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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Pursuant to Section 240.14a-11(c) or Section 240.14a-12
priceline.com Incorporated
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(Name of Registrant as Specified In Its Charter)
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(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)(4) 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.
(6) Amount Previously Paid: _________________________________
(7) Form, Schedule or Registration Statement No. ___________________________
(8) Filing Party: _______________________________
(9) Date Filed: _________________________________
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priceline.com(sm)
March 27, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of
Stockholders (the "Annual Meeting") of priceline.com Incorporated (the
"Company") to be held at 2:00 p.m. on Monday, April 24, 2000 at the Hyatt
Regency Greenwich, 1800 East Putnam Avenue, Old Greenwich, Connecticut 06870.
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,
providing for the granting of options to non-employee directors under the plan,
and effecting certain other changes described in the Proxy Statement; and (iii)
ratify the appointment of Deloitte & Touche LLP as the Company's independent
auditors. The accompanying Notice of 2000 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
and Chief Executive Officer
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
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priceline.com Incorporated
800 Connecticut Avenue
Norwalk, Connecticut 06854
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, APRIL 24, 2000
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, April 24,
2000 at 2:00 p.m. local time at the Hyatt Regency Greenwich, 1800 East Putnam
Avenue, Old Greenwich, Connecticut 06870 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 Company common stock with respect to
which awards may be granted to 25,375,000 shares from 9,375,000 shares,
providing for the granting of options to non-employee directors, and effecting
certain other changes described in the Proxy Statement.
3. To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for our fiscal year ending December 31, 2000.
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 March 17, 2000,
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
March 27, 2000
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.
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priceline.com Incorporated
800 Connecticut Avenue
Norwalk, Connecticut 06854
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MONDAY, APRIL 24, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of
priceline.com Incorporated ("priceline.com" or the "Company") for use at the
Annual Meeting of Stockholders to be held on Monday, April 24, 2000, 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
Hyatt Regency Greenwich, 1800 East Putnam Avenue, Old Greenwich, Connecticut
06870. We intend to mail this proxy statement and accompanying proxy card on or
about March 27, 2000, 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 March 17, 2000
will be entitled to notice of and to vote at the Annual Meeting. At the close of
business on March 17, 2000, 170,136,752 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
LLP. 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.
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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 2001 annual meeting of stockholders pursuant to Rule
14a-8 of the Securities and Exchange Commission is November 16, 2000. 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, Jay S. Walker, Daniel H. Schulman, Paul A.
Allaire, Ralph M. Bahna, Paul J. Blackney, William E. Ford, Marshall Loeb, N.J.
Nicholas, Jr. and Nancy B. Peretsman. 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
2001 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
Directors. The Board of Directors recommends a vote FOR each of the below-named
nominees.
At the next regularly scheduled meeting of the Board of Directors, the
Board will take action to increase the size of the Board to eleven Board seats
and to nominate and elect Heidi G. Miller, the Company's Senior Executive Vice
President, Chief Financial Officer, Strategic Planning and Administration, to
fill the newly created Board seat. Upon nomination and election, Ms. Miller will
hold office until the 2001 annual meeting and until her successor is elected and
has qualified, or until her earlier death, resignation or removal.
Set forth below is biographical information for each person nominated to
serve as a Director of the Company.
Richard S. Braddock, age 58, has served as Chairman of the Board of
Directors and Chief Executive Officer of priceline.com since August 1998. From
December 1997 to January 1999, he served as the non-
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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 serves as a director of
Synapse Group, Inc., a direct marketing firm; Amtec, Inc., a telecommunications
company; Eastman Kodak Company, an imaging products company; E*TRADE Group,
Inc., a provider of online investing services; Cadbury Schweppes plc, a global
beverage and confectionery manufacturer; Prime Response U.S., Inc., a data base
software marketing company; Walker Digital Corporation, a technology research
and development company that was founded and is controlled by Jay S. Walker; and
Priceline WebHouse Club, Inc., a licensee of priceline.com engaged in the sale
of groceries and related products over the Internet.
Jay S. Walker, age 45, is priceline.com's Founder and has served as Vice
Chairman of the Board of Directors of priceline.com since August 1998. From
inception through August 1998, he served as Chairman of the Board of Directors
and Chief Executive Officer of priceline.com. Mr. Walker is an entrepreneur and
has been actively engaged in the start-up of new enterprises for more than 15
years. Mr. Walker serves as Chairman of the board of directors of Walker Digital
Corporation, a technology research and development company that he founded in
September 1994. In addition, he is the co-founder and non-executive Chairman of
Synapse Group, Inc., a direct marketing firm he co-founded in 1992.
Daniel H. Schulman, age 42, has been the President and Chief Operating
Officer of priceline.com since July 1, 1999. He has served as a Director of
priceline.com since July 15, 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 WorldNet(sm) Service. From December
1995 to February 1997, he was Vice President, Business Services Marketing of the
AT&T Business Markets Division and from May 1994 to November 1995, Mr. Schulman
was Small Business Marketing Vice President 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; Symantec, an Internet security
software company; and Teach for America, an organization focused on selecting
teachers for urban and inner city areas.
Paul A. Allaire, age 61, has served as a Director of priceline.com since
February 1999. Since 1991, he has been the Chairman of the Board of Directors
and the Chairman of the Executive Committee of Xerox Corporation, a company
offering document processing services and products, and from 1990 to May 1999,
he was the Chief Executive Officer of Xerox. Mr. Allaire also serves as a
director of various affiliates of Xerox. Mr. Allaire also serves as a director
of J.P. Morgan & Co., Inc., a global financial services company; Lucent
Technologies Inc., a global communications systems and software company; Sara
Lee Corporation, a global consumer packaged goods company; and SmithKline
Beecham p.l.c., 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, the Ford Foundation, and the Council on Competitiveness.
