AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 1997

REGISTRATION NO. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

AMAZON.COM, INC.
(Exact name of registrant as specified in its charter)

            DELAWARE                            7375                           91-1646860
(State or other jurisdiction of     (Primary Standard Industrial            (I.R.S. Employer
 incorporation or organization)     Classification Code Number)           Identification No.)

1516 SECOND AVENUE, 4TH FLOOR
SEATTLE, WASHINGTON 98101
(206) 622-2335
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)

JEFFREY P. BEZOS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMAZON.COM, INC.
1516 SECOND AVENUE, 4TH FLOOR
SEATTLE, WASHINGTON 98101
(206) 622-2335
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

COPIES TO:

  CHARLES J. KATZ, JR., ESQ.                               MARK A. BERTELSEN, ESQ.
   L. MICHELLE WILSON, ESQ.                                DAVID C. DRUMMOND, ESQ.
     DAVID F. MCSHEA, ESQ.                                 ROBERT M. TARKOFF, ESQ.
         PERKINS COIE                              WILSON SONSINI GOODRICH & ROSATI, P.C.
 1201 THIRD AVENUE, 40TH FLOOR                               650 PAGE MILL ROAD
SEATTLE, WASHINGTON 98101-3099                        PALO ALTO, CALIFORNIA 94304-1050
        (206) 583-8888                                         (415) 493-9300


Approximate date of commencement of proposed sale to the public: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

================================================================================================
                                                  PROPOSED         PROPOSED
  TITLE OF EACH CLASS            AMOUNT           MAXIMUM          MAXIMUM         AMOUNT OF
  OF SECURITIES TO BE             TO BE        OFFERING PRICE     AGGREGATE       REGISTRATION
       REGISTERED             REGISTERED(1)     PER SHARE(2)  OFFERING PRICE(2)       FEE
- ------------------------------------------------------------------------------------------------
Common Stock, $0.01 par
  value per share.......    2,875,000 shares       $13.00        $37,375,000        $11,326
================================================================================================

(1) Includes 375,000 shares that the Underwriters have the option to purchase to cover over-allotments, if any.

(2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c).

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.


INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MARCH 24, 1997
LOGO

2,500,000 SHARES
COMMON STOCK

All of the 2,500,000 shares of Common Stock, par value $0.01 per share ("Common Stock"), are being sold by Amazon.com, Inc. ("Amazon.com" or the "Company"). Prior to this offering, there has been no public market for the Common Stock. It is currently estimated that the initial public offering price will be between $ and $ per share. See "Underwriting" for a discussion of the factors considered in determining the initial public offering price. The Company has applied to have the Common Stock approved for listing on the Nasdaq National Market under the symbol "AMZN."

FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS" COMMENCING ON PAGE 5.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                              PRICE TO             UNDERWRITING         PROCEEDS TO
                                              PUBLIC               DISCOUNT(1)          COMPANY(2)
Per Share                                     $                    $                    $
Total(3)                                      $                    $                    $

(1) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses estimated at $850,000, payable by the Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to 375,000 additional shares of Common Stock solely to cover over-allotments, if any. If such option is exercised in full, the total Price to Public, Underwriting Discount and Proceeds to Company will be $ , $ and $ , respectively. See "Underwriting."

The shares of Common Stock are offered by the Underwriters, subject to prior sale, when, as and if delivered to and accepted by them, and subject to approval of certain legal matters by counsel and certain other conditions. The Underwriters reserve the right to withdraw, cancel or modify such offer and to reject orders in whole or in part. Delivery of the shares of Common Stock offered hereby to the Underwriters is expected to be made in New York, New York on or about , 1997.

DEUTSCHE MORGAN GRENFELL

ALEX. BROWN & SONS
INCORPORATED

HAMBRECHT & QUIST

The date of this Prospectus is , 1997.


[SCREEN-SHOTS OF WEB PAGES]

The Company has applied for federal registration of the marks "AMAZON.COM" and "AMAZON.COM BOOKS." All other trademarks or service marks appearing in this Prospectus are trademarks or service marks of the respective companies that utilize them.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE COVERING TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

Except as otherwise noted, all information in this Prospectus, including share and per share information, (i) assumes no exercise of the Underwriters' over-allotment option, (ii) reflects the conversion of each outstanding share of the Company's Preferred Stock into six shares of Common Stock upon the closing of this offering, (iii) gives effect to a four-for-one stock split of the Company's outstanding Common Stock effective November 23, 1996 and a three-for-two split of the Company's outstanding Common Stock to be effected prior to the closing of this offering, and (iv) reflects an increase in the authorized number of shares of Common Stock from 25,000,000 to 100,000,000 and an increase in the authorized number of shares of Preferred Stock from 5,000,000 to 10,000,000 to be effected prior to the closing of this offering.

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PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified in its entirety by, the more detailed information and financial statements and notes thereto appearing elsewhere in this Prospectus.

THE COMPANY

Amazon.com is the leading online retailer of books. Since opening for business as "Earth's Biggest Bookstore" in July 1995, the Amazon.com bookstore has quickly become one of the most widely known, used and cited commerce sites on the World Wide Web (the "Web"). Amazon.com strives to offer its customers compelling value through innovative use of technology, broad selection, high-quality content, a high level of customer service, competitive pricing and personalized services. As an online bookseller, Amazon.com has virtually unlimited online shelf space and can offer customers a vast selection through an efficient search and retrieval interface. The Company offers more than 2.5 million titles, including most of the estimated 1.5 million English-language books believed to be in print, more than one million out-of-print titles believed likely to be in circulation and a smaller number of CDs, videotapes and audiotapes. Beyond the benefits of selection, purchasing books from Amazon.com is more convenient than shopping in a physical bookstore because online shopping can be done 24 hours a day and does not require a trip to a store. Furthermore, Amazon.com's high inventory turnover, lack of investment in expensive retail real estate and reduced personnel requirements give it meaningful structural economic advantages relative to traditional booksellers.

Through December 31, 1996, Amazon.com had sales of more than $16 million to approximately 180,000 customer accounts in over 100 countries. Average daily visits (not "hits") have grown from approximately 2,200 in December 1995 to approximately 50,000 in December 1996, and repeat customers currently account for over 40% of orders. Time magazine rated Amazon.com one of the 10 "Best Websites of 1996."

THE OFFERING

Common Stock offered.......................................   2,500,000 shares
Common Stock to be outstanding after this offering.........   22,954,534 shares(1)
Use of proceeds............................................   For working capital and other general
                                                              corporate purposes.
Proposed Nasdaq National Market symbol.....................   AMZN


(1) Excludes 3,052,974 shares and 264,000 shares of Common Stock issuable upon exercise of options outstanding at February 28, 1997 under the Company's Amended and Restated 1994 Stock Option Plan (the "1994 Stock Option Plan") and outside the 1994 Stock Option Plan, respectively, at a weighted average exercise price of $1.23 per share. See "Management -- Employee Benefit Plans" and Note 3 of Notes to Financial Statements.

SUMMARY FINANCIAL DATA
(In thousands, except per share data)

                         FOR THE PERIOD            YEAR ENDED                           QUARTER ENDED
                        FROM JULY 5, 1994  --------------------------  ------------------------------------------------
                         (INCEPTION) TO    DECEMBER 31,  DECEMBER 31,  MARCH 31,  JUNE 30,  SEPTEMBER 30,  DECEMBER 31,
                        DECEMBER 31, 1994      1995          1996        1996       1996        1996           1996
                        -----------------  ------------  ------------  ---------  --------  -------------  ------------
STATEMENT OF OPERATIONS
  DATA:
Net sales..............         $ --            $ 511      $ 15,746       $ 875     $2,230     $ 4,173       $  8,468
Loss from operations...          (52)            (304)       (5,979)       (336)      (776)     (2,472)        (2,395)
Net loss...............          (52)            (303)       (5,777)       (331)      (767)     (2,380)        (2,299)
Net loss per share(1)...        (0.00)          (0.02)        (0.26)      (0.02)     (0.04)      (0.10)         (0.10)
Shares used in
  computation of net
  loss per share(1)....       17,577           18,780        22,543      22,098     22,279      22,897         22,899

                                                                                           AT DECEMBER 31, 1996
                                                                                        --------------------------
                                                                                         ACTUAL     AS ADJUSTED(2)
                                                                                        ---------   --------------
BALANCE SHEET DATA:
Cash and cash equivalents.............................................................   $ 6,248       $ 35,623
Working capital.......................................................................     2,270         31,645
Total assets..........................................................................     8,271         37,646
Stockholders' equity..................................................................     3,401         32,776


(1) See Note 1 of Notes to Financial Statements for information concerning the determination of net loss per share.

(2) Adjusted to give effect to the sale by the Company of the shares of Common Stock offered hereby at an assumed initial public offering price of $13.00 per share and after deducting the estimated underwriting discount and offering expenses, and the receipt of the net proceeds therefrom. See "Use of Proceeds" and "Capitalization."

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THE COMPANY

Amazon.com is the leading online retailer of books. Since opening for business as "Earth's Biggest Bookstore" in July 1995, the Amazon.com bookstore has quickly become one of the most widely known, used and cited commerce sites on the Web. By offering customers an authoritative selection of more than 2.5 million titles, as well as competitive pricing and outstanding customer service, Amazon.com believes it has achieved a preeminent position among online retailers.

Customers enter the Amazon.com bookstore through the Company's Web site and, in addition to ordering books, can conduct targeted searches, browse from among highlighted selections, bestsellers and other features, read and post reviews, register for personalized services, participate in promotions and check order status. Customers simply click on a button to add books to their virtual shopping baskets. Customers can add and subtract books from their shopping baskets as they browse, prior to making a final purchase decision, just as in a physical store. To execute orders, customers click on the buy button and are prompted to supply shipping and credit card details. Customers are offered a variety of delivery services, including overnight and various international shipping options, as well as giftwrapping.

The worldwide book industry is large, growing and relatively fragmented. According to Euromonitor, U.S. book sales were estimated to be approximately $26 billion in 1996 and are expected to grow to approximately $30 billion in 2000, while worldwide book sales were estimated at approximately $82 billion in 1996 and are expected to grow to approximately $90 billion in 2000.

Amazon.com was founded to capitalize on the opportunity for online book retailing. The Company believes that the retail book industry is particularly suited to online retailing for many compelling reasons. An online bookseller has virtually unlimited online shelf space and can offer customers a vast selection through an efficient search and retrieval interface. This is particularly valuable in the book market because the extraordinary number of different items precludes even the largest physical bookstore from economically stocking more than a small minority of available titles. In addition, by serving a large and global market through centralized distribution and operations, online booksellers can realize significant structural cost advantages relative to traditional booksellers. Furthermore, unlike with clothing or other personal products, consumers can make educated book purchase decisions using online information. Books can be selected and sampled effectively through online synopses, excerpts and reviews and have consistent quality across different retailers. In addition, the demographic overlap between frequent book buyers and Internet users is high. Further, online bookselling has the potential to eliminate or mitigate critical inefficiencies and problems faced by book publishers.

Amazon.com intends to use technology to deliver an outstanding service offering and to achieve the significant economies inherent in the online store model. The Company's strategy is to build strong brand recognition, customer loyalty and supplier relationships, while creating an economic model that is superior to that of the capital and real estate intensive traditional book retailing business.

The Company has grown rapidly since first opening its bookstore. Through December 31, 1996, Amazon.com had sales of more than $16 million to approximately 180,000 customer accounts in over 100 countries. Compounded quarterly sales growth exceeded 100% from the first to the fourth quarter of 1996. Average daily visits (not "hits") have grown from approximately 2,200 in December 1995 to approximately 50,000 in December 1996, and repeat customers account for over 40% of orders. Time magazine rated Amazon.com one of the 10 "Best Websites of 1996." Growth rates experienced to date are not sustainable. See "Risk Factors -- Limited Operating History; Accumulated Deficit; Anticipated Losses."

The Company was incorporated in Washington in July 1994 and reincorporated in Delaware in June 1996. The Company's headquarters are located at 1516 Second Avenue, 4th Floor, Seattle, Washington 98101. Its telephone number at that location is (206) 622-2335. Information contained on the Company's Web site will not be deemed to be a part of this Prospectus. As used herein, "titles" offered by the Company means the number of items offered in the Company's catalog and includes primarily books but also a small number of CDs, videotapes and audiotapes.

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RISK FACTORS

In addition to the other information contained in this Prospectus, investors should carefully consider the following risk factors before making an investment decision concerning the Common Stock. All statements, trend analysis and other information contained in this Prospectus relative to markets for the Company's products and trends in net sales, gross margin and anticipated expense levels, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect" and "intend" and other similar expressions, constitute forward-looking statements. These forward-looking statements are subject to business and economic risks, and the Company's actual results of operations may differ materially from those contained in the forward-looking statements.

LIMITED OPERATING HISTORY; ACCUMULATED DEFICIT; ANTICIPATED LOSSES. The Company was founded in July 1994 and began selling books on its Web site in July 1995. Accordingly, the Company has a limited operating history on which to base an evaluation of its business and prospects. The Company's prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets such as online commerce. Such risks for the Company include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks, the Company must, among other things, maintain and increase its customer base, implement and successfully execute its business and marketing strategy, continue to develop and upgrade its technology and transaction-processing systems, improve its Web site, provide superior customer service and order fulfillment, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that the Company will be successful in addressing such risks, and the failure to do so could have a material adverse effect on the Company's business, prospects, financial condition and results of operations.

Since inception, the Company has incurred significant losses, and as of December 31, 1996 had an accumulated deficit of $6.0 million. The Company believes that its success will depend in large part on its ability to (i) extend its brand position, (ii) provide its customers with outstanding value and a superior shopping experience, and (iii) achieve sufficient sales volume to realize economies of scale. Accordingly, the Company intends to invest heavily in marketing and promotion, site development and technology and operating infrastructure development. The Company also intends to offer attractive pricing programs, which will reduce its gross margins. Because the Company has relatively low product gross margins, achieving profitability given planned investment levels depends upon the Company's ability to generate and sustain substantially increased revenue levels. As a result, the Company believes that it will incur substantial operating losses for the foreseeable future, and that the rate at which such losses will be incurred will increase significantly from current levels. Although the Company has experienced significant revenue growth in recent periods, such growth rates are not sustainable and will decrease in the future. In view of the rapidly evolving nature of the Company's business and its limited operating history, the Company believes that period-to-period comparisons of its operating results are not necessarily meaningful and should not be relied upon as an indication of future performance. See "Management's Discussion and Analysis of Financial Condition and Results of Operations."

The Company expects to use a portion of the net proceeds of this offering to fund its operating losses. If such net proceeds, together with cash generated by operations, are insufficient to fund future operating losses, the Company may be required to raise additional funds. There can be no assurance that such financing will be available in amounts or on terms acceptable to the Company, if at all.

UNPREDICTABILITY OF FUTURE REVENUES; POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS; SEASONALITY. As a result of the Company's limited operating history and the emerging nature of the markets in which it competes, the Company is unable to accurately forecast its revenues. The Company's current and future expense levels are based largely on its investment

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plans and estimates of future revenues and are to a large extent fixed. Sales and operating results generally depend on the volume of, timing of and ability to fulfill orders received, which are difficult to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues in relation to the Company's planned expenditures would have an immediate adverse effect on the Company's business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service or marketing decisions that could have a material adverse effect on its business, prospects, financial condition and results of operations. See "Business -- Competition."

The Company expects to experience significant fluctuations in its future quarterly operating results due to a variety of factors, many of which are outside the Company's control. Factors that may adversely affect the Company's quarterly operating results include (i) the Company's ability to retain existing customers, attract new customers at a steady rate and maintain customer satisfaction, (ii) the Company's ability to manage inventory and fulfillment operations and maintain gross margins, (iii) the announcement or introduction of new sites, services and products by the Company and its competitors, (iv) price competition or higher wholesale prices in the industry, (v) the level of use of the Internet and online services and increasing consumer acceptance of the Internet and other online services for the purchase of consumer products such as those offered by the Company, (vi) the Company's ability to upgrade and develop its systems and infrastructure and attract new personnel in a timely and effective manner, (vii) the level of traffic on the Company's Web site, (viii) technical difficulties, system downtime or Internet brownouts, (ix) the amount and timing of operating costs and capital expenditures relating to expansion of the Company's business, operations and infrastructure, (x) the number of popular books introduced during the period, (xi) the level of merchandise returns experienced by the Company, (xii) governmental regulation, and (xiii) general economic conditions and economic conditions specific to the Internet, online commerce and the book industry.

The Company expects that it will experience seasonality in its business, reflecting a combination of seasonal fluctuations in Internet usage and traditional retail seasonality patterns. Internet usage and the rate of Internet growth may be expected to decline during the summer. Further, sales in the traditional retail book industry are significantly higher in the fourth calendar quarter of each year than in the preceding three quarters.

Due to the foregoing factors, in one or more future quarters the Company's operating results may fall below the expectations of securities analysts and investors. In such event, the trading price of the Common Stock would likely be materially adversely affected.

RISK OF CAPACITY CONSTRAINTS; RELIANCE ON INTERNALLY DEVELOPED SYSTEMS; SYSTEM DEVELOPMENT RISKS. A key element of the Company's strategy is to generate a high volume of traffic on, and use of, its Web site. Accordingly, the satisfactory performance, reliability and availability of the Company's Web site, transaction-processing systems and network infrastructure are critical to the Company's reputation and its ability to attract and retain customers and maintain adequate customer service levels. The Company's revenues depend on the number of visitors who shop on its Web site and the volume of orders it fulfills. Any system interruptions that result in the unavailability of the Company's Web site or reduced order fulfillment performance would reduce the volume of goods sold and the attractiveness of the Company's product and service offerings. The Company has experienced periodic system interruptions, which it believes will continue to occur from time to time. Any substantial increase in the volume of traffic on the Company's Web site or the number of orders placed by customers will require the Company to expand and upgrade further its technology, transaction-processing systems and network infrastructure. There can be no assurance that the Company will be able to accurately project the rate or timing of increases, if any, in the use of its Web site or timely expand and upgrade its systems and infrastructure to accommodate such increases.

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The Company uses an internally developed system for its Web site, search engine and substantially all aspects of transaction processing, including order management, cash and credit card processing, purchasing, inventory management and shipping. The system is not integrated with the remainder of the Company's accounting and financial systems. To date, development efforts for the Company's transaction-processing system have focused primarily on support for rapid growth of order volume and customer service, and less on traditional accounting, control and reporting aspects of system development. As a result, the Company's current management information system, which produces frequent operational reports, is inefficient with respect to traditional accounting-oriented reporting and requires a significant amount of manual effort to prepare information for financial and accounting reporting. This may make it difficult for management to obtain accurate financial statements and reporting information on a timely basis. The Company intends to upgrade and expand its transaction-processing systems and to integrate newly developed and/or purchased modules with its existing systems in order to improve its accounting, control and reporting methods and support increased transaction volume. The Company's inability to add additional software and hardware or to develop and upgrade further its existing technology, transaction-processing systems or network infrastructure to accommodate increased traffic on its Web site or increased sales volume through its transaction-processing systems may cause unanticipated system disruptions, slower response times, degradation in levels of customer service, impaired quality and speed of order fulfillment, and delays in reporting accurate financial information. In addition, although the Company works to prevent unauthorized access to Company data, it is impossible to completely eliminate this risk. There can be no assurance that the Company will be able in a timely manner to effectively upgrade and expand its transaction-processing system or to integrate smoothly any newly developed or purchased modules with its existing systems. Any inability to do so would have a material adverse effect on the Company's business, prospects, financial condition and results of operations. See "Business -- Technology."

RISK OF SYSTEM FAILURE; SINGLE SITE AND ORDER INTERFACE. The Company's success, in particular its ability to successfully receive and fulfill orders and provide high-quality customer service, largely depends on the efficient and uninterrupted operation of its computer and communications hardware systems. Substantially all of the Company's computer and communications hardware is located at a single leased facility in Seattle, Washington. The Company's systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, break-ins, earthquake and similar events. The Company does not presently have redundant systems or a formal disaster recovery plan and does not carry sufficient business interruption insurance to compensate it for losses that may occur. Despite the implementation of network security measures by the Company, its servers are vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions, delays, loss of data or the inability to accept and fulfill customer orders. The occurrence of any of the foregoing risks could have a material adverse effect on the Company's business, prospects, financial condition and results of operations. See "Business -- Facilities" and "-- Technology."

MANAGEMENT OF POTENTIAL GROWTH; NEW MANAGEMENT TEAM; LIMITED SENIOR MANAGEMENT RESOURCES. The Company has rapidly and significantly expanded its operations, and anticipates that further significant expansion will be required to address potential growth in its customer base and market opportunities. This expansion has placed, and is expected to continue to place, a significant strain on the Company's management, operational and financial resources. From January 1, 1996 to December 31, 1996, the Company expanded from 11 to 151 employees. The majority of the Company's senior management joined the Company within the last four months, and some officers have no prior senior management experience at public companies. The Company's new employees include a number of key managerial, technical and operations personnel who have not yet been fully integrated into the Company, and the Company expects to add additional key personnel in the near future. In particular, the Company intends to hire a Chief Information Officer to manage the operation, development and enhancement of its information

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system. To manage the expected growth of its operations and personnel, the Company will be required to improve existing and implement new transaction-processing, operational and financial systems, procedures and controls, and to expand, train and manage its already growing employee base. The Company also will be required to expand its finance, administrative and operations staff. Further, the Company's management will be required to maintain and expand its relationships with various distributors and publishers, freight companies, other Web sites and other Web service providers, Internet and other online service providers and other third parties necessary to the Company's business. There can be no assurance that the Company's current and planned personnel, systems, procedures and controls will be adequate to support the Company's future operations, that management will be able to hire, train, retain, motivate and manage required personnel or that Company management will be able to successfully identify, manage and exploit existing and potential market opportunities. If the Company is unable to manage growth effectively, its business, prospects, financial condition and results of operations will be materially adversely affected. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business -- Employees."

DEPENDENCE ON CONTINUED GROWTH OF ONLINE COMMERCE. The Company's future revenues and any future profits are substantially dependent upon the widespread acceptance and use of the Internet and other online services as an effective medium of commerce by consumers. Rapid growth in the use of and interest in the Internet, the Web and online services is a recent phenomenon, and there can be no assurance that acceptance and use will continue to develop or that a sufficiently broad base of consumers will adopt, and continue to use, the Internet and other online services as a medium of commerce. Demand and market acceptance for recently introduced services and products over the Internet are subject to a high level of uncertainty and there exist few proven services and products. The Company relies on consumers who have historically used traditional means of commerce to purchase merchandise. For the Company to be successful, these consumers must accept and utilize novel ways of conducting business and exchanging information.

In addition, the Internet and other online services may not be accepted as a viable commercial marketplace for a number of reasons, including potentially inadequate development of the necessary network infrastructure or delayed development of enabling technologies and performance improvements. To the extent that the Internet and other online services continue to experience significant growth in the number of users, their frequency of use or an increase in their bandwidth requirements, there can be no assurance that the infrastructure for the Internet and online services will be able to support the demands placed upon them. In addition, the Internet or other online services could lose their viability due to delays in the development or adoption of new standards and protocols required to handle increased levels of Internet activity, or due to increased governmental regulation. Changes in or insufficient availability of telecommunications services to support the Internet or other online services also could result in slower response times and adversely affect usage of the Internet and other online services generally and Amazon.com in particular. If use of the Internet and other online services does not continue to grow or grows more slowly than expected, if the infrastructure for the Internet and other online services does not effectively support growth that may occur, or if the Internet and other online services do not become a viable commercial marketplace, the Company's business, prospects, financial condition and results of operations would be materially adversely affected.

RAPID TECHNOLOGICAL CHANGE. To remain competitive, the Company must continue to enhance and improve the responsiveness, functionality and features of the Amazon.com online store. The Internet and the online commerce industry are characterized by rapid technological change, changes in user and customer requirements and preferences, frequent new product and service introductions embodying new technologies and the emergence of new industry standards and practices that could render the Company's existing Web site and proprietary technology and systems obsolete. The Company's success will depend, in part, on its ability to license leading technologies useful in its business, enhance its existing services, develop new services and

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technology that address the increasingly sophisticated and varied needs of its prospective customers, and respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. The development of Web site and other proprietary technology entails significant technical and business risks. There can be no assurance that the Company will successfully use new technologies effectively or adapt its Web site, proprietary technology and transaction-processing systems to customer requirements or emerging industry standards. If the Company is unable, for technical, legal, financial or other reasons, to adapt in a timely manner in response to changing market conditions or customer requirements, its business, prospects, financial condition and results of operations would be materially adversely affected. See "Business -- Technology."

DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL. The Company's performance is substantially dependent on the continued services and on the performance of its senior management and other key personnel, particularly Jeffrey P. Bezos, its President, Chief Executive Officer and Chairman of the Board. The Company's performance also depends on the Company's ability to retain and motivate its other officers and key employees. The loss of the services of any of its executive officers or other key employees could have a material adverse effect on the Company's business, prospects, financial condition and results of operations. The Company does not have long-term employment agreements with any of its key personnel and maintains no "key person" life insurance policies. The Company's future success also depends on its ability to identify, attract, hire, train, retain and motivate other highly skilled technical, managerial, editorial, merchandising, marketing and customer service personnel. Competition for such personnel is intense, and there can be no assurance that the Company will be able to successfully attract, assimilate or retain sufficiently qualified personnel. In particular, the Company has encountered difficulties in attracting a sufficient number of qualified software developers for its Web site and transaction-processing systems, and there can be no assurance that the Company will be able to retain and attract such developers. The failure to retain and attract the necessary technical, managerial, editorial, merchandising, marketing and customer service personnel could have a material adverse effect on the Company's business, prospects, financial condition and results of operations. See "Business -- Employees" and "Management."

ONLINE COMMERCE SECURITY RISKS. A significant barrier to online commerce and communications is the secure transmission of confidential information over public networks. The Company relies on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to effect secure transmission of confidential information, such as customer credit card numbers. There can be no assurance that advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments will not result in a compromise or breach of the algorithms used by the Company to protect customer transaction data. If any such compromise of the Company's security were to occur, it could have a material adverse effect on the Company's reputation, business, prospects, financial condition and results of operations. A party who is able to circumvent the Company's security measures could misappropriate proprietary information or cause interruptions in the Company's operations. The Company may be required to expend significant capital and other resources to protect against such security breaches or to alleviate problems caused by such breaches. Concerns over the security of the Internet and other online transactions and the privacy of users may also inhibit the growth of the Internet and other online services generally, and the Web in particular, especially as a means of conducting commercial transactions. To the extent that activities of the Company or third-party contractors involve the storage and transmission of proprietary information, such as credit card numbers, security breaches could damage the Company's reputation and expose the Company to a risk of loss or litigation and possible liability. There can be no assurance that the Company's security measures will prevent security breaches or that failure to prevent such security breaches will not have a material adverse effect on the Company's business, prospects, financial condition and results of operations. See "Business -- Technology."

9

COMPETITION. The online commerce market, particularly over the Internet, is new, rapidly evolving and intensely competitive, which competition the Company expects to intensify in the future. Barriers to entry are minimal, and current and new competitors can launch new sites at a relatively low cost. In addition, the retail book industry is intensely competitive. The Company currently or potentially competes with a variety of other companies. These competitors include (i) various online booksellers and vendors of other information-based products such as CDs and videotapes, including Book Stacks Unlimited, Inc., a subsidiary of CUC International, Inc. ("CUC"), (ii) a number of indirect competitors that specialize in online commerce or derive a substantial portion of their revenues from online commerce, including America Online, Inc. ("AOL") and Microsoft Corporation, through which other bookstores may offer products, and (iii) retail vendors of books, music and videotapes, including large specialty booksellers, with significant brand awareness, sales volume and customer bases, such as Barnes & Noble, Inc. ("B&N") and Borders Group, Inc. ("Borders"). Both B&N and Borders have announced their intention to devote substantial resources to online commerce in the near future and B&N, specifically, has entered into a relationship with AOL through which, beginning in March 1997, it offers a broad selection of titles at discounted prices.

The Company believes that the principal competitive factors in its market are brand recognition, selection, personalized services, convenience, price, accessibility, customer service, quality of search tools, quality of editorial and other site content and reliability and speed of fulfillment. Many of the Company's current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than the Company. In addition, online retailers may be acquired by, receive investments from or enter into other commercial relationships with larger, well-established and well-financed companies as use of the Internet and other online services increases. Certain of the Company's competitors may be able to secure merchandise from vendors on more favorable terms, devote greater resources to marketing and promotional campaigns, adopt more aggressive pricing or inventory availability policies and devote substantially more resources to Web site and systems development than the Company. Increased competition may result in reduced operating margins, loss of market share and a diminished brand franchise. There can be no assurance that the Company will be able to compete successfully against current and future competitors, and competitive pressures faced by the Company may have a material adverse effect on the Company's business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service or marketing decisions or acquisitions that could have a material adverse effect on its business, prospects, financial condition and results of operations. New technologies and the expansion of existing technologies may increase the competitive pressures on the Company. For example, client-agent applications that select specific titles from a variety of Web sites may channel customers to online booksellers that compete with the Company. In addition, companies that control access to transactions through network access or Web browsers could promote the Company's competitors or charge the Company a substantial fee for inclusion. See "Business -- Competition."

RELIANCE ON CERTAIN SUPPLIERS. The Company purchases a substantial majority of its products from two major vendors, Ingram Book Group ("Ingram") and Baker & Taylor, Inc. ("B&T"). Ingram is the single largest supplier and accounted for 59% of the Company's inventory purchases in 1996. The Company carries minimal inventory and relies to a large extent on rapid fulfillment from these and other vendors. The Company has no long-term contracts or arrangements with any of its vendors that guarantee the availability of merchandise, the continuation of particular payment terms or the extension of credit limits. There can be no assurance that the Company's current vendors will continue to sell merchandise to the Company on current terms or that the Company will be able to establish new or extend current vendor relationships to ensure acquisition of merchandise in a timely and efficient manner and on acceptable commercial terms. If the Company were unable to develop and maintain relationships with vendors that would allow it

10

to obtain sufficient quantities of merchandise on acceptable commercial terms, its business, prospects, financial condition and results of operations would be materially adversely affected. See "Business -- Warehousing and Fulfillment."

RISKS ASSOCIATED WITH ENTRY INTO NEW BUSINESS AREAS. The Company may choose to expand its operations by developing new Web sites, promoting new or complementary products or sales formats, expanding the breadth and depth of products and services offered or expanding its market presence through relationships with third parties. In addition, the Company may pursue the acquisition of new or complementary businesses, products or technologies, although it has no present understandings, commitments or agreements with respect to any material acquisitions or investments. There can be no assurance that the Company would be able to expand its efforts and operations in a cost-effective or timely manner or that any such efforts would increase overall market acceptance. Furthermore, any new business or Web site launched by the Company that was not favorably received by consumers could damage the Company's reputation or the Amazon.com brand. Expansion of the Company's operations in this manner would also require significant additional expenses and development, operations and editorial resources and would strain the Company's management, financial and operational resources. The lack of market acceptance of such efforts or the Company's inability to generate satisfactory revenues from such expanded services or products to offset their cost could have a material adverse effect on the Company's business, prospects, financial condition and results of operations.

TRADEMARKS AND PROPRIETARY RIGHTS. The Company regards its copyrights, service marks, trademarks, trade dress, trade secrets and similar intellectual property as critical to its success, and relies on trademark and copyright law, trade secret protection and confidentiality and/or license agreements with its employees, customers, partners and others to protect its proprietary rights. The Company pursues the registration of its trademarks and service marks in the U.S. and internationally, and has applied for the registration of certain of its trademarks and service marks. Effective trademark, service mark, copyright and trade secret protection may not be available in every country in which the Company's products and services are made available online. The Company has licensed in the past, and expects that it may license in the future, certain of its proprietary rights, such as trademarks or copyrighted material, to third parties. While the Company attempts to ensure that the quality of its brand is maintained by such licensees, there can be no assurance that such licensees will not take actions that might materially adversely affect the value of the Company's proprietary rights or reputation, which could have a material adverse effect on the Company's business, prospects, financial condition and results of operations. There can be no assurance that the steps taken by the Company to protect its proprietary rights will be adequate or that third parties will not infringe or misappropriate the Company's copyrights, trademarks, trade dress and similar proprietary rights. In addition, there can be no assurance that other parties will not assert infringement claims against the Company. The Company has been subject to claims and expects to be subject to legal proceedings and claims from time to time in the ordinary course of its business, including claims of alleged infringement of the trademarks and other intellectual property rights of third parties by the Company and its licensees. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. The Company is not currently aware of any legal proceedings pending against it. The Company has received notice from B&N of an alleged claim. See "Business -- Intellectual Property."

GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES. The Company is not currently subject to direct regulation by any domestic or foreign governmental agency, other than regulations applicable to businesses generally, and laws or regulations directly applicable to access to online commerce. However, due to the increasing popularity and use of the Internet and other online services, it is possible that a number of laws and regulations may be adopted with respect to the Internet or other online services covering issues such as user privacy, pricing, content, copyrights, distribution and characteristics and quality of products and services. Furthermore, the growth and development of the market for online commerce may prompt calls for more stringent consumer protection laws that may impose additional burdens on those companies conducting business online. The adoption of any additional laws or regulations may decrease the growth of the Internet or other online services, which could, in turn, decrease the demand for the Company's products

11

and services and increase the Company's cost of doing business, or otherwise have an adverse effect on the Company's business, prospects, financial condition and results of operations. Moreover, the applicability to the Internet and other online services of existing laws in various jurisdictions governing issues such as property ownership, sales tax, libel and personal privacy is uncertain and may take years to resolve. Any such new legislation or regulation, the application of laws and regulations from jurisdictions whose laws do not currently apply to the Company's business, or the application of existing laws and regulations to the Internet and other online services could have a material adverse effect on the Company's business, prospects, financial condition and results of operations.

SALES TAX COLLECTION. The Company does not currently collect sales or other similar taxes in respect of shipments of goods into states other than Washington. However, one or more states may seek to impose sales tax collection obligations on out-of-state companies such as the Company which engage in online commerce. In addition, any new operation in states outside Washington could subject shipments into such states to state sales taxes. A successful assertion by one or more states or any foreign country that the Company should collect sales or other similar taxes on the sale of merchandise could have a material adverse effect on the Company's business, prospects, financial condition and results of operations.

CONTROL OF THE COMPANY. Immediately upon completion of this offering, the outstanding Common Stock will be beneficially owned approximately 43% by Jeffrey P. Bezos, the Company's President, Chief Executive Officer and Chairman of the Board, and 10% by members of Mr. Bezos' family and trusts controlled by members of Mr. Bezos' family (42% and 10%, respectively, if the over-allotment option is exercised in full). The above persons and entities will hold an aggregate of approximately 53% of the outstanding voting power of the Company immediately upon completion of this offering. As a result, upon completion of this offering, the Bezos family will be able to (i) elect, or defeat the election of, any of the Company's directors, (ii) amend or prevent amendment of the Company's Restated Certificate of Incorporation or Bylaws, or (iii) effect or prevent a merger, sale of assets or other corporate transaction, and the Company's public stockholders, for so long as they hold less than 50% of the outstanding voting power of the Company, will not be able to control the outcome of such transactions. The extent of ownership by the Bezos family may have the effect of preventing a change in control of the Company or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could have an adverse effect on the market price of the Common Stock. See "Management," "Certain Transactions" and "Principal Stockholders."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE. The trading price of the Common Stock is likely to be highly volatile and could be subject to wide fluctuations in response to factors such as actual or anticipated variations in quarterly operating results, announcements of technological innovations, new sales formats or new products or services by the Company or its competitors, changes in financial estimates by securities analysts, conditions or trends in the Internet and online commerce industries, changes in the market valuations of other Internet, online service or retail companies, announcements by the Company of significant acquisitions, strategic partnerships, joint ventures or capital commitments, additions or departures of key personnel, sales of Common Stock and other events or factors, many of which are beyond the Company's control. In addition, the stock market in general, and the Nasdaq National Market and the market for Internet-related and technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. The trading prices of many technology companies' stocks are at or near historical highs and reflect price earnings ratios substantially above historical levels. There can be no assurance that these trading prices and price earnings ratios will be sustained. These broad market and industry factors may materially and adversely affect the market price of the Common Stock, regardless of the Company's operating performance. In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted against such company. Such litigation, if instituted, could result in substantial costs and a diversion of management's attention and resources, which would have a material adverse effect on the Company's business, prospects, financial condition and results of operations.

12

SHARES ELIGIBLE FOR FUTURE SALE. Sales of substantial amounts of the Company's Common Stock in the public market after this offering could adversely affect prevailing market prices for the Common Stock. The 2,500,000 shares of Common Stock offered hereby will be freely tradeable without restriction in the public market. Taking into account restrictions imposed by the Securities Act of 1933, as amended (the "Securities Act"), rules promulgated by the Securities and Exchange Commission (the "Commission") thereunder and lock-up agreements between certain stockholders and the Company or Deutsche Morgan Grenfell Inc., the number of additional shares that will be available for sale in the public market, subject in some cases to the volume and other restrictions of Rule 144 under the Securities Act, will be as follows: approximately 19,336,009 additional shares will be eligible for sale beginning 181 days after the date of this Prospectus. Approximately 993,786 remaining shares will be eligible for sale pursuant to Rule 144 upon the expiration of one-year holding periods, which will expire between November 1997 and March 1998. Deutsche Morgan Grenfell Inc. may, in its sole discretion and at any time without notice, release all or any portion of the shares subject to such lock-up agreements. Upon the closing of this offering, holders of 13,301,376 shares of Common Stock are entitled to certain rights with respect to the registration of such shares under the Securities Act. In addition, the Company intends to file a registration statement on Form S-8 under the Securities Act approximately 180 days after the date of this Prospectus to register approximately 9,534,648 shares of Common Stock reserved for issuance under the 1994 Stock Option Plan and the Company's 1997 Stock Option Plan. See "Description of Capital Stock -- Registration Rights" and "Shares Eligible for Future Sale."

ANTITAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS. Upon the closing of this offering, the Company's Board of Directors will have the authority to issue up to 10,000,000 shares of Preferred Stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by the stockholders. The rights of the holders of Common Stock will be subject to, and may be adversely affected by, the rights of the holders of any Preferred Stock that may be issued in the future. The issuance of Preferred Stock may have the effect of delaying, deferring or preventing a change in control of the Company without further action by the stockholders and may adversely affect the voting and other rights of the holders of Common Stock. The Company has no present plans to issue shares of Preferred Stock. Further, certain provisions of the Company's Restated Certificate of Incorporation and Bylaws and Delaware law could delay or make more difficult a merger, tender offer or proxy contest involving the Company. See "Description of Capital Stock."

NO SPECIFIC USE OF PROCEEDS. The Company has not designated any specific use for the net proceeds from the sale by the Company of the Common Stock offered hereby. The Company expects to use the net proceeds for general corporate purposes, including working capital to fund anticipated operating losses and capital expenditures. A portion of net proceeds may also be used to acquire or invest in complementary businesses, products and technologies. From time to time, in the ordinary course of business, the Company expects to evaluate potential acquisitions of such businesses, products or technologies. However, the Company has no present understandings, commitments or agreements with respect to any material acquisition or investment. Accordingly, management will have significant flexibility in applying the net proceeds of this offering. The failure of management to apply such funds effectively could have a material adverse effect on the Company's business, prospects, financial condition and results of operations. See "Use of Proceeds."

IMMEDIATE AND SUBSTANTIAL DILUTION. The initial public offering price is substantially higher than the book value per outstanding share of Common Stock. Accordingly, purchasers in this offering will suffer an immediate and substantial dilution of $11.50 per share in the net tangible book value of the Common Stock from the initial public offering price. Additional dilution will occur upon exercise of outstanding options granted by the Company. See "Dilution."

13

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,500,000 shares of Common Stock offered hereby, assuming an initial public offering price of $13.00 per share, are estimated to be approximately $29.4 million (approximately $33.9 million if the Underwriters' over-allotment option is exercised in full), after deducting the estimated underwriting discount and offering expenses.

The principal purposes of this offering are to obtain additional capital, to create a public market for the Common Stock, to facilitate future access by the Company to public equity markets, and to provide increased visibility and credibility in a marketplace where many of the Company's current and potential competitors are or will be publicly held companies. The Company has no specific plan for the net proceeds of the offering. The Company expects to use the net proceeds for general corporate purposes, including working capital to fund anticipated operating losses and capital expenditures. A portion of net proceeds may also be used to acquire or invest in complementary businesses, products and technologies. From time to time, in the ordinary course of business, the Company expects to evaluate potential acquisitions of such businesses, products or technologies. However, the Company has no present understandings, commitments or agreements with respect to any material acquisitions or investments. Pending use of the net proceeds for the above purposes, the Company intends to invest such funds in short-term, interest-bearing, investment-grade securities. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources."

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its capital stock. The Company currently intends to retain any future earnings of its business, and therefore does not anticipate paying any cash dividends in the foreseeable future.

14

CAPITALIZATION

The following table sets forth at December 31, 1996 the (i) actual capitalization of the Company, (ii) the pro forma capitalization of the Company, giving effect to the conversion of the Preferred Stock outstanding as of December 31, 1996 into Common Stock upon the closing of this offering, and (iii) the pro forma capitalization as adjusted to reflect the receipt of the estimated net proceeds from the sale of the 2,500,000 shares of Common Stock offered hereby at an assumed initial public offering price of $13.00 per share and after deducting the estimated underwriting discount and offering expenses payable by the Company. This table should be read in conjunction with the Company's financial statements and the notes thereto included elsewhere in this Prospectus.

                                                                     DECEMBER 31, 1996
                                                             ---------------------------------
                                                                                    PRO FORMA
                                                             ACTUAL    PRO FORMA   AS ADJUSTED
                                                             -------   ---------   -----------
                                                              (IN THOUSANDS, EXCEPT SHARE AND
                                                                      PER SHARE DATA)
Long-term obligations, net of current maturities...........  $    --    $    --      $    --

Stockholders' equity:
Preferred Stock, $0.01 par value per share; 10,000,000
  shares authorized: 569,396 shares issued and outstanding,
  actual; no shares issued and outstanding, pro forma and
  pro forma as adjusted(1).................................        6         --           --
Common Stock, $0.01 par value per share; 100,000,000 shares
  authorized; 15,900,237 shares issued and outstanding,
  actual; 19,316,613 shares issued and outstanding, pro
  forma; 21,816,613 shares issued and outstanding, pro
  forma as adjusted(2).....................................      159        193          218
Additional paid-in capital.................................    9,873      9,845       39,195
Deferred compensation......................................     (612)      (612)        (612)
Accumulated deficit........................................   (6,025)    (6,025)      (6,025)
                                                             -------   ---------   -----------
  Total stockholders' equity...............................    3,401      3,401       32,776
                                                             -------   ---------   -----------
          Total capitalization.............................  $ 3,401    $ 3,401      $32,776
                                                             =======    =======    =========


(1) Excludes 5,000 shares of Series A Preferred Stock issued in January and February 1997.

(2) Excludes 3,016,851 and 312,000 shares of Common Stock issuable upon exercise of options outstanding at December 31, 1996 under the 1994 Stock Option Plan and outside the 1994 Stock Option Plan, respectively, at a weighted average exercise price of $0.448 per share. See Note 3 of Notes to Financial Statements.

15

DILUTION

The pro forma net tangible book value of the Company at December 31, 1996 was $3.4 million, or $0.18 per share. Pro forma net tangible book value per share represents the amount of total tangible assets of the Company reduced by the Company's total liabilities, divided by the pro forma number of shares of Common Stock outstanding, after giving effect to the automatic conversion of all shares of Preferred Stock outstanding as of December 31, 1996 into an aggregate of 3,416,376 shares of Common Stock upon the closing of this offering. After giving effect to the sale by the Company of the 2,500,000 shares of Common Stock offered hereby at an assumed initial public offering price of $13.00 per share (after deducting estimated underwriting discounts and offering expenses), the adjusted pro forma net tangible book value of the Company at December 31, 1996 would have been $32.8 million, or $1.50 per share. This represents an immediate increase in pro forma net tangible book value of $1.32 per share to existing stockholders and an immediate dilution of $11.50 per share to new investors. The following table illustrates this per share dilution:

Assumed initial public offering price per share..................            $13.00
  Pro forma net tangible book value per share at December 31,
     1996........................................................  $0.18
  Increase per share attributable to new investors...............   1.32
                                                                   -----
Adjusted pro forma net tangible book value per share after this
  offering.......................................................              1.50
                                                                             ------
Dilution per share to new investors..............................            $11.50
                                                                             ======

The following table sets forth on a pro forma basis at December 31, 1996, after giving effect to the automatic conversion of all shares of Preferred Stock outstanding as of December 31, 1996 into an aggregate of 3,416,376 shares of Common Stock upon the closing of this offering, the number of shares of Common Stock purchased from the Company, the total consideration paid to the Company and the average price paid per share by existing stockholders and by investors purchasing Common Stock in this offering:

                              SHARES PURCHASED        TOTAL CONSIDERATION       AVERAGE
                            --------------------     ---------------------     PRICE PER
                              NUMBER     PERCENT       AMOUNT      PERCENT       SHARE
                            ----------   -------     -----------   -------     ---------
Existing stockholders.....  19,316,613     88.5%     $ 9,563,333     22.7%      $  0.50
New investors.............   2,500,000     11.5       32,500,000     77.3         13.00
                            ----------   -------     -----------   -------
          Total...........  21,816,613    100.0%     $42,063,333    100.0%
                            ==========   ======      ===========   ======

The foregoing tables assume no exercise of any outstanding stock options or the Underwriters' over-allotment options. See "Underwriting" for information concerning the Underwriters' over-allotment option. As of December 31, 1996, there were outstanding options to purchase 3,016,851 and 312,000 shares of Common Stock under the 1994 Stock Option Plan and outside the 1994 Stock Option Plan, respectively, at a weighted average exercise price of $0.448 per share. To the extent that the outstanding options, or any options granted in the future, are exercised, there will be further dilution to new investors.

16

SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with the financial statements and the notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere herein. The statement of operations data for the period from July 5, 1994 (inception) to December 31, 1994 and for the years ended December 31, 1995 and 1996 and the balance sheet data at December 31, 1995 and 1996 are derived from the financial statements of the Company, which have been audited by Ernst & Young LLP, independent auditors, and are included elsewhere in this Prospectus, and are qualified by reference to such financial statements and the notes thereto. The balance sheet data at December 31, 1994 are derived from the financial statements of the Company which were also audited by Ernst & Young LLP, which are not included herein. The statement of operations data for each of the four quarters in the year ended December 31, 1996 are derived from unaudited financial statements which have been prepared substantially on the same basis as the audited financial statements and, in the opinion of management of the Company, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair presentation of the results of operations for these periods. The historical results are not necessarily indicative of future results.

                          FOR THE PERIOD
                               FROM
                           JULY 5, 1994     YEAR ENDED DECEMBER                       QUARTER ENDED
                          (INCEPTION) TO            31,            ----------------------------------------------------
                           DECEMBER 31,    ---------------------   MARCH 31,   JUNE 30,    SEPTEMBER 30,   DECEMBER 31,
                               1994          1995        1996        1996        1996          1996            1996
                          --------------   ---------   ---------   ---------   ---------   -------------   ------------
                                                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS
  DATA:
Net sales................   $       --     $     511   $  15,746   $    875    $  2,230      $   4,173      $    8,468
Cost of sales............           --           409      12,287        695       1,753          3,262           6,577
                          --------------   ---------   ---------   ---------   ---------   -------------   ------------
Gross profit.............           --           102       3,459        180         477            911           1,891
Operating expenses:
  Marketing and sales....           --           200       6,090        205         696          2,251           2,938
  Product development....           38           171       2,313        263         394            755             901
  General and
    administrative.......           14            35       1,035         48         163            377             447
                          --------------   ---------   ---------   ---------   ---------   -------------   ------------
        Total operating
          expenses.......           52           406       9,438        516       1,253          3,383           4,286
                          --------------   ---------   ---------   ---------   ---------   -------------   ------------
Loss from operations.....          (52)         (304)     (5,979)      (336)       (776)        (2,472)         (2,395)
Interest income..........           --             1         202          5           9             92              96
                          --------------   ---------   ---------   ---------   ---------   -------------   ------------
Net loss.................   $      (52)    $    (303)  $  (5,777)  $   (331)   $   (767)     $  (2,380)     $   (2,299)
                          ============       =======     =======   =========    =======    ============    ============
Net loss per share(1)....   $    (0.00)    $   (0.02)  $   (0.26)  $  (0.02)   $  (0.04)     $   (0.10)     $    (0.10)
                          ============       =======     =======   =========    =======    ============    ============
Shares used in
  computation of
  net loss per
  share(1)...............       17,577        18,780      22,543     22,098      22,279         22,897          22,899
                          ============       =======     =======   =========    =======    ============    ============

                                                                                      DECEMBER 31,
                                                                        ----------------------------------------
                                                                           1994           1995           1996
                                                                        ----------     ----------     ----------
                                                                                     (IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents.............................................    $   52         $  996        $  6,248
Working capital (deficiency)..........................................       (16)           920           2,270
Total assets..........................................................        76          1,084           8,271
Long-term obligations, net of current maturities......................        --             --              --
Stockholders' equity..................................................         8            977           3,401


(1) See Note 1 of Notes to Financial Statements for information concerning the determination of net loss per share.

17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All statements, trend analysis and other information contained in this Prospectus relative to markets for the Company's products and trends in net sales, gross margin and anticipated expense levels, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect" and "intend" and other similar expressions, constitute forward-looking statements. These forward-looking statements are subject to business and economic risks, and the Company's actual results of operations may differ materially from those contained in the forward-looking statements. For a more detailed discussion of these and other business risks, see "Risk Factors."

OVERVIEW

Amazon.com is the leading online retailer of books. The Company also sells a smaller number of CDs, videotapes and audiotapes. All these products are sold through the Company's Web site.

The Company was incorporated in July 1994 and commenced offering products for sale on its Web site in July 1995. For the period from inception through July 1995, the Company had no sales and its operating activities related primarily to the development of the necessary computer infrastructure and initial planning and development of the Amazon.com site and operations. Operating expenses in 1994 were minimal. For the period beginning with the opening of the Amazon.com bookstore in July 1995 through December 31, 1995, the Company continued the foregoing activities and also focused on building sales momentum, establishing vendor relationships, marketing the Amazon.com brand and establishing fulfillment and customer service operations. The Company's cost of sales and operating expenses have increased significantly since the Company's inception. This trend reflects the costs associated with the formation of the Company, as well as increased efforts to promote the Amazon.com brand, build market awareness, attract new customers, recruit personnel, build operating infrastructure, and develop the Company's Web site and associated transaction-processing systems.

The Company has a limited operating history on which to base an evaluation of its business and prospects. The Company's prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly companies in new and rapidly evolving markets such as online commerce. Such risks for the Company include, but are not limited to, an evolving and unpredictable business model and management of growth. To address these risks, the Company must, among other things, maintain and increase its customer base, implement and successfully execute its business and marketing strategy, continue to develop and upgrade its technology and transaction-processing systems, improve its Web site, provide superior customer service and order fulfillment, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that the Company will be successful in addressing such risks, and the failure to do so could have a material adverse effect on the Company's business, prospects, financial condition and results of operations.

Since inception, the Company has incurred significant losses, and as of December 31, 1996 had an accumulated deficit of $6.0 million. The Company believes that its success will depend in large part on its ability to (i) extend its brand position, (ii) provide its customers with outstanding value and a superior shopping experience, and (iii) achieve sufficient sales volume to realize economies of scale. Accordingly, the Company intends to invest heavily in marketing and promotion, site development, and technology and operating infrastructure development. The Company also intends to offer attractive pricing programs, which will reduce its gross margins. Because the Company has relatively low product gross margins, achieving profitability given planned investment levels depends upon the Company's ability to generate and sustain substantially increased revenue levels. As a result, the Company believes that it will incur substantial operating losses for the foreseeable future, and that the rate at which such losses will be incurred

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will increase significantly from current levels. Although the Company has experienced significant revenue growth in recent periods, such growth rates are not sustainable and will decrease in the future. In view of the rapidly evolving nature of the Company's business and its limited operating history, the Company believes that period-to-period comparisons of its operating results are not necessarily meaningful and should not be relied upon as an indication of future performance.

RESULTS OF OPERATIONS -- YEARS ENDED DECEMBER 31, 1995 AND 1996

Net Sales. Net sales are comprised of the selling price of books and other merchandise sold by the Company, net of returns, as well as outbound shipping and handling charges. Net sales grew from $511,000 in 1995 to $15.7 million in 1996 as a result of the significant growth of the Company's customer base, repeat purchases from the Company's existing customers and six additional months of sales in 1996. International sales represented approximately 39% and 33% of net sales in 1995 and 1996, respectively.

Cost of Sales. Cost of sales consists primarily of the costs of merchandise sold to customers and outbound and inbound shipping costs. Cost of sales increased substantially in absolute dollars during 1996, reflecting the Company's increased sales volume. The Company's gross profit margin was approximately 20% of net sales in 1995 and approximately 22% of net sales in 1996.

The Company believes that offering its customers attractive prices is an essential component of its business strategy. Accordingly, the Company offers discounts on a broad selection of books. In March 1997, the Company began discounting the Amazon.com 500 and other featured books by 40% from list price. The Company may in the future expand or increase the discounts it offers to its customers and may otherwise alter its pricing structures and policies. The Company anticipates that its March 1997 pricing change and any further price reductions will reduce gross margins below those experienced during 1995 and 1996.

Marketing and Sales Expenses. Marketing and sales expenses consist primarily of advertising, public relations and promotional expenditures, as well as payroll and related expenses for personnel engaged in marketing, selling and fulfillment activities. Marketing and sales expenses increased from $200,000 in 1995 to $6.1 million in 1996. Marketing and sales expenses as a percentage of net sales were 39% in each of 1995 and 1996. The increase in marketing and sales expenses was primarily attributable to expansion of the Company's online and print advertising, public relations and other promotional expenditures, as well as to increased personnel and related expenses required to implement the Company's marketing strategy and fulfill customer demand. The Company intends to pursue an aggressive branding and marketing campaign and therefore expects marketing and sales expenses to increase significantly in absolute dollars.

Product Development Expenses. Product development expenses consist principally of payroll and related expenses for development, editorial, and network operations personnel and consultants, systems and telecommunications infrastructure and costs of acquired content. Product development expenses increased from $171,000 in 1995 to $2.3 million in 1996. Product development expenses as a percentage of net sales were 33% in 1995 and 15% in 1996. The increase in product development expenses was primarily attributable to increased staffing and associated costs related to enhancing the features, content and functionality of the Company's Web site transaction-processing systems, as well as increased investments in systems and telecommunications infrastructure. Such expenses decreased significantly as a percentage of net sales in 1996 due to the significant increase in 1996 net sales. To date, all product development costs have been expensed as incurred. The Company believes that continued investment in product development is critical to attaining its strategic objectives and, as a result, expects product development expenses to increase significantly in absolute dollars.

General and Administrative Expenses. General and administrative expenses consist of payroll and related expenses for executive, accounting and administrative personnel, recruiting, professional fees and other general corporate expenses. General and administrative expenses increased

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from $35,000 in 1995 to $1.0 million in 1996. General and administrative expenses as a percentage of net sales were 7% in each of 1995 and 1996. The increase in general and administrative expenses was primarily due to increased salaries and related expenses associated with the hiring of additional personnel, and increases in professional fees and travel. The Company expects general and administrative expenses to increase in absolute dollars as the Company expands its staff and incurs additional costs related to the growth of its business and being a public company.

Interest Income. Interest income consists of earnings on the Company's cash and cash equivalents. Interest income increased from $1,000 in 1995 to $202,000 in 1996. The increase was attributable to earnings on higher average cash and cash equivalents balances during the year.

Income Taxes. The Company has had a net loss for each period since inception. As of December 31, 1996, the Company had approximately $5.5 million of net operating loss carryforwards for federal income tax purposes, which expire in 2011. The Company has provided a full valuation allowance on the deferred tax asset, consisting primarily of net operating loss carryforwards, because of uncertainty regarding its realizability. See Note 4 of Notes to Financial Statements.

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain unaudited quarterly statement of operations data for each of the four quarters during the year ended December 31, 1996. In the opinion of management, this information has been prepared substantially on the same basis as the audited financial statements appearing elsewhere in this Prospectus, and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the unaudited quarterly results. The quarterly data should be read in conjunction with the audited financial statements of the Company and the notes thereto appearing elsewhere in this Prospectus. The operating results for any quarter are not necessarily indicative of the operating results for any future period.

