future success by further
aligning the interests of management with those of the Company's stockholders.
Further, the Company's overall compensation philosophy places significant
emphasis on equity incentives and, in the case of non-employee directors,
compensation is entirely in the form of equity incentives. THE BOARD OF
D
IRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.

         The proposed Amendment Number Two to the 1999 Omnibus Plan, is attached
hereto as Appendix A and reference is made to the Appendix for a complete
statement of the amendment. A description of the 1999 Omnibus Plan, as it is
proposed to be amended, follows. This description is only a summary and is
qualified in its entirety by the provisions of the 1999 Omnibus Plan, which is
attached hereto as Appendix B, and Amendment Number Two thereto. Terms not
defined herein have the meanings given to such terms in the 1999 Omnibus Plan.

SUMMARY OF PRICELINE.COM INCORPORATED 1999 OMNIBUS PLAN

         The 1999 Omnibus Plan is intended to promote the interests of
priceline.com by providing employees of priceline.com with appropriate
incentives and rewards to encourage them to enter into and continue in the
employ of the Company and to acquire a proprietary interest in the long-term
success of the Company; and to reward the performance of individual officers,
other employees, consultants and directors in fulfilling their responsibilities
for long-range achievements.

         GENERAL

         The 1999 Omnibus Plan provides for the granting of awards to such
officers, other employees, consultants and directors of priceline.com and its
affiliates as the Compensation Committee, which is the committee of the Board of
Directors appointed to administer the Plan, may approve from time to time.
Awards under the 1999 Omnibus Plan may be made in the form of incentive stock
options, non-qualified stock options, restricted stock or other awards.

         The maximum number of shares of Common Stock reserved for the grant or
settlement of awards under the 1999 Omnibus Plan is currently 25,375,000 subject
to adjustment as provided in the Plan. As described above, it is proposed that
the maximum number of shares of Common Stock reserved for the grant or
settlement of awards under the 1999 Omnibus Plan be increased to 35,375,000. The
maximum number of shares of Common Stock that may be awarded in respect of
options, restricted stock and other awards to a single individual in any given
year may not exceed 9,375,000, 3,125,000 and 6,250,000, respectively, which
amounts are subject to adjustment as described below. Awards (either as options,
restricted stock or other awards) will be made in a manner consistent with
Section 162(m) of the Internal Revenue Code of 1986, generally referred to as
the "Code." Shares of Common Stock acquired upon the exercise or settlement of
awards may, in whole or in part, be authorized but unissued shares or shares
that shall have been or may be reacquired by priceline.com in the open market,
in private transactions or otherwise. If any shares subject to an award are
forfeited, canceled, exchanged or surrendered or if an award otherwise
terminates or expires without a distribution of shares to the holder of such
award, the shares of Common Stock with respect to such award will, to the extent
of any such forfeiture, cancellation, exchange, surrender, termination or
expiration, again be available for awards under the 1999 Omnibus Plan.

         Except as provided in an agreement evidencing the grant of an award, in
the event that the Compensation Committee determines that any dividend or other
distribution (whether in the form of cash, Common Stock, or other property),
recapitalization, stock split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Common Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of holders of awards under the 1999 Omnibus Plan, then the Compensation
Committee will make such equitable changes or adjustments as it deems necessary
or appropriate to any or all of the:


                                       7

<PAGE>

         o        number and kind of shares of Common Stock or other property
                  (including cash) that may thereafter be issued in connection
                  with awards,

         o        number and kind of shares of Common Stock or other property,
                  including cash, issued or issuable in respect of outstanding
                  awards,

         o        exercise price, grant price, or purchase price relating to any
                  awards, provided that, with respect to incentive stock
                  options, such adjustment shall be made in accordance with
                  Section 424(h) of the Code,

         o        performance criteria with respect to an award, and

         o        individual limitations applicable to awards.

         ADMINISTRATION

         The 1999 Omnibus Plan is administered by the Compensation Committee,
the composition of which is intended to satisfy the provisions of Section 162(m)
of the Code and Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended, which is generally referred to as the "Exchange Act". The
Compensation Committee has the authority, in its sole discretion, subject to and
not inconsistent with the express provisions of the 1999 Omnibus Plan, to
administer, and to exercise all the powers and authorities either specifically
granted to it under the 1999 Omnibus Plan or necessary or advisable in the
administration of the 1999 Omnibus Plan, including, without limitation, the
authority to grant awards; determine the persons to whom and the time or times
at which awards shall be granted; to determine the type and number of awards to
be granted, the number of shares of Common Stock to which an award may relate
and the terms, conditions, restrictions and performance goals relating to any
award; determine whether, to what extent, and under what circumstances an award
may be settled, canceled, forfeited, exchanged, or surrendered; make adjustments
in the performance goals in recognition of unusual or non-recurring events
affecting priceline.com or the financial statements of priceline.com, to the
extent not inconsistent with Section 162(m) of the Code, if applicable, or in
response to changes in applicable laws, regulations, or accounting principles;
construe and interpret the 1999 Omnibus Plan and any award; prescribe, amend and
rescind rules and regulations relating to the 1999 Omnibus Plan; determine the
terms and provisions of agreements evidencing awards; and make all other
determinations deemed necessary or advisable for the administration of the 1999
Omnibus Plan.

         The Compensation Committee may, in its absolute discretion, without
amendment to the 1999 Omnibus Plan:

         (1)      accelerate the date on which any option granted under the Plan
                  becomes exercisable, waive or amend the operation of the Plan
                  provisions respecting exercise after termination of employment
                  or otherwise adjust any of the terms of such option,

         (2)      accelerate the vesting or waive any condition imposed with
                  respect to any restricted stock, and

         (3)      otherwise adjust any of the terms applicable to any award.

         AWARDS UNDER THE 1999 OMNIBUS PLAN

         STOCK OPTIONS. Unless otherwise determined by the Compensation
Committee, options granted to employees and consultants pursuant to the 1999
Omnibus Plan become exercisable ratably over three years commencing on the first
anniversary of the date of grant. The "option exercise price," which is the
purchase price per share payable upon the exercise of an option, will be
established by the Compensation Committee; provided, however, that the option
exercise price may be no less than the "fair market value" of a share of Common
Stock on the date of grant, which is determined as the closing sales price of a
share of Common Stock on the NASDAQ Stock Market for the date immediately
preceding the date of grant on which there was a sale of Common Stock. The
option exercise price is payable by any one of the following methods or a
combination thereof:

         (1)      in cash or by personal check, certified check, bank cashier's
                  check or wire transfer;


                                       8

<PAGE>

         (2)      subject to the approval of the Compensation Committee, in
                  shares of Common Stock owned by the optionee for at least six
                  months prior to the date of exercise and valued at their fair
                  market value on the effective date of such exercise; or

         (3)      in such other manner as the Compensation Committee may from
                  time to time authorize.

         RESTRICTED STOCK. The Compensation Committee may authorize the Company
to issue restricted shares of Common Stock to such persons, in such amounts, and
subject to such terms and conditions, including the attainment of performance
goals, which performance goals may be based upon one or more of the following
criteria: pre-tax or after-tax income; operating profit; return on equity,
assets, capital or investment; earnings or book value per share; sales or
revenues; operating expenses; stock price appreciation; and the implementation
or completion of critical projects or processes, as the Compensation Committee
may determine in its discretion. Unless the Compensation Committee determines
otherwise, termination of employment during the restricted period will result in
the forfeiture by the participant of all shares still subject to restrictions.

         OTHER AWARDS. Other awards valued in whole or in part by reference to,
or otherwise based on, shares of Common Stock may be granted either alone or in
addition to other awards under the 1999 Omnibus Plan. Subject to the provisions
of the 1999 Omnibus Plan, the Compensation Committee has the sole and complete
authority to determine the persons to whom and the time or times at which such
other awards will be granted, the number of shares of Common Stock to be granted
pursuant to such other awards and all other conditions of such other awards,
including the attainment of performance goals.

         NON-EMPLOYEE DIRECTOR OPTIONS. The 1999 Omnibus Plan currently provides
that, unless otherwise determined by the Compensation Committee in its sole and
absolute discretion, and without further action by the Board of Directors of
priceline.com or its stockholders, each non-employee director will be granted a
non-qualified stock option to purchase 20,000 shares of Common Stock on the date
such non-employee director joins the Board and will be granted a non-qualified
stock option to purchase 10,000 shares of Common Stock as of the first business
day following each annual meeting of stockholders of the Company. As described
above, it is proposed that each non-employee director be granted a non-qualified
stock option to purchase 20,000 shares of Common Stock as of the first business
day following each annual meeting of stockholders of the Company. Unless
otherwise determined by the Compensation Committee at the time of grant, each
option will have a ten-year term, will become exercisable as to one-third of the
shares subject to options on the first anniversary of the date of grant and, as
to the balance, monthly in equal installments over the next twenty-four months
following the first anniversary of the date of grant, and will have an exercise
price per share equal to the fair market value of a share of Common Stock on the
date of grant and otherwise be in accordance with the terms specified above for
options granted to employees and consultants.

         NEW PLAN BENEFITS

         Except as set forth below, inasmuch as awards under the 1999 Omnibus
Plan will be granted at the sole discretion of the Compensation Committee, it is
not possible to determine the awards that will be granted during 2001. As of
March 31, 2001, options covering 16,170,829 shares of Common Stock were
outstanding under the 1999 Omnibus Plan.

         The following table sets forth the non-qualified option grants that
will be made to (a) non-employee directors as a group as of the first business
day following the Stockholders' approval at the Annual Meeting of the proposed
amendments to the 1999 Omnibus Plan, and (b) certain named executive officers in
May and June 2001. The non-qualified option grants to the named executive
officers set forth below were authorized in connection with a turnaround plan
put in place by the Company in the fourth quarter 2000 (the "Turnaround Plan").
In connection with the Turnaround Plan, the named executive officers set forth
below returned an aggregate of 8.45 million non-qualified options to the Company
to ensure that a sufficient number of shares of Common Stock were available
under the 1999 Omnibus Plan for option grants to employees in connection with
the Turnaround Plan. In turn, the Company committed to issue the named executive
officers set forth below non-qualified options, in the amounts set forth below,
six months and one day after the return of the options.


                                       9

<PAGE>

                                1999 Omnibus Plan


<TABLE>
<CAPTION>
                                   NAME AND POSITION           NUMBER OF OPTIONS
                                   -----------------           -----------------
<S>                                                                 <C>      
                 Daniel H. Schulman
                 President and Chief Executive Officer.........     2,000,000

                 Jeffery H. Boyd
                 Chief Operating Officer.......................     1,600,000

                 W. Michael McCadden
                 Chief Marketing Officer.......................     1,000,000
                 Non-employee Directors, as a group (8 total)..       160,000
</TABLE>


         CERTAIN FEDERAL INCOME TAX CONSEQUENCES

         The following discussion is a brief summary of the principal United
States Federal income tax consequences under current Federal income tax laws
relating to awards under the 1999 Omnibus Plan. This summary is not intended to
be exhaustive and, among other things, does not describe state, local or foreign
income and other tax consequences.

         NON-QUALIFIED STOCK OPTIONS. An optionee will not recognize any taxable
income upon the grant of a non-qualified stock option. Priceline.com will not be
entitled to a tax deduction with respect to the grant of a non-qualified stock
option. Upon exercise of a non-qualified stock option, the excess of the fair
market value of the Common Stock on the exercise date over the option exercise
price will be taxable as compensation income to the optionee and will be subject
to applicable withholding taxes. Priceline.com will generally be entitled to a
tax deduction at such time in the amount of such compensation income. The
optionee's tax basis for the Common Stock received pursuant to the exercise of a
non-qualified stock option will equal the sum of the compensation income
recognized and the exercise price.

         In the event of a sale of Common Stock received upon the exercise of a
non-qualified stock option, any appreciation or depreciation after the exercise
date generally will be treated as capital gain or loss.

         INCENTIVE STOCK OPTIONS. An optionee will not recognize any taxable
income at the time of grant or timely exercise of an incentive stock option and
priceline.com will not be entitled to a tax deduction with respect to such grant
or exercise. Exercise of an incentive stock option may, however, give rise to
taxable compensation income subject to applicable withholding taxes, and a tax
deduction to priceline.com, if the incentive stock option is not exercised on a
timely basis (generally, while the optionee is employed by priceline.com or
within 90 days after termination of employment) or if the optionee subsequently
engages in a "disqualifying disposition," as described below.

         A sale or exchange by an optionee of shares acquired upon the exercise
of an incentive stock option more than one year after the transfer of the shares
to such optionee and more than two years after the date of grant of the
incentive stock option will result in any difference between the net sale
proceeds and the exercise price being treated as long-term capital gain or loss
to the optionee. If such sale or exchange takes place within two years after the
date of grant of the incentive stock option or within one year from the date of
transfer of the incentive stock option shares to the optionee, such sale or
exchange will generally constitute a "disqualifying disposition" of such shares
that will have the following results: any excess of (a) the lesser of (i) the
fair market value of the shares at the time of exercise of the Incentive Stock
Option and (ii) the amount realized on such disqualifying disposition of the
shares over (b) the option exercise price of such shares, will be ordinary
income to the optionee, subject to applicable withholding taxes, and
priceline.com will be entitled to a tax deduction in the amount of such income.
Any further gain or loss after the date of exercise generally will be treated as
capital gain or loss.

         RESTRICTED STOCK. A grantee will not recognize any income upon the
receipt of restricted stock unless the holder elects under Section 83(b) of the
Code, within thirty days of such receipt, to recognize ordinary income in an
amount equal to the fair market value of the restricted stock at the time of
receipt, less any amount paid for the shares. If the election is made, the
holder will not be allowed a deduction for amounts subsequently 


                                       10

<PAGE>

required to be returned to priceline.com. If the election is not made, the
holder will generally recognize ordinary income, on the date that the
restrictions to which the restricted stock are subject are removed, in an amount
equal to the fair market value of such shares on such date, less any amount paid
for the shares. At the time the holder recognizes ordinary income, priceline.com
generally will be entitled to a deduction in the same amount.

         Generally, upon a sale or other disposition of restricted stock with
respect to which the holder has recognized ordinary income, for example, if a
Section 83(b) election was previously made or the restrictions were previously
removed, the holder will recognize capital gain or loss in an amount equal to
the difference between the amount realized on such sale or other disposition and
the holder's basis in such shares.

         OTHER TYPES OF AWARDS. The grant of any other stock-based award
generally will not result in income for the grantee or in a tax deduction for
priceline.com. Upon the settlement of such an award, the grantee will recognize
ordinary income equal to the aggregate value of the payment received, and
priceline.com generally will be entitled to a tax deduction in the same amount.


                                   PROPOSAL 3

                RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

         We have selected Deloitte & Touche LLP as our independent auditors for
the fiscal year ending December 31, 2001. We are submitting our selection of
independent auditors for ratification by the stockholders at the Annual Meeting.
Deloitte & Touche LLP has audited our financial statements since July 1997. We
expect that representatives of Deloitte & Touche LLP will be present at the
Annual Meeting, will have an opportunity to make a statement if they wish and
will be available to respond to appropriate questions.

         The Company's Bylaws do not require that the stockholders ratify the
selection of our independent auditors. However, we are submitting the selection
of Deloitte & Touche LLP to the stockholders for ratification as a matter of
good corporate practice. If the stockholders do not ratify the selection, the
Board of Directors and the Audit Committee will reconsider whether or not to
retain Deloitte & Touche LLP. Even if the selection is ratified, the Board of
Directors and the Audit Committee in their discretion may change the appointment
at any time during the year if we determine that such a change would be in the
best interests of the Company and its stockholders.