Ralph M. Bahna, age 57, 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 Quarters(TM) . 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 Quarters(TM). 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 53, 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
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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 38, has served as a Director of priceline.com since
July 31, 1998. He has been a Managing Member of General Atlantic Partners, LLC
since 1991 and is an executive officer of General Atlantic Service Corporation,
private equity firms that invests globally exclusively in Internet, software
services and related information technology companies. Mr. Ford also serves as a
director of Quintiles Transnational Corp., a provider of a full range of
integrated product development and commercialization services to the global
pharmaceutical, biotechnology and medical devices industries; LHS Group Inc., a
billing solutions company; E*TRADE Group, Inc., an online discount broker;
Eclipsys Corporation, a provider of clinical, financial and administrative
software solutions to the healthcare industry; and several private information
technology companies. He also serves as a director of Synapse Group, Inc. and
Walker Digital LLC.
Marshall Loeb, age 70, 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 13 books, most recently Marshall
Loeb's Lifetime Financial Strategies.
N. J. Nicholas, Jr., age 60, 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 46, 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.
Set forth below is biographical information for each executive officer of
the Company, other than executive officers who are nominated to serve as
Directors of the Company and whose biographical information are set forth above.
Heidi G. Miller, age 46, has been the Senior Executive Vice President,
Chief Financial Officer, Strategic Planning and Administration of priceline.com
since March of 2000. From 1982 to 1992, Ms. Miller served in various capacities
with Chemical Bank. In 1992, she joined Primerica, which was subsequently
renamed Travelers Group and in 1995 was made its Chief Financial Officer. After
the merger of Citicorp and Travelers in 1998, Ms. Miller assumed the role of
Chief Financial Officer and became a corporate officer of the newly created
Citigroup, Inc. Ms. Miller also serves on the board of Mead Inc. and General
Mills Inc. and Risk Inc.
Jeffery H. Boyd, age 43, has been the Executive Vice President, General
Counsel and Secretary of priceline.com since January 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.
Timothy G. Brier, age 52, has been Executive Vice President, Travel of
priceline.com since its inception. In 1994, Mr. Brier co-founded CAP Systems, a
division of Synapse Group, Inc., that provides affinity
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marketing programs to airlines, and served as its President from 1995 to 1998.
From 1990 to 1995, he was Vice President of Marketing for Continental Airlines.
From 1988 to 1990, Mr. Brier was Vice President of Marketing Planning for Pan
American World Airways and from 1985 to 1988 was Vice President of Marketing for
TWA.
W. Michael McCadden, age 41, 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.
Ronald V. Rose, age 48, 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. In 1998, Mr. Rose assisted in creating Xpresso, a leading JAVA
financial desktop computer, and from 1991 to 1995, Mr. Rose assisted Bedford
Associates, Inc., a technology company, in creating two technology start-up
business units focused on telecommunications and technology consulting.
Thomas P. D'Angelo, age 40, has been 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 leading travel management companies.
Board Committees and Meetings
During 1999, the Board of Directors held eight meetings. The Board has an
Executive Committee, an Audit Committee, a Compensation Committee and an
Independent Committee.
The Executive Committee of the Board consists of Messrs. Richard S.
Braddock and Jay S. Walker. The Executive Committee has all of the powers of the
Board of Directors of the Company (other than as prohibited under the Delaware
General Corporation Law) in between meetings of the Board of Directors. The
Executive Committee is required to report to the Board of Directors at any
regular or special meeting of the Board of Directors of any prior matters
considered or acts taken by the Executive Committee since the immediately
preceding meeting of the Board of Directors. Mr. Braddock is Chairman of the
Executive Committee. The Executive Committee did not meet in 1999.
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 three times in 1999.
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 once in 1999.
The Company recently established an Independent Committee of the Board
consisting of Messrs. N.J. Nicholas, Jr., Paul A. Allaire and Ralph M. Bahna,
none of whom are employees of priceline.com or its affiliates and related
companies, to allow for independent review of the terms of certain transactions.
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, including Walker Digital
Corporation, Walker Digital LLC, Priceline WebHouse Club, Inc. and Priceline
Perfect Yard Sale, Inc. Mr.
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Nicholas is Chairman of the Independent Committee. The Independent Committee was
established in February 2000.
During 1999, 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 is 9,375,000, subject to adjustment pursuant to the terms of the Plan. Of
such number, options covering 8,837,815 shares of Common Stock were outstanding
under the Plan as of March 10, 2000.
The Board of Directors proposes that the 1999 Omnibus Plan be amended as
follows: (i) to increase 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,
subject to adjustment pursuant to the terms of the Plan; (ii) to provide for the
granting of options to non-employee directors such that new non-employee
directors be granted an option to purchase 20,000 shares of Common Stock as of
the date that such new non-employee director begins to serve as a non-employee
director of the Company, and that each non-employee director be granted an
option to purchase an additional 10,000 shares of Common Stock as of the first
business day following each annual meeting of the stockholders; and (iii) to
eliminate the automatic vesting and exercisablity rights upon the occurrence of
a change in control of the Company for all options and other awards made under
the Plan on or after the effective date of the amendments.
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
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
Directors recommends a vote FOR Proposal 2.
A copy of the 1999 Omnibus Plan, and the proposed Amendment Number One to
the 1999 Omnibus Plan, are attached hereto as Appendix A and reference is made
to the Appendix for a complete statement of the Plan and the amendments. 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 Plan and Amendment Number One thereto. Terms not defined
herein have the meanings given to such terms in the Plan.
priceline.com Incorporated 1999 Omnibus Plan
The 1999 Omnibus Plan is intended to promote the long-term financial
interests and growth 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 select 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.
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The maximum number of shares of Common Stock reserved for the grant or
settlement of awards under the 1999 Omnibus Plan was originally set at 9,375,000
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 amended to
25,375,000. 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 (1) the number and kind of shares of Common
Stock or other property (including cash) that may thereafter be issued in
connection with awards, (2) the number and kind of shares of Common Stock or
other property, including cash, issued or issuable in respect of outstanding
awards, (3) the 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, (4) the performance
criteria with respect to an award, and (5) the individual limitations applicable
to awards.
Administration
Except as provided below with respect to non-employee directors, 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, (a) accelerate the date on which any option
granted thereunder becomes exercisable, waive or amend the operation of the 1999
Omnibus Plan provisions thereunder respecting exercise after termination of
employment or otherwise adjust any of the terms of such option, (b) accelerate
the vesting or waive any condition imposed with respect to any restricted stock,
and (c) otherwise adjust any of the terms applicable to any award.