                                                             QUARTER ENDED
                                          ----------------------------------------------------
                                           MARCH       JUNE
                                            31,         30,      SEPTEMBER 30,    DECEMBER 31,
                                           1996        1996          1996             1996
                                          -------     -------    -------------    ------------
                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
Net sales...............................  $   875     $ 2,230       $ 4,173         $  8,468
Cost of sales...........................      695       1,753         3,262            6,577
                                          -------     -------    -------------    ------------
Gross profit............................      180         477           911            1,891
Operating expenses:
  Marketing and sales...................      205         696         2,251            2,938
  Product development...................      263         394           755              901
  General and administrative............       48         163           377              447
                                          -------     -------    -------------    ------------
          Total operating expenses......      516       1,253         3,383            4,286
                                          -------     -------    -------------    ------------
Loss from operations....................     (336)       (776)       (2,472)          (2,395)
Interest income.........................        5           9            92               96
                                          -------     -------    -------------    ------------
Net loss................................  $  (331)    $  (767)      $(2,380)        $ (2,299)
                                          =======     =======    ==========       ==========
Net loss per share......................  $ (0.02)    $ (0.04)      $ (0.10)        $  (0.10)
                                          =======     =======    ==========       ==========
Shares used in computation of net loss
  per share.............................   22,098      22,279        22,897           22,899
                                          =======     =======    ==========       ==========

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                                                       AS A PERCENTAGE OF NET SALES
                                         ---------------------------------------------------------
                                         MARCH 31,     JUNE 30,     SEPTEMBER 30,     DECEMBER 31,
                                           1996          1996           1996              1996
                                         ---------     --------     -------------     ------------
Net sales..............................    100.0%        100.0%         100.0%            100.0%
Cost of sales..........................     79.4          78.6           78.2              77.7
                                         ---------     --------     -------------     ------------
Gross profit...........................     20.6          21.4           21.8              22.3
Operating expenses:
  Marketing and sales..................     23.4          31.2           53.9              34.7
  Product development..................     30.1          17.7           18.1              10.6
  General and administrative...........      5.5           7.3            9.0               5.3
                                         ---------     --------     -------------     ------------
          Total operating expenses.....     59.0          56.2           81.0              50.6
                                         ---------     --------     -------------     ------------
Loss from operations...................    (38.4)        (34.8)         (59.2)            (28.3)
Interest income........................      0.6           0.4            2.2               1.1
                                         ---------     --------     -------------     ------------
Net loss...............................    (37.8)%       (34.4)%        (57.0)%           (27.2)%
                                         =======        ======      ==========        ==========

The Company's net sales have increased significantly in all quarters presented due to the expansion of the Company's customer base and repeat purchases by existing customers. International sales have grown less rapidly than domestic sales and have decreased as a percentage of net sales during each of the four quarters in the year ended December 31, 1996. All operating expense categories increased in absolute dollars in each quarter, reflecting increased spending on developing, delivering, supporting and marketing the Company's business and products, and building the Company's market presence. This trend accelerated in the third quarter of 1996, particularly with respect to marketing and sales expenses, following the Preferred Stock financing in June 1996.

As a result of the Company's limited operating history and the emerging nature of the markets in which it competes, the Company is unable to accurately forecast its revenues. The Company's current and future expense levels are based largely on its investment plans and estimates of future revenues and are to a large extent fixed. Sales and operating results generally depend on the volume of, timing of and ability to fulfill orders received, which are difficult to forecast. The Company may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues in relation to the Company's planned expenditures would have an immediate adverse effect on the Company's business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service or marketing decisions that could have a material adverse effect on its business, prospects, financial condition and results of operations. See "Business -- Competition."

The Company expects to experience significant fluctuations in its future quarterly operating results due to a variety of factors, many of which are outside the Company's control. Factors that may adversely affect the Company's quarterly operating results include (i) the Company's ability to retain existing customers, attract new customers at a steady rate and maintain customer satisfaction, (ii) the Company's ability to manage inventory and fulfillment operations and maintain gross margins, (iii) the announcement or introduction of new sites, services and products by the Company and its competitors, (iv) price competition or higher wholesale prices in the industry, (v) the level of use of the Internet and online services and increasing consumer acceptance of the Internet and other online services for the purchase of consumer products such as those offered by the Company, (vi) the Company's ability to upgrade and develop its systems and infrastructure and attract new personnel in a timely and effective manner, (vii) the level of traffic on the Company's Web site, (viii) technical difficulties, system downtime or Internet brownouts, (ix) the amount and timing of operating costs and capital expenditures relating to expansion of the Company's business, operations and infrastructure, (x) the number of popular books introduced during the period, (xi) the level of merchandise returns experienced by the

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Company, (xii) governmental regulation, and (xiii) general economic conditions and economic conditions specific to the Internet, online commerce and the book industry.

The Company expects that it will experience seasonality in its business, reflecting a combination of seasonal fluctuations in Internet usage and traditional retail seasonality patterns. Internet usage and the rate of Internet growth may be expected to decline during the summer. Further, sales in the traditional retail book industry are significantly higher in the fourth calendar quarter of each year than in the preceding three quarters.

Due to the foregoing factors, in one or more future quarters the Company's operating results may fall below the expectations of securities analysts and investors. In such event, the trading price of the Common Stock would likely be materially adversely affected.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has financed its operations primarily through private sales of Common Stock and Preferred Stock which, through December 31, 1996, totaled $1.6 million and $8.0 million, respectively.

Net cash used in operating activities was $232,000 in 1995 and $1.7 million in 1996. Cash used in operating activities in 1995 was attributable to a net loss of $303,000 and increases in inventories and prepaid expenses, partially offset by an increase in accounts payable and accrued expenses, as well as depreciation. For 1996, cash used in operating activities resulted from a net loss of $5.8 million and increases of $554,000 in inventories, $307,000 in prepaid expenses and $146,000 in deposits, largely offset by increases of $4.8 million in accounts payable and accrued expenses and $286,000 in depreciation. Net cash used in investing activities of $52,000 and $1.2 million for 1995 and 1996, respectively, were primarily attributable to purchases of equipment.

Cash flows provided by financing activities of $1.2 million in 1995 consisted primarily of proceeds from the issuance of Common Stock and the exercise of stock options. Cash flow of $8.2 million attributable to financing activities in 1996 consisted of net proceeds of $8.0 million from the issuance of Preferred Stock and $231,000 from the sale of Common Stock and the exercise of Common Stock options.

As of December 31, 1996, the Company had $6.2 million of cash and cash equivalents. As of that date, the Company's principal commitments consisted of obligations outstanding under operating leases. Although the Company has no material commitments for capital expenditures, it anticipates a substantial increase in its capital expenditures and lease commitments consistent with anticipated growth in operations, infrastructure and personnel. The Company may establish additional warehouse locations, which will require it to commit to additional lease obligations and stock inventories, and to purchase equipment and install leasehold improvements. In the future, the Company may support a larger merchandise inventory in order to provide better availability to customers and achieve purchasing efficiencies.

The Company believes that the net proceeds from this offering, together with its current cash and cash equivalents, will be sufficient to meet its anticipated cash needs for working capital and capital expenditures for the next 12 months. If cash generated from operations is insufficient to satisfy the Company's liquidity requirements, the Company may seek to sell additional equity or debt securities or to obtain a credit facility. The sale of additional equity or convertible debt securities could result in additional dilution to the Company's stockholders. There can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all.

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BUSINESS

Amazon.com is the leading online retailer of books. Since opening for business as "Earth's Biggest Bookstore" in July 1995, the Amazon.com bookstore has quickly become one of the most widely known, used and cited commerce sites on the Web. Amazon.com strives to offer its customers compelling value through innovative use of technology, broad selection, high-quality content, a high level of customer service, competitive pricing and personalized services. As an online bookseller, Amazon.com has virtually unlimited online shelf space and can offer a vast selection through an efficient search and retrieval interface. The Company offers more than 2.5 million titles, including most of the estimated 1.5 million English-language books believed to be in print, more than one million out-of-print titles believed likely to be in circulation and a smaller number of CDs, videotapes and audiotapes. Beyond the benefits of selection, purchasing books from Amazon.com is more convenient than shopping in a physical bookstore because online shopping can be done 24 hours a day and does not require a trip to a store. Furthermore, Amazon.com's high inventory turnover, lack of investment in expensive retail real estate and reduced personnel requirements give it meaningful structural economic advantages relative to traditional booksellers.

The Company has grown rapidly since first opening its bookstore. Through December 31, 1996, Amazon.com had sales of more than $16 million to approximately 180,000 customer accounts in over 100 countries. Compounded quarterly sales growth exceeded 100% from the first to the fourth quarter of 1996. Average daily visits (not "hits") have grown from approximately 2,200 in December 1995 to approximately 50,000 in December 1996, and repeat customers account for over 40% of orders. Time magazine rated Amazon.com one of the 10 "Best Websites of 1996." Growth rates experienced to date are not sustainable. See "Risk Factors -- Limited Operating History; Accumulated Deficit; Anticipated Losses."

INDUSTRY BACKGROUND

Growth of the Internet and Online Commerce

The Internet is an increasingly significant global medium for communications, content and online commerce. International Data Corporation ("IDC") estimates that the number of Web users grew to approximately 35 million by the end of 1996 and will grow to approximately 163 million by 2000. Growth in Internet usage has been fueled by a number of factors, including the large and growing installed base of personal computers in the workplace and home, advances in the performance and speed of personal computers and modems, improvements in network infrastructure, easier and cheaper access to the Internet and increased awareness of the Internet among businesses and consumers.

The increasing functionality, accessibility and overall usage of the Internet and online services have made them an attractive commercial medium. The Internet and other online services are evolving into a unique sales and marketing channel, just as retail stores, mail-order catalogs and television shopping have done. Online retailers can interact directly with customers by frequently adjusting their featured selections, editorial insights, shopping interfaces, pricing and visual presentations. The minimal cost to publish on the Web, the ability to reach and serve a large and global group of customers electronically from a central location, and the potential for personalized low-cost customer interaction provide additional economic benefits for online retailers. Unlike traditional retail channels, online retailers do not have the burdensome costs of managing and maintaining a significant retail store infrastructure or the continuous printing and mailing costs of catalog marketing. Because of these advantages over traditional retailers, online retailers have the potential to build large, global customer bases quickly and to achieve superior economic returns over the long term. An increasingly broad base of products is being sold successfully online, including computers, travel services, brokerage services, automobiles and music, as well as books. IDC estimates that the total value of goods and services purchased over the Web grew from $318 million in 1995, to an annualized run rate of $5.4 billion in December 1996, and will increase to $95 billion in 2000.

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Traditional Book Industry

The worldwide book industry is large, growing and relatively fragmented. According to Euromonitor, U.S. book sales were estimated to be approximately $26 billion in 1996 and are expected to grow to approximately $30 billion in 2000, while worldwide book sales were estimated at approximately $82 billion in 1996 and are expected to grow to approximately $90 billion in 2000. Books In Print lists approximately 50,000 publishers. Publishers sell books both directly to retailers and to a network of distributors. Distributors serve as the primary vendors for many retailers and carry up to 350,000 of the best-selling titles. The two largest U.S. retailers, which together are estimated to account for less than 25% of total U.S. book sales, have focused aggressively on superstore growth and have closed many of their smaller mall stores. Based on publicly available data, the Company estimates that such superstores carry an average of approximately 130,000 titles, with the largest stores carrying up to 175,000 titles on site. There are thousands of independent bookstores in the U.S., which typically carry a more limited selection of titles in a small selling space and have recently come under intense competitive pressure from the superstore format.

Several characteristics of the traditional book industry have created inefficiencies for all participants. Physical store-based book retailers must make significant investments in inventory, real estate and personnel for each retail location. This capital and real estate intensive business model, among other things, limits the amount of inventory that can be economically carried in any location. The average superstore stocks less than 10% of the estimated 1.5 million English-language books believed to be in print, which limits customer selection and available retail shelf space for the majority of published titles. In addition, publishers typically offer generous rights of return to their customers and, as a result, effectively bear the risk of their customers' demand forecasting which encourages overordering. As a result, returns in the book industry are high, creating substantial additional costs. Finally, publishers and traditional book retailers cannot easily obtain demographic and behavioral data about customers, limiting opportunities for direct marketing and personalized services.

THE AMAZON.COM SOLUTION

Amazon.com was founded to capitalize on the opportunity for online book retailing. The Company believes that the retail book industry is particularly suited to online retailing for many compelling reasons. An online bookseller has virtually unlimited online shelf space and can offer customers a vast selection through an efficient search and retrieval interface. This is particularly valuable in the book market because the extraordinary number of different items precludes even the largest physical bookstore from economically stocking more than a small minority of available titles. In addition, by serving a large and global market through centralized distribution and operations, online booksellers can realize significant structural cost advantages relative to traditional booksellers. Furthermore, unlike with clothing or other personal products, consumers can make educated book purchase decisions using online information. Books can be selected and sampled effectively through online synopses, excerpts and reviews and have consistent quality across different retailers. In addition, the demographic overlap between frequent book buyers and Internet users is high. Further, online bookselling promises significant benefits for publishers because centralized distribution is believed to greatly reduce product returns and because consumer preference information can be efficiently captured and utilized.

Since opening for business as "Earth's Biggest Bookstore" in July 1995, the Amazon.com bookstore has quickly become one of the most widely known, used and cited commerce sites on the Web. By offering customers an authoritative selection of more than 2.5 million titles, as well as competitive pricing and outstanding customer service, Amazon.com believes it has achieved a preeminent position among online retailers. Key components of the Amazon.com solution include:

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Authoritative Selection. Amazon.com offers a breadth of selection that would be economically impractical to stock in a physical bookstore or to include in a mail-order catalog. Amazon.com offers more than 2.5 million titles through a consistent search and retrieval interface, including most of the estimated 1.5 million English-language books believed to be in print, more than one million out-of-print titles believed likely to be in circulation and a smaller number of CDs, videotapes and audiotapes. In contrast, the average retail superstore stocks only 130,000 titles, fewer than 10% of titles in print.

Online Store Economics. As an online bookseller, Amazon.com enjoys meaningful structural economic advantages relative to traditional retailers. As a result of its online business model and centralized distribution, Amazon.com offers significantly improved inventory turnover, eliminates investment in expensive retail real estate and dramatically reduces personnel requirements. Further, Amazon.com serves a global market through centralized operations, allowing its investments in Web sites, content, marketing and technology to be leveraged over a relatively large sales base.

Customer Convenience. Beyond the benefits of selection, purchasing books from Amazon.com is more convenient than shopping in a physical bookstore because the Amazon.com bookstore is open 24 hours per day and shopping does not require a trip to a store. Books can be shipped directly to the customer's home or office. The Company believes that customers may buy more books because they have more hours to shop, can act immediately on a purchase impulse and can locate books that are hard to find. Because the Amazon.com bookstore has a global reach, it can deliver an extremely broad selection to customers in rural, international or other locations that cannot support large-scale physical bookstores.

Compelling Content. Amazon.com has attracted a high-quality editorial staff and delivers relevant, informative and entertaining editorial and other content, including synopses, reviews and excerpts. In addition, reviews by authors, other users, publishers and third-party reviewers provide diverse and often stimulating points of view to inform and entertain customers while shopping.

Personalized Service. Amazon.com currently offers the Eyes and Editors notification services and has announced the MatchMaker collaborative filtering service for its customers. Over time, the Company can accumulate substantial behavior and preference information that will allow it to provide increasingly rich value-added services to its customers.

Benefits to Vendors. Amazon.com's methods of online bookselling offer substantial benefits to publishers. Because Amazon.com centralizes distribution and orders most products based on actual customer demand, it believes that its returns of books to publishers and wholesalers are significantly below industry norms. The Company believes its market approach may increase sales of many second- and third-tier titles that are not typically stocked in physical bookstores. In addition, the Company believes it will be able to help publishers target customers for particular product offerings.

STRATEGY

Amazon.com's objective is to be the leading online retailer of information-based products and services, with an initial focus on books. The Company plans to attain this goal through the following key strategies:

Create Customer Loyalty by Delivering a Compelling Value Proposition. The Company's goal is to be the authoritative source for books and information-based products by delivering to its customers the benefits of online commerce and by maintaining relentless customer focus. Amazon.com strives to offer its customers compelling value through innovative use of technology, broad selection, high-quality content, a high level of customer service, competitive pricing and personalized services. In addition, the Company seeks to offer its customers a high-quality shopping experience through informative and entertaining editorial content, as well as simple and efficient navigation and search capabilities.

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Build Strong Brand Recognition. Amazon.com is a leading brand name in online commerce and believes that it is benefiting from first mover advantages and momentum. The Company's strategy is to promote, advertise and increase its brand equity and visibility through excellent service and a variety of marketing and promotional techniques, including advertising on leading Web sites and other media, conducting an ongoing public relations campaign and developing business alliances and partnerships.

Create a Superior Economic Model. Because it is not burdened by the costs or legacy of a physical store network and related personnel, the Company believes it has an inherent economic advantage relative to traditional retailers. The Company's goal is to capitalize on this advantage by aggressively driving revenue growth to achieve economies of scale and by incorporating technological advances throughout its business.

Maintain Technology Focus and Expertise. A state-of-the-art interactive commerce platform is necessary to enhance the Amazon.com service offering, leverage the unique characteristics of online retailing, and enable a superior economic model. Amazon.com's internal development group has expended and will continue to expend substantial efforts developing, acquiring and implementing technology-driven enhancements to its Web site and transaction-processing systems. Among other technology objectives, the Company intends to provide increasingly valuable personalized service programs, make the user interface as intuitive, engaging and fast as possible and continuously improve the efficiency of its fulfillment activities.

Build Strong Publisher and Distributor Relationships. The Company views its publishers and distributors as customers and seeks to utilize the substantial structural advantages inherent in its business model to build strong relationships with them. Amazon.com's current inventory management practices result in many fewer returns than are traditional in the industry. In addition, the demographic and purchasing data accumulated by the Company will enable it to help publishers target customers for particular product offerings. Through targeted marketing and virtually unlimited online shelf space, the Company can offer publishers enhanced promotional opportunities for new authors, new titles and second- and third-tier titles.

Attract and Retain Exceptional Employees. The Company believes that versatile and experienced employees, management and directors provide significant advantages in the rapidly evolving market in which it competes. Since inception, the Company has devoted and will continue to devote substantial efforts to building a talented employee base and to attracting an experienced management team with a track record in large and fast-growing organizations.

Pursue Incremental Revenue Opportunities. The Company intends to leverage its brand, online commerce experience, operating infrastructure and customer base to broaden its presence and develop additional revenue opportunities. For example, the Company's Associates Program allows the Company to work collaboratively with owners of other Web sites, and the Company believes that it can further expand its reach through alliances with other Web sites, online service providers and other relationships. In addition, the Company will consider developing incremental revenue opportunities through affiliated or related sites, related product areas, geographic expansion or acquisition of complementary businesses, products or technologies. Finally, the Company's customer demographic and substantial site traffic create a meaningful opportunity for advertising sales.

THE AMAZON.COM BOOKSTORE

Customers enter the Amazon.com bookstore through the Company's Web site and, in addition to ordering books, can conduct targeted searches, browse from among highlighted selections, bestsellers and other features, read and post reviews, register for personalized services, participate in promotions and check order status.

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[PICTURES OF THE COMPANY'S WELCOME, SEARCH, REVIEW AND ORDERING WEB PAGES]

Browsing. The Amazon.com site offers visitors a variety of highlighted subject areas and special features. Popular features include Editors' Favorites organized by subject matter, as well as Amazon.com and national bestsellers lists. The Amazon.com 500 features 500 current bestsellers and titles that Amazon.com predicts will be future bestsellers at 40% discounts from list price, including various focus lists such as the Computer 50 and the Science Fiction
50. In addition, the Spotlight section features different interesting titles every day, selected by the Company's highly skilled in-house and contract editors, based on criteria such as books in the news and upcoming releases. Book of the Day focuses on a particular highlighted book chosen to provide readers a mix of popular, unusual, entertaining and topical selections. A selection of noteworthy titles is highlighted directly on the home page, as is Titles in the News, which lists titles recently featured in sources such as The New York Times Book Review, National Public Radio, The Atlantic Monthly, Entertainment Weekly, Oprah, Wired and others. In addition, the Amazon.com home page presents a variety of other features of topical or current-event interest, such as a Women's History Month reading list and a guide to books written by participants and speakers at notable industry conferences. The site also periodically offers advance glimpses into new or upcoming releases, such as the recently featured first two chapters of John Grisham's new novel, The Partner. Other features include the Hot This Week section of best-selling new or prereleased titles and Award Winners, a list of nominees and winners of over 20 different literary prizes, including the Nobel Prize for Literature and the Pulitzer Prize. To enhance the shopping experience and increase sales, the Company features various books on a rotating basis throughout the store. As a customer proceeds through the catalog, he or she encounters cover art of featured books. Clicking with the mouse on any of these images pulls up more information about the featured book, as well as a button which, if clicked on, adds the book to the customer's order. These images of featured books appear, one or two at a time, in addition to whatever material the customer specifically requested.

Searching. A primary feature of the Amazon.com bookstore is its interactive, searchable catalog of more than 2.5 million titles. The Company provides a selection of search tools to find books based on title, subject, author, keyword, publication date or ISBN. Customers can also use more complex and precise search tools such as Boolean search queries. The Company licenses some of its catalog and other information from third parties.

Reviews and Content. The Amazon.com store offers numerous forms of content to entertain and engage readers, enhance the customer's shopping experience and encourage purchases. Numerous author interviews are presented, along with reviews from professional sources and other consumers. Various types of content are available for particular titles, including cover art, synopses, annotations, interviews by authors or reviews by other readers. Customers are encouraged to write and post their own reviews, and authors are invited to "self-administer" interviews by answering pre-defined questions.

Online Community. By creating an online community, the Company hopes to provide customers with an inviting and familiar experience that will encourage them to return frequently to the site and to interact with other users, and that will promote loyalty and repeat purchase. Amazon.com invites readers, authors and publishers to post reviews, sponsors review competitions and provides a forum for author interviews. Reviewers and authors are encouraged to provide their e-mail addresses to facilitate interaction with other readers.

Personalized Services. Amazon.com currently offers two free e-mail notification services. The Company's Eyes service allows customers to specify an author, title or subject area and receive notice automatically when a new book is published that matches their criteria. Typically, a few weeks prior to the release date of a matching new book, the Company's Eyes book notification service software sends the customer an e-mail message containing prerelease information. The Company's Editors service draws on experts in more than 50 subjects and genres to send e-mail notices highlighting interesting information on the chosen subject or genre. The editors study

27

advance reviews and preview galleys to find titles of interest to subscribers. Subscribers receive e-mail messages periodically in selected subject areas.

MatchMaker Collaborative Filtering. Amazon.com announced its MatchMaker collaborative filtering service in March 1997. MatchMaker will function as an expert reviewer that develops a relationship with customers, helping them to find books they may like based on their preferences. MatchMaker will match the preferences of people to one another, drawing from a pool of titles chosen by other Amazon.com customers who share similar interests and tastes.

Ordering. To purchase books, customers simply click on a button to add books to their virtual shopping baskets. Customers can add and subtract books from their shopping baskets as they browse, prior to making a final purchase decision, just as in a physical store. To execute orders, customers click on the buy button and are prompted to supply shipping and credit card details, either by e-mail or by telephone. This information is stored on the Company's secure server and need not be provided again by repeat customers. The personal password allows repeat customers to automatically access their previously provided shipping and credit card information, as well as their book notification profiles. The Company's system automatically confirms each order by e-mail to the customer within minutes after the order is placed and advises customers by e-mail shortly after orders are shipped.

Availability and Fulfillment. Some of the Company's titles are available for immediate shipment, others are available for shipment within 48 to 72 hours and the remainder of in-print titles are generally available within four to six weeks, although some titles may not be available at all. Out-of-print titles generally are available in two to six months, although some titles may not be available at all. Customers select from a variety of delivery options, including overnight and various international shipping options, as well as giftwrapping services. The Company uses e-mail to notify customers of order status under various conditions. If a hard-to-find book is discovered to have a price higher than the estimate at the time the customer's order was placed, the Company notifies the customer and seeks approval for sale at the higher price. The Company seeks to provide rapid and reliable fulfillment of customer orders, and intends to continue to improve its availability and fulfillment in the future.

Out-of-Print. Amazon.com began offering an out-of-print book service in March 1997. Over one million out-of-print titles are listed in the Company's catalog. Because of the difficulty of sourcing out-of-print titles, customers are advised to expect two- to six-month delivery times and that the books may not be available at all.

MARKETING AND PROMOTION

The Company's goal is to be the worldwide authoritative source for books. Amazon.com's marketing strategy is designed to strengthen the Amazon.com brand name, increase customer traffic to the Amazon.com bookstore, build strong customer loyalty, maximize repeat purchases and develop incremental revenue opportunities.

Amazon.com intends to build customer loyalty by creatively applying technology to deliver personalized programs and service, as well as creative and flexible merchandising. The Company will be able to provide increasingly targeted and customized services by using the extensive customer preference and behavioral data obtained as a result of its online experience and market share. The Internet allows rapid and effective experimentation and analysis, instant user feedback and efficient "redecorating of the store for each and every customer," all of which the Company intends to incorporate in its merchandising. In contrast to traditional direct-marketing efforts, the Company's personalized notification services send customers highly customized notices at their request. By offering customers a compelling and personalized value proposition, the Company seeks to increase the number of visitors that make a purchase, to encourage repeat visits and purchases and to extend customer retention. Loyal, satisfied customers also generate word-of-

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mouth advertising and awareness, and are able to reach thousands of other customers and potential customers because of the reach of online communication.

The Company employs a variety of media, program and product development, business development and promotional activities to achieve these goals.

Online Service and Internet Advertising. The Company places advertisements on various high-profile and high-traffic conduit Web sites, including CNET, Yahoo!, Pointcast, Excite, Lycos, Quote.com and CNN. These advertisements usually take the form of banners that encourage readers to click through directly to the Amazon.com bookstore.

Advertising and Public Relations. The Company engages in a coordinated program of print advertising in specialized and general circulation newspapers and magazines, such as The New York Times Book Review and Wired Magazine. In the future it may begin advertising in other media. As a result of its public relations activities as well as unsolicited invitations, the Company has been featured in a wide variety of television shows, articles and radio programs and as part of the "What's New" and "What's Cool" sections of Netscape and Yahoo!, respectively.

Associates Program. The Company extends its market presence through its Associates Program, which included over 4,800 registered members as of December 31, 1996. The program enables Associate Web sites to offer books to their audiences for fulfillment by Amazon.com. The Associate embeds a hyperlink to Amazon.com's site, together with books recommended for that Associate's targeted customer base. The customer is automatically connected to Amazon.com's site and may place his or her order. The Associate is able to offer enhanced services and recommendations, avoiding the expenses associated with ordering and fulfillment, and receives a commission for certain orders. Prominent Associate sites include Netscape Developer's Bookstore, The Village Voice and Upside.com.

Personalized Shopping Services. The Company offers personalized notification and shopping services through its Eyes and Editors services and has recently announced its MatchMaker collaborative filtering system.

Customer Gifts. The Company has in the past sent, and may in the future send, gifts to its customer base. These activities are designed to increase customer loyalty and provide customers with a continuing reminder of the Amazon.com brand and Web site.

CUSTOMER SERVICE

The Company believes that its ability to establish and maintain long-term relationships with its customers and encourage repeat visits and purchases depends, in part, on the strength of its customer support and service operations and staff. Furthermore, the Company values frequent communication with and feedback from its customers in order to continually improve the store and its services. Amazon.com offers nine e-mail addresses to enable customers to request information and to encourage feedback and suggestions. The Company's team of customer support and service personnel are responsible for handling general customer inquiries, answering customer questions about the ordering process, and investigating the status of orders, shipments and payments. Amazon.com also offers a toll-free line for customers who are reluctant to enter their credit card numbers through the Web site. The Company has automated certain of the tools used by its customer support and service staff and intends to actively pursue enhancements to and further automation of its customer support and service systems and operations.

WAREHOUSING AND FULFILLMENT

The Company sources product from a network of book distributors and publishers. The Company carries minimal inventory and relies to a large extent on rapid fulfillment from major distributors and wholesalers which carry a broad selection of titles. The Company purchases a substantial majority of its products from Ingram and B&T. Ingram is the single largest supplier and

29

accounted for 59% of the Company's inventory purchases in 1996. Of the more than 2.5 million titles offered by the Company, up to 400,000 are currently supplied by book distributors and wholesalers, including Ingram and B&T.

The Company utilizes automated interfaces for sorting and organizing its orders to enable it to achieve the most rapid and economic purchase and delivery terms possible. The Company's proprietary software selects the orders that can be filled quickly via electronic interfaces with vendors, and forwards remaining orders to its special order group. Under the Company's arrangements with its distributors, electronically ordered books often are shipped by the distributor within hours of receipt of an order from Amazon.com. The Company has developed customized information systems and dedicated ordering personnel that specialize in sourcing hard-to-find books. The Company currently processes all sales through its warehouse in Seattle.

TECHNOLOGY

The Company has implemented a broad array of site management, search, customer interaction, transaction-processing and fulfillment services and systems using a combination of its own proprietary technologies and commercially available, licensed technologies. The Company's current strategy is to license commercially available technology whenever possible rather than seek internally developed solutions. Amazon.com focuses its development efforts on creating and enhancing the specialized, proprietary software that is unique to its business.

The Company uses a set of applications for accepting and validating customer orders, organizing, placing and managing orders with suppliers, receiving product and assigning it to customer orders, and managing shipment of books to customers based on various ordering criteria. The Company's transaction-processing systems handle millions of items, six different availability statuses, gift-wrapping requests and multiple shipment methods, and allow the customer to choose whether to receive single or several shipments based on availability. These applications also manage the process of accepting, authorizing and charging customer credit cards. In addition, the Company's systems allow it to maintain ongoing automated e-mail communications with customers throughout the ordering process at a negligible incremental cost. These systems automate many routine communications entirely, facilitate management of customer e-mail inquiries and allow customers to, on a self-service basis, check order status, change their e-mail address or password, and check subscriptions to personal notification services. The Amazon.com bookstore also incorporates a variety of search and database tools.

A group of systems administrators and network managers monitor and operate the Company's Web site, network operations and transaction-processing systems. The continued uninterrupted operation of the Company's Web site and transaction-processing systems is essential to its business, and it is the job of the site operations staff to ensure, to the greatest extent possible, the reliability of the Company's Web site and transaction-processing systems. The Company uses the services of two Internet service providers, UUNet Technologies, Inc. and Interconnected Associates, Inc., to obtain connectivity to the Internet over multiple dedicated T1 lines.

The Company's transaction-processing system is not integrated with the remainder of the Company's accounting and financial systems. As a result, the Company's current management information system, which produces frequent operational reports, is inefficient with respect to traditional accounting-oriented reporting and requires a significant amount of manual effort to prepare information for financial and accounting reporting. See "Risk Factors -- Risk of Capacity Constraints; Reliance on Internally Developed Systems; System Development Risks," "-- Risk of System Failure; Single Site and Order Interface" and "-- Online Commerce Security Risks."

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COMPETITION

The online commerce market, particularly over the Internet, is new, rapidly evolving and intensely competitive, which competition the Company expects to intensify in the future. Barriers to entry are minimal, and current and new competitors can launch new sites at a relatively low cost. In addition, the retail book industry is intensely competitive. The Company currently or potentially competes with a variety of other companies. These competitors include (i) various online booksellers and vendors of other information-based products such as CDs and videotapes, including Book Stacks Unlimited, Inc., a subsidiary of CUC, (ii) a number of indirect competitors that specialize in online commerce or derive a substantial portion of their revenues from online commerce, including AOL and Microsoft Corporation, through which other bookstores may offer products, and (iii) retail vendors of books, music and videotapes, including large specialty booksellers, with significant brand awareness, sales volume and customer bases, such as B&N and Borders. Both B&N and Borders have announced their intention to devote substantial resources to online commerce in the near future and B&N, specifically, has entered into a relationship with AOL through which, beginning in March 1997, it offers a broad selection of titles at discounted prices.

The Company believes that the principal competitive factors in its market are brand recognition, selection, personalized services, convenience, price, accessibility, customer service, quality of search tools, quality of editorial and other site content and reliability and speed of fulfillment. Many of the Company's current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than the Company. In addition, online retailers may be acquired by, receive investments from or enter into other commercial relationships with larger, well-established and well-financed companies as use of the Internet and other online services increases. Certain of the Company's competitors may be able to secure merchandise from vendors on more favorable terms, devote greater resources to marketing and promotional campaigns, adopt more aggressive pricing or inventory availability policies and devote substantially more resources to Web site and systems development than the Company. Increased competition may result in reduced operating margins, loss of market share and a diminished brand franchise. There can be no assurance that the Company will be able to compete successfully against current and future competitors, and competitive pressures faced by the Company may have a material adverse effect on the Company's business, prospects, financial condition and results of operations. Further, as a strategic response to changes in the competitive environment, the Company may from time to time make certain pricing, service or marketing decisions or acquisitions that could have a material adverse effect on its business, prospects, financial condition and results of operations. New technologies and the expansion of existing technologies may increase the competitive pressures on the Company. For example, client-agent applications that select specific titles from a variety of Web sites may channel customers to online booksellers that compete with the Company. In addition, companies that control access to transactions through network access or Web browsers could promote the Company's competitors or charge the Company a substantial fee for inclusion. See "Risk Factors -- Competition."

LEGAL PROCEEDINGS

The Company has been subject to claims and expects to be subject to legal proceedings and claims from time to time in the ordinary course of its business, including claims of alleged infringement by the Company of trademarks and other intellectual property rights of third parties. The Company is not currently aware of any material legal proceedings pending against it.

INTELLECTUAL PROPERTY

The Company regards its copyrights, service marks, trademarks, trade dress, trade secrets and similar intellectual property as critical to its success, and relies on trademark and copyright law, trade secret protection and confidentiality and/or license agreements with its employees,

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customers, partners and others to protect its proprietary rights. The Company pursues the registration of its trademarks and service marks in the U.S. and internationally, and has applied for the registration of certain of its trademarks and service marks. Effective trademark, service mark, copyright and trade secret protection may not be available in every country in which the Company's products and services are made available online. The Company has licensed in the past, and expects that it may license in the future, certain of its proprietary rights, such as trademarks or copyrighted material, to third parties. While the Company attempts to ensure that the quality of its brand is maintained by such licensees, there can be no assurance that such licensees will not take actions that might materially adversely affect the value of the Company's proprietary rights or reputation, which could have a material adverse effect on the Company's business, prospects, financial condition and results of operations. There can be no assurance that the steps taken by the Company to protect its proprietary rights will be adequate or that third parties will not infringe or misappropriate the Company's copyrights, trademarks, trade dress and similar proprietary rights. In addition, there can be no assurance that other parties will not assert infringement claims against the Company. The Company has been subject to claims and expects to be subject to legal proceedings and claims from time to time in the ordinary course of its business, including claims of alleged infringement of the trademarks and other intellectual property rights of third parties by the Company and its licensees. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. The Company is not currently aware of any legal proceedings pending against it. The Company has received a letter from legal counsel for B&N which claims in part that the Company has infringed B&N's alleged common-law trademark rights. The Company believes that B&N's claims are without merit. The Company does not believe that these claims will have, individually or in the aggregate, a material adverse effect on its financial position or results of operations.

EMPLOYEES

As of December 31, 1996, the Company employed 151 full-time employees. The Company also employs independent contractors and other temporary employees in its editorial, operations and finance and administration departments. None of the Company's employees is represented by a labor union, and the Company considers its employee relations to be good. Competition for qualified personnel in the Company's industry is intense, particularly among software development and other technical staff. The Company believes that its future success will depend in part on its continued ability to attract, hire and retain qualified personnel. See "Risk Factors -- Management of Potential Growth; New Management Team; Limited Senior Management Resources" and "-- Dependence on Key Personnel; Need for Additional Personnel."

FACILITIES

The Company's principal administrative, engineering, marketing and customer service facilities total approximately 42,400 square feet and are located in Seattle, Washington under a lease that expires on July 31, 1999. The Company's warehousing and merchandising operations are housed in an approximately 50,000-square-foot facility in Seattle, Washington under a lease that expires on October 31, 1999. The Company anticipates that it will require additional administrative, customer service, warehouse and fulfillment space within the next 12 months, but that suitable additional space will be available on commercially reasonable terms, although there can be no assurance in this regard. The Company does not own any real estate.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive officers and directors of the Company as of March 17, 1997:

NAME                                    AGE                   POSITION
--------------------------------------  ---    --------------------------------------
Jeffrey P. Bezos......................  33     President, Chief Executive Officer and
                                                 Chairman of the Board
Rick R. Ayre..........................  47     Vice President and Executive Editor
Mark L. Breier........................  37     Vice President of Marketing
Joy D. Covey..........................  33     Chief Financial Officer, Vice
                                               President of Finance and
                                                 Administration, Treasurer and
                                                 Secretary
Oswaldo F. Duenas.....................  50     Vice President of Operations
Mary E. Engstrom......................  34     Vice President of Publisher Affairs
Sheldon J. Kaphan.....................  44     Vice President and Chief Technology
                                                 Officer
Scott E. Lipsky.......................  32     Vice President of Business Expansion
John D. Risher........................  31     Vice President of Product Development
Joel R. Spiegel.......................  41     Vice President of Engineering
Tom A. Alberg(1)......................  57     Director
Scott D. Cook.........................  44     Director
L. John Doerr(2)......................  45     Director
Patricia Q. Stonesifer(1)(2)..........  40     Director


(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

JEFFREY P. BEZOS. Mr. Bezos has been President and Chairman of the Board of the Company since founding it in 1994, and Chief Executive Officer since May 1996, and served as Treasurer and Secretary from May 1996 to March 1997. From December 1990 to June 1994, Mr. Bezos was employed by D.E. Shaw & Co., a Wall Street investment firm, becoming Senior Vice President in 1992. From April 1988 to December 1990, Mr. Bezos was employed by Bankers Trust Company, becoming Vice President in February 1990. Mr. Bezos received his B.S. in Electrical Engineering and Computer Science, Summa Cum Laude, from Princeton University.

RICK R. AYRE. Mr. Ayre joined the Company in September 1996 as Vice President and Executive Editor. From September 1991 to September 1996, Mr. Ayre served in a number of positions at PC Magazine, most recently as Executive Editor for Technology. From September 1988 to September 1991, Mr. Ayre served as Chief of Information Resources Management of Highland Drive VAMC, a hospital. Mr. Ayre received his B.A. in Sociology from Drury College.

MARK L. BREIER. Mr. Breier joined the Company in January 1997 as Vice President of Marketing. From March 1994 to September 1996, Mr. Breier served as Vice President of Marketing of Cinnabon World Famous Cinnamon Rolls. Mr. Breier was involved in product management and introduction at Dreyer's Grand Ice Cream from October 1988 to March 1994, at Kraft Foods, Inc., a multinational consumer products company, from April 1986 to October 1988 and at Parker Brothers, a worldwide manufacturer of toys and games, from August 1985 to March 1986. Mr. Breier received his B.A. in Economics from Stanford University and his M.B.A. from the Stanford University Graduate School of Business.

JOY D. COVEY. Ms. Covey joined the Company in December 1996 as Chief Financial Officer and Vice President of Finance and Administration, and became Secretary and Treasurer in March 1997. From June 1995 to February 1996, Ms. Covey served as Vice President, Operations of the

33

Broadcast Division of Avid Technology, Inc. ("Avid"), a developer of digital media systems, and from January 1995 to June 1995, Ms. Covey served as Vice President of Business Development for Avid. From July 1991 to January 1995, Ms. Covey served as Chief Financial Officer of Digidesign, Inc., a developer of random access digital audio systems and software. Prior to that, she was an associate at Wasserstein Perella & Co., and a certified public accountant at Arthur Young & Company (now Ernst & Young LLP). Ms. Covey received her B.S. in Business Administration, Summa Cum Laude, from California State University, Fresno, her M.B.A., With High Distinction, from Harvard Business School and her J.D., Magna Cum Laude, from Harvard Law School. She is a Certified Public Accountant and a member of the California State Bar.

OSWALDO F. DUENAS. Mr. Duenas joined the Company in January 1997 as Vice President of Operations. From February 1994 to December 1996, Mr. Duenas served as Vice President of the Latin American division of International Service System, Inc., Latin America's largest integrated service company, where he oversaw sales, marketing, operations and customer relations for the division and managed several thousand employees. From September 1993 to January 1994, Mr. Duenas served as President and Director General of National Vision Associates, a Mexican vision retail business. From 1973 to 1993, Mr. Duenas held various management positions with Federal Express, a worldwide express transportation company.

MARY E. ENGSTROM. Ms. Engstrom joined the Company in February 1997 as Vice President of Publisher Affairs. From December 1996 to February 1997, Ms. Engstrom served as Vice President of Marketing of Symantec Corporation ("Symantec"), a developer of information management and productivity enhancement software, and from February 1996 to February 1997, Ms. Engstrom served as General Manager of the Security Business Unit of Symantec. From July 1989 to September 1994, Ms. Engstrom held several management positions at Microsoft Corporation, including Group Product Manager for Microsoft Access, Group Product Manager for Microsoft Project and Director of Marketing, Strategic Relations. Ms. Engstrom received her B.A. in Economics from the University of California, Berkeley, and her M.B.A. from the Anderson Graduate School of Management at the University of California, Los Angeles.

SHELDON J. KAPHAN. Mr. Kaphan has served as the Company's Vice President and Chief Technology Officer since March 1997. From October 1994 to March 1997, Mr. Kaphan served as Vice President of Research and Development of the Company. From October 1992 to July 1994, Mr. Kaphan served as senior engineer at Kaleida Labs Inc., a multimedia joint venture between Apple Computer Inc. and International Business Machines Corporation. Mr. Kaphan received his B.A. in Mathematics from the University of California, Santa Cruz.

SCOTT E. LIPSKY. Mr. Lipsky joined the Company in July 1996 as Vice President of Business Expansion. From March 1994 to July 1996, Mr. Lipsky served as Chief Information Officer of the superstore division, and Chief Technology Officer of the college division, of B&N, a national bookstore chain. From September 1991 to January 1994, Mr. Lipsky served as founder and President of Omni Information Group, a consulting, software development and systems integration company serving the retail-chain market. From February 1987 to September 1991, Mr. Lipsky was Vice President of Information Systems at Babbage's, a consumer software retail chain.

JOHN D. RISHER. Mr. Risher joined the Company in February 1997 as Vice President of Product Development. From July 1991 to February 1997, Mr. Risher held a variety of marketing and project management positions at Microsoft Corporation, including Team Manager for Microsoft Access and Founder and Product Unit Manager for MS Investor, Microsoft's Web site for personal investment. Mr. Risher received his B.A. in Comparative Literature, Magna Cum Laude, from Princeton University and his M.B.A. from Harvard Business School.

JOEL R. SPIEGEL. Mr. Spiegel joined the Company in March 1997 as Vice President of Engineering. From March 1995 to March 1997, Mr. Spiegel held several positions with Microsoft Corporation, including Windows 95 Multimedia Development Manager, Windows Multimedia Group Manager and Product Unit Manager, Information Retrieval. From June 1986 to March 1995, he held a variety of positions at Apple Computer Inc., most recently as Senior Manager responsible for new product development in the Apple Business Systems Division. Prior to that, Mr. Spiegel

34

held software product development positions at a number of companies, including Hewlett-Packard and VisiCorp. Mr. Spiegel received his B.A. in Biology with Honors from Grinnell College.

TOM A. ALBERG. Mr. Alberg has been a director of the Company since June 1996. Mr. Alberg has been a principal in the firm of Madrona Investment Group, L.L.C., a private merchant banking firm, since January 1996. From April 1991 to October 1995, he was the President and a director of LIN Broadcasting Corporation, and from July 1990 to October 1995, he was Executive Vice President of McCaw Cellular Communications, Inc.; both companies were providers of cellular telephone services and are now part of AT&T Corp. Prior to 1990, Mr. Alberg was a partner of the law firm Perkins Coie, where he also served as Chairman of the firm's Executive Committee. Mr. Alberg is also a director of Active Voice Corporation, Emeritus Corp., Mosaix, Inc., Teledesic Corporation and Visio Corp. Mr. Alberg received his B.A. from Harvard University and his J.D. from Columbia Law School.

SCOTT D. COOK. Mr. Cook has been a director of the Company since January 1997. Mr. Cook co-founded Intuit, Inc., a leading personal finance, tax and accounting software company, in 1983, has served as President of Intuit since that time and has served as its Chairman of the Board since April 1994. Prior to co-founding Intuit, Mr. Cook was a consultant for Bain & Company, a strategy consulting firm, and a brand manager for Procter & Gamble. Mr. Cook is also a director of Broderbund Software, Inc. and Intuit, Inc. Mr. Cook received his B.A. in Mathematics and Economics from the University of Southern California and his M.B.A. from Harvard Business School.

L. JOHN DOERR. Mr. Doerr has been a director of the Company since June 1996. Mr. Doerr has been a general partner of Kleiner Perkins Caufield & Byers, a venture capital firm, since September 1980. Prior to joining Kleiner Perkins Caufield & Byers, Mr. Doerr was employed by Intel Corporation for five years. Mr. Doerr is also a director of Netscape Communications Corporation, Intuit, Inc., Macromedia, Inc., Platinum Software, Inc., Shiva Corporation and Sun Microsystems, as well as several private companies. Mr. Doerr received his M.E.E. and B.S.E.E. from Rice University and his M.B.A. from Harvard Business School.

PATRICIA Q. STONESIFER. Ms. Stonesifer has been a director of the Company since February 1997. Ms. Stonesifer is an independent management consultant whose clients include DreamWorks SKG. Ms. Stonesifer served as Senior Vice President of the Interactive Media Division of Microsoft Corporation from February 1996 to December 1996, was head of Microsoft's Consumer Division from August 1993 to February 1996 and held a range of positions at Microsoft from 1988 to 1993. While at Microsoft, Ms. Stonesifer managed its investments in new online content and service products, including MSN, the Microsoft Network (msn.com); MSNBC, Microsoft's joint venture with NBC; Slate (slate.com); and Expedia (expedia.com), as well as other Internet-based products. Prior to joining Microsoft, Ms. Stonesifer held a number of positions at Que Corporation. Ms. Stonesifer is also a director of Kinko's, Inc. and a member of the Executive Board of the Academy of Interactive Arts and Sciences. Ms. Stonesifer received her B.A. in General Studies from Indiana University.

COMMITTEES OF THE BOARD OF DIRECTORS

The Audit Committee consists of Mr. Alberg and Ms. Stonesifer. Among other functions, the Audit Committee makes recommendations to the Board of Directors regarding the selection of independent auditors, reviews the results and scope of the audit and other services provided by the Company's independent auditors, reviews the Company's balance sheet, statement of operations and cash flows and reviews and evaluates the Company's internal control functions.

The Compensation Committee consists of Mr. Doerr and Ms. Stonesifer. The Compensation Committee reviews and approves the compensation and benefits for the Company's executive officers, administer the Company's stock option plans and make recommendations to the Board of Directors regarding such matters.

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DIRECTOR COMPENSATION

Directors of the Company do not receive cash compensation for their services as directors or members of committees of the Board of Directors, but are reimbursed for their reasonable expenses incurred in attending meetings of the Board of Directors. In December 1995, the Company granted to Mr. Alberg a nonqualified stock option to purchase 60,000 shares of Common Stock at an exercise price of $0.3333 per share and a nonqualified stock option to purchase 60,000 shares of Common Stock at an exercise price of $0.6666 per share. In January 1997, the Company granted Mr. Cook, a director of the Company, an option to purchase 60,000 shares of Common Stock at an exercise price of $1.3333 per share. In February 1997, the Company granted Ms. Stonesifer, a director of the Company, an option to purchase 60,000 shares of Common Stock at an exercise price of $2.6666 per share. The Company currently intends to make comparable option grants to future outside directors. See "Certain Transactions."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee currently consists of Mr. Doerr and Ms. Stonesifer. No member of the Board of Directors or of the Compensation Committee serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of the Company's Board of Directors or Compensation Committee. In February 1997, Ms. Stonesifer, a member of the Compensation Committee, purchased 2,500 shares of the Company's Series A Preferred Stock at $40.00 per share.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Restated Certificate of Incorporation limits the liability of directors to the full extent permitted by Delaware law. Delaware law provides that a corporation's certificate of incorporation may contain a provision eliminating or limiting the personal liability of directors for monetary damages for breach of their fiduciary duties as directors, except for liability (i) for any breach of their duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law (the "DGCL"), or (iv) for any transaction from which the director derived an improper personal benefit. The Company's Bylaws provide that the Company shall indemnify its directors and officers and may indemnify its employees and agents to the fullest extent permitted by law. The Company believes that indemnification under its Bylaws covers at least negligence and gross negligence on the part of indemnified parties.

The Company has entered into agreements to indemnify its directors and executive officers. These agreements, among other things, indemnify the Company's directors and officers for certain expenses (including attorneys' fees), judgments, fines and settlement amounts incurred by such persons in any action or proceeding, including any action by or in the right of the Company, arising out of such person's services as a director or officer of the Company, any subsidiary of the Company or any other company or enterprise to which the person provides services at the request of the Company. The Company believes that these provisions and agreements are necessary to attract and retain qualified directors and officers.

At present, there is no pending litigation or proceeding involving any director, officer, employee or agent of the Company where indemnification will be required or permitted. The Company is not aware of any threatened litigation or proceeding that might result in a claim for such indemnification.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation received for services rendered to the Company in all capacities during the year ended December 31, 1996 by the Company's President and Chief Executive Officer. No other executive officer of the Company who held office at December 31, 1996 met the definition of "highly compensated" within the meaning of the Commission's executive compensation disclosure rules.

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SUMMARY COMPENSATION TABLE

                                                 ANNUAL COMPENSATION
                                        --------------------------------------
          NAME AND PRINCIPAL                                    OTHER ANNUAL        ALL OTHER
               POSITION                 SALARY($)   BONUS($)   COMPENSATION($)   COMPENSATION($)
- --------------------------------------  ---------   --------   ---------------   ---------------
Jeffrey P. Bezos......................   $ 64,333    $  -0-         $ -0-             $ -0-
  President and Chief Executive
     Officer

Mr. Bezos does not currently hold options to purchase capital stock of the Company.

EMPLOYEE BENEFIT PLANS

1994 Stock Option Plan. The Company's Board of Directors has adopted the Company's 1994 Stock Option Plan and reserved an aggregate of 4,800,000 shares of Common Stock for grants of stock options under the plan. The 1994 Stock Option Plan provides for the grant of options for Common Stock to employees, directors, officers, consultants, advisors and independent contractors of the Company or an affiliate of the Company. The 1994 Stock Option Plan was approved by the Board of Directors and the sole stockholder on September 15, 1994, and amended by the Board of Directors on September 25, 1996. As of February 28, 1997, options to purchase 3,052,974 shares of Common Stock were outstanding under the 1994 Stock Option Plan with exercise prices ranging from $0.1717 to $4.00 per share, options to purchase 110,640 shares were available for grant and options for 1,636,386 shares had been exercised.

The 1994 Stock Option Plan is administered by the Compensation Committee. The Compensation Committee has the authority to select individuals who are to receive options under the 1994 Stock Option Plan and to specify the terms and conditions of each option so granted (incentive or nonqualified), the vesting provisions, the option term and the exercise price. Options granted under the 1994 Stock Option Plan must be exercised within three months of the optionee's termination of service (as defined in the 1994 Stock Option Plan) to or employment by the Company (subject to extension to one year from the date of termination if the optionee dies within such three-month exercise period), or within one year after the optionee's termination by death or disability (subject to extension to one year from the date of death if the optionee dies during the one-year exercise period after termination by disability), but in no event later than the expiration of the option term. Options granted under the 1994 Stock Option Plan are not transferable by the optionee except by will or the laws of descent and distribution and generally are exercisable during the lifetime of the optionee only by such optionee.

In the event of a sale of all or substantially all of the Company's assets, a merger or reorganization in which the Company is not the surviving corporation, or the sale or other transfer of more than 50% of the outstanding shares of Common Stock (each, a "Terminating Event"), the Compensation Committee may determine whether provision will be made for assumption of or substitution for the stock options granted under the 1994 Stock Option Plan by the successor corporation. If the Compensation Committee determines that no such assumption or substitution will be made, all options will become fully vested and each optionee will have the right to exercise any unexercised and unexpired options within 30 days from the date of notice of such determination. With respect to options granted prior to December 20, 1996, Terminating Events also include the sale of a material division of the Company, an acquisition by the Company resulting in an extraordinary expansion of the Company and a material change in the capital structure of the Company (excluding the issuance of securities of the Company for adequate consideration and the conversion into Common Stock of convertible securities of the Company).

1997 Stock Option Plan. The purpose of the 1997 Stock Option Plan is to enhance the long-term stockholder value of the Company by offering opportunities to employees, directors, officers, consultants, agents, advisors and independent contractors of the Company to participate in the Company's growth and success, and to encourage them to remain in the service of the Company and acquire and maintain stock ownership in the Company.

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As of February 28, 1997, an aggregate of 6,000,000 shares of Common Stock were available for issuance under the 1997 Stock Option Plan, and no options were outstanding. In addition, any shares of Common Stock available for issuance under the 1994 Stock Option Plan that are not issued under that plan shall be added to the aggregate number of shares available for issuance under the 1997 Stock Option Plan. Options for a maximum of 375,000 shares may be granted under the 1997 Stock Option Plan to any individual in any one fiscal year, except that the Company may make additional one-time grants of up to 1,500,000 shares to newly hired individuals.

The 1997 Stock Option Plan is administered by the Compensation Committee, which has the authority to select individuals who are to receive options under the 1997 Stock Option Plan and to specify the terms and conditions of each option so granted (incentive or nonqualified), the vesting provisions, the option term and the exercise price. Unless otherwise provided by the Plan Administrator, an option granted under the 1997 Stock Option Plan expires 10 years from the date of grant (five years in the case of an incentive stock option granted to the holder of 10% or more of the Company's outstanding capital stock) or, if earlier, three months after the optionee's termination of employment or service other than termination for cause, one year after the optionee's retirement, early retirement at the Company's request, death or disability, or immediately upon notification to an optionee of termination for cause. Options granted under the 1997 Stock Option Plan are not generally transferable by the optionee except by will or the laws of descent and distribution and generally are exercisable during the lifetime of the optionee only by such optionee.

In the event of (i) the merger or consolidation of the Company in which it is not the surviving corporation, or pursuant to which shares of Common Stock are converted into cash, securities or other property (other than a merger in which holders of Common Stock immediately before the merger have the same proportionate ownership of the capital stock of the surviving corporation immediately after the merger), (ii) the sale, lease, exchange or other transfer of all or substantially all of the Company's assets (other than a transfer to a majority-owned subsidiary), or (iii) the approval by the holders of Common Stock of any plan or proposal for the Company's liquidation or dissolution (each, a "Corporate Transaction"), the Compensation Committee will determine whether provision will be made in connection with the Corporate Transactions for assumption of the options under the 1997 Stock Option Plan or substitution of appropriate new options covering the stock of the successor corporation, or an affiliate of the successor corporation. If the Compensation Committee determines that no such assumption or substitution will be made, each outstanding option under the 1997 Stock Option Plan shall automatically accelerate so that it will become 100% vested and exercisable immediately before the Corporate Transaction, except that acceleration will not occur if, in the opinion of the Company's accountants, it would render unavailable "pooling of interest" accounting for the Corporate Transaction.

Repurchase Right Under Option Plans. With respect to each of the 1994 Stock Option Plan and the 1997 Stock Option Plan (collectively, the "Plans"), the Compensation Committee has the discretion to authorize the issuance of unvested shares of Common Stock pursuant to the exercise of a stock option under the applicable Plan. If the optionee ceases to be employed by or provide services to the Company, all shares of Common Stock issued on exercise of a stock option which are unvested at the time of cessation shall be subject to repurchase by the Company at the exercise price paid for such shares. The terms and conditions upon which the repurchase rights are exercisable by the Company are determined by the Compensation Committee and set forth in the agreement evidencing such right. The Compensation Committee has discretionary authority to cancel the Company's outstanding repurchase rights with respect to one or more shares purchased or purchasable under an option granted pursuant to that Plan. In the event of a Terminating Event or a Corporate Transaction under the 1994 Stock Option Plan or the 1997 Stock Option Plan, respectively, if vesting of the options accelerates, the repurchase rights of the Company with respect to shares previously acquired on exercise of options granted under the 1994 Stock Option Plan or the 1997 Stock Option Plan, respectively, shall terminate.