         The affirmative vote of the holders of a majority of the outstanding
shares present, in person or represented by proxy, and entitled to vote at the
Annual Meeting will be required to ratify the selection of Deloitte & Touche
L
LP. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.


                                       11

<PAGE>


                              SECURITY OWNERSHIP OF
                    CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of March
31, 2001, by (1) each stockholder known by priceline.com to be the beneficial
owner of more than 5% of the Company's Common Stock; (2) each Director and
nominee for Director of priceline.com; (3) priceline.com's Chief Executive
Officer and each of its other four most highly compensated executive officers;
and (4) all executive officers and Directors as a group.


<TABLE>
<CAPTION>
 
                                                         SHARES BENEFICIALLY OWNED (a)
                                                          -----------------------------
        NAME OF BENEFICIAL OWNER                             NUMBER           PERCENT
        ------------------------------------------         ----------         -------
<S>                                                        <C>                 <C>  
        Richard S. Braddock (b)...................         17,842,145           8.16%
        Daniel H. Schulman (c)....................          2,500,000           1.23%
        Paul A. Allaire (d).......................             59,812               *
        Ralph M. Bahna (e)........................            313,362               *
        Paul J. Blackney (f)......................            111,370               *
        William E. Ford (g).......................         17,452,941           8.00%
        Marshall Loeb (h).........................             35,862               *
        N.J. Nicholas, Jr. (i)....................          3,219,862           1.58%
        Nancy B. Peretsman (j)....................          2,020,347           1.00%
        Ian F. Wade (k)...........................         17,546,622           8.03%
        Jeffery H. Boyd (l).......................          1,400,000               *
        Thomas P. D'Angelo (m)....................            398,612               *
        W. Michael McCadden (n)...................          1,000,000               *
        Trey Urbahn (o)...........................            727,667               *
        Delta Air Lines, Inc. (p).................         32,212,199          13.82%
        General Atlantic Partners, LLC (g)........         17,418,079           7.98%
        Cheung Kong (Holdings) Limited (q)........         35,093,244          14.87%
        Hutchison Whampoa Limited (k).............         17,546,622           8.03%
        Jay S. Walker (r).........................         43,492,897          17.80%
        All directors and executive officers
             as a group (16 persons)..............         66,339,202          24.83%
</TABLE>


*        Represents beneficial ownership of less than one percent.

         (a)      Beneficial ownership is determined in accordance with the
                  rules of the Securities and Exchange Commission and generally
                  includes voting or investment power with respect to
                  securities. Shares of Common Stock and options or warrants
                  that are currently exercisable or exercisable within 60 days
                  of March 31, 2001 are deemed to be outstanding and to be
                  beneficially owned by the person holding such options for the
                  purpose of computing the percentage ownership of such person,
                  but are not treated as outstanding for the purpose of
                  computing the percentage ownership of any other person. Shares
                  of restricted common stock, whether vested or unvested, are
                  deemed to be outstanding and to be beneficially owned by the
                  person holding such restricted stock for the purpose of
                  computing the percentage ownership of such person and are
                  treated as outstanding for the purpose of computing the
                  percentage ownership of each other person.

         (b)      Includes: (1) 750,000 shares of restricted Common Stock that
                  are not vested; (2) 120,000 shares owned by the Richard and
                  Susan Braddock Family Foundation Inc. as to which Mr. Braddock
                  expressly disclaims beneficial ownership; (3) 3,758,436 shares
                  owned by Mr. Braddock as Trustee of The Richard S. Braddock
                  1999 Annuity Trust; (4) 6,000 shares owned by Mr. Braddock's
                  immediate family member as to which Mr. Braddock expressly
                  disclaims beneficial ownership; and (5) 6,005,350 shares
                  subject to vested options.

         (c)      Includes 2,500,000 shares of restricted Common Stock that are
                  not vested. 1,500,000 shares of the restricted Common Stock
                  vest on May 20, 2001. Excludes 2,000,000 shares subject to
                  options that the Company has committed to issue Mr. Schulman
                  on June 25, 2001, 1,000,000 shares of which will vest and be
                  exercisable on the date of grant.


                                       12

<PAGE>

         (d)      Includes: (1) 37,500 shares subject to vested options; and (2)
                  3,612 shares subject to options that vest and are exercisable
                  within 60 days of March 31, 2001. Excludes 6,388 shares
                  subject to options that are not vested or exercisable within
                  60 days of March 31, 2001.

         (e)      Includes: (1) 31,250 shares subject to vested options; and (2)
                  3,612 shares subject to options that vest and are exercisable
                  within 60 days of March 31, 2001. Excludes 6,388 shares
                  subject to options that are not vested or exercisable within
                  60 days of March 31, 2001.

         (f)      Includes 3,612 shares subject to options that vest and are
                  exercisable within 60 days of March 31, 2001. Excludes 6,388
                  shares subject to options that are not vested or exercisable
                  within 60 days of March 31, 2001.

         (g)      Includes: (1) 12,315,252 shares owned by General Atlantic
                  Partners 48, L.P.; (2) 982,666 shares owned by General
                  Atlantic Partners 50, L.P.; (3) 4,120,161 shares owned by GAP
                  Coinvestment Partners, L.P.; (4) 31,250 shares subject to
                  vested options held by Mr. Ford; and (5) 3,612 shares subject
                  to options held by Mr. Ford that vest and are exercisable
                  within 60 days of March 31, 2001. Excludes 6,388 shares
                  subject to options held by Mr. Ford that are not vested or
                  exercisable within 60 days of March 31, 2001. Mr. Ford, a
                  director of the Company, is a managing member of General
                  Atlantic Partners, LLC and a general partner of GAP
                  Coinvestment Partners, L.P. General Atlantic Partners, LLC is
                  the general partner of General Atlantic Partners 48, L.P. and
                  General Atlantic Partners 50, L.P. Mr. Ford disclaims
                  beneficial ownership of the 17,418,079 shares referred to in
                  clauses (1), (2) and (3) above, except to the extent of his
                  pecuniary interest therein. General Atlantic disclaims
                  beneficial ownership of the options referred to above. The
                  address of General Atlantic is 3 Pickwick Plaza, Greenwich,
                  Connecticut 06830.

         (h)      Includes: (1) 1,000 shares held by an immediate family member
                  of Mr. Loeb; (2) 31,250 shares subject to vested options which
                  are held by Mr. Loeb's daughter, as to which Mr. Loeb
                  disclaims beneficial ownership; and (3) 3,612 shares subject
                  to options that vest and are exercisable within 60 days of
                  March 31, 2001. Excludes 6,388 shares subject to options that
                  are not vested or exercisable within 60 days of March 31,
                  2001.

         (i)      Includes: (1) 2,625,000 shares held by Gore Creek Trust, as to
                  which Mr. Nicholas disclaims beneficial ownership; (2) 40,000
                  shares owned by an immediate family member of Mr. Nicholas, as
                  to which Mr. Nicholas disclaims beneficial ownership; (3)
                  vested options held by Gore Creek Trust to purchase 520,000
                  shares owned by Mr. Walker, as to which Mr. Nicholas disclaims
                  beneficial ownership; (4) 31,250 shares subject to vested
                  options held by Mr. Nicholas; and (5) 3,612 shares subject to
                  options that vest and are exercisable within 60 days of March
                  31, 2001. Excludes 6,388 shares subject to options held by Mr.
                  Nicholas that are not vested or exercisable within 60 days of
                  March 31, 2001.

         (j)      Includes: (1) 580,799 shares held by Allen & Company
                  Incorporated on its own behalf and on behalf of certain of its
                  officers, directors and employees; (2) vested options held by
                  Allen & Company Incorporated to purchase 571,875 shares owned
                  by Mr. Walker; (3) 825,000 shares held by Ms. Peretsman; (4)
                  7,811 shares held by Allen & Company Incorporated for the
                  benefit of certain members of Ms. Peretsman's family; (5)
                  31,250 shares subject to vested options held by Ms. Peretsman;
                  and (6) 3,612 shares subject to options that vest and are
                  exercisable within 60 days of March 31, 2001. Excludes (1)
                  6,388 shares subject to options held by Ms. Peretsman that are
                  not vested or exercisable within 60 days of March 31, 2001 and
                  (2) 33,333 shares held by a foundation for which Ms. Peretsman
                  serves as a trustee. Ms. Peretsman, who is a Managing Director
                  and Executive Vice President of Allen & Company Incorporated,
                  disclaims beneficial ownership of the shares and options
                  referred to in clauses (1) and (2) above, except to the extent
                  of her pecuniary interest therein. Allen & Company disclaims
                  beneficial ownership of the shares and options referred to in
                  clauses (3), (4), (5) and (6) above.

         (k)      Includes 17,546,622 shares held by Forthcoming Era Limited, an
                  indirect wholly owned subsidiary of Hutchison Whampoa Limited.
                  Excludes 20,000 shares subject to options held by Mr. Wade
                  that are not vested or exercisable within 60 days of March 31,
                  2001. Mr. Wade, a director of the Company, is Group Managing
                  Director of the A.S. Watson Group of Hutchison Whampoa
                  Limited. Mr. Wade disclaims beneficial ownership of the
                  35,093,244 shares beneficially owned by Hutchison Whampoa
                  Limited, Forthcoming Era Limited, Cheung Kong (Holdings)
                  Limited and Prime Pro Group Limited, 


                                       13

<PAGE>

                  except to the extent of his pecuniary interest therein. The
                  address of Hutchison Whampoa Limited is 22nd Floor, Hutchison
                  House, 10 Harcourt Road, Hong Kong.

         (l)      Includes 1,400,000 shares of restricted Common Stock that are
                  not vested. 700,000 shares of the restricted Common Stock vest
                  on May 20, 2001. Excludes 1,600,000 shares subject to options
                  that the Company has committed to issue Mr. Boyd on May 25,
                  2001, 800,000 shares of which will vest and be exercisable on
                  the date of grant.

         (m)      Includes 100,000 shares of restricted Common Stock that are
                  not vested. 50,000 shares of the restricted Common Stock vest
                  on May 20, 2001. Also includes: (1) 47,223 shares subject to
                  vested options; and (2) 251,389 shares subject to options that
                  vest and are exercisable within 60 days of March 31, 2001.
                  Excludes 353,888 shares subject to options that are not vested
                  or exercisable within 60 days of March 31, 2001.

         (n)      Includes 1,000,000 shares of restricted Common Stock that are
                  not vested. 500,000 shares of the restricted Common Stock vest
                  on May 20, 2001. Excludes 1,000,000 shares subject to options
                  that the Company has committed to issue Mr. McCadden on May
                  25, 2001, 500,000 shares of which will vest and be exercisable
                  on the date of grant.

         (o)      Includes 200,000 shares of restricted Common Stock that are
                  not vested. 100,000 shares of the restricted Common Stock vest
                  on May 20, 2001. Also includes: (1) 273,333 shares subject to
                  vested options; and (2) 253,333 shares subject to options that
                  vest and are exercisable within 60 days of March 31, 2001.
                  Excludes 483,333 shares subject to options that are not vested
                  or exercisable within 60 days of March 31, 2001.

         (p)      Includes 31,622,368 shares subject to vested warrants. The
                  address of Delta Air Lines, Inc. is Hartsfield Atlanta
                  International Airport, Atlanta, Georgia, 30320.

         (q)      Includes: (1) 17,546,622 shares held by Prime Pro Group
                  Limited, an indirect wholly owned subsidiary of Cheung Kong
                  (Holdings) Limited; and (2) 17,546,622 shares held by
                  Forthcoming Era Limited, an indirect wholly owned subsidiary
                  of Hutchison Whampoa Limited. Cheung Kong (Holdings) Limited
                  is a 49.97% shareholder of Hutchison Whampoa Limited. Cheung
                  Kong (Holdings) Limited and Prime Pro Group Limited disclaim
                  beneficial ownership of the 17,546,622 shares beneficially
                  owned by Hutchison Whampoa Limited and Forthcoming Era
                  Limited. Cheung Kong (Holdings) Limited and Prime Pro Group
                  Limited also disclaim beneficial ownership of the 20,000
                  shares subject to options held by Mr. Wade, and the foregoing
                  totals exclude such shares (see note (k) above). The address
                  of Cheung Kong (Holdings) Limited is 7th Floor, Cheung Kong
                  Center, 2 Queen's Road Central, Hong Kong.

         (r)      Includes: (1) 32,242,056 shares held by Mr. Walker
                  individually, including (i) an aggregate of 2,620,000 shares
                  as to which Mr. Walker has granted options to certain
                  individuals and (ii) 10,000,000 shares that are subject to
                  forward contracts that Mr. Walker has entered into with
                  certain investors which entitle the investors to take title to
                  the shares during a specified future time period, prior to
                  which time Mr. Walker will continue to retain voting control
                  and record ownership of such shares; (2) 2,304,504 shares held
                  by Walker Digital, LLC, a Delaware limited liability company
                  controlled by Walker Digital Corporation, of which Mr. Walker
                  is Founder, Chairman and the controlling stockholder; (3)
                  9,731,337 shares held by The Jay S. Walker Irrevocable Credit
                  Trust, as to which Mr. Walker disclaims beneficial ownership;
                  and (4) 1,000 shares held by an immediate family member of Mr.
                  Walker, as to which Mr. Walker disclaims beneficial ownership.
                  Also includes vested options to purchase 1,515,000 shares. The
                  address of Mr. Walker is Five High Ridge Park, Stamford,
                  Connecticut 06905.

The address of all directors, officers and other individual stockholders (except
as otherwise set forth herein) is 800 Connecticut Avenue, Norwalk, Connecticut
06854.


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than ten percent of a registered class of our
equity securities, to file with the Securities and Exchange 


                                       14

<PAGE>

Commission initial reports of ownership and reports of changes in ownership of
priceline.com Common Stock and other equity securities of the Company. Officers,
directors and greater than ten percent stockholders are required by Securities
and Exchange Commission regulations to furnish us with copies of all Section
16(a) forms they file.

         As the result of an administrative error, Form 5s filed by the Company
on behalf of Paul Allaire, Ralph Bahna, Paul Blackney, Richard Braddock, Jeffery
Boyd, Thomas D'Angelo, Marshall Loeb, W. Michael McCadden, Robert Mylod, N.J.
Nicholas, Jr., Nancy Peretsman, Ronald Rose, Daniel Schulman and Trey Urbahn for
the fiscal year ended December 31, 2000 were filed with the Securities and
Exchange Commission one day late. Other than as set forth in this paragraph, to
our knowledge, based solely on a review of the copies of such reports furnished
to us and written representations that no other reports were required, during
the fiscal year ended December 31, 2000, our officers, directors and greater
than ten percent beneficial owners complied with the Section 16(a) filing
requirements.

 
                      DIRECTOR AND EXECUTIVE COMPENSATION


COMPENSATION OF DIRECTORS

         Directors who are also employees of priceline.com receive no
compensation for serving on the Board of Directors. With respect to Directors
who are not employees of priceline.com, the Company reimburses such non-employee
directors for all travel and other expenses incurred in connection with
attending Board of Directors and committee meetings. Non-employee directors also
receive stock option grants under the 1999 Omnibus Plan.

COMPENSATION OF EXECUTIVE OFFICERS

         The following table shows compensation earned during fiscal 1998, 1999
and 2000 by our Chief Executive Officer and the next four most
highly-compensated executive officers serving at the end of fiscal 2000. These
people are referred to as the "named executive officers." Unless otherwise
indicated, titles shown in the table are titles held as of December 31, 2000.