7
<PAGE>
Pursuant to Amendment Number One, the 1999 Omnibus Plan would be amended
to provide that the administration of the plan as it applies to non-employee
directors of the Company (including the exercise of all powers and authorities
specified above) be vested with the Board.
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. 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; (2) subject to the approval of the
Compensation 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 (3) in such other manner as the
Compensation Committee may from time to time authorize.
Restricted Stock. The Compensation Committee may grant 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, 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. Pursuant to Amendment Number One, the 1999
Omnibus Plan would be amended to provide that, unless determined otherwise by
the Board in it sole and absolute discretion, and without further action by the
Board or the stockholders of the Company, each non-employee director will,
subject to the terms of the Plan, be granted a non-qualified option to purchase
(i) 20,000 shares of Common Stock as of the date the non-employee director
begins service as a non-employee director and (ii) an additional 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; provided that the individual
is a non-employee director on such date. Unless otherwise determined by the
Board at the time of grant, each option would have a ten-year term, would 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 first Twenty-Four months following the First Anniversary
of the date of grant, and would 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.
Other Features of the 1999 Omnibus Plan
As originally provided by the 1999 Omnibus Plan, in the event of a Change
in Control (as defined in the Plan), all outstanding awards would become fully
vested and/or immediately exercisable and any restrictions thereon would lapse.
However, under the terms of the Plan, the Board or the Compensation Committee
may suspend, revise, terminate or amend the 1999 Omnibus Plan at any time;
provided, that no such action may, without the consent of a participant, reduce
the participant's rights under any outstanding award.
Consistent with the foregoing, Amendment Number One would amend certain
sections of the 1999 Omnibus Plan such that options granted pursuant to the Plan
on or after the effective date of the amendment would not become fully vested
and/or immediately exercisable and any restrictions thereon would not lapse upon
a Change in Control unless otherwise determined by the Compensation Committee or
the entire Board of Directors.
8
<PAGE>
New Plan Benefits
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 2000. As of March 10, 2000, options covering
8,837,815 shares of Common Stock were outstanding under the 1999 Omnibus Plan.
See "Option Grants in Last Fiscal Year."
The following table sets forth the non-qualified option grants that will
be made to 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.
1999 Omnibus Plan
Name and Position Number of Options
----------------- -----------------
Non-employee Directors,
As a group (7 total) 70,000
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 taxed 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 qualify as capital gain or loss and will not
result in any deduction by priceline.com.
9
<PAGE>
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 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, 2000. 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
LLP. The Board of Directors recommends a vote FOR Proposal 3.
10
<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
10, 2000, 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;
(4) Melissa M. Taub, who would have been one of the four most highly-compensated
executive officers for fiscal 1999 had she not resigned from her executive
position before December 31, 1999; and (5) all executive officers and Directors
as a group.
SHARES BENEFICIALLY OWNED (a)
-----------------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT
- ----------------------------------------------- ------ -------
Jay S. Walker (b) .............................. 64,068,933 37.35
Richard S. Braddock (c) ........................ 17,587,795 9.97
Timothy G. Brier (d) ........................... 2,623,022 1.53
Paul E. Francis (e) ............................ 1,866,000 1.09
Melissa M. Taub (f) ............................ 967 *
Thomas P. D'Angelo (g) ......................... 45,000 *
Ronald V. Rose (h) ............................. 37,500 *
Paul A. Allaire (i) ............................ 56,200 *
Ralph M. Bahna (j) ............................. 309,750 *
Paul J. Blackney ............................... 140,008 *
William E. Ford (k) ............................ 20,523,084 12.06
Marshall Loeb (l) .............................. 32,250 *
N. J. Nicholas, Jr. (m) ........................ 3,606,250 2.11
Nancy B. Peretsman (n) ......................... 2,504,375 1.47
General Atlantic Partners, LLC (k) ............. 20,532,084 12.06
Paul G. Allen (o) .............................. 9,098,966 5.34
Walker Digital LLC (b) ......................... 64,068,933 37.35
All directors and executive officers as a
group, including (b) - (n), Mr. Blackney and
(p) (17 persons) ............................... 113,917,800 63.16
* 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 10, 2000 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.
(b) Includes: (1) 49,923,929 shares held by Mr. Walker individually,
including an aggregate of 4,317,921 shares as to which Mr. Walker
has granted options to certain individuals; (2) 7,279,504 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, including an
aggregate of 302,777 shares as to which Walker Digital Corporation
has granted options to certain of its employees and consultants; (3)
5,500,000 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 1,382,500 shares. Excludes 132,500 shares
subject to options that are not vested or exercisable within 60 days
of March 10, 2000. The address of Mr. Walker and Walker Digital, LLC
is Five High Ridge Park, Stamford, Connecticut 06905.
11
<PAGE>
(c) Includes: (1) 4,941,104 shares held by Richard S. Braddock as
Trustee of The Richard S. Braddock 1999 Annuity Trust; (2) 1,000
shares held by an immediate family member of Mr. Braddock, as to
which Mr. Braddock disclaims beneficial ownership; and (3) 120,000
shares held by The Richard and Susan Braddock Family Foundation,
Inc., as to which Mr. Braddock disclaims beneficial ownership. Also
includes vested options to purchase 6,250,000 shares and options to
purchase 250,000 shares that are currently exercisable for shares
owned by Mr. Walker.
(d) Includes: (1) 490,347 shares held by The Timothy Brier 1998 Grantor
Retained Annuity Trust; (2) 52,500 shares held by his spouse; (3)
6,900 shares held by immediate family members of Mr. Brier, as to
which Mr. Brier disclaims beneficial ownership; and (4) 32,500
shares held by the Patricia Brier & Timothy TR UA December 13, 1999
Trinity Trust, as to which Mr. Brier disclaims beneficial ownership.
Includes vested options to purchase 1,212,500 shares but excludes
440,625 shares subject to options that are not vested or exercisable
within 60 days of March 10, 2000.
(e) Includes: (1) 62,500 shares held by The Paul E. Francis 1998 Trust,
dated April 1, 1998; and (2) 125,000 shares held by The Paul E.