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CERTAIN TRANSACTIONS

Since the inception of the Company in July 1994, the Company has issued shares of Preferred Stock in private placement transactions as follows: 555,161 and 14,235 shares of Series A Preferred Stock at $14.05 per share to Kleiner Perkins Caufield & Byers VIII and KPCB Information Sciences Zaibatsu Fund II, respectively, and 2,500 and 2,500 shares of Series A Preferred Stock at $40.00 per share to Scott D. Cook and Patricia Q. Stonesifer, respectively. L. John Doerr, a director of the Company, is a general partner of KPCB VIII Associates, which is a general partner of Kleiner Perkins Caufield & Byers VIII and KPCB Information Sciences Zaibatsu Fund II. Mr. Doerr disclaims beneficial ownership of the shares of Series A Preferred Stock issued to such entities, except for his proportional interest therein. Mr. Cook and Ms. Stonesifer are directors of the Company. All outstanding shares of Series A Preferred Stock will convert into an aggregate of 3,446,376 shares of Common Stock upon the closing of this offering. The holders of certain of such shares of Series A Preferred Stock are entitled to certain registration rights with respect to the Common Stock issuable upon conversion thereof. See "Description of Capital Stock--Registration Rights."

In July 1994, Jeffrey P. Bezos, the President, Chief Executive Officer and Chairman of the Board of the Company, purchased 10,200,000 shares of Common Stock for an aggregate price of $10,000. Mr. Bezos made interest-free loans to the Company in the principal amounts of $15,000, $29,000 and $40,000 in July 1994, November 1994 and November 1995, respectively, which were fully repaid in August 1995, April 1995 and November 1995, respectively. From November 1994 to December 1996, Mr. Bezos personally guaranteed the obligations of the Company under a merchant account with Seafirst Bank. Since July 1995, Mr. Bezos has personally guaranteed the obligations of the Company under a bankcard merchant account with Wells Fargo Bank. Since April 1995, Mr. Bezos has personally guaranteed company credit cards. The Company intends to secure releases of all of Mr. Bezos' guarantees as soon as possible following the closing of this offering. The Company has granted to Mr. Bezos certain rights with respect to the registration of 9,885,000 shares of Common Stock. See "Description of Capital Stock -- Registration Rights."

In February 1995, the Company sold 582,528 shares of Common Stock to Miguel
A. Bezos at a price per share of $0.1717. In July 1995, the Company sold 847,716 shares of Common Stock to the Gise Family Trust at a price per share of $0.1717. Jacklyn Gise Bezos is the trustee and beneficiary of the Gise Family Trust. Miguel A. Bezos and Jacklyn Gise Bezos are the parents of Jeffrey P. Bezos. In May 1996, the Company sold 30,000 shares of Common Stock to each of Mark S. Bezos and Christina Bezos Poore, siblings of Jeffrey P. Bezos, at a price per share of $0.3333.

In December 1995, the Company sold 150,000 shares of Common Stock to Tom A. Alberg, a director of the Company, at a price per share of $0.3333.

In June 1996, in connection with the Company's Series A Preferred Stock financing, Mr. Bezos granted the Company a right to repurchase 612,000 shares of Common Stock held by him at $0.0010 per share if his employment terminates under certain circumstances. The Company's right of repurchase lapses ratably over the 36-month period ending June 21, 1999.

The Company believes that all the transactions set forth above were made on terms no less favorable to the Company than could have been obtained from unaffiliated third parties. Any future transactions, including loans, between the Company and its officers, directors and principal stockholders and their affiliates will be approved by a majority of the Board of Directors, including a majority of the independent and disinterested directors, and will be on terms no less favorable to the Company than could be obtained from unaffiliated third parties.

The Company has entered into indemnification agreements with each of its executive officers and directors. See "Management -- Limitation of Liability and Indemnification Matters."

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PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial ownership of the Company's outstanding Common Stock as of February 28, 1997 and as adjusted to reflect the sale of the Common Stock offered hereby for (i) each person or entity known by the Company to beneficially own more than 5% of the Common Stock, (ii) each director of the Company, (iii) the Company's Chief Executive Officer, and (iv) all of the Company's directors and executive officers as a group. Except as otherwise indicated, the Company believes that the beneficial owners of the Common Stock listed below, based on information furnished by such owners, have sole voting and investment power with respect to such shares.

                                                                                   PERCENTAGE OF
                                                                                SHARES OUTSTANDING
                                                                                -------------------
                                                            NUMBER OF SHARES    PRIOR TO    AFTER
                    NAME AND ADDRESS                       BENEFICIALLY OWNED   OFFERING   OFFERING
- ---------------------------------------------------------  ------------------   --------   --------
Jeffrey P. Bezos.........................................       9,885,000          48.3%      43.1%
  c/o Amazon.com, Inc.
  1516 Second Avenue, 4th Floor
  Seattle, WA 98101
L. John Doerr(1).........................................       3,416,376          16.7       14.9
  Kleiner Perkins Caufield & Byers
  4 Embarcadero Center, Suite 3520
  San Francisco, CA 94111
Tom A. Alberg(2).........................................         195,000             *          *
Scott D. Cook(3).........................................          75,000             *          *
Patricia Q. Stonesifer(4)................................          75,000             *          *
All directors and executive officers as a group (13
  persons)(5)............................................      15,560,226          73.4       65.6


* Less than 1%

(1) Represents 3,330,966 shares and 85,410 shares of Common Stock issuable upon conversion of Series A Preferred Stock held by Kleiner Perkins Caufield & Byers VIII and KPCB Information Sciences Zaibatsu Fund II, respectively. Mr. Doerr is a general partner of KPCB VIII Associates, which is a general partner of Kleiner Perkins Caufield & Byers VIII and KPCB Information Sciences Zaibatsu Fund II. Mr. Doerr disclaims beneficial ownership of such shares, except for his proportional interest therein.

(2) Includes 48,000 shares subject to options exercisable within 60 days of February 28, 1997.

(3) Represents 60,000 shares subject to options exercisable within 60 days of February 28, 1997, certain of which shares may be subject to a right of repurchase by the Company, and 15,000 shares of Common Stock issuable upon conversion of Series A Preferred Stock.

(4) Represents 60,000 shares subject to options exercisable within 60 days of February 28, 1997, certain of which shares may be subject to a right of repurchase by the Company, and 15,000 shares of Common Stock issuable upon conversion of Series A Preferred Stock.

(5) Includes 759,498 shares subject to options exercisable within 60 days of February 28, 1997, certain of which may be subject to a right of repurchase.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock, $0.01 par value per share, and 10,000,000 shares of Preferred Stock, $0.01 par value per share. The following summary of certain provisions of the Common Stock and Preferred Stock does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of the Company's Restated Certificate of Incorporation, which is included as an exhibit to the Registration Statement of which this Prospectus is a part, and by the provisions of applicable law.

COMMON STOCK

As of February 28, 1997, there were 17,008,158 shares of Common Stock outstanding held of record by 54 stockholders. There will be 22,954,534 shares of Common Stock outstanding (assuming no exercise of the Underwriters' over-allotment option and no exercise of outstanding options) after giving effect to the sale of Common Stock offered to the public hereby. The holders of Common Stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. See "Risk Factors -- Control of the Company." Subject to preferences that may be applicable to any outstanding shares of Preferred Stock, the holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared by the Board of Directors out of funds legally available for the payment of dividends. See "Dividend Policy." In the event of a liquidation, dissolution or winding up of the Company, the holders of Common Stock are entitled to share ratably in all assets remaining after payment of liabilities and liquidation preferences of any outstanding shares of Preferred Stock. Holders of Common Stock have no preemptive rights or rights to convert their Common Stock into any other securities. There are no redemption or sinking fund provisions applicable to the Common Stock. All outstanding shares of Common Stock are fully paid and nonassessable, and the shares of Common Stock to be issued upon completion of this offering will be fully paid and nonassessable.

PREFERRED STOCK

Upon the closing of this offering, all outstanding shares of Preferred Stock will be converted into 3,446,376 shares of Common Stock. Thereafter, pursuant to the Company's Restated Certificate of Incorporation, the Board of Directors will have the authority, without further action by the stockholders, to issue up to 10,000,000 shares of Preferred Stock in one or more series and to fix the designations, powers, preferences, privileges and relative participating, optional or special rights and the qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights of the Common Stock. The Board of Directors, without stockholder approval, can issue Preferred Stock with voting, conversion or other rights that could adversely affect the voting power and other rights of the holders of Common Stock. Preferred Stock could thus be issued quickly with terms calculated to delay or prevent a change in control of the Company or make removal of management more difficult. Additionally, the issuance of Preferred Stock may have the effect of decreasing the market price of the Common Stock, and may adversely affect the voting and other rights of the holders of Common Stock. The Company has no plans to issue any Preferred Stock.

ANTITAKEOVER EFFECTS OF CERTAIN PROVISIONS OF RESTATED CERTIFICATE OF INCORPORATION AND WASHINGTON LAW

As noted above, the Company's Board of Directors, without stockholder approval, has the authority under the Company's Restated Certificate of Incorporation to issue Preferred Stock with rights superior to the rights of the holders of Common Stock. As a result, Preferred Stock could be issued quickly and easily, could adversely affect the rights of holders of Common Stock and could be issued with terms calculated to delay or prevent a change in control of the Company or make removal of management more difficult.

The laws of the State of Washington, where the Company's principal executive offices are located, impose restrictions on certain transactions between certain foreign corporations and significant stockholders. Chapter 23B.19 of the Washington Business Corporation Act (the "WBCA") prohibits a "Target Corporation," with certain exceptions, from engaging in certain

41

"Significant Business Transactions" with a person or group of persons which beneficially owns 10% or more of the voting securities of the Target Corporation (an "Acquiring Person") for a period of five years after such acquisition, unless the transaction or acquisition of shares is approved by a majority of the members of the Target Corporation's board of directors prior to the time of acquisition. Such prohibited transactions include, among other things, a merger or consolidation with, disposition of assets to, or issuance or redemption of stock to or from, the Acquiring Person, termination of 5% or more of the employees of the Target Corporation as a result of the Acquiring Person's acquisition of 10% or more of the shares or allowing the Acquiring Person to receive any disproportionate benefit as a stockholder. After the five-year period, a Significant Business Transaction may take place as long as it complies with certain fair price provisions of the statute. A Target Corporation includes a foreign corporation if (i) the corporation has a class of voting stock registered pursuant to Section 12 or 15 of the Securities Exchange Act of 1934, as amended, (ii) the corporation's principal executive office is located in Washington State, (iii) any of (a) more than 10% of the corporation's stockholders of record are Washington residents, (b) more than 10% of its shares of record are owned by Washington residents, or (c) 1,000 or more of its stockholders of record are Washington residents, (iv) a majority of the corporation's employees are Washington residents or more than 1,000 Washington residents are employees of the corporation, and (v) a majority of the corporation's tangible assets are located in Washington State or the corporation has more than $50 million of tangible assets located in Washington State. A corporation may not "opt out" of this statute. Depending upon whether the Company meets the definition of a Target Corporation, Chapter 23B.19 of the WBCA may have the effect of delaying, deferring or preventing a change in control of the Company.

Although Section 203 of the DGCL generally prohibits Delaware corporations from engaging in certain "Business Combinations" (as defined therein) with certain "Interested Stockholders" (as defined therein) for a period of three years unless certain criteria are met, the Company has expressly elected in its Restated Certificate of Incorporation not to be governed by Section 203 of the DGCL.

REGISTRATION RIGHTS

Pursuant to an agreement among the Company, Mr. Bezos, who is the holder of 9,885,000 shares of Common Stock (the "Common Holder"), and two holders of 569,396 shares of Series A Preferred Stock in the aggregate which are convertible into 3,416,376 shares of Common Stock (the "Preferred Holders"), the Common Holder and the Preferred Holders are entitled to certain rights with respect to the registration of such shares under the Securities Act. If the Company proposes to register any of its securities under the Securities Act, either for its own account or for the account of other security holders, the Common Holder and the Preferred Holders are entitled to notice of such registration and to include shares of Common Stock in such registration at the Company's expense. Additionally, the Preferred Holders are entitled to certain demand registration rights pursuant to which they may require the Company to file a registration statement under the Securities Act at the Company's expense with respect to their shares of Common Stock, and the Company is required to use its commercially reasonable efforts to effect such registration (a "Requested Registration"). Further, the Preferred Holders may require the Company to file additional registration statements on Form S-3 at the expense of the Preferred Holders. All of these registration rights are subject to certain conditions and limitations, among them the right of the underwriters of an offering to limit the number of shares included in such registration and the right of the Company not to effect a Requested Registration before the earlier of (a) one year after the offering made hereby and (b) June 21, 1999.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is ChaseMellon Shareholder Services, Ridgefield Park, New Jersey.

NASDAQ NATIONAL MARKET LISTING

Application has been made to have the Common Stock listed for quotation on the Nasdaq National Market under the symbol "AMZN."

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for the Common Stock and there can be no assurance that a significant public market for the Common Stock will be developed or be sustained after this offering. Sales of substantial amounts of Common Stock in the public market after this offering, or the possibility of such sales occurring, could adversely affect prevailing market prices for the Common Stock or the future ability of the Company to raise capital through an offering of equity securities.

After this offering, the Company will have outstanding 22,954,534 shares of Common Stock. Of these shares, the 2,500,000 shares offered hereby will be freely tradeable in the public market without restriction under the Securities Act, unless such shares are held by "affiliates" of the Company, as that term is defined in Rule 144 under the Securities Act.

The remaining 20,454,534 shares of Common Stock outstanding upon completion of this offering will be "restricted securities," as that term is defined in Rule 144 ("Restricted Shares"). The Restricted Shares were issued and sold by the Company in private transactions in reliance upon exemptions from registration under the Securities Act. Restricted Shares may be sold in the public market only if they are registered or if they qualify for an exemption from registration under Rule 144 or 701 under the Securities Act, which are summarized below.

Pursuant to certain "lock-up" agreements, all the executive officers, directors and certain stockholders and employees of the Company, who collectively hold an aggregate of approximately 20,329,794 shares, have agreed not to offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any such shares for a period of 180 days from the date of this Prospectus. The Company has also entered into an agreement with Deutsche Morgan Grenfell Inc. that it will not offer, sell or otherwise dispose of Common Stock for a period of 180 days from the date of this Prospectus. As a result of the expiration of such lock-up agreements, approximately 19,336,009 of the Restricted Shares will be eligible for immediate sale beginning 181 days after the date of this Prospectus (of which 17,260,470 shares will be subject to certain volume, manner of sale and other limitations under Rule 144). Approximately 993,786 remaining shares will be eligible for sale pursuant to Rule 144 upon the expiration of one-year holding periods, which will expire between November 1997 and March 1998.

Following the expiration of such lock-up periods, certain shares issued upon exercise of options granted by the Company prior to the date of this Prospectus will also be available for sale in the public market pursuant to Rule 701 under the Securities Act. Rule 701 permits resales of such shares in reliance upon Rule 144 but without compliance with certain restrictions, including the holding period requirement, imposed under Rule 144. In general, under Rule 144 as in effect at the closing of this offering, beginning 90 days after the date of this Prospectus, a person (or persons whose shares of the Company are aggregated) who has beneficially owned Restricted Shares for at least one year (including the holding period of any prior owner who is not an affiliate of the Company) would be entitled to sell within any three-month period a number of shares that does not exceed the greater of (i) one percent of the then outstanding shares of Common Stock (approximately 229,545 shares immediately after this offering) or (ii) the average weekly trading volume of the Common Stock during the four calendar weeks preceding the filing of a Form 144 with respect to such sale. Sales under Rule 144 are also subject to certain manner of sale and notice requirements and to the availability of current public information about the Company. Under Rule 144(k), a person who is not deemed to have been an affiliate of the Company at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years (including the holding period of any prior owner who is not an affiliate of the Company) is entitled to sell such shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

The Company intends to file after the effective date of this offering a Registration Statement on Form S-8 to register an aggregate of approximately 9,534,648 shares of Common Stock reserved for issuance under the 1994 Stock Option Plan and the 1997 Stock Option Plan. Such Registration Statement will become effective automatically upon filing. Shares issued under the foregoing plans, after the filing of a Registration Statement on Form S-8, may be sold in the open market, subject, in the case of certain holders, to the Rule 144 limitations applicable to affiliates, the above-referenced lock-up agreements and vesting restrictions imposed by the Company.

In addition, following this offering, the holders of 13,301,376 shares of outstanding Common Stock will, under certain circumstances, have rights to require the Company to register their shares for future sale. See "Description of Capital Stock -- Registration Rights."

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UNDERWRITING

The Underwriters named below, for whom Deutsche Morgan Grenfell Inc., Alex. Brown & Sons Incorporated, and Hambrecht & Quist LLC are acting as representatives (the "Representatives"), have severally agreed, subject to the terms and conditions contained in the Underwriting Agreement (the form of which will be filed as an exhibit to the Company's Registration Statement, of which this Prospectus is a part), to purchase from the Company the respective number of shares of Common Stock indicated below opposite their respective names. The Underwriters are committed to purchase all of the shares, if they purchase any.

                                                                                 NUMBER OF
                                 UNDERWRITERS                                     SHARES
- -------------------------------------------------------------------------------  ---------
Deutsche Morgan Grenfell Inc...................................................
Alex. Brown & Sons Incorporated................................................
Hambrecht & Quist LLC..........................................................

                                                                                 ---------
          Total................................................................  2,500,000
                                                                                 =========

The Underwriting Agreement provides that the obligations of the several Underwriters thereunder are subject to approval of certain legal matters by counsel and to various other conditions.

The Representatives have advised the Company that the Underwriters propose initially to offer the Common Stock to the public on the terms set forth on the cover page of this Prospectus. The Underwriters may allow to selected dealers (who may include the Underwriters) a concession of not more than $ per share. The selected dealers may reallow a concession of not more than $ to certain other dealers. After the initial public offering, the price and concessions and re-allowances to dealers and other selling terms may be changed by the Representatives. The Common Stock is offered subject to receipt and acceptance by the Underwriters, and to certain other conditions, including the right to reject orders in whole or in part. The Underwriters do not intend to sell any of the shares of Common Stock offered hereby to accounts for which they exercise discretionary authority.

The Company has granted an option to the Underwriters to purchase up to a maximum of 375,000 additional shares of Common Stock to cover over-allotments, if any, at the public offering price, less the underwriting discount set forth on the cover page of this Prospectus. Such option may be exercised at any time until 30 days after the date of the Underwriting Agreement. To the extent the Underwriters exercise this option, each of the Underwriters will be committed, subject to certain conditions, to purchase such additional shares in approximately the same proportion as set forth in the above table. The Underwriters may purchase such shares only to cover over-allotments made in connection with this offering.

In connection with this offering, the Company and the directors, executive officers and certain stockholders have agreed not to offer or sell any Common Stock until the expiration of 180 days following the date of the final Prospectus without the prior written consent of Deutsche Morgan Grenfell Inc.

The Underwriting Agreement provides that the Company will indemnify the several Underwriters against certain liabilities, including civil liabilities under the Securities Act, as amended, or will contribute to payments the Underwriters may be required to make in respect thereof.

Prior to this offering, there has been no public market for the Common Stock. The initial public offering price will be determined by negotiation between the Company and the Representatives. The principal factors to be considered in determining the public offering price include the information set forth in this Prospectus and otherwise available to the Representatives; the history and the prospects for the industry in which the Company will compete; the ability of the Company's management; the prospects for future earnings of the Company; the present state of

44

the Company's development and its current financial condition; the general condition of the securities markets at the time of this offering; and the recent market prices of, and the demand for, publicly traded common stock of generally comparable companies. Each of the Representatives has informed the Company that it currently intends to make a market in the shares subsequent to the effectiveness of this offering, but there can be no assurance that the Representatives will take any action to make a market in any securities of the Company.

Certain persons participating in this offering may over-allot or effect transactions which stabilize, maintain or otherwise affect the market price of the Common Stock at levels above those which might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing penalty bids. A stabilizing bid means the placing of any bid or effecting of any purchase for the purpose of pegging, fixing or maintaining the price of the Common Stock. A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with this offering. A penalty bid means an arrangement that permits the Underwriters to reclaim a selling concession from a syndicate member in connection with this offering when shares of Common Stock sold by the syndicate member are purchased in syndicate covering transactions. Such transactions may be effected on the Nasdaq Stock Market, in the over-the-counter market, or otherwise. Such stabilizing, if commenced, may be discontinued at any time.

LEGAL MATTERS

Certain legal matters will be passed on for the Company by Perkins Coie, Seattle, Washington. Certain legal matters will be passed on for the Underwriters by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California.

EXPERTS

The financial statements of Amazon.com, Inc. at December 31, 1995 and 1996, and for the period July 5, 1994 (date of inception) to December 31, 1994 and the years ended December 31, 1995 and 1996, appearing in this Prospectus and the Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement, of which this Prospectus constitutes a part, under the Securities Act with respect to the shares of Common Stock offered hereby. This Prospectus omits certain information contained in the Registration Statement, and reference is made to the Registration Statement and the exhibits thereto for further information with respect to the Company and the Common Stock offered hereby. Statements contained herein concerning the provisions of any documents are not necessarily complete, and in each instance reference is made to the copy of such document filed as an exhibit to the Registration Statement. Each such statement is qualified in its entirety by such reference. The Registration Statement, including exhibits filed therewith, may be inspected without charge at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional offices of the Commission located at 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may be obtained from the Public Reference Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission maintains a Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, such as the Company, that file electronically with the Commission. Information concerning the Company is also available for inspection at the offices of the Nasdaq National Market, Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.

45

AMAZON.COM, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Ernst & Young LLP, Independent Auditors...................................    F-2
Balance Sheets......................................................................    F-3
Statements of Operations............................................................    F-4
Statements of Stockholders' Equity..................................................    F-5
Statements of Cash Flows............................................................    F-6
Notes to Financial Statements.......................................................    F-7

F-1

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors
Amazon.com, Inc.

We have audited the accompanying balance sheets of Amazon.com, Inc. as of December 31, 1995 and 1996, and the related statements of operations, stockholders' equity, and cash flows for the period from July 5, 1994 (date of inception) to December 31, 1994 and the years ended December 31, 1995 and 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Amazon.com, Inc. at December 31, 1995 and 1996, and the results of its operations and its cash flows for the period from July 5, 1994 (date of inception) to December 31, 1994 and the years ended December 31, 1995 and 1996, in conformity with generally accepted accounting principles.

Seattle, Washington
February 28, 1997, except for Note 6, as to which the date is March , 1997


The foregoing report is in the form that will be signed upon the completion of the three-for-two common stock split described in Note 6 to the Financial Statements.

ERNST & YOUNG LLP

Seattle, Washington
March 24, 1997

F-2

AMAZON.COM, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

ASSETS

                                                                                  PRO FORMA
                                                                                 STOCKHOLDERS'
                                                                                  EQUITY AT
                                                              DECEMBER 31,       DECEMBER 31,
                                                           ------------------        1996
                                                            1995       1996        (NOTE 6)
                                                           ------     -------    ------------
                                                                                 (UNAUDITED)
Current assets:
  Cash and cash equivalents.............................   $  996     $ 6,248
  Inventories...........................................       17         571
  Prepaid expenses and other............................       14         321
                                                           ------     -------
          Total current assets..........................    1,027       7,140
Equipment, net..........................................       57         985
Deposits................................................       --         146
                                                           ------     -------
          Total assets..................................   $1,084     $ 8,271
                                                           ======     =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable......................................   $   99     $ 2,852
  Accrued advertising...................................       --         598
  Accrued product development...........................       --         500
  Other liabilities and accrued expenses................        8         920
                                                           ------     -------
          Total current liabilities.....................      107       4,870
Commitments
Stockholders' equity:
  Preferred stock, $0.01 par value:
     Authorized shares -- 10,000,000
     Issued and outstanding shares -- 569,396 at
       December 31, 1996 (none pro forma), aggregate
       liquidation preference -- $8,000.................       --           6      $     --
  Common stock, $0.01 par value:
     Authorized shares -- 100,000,000
     Issued and outstanding shares -- 14,555,244 and
       15,900,237 at December 31, 1995 and 1996,
       respectively (19,316,613 pro forma)..............    1,075         159           193
  Advances received for common stock....................      150          --            --
  Additional paid-in capital............................       --       9,873         9,845
  Deferred compensation.................................       --        (612)         (612)
  Accumulated deficit...................................     (248)     (6,025)       (6,025)
                                                           ------     -------    ------------
          Total stockholders' equity....................      977       3,401      $  3,401
                                                                                 ==========
                                                           ------     -------
          Total liabilities and stockholders' equity....   $1,084     $ 8,271
                                                           ======     =======

See accompanying notes.

F-3

AMAZON.COM, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

                                             FOR THE PERIOD FROM
                                             JULY 5, 1994 (DATE
                                                OF INCEPTION)         YEAR ENDED DECEMBER 31,
                                               TO DECEMBER 31,       -------------------------
                                                    1994                1995           1996
                                             -------------------     ----------     ----------
Net sales.................................         $    --            $    511       $ 15,746
Cost of sales.............................              --                 409         12,287
                                                      ----               -----        -------
Gross profit..............................              --                 102          3,459
Operating expenses:
  Marketing and sales.....................              --                 200          6,090
  Product development.....................              38                 171          2,313
  General and administrative..............              14                  35          1,035
                                                      ----               -----        -------
          Total operating expenses........              52                 406          9,438
                                                      ----               -----        -------
Loss from operations......................             (52)               (304)        (5,979)
Interest income...........................              --                   1            202
                                                      ----               -----        -------
Net loss..................................         $   (52)           $   (303)      $ (5,777)
                                                      ====               =====        =======
Net loss per share........................         $ (0.00)           $  (0.02)      $  (0.26)
                                                      ====               =====        =======
Shares used in computation of
  net loss per share......................          17,577              18,780         22,543
                                                      ====               =====        =======

See accompanying notes.

F-4

AMAZON.COM, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

                  PREFERRED STOCK       COMMON STOCK         ADVANCES     ADDITIONAL                                    TOTAL
                  ----------------   -------------------   RECEIVED FOR    PAID-IN       DEFERRED     ACCUMULATED   STOCKHOLDERS'
                  SHARES    AMOUNT     SHARES     AMOUNT   COMMON STOCK    CAPITAL     COMPENSATION     DEFICIT        EQUITY
                  -------   ------   ----------   ------   ------------   ----------   ------------   -----------   -------------
 Sale of common
   stock to
   founder......       --   $  --    10,200,000   $  10       $   --        $   --        $   --        $    --        $    10
 Advances
   received for
   common
   stock........       --      --            --      --           50            --            --             --             50
 Net loss for
   the period
   ended
   December 31,
   1994.........       --      --            --      --           --            --            --            (52)           (52)
                  -------   ------   ----------   ------       -----       -------       -------        -------        -------
Balance at
 December 31,
 1994...........       --      --    10,200,000      10           50            --            --            (52)             8
 Sale of common
   stock........       --      --     4,235,244   1,172          (50)           --            --             --          1,122
Reclassification
   of
   accumulated
   deficit due
   to
   termination
   of S
   Corporation
   status.......       --      --            --    (107)          --            --            --            107             --
 Advances
   received for
   common
   stock........       --      --            --      --          150            --            --             --            150
 Exercise of
   common stock
   options......       --      --       120,000      --           --            --            --             --             --
 Net loss for
   the year
   ended
   December 31,
   1995.........       --      --            --      --           --            --            --           (303)          (303)
                  -------   ------   ----------   ------       -----       -------       -------        -------        -------
Balance at
 December 31,
 1995...........       --      --    14,555,244   1,075          150            --            --           (248)           977
 Reincorporation
   in
   Delaware.....       --      --            --    (929)          --           929            --             --             --
 Sale of
   preferred
   stock, net of
   issuance
   costs of
   $30..........  569,396       6            --      --           --         7,964            --             --          7,970
 Sale of common
   stock........       --      --       840,534       8         (150)          178            --             --             36
 Exercise of
   common stock
   options......       --      --       504,459       5           --           190            --             --            195
 Unearned
   compensation
   related to
   stock
   options......       --      --            --      --           --           612          (612)            --             --
 Net loss for
   the year
   ended
   December 31,
   1996.........       --      --            --      --           --            --            --         (5,777)        (5,777)
                  -------   ------   ----------   ------       -----       -------       -------        -------        -------
Balance at
 December 31,
 1996...........  569,396   $   6    15,900,237   $ 159       $   --        $9,873        $ (612)       $(6,025)       $ 3,401
                  =======   ======   ==========   ======       =====       =======       =======        =======        =======

See accompanying notes.

F-5

AMAZON.COM, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

                                                            FOR THE
                                                            PERIOD
                                                         FROM JULY 5,
                                                         1994 (DATE OF         YEAR ENDED
                                                         INCEPTION) TO        DECEMBER 31,
                                                         DECEMBER 31,      ------------------
                                                             1994           1995       1996
                                                         -------------     ------     -------
OPERATING ACTIVITIES
Net loss...............................................      $ (52)        $ (303)    $(5,777)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation.........................................          5             19         286
  Changes in operating assets and liabilities:
     Increase in inventories...........................         --            (17)       (554)
     Increase in prepaid expenses and other............         --            (14)       (307)
     Increase in deposits..............................         --             --        (146)
     Increase in accounts payable and accrued
       expenses........................................         23             83       4,763
                                                         -------------     ------     -------
       Net cash used in operating activities...........        (24)          (232)     (1,735)

INVESTING ACTIVITIES
Purchases of equipment.................................        (28)           (52)     (1,214)
                                                         -------------     ------     -------
       Net cash used in investing activities...........        (28)           (52)     (1,214)

FINANCING ACTIVITIES
Proceeds from exercise of stock options, sale of stock,
  and advances received for common stock...............         60          1,272         231
Proceeds from sale of preferred stock..................         --             --       7,970
Proceeds from (repayment of) notes payable.............         44            (44)         --
                                                         -------------     ------     -------
       Net cash provided by financing activities.......        104          1,228       8,201
                                                         -------------     ------     -------

Net increase in cash...................................         52            944       5,252
Cash and cash equivalents at beginning of year.........         --             52         996
                                                         -------------     ------     -------
Cash and cash equivalents at end of year...............      $  52         $  996     $ 6,248
                                                         ==========        ======     =======

See accompanying notes.

F-6

AMAZON.COM, INC.

NOTES TO FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

Description of Business

Amazon.com, Inc. (the Company) was incorporated on July 5, 1994. The Company is an online retailer of books and other information-based products on the Company's Internet site, and offers more than 2.5 million titles.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents represent short-term investments consisting of commercial paper and money market funds carried at cost, which approximates market. The Company considers all short-term investments with a maturity of three months or less at the date of purchase to be cash equivalents.

Inventories

Inventories are valued at the lower of average cost or market.

The Company's largest vendor accounted for 59% of the Company's book purchases in 1996. The vendor's inability to supply books in a timely manner or on terms acceptable to the Company could severely affect the Company's ability to meet customers' demands.

Equipment

Equipment is recorded at cost less accumulated depreciation. Depreciation of equipment is provided using the straight-line method over the estimated useful lives of two to four years.

Income Taxes

The Company was initially organized under the provisions of Subchapter S of the Internal Revenue Code of 1986, as amended (the Code). In lieu of corporate income taxes, the stockholders of a Subchapter S corporation are taxed on their proportionate shares of the company's taxable income. Effective March 31, 1995, the Company, with the consent of its stockholders, elected to be taxed under the provisions of Subchapter C of the Code. Accordingly, cumulative net losses of $107,000 incurred by the Company as of that date have been reclassified to common stock.

Revenue Recognition

The Company recognizes revenue from product sales when the products are shipped to customers. Outbound shipping and handling charges are included in net sales. International sales were $198,000 and $5.1 million for the years ended December 31, 1995 and 1996, respectively.

F-7

AMAZON.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Advertising Costs

The cost of advertising is expensed as incurred. For the years ended December 31, 1995 and 1996, the Company incurred advertising expense of $30,000 and $3.4 million, respectively.

Product Development

Product development expenses consist principally of payroll and related expenses for development, editorial, and network operations personnel and consultants, systems and telecommunications infrastructure and costs of acquired content. All product development costs have been expensed as incurred.

Stock Compensation

The Company has elected to apply the disclosure-only provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation." Accordingly, the Company accounts for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. Compensation cost for stock options is measured as the excess, if any, of the fair value of the Company's common stock at the date of grant over the stock option exercise price.

Concentrations of Credit Risk

The Company is subject to concentrations of credit risk from its cash investments. The Company's credit risk is managed by investing its excess cash in high-quality money market instruments and securities of the U.S. government.

Net Loss Per Share

Net loss per share is computed based on the weighted average number of common shares outstanding. In accordance with the Securities and Exchange Commission requirements, common and common equivalent shares issued during the 12-month period prior to the filing of the Company's initial public offering have been included in the calculation as if they were outstanding for all periods presented using the treasury stock method and the assumed initial public offering price. Common equivalent shares consist of the common shares issuable upon the conversion of the convertible preferred stock and shares issuable upon the exercise of stock options.

Reclassifications

Certain prior-year balances have been reclassified to conform to the current-year presentation.

F-8

AMAZON.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. EQUIPMENT

Equipment, at cost, consists of the following:

                                                              DECEMBER 31,
                                                             ---------------
                                                             1995      1996
                                                             ----     ------
                                                             (IN THOUSANDS)
Computers and equipment....................................  $73      $1,031
Purchased software.........................................    8         134
Leasehold improvements.....................................   --         130
                                                             ---      ------
                                                              81       1,295
Less accumulated depreciation..............................   24         310
                                                             ---      ------
                                                             $57      $  985
                                                             ===      ======

3. STOCKHOLDERS' EQUITY

Reincorporation

On May 28, 1996, the Company reincorporated in the state of Delaware with authorized capital of 5,000,000 shares of $0.01 par value preferred stock and 25,000,000 shares of $0.01 par value common stock. The accompanying financial statements have been restated to reflect this reincorporation.

Preferred Stock

Preferred stock is convertible into common stock at the option of the holder, at any time, at a rate of four shares of common stock for one share of preferred stock. The conversion rate may be adjusted depending on future events. (See Note 6). The preferred stock also has certain mandatory conversion requirements, including in the event of an initial public offering of the Company's common stock, subject to certain minimum requirements.

Each share of preferred stock has voting rights equivalent to the number of common shares issuable, if converted. The preferred stock also has preferential rights in the event of any distribution of assets upon liquidation of the Company, which are determined as fixed amounts per share, plus any declared but unpaid dividends. Noncumulative dividends accrue at $1 per share, per annum, when and if declared.

In June 1996, the Company issued 569,396 shares of Series A convertible preferred stock at a price of $14.05 per share.

In January and February 1997, the Company sold 2,500 shares of Series A preferred stock at $40 per share to each of two new directors of the Company, aggregating 5,000 shares, and increased the total number of designated Series A preferred stock to 579,396 shares.

Common Stock

At December 31, 1994 and 1995, the Company received advances for common stock. The common stock was subsequently issued at $0.172 and $0.333 per share, respectively.

On November 23, 1996, the Company effected a 4-for-1 common stock split. The accompanying financial statements have been restated to reflect this stock split. (See Note 6).

In conjunction with the sale of Series A preferred stock in June 1996, the Company's founder granted the Company a right to repurchase 612,000 shares of common stock held by him at the original purchase price of $0.001 per share if his employment terminates under certain circum-

F-9

AMAZON.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

stances. The Company's right of repurchase lapses ratably over the 36-month period ending June 21, 1999. At December 31, 1996, 510,000 shares held by the founder were subject to repurchase under this agreement.

STOCK OPTIONS

The Company adopted the 1994 Stock Option Plan (the 1994 Plan), which provides for the issuance of incentive and nonqualified stock options to employees and officers. There are 4,800,000 shares of common stock reserved under the 1994 Plan. Generally, options are granted by the Company's Board of Directors at an exercise price of not less than the fair market value of the Company's common stock at the date of grant. Each outstanding option granted prior to December 20, 1996 has a term of five years from the date of vesting. Each outstanding option granted subsequent to December 20, 1996 has a term of ten years from the date of grant. Generally, options granted under the 1994 Plan become exercisable immediately and vest at the rate of 20% after year one, 20% after year two, and 5% at the end of each quarter for years three through five. Shares issued upon exercise of options that are unvested are subject to repurchase by the Company upon termination of employment or services.

During 1995, the Company granted a total of 360,000 nonqualified stock options outside of the 1994 Plan under separate agreements with three individuals. Under the terms of these agreements, the option prices range from $0.333 to $0.667 and vest at the rate of 40% on the date of grant, 30% after two years, and 30% after four years. Unexercised options expire five years after the date of grant. At December 31, 1996, options for 96,000 shares of common stock were exercisable and options for 48,000 shares had been exercised.

The following table summarizes the Company's stock option activity:

                                                                    WEIGHTED
                                                                    AVERAGE
                                                      NUMBER OF     EXERCISE
                                                       SHARES        PRICE
                                                      ---------     --------
  Options granted in 1994...........................  1,176,816      $0.001
                                                      ---------
Balance, December 31, 1994..........................  1,176,816       0.001
  Options granted...................................    742,464       0.344
  Options canceled..................................    (30,000)      0.172
  Options exercised.................................   (120,000)      0.001
                                                      ---------
Balance December 31, 1995...........................  1,769,280       0.142
  Options granted:
     At fair market value...........................  1,038,600       0.333
     At less than fair market value.................  1,554,150       0.796
  Options canceled..................................   (528,720)      0.278
  Options exercised.................................   (504,459)      0.387
                                                      ---------
Balance December 31, 1996...........................  3,328,851       0.448
                                                      =========

At December 31, 1996, 1,206,690 shares of common stock were available for future issuance under the 1994 Plan.

F-10

AMAZON.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The following table summarizes information about options outstanding and exercisable at December 31, 1996:

                                 OPTIONS OUTSTANDING
                     --------------------------------------------
                                     WEIGHTED-                            OPTIONS EXERCISABLE
                                      AVERAGE                        -----------------------------
                                     REMAINING       WEIGHTED-                        WEIGHTED-
     RANGE OF          OPTIONS      CONTRACTUAL       AVERAGE          OPTIONS         AVERAGE
  EXERCISE PRICES    OUTSTANDING       LIFE        EXERCISE PRICE    EXERCISABLE    EXERCISE PRICE
-------------------  -----------    -----------    --------------    -----------    --------------
$0.001 - $0.334....    1,770,450     6.5 years         $0.168          1,662,450        $0.158
  0.335 -  1.00 ...    1,558,401     8.1 years          0.766          1,450,401         0.773
                       ---------                                       ---------
  0.001 -  1.00 ...    3,328,851     7.3 years          0.448          3,112,851         0.445

At December 31, 1996, common stock reserved for future issuance was as follows:

Preferred stock conversion....................   3,416,376
Stock options:
  1994 Plan...................................   4,223,541
  Outside 1994 Plan...........................     312,000
                                                ----------
                                                 7,951,917
                                                ==========

The Company follows the intrinsic value method in accounting for its stock options. Had compensation cost been recognized based on the fair value at the date of grant for options awarded under the 1994 Plan, the pro forma amounts of the Company's net loss and net loss per share for the years ended December 31, 1995 and 1996 would have been as follows:

                                                            DECEMBER 31,
                                                          -----------------
                                                           1995       1996
                                                          ------     ------
                                                           (IN THOUSANDS,
                                                          EXCEPT PER SHARE
                                                                DATA)
Net loss -- as reported.................................  $  303     $5,777
Net loss -- pro forma...................................     304      5,808
Net loss per common share -- as reported................   (0.02)     (0.26)
Net loss per common share -- pro forma..................   (0.02)     (0.26)

The fair value of each option grant was estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: risk-free interest rates of 5.16% to 7.60%; expected option life of three years; and no expected dividends. As the Company is privately held, expected volatility is not applicable. The weighted-average fair value of options granted during the years 1995 and 1996 was $0.06 and $0.08, respectively, for options granted at fair market value. The weighted-average fair value of options granted at less than fair market value during 1996 was $0.53.

Deferred Compensation

The Company recorded aggregate deferred compensation of $612,000 during the fourth quarter of 1996. The amount recorded represents the difference between the grant price and the deemed fair value of the Company's common stock for shares subject to options granted in 1996. The amortization of deferred compensation will be charged to operations over the vesting period of the options, which is typically five years. No amount was amortized in 1996.

F-11

AMAZON.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. INCOME TAXES

At December 31, 1996, the Company had net operating loss carryforwards of approximately $5.5 million. Utilization of net operating loss carryforwards may be subject to certain limitations under Section 382 of the Code. The carryforwards expire in 2011.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

                                                             DECEMBER 31,
                                                          ------------------
                                                          1995        1996
                                                          ----       -------
                                                            (IN THOUSANDS)
Deferred tax assets:
  Net operating loss carryforwards.....................   $ 84       $ 1,855
  Book-over-tax depreciation...........................      2            --
                                                          ----       -------
                                                            86         1,855
Valuation allowance for deferred tax assets............    (86)       (1,855)
                                                          ----       -------
Net deferred tax assets................................   $ --       $    --
                                                          ====       =======

5. COMMITMENTS

The Company currently leases office and warehouse space and equipment under noncancelable operating leases. Rental expense under operating lease agreements for 1994, 1995, and 1996 was $2,000, $12,000, and $257,000, respectively.

In February 1997, the Company entered into several additional lease commitments for equipment and facilities. Future minimum lease commitments under noncancelable leases and service agreements as of December 31, 1996, including the lease commitments entered into in February 1997, are as follows:

                               (IN THOUSANDS)
                               --------------
1997.........................      $1,540
1998.........................       1,534
1999.........................       1,133
2000.........................         107
2001.........................           9
                                   ------
                                   $4,323
                                   ======

6. SUBSEQUENT EVENTS

In February 1997, the Company adopted the 1997 Stock Option Plan (the 1997 Plan). Under the 1997 Plan, 6,000,000 shares of common stock have been reserved for future issuance.

In March 1997, the Company's Board of Directors approved amendments to the Company's Restated Certificate of Incorporation to increase authorized common stock to 100,000,000 shares; increase authorized preferred stock to 10,000,000 shares; and effect a three-for-two common stock split. These amendments are subject to stockholder approval. The accompanying financial statements have been restated to reflect this stock split.

F-12

AMAZON.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

In March 1997, the Company's Board of Directors authorized management to file a registration statement with the Securities and Exchange Commission to permit the Company to sell shares of its common stock to the public. Upon completion of the Company's initial public offering, each outstanding share of preferred stock will convert into six shares of common stock. Unaudited pro forma stockholders' equity reflects the assumed conversion of the preferred stock into common stock as of December 31, 1996.

F-13

[SCREEN-SHOTS OF WEB PAGES]


NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

TABLE OF CONTENTS

                                        PAGE
                                        ----
Prospectus Summary....................    3
The Company...........................    4
Risk Factors..........................    5
Use of Proceeds.......................   14
Dividend Policy.......................   14
Capitalization........................   15
Dilution..............................   16
Selected Financial Data...............   17
Management's Discussion and Analysis
  of Financial Condition and Results
  of Operations.......................   18
Business..............................   23
Management............................   33
Certain Transactions..................   39
Principal Stockholders................   40
Description of Capital Stock..........   41
Shares Eligible for Future Sale.......   43
Underwriting..........................   44
Legal Matters.........................   45
Experts...............................   45
Additional Information................   45
Index to Financial Statements.........  F-1

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

LOGO

2,500,000 SHARES

COMMON STOCK
DEUTSCHE MORGAN GRENFELL

ALEX. BROWN & SONS

INCORPORATED

HAMBRECHT & QUIST

Prospectus

, 1997


PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than the underwriting discount, payable by the registrant in connection with the sale of the Common Stock being registered hereby. All amounts shown are estimates, except the Securities and Exchange Commission registration fee, the NASD filing fee and the Nasdaq National Market listing fee.

Securities and Exchange Commission registration fee.............................  $ 11,326
NASD filing fee.................................................................     4,525
Nasdaq National Market listing fee..............................................    50,000
Blue Sky fees and expenses......................................................     5,000
Printing and engraving expenses.................................................   150,000
Legal fees and expenses.........................................................   275,000
Accounting fees and expenses....................................................   150,000
Directors and officers insurance................................................   150,000
Transfer Agent and Registrar fees...............................................    10,000
Miscellaneous expenses..........................................................    44,149
                                                                                  --------
          Total.................................................................  $850,000
                                                                                  ========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the Delaware General Corporation Law (the "DGCL") provides that a corporation may indemnify directors and officers, as well as other employees and individuals, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation -- a "derivative action"), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) incurred in connection with the defense or settlement of such actions, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation's charter, bylaws, disinterested director vote, stockholder vote, agreement or otherwise.

Section 10 of the registrant's Bylaws (Exhibit 3.2 hereto) requires indemnification to the full extent permitted under Delaware law as it now exists or may hereafter be amended. Subject to any restrictions imposed by Delaware law, the Bylaws provide an unconditional right to indemnification for all expense, liability and loss (including attorneys' fees, judgment, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by any person in connection with any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative (including, to the extent permitted by law, any derivative action) by reason of the fact that such person is or was serving as a director or officer of the registrant or that, being or having been a director or officer of the registrant, such person is or was serving at the request of the registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan. The Bylaws also provide that the registrant may, by action of its Board of Directors, provide indemnification to its employees and agents with the same scope and effect as the foregoing indemnification of directors and officers.

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Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for (i) any breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) payments of unlawful dividends or unlawful stock repurchases or redemptions, or (iv) any transaction from which the director derived an improper personal benefit.

Article 10 of the registrant's Restated Certificate of Incorporation (Exhibit 3.1 hereto) provides that to the full extent that the DGCL, as it now exists or may hereafter be amended, permits the limitation or elimination of the liability of directors, a director of the registrant shall not be liable to the registrant or its stockholders for monetary damages for breach of fiduciary duty as a director. Any amendment to or repeal of such Article 10 shall not adversely affect any right or protection of a director of the registrant for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.

The registrant has entered into certain indemnification agreements with its officers and directors, the form of which is attached as Exhibit 10.1 to this Registration Statement and incorporated herein by reference. The indemnification agreements provide the registrant's officers and directors with further indemnification to the maximum extent permitted by the DGCL. Reference is made to the Underwriting Agreement (Exhibit 1.1 hereto), in which the Underwriters have agreed to indemnify the officers and directors of the registrant against certain liabilities.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since its inception in July 1994, the registrant has issued and sold unregistered securities as follows (which information has been adjusted to give effect to a four-for-one stock split of the registrant's outstanding Common Stock effective November 23, 1996 and a three-for-two stock split of the registrant's outstanding Common Stock to be effected prior to the closing of the offering):

1. On July 5, 1994, the registrant issued an aggregate of 10,200,000 shares of Common Stock to its founder for a consideration of approximately $.0010 per share, or an aggregate of $10,000. The foregoing purchase and sale were exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(2) thereof on the basis that the transaction did not involve a public offering.

2. On February 9, 1995, July 24, 1995 and May 3, 1996, the registrant issued an aggregate of 2,012,772 shares of Common Stock to three investors for a consideration of approximately $.1717 per share, or an aggregate of $345,525. The foregoing purchases and sales were exempt from registration under the Securities Act pursuant to Section 4(2) thereof on the basis that the transactions did not involve a public offering.

3. On August 7, 1995, the registrant issued 42,000 shares of Common Stock to one investor for a consideration of approximately $.1287 per share, or an aggregate of $5,408. The foregoing purchase and sale were exempt from registration under the Securities Act pursuant to Section 4(2) thereof on the basis that the transaction did not involve a public offering.

4. Between December 6, 1995 and May 16, 1996, the registrant issued an aggregate of 3,021,000 shares of Common Stock to 23 investors for a consideration of approximately $.3333 per share, or an aggregate of $1,007,000. The foregoing purchases and sales were exempt from registration under the Securities Act pursuant to Section 4(2) thereof on the basis that the transactions did not involve a public offering.

5. On June 18, 1996, the registrant effected a reincorporation from the state of Washington to the state of Delaware. The registrant, as a Washington corporation, merged with and into a new corporation incorporated in Delaware, with the new corporation surviving the merger (the "Surviving Entity"). As a result, each share of Common Stock of the registrant, as a Washington corporation, converted into one fully paid and nonassessable share of Common Stock of the

II-2


Surviving Entity. Such issuances were exempt from registration under the Securities Act under Section 2(3) thereof on the basis that the transaction did not involve a sale of securities.

6. On June 21, 1996, the registrant issued 569,396 shares of Series A Preferred Stock, which are convertible into 3,416,376 shares of Common Stock, to two investors for a consideration of approximately $14.05 per share of Series A Preferred Stock, or an aggregate of $8,000,014. The foregoing purchases and sales were exempt from registration under the Securities Act pursuant to Section 4(2) thereof on the basis that the transactions did not involve a public offering.

7. In January and February 1997, the registrant issued an aggregate of 5,000 shares of Series A Preferred Stock, which are convertible into 30,000 shares of Common Stock, to two investors for a consideration of $40.00 per share of Series A Preferred Stock, or an aggregate of $200,000. The foregoing purchases and sales were exempt from registration under the Securities Act pursuant to Section 4(2) thereof on the basis that the transactions did not involve a public offering.

8. From October 24, 1994 through February 28, 1997, the registrant granted stock options to purchase 5,296,080 shares of the Common Stock at a weighted average exercise price of $1.2927 per share to employees, consultants and directors pursuant to its 1994 Stock Option Plan. Of these options, 606,720 have been canceled without being exercised, 1,636,386 have been exercised and 3,052,974 remain outstanding. From December 6, 1995 through February 28, 1997, the registrant also granted stock options outside of any plan to purchase 360,000 shares of the registrant's Common Stock at a weighted average exercise price of $0.50 per share to consultants and directors. Of these options, none have been canceled, 96,000 have been exercised and 264,000 remain outstanding.

The sales and issuances of these securities were exempt from registration under the Securities Act pursuant to Rule 701 promulgated thereunder on the basis that these options were offered and sold either pursuant to a written compensatory benefit plan or pursuant to written contracts relating to consideration, as provided by Rule 701, or pursuant to Section 4(2) thereof on the basis that the transactions did not involve a public offering.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

NUMBER                                          DESCRIPTION
- ------       ----------------------------------------------------------------------------------
  1.1*    -- Form of Underwriting Agreement.
  2.1     -- Agreement and Plan of Merger between the Registrant, a Washington corporation, and
             Amazon.com, Inc., a Delaware corporation, dated May 28, 1996.
  3.1     -- Restated Certificate of Incorporation and all amendments thereto of the
             Registrant.
  3.2     -- Bylaws of the Registrant.
  4.1*    -- Specimen Common Stock Certificate.
  5.1     -- Opinion of Perkins Coie as to the legality of the shares.
 10.1*    -- Form of Indemnification Agreement between the Registrant and each of its Directors
             and Executive Officers.
 10.2     -- Series A Preferred Stock Purchase Agreement, dated June 21, 1996, by and among the
             Registrant and Kleiner Perkins Caufield & Byers VIII and KPCB Information Sciences
             Zaibatsu Fund II.
 10.3     -- Co-Sale Agreement, dated June 21, 1996, by and among the Registrant and Kleiner
             Perkins Caufield & Buyers VIII, KPCB Information Sciences Zaibatsu Fund II and
             Jeffrey P. Bezos.

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NUMBER                                          DESCRIPTION
- ------       ----------------------------------------------------------------------------------
 10.4     -- Right of First Refusal Agreement, dated June 21, 1996, by and between the
             Registrant and Kleiner Perkins Caufield & Byers VIII, KPCB Information Sciences
             Zaibatsu Fund II and Jeffrey P. Bezos.
 10.5     -- Repurchase Agreement, dated June 21, 1996, by and between the Registrant and
             Jeffrey P. Bezos.
 10.6     -- Voting Agreement, dated June 21, 1996, by and among the Registrant and Kleiner
             Perkins Caufield & Byers VIII, KPCB Information Sciences Zaibatsu Fund II and
             Jeffrey P. Bezos.
 10.7     -- Investor Rights Agreement, dated as of June 21, 1996, by and among the Registrant,
             Kleiner Perkins Caufield & Byers VIII, KPCB Information Sciences Zaibatsu Fund II
             and Jeffrey P. Bezos.
 10.8     -- Investment Letter Agreement regarding Purchase of Series A Stock, dated January
             31, 1997, between the Registrant and Scott D. Cook.
 10.9     -- Right of First Refusal Agreement, dated January 31, 1997, between the Registrant
             and Scott D. Cook.
 10.10    -- Investment Letter Agreement regarding Purchase of Series A Stock, dated February
             20, 1997, between the Registrant and Patricia Q. Stonesifer.
 10.11    -- Right of First Refusal Agreement, dated February 20, 1997, between the Registrant
             and Patricia Q. Stonesifer.
 10.12    -- Subscription, dated July 5, 1994, by Jeffrey P. Bezos.
 10.13    -- Shareholder's Agreement, dated February 9, 1995, by and between the Registrant and
             Miguel A. Bezos.
 10.14    -- Shareholder's Agreement, dated July 24, 1995, by and between the Registrant and
             the Gise Family Trust.
 10.15    -- Shareholder's Agreement, dated August 8, 1995, by and between the Registrant and
             Sheldon J. Kaphan.
 10.16    -- Shareholder's Agreement, dated November 26, 1995, by and between the Registrant
             and Tom A. Alberg.
 10.17    -- [Reserved]
 10.18    -- Shareholder's Agreement, dated July 10, 1996, by and between the Registrant and
             Scott E. Lipsky.
 10.19    -- Shareholder's Agreement, dated December 31, 1996, by and between the Registrant
             and Joy D. Covey.
 10.20    -- Amended and Restated 1994 Stock Option Plan (version as of December 20, 1996 for
             Amended and Restated Grants and version as of December 20, 1996 for New Grants).
 10.21    -- 1997 Stock Option Plan.
 10.22    -- Amended and Restated Incentive Stock Option Letter Agreement, effective October
             24, 1994, from the Registrant to Sheldon J. Kaphan.
 10.23    -- Non-Qualified Stock Option Letter Agreement, effective December 6, 1995, from the
             Registrant to Tom A. Alberg.
 10.24    -- Non-Qualified Stock Option Letter Agreement, effective December 6, 1995, from the
             Registrant to Tom A. Alberg.
 10.25    -- Non-Qualified Stock Option Letter Agreement, effective December 20, 1996, from the
             Registrant to Joy D. Covey.

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NUMBER                                          DESCRIPTION
- ------       ----------------------------------------------------------------------------------
 10.26    -- Incentive Stock Option Letter Agreement, effective December 20, 1996, from the
             Registrant to Joy D. Covey.
 10.27    -- Subrogation Agreement, dated June 19, 1996, by and between the Registrant and
             Jeffrey P. Bezos.
 10.28    -- Lease Agreement, dated July 1, 1996, as amended on December 21, 1996, January 9,
             1997 and February 27, 1997, by and between the Registrant and Trident Investments,
             Inc.
 10.29    -- Lease Agreement, dated September 30, 1996, by and between the Registrant and
             Pacific Northwest Group A.
 10.30    -- Sublease Agreement, dated February 19, 1997, by and between C.C. Filson Company
             and the Registrant.
 10.31    -- Sublease Agreement, dated January 19, 1996, by and between the Registrant and
             Coast Wide Supply Co.
 10.32    -- Master Lease Agreement No. 6672336, dated February 12, 1997, between the
             Registrant and Digital Financial Services, a division of General Electric Capital
             Corporation.
 11.1     -- Statement regarding computation of net loss per share.
 23.1     -- Consent of Ernst & Young LLP.
 23.2     -- Consent of Perkins Coie (contained in the opinion filed as Exhibit 5.1 hereto).
 24.1     -- Power of Attorney (contained on signature page).
 27.1     -- Financial Data Schedule.


* To be filed by amendment.

(b) Financial Statement Schedules

All schedules are omitted because they are inapplicable or the requested information is shown in the financial statements of the registrant or related notes thereto.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 14, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes to provide to the Underwriters at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.

II-5


The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Seattle, State of Washington, on the 24th day of March, 1997.

AMAZON.COM, INC.