                           SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
                                                                                LONG-TERM
                                                                               COMPENSATION
                                                                          ---------------------
                                     ANNUAL COMPENSATION
                              --------------------------------
                                                                                 NUMBER OF
                                                                 Restricted      SECURITIES      ALL OTHER
  NAME AND PRINCIPAL                                             Stock           UNDERLYING     COMPENSATION
  POSITION                    YEAR   SALARY($)     BONUS($)      Awards(a)      OPTIONS(#)(b)        ($)
  -----------------------     ----   ---------     --------      ---------      -------------   ------------
<S>                           <C>     <C>         <C>            <C>              <C>             <C>    
  Richard S. Braddock (c)     2000    262,500            --      1,148,400  (d)          --        293,582     (e)
    Chairman................  1999    300,000            --             --               --            --
                              1998    112,500            --             --        6,250,000            --

  Daniel H. Schulman (f)      2000    329,808            --      3,828,000  (g)   4,000,000       4,842,981    (h)
    Chief Executive Officer.  1999    165,000                           --        3,000,000             --
                              1998         --            --             --               --             --

  Jeffery H. Boyd,            2000    260,192            --      3,412,500  (i)     800,000       2,131,200    (j)
  Executive Vice Chief        1999         --            --             --               --             --
    Operating Officer.......  1998         --            --             --               --             --

  W. Michael McCadden, Chief  2000    254,840     1,400,000  (k) 2,437,500  (l)     650,000             --
    Marketing Officer.......  1999         --            --             --               --             --
                              1998         --            --             --               --             --

  Trey Urbahn,                2000    240,000       250,000        487,500  (m)     760,000             --
    President Air...........  1999    201,250            --             --               --         68,038     (n)
                              1998     62,055            --             --          500,000             --

  Thomas D'Angelo, Senior     2000    189,583       250,000        243,750  (o)     615,000             --
  Vice President, Finance     1999    158,125        10,000             --               --          1,365     (p)
    and Controller..........  1998    140,569        10,000             --          312,500            569     (q)
</TABLE>


(a)      Represents the dollar value of an award of restricted Common Stock,
         whether the award is vested or unvested, calculated by multiplying the
         closing market price of the Company's unrestricted Common Stock on the
         date of grant by the number of shares awarded. Subject to the
         discretion of the Compensation Committee, holders of the Company's
         restricted Common Stock are entitled to 


                                       15

<PAGE>

         receive dividends on shares of restricted Common Stock. At December 31,
         2000, there were an aggregate of 7,450,000 shares of restricted Common
         Stock issued and outstanding with an aggregate value of $9,778,125.

(b)      The 7,000,000, 800,000 and 650,000 options listed below that were
         granted to Mr. Schulman, Mr. Boyd and Mr. McCadden, respectively, were
         returned to the Company by each of these individuals in the fourth
         quarter 2000.

(c)      Mr. Braddock, the Chairman of the Board of Directors, stepped down as
         Chief Executive Officer of the Company in May 2000. At that time, Mr.
         Braddock stopped receiving a salary.

(d)      At December 31, 2000, Mr. Braddock held 750,000 unvested shares of
         restricted Common Stock having an aggregate value at December 31, 2000
         of $984,375. 375,000 shares of the restricted Common Stock vest on June
         20, 2001 and the remaining 375,000 shares vest on December 20, 2002,
         subject to accelerated vesting upon the achievement by the Company of
         certain performance goals.

(e)      Represents forgiveness of interest on a $3.3 million loan that was
         repaid to the Company by Mr. Braddock in 2000.

(f)      Mr. Schulman has been President and Chief Executive Officer of the
         Company since May 2000.

(g)      At December 31, 2000, Mr. Schulman held 2,500,000 unvested shares of
         restricted Common Stock having an aggregate value at December 31, 2000
         of $3,281,250. 1,500,000 shares of the restricted Common Stock vest on
         May 20, 2001 and the remaining 1,000,000 shares vest on December 20,
         2002, subject to accelerated vesting upon the achievement by the
         Company of certain performance goals.

(h)      Represents the forgiveness of principal and interest on a loan to Mr.
         Schulman.

(i)      At December 31, 2000, Mr. Boyd held 1,400,000 unvested shares of
         restricted Common Stock having an aggregate value at December 31, 2000
         of $1,837,500. 700,000 shares of the restricted Common Stock vest on
         May 20, 2001 and the remaining 700,000 shares vest on November 20,
         2002, subject to accelerated vesting upon the achievement by the
         Company of certain performance goals.

(j)      Represents the forgiveness of principal and interest on a loan to Mr.
         Boyd.

(k)      Represents a one-time cash retention bonus of $1,300,000 earned as of
         December 31, 2000 to be paid in May 2001 and a $100,000 bonus paid to
         Mr. McCadden at the time he joined the Company.

(l)      At December 31, 2000, Mr. McCadden held 1,000,000 unvested shares of
         restricted Common Stock having an aggregate value at December 31, 2000
         of $1,312,500. 500,000 shares of the restricted Common Stock vest on
         May 20, 2001 and the remaining 500,000 shares vest on November 20,
         2002, subject to accelerated vesting upon the achievement by the
         Company of certain performance goals.

(m)      At December 31, 2000, Mr. Urbahn held 200,000 unvested shares of
         restricted Common Stock having an aggregate value at December 31, 2000
         of $262,500. 100,000 shares of the restricted Common Stock vest on May
         20, 2001 and the remaining 100,000 shares vest on November 20, 2002,
         subject to accelerated vesting upon the achievement by the Company of
         certain performance goals.

(n)      Represents reimbursement for relocation expenses.

(o)      At December 31, 2000, Mr. D'Angelo held 100,000 unvested shares of
         restricted Common Stock having an aggregate value at December 31, 2000
         of $131,250. 50,000 shares of the restricted Common Stock vest on May
         20, 2001 and the remaining 50,000 shares vest on November 20, 


                                       16

<PAGE>

         2002, subject to accelerated vesting upon the achievement by the
         Company of certain performance goals.

(p)      Represents life insurance premiums paid.

(q)      Represents disability insurance premiums paid.

         The following table sets forth information concerning the grant of
stock options during the fiscal year ended December 31, 2000 to the named
executive officers.

                        OPTION GRANTS IN LAST FISCAL YEAR


<TABLE>
<CAPTION>
                                                             INDIVIDUAL GRANTS

                           ---------------------------------------------------------------------------------------

                            NUMBER OF
                           SECURITIES       % OF TOTAL                                     POTENTIAL REALIZABLE
                           UNDERLYING         OPTIONS         EXERCISE                    VALUE AT ASSUMED ANNUAL
                             OPTIONS        GRANTED TO        OR BASE                      RATES OF STOCK PRICE
                             GRANTED       EMPLOYEES IN        PRICE        EXPIRATION    APPRECIATION FOR OPTION
Names                        (#)(a)         FISCAL YEAR        ($/SH)         DATE                TERM (b)
----------------------     -----------     ------------       --------      ----------    ------------------------
                                                                                                 5%            10%
                                                                                                 --            ---
<S>                        <C>                 <C>              <C>        <C>           <C>            <C>      
Richard S. Braddock...           N/A            N/A               N/A           N/A             N/A            N/A

                             500,000           1.6%             56.75       2/23/10      $1,418,750     $2,837,500
                             500,000           1.6%             49.50       5/10/10       1,237,500      2,475,000
                           1,500,000           4.8%             30.00       8/08/10       2,250,000      4,500,000
Daniel H. Schulman....     1,500,000           4.8%             37.50       8/08/10       2,812,500      5,625,000

                             500,000           1.6%             54.00       1/03/10       1,350,000      2,700,000
Jeffery H. Boyd.......       300,000           1.0%             25.63       8/08/10         384,375        768,750

                             400,000           1.3%             51.25       1/02/10       1,025,000      2,050,000
W. Michael McCadden...       250,000           0.8%             25.63       8/08/10         320,313        640,625

                              60,000           0.2%             51.13       1/11/10         153,375        306,750
                             200,000           0.6%             25.63       8/08/10         256,250        512,500
Trey Urbahn...........       500,000           1.6%              2.44      11/19/10          60,938        121,875

                              25,000           0.1%             51.13       1/11/10          63,906        127,813
                              90,000           0.3%             25.63       8/08/10         115,313        230,625
Thomas D'Angelo.......       500,000           1.6%              2.44      11/19/10          60,938        121,875
</TABLE>


         (a)      Excludes an aggregate of 4,600,000 options the Company has
                  committed to issue to certain named executive officers in
                  2001. See "Summary of priceline.com Incorporated 1999 Omnibus
                  Plan - New Plan Benefits." All of the options granted to Mr.
                  Schulman, Mr. Boyd and Mr. McCadden in 2000 were returned to
                  the Company in the fourth quarter 2000.

         (b)      The dollar amounts under these columns are the result of
                  calculations at the 5% and 10% rates set by the Securities and
                  Exchange Commission and therefore are not intended to forecast
                  possible future appreciation, if any, of the Company's stock
                  price.


                                       17

<PAGE>

         The following table sets forth information concerning the exercise of
stock options during the fiscal year ended December 31, 2000, and the fiscal
year-end value of stock options, held by the named executive officers.

               AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUES


<TABLE>
<CAPTION>
                                                                 NUMBER OF            VALUE OF
                                                                  SHARES            UNEXERCISED
                                                                 UNDERLYING         IN-THE-MONEY
                                                                UNEXERCISED          OPTIONS AT
                                                                 OPTIONS AT         12/31/00 ($)
                                                                12/31/00 (#)             (a)
                                                               ---------------     ----------------
                                  SHARES
                                 ACQUIRED        
                                    ON            VALUE  
                                 EXERCISE        REALIZED        EXERCISABLE/        EXERCISABLE/
      Names                         (#)           ($)(b)        UNEXERCISABLE        UNEXERCISABLE           
      ----------------------     --------        --------       -------------        -------------           
<S>                               <C>            <C>           <C>                    <C>       
      Richard S. Braddock...      244,650        9,780,085         6,005,350/0        3,077,742/0
      Daniel H. Schulman....         0               0                     0/0                0/0
      Jeffery H. Boyd.......         0               0                     0/0                0/0
      W. Michael McCadden...         0               0                     0/0                0/0
      Trey Urbahn...........      200,000        12,611,818    250,000/760,000          111,875/0
      Thomas P. D'Angelo....      225,000        12,908,517     37,500/615,000           19,219/0
</TABLE>


         (a)      Assumes a fiscal year-end market price of $1.31 per share.

         (b)      Value before income taxes payable as a result of exercise.

OTHER

         The Company has been served with a complaint that purports to be a
shareholder derivative action against the Company's Board of Directors and
certain of its current executive officers, as well as the Company (as a nominal
defendant). The complaint alleges breach of fiduciary duty. The action is
captioned Mark Zimmerman v. priceline.com Incorporated, Jay Walker, R. Braddock,
D. Schulman, P. Allaire, R. Bahna, P. Blackney, W. Ford, M. Loeb, N. Nicholas,
N. Peretsman, 18473-NC, (Court of Chancery of Delaware, County of New Castle,
State of Delaware). On February 6, 2001, all defendants moved to dismiss the
complaint for failure to make a demand upon the Board of Directors and failure
to state a cause of action upon which relief can be granted. The Company intends
to defend vigorously against this action.

                            COMPENSATION ARRANGEMENTS

         SCHULMAN EMPLOYMENT AGREEMENT. In December 2000, priceline.com entered
into an amended and restated employment agreement with Daniel H. Schulman, the
Company's President and Chief Executive Officer, which provides for a minimum
salary of $400,000 per year and expires on June 30, 2004.

         Under the terms of his agreement, Mr. Schulman was granted 2.5 million
shares of restricted Common Stock and, subject to the availability of a
sufficient number of authorized shares under the Company's employee benefit
plans, the Company committed to issue Mr. Schulman options to purchase 2.0
million shares of Common Stock on June 25, 2001. The options will have an
exercise price equal to the fair market value of the Company's Common Stock on
the date of grant. If Mr. Schulman is employed by the Company on the relevant
vesting date:

         o        one half of the options will vest on the date of grant and the
                  remaining half will vest pro rata over the following eighteen
                  month period; and 
         o        one half of the shares of the restricted Common Stock will
                  vest on May 20, 2001 and the remaining half (the "Balance")
                  will vest on December 20, 2002.

In addition, the Balance will also vest upon the achievement by the Company of
pro forma net income for a twelve month period. Pro forma net income means the
net income of the Company plus supplier warrant costs, option payroll taxes,
stock compensation costs, restructuring and other one-time charges and preferred
stock 


                                       18

<PAGE>

dividends. The agreement accelerates the forgiveness of $4.5 million of $9.0
million in loans outstanding to Mr. Schulman.

         In the event of a termination without cause, termination for good
reason, termination for death or disability or a change of control of
priceline.com, each as defined in the agreement, the vesting of the restricted
stock and the options will be accelerated. In addition, in the event of a
termination without cause or a termination for good reason, Mr. Schulman will be
entitled to receive two times his base salary over a twelve month period
following his termination. Subject to certain limitations, if severance
remuneration payable under the agreement is held to constitute an "excess
parachute payment" and Mr. Schulman becomes liable for any tax penalties on that
payment, priceline.com will make a cash payment to him in an amount equal to the
tax penalties plus an amount equal to any additional tax for which he will be
liable as a result of receipt of the payment for such tax penalties and payment
for such reimbursement for additional tax. The agreement contains
non-solicitation and non-disparagement provisions in the event of Mr. Schulman's
termination of employment.

         BOYD EMPLOYMENT AGREEMENT. In November 2000, priceline.com entered into
an amended and restated employment agreement with Jeffery H. Boyd, the Company's
Chief Operating Officer, which provides for a minimum salary of $300,000 per
year and expires on November 19, 2002.

         Under the terms of his agreement, Mr. Boyd was granted 1.4 million
shares of restricted Common Stock and, subject to the availability of a
sufficient number of authorized shares under the Company's employee benefit
plans, the Company committed to issue Mr. Boyd options to purchase 1.6 million
shares of Common Stock on May 25, 2001. The options will have an exercise price
equal to the fair market value of the Company's Common Stock on the date of
grant. If Mr. Boyd is employed by the Company on the relevant vesting date:

         o        one half of the options will vest on the date of grant and the
                  remaining half will vest pro rata over the following eighteen
                  month period; and 
         o        one half of the shares of the restricted Common Stock will
                  vest on May 20, 2001 and the remaining half (the "Balance")
                  will vest on November 20, 2002.

In addition, the Balance will vest upon the achievement by the Company of pro
forma net income for a twelve month period. Pro forma net income means the net
income of the Company plus supplier warrant costs, option payroll taxes, stock
compensation costs, restructuring and other one-time charges and preferred stock
dividends. The agreement accelerates the forgiveness of $2.0 million of an
outstanding loan to Mr. Boyd.

         In the event of a termination without cause, termination for good
reason, termination for death or disability or a change of control of
priceline.com, each as defined in the agreement, the vesting of the restricted
stock and the options will be accelerated. In addition, in the event of a
termination without cause or a termination for good reason, Mr. Boyd will be
entitled to receive two times his base salary over a twelve month period
following his termination. Subject to certain limitations, if severance
remuneration payable under the agreement is held to constitute an "excess
parachute payment" and Mr. Boyd becomes liable for any tax penalties on that
payment, priceline.com will make a cash payment to him in an amount equal to the
tax penalties plus an amount equal to any additional tax for which he will be
liable as a result of receipt of the payment for such tax penalties and payment
for such reimbursement for additional tax. The agreement contains
non-solicitation and non-disparagement provisions in the event of Mr. Boyd's
termination of employment.