Francis 1999 Grantor Retained Annuity Trust. Includes vested options
to purchase 597,500 shares but excludes 285,000 shares subject to
options that are not vested or exercisable within 60 days of March
10, 2000. Excludes 1,836 shares owned by the Strypemonde Foundation,
a charitable foundation established by Mr. Francis and his spouse.
Also excludes 15,625 shares held by The Paul E. Francis 1998 Trust,
dated December 2, 1998, and 15,625 shares held by The Paul E.
Francis 1999 Trust, dated February 26, 1999, which were established
by Mr. Francis for unrelated individuals. Effective February 18,
2000, Paul E. Francis resigned from his position as an executive
officer of priceline.com.
(f) Excludes 83,883 shares subject to options that are not vested or
exercisable within 60 days of March 10, 2000.
(g) Includes vested options to purchase 45,000 shares but excludes
62,500 shares subject to options that are not vested or exercisable
within 60 days of March 10, 2000.
(h) Includes vested options to purchase 37,500 shares but excludes
185,000 shares subject to options that are not vested or exercisable
within 60 days of March 10, 2000.
(i) Includes vested options to purchase 37,500 shares.
(j) Includes vested options to purchase 31,250 shares.
(k) Includes 20,491,834 shares held by various General Atlantic
entities. In addition, includes vested options to purchase 31,250
shares held by Mr. Ford. Mr. Ford, a director of the Company, is a
managing member of General Atlantic Partners, LLC and a general
partner of certain General Atlantic entities. Mr. Ford disclaims
beneficial ownership of the 20,491,834 shares referred to above,
except to the extent of his pecuniary interest therein. General
Atlantic disclaims beneficial ownership of the 31,250 options
referred to above. The address of General Atlantic is 3 Pickwick
Plaza, Greenwich, Connecticut 06830.
(l) Includes: (1) 1,000 shares held by an immediate family member of Mr.
Loeb; and (2) vested options to purchase 31,250 shares which are
held by Mr. Loeb's daughter, as to which Mr. Loeb disclaims
beneficial ownership.
(m) Includes 2,855,000 shares held by Gore Creek Trust, as to which Mr.
Nicholas disclaims beneficial ownership. Includes options held by
Gore Creek Trust to purchase 720,000 shares that are currently
exercisable for shares owned by Mr. Walker, as to which Mr. Nicholas
disclaims beneficial ownership. Also includes vested options to
purchase 31,250 shares.
(n) Includes: (1) 1,068,414 shares held by Allen & Company Incorporated
on its own behalf and on behalf of certain of its officers,
directors and employees; (2) options held by Allen & Company
Incorporated to purchase 571,875 shares owned by Mr. Walker; (3)
825,000 shares held by Ms. Nancy B. Peretsman; (4) 7,811 shares held
by Allen & Company Incorporated for the benefit of
12
<PAGE>
certain members of Ms. Peretsman's family; and (5) vested options
held by Ms. Peretsman to purchase 31,250 shares. 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) and (5) above.
(o) Includes 9,098,966 shares owned by Vulcan Ventures Incorporated, a
corporation wholly-owned by Mr. Allen. The address of Mr. Allen and
Vulcan Ventures Incorporated is 110-110th Avenue N.E., Bellevue,
Washington 98004.
(p) Includes options to purchase 516,666 shares but excludes 2,883,334
shares subject to options that are not vested or exercisable within
60 days of March 10, 2000.
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 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 regulation to furnish us with copies of all Section 16(a) forms they
file.
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, 1999, our officers, directors and
greater than ten percent beneficial owners complied with the Section 16(a)
filing requirements.
13
<PAGE>
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 are also eligible to
receive stock option grants under the 1997 Omnibus Plan and the 1999 Omnibus
Plan.
Compensation of Executive Officers
The following table shows compensation earned during fiscal 1998 and 1999
by our Chairman of the Board, Chief Executive Officer, the next four most
highly-compensated executive officers serving at the end of fiscal 1999 and
Melissa M. Taub, who would have been one of the four most highly-compensated
executive officers for fiscal 1999 had she not resigned from her executive
position before December 31, 1999. 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, 1999.
Summary Compensation Table
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------- ------------
NUMBER OF
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)
- --------------------------- ---- ---------- --------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Richard S. Braddock (a) 1999 300,000 -- -- --
Chairman and Chief Executive Officer ....... 1998 112,500 -- 6,250,000 --
--
Melissa M. Taub(b), Senior Vice 1999 200,000 69,274 250,000 --
President, General Counsel & Secretary ..... 1998 63,027 -- -- --
Timothy G. Brier, Executive Vice 1999 250,000 -- -- 6,528(c)
President, Travel ......................... 1998 177,083 72,917 2,003,125 6,789(c)
Paul E. Francis (e) 1999 225,000 -- -- 1,240(c)
Chief Financial Officer ................... 1998 225,000 -- 1,035,000 413(c)
Ronald V. Rose 1999 172,273 37,850 187,500 --
Chief Information Officer ................. 1998 -- -- -- --
Thomas P. D'Angelo, Vice President 1999 158,125 10,000 -- 394(c)
Finance and Controller .................... 971(d)
1998 140,569 10,000 312,500 569(c)
</TABLE>
- ----------
(a) Mr. Braddock commenced serving as Chairman and Chief Executive
Officer in August 1998.
(b) Effective December 16, 1999, Ms. Taub resigned from her position as
Senior Vice President, General Counsel and Secretary of
priceline.com.
(c) Represents life insurance premiums paid.
(d) Represents disability insurance premiums paid.
(e) Effective March 18, 2000, Mr. Francis resigned from his position as
Chief Financial Officer of priceline.com.