By:      /s/ JEFFREY P. BEZOS
   -----------------------------------
       Jeffrey P. Bezos, President
       and Chief Executive Officer

POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes and appoints Jeffrey P. Bezos and Joy D. Covey, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file, any and all amendments to this Registration Statement, including any and all post-effective amendments, and any registration statement relating to the same offerings as this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or either of them, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated below on the 24th day of March, 1997.

            /s/ JEFFREY P. BEZOS               President, Chief Executive Officer and
- ---------------------------------------------    Chairman of the Board (Principal Executive
              Jeffrey P. Bezos                   Officer)

              /s/ JOY D. COVEY                 Chief Financial Officer, Vice President of
- ---------------------------------------------    Finance and Administration (Principal
                Joy D. Covey                     Financial and Accounting Officer)

              /s/ TOM A. ALBERG                Director
- ---------------------------------------------
                Tom A. Alberg

              /s/ SCOTT D. COOK                Director
- ---------------------------------------------
                Scott D. Cook

              /s/ L. JOHN DOERR                Director
- ---------------------------------------------
                L. John Doerr

         /s/ PATRICIA Q. STONESIFER            Director
- ---------------------------------------------
           Patricia Q. Stonesifer

II-7


INDEX TO EXHIBITS

EXHIBIT
NUMBER                                         EXHIBITS
- ------        --------------------------------------------------------------------------
  1.1*    --  Form of Underwriting Agreement.
  2.1     --  Agreement and Plan of Merger between the Registrant, a Washington
              corporation, and Amazon.com, Inc., a Delaware corporation, dated May 28,
              1996.
  3.1     --  Restated Certificate of Incorporation and all amendments thereto of the
              Registrant.
  3.2     --  Bylaws of the Registrant.
  4.1*    --  Specimen Common Stock Certificate.
  5.1     --  Opinion of Perkins Coie as to the legality of the shares.
 10.1*    --  Form of Indemnification Agreement between the Registrant and each of its
              Directors and Executive Officers.
 10.2     --  Series A Preferred Stock Purchase Agreement, dated June 21, 1996, by and
              among the Registrant and Kleiner Perkins Caufield & Byers VIII and KPCB
              Information Sciences Zaibatsu Fund II.
 10.3     --  Co-Sale Agreement, dated June 21, 1996, by and among the Registrant and
              Kleiner Perkins Caufield & Buyers VIII, KPCB Information Sciences Zaibatsu
              Fund II and Jeffrey P. Bezos.
 10.4     --  Right of First Refusal Agreement, dated June 21, 1996, by and between the
              Registrant and Kleiner Perkins Caufield & Byers VIII, KPCB Information
              Sciences Zaibatsu Fund II and Jeffrey P. Bezos.
 10.5     --  Repurchase Agreement, dated June 21, 1996, by and between the Registrant
              and Jeffrey P. Bezos.
 10.6     --  Voting Agreement, dated June 21, 1996, by and among the Registrant and
              Kleiner Perkins Caufield & Byers VIII, KPCB Information Sciences Zaibatsu
              Fund II and Jeffrey P. Bezos.
 10.7     --  Investor Rights Agreement, dated as of June 21, 1996, by and among the
              Registrant, Kleiner Perkins Caufield & Byers VIII, KPCB Information
              Sciences Zaibatsu Fund II and Jeffrey P. Bezos.
 10.8     --  Investment Letter Agreement regarding Purchase of Series A Stock, dated
              January 31, 1997, between the Registrant and Scott D. Cook.
 10.9     --  Right of First Refusal Agreement, dated January 31, 1997, between the
              Registrant and Scott D. Cook.
 10.10    --  Investment Letter Agreement regarding Purchase of Series A Stock, dated
              February 20, 1997, between the Registrant and Patricia Q. Stonesifer.
 10.11    --  Right of First Refusal Agreement, dated February 20, 1997, between the
              Registrant and Patricia Q. Stonesifer.
 10.12    --  Subscription, dated July 5, 1994, by Jeffrey P. Bezos.
 10.13    --  Shareholder's Agreement, dated February 9, 1995, by and between the
              Registrant and Miguel A. Bezos.
 10.14    --  Shareholder's Agreement, dated July 24, 1995, by and between the
              Registrant and the Gise Family Trust.
 10.15    --  Shareholder's Agreement, dated August 8, 1995, by and between the
              Registrant and Sheldon J. Kaphan.


EXHIBIT
NUMBER                                         EXHIBITS
- ------        --------------------------------------------------------------------------
 10.16    --  Shareholder's Agreement, dated November 26, 1995, by and between the
              Registrant and Tom A. Alberg.
 10.17    --  [Reserved]
 10.18    --  Shareholder's Agreement, dated July 10, 1996, by and between the
              Registrant and Scott E. Lipsky.
 10.19    --  Shareholder's Agreement, dated December 31, 1996, by and between the
              Registrant and Joy D. Covey.
 10.20    --  Amended and Restated 1994 Stock Option Plan (version as of December 20,
              1996 for Amended and Restated Grants and version as of December 20, 1996
              for New Grants).
 10.21    --  1997 Stock Option Plan.
 10.22    --  Amended and Restated Incentive Stock Option Letter Agreement, effective
              October 24, 1994, from the Registrant to Sheldon J. Kaphan.
 10.23    --  Non-Qualified Stock Option Letter Agreement, effective December 6, 1995,
              from the Registrant to Tom A. Alberg.
 10.24    --  Non-Qualified Stock Option Letter Agreement, effective December 6, 1995,
              from the Registrant to Tom A. Alberg.
 10.25    --  Non-Qualified Stock Option Letter Agreement, effective December 20, 1996,
              from the Registrant to Joy D. Covey.
 10.26    --  Incentive Stock Option Letter Agreement, effective December 20, 1996, from
              the Registrant to Joy D. Covey.
 10.27    --  Subrogation Agreement, dated June 19, 1996, by and between the Registrant
              and Jeffrey P. Bezos.
 10.28    --  Lease Agreement, dated July 1, 1996, as amended on December 21, 1996,
              January 9, 1997 and February 27, 1997, by and between the Registrant and
              Trident Investments, Inc.
 10.29    --  Lease Agreement, dated September 30, 1996, by and between the Registrant
              and Pacific Northwest Group A.
 10.30    --  Sublease Agreement, dated February 19, 1997, by and between C.C. Filson
              Company and the Registrant.
 10.31    --  Sublease Agreement, dated January 19, 1996, by and between the Registrant
              and Coast Wide Supply Co.
 10.32    --  Master Lease Agreement No. 6672336, dated February 12, 1997, between the
              Registrant and Digital Financial Services, a division of General Electric
              Capital Corporation.
 11.1     --  Statement regarding computation of net loss per share.
 23.1     --  Consent of Ernst & Young LLP.
 23.2     --  Consent of Perkins Coie (contained in the opinion filed as Exhibit 5.1
              hereto).
 24.1     --  Power of Attorney (contained on signature page).
 27.1     --  Financial Data Schedule.


* To be filed by amendment.


Exhibit 2.1

AGREEMENT AND PLAN OF MERGER

BETWEEN

AMAZON.COM, INC.
(A WASHINGTON CORPORATION)

AND

AMAZON.COM, INC.
(A DELAWARE CORPORATION)

DATED AS OF
MAY 28, 1996


CONTENTS

1.    THE MERGER ....................................................  2

      1.1   The Merger ..............................................  2

      1.2   Effective Date ..........................................  2

      1.3   Certificate of Incorporation ............................  2

      1.4   Bylaws ..................................................  2

      1.5   Directors and Officers ..................................  2

2.    CONVERSION OF SHARES ..........................................  3

      2.1   Amazon Washington Common Stock ..........................  3

      2.2   Amazon Delaware Common Stock ............................  3

      2.3   Options .................................................  3

      2.4   Exchange of Certificates ................................  3

3.    EFFECT OF THE MERGER ..........................................  3

      3.1   Rights, Privileges, Etc. ................................  3

      3.2   Further Assurances ......................................  4

4.    GENERAL .......................................................  4

      4.1   Abandonment .............................................  4

      4.2   Amendment ...............................................  4

      4.3   Governing Law ...........................................  5

      4.4   Counterparts ............................................  5


Page 1

AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER ("this Agreement") is made and entered into as of May 28, 1996, between Amazon.com, Inc., a Washington corporation ("Amazon Washington"), and Amazon.com, Inc., a Delaware corporation ("Amazon Delaware"). Amazon Washington and Amazon Delaware are from time to time herein referred to as the "Constituent Corporations."

RECITALS

A. Amazon Washington is a corporation duly organized and existing under the laws of the State of Washington and, on the date hereof, has authority to issue 5,000,000 shares of common stock, no par value per share ("Amazon Washington Common Stock"), of which 2,589,711 shares are issued and outstanding as of May 28, 1996.

B. Amazon Delaware is a corporation duly organized and existing under the laws of the State of Delaware and, on the date hereof, has authority to issue 25,000,000 shares of common stock, par value $.01 per share ("Amazon Delaware Common Stock"), of which one share is issued and outstanding and owned by Amazon Washington, and 5,000,000 shares of preferred stock, par value $.01 per share, of which no shares are issued and outstanding.

C. The Boards of Directors of the Constituent Corporations deem it advisable and to the advantage of the Constituent Corporations and their respective shareholders that Amazon Washington be merged with and into Amazon Delaware for the purpose of changing the jurisdiction of incorporation of Amazon Washington from the State of Washington to the State of Delaware.

D. Each of the Constituent Corporations has, subject to approval by its shareholders, adopted the Plan of Merger embodied in this Agreement.

AGREEMENT

In consideration of the terms hereof, the Constituent Corporations do hereby agree to merge on the terms and conditions herein provided, as follows:


Page 1

1. THE MERGER

1.1 THE MERGER

Upon the terms and subject to the conditions hereof, on the Effective Date (as hereinafter defined), Amazon Washington shall be merged with and into Amazon Delaware in accordance with the applicable laws of the States of Washington and Delaware (the "Merger"). The separate existence of Amazon Washington shall cease, and Amazon Delaware shall be the surviving corporation (the "Surviving Corporation") and shall be governed by the laws of the State of Delaware.

1.2 EFFECTIVE DATE

The Merger shall become effective on the date and at the time of filing of Articles of Merger, in substantially the form annexed hereto as Appendix A-1, with the Secretary of State of the State of Washington, and a Certificate of Merger in substantially the same form with the Secretary of State of the State of Delaware, whichever later occurs (the "Effective Date"), all after satisfaction of the requirements of the applicable laws of such States prerequisite to such filings, including without limitation the approval of the shareholders of the Constituent Corporations.

1.3 CERTIFICATE OF INCORPORATION

On the Effective Date, the Certificate of Incorporation of Amazon Delaware, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the Certificate of Incorporation of the Surviving Corporation.

1.4 BYLAWS

On the Effective Date, the Bylaws of Amazon Delaware, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the bylaws of the Surviving Corporation.

1.5 DIRECTORS AND OFFICERS

The directors and officers of Amazon Delaware immediately prior to the Effective Date shall be the directors and officers of the Surviving Corporation, until their successors shall have been duly elected and qualified or until otherwise provided by law, the Certificate of Incorporation of the Surviving Corporation or the Bylaws of the Surviving Corporation.


Page 2

2. CONVERSION OF SHARES

2.1 AMAZON WASHINGTON COMMON STOCK

Upon the Effective Date, by virtue of the Merger and without any action on the part of any holder thereof, each share of Amazon Washington Common Stock outstanding immediately prior thereto shall be changed and converted into one fully paid and nonassessable share of the common stock of the Surviving Corporation, par value of $.01 per share ("Survivor Stock").

2.2 AMAZON DELAWARE COMMON STOCK

Upon the Effective Date, by virtue of the Merger and without any action on the part of the holder thereof, each share of Amazon Delaware Common Stock outstanding immediately prior thereto shall be cancelled and returned to the status of authorized but unissued shares.

2.3 OPTIONS

Upon the Effective Date, the Surviving Corporation shall assume and continue the rights and obligations of Amazon Washington under each then outstanding option to purchase Amazon Washington Common Stock, and the outstanding and unexercised portions of all options and rights to buy Amazon Washington Common Stock shall become options or rights for the same number of shares of Survivor Stock with no other changes in the terms and conditions of such options or rights, including exercise prices, and upon the Effective Date, the Surviving Corporation hereby assumes the outstanding and unexercised portions of such options and rights and the obligations of Amazon Washington with respect thereto.

2.4 EXCHANGE OF CERTIFICATES

Each person who becomes entitled to receive Survivor Stock by virtue of the Merger shall be entitled to receive from the Surviving Corporation, as promptly as practicable after the Effective Time, a certificate or certificates representing the number of shares of Survivor Stock to which such person is entitled as provided herein.

3. EFFECT OF THE MERGER

3.1 RIGHTS, PRIVILEGES, ETC.

On the Effective Date of the Merger, the Surviving Corporation, without further act, deed or other transfer, shall retain or succeed to, as the case may be, and possess and be vested with all the rights, privileges, immunities, powers, franchises


Page 3

and authority, of a public as well as of a private nature, of Amazon Washington and Amazon Delaware; all property of every description and every interest therein, and all debts and other obligations of or belonging to or due to each of Amazon Washington and Amazon Delaware on whatever account shall thereafter be taken and deemed to be held by or transferred to, as the case may be, or invested in the Surviving Corporation without further act or deed; title to any real estate, or any interest therein vested in Amazon Washington or Amazon Delaware, shall not revert or in any way be impaired by reason of this merger; and all of the rights of creditors of Amazon Washington and Amazon Delaware shall be preserved unimpaired, and all liens upon the property of Amazon Washington or Amazon Delaware shall be preserved unimpaired, and all debts, liabilities, obligations and duties of the respective corporations shall thenceforth remain with or be attached to, as the case may be, the Surviving Corporation and may be enforced against it to the same extent as if all of said debts, liabilities, obligations and duties had been incurred or contracted by it.

3.2 FURTHER ASSURANCES

From time to time, as and when required by the Surviving Corporation or by its successors and assigns, there shall be executed and delivered on behalf of Amazon Washington such deeds and other instruments, and there shall be taken or caused to be taken by it such further and other action, as shall be appropriate or necessary in order to vest or perfect in or to conform of record or otherwise in the Surviving Corporation the title to and possession of all the property, interest, assets, rights, privileges, immunities, powers, franchises and authority of Amazon Washington and otherwise to carry out the purposes of this Agreement, and the officers and directors of the Surviving Corporation are fully authorized in the name and on behalf of Amazon Washington or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

4. GENERAL

4.1 ABANDONMENT

At any time before the Effective Date, this Agreement may be terminated and the Merger may be abandoned for any reason whatsoever by the Board of Directors of either Amazon Washington or Amazon Delaware or both, notwithstanding the approval of this Agreement by the shareholders of Amazon Washington and Amazon Delaware.

4.2 AMENDMENT

At any time prior to the Effective Date, this Agreement may be amended or modified in writing by the Board of Directors of either Amazon Washington or


Page 4

Amazon Delaware or both; provided, however, that an amendment made subsequent to the adoption of this Agreement by the shareholders of either Constituent Corporation shall not alter or change any of the terms and conditions of this Agreement if such alteration or change would adversely affect the rights of the shareholders of such Constituent Corporation.

4.3 GOVERNING LAW

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware and, so far as applicable, the merger provisions of the Washington Business Corporation Act.

4.4 COUNTERPARTS

In order to facilitate the filing and recording of this Agreement, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.

(This space intentionally left blank.)


Page 5

IN WITNESS WHEREOF, the parties hereto have entered into and signed this Agreement as of the date and year first written.

AMAZON.COM, INC. (a Washington corporation)

By    //s//  Jeffrey P. Bezos
   ----------------------------------------
   Name: Jeffrey P. Bezos
   Title: President, Secretary and
   Treasurer

AMAZON.COM, INC. (a Delaware corporation)

By  //s//  Jeffrey P. Bezos
   ----------------------------------------
   Name: Jeffrey P. Bezos
   Title: CEO, Secretary and Treasurer


Page 6

APPENDIX A-1

CERTIFICATE OF MERGER

OF

AMAZON.COM, INC.
(a Delaware corporation)

AND

AMAZON.COM, INC.
(a Washington corporation)

In accordance with Section 252 of the Delaware General Corporation Law, the undersigned, Jeffrey P. Bezos, being the Chief Executive Officer of Amazon.com, Inc., a Delaware corporation, DOES HEREBY CERTIFY as follows:

(1) The name and state of incorporation of each of the constituent corporations are Amazon.com, Inc., a Delaware corporation, and Amazon.com, Inc., a Washington corporation;

(2) An agreement of merger has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with
Section 252 of the Delaware General Corporation Law;

(3) The name of the surviving corporation is Amazon.com, Inc.;

(4) The surviving corporation, Amazon.com, Inc., will be a Delaware corporation and its Certificate of Incorporation as currently filed with the Secretary of State of the State of Delaware shall be the Certificate of Incorporation of the surviving corporation;

(5) The executed agreement of merger is on file at the principal place of business of the surviving corporation, 2250 First Avenue South, Seattle, Washington 98134;

(6) A copy of the agreement of merger will be furnished by the surviving corporation, on request and without cost, to any current stockholder of either constituent corporation;


Page 7

(7) The authorized capital stock of Amazon.com, Inc., a Washington corporation, consists of 5,000,000 shares of Common Stock, no par value per share; and

(8) This certificate shall become effective at 5:00 p.m. PST on the date it is filed.

IN WITNESS WHEREOF, the undersigned has signed his name and affirmed that this instrument is the act and deed of the corporation and that the statements herein are true, under penalties of perjury, this ___ day of June, 1996.

AMAZON.COM, INC. (a Delaware corporation)

By

Jeffrey P. Bezos CEO, Secretary and Treasurer


Page 8

APPENDIX A-1

ARTICLES OF MERGER

AMAZON.COM, INC.
(A WASHINGTON CORPORATION)

AND

AMAZON.COM, INC.
(A DELAWARE CORPORATION)

Pursuant to the provisions of the Washington Business Corporation Act, Title 23B of the Revised Code of Washington and the Delaware General Corporation Law, the following Articles of Merger are executed for the purpose of merging Amazon.com, Inc., a Washington corporation (the "Disappearing Corporation"), into Amazon.com, Inc., a Delaware corporation (the "Surviving Corporation").

1. The Agreement and Plan of Merger approved by the shareholders of the Disappearing Corporation and by the sole stockholder of the Surviving Corporation is attached hereto as Exhibit A.

2. The Agreement and Plan of Merger was duly approved by the sole stockholder of the Surviving Corporation pursuant to the Delaware General Corporation Law and by the shareholders of the Disappearing Corporation pursuant to RCW 23B.11.030.Dated: June ___, 1996

AMAZON.COM, INC.

By
Jeffrey P. Bezos, President


Page 9

Exhibit 3.1

RESTATED CERTIFICATE OF INCORPORATION
OF
AMAZON.COM, INC.

Amazon.com, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify:

1. The original Certificate of Incorporation was filed with the Secretary of State on May 28, 1996.

2. The following Restated Certificate of Incorporation was duly adopted by the corporation's Board of Directors in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware and only restates and integrates and does not further amend the provisions of the corporation's Certificate of Incorporation as heretofore amended and supplemented, and there is no discrepancy between those provisions and the following:

ARTICLE 1. NAME

The name of this corporation is Amazon.com, Inc.

ARTICLE 2. REGISTERED OFFICE AND AGENT

The address of the initial registered office of this corporation is 1013 Centre Road, Wilmington, County of New Castle, State of Delaware 19805, and the name of its initial registered agent at such address is Corporation Service Company.

ARTICLE 3. PURPOSES

The purpose of this corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE 4. SHARES

The total authorized stock of this corporation shall consist of 25,000,000 shares of common stock having a par value of $.01 per share and 5,000,000 shares of preferred stock having a par value of $.01 per share. Authority is hereby expressly granted to the Board of Directors to fix by resolution or resolutions any of the designations and the powers, preferences and rights, and the qualifications, limitations or restrictions which are permitted by Delaware General Corporation Law in respect of any class or classes of stock or any series of any class of stock of the corporation. This corporation shall from time to time in accordance with the laws of the State of Delaware increase the authorized amount of its Common Stock if at any time the


number of shares of Common Stock remaining unissued and available for issuance shall not be sufficient to permit the conversion of the Preferred Stock.

The Preferred Stock shall be divided into series, and 569,396 shares of Preferred Stock are designated Series A Preferred Stock ("Series A Preferred Stock"). The Series A Preferred Stock shall have the rights, preferences and other terms as are set forth in this Article 4.

4.1. Dividends.

(a) The holders of the Series A Preferred Stock shall be entitled to receive dividends, prior and in preference to any dividend on Common Stock, at the rate of $1.00 per share of Series A Preferred Stock, per annum (as adjusted for any stock dividends, combinations or splits with respect to such shares), whenever funds are legally available and when and if declared by the Board of Directors. The dividends shall be non-cumulative and non-accruing.

(b) No dividends (other than those payable solely in Common Stock) shall be paid on any Common Stock of the Corporation during any fiscal year of the Corporation until dividends in the total amount set forth above per share of Series A Preferred Stock per annum (as adjusted for any stock dividends, combinations or splits with respect to such shares) shall have been paid or declared and set apart during that fiscal year on the Series A Preferred Stock, and no dividends shall be paid on any share of Common Stock unless a dividend (including, for this purpose the amount of any dividends paid pursuant to the provisions of Subsection 4.1(a)) is paid with respect to all outstanding shares of Series A Preferred Stock in an amount for each such share of Series A Preferred Stock equal to or greater than the aggregate amount of such dividends for all shares of Common Stock into which each such share of Series A Preferred Stock could then be converted.

4.2. Liquidation Preference.

(a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the holders of Common Stock by reason of their ownership thereof, the amount of $14.05 per share then held by them (as adjusted for any stock dividends, combinations or splits with respect to such shares) plus all declared but unpaid dividends on each such share. If, upon the occurrence of such event, the assets and funds thus distributed among the holders of the Series A Preferred Stock shall be insufficient to permit the payment to such holders and the holders of any other class or series of preferred stock ranking on a parity with or senior to the Series A Preferred Stock of the full preferential amounts


due to such holders, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of the Series A Preferred Stock and the holders of any other such class or series of preferred stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

(b) After payment has been made to the holders of the Series A Preferred Stock and the holders of any other class or series of preferred stock of the full amounts to which they shall be entitled as provided in Section 4.2(a), the entire remaining assets and funds of the Corporation legally available for distribution, if any, shall be distributed among the holders of Common Stock in proportion to the shares of Common Stock then held by each.

(c) A consolidation or merger of the Corporation with or into any other corporation or corporations, or a sale of all or substantially all of the assets of the Corporation, shall not be deemed to be a liquidation, dissolution or winding up within the meaning of this Section 4.2, but shall be subject to the provisions of Section 4.5 hereof.

4.3. Voting Rights.

Except with respect to the election of directors of the Corporation, the holder of each share of Series A Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Series A Preferred Stock could be converted and shall have voting rights and powers equal to the voting rights and powers of the Common Stock (except as otherwise expressly provided herein or as required by law), voting together as a single class, and shall be entitled to notice of any stockholders' meeting in accordance with the By-laws of the Corporation. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares into which shares of Series A Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

4.4. Conversion Rights. The holders of the Series A Preferred Stock shall have the conversion rights as follows:

(a) Right to Convert: Each share of the Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such shares, into one fully paid and nonassessable share of Common Stock (the "Series A Conversion Rate"), subject to adjustment as hereinafter provided.


(b) Automatic Conversion.

1. Initial Public Offering. Each share of Series A Preferred Stock shall automatically be converted into shares of Common Stock at the then-effective Series A Conversion Rate immediately upon the closing of the sale of the Corporation's Common Stock in a firm commitment, underwritten public offering registered under the Securities Act of 1933, as amended (other than a registration relating solely to a transaction under Rule 145 under such Act (or any successor thereto) or to an employee benefit plan of the Corporation), (i) at a public offering price (prior to underwriter commissions and expenses) equal to or exceeding $20.00 per share of Common Stock (as adjusted for any stock dividends, combinations or splits with respect to such shares), and (ii) the aggregate proceeds to the Corporation (before deduction for underwriter commissions and expenses relating to the issuance, including without limitation fees of the Corporation's counsel) of which equal or exceed $7,500,000.

2. Stockholder Vote. Each share of Series A Preferred Stock shall automatically be converted into shares of Common Stock at the then-effective Series A Conversion Rate upon the affirmative vote or written consent of holders of not less than two-thirds of the shares of Series A Preferred Stock outstanding at such time.

(c) Mechanics of Conversion. Before any holder of Series A Preferred Stock shall be entitled to convert the same into shares of Common Stock, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for such stock, and shall give written notice to the Corporation at such office that such holder elects to convert the same and shall state therein the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series A Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of surrender of the shares of Series A Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.

(d) Adjustments to Conversion Prices for Combinations or Subdivisions of Common Stock. In the event that this Corporation at any time or from time to time after the date of filing of this Restated Certificate of Incorporation shall declare or pay any dividend on the Common Stock payable in Common Stock or in any right to acquire Common Stock, or shall effect a subdivision of the outstanding


shares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise than by payment of a dividend in Common Stock or in any right to acquire Common Stock), or in the event the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, then the Series A Conversion Rate in effect immediately prior to such event shall, concurrently with the effectiveness of such event, be proportionately and equitably decreased or increased, as appropriate.

(e) No Impairment. The Corporation will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation.

(f) Certificates as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Series A Conversion Rate pursuant to this Section 4.4, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series A Preferred Stock, as the case may be, a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series A Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the applicable Series A Conversion Rate at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of such Series A Preferred Stock.

(g) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate of Incorporation.

(h) Fractional Shares. No fractional shares shall be issued upon the conversion of any share or shares of Series A Preferred Stock. All shares of Common


Stock (including fractions thereof) issuable upon conversion of more than one share of Series A Preferred Stock by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of a fraction of a share of Common Stock, the Corporation shall, in lieu of issuing any fractional share, pay the holder otherwise entitled to such fraction a sum in cash equal to the fair market value of such fraction on the date of conversion (as determined in good faith by the Board of Directors of the Corporation).

(i) Adjustments. Except under the circumstances set forth in Section 4.5 below (in which case this subsection (i) shall not apply), in case of any reorganization or any reclassification of the capital stock of the Corporation, any consolidation or merger of the Corporation with or into another corporation or corporations, or the conveyance of all or substantially all of the assets of the Corporation to another corporation, each share of Series A Preferred Stock shall thereafter be convertible into the number of shares of stock or other securities or property (including cash) to which a holder of the number of shares of Common Stock deliverable upon conversion of such share of Series A Preferred Stock would have been entitled upon the record date of (or date of, if no record date is fixed) such reorganization, reclassification, consolidation, merger or conveyance, and, in any case, appropriate adjustment (as determined by the Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holders of the Series A Preferred Stock, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as equivalent as is practicable, in relation to any shares of stock or the securities or property (including cash) thereafter deliverable upon the conversion of the shares of such Series A Preferred Stock.

4.5. Merger, Consolidation.

(a) At any time, in the event of:

1. a consolidation or merger of the Corporation with or into any other corporation, or any other entity or person in which the stockholders of the Corporation hold in the aggregate less than one-half of the outstanding voting securities of the surviving entity after the merger,

2. any corporate reorganization in which the stockholders of the Corporation hold in the aggregate less than one-half of the outstanding voting securities of the surviving entity after the merger,

3. a sale of all or substantially all of the assets of the Corporation, or


4. a reorganization of the Corporation as defined in Section 368(a)(1)(B) of the Internal Revenue Code of 1986 or in which more than fifty percent (50%) of the outstanding stock of the Corporation is exchanged (calculated on an as-converted to Common Stock basis), the holders of the Series A Preferred Stock, the holders of any other class or series of preferred stock hereafter created and issued and the holders of Common Stock shall be paid in cash or in securities received from the acquiring corporation or in a combination thereof, at the closing of any such transaction, amounts per share equal to the amounts per share which would be payable to such holders pursuant to Section 4.2 if all consideration received by the Corporation and its stockholders in connection with such event were being available distributed in a liquidation of the Corporation; provided, however, that if upon the occurrence of such event, the assets and funds thus available for distribution among the holders of the Series A Preferred Stock and the holders of any other class or series of preferred stock ranking on a parity with or senior to the Series A Preferred Stock shall be insufficient to permit the payment to such holders of the full preferential amounts due to them pursuant to Section 4.2 above, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of the Series A Preferred Stock and the holders of any other such class or series of preferred stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

(b) Any securities to be delivered to stockholders pursuant to Section 4.5(a) above shall be valued as follows:

(i) Securities not subject to investment letter or other similar restrictions on free marketability:

1. If traded on a securities exchange, the value shall be deemed to be the average of the security's closing prices on such exchange over the 30-day period ending three (3) days prior to the closing;

2. If actively traded over-the-counter, the value shall be deemed to be the average of the midpoints of the closing bid and ask prices over the 30-day period ending three (3) days prior to the closing, and

3. If there is no active public market, the value shall be the fair market value thereof, as mutually determined by the Corporation and the holders of not less than a majority of the outstanding Series A Preferred Stock; and

(ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability shall be to make an appropriate discount from the market value determined as above in
(i)(1), (2) or (3) to reflect the approximate fair market value thereof, as mutually determined by the


Corporation and the holders of not less than a majority of the outstanding Series A Preferred Stock.

(iii) In the event of any dispute between the Corporation and the holders of Series A Preferred Stock regarding valuation issues as provided in this Section 4.5(b), such dispute shall be submitted to binding arbitration in accordance with the currently prevailing commercial arbitration rules of the American Arbitration Association. The decisions and awards rendered in such proceedings shall be final and conclusive and may be entered in any court having jurisdiction thereof.

(c) The Corporation shall give each holder of record of Series A Preferred Stock written notice of such impending transaction not later than fifteen (15) days prior to the stockholders' meeting called to approve such transaction or twenty fifteen (15) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of said notices shall describe the material terms and conditions of the contemplated transaction as well as the terms and conditions of this Section 4.5, and the Corporation shall thereafter give such holders prompt notice of any material changes.

4.6. Amendment. Any term relating to the Series A Preferred Stock may be amended and the observance of any term relating to the Series A Preferred Stock may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the vote or written consent of holders of at least a majority of the shares of the Series A Preferred Stock then outstanding and the Corporation. Any amendment or waiver so effected shall be binding upon the Corporation and any holder of shares of the Series A Preferred Stock.

4.7. Restrictions and Limitations. As long as any shares of Series A Preferred Stock shall be issued and outstanding, the Corporation shall not, without first obtaining the approval (by vote or consent as provided by law) of the holders of not less than a majority of the total number of shares of the Series A Preferred Stock then outstanding:

(a) amend or repeal any provision of, or add any provision to, the Company's Restated Certificate of Incorporation or Bylaws if such action would alter or change the preferences, rights, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred Stock;

(b) authorize, create or issue shares of any class or series of stock having any preference or priority superior to any such preference or priority of the Series A Preferred Stock;


(c) enter into any transaction or series of related transactions, as a result of which majority voting control of the Company shall have passed to another person or entity (or group of related persons or entities);

(d) increase or decrease (other than for decreases resulting from conversion of the Series A Preferred Stock) the number of authorized shares of Series A Preferred Stock; or

(e) amend this Subsection 4.7.

4.8. No Reissuance of Preferred Stock. No share or shares of Series A Preferred Stock acquired by the Corporation by reason of redemption, purchase, conversion or otherwise shall be reissued, and all such shares shall be canceled, retired and eliminated from the shares which the Corporation shall be authorized to issue.

ARTICLE 5. DIRECTORS

The number of Directors of this corporation shall be determined in the manner provided by the Bylaws and may be increased or decreased from time to time in the manner provided therein. Written ballots are not required in the election of Directors.

ARTICLE 6. BYLAWS

The Board of Directors shall have the power to adopt, amend or repeal the Bylaws of this corporation; provided, however, the Board of Directors may not repeal or amend any bylaw that the stockholders have expressly provided may not be amended or repealed by the Board of Directors. The stockholders shall also have the power to adopt, amend or repeal the Bylaws of this corporation.

ARTICLE 7. PREEMPTIVE RIGHTS

Preemptive rights shall not exist with respect to shares of stock or securities convertible into shares of stock of this corporation.

ARTICLE 8. CUMULATIVE VOTING

The right to cumulate votes in the election of Directors shall not exist with respect to shares of stock of this corporation.

ARTICLE 9. AMENDMENTS TO CERTIFICATE OF INCORPORATION

This corporation reserves the right to amend or repeal, by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote, any of the


provisions contained in this Certificate of Incorporation. The rights of the stockholders of this corporation are granted subject to this reservation.

ARTICLE 10. LIMITATION OF DIRECTOR LIABILITY

To the full extent that the Delaware General Corporation Law, as it exists on the date hereof or may hereafter be amended, permits the limitation or elimination of the liability of directors, a director of this corporation shall not be liable to this corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any amendment to or repeal of this Article 11 shall not adversely affect any right or protection of a director of this corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.

ARTICLE 11. ACTION BY STOCKHOLDERS WITHOUT A MEETING

Only action properly brought before the stockholders by or at the direction of the Board of Directors may be taken without a meeting, without prior notice and without a vote, if a written consent setting forth the action so taken is signed by the holders of outstanding shares of capital stock entitled to be voted with respect to the subject matter thereof having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.

ARTICLE 12. SPECIAL MEETINGS OF STOCKHOLDERS

The Chairman of the Board of Directors, the Chief Executive Officer, the President or the Board of Directors may call special meetings of the stockholders for any purpose. A special meeting of the stockholders shall be held if the holders of not less than thirty percent (30%) of all the votes entitled to be cast on any issue proposed to be considered at such special meeting have dated, signed and delivered to the Secretary one or more written demands for such meeting, describing the purpose or purposes for which it is to be held.

ARTICLE 13. BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS

This corporation expressly elects not to be governed by section 203(a) of Title 8 of the Delaware General Corporation Law.


IN WITNESS WHEREOF, this corporation has caused this Restated Certificate of Incorporation to be signed by its duly authorized officer this 9th day of July, 1996.

AMAZON.COM, INC.

By  //s// Jeffrey P. Bezos
   ----------------------------------
Jeffrey P. Bezos, Chief Executive
Officer


CERTIFICATE OF AMENDMENT

TO

RESTATED CERTIFICATE OF INCORPORATION

OF

AMAZON.COM, INC.

Amazon.com., Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Company"), does hereby certify as follows:

1. A resolution setting forth the following amendment to the Company's Restated Certificate of Incorporation and declaring the advisability of such amendment was duly adopted by the Company's Board of Directors by unanimous written consent of its members and filed with the minutes of the Board in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware:

The second paragraph of Article 4 of the Company's Restated Certificate of Incorporation is amended to read in its entirety as follows:

"The Preferred Stock shall be divided into series, and 571,896 shares of Preferred Stock are designated Series A Preferred Stock ("Series A Preferred Stock"). The Series A Preferred Stock shall have the rights, preferences and other terms as are set forth in this Article 4."

2. In lieu of a meeting of the stockholders, written consent has been given for the adoption of said amendment in accordance with the applicable provisions of Section 228 and Section 242 of the General Corporation Law of the State of Delaware, and written notice of the taking of such corporate action has been given as provided in said Section 228.

IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by its duly authorized officer on this 24th day of January, 1997.

AMAZON.COM, INC.

By: //s//  Jeffrey P. Bezos
   -------------------------------
Name:  Jeffrey P. Bezos
     -----------------------------
Title:   President
      ----------------------------


CERTIFICATE OF AMENDMENT

TO

RESTATED CERTIFICATE OF INCORPORATION

OF

AMAZON.COM, INC.

Amazon.com., Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Company"), does hereby certify as follows:

1. A resolution setting forth the following amendment to the Company's Restated Certificate of Incorporation and declaring the advisability of such amendment was duly adopted by the Company's Board of Directors by unanimous written consent of its members and filed with the minutes of the Board in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware:

The second paragraph of Article 4 of the Company's Restated Certificate of Incorporation is amended to read in its entirety as follows:

"The Preferred Stock shall be divided into series, and 579,396 shares of Preferred Stock are designated Series A Preferred Stock ("Series A Preferred Stock"). The Series A Preferred Stock shall have the rights, preferences and other terms as are set forth in this Article 4."

2. In lieu of a meeting of the stockholders, written consent has been given for the adoption of said amendment in accordance with the applicable provisions of Section 228 and Section 242 of the General Corporation Law of the State of Delaware, and written notice of the taking of such corporate action has been given as provided in said Section 228.

IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by its duly authorized officer on this 19th day of February, 1997.

AMAZON.COM, INC.

By: //s//  Jeffrey P. Bezos
   -------------------------------
Name:  Jeffrey P. Bezos
     -----------------------------
Title:   President
      ----------------------------


EXHIBIT 3.2

BYLAWS
OF
AMAZON.COM, INC.

ORIGINALLY ADOPTED ON MAY 28, 1996
AMENDMENTS ARE LISTED ON P. I


AMAZON.COM, INC.
AMENDMENTS

Date of
Section Effect of Amendment Amendment

i

CONTENTS

SECTION 1.       OFFICES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1
SECTION 2.       STOCKHOLDERS   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1
         2.1     Annual Meeting   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1
         2.2     Special Meetings   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1
         2.3     Place of Meeting   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1
         2.4     Notice of Meeting  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2
         2.5     Business for Stockholders' Meetings  . . . . . . . . . . . . . . . . . . . . .      2
                    2.5.1         Business at Annual Meetings   . . . . . . . . . . . . . . . .      2
                    2.5.2         Business at Special Meetings  . . . . . . . . . . . . . . . .      3
                    2.5.3         Notice to Corporation   . . . . . . . . . . . . . . . . . . .      3
         2.6     Waiver of Notice   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3
                    2.6.1         Waiver in Writing   . . . . . . . . . . . . . . . . . . . . .      3
                    2.6.2         Waiver by Attendance  . . . . . . . . . . . . . . . . . . . .      3
         2.7     Fixing of Record Date for Determining Stockholders   . . . . . . . . . . . . .      4
                    2.7.1         Meetings  . . . . . . . . . . . . . . . . . . . . . . . . . .      4
                    2.7.2         Consent to Corporate Action Without a Meeting   . . . . . . .      4
                    2.7.3         Dividends, Distributions and Other Rights   . . . . . . . . .      4
         2.8     Voting List  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5
         2.9     Quorum   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5
         2.10    Manner of Acting   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      5
         2.11    Proxies  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      6
                    2.11.1        Appointment   . . . . . . . . . . . . . . . . . . . . . . . .      6
                    2.11.2        Delivery to Corporation; Duration   . . . . . . . . . . . . .      6
         2.12    Voting of Shares   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      6
         2.13    Voting for Directors   . . . . . . . . . . . . . . . . . . . . . . . . . . . .      6
         2.14    Action by Stockholders Without a Meeting   . . . . . . . . . . . . . . . . . .      7
         2.15    Inspectors of Election   . . . . . . . . . . . . . . . . . . . . . . . . . . .      7
                    2.15.1        Appointment   . . . . . . . . . . . . . . . . . . . . . . . .      7
                    2.15.2        Duties  . . . . . . . . . . . . . . . . . . . . . . . . . . .      8
SECTION 3.       BOARD OF DIRECTORS   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      8
         3.1     General Powers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      8
         3.2     Number and Tenure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      8
         3.3     Nomination and Election.   . . . . . . . . . . . . . . . . . . . . . . . . . .      9
                    3.3.1         Nomination  . . . . . . . . . . . . . . . . . . . . . . . . .      9
                    3.3.2         Election  . . . . . . . . . . . . . . . . . . . . . . . . . .     10
         3.4     Annual and Regular Meetings  . . . . . . . . . . . . . . . . . . . . . . . . .     10
         3.5     Special Meetings   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     10
         3.6     Meetings by Telephone  . . . . . . . . . . . . . . . . . . . . . . . . . . . .     10
         3.7     Notice of Special Meetings   . . . . . . . . . . . . . . . . . . . . . . . . .     10

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                    3.7.1         Personal Delivery   . . . . . . . . . . . . . . . . . . . . .     10
                    3.7.2         Delivery by Mail  . . . . . . . . . . . . . . . . . . . . . .     11
                    3.7.3         Delivery by Private Carrier   . . . . . . . . . . . . . . . .     11
                    3.7.4         Facsimile Notice  . . . . . . . . . . . . . . . . . . . . . .     11
                    3.7.5         Delivery by Telegraph   . . . . . . . . . . . . . . . . . . .     11
                    3.7.6         Oral Notice   . . . . . . . . . . . . . . . . . . . . . . . .     11
         3.8     Waiver of Notice   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11
                    3.8.1         In Writing  . . . . . . . . . . . . . . . . . . . . . . . . .     11
                    3.8.2         By Attendance   . . . . . . . . . . . . . . . . . . . . . . .     12
         3.9     Quorum   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12
         3.10    Manner of Acting   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12
         3.11    Presumption of Assent  . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12
         3.12    Action by Board or Committees Without a Meeting  . . . . . . . . . . . . . . .     12
         3.13    Resignation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12
         3.14    Removal  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     13
         3.15    Vacancies  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     13
         3.16    Committees   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     13
                    3.16.1        Creation and Authority of Committees  . . . . . . . . . . . .     13
                    3.16.2        Audit Committee   . . . . . . . . . . . . . . . . . . . . . .     14
                    3.16.3        Compensation Committee  . . . . . . . . . . . . . . . . . . .     14
                    3.16.4        Nominating and Organization Committee   . . . . . . . . . . .     14
                    3.16.5        Minutes of Meetings   . . . . . . . . . . . . . . . . . . . .     15
                    3.16.6        Quorum and Manner of Acting   . . . . . . . . . . . . . . . .     15
                    3.16.7        Resignation   . . . . . . . . . . . . . . . . . . . . . . . .     15
                    3.16.8        Removal   . . . . . . . . . . . . . . . . . . . . . . . . . .     15
         3.17    Compensation   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     15
SECTION 4.       OFFICERS   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     16
         4.1     Number   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     16
         4.2     Election and Term of Office  . . . . . . . . . . . . . . . . . . . . . . . . .     16
         4.3     Resignation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     16
         4.4     Removal  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     16
         4.5     Vacancies  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     16
         4.6     Chairman of the Board  . . . . . . . . . . . . . . . . . . . . . . . . . . . .     17
         4.7     Chief Executive Officer  . . . . . . . . . . . . . . . . . . . . . . . . . . .     17
         4.8     President  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     17
         4.9     Vice President   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     17
         4.10    Secretary  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     18
         4.11    Treasurer  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     18
         4.12    Salaries   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     18
SECTION 5.       CONTRACTS, LOANS, CHECKS AND DEPOSITS  . . . . . . . . . . . . . . . . . . . .     18
         5.1     Contracts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     18
         5.2     Loans to the Corporation   . . . . . . . . . . . . . . . . . . . . . . . . . .     18
         5.3     Checks, Drafts, Etc.   . . . . . . . . . . . . . . . . . . . . . . . . . . . .     18

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         5.4     Deposits   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     19
SECTION 6.       CERTIFICATES FOR SHARES AND THEIR TRANSFER   . . . . . . . . . . . . . . . . .     19
         6.1     Issuance of Shares   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     19
         6.2     Certificates for Shares  . . . . . . . . . . . . . . . . . . . . . . . . . . .     19
         6.3     Stock Records  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     19
         6.4     Restriction on Transfer  . . . . . . . . . . . . . . . . . . . . . . . . . . .     20
         6.5     Transfer of Shares   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     20
         6.6     Lost or Destroyed Certificates   . . . . . . . . . . . . . . . . . . . . . . .     20
         6.7     Shares of Another Corporation  . . . . . . . . . . . . . . . . . . . . . . . .     20
SECTION 7.       BOOKS AND RECORDS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21
SECTION 8.       ACCOUNTING YEAR  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21
SECTION 9.       SEAL   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21
SECTION 10.      INDEMNIFICATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     21
         10.1    Right to Indemnification   . . . . . . . . . . . . . . . . . . . . . . . . . .     21
         10.2    Right of Indemnitee to Bring Suit  . . . . . . . . . . . . . . . . . . . . . .     22
         10.3    Nonexclusivity of Rights   . . . . . . . . . . . . . . . . . . . . . . . . . .     22
         10.4    Insurance, Contracts and Funding   . . . . . . . . . . . . . . . . . . . . . .     23
         10.5    Indemnification of Employees and Agents of the Corporation   . . . . . . . . .     23
         10.6    Persons Serving Other Entities   . . . . . . . . . . . . . . . . . . . . . . .     23
         10.7    Procedures for the Submission of Claims  . . . . . . . . . . . . . . . . . . .     23
SECTION 11.      AMENDMENTS OR REPEAL   . . . . . . . . . . . . . . . . . . . . . . . . . . . .     23

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BYLAWS
OF
AMAZON.COM, INC.

SECTION 1. OFFICES

The principal office of the corporation shall be located at its principal place of business or such other place as the Board of Directors (the "Board") may designate. The corporation may have such other offices, either within or without the state of Delaware, as the Board may designate or as the business of the corporation may require from time to time.

SECTION 2. STOCKHOLDERS

2.1 ANNUAL MEETING

The annual meeting of the stockholders shall be held the second Thursday of May in each year at the principal office of the corporation or such other place designated by the Board for the purpose of electing Directors and transacting such other business as may properly come before the meeting. If the day fixed for the annual meeting is a legal holiday at the place of the meeting, the meeting shall be held on the next succeeding business day. If the annual meeting is not held on the date designated therefor, the Board shall cause the meeting to be held as soon thereafter as may be convenient. At any time prior to the commencement of the annual meeting, the Board may postpone the annual meeting for a period of up to 120 days from the date fixed for such meeting in accordance with this subsection 2.1.

2.2 SPECIAL MEETINGS

The Chairman of the Board, the President, the Board or the holders of not less than 30 percent of all the outstanding shares of the corporation entitled to vote on any issue proposed to be considered at the meeting may call special meetings of the stockholders for any purpose.

2.3 PLACE OF MEETING

All meetings shall be held at the principal office of the corporation or at such other place within or without the State of Delaware designated by the Board, by any persons entitled to call a meeting hereunder or in a waiver of notice signed by all of the stockholders entitled to notice of the meeting.


2.4 NOTICE OF MEETING

The Chairman of the Board, the President, the Secretary, the Board, or stockholders calling an annual or special meeting of stockholders as provided for herein, shall cause to be delivered to each stockholder entitled to notice of or to vote at the meeting either personally or by mail, not less than 10 nor more than 60 days before the meeting, written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Upon written request by the holders of not less than the number of outstanding shares of the corporation specified in subsection 2.2 hereof and entitled to vote at the meeting, it shall be the duty of the Secretary to give notice of a special meeting of stockholders to be held on such date and at such place and hour as the Secretary may fix, not less than 10 nor more than 60 days after receipt of said request, and if the Secretary shall neglect or refuse to issue such notice, the person making the request may do so and may fix the date for such meeting. If such notice is mailed, it shall be deemed delivered when deposited in the official government mail properly addressed to the stockholder at such stockholder's address as it appears on the stock transfer books of the corporation with postage prepaid. If the notice is telegraphed, it shall be deemed delivered when the content of the telegram is delivered to the telegraph company. Notice given in any other manner shall be deemed delivered when dispatched to the stockholder's address, telephone number or other number appearing on the stock transfer records of the corporation.

2.5 BUSINESS FOR STOCKHOLDERS' MEETINGS

2.5.1 BUSINESS AT ANNUAL MEETINGS

In addition to the election of directors, other proper business may be transacted at an annual meeting of stockholders, provided that such business must be properly brought before such meeting. To be properly brought before an annual meeting, business must be (a) brought by or at the direction of the Board or (b) brought before the meeting by a stockholder pursuant to written notice thereof, in accordance with subsection 2.5.3 hereof, and received by the Secretary not fewer than 60 nor more than 90 days prior to the date specified in subsection 2.1 hereof for such annual meeting (or if less than 60 days' notice or prior public disclosure of the date of the annual meeting is given or made to the stockholders, not later than the tenth day following the day on which the notice of the date of the annual meeting was mailed or such public disclosure was made). No business shall be conducted at any annual meeting of stockholders except in accordance with this subsection 2.5.1, unless the application of this subsection 2.5.1 to a particular matter is waived in writing by the Board of Directors. If the facts warrant, the Board, or the chairman of an annual meeting of stockholders, may determine and declare that
(a) a proposal does not constitute proper business to be transacted at the meeting or (b) business was not properly brought before the meeting in accordance with the provisions of this subsection 2.5.1 and, if, it is so determined in either case, any such business shall not be transacted. The procedures set forth in this subsection 2.5.1 for business to be properly

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brought before an annual meeting by a stockholder are in addition to, and not in lieu of, the requirements set forth in Rule 14a-8 under Section 14 of the Securities Exchange Act of 1934, as amended, or any successor provision.

2.5.2 BUSINESS AT SPECIAL MEETINGS

At any special meeting of the stockholders, only such business as is specified in the notice of such special meeting given by or at the direction of the person or persons calling such meeting, in accordance with subsection 2.4 hereof, shall come before such meeting.

2.5.3 NOTICE TO CORPORATION

Any written notice required to be delivered by a stockholder to the corporation pursuant to subsection 2.2, subsection 2.4, subsection 2.5.1 or subsection 2.5.2 hereof must be given, either by personal delivery or by registered or certified mail, postage prepaid, to the Secretary at the corporation's executive offices. Any such stockholder notice shall set forth
(i) the name and address of the stockholder proposing such business; (ii) a representation that the stockholder is entitled to vote at such meeting and a statement of the number of shares of the corporation that are beneficially owned by the stockholder; (iii) a representation that the stockholder intends to appear in person or by proxy at the meeting to propose such business; and
(iv) as to each matter the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, the language of the proposal (if appropriate), and any material interest of the stockholder in such business.

2.6 WAIVER OF NOTICE

2.6.1 WAIVER IN WRITING

Whenever any notice is required to be given to any stockholder under the provisions of these Bylaws, the Certificate of Incorporation or the General Corporation Law of the State of Delaware, as now or hereafter amended (the "DGCL"), a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice.

2.6.2 WAIVER BY ATTENDANCE

The attendance of a stockholder at a meeting shall constitute a waiver of notice of such meeting, except when a stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

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2.7 FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS

2.7.1 MEETINGS

For the purpose of determining stockholders entitled to notice of and to vote at any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than 60 (or the maximum number permitted by applicable law) nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of and to vote at the meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

2.7.2 CONSENT TO CORPORATE ACTION WITHOUT A MEETING

For the purpose of determining stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than
10 (or the maximum number permitted by applicable law) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by Chapter 1 of the DGCL, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by Chapter 1 of the DGCL, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

2.7.3 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS

For the purpose of determining stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 (or the maximum number permitted by

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applicable law) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

2.8 VOTING LIST

At least 10 days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, or any adjournment thereof, shall be made, arranged in alphabetical order, with the address of and number of shares held by each stockholder. This list shall be open to examination by any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of 10 days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. This list shall also be produced and kept at such meeting for inspection by any stockholder who is present.

2.9 QUORUM

A majority of the outstanding shares of the corporation entitled to vote, present in person or represented by proxy at the meeting, shall constitute a quorum at a meeting of the stockholders; provided, that where a separate vote by a class or classes is required, a majority of the outstanding shares of such class or classes, present in person or represented by proxy at the meeting, shall constitute a quorum entitled to take action with respect to that vote on that matter. If less than a majority of the outstanding shares entitled to vote are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. If a quorum is present or represented at a reconvened meeting following such an adjournment, any business may be transacted that might have been transacted at the meeting as originally called. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.

2.10 MANNER OF ACTING

In all matters other than the election of Directors, if a quorum is present, the affirmative vote of the majority of the outstanding shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the vote of a greater number is required by these Bylaws, the Certificate of Incorporation or the DGCL. Where a separate vote by a class or classes is required, if a quorum of such class or classes is present, the affirmative vote of the majority of outstanding shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class or classes, unless the vote of a greater number is required by these Bylaws, the Certificate of Incorporation or the DGCL. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of Directors.

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2.11 PROXIES

2.11.1 APPOINTMENT

Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy. Such authorization may be accomplished by (a) the stockholder or such stockholder's authorized officer, director, employee or agent executing a writing or causing his or her signature to be affixed to such writing by any reasonable means, including facsimile signature or (b) by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the intended holder of the proxy or to a proxy solicitation firm, proxy support service or similar agent duly authorized by the intended proxy holder to receive such transmission; provided, that any such telegram, cablegram or other electronic transmission must either set forth or be accompanied by information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission by which a stockholder has authorized another person to act as proxy for such stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

2.11.2 DELIVERY TO CORPORATION; DURATION

A proxy shall be filed with the Secretary before or at the time of the meeting or the delivery to the corporation of the consent to corporate action in writing. A proxy shall become invalid three years after the date of its execution unless otherwise provided in the proxy. A proxy with respect to a specified meeting shall entitle the holder thereof to vote at any reconvened meeting following adjournment of such meeting but shall not be valid after the final adjournment thereof.

2.12 VOTING OF SHARES

Each outstanding share entitled to vote with respect to the subject matter of an issue submitted to a meeting of stockholders shall be entitled to one vote upon each such issue.

2.13 VOTING FOR DIRECTORS

Each stockholder entitled to vote at an election of Directors may vote, in person or by proxy, the number of shares owned by such stockholder for as many persons as there are Directors to be elected and for whose election such stockholder has a right to vote; provided, however, that no cumulative voting shall be permitted in the election of Directors.

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2.14 ACTION BY STOCKHOLDERS WITHOUT A MEETING

Subject to the following paragraph, any action that is properly brought before the stockholders by or at the direction of the Board of Directors and that could be taken at an annual or special meeting of stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall (a) be signed by the holders of outstanding shares of capital stock entitled to be voted with respect to the subject matter thereof having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted (as determined in accordance with subsection 2.6.2 hereof) and (b) be delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the records of proceedings of meetings of stockholders. Delivery made to the corporation's registered office shall be by hand or by certified mail or registered mail, return receipt requested. Every written consent shall bear the date of signature of each stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless written consents signed by the requisite number of stockholders entitled to vote with respect to the subject matter thereof are delivered to the corporation, in the manner required by this
Section 2, within 60 (or the maximum number permitted by applicable law) days of the earliest dated consent delivered to the corporation in the manner required by this Section 2. The validity of any consent executed by a proxy for a stockholder pursuant to a telegram, cablegram or other means of electronic transmission transmitted to such proxy holder by or upon the authorization of the stockholder shall be determined by or at the direction of the Secretary. A written record of the information upon which the person making such determination relied shall be made and kept in the records of the proceedings of the stockholders. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any such consent shall be inserted in the minute book as if it were the minutes of a meeting of the stockholders.

2.15 INSPECTORS OF ELECTION

2.15.1 APPOINTMENT

In advance of any meeting of stockholders after this corporation has become a Public Company (as defined below), the Board shall appoint one or more persons to act as inspectors of election at such meeting and to make a written report thereof. The Board may designate one or more persons to serve as alternate inspectors to serve in place of any inspector who is unable or fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairman of such meeting shall appoint one or more persons to act as inspector of elections at such meeting. This corporation shall be a "Public Company" upon the earliest of (a) a vote by the Board of Directors of the corporation designating the corporation a Public Company, (b) when a registration statement filed by the

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corporation under the Securities Act of 1933, as amended, in connection with an offering of the corporation's securities to the public first becomes effective or (c) upon the effective date of the registration of the corporation's securities pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

2.15.2 DUTIES

The inspectors of election shall:

(a) ascertain the number of shares of the corporation outstanding and the voting power of each such share;

(b) determine the shares represented at the meeting and the validity of proxies and ballots;

(c) count all votes and ballots;

(d) determine and retain for a reasonable period of time a record of the disposition of any challenges made to any determination by them; and

(e) certify their determination of the number of shares represented at the meeting and their count of the votes and ballots.

The validity of any proxy or ballot shall be determined by the inspectors of election in accordance with the applicable provisions of these Bylaws and the DGCL as then in effect. In determining the validity of any proxy transmitted by telegram, cablegram or other electronic transmission, the inspectors shall record in writing the information upon which they relied in making such determination. Each inspector of elections shall, before entering upon the discharge of his or her duties, take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors of election may appoint or retain other persons or entities to assist them in the performance of their duties.

SECTION 3. BOARD OF DIRECTORS

3.1 GENERAL POWERS

The business and affairs of the corporation shall be managed by the Board.

3.2 NUMBER AND TENURE

The Board shall be composed of not less than one nor more than nine Directors, the specific number to be set by resolution of the Board. No decrease in the number of Directors shall have the effect of shortening the term of any incumbent Director. Each Director shall serve for the term he or she was elected, or until his or her successor shall have been elected and qualified, or until his or her death, resignation or removal from

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office. Directors need not be stockholders of the corporation or residents of the State of Delaware.

