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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
priceline.com Incorporated
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(Name of Issuer)
common stock, par value $.008 per share
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(Title of Class of Securities)
741503106
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(CUSIP Number)
Robert S. Harkey, Esquire
Senior Vice President - General Counsel
Delta Air Lines, Inc.
Hartsfield Atlanta International Airport
Atlanta, Georgia 30320
(404) 715-2387
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
August 17, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. [ ]
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
(Page 1 of 9 pages)
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SCHEDULE 13D
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CUSIP NO. 741503106 Page 2 of 9 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Delta Air Lines, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
16,802,288
NUMBER OF --------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH --------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 16,802,288
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,802,288
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.4%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 741503106 Page 3 of 9 Pages
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ITEM 1 SECURITY AND ISSUER
This Amendment No. 2 to Schedule 13D on the common stock of
priceline.com Incorporated, a Delaware corporation, is being filed on behalf of
the undersigned to amend the Schedule 13D which was originally filed with the
Securities and Exchange Commission on July 21, 1999 and which was amended on
July 30, 1999 (the "Schedule 13D"). Unless otherwise indicated, all capitalized
terms used herein but not defined herein shall have the meaning as set forth in
the Schedule 13D.
ITEM 2 IDENTITY AND BACKGROUND
This statement is being filed by Delta Air Lines, Inc., a
Delaware corporation. The principal executive offices of Delta are located at
Hartsfield Atlanta International Airport, Atlanta, Georgia 30320.
Delta provides scheduled air transportation over an extensive
route network. Based on calendar 1998 data, Delta is the largest U.S. airline in
terms of aircraft departures and passengers enplaned, and the third largest U.S.
airline as measured by operating revenues and revenue passenger miles flown. As
of July 21, 1999, Delta provided scheduled air service to 142 cities in 41
states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, and
to 42 international cities in 28 countries. In addition to scheduled passenger
service, Delta provides air freight, mail and related aviation services.
The name, principal occupation and business address of each of
the directors and executive officers of Delta are set forth on Schedule A to the
Schedule 13D. Each director and executive officer of Delta is a citizen of the
United States of America. Neither Delta nor, to the best of its knowledge, any
of its directors or officers has during the last five years been (i) convicted
in a criminal proceeding (excluding minor traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3 SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Delta holds a warrant, evidenced by a Participation Warrant
Agreement dated as of August 31, 1998, as amended by the First Amendment and
Waiver to Participation Warrant Agreement dated December 31, 1998 (the "Warrant
Agreement"). As reported in Amendment No. 1 to the Schedule 13D filed with the
U.S. Securities and Exchange Commission by Delta on July 30, 1999, Delta had the
right under the Warrant Agreement to purchase 18,619,402 shares of
priceline.com's common stock at an exercise price of $0.9254896 per share.
On August 17, 1999, Delta partially exercised its warrant with
respect to 1,817,114 shares of priceline.com common stock and immediately resold
the shares in a registered public offering. The sale price of the priceline.com
common stock was $67 per share before taking into account underwriters'
discounts and commissions. Delta's warrant remains exercisable for a
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CUSIP NO. 741503106 Page 4 of 9 Pages
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balance of 16,802,288 shares of priceline.com common stock. Under Rule
13d-3(d)(1), Delta is deemed to own beneficially all shares of priceline.com's
common stock which Delta has the right to acquire within 60 days. Accordingly,
Delta is deemed to be the beneficial owner, for purposes of Rule 13d-3(d)(1), of
the 16,802,288 shares of priceline.com's common stock subject to Delta's
warrant.
Priceline.com offers tickets for sale on Delta pursuant to an
Airline Participation Agreement between Delta and priceline.com dated August 31,
1998. Delta acquired its warrant (on terms that were later amended) in
connection with its agreement to enter into the Airline Participation Agreement
and a related agreement. The terms of the Airline Participation Agreement and
the related agreement are described generally in Item 4 below.