14
<PAGE>
The following table sets forth information concerning the grant of stock
options during the fiscal year ended December 31, 1999 to the named executive
officers.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL POTENTIAL REALIZATION
SECURITIES OPTIONS EXERCISE VALUE AT ASSUMED ANNUAL
UNDERLYING GRANTED TO OR BASE RATES OF STOCK PRICE
OPTIONS EMPLOYEES IN PRICE EXPIRATION APPRECIATION FOR OPTION
Names GRANTED (#) FISCAL YEAR ($/SH) DATE TERM (b)
- ----- ----------- ------------ -------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard S. Braddock .... -- -- -- -- 5% 10%
Melissa M. Taub ........ -- -- -- -- -- --
Paul E. Francis ........ -- -- -- -- -- --
Timothy G. Brier ....... -- -- -- -- -- --
Ronald V. Rose (a)...... 187,500 2.9% 6.40 1/29/09 754,673 1,912,490
All Shareholders ....... N/A N/A N/A N/A 532,579,876 1,349,661,970
</TABLE>
- ----------
(a) Options granted under the Company's 1997 Omnibus Plan. 62,500 shares
have vested, and the remainder of the shares vest with respect to
62,500 shares on each of December 31, 2000 and 2001. The
Compensation Committee of the Board of Directors has the discretion
to grant a reload option to Mr. Rose under certain circumstances
upon exercise of his options. The Compensation Committee, with the
approval of the Board of Directors, has the discretion to accelerate
the vesting and exercisability of the options upon a change in
control of the Company.
(b) The dollar amounts under these columns are the result of
calculations at the 5% and 10% rates set by the SEC and therefore
are not intended to forecast possible future appreciation, if any,
of the Company's stock price. Potential realizable values for all
shareholders are based on 132,320,427 shares outstanding on January
29, 1999.
The following table sets forth information concerning the exercise of
stock options during the fiscal year ended December 31, 1999, 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 12/31/99 ($)
12/31/99 (#) (b)
--------------- ----------------
SHARES
ACQUIRED
ON VALUE
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
Names (#) ($) (a) UNEXERCISABLE UNEXERCISABLE
- ----- -------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Richard S. Braddock .... -- -- 6,250,000 296,093,750
/0 /0
Melissa M. Taub ........ 50,000 4,172,934 116,667 5,527,099
/83,333 /3,947,901
Paul E. Francis ........ -- -- 750,000 35,531,250
/285,000 /13,501,875
Timothy G. Brier ....... 50,000 4,172,934 1,512,500 71,654,688
/440,625 /20,874,609
Ronald V. Rose ......... -- -- 62,500 2,960,937
/125,000 /5,921,875
Thomas P. D'Angelo ..... 50,000 4,172,934 200,000 9,475,000
/62,500 /2,960,937
</TABLE>
- ----------
(a) Value before income taxes payable as a result of exercise.
(b) Assumes a fiscal year-end market price of $47.375 per share.
15
<PAGE>
Compensation Arrangements
Braddock Employment Agreement. Pursuant to an employment agreement, dated
as of August 15, 1998, between priceline.com and Mr. Richard S. Braddock, Mr.
Braddock serves as the Chairman and Chief Executive Officer of priceline.com
through August 15, 2001. Pursuant to an agreement in principle entered into July
23, 1998, by and between priceline.com and Mr. Braddock in anticipation of
entering into the employment agreement, Mr. Braddock received 6,500,000 equity
units in priceline.com's predecessor, which have since been converted into
8,125,000 shares of Common Stock. Mr. Braddock also was granted an option to
purchase up to 5,000,000 equity units in priceline.com's predecessor at an
exercise price of $1.00 per share, subject to standard anti-dilution
adjustments, which has been converted into an option to purchase 6,250,000
shares of Common Stock at an exercise price of $0.80 per share and which is
fully vested. Under the terms of his employment agreement, Mr. Braddock is
entitled to an initial annual base salary of $300,000, subject to annual
adjustment, and is eligible to participate in any cash bonus program that may be
introduced by priceline.com. In connection with the execution of the employment
agreement, Mr. Braddock also received an option to purchase an equity interest
in Walker Digital from Walker Digital. Upon termination of his employment with
us by disability or death, Mr. Braddock or his estate will be entitled to
receive base salary for an additional six months following termination. If we
terminate Mr. Braddock's employment without cause, Mr. Braddock will be entitled
to receive his base salary compensation and benefits for the balance of the term
of the agreement, payable in monthly installments.
Brier Employment Agreement. Pursuant to an employment agreement, dated as
of July 23, 1998, as amended, between priceline.com and Mr. Timothy G. Brier,
Mr. Brier serves as Executive Vice President of priceline.com. Under the terms
of his employment agreement, Mr. Brier is entitled to an annual base salary of
$250,000, and until April 6, 1999, was entitled to receive cash bonuses based
upon the number of airlines and consolidators that participate in the
priceline.com service. Under certain circumstances, Mr. Brier may also be
entitled to a compensatory bonus that is designed to ensure that his aggregate
annual compensation for services rendered to priceline.com and CAP Systems,
another entity affiliated with Mr. Walker for which Mr. Brier continues to
provide services, equals $625,000. In addition, Mr. Brier was issued 1,200,000
equity units in priceline.com's predecessor, which have since been converted
into 1,500,000 shares of Common Stock. Priceline.com also granted Mr. Brier an
option to purchase up to 2,003,125 shares of Common Stock at an exercise price
of $0.80 per share, subject to standard anti-dilution adjustments. Upon
termination of his employment with us, Mr. Brier will have the right to continue
to participate in our medical plan, at a cost equal to our average capita cost
for health insurance, for a period of time equal to the product of five
multiplied by the number of years (including partial years) he was employed by
us. Upon termination by disability or death, Mr. Brier or his estate will be
entitled to receive his base salary for an additional six months following
termination. If we terminate Mr. Brier's employment without cause, Mr. Brier
will be entitled to receive his base salary and bonus compensation for an
additional one year period, payable in monthly installments.
Taub Employment Agreement. In connection with her resignation as our
Senior Vice President, General Counsel and Secretary, and in lieu of severance
to which she was entitled under her previous employment agreement, Melissa Taub
entered into a Continuing Employment Agreement with us that provides for her
continuing employment as a non-officer employee until December 16, 2000. During
this period, she will receive a salary of $200,000 per year and payment of her
bonus for the fiscal year 1999. Ms. Taub's unvested stock options will continue
to vest in accordance with their original vesting schedule and all of her stock
options will be exercisable until 90 days after December 16, 2000. In addition,
Ms. Taub was awarded a fully vested option to purchase 25,000 shares of Walker
Digital Corporation common stock at an exercise price per share of $1.00, which
option will be exercisable until December 16, 2009. Ms. Taub will be entitled to
no additional severance benefits, and if she performs services for any entity
other than us or Walker Digital or is self-employed from June 16, 2000 to
December 16, 2000, any amounts received by her that are recognized as income
(other than income from the exercise of stock options or vesting of other equity
awards) will offset our obligation to pay her salary during that period.