3.3 NOMINATION AND ELECTION.

3.3.1 NOMINATION

Only persons who are nominated in accordance with the following procedures shall be eligible for election as Directors. Nominations for the election of Directors may be made (a) by or at the direction of the Board or
(b) by any stockholder of record entitled to vote for the election of Directors at such meeting; provided, however, that a stockholder may nominate persons for election as Directors only if written notice (in accordance with subsection 2.5.3 hereof) of such stockholder's intention to make such nominations is received by the Secretary not later than (i) with respect to an election to be held at an annual meeting of stockholders, not fewer than 60 nor more than 90 days prior to the date specified in subsection 2.1 hereof for such annual meeting (or if less than 60 days' notice or prior public disclosure of the date of the annual meeting is given or made to the stockholders, not later than the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made) and (ii) with respect to an election to be held at a special meeting of stockholders for the election of Directors, the close of business on the seventh business day following the date on which notice of such meeting is first given to stockholders. Any such stockholder's notice shall set forth (a) the name and address of the stockholder who intends to make a nomination; (b) a representation that the stockholder is entitled to vote at such meeting and a statement of the number of shares of the corporation that are beneficially owned by the stockholder;
(c) a representation that the stockholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice;
(d) as to each person the stockholder proposes to nominate for election or re-election as a Director, the name and address of such person and, if the corporation is then a Public Company, such other information regarding such nominee as would be required in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had such nominee been nominated by the Board, and a description of any arrangements or understandings, between the stockholder and such nominee and any other persons (including their names), pursuant to which the nomination is to be made; and (e) the consent of each such nominee to serve as a Director if elected. If the facts warrant, the Board, or the chairman of a stockholders' meeting at which Directors are to be elected, may determine and declare that a nomination was not made in accordance with the foregoing procedure and, if it is so determined, the defective nomination shall be disregarded. The procedures set forth in this subsection 3.3 for nomination for the election of Directors by stockholders are in addition to, and not in limitation of, any procedures now in effect or hereafter adopted by or at the direction of the Board or any committee thereof.

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3.3.2 ELECTION

At each election of Directors, the persons receiving the greatest number of votes shall be the Directors.

3.4 ANNUAL AND REGULAR MEETINGS

An annual Board meeting shall be held without notice immediately after and at the same place as the annual meeting of stockholders. By resolution, the Board or any committee designated by the Board may specify the time and place either within or without the State of Delaware for holding regular meetings thereof without other notice than such resolution.

3.5 SPECIAL MEETINGS

Special meetings of the Board or any committee appointed by the Board may be called by or at the request of the Chairman of the Board, the Chief Executive Officer, the President, the Secretary or, in the case of special Board meetings, any Director, and, in the case of any special meeting of any committee appointed by the Board, by the Chairman thereof. The person or persons authorized to call special meetings may fix any place either within or without the State of Delaware as the place for holding any special meeting called by them.

3.6 MEETINGS BY TELEPHONE

Members of the Board or any committee designated by the Board may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.

3.7 NOTICE OF SPECIAL MEETINGS

Notice of a special Board or committee meeting stating the place, day and hour of the meeting shall be given to a Director in writing or orally by telephone or in person. Neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice of such meeting.

3.7.1 PERSONAL DELIVERY

If notice is given by personal delivery, the notice shall be effective if delivered to a Director at least two days before the meeting.

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3.7.2 DELIVERY BY MAIL

If notice is delivered by mail, the notice shall be deemed effective if deposited in the official government mail properly addressed to a Director at his or her address shown on the records of the corporation with postage prepaid at least five days before the meeting.

3.7.3 DELIVERY BY PRIVATE CARRIER

If notice is given by private carrier, the notice shall be deemed effective when dispatched to a Director at his or her address shown on the records of the corporation at least three days before the meeting.

3.7.4 FACSIMILE NOTICE

If notice is delivered by wire or wireless equipment that transmits a facsimile of the notice, the notice shall be deemed effective when dispatched at least two days before the meeting to a Director at his or her telephone number or other number appearing on the records of the corporation.

3.7.5 DELIVERY BY TELEGRAPH

If notice is delivered by telegraph, the notice shall be deemed effective if the content thereof is delivered to the telegraph company at least two days before the meeting for delivery to a Director at his or her address shown on the records of the corporation.

3.7.6 ORAL NOTICE

If notice is delivered orally, by telephone or in person, the notice shall be deemed effective if personally given to the Director at least two days before the meeting.

3.8 WAIVER OF NOTICE

3.8.1 IN WRITING

Whenever any notice is required to be given to any Director under the provisions of these Bylaws, the Certificate of Incorporation or the DGCL, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board or any committee appointed by the Board need be specified in the waiver of notice of such meeting.

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3.8.2 BY ATTENDANCE

The attendance of a Director at a Board or committee meeting shall constitute a waiver of notice of such meeting, except when a Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

3.9 QUORUM

A majority of the total number of Directors fixed by or in the manner provided in these Bylaws or, if vacancies exist on the Board, a majority of the total number of Directors then serving on the Board, provided, however, that such number may be not less than one-third of the total number of Directors fixed by or in the manner provided in these Bylaws, shall constitute a quorum for the transaction of business at any Board meeting. If less than a majority are present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice.

3.10 MANNER OF ACTING

The act of the majority of the Directors present at a Board or committee meeting at which there is a quorum shall be the act of the Board or committee, unless the vote of a greater number is required by these Bylaws, the Certificate of Incorporation or the DGCL.

3.11 PRESUMPTION OF ASSENT

A Director of the corporation present at a Board or committee meeting at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his or her dissent is entered in the minutes of the meeting, or unless such Director files a written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof, or forwards such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. A Director who voted in favor of such action may not dissent.

3.12 ACTION BY BOARD OR COMMITTEES WITHOUT A MEETING

Any action that could be taken at a meeting of the Board or of any committee appointed by the Board may be taken without a meeting if a written consent setting forth the action so taken is signed by each of the Directors or by each committee member. Any such written consent shall be inserted in the minute book as if it were the minutes of a Board or a committee meeting.

3.13 RESIGNATION

Any Director may resign at any time by delivering written notice to the Chairman of the Board, the Chief Executive Officer, the President, the Secretary or the Board, or to

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the registered office of the corporation. Any such resignation shall take effect at the time specified therein, or if the time is not specified, upon delivery thereof and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

3.14 REMOVAL

At a meeting of stockholders called expressly for that purpose, or without a meeting pursuant to Section 2.14 of these Bylaws, one or more members of the Board (including the entire Board) may be removed, with or without cause, by the holders of not less than a majority of the shares entitled to elect the Director or Directors whose removal is sought in the manner provided by these Bylaws.

3.15 VACANCIES

Any vacancy occurring on the Board may be filled only by the affirmative vote of a majority of the remaining Directors, whether or not they constitute a quorum of the Board. A Director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office, if any. Any directorship to be filled by reason of an increase in the number of Directors may be filled by the Board for a term of office continuing only until the next election of Directors, and until his or her successor shall be elected and qualify.

3.16 COMMITTEES

3.16.1 CREATION AND AUTHORITY OF COMMITTEES

The Board may, by resolution passed by a majority of the number of Directors fixed by or in the manner provided in these Bylaws, appoint standing or temporary committees, each committee to consist of one or more Directors of the corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board establishing such committee or as otherwise provided in these Bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that require it; but no such committee shall have the power or authority in reference to (a) amending the Certificate of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board as provided in Section 151(a) of the DGCL, fix the designations, preferences or rights of such shares to the extent permitted under Section 141 of the DGCL), (b) adopting an agreement of merger or consolidation under Sections 251 or 252

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of the DGCL, (c) recommending to the stockholders the sale, lease or exchange or other disposition of all or substantially all of the property and assets of the corporation, (d) recommending to the stockholders a dissolution of the corporation or a revocation of a dissolution, or (e) amending these Bylaws; and, unless expressly provided by resolution of the Board, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to
Section 253 of the DGCL.

3.16.2 AUDIT COMMITTEE

In addition to any committees appointed pursuant to this subsection 3.16, no later than such time as this corporation may become a Public Company there shall be an Audit Committee, appointed annually by the Board, consisting of at least two Directors who are not members of management. It shall be the responsibility of the Audit Committee, if and when appointed, to review the scope and results of the annual independent audit of books and records of the corporation, to review compliance with all corporate policies which have been approved by the Board and to discharge such other responsibilities as may from time to time be assigned to it by the Board. The Audit Committee shall meet at such times and places as the members deem advisable, and shall make such recommendations to the Board as they consider appropriate.

3.16.3 COMPENSATION COMMITTEE

The Board may, in its discretion, designate a Compensation Committee consisting of one or more Directors as it may from time to time determine. The duties of the Compensation Committee shall consist of the following: (a) to establish and review periodically, but not less than annually, the compensation of the officers of the corporation and to make recommendations concerning such compensation to the Board; (b) to consider incentive compensation plans for the employees of the corporation; (c) to carry out the duties assigned to the Compensation Committee under any stock option plan or other plan approved by the corporation; (d) to consult with the Chief Executive Officer or the President concerning any compensation matters deemed appropriate by the Chief Executive Officer or the President or the Compensation Committee; and (e) to perform such other duties as shall be assigned to the Compensation Committee by the Board.

3.16.4 NOMINATING AND ORGANIZATION COMMITTEE

The Board may, in its discretion, designate a Nominating and Organization Committee consisting of one or more Directors as it may from time to time determine. The duties of the Nominating and Organization Committee shall consist of the following: (a) to report and make recommendations to the Board on the size and composition of the Board and nominees for Directors;
(b) to evaluate the performance of the officers of the corporation and together with management, select and recommend to the Board appropriate individuals for election, appointment and promotion as officers of the corporation and ensure the continuity of capable management; (c) to report and make recommendations to

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the Board on the organization of the corporation; and (d) to perform such other duties as shall be assigned to the Nominating and Organization Committee by the Board.

3.16.5 MINUTES OF MEETINGS

All committees so appointed shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose.

3.16.6 QUORUM AND MANNER OF ACTING

A majority of the number of Directors composing any committee of the Board, as established and fixed by resolution of the Board, shall constitute a quorum for the transaction of business at any meeting of such committee but, if less than a majority are present at a meeting, a majority of such Directors present may adjourn the meeting from time to time without further notice. The act of a majority of the members of a committee present at a meeting at which a quorum is present shall be the act of such committee.

3.16.7 RESIGNATION

Any member of any committee may resign at any time by delivering written notice to the Chairman of the Board, the Chief Executive Officer, the President, the Secretary, the Board or the Chairman of such committee. Any such resignation shall take effect at the time specified therein or, if the time is not specified, upon delivery thereof and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

3.16.8 REMOVAL

The Board may remove from office any member of any committee elected or appointed by it, but only by the affirmative vote of not less than a majority of the number of Directors fixed by or in the manner provided in these Bylaws.

3.17 COMPENSATION

By Board resolution, Directors and committee members may be paid their expenses, if any, of attendance at each Board or committee meeting, a fixed sum for attendance at each Board or committee meeting, or a stated salary as Director or a committee member, or a combination of the foregoing. No such payment shall preclude any Director or committee member from serving the corporation in any other capacity and receiving compensation therefor.

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SECTION 4. OFFICERS

4.1 NUMBER

The officers of the corporation shall be a Chief Executive Officer, a President, a Secretary and a Treasurer, each of whom shall be elected by the Board. One or more Vice Presidents and such other officers and assistant officers, including a Chairman of the Board, may be elected or appointed by the Board, such officers and assistant officers to hold office for such period, have such authority and perform such duties as are provided in these Bylaws or as may be provided by resolution of the Board. Any officer may be assigned by the Board any additional title that the Board deems appropriate. The Board may delegate to any officer or agent the power to appoint any such subordinate officers or agents and to prescribe their respective terms of office, authority and duties. Any two or more offices may be held by the same person.

4.2 ELECTION AND TERM OF OFFICE

The officers of the corporation shall be elected annually by the Board at the Board meeting held after the annual meeting of the stockholders. If the election of officers is not held at such meeting, such election shall be held as soon thereafter as a Board meeting conveniently may be held. Unless an officer dies, resigns or is removed from office, he or she shall hold office until the next annual meeting of the Board or until his or her successor is elected.

4.3 RESIGNATION

Any officer may resign at any time by delivering written notice to the Chairman of the Board, the Chief Executive Officer, the President, a Vice President, the Secretary or the Board. Any such resignation shall take effect at the time specified therein or, if the time is not specified, upon delivery thereof and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

4.4 REMOVAL

Any officer or agent elected or appointed by the Board may be removed by the Board whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

4.5 VACANCIES

A vacancy in any office because of death, resignation, removal, disqualification, creation of a new office or any other cause may be filled by the Board for the unexpired portion of the term, or for a new term established by the Board.

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4.6 CHAIRMAN OF THE BOARD

If elected, the Chairman of the Board shall perform such duties as shall be assigned to him or her by the Board from time to time and shall preside over meetings of the Board and stockholders unless another officer is appointed or designated by the Board as chairman of such meeting.

4.7 CHIEF EXECUTIVE OFFICER

The Chief Executive Officer shall be the chief executive officer of the corporation, shall preside over meetings of the Board and stockholders in the absence of a Chairman of the Board and, subject to the Board's control, shall supervise and control all of the assets, business and affairs of the corporation. The Chief Executive Officer may sign certificates for shares of the corporation, deeds, mortgages, bonds, contracts or other instruments, except when the signing and execution thereof have been expressly delegated by the Board or by these Bylaws to some other officer or agent of the corporation or are required by law to be otherwise signed or executed by some other officer or in some other manner. In general, the Chief Executive Officer shall perform all duties incident to the office of Chief Executive Officer and such other duties as are prescribed by the Board from time to time.

4.8 PRESIDENT

In the event of the death of the Chief Executive Officer or his inability to act, the President shall perform the duties of the Chief Executive Officer, except as may be limited by resolution of the Board, with all the powers of and subject to all the restrictions upon the Chief Executive Officer. The President may sign with the Secretary or any Assistant Secretary certificates for shares of the corporation. The President shall have, to the extent authorized by the Chief Executive Officer or the Board, the same powers as the Chief Executive Officer to sign deeds, mortgages, bonds, contracts or other instruments. The President shall perform such other duties as from time to time may be assigned to him or her by the Chief Executive Officer or the Board.

4.9 VICE PRESIDENT

In the event of the death of the President or his or her inability to act, the Vice President (or if there is more than one Vice President, the Vice President who was designated by the Board as the successor to the President, or if no Vice President is so designated, the Vice President first elected to such office) shall perform the duties of the President, except as may be limited by resolution of the Board, with all the powers of and subject to all the restrictions upon the President. Any Vice President may sign with the Secretary or any Assistant Secretary certificates for shares of the corporation. Vice Presidents shall have, to the extent authorized by the President or the Board, the same powers as the President to sign deeds, mortgages, bonds, contracts or other instruments. Vice Presidents shall perform such other duties as from time to time may be assigned to them by the President or the Board.

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4.10 SECRETARY

The Secretary shall be responsible for preparation of minutes of meetings of the Board and stockholders, maintenance of the corporation's records and stock registers, and authentication of the corporation's records and shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the President or the Board. In the absence of the Secretary, an Assistant Secretary may perform the duties of the Secretary.

4.11 TREASURER

The Treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation; receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in banks, trust companies or other depositories selected in accordance with the provisions of these Bylaws; sign certificates for shares of the corporation; and in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the President or by the Board. In the absence of the Treasurer, an Assistant Treasurer may perform the duties of the Treasurer.

4.12 SALARIES

The salaries of the officers shall be fixed from time to time by the Board or by any person or persons to whom the Board has delegated such authority. No officer shall be prevented from receiving such salary by reason of the fact that he or she is also a Director of the corporation.

SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS

5.1 CONTRACTS

The Board may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation. Such authority may be general or confined to specific instances.

5.2 LOANS TO THE CORPORATION

No loans for borrowed money shall be contracted on behalf of the corporation and no evidences of indebtedness for borrowed money shall be issued in its name unless authorized by a resolution of the Board. Such authority may be general or confined to specific instances.

5.3 CHECKS, DRAFTS, ETC.

All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such

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officer or officers, or agent or agents, of the corporation and in such manner as is from time to time determined by resolution of the Board.

5.4 DEPOSITS

All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board may select.

SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER

6.1 ISSUANCE OF SHARES

No shares of the corporation shall be issued unless authorized by the Board, which authorization shall include the maximum number of shares to be issued and the consideration to be received for each share.

6.2 CERTIFICATES FOR SHARES

Certificates representing shares of the corporation shall be signed by the Chief Executive Officer or the President, or a Vice President, and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, any of whose signatures may be a facsimile. The Board may in its discretion appoint responsible banks, trust companies or other professionals from time to time to act as transfer agents and registrars of the stock of the corporation; and, when such appointments shall have been made, no stock certificate shall be valid until countersigned by one of such transfer agents and registered by one of such registrars. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person was such officer, transfer agent or registrar at the date of issue. All certificates shall include on their face written notice of any restrictions that may be imposed on the transferability of such shares and shall be consecutively numbered or otherwise identified.

6.3 STOCK RECORDS

The stock transfer books shall be kept at the registered office or principal place of business of the corporation or at the office of the corporation's transfer agent or registrar. The name and address of each person to whom certificates for shares are issued, together with the class and number of shares represented by each such certificate and the date of issue thereof, shall be entered on the stock transfer books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes.

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6.4 RESTRICTION ON TRANSFER

Except to the extent that the corporation has obtained an opinion of counsel acceptable to the corporation that transfer restrictions are not required under applicable securities laws, or has otherwise satisfied itself that such transfer restrictions are not required, all certificates representing shares of the corporation shall bear a legend on the face of the certificate, or on the reverse of the certificate if a reference to the legend is contained on the face, that reads substantially as follows:

"The securities evidenced by this certificate have not been registered under the Securities Act of 1933 or any applicable state law, and no interest therein may be sold, distributed, assigned, offered, pledged or otherwise transferred unless (a) there is an effective registration statement under such Act and applicable state securities laws covering any such transaction involving said securities or (b) this corporation receives an opinion of legal counsel for the holder of these securities (concurred in by legal counsel for this corporation) stating that such transaction is exempt from registration or this corporation otherwise satisfies itself that such transaction is exempt from registration. Neither the offering of the securities nor any offering materials have been reviewed by any administrator under the Securities Act of 1933 or any applicable state law."

6.5 TRANSFER OF SHARES

The transfer of shares of the corporation shall be made only on the stock transfer books of the corporation pursuant to authorization or document of transfer made by the holder of record thereof or by his or her legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney-in-fact authorized by power of attorney duly executed and filed with the Secretary of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificates for a like number of shares shall have been surrendered and canceled.

6.6 LOST OR DESTROYED CERTIFICATES

In the case of a lost, destroyed or mutilated certificate, a new certificate may be issued therefor upon such terms and indemnity to the corporation as the Board may prescribe.

6.7 SHARES OF ANOTHER CORPORATION

Shares owned by the corporation in another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Board may determine or, in the absence of such determination, by the Chief Executive Officer, the President or any Vice President of the corporation.

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SECTION 7. BOOKS AND RECORDS

The corporation shall keep correct and complete books and records of account, stock transfer books, minutes of the proceedings of its stockholders and Board and such other records as may be necessary or advisable.

SECTION 8. ACCOUNTING YEAR

The accounting year of the corporation shall be the calendar year, provided that if a different accounting year is at any time selected for purposes of federal income taxes, the accounting year shall be the year so selected.

SECTION 9. SEAL

The seal of the corporation, if any, shall consist of the name of the corporation, the state of its incorporation and the year of its incorporation.

SECTION 10. INDEMNIFICATION

10.1 RIGHT TO INDEMNIFICATION

Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a Director or officer of the corporation or that, being or having been such a Director or officer of the corporation, he or she is or was serving at the request of the corporation as a Director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as such a Director or officer or in any other capacity while serving as such a Director or officer, shall be indemnified and held harmless by the corporation to the full extent permitted by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than permitted prior thereto), or by other applicable law as then in effect, against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a Director or officer and shall inure to the benefit of the indemnitee's heirs, executors and administrators; provided, however, that except as provided in subsection 10.2 hereof with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized or ratified by the Board. The right to indemnification conferred in

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this subsection 10.1 shall be a contract right and shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that if the DGCL requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a Director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this subsection 10.1 or otherwise.

10.2 RIGHT OF INDEMNITEE TO BRING SUIT

If a claim under subsection 10.1 hereof is not paid in full by the corporation within 60 days after a written claim has been received by the corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. The indemnitee shall be presumed to be entitled to indemnification under this Section 10 upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, where the required undertaking, if any is required, has been tendered to the corporation), and thereafter the corporation shall have the burden of proof to overcome the presumption that the indemnitee is not so entitled. Neither the failure of the corporation (including its Board, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances nor an actual determination by the corporation (including its Board, independent legal counsel or its stockholders) that the indemnitee is not entitled to indemnification shall be a defense to the suit or create a presumption that the indemnitee is not so entitled.

10.3 NONEXCLUSIVITY OF RIGHTS

The rights to indemnification and to the advancement of expenses conferred in this Section 10 shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, agreement, vote of stockholders or disinterested Directors, provisions of the Certificate of Incorporation or Bylaws of the corporation or otherwise. Notwithstanding any amendment to or repeal of this Section 10, any indemnitee shall be entitled to indemnification in accordance with the provisions hereof with respect to any acts or omissions of such indemnitee occurring prior to such amendment or repeal.

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10.4 INSURANCE, CONTRACTS AND FUNDING

The corporation may maintain insurance, at its expense, to protect itself and any Director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL. The corporation, without further stockholder approval, may enter into contracts with any Director, officer, employee or agent in furtherance of the provisions of this Section 10 and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in this Section 10.

10.5 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION

The corporation may, by action of the Board, grant rights to indemnification and advancement of expenses to employees or agents or groups of employees or agents of the corporation with the same scope and effect as the provisions of this Section 10 with respect to the indemnification and advancement of expenses of Directors and officers of the corporation; provided, however, that an undertaking shall be made by an employee or agent only if required by the Board.

10.6 PERSONS SERVING OTHER ENTITIES

Any person who is or was a Director or officer of the corporation who is or was serving (a) as a Director or officer of another corporation of which a majority of the shares entitled to vote in the election of its Directors is held by the corporation or (b) in an executive or management capacity in a partnership, joint venture, trust or other enterprise of which the corporation or a wholly owned subsidiary of the corporation is a general partner or has a majority ownership shall be deemed to be so serving at the request of the corporation and entitled to indemnification and advancement of expenses under subsection 10.1 hereof.

10.7 PROCEDURES FOR THE SUBMISSION OF CLAIMS

The Board may establish reasonable procedures for the submission of claims for indemnification pursuant to this Section 10, determination of the entitlement of any person thereto and review of any such determination. Such procedures shall be set forth in an appendix to these Bylaws and shall be deemed for all purposes to be a part hereof.

SECTION 11. AMENDMENTS OR REPEAL

The Board of Directors shall have the power to adopt, amend or repeal the Bylaws of this corporation; provided, however, the Board of Directors may not repeal or amend any bylaw that the stockholders have expressly provided may not be amended or repealed

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by the Board of Directors. The stockholders shall also have the power to adopt, amend or repeal the Bylaws of this corporation.

Notwithstanding any amendment to Section 10 hereof or repeal of these Bylaws, or of any amendment or repeal of any of the procedures that may be established by the Board pursuant to Section 10 hereof, any indemnitee shall be entitled to indemnification in accordance with the provisions hereof and thereof with respect to any acts or omissions of such indemnitee occurring prior to such amendment or repeal.

The foregoing Bylaws were adopted by the Board of Directors on May 28, 1996.

//s//  Jeffrey P. Bezos
------------------------------
Jeffrey P. Bezos, Secretary

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EXHIBIT 5.1

[PERKINS COIE LETTERHEAD]

March 24, 1997

Amazon.com, Inc.
1516 Second Avenue, 4th Floor
Seattle, WA 98101

Ladies and Gentlemen:

We have acted as counsel to you in connection with the proceedings for the authorization and issuance by Amazon.com, Inc. (the "Company") of up to 2,500,000 shares (the "Company Shares") of the Company's common stock, $.01 par value per share (the "Common Stock"), together with an additional 375,000 shares of Common Stock if and to the extent the underwriters exercise an over-allotment option granted by the Company (the "Over-Allotment Shares"), and the preparation and filing of a registration statement on Form S-1 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), which you are filing with the Securities and Exchange Commission with respect to the Company Shares and the Over-Allotment Shares (collectively, the "Shares").

We have examined the Registration Statement and such documents and records of the Company and other documents as we have deemed necessary for the purpose of this opinion. Based upon the foregoing, we are of the opinion that upon the happening of the following events:

(a) the filing and effectiveness of the Registration Statement and any amendments thereto,

(b) due execution by the Company and registration by its registrar of the Shares,

(c) the offering and sale of the Shares as contemplated by the Registration Statement, and

(d) receipt by the Company of the consideration required for the Shares contemplated by the Registration Statement,

the Shares will be duly authorized, validly issued, fully paid and nonassessable.


Amazon.com, Inc.
March 24, 1997

Page 2

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and any amendment thereto, including any and all post-effective amendments and any registration statement relating to the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act, and to the reference to our firm in the Prospectus of the Registration Statement under the heading "Legal Matters." In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.

Very truly yours,

/s/ PERKINS COIE


EXHIBIT 10.2

AMAZON.COM, INC.

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

JUNE 21, 1996


TABLE OF CONTENTS

                                                                                                                            PAGE
1.       Purchase and Sale of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -1-
         1.1     Sale and Issuance of Series A Preferred Stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -1-
         1.2     Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -1-

2.       Representations and Warranties of the Company  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -1-
         2.1     Organization, Good Standing and Qualification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -1-
         2.2     Capitalization   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -2-
         2.3     Subsidiaries   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -2-
         2.4     Authorization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -2-
         2.5     Valid Issuance of Preferred and Common Stock   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -3-
         2.6     Governmental Consents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -3-
         2.7     Litigation   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -3-
         2.8     Employees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -4-
         2.9     Patents and Trademarks   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -4-
         2.10    Compliance with Other Instruments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -5-
         2.11    Permits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -5-
         2.12    Environmental and Safety Laws  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -5-
         2.13    Disclosure   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -5-
         2.14    Registration Rights  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -6-
         2.15    Title to Property and Assets   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -6-
         2.16    Financial Statements   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -6-
         2.17    Agreements; Action   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -6-
         2.18    Tax Returns and Audits   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -7-
         2.19    Shareholder Agreements   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -7-
         2.20    Brokers or Finders   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -7-
         2.21    Qualified Small Business   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -7-

3.       Representations and Warranties of the Investors  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -7-
         3.1     Experience   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -8-
         3.2     Investment   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -8-
         3.3     Rule 144   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -8-
         3.4     No Public Market   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -8-
         3.5     Access to Data   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -8-
         3.6     Authorization  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         3.7     Accredited Investor  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-

4.       Conditions of Investor's Obligations at Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         4.1     Representations and Warranties   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         4.2     Performance  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         4.3     Compliance Certificate   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-

i

TABLE OF CONTENTS
(CONTINUED)

                                                                                                                            PAGE
         4.4     Board of Directors   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         4.5     Blue Sky   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         4.6     Opinion of Company Counsel   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         4.7     Investor Rights Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-
         4.8     Co-Sale Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -9-

5.       Conditions of the Company's Obligations at Closing  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    -9-
         5.1     Representations and Warranties   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -10-
         5.2     Payment of Purchase Price  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -10-
         5.3     Blue Sky   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -10-
         5.4     Investor Rights Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -10-
         5.5     Co-Sale Agreement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -10-
         5.6     Proceedings and Documents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -10-

6.       Miscellaneous  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -11-
         6.1     Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -11-
         6.2     Survival   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -11-
         6.3     Successors and Assigns   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -11-
         6.4     Entire Agreement; Amendment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -11-
         6.5     Notices, Etc   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -11-
         6.6     Delays or Omissions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -12-
         6.7     California Corporate Securities Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -12-
         6.8     Expenses   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -12-
         6.9     Finder's Fee   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -12-
         6.10    Counterparts   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -12-
         6.11    Severability   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   -12-

-ii-

TABLE OF CONTENTS
(CONTINUED)

EXHIBITS
         Exhibit A        Schedule of Investors
         Exhibit B        Amended and Restated Certificate of Incorporation
         Exhibit C        Schedule of Exceptions
         Exhibit D        Investor Rights Agreement
         Exhibit E        Co-Sale Agreement
         Exhibit F        Right of First Refusal Agreement
         Exhibit G        Voting Agreement

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STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT is made as of the 21st day of June, 1996, by and among AMAZON.COM, INC., a Delaware corporation (the "Company"), with its principal office at 2250 First Avenue South, Seattle, Washington 98134 and the investors listed on Exhibit A hereto, each of which is herein referred to as an "Investor."

1. Purchase and Sale of Stock.

1.1 Sale and Issuance of Series A Preferred Stock.

(a) The Company shall adopt and file with the Secretary of State of Delaware on or before the Closing (as defined below) the Designation of Rights and Preferences of Series A Preferred Stock in the form attached hereto as Exhibit B (the "Designation").

(b) Subject to the terms and conditions of this Agreement, each Investor agrees, severally, to purchase at the Closing and the Company agrees to sell and issue to each Investor at the Closing that number of shares of the Company's Series A Preferred Stock (the "Series A Preferred") set forth opposite each Investor's name on Exhibit A hereto for the purchase price per share of $14.05 as set forth thereon. The shares of Series A Preferred to be sold pursuant to this Agreement are collectively referred to herein as the "Shares."

1.2 Closing. The purchase and sale of the Shares shall take place at the offices of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California, at 9:30 a.m., on June 21, 1996, or at such other time and place as the Company and Investors acquiring in the aggregate more than half the Shares sold pursuant hereto mutually agree upon orally or in writing (which time and place are designated as the "Closing"). At the Closing the Company shall deliver to each Investor a certificate or certificates representing the Series A Preferred that such Investor is purchasing against payment of the purchase price therefor by check, wire transfer or any combination thereof.

2. Representations and Warranties of the Company. Except as set forth in the Schedule of Exceptions attached hereto as Exhibit C, the Company hereby represents and warrants as follows:

2.1 Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as currently conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties. True and accurate copies of the Company's Certificate of


Incorporation and Bylaws, each as amended and in effect at the Closing, have been delivered to the special counsel to the Investors.

2.2 Capitalization. The authorized capital stock of the Company consists of Twenty Five Million (25,000,000) shares of Common Stock ("Common Stock"), of which Two Million Five Hundred Eighty Nine Thousand Seven Hundred Eleven (2,589,711) shares are issued and outstanding on the date of this Agreement and Five Million (5,000,000) shares of Preferred Stock ("Preferred Stock"), of which Five Hundred Sixty Nine Thousand, Three Hundred and Ninety Six (569,396) are designated as Series A Preferred Stock, and none of which is issued and outstanding. All such issued and outstanding shares have been duly authorized and validly issued and are fully paid and nonassessable. The Company has reserved Five Hundred Sixty Nine Thousand, Three Hundred Ninety Six (569,396) shares of Common Stock for issuance upon conversion of the Series A Preferred. The Company has reserved Four Hundred Fourteen Thousand Six Hundred Thirty-Six (414,636) shares of Common Stock for issuance upon exercise of options granted and outstanding as of the date of this Agreement. The Company has reserved Three Hundred Forty-One Thousand Six Hundred Fifteen (341,615) shares of Common Stock for issuance after the date of this Agreement to future employees, consultants and directors of the Company. Other than the shares reserved for issuance described in this paragraph, there are no outstanding rights, options, warrants, preemptive rights, rights of first refusal or similar rights for the purchase or acquisition from the Company of any securities of the Company. All outstanding shares have been issued in compliance with state and federal securities laws.

2.3 Subsidiaries. The Company does not presently own or control, directly or indirectly, any interest in any other corporation, association, or other business entity. The Company is not a participant in any joint venture, partnership, or similar arrangement.

2.4 Authorization. All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement, the Investor Rights Agreement in the form attached hereto as Exhibit D (the "Investor Rights Agreement"), the Co-Sale Agreement in the form attached hereto as Exhibit E (the "Co-Sale Agreement"), the Right of First Refusal Agreement in the form attached hereto as Exhibit F (the "Right of First Refusal Agreement") and the Voting Agreement in the form attached hereto as Exhibit G (the "Voting Agreement), the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Shares being sold hereunder and the Common Stock issuable upon conversion of the Shares has been taken or will be taken prior to the Closing, and this Agreement, the Investor Rights Agreement and the Co- Sale Agreement constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, subject to: (i) judicial principles limiting the availability of specific performance, injunctive relief, and other equitable remedies; (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights; and (iii) limitations on the enforceability of the indemnification provisions of the Investor Rights Agreement.

-2-

2.5 Valid Issuance of Preferred and Common Stock. The shares of Series A Preferred that are being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer directly or indirectly created by the Company other than restrictions on transfer under this Agreement, the Investor Rights Agreement, the Right of First Refusal Agreement and the Co-Sale Agreement and under applicable state and federal securities laws. The Common Stock issuable upon conversion of the Series A Preferred purchased under this Agreement has been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Designation, will be duly and validly issued, fully paid, and nonassessable and will be free of restrictions on transfer directly or indirectly created by the Company other than restrictions on transfer under this Agreement, the Investor Rights Agreement, the Right of First Refusal Agreement and the Co-Sale Agreement and under applicable state and federal securities laws.

2.6 Governmental Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the offer, sale or issuance of the Shares (and the Common Stock issuable upon conversion of the Shares) or the consummation of any other transaction contemplated hereby, except for the following: (i) the filing of the Restated Certificate in the office of the Secretary of State of the State of Delaware, which shall be filed by the Company on or prior to the Closing Date; (ii) the filing of such notices as may be required under the Securities Act of 1933, as amended (the "Securities Act"); (iii) the filing of a notice of exemption pursuant to Section 25102(f) of the California Corporate Securities Law of 1968, as amended (the "California Securities Law"), which shall be filed by the Company promptly following the Closing; and (iv) the compliance with Washington and any other applicable state securities laws, which compliance will have occurred within the appropriate time periods therefor. Based in part on the representations of the Investors set forth in Section 3 below, the offer, sale and issuance of the Shares in conformity with the terms of this Agreement are exempt from the registration requirements of Section 5 of the Securities Act, from the qualification requirements of Section 25110 of the California Securities Law and from any similar requirement under Washington securities law.

2.7 Litigation. There is no action, suit, proceeding or investigation pending or, to the best of the Company's knowledge, currently threatened before any court, administrative agency or other governmental body against the Company which questions the validity of this Agreement, the Investor Rights Agreement or the Co-Sale Agreement or the right of the Company to enter into any of them, or to consummate the transactions contemplated hereby or thereby, or which would be reasonably likely to result, either individually or in the aggregate, in any material adverse change in the condition (financial or otherwise), business, property, assets or liabilities of the Company. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or, to the best knowledge of the Company, threatened (or any basis therefor known to the Company)

-3-

involving the prior employment of any of the Company's employees, their use in connection with the Company's business of any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. The Company is not a party or subject to, and none of its assets is bound by, the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which would be reasonably likely to have a material adverse effect on the Company.

2.8 Employees. Each employee of the Company has executed a proprietary information agreement, in substantially the form delivered to special counsel to the Investors. To the best knowledge of the Company, no officer or key employee is in violation of any prior employee contract or proprietary information agreement. Each holder of Common Stock of the Company has entered into a Shareholders Agreement in the form provided to special counsel to the Investors. The Company is not a party to or bound by any currently effective employment contract, deferred compensation agreement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employee compensation agreement or arrangement with any collective bargaining agent. No employees of the Company are represented by any labor union or covered by any collective bargaining agreement. There is no pending or, to the best of the Company's knowledge, threatened labor dispute involving the Company and any group of its employees.

2.9 Patents and Trademarks. The Company has sufficient title to and ownership of all trade secrets, and, to its knowledge, copyrights, information, proprietary rights and processes, patents, trademarks, service marks and trade names necessary for its business as now conducted without any material conflict with or infringement of the rights of others. There are no material outstanding options, licenses, or agreements of any kind relating to the foregoing, nor is the Company bound by or a party to any material options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other person or entity. The Company has not received any written, or to its knowledge, oral communications alleging that the Company has violated or, by conducting its business as proposed, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity. To the Company's knowledge, none of the Company's employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or that would conflict with the Company's business as proposed to be conducted. To the Company's knowledge, neither the execution nor delivery of this Agreement or the Investor Rights Agreement, nor the carrying on of the Company's business by the employees of the Company, nor the conduct of the Company's business as proposed, will conflict with or

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result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated. The Company covenants that it will not, at any time, knowingly conduct its business in such a way as to conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is obligated. The Company does not believe it is or will be necessary to utilize any inventions of any of its employees (or people it currently intends to hire) made prior to their employment by the Company.

2.10 Compliance with Other lnstruments. The Company is not in violation or default of any provision of its Certificate of Incorporation or Bylaws, each as amended and in effect on and as of the Closing. The Company is not in violation or default of any material provision of any instrument, mortgage, deed of trust, loan, contract, commitment, judgment, decree, order or obligation to which it is a party or by which it or any of its properties or assets are bound which would materially adversely affect the condition (financial or otherwise), business, property, assets or liabilities of the Company or, to the best of its knowledge, of any provision of any federal, state or local statute, rule or governmental regulation which would materially adversely affect the condition (financial or otherwise), business, property, assets or liabilities of the Company. The execution, delivery and performance of and compliance with this Agreement, the Investor Rights Agreement and the Co-Sale Agreement, and the issuance and sale of the Shares, will not result in any such violation, be in conflict with or constitute, with or without the passage of time or giving of notice, a default under any such provision, require any consent or waiver under any such provision (other than any consents or waivers that have been obtained), or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company pursuant to any such provision.

2.11 Permits. The Company has all franchises, permits, licenses, and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could reasonably be expected to materially and adversely affect the business, properties, prospects, or financial condition of the Company, and the Company believes it can obtain, without undue burden or expense, any similar authority for the conduct of its business as planned to be conducted. The Company is not in default in any material respect under any of such franchises, permits, licenses, or other similar authority.

2.12 Environmental and Safety Laws. To the best of its knowledge, the Company is not in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and to the best of its knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation,

2.13 Disclosure. No representation, warranty or statement by the Company in this Agreement, or in any written statement or certificate furnished to the Investors pursuant to this Agreement, contains any untrue statement of a material fact or, when taken together, omits to state a material fact necessary to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. However, as to any projections furnished to the Investors, such projections were prepared in good faith

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by the Company, but the Company makes no representation or warranty that it will be able to achieve such projections.

2.14 Registration Rights. Except as provided in the Investor Rights Agreement, the Company has not granted or agreed to grant any registration rights, including piggyback rights, to any person or entity.

2.15 Title to Property and Assets. The Company has good and marketable title to all of its properties and assets free and clear of all mortgages, liens and encumbrances, except liens for current taxes and assessments not yet due and possible minor liens and encumbrances which do not, in any case, in the aggregate, materially detract from the value of the property subject thereto or materially impair the operations of the Company. With respect to the property and assets it leases, the Company is in compliance with such leases and, to the best of its knowledge, holds a valid leasehold interest free of all liens, claims or encumbrances. The Company's properties and assets are in good condition and repair in all material respects.

2.16 Financial Statements. The Company has delivered to the Investors (a) a balance sheet and income statement of the Company as of and for the fiscal year ended December 31, 1995, and (b) a balance sheet and income statement of the Company as of and for the three-month period ended March 31, 1996. The foregoing financial statements, all of which are unaudited, are herein referred to as the "Financial Statements." The balance sheet of the Company as of March 31, 1996 is herein referred to as the "Company Balance Sheet." The Financial Statements fairly present, in all material respects, the financial position and results of operations of the Company as of the dates and for the periods indicated. The Company has no material liabilities or obligations which are not reflected or reserved against in the Company Balance Sheet, except liabilities or obligations incurred since the date of the Company Balance Sheet in the ordinary course of business.

2.17 Agreements; Action.

(a) Except for agreements described herein and in the Investor Rights Agreement, there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, affiliates, or any affiliate thereof

(b) There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company is a party or by which it is bound that may involve (i) obligations (contingent or otherwise) of, or payments by the Company in excess of, $50,000, or (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company, or (iii) provisions restricting or adversely affecting the development, manufacture or distribution of the Company's products or services or (iv) indemnification by the Company with respect to infringements of proprietary rights.

(c) The Company has not (i) declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital

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stock, (ii) incurred any indebtedness for money borrowed or any other liabilities individually in excess of $75,000 or, in the case of indebtedness and/or liabilities individually less than $75,000, in excess of $150,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business.

(d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections.

(e) The Company is not a party to and is not bound by any contract, agreement or instrument, or subject to any restriction under its Certificate of Incorporation or its Bylaws that adversely affects its business as now conducted or as proposed to be conducted, its properties or its financial condition.

2.18 Tax Returns and Audits. The Company has accurately prepared all United States income tax returns and all state and municipal tax returns required to be filed by it, if any, has paid all taxes, assessments, fees and charges when and as due under such returns and has made adequate provision for the payment of all other taxes, assessments, fees and charges shown on such returns or on assessments received by the Company, where, if not paid or filed or prepared correctly, would not have a material adverse effect on the Company. To the best of the Company's knowledge, no deficiency assessment or proposed adjustment of the Company's United States income tax or state or municipal taxes is pending.

2.19 Shareholder Agreements. Except for agreements contemplated hereby of even date herewith, there are no agreements, other than agreements, true and complete copies of which the Company has provided to special counsel to the Investors, between the Company and any of the Company's shareholders, or to the best knowledge of the Company, among any of the Company's shareholders, which in any way affect any shareholder's ability or right freely to alienate or vote such shares (except restrictions designed to provide compliance with securities laws).

2.20 Brokers or Finders. The Company has not agreed to incur, directly or indirectly, any liability for brokerage or finders' fees, agents' commissions or other similar charges in connection with this Agreement or any of the transactions contemplated hereby.

2.21 Qualified Small Business. As of the Closing (without reference to any time after the Closing), the Company is a "qualified small business," as such term is defined in Section 1202 of the Internal Revenue Code of 1986, as amended.

3. Representations and Warranties of the Investors. Each Investor hereby represents and warrants that:

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3.1 Experience. Such Investor is experienced in evaluating start-up companies such as the Company, is able to fend for itself in transactions such as the one contemplated by this Agreement, has such knowledge and experience in financial and business matters that such Investor is capable of evaluating the merits and risks of such Investor's prospective investment in the Company, and has the ability to bear the economic risks of the investment.

3.2 Investment. Such Investor is acquiring the Shares (and the Common Stock issuable upon conversion of the Shares) for investment for such Investor's own account and not with the view to, or for resale in connection with, any distribution thereof. Such Investor understands that the Shares (and the Common Stock issuable upon conversion of the Shares) have not been registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein. Such Investor further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person with respect to any of the Shares (or any Common Stock acquired upon conversion thereof). Such Investor understands and acknowledges that the offering of the Shares pursuant to this Agreement will not, and any issuance of Common Stock on conversion may not, be registered under the Securities Act on the ground that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from the registration requirements of the Securities Act.

3.3 Rule 144. Such Investor acknowledges that the Shares (and the Common Stock issuable upon conversion of the Shares) must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available. Such Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions. Such Investor covenants that, in the absence of an effective registration statement covering the stock in question, such Investor will sell, transfer, or otherwise dispose of the Shares (and any Common Stock issued on conversion thereof) only in a manner consistent with such Investor's representations and covenants set forth in this Section 3. In connection therewith, such Investor acknowledges that the Company will make a notation on its stock books regarding the restrictions on transfers set forth in this Section 3 and will transfer securities on the books of the Company only to the extent not inconsistent therewith.

3.4 No Public Market. Such Investor understands that no public market now exists for any of the securities issued by the Company, and that it is unlikely that a public market will ever exist for the Shares (or the Common Stock issuable upon conversion of the Shares).

3.5 Access to Data. Such Investor has received and reviewed information about the Company and has had an opportunity to discuss the Company's business, management and financial affairs with its management and to review the Company's facilities.

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Such Investor understands that such discussions, as well as any written information issued by the Company, were intended to describe the aspects of the Company's business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description. The foregoing, however, does not limit or modify the representations and warranties of the Company in Section 2 of this Agreement or the right of the Investors to rely thereon.

3.6 Authorization. This Agreement when executed and delivered by such Investor will constitute a valid and legally binding obligation of the Investor, enforceable in accordance with its terms, subject to: (i) judicial principles respecting election of remedies or limiting the availability of specific performance, injunctive relief, and other equitable remedies; (ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect generally relating to or affecting creditors' rights; and (iii) limitations on the enforceability of the indemnification provisions of the Investor Rights Agreement.

3.7 Accredited Investor. Such Investor acknowledges that it is an "accredited investor" as defined in Rule 501 of Regulation D as promulgated by the Securities and Exchange Commission under the Securities Act and shall submit to the Company such further assurances of such status as may be reasonably requested by the Company. For state securities law purposes, the principal address of the Investor is that set forth on Exhibit A.

4. Conditions of Investor's Obligations at Closing. The obligations of each Investor under subsection 1.1(b) of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against any Investor who does not consent in writing thereto:

4.1 Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing.

4.2 Performance. The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

4.3 Compliance Certificate. The President of the Company shall deliver to each Investor at the Closing a certificate stating that the conditions specified in Sections 4.1 and 4.2 have been fulfilled and stating that there shall have been no adverse change in the business, affairs, prospects, operations, properties, assets or condition of the Company since the date of this Agreement.

4.4 Board of Directors. Effective upon the Closing, the directors of the Company shall be Messrs. Jeffrey P. Bezos, Tom A. Alberg, and L. John Doerr.

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4.5 Blue Sky. The Company shall have obtained all necessary permits and qualifications, if any, or secured an exemption therefrom, required by any state or country prior to the offer and sale of the Shares.

4.6 Opinion of Company Counsel. Each Investor shall have received from Perkins, Coie, counsel for the Company, an opinion, dated as of the Closing, reasonably satisfactory to the Investors and their counsel.

4.7 Investor Rights Agreement. The Company and each Investor and Jeffrey P. Bezos shall have entered into the Investor Rights Agreement.

4.8 Co-Sale Agreement. The Company and each Investor and Jeffrey P. Bezos shall have entered into the Co-Sale Agreement.

5. Conditions of the Company's Obligations at Closing. The obligations of the Company to each Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by that Investor:

5.1 Representations and Warranties. The representations and warranties of the Investor contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing.

5.2 Payment of Purchase Price. The Investor shall have delivered the purchase price specified in Section 1.2 against delivery of the Shares set forth in the Schedule of Investors attached hereto as Exhibit A by the Company to such Investor.

5.3 Blue Sky. The Company shall have obtained all necessary permits and qualifications, if any, or secured an exemption therefrom, required by any state or country for the offer and sale of the Shares.

5.4 Investor Rights Agreement. Each of the Investors and Jeffrey P. Bezos shall have executed the Investor Rights Agreement on or prior to the date of the Closing.

5.5 Co-Sale Agreement. Each of the Investors and Jeffrey P. Bezos shall have executed the Co-Sale Agreement on or prior to the date of the Closing.

5.6 Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing hereby, and all documents and instruments incident to these transactions, shall be reasonably satisfactory in substance to the Company and its counsel.

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6. Miscellaneous.

6.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State of Washington, without regard to any provisions thereof relating to conflicts of laws among different jurisdictions.

6.2 Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by any Investor and the closing of the transactions contemplated hereby for a period of three
(3) years, whereupon they shall cease and be of no further force and effect. All statements as to factual matters contained in any certificate or exhibit delivered by or on behalf of the Company pursuant hereto shall be deemed to be the representations and warranties of the Company hereunder as of such date of such certificate or exhibit.

6.3 Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto; provided, however, that the rights of an Investor to purchase Shares shall not be assignable without the consent of the Company.

6.4 Entire Agreement; Amendment. This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought; provided, however, that holders of a majority of the outstanding Shares (whether or not converted) may waive or amend, on behalf of all Investors and other holders of Shares, any provisions hereof benefitting the Investors so long as the effect thereof will be that all such Investors and other holders of Shares will be treated equally.

6.5 Notices, Etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, return receipt requested, or otherwise delivered by hand or by messenger, addressed (a) if to an Investor, at such Investor's address set forth on Exhibit A, or at such other address as such Investor shall have furnished to the Company in writing, or (b) if to any other holder of any Shares, at such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of such Shares who has so furnished an address to the Company, or (c) if to the Company, at its address set forth on the first page of this Agreement addressed to the attention of the Corporate Secretary, or at such other address as the Company shall have furnished to the Investors. If notice is provided by mail, notice shall be deemed to be given three (3) business days after proper deposit in the U. S. Mail.

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6.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any holder of any Shares upon any breach or default of the Company under this Agreement shall impair any such right, power or remedy of such holder, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver on the part of any holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing or as provided in this Agreement. All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative.

6.7 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

6.8 Expenses. The Company and each Investor shall bear their own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby; provided, however, that the Company shall pay, promptly after the Closing, the reasonable, itemized legal fees and expenses of Wilson Sonsini Goodrich & Rosati ("WSGR"), special counsel to the Investors, up to an aggregate maximum of $15,000.

6.9 Finder's Fee. The Company and the Investors shall each indemnify and hold the other harmless from any liability for any commission or compensation in the nature of a finder's fee (including the costs, expenses and legal fees of defending against such liability) for which the Company or the Investors, or any of their respective partners, employees, or representatives, as the case may be, is responsible.

6.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be executed by less than all Investors, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

6.11 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or

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void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

(This space intentionally left blank.)

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

AMAZON.COM, INC.

By: Jeff P. Bezos
Jeffrey P. Bezos, President and
Chief Executive Officer

[SIGNATURE PAGE FOR SERIES A PREFERRED STOCK PURCHASE AGREEMENT]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

INVESTORS:

KLEINER, PERKINS, CAUFIELD &
BYERS VIII

By: L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

KPCB INFORMATION SCIENCES
ZAIBATSU FUND II

By: L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

[SIGNATURE PAGE FOR SERIES A PREFERRED STOCK PURCHASE AGREEMENT]

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EXHIBIT A

SCHEDULE OF INVESTORS

                                                                 NO. OF
                                                                SHARES OF        AGGREGATE PURCHASE
                                                                 SERIES A         PRICE OF SERIES A
                        INVESTOR                                PURCHASED             PURCHASED
- ----------------------------------------                        ---------        ------------------
Kleiner, Perkins, Caufield & Byers, VIII                         555,161           $7,800,012.05
2750 Sand Hill Road                                              -------           -------------
Menlo Park, CA  94025

KPCB Information Sciences Zaibatsu Fund II                        14,235           $  200,001.75
2750 Sand Hill Road                                              -------           -------------
Menlo Park, CA  94025
                               TOTAL:                            569,396           $8,000,013.80
                                                                 -------           -------------

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EXHIBIT 10.3

CO-SALE AGREEMENT

This Co-Sale Agreement (the "Co-Sale Agreement") is made as of June 21, 1996, by and among Amazon.com, Inc., a Delaware corporation (the "Company"), the purchasers of the Company's Series A Preferred Stock (individually an "Investor," collectively the "Investors"), and Jeffrey P. Bezos (the "Founder").

Whereas, the Company and the Investors are entering into a Series A Preferred Stock Purchase Agreement of even date herewith (the "Purchase Agreement"); and

Whereas, in order to induce the Company and the Investors to enter into the Purchase Agreement, the Company, the Investors and the Founder desire to enter into this Co-Sale Agreement, which pertains to sales of certain securities by the Founder;

Now, therefore, in consideration of the mutual promises and covenants hereinafter set forth, the Company, the Investors, and the Founder hereby agree as follows:
SECTION 1

RIGHT OF CO-SALE

1.1 Sales by Founder. In the event that the Founder proposes to sell, assign, transfer or otherwise convey shares of Common Stock or securities convertible into, exchangeable for or exercisable for Common Stock ("Co-Sale Securities"), then the Founder shall offer in writing to each Investor the right to participate in such sale on the same terms and conditions available to such Founder.

Upon written notice to the Founder within fifteen (15) days of receipt by each Investor of notification from the Founder of the proposed sale, an Investor may sell that number of shares of Co-Sale Securities equal to the total number of shares to be sold in the transaction, multiplied by a fraction, the numerator of which is the number of shares of Co-Sale Securities held by such Investor and the denominator of which is the number of shares of Co-Sale Securities held by all selling Investors plus the Founder. To the extent any Investor exercises such right of participation, the number of shares of Co-Sale Securities that the Founder may sell in the transaction shall be correspondingly reduced.

1.2 Limitations on Right of Co-Sale. Section 1.1 of this Agreement shall not apply where the sale, assignment, transfer or other conveyance of Co-Sale Securities by a Founder is:

(a) to that Founder's spouse, parents, or children or other members of the Founder's family (including relatives by marriage), or to a custodian, trustee or other fiduciary for the account of the Founder or members of his family or to a family limited partnership,


limited liability company or other entity or person in connection with a bona fide estate planning transaction;

(b) by way of bequest or inheritance upon death;

(c) to the Company;

(d) by way of a bona fide gift;

(e) when the number of Co-Sale Securities to be transferred, combined with all prior sales and transfers of Co-Sale Securities by Founder after the date hereof other than transfers pursuant to subparagraphs
(a), (b), (c), (d) and (f) hereof, is equal to or less than fifteen percent (15%) of the Co-Sale Securities held by the Founder as of the date hereof; or

(f) by way of any pledge of Co-Sale Securities made by Founder pursuant to a bona fide loan transaction with an established financial institution that creates a mere security interest; provided, however, that any transferees pursuant to this Section 1.2 shall receive and hold such shares subject in all respects to the provisions of this Agreement, and that there shall be no further transfer of such shares except in accordance herewith.

1.3 Termination of Co-Sale Right. The Co-Sale Right set forth in this Agreement shall terminate and be of no further force and effect immediately upon the earliest of:

(a) the closing of an initial firm commitment underwritten public offering of the Company's Common Stock pursuant to an effective registration statement on Form S-1 under the Securities Act of 1933 covering the offer and sale of Common Stock by the Company to the public at an aggregate offering price of at least $7,500,000 and a per share offering price to the public at least equal to twenty dollars ($20.00) (appropriately adjusted to reflect any stock split, stock dividend or recapitalization of the Company);

(b) the acquisition of all or substantially all the assets or stock of the Company or the merger of the Company with or into any other entity in which a change of control of the Company occurs; or

(c) five years after the date of this Agreement.

SECTION 2

PROHIBITED TRANSFERS

2.1 Treatment of Prohibited Transfers. In the event a Founder sells any Co-Sale Securities of the Company in contravention of the participation rights of the Investors under

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this Agreement (a "Prohibited Transfer"), the Investors, in addition to such other remedies as may be available at law, in equity or hereunder, shall have the put option provided in Section 2.2 below, and the Founder shall be bound by the applicable provisions of such put option.

2.2 Put Option. In the event of a Prohibited Transfer, each Investor shall have the right to sell to the Founder who effected the Prohibited Transfer, and, if such right is exercised, the Founder shall have the obligation to purchase from each Investor, a number of shares of Common Stock of the Company (either directly or through delivery of convertible Series A Preferred Stock) equal to the number of shares each Investor would have been entitled to transfer to the purchaser in the Prohibited Transfer pursuant to the terms hereof. Such sale shall be made on the following term and conditions:

(a) The price per share at which the shares are to be sold to the Founder shall be equal to the price per share paid by the purchaser to the Founder in the Prohibited Transfer. The Founder shall also reimburse each Investor for any and all fees and expenses, including legal fees and expenses, promptly following demand therefor, incurred pursuant to the exercise or the attempted exercise of the Investor's rights under this Section 2.

(b) In order to exercise the put option created under this Section 2, an Investor must, within 20 days after the later of the date on which the Investor (i) received notice from the Founder of the Prohibited Transfer or (ii) otherwise become aware of the Prohibited Transfer, deliver to the Founder the certificate or certificates representing shares to be sold, each certificate to be properly endorsed for transfer.

(c) The Founder shall, upon receipt of the certificate or certificates for the shares to be sold by an Investor, pursuant to Section 2.2(b), immediately pay the aggregate purchase price therefor and the amount of reimbursable fees and expense, as specified in Section 2.2(a), by certified check or bank draft made payable to the order of such Investor.