         MCCADDEN EMPLOYMENT AGREEMENT. In November 2000, priceline.com entered
into an employment agreement with W. Michael McCadden, the Company's Chief
Marketing Officer, which provides for a minimum salary of $300,000 per year and
expires on November 19, 2002.

         Under the terms of his agreement, Mr. McCadden was granted 1.0 million
shares of restricted Common Stock and, subject to the availability of a
sufficient number of authorized shares under the Company's employee benefit
plans, the Company committed to issue Mr. McCadden options to purchase 1.0
million shares of Common Stock on May 25, 2001. The options will have an
exercise price equal to the fair market value of the Company's Common Stock on
the date of grant. If Mr. McCadden is employed by the Company on the relevant
vesting date:

         o        one half of the options will vest on the date of grant and the
                  remaining half will vest pro rata over the following eighteen
                  month period; and 


                                       19

<PAGE>

         o        one half of the shares of the restricted Common Stock will
                  vest on May 20, 2001 and the remaining half (the "Balance")
                  will vest on November 20, 2002.

In addition, the Balance will vest upon the achievement by the Company of pro
forma net income for a twelve month period. Pro forma net income means the net
income of the Company plus supplier warrant costs, option payroll taxes, stock
compensation costs, restructuring and other one-time charges and preferred stock
dividends. The agreement provides for a one-time cash retention bonus of $1.3
million to be paid to Mr. McCadden on May 20, 2001.

         In the event of a termination without cause, termination for good
reason, termination for death or disability or a change of control of
priceline.com, each as defined in the agreement, the vesting of the restricted
stock and the options will be accelerated. In addition, in the event of a
termination without cause or a termination for good reason, Mr. McCadden will be
entitled to receive two times his base salary over a twelve month period
following his termination. Subject to certain limitations, if severance
remuneration payable under the agreement is held to constitute an "excess
parachute payment" and Mr. McCadden becomes liable for any tax penalties on that
payment, priceline.com will make a cash payment to him in an amount equal to the
tax penalties plus an amount equal to any additional tax for which he will be
liable as a result of receipt of the payment for such tax penalties and payment
for such reimbursement for additional tax. The agreement contains
non-solicitation and non-disparagement provisions in the event of Mr. McCadden's
termination of employment.

         D'ANGELO EMPLOYMENT AGREEMENT. In February 2001, priceline.com entered
into an agreement with Thomas P. D'Angelo, the Company's Senior Vice President
Finance and Comptroller. Under the terms of the agreement, in the event of a
termination without cause or a termination for good reason, each as defined in
the agreement, Mr. D'Angelo will be entitled to receive his base salary of
$200,000 over a twelve month period following his termination.

 
          COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

         As noted above, the Compensation Committee is comprised of four
non-employee directors: Messrs. Allaire, Bahna, Loeb and Nicholas, Jr. No member
of the Compensation Committee is or was formerly an officer or an employee of
the Company. No interlocking relationship exists between the Board of Directors
or Compensation Committee and the Board of Directors or Compensation Committee
of any other company, nor has such interlocking relationship existed in the
past.


                                       20

<PAGE>


   REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE

                                  COMPENSATION

         We constitute the Compensation Committee of the Board of Directors of
priceline.com Incorporated. None of us has been an officer or employee of
priceline.com. We are responsible for establishing the compensation for the
executive officers, including the Chief Executive Officer, of priceline.com.

COMPENSATION PHILOSOPHY AND OBJECTIVES

         The goals of priceline.com's compensation program are to align
compensation with the Company's and each executive's business objectives and
performance and to enable priceline.com to attract, retain and reward executive
officers and other key employees who contribute to priceline.com's long-term
success and to motivate them to enhance long-term stockholder value.
Priceline.com's compensation emphasizes equity based incentive compensation
through stock options or, in certain instances, restricted stock, rather than
high levels of fixed or variable cash compensation.

         During the second half of 2000, priceline.com experienced a decrease in
the momentum of its business and a significant decline in its stock price. As a
result, in the fourth quarter 2000, priceline.com designed and put in place a
turnaround plan, a critical component of which was to retain and continue to
motivate the Company's executive officers and key employees and further align
their interests with the long-term interests of priceline.com's stockholders. At
the time priceline.com's turnaround plan was initiated, we believed that it was
essential that priceline.com maintain the continuity of its senior management
and key employees in order to facilitate the turnaround plan. We also believed
that maintaining the continuity of senior management would differentiate
priceline.com from other companies in the e-commerce arena that were
experiencing a flight of senior management and employee talent.

         We worked with priceline.com's senior executive officers and outside
compensation consultants to develop a compensation program designed to achieve
these goals and we approved a compensation program that consists of a mix of
salary, cash retention bonuses, equity incentives, including stock options and
restricted stock, and, in two instances, the acceleration of the forgiveness of
outstanding loans.

COMPENSATION COMPONENTS

         BASE SALARY. We meet at least annually to review and approve each
executive officer's salary for the ensuing year. When reviewing base salaries,
we consider the following factors: competitive pay practices, individual
performance against goals, levels of responsibility, breadth of knowledge and
prior experience. The relative importance of these factors varies, depending on
the individual whose salary is being reviewed.

         CASH RETENTION BONUSES. In connection with the turnaround plan,
priceline.com paid one-time cash retention bonuses to certain executive officers
and key employees. The retention bonuses were designed to encourage these
executive officers and key employees to remain with priceline.com during at
least the first phase of the Company's turnaround plan, and preferably longer.
As a result, these employees were informed at the time that the turnaround plan
was initiated that they were to receive a one-time cash retention bonus earned
as of December 31, 2000 to be paid in February 2001. In addition, as part of the
Company's effort to maintain the continuity of its senior management,
priceline.com's Chief Marketing Officer was given a one-time cash retention
bonus earned as of December 31, 2000 to be paid in May 2001.

         STOCK OPTIONS. Priceline.com's stock option plans are designed to
provide its employees and directors with an incentive which aligns their
interests with those of priceline.com's stockholders in achieving the Company's
long-term goals. Initial grants of stock options are generally made to eligible
employees upon commencement of employment, with additional grants being made to
certain employees periodically or following a significant change in job
responsibilities, scope or title. Stock options under the option plans generally
vest over a three-year period and expire ten years from the date of grant. The
exercise price of options granted under the plans is the fair market value of
the Common Stock on the date of grant.

         The Company made additional grants of stock options to each of its
executive officers and key employees in August and November 2000. To ensure that
a sufficient number of shares of Common Stock were authorized for issuance under
the Company's stock option plan for the option grants to employees in November
2000, Dan Schulman (Chief Executive Officer), Jeffery Boyd (Chief Operating
Officer) and Michael McCadden (Chief Marketing Officer) returned 7.0 million,
800,000 and 650,000 options, respectively, to the Company. The


                                       21

<PAGE>

November option grants were designed to retain employees through at least the
first six months of priceline.com's turnaround plan -- a time period during
which we believed the full progress of the Company's turnaround plan was
unlikely to be ascertainable and, as a result, the Company was most at risk of
losing its employees. As a result, the vesting provisions related to the
November grant of stock options were different from previous grants -- half of
the stock options vested over six months and the remaining half over the
following eighteen month period.

         The number of stock options granted to each participant under the
option plans is generally determined by guidelines reviewed by the Committee.
These guidelines combine several factors, including the performance and salary
level of each participant as well as the market price of the stock at the time
of grant.

         RESTRICTED STOCK. In connection with the Company's turnaround plan,
priceline.com granted certain executive officers shares of restricted stock. In
general, half of the shares of restricted stock vest six months from the date of
grant and the remaining half (the "BALANCE") vest two years from the date of
grant. To further align executive incentives with the primary goal underlying
the Company's turnaround plan -- achieving profitability -- the Balance will
vest earlier if the Company achieves pro forma net income (as defined) for a
twelve month period. Pro forma net income means the net income of priceline.com
plus supplier warrant costs, option payroll taxes, stock compensation costs,
restructuring and other one-time charges and preferred stock dividends.

         LOAN FORGIVENESS. Priceline.com accelerated the forgiveness of loans
outstanding to two executive officers -- Mr. Schulman, priceline.com's Chief
Executive Officer, whose loan forgiveness is described below, and Mr. Boyd,
priceline.com's Chief Operating Officer. By their terms, each of these loans was
to be forgiven upon Mr. Schulman's or Mr. Boyd's continued employment with the
Company for five years or in the event of certain changes of control, death, or
termination without cause or for good reason. Mr. Boyd's employment arrangement
at the time he joined priceline.com included a loan of $2.0 million, which was
intended to mitigate a decrease in cash compensation he experienced when joining
priceline.com. Priceline.com accelerated the forgiveness of Mr. Boyd's loan in
connection with his promotion from General Counsel to Chief Operating Officer
and his corresponding assumption of more significant responsibilities within the
Company.

2000 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER

         In May 2000, Mr. Braddock, the Chairman of the Board of Directors,
stepped down as Chief Executive Officer of priceline.com and Mr. Schulman was
promoted to Chief Executive Officer. In connection with his promotion to Chief
Executive Officer, Mr. Schulman was given a loan of $3.0 million and options to
purchase 500,000 shares of Common Stock. In August 2000, as a retention measure
following a significant decline in priceline.com's stock price over the first
seven months of 2000, the Company granted Mr. Schulman options to purchase 3
million shares of Common Stock, half of which had an exercise price
approximately 20% above the fair market value of priceline.com's common stock on
the date of grant.

         As described above, at the time priceline.com's turnaround plan was put
in place in the fourth quarter 2000, we believed that it was critical for
priceline.com to maintain senior management continuity in order to facilitate
the Company's turnaround plan and differentiate priceline.com from other
companies in the e-commerce arena that were experiencing a flight of senior
management talent. These objectives, and not specific measures of
priceline.com's performance during 2000, guided our compensation decisions.

         With these goals in mind, we worked with the Company's senior
management and consulted with outside compensation consultants and restructured
Mr. Schulman's compensation in December 2000. As discussed above, as part of
this restructuring, Mr. Schulman returned options to purchase 7.0 million shares
of Common Stock to the Company. In return, the Company accelerated the
forgiveness of $4.5 million of $9.0 million in loans outstanding to Mr.
Schulman. Priceline.com also granted Mr. Schulman 2.5 million shares of
restricted stock, half of which vest in May 2001 and the remaining half of which
vest in December 2002. Subject to the availability of a sufficient number of
shares authorized for issuance under priceline.com's option plans, the Company
committed to issue Mr. Schulman options to purchase 2.0 million shares of
priceline.com stock, six months and one day after his forfeiture of options. The
options will have an exercise price equal to the fair market value of the
Company's Common Stock on the date of grant. In addition, effective January 1,
2001, Mr. Schulman's base salary was increased from $300,000 to $400,000.


                                       22

<PAGE>

         In December 2000, Mr. Braddock, Chairman of priceline.com, became more
involved in addressing strategic issues confronting the Company and, as
recognition for his increased involvement, was granted 750,000 shares of
restricted stock. During 2000, Mr. Braddock agreed to stop receiving a salary,
which had been $300,000 per year, and repaid the principal of $3.3 million on a
loan to him from the Company. The Company forgave interest of $294,000 that was
due on the loan.

SECTION 162(M) OF THE INTERNAL REVENUE CODE

         Section 162(m) of the Internal Revenue Code of 1986 limits deductions
for federal income tax purposes to $1 million of compensation paid to certain
named executive officers in a taxable year. Compensation above $1 million may be
deducted if it is "performance-based compensation." We do not expect this
limitation to affect the Company in 2000. The Company reserves the right to
utilize compensation plans which will not qualify as "performance-based
compensation" and for which deductibility will be so limited.

EMPLOYEE COMPENSATION

         One of priceline.com's most important assets is its employees. We
believe the market for talented people who conceive, design, build, maintain and
manage priceline.com's technology and products is highly competitive. Unless the
Company's compensation policies are competitive, it will risk losing its
employees and the viability of its business could be jeopardized. As a result of
the significant decline in priceline.com's stock price during 2000, stock
options granted during 1999 and the first half of 2000 no longer served as
meaningful incentive or retention compensation vehicles. To address this
problem, priceline.com made two separate special broad based grants of stock
options to non-executive employees -- the first in August 2000, following a
general and significant decline in priceline.com's stock price over the first
seven months of 2000, and the second in November 2000 in connection with the
initiation of priceline.com's turnaround plan (the "November 2000 Option
Grant"). In addition, in November 2000, in connection with the initiation of its
turnaround plan, priceline.com informed certain employees that they were to
receive a one-time cash retention bonus to be paid in February 2001 (the
"February 2001 Cash Bonus").

         The February 2001 Cash Bonus and the November 2000 Option Grant were
designed to retain employees through at least the first three and six months,
respectively, of the Company's turnaround plan -- time periods during which we
believed the Company was most at risk of losing its employees. The vesting
provisions related to the November 2000 Option Grant were different from
previous grants -- half of the stock options vested six months from the date of
grant and the remaining half over the following eighteen month period.

         We carefully considered these compensation measures, taking into
account stockholders' concerns and the advice of outside compensation
consultants, and felt that these actions were critical to our continuing efforts
to retain the Company's employees and guide priceline.com through its
turnaround.


                                          Compensation Committee

                                          N.J. Nicholas, Jr. (Chairman)
                                          Paul A. Allaire
                                          Ralph M. Bahna
                                          Marshall Loeb


                                       23

<PAGE>

                       PERFORMANCE MEASUREMENT COMPARISON

         The following graph shows the total stockholder return through December
31, 2000 of an investment of $100 in cash on March 30, 1999 for priceline.com
Common Stock and an investment of $100 in cash on March 30, 1999 for (i) the
NASDAQ National Market Index and (ii) the Media General Internet Software and
Services Index. The Media General Internet Software and Services Index is an
index of 212 stocks representing the Internet industry, including Internet
software and services companies and e-commerce companies. Historic stock
performance is not necessarily indicative of future stock price performance. All
values assume reinvestment of the full amount of all dividends and are
calculated as of the last day of each month:

                                     [GRAPH]


<TABLE>
<CAPTION>

                                                Media General
           Measurement       priceline.com    Internet Software
              Point          Incorporated     and Services Index      NASDAQ
           -----------       -------------    ------------------    ----------
<S>                           <C>                  <C>                  <C>
             03/30/99          100.00              100.00               100.00
             03/31/99          120.11              100.00               100.00
             06/30/99          167.48              100.70               108.81
             09/30/99           93.48               97.45               110.58
             12/31/99           68.66              177.25               163.32
             03/31/00          115.94              173.33               185.83
             06/30/00           55.05              108.70               159.83
             09/29/00           17.21               97.56               147.49
             12/29/00            1.90               42.07                99.12
</TABLE>




                              CERTAIN TRANSACTIONS

         The Company was founded as a limited liability company in July 1997 and
converted to a corporation in July 1998. In connection with this conversion, all
equity units issued by the Company's predecessor were converted into an equal
number of shares of Common Stock. The following discussion does not distinguish
between the Company and its predecessor and the Common Stock and the equity
units of the Company's 


                                       24

<PAGE>

predecessor. The information set forth below also reflects a 1.25-for-one stock
split of the Common Stock on March 26, 1999.