16
<PAGE>
Report of the Compensation Committee of the Board of Directors on Executive
Compensation(1)
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 the Company.
The goals of the Company's compensation program are to align compensation
with business objectives and performance and to enable it to attract, retain and
reward executive officers and other key employees who contribute to our
long-term success and to motivate them to enhance long-term stockholder value.
To meet these goals, we have adopted a mix of the compensation elements of
salary and stock options.
The Company commenced operations in 1998. The Chief Executive Officer
joined the Company in August 1998 and the President and Chief Operating Officer
joined in July 1999. Accordingly, compensation for each individual was
principally determined by the provisions of their employment contracts.
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. We are also guided by contractual obligations to certain of
our executive officers which set minimum salary levels. The relative importance
of these factors varies, depending on the particular individual whose salary is
being reviewed. To give us more information for making compensation comparisons,
we review surveys of compensation for comparable companies with revenue growth
similar to our own. Our compensation emphasizes equity based incentive
compensation through stock options rather than high levels of fixed or variable
cash compensation.
Stock Options. The Company's stock option plans are designed to provide
its employees, directors and consultants with an incentive which aligns their
interests with those of the Company's stockholders, in the Company's long-term
performance. 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 100% of the fair market
value of the Common Stock on the date of grant.
The number of stock options granted to each participant under the option
plans is generally determined by guidelines reviewed by the Committee, which
combine several factors. They include the salary and performance level of each
participant as well as the approximate market price of the stock at the time of
grant. Stock option grants in 1999 to certain executive officers have been
negotiated as part of their initial hiring. We believe their existing grants and
vesting schedules currently align their objectives with those of the Company's
stockholders.
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." While we do not expect this
limitation to affect the Company in 1999, the Committee reserves the right to
utilize compensation plans which will not qualify as "performance-based
compensation" and for which deductibility will be so limited.
1999 Compensation. Compensation in 1999 for Mr. Braddock, the Company's
Chief Executive Officer, consisted of base salary. Mr. Braddock's total
compensation is heavily weighted toward equity incentives, consisting of
restricted stock and stock options, granted in 1998 under the terms of Mr.
Braddock's employment agreement. Mr. Braddock's compensation was designed to
align his interests with those of the Company's stockholders by tying the value
of the awards to the success of his efforts toward building the
- ----------
(1) The material in this report is not "soliciting material," is not deemed
"filed" with the SEC, and is not to be incorporated by reference into any
filing of the Company under the 1933 Act or Securities Exchange Act of
1934, whether made before or after the date hereof and irrespective of any
general incorporation language contained in such filing.
17
<PAGE>
Company's management, business and infrastructure, facilitating the initial
public offering of the Company's Common Stock and promoting growth and operating
and financial performance thereafter.
Compensation in 1999 for Mr. Schulman, the Company's President and Chief
Executive Officer, consisted of base salary and equity incentives in the form of
stock options granted under the terms of Mr. Schulman's employment agreement.
Mr. Schulman's compensation is heavily weighted toward equity incentives and
designed to link his total compensation to the Company's growth and operating
and financial performance. Mr. Schulman's agreement also included a loan to Mr.
Schulman, which was intended to mitigate a decrease in current cash compensation
he experienced when joining the Company.
Compensation for other Named Executive Officers is also heavily weighted
toward equity incentives to align the officers' interests with those of the
Company's stockholders.
Summary. Through the plans described above, a significant portion of our
compensation program for our executive officers (including our Chief Executive
Officer) is contingent upon the individual's and the Company's performance, and
realization of benefits by our Chief Executive Officer and the other executive
officers is closely linked to increases in stockholder value. We remain
committed to this philosophy of pay for performance, recognizing that the
competitive market for talented executives and the volatility of our business
may result in highly variable compensation during any given annual period.
Compensation Committee
N.J. Nicholas, Jr. (Chairman)
Paul A. Allaire
Ralph M. Bahna
Marshall Loeb
18
<PAGE>
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.
Performance Measurement Comparison(2)
The following graph shows the total stockholder return through December
31, 1999 of an investment of $100 in cash on March 30, 1999 for priceline.com
Common Stock (the day the Common Stock began trading on the NASDAQ National
Market) 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:
CUMULATIVE TOTAL RETURN
PRICELINE.COM INCORPORATED,
NASDAQ MARKET INDEX AND MG GROUP INDEX
[The following table was depicted as a line chart in the printed material.]
- ----------
(2) This Section is not "soliciting material," is not deemed "filed" with the
Securities and Exchange Commission and is not to be incorporated by
reference in any filing of the Company under the Securities Act of 1933 or
the Securities Exchange Act of 1934 whether made before or after the date
hereof and irrespective of any general incorporation language in any such
filing.
19
<PAGE>
Media General
Internet
Measurement priceline.com Software and
Point Incorporated Services Index NASDAQ
----- ------------- -------------- ------
3/30/99 $100.00 $100.00 $100.00
3/31/99 120.11 100.00 100.00
4/30/99 235.33 118.28 103.21
5/28/99 162.36 95.21 100.16
6/30/99 167.48 96.55 108.72
7/30/99 109.51 78.14 106.79
8/31/99 98.73 82.11 110.45
9/30/99 93.48 92.74 110.61
10/29/99 87.32 96.46 119.17
11/30/99 90.04 123.82 133.28
12/31/99 68.66 156.54 162.95
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 predecessor. The information set forth below also
reflects a 1.25-for-one stock split of the Common Stock on March 26, 1999.
Relationship 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. 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. The Company also has the right to purchase at fair
market value any intellectual property that is owned and subsequently acquired,
developed or discovered by Walker Digital that will provide significant value in
the use or commercial exploitation of the Company's system. 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.