(d) NOTWITHSTANDING THE FOREGOING, ANY ATTEMPT TO TRANSFER SHARES OF THE COMPANY IN VIOLATION OF ARTICLE I HEREOF SHALL BE VOID AND THE COMPANY AGREES IT WILL NOT EFFECT SUCH A TRANSFER NOR WILL IT TREAT ANY ALLEGED TRANSFEREE AS THE HOLDER OF SUCH SHARES WITHOUT THE WRITTEN CONSENT OF THE INVESTORS. THE COMPANY AND THE FOUNDER AGREE THAT ANY AND ALL CERTIFICATES REPRESENTING ANY SHARES OR OTHER SECURITIES OF THE COMPANY HELD FROM TIME TO TIME DURING THE TERM OF THIS CO-SALE AGREEMENT SHALL BEAR A LEGEND REFERRING TO THE RESTRICTIONS IMPOSED BY THIS AGREEMENT.

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SECTION 3

MISCELLANEOUS

3.1 Governing Law. This Agreement shall be governed in all respects by and construed in all respects in accordance with the laws of the State of Washington.

3.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, transferees, executors and administrators of the parties hereto. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

3.3 Entire Agreement This Agreement constitutes the full and entire understanding and agreement between the parties with regard to Co-Sale rights.

3.4 Amendment and Waiver. This Agreement, or any provision hereof, may be amended or waived only in writing signed by the Company, the Founder and the holders of a majority of the Series A Preferred Stock (including any Common Stock then held by the Investors issued upon conversion of such Series A Preferred Stock), and any amendment or waiver so approved shall be binding upon all the Investors (including any transferee of an Investor).

3.5 Notices, etc. All notices and other communications required or permitted under this Agreement shall be in writing and shall be mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or by messenger addressed (a) if to an Investor, at such Investor's address set forth on the Purchase Agreement, or (b) if to a Founder or to the Company, at the address of the Company's principal executive offices.

3.6 Severability. In the event that any provision of this Agreement are held to be unenforceable under applicable law, this Agreement shall continue in full force and effect without said provision and shall be enforceable in accordance with its terms.

3.7 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

3.8 Counterparts. This Agreement may be executed in any number of Counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

-4-

IN WITNESS WHEREOF, the parties have executed this agreement as of the date first above written. AMAZON.COM, INC.

By: Jeffrey P. Bezos
Jeffrey P. Bezos, President and Chief Executive Officer

FOUNDER

Jeffrey P. Bezos
Jeffrey P. Bezos

[SIGNATURE PAGE FOR CO-SALE AGREEMENT]


IN WITNESS WHEREOF, the parties have executed this agreement as of the date first above written. INVESTORS: KLEINER, PERKINS, CAUFIELD & BYERS VIII

By: L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

KPCB INFORMATION SCIENCES
ZAIBATSU FUND II

By: L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

[SIGNATURE PAGE FOR CO-SALE AGREEMENT]


EXHIBIT 10.4

AMAZON.COM, INC.
RIGHT OF FIRST REFUSAL AGREEMENT

THIS AGREEMENT is made as of June 21, 1996, among Amazon.com, Inc., a Delaware corporation (the "Company"), and the undersigned holders of Series A Preferred Stock of the Company (the "Stockholders").

WHEREAS, in connection with the Company's Series A Preferred Stock financing, the Company has sold shares of its Series A Preferred Stock to the Stockholders; and

WHEREAS, the Stockholders have agreed to grant the Company a Right of First Refusal with respect to all shares of the Company's Preferred Stock or Common Stock owned by them or issued to them in the future with respect to such shares in any stock dividend, stock split, reclassification or similar event (the "Shares").

THEREFORE, the undersigned agree as follows:

1. Shares. Upon closing of the Series A Preferred Stock financing with the Company pursuant to which the Stockholders purchase shares of the Company's Series A Preferred Stock, each Stockholder hereby severally represents that it owns that number of shares of Preferred Stock set forth opposite its name on Exhibit A to the Series A Preferred Stock Purchase Agreement of even date herewith.

2. Company's Right of First Refusal. Before any Shares held by a Stockholder (a "Selling Stockholder") or any transferee (either being sometimes referred to herein as the "Holder") may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section (the "Right of First Refusal").

(a) Notice of Proposed Transfer. The Selling Stockholder shall (a) deliver to the Company a written notice (the "Notice") stating: (i) the Selling Stockholder's bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred to each Proposed Transferee; (iv) the bona fide cash price or other consideration for which the Selling Stockholder proposes to transfer the Shares (the "Offered Price"); and (v) the material terms and conditions of the proposed transfer (the "Offer Terms") and (b) offer the Shares at the Offered Price and on the Offer Terms to the Company or its assignee(s).

(b) Exercise of Right of First Refusal. At any time within 30 days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Selling Stockholder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price and on the terms determined in accordance with subsection (c) below.


(c) Purchase Price. The purchase price ("Purchase Price") for the Shares purchased by the Company or its assignee(s) under this
Section shall be the Offered Price, and the terms and conditions of the transfer shall be identical in all material respects to the Offer Terms (the "Terms"). If the Offered Price includes consideration other than cash the cash equivalent value of the non-cash consideration SW be determined by the Board of Directors of the Company in good faith.

(d) Purchase Price. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Selling Stockholder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof, in any case in accordance with the Terms, within thirty (30) days after delivery of the written notice by the Company as set forth in Section 2(b).

(e) Selling Stockholder's Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section, then the Selling Stockholder may sell or otherwise transfer such Shares to that Proposed Transferred at the Offered Price or at a higher price and on the Offer Terms, provided that such sale or other transfer is consummated within sixty (60) days after the date of the Notice and provided further that any such sale or other transfer is affected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Selling Stockholder may be sold or otherwise transferred.

(f) Exception for Affiliate Transfers. Anything to the contrary contained in this Section notwithstanding, the transfer of any or all of the Shares to an affiliate of the Stockholder (including limited partners of the Stockholder) shall be exempt from the provisions of this Section. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Agreement, and there shall be no further transfer of such Shares except in accordance with the terms of this Agreement.

(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any Shares immediately after the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the 1933 Act, as amended.

(h) Assignment of Right of First Refusal. The Right of First Refusal shall be freely assignable by the Company at any time.

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3. General Provisions.

(a) This Agreement shall be governed by the laws of the State of Washington as they apply to contacts entered into and wholly to be performed in such state. This Agreement represents the entire agreement between the parties with respect to the Company's Right of First Refusal and may only be modified or amended in writing signed by both parties.

(b) Any notice, demand or request required or permitted to be given by either the Company or the Purchase pursuant to the terms of this Agreement shall be in writing and shall be deemed given (i) when delivered personally, (ii) five days after it is deposited in the U.S. mail, First Class with postage prepaid, or (iii) one day after deposit (prepaid) with a nationally recognized overnight courier, and addressed to the parties at the addresses of the parties set forth in the Series A Preferred Stock Purchase Agreement or such other address as a party may request by notifying the other in writing.

(c) Either party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party's right to assert all other legal remedies available to it under the circumstances.

(d) The parties acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper to enforce this Agreement or to prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief in appropriate circumstances.

(e) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(f) Each party to this Agreement represents that such party has duly authorized, executed and delivered this Agreement and that this Agreement is a valid and binding obligation of such party, enforceable against such party in accordance with its terms.

(g) All certificates representing any Shares subject to the provisions of this Agreement shall have endorsed thereon an appropriate legend referencing the restrictions imposed by this Agreement.

-3-

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

COMPANY

AMAZON.COM, INC.

By: /s/ Jeff P. Bezos
   -----------------------------------
   Jeffrey P. Bezos, President and
   Chief Executive Officer

[SIGNATURE PAGE FOR RIGHT OF FIRST OFFER AGREEMENT]


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

SERIES A PREFERRED STOCKHOLDERS:

KLEINER, PERKINS, CAUFIELD &
BYERS VIII

By: /s/  L. John Doerr
   -------------------------------------
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caulfield & Byers VIII
KPCB INFORMATION SCIENCES
   ZAIBATSU FUND II

By: /s/  L. John Doerr
   -------------------------------------
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caulfield & Byers VIII

[SIGNATURE PAGE FOR RIGHT OF FIRST OFFER AGREEMENT]


EXHIBIT 10.5

AMAZON.COM, INC.

REPURCHASE AGREEMENT

This Agreement is entered into as of June 21, 1996 by and between Amazon.com, Inc., a Delaware corporation (the "Company"), and Jeffrey P. Bezos ("Investor").

RECITALS

A. Prior to the date of this Agreement, the Company sold to Investor and Investor purchased from the Company 1,700,000 shares of common stock, $.01 par value per share, of the Company (the "Stock") at a price of $.006 per share ("Purchase Price").

B. The Company and each of Kleiner, Perkins, Caufield & Byers, VIII and KPCB Information Sciences Zaibatsu Fund II (the "Series A Investors") are entering into a Series A Preferred Stock Purchase Agreement of even date herewith (the "Series A Agreement") pursuant to which the Series A Investors are purchasing from the Company an aggregate of 569,396 shares of Series A Preferred Stock, $.01 par value per share, of the Company for an aggregate purchase price of $8,000,000;

C. In order to induce the Company to enter into the Series A Agreement, and to induce the Series A Investors to invest funds in the Company pursuant to the Series A Agreement, Investor has agreed that a percentage of the Stock originally purchased by such Investor from the Company be subject to a purchase option in favor of the Company, and certain other matters set forth herein.

AGREEMENTS

In consideration of the foregoing and the other provisions set forth herein, the parties hereby agree as follows:

1. PURCHASE OPTION

Six percent (6%) of the Stock (such 102,000 shares, subject to increase or decrease pursuant to any forward or reverse stock split, stock dividend or similar non-economic adjustment being referred to herein as the "Option Shares") shall be subject to the following option (the "Purchase Option"):

(a) In the event that, prior to the termination of this Agreement, Investor ceases to be continuously employed by the Company, or a parent or


subsidiary or successor or affiliate of the Company, due either to his voluntary resignation (other than due to disability) or to termination by the Company for Cause (as defined below), the Company may exercise the Purchase Option. For the purpose of this paragraph 1, Investor's "continuous employment" shall cease when Investor ceases to be actively employed by the Company or a parent or subsidiary or successor or affiliate of the Company, as determined in the reasonable discretion of the Board of Directors of the Company after at least 30 days' prior written notice is provided to Investor that such a determination is under consideration. Vacations and absences due to illness, disability or family crisis shall not be considered in determining whether a cessation of Investor's active employment has occurred. The date when continuous employment ceases is hereinafter referred to as the Termination Date. The term "Cause" shall mean: (i) Investor's conviction of (or plea of guilty or nolo contendere to) a felony which had or will have a material detrimental effect on the Company's business, (ii) a grossly negligent or willful act by Investor which constitutes gross misconduct and is injurious to the Company, and (iii) continued violations by Investor of his material duties which are demonstrably willful and deliberate or grossly negligent on Investor's part after there has been delivered to Investor a written demand for performance from the Company which describes the basis for the Company's belief that Investor has not substantially performed his duties.

The Company shall have the right at any time within forty-five
(45) days after the Termination Date, provided that such date is prior to the termination of this Agreement, to purchase from the Investor, at a price per share equal to the Purchase Price (appropriately adjusted for any subsequent stock split, dividend, combination, or other recapitalization) (the "Repurchase Price"), up to but not exceeding a number of Option Shares equal to one hundred percent (100%) of the Option Shares less 2,833 Option Shares (appropriately adjusted for any subsequent stock split, dividend, combination, or other recapitalization) for each completed month of employment with the Company between the date of this Agreement (the "Commencement Date") and the Termination Date.

(b) The Purchase Option, if exercised by the Company, shall be exercised by written notice signed by an officer or director of the Company after approval by the Board of Directors and delivered to Investor on or prior to the expiration of the 30 day period referred to in paragraph (a) above. The Company may pay for the Option Shares it has elected to repurchase
(i) by delivery to the Investor of a check in the amount of the aggregate Repurchase Price for the number of shares of Stock being repurchased, (ii) by cancellation by the Company of an amount of Investor's indebtedness to the Company or (iii) by a combination of (i) and (ii), so that the combined payment to the Investor and cancellation of indebtedness of the Investor equals such aggregate Repurchase Price. Payment of the Repurchase Price shall be

-2-

completed within five business days after notice of exercise of the Purchase Option is delivered to Investor.

(c) Immediately prior to the consummation or occurrence of any of the following:

(i) any merger, sale of assets, consolidation, reorganization or other sale of the Company as a result of which securities representing a majority of the voting power of the Company are held by persons or entities that held less than a majority voting interest in the Company prior to such transaction;

(ii) the liquidation, dissolution or indefinite cessation of the business operations of the Company;

(iii) the execution by the Company of a general assignment for the benefit of creditors, the appointment of a receiver or trustee to take possession of the property and assets of the Company, or the filing of a petition under applicable bankruptcy laws with respect to the Company;

(iv) consummation of an initial registered public offering of the Company's Common Stock under the Securities Act of 1933, as amended;

(v) the death or disability of Investor; or

(vi) the cessation of Investor's employment with the Company (or a parent or subsidiary or successor or affiliate of the Company) due to any reason other than voluntary resignation (other than due to disability) or termination by the Company for Cause;

the Purchase Option shall automatically lapse in its entirety and this Agreement shall thereupon terminate.

2. LEGENDS

All certificates representing any Option Shares subject to the provisions of this Agreement shall have endorsed thereon an appropriate legend referencing the restrictions imposed by this Agreement.

3. RIGHTS OF INVESTOR AS SHAREHOLDER

Subject to the terms hereof, Investor shall have all the rights of a shareholder with respect to the Option Shares during the term of this Agreement, including

-3-

without limitation the right to vote and receive any dividends or other distributions declared thereon.

4. ADJUSTMENTS FOR STOCK SPLITS AND OTHER NON-ECONOMIC EVENTS

If, at any time or from time to time, there is any stock dividend, stock split, recapitalization, or other similar change or adjustment made with respect to the outstanding securities of the Company, any and all new, substituted or additional securities to which Investor is entitled by reason of his or her ownership of the Option Shares then subject to the Purchase Option shall be included in the definition of "Option Shares" for purposes of this Agreement and shall be subject to the Purchase Option pursuant to Section 1 with the same force and effect as the Option Shares currently subject to this Agreement and the Purchase Option. While the total Repurchase Price shall remain the same after each such event, the Repurchase Price per share of Stock upon exercise of the Purchase Option shall be appropriately adjusted as reasonably determined by the Board of Directors of the Company.

5. TERMINATION

This Agreement shall terminate in its entirety upon the lapse of the Purchase Option in its entirety pursuant to Section 1(c) or otherwise, or upon the completion of a repurchase transaction pursuant to an exercise of the Purchase Option, in either case in accordance with the terms of this Agreement.

6. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

7. AMENDMENT

This Agreement shall not be subject to modification or amendment in any respect, except by an instrument in writing signed by Investor and on behalf of the Company and approved by its Board of Directors.

8. GOVERNING LAW

This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Washington, without regard to principles of conflict of laws.

-4-

9. ARBITRATION

Any controversies or claims arising out of or relating to this Agreement shall be fully and finally settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA Rules"), conducted by one arbitrator either mutually agreed upon by the parties or chosen in accordance with the AAA Rules, except that the parties thereto shall have any right to discovery as would be permitted by the Federal Rules of Civil Procedure for a period of 90 days following the commencement of such arbitration, and the arbitrator thereof shall resolve any dispute which arises in connection with such discovery. Arbitration proceedings shall be conducted in Seattle, Washington.

10. NOTICES

All notices, demands or other communications desired or required to be given by any party to any other party hereto shall be in writing and shall be deemed effectively given upon (a) personal delivery to the party to be notified, (b) upon confirmation of receipt of telecopy or other electronic facsimile transmission, (c) one business day after deposit with a reputable overnight courier, prepaid for priority overnight delivery and addressed as set forth in (d), or (d) five days after deposit with the United States Post Office, postage prepaid, and addressed as follows: (i) if to Investor, to Jeffrey P. Bezos, c/o Amazon.com, Inc., at the address and facsimile number of the Company''s then current executive offices; (ii) if to the Company, at the address and facsimile number of the Company''s then current executive offices; or (iii) to such other addresses and to the attention of such other individuals as any party shall have designated to the other parties by notice given in the foregoing manner.

11. SEVERABILITY

If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

12. ENTIRE AGREEMENT

This Agreement constitutes the full and entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements with respect to the subject matter hereof.

-5-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

AMAZON.COM, INC.

By Jeff P. Bezos
Jeffrey P. Bezos, CEO

INVESTOR:

Jeff P. Bezos
Jeffrey P. Bezos

-6-

EXHIBIT 10.6

AMAZON.COM, INC.

VOTING AGREEMENT

This Shareholders Agreement (this "Agreement") is made as of June 21, 1996 by and among Amazon.com, Inc., a Delaware corporation (the "Company"), Jeffrey P. Bezos (the "Founder") and the Investors listed on the signature pages of this Agreement (the "Investors"). The Founder and the Investors are collectively referred to herein as the "Shareholders."

RECITALS

A. The Founder is the holder of 1,700,000 shares of common stock, $.01 par value per share, of the Company (excluding any such common stock which may be issued upon conversion of Series A Stock (as defined below), "Common Stock").

B. Simultaneously herewith, the Company and the Investors are entering into a Series A Preferred Stock Purchase Agreement (the "Series A Agreement") pursuant to which the Company is issuing and the Investors are purchasing, in the amounts set forth in Exhibit A to the Series A Agreement, an aggregate of 569,396 shares of the Company's Series A Preferred Stock, $.01 par value per share (including the shares of Common Stock issuable upon conversion thereof, the "Series A Stock").

C. It is a condition to the obligations of the Investors under the Series A Agreement that this Agreement be executed by the parties hereto, and the parties are willing to execute, and to be bound by the provisions of, this Agreement.

AGREEMENT

In consideration of the foregoing and the agreements set forth below, the parties hereby agree as follows:

1. ELECTION OF DIRECTORS

1.1 VOTING OF SHARES

In elections of directors of the Company and during the term of this Agreement, the Shareholders shall vote all shares of the capital stock of the Company owned by them, or as to which they have voting power, for the candidates designated pursuant to the provisions of this Agreement.

1

1.2 NUMBER OF DIRECTORS

The Board of Directors shall consist of such number of directors, which shall not be less than five, as may be determined in accordance with the Bylaws of the Company. The parties agree that the Board of Directors shall consist of five directors until such time as the number of directors may be increased above such number in accordance with such Bylaws. The parties shall use their best efforts to permit no amendment of the Bylaws of the Company that would reduce the number of directors constituting the Board of Directors below five or that otherwise would conflict with the terms of this Agreement.

1.3 DESIGNATED DIRECTORS

In elections of Directors of the Company, the Shareholders shall vote for the candidates designated pursuant to this Section 1.3:

(a) One candidate for the Board of Directors shall be designated by the holders of Series A Stock (the "Series A Director").

(b) Two candidates for the Board of Directors shall be designated by the holders of Common Stock ("Common Stock Directors").

(c) Two candidates for the Board of Directors shall be designated by the holders of Series A Stock and Common Stock voting together as a single class.

The holders of Series A Stock initially designate L. John Doerr as the Series A Director, and the Founder, as the holder of a majority of the outstanding shares of Common Stock and on behalf of all holders of Common Stock, initially designates Jeffrey P. Bezos and Tom A. Alberg as the Common Stock Directors.

In the event that the number of directors constituting the Board of Directors is increased above five, the provisions of this Agreement shall continue with respect to five of the total number of directors, with the remaining directors being elected in such manner as may be provided by law or in the Certificate of Incorporation or Bylaws of the Company or pursuant to any agreement entered into in connection with such increase.

1.4 VOTING AMONG SHAREHOLDERS

Whenever the holders of Series A Stock or the holders of Common Stock shall be entitled to designate a candidate or candidates to the Board of Directors, the designating group shall choose such candidate or candidates by a majority vote among the members of that group based on the number of outstanding voting securities held

2

by the members of that group; provided, however, that if shares are held and voted by members of a group in such proportion that no majority vote is obtained, then the candidates with the greatest number of votes shall be deemed chosen (up to the number of candidates to be selected by such group). The candidate(s) so chosen shall be the designated candidate(s) for that group and the Shareholders agree to vote for such individuals. No director shall be removed except by the affirmative vote of the group entitled to elect such director, and no director may be so removed if the votes cast against such director's removal would be sufficient (assuming that each of such group's designated directors were being chosen) to designate such director for the group. The manner of obtaining such vote shall be determined by the holders of securities of such group, and the Company shall be entitled to rely on a certificate from any holder of such group as to the validity of the action of such group.

1.5 REMOVAL OF DIRECTORS AND VACANCIES

Directors may be removed at any time with or without cause, provided that no Shareholder shall vote for the removal of a director nominated and elected pursuant to this Agreement, and no such vote shall be effective, unless the parties who nominated such director, voting among themselves in accordance with Section 1.4, shall so specify. If such parties do so specify the removal of a director, the Shareholders agree to vote all shares of capital stock of the Company owned by them, or as to which they have voting power, for the removal of such director. If a vacancy occurs on the Board of Directors, the remaining directors shall immediately elect the nominee of the group that nominated the departing director. If the remaining directors fail for any reason to elect such nominee, the Company or the Shareholders shall cause a shareholders' meeting to be held at the earliest practicable date, at which meeting the Shareholders shall vote, pursuant to this Agreement, all shares of capital stock of the Company owned by them, or as to which they have voting power, for such nominee.

2. ADDITIONAL SHARES OF STOCK

In the event additional shares of voting capital stock of the Company are, at any time during the term of this Agreement, issued to a Shareholder, such additional shares of voting capital stock shall automatically become subject to the terms and provisions of this Agreement and shall be voted in accordance herewith.

3. TERMINATION

This Agreement shall terminate in its entirety upon the earliest to occur of (a) immediately prior to the closing of an initial public offering of the Company's common stock registered under the Securities Act of 1933, as amended, (b) any merger, sale of assets, consolidation, reorganization or other sale of the Company as a result of which securities representing a majority of the voting power of the Company

3

are held by persons or entities that held less than a majority voting interest in the Company prior to such transaction, (c) the liquidation, dissolution or indefinite cessation of the business operations of the Company, (d) the execution by the Company of a general assignment for the benefit of creditors, the appointment of a receiver or trustee to take possession of the property and assets of the Company, or the filing of a petition under applicable bankruptcy laws with respect to the Company, and (e) the seventh anniversary of the date of this Agreement.

4. AUTHORIZATION

Each party hereto represents that this Agreement has been duly authorized, executed and delivered by such party and constitutes a valid and binding obligation of such party, enforceable against such party in accordance with its terms.

5. SUCCESSORS

The provisions of this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the parties hereto.

6. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

7. AMENDMENT

This Agreement shall not be subject to modification or amendment in any respect, except by an instrument in writing signed by the Company and each of the Shareholders.

8. GOVERNING LAW

This Agreement is entered into pursuant to and in accordance with the provisions of Section 218 of the Delaware General Corporation Law. All disputes hereunder shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to principles of conflict of laws.

9. SPECIFIC PERFORMANCE

The parties acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper to enforce this Agreement or to prevent

4

any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief in appropriate circumstances.

10. NOTICES

All notices, demands or other communications desired or required to be given by any party to any other party hereto shall be in writing and shall be deemed effectively given upon (a) personal delivery to the party to be notified, (b) upon confirmation of receipt of telecopy or other electronic facsimile transmission, (c) one business day after deposit with a reputable overnight courier, prepaid for priority overnight delivery and addressed as set forth in (d), or (d) five days after deposit with the United States Post Office, postage prepaid, and addressed as follows: (i) if to the Founder, to Jeffrey P. Bezos, c/o Amazon.com, Inc., at the address and facsimile number of the Company''s then current executive offices; (ii) if to the Investors, c/o Kleiner, Perkins Caufield and Byers, 2750 Sand Hill Road, Menlo Park, CA 94025, facsimile number (415) __________; or (iii) to such other addresses and to the attention of such other individuals as any party shall have designated to the other parties by notice given in the foregoing manner.

11. SEVERABILITY

If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provisions shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

12. ENTIRE AGREEMENT

This Agreement constitutes the full and entire understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements with respect to the subject matter hereof.

5

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

AMAZON.COM, INC.

By: Jeff P. Bezos

Title: President and Chief Executive Officer

FOUNDER:

Jeff P. Bezos
Jeffrey P. Bezos

INVESTORS:

KLEINER, PERKINS, CAUFIELD & BYERS,
VIII

By
Title

KPCB INFORMATION SCIENCES FUND, II

By
Title

6

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

INVESTORS:

KLEINER, PERKINS, CAUFIELD &
BYERS, VIII

By L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

KPCB INFORMATION SCIENCES
ZAIBATSU FUND, II

By L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

7

EXHIBIT 10.7

AMAZON.COM, INC.

INVESTOR RIGHTS AGREEMENT

JUNE 21, 1996


TABLE OF CONTENTS

                                                                                                Page
SECTION 1.  Restrictions on Transferability, Registration Rights  . . . . . . . . . . . . . . .   1

         1.1     Certain Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         1.2     Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         1.3     Restrictive Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         1.4     Notice of Proposed Transfers . . . . . . . . . . . . . . . . . . . . . . . . .   3
         1.5     Requested Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         1.6     Company Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         1.7     Registration on Form S-3 . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
         1.8     Expenses of Registration . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
         1.9     Registration Procedures  . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
         1.10    Indemnification  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         1.11    Information by Holder  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
         1.12    Rule 144 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
         1.13    Transfer of Registration Rights  . . . . . . . . . . . . . . . . . . . . . . .   11
         1.14    Standoff Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
         1.15    Termination of Rights  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

SECTION 2.  Affirmative Covenants of the Company  . . . . . . . . . . . . . . . . . . . . . . .   11

         2.1     Financial Information  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
         2.2     Operating Plan and Budget  . . . . . . . . . . . . . . . . . . . . . . . . . .   12
         2.3     Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
         2.4     Assignment of Rights to Financial Information  . . . . . . . . . . . . . . . .   12
         2.5     Proprietary Information Agreement  . . . . . . . . . . . . . . . . . . . . . .   12
         2.6     Termination of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . .   12
         2.7     Right of First Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
         2.8     Initial Public Offering  . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

SECTION 3.  Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

         3.1     Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.2     Third Parties  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.3     Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.4     Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.5     Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.6     Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.7     Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.8     Effect of Amendment or Waiver  . . . . . . . . . . . . . . . . . . . . . . . .   14
         3.9     Rights of Holders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15
         3.10    Delays or Omissions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15

EXHIBIT A        Schedule of Investors
EXHIBIT B        Restrictive Legend


INVESTOR RIGHTS AGREEMENT

THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into as of the 21st day of June, 1996, by and among Amazon.com, Inc., a Delaware corporation (the "Company"), the persons set forth on the Schedule of Investors attached hereto as Exhibit A (the "Investors") and, with respect to Section 1.6, Section 2.6 and Section 2.8, Jeffrey P. Bezos.

RECITALS

The Company and the Investors are entering into a Series A Preferred Stock Purchase Agreement (the "Series A Agreement) of even date herewith, pursuant to which the Company shall sell, and the Investors shall acquire, shares of the Company's Series A Preferred Stock (the "Series A Preferred"). The shares of Series A Preferred are referred to collectively herein as the "Shares."

NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, the parties agree as follows:

SECTION 1.

RESTRICTIONS ON TRANSFERABILITY; REGISTRATION RIGHTS

1.1 Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

"Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

"Conversion Shares" means the Common Stock issued or issuable upon conversion of the Shares.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

"Holder" shall mean any Investor holding Registrable Securities and any person holding Registrable Securities to whom the rights under this Agreement have been transferred in accordance with Section 1.13 hereof. Jeffrey P. Bezos shall be deemed to be a Holder, but only with respect to a registration effected pursuant to Section 1.6 below.

"Initiating Holders" shall mean any Investors or transferees of Investors under Section 1.13 hereof who in the aggregate are Holders of not less than fifty percent (50%) of the Registrable Securities.

The terms "register," "registered" and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.


"Registration Expenses" shall mean all expenses incurred by the Company in complying with Sections 1.5, 1.6 and 1.7 hereof, including, without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

"Registrable Securities" means any Common Stock of the Company issued or issuable in respect of the Shares or Conversion Shares or other securities issued or issuable with respect to the Shares or Conversion Shares upon any stock split, stock dividend, recapitalization, or similar event, or any Common Stock otherwise issued or issuable with respect to the Shares or Conversion Shares; provided, however, that shares of Common Stock or other securities shall only be treated as Registrable Securities if and so long as they have not been (A) sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, or (B) sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale. The Common Stock held by Bezos shall be deemed Registrable Securities, but only with respect to a registration effected pursuant to Section 1.6 below, and subject to all limitations therein.

"Restricted Securities" shall mean the securities of the Company required to bear the legend set forth in Section 1.3 hereof.

"Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

"Selling Expenses" shall mean an underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders and all fees and disbursements of counsel for the Holders (as limited by Section 1.8).

1.2 Restrictions. The Shares and the Conversion Shares shall not be sold, assigned, transferred or pledged except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. The Investors will cause any proposed purchaser, assignee, transferee or pledgee of the Shares and the Conversion Shares to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

1.3 Restrictive Legend. Each certificate representing (i) the Shares, (ii) the Conversion Shares, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii) upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of Section 1.4 below) be stamped or otherwise imprinted with a legend in the form of Exhibit B attached hereto (in addition to any legend required under applicable state securities laws).

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Each Investor and Holder consents to the Company making a notation on its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer established in this Section 1.

1.4 Notice of Proposed Transfers. The holder of each certificate representing Restricted Securities, by acceptance thereof, agrees to comply in all respects with the provisions of this Section 1. Prior to any proposed sale, assignment, transfer or pledge of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the holder thereof shall give written notice to the Company of such holder's intention to effect such transfer, sale, assignment or pledge. Each such notice shall describe the manner and circumstances of the proposed transfer, sale, assignment or pledge in sufficient detail, and shall be accompanied at such holder's expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall be, reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transfer of the Restricted Securities may be effected without registration under the Securities Act, or (ii) a "no action" letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, or (iii) any other evidence reasonably satisfactory to counsel to the Company, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the holder to the Company. The Company will not require such a legal opinion or "no action" letter (a) in any transaction in compliance with Rule 144 or (b) in any transaction in which an Investor which is a partnership distributes Restricted Securities solely to partners thereof for no additional consideration. Each certificate evidencing the Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to Rule 144, the appropriate restrictive legend set forth in
Section 1.3 above, except that such certificate shall not bear such restrictive legend if, in the opinion of counsel for such holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.

1.5 Requested Registration.

(a) Request for Registration. In case the Company shall receive from Initiating Holders a written request that the Company effect any registration, qualification or compliance with respect to the Registrable Securities, the Company will:

(i) promptly give written notice of the proposed registration, qualification or compliance to all other Holders; and

(ii) as soon as practicable, use its commercially reasonable efforts to effect such registration, qualification or compliance (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within thirty
(30) days after receipt of such written notice from the Company; provided, however, that

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the Company shall not be obligated to take any action to effect any such registration, qualification or compliance pursuant to this Section 1.5;

(1) In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(2) Prior to the earlier of (a) one year following the effective date of the first public offering of the Common Stock of the Company to the general public which is effected pursuant to a registration statement filed with and declared effective by, the Commission under the Securities Act (the "Initial Public Offering") or (b) the third anniversary of the date of this Agreement;

(3) Unless not less than one half of the Registrable Securities then outstanding are included in the request for registration pursuant to Section 1.5(a) above;

(4) After (i) the Company has effected two (2) such registrations pursuant to this subparagraph 1.5(a) and each such registration has been declared or ordered effective and remained effective for the period specified in Section 1.9(a) of this Agreement or (ii) after seven
(7) years after the date hereof or five years after the closing of the Company's Initial Public Offering, whichever is earlier; or

(5) If the Company shall furnish to such Holders a Certificate, signed by the President of the Company, stating that in the good faith judgment of the Board of Directors it would be seriously detrimental to the Company or its shareholders for a registration statement to be filed in the near future, then the Company's obligation to use its commercially reasonable efforts to register, qualify or comply under this
Section 1.5 shall be deferred for a period not to exceed one hundred and twenty
(120) days from the date of receipt of written request from the Initiating Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period.

Subject to the foregoing clauses (1) through (5), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders.

(b) Underwriting. In the event that a registration pursuant to Section 1.5 is for a registered public offering involving an underwriting, the Company shall so advise the Holders as part of the notice given pursuant to Section 1.5(a)(i). The right of any Holder to registration pursuant to Section 1.5 shall be conditioned upon such Holder's participation in the underwriting arrangements required by this Section 1.5 and the inclusion of such Holder's Registrable Securities in the underwriting to the extent requested, to the went provided herein.

The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company (which managing underwriter shall be reasonably acceptable to a majority in interest of the Initiating Holders). Notwithstanding any other provision of this Section 1.5, if the managing underwriter determines that marketing factors require a

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limitation of the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities in writing and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be allocated among all Holders thereof in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by such Holders at the time of filing the registration statement, provided, however, that the number of shares of Registrable Securities to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. No Registrable Securities excluded from the underwriting by reason of the underwriter's marketing limitation shall be included in such registration. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest 100 shares.

If any Holder of Registrable Securities disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the managing underwriter and the Initiating Holders. The Registrable Securities and/or other securities so withdrawn shall also be withdrawn from registration, and such Registrable Securities shall not be transferred in a public distribution prior to one hundred and eighty (180) days after the effective date of such registration.

1.6 Company Registration.

(a) Notice of Registration. If at any time or from time to time prior to the seventh anniversary of the date of this Agreement or the fifth anniversary of the Company's Initial Public Offering, whichever is earlier, the Company shall determine to register any of its securities, either for its own account or the account of a security holder or holders other than
(i) a registration relating solely to employee benefit plans, or (ii) a registration relating solely to a Commission Rule 145 transaction, the Company will (but not more than five (5) times pursuant to this Section 1.6(a)):

(i) promptly give to each Holder written notice thereof; and include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests made within fifteen (15) days after receipt of such written notice from the Company by any Holder, but only to the extent that such inclusion will not diminish the number of securities included by holders of the Company's securities who have demanded such registration pursuant to Section 1.5 hereof.

(b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 1.6(a)(i). In such event, the right of any Holder to registration pursuant to Section 1.6 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of Registrable Securities in the underwriting, to the extent requested, to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company. Notwithstanding any other provision of this Section 1.6, if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the number of Registrable Securities to be included in the registration and underwriting (up to the exclusion of all Registrable Securities in the event of the Company's initial public offering), on a pro rata basis based on the total number of securities (including, without limitation, Registrable Securities) entitled to registration

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pursuant to registration rights granted to the participating Holders by the Company; provided, however, that if such offering is not the initial offering of shares to the public, no such reduction may reduce the number of securities being sold by the Holders to less than fifteen percent (15%) of the shares being sold in such offering. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder or other holder to the nearest 100 shares. If any Holder or other holder disapproves of the terms of any such underwriting, he or she may elect to withdraw therefrom by written notice to the Company and the managing underwriter. Any securities excluded or withdrawn from such underwriting shall be withdrawn from such registration, and shall not be transferred in a public distribution prior to one hundred twenty (120) days after the effective date of the registration statement relating thereto.

(c) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1.6 prior to the effectiveness of such registration, whether or not any Holder has elected to include securities in such registration.

1.7 Registration on Form S-3.

(a) Notwithstanding the restrictions of Section 1.6 above, if any Holder or Holders of not less than twenty percent (20%) of the Registrable Securities requests that the Company file a registration statement on Form S-3 (or any successor form to Form S-3) for a public offering of shares of the Registrable Securities, the reasonably anticipated aggregate price to the public of which, net of underwriting discounts and commissions, would exceed $1,000,000, and the Company is a registrant entitled to use Form S-3 to register the Registrable Securities for such an offering, the Company shall use its commercially reasonable efforts to cause such Registrable Securities to be registered for the offering on such form. The Company will (i) promptly give written notice of the proposed registration to all other Holders, and (ii) as soon as practicable, use its commercially reasonable efforts to effect such registration (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate, the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within fifteen (15) days after receipt of such written notice from the Company. The substantive provisions of Section 1.5(b) shall be applicable to each registration initiated under this Section 1.7.

(b) Notwithstanding the foregoing, the Company shall not be obligated to take any action pursuant to this Section 1.7: (i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; (ii) during the period starting with the date sixty (60) days prior to the Company's estimated date of filing of and ending on the date six (6) months immediately following the effective date of, a registration statement (other than with respect to a registration statement relating to a Rule 145 transaction, an offering solely to employees or any other registration which is not appropriate for the registration of Registrable Securities), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; (iii) after the Company has effected three (3) such registrations pursuant to this Section 1.7 and each

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such registration has been declared or ordered effective and has remained effective for the period specified in Section 1.9(a) of this Agreement; (iv) after seven (7) years after the date of this Agreement or five (5) years after the closing of the Company's Initial Public Offering, whichever is earlier; or
(v) if the Company shall furnish to such Holder a certificate signed by the President of the Company stating that, in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company or its shareholders for registration statements to be filed in the near future, then the Company's obligation to use its best efforts to file a registration statement shall be deferred for a period not to exceed one hundred twenty (120) days from the receipt of the request to file such registration by such Holder or Holders; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period.

1.8 Expenses of Registration. All Registration Expenses incurred in connection with any registration pursuant to Sections 1.5 and 1.6 and the reasonable cost of one special legal counsel to represent all of the Holders together in any such registration shall be borne by the Company. All Registration Expenses incurred in connection with any registration pursuant to
Section 1.7 of this Agreement and the cost of any counsel for the Holders in any such registration shall be borne by the Holders pro rata according to the number of Registrable Securities included by them in such registration. If a registration proceeding is begun upon the request of Initiating Holders pursuant to Section 1.5, but such request is subsequently withdrawn, then the Holders of Registrable Securities to have been registered may either: (i) bear all Registration Expenses of such proceeding, pro rata on the basis of the number of shares to have been registered, in which case the Company shall be deemed not to have effected a registration pursuant to subparagraph 1.5(a) of this Agreement; or (ii) require the Company to bear all Registration Expenses of such proceeding, in which case the Company shall be deemed to have effected a registration pursuant to subparagraph 1.5(a) of this Agreement. Notwithstanding the foregoing however, if at the time of the withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request, then the Holders shall not be required to pay any of said Registration Expenses. In such case, the Company shall be deemed not to have effected a registration pursuant to subparagraph 1.5(a) of this Agreement. Unless otherwise stated, all other Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the Holders of the registered securities included in such registration pro rata on the basis of the number of shares so registered.

1.9 Registration Procedures. In the case of each registration, qualification or compliance effected by the Company pursuant to this Section 1, the Company will keep each Holder advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. The Company will:

(a) Prepare and file with the Commission a registration statement with respect to such securities and use its best efforts to cause such registration statement to become and remain effective until the distribution described in the registration statement has been completed, but in no event longer than sixty (60) days; and

(b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement.

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(c) Furnish to the Holders participating in such registration and to the underwriters, if any, of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such underwriters may reasonably request in order to facilitate the public offering of such securities.

(d) Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Act.

(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

(g) Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange or other trading market on which similar securities issued by the Company are then listed.

(h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

(i) Use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this
Section 1, on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this
Section 1, if such securities are being sold through underwriters, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities.

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1.10 Indemnification.

(a) The Company will indemnify each Holder, each of its officers and directors and partners, and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this
Section 1, and each underwriter, if any, and each person who controls any underwriter within the meaning of Section 15 of the Securities Act, against all actual out-of-pocket expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, preliminary prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation or any alleged violation by the Company of any rule or regulation promulgated under the Securities Act or the Exchange Act or any state securities law applicable to the Company in connection with any such registration, qualification or compliance, and the Company will reimburse each such Holder, each of its officers and directors, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other actual out-of-pocket expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, as such expenses are incurred, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by such Holder, controlling person or underwriter specifically for use therein.

(b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other such Holder, each of its officers and directors and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all actual out-of-pocket expenses, claims, losses, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein, in light of the circumstances in which they were made, or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, officers, persons, underwriters or control persons for any legal and any other actual out-of-pocket expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as such expenses are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder specifically for use therein.

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(c) Each party entitled to indemnification under this
Section 1.10 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense; provided, however, that an Indemnified Party (together with all other Indemnified Parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses of such counsel to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. The failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 1.10 unless the failure to give such notice is materially prejudicial to an Indemnifying Party's ability to defend such action. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party (not to be unreasonably withheld), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

1.11 Information by Holder. The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders, the Registrable Securities held by them and the distribution proposed by such Holder or Holders as the Company may request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Section 1.

1.12 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Restricted Securities to the public without registration, after such time as a public market exists for the Common Stock of the Company, the Company agrees to use its best efforts to:

(a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date that the Company becomes subject to the reporting requirements of the Exchange Act.

(b) File with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act (at any time after it has become subject to such reporting requirements); and

(c) So long as an Investor owns any Restricted Securities, to furnish to the Investor forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the

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Company as an Investor may reasonably request in availing itself of any rule or regulation of the Commission allowing an Investor to sell any such securities without registration.

1.13 Transfer of Registration Rights. The rights to cause the Company to register securities granted Investors under Sections 1.5, 1.6 and 1.7 may be assigned to a transferee or assignee reasonably acceptable to the Company in connection with transfer or assignment of Registrable Securities by an Investor (together with any affiliate); provided that (a) such transfer may otherwise be effected in accordance with applicable securities laws, (b) notice of such assignment is given to the Company, and (c) such transferee or assignee
(i) is a wholly-owned subsidiary or constituent partner (including limited partners, retired partners, spouses and ancestors, lineal descendants and siblings of such partners or spouses who acquire Registrable Securities by gift, will or intestate succession) of such Investor, or (ii) acquires from such Investor at least 25% of the Shares (as appropriately adjusted for stock splits and the like) originally purchased by such Investor (or Common Stock issued upon conversion thereof).

1.14 Standoff Agreement. Each Holder agrees in connection with any registration of the Company's securities (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan), upon request of the Company or the underwriters managing any underwritten offering of the Company's securities, not to sell, make any short sale of, loan, pledge (or otherwise encumber or hypothecate), grant any option for the purchase of, or otherwise directly or indirectly dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of the Company and such managing underwriters for such period of time as the Board of Directors establishes pursuant to its good faith negotiations with such managing underwriters; provided, however, that the Investors shall not be subject to such lockup unless the officers and directors of the Company who own stock of the Company shall also be bound by such restrictions.

1.15 Termination of Rights. The rights of any particular Holder to cause the Company to register securities under Sections 1.5, 1.6 and 1.7 shall terminate with respect to such Holder on the earlier of (a) the fifth anniversary of the effective date of the Company's Initial Public Offering or
(b) the seventh anniversary of the date of this Agreement.

SECTION 2.

AFFIRMATIVE COVENANTS OF THE COMPANY

The Company hereby covenants and agrees as follows:

2.1 Financial Information. So long as an Investor holds at least 25% of the Shares originally purchased by such Investor and/or shares of Common Stock issued upon the conversion thereof (as adjusted for any stock splits, consolidations and the like), the Company will furnish to such Investor the following reports:

(a) As soon as practicable after the end of each fiscal year, and in any event within ninety (90) days thereafter, audited consolidated balance sheets and statements of shareholders' equity of the Company and its subsidiaries, if any, as of the end of such fiscal year, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for such year,

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prepared in accordance with generally accepted accounting principles and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and certified by independent public accountants of national standing selected by the Company. and

(b) As soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited balance sheets of the Company and its subsidiaries, if any, as of the end of each such quarter, and consolidated statements of income and cash flows of the Company and its subsidiaries, if any, for each such quarter, all prepared in accordance with generally accepted accounting principles.

(c) As soon as practicable after the end of each calendar month, and in any event within 30 days thereafter, consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of each calendar month, and consolidated statements of income and cash flows for such period and for the current fiscal year to date, together with a comparison of such statements to the Company's operating plan then in effect.

2.2 Operating Plan and Budget. So long as an Investor holds at least 25% of the Shares originally purchased by such Investor and/or shares of Common Stock issued upon conversion thereof (as adjusted for any stock splits, consolidations and the like) the Company will furnish such Investor with the Company's budget and operating plan (including projected balance sheets and profit and loss and cash flow statements) for each fiscal year, as soon as practicable after approval or adoption thereof by the Company's Board of Directors.

2.3 Inspection. The Company shall permit each Investor, upon reasonable notice to the Company at such Investor's expense, to visit and inspect the Company's properties, to examine its books of account and records and to discuss the Company's affairs, finances and accounts with its officers, all at such reasonable times during normal business hours as may be requested by the Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.3 to provide access to any information which it reasonably considers to be a trade secret or similar confidential information.

2.4 Assignment of Rights to Financial Information. The rights granted pursuant to Sections 2.1 and 2.2 may be assigned by an Investor to a third party who acquires at least 50% of the Shares originally purchased by such Investor and/or shares of Common Stock issued upon conversion thereof (as adjusted for any stock splits, consolidations, and the like) and who is not a competitor, or affiliated in any manner with a competitor, of the Company, provided that the Company receives notice twenty (20) days prior to such assignment.

2.5 Proprietary Information Agreement. The Company shall require each person employed by, or who consults for, the Company to execute a proprietary information confidentiality and nondisclosure agreement in substantially the form provided to special counsel to the Investors.

2.6 Termination of Covenants. The covenants set forth in Sections 2.1 through 2.5 shall terminate on, and be of no further force or effect after, the closing of the Company's initial public offering of Common Stock.

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2.7 Right of First Offer. Subject to the term and conditions specified in this Section 2.7, the Company hereby grants to each Investor a right of first offer with respect to future sales by the Company of its Securities (as hereinafter defined).

Each time the Company proposes to offer subsequent to the offering under the Series A Agreement any shares of, or securities convertible into or exercisable for any shares of, any class of its capital stock ("Securities"), the Company shall first make an offering of such Securities to each Investor in accordance with the following provisions:

(a) The Company shall deliver a notice (Notice") to each Investor stating (i) its bona fide intention to offer such Securities, (ii) the number of such Securities to be offered, (iii) the price, if any, for which it proposes to offer such Securities, and (iv) the terms of such offer.

(b) Within fifteen (15) calendar days after receipt of the Notice, the Investor may elect to purchase or obtain, at the price and on the terms specified in the Notice, up to an amount of such Securities equal to that portion of such Securities which equals the proportion that the number of shares of Common Stock then issued or issuable to the Investor upon conversion of the shares of Series A Preferred held by the Investor bears to the sum of the number of shares of Common Stock then issued plus the number of shares of Common Stock issuable upon (i) conversion of all convertible securities of the Company then outstanding and (ii) exercise of all vested options and warrants then outstanding. An Investor shall be entitled to apportion the right of first offer hereby granted among itself and its partners and affiliates in such proportions as it deems appropriate.

(c) If all Securities which the Investors are entitled to purchase pursuant to this Section 2.7 are not elected to be obtained as provided in subsection 2.7(b) hereof, the Company may, during the sixty (60) day period following the expiration of the period provided in subsection 2.7(b) hereof, offer such unsubscribed Securities to any person or persons at a price not less than, and upon terms not materially more favorable to the offeree than, those specified in the Notice. If the Company does not enter into an agreement for the sale of the Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived.

(d) The right of first offer in this Section 2.7 shall not be applicable (i) to the issuance or sale of shares of capital stock (or options therefor) to employees, officers, directors or consultants for the primary purpose of soliciting or retaining their services, (ii) to the issuance or sale of the Company's securities to leasing entities or financial institutions in connection with commercial leasing or borrowing transactions,
(iii) to or after consummation of the Company's Initial Public Offering, (iv) to conversions of convertible securities or exercises of exercisable securities, (v) to any issuances of any of the shares of Series A Preferred authorized as of the date of this Agreement or (vi) to any issuance of securities in connection with any acquisition, business combination, reorganization, merger or similar event.

2.9 Initial Public Offering. The Investors agree not to take any action or omit to take any action reasonably requested by the Company which would prevent, block or impede the consummation of an Initial Public Offering.

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SECTION 3.

MISCELLANEOUS

3.1 Assignment. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties hereto.

3.2 Third Parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto, and their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

3.3 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Washington in the United States of America.

3.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

3.5 Notices. Any notice required or permitted by this Agreement shall be in writing and shall be sent by prepaid registered or certified mail, return receipt requested, addressed to the other party at the address shown below or at such other address for which such party gives notice hereunder. Such notice shall be deemed to have been given three (3) days after deposit in the mail.

3.6 Severability. If one or more provisions of this Agreement am held to be unenforceable under applicable law, portions of such provisions, or such provisions in their entirety, to the extent necessary, shall be severed from this Agreement, and the balance of this Agreement shall be enforceable in accordance with its terms.

3.7 Amendment and Waiver. Any provision of this Agreement may be amended with the written consent of the Company and the Holders (other than Mr. Bezos) of at least fifty percent (50%) of the outstanding shares of the Registrable Securities; provided, however, that no amendment may impose additional obligations upon Mr. Bezos that are not also imposed on the Holders without Mr. Bezos' prior written consent. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Holder of Registrable Securities and the Company. In addition, the Company may waive performance of any obligation owing to it, as to some or all of the Holders of Registrable Securities, or agree to accept alternatives to such performance, without obtaining the consent of any Holder of Registrable Securities. In the event that an underwriting agreement is entered into between the Company and any Holder, and such underwriting agreement contains terms differing from this Agreement, as to any such Holder the terms of such underwriting agreement shall govern.

3.8 Effect of Amendment or Waiver. The Investors and their successors and assigns acknowledge that by the operation of Section 3.7 hereof the holders of fifty percent (50%) of the outstanding Registrable Securities (other than Mr. Bezos), acting in conjunction with the Company, will have the right and power to diminish or eliminate any or all rights or increase any or all obligations pursuant to this Agreement.

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3.9 Rights of Holders. Each holder of Registrable Securities shall have the absolute right to exercise or refrain from exercising any right or rights that such holder may have by reason of this Agreement, including, without limitation, the right to consent to the waiver or modification of any obligation under this Agreement, and such holder shall not incur any liability to any other holder of any securities of the Company as a result of exercising or refraining from exercising any such right or rights.

3.10 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party to this Agreement, upon any breach or default of the other party, shall impair any such right, power or remedy of such non-breaching party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any holder, shall be cumulative and not alternative.

[This space intentionally left blank.]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

AMAZON.COM, INC.

By: Jeff P. Bezos
Jeffery P. Bezos, President and
Chief Executive Officer

FOUNDER

Jeff P. Bezos
Jeffery P. Bezos

[SIGNATURE PAGE FOR INVESTOR RIGHTS AGREEMENT]


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

INVESTORS:

KLEINER, PERKINS, CAUFIELD &
BYERS VIII

By: L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

KPCB INFORMATION SCIENCES
ZAIBATSU FUND II

By: L. John Doerr
General Partner of KPCB VIII
Associates, the General Partner of
Kleiner, Perkins, Caufield & Byers VIII

[SIGNATURE PAGE FOR INVESTOR RIGHTS AGREEMENT]


EXHIBIT A

SCHEDULE OF INVESTORS

Kleiner Perkins Caufield & Byers VII
2750 Sand Hill Road
Menlo Park, CA 94025

KPCB Information Sciences Zaibitsu Fund II 2750 Sand Hill Road
Menlo Park, CA 94025


EXHIBIT B

RESTRICTIVE LEGEND


Exhibit 10.8

January 31, 1997

Amazon.com, Inc.
1516 Second Avenue, 4th Floor
Seattle, Washington 98101
Attn.: Jeffrey P. Bezos

RE: INVESTMENT LETTER

Ladies and Gentlemen:

I hereby irrevocably agree to purchase 2,500 shares of the Series A Preferred Stock, par value $.01 per share (the "Securities"), of Amazon.com, Inc., a Delaware corporation (the "Company"), for a purchase price of $40.00 per share. A check made payable to the order of the Company in the amount of $100,000, representing the aggregate purchase price for the Securities, is delivered herewith.

I am aware that the Securities have not been registered under the federal Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws, pursuant to exemptions from registration. I understand that the reliance by the Company on such exemptions is predicated in part upon the truth and accuracy of the statements by me in this letter.

I hereby represent and warrant that (1) I have been furnished with all information which I deem necessary to evaluate the merits and risks of the purchase of the Securities; (2) I have had the opportunity to ask questions and receive answers concerning the information received about the Securities and the Company; (3) I have been given the opportunity to obtain any additional information I deem necessary to verify the accuracy of any information obtained concerning the Securities and the Company; and (4) I am an "accredited investor" as defined by Rule 501 promulgated by the Securities and Exchange Commission (the "SEC") under Regulation D of the 1933 Act.

I hereby represent and warrant that I am purchasing the Securities for my own personal account for investment and not with a view to the sale or distribution of all or any part of the Securities. No one other than myself has any beneficial interest in the Securities.

I understand that because the Securities have not been registered under the 1933 Act, I must continue to bear the economic risk of the investment for an indefinite time and the Securities cannot be sold unless the Securities are subsequently registered or an exemption from registration is available.

I agree that I will in no event sell or distribute all or any part of the Securities unless (1) there is an effective registration statement under the 1933 Act and applicable state


Amazon.com, Inc.
January ___, 1997

Page 2

securities laws covering any such transaction involving the Securities or (2) the Company receives an opinion of my legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration, or the Company otherwise satisfies itself that such transaction is exempt from registration.

I consent to the placing of a legend on my certificate for the Securities stating that the Securities have not been registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Securities until the Securities may be legally resold or distributed.

I understand that at the present time Rule 144 of the SEC may not be relied on for the resale or distribution of the Securities by me. I understand that the Company has no obligation to me to register the Securities with the SEC and has not represented to me that it will register the Securities.

Very truly yours,

Scott D. Cook

Scott D. Cook

Address:
Intuit
P.O. Box 7850 M/S 2475
Mountain View, CA 94039-7850

Taxpayer ID No.: 000-00-0000

Accepted: January 31 , 1997

AMAZON.COM, INC.

By Jeff P. Bezos
Its President


EXHIBIT 10.9

AMAZON.COM, INC.

RIGHT OF FIRST REFUSAL AGREEMENT

THIS RIGHT OF FIRST REFUSAL AGREEMENT (this "Agreement") is made as of January 31, 1997, between Amazon.com, Inc., a Delaware corporation (the "Company"), and Scott Cook (the "Investor") .

WHEREAS, the Investor is acquiring concurrently with the execution and delivery of this Agreement 2,500 shares of the Company's Series A Preferred Stock, par value $.01 per share (the "Series A Preferred Stock"), at a purchase price of $40.00 per share; and

WHEREAS, as a condition to the issuance to the Investor of such shares of the Series A Preferred Stock, the Investor has agreed to grant the Company a right of first refusal with respect to such shares of the Series A Preferred Stock and all shares of the common stock, preferred stock, and all other securities of the Company which may be issued to the Investor in exchange for or in respect of such shares of the Series A Preferred Stock in any stock dividend, stock split, reclassification or similar event (together, the "Shares").

THEREFORE, the undersigned agree as follows:

1. COMPANY'S RIGHT OF FIRST REFUSAL

Before any Shares held by the Investor or any transferee of the Investor (either being sometimes referred to herein as the "Selling Stockholder") may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this
Section (the "Right of First Refusal").

(a) Notice of Proposed Transfer. The Selling Stockholder shall
(a) deliver to the Company a written notice (the "Notice") stating: (i) the Selling Stockholder's bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred to each Proposed Transferee; (iv) the bona fide cash price or other consideration for which the Selling Stockholder proposes to transfer the Shares (the "Offered Price"); and
(v) the material terms and conditions of the proposed transfer (the "Offer Terms") and (b) offer the Shares at the Offered Price and on the Offer Terms to the Company or its assignee(s).


(b) Exercise of Right of First Refusal. At any time within 30 days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Selling Stockholder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price and on the terms determined in accordance with subsection (c) below.

(c) Purchase Price. The purchase price (the "Purchase Price") for the Shares purchased by the Company or its assignee(s) under this Section shall be the Offered Price, and the terms and conditions of the transferee shall be identical in all material respects to the Offer Terms (the "Terms"). If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(d) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Selling Stockholder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof, in any case in accordance with the Terms, within thirty (30) days after delivery of the written notice by the Company as set forth in Section 2(b).

(e) Selling Stockholder's Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this
Section , then the Selling Stockholder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price and on the Offer Terms, provided that such sale or other transfer is consummated within sixty (60) days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Selling Stockholder may be sold or otherwise transferred.