R
ELATIONSHIP WITH WALKER DIGITAL

         The Company's core buyer-driven commerce business model and related
intellectual property rights were initially developed by Walker Digital
Corporation, a technology research and development company that was founded and
is controlled by Mr. Walker, the former Vice Chairman of priceline.com. In
partial consideration for the transfer of such rights and for the ongoing
planning, maintenance and prosecution of the patents related to such rights, the
Company issued Walker Digital 6,895,833 shares of Common Stock. Pursuant to the
terms of a Purchase and Intercompany Services Agreement ("Intercompany
Agreement"), the Company also granted Walker Digital a perpetual, non-exclusive,
royalty-free right and license to use the intellectual property related to the
Company's service for non-commercial internal research and development purposes.
Pursuant to the terms of the indemnification obligations contained in the
Intercompany Agreement, Walker Digital agreed to indemnify the Company for
damages, liability and legal expenses incurred in connection with certain
litigation filed in the United States District Court for the Northern District
of California by Marketel International, Inc.

         During the years ended December 31, 1999 and 1998, Walker Digital
provided the Company with services including subleasing office facilities to the
Company amounting to approximately $1.4 million and $706,000, respectively. The
Company charged Walker Digital approximately $2.3 million, $1.8 million and
$385,000 for the years ended December 31, 2000, 1999 and 1998, respectively, for
certain reimbursable expenses and services, including legal and accounting
services and IT infrastructure. In the fourth quarter 2000, the Company recorded
a special charge of $6.3 million for the unrecoverable reimbursable expenses due
to the Company from Walker Digital in connection with Walker Digital's
contractual obligations to fund certain patent and intellectual property
litigation costs.

         Several of the Company's investors, directors, executive officers and
other key employees are or were directors, officers, employees or stockholders
of Walker Digital and either own, or hold an option to purchase, equity
securities of Walker Digital and its affiliates. See "Election of Directors."

         The Company has established an Independent Committee of the Board that
is comprised of three directors who are not employees of the Company or its
affiliates and related companies to review and ratify any future material
transaction between the Company and its affiliates and related companies,
including Walker Digital. See "Board Committees and Meetings."

PRICELINE WEBHOUSE CLUB AND PRICELINE PERFECT YARD SALE

         During 2000, the Company had licensing arrangements with two companies,
Priceline WebHouse Club, Inc. ("WebHouse Club") and Priceline Perfect Yard Sale,
Inc. ("Perfect Yard Sale"), each of which were affiliated with Walker Digital.
The Company licensed its patented Name Your Own Pricesm business model and
affiliated trademarks and software systems to WebHouse Club, which operated an
Internet-based service for groceries and other retail products, and Perfect Yard
Sale, which operated a consumer to consumer service for the sale of used goods
over the Internet. In addition, in the fourth quarter 1999, the Company received
a warrant in WebHouse Club in exchange for services rendered and, upon receipt
of the warrant, recognized approximately $189 million of income representing the
estimated fair value of the warrant, based on an independent valuation. In 2000,
both WebHouse Club and Perfect Yard Sale ceased operations. As a result of
WebHouse Club ceasing operations, in the third quarter 2000, the Company
recorded a non-cash charge of approximately $189 million to write off the full
carrying value of the warrant. In addition, the Company recorded a special
charge in the fourth quarter 2000 of $1.7 million related to WebHouse Club and
$1.1 million related to Perfect Yardsale. The special charge related to asset
impairments related to the write-down to estimated net realizable value of
certain receivables.

LOANS TO CERTAIN OFFICERS OF THE COMPANY

         In April 1999, the Company made a $3.3 million loan to Mr. Richard S.
Braddock, who was Chief Executive Officer of the Company at the time. The loan
accrued interest at 5.28% per annum. During 2000, Mr. Braddock repaid the
principal due of $3.3 million and the Company forgave the interest due of
$294,000.


                                       25

<PAGE>

         In July 1999, the Company made a loan to Mr. Daniel H. Schulman,
President and Chief Executive Officer of the Company, in the amount of $6.0
million. In May 2000, in connection with his promotion to Chief Executive
Officer, Mr. Schulman was given a loan of $3.0 million. The loans accrue
interest at the rates of 5.82% and 6.4%, respectively, per annum until maturity
in July 2004 and are not contingent upon Mr. Schulman exercising options to
purchase Common Stock. In December 2000, the Company accelerated the forgiveness
of $4.5 million of the outstanding $6.0 million loan. Subject to certain
prepayment obligations and to forgiveness in the event of certain changes of
control, death, or termination without cause or for good reason, pursuant to the
terms of these loans, accrued interest and principal are payable in July 2004,
but are forgiven under certain circumstances.

         In January 2000, in connection with his employment with the Company,
the Company made a loan to Mr. Jeffery H. Boyd, then Executive Vice President
and General Counsel of the Company, in the amount of $2.0 million. The loan
accrued interest at the rate of 6.56% per annum until maturity in February 2004.
In November, the Company accelerated the forgiveness of Mr. Boyd's loan in
connection with his promotion to Chief Operating Officer.

         In March 2000, in connection with her employment with the Company, the
Company made a loan to Ms. Heidi G. Miller in the amount of $3.0 million. The
loan accrued interest at the rate of 6.56% per annum until maturity in March
2005. Pursuant to the terms of her employment agreement, which Ms. Miller
entered into when she joined the Company, her loan was forgiven when she left
the Company during the fourth quarter of 2000.

         The Company has entered into compensation arrangements with certain of
its directors and officers. See "Director and Executive Compensation" and
"Compensation Arrangements."

INTERNATIONAL LICENSEES

         Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited, which is
a 49.97% shareholder of Hutchison Whampoa Limited, purchased an aggregate of
35,093,244 shares of the Company's common stock in February 2001. In connection
with the purchase, Hutchison Whampoa Limited and Cheung Kong (Holdings) Limited
received certain registration rights and Hutchison Whampoa Limited received a
seat on the Company's Board of Directors. Ian F. Wade, a Group Managing Director
of Hutchison Whampoa Limited's A.S. Watson & Co., Limited, joined the
priceline.com Board of Directors in February 2001.

         In June 2000, the Company entered into definitive agreements with
subsidiaries of Hutchison Whampoa Limited to introduce the Company's services to
several Asian markets. Under the terms of the agreements, the Company licenses
its business model and provides its expertise in technology, marketing and
operations to Hutchison-priceline Limited. Hutchison-priceline Limited pays the
Company an annual licensing fee to use the Company's intellectual property and
reimburses the Company for the cost of services provided. In addition, the
Company purchased a convertible note allowing it to take a significant equity
stake in Hutchison-priceline Limited. In February 2001, Hutchison Whampoa
Limited purchased $9.5 million worth of Hutchison-priceline Limited convertible
notes. In connection with the sale, Hutchison received the right, for a period
of six months, to negotiate with the Company for the establishment of a
potential business in Japan. Robert Mylod, the Company's Chief Financial
Officer, and Jeffery H. Boyd, the Company's Chief Operating Officer, are on the
board of directors of Hutchison-priceline Limited.

         In June 2000, the Company entered into definitive agreements with
affiliates of General Atlantic Partners, LLC, to introduce the Company's
services to several European markets. General Atlantic Partners, LLC and certain
related entities hold an aggregate of 17,418,079 shares of the Company's Common
Stock. Under the terms of the agreements entered into in June 2000, the Company
licenses its business model and provides its expertise in technology, marketing
and operations to priceline.com europe Ltd., which pays the Company an annual
licensing fee to use its intellectual property and reimburses the Company for
the cost of services provided. In addition, the Company purchased a warrant
which allows the Company, under certain conditions, to take a significant equity
stake in priceline Europe Holdings, N.V., the parent of priceline.com europe
Ltd. In January 2001, General Atlantic Partners invested an additional $25.0
million in priceline Europe Holdings, N.V., bringing its total investment in the
company to $50.0 million. William E. Ford, a managing member of General Atlantic
Partners, LLC, is a Director of the Company and a director of priceline Europe


                                       26

<PAGE>

Holdings, N.V. and priceline.com europe Ltd. Rick Braddock, the chairman of the
Board of Directors of the Company, is a director of priceline Europe Holdings,
N.V. and priceline.com europe Ltd.


OTHER TRANSACTIONS

         The Company has granted registration rights to certain stockholders and
warrant holders, including Mr. Braddock, Mr. Walker, Walker Digital, The Jay S.
Walker Irrevocable Credit Trust, General Atlantic, Vulcan Ventures Incorporated,
Delta Air Lines, Inc., Hutchison Whampoa Limited and Cheung Kong (Holdings)
Limited. Up to all of the shares held by said stockholders, exclusive of options
granted to them under the 1999 Omnibus Plan and the 1997 Omnibus Plan or
acquired in the public market, are entitled to said registration rights. See
"Security Ownership Of Certain Beneficial Owners and Management." Additional
shares acquired by these individuals while an affiliate of the Company may also
be entitled to registration rights under the registration rights agreements. In
addition, the holders of all of the securities registrable pursuant to the
agreements may be entitled under the agreements, subject to certain limitations,
to require the Company to include their registrable securities in future
registration statements the Company files. Registration of shares of Common
Stock pursuant to the rights granted in this agreement will result in such
shares becoming freely tradeable without restriction under the Securities Act of
1933. All registration expenses incurred in connection with the above
registrations will be borne by the Company

         In connection with certain adaptive marketing programs, the Company
offered a magazine subscription promotion pursuant to a revenue sharing
arrangement with Synapse Group, Inc., a direct marketing firm. Under this
arrangement, the Company shared in a percentage of the revenues generated upon
the conversion of the Company-generated subscriptions to annual subscriptions
after a six-month free trial period. During 2000, the Company received
approximately $830,000 from Synapse Group, Inc. During the fourth quarter 2000,
the Company ceased offering any adaptive marketing programs. Affiliates of
General Atlantic have invested approximately $59.3 million in Synapse Group,
Inc. Marshall Loeb, a Director of the Company, has also made an investment of
approximately $3.5 million in Synapse Group, Inc. and certain Directors of the
Company sit on the Board of Directors of Synapse Group, Inc.

         Daniel H. Schulman, who is the President and Chief Executive Officer
and a Director of the Company, is a member of the Board of Directors of
Net2Phone, Inc., a provider of Internet protocol and related telecommunication
services. Net2Phone is a preferred provider of long distance services offered to
the Company's customers. During 2000, pursuant to certain agreements between the
Company and Net2Phone, Net2Phone generated revenues of approximately $3.0
million for the Company and the Company paid Net2Phone approximately $2.5
million for the cost of long distance services the Company purchased from
Net2Phone and sold to its customers.

         Paul J. Blackney, who is a Director of the Company, is the President
and Chief Executive Officer of Worldspan, L.P., a global travel distribution
system ("GDS"), which was, and continues to be, the Company's sole GDS for
booking travel reservations for its customers. In January 2000, the Company
entered into an amendment to its subscriber agreement with Worldspan, pursuant
to which Worldspan paid $3,000,000 in exchange for the Company's committing to a
certain minimum volume of bookings for the five (5) year term of the agreement.
The amendment also provides for certain discounts and incentives to be provided
by Worldspan to the Company.

INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY

         Section 145 of the Delaware General Corporation Law authorizes a
corporation's board of directors to grant indemnity to directors and officers in
terms sufficiently broad to permit such indemnification under certain
circumstances for liabilities, including reimbursement for expenses incurred,
arising under the Securities Act of 1933.

         As permitted by Delaware law, the Company's certificate of
incorporation includes a provision that eliminates the personal liability of its
Directors for monetary damages for breach of fiduciary duty as a Director,
except for liability (1) for any breach of the Director's duty of loyalty to the
Company or its stockholders; (2) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law; (3) under Section
174 of the Delaware General Corporation Law regarding unlawful dividends and
stock purchases; or (4) for any transaction from which the Director derived an
improper personal benefit.


                                       27

<PAGE>

         As permitted by Delaware law, the Company's certificate of
incorporation, provides that (1) the Company is required to indemnify its
Directors and officers to the fullest extent permitted by Delaware law, subject
to certain very limited exceptions; (2) the Company is permitted to indemnify
its other employees to the extent that it indemnifies its officers and
Directors, unless otherwise required by law, its certificate of incorporation,
its by-laws or agreements; (3) the Company is required to advance expenses, as
incurred, to its Directors and officers in connection with a legal proceeding to
the fullest extent permitted by Delaware law, subject to certain very limited
exceptions; and (4) the rights conferred in the certificate of incorporation are
not exclusive.


                                       28

<PAGE>

 
            REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

         The Audit Committee of the Board of Directors is composed of four
directors each of whom must satisfy the applicable independence and financial
literacy requirements of the NASDAQ Stock Market and operates under a written
charter adopted by the Board of Directors. Priceline.com's management is
responsible for its internal accounting controls and the financial reporting
process. Priceline.com's independent accountants, Deloitte & Touche, are
responsible for performing an independent audit of priceline.com's financial
statements in accordance with auditing standards generally accepted in the
United States and to issue a report thereon. The Audit Committee's
responsibility is to monitor and oversee these processes in accordance with its
charter, a copy of which is attached to this proxy statement as Appendix C.

REVIEW WITH MANAGEMENT

         The Audit Committee has reviewed and discussed priceline.com's audited
financial statements for the three years ended December 21, 2000 with
management.

REVIEW AND DISCUSSIONS WITH INDEPENDENT ACCOUNTANTS

         The Audit Committee has discussed with Deloitte & Touche LLP,
priceline.com's independent accountants, the matters required to be discussed by
SAS 61 (Codification of Statements on Auditing Standards) which includes, among
other items, matters related to the conduct of the audit of priceline.com's
financial statements.

         The Audit Committee has also received written disclosures and the
letter from Deloitte & Touche LLP required by Independence Standards Board
Standard No. 1 (which relates to the accountants' independence from
priceline.com and its related entities) and has discussed with Deloitte & Touche
LLP its independence from priceline.com. In addition, the Audit Committee has
considered whether the independent accountant's provision of non-audit services
is compatible with maintaining the independent accountants' independence.

CONCLUSION

         Based on the review and discussions referred to above, and the Audit
Committee's review of the representations of management and the report of the
independent accountants, the Audit Committee recommended to priceline.com's
Board of Directors that priceline.com's audited financial statements be included
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 2000.



                              SUBMITTED BY THE AUDIT COMMITTEE
                              OF THE BOARD OF DIRECTORS

                                 William Ford, Chairman
                                 Paul Allaire
                                 Paul Blackney
                                 Nancy Peretsman


                                       29

<PAGE>

                              AUDITOR INDEPENDENCE

         Deloitte & Touche LLP are the Company's independent auditors. The audit
committee of the Company's board of directors has considered whether the
provision of non-audit services is compatible with maintaining Deloitte's
independence.

AUDIT FEES

         The aggregate fees for professional services rendered by Deloitte &
Touche LLP for the audit of the annual financial statements of the Company for
the year ended December 31, 2000 and the timely review of the interim financial
statements included in quarterly reports on Form 10-Q for the periods ended
March 31, June 30 and September 30, 2000 were $881,000.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

         The aggregate fees for financial information systems design and
implementation services rendered by Deloitte & Touche LLP for the year ended
December 31, 2000 were $0.

ALL OTHER FEES

         The aggregate fees for other services rendered by Deloitte & Touche LLP
for the year ended December 31, 2000 were approximately $1,545,000, primarily
for services related to tax compliance, licensee transactions and state and
local tax consultation.


                                       30

<PAGE>

                                  OTHER MATTERS

         The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, the persons named in the accompanying proxy intend
to vote on those matters in accordance with their best judgment.