The Company recently expanded its buyer-driven commerce system
through licensing arrangements with two companies affiliated with Walker
Digital. The Company has licensed its patented Name Your Own Price(SM) business
model and affiliated trademarks and software systems to Priceline WebHouse Club,
Inc. ("WebHouse Club"), which operates an Internet-based service for groceries
and other retail products. Walker Digital owns 34.1% of the outstanding capital
stock of WebHouse Club and the balance is owned by certain institutional and
individual investors. The Company owns a warrant that entitles it to purchase up
to 137.5 million shares of common stock of WebHouse Club, or 77.5% of the fully
diluted equity of WebHouse Club, at an exercise price of $3.00 per share, upon
the satisfaction of certain conditions. In connection with the WebHouse Club
transaction, Walker Digital granted to the Company an exclusive (in the field of
retail commerce), worldwide license to certain intellectual property, including
patents, useful in WebHouse Club's business. The Company exclusively sublicensed
these intellectual property rights to WebHouse Club and granted to WebHouse Club
an exclusive worldwide license to its buyer-driven commerce patent rights and
other intellectual property for use in the sale of groceries, health and beauty
items and household supplies by retailers, as well as a non-exclusive worldwide
license to such intellectual property for use in Internet based buyer-driven
commerce for the sale, by retailers, of other products or services. WebHouse
Club pays the Company a sliding scale royalty descending from 1.0% to 0% of net
revenues. In addition to the patent and technology license, the Company and
WebHouse Club share certain information technology infrastructure, and the
Company provides WebHouse Club with marketing and information technology
services.
20
<PAGE>
The Company also has licensed its patented Name Your Own Price(SM)
business model and affiliated trademarks to Priceline Perfect Yard Sale, Inc.
("Perfect Yard Sale"), a subsidiary of Walker Digital, which operates a consumer
to consumer service for the sale of quality used goods over the Internet. Under
the terms of a preliminary agreement between the Company and Perfect Yard Sale
(the "PYS Agreement"), the Company granted to Perfect Yard Sale an exclusive
royalty-free license to the Company's buyer-driven commerce patent rights and
related intellectual property, the Priceline name and associated trademarks for
use in Perfect Yard Sale's business, and agreed to provide related services on a
royalty-free basis pending execution of definitive documentation. Under the
terms of the PYS Agreement, the Company has the right to receive warrants to
purchase a majority of the outstanding voting equity of Perfect Yard Sale on
mutually agreed upon terms.
Walker Digital owns the intellectual property rights underlying the
technology associated with the Company's adaptive marketing programs. Walker
Digital has licensed to the Company the right to use these intellectual property
rights under a perpetual, exclusive, royalty-free license agreement. Walker
Digital has pending several United States patent applications directed to
different aspects of the processes and technology supporting the Company's
adaptive marketing programs.
Walker Digital and the Company provide each other with a variety of
services. The services provided by the Company include various management and
administrative services, for which the Company collects fees from Walker
Digital. Walker Digital currently provides research and development assistance
on an as needed basis, as requested by the Company. Additionally, the Company
has guaranteed Walker Digital's obligations under a lease of 2,500 square feet
for office space in a building in New York City that is used by both companies.
The lease provides for annual rental payments of approximately $170,000 plus
expenses for a term of five years. From July 1997 to February 2000, the Company
sublet its former corporate offices in Stamford, Connecticut from Walker
Digital. Pursuant to the terms of such sublease, the Company paid Walker Digital
an aggregate of approximately $2,239,000.
Several of the Company's directors, executive officers and other key
employees also are 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, WebHouse Club and Perfect Yard Sale. See "Board
Committees and Meetings."
Merger of Priceline Travel, Inc. Into the Company
The Company's travel agency license was previously held by Priceline
Travel, Inc., a separate company that was owned by Mr. Walker. As a result, all
of the Company's airline ticket sales were effected through Priceline Travel.
Priceline Travel was merged into the Company on March 24, 1999 for nominal
consideration.
Other Transactions
The Company implemented an option exercise program that enabled its
employees who were employed as of June 1, 1999 to sell, during an eleven-day
period ending on July 30, 1999, a portion of the shares underlying their options
vested on or before June 1, 1999, which otherwise would not have been
exercisable until September 26, 1999. Seventy employees, including Timothy G.
Brier, Melissa M. Taub, and Thomas P. D'Angelo participated in the option
exercise program, pursuant to which 967,183 shares underlying their options were
sold in the public market on their behalf through a cashless exercise program
administered by Morgan Stanley & Co. Incorporated. After expiration of the
eleven-day period, such employees agreed to an extended 180-day lock-up period
on the balance of their unsold option shares, representing 7,669,588 in the
aggregate, which lock-up period has since expired. Employees who had no options
vested as of June 1, 1999 and former employees, directors and consultants were
not eligible to participate in the option exercise program.
In July 1999, the Company made a loan to Mr. Daniel H. Schulman,
President and Chief Operating Officer of the Company, in the amount of $6.0
million. The loan accrues interest at the rate of 5.82% per annum until maturity
in July 2004. Mr. Schulman will be required to make prepayments of principal and
21
<PAGE>
accrued interest in an amount equal to 25% of his pre-tax proceeds over
$10,000,000 from the exercise of his stock options until June 14, 2004, unless
earlier repaid or forgiven, at which point any remaining outstanding amounts
under the loan will be forgiven by the Company. Any remaining outstanding
amounts under the loan also will be forgiven by the Company in the event of
certain changes in control, death, disability, termination without cause or
termination for good reason.
In January 2000, in connection with his employment with the Company,
the Company made a loan to Mr. Jeffery H. Boyd, the new Executive Vice President
and General Counsel of the Company, in the amount of $2.0 million. The loan
accrues interest at the rate of 6.56% per annum until maturity in February 2004.
Mr. Boyd will be required to make prepayments of principal and accrued interest
in an amount equal to 25% of his pre-tax proceeds over $2,000,000 from the
exercise of his stock options until February 2005, unless earlier repaid or
forgiven, at which point any remaining outstanding amounts under the loan will
be forgiven by the Company. Any remaining outstanding amounts under the loan
also will be forgiven by the Company in the event of certain changes in control,
death, disability, termination without cause or termination for good reason.