(f) Exception for Certain Transfers. Anything to the contrary contained in this Section notwithstanding, (i) the transfer of any or all of the Shares for no consideration by way of a gift to the spouse of the Selling Stockholder or to his or her lineal descendants, or to trusts for the benefit of his or her spouse or lineal descendants and (ii) the transfer of any or all of the Shares to the Company shall be exempt from the provisions of this Section if, in such case, the transferee, and the

-2-

transferee's spouse, if any, shall receive and hold any and all Shares so transferred subject to the provisions of this Agreement and subject to the obligations of the Investor hereunder, and shall, upon request by the Company execute, prior to the transfer to such transferee, an Endorsement in the form attached hereto as Exhibit A.

(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any Shares immediately after the first sale of the common stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

(h) Assignment of Right of First Refusal. The Right of First Refusal shall be freely assignable by the Company at any time.

2. GENERAL PROVISIONS

(a) This Agreement shall be governed by the laws of the State of Washington as they apply to contracts entered into and wholly to be performed in such state. This Agreement represents the entire agreement between the parties with respect to the Company's Right of First Refusal and may only be modified or amended in writing signed by both parties.

(b) Any notice, demand or request required or permitted to be given by either the Company or the Selling Stockholder pursuant to the terms of this Agreement shall be in writing and shall be deemed given (i) when delivered personally, (ii) five days after it is deposited in the U.S. mail, certified with return receipt requested and with postage prepaid, or (iii) one day after deposit (prepaid) with a nationally recognized overnight courier, and addressed to the party being notified at his or its address specified on the applicable signature page hereto or such other address which the addressee may subsequently notify the other party in writing.

(c) Either party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party's right to assert all other legal remedies available to it under the circumstances.

(d) The parties acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper to enforce this

-3-

Agreement or to prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief in appropriate circumstances.

(e) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(f) Each party to this Agreement represents that such party has duly authorized, executed and delivered this Agreement and that this Agreement is a valid and binding obligation of such party, enforceable against such party in accordance with its terms.

(g) All certificates representing any Shares subject to the provisions of this Agreement shall have endorsed thereon an appropriate legend referencing the restrictions imposed by this Agreement.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the first date above written.

COMPANY:

AMAZON.COM, INC.

By: Jeff P. Bezos

Jeffrey P. Bezos, President and Chief Executive Officer

Address:

1516 Second Avenue, 4th Floor
Seattle, Washington 90101

INVESTOR:

Scott D. Cook
Scott Cook

Address:

Intuit
P.O. Box 7850, M/S 2475
Mountain View CA 94039-7850

-5-

AMAZON.COM, INC.

RIGHT OF FIRST REFUSAL AGREEMENT

CONSENT OF SPOUSE

I Helen Signe Ostby , the spouse of Scott Cook, have read and approve the foregoing Right of First Refusal Agreement (the "Agreement"). In consideration of the terms and conditions as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact with respect to the exercise of any rights and obligations under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights or obligations in the Agreement or any shares issued pursuant thereto under the community property laws of the state of California, similar laws relating to marital property in effect in the state of our residence as of the date of the Agreement or otherwise.

Date:   January 31, 1997
        -------------------------------


        Scott D. Cook       H. S. Ostby
        -------------------------------
        (Signature)

H. S. Ostby
(Printed Name)

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EXHIBIT A

AMAZON.COM, INC.

RIGHT OF FIRST REFUSAL AGREEMENT

ENDORSEMENT

The undersigned, a stockholder of Amazon.com, Inc., a Delaware corporation (the "Company"), and his or her spouse hereby agree to the terms and conditions of the Right of First Refusal Agreement dated as of January ___, 1997 (the "Agreement") originally entered into by and between the Company and Scott Cook and acknowledge receipt of a copy of the Agreement and agree to be bound by the obligations applicable to the Investor under the Agreement to the same extent as if the undersigned were the Investor thereunder.

Dated:

- --------------------------                  --------------------------
(Signature of Stockholder)                  (Signature of Spouse)



- --------------------------                  --------------------------
(Printed Name)                              (Printed Name)

Address:

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

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

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

-7-

EXHIBIT 10.10
February 20, 1997

Amazon.com, Inc.
1516 Second Avenue, 4th Floor
Seattle, Washington 98101
Attn.: Jeffrey P. Bezos

RE: INVESTMENT LETTER

Ladies and Gentlemen:

I hereby irrevocably agree to purchase 2,500 shares of Series A Preferred Stock, par value $.01 per share (the "Securities"), of Amazon.com, Inc., a Delaware corporation (the "Company"), for a purchase price of $40.00 per share. A check made payable to the order of the Company in the amount of $100,000, representing the aggregate purchase price for the Securities, is delivered herewith.

I am aware that the Securities have not been registered under the federal Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws, pursuant to exemptions from registration. I understand that the reliance by the Company on such exemptions is predicated in part upon the truth and accuracy of the statements by me in this letter.

I hereby represent and warrant that (1) I have been furnished with all information which I deem necessary to evaluate the merits and risks of the purchase of the Securities; (2) I have had the opportunity to ask questions and receive answers concerning the information received about the Securities and the Company; (3) I have been given the opportunity to obtain any additional information I deem necessary to verify the accuracy of any information obtained concerning the Securities and the Company; and (4) I am an "accredited investor" as defined by Rule 501 promulgated by the Securities and Exchange Commission (the "SEC") under Regulation D of the 1933 Act.

I hereby represent and warrant that I am purchasing the Securities for my own personal account for investment and not with a view to the sale or distribution of all or any part of the Securities. No one other than myself has any beneficial interest in the Securities.

I understand that because the Securities have not been registered under the 1933 Act, I must continue to bear the economic risk of the investment for an indefinite time and the Securities cannot be sold unless the Securities are subsequently registered or an exemption from registration is available.

I agree that I will in no event sell or distribute all or any part of the Securities unless (1) there is an effective registration statement under the 1933 Act and applicable state


Amazon.com, Inc.
February ___, 1997

Page 2

securities laws covering any such transaction involving the Securities or (2) the Company receives an opinion of my legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration, or the Company otherwise satisfies itself that such transaction is exempt from registration.

I consent to the placing of a legend on my certificate for the Securities stating that the Securities have not been registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Securities until the Securities may be legally resold or distributed.

I understand that at the present time Rule 144 of the SEC may not be relied on for the resale or distribution of the Securities by me. I understand that the Company has no obligation to me to register the Securities with the SEC and has not represented to me that it will register the Securities.

Very truly yours,

Patty Stonesifer

Patty Stonesifer

Address:
P.O. 876

Redmond, WA 98073


                                           Taxpayer ID No.:   000-00-0000
                                           ------------------------------

Accepted:  February  20 , 1997

AMAZON.COM, INC.


By  Jeff P. Bezos
- ------------------------------
Its     President


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


EXHIBIT 10.11

AMAZON.COM, INC.

RIGHT OF FIRST REFUSAL AGREEMENT

THIS RIGHT OF FIRST REFUSAL AGREEMENT (this "Agreement") is made as of February 20, 1997, between Amazon.com, Inc., a Delaware corporation (the "Company"), and Patty Stonesifer (the "Investor") .

WHEREAS, the Investor is acquiring concurrently with the execution and delivery of this Agreement 2,500 shares of the Company's Series A Preferred Stock, par value $.01 per share (the "Series A Preferred Stock"), at a purchase price of $40.00 per share; and

WHEREAS, as a condition to the issuance to the Investor of such shares of the Series A Preferred Stock, the Investor has agreed to grant the Company a right of first refusal with respect to such shares of the Series A Preferred Stock and all shares of the common stock, preferred stock, and all other securities of the Company which may be issued to the Investor in exchange for such shares of the Series A Preferred Stock or in respect of such shares of the Series A Preferred Stock in any stock dividend, stock split, reclassification or similar event (together, the "Shares").

THEREFORE, the undersigned agree as follows:

1. COMPANY'S RIGHT OF FIRST REFUSAL

Before any Shares held by the Investor or any transferee of the Investor (either being sometimes referred to herein as the "Selling Stockholder") may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this
Section (the "Right of First Refusal").

(a) Notice of Proposed Transfer. The Selling Stockholder shall
(a) deliver to the Company a written notice (the "Notice") stating: (i) the Selling Stockholder's bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred to each Proposed Transferee; (iv) the bona fide cash price or other consideration for which the Selling Stockholder proposes to transfer the Shares (the "Offered Price"); and
(v) the material terms and conditions of the proposed transfer (the "Offer Terms") and (b) offer the Shares at the Offered Price and on the Offer Terms to the Company or its assignee(s).


(b) Exercise of Right of First Refusal. At any time within 30 days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Selling Stockholder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price and on the terms determined in accordance with subsection (c) below.

(c) Purchase Price. The purchase price (the "Purchase Price") for the Shares purchased by the Company or its assignee(s) under this Section shall be the Offered Price, and the terms and conditions of the transfer shall be identical in all material respects to the Offer Terms (the "Terms"). If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(d) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Selling Stockholder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof, in any case in accordance with the Terms, within thirty (30) days after delivery of the written notice by the Company as set forth in Section 2(b).

(e) Selling Stockholder's Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this
Section ,then the Selling Stockholder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price and on the Offer Terms, provided that such sale or other transfer is consummated within sixty (60) days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this
Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Selling Stockholder may be sold or otherwise transferred.

(f) Exception for Certain Transfers. Anything to the contrary contained in this Section notwithstanding, (i) the transfer of any or all of the Shares for no consideration by way of a gift to the spouse of the Selling Stockholder or to his or her lineal descendants, or to trusts for the benefit of his or her spouse or lineal descendants and (ii) the transfer of any or all of the Shares to the Company shall be exempt from the provisions of this Section if, in such case, the transferee, and the

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transferee's spouse, if any, shall receive and hold any and all Shares so transferred subject to the provisions of this Agreement and subject to the obligations of the Investor hereunder, and shall, upon request by the Company execute, prior to the transfer to such transferee, an Endorsement in the form attached hereto as Exhibit A.

(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate as to any Shares immediately after the first sale of the common stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended.

(h) Assignment of Right of First Refusal. The Right of First Refusal shall be freely assignable by the Company at any time.

2. GENERAL PROVISIONS

(a) This Agreement shall be governed by the laws of the State of Washington as they apply to contracts entered into and wholly to be performed in such state. This Agreement represents the entire agreement between the parties with respect to the Company's Right of First Refusal and may only be modified or amended in writing signed by both parties.

(b) Any notice, demand or request required or permitted to be given by either the Company or the Selling Stockholder pursuant to the terms of this Agreement shall be in writing and shall be deemed given (i) when delivered personally, (ii) five days after it is deposited in the U.S. mail, certified with return receipt requested and with postage prepaid, or (iii) one day after deposit (prepaid) with a nationally recognized overnight courier, and addressed to the party being notified at his or her address specified on the applicable signature page hereto or such other address which the addressee may subsequently notify the other party in writing.

(c) Either party's failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party's right to assert all other legal remedies available to it under the circumstances.

(d) The parties acknowledge that money damages may not be an adequate remedy for violations of this Agreement and that any party may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper to enforce this

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Agreement or to prevent any violation hereof and, to the extent permitted by applicable law, each party waives any objection to the imposition of such relief in appropriate circumstances.

(e) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(f) Each party to this Agreement represents that such party has duly authorized, executed and delivered this Agreement and that this Agreement is a valid and binding obligation of such party, enforceable against such party in accordance with its terms.

(g) All certificates representing any Shares subject to the provisions of this Agreement shall have endorsed thereon an appropriate legend referencing the restrictions imposed by this Agreement.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the first date above written.

COMPANY:

AMAZON.COM, INC.

By: Jeff P. Bezos

Jeffrey P. Bezos, President and Chief Executive Officer

Address:

1516 Second Avenue, 4th Floor
Seattle, Washington 98101

INVESTOR:

Patty Stonesifer
Patty Stonesifer

Address:

P.O. Box 876

Redmond, WA 98073


-5-

AMAZON.COM, INC.

RIGHT OF FIRST REFUSAL AGREEMENT

CONSENT OF SPOUSE

I Robert Stonesifer , the spouse of Patty Stonesifer, have read and approve the foregoing Right of First Refusal Agreement (the "Agreement"). In consideration of the terms and conditions as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact with respect to the exercise of any rights and obligations under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights or obligations in the Agreement or any shares issued pursuant thereto under the community property laws of the state of Washington, similar laws relating to marital property in effect in the state of our residence as of the date of the Agreement or otherwise.

Date: February 20, 1997

Robert Stonesifer
(Signature)

Robert Stonesifer
(Printed Name)

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EXHIBIT A

AMAZON.COM, INC.

RIGHT OF FIRST REFUSAL AGREEMENT

ENDORSEMENT

The undersigned, a stockholder of Amazon.com, Inc., a Delaware corporation (the "Company"), and his or her spouse hereby agree to the terms and conditions of the Right of First Refusal Agreement dated as of February 20 , 1997 (the "Agreement") originally entered into by and between the Company and Patty Stonesifer and acknowledge receipt of a copy of the Agreement and agree to be bound by the obligations applicable to the Investor under the Agreement to the same extent as if the undersigned were the Investor thereunder.

         Dated:      February 20, 1997
               ------------------------------


  Patty Stonesifer                          Robert Stonesifer
- ------------------------------              -------------------------------
(Signature of Stockholder)                  (Signature of Spouse)



  Patty Stonesifer                          Robert Stonesifer
- ------------------------------              -------------------------------
(Printed Name)                              (Printed Name)

Address:

   P. O. Box 876
- ----------------------------
   Redmond, WA  98073
- ----------------------------

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

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EXHIBIT 10.12

SUBSCRIPTION

The undersigned, a resident of the State of Washington, hereby subscribes for 1,700,000 shares of the common stock of Cadabra, Inc., a Washington corporation, and agrees to pay therefor the sum of $10,000.

These shares are being acquired for the undersigned's own account, for investment and not with a view to resale or distribution. The undersigned consents to the placing of a restrictive legend on the stock certificate stating that the stock has not been registered under the Securities Act of 1933 or any applicable state law and may not be sold, distributed, assigned, offered, pledged or otherwise transferred without complying with federal and state securities laws and to the placing of a stop transfer order on the books of the corporation and with any transfer agents against the stock until the stock may be legally resold or distributed.

Dated: July 5, 1994

Jeff P. Bezos

Jeffrey P. Bezos


EXHIBIT 10.13

SHAREHOLDER'S AGREEMENT
OF
AMAZON.COM, INC.

THIS SHAREHOLDER'S AGREEMENT (this "Agreement"), is made and entered into as of this 9th day of February 1995 by and between Amazon.com, Inc. (the "Company"), a Delaware corporation, and M. A. Bezos (the "Shareholder").

SELECT only one of the following:

______ For purposes of this Agreement, the Shareholder is an employee shareholder (an "Employee Shareholder") and is bound to all the provisions of this agreement including Article 9. Shareholder's Initials:________

x For purposes of this Agreement, the Shareholder is not an Employee Shareholder and is not bound to the provisions of Article 9 of this Agreement. Shareholder's Initials: MAB

WHEREAS, the parties hereto deem it in their best interest to provide for ultimate ownership of the shares of the Company (the "Stock"), or rights thereto, including the right to transfer such Stock and the right to purchase such Stock upon the occurrence of certain events;

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual promises set forth herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
RESTRICTION ON DISPOSITION

1.1 Disposition Prohibited. The Shareholder shall not dispose of any of his or her Stock except as permitted by this Agreement, and any such attempted disposition shall be void and shall not be recognized or registered upon the books of the Company.

1.2 Definition of "Dispose". The term "dispose" includes, but is not limited to, the acts of selling, assigning, transferring, pledging, encumbering, giving away, devising, and any other form of conveying, including conveyances caused by marital separation, divorce, receivership, or bankruptcy, whether voluntary or involuntary or by operation of law.

1.3 Notice of Involuntary Disposition. The Shareholder, or his or her personal representative, shall notify the Company immediately upon the occurrence of an involuntary disposal of his or her Stock. The Company shall notify the other shareholders of any such involuntary transfer.

1.4 Role of Offeror or Transferor. If the Company is entitled to elect to purchase or redeem any Stock owned by the Shareholder hereunder, the Shareholder shall not participate in or interfere with, and shall abstain from any vote upon (but shall be present for the purpose of meeting any quorum requirement), any action to be taken by the Company in effecting such an election. The Shareholder, or the legal representative of the Shareholder, shall cooperate in effecting all company action and execute and deliver all papers as may be necessary to consummate any purchase by the Company of such Stock. Unless otherwise set forth herein, the option of the Company to purchase or redeem Stock owned by the Shareholder shall be exercised only upon a majority vote of the Board of Directors.

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ARTICLE 2
DISPOSITIONS DURING LIFE

2.1 Voluntary Disposition.

(a) Disposition of Stock prior to and on December 31, 1999. This Agreement prohibits the Shareholder from disposing of any Stock until after December 31, 1999, unless prior written consent is received from the Company, which consent can be given only upon a majority vote of the Board of Directors.

(b) Disposition of Stock after December 31, 1999. In the event that the Shareholder ("the Offering Shareholder") receives a bona fide offer (the "Offer") after December 31, 1999, to purchase all or any portion of his or her Stock (the "Shares") and the Offering Shareholder desires to sell his or her Shares pursuant to the terms of the Offer, then the Offering Shareholder shall forthwith deliver to the Company written notice of such offer. Such written notice shall contain the name and address of the bona fide offeror, and the bona fide purchase price offered for the Shares and all other terms of such offer. The Company shall convey such notice to each other shareholder who is at that time a current shareholder of the Company ("the Remaining Shareholders"). Within sixty (60) days after receipt by the Company of the written notice of the Offer (the "Option Period"), the Company shall have the right to purchase or redeem all of the Shares included in such Offer either upon the price and terms set forth in the Offer or, at the election of the Company, upon the price and terms described in Article 5. A vote by the majority of the members of the Board of Directors shall be required to exercise or waive the option, except that a Director who is the proposed transferor may not participate in the voting, and shall not be included in the number of Directors when computing whether a majority vote of the member of the Board was obtained. If the Company does not exercise such right within the Option Period, or exercises such right only as to a portion of such shares, the Remaining Shareholders shall have the right for a period of thirty (30) days following the end of the Option Period ("the Second Option Period") to purchase all of the Shares included in the Offer that are not purchased by the Company, upon the same terms as are available to the Company as follows:

(1) Each Remaining Shareholder shall, during the Second Option Period, advise the Secretary of the Company whether such Remaining Shareholder wishes to exercise his or her right to purchase Shares and the maximum number of Shares that he or she wishes to purchase.

(2) If the aggregate of the maximum number of Shares covered by the Offer to be purchased by all Remaining Shareholders exceeds the number of Shares available for purchase by them, the number of Shares offered shall be apportioned pro rata among the Remaining Shareholders electing to purchase based upon a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders electing to purchase. Fractions resulting in any such computation shall be rounded to the next whole number. If such computation results in a purchase of less than all Shares offered by the Offering Shareholder, then the difference between the number of Shares agreed to be purchased and the number of Shares offered shall be allocated to those Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to such Remaining Shareholders in the first allocation. Such allocation shall be based on a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to them. For the purpose of accomplishing the allocations set forth herein, the Secretary of the Company shall make the allocations and his or her determination as to the allocations shall be conclusive.

Page 2

(3) If the maximum number of Shares to be purchased by the Remaining Shareholders is less than the Shares offered by the Offering Shareholder available for purchase by the Remaining Shareholders, or after successive allocations each Remaining Shareholder has been allocated the maximum number of Shares agreed to be purchased by him or her, and all Shares offered by the Offering Shareholder are still not allocated to a Remaining Shareholder, then the Company shall have the option to purchase the unallocated portion within the Second Option Period upon the same terms as were available to the Company in the Option Period.

(4) If neither the Company nor the Remaining Shareholders exercises the right to purchase the entirety of the Shares within the time provided for such exercise, the Offering Shareholder shall be free to sell any remaining Shares so offered pursuant to the Offer, and only pursuant to the Offer, for a period of sixty (60) days following the end of the Second Option Period, provided, however, that the transferee of those Shares must first agree in writing to be bound by the terms and conditions of this Agreement that apply to the Shareholder. If no such sale is made by the Offering Shareholder within such 60-day period, then the restrictions set forth in this Agreement shall thereafter continue to apply to the Shares and no Stock, nor any interest therein, shall thereafter be disposed, whether pursuant to an Offer or otherwise, without again first complying with all of the provisions of this Agreement.

2.2 This section remains only so as to preserve the numbering in this Agreement.

2.3 Closing. The closing of any purchase and sale under this Article 2 shall take place at the principal office of the Company at the date designated by the Company, which shall not be more than ninety (90) days after the written consent of the Company pursuant to Section 2.1(a) or ninety (90) days after the end of the Second Option Period pursuant to Section 2.1(b).

ARTICLE 3
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 4
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 5
VALUATION AND PAYMENT OF TERMS

5.1 Agreed Valuation and Terms. For purposes of Article 2, the value per share of the Stock and the terms of the purchase or redemption shall be determined annually by a majority vote of the Company's Board of Directors at the Company's annual Directors' meeting, which is scheduled for December 31 of each year, or at any other time prior to the closing of the proposed purchase or redemption. If the necessary vote cannot be obtained or if the Offering Shareholder objects to the value established by the Company's Board of Directors, then the value per share shall be established pursuant to Section 5.4, and the terms of purchase or redemption shall be those most recently adopted by the Directors pursuant to this Section 5.1, or if no such terms have been so adopted or if the Offering Shareholder objects to such terms, then those terms described in Section 5.2 below.

5.2 Initial Valuation and Terms.
a) The initial value per share of the Company's Stock is the book value.

b) The terms for payment are a down payment of ten percent (10%) of the purchase or redemption price (or more at the purchaser's option) with the balance to be paid in sixty (60) equal monthly installments of principal and interest including interest on the declining principal balance calculated so that the entire principal balances of the note shall be paid in full on the fifth anniversary of the note.

Page 3

5.3 Book Value. If the "book value" shall be used as the measurement of value, per share, the following definition of "book value" shall apply:

Capital Stock plus retained earnings plus additional paid-in capital as of the last day of the month preceding the date of purchase ("Valuation Date"), as determined by the accountant regularly employed by the Company or, if no accountant is regularly employed by the Company, then by an accountant selected by mutual agreement of the parties.

5.4 Alternative Appraisal Value. If a valuation as provided for in Section 5.1 is not recorded for a particular year, the last previous valuation shall be used; except that if no valuation is recorded within eighteen (18) months preceding the proposed disposition, then in the event that the parties cannot agree to use the last previous recorded valuation, the value per share shall be determined by three appraisers. Within fifteen (15) days of the date that use of the last previous recorded valuation was rejected, the rejecting party shall select an appraiser and notify the other of the appraiser's name and address. Within fifteen (15) days after receipt of that notice, the remaining party shall select an appraiser and notify the first party of the name and address of such appraiser. If any party is unable to or unwilling to agree upon an appraiser within fifteen (15) days of the time designated for such selection, then the appraiser shall be selected by the presiding judge of the King County Superior Court. The two appraisers selected by the parties shall promptly appoint a third appraiser as soon as practical. The three appraisers shall evaluate and agree upon the value per share of the Stock as soon as practical after their selection; the vote of two such appraisers shall be sufficient to establish the value per share. The appraisers need not be licensed appraisers but should be experienced in business matters and shall be independent of all parties. Each party shall pay the fee charged for that party's appraiser; the fee charged by the third appraiser and any costs related to the appraisal shall be borne equally by each party.

5.5 Note for Unpaid Balance. Unless otherwise expressly provided herein, any unpaid balance owing under this Agreement shall be evidenced by an installment promissory note executed by the purchaser to the order of the seller providing for an interest rate equal to the prime rate of Bank of America on the business day prior to the closing date. The note shall give the purchaser the option of prepaying the principal in full or in part at any time without penalty.

5.6 Setoff. In the event the Company purchases any Stock pursuant to this Agreement, the Company shall set off against the purchase price for the Stock any indebtedness owed to the Company by such Shareholder or his or her estate, whether or not such indebtedness is then due. If any shareholder or other third party purchases any Stock pursuant to this Agreement, as a condition of the purchase, the purchaser agrees, prior to making any payment to the transferring Shareholder, that the purchaser shall pay to the Company that part of the purchase price equal to any indebtedness owed by the seller or his or her estate to the Company, whether or not such indebtedness is then due, and such payments shall be deemed payments on account of said purchase price or the promissory note issued by such shareholder with respect thereto.

ARTICLE 6
ENDORSEMENT OF CERTIFICATE

6.1 The Secretary of the Company shall endorse all certificates representing Stock owned by the Shareholder and all certificates representing Stock issued or transferred after this Agreement is entered into with the following legend:

The transfer of the shares represented by this certificate is restricted by the terms of a Shareholder's Agreement between the Shareholder and the Company dated February 9th 1995 a copy of which is on file in the office of the Company.

Page 4

ARTICLE 7
TERMINATION OF THIS AGREEMENT

7.1 Termination. This Agreement shall terminate at such time as the Common Stock of the Company is listed on a recognized United States national securities exchange or is traded in an over-the-counter market.

ARTICLE 8
AGREEMENT BINDING UPON TRANSFEREES

8.1 Except as otherwise provided for in this Agreement, in the event that any Stock is at any time disposed of or transferred to any party pursuant to the provisions hereof, the transferee shall take such Stock pursuant to all the terms, provisions, conditions, and covenants of this Agreement, and the transferee shall, as a condition precedent to the valid transfer of such Stock to such transferee, be bound, and agree (for and on behalf of himself or herself, his or her legal and personal representatives, his or her assigns, and his or her transferees, direct or indirect) in writing to be bound, by all provisions of this Agreement, including Article 9 in the case of a disposal or transfer from an Employee Shareholder.

ARTICLE 9
GRANT OF IRREVOCABLE PROXY

9.1 Definition of Total Disability. As used in this Agreement, the term "Total Disability" refers to a condition resulting from injury or illness to the Employee Shareholder which prevents the Employee Shareholder from performing the duties he or she has previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days (the "Disability Period"), and Total Disability shall be deemed to occur on the first day following the initial 365 day period (the "Total Disability Date"). In the event that the disabled Employee Shareholder returns to the Company within the Disability Period, but can fully perform the required services for less than thirty (30) days, and then relapses to his or her disability, the Disability Period shall not be considered to have been interrupted. In the event the Company has disability insurance protection on the Employee Shareholder, or the Employee Shareholder has an individual policy, the receipt of such disability insurance payments shall be deemed proof that the Employee Shareholder is disabled, and the waiting period and periods during which such Employee receives disability payments from such insurance, shall be deemed proof of the extent of time the Employee Shareholder has been disabled. Any dispute as to whether or not an Employee Shareholder is "Totally Disabled" and for how long he or she has been disabled as defined in this Agreement, shall be settled by mediation and/or arbitration in accordance with the provisions of this Agreement.

9.2 Grant of Irrevocable Proxy. The Employee Shareholder hereby grants to the Company an irrevocable proxy to vote all of the Stock held by the Employee Shareholder upon or subsequent to his or her death, Total Disability as defined above, or termination of employment with the Company, without regard to when or for what reason, if any, such employment shall terminate. Such proxy is coupled with an interest arising out of the terms of the Agreement, and such continues so long as this Agreement remains in full force and effect.

The irrevocable proxies described in this Article 9 shall remain in effect until the Company has issued and has outstanding shares of Common Stock held of record by 300 stockholders or more and the Common Stock of the Company is quoted on a recognized United States national securities exchange or the over-the-counter market.

This irrevocable proxy is coupled with an interest arising out of the terms of this Agreement, and continues as long as this Agreement remains in full force and effect.

Page 5

ARTICLE 10
GENERAL PROVISIONS

10.1 Mediation and Arbitration. All controversies, claims, disputes and matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by mediation and/or arbitration in accordance with this Article
10.1. The party who seeks resolution of a controversy, claim, dispute or other matter in question shall notify the other party in writing of the existence and subject matter hereof, and shall designate in such notices the names of three prospective mediators, each of whom shall be registered with the Seattle, Washington office of the American Arbitration Association. The recipient party shall select from such list one individual to act as a mediator in the dispute set forth by the notifying party. The parties agree to meet with said mediator in the City of Seattle within two weeks after the recipient party has received notice of the dispute and agree to utilize their best efforts and all expediency to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither party shall be bound by any recommendation of the mediator; however, any agreement reached during mediation shall be final and conclusive.

If the dispute is not resolved by such mediation, it shall be decided by mandatory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Either party may apply to the American Arbitration Association for a determination of the dispute set forth in the notification thereof by the originating party. The parties agree that the arbitration shall take place in the City of Seattle, and shall be governed by the laws of the State of Washington. The award entered or decision made by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Expense of mediation and/or arbitration shall be shared equally by both parties.

10.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties, their spouses, heirs, legal representatives, successors, transferees and assigns.

10.3 Specific Performance. It is agreed that the remedy at law for any breach of this Agreement would be inadequate, and that the aggrieved party shall be entitled to injunctive relief as well as damages for such breach.

10.4 Notices. All notices, offers, acceptance, waivers and other acts under this Agreement shall be in writing and shall be sufficiently given if delivered to the addresses in person or if mailed, postage prepaid, return receipt requested, to the addresses as follows or at any address that such party may designate by written notice to the other:

If to the Company:                  Jeffrey P. Bezos
                                    c/o Chuck Katz
                                    Perkins Coie
                                    1201 Third Avenue, 40th Floor
                                    Seattle, WA 98101-3099

If to M.A.Bezos
(shareholder) 200 Park Ave. (#224)
Florham Park, NJ 07932

10.5 Prior Agreements. This Agreement contains the entire agreement between the parties and supersedes all prior agreements entered into by the parties relative to the subject matter of this Agreement.

Page 6

10.6 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Jurisdiction over and venue of any suit arising out of or related to this Agreement shall be exclusively in the state and federal courts of King County, Washington.

10.7 New Shareholders. Nothing in this agreement shall restrict the Company from selling shares of its Stock to third persons on such terms and conditions as the Company's Board of Directors deems appropriate.

10.8 Severability. If for any reason any portion of this Agreement shall be held to be invalid or unenforceable, the holding of invalidity or unenforceability of that portion shall not affect any other portion of this Agreement and the remaining portions of this Agreement shall remain in full force and effect.

10.9 Counsel. The Shareholder acknowledges that he or she is aware of his or her right to have independent counsel review this Agreement concerning his or her rights and obligations under this Agreement prior to his or her execution of it. The Shareholder represents: (i) that he or she has consulted independent counsel, or by executing this Agreement, waives his or her right to consult with an attorney concerning this Agreement; and (ii) that the Shareholder understands the terms of this Agreement and will be bound by this Agreement.

10.10 Investment and Other Warranties. Each Shareholder, by his or her execution of this Agreement, acknowledges and understands that, in connection with the Stock now or hereafter owned by him or her:

(a) the Shareholder has been fully informed as to the circumstances under which he or she is required to hold the Stock pursuant to the requirements of the Securities Act of 1933, as amended (the "Act");

(b) the Company has informed the Shareholder that such Stock is not registered under the Act and may not be transferred or otherwise disposed of unless such Stock is subsequently registered under the Act or unless an exemption from such registration is available; and

(c) the Shareholder has been informed that the Stock is subject to this Agreement and that a restrictive legend, referring to the restrictions set forth herein, has or will be placed upon the certificate(s) evidencing such Stock.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

AMAZON.COM, INC.

By:            Jeff P. Bezos

Name:          Jeffrey P. Bezos

Title:         President

Date:          2/9/95

SHAREHOLDER

Signature:     M.A. Bezos

Name:          M.A. Bezos

Title:
               ----------------------------------

Date:          2/9/95

SPOUSAL CONSENT

By execution of this Agreement, Jacklyn G. Bezos hereby agrees and consents to all the terms and conditions of this Agreement and agrees to be bound by such terms and conditions, and does hereby appoint his or her spouse as attorney-in-fact in all respects with regard to the Company, its affairs, and interest in the Company's Stock. Jacklyn G. Bezos has been informed of his or her right to obtain independent legal counsel concerning this Shareholder's Agreement and the rights and obligations provided for in this Agreement, and by execution of this Agreement, acknowledges having either obtained such independent counsel or having waived the same.

By: Jacklyn G. Bezos , Individual

Page 8

EXHIBIT 10.14

SHAREHOLDER'S AGREEMENT
OF
AMAZON.COM, INC.

THIS SHAREHOLDER'S AGREEMENT (this "Agreement"), is made and entered into as of this 24th day of July 1995 by and between Amazon.com, Inc. (the "Company"), a Delaware corporation, and Lawrence P. Gise (the "Shareholder"). (Shares to be registered for and held under Gise Family Trust under agreement dated 4/21/93.)

SELECT only one of the following:

______ For purposes of this Agreement, the Shareholder is an employee shareholder (an "Employee Shareholder") and is bound to all the provisions of this agreement including Article 9. Shareholder's Initials:________

x For purposes of this Agreement, the Shareholder is not an Employee Shareholder and is not bound to the provisions of Article 9 of this Agreement. Shareholder's Initials: LPG

WHEREAS, the parties hereto deem it in their best interest to provide for ultimate ownership of the shares of the Company (the "Stock"), or rights thereto, including the right to transfer such Stock and the right to purchase such Stock upon the occurrence of certain events;

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual promises set forth herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
RESTRICTION ON DISPOSITION

1.1 Disposition Prohibited. The Shareholder shall not dispose of any of his or her Stock except as permitted by this Agreement, and any such attempted disposition shall be void and shall not be recognized or registered upon the books of the Company.

1.2 Definition of "Dispose". The term "dispose" includes, but is not limited to, the acts of selling, assigning, transferring, pledging, encumbering, giving away, devising, and any other form of conveying, including conveyances caused by marital separation, divorce, receivership, or bankruptcy, whether voluntary or involuntary or by operation of law.

1.3 Notice of Involuntary Disposition. The Shareholder, or his or her personal representative, shall notify the Company immediately upon the occurrence of an involuntary disposal of his or her Stock. The Company shall notify the other shareholders of any such involuntary transfer.

1.4 Role of Offeror or Transferor. If the Company is entitled to elect to purchase or redeem any Stock owned by the Shareholder hereunder, the Shareholder shall not participate in or interfere with, and shall abstain from any vote upon (but shall be present for the purpose of meeting any quorum requirement), any action to be taken by the Company in effecting such an election. The Shareholder, or the legal representative of the Shareholder, shall cooperate in effecting all company action and execute and deliver all papers as may be necessary to consummate any purchase by the Company of such Stock. Unless otherwise set forth herein, the option of the Company to purchase or redeem Stock owned by the Shareholder shall be exercised only upon a majority vote of the Board of Directors.

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ARTICLE 2
DISPOSITIONS DURING LIFE

2.1 Voluntary Disposition.

(a) Disposition of Stock prior to and on December 31, 1999. This Agreement prohibits the Shareholder from disposing of any Stock until after December 31, 1999, unless prior written consent is received from the Company, which consent can be given only upon a majority vote of the Board of Directors.

(b) Disposition of Stock after December 31, 1999. In the event that the Shareholder ("the Offering Shareholder") receives a bona fide offer (the "Offer") after December 31, 1999, to purchase all or any portion of his or her Stock (the "Shares") and the Offering Shareholder desires to sell his or her Shares pursuant to the terms of the Offer, then the Offering Shareholder shall forthwith deliver to the Company written notice of such offer. Such written notice shall contain the name and address of the bona fide offeror, and the bona fide purchase price offered for the Shares and all other terms of such offer. The Company shall convey such notice to each other shareholder who is at that time a current shareholder of the Company ("the Remaining Shareholders"). Within sixty (60) days after receipt by the Company of the written notice of the Offer (the "Option Period"), the Company shall have the right to purchase or redeem all of the Shares included in such Offer either upon the price and terms set forth in the Offer or, at the election of the Company, upon the price and terms described in Article 5. A vote by the majority of the members of the Board of Directors shall be required to exercise or waive the option, except that a Director who is the proposed transferor may not participate in the voting, and shall not be included in the number of Directors when computing whether a majority vote of the member of the Board was obtained. If the Company does not exercise such right within the Option Period, or exercises such right only as to a portion of such shares, the Remaining Shareholders shall have the right for a period of thirty (30) days following the end of the Option Period ("the Second Option Period") to purchase all of the Shares included in the Offer that are not purchased by the Company, upon the same terms as are available to the Company as follows:

(1) Each Remaining Shareholder shall, during the Second Option Period, advise the Secretary of the Company whether such Remaining Shareholder wishes to exercise his or her right to purchase Shares and the maximum number of Shares that he or she wishes to purchase.

(2) If the aggregate of the maximum number of Shares covered by the Offer to be purchased by all Remaining Shareholders exceeds the number of Shares available for purchase by them, the number of Shares offered shall be apportioned pro rata among the Remaining Shareholders electing to purchase based upon a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders electing to purchase. Fractions resulting in any such computation shall be rounded to the next whole number. If such computation results in a purchase of less than all Shares offered by the Offering Shareholder, then the difference between the number of Shares agreed to be purchased and the number of Shares offered shall be allocated to those Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to such Remaining Shareholders in the first allocation. Such allocation shall be based on a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to them. For the purpose of accomplishing the allocations set forth herein, the Secretary of the Company shall make the allocations and his or her determination as to the allocations shall be conclusive.

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(3) If the maximum number of Shares to be purchased by the Remaining Shareholders is less than the Shares offered by the Offering Shareholder available for purchase by the Remaining Shareholders, or after successive allocations each Remaining Shareholder has been allocated the maximum number of Shares agreed to be purchased by him or her, and all Shares offered by the Offering Shareholder are still not allocated to a Remaining Shareholder, then the Company shall have the option to purchase the unallocated portion within the Second Option Period upon the same terms as were available to the Company in the Option Period.

(4) If neither the Company nor the Remaining Shareholders exercises the right to purchase the entirety of the Shares within the time provided for such exercise, the Offering Shareholder shall be free to sell any remaining Shares so offered pursuant to the Offer, and only pursuant to the Offer, for a period of sixty (60) days following the end of the Second Option Period, provided, however, that the transferee of those Shares must first agree in writing to be bound by the terms and conditions of this Agreement that apply to the Shareholder. If no such sale is made by the Offering Shareholder within such 60-day period, then the restrictions set forth in this Agreement shall thereafter continue to apply to the Shares and no Stock, nor any interest therein, shall thereafter be disposed, whether pursuant to an Offer or otherwise, without again first complying with all of the provisions of this Agreement.

2.2 This section remains only so as to preserve the numbering in this Agreement.

2.3 Closing. The closing of any purchase and sale under this Article 2 shall take place at the principal office of the Company at the date designated by the Company, which shall not be more than ninety (90) days after the written consent of the Company pursuant to Section 2.1(a) or ninety (90) days after the end of the Second Option Period pursuant to Section 2.1(b).

ARTICLE 3
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 4
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 5
VALUATION AND PAYMENT OF TERMS

5.1 Agreed Valuation and Terms. For purposes of Article 2, the value per share of the Stock and the terms of the purchase or redemption shall be determined annually by a majority vote of the Company's Board of Directors at the Company's annual Directors' meeting, which is scheduled for December 31 of each year, or at any other time prior to the closing of the proposed purchase or redemption. If the necessary vote cannot be obtained or if the Offering Shareholder objects to the value established by the Company's Board of Directors, then the value per share shall be established pursuant to Section 5.4, and the terms of purchase or redemption shall be those most recently adopted by the Directors pursuant to this Section 5.1, or if no such terms have been so adopted or if the Offering Shareholder objects to such terms, then those terms described in Section 5.2 below.

5.2 Initial Valuation and Terms.
a) The initial value per share of the Company's Stock is the book value.

b) The terms for payment are a down payment of ten percent (10%) of the purchase or redemption price (or more at the purchaser's option) with the balance to be paid in sixty (60) equal monthly installments of principal and interest including interest on the declining principal balance calculated so that the entire principal balances of the note shall be paid in full on the fifth anniversary of the note.

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5.3 Book Value. If the "book value" shall be used as the measurement of value, per share, the following definition of "book value" shall apply:

Capital Stock plus retained earnings plus additional paid-in capital as of the last day of the month preceding the date of purchase ("Valuation Date"), as determined by the accountant regularly employed by the Company or, if no accountant is regularly employed by the Company, then by an accountant selected by mutual agreement of the parties.

5.4 Alternative Appraisal Value. If a valuation as provided for in Section 5.1 is not recorded for a particular year, the last previous valuation shall be used; except that if no valuation is recorded within eighteen (18) months preceding the proposed disposition, then in the event that the parties cannot agree to use the last previous recorded valuation, the value per share shall be determined by three appraisers. Within fifteen (15) days of the date that use of the last previous recorded valuation was rejected, the rejecting party shall select an appraiser and notify the other of the appraiser's name and address. Within fifteen (15) days after receipt of that notice, the remaining party shall select an appraiser and notify the first party of the name and address of such appraiser. If any party is unable to or unwilling to agree upon an appraiser within fifteen (15) days of the time designated for such selection, then the appraiser shall be selected by the presiding judge of the King County Superior Court. The two appraisers selected by the parties shall promptly appoint a third appraiser as soon as practical. The three appraisers shall evaluate and agree upon the value per share of the Stock as soon as practical after their selection; the vote of two such appraisers shall be sufficient to establish the value per share. The appraisers need not be licensed appraisers but should be experienced in business matters and shall be independent of all parties. Each party shall pay the fee charged for that party's appraiser; the fee charged by the third appraiser and any costs related to the appraisal shall be borne equally by each party.

5.5 Note for Unpaid Balance. Unless otherwise expressly provided herein, any unpaid balance owing under this Agreement shall be evidenced by an installment promissory note executed by the purchaser to the order of the seller providing for an interest rate equal to the prime rate of Bank of America on the business day prior to the closing date. The note shall give the purchaser the option of prepaying the principal in full or in part at any time without penalty.

5.6 Setoff. In the event the Company purchases any Stock pursuant to this Agreement, the Company shall set off against the purchase price for the Stock any indebtedness owed to the Company by such Shareholder or his or her estate, whether or not such indebtedness is then due. If any shareholder or other third party purchases any Stock pursuant to this Agreement, as a condition of the purchase, the purchaser agrees, prior to making any payment to the transferring Shareholder, that the purchaser shall pay to the Company that part of the purchase price equal to any indebtedness owed by the seller or his or her estate to the Company, whether or not such indebtedness is then due, and such payments shall be deemed payments on account of said purchase price or the promissory note issued by such shareholder with respect thereto.

ARTICLE 6
ENDORSEMENT OF CERTIFICATE

6.1 The Secretary of the Company shall endorse all certificates representing Stock owned by the Shareholder and all certificates representing Stock issued or transferred after this Agreement is entered into with the following legend:

The transfer of the shares represented by this certificate is restricted by the terms of a Shareholder's Agreement between the Shareholder and the Company dated July 24 1995, a copy of which is on file in the office of the Company.

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ARTICLE 7
TERMINATION OF THIS AGREEMENT

7.1 Termination. This Agreement shall terminate at such time as the Common Stock of the Company is listed on a recognized United States national securities exchange or is traded in an over-the-counter market.

ARTICLE 8
AGREEMENT BINDING UPON TRANSFEREES

8.1 Except as otherwise provided for in this Agreement, in the event that any Stock is at any time disposed of or transferred to any party pursuant to the provisions hereof, the transferee shall take such Stock pursuant to all the terms, provisions, conditions, and covenants of this Agreement, and the transferee shall, as a condition precedent to the valid transfer of such Stock to such transferee, be bound, and agree (for and on behalf of himself or herself, his or her legal and personal representatives, his or her assigns, and his or her transferees, direct or indirect) in writing to be bound, by all provisions of this Agreement, including Article 9 in the case of a disposal or transfer from an Employee Shareholder.

ARTICLE 9
GRANT OF IRREVOCABLE PROXY

9.1 Definition of Total Disability. As used in this Agreement, the term "Total Disability" refers to a condition resulting from injury or illness to the Employee Shareholder which prevents the Employee Shareholder from performing the duties he or she has previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days (the "Disability Period"), and Total Disability shall be deemed to occur on the first day following the initial 365 day period (the "Total Disability Date"). In the event that the disabled Employee Shareholder returns to the Company within the Disability Period, but can fully perform the required services for less than thirty (30) days, and then relapses to his or her disability, the Disability Period shall not be considered to have been interrupted. In the event the Company has disability insurance protection on the Employee Shareholder, or the Employee Shareholder has an individual policy, the receipt of such disability insurance payments shall be deemed proof that the Employee Shareholder is disabled, and the waiting period and periods during which such Employee receives disability payments from such insurance, shall be deemed proof of the extent of time the Employee Shareholder has been disabled. Any dispute as to whether or not an Employee Shareholder is "Totally Disabled" and for how long he or she has been disabled as defined in this Agreement, shall be settled by mediation and/or arbitration in accordance with the provisions of this Agreement.

9.2 Grant of Irrevocable Proxy. The Employee Shareholder hereby grants to the Company an irrevocable proxy to vote all of the Stock held by the Employee Shareholder upon or subsequent to his or her death, Total Disability as defined above, or termination of employment with the Company, without regard to when or for what reason, if any, such employment shall terminate. Such proxy is coupled with an interest arising out of the terms of the Agreement, and such continues so long as this Agreement remains in full force and effect.

The irrevocable proxies described in this Article 9 shall remain in effect until the Company has issued and has outstanding shares of Common Stock held of record by 300 stockholders or more and the Common Stock of the Company is quoted on a recognized United States national securities exchange or the over-the-counter market.

This irrevocable proxy is coupled with an interest arising out of the terms of this Agreement, and continues as long as this Agreement remains in full force and effect.

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ARTICLE 10
GENERAL PROVISIONS

10.1 Mediation and Arbitration. All controversies, claims, disputes and matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by mediation and/or arbitration in accordance with this Article
10.1. The party who seeks resolution of a controversy, claim, dispute or other matter in question shall notify the other party in writing of the existence and subject matter hereof, and shall designate in such notices the names of three prospective mediators, each of whom shall be registered with the Seattle, Washington office of the American Arbitration Association. The recipient party shall select from such list one individual to act as a mediator in the dispute set forth by the notifying party. The parties agree to meet with said mediator in the City of Seattle within two weeks after the recipient party has received notice of the dispute and agree to utilize their best efforts and all expediency to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither party shall be bound by any recommendation of the mediator; however, any agreement reached during mediation shall be final and conclusive.

If the dispute is not resolved by such mediation, it shall be decided by mandatory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Either party may apply to the American Arbitration Association for a determination of the dispute set forth in the notification thereof by the originating party. The parties agree that the arbitration shall take place in the City of Seattle, and shall be governed by the laws of the State of Washington. The award entered or decision made by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Expense of mediation and/or arbitration shall be shared equally by both parties.

10.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties, their spouses, heirs, legal representatives, successors, transferees and assigns.

10.3 Specific Performance. It is agreed that the remedy at law for any breach of this Agreement would be inadequate, and that the aggrieved party shall be entitled to injunctive relief as well as damages for such breach.

10.4 Notices. All notices, offers, acceptance, waivers and other acts under this Agreement shall be in writing and shall be sufficiently given if delivered to the addresses in person or if mailed, postage prepaid, return receipt requested, to the addresses as follows or at any address that such party may designate by written notice to the other:

If to the Company:                  Jeffrey P. Bezos
                                    c/o Chuck Katz
                                    Perkins Coie
                                    1201 Third Avenue, 40th Floor
                                    Seattle, WA 98101-3099

If to Lawrence P. Gise              Lawrence P. Gise
                                    600 Leona St.
                                    Cotulla, TX 78014

10.5 Prior Agreements. This Agreement contains the entire agreement between the parties and supersedes all prior agreements entered into by the parties relative to the subject matter of this Agreement.

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EXHIBIT 10.15

SHAREHOLDER'S AGREEMENT
OF
AMAZON.COM, INC.

THIS SHAREHOLDER'S AGREEMENT (this "Agreement"), is made and entered into as of this 8th day of August 1995 by and between Amazon.com, Inc. (the "Company"), a Delaware corporation, and Sheldon J. Kaphan (the "Shareholder").

SELECT only one of the following:

x For purposes of this Agreement, the Shareholder is an employee shareholder (an "Employee Shareholder") and is bound to all the provisions of this agreement including Article 9. Shareholder's Initials: SJK

______ For purposes of this Agreement, the Shareholder is not an Employee Shareholder and is not bound to the provisions of Article 9 of this Agreement. Shareholder's Initials:________

WHEREAS, the parties hereto deem it in their best interest to provide for ultimate ownership of the shares of the Company (the "Stock"), or rights thereto, including the right to transfer such Stock and the right to purchase such Stock upon the occurrence of certain events;

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual promises set forth herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
RESTRICTION ON DISPOSITION

1.1 Disposition Prohibited. The Shareholder shall not dispose of any of his or her Stock except as permitted by this Agreement, and any such attempted disposition shall be void and shall not be recognized or registered upon the books of the Company.

1.2 Definition of "Dispose". The term "dispose" includes, but is not limited to, the acts of selling, assigning, transferring, pledging, encumbering, giving away, devising, and any other form of conveying, including conveyances caused by marital separation, divorce, receivership, or bankruptcy, whether voluntary or involuntary or by operation of law.

1.3 Notice of Involuntary Disposition. The Shareholder, or his or her personal representative, shall notify the Company immediately upon the occurrence of an involuntary disposal of his or her Stock. The Company shall notify the other shareholders of any such involuntary transfer.

1.4 Role of Offeror or Transferor. If the Company is entitled to elect to purchase or redeem any Stock owned by the Shareholder hereunder, the Shareholder shall not participate in or interfere with, and shall abstain from any vote upon (but shall be present for the purpose of meeting any quorum requirement), any action to be taken by the Company in effecting such an election. The Shareholder, or the legal representative of the Shareholder, shall cooperate in effecting all company action and execute and deliver all papers as may be necessary to consummate any purchase by the Company of such Stock. Unless otherwise set forth herein, the option of the Company to purchase or redeem Stock owned by the Shareholder shall be exercised only upon a majority vote of the Board of Directors.

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ARTICLE 2
DISPOSITIONS DURING LIFE

2.1 Voluntary Disposition.

(a) Disposition of Stock prior to and on December 31, 1999. This Agreement prohibits the Shareholder from disposing of any Stock until after December 31, 1999, unless prior written consent is received from the Company, which consent can be given only upon a majority vote of the Board of Directors.

(b) Disposition of Stock after December 31, 1999. In the event that the Shareholder ("the Offering Shareholder") receives a bona fide offer (the "Offer") after December 31, 1999, to purchase all or any portion of his or her Stock (the "Shares") and the Offering Shareholder desires to sell his or her Shares pursuant to the terms of the Offer, then the Offering Shareholder shall forthwith deliver to the Company written notice of such offer. Such written notice shall contain the name and address of the bona fide offeror, and the bona fide purchase price offered for the Shares and all other terms of such offer. The Company shall convey such notice to each other shareholder who is at that time a current shareholder of the Company ("the Remaining Shareholders"). Within sixty (60) days after receipt by the Company of the written notice of the Offer (the "Option Period"), the Company shall have the right to purchase or redeem all of the Shares included in such Offer either upon the price and terms set forth in the Offer or, at the election of the Company, upon the price and terms described in Article 5. A vote by the majority of the members of the Board of Directors shall be required to exercise or waive the option, except that a Director who is the proposed transferor may not participate in the voting, and shall not be included in the number of Directors when computing whether a majority vote of the member of the Board was obtained. If the Company does not exercise such right within the Option Period, or exercises such right only as to a portion of such shares, the Remaining Shareholders shall have the right for a period of thirty (30) days following the end of the Option Period ("the Second Option Period") to purchase all of the Shares included in the Offer that are not purchased by the Company, upon the same terms as are available to the Company as follows:

(1) Each Remaining Shareholder shall, during the Second Option Period, advise the Secretary of the Company whether such Remaining Shareholder wishes to exercise his or her right to purchase Shares and the maximum number of Shares that he or she wishes to purchase.

(2) If the aggregate of the maximum number of Shares covered by the Offer to be purchased by all Remaining Shareholders exceeds the number of Shares available for purchase by them, the number of Shares offered shall be apportioned pro rata among the Remaining Shareholders electing to purchase based upon a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders electing to purchase. Fractions resulting in any such computation shall be rounded to the next whole number. If such computation results in a purchase of less than all Shares offered by the Offering Shareholder, then the difference between the number of Shares agreed to be purchased and the number of Shares offered shall be allocated to those Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to such Remaining Shareholders in the first allocation. Such allocation shall be based on a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to them. For the purpose of accomplishing the allocations set forth herein, the Secretary of the Company shall make the allocations and his or her determination as to the allocations shall be conclusive.

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(3) If the maximum number of Shares to be purchased by the Remaining Shareholders is less than the Shares offered by the Offering Shareholder available for purchase by the Remaining Shareholders, or after successive allocations each Remaining Shareholder has been allocated the maximum number of Shares agreed to be purchased by him or her, and all Shares offered by the Offering Shareholder are still not allocated to a Remaining Shareholder, then the Company shall have the option to purchase the unallocated portion within the Second Option Period upon the same terms as were available to the Company in the Option Period.

(4) If neither the Company nor the Remaining Shareholders exercises the right to purchase the entirety of the Shares within the time provided for such exercise, the Offering Shareholder shall be free to sell any remaining Shares so offered pursuant to the Offer, and only pursuant to the Offer, for a period of sixty (60) days following the end of the Second Option Period, provided, however, that the transferee of those Shares must first agree in writing to be bound by the terms and conditions of this Agreement that apply to the Shareholder. If no such sale is made by the Offering Shareholder within such 60-day period, then the restrictions set forth in this Agreement shall thereafter continue to apply to the Shares and no Stock, nor any interest therein, shall thereafter be disposed, whether pursuant to an Offer or otherwise, without again first complying with all of the provisions of this Agreement.

2.2 This section remains only so as to preserve the numbering in this Agreement.

2.3 Closing. The closing of any purchase and sale under this Article 2 shall take place at the principal office of the Company at the date designated by the Company, which shall not be more than ninety (90) days after the written consent of the Company pursuant to Section 2.1(a) or ninety (90) days after the end of the Second Option Period pursuant to Section 2.1(b).

ARTICLE 3
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 4
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 5
VALUATION AND PAYMENT OF TERMS

5.1 Agreed Valuation and Terms. For purposes of Article 2, the value per share of the Stock and the terms of the purchase or redemption shall be determined annually by a majority vote of the Company's Board of Directors at the Company's annual Directors' meeting, which is scheduled for December 31 of each year, or at any other time prior to the closing of the proposed purchase or redemption. If the necessary vote cannot be obtained or if the Offering Shareholder objects to the value established by the Company's Board of Directors, then the value per share shall be established pursuant to Section 5.4, and the terms of purchase or redemption shall be those most recently adopted by the Directors pursuant to this Section 5.1, or if no such terms have been so adopted or if the Offering Shareholder objects to such terms, then those terms described in Section 5.2 below.

5.2 Initial Valuation and Terms.

a) The initial value per share of the Company's Stock is the book value.

b) The terms for payment are a down payment of ten percent (10%) of the purchase or redemption price (or more at the purchaser's option) with the balance to be paid in sixty (60) equal monthly installments of principal and interest including interest on the declining principal balance calculated so that the entire principal balances of the note shall be paid in full on the fifth anniversary of the note.

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5.3 Book Value. If the "book value" shall be used as the measurement of value, per share, the following definition of "book value" shall apply:

Capital Stock plus retained earnings plus additional paid-in capital as of the last day of the month preceding the date of purchase ("Valuation Date"), as determined by the accountant regularly employed by the Company or, if no accountant is regularly employed by the Company, then by an accountant selected by mutual agreement of the parties.

5.4 Alternative Appraisal Value. If a valuation as provided for in Section 5.1 is not recorded for a particular year, the last previous valuation shall be used; except that if no valuation is recorded within eighteen (18) months preceding the proposed disposition, then in the event that the parties cannot agree to use the last previous recorded valuation, the value per share shall be determined by three appraisers. Within fifteen (15) days of the date that use of the last previous recorded valuation was rejected, the rejecting party shall select an appraiser and notify the other of the appraiser's name and address. Within fifteen (15) days after receipt of that notice, the remaining party shall select an appraiser and notify the first party of the name and address of such appraiser. If any party is unable to or unwilling to agree upon an appraiser within fifteen (15) days of the time designated for such selection, then the appraiser shall be selected by the presiding judge of the King County Superior Court. The two appraisers selected by the parties shall promptly appoint a third appraiser as soon as practical. The three appraisers shall evaluate and agree upon the value per share of the Stock as soon as practical after their selection; the vote of two such appraisers shall be sufficient to establish the value per share. The appraisers need not be licensed appraisers but should be experienced in business matters and shall be independent of all parties. Each party shall pay the fee charged for that party's appraiser; the fee charged by the third appraiser and any costs related to the appraisal shall be borne equally by each party.