                                       31

<PAGE>

                                                                     Appendix A


                              AMENDMENT NUMBER TWO

                                     TO THE

                           PRICELINE.COM INCORPORATED

                                1999 OMNIBUS PLAN

         WHEREAS, priceline.com Incorporated (the "COMPANY") maintains the
priceline.com Incorporated 1999 Omnibus Plan (the "PLAN");

         WHEREAS, on April 24, 2000, in connection with the 2000 Annual Meeting
of Stockholders, the stockholders of the Company authorized Amendment Number One
to the Plan;

         WHEREAS, the Board of Directors of the Company (the "BOARD"), acting
through the Compensation Committee, is authorized to amend the Plan, subject to
stockholder approval in certain instances;

         WHEREAS, the Board desires to amend the Plan, subject to stockholder
approval.

         NOW, THEREFORE, effective immediately, but subject to, and conditioned
upon, approval of this amendment by the stockholders of the Company in
accordance with the requirements of the laws of the State of Delaware at the
next annual stockholders meeting, the Plan is amended as follows:

         1. Section 3 of the Plan is amended by replacing the first sentence
            thereof with the following:

            "The maximum number of shares of Stock reserved for the grant or
            settlement of Awards under the Plan shall be 35,375,000 shares,
            subject to adjustment as provided herein."


                                       32

<PAGE>

         2. Section 6(b) of the Plan is amended by replacing the reference to
            "10,000 shares of Stock" with "20,000 shares of Stock."

         IN WITNESS WHEREOF, this Amendment has been executed this 6th day of
April, 2001.

                                    Priceline.com Incorporated



                                    By:   __________________________
                                          Name:  Peter J. Millones
                                          Title: Assistant Secretary



                                       33

<PAGE>

                                                                      Appendix B


                           PRICELINE.COM INCORPORATED
                                1999 OMNIBUS PLAN


1.       ESTABLISHMENT AND PURPOSE.

         There is hereby adopted the priceline.com Incorporated 1999 Omnibus
Plan (the "Plan"). The Plan is intended to promote the interests of
priceline.com Incorporated (the "Company") by providing employees of the Company
with appropriate incentives and rewards to en courage them to enter into and
continue in the employ of the Company and to acquire a proprietary interest in
the long-term success of the Company; and to reward the performance of
individual officers, other employees, consultants and directors in fulfilling
their responsibilities for long-range achievements.

2.       DEFINITIONS.

         As used in the Plan, the following definitions apply to the terms
indicated below:

         (a)  "Affiliate" means an affiliate of the Company, as defined in Rule
              12b-2 promulgated under Section 12 of the Exchange Act.

         (b)  "Agreement" shall mean the written agreement between the Company
              and a Participant evidencing an Award.

         (c)  "Award" means any Option, Restricted Stock or Other Stock-Based
              Award granted under the Plan.

         (d)  "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
              under the Exchange Act.

         (e)  "Board" shall mean the Board of Directors of the Company.

         (f)  "Cause" shall mean (1) the willful and continued failure by the
              Participant substantially to perform his or her duties and
              obligations to the Company (other than any such failure resulting
              from his or her incapacity due to physical or mental illness); (2)
              the willful engaging by the Participant in misconduct which is
              materially injurious to the Company; (3) the commission by the
              Participant of a felony; or (4) the commission by the Participant
              of a crime against the Company which is materially injurious to
              the Company. For purposes of this Section 2(f), no act, or failure
              to act, on a Participant's part shall be considered "willful"
              unless done, or omitted to be done, by the Participant in bad
              faith and without reasonable belief that his or her action or
              omission was in the best interest of the Company. Determination of
              Cause shall be made by the Committee in its sole discretion.

         (g)  "Change in Control" means 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 25% or more of the
                        combined voting power of the Company's then outstanding
                        voting securities;

                (ii)    the following individuals cease for any reason to
                        constitute a majority of the number of directors then
                        serving: individuals who, on the Effective 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 stock
                        holders was approved or recommended by a vote of at
                        least two-thirds (2/3) of the directors then still in
                        office who either were directors on the Effective Date
                        or whose appointment, election or nomination for
                        election was previously so approved or recommended;


                                       34

<PAGE>

                (iii)   there is consummated a 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 50% of the
                        combined voting power of the voting securities of the
                        Company or such surviving or parent entity out standing
                        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 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 stockholders of the Company approve a plan of
                        complete liquidation of the Company or there is
                        consummated an 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 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.

         (h)  "Code" shall mean the Internal Revenue Code of 1986, as amended
              from time to time, and any regulations promulgated thereunder.

         (i)  "Committee" means (1) with respect to the application of this Plan
              to employees and consultants, a committee established by the
              Board, which committee shall be intended to consist of two or more
              non-employee directors, each of whom shall be a "non-employee
              director" as defined in Rule 16b-3 of the Exchange Act and an
              "outside director" as defined under Section 162(m) of the Code and
              (2) with respect to the application of this Plan to Non-Employee
              Directors, the Board.

         (j)  "Company" means priceline.com Incorporated, a corporation
              organized under the laws of the State of Delaware, or any
              successor corporation.

         (k)  "Director" shall mean a member of the Board.

         (l)  "Disability" shall mean: (1) any physical or mental condition that
              would qualify a Participant for a disability benefit under the
              long-term disability plan maintained by the Company and applicable
              to him or her; (2) when used in connection with the exercise of an
              Incentive Stock Option following termination of employment,
              disability within the meaning of Section 22(e)(3) of the Code, or
              (3) such other condition as may be determined in the sole
              discretion of the Committee to constitute Disability.

         (m)  "Effective Date" shall mean the effective date of the Initial
              Public Offering, provided that the Plan had been approved by the
              stockholders of the Company prior to the Initial Public Offering.

         (n)  "Exchange Act" shall mean the Securities Exchange Act of 1934, as
              amended from time to time.

         (o)  "Executive Officer" shall have the meaning set forth in Rule 3b-7
              promulgated under the Exchange Act.

         (p)  The "Fair Market Value" of a share of Stock as of a particular
              date shall mean the closing sales price per share of Stock on the
              national securities exchange on which the Stock is principally
              traded, for the last preceding date on which there was a sale of
              such Stock on such exchange.

         (q)  "Incentive Stock Option" shall mean an Option that is an
              "incentive stock option" within the meaning of Section 422 of the
              Code, or any successor provision, and that is designated by the
              Committee as an Incentive Stock Option.


                                       35

<PAGE>

         (r)  "Initial Public Offering" shall mean the initial public offering
              of shares of Stock of the Company, as more fully described in the
              preliminary Registration Statement on Form S-1 in tended to be
              filed with the Securities and Exchange Commission on or about
              December 23, 1998, as such Registration Statement may be amended
              from time to time.

         (s)  "Issue Date" shall mean the date established by the Company on
              which certificates representing Restricted Stock shall be issued
              by the Company pursuant to the terms of Section 8(e).

         (t)  "Non-Employee Director" shall mean a member of the Board who is
              not and has never been an employee of the Company.

         (u)  "Non-Qualified Option" shall mean an Option other than an
              Incentive Stock Option.

         (v)  "Option" shall mean an option to purchase a number of shares of
              Stock granted pursuant to Section 7.

         (w)  "Other Stock-Based Award" shall mean an award granted pursuant to
              Section 9 hereof.

         (x)  "Partial Exercise" shall mean an exercise of an Award for less
              than the full extent permitted at the time of such exercise.

         (y)  "Participant" shall mean (1) an employee, consultant or
              Non-Employee Director of the Company to whom an Award is granted
              hereunder and (2) any such persons successors, heirs, executors
              and administrators, as the case may be, in such capacity.

         (z)  "Performance Goals" means performance goals based on one or more
              of the following criteria: (i) pre-tax income or after-tax income,
              (ii) operating profit, (iii) return on equity, as sets, capital or
              investment, (iv) earnings or book value per share, (v) sales or
              revenues, (vi) operating expenses, (vii) Stock price appreciation
              and (viii) implementation or completion of critical projects or
              processes. Where applicable, the Performance Goals may be
              expressed in terms of attaining a specified level of the
              particular criteria or the attainment of a percentage increase or
              decrease in the particular criteria, and may be applied to one or
              more of the Company, a Subsidiary or Affiliate, or a division or
              strategic business unit of the Company, or may be applied to the
              performance of the Company relative to a market index, a group of
              other companies or a combination thereof, all as determined by the
              Committee. The Performance Goals may include a threshold level of
              performance below which no vesting will occur, levels of
              performance at which specified vesting will occur, and a maximum
              level of performance at which full vesting will occur. Each of the
              foregoing Performance Goals shall be determined in accordance with
              generally accepted accounting principles and shall be subject to
              certification by the Committee; provided that the Committee shall
              have the authority to make equitable adjustments to the
              Performance Goals in recognition of unusual or non-recurring
              events affecting the Company or any Subsidiary or Affiliate or the
              financial statements of the Company or any Subsidiary or
              Affiliate, in response to changes in applicable laws or
              regulations, or to account for items of gain, loss or expense
              determined to be extraordinary or unusual in nature or infrequent
              in occurrence or related to the disposal of a segment of a
              business or related to a change in accounting principles.

         (aa) "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 Stock of the Company.

         (bb) "Plan" means the priceline.com 1999 Omnibus Plan, as amended from
              time to time.

         (cc) "Reload Option" shall mean a Non-Qualified Stock Option granted
              pursuant to Section 7(c)(5).

         (dd) "Restricted Stock" shall mean a share of Stock which is granted
              pursuant to the terms of Section 8 hereof and which is subject to
              the restrictions set forth in Section 8(c).


                                       36

<PAGE>

         (ee) "Rule 16b-3" shall mean the Rule 16b-3 promulgated under the
              Exchange Act, as amended from time to time.

         (ff) "Securities Act" shall mean the Securities Act of 1933, as amended
              from time to time.

         (gg) "Stock" means shares of the common stock, par value $.01 per
              share, of the Company.

         (hh) "Subsidiary" means any corporation in an unbroken chain of
              corporations beginning with the Company if, at the time of
              granting of an Award, each of the corporations (other than the
              last corporation in the unbroken chain) owns stock possessing 50%
              or more of the total combined voting power of all classes of stock
              in one of the other corporations in the chain.

         (ii) "Vesting Date" shall mean the date established by the Committee on
              which Restricted Stock may vest.

3.       STOCK SUBJECT TO THE PLAN.

         The maximum number of shares of Stock reserved for the grant or
settlement of Awards under the Plan shall be 25,375,000 shares, subject to
adjustment as provided herein. No more than 7,500,000 shares of Stock may be
awarded in respect of Options, no more than 2,500,000 shares of Stock may be
awarded in respect of Restricted Stock and no more than 5,000,000 shares of
Stock may be awarded in respect of Other Stock-Based Awards to a single
individual in any given year during the life of the Plan, which amounts shall be
subject to adjustment as provided herein. Determinations made in respect of the
limitation set forth in the preceding sentence shall be made in a manner
consistent with Section 162(m) of the Code. Such shares may, in whole or in
part, be authorized but unissued shares or shares that shall have been or may be
reacquired by the Company in the open market, in private transactions or
otherwise. If any shares subject to an Award are forfeited, canceled, exchanged
or surrendered or if an Award otherwise terminates or expires without a
distribution of shares to the holder of such Award, the shares of Stock with
respect to such Award shall, to the extent of any such forfeiture, cancellation,
exchange, surrender, termination or expiration, again be available for Awards
under the Plan.

         Except as provided in an Award Agreement, in the event that the
Committee shall determine that any dividend or other distribution (whether in
the form of cash, Stock, or other property), recapitalization, Stock split,
reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase, or share exchange, or other similar corporate transaction or event,
affects the Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of holders of Awards under the Plan, then
the Committee shall make such equitable changes or adjustments as it deems
necessary or appropriate to any or all of (i) the number and kind of shares of
Stock or other property (including cash) that may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Stock or other
property (including cash) issued or issuable in respect of outstanding Awards,
(iii) the exercise price, grant price, or purchase price relating to any Award;
provided that, with respect to Incentive Stock Options, such adjustment shall be
made in accordance with Section 424(h) of the Code, (iv) the Performance Goals
and (v) the individual limitations applicable to Awards.

4.       ADMINISTRATION OF THE PLAN.

         The Plan shall be administered by the Committee. The Committee shall
have the authority in its sole discretion, subject to and not inconsistent with
the express provisions of the Plan, to administer the Plan and to exercise all
the powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, with out
limitation, the authority to grant Awards; to determine the persons to whom and
the time or times at which Awards shall be granted; to determine the type and
number of Awards to be granted, the number of shares of Stock to which an Award
may relate and the terms, conditions, restrictions and Performance Goals
relating to any Award; to determine whether, to what extent, and under what
circumstances an Award may be settled, canceled, forfeited, exchanged, or
surrendered; to make adjustments in the Performance Goals in recognition of
unusual or non-recurring events affecting the Company or the financial
statements of the Company (to the extent not inconsistent with Section 162(m) of
the Code, if applicable), or in response to changes in applicable laws,
regulations, or accounting principles; to construe and interpret the Plan and
any Award; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of Agreements; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.


                                       37

<PAGE>

         The Committee may, in its absolute discretion, without amendment to the
Plan, (a) accelerate the date on which any Option granted under the Plan becomes
exercisable, waive or amend the operation of Plan provisions respecting exercise
after termination of employment or otherwise adjust any of the terms of such
Option, (b) accelerate the Vesting Date or waive any condition imposed hereunder
with respect to any Restricted Stock and (c) otherwise adjust any of the terms
applicable to any Award; provided, however, in each case, that in the event of
the occurrence of a Change in Control, the provisions of Section 10 hereof shall
govern vesting and exercisability schedule of any Award granted hereunder.

         No member of the Committee shall be liable for any action, omission or
determination relating to the Plan, and the Company shall indemnify (to the
extent permitted under Delaware law) and hold harmless each member of the
Committee and each other director or employee of the Company to whom any duty or
power relating to the administration or interpretation of the Plan has been
delegated against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the approval of the
Committee) arising out of any action, omission or determination relating to the
Plan, unless, in either case, such action, omission or determination was taken
or made by such member, director or employee in bad faith and without reasonable
belief that it was in the best interests of the Company.

5.       ELIGIBILITY.

         Incentive Stock Options shall be granted only to key employees
(including officers and directors who are also employees) of the Company, its
parent or any of its Subsidiaries. All other Awards may be granted to officers,
independent contractors, key employees and non-employee directors of the Company
or of any of its Subsidiaries and Affiliates.

6.       AWARDS UNDER THE PLAN; NON-EMPLOYEE DIRECTOR GRANTS

         (a) Grants. The Committee may grant Options, Restricted Stock and Other
         Stock-Based Awards to Participants in such amounts and on such terms
         and conditions, not inconsistent with the Plan, as the Committee shall
         determine in its sole and absolute discretion.

         (b) Non-Employee Director Grants. Unless determined otherwise by the
         Committee in its sole and absolute discretion, and without further
         action by the Board or the stockholders of the Company, each
         Non-Employee Director shall, subject to the terms of the Plan, be
         granted a Non-Qualified Option to purchase (1) 20,000 shares of Stock
         as of the date the Non-Employee Director begins service as a
         Non-Employee Director and (2) an additional Option to purchase 10,000
         shares of Stock as of the first business day following each annual
         meeting of stockholders of the Company, provided that the individual is
         a Non-Employee Director on such date. Unless otherwise determined by
         the Committee at the time of grant, each such Option shall be for a ten
         (10) year term, shall become exercisable as to one-third of the shares
         subject to the Option on the first anniversary of the date of grant and
         as to the balance monthly in equal installments over the next
         twenty-four months following such first anniversary, shall be granted
         at a per share exercise price equal to the Fair Market Value and
         otherwise be in accordance with Section 7 of this Plan.