In March 2000, in connection with her employment with the Company,
the Company made a loan to Ms. Heidi G. Miller, the new Senior Executive Vice
President, Chief Financial Officer, Strategic Planning and Administration of the
Company, in the amount of $3.0 million. The loan accrues interest at the rate of
6.56% per annum until maturity in March 2005. Ms. Miller will be required to
make prepayments of principal and accrued interest in an amount equal to 25% of
her pre-tax proceeds over $6,600,000 from the exercise of her stock options
until February 18, 2005, unless earlier repaid or forgiven, at which point any
remaining outstanding amounts under the loan will be forgiven by the Company.
Any remaining outstanding amounts under the loan also will be forgiven by the
Company in the event of certain changes in control, death, disability,
termination without cause or termination for good reason.
In April 1999, the Company made a $3.3 million loan to Mr. Richard
S. Braddock for the payment of taxes related to the issuance to Mr. Braddock of
8,125,000 shares of Common Stock in August 1998. The loan bears interest at
5.28% per annum. Interest is payable annually and principal is payable in
January 2004.
The Company has entered into compensation arrangements with certain
of its directors and officers. See "Director and Executive Compensation" and
"Compensation Arrangements."
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 and Vulcan Ventures
Incorporated. 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 will also
be entitled to registration rights under the agreement. In addition, the holders
of all of the securities registrable pursuant to the agreement are entitled
under the agreement, 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 February 1999, the Company made a payment of $850,000 to Allen &
Company Incorporated for financial advisory services. Ms. Peretsman, who is a
Director of the Company, is a director and stockholder of Allen & Company.
The Company offers its magazine subscription promotion pursuant to a
revenue sharing arrangement with Synapse Group, Inc., a direct marketing firm
that is an affiliate of Mr. Walker. Under this arrangement, the Company shares
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. 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 $3.2 million in Synapse Group, Inc.
Daniel H. Schulman, who is the President, Chief Operating 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
22
<PAGE>
telecommunication services. In November 1999, the Company entered into a
Memorandum of Understanding with Net2Phone for Net2Phone's participation as a
preferred provider in the Company's telecommunications service currently
scheduled to launch in late March 2000. Under the terms of the Memorandum of
Understanding, Net2Phone will pay the Company $17,000,000 over three (3) years.
The Company and Net2Phone currently are negotiating the definitive agreement
which will supersede the Memorandum of Understanding. In November 1999,
Net2Phone and the Company also entered into a short-term co-marketing agreement
pursuant to which Net2Phone paid the Company approximately $1,000,000 in
connection with the Company's providing certain marketing opportunities to
Net2Phone.
Paul J. Blackney, who is a Director of the Company, became 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.
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.
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.
23
<PAGE>
Appendix A
AMENDMENT NUMBER ONE
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, 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; and
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 2(i) of the Plan is amended in its entirety to read as
follows:
" (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.
<PAGE>
2. Section 2(y) of the Plan is amended in its entirety to read as
follows:
"(y) "Participant" shall mean (i) 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.
3. 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 25,375,000 shares, subject to
adjustment as provided herein."
4. Section 6 of the Plan shall be amended in its entirety to read as
follows:
"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
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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).
5. Section 10 of the Plan is amended by replacing the first sentence
thereof with the following:
"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."
IN WITNESS WHEREOF, this Amendment has been executed this __th day
of ____, 2000.
PRICELINE.COM INCORPORATED
By:___________________________
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Appendix A
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 in tended 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;
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(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 the committee established by the Board to
administer the Plan, the composition of which shall at all times
satisfy the provisions Section 162(m) of the Code. Each member of
the Committee shall be a Non-Employee Director as defined in Rule
16b-3 under the Exchange Act.
(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.
(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
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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 or consultant of the
Company to whom an Award is granted pursuant to the Plan and (2)
upon the death of an individual described in (1), his or her
successors, heirs, executors and administrators, as the case may be.
(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).
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(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 7,500,000 shares subject to adjustment as
provided here in. 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.
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<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; Agreement.
The Committee may grant Options, Restricted Stock and Other Stock-Based
Awards in such amounts and with such terms and conditions as the Committee shall
determine, subject to the provisions of the Plan.
Each Award granted under the Plan shall be evidenced by an Agreement which
shall contain such provisions as the Committee may in its sole discretion deem
necessary or desirable. By accepting an Award, a Participant thereby agrees that
the award shall be subject to all of the terms and provisions of the Plan and
the applicable Agreement.
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.
(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.
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(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.
(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
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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.
(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.
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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.
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 this Plan to the contrary, upon the occurrence
of a Change in Control, any Award carrying a right to exercise that was not
previously exercisable and vested shall become fully exercisable and vested and
the restrictions and forfeiture conditions applicable to any other Award granted
under the Plan shall lapse and such Award shall be deemed fully vested.
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
8
<PAGE>
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 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.
9
<PAGE>
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.
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.
10
<PAGE>
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 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.
11
<PAGE>
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priceline.com Incorporated
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 24, 2000
The undersigned hereby appoints JEFFERY H. BOYD and JODI P. DOTTORI, 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,
April 24, 2000, at 2:00 p.m. local time, at Hyatt Regency Greenwich, 1800 East
Putnam Avenue, Old Greenwich, Connecticut 06870, 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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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH Please mark
OF THE NOMINEES FOR DIRECTOR LISTED BELOW. THE your votes as |X|
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR indicated in
PROPOSALS 2 AND 3. this example
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, Jay S. Walker, Daniel H. Schulman, Paul A.
Allaire, Ralph M. Bahna, Paul J. Blackney, William E. Ford, Marshall Loeb, N.J.
Nicholas, Jr. and Nancy B. Peretsman
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 25,375,000 shares from
9,375,000 shares, providing for the granting of options to
non-employee directors, and effecting certain other changes
described in the Proxy Statement.
FOR AGAINST ABSTAIN
|_| |_| |_|
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Proposal 3: To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for our fiscal year ending
December 31, 2000.
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, ChaseMellon Shareholder 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 ^
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