ITEM 4 PURPOSE OF TRANSACTION
As discussed under Item 3 above, Delta acquired its warrant in
connection with its entering into an Airline Participation Agreement with
priceline.com on August 31, 1998. The Airline Participation Agreement nominally
has a ten-year term but is subject to termination by Delta after August 31, 2001
upon 180 days' notice to priceline.com. The Airline Participation Agreement does
not impose any material obligations on Delta. Delta is not obligated to supply
airline tickets to priceline.com and may supply airline tickets to
priceline.com's competitors at any time and at any price, without offering any
airline tickets to priceline.com. In addition to the Airline Participation
Agreement, priceline.com and Delta are parties to a related agreement which
provides, among other things, certain incentives designed to encourage Delta to
increase its participation in priceline.com's buying service. Under this
agreement, Delta is entitled to share in revenue generated from airline ticket
sales on Delta if priceline.com's gross margin on those sales exceeds
approximately 12% in any calendar quarter. In addition, priceline.com is
required to use the highest qualifying fare to fulfill ticket requests allocable
to Delta, subject to an agreed minimum ticket sale margin to priceline.com. The
agreement also requires priceline.com, subject to various exceptions, to obtain
Delta's approval of the addition of new carriers to the priceline.com service
and restricts the routes for which tickets may be offered by specified carriers
through the priceline.com service. Delta also may require the exclusion of
specific markets in order for certain other airlines to participate.
Priceline.com also is required to license its buyer-driven commerce system to
Delta on a non-exclusive basis and on commercially reasonable terms under
specified conditions. In addition, priceline.com's ability to transfer or
license its intellectual property to other travel providers is limited in the
manner set forth in the agreement.
Generally, Delta holds its warrant to purchase priceline.com's
common stock for investment purposes. Depending on market conditions and other
factors, including evaluation of priceline.com's businesses and prospects,
availability of funds, alternative uses of funds and general economic
conditions, Delta may from time to time further exercise its warrant, hold the
shares received upon exercise, acquire additional securities of priceline.com or
dispose of all or a portion of its investment in priceline.com.
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CUSIP NO. 741503106 Page 5 of 9 Pages
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Except as described in this statement, neither Delta nor, to
the best of its knowledge, any of the persons named in Schedule A to the
Schedule 13D presently has any plans or proposals which relate to or would
result in any of the following:
(a) The acquisition by any person of additional
securities of priceline.com, or the disposition of securities of priceline.com;
(b) An extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving priceline.com or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of
priceline.com or any of its subsidiaries;
(d) Any change in the present board of directors or
management of priceline.com, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or
dividend policy of priceline.com;
(f) Any other material change in priceline.com's business
or corporate structure;
(g) Changes in priceline.com's charter, bylaws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of priceline.com by any person;
(h) Causing a class of securities of priceline.com to be
delisted from a national securities exchange or to cease to be authorized to be
quoted in an inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of priceline.com
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Act; or
(j) Any action similar to any of those enumerated above.
Delta is a party to a Registration Rights Agreement, dated as
of December 8, 1998, among priceline.com and some of priceline.com's
stockholders and warrantholders, pursuant to which the stockholders and
warrantholders have the right in certain circumstances to require priceline.com
to register their shares of common stock for resale under the Securities Act of
1933. Except in limited circumstances, priceline.com is obligated to pay all
expenses in connection with such a registration. A copy of the Registration
Rights Agreement and the agreement pursuant to which Delta became a party to the
Registration Rights Agreement has been filed with the Securities and Exchange
Commission as an exhibit to the Schedule 13D.
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CUSIP NO. 741503106 Page 6 of 9 Pages
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In connection with the public offering of priceline.com common
stock, certain stockholders of priceline.com assigned Delta their rights to sell
shares in the proposed offering. A copy of the assignment was filed as an
exhibit to the Schedule 13D.
ITEM 5 INTEREST IN SECURITIES OF PRICELINE.COM
(a) Delta is the beneficial owner of 16,802,288 shares of
priceline.com's common stock, all of which are issuable to Delta upon the
exercise of its warrant. The shares beneficially owned by Delta represent
approximately 10.4% of priceline.com's outstanding common stock (calculated as
required by Rule 13d-3(d)(1) and assuming that there are 145,137,541 shares of
priceline.com common stock outstanding, based on the prospectus filed by
priceline.com on August 13, 1999).
Mary Johnston Evans, a director of Delta, holds 100 shares of
priceline.com common stock. To the best of Delta's knowledge, none of the other
directors or executive officers of Delta beneficially owns shares of
priceline.com's common stock.
(b) Delta has sole voting and dispositive power over all
of the shares of priceline.com's common stock Delta beneficially owns and, to
the best of Delta's knowledge, Mary Johnston Evans has sole voting and
dispositive power over all of the shares of priceline.com's common stock she
holds.