         (c) Agreements. Each Award granted under the Plan shall be evidenced by
         an Agreement that shall contain such provisions as the Committee may,
         in its sole and absolute discretion, deem necessary or desirable. By
         accepting an Award, a Participant thereby agrees that the Award shall
         be subject to all terms and provisions of the Plan and the applicable
         Agreement.

         (d) Notwithstanding the above, no grants under Section (b) above shall
         be made to the extent it would exceed the limitations set forth in
         Section 3 of the Plan with any grants then due being cut back pari
         passu and such non-made grants automatically being made at such time as
         they may be made under Section 3 (other than as a result of an
         amendment thereof).

7.       OPTIONS.

         (a) IDENTIFICATION OF OPTIONS. Each Option shall be clearly identified
         in the applicable Agreement as either an Incentive Stock Option or a
         Non-Qualified Option.


                                       38

<PAGE>

         (b) EXERCISE PRICE. Each Agreement with respect to an Option shall set
         forth the exercise price per share of Stock payable by the grantee to
         the Company upon exercise of the Option. The exercise price per share
         of Stock shall be determined by the Committee; provided, however, that
         in no case shall an Option have an exercise price per share of Stock
         that is less than the Fair Market Value of a share of Stock on the date
         the Option is granted.

         (c) TERM AND EXERCISE OF OPTIONS.

                (1)   Unless the applicable Agreement provides otherwise, an
                      Option shall become cumulatively exercisable as to 33 1/3%
                      percent of the Units covered thereby on each of the first,
                      second and third anniversaries of the date of grant. The
                      Committee shall determine the expiration date of each
                      Option; provided, however, that no Option shall be
                      exercisable more than 10 years after the date of grant.
                      Unless the applicable Agreement provides otherwise and
                      except in the event of a Change in Control, no Option
                      shall be exercisable prior to the first anniversary of the
                      date of grant.

                (2)   An Option may be exercised for all or any portion of the
                      Stock as to which it is exercisable, provided that no
                      Partial Exercise of an Option shall be for an aggregate
                      exercise price of less than $100.00. The Partial Exercise
                      of an Option shall not cause the expiration, termination
                      or cancellation of the remaining portion thereof.

                (3)   An Option shall be exercised by delivering notice to the
                      Company's principal office, to the attention of its
                      Secretary. Such notice shall be accompanied by the
                      applicable Agreement, shall specify the number of shares
                      of Stock with respect to which the Option is being
                      exercised and the effective date of the proposed exercise
                      and shall be signed by the Participant or other person
                      then having the right to exercise the Option. Payment for
                      Stock purchased upon the exercise of an Option shall be
                      made on the effective date of such exercise by one or a
                      combination of the following means: (i) in cash or by
                      personal check, certified check, bank cashier's check or
                      wire transfer; (ii) subject to the approval of the
                      Committee, in Stock owned by the Participant for at least
                      six months prior to the date of exercise and valued at
                      their Fair Market Value on the effective date of such
                      exercise; or (iii) subject to the approval of the
                      Committee, by such other provision as the Committee may
                      from time to time authorize.

                (4)   Certificates for Stock purchased upon the exercise of an
                      Option shall be issued in the name of the Participant or
                      other per son entitled to receive such Stock, and
                      delivered to the Participant or such other person as soon
                      as practicable following the effective date on which the
                      Option is exercised.

                (5)   The Committee shall have the authority to specify, at the
                      time of grant or, with respect to Non-Qualified Options,
                      at or after the time of grant, that a Participant shall be
                      granted a new Non-Qualified Option (a "Reload Option") for
                      a number of shares of Stock equal to the number of shares
                      of Stock surrendered by the Participant upon exercise of
                      all or a part of an Option in the manner described in
                      Section 7(c)(3)(ii) above, subject to the availability of
                      Stock under the Plan at the time of such exercise;
                      provided, however, that no Reload Option shall be granted
                      to a Non-Employee Director. Reload Options shall be
                      subject to such conditions as may be specified by the
                      Committee in its discretion, subject to the terms of the
                      Plan.

         (d)  LIMITATIONS ON INCENTIVE STOCK OPTIONS.

                (1)   To the extent that the aggregate Fair Market Value of
                      Stock of the Company with respect to which Incentive Stock
                      Options are exercisable for the first time by a
                      Participant during any calendar year under the Plan and
                      any other option plan of the Company (or any Subsidiary)
                      shall exceed $100,000, such Options shall be treated as
                      Non-Qualified Options. Such Fair Market Value shall be
                      determined as of the date on which each such Incentive
                      Stock Option is granted.


                                       39

<PAGE>

                (2)   No Incentive Stock Option may be granted to an individual
                      if, at the time of the proposed grant; such individual
                      owns (or is attributed to own by virtue of the Code) Stock
                      possessing more than ten (10) percent of the total
                      combined voting power of all classes of stock of the
                      Company or any Subsidiary unless (i) the exercise price of
                      such Incentive Stock Option is at least 110 percent of the
                      Fair Market Value of a share of Stock at the time such
                      Incentive Stock Option is granted and (ii) such Incentive
                      Stock Option is not exercisable after the expiration of
                      five years from the date such Incentive Stock Option is
                      granted.

         (e)  EFFECT OF TERMINATION OF EMPLOYMENT.

                (1)   Unless the applicable Agreement provides otherwise, in the
                      event that the employment, directorship or consultancy
                      (together, hereinafter referred to as "employment") of a
                      Participant with the Company shall terminate for any
                      reason other than Cause, Disability or death, (i) Options
                      granted to such Participant, to the extent that they are
                      exercisable at the time of such termination, shall remain
                      exercisable until the date that is 90 days after such
                      termination, on which date they shall expire, and (ii)
                      Options granted to such Participant, to the extent that
                      they were not exercisable at the time of such termination,
                      shall expire at the close of business on the date of such
                      termination. The 90 day period described in this Section
                      7(e)(1) shall be extended to one year from such
                      termination, in the event of the Participant's death
                      during such 90 day period. Notwithstanding the foregoing,
                      no Option shall be exercisable after the expiration of its
                      term.

                (2)   Unless the applicable Agreement provides otherwise, in the
                      event that the employment of a Participant with the
                      Company shall terminate on account of the Disability or
                      death of the Participant, (i) Options granted to such
                      Participant, to the extent that they were exercisable at
                      the time of such termination, shall remain exercisable
                      until the first anniversary of such termination, on which
                      date they shall expire, and (ii) Options granted to such
                      Participant, to the extent that they were not exercisable
                      at the time of such termination, shall expire at the close
                      of business on the date of such termination; provided,
                      however, that no Option shall be exercisable after the
                      expiration of its term.

                (3)   In the event of the termination of a Participant's
                      employment for Cause, all out standing Options granted to
                      such Participant shall expire as of the commencement of
                      business on the date of such termination.

8.       RESTRICTED STOCK.

         (a)  ISSUE DATE AND VESTING DATE. At the time of the grant of
              Restricted Stock, the Committee shall establish an Issue Date or
              Issue Dates and a Vesting Date or Vesting Dates with respect to
              such shares of Restricted Stock. The Committee may divide such
              shares of Restricted Stock into classes and assign a different
              Issue Date and/or Vesting Date for each class. If the grantee is
              employed by the Company on an Issue Date (which may be the date of
              grant), the specified number of shares of Restricted Stock shall
              be issued in accordance with the provisions of Section 8(e).
              Provided that all conditions to the vesting of Restricted Stock
              imposed pursuant to Section 8(b) are satisfied, and except as
              provided in Section 8(g), upon the occurrence of the Vesting Date
              with respect to Restricted Stock, such Restricted Stock shall vest
              and the restrictions of Section 8(c) shall lapse.

         (b)  CONDITIONS TO VESTING. At the time of the grant of Restricted
              Stock, the Committee may impose such restrictions or conditions to
              the vesting of such Restricted Stock as it, in its absolute
              discretion, deems appropriate, including the attainment of
              Performance Goals.

         (c)  RESTRICTIONS ON TRANSFER PRIOR TO VESTING. Prior to the vesting of
              any Restricted Stock, no transfer of a Participant's rights with
              respect to such Restricted Stock, whether voluntary or
              involuntary, by operation of law or otherwise, shall be permitted.
              Immediately upon any attempt to transfer such rights, such
              Restricted Stock, and all of the rights related thereto, shall be
              forfeited by the Participant.


                                       40

<PAGE>

         (d)  DIVIDENDS ON RESTRICTED STOCK. The Committee in its discretion may
              require that any dividends or distributions paid on Restricted
              Stock be held in escrow until all restrictions on such Restricted
              Stock has lapsed.

         (e)  ISSUANCE OF CERTIFICATES.

                (1)   Reasonably promptly after the Issue Date with respect to
                      Restricted Stock, the Company shall cause to be issued a
                      certificate, registered in the name of the Participant to
                      whom such shares of Restricted Stock were granted,
                      evidencing such shares of Restricted Stock; provided that
                      the Company shall not cause such a certificate to be
                      issued unless it has received a power of attorney duly
                      endorsed in blank with respect to such shares of
                      Restricted Stock. Each such certificate shall bear the
                      following legend:

                         THE TRANSFERABILITY OF THIS CERTIFICATE AND THE STOCK
                         REPRESENTED HEREBY ARE SUBJECT TO THE RESTRICTIONS,
                         TERMS AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS
                         AND RESTRICTIONS AGAINST TRANSFER) CONTAINED IN THE
                         PRICELINE.COM 1999 OMNIBUS PLAN AND AN AGREEMENT
                         ENTERED INTO BETWEEN THE REGISTERED OWNER OF SUCH STOCK
                         AND PRICELINE.COM. A COPY OF THE 1999 OMNIBUS PLAN AND
                         AGREEMENT IS ON FILE WITH THE SECRETARY OF THE COMPANY.

                      Such legend shall not be removed until such Stock vests
                      pursuant to the terms hereof.

                (2)   Each certificate issued pursuant to this Section 8(e),
                      together with the powers relating to the Restricted Stock
                      evidenced by such certificate, shall be held by the
                      Company unless the Committee determines otherwise.

         (f)  CONSEQUENCES OF VESTING. Upon the vesting of any Restricted Stock
              pursuant to the terms hereof, the restrictions of Section 8(c)
              shall lapse with respect to such Restricted Stock. Reasonably
              promptly after any Restricted Stock vests, the Company shall cause
              to be delivered to the Participant to whom such shares of
              Restricted Stock were granted a certificate evidencing such Stock,
              free of the legend set forth in Section 8(e).

         (g)  EFFECT OF TERMINATION OF EMPLOYMENT. Subject to such other
              provision as the Committee may set forth in the applicable
              Agreement, and to the Committee's amendment authority pursuant to
              Section 4, upon the termination of a Participant's employment for
              any reason other than Cause, any and all Stock to which
              restrictions on transferability apply shall be immediately
              forfeited by the Participant and transferred to, and reacquired
              by, the Company; provided that if the Committee, in its sole
              discretion, shall within thirty (30) days after such termination
              of employment notify the Participant in writing of its decision
              not to terminate the Participant's rights in such shares of Stock,
              then the Participant shall continue to be the owner of such shares
              of Stock subject to such continuing restrictions as the Committee
              may prescribe in such notice. In the event of a forfeiture of
              Stock pursuant to this section, the Company shall repay to the
              Participant (or the Participant's estate) any amount paid by the
              Participant for such shares of Stock. In the event that the
              Company requires a return of Stock, it shall also have the right
              to require the return of all dividends or distributions paid on
              such Stock, whether by termination of any escrow arrangement under
              which such dividends or distributions are held or otherwise.

                (1)   In the event of the termination of a Participant's
                      employment for Cause, all shares of Restricted Stock
                      granted to such Participant which have not vested as of
                      the date of such termination shall immediately be returned
                      to the Company, together with any dividends or
                      distributions paid on such shares of Stock, in return for
                      which the Company shall repay to the Participant any
                      amount paid by the Participant for such shares of Stock.

         (h)  SPECIAL PROVISIONS REGARDING AWARDS. Notwithstanding anything to
              the contrary contained herein, Restricted Stock granted pursuant
              to this Section 8 to Executive Officers may be based on the
              attainment by the Company (or a Subsidiary or division of the
              Company if applicable) of Performance Goals pre-established by the
              Committee.


                                       41

<PAGE>

9.       OTHER STOCK-BASED AWARDS.

         Other forms of Awards valued in whole or in part by reference to, or
otherwise based on, shares of Stock ("Other Stock-Based Awards") may be granted
either alone or in addition to other Awards under the Plan. Subject to the
provisions of the Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Other
Stock-Based Awards shall be granted, the number of shares of Stock to be granted
pursuant to such Other Stock-Based Awards and all other conditions of such Other
Stock-Based Awards, including the attainment of Performance Goals.

10.      CHANGE IN CONTROL.

         Notwithstanding anything in the Plan to the contrary, upon the
occurrence of a Change in Control, any Award issued prior to April 25, 2000
carrying a right to exercise that was not previously exercisable and vested,
shall become fully exercisable and vested and the restriction and forfeiture
conditions applicable to any other such Award shall lapse and such Award shall
be deemed fully vested. In the case of any Award made on or after the aforesaid
date, no acceleration of exercisability, vesting or lapsing shall occur on a
Change in Control except to the extent, if any, provided in the specific Award
Agreement or as otherwise determined by the Committee or the Board.
Notwithstanding anything in the Plan to the contrary, upon the occurrence of a
Change in Control, the purchaser(s) of the Company's assets or stock may, in
his, her, or its discretion, deliver to the holder of an Award the same kind of
consideration that is delivered to the stockholders of the Company as a result
of such sale, conveyance or Change in Control, or the Board may cancel all
outstanding Options in exchange for consideration in cash or in kind which
consideration in both cases shall be equal in value to the higher of (i) the
Fair Market Value of those shares of Stock or other securities the holder of
such Option would have received had the Option been exercised and no disposition
of the shares acquired upon such exercise been made prior to such sale,
conveyance or Change in Control, less the exercise price there for, and (ii) the
Fair Market Value of those shares of Stock or other securities the holder of the
Option would have received had the Option been exercised and no disposition of
the shares acquired upon such exercise been made immediately following such
sale, conveyance or Change in Control, less the exercise price therefor.

         Upon dissolution or liquidation of the Company, all Options and other
Awards granted under this Plan shall terminate, but each holder of an Option
shall have the right, immediately prior to such dissolution or liquidation, to
exercise his or her Option to the extent then exercisable.

11.      RIGHTS AS A STOCKHOLDER.

         No person shall have any rights as a stockholder with respect to any
shares of Stock covered by or relating to any Award until the date of issuance
of a certificate with respect to such shares of Stock. Except as otherwise
expressly provided in Section 3(b), no adjustment to any Award shall be made for
dividends or other rights prior to the date such certificate is issued.

12.      NO SPECIAL EMPLOYMENT RIGHTS; NO RIGHT TO AWARD.

         Nothing contained in the Plan or any Agreement shall confer upon any
Participant any right with respect to the continuation of employment by the
Company or interfere in any way with the right of the Company, subject to the
terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
Participant.

         No person shall have any claim or right to receive an Award hereunder.
The Committee's granting of an Award to a participant at any time shall neither
require the Committee to grant any other Award to such Participant or other
person at any time or preclude the Committee from making subsequent grants to
such Participant or any other person.

13.      SECURITIES MATTERS.

         (a)  The Company shall be under no obligation to effect the
              registration pursuant to the Securities Act of any interests in
              the Plan or any Stock to be issued hereunder or to effect similar
              compliance under any state laws. Notwithstanding anything herein
              to the contrary, the Company shall not be 


                                       42

<PAGE>

              obligated to cause to be issued or delivered any certificates
              evidencing Stock pursuant to the Plan unless and until the Company
              is advised by its counsel that the issuance and delivery of such
              certificates is in compliance with all applicable laws,
              regulations of governmental authority and the requirements of any
              securities exchange on which shares of Stock are traded. The
              Committee may require, as a condition of the issuance and delivery
              of certificates evidencing shares of Stock pursuant to the terms
              hereof, that the recipient of such shares of Stock make such
              agreements and representations, and that such certificates bear
              such legends, as the Committee, in its sole discretion, deems
              necessary or desirable.

         (b)  The transfer of any shares of Stock hereunder shall be effective
              only at such time as counsel to the Company shall have determined
              that the issuance and delivery of such shares of Stock is in
              compliance with all applicable laws, regulations of governmental
              authority, the requirements of any securities exchange on which
              shares of Stock are traded. The Committee may, in its sole
              discretion, defer the effectiveness of any transfer of Stock
              hereunder in order to allow the issuance of such Stock to be made
              pursuant to registration or an exemption from registration or
              other methods for compliance available under federal or state
              securities laws. The Committee shall inform the Participant in
              writing of its decision to defer the effectiveness of a transfer.
              During the period of such deferral in connection with the exercise
              of an Option, the Participant may, by written notice, withdraw
              such exercise and obtain the refund of any amount paid with
              respect thereto.

14.      WITHHOLDING TAXES.

         Whenever shares of Stock are to be delivered pursuant to an Award, the
Company shall have the right to require the Participant to remit to the Company
in cash an amount sufficient to satisfy any federal, state and local withholding
tax requirements related thereto. With the approval of the Committee, a
Participant may satisfy the foregoing requirement by electing to have the
Company withhold from delivery shares of Stock having a value equal to the
amount of tax to be withheld. Such shares of Stock shall be valued at their Fair
Market Value on the date of which the amount of tax to be withheld is deter
mined (the "Tax Date"). Fractional shares of Stock amounts shall be settled in
cash. Such a withholding election may be made with respect to all or any portion
of the Stock to be delivered pursuant to an Award.

15.      NOTIFICATION OF ELECTION UNDER SECTION 83(B) OF THE CODE.

         If any Participant shall, in connection with the acquisition of Stock
under the Plan, make the election permitted under Section 83(b) of the Code
(i.e., an election to include in gross income in the year of transfer the
amounts specified in Section 83(b)), such Participant shall notify the Company
of such election within 10 days of filing notice of the election with the
Internal Revenue Service, in addition to any filing and a notification required
pursuant to regulation issued under the authority of Section 83(b) of the Code.

16.      NOTIFICATION UPON DISQUALIFYING DISPOSITION UNDER SECTION 421(B) OF THE
         CODE.

         Each Participant shall notify the Company of any disposition of Stock
issued pursuant to the exercise of an Incentive Stock Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within 10 days of such disposition.

17.      AMENDMENT OR TERMINATION OF THE PLAN.

         The Board may, at any time, suspend or terminate the Plan or revise or
amend it in any respect whatsoever; provided, however, that stockholder approval
shall be required if and to the extent the Board determines that such approval
is appropriate for purposes of satisfying Section 162(m) or 422 of the Code or
is otherwise required by law or applicable stock exchange requirements. Awards
may be granted under the Plan prior to the receipt of such approval but each
such grant shall be subject in its entirety to such approval and no award may be
exercised, vested or otherwise satisfied prior to the receipt of such approval.
Nothing herein shall restrict the Committee's ability to exercise its
discretionary authority pursuant to Section 4, which discretion may be exercised
without amendment to the Plan. No action hereunder may, without the consent of a
Participant, reduce the Participant's rights under any outstanding Award.


                                       43

<PAGE>

18.      TRANSFERS UPON DEATH; NONASSIGNABILITY.

         Upon the death of a Participant, outstanding Awards granted to such
Participant may be exercised only by the executor or administrator of the
Participant's estate or by a person who shall have acquired the right to such
exercise by will or by the laws of descent and distribution. No transfer of an
Award by will or the laws of descent and distribution shall be effective to bind
the Company unless the Committee shall have been furnished with (a) written
notice thereof and with a copy of the will and/or such evidence as the Committee
may deem necessary to establish the validity of the transfer and (b) an
agreement by the transferee to comply with all the terms and conditions of the
Award that are or would have been applicable to the Participant and to be bound
by the acknowledgments made by the Participant in connection with the grant of
the Award.

         During a Participant's lifetime, the Committee may permit the transfer,
assignment or other encumbrance of an outstanding Option unless (y) such Option
is an Incentive Stock Option and the Committee and the Participant intend that
it shall retain such status, or (z) such Option is meant to qualify for the
exemptions available under Rule 16b-3, nontransferability is necessary under
Rule 16b-3 in order for the award to so qualify and the Committee and the
Participant intend that it shall continue to so qualify. Subject to any
conditions as the Committee may prescribe, a Participant may, upon providing
written notice to the Secretary of the Company, elect to transfer any or all
Options granted to such Participant pursuant to the Plan to members of his or
her immediate family, including, but not limited to, children, grandchildren and
spouse or to trusts for the benefit of such immediate family members or to
partnerships in which such family members are the only partners; provided,
however, that no such transfer by any Participant may be made in exchange for
consideration.

19.      EXPENSES AND RECEIPTS.

         The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Award will be used for general
corporate purposes.

20.      FAILURE TO COMPLY.

         In addition to the remedies of the Company elsewhere provided for
herein, failure by a Participant (or beneficiary) to comply with any of the
terms and conditions of the Plan or the applicable Agreement, unless such
failure is remedied by such Participant (or beneficiary) within ten days after
notice of such failure by the Committee, shall be grounds for the cancellation
and forfeiture of such Award, in whole or in part, as the Committee, in its
absolute discretion, may determine.

21.      EFFECTIVE DATE AND TERM OF PLAN.

         The Plan became effective on the Effective Date and, unless earlier
terminated by the Board, the right to grant Awards under the Plan will terminate
on the tenth anniversary of the Effective Date. Awards outstanding at Plan
termination will remain in effect according to their terms and the provisions of
the Plan.

22.      APPLICABLE LAW.

         Except to the extent preempted by any applicable federal law, the Plan
will be construed and administered in accordance with the laws of the State of
Delaware, without reference to its principles of conflicts of law.

23.      PARTICIPANT RIGHTS.

         No Participant shall have any claim to be granted any award under the
Plan, and there is no obligation for uniformity of treatment for Participants.
Except as provided specifically herein, a Participant or a transferee of an
Award shall have no rights as a stockholder with respect to any shares of Stock
covered by any award until the date of the issuance of a certificate or
certificates to him or her for such shares of Stock.

24.      UNFUNDED STATUS OF AWARDS.

         The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant pursuant to an Award, nothing contained in the Plan or any 


                                       44

<PAGE>

Agreement shall give any such Participant any rights that are greater than those
of a general creditor of the Company.

25.      BENEFICIARY.

         A Participant may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Participant, the executor or administrator of the Participant's
estate shall be deemed to be the grantee's beneficiary.

26.      INTERPRETATION.

         The Plan is designed and intended to comply with Rule l6b-3 and, to the
extent applicable, with Section 162(m) of the Code, and all provisions hereof
shall be construed in a manner to so comply.

27.      SEVERABILITY.

If any provision of the Plan is held to be invalid or unenforceable, the other
provisions of the Plan shall not be affected but shall be applied as if the
invalid or unenforceable provision had not been included in the Plan.



                                       45

<PAGE>

                                                                     Appendix C


                           priceline.com INCORPORATED
                             AUDIT COMMITTEE CHARTER


Overseeing the Company's relationship with the independent auditors, including
discussing with the auditors the overall scope, plans and fees of the audit,
receiving and reviewing audit reports, and providing the auditors full access to
the Committee to report on any and all appropriate matters.

Discussing with a representative of management and the independent auditors: (1)
the interim financial information contained in the Company's Quarterly Report on
Form 10-Q prior to its filing, (2) the Company's Quarterly earnings
announcements, and (3) the results of the review of such information by the
independent auditors. These discussions may be held with the Committee as a
whole or with the Committee chair in person or by telephone.

Reviewing internal controls, including any internal audit activities and
discussing with management and the independent auditors the results of such
review.

Discussing with management and the independent auditors the quality and adequacy
of, and compliance, with the Company's internal controls.

Discussing with management and/or the Company's general counsel any legal
matters (including the status of pending litigation) that may have a material
impact on the Company's financial statements, and any material reports or
inquiries from regulatory or governmental agencies.

The Committee's job is one of oversight. Management is responsible for the
preparation of the Company's financial statements and the independent auditors
are responsible for auditing those financial statements. The Committee and the
Board recognize that management and the independent auditors have more resources
and time, and more detailed knowledge and information regarding the Company's
accounting, auditing, internal control and financial reporting practices than
the Committee does; accordingly the Committee's oversight role does not provide
any expert or special assurances as to the financial statements and other
financial information provided by the Company to its shareholders and others.

RESPONSIBILITIES:

Although the Committee may wish to consider other duties from time to time, the
general recurring activities of the Committee in carrying out its oversight role
are described below. The Committee shall be responsible for:

-     Recommending to the Board the independent auditors to be retained (or
      nominated for shareholder approval) to audit the financial statements of
      the Company. Such auditors are ultimately accountable to the Board and the
      Committee as representatives of the shareholders.

-     Evaluating, together with the Board and management, the performance of the
      independent auditors and, where appropriate, replacing such auditors.

-     Obtaining annually from the independent auditors a formal written
      statement describing all relationships between the auditors and the
      Company, consistent with Independence Standards Board Standard No. 1. The
      Committee shall actively engage in a dialogue with the independent
      auditors with respect to any relationships that may impact the objectivity
      and independence of the auditors and shall take or recommend that the
      Board take appropriate actions to oversee and satisfy itself as to the
      auditors' independence.


                                       46

<PAGE>

-     Reviewing the audited financial statements and discussing them with
      management and the independent auditors. These discussions shall include
      the matters required to be discussed under Statement of Auditing Standards
      No. 61 as may be modified or supplemented and other such inquiries as the
      Committee or the independent auditors shall deem appropriate. Based on
      such review, the Committee shall make its recommendation to the Board as
      to the inclusion of the Company's audited financial statements in the
      Company's Annual Report on Form 10-K.

-     Issuing annually a report to be included in the Company's proxy statement
      as required by the rules of the Securities and Exchange Commission.

ROLE AND ORGANIZATION

The Committee assists the Board in fulfilling its responsibility for oversight
of the quality and integrity of the accounting, auditing, internal control and
financial reporting practices of the Company. It may also have such other duties
as may from time to time be assigned to it by the Board. The membership of the
Committee shall consist of at least three directors, and the composition of the
Committee shall comply with the rules of National Association of Securities
Dealers, Inc. ("NASD") with regard to the independence and financial literacy of
Committee members, and financial and accounting expertise as to at least one
Committee member.

The Committee shall maintain free and open communication with the independent
auditors, any internal auditors and Company management. In discharging its
oversight role, the Committee is empowered to investigate any matter relating to
the Company's accounting, auditing, internal control or financial reporting
practices brought to its attention, with full access to all Company books,
records, facilities and personnel. The Committee may also retain outside
counsel, auditors or other advisors if the Committee deems it necessary or
appropriate.

One member of the Committee shall be appointed as chair by the Board. The chair
shall be responsible for leadership of the Committee, including scheduling and
presiding over meetings, approving agendas and making regular reports to the
Board. The chair will also maintain regular liaison with the Chief Executive
Officer, Chief Financial Officer and the lead independent audit partner. At
least once each year the Committee shall have separate private meetings with the
independent auditor.



Adopted:    April 24, 2000



                                       47

<PAGE>

                                  Priceline.com

                           priceline.com Incorporated

                      PROXY SOLICITED BY BOARD OF DIRECTORS
                     FOR THE ANNUAL MEETING OF STOCKHOLDERS
                           TO BE HELD ON MAY 21, 2001

The undersigned hereby appoints JEFFERY H. BOYD and PETER J. MILLONES, and each
of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of priceline.com Incorporated
that the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of priceline.com Incorporated (the "Company") to be held on Monday,
May 21, 2001, at 2:00 p.m. local time, at Doubletree Club Hotel, 789 Connecticut
Avenue, Norwalk, Connecticut 06854, and at any and all continuations and
adjournments of that meeting, with all powers that the undersigned would possess
if personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as to
any and all other matters that may properly come before the meeting.

UNLESS YOU INDICATE OTHERWISE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED
IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, AS MORE SPECIFICALLY DESCRIBED IN THE
PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE
VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS.

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                             *FOLD AND DETACH HERE*


<PAGE>

THE BOARD OF  DIRECTORS  RECOMMENDS A VOTE FOR EACH OF      Please mark     |X|
THE NOMINEES FOR DIRECTOR  LISTED BELOW.                    your votes as
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS      indicated in
2 AND 3.                                                    this example

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS
2 AND 3.

Proposal 1: To elect ten directors to hold office until the next annual meeting
            of stockholders or until their respective successors are elected and
            qualified.

              FOR all nominees                  WITHHOLD
             listed to the right                AUTHORITY
              (except as marked         to vote for all nominees
              to the contrary)            listed to the right

                    |_|                            |_|


Nominees: Richard S. Braddock, Daniel H. Schulman, Paul A. Allaire, Ralph M.
Bahna, Paul J. Blackney, William E. Ford, Marshall Loeb, N.J. Nicholas, Jr.,
Nancy B. Peretsman and Ian F. Wade

To withhold authority to vote for any nominee, write that nominee's name below:

--------------------------------------------------------------------------------


Proposal 2: To approve amendments to the priceline.com Incorporated 1999 Omnibus
            Plan increasing the number of shares of Company common stock with
            respect to which awards may be granted to 35,375,000 shares from
            25,375,000 shares and increasin

            FOR           AGAINST         ABSTAIN

            |_|             |_|             |_|


Proposal 3: To ratify the selection of Deloitte & Touche LLP as independent
            auditors of the Company for our fiscal year ending December 31,
            2001.g the number of shares of Company common stock subject to the
            annual stock options granted to non-employee directors from 10,000
            to 20,000

            FOR           AGAINST         ABSTAIN

            |_|             |_|             |_|

"By checking the box to the right, I consent to future access of the      |_|
Annual Report, Proxy Statements prospectuses and other communications
electronically via the Internet. I understand that the Company may no
longer distribute printed materials to me for any future shareholder
meeting until such consent is revoked. I understand that I may revoke
any consent at any time by contacting the Company's transfer agent,
Mellon Investor Services, Ridgefield Park, NJ and that costs normally
associated with electronic access, such as usage and telephone
charges, will be my responsibility."

                                                                     WILL ATTEND
To help our preparations for the meeting, please check here if you       |_|
plan to attend


PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
THAT IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.

EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND
THE ANNUAL MEETING. HOWEVER, IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK
OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE
RECORD HOLDER A PROXY ISSUED IN YOUR NAME.

Signature ___________________ Signature _____________________ Date _____________

Please sign exactly as your name appears hereon. If the stock is registered in
the names of two or more persons, each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If signer is
a corporation, please give full corporate name and have a duly authorized
officer sign, stating title. If signer is a partnership, please sign in
partnership name by authorized person.
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                        *FOLD AND DETACH HERE*