(c) Except as otherwise set forth in this statement,
neither Delta nor, to the best of Delta's knowledge, any of Delta's directors or
executive officers has effected any transactions in priceline.com's common stock
during the past 60 days.
(d) No person other than Delta has the right to receive
or the power to direct the receipt of dividends from, or the proceeds from the
sale of, the shares of priceline.com's common stock beneficially owned by Delta
or, to the best of Delta's knowledge, Mary Johnston Evans.
(e) Delta has not ceased being the beneficial owner of
more than 5% of priceline.com's outstanding common stock.
ITEM 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF PRICELINE.COM
As described in Item 3 above, Delta holds a warrant to
purchase 16,802,288 shares of priceline.com's common stock. The warrant, which
has an exercise price of $0.9254896 per share, is currently exercisable with
respect to all 16,802,288 shares. The warrant expires on December 31, 2005.
As described in Item 4 above, Delta is a party to and an
assignee of certain rights under a Registration Rights Agreement with respect to
priceline.com's common stock. Copies of the Registration Rights Agreement and
the agreements pursuant to which Delta became a party
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CUSIP NO. 741503106 Page 7 of 9 Pages
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to and an assignee of certain rights under the Registration Rights Agreement
were filed as exhibits to the Schedule 13D.
In connection with priceline.com's initial public offering of
common stock, Delta agreed not to engage in sales, transfers or similar
transactions involving priceline.com's common stock without the prior written
consent of Morgan Stanley & Co. Incorporated prior to 180 days after March 29,
1999. A copy of this agreement was filed as an exhibit to the Schedule 13D.
ITEM 7 MATERIALS FILED AS EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
1 Participation Warrant Agreement, dated August 31, 1998, between
priceline.com and Delta.*
2 First Amendment and Waiver to Participation Warrant Agreement, dated
December 31, 1998, between priceline.com and Delta.*
3 Amended and Restated Registration Rights Agreement, dated as of
December 8, 1998, among priceline.com and certain stockholders and
warrantholders of priceline.com.*
4 Acknowledgment and Agreement to the Amended and Restated Registration
Rights Agreement, dated July 16, 1999, between Delta and
priceline.com.*
5 Assignment of Certain Registration Rights, dated as of July 16, 1999,
by and among Delta and the assignors named therein.*
6 Airline Participation Agreement, dated August 31, 1998, by and among
Delta, priceline.com and Priceline Travel, Inc.*
7 General Agreement, dated August 31, 1998, by and among Delta,
priceline.com and Priceline Travel, Inc.*
8 Amendment to the Airline Participation Agreement and the General
Agreement, dated December 31, 1998, between and among priceline.com,
Priceline Travel, Inc. and Delta.*
9 Lock-up Agreement, dated February 22, 1999.*
</TABLE>
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* Previously filed
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CUSIP NO. 741503106 Page 8 of 9 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: August 19, 1999 Delta Air Lines, Inc.
By: /s/ Warren C. Jenson
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Warren C. Jenson
Executive Vice President and Chief
Financial Officer
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CUSIP NO. 741503106 Page 9 of 9 Pages
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
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<S> <C>
1 Participation Warrant Agreement, dated August 31, 1998, between
priceline.com and Delta.*
2 First Amendment and Waiver to Participation Warrant Agreement, dated
December 31, 1998, between priceline.com and Delta.*
3 Amended and Restated Registration Rights Agreement, dated as of
December 8, 1998, among priceline.com and certain stockholders and
warrantholders of priceline.com.*
4 Acknowledgment and Agreement to the Amended and Restated Registration
Rights Agreement, dated July 16, 1999, between Delta and
priceline.com.*
5 Assignment of Certain Registration Rights, dated as of July 16, 1999,
by and among Delta and the assignors named therein.*
6 Airline Participation Agreement, dated August 31, 1998, by and among
Delta, priceline.com and Priceline Travel, Inc.*
7 General Agreement, dated August 31, 1998, by and among Delta,
priceline.com and Priceline Travel, Inc.*
8 Amendment to the Airline Participation Agreement and the General
Agreement, dated December 31, 1998, between and among priceline.com,
Priceline Travel, Inc. and Delta.*
9 Lock-up Agreement, dated February 22, 1999.*
</TABLE>
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* Previously filed