5.5 Note for Unpaid Balance. Unless otherwise expressly provided herein, any unpaid balance owing under this Agreement shall be evidenced by an installment promissory note executed by the purchaser to the order of the seller providing for an interest rate equal to the prime rate of Bank of America on the business day prior to the closing date. The note shall give the purchaser the option of prepaying the principal in full or in part at any time without penalty.

5.6 Setoff. In the event the Company purchases any Stock pursuant to this Agreement, the Company shall set off against the purchase price for the Stock any indebtedness owed to the Company by such Shareholder or his or her estate, whether or not such indebtedness is then due. If any shareholder or other third party purchases any Stock pursuant to this Agreement, as a condition of the purchase, the purchaser agrees, prior to making any payment to the transferring Shareholder, that the purchaser shall pay to the Company that part of the purchase price equal to any indebtedness owed by the seller or his or her estate to the Company, whether or not such indebtedness is then due, and such payments shall be deemed payments on account of said purchase price or the promissory note issued by such shareholder with respect thereto.

ARTICLE 6
ENDORSEMENT OF CERTIFICATE

6.1 The Secretary of the Company shall endorse all certificates representing Stock owned by the Shareholder and all certificates representing Stock issued or transferred after this Agreement is entered into with the following legend:

The transfer of the shares represented by this certificate is restricted by the terms of a Shareholder's Agreement between the Shareholder and the Company dated _______________, 19___, a copy of which is on file in the office of the Company.

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ARTICLE 7
TERMINATION OF THIS AGREEMENT

7.1 Termination. This Agreement shall terminate at such time as the Common Stock of the Company is listed on a recognized United States national securities exchange or is traded in an over-the-counter market.

ARTICLE 8
AGREEMENT BINDING UPON TRANSFEREES

8.1 Except as otherwise provided for in this Agreement, in the event that any Stock is at any time disposed of or transferred to any party pursuant to the provisions hereof, the transferee shall take such Stock pursuant to all the terms, provisions, conditions, and covenants of this Agreement, and the transferee shall, as a condition precedent to the valid transfer of such Stock to such transferee, be bound, and agree (for and on behalf of himself or herself, his or her legal and personal representatives, his or her assigns, and his or her transferees, direct or indirect) in writing to be bound, by all provisions of this Agreement, including Article 9 in the case of a disposal or transfer from an Employee Shareholder.

ARTICLE 9
GRANT OF IRREVOCABLE PROXY

9.1 Definition of Total Disability. As used in this Agreement, the term "Total Disability" refers to a condition resulting from injury or illness to the Employee Shareholder which prevents the Employee Shareholder from performing the duties he or she has previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days (the "Disability Period"), and Total Disability shall be deemed to occur on the first day following the initial 365 day period (the "Total Disability Date"). In the event that the disabled Employee Shareholder returns to the Company within the Disability Period, but can fully perform the required services for less than thirty (30) days, and then relapses to his or her disability, the Disability Period shall not be considered to have been interrupted. In the event the Company has disability insurance protection on the Employee Shareholder, or the Employee Shareholder has an individual policy, the receipt of such disability insurance payments shall be deemed proof that the Employee Shareholder is disabled, and the waiting period and periods during which such Employee receives disability payments from such insurance, shall be deemed proof of the extent of time the Employee Shareholder has been disabled. Any dispute as to whether or not an Employee Shareholder is "Totally Disabled" and for how long he or she has been disabled as defined in this Agreement, shall be settled by mediation and/or arbitration in accordance with the provisions of this Agreement.

9.2 Grant of Irrevocable Proxy. The Employee Shareholder hereby grants to the Company an irrevocable proxy to vote all of the Stock held by the Employee Shareholder upon or subsequent to his or her death, Total Disability as defined above, or termination of employment with the Company, without regard to when or for what reason, if any, such employment shall terminate. Such proxy is coupled with an interest arising out of the terms of the Agreement, and such continues so long as this Agreement remains in full force and effect.

The irrevocable proxies described in this Article 9 shall remain in effect until the Company has issued and has outstanding shares of Common Stock held of record by 300 stockholders or more and the Common Stock of the Company is quoted on a recognized United States national securities exchange or the over-the-counter market.

This irrevocable proxy is coupled with an interest arising out of the terms of this Agreement, and continues as long as this Agreement remains in full force and effect.

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ARTICLE 10
GENERAL PROVISIONS

10.1 Mediation and Arbitration. All controversies, claims, disputes and matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by mediation and/or arbitration in accordance with this Article
10.1. The party who seeks resolution of a controversy, claim, dispute or other matter in question shall notify the other party in writing of the existence and subject matter hereof, and shall designate in such notices the names of three prospective mediators, each of whom shall be registered with the Seattle, Washington office of the American Arbitration Association. The recipient party shall select from such list one individual to act as a mediator in the dispute set forth by the notifying party. The parties agree to meet with said mediator in the City of Seattle within two weeks after the recipient party has received notice of the dispute and agree to utilize their best efforts and all expediency to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither party shall be bound by any recommendation of the mediator; however, any agreement reached during mediation shall be final and conclusive.

If the dispute is not resolved by such mediation, it shall be decided by mandatory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Either party may apply to the American Arbitration Association for a determination of the dispute set forth in the notification thereof by the originating party. The parties agree that the arbitration shall take place in the City of Seattle, and shall be governed by the laws of the State of Washington. The award entered or decision made by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Expense of mediation and/or arbitration shall be shared equally by both parties.

10.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties, their spouses, heirs, legal representatives, successors, transferees and assigns.

10.3 Specific Performance. It is agreed that the remedy at law for any breach of this Agreement would be inadequate, and that the aggrieved party shall be entitled to injunctive relief as well as damages for such breach.

10.4 Notices. All notices, offers, acceptance, waivers and other acts under this Agreement shall be in writing and shall be sufficiently given if delivered to the addresses in person or if mailed, postage prepaid, return receipt requested, to the addresses as follows or at any address that such party may designate by written notice to the other:

If to the Company:                  Jeffrey P. Bezos
                                    c/o Chuck Katz
                                    Perkins Coie
                                    1201 Third Avenue, 40th Floor
                                    Seattle, WA 98101-3099


If to Sheldon J. Kaphan             Sheldon J. Kaphan
                                    7748 32nd Ave. NE
                                    Seattle, WA 98115

10.5 Prior Agreements. This Agreement contains the entire agreement between the parties and supersedes all prior agreements entered into by the parties relative to the subject matter of this Agreement.

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10.6 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Jurisdiction over and venue of any suit arising out of or related to this Agreement shall be exclusively in the state and federal courts of King County, Washington.

10.7 New Shareholders. Nothing in this agreement shall restrict the Company from selling shares of its Stock to third persons on such terms and conditions as the Company's Board of Directors deems appropriate.

10.8 Severability. If for any reason any portion of this Agreement shall be held to be invalid or unenforceable, the holding of invalidity or unenforceability of that portion shall not affect any other portion of this Agreement and the remaining portions of this Agreement shall remain in full force and effect.

10.9 Counsel. The Shareholder acknowledges that he or she is aware of his or her right to have independent counsel review this Agreement concerning his or her rights and obligations under this Agreement prior to his or her execution of it. The Shareholder represents: (i) that he or she has consulted independent counsel, or by executing this Agreement, waives his or her right to consult with an attorney concerning this Agreement; and (ii) that the Shareholder understands the terms of this Agreement and will be bound by this Agreement.

10.10 Investment and Other Warranties. Each Shareholder, by his or her execution of this Agreement, acknowledges and understands that, in connection with the Stock now or hereafter owned by him or her:

(a) the Shareholder has been fully informed as to the circumstances under which he or she is required to hold the Stock pursuant to the requirements of the Securities Act of 1933, as amended (the "Act");

(b) the Company has informed the Shareholder that such Stock is not registered under the Act and may not be transferred or otherwise disposed of unless such Stock is subsequently registered under the Act or unless an exemption from such registration is available; and

(c) the Shareholder has been informed that the Stock is subject to this Agreement and that a restrictive legend, referring to the restrictions set forth herein, has or will be placed upon the certificate(s) evidencing such Stock.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

AMAZON.COM, INC.

By:            Jeff P. Bezos

Name:          Jeffrey P. Bezos

Title:         President

Date:          August 8, 1995

SHAREHOLDER

Signature:     Sheldon J. Kaphan

Name:          Sheldon J. Kaphan

Title:         ____________________________________

Date:          9 August 1995

SPOUSAL CONSENT

By execution of this Agreement, _______________________ hereby agrees and consents to all the terms and conditions of this Agreement and agrees to be bound by such terms and conditions, and does hereby appoint his or her spouse as attorney-in-fact in all respects with regard to the Company, its affairs, and interest in the Company's Stock. _______________________ has been informed of his or her right to obtain independent legal counsel concerning this Shareholder's Agreement and the rights and obligations provided for in this Agreement, and by execution of this Agreement, acknowledges having either obtained such independent counsel or having waived the same.

By: _______________________

___________________, Individual

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EXHIBIT 10.16

SHAREHOLDER'S AGREEMENT
OF
AMAZON.COM, INC.

THIS SHAREHOLDER'S AGREEMENT (this "Agreement"), is made and entered into as of this 26th day of November, 1995, by and between Amazon.com, Inc. (the "Company"), a Delaware corporation, and Tom A. Alberg (the "Shareholder").

SELECT only one of the following:

______ For purposes of this Agreement, the Shareholder is an employee shareholder (an "Employee Shareholder") and is bound to all the provisions of this agreement including Article 9. Shareholder's Initials:________

x For purposes of this Agreement, the Shareholder is not an Employee Shareholder and is not bound to the provisions of Article 9 of this Agreement. Shareholder's Initials: TAA

WHEREAS, the parties hereto deem it in their best interest to provide for ultimate ownership of the shares of the Company (the "Stock"), or rights thereto, including the right to transfer such Stock and the right to purchase such Stock upon the occurrence of certain events;

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual promises set forth herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
RESTRICTION ON DISPOSITION

1.1 Disposition Prohibited. The Shareholder shall not dispose of any of his or her Stock except as permitted by this Agreement, and any such attempted disposition shall be void and shall not be recognized or registered upon the books of the Company.

1.2 Definition of "Dispose". The term "dispose" includes, but is not limited to, the acts of selling, assigning, transferring, pledging, encumbering, giving away, devising, and any other form of conveying, including conveyances caused by marital separation, divorce, receivership, or bankruptcy, whether voluntary or involuntary or by operation of law.

1.3 Notice of Involuntary Disposition. The Shareholder, or his or her personal representative, shall notify the Company immediately upon the occurrence of an involuntary disposal of his or her Stock. The Company shall notify the other shareholders of any such involuntary transfer.

1.4 Role of Offeror or Transferor. If the Company is entitled to elect to purchase or redeem any Stock owned by the Shareholder hereunder, the Shareholder shall not participate in or interfere with, and shall abstain from any vote upon (but shall be present for the purpose of meeting any quorum requirement), any action to be taken by the Company in effecting such an election. The Shareholder, or the legal representative of the Shareholder, shall cooperate in effecting all company action and execute and deliver all papers as may be necessary to consummate any purchase by the Company of such Stock. Unless otherwise set forth herein, the option of the Company to purchase or redeem Stock owned by the Shareholder shall be exercised only upon a majority vote of the Board of Directors.

Page 1

ARTICLE 2
DISPOSITIONS DURING LIFE

2.1 Voluntary Disposition.

(a) Disposition of Stock prior to and on December 31, 1999. This Agreement prohibits the Shareholder from disposing of any Stock until after December 31, 1999, unless prior written consent is received from the Company, which consent can be given only upon a majority vote of the Board of Directors.

(b) Disposition of Stock after December 31, 1999. In the event that the Shareholder ("the Offering Shareholder") receives a bona fide offer (the "Offer") after December 31, 1999, to purchase all or any portion of his or her Stock (the "Shares") and the Offering Shareholder desires to sell his or her Shares pursuant to the terms of the Offer, then the Offering Shareholder shall forthwith deliver to the Company written notice of such offer. Such written notice shall contain the name and address of the bona fide offeror, and the bona fide purchase price offered for the Shares and all other terms of such offer. The Company shall convey such notice to each other shareholder who is at that time a current shareholder of the Company ("the Remaining Shareholders"). Within sixty (60) days after receipt by the Company of the written notice of the Offer (the "Option Period"), the Company shall have the right to purchase or redeem all of the Shares included in such Offer either upon the price and terms set forth in the Offer or, at the election of the Company, upon the price and terms described in Article 5. A vote by the majority of the members of the Board of Directors shall be required to exercise or waive the option, except that a Director who is the proposed transferor may not participate in the voting, and shall not be included in the number of Directors when computing whether a majority vote of the member of the Board was obtained. If the Company does not exercise such right within the Option Period, or exercises such right only as to a portion of such shares, the Remaining Shareholders shall have the right for a period of thirty (30) days following the end of the Option Period ("the Second Option Period") to purchase all of the Shares included in the Offer that are not purchased by the Company, upon the same terms as are available to the Company as follows:

(1) Each Remaining Shareholder shall, during the Second Option Period, advise the Secretary of the Company whether such Remaining Shareholder wishes to exercise his or her right to purchase Shares and the maximum number of Shares that he or she wishes to purchase.

(2) If the aggregate of the maximum number of Shares covered by the Offer to be purchased by all Remaining Shareholders exceeds the number of Shares available for purchase by them, the number of Shares offered shall be apportioned pro rata among the Remaining Shareholders electing to purchase based upon a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders electing to purchase. Fractions resulting in any such computation shall be rounded to the next whole number. If such computation results in a purchase of less than all Shares offered by the Offering Shareholder, then the difference between the number of Shares agreed to be purchased and the number of Shares offered shall be allocated to those Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to such Remaining Shareholders in the first allocation. Such allocation shall be based on a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to them. For the purpose of accomplishing the allocations set forth herein, the Secretary of the Company shall make the allocations and his or her determination as to the allocations shall be conclusive.

Page 2

(3) If the maximum number of Shares to be purchased by the Remaining Shareholders is less than the Shares offered by the Offering Shareholder available for purchase by the Remaining Shareholders, or after successive allocations each Remaining Shareholder has been allocated the maximum number of Shares agreed to be purchased by him or her, and all Shares offered by the Offering Shareholder are still not allocated to a Remaining Shareholder, then the Company shall have the option to purchase the unallocated portion within the Second Option Period upon the same terms as were available to the Company in the Option Period.

(4) If neither the Company nor the Remaining Shareholders exercises the right to purchase the entirety of the Shares within the time provided for such exercise, the Offering Shareholder shall be free to sell any remaining Shares so offered pursuant to the Offer, and only pursuant to the Offer, for a period of sixty (60) days following the end of the Second Option Period, provided, however, that the transferee of those Shares must first agree in writing to be bound by the terms and conditions of this Agreement that apply to the Shareholder. If no such sale is made by the Offering Shareholder within such 60-day period, then the restrictions set forth in this Agreement shall thereafter continue to apply to the Shares and no Stock, nor any interest therein, shall thereafter be disposed, whether pursuant to an Offer or otherwise, without again first complying with all of the provisions of this Agreement.

2.2 This section remains only so as to preserve the numbering in this Agreement.

2.3 Closing. The closing of any purchase and sale under this Article 2 shall take place at the principal office of the Company at the date designated by the Company, which shall not be more than ninety (90) days after the written consent of the Company pursuant to Section 2.1(a) or ninety (90) days after the end of the Second Option Period pursuant to Section 2.1(b).

ARTICLE 3
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 4
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 5
VALUATION AND PAYMENT OF TERMS

5.1 Agreed Valuation and Terms. For purposes of Article 2, the value per share of the Stock and the terms of the purchase or redemption shall be determined annually by a majority vote of the Company's Board of Directors at the Company's annual Directors' meeting, which is scheduled for December 31 of each year, or at any other time prior to the closing of the proposed purchase or redemption. If the necessary vote cannot be obtained or if the Offering Shareholder objects to the value established by the Company's Board of Directors, then the value per share shall be established pursuant to Section 5.4, and the terms of purchase or redemption shall be those most recently adopted by the Directors pursuant to this Section 5.1, or if no such terms have been so adopted or if the Offering Shareholder objects to such terms, then those terms described in Section 5.2 below.

5.2 Initial Valuation and Terms.
a) The initial value per share of the Company's Stock is the book value.

b) The terms for payment are a down payment of ten percent (10%) of the purchase or redemption price (or more at the purchaser's option) with the balance to be paid in sixty (60) equal monthly installments of principal and interest including interest on the declining principal balance calculated so that the entire principal balances of the note shall be paid in full on the fifth anniversary of the note.

Page 3

5.3 Book Value. If the "book value" shall be used as the measurement of value, per share, the following definition of "book value" shall apply:

Capital Stock plus retained earnings plus additional paid-in capital as of the last day of the month preceding the date of purchase ("Valuation Date"), as determined by the accountant regularly employed by the Company or, if no accountant is regularly employed by the Company, then by an accountant selected by mutual agreement of the parties.

5.4 Alternative Appraisal Value. If a valuation as provided for in Section 5.1 is not recorded for a particular year, the last previous valuation shall be used; except that if no valuation is recorded within eighteen (18) months preceding the proposed disposition, then in the event that the parties cannot agree to use the last previous recorded valuation, the value per share shall be determined by three appraisers. Within fifteen (15) days of the date that use of the last previous recorded valuation was rejected, the rejecting party shall select an appraiser and notify the other of the appraiser's name and address. Within fifteen (15) days after receipt of that notice, the remaining party shall select an appraiser and notify the first party of the name and address of such appraiser. If any party is unable to or unwilling to agree upon an appraiser within fifteen (15) days of the time designated for such selection, then the appraiser shall be selected by the presiding judge of the King County Superior Court. The two appraisers selected by the parties shall promptly appoint a third appraiser as soon as practical. The three appraisers shall evaluate and agree upon the value per share of the Stock as soon as practical after their selection; the vote of two such appraisers shall be sufficient to establish the value per share. The appraisers need not be licensed appraisers but should be experienced in business matters and shall be independent of all parties. Each party shall pay the fee charged for that party's appraiser; the fee charged by the third appraiser and any costs related to the appraisal shall be borne equally by each party.

5.5 Note for Unpaid Balance. Unless otherwise expressly provided herein, any unpaid balance owing under this Agreement shall be evidenced by an installment promissory note executed by the purchaser to the order of the seller providing for an interest rate equal to the prime rate of Bank of America on the business day prior to the closing date. The note shall give the purchaser the option of prepaying the principal in full or in part at any time without penalty.

5.6 Setoff. In the event the Company purchases any Stock pursuant to this Agreement, the Company shall set off against the purchase price for the Stock any indebtedness owed to the Company by such Shareholder or his or her estate, whether or not such indebtedness is then due. If any shareholder or other third party purchases any Stock pursuant to this Agreement, as a condition of the purchase, the purchaser agrees, prior to making any payment to the transferring Shareholder, that the purchaser shall pay to the Company that part of the purchase price equal to any indebtedness owed by the seller or his or her estate to the Company, whether or not such indebtedness is then due, and such payments shall be deemed payments on account of said purchase price or the promissory note issued by such shareholder with respect thereto.

ARTICLE 6
ENDORSEMENT OF CERTIFICATE

6.1 The Secretary of the Company shall endorse all certificates representing Stock owned by the Shareholder and all certificates representing Stock issued or transferred after this Agreement is entered into with the following legend:

The transfer of the shares represented by this certificate is restricted by the terms of a Shareholder's Agreement between the Shareholder and the Company dated 11/26 1995, a copy of which is on file in the office of the Company.

Page 4

ARTICLE 7
TERMINATION OF THIS AGREEMENT

7.1 Termination. This Agreement shall terminate at such time as the Common Stock of the Company is listed on a recognized United States national securities exchange or is traded in an over-the-counter market.

ARTICLE 8
AGREEMENT BINDING UPON TRANSFEREES

8.1 Except as otherwise provided for in this Agreement, in the event that any Stock is at any time disposed of or transferred to any party pursuant to the provisions hereof, the transferee shall take such Stock pursuant to all the terms, provisions, conditions, and covenants of this Agreement, and the transferee shall, as a condition precedent to the valid transfer of such Stock to such transferee, be bound, and agree (for and on behalf of himself or herself, his or her legal and personal representatives, his or her assigns, and his or her transferees, direct or indirect) in writing to be bound, by all provisions of this Agreement, including Article 9 in the case of a disposal or transfer from an Employee Shareholder.

ARTICLE 9
GRANT OF IRREVOCABLE PROXY

9.1 Definition of Total Disability. As used in this Agreement, the term "Total Disability" refers to a condition resulting from injury or illness to the Employee Shareholder which prevents the Employee Shareholder from performing the duties he or she has previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days (the "Disability Period"), and Total Disability shall be deemed to occur on the first day following the initial 365 day period (the "Total Disability Date"). In the event that the disabled Employee Shareholder returns to the Company within the Disability Period, but can fully perform the required services for less than thirty (30) days, and then relapses to his or her disability, the Disability Period shall not be considered to have been interrupted. In the event the Company has disability insurance protection on the Employee Shareholder, or the Employee Shareholder has an individual policy, the receipt of such disability insurance payments shall be deemed proof that the Employee Shareholder is disabled, and the waiting period and periods during which such Employee receives disability payments from such insurance, shall be deemed proof of the extent of time the Employee Shareholder has been disabled. Any dispute as to whether or not an Employee Shareholder is "Totally Disabled" and for how long he or she has been disabled as defined in this Agreement, shall be settled by mediation and/or arbitration in accordance with the provisions of this Agreement.

9.2 Grant of Irrevocable Proxy. The Employee Shareholder hereby grants to the Company an irrevocable proxy to vote all of the Stock held by the Employee Shareholder upon or subsequent to his or her death, Total Disability as defined above, or termination of employment with the Company, without regard to when or for what reason, if any, such employment shall terminate. Such proxy is coupled with an interest arising out of the terms of the Agreement, and such continues so long as this Agreement remains in full force and effect.

The irrevocable proxies described in this Article 9 shall remain in effect until the Company has issued and has outstanding shares of Common Stock held of record by 300 stockholders or more and the Common Stock of the Company is quoted on a recognized United States national securities exchange or the over-the-counter market.

This irrevocable proxy is coupled with an interest arising out of the terms of this Agreement, and continues as long as this Agreement remains in full force and effect.

Page 5

ARTICLE 10
GENERAL PROVISIONS

10.1 Mediation and Arbitration. All controversies, claims, disputes and matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by mediation and/or arbitration in accordance with this Article
10.1. The party who seeks resolution of a controversy, claim, dispute or other matter in question shall notify the other party in writing of the existence and subject matter hereof, and shall designate in such notices the names of three prospective mediators, each of whom shall be registered with the Seattle, Washington office of the American Arbitration Association. The recipient party shall select from such list one individual to act as a mediator in the dispute set forth by the notifying party. The parties agree to meet with said mediator in the City of Seattle within two weeks after the recipient party has received notice of the dispute and agree to utilize their best efforts and all expediency to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither party shall be bound by any recommendation of the mediator; however, any agreement reached during mediation shall be final and conclusive.

If the dispute is not resolved by such mediation, it shall be decided by mandatory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Either party may apply to the American Arbitration Association for a determination of the dispute set forth in the notification thereof by the originating party. The parties agree that the arbitration shall take place in the City of Seattle, and shall be governed by the laws of the State of Washington. The award entered or decision made by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Expense of mediation and/or arbitration shall be shared equally by both parties.

10.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties, their spouses, heirs, legal representatives, successors, transferees and assigns.

10.3 Specific Performance. It is agreed that the remedy at law for any breach of this Agreement would be inadequate, and that the aggrieved party shall be entitled to injunctive relief as well as damages for such breach.

10.4 Notices. All notices, offers, acceptance, waivers and other acts under this Agreement shall be in writing and shall be sufficiently given if delivered to the addresses in person or if mailed, postage prepaid, return receipt requested, to the addresses as follows or at any address that such party may designate by written notice to the other:

If to the Company:                  Jeffrey P. Bezos
                                    c/o Chuck Katz
                                    Perkins Coie
                                    1201 Third Avenue, 40th Floor
                                    Seattle, WA 98101-3099


If to Tom A. Alberg                 Tom A. Alberg
                                    3404 E. Ward
                                    Seattle, WA 98112

10.5 Prior Agreements. This Agreement contains the entire agreement between the parties and supersedes all prior agreements entered into by the parties relative to the subject matter of this Agreement.

Page 6

10.6 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Jurisdiction over and venue of any suit arising out of or related to this Agreement shall be exclusively in the state and federal courts of King County, Washington.

10.7 New Shareholders. Nothing in this agreement shall restrict the Company from selling shares of its Stock to third persons on such terms and conditions as the Company's Board of Directors deems appropriate.

10.8 Severability. If for any reason any portion of this Agreement shall be held to be invalid or unenforceable, the holding of invalidity or unenforceability of that portion shall not affect any other portion of this Agreement and the remaining portions of this Agreement shall remain in full force and effect.

10.9 Counsel. The Shareholder acknowledges that he or she is aware of his or her right to have independent counsel review this Agreement concerning his or her rights and obligations under this Agreement prior to his or her execution of it. The Shareholder represents: (i) that he or she has consulted independent counsel, or by executing this Agreement, waives his or her right to consult with an attorney concerning this Agreement; and (ii) that the Shareholder understands the terms of this Agreement and will be bound by this Agreement.

10.10 Investment and Other Warranties. Each Shareholder, by his or her execution of this Agreement, acknowledges and understands that, in connection with the Stock now or hereafter owned by him or her:

(a) the Shareholder has been fully informed as to the circumstances under which he or she is required to hold the Stock pursuant to the requirements of the Securities Act of 1933, as amended (the "Act");

(b) the Company has informed the Shareholder that such Stock is not registered under the Act and may not be transferred or otherwise disposed of unless such Stock is subsequently registered under the Act or unless an exemption from such registration is available; and

(c) the Shareholder has been informed that the Stock is subject to this Agreement and that a restrictive legend, referring to the restrictions set forth herein, has or will be placed upon the certificate(s) evidencing such Stock.

Page 7

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

AMAZON.COM, INC.

By:            Jeff P. Bezos

Name:          Jeffrey P. Bezos

Title:         President

Date:          12/6/95

SHAREHOLDER

Signature:     Tom A. Alberg

Name:          Tom A. Alberg

Title:         ____________________________________

Date:          11/27/95

SPOUSAL CONSENT

By execution of this Agreement, Judith Beck hereby agrees and consents to all the terms and conditions of this Agreement and agrees to be bound by such terms and conditions, and does hereby appoint his or her spouse as attorney-in-fact in all respects with regard to the Company, its affairs, and interest in the Company's Stock. Judith Beck has been informed of his or her right to obtain independent legal counsel concerning this Shareholder's Agreement and the rights and obligations provided for in this Agreement, and by execution of this Agreement, acknowledges having either obtained such independent counsel or having waived the same.

By: Judith Beck

Judith Beck, Individual

Page 8

EXHIBIT 10.18

SHAREHOLDER'S AGREEMENT
OF
AMAZON.COM, INC.

THIS SHAREHOLDER'S AGREEMENT (this "Agreement"), is made and entered into as of this 10th day of July 1996 by and between Amazon.com, Inc. (the "Company"), a Delaware corporation, and Scott Lipsky (the "Shareholder").

SELECT only one of the following:

x For purposes of this Agreement, the Shareholder is an employee shareholder (an "Employee Shareholder") and is bound to all the provisions of this agreement including Article 9. Shareholder's Initials: SL

______ For purposes of this Agreement, the Shareholder is not an Employee Shareholder and is not bound to the provisions of Article 9 of this Agreement. Shareholder's Initials:________

WHEREAS, the parties hereto deem it in their best interest to provide for ultimate ownership of the shares of the Company (the "Stock"), or rights thereto, including the right to transfer such Stock and the right to purchase such Stock upon the occurrence of certain events;

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual promises set forth herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
RESTRICTION ON DISPOSITION

1.1 Disposition Prohibited. The Shareholder shall not dispose of any of his or her Stock except as permitted by this Agreement, and any such attempted disposition shall be void and shall not be recognized or registered upon the books of the Company.

1.2 Definition of "Dispose". The term "dispose" includes, but is not limited to, the acts of selling, assigning, transferring, pledging, encumbering, giving away, devising, and any other form of conveying, including conveyances caused by marital separation, divorce, receivership, or bankruptcy, whether voluntary or involuntary or by operation of law.

1.3 Notice of Involuntary Disposition. The Shareholder, or his or her personal representative, shall notify the Company immediately upon the occurrence of an involuntary disposal of his or her Stock. The Company shall notify the other shareholders of any such involuntary transfer.

1.4 Role of Offeror or Transferor. If the Company is entitled to elect to purchase or redeem any Stock owned by the Shareholder hereunder, the Shareholder shall not participate in or interfere with, and shall abstain from any vote upon (but shall be present for the purpose of meeting any quorum requirement), any action to be taken by the Company in effecting such an election. The Shareholder, or the legal representative of the Shareholder, shall cooperate in effecting all company action and execute and deliver all papers as may be necessary to consummate any purchase by the Company of such Stock. Unless otherwise set forth herein, the option of the Company to purchase or redeem Stock owned by the Shareholder shall be exercised only upon a majority vote of the Board of Directors.

Page 1

ARTICLE 2
DISPOSITIONS DURING LIFE

2.1 Voluntary Disposition.

(a) Disposition of Stock prior to and on December 31, 1999. This Agreement prohibits the Shareholder from disposing of any Stock until after December 31, 1999, unless prior written consent is received from the Company, which consent can be given only upon a majority vote of the Board of Directors.

(b) Disposition of Stock after December 31, 1999. In the event that the Shareholder ("the Offering Shareholder") receives a bona fide offer (the "Offer") after December 31, 1999, to purchase all or any portion of his or her Stock (the "Shares") and the Offering Shareholder desires to sell his or her Shares pursuant to the terms of the Offer, then the Offering Shareholder shall forthwith deliver to the Company written notice of such offer. Such written notice shall contain the name and address of the bona fide offeror, and the bona fide purchase price offered for the Shares and all other terms of such offer. The Company shall convey such notice to each other shareholder who is at that time a current shareholder of the Company ("the Remaining Shareholders"). Within sixty (60) days after receipt by the Company of the written notice of the Offer (the "Option Period"), the Company shall have the right to purchase or redeem all of the Shares included in such Offer either upon the price and terms set forth in the Offer or, at the election of the Company, upon the price and terms described in Article 5. A vote by the majority of the members of the Board of Directors shall be required to exercise or waive the option, except that a Director who is the proposed transferor may not participate in the voting, and shall not be included in the number of Directors when computing whether a majority vote of the member of the Board was obtained. If the Company does not exercise such right within the Option Period, or exercises such right only as to a portion of such shares, the Remaining Shareholders shall have the right for a period of thirty (30) days following the end of the Option Period ("the Second Option Period") to purchase all of the Shares included in the Offer that are not purchased by the Company, upon the same terms as are available to the Company as follows:

(1) Each Remaining Shareholder shall, during the Second Option Period, advise the Secretary of the Company whether such Remaining Shareholder wishes to exercise his or her right to purchase Shares and the maximum number of Shares that he or she wishes to purchase.

(2) If the aggregate of the maximum number of Shares covered by the Offer to be purchased by all Remaining Shareholders exceeds the number of Shares available for purchase by them, the number of Shares offered shall be apportioned pro rata among the Remaining Shareholders electing to purchase based upon a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders electing to purchase. Fractions resulting in any such computation shall be rounded to the next whole number. If such computation results in a purchase of less than all Shares offered by the Offering Shareholder, then the difference between the number of Shares agreed to be purchased and the number of Shares offered shall be allocated to those Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to such Remaining Shareholders in the first allocation. Such allocation shall be based on a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to them. For the purpose of accomplishing the allocations set forth herein, the Secretary of the Company shall make the allocations and his or her determination as to the allocations shall be conclusive.

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(3) If the maximum number of Shares to be purchased by the Remaining Shareholders is less than the Shares offered by the Offering Shareholder available for purchase by the Remaining Shareholders, or after successive allocations each Remaining Shareholder has been allocated the maximum number of Shares agreed to be purchased by him or her, and all Shares offered by the Offering Shareholder are still not allocated to a Remaining Shareholder, then the Company shall have the option to purchase the unallocated portion within the Second Option Period upon the same terms as were available to the Company in the Option Period.

(4) If neither the Company nor the Remaining Shareholders exercises the right to purchase the entirety of the Shares within the time provided for such exercise, the Offering Shareholder shall be free to sell any remaining Shares so offered pursuant to the Offer, and only pursuant to the Offer, for a period of sixty (60) days following the end of the Second Option Period, provided, however, that the transferee of those Shares must first agree in writing to be bound by the terms and conditions of this Agreement that apply to the Shareholder. If no such sale is made by the Offering Shareholder within such 60-day period, then the restrictions set forth in this Agreement shall thereafter continue to apply to the Shares and no Stock, nor any interest therein, shall thereafter be disposed, whether pursuant to an Offer or otherwise, without again first complying with all of the provisions of this Agreement.

2.2 This section remains only so as to preserve the numbering in this Agreement.

2.3 Closing. The closing of any purchase and sale under this Article 2 shall take place at the principal office of the Company at the date designated by the Company, which shall not be more than ninety (90) days after the written consent of the Company pursuant to Section 2.1(a) or ninety (90) days after the end of the Second Option Period pursuant to Section 2.1(b).

ARTICLE 3
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 4
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 5
VALUATION AND PAYMENT OF TERMS

5.1 Agreed Valuation and Terms. For purposes of Article 2, the value per share of the Stock and the terms of the purchase or redemption shall be determined annually by a majority vote of the Company's Board of Directors at the Company's annual Directors' meeting, which is scheduled for December 31 of each year, or at any other time prior to the closing of the proposed purchase or redemption. If the necessary vote cannot be obtained or if the Offering Shareholder objects to the value established by the Company's Board of Directors, then the value per share shall be established pursuant to Section 5.4, and the terms of purchase or redemption shall be those most recently adopted by the Directors pursuant to this Section 5.1, or if no such terms have been so adopted or if the Offering Shareholder objects to such terms, then those terms described in Section 5.2 below.

5.2 Initial Valuation and Terms.
a) The initial value per share of the Company's Stock is the book value.

b) The terms for payment are a down payment of ten percent (10%) of the purchase or redemption price (or more at the purchaser's option) with the balance to be paid in sixty (60) equal monthly installments of principal and interest including interest on the declining principal balance calculated so that the entire principal balances of the note shall be paid in full on the fifth anniversary of the note.

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5.3 Book Value. If the "book value" shall be used as the measurement of value, per share, the following definition of "book value" shall apply:

Capital Stock plus retained earnings plus additional paid-in capital as of the last day of the month preceding the date of purchase ("Valuation Date"), as determined by the accountant regularly employed by the Company or, if no accountant is regularly employed by the Company, then by an accountant selected by mutual agreement of the parties.

5.4 Alternative Appraisal Value. If a valuation as provided for in Section 5.1 is not recorded for a particular year, the last previous valuation shall be used; except that if no valuation is recorded within eighteen (18) months preceding the proposed disposition, then in the event that the parties cannot agree to use the last previous recorded valuation, the value per share shall be determined by three appraisers. Within fifteen (15) days of the date that use of the last previous recorded valuation was rejected, the rejecting party shall select an appraiser and notify the other of the appraiser's name and address. Within fifteen (15) days after receipt of that notice, the remaining party shall select an appraiser and notify the first party of the name and address of such appraiser. If any party is unable to or unwilling to agree upon an appraiser within fifteen (15) days of the time designated for such selection, then the appraiser shall be selected by the presiding judge of the King County Superior Court. The two appraisers selected by the parties shall promptly appoint a third appraiser as soon as practical. The three appraisers shall evaluate and agree upon the value per share of the Stock as soon as practical after their selection; the vote of two such appraisers shall be sufficient to establish the value per share. The appraisers need not be licensed appraisers but should be experienced in business matters and shall be independent of all parties. Each party shall pay the fee charged for that party's appraiser; the fee charged by the third appraiser and any costs related to the appraisal shall be borne equally by each party.

5.5 Note for Unpaid Balance. Unless otherwise expressly provided herein, any unpaid balance owing under this Agreement shall be evidenced by an installment promissory note executed by the purchaser to the order of the seller providing for an interest rate equal to the prime rate of Bank of America on the business day prior to the closing date. The note shall give the purchaser the option of prepaying the principal in full or in part at any time without penalty.

5.6 Setoff. In the event the Company purchases any Stock pursuant to this Agreement, the Company shall set off against the purchase price for the Stock any indebtedness owed to the Company by such Shareholder or his or her estate, whether or not such indebtedness is then due. If any shareholder or other third party purchases any Stock pursuant to this Agreement, as a condition of the purchase, the purchaser agrees, prior to making any payment to the transferring Shareholder, that the purchaser shall pay to the Company that part of the purchase price equal to any indebtedness owed by the seller or his or her estate to the Company, whether or not such indebtedness is then due, and such payments shall be deemed payments on account of said purchase price or the promissory note issued by such shareholder with respect thereto.

ARTICLE 6
ENDORSEMENT OF CERTIFICATE

6.1 The Secretary of the Company shall endorse all certificates representing Stock owned by the Shareholder and all certificates representing Stock issued or transferred after this Agreement is entered into with the following legend:

The transfer of the shares represented by this certificate is restricted by the terms of a Shareholder's Agreement between the Shareholder and the Company dated _______________, 19___, a copy of which is on file in the office of the Company.

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ARTICLE 7
TERMINATION OF THIS AGREEMENT

7.1 Termination. This Agreement shall terminate at such time as the Common Stock of the Company is listed on a recognized United States national securities exchange or is traded in an over-the-counter market.

ARTICLE 8
AGREEMENT BINDING UPON TRANSFEREES

8.1 Except as otherwise provided for in this Agreement, in the event that any Stock is at any time disposed of or transferred to any party pursuant to the provisions hereof, the transferee shall take such Stock pursuant to all the terms, provisions, conditions, and covenants of this Agreement, and the transferee shall, as a condition precedent to the valid transfer of such Stock to such transferee, be bound, and agree (for and on behalf of himself or herself, his or her legal and personal representatives, his or her assigns, and his or her transferees, direct or indirect) in writing to be bound, by all provisions of this Agreement, including Article 9 in the case of a disposal or transfer from an Employee Shareholder.

ARTICLE 9
GRANT OF IRREVOCABLE PROXY

9.1 Definition of Total Disability. As used in this Agreement, the term "Total Disability" refers to a condition resulting from injury or illness to the Employee Shareholder which prevents the Employee Shareholder from performing the duties he or she has previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days (the "Disability Period"), and Total Disability shall be deemed to occur on the first day following the initial 365 day period (the "Total Disability Date"). In the event that the disabled Employee Shareholder returns to the Company within the Disability Period, but can fully perform the required services for less than thirty (30) days, and then relapses to his or her disability, the Disability Period shall not be considered to have been interrupted. In the event the Company has disability insurance protection on the Employee Shareholder, or the Employee Shareholder has an individual policy, the receipt of such disability insurance payments shall be deemed proof that the Employee Shareholder is disabled, and the waiting period and periods during which such Employee receives disability payments from such insurance, shall be deemed proof of the extent of time the Employee Shareholder has been disabled. Any dispute as to whether or not an Employee Shareholder is "Totally Disabled" and for how long he or she has been disabled as defined in this Agreement, shall be settled by mediation and/or arbitration in accordance with the provisions of this Agreement.

9.2 Grant of Irrevocable Proxy. The Employee Shareholder hereby grants to the Company an irrevocable proxy to vote all of the Stock held by the Employee Shareholder upon or subsequent to his or her death, Total Disability as defined above, or termination of employment with the Company, without regard to when or for what reason, if any, such employment shall terminate. Such proxy is coupled with an interest arising out of the terms of the Agreement, and such continues so long as this Agreement remains in full force and effect.

The irrevocable proxies described in this Article 9 shall remain in effect until the Company has issued and has outstanding shares of Common Stock held of record by 300 stockholders or more and the Common Stock of the Company is quoted on a recognized United States national securities exchange or the over-the-counter market.

This irrevocable proxy is coupled with an interest arising out of the terms of this Agreement, and continues as long as this Agreement remains in full force and effect.

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ARTICLE 10
GENERAL PROVISIONS

10.1 Mediation and Arbitration. All controversies, claims, disputes and matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by mediation and/or arbitration in accordance with this Article
10.1. The party who seeks resolution of a controversy, claim, dispute or other matter in question shall notify the other party in writing of the existence and subject matter hereof, and shall designate in such notices the names of three prospective mediators, each of whom shall be registered with the Seattle, Washington office of the American Arbitration Association. The recipient party shall select from such list one individual to act as a mediator in the dispute set forth by the notifying party. The parties agree to meet with said mediator in the City of Seattle within two weeks after the recipient party has received notice of the dispute and agree to utilize their best efforts and all expediency to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither party shall be bound by any recommendation of the mediator; however, any agreement reached during mediation shall be final and conclusive.

If the dispute is not resolved by such mediation, it shall be decided by mandatory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Either party may apply to the American Arbitration Association for a determination of the dispute set forth in the notification thereof by the originating party. The parties agree that the arbitration shall take place in the City of Seattle, and shall be governed by the laws of the State of Washington. The award entered or decision made by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Expense of mediation and/or arbitration shall be shared equally by both parties.

10.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties, their spouses, heirs, legal representatives, successors, transferees and assigns.

10.3 Specific Performance. It is agreed that the remedy at law for any breach of this Agreement would be inadequate, and that the aggrieved party shall be entitled to injunctive relief as well as damages for such breach.

10.4 Notices. All notices, offers, acceptance, waivers and other acts under this Agreement shall be in writing and shall be sufficiently given if delivered to the addresses in person or if mailed, postage prepaid, return receipt requested, to the addresses as follows or at any address that such party may designate by written notice to the other:

If to the Company:                  Jeffrey P. Bezos
                                    c/o Chuck Katz
                                    Perkins Coie
                                    1201 Third Avenue, 40th Floor
                                    Seattle, WA 98101-3099


If to
       -------------------:         -------------------------------------------

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

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


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10.5 Prior Agreements. This Agreement contains the entire agreement between the parties and supersedes all prior agreements entered into by the parties relative to the subject matter of this Agreement.

10.6 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Jurisdiction over and venue of any suit arising out of or related to this Agreement shall be exclusively in the state and federal courts of King County, Washington.

10.7 New Shareholders. Nothing in this agreement shall restrict the Company from selling shares of its Stock to third persons on such terms and conditions as the Company's Board of Directors deems appropriate.

10.8 Severability. If for any reason any portion of this Agreement shall be held to be invalid or unenforceable, the holding of invalidity or unenforceability of that portion shall not affect any other portion of this Agreement and the remaining portions of this Agreement shall remain in full force and effect.

10.9 Counsel. The Shareholder acknowledges that he or she is aware of his or her right to have independent counsel review this Agreement concerning his or her rights and obligations under this Agreement prior to his or her execution of it. The Shareholder represents: (i) that he or she has consulted independent counsel, or by executing this Agreement, waives his or her right to consult with an attorney concerning this Agreement; and (ii) that the Shareholder understands the terms of this Agreement and will be bound by this Agreement.

10.10 Investment and Other Warranties. Each Shareholder, by his or her execution of this Agreement, acknowledges and understands that, in connection with the Stock now or hereafter owned by him or her:

(a) the Shareholder has been fully informed as to the circumstances under which he or she is required to hold the Stock pursuant to the requirements of the Securities Act of 1933, as amended (the "Act");

(b) the Company has informed the Shareholder that such Stock is not registered under the Act and may not be transferred or otherwise disposed of unless such Stock is subsequently registered under the Act or unless an exemption from such registration is available; and

(c) the Shareholder has been informed that the Stock is subject to this Agreement and that a restrictive legend, referring to the restrictions set forth herein, has or will be placed upon the certificate(s) evidencing such Stock.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

AMAZON.COM, INC.

By:            ____________________________________

Name:          ____________________________________

Title:         ____________________________________

Date:          ____________________________________

SHAREHOLDER

Signature:     Scott Lipsky

Name:          Scott Lipsky

Title:         ____________________________________

Date:          7/10/96

SPOUSAL CONSENT

By execution of this Agreement, _______________________ hereby agrees and consents to all the terms and conditions of this Agreement and agrees to be bound by such terms and conditions, and does hereby appoint his or her spouse as attorney-in-fact in all respects with regard to the Company, its affairs, and interest in the Company's Stock. _______________________ has been informed of his or her right to obtain independent legal counsel concerning this Shareholder's Agreement and the rights and obligations provided for in this Agreement, and by execution of this Agreement, acknowledges having either obtained such independent counsel or having waived the same.

By: _______________________

___________________, Individual

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EXHIBIT 10.19

SHAREHOLDER'S AGREEMENT
OF
AMAZON.COM, INC.

THIS SHAREHOLDER'S AGREEMENT (this "Agreement"), is made and entered into as of this 31 day of December 1996 by and between Amazon.com, Inc. (the "Company"), a Delaware corporation, and Joy Covey (the "Shareholder").

SELECT only one of the following:

x For purposes of this Agreement, the Shareholder is an employee shareholder (an "Employee Shareholder") and is bound to all the provisions of this agreement including Article 9. Shareholder's Initials: JC

______ For purposes of this Agreement, the Shareholder is not an Employee Shareholder and is not bound to the provisions of Article 9 of this Agreement. Shareholder's Initials:________

WHEREAS, the parties hereto deem it in their best interest to provide for ultimate ownership of the shares of the Company (the "Stock"), or rights thereto, including the right to transfer such Stock and the right to purchase such Stock upon the occurrence of certain events;

NOW, THEREFORE, in consideration of the foregoing and in consideration of the mutual promises set forth herein, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1
RESTRICTION ON DISPOSITION

1.1 Disposition Prohibited. The Shareholder shall not dispose of any of his or her Stock except as permitted by this Agreement, and any such attempted disposition shall be void and shall not be recognized or registered upon the books of the Company.

1.2 Definition of "Dispose". The term "dispose" includes, but is not limited to, the acts of selling, assigning, transferring, pledging, encumbering, giving away, devising, and any other form of conveying, including conveyances caused by marital separation, divorce, receivership, or bankruptcy, whether voluntary or involuntary or by operation of law.

1.3 Notice of Involuntary Disposition. The Shareholder, or his or her personal representative, shall notify the Company immediately upon the occurrence of an involuntary disposal of his or her Stock. The Company shall notify the other shareholders of any such involuntary transfer.

1.4 Role of Offeror or Transferor. If the Company is entitled to elect to purchase or redeem any Stock owned by the Shareholder hereunder, the Shareholder shall not participate in or interfere with, and shall abstain from any vote upon (but shall be present for the purpose of meeting any quorum requirement), any action to be taken by the Company in effecting such an election. The Shareholder, or the legal representative of the Shareholder, shall cooperate in effecting all company action and execute and deliver all papers as may be necessary to consummate any purchase by the Company of such Stock. Unless otherwise set forth herein, the option of the Company to purchase or redeem Stock owned by the Shareholder shall be exercised only upon a majority vote of the Board of Directors.

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ARTICLE 2
DISPOSITIONS DURING LIFE

2.1 Voluntary Disposition.

(a) Disposition of Stock prior to and on December 31, 1999. This Agreement prohibits the Shareholder from disposing of any Stock until after December 31, 1999, unless prior written consent is received from the Company, which consent can be given only upon a majority vote of the Board of Directors.

(b) Disposition of Stock after December 31, 1999. In the event that the Shareholder ("the Offering Shareholder") receives a bona fide offer (the "Offer") after December 31, 1999, to purchase all or any portion of his or her Stock (the "Shares") and the Offering Shareholder desires to sell his or her Shares pursuant to the terms of the Offer, then the Offering Shareholder shall forthwith deliver to the Company written notice of such offer. Such written notice shall contain the name and address of the bona fide offeror, and the bona fide purchase price offered for the Shares and all other terms of such offer. The Company shall convey such notice to each other shareholder who is at that time a current shareholder of the Company ("the Remaining Shareholders"). Within sixty (60) days after receipt by the Company of the written notice of the Offer (the "Option Period"), the Company shall have the right to purchase or redeem all of the Shares included in such Offer either upon the price and terms set forth in the Offer or, at the election of the Company, upon the price and terms described in Article 5. A vote by the majority of the members of the Board of Directors shall be required to exercise or waive the option, except that a Director who is the proposed transferor may not participate in the voting, and shall not be included in the number of Directors when computing whether a majority vote of the member of the Board was obtained. If the Company does not exercise such right within the Option Period, or exercises such right only as to a portion of such shares, the Remaining Shareholders shall have the right for a period of thirty (30) days following the end of the Option Period ("the Second Option Period") to purchase all of the Shares included in the Offer that are not purchased by the Company, upon the same terms as are available to the Company as follows:

(1) Each Remaining Shareholder shall, during the Second Option Period, advise the Secretary of the Company whether such Remaining Shareholder wishes to exercise his or her right to purchase Shares and the maximum number of Shares that he or she wishes to purchase.

(2) If the aggregate of the maximum number of Shares covered by the Offer to be purchased by all Remaining Shareholders exceeds the number of Shares available for purchase by them, the number of Shares offered shall be apportioned pro rata among the Remaining Shareholders electing to purchase based upon a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders electing to purchase. Fractions resulting in any such computation shall be rounded to the next whole number. If such computation results in a purchase of less than all Shares offered by the Offering Shareholder, then the difference between the number of Shares agreed to be purchased and the number of Shares offered shall be allocated to those Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to such Remaining Shareholders in the first allocation. Such allocation shall be based on a fraction, the numerator of which is the number of Shares outstanding held by each such Remaining Shareholder and the denominator of which is the number which is the aggregate number of Shares outstanding held by all Remaining Shareholders who have offered to purchase a number of Shares greater than the number allocated to them. For the purpose of accomplishing the allocations set forth herein, the Secretary of the Company shall make the allocations and his or her determination as to the allocations shall be conclusive.

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(3) If the maximum number of Shares to be purchased by the Remaining Shareholders is less than the Shares offered by the Offering Shareholder available for purchase by the Remaining Shareholders, or after successive allocations each Remaining Shareholder has been allocated the maximum number of Shares agreed to be purchased by him or her, and all Shares offered by the Offering Shareholder are still not allocated to a Remaining Shareholder, then the Company shall have the option to purchase the unallocated portion within the Second Option Period upon the same terms as were available to the Company in the Option Period.

(4) If neither the Company nor the Remaining Shareholders exercises the right to purchase the entirety of the Shares within the time provided for such exercise, the Offering Shareholder shall be free to sell any remaining Shares so offered pursuant to the Offer, and only pursuant to the Offer, for a period of sixty (60) days following the end of the Second Option Period, provided, however, that the transferee of those Shares must first agree in writing to be bound by the terms and conditions of this Agreement that apply to the Shareholder. If no such sale is made by the Offering Shareholder within such 60-day period, then the restrictions set forth in this Agreement shall thereafter continue to apply to the Shares and no Stock, nor any interest therein, shall thereafter be disposed, whether pursuant to an Offer or otherwise, without again first complying with all of the provisions of this Agreement.

2.2 This section remains only so as to preserve the numbering in this Agreement.

2.3 Closing. The closing of any purchase and sale under this Article 2 shall take place at the principal office of the Company at the date designated by the Company, which shall not be more than ninety (90) days after the written consent of the Company pursuant to Section 2.1(a) or ninety (90) days after the end of the Second Option Period pursuant to Section 2.1(b).

ARTICLE 3
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 4
This article remains only so as to preserve the numbering in this Agreement.

ARTICLE 5
VALUATION AND PAYMENT OF TERMS

5.1 Agreed Valuation and Terms. For purposes of Article 2, the value per share of the Stock and the terms of the purchase or redemption shall be determined annually by a majority vote of the Company's Board of Directors at the Company's annual Directors' meeting, which is scheduled for December 31 of each year, or at any other time prior to the closing of the proposed purchase or redemption. If the necessary vote cannot be obtained or if the Offering Shareholder objects to the value established by the Company's Board of Directors, then the value per share shall be established pursuant to Section 5.4, and the terms of purchase or redemption shall be those most recently adopted by the Directors pursuant to this Section 5.1, or if no such terms have been so adopted or if the Offering Shareholder objects to such terms, then those terms described in Section 5.2 below.

5.2 Initial Valuation and Terms.
a) The initial value per share of the Company's Stock is the book value.

b) The terms for payment are a down payment of ten percent (10%) of the purchase or redemption price (or more at the purchaser's option) with the balance to be paid in sixty (60) equal monthly installments of principal and interest including interest on the declining principal balance calculated so that the entire principal balances of the note shall be paid in full on the fifth anniversary of the note.

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5.3 Book Value. If the "book value" shall be used as the measurement of value, per share, the following definition of "book value" shall apply:

Capital Stock plus retained earnings plus additional paid-in capital as of the last day of the month preceding the date of purchase ("Valuation Date"), as determined by the accountant regularly employed by the Company or, if no accountant is regularly employed by the Company, then by an accountant selected by mutual agreement of the parties.

5.4 Alternative Appraisal Value. If a valuation as provided for in Section 5.1 is not recorded for a particular year, the last previous valuation shall be used; except that if no valuation is recorded within eighteen (18) months preceding the proposed disposition, then in the event that the parties cannot agree to use the last previous recorded valuation, the value per share shall be determined by three appraisers. Within fifteen (15) days of the date that use of the last previous recorded valuation was rejected, the rejecting party shall select an appraiser and notify the other of the appraiser's name and address. Within fifteen (15) days after receipt of that notice, the remaining party shall select an appraiser and notify the first party of the name and address of such appraiser. If any party is unable to or unwilling to agree upon an appraiser within fifteen (15) days of the time designated for such selection, then the appraiser shall be selected by the presiding judge of the King County Superior Court. The two appraisers selected by the parties shall promptly appoint a third appraiser as soon as practical. The three appraisers shall evaluate and agree upon the value per share of the Stock as soon as practical after their selection; the vote of two such appraisers shall be sufficient to establish the value per share. The appraisers need not be licensed appraisers but should be experienced in business matters and shall be independent of all parties. Each party shall pay the fee charged for that party's appraiser; the fee charged by the third appraiser and any costs related to the appraisal shall be borne equally by each party.

5.5 Note for Unpaid Balance. Unless otherwise expressly provided herein, any unpaid balance owing under this Agreement shall be evidenced by an installment promissory note executed by the purchaser to the order of the seller providing for an interest rate equal to the prime rate of Bank of America on the business day prior to the closing date. The note shall give the purchaser the option of prepaying the principal in full or in part at any time without penalty.

5.6 Setoff. In the event the Company purchases any Stock pursuant to this Agreement, the Company shall set off against the purchase price for the Stock any indebtedness owed to the Company by such Shareholder or his or her estate, whether or not such indebtedness is then due. If any shareholder or other third party purchases any Stock pursuant to this Agreement, as a condition of the purchase, the purchaser agrees, prior to making any payment to the transferring Shareholder, that the purchaser shall pay to the Company that part of the purchase price equal to any indebtedness owed by the seller or his or her estate to the Company, whether or not such indebtedness is then due, and such payments shall be deemed payments on account of said purchase price or the promissory note issued by such shareholder with respect thereto.

ARTICLE 6
ENDORSEMENT OF CERTIFICATE

6.1 The Secretary of the Company shall endorse all certificates representing Stock owned by the Shareholder and all certificates representing Stock issued or transferred after this Agreement is entered into with the following legend:

The transfer of the shares represented by this certificate is restricted by the terms of a Shareholder's Agreement between the Shareholder and the Company dated _______________, 19___, a copy of which is on file in the office of the Company.

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ARTICLE 7
TERMINATION OF THIS AGREEMENT

7.1 Termination. This Agreement shall terminate at such time as the Common Stock of the Company is listed on a recognized United States national securities exchange or is traded in an over-the-counter market.

ARTICLE 8
AGREEMENT BINDING UPON TRANSFEREES

8.1 Except as otherwise provided for in this Agreement, in the event that any Stock is at any time disposed of or transferred to any party pursuant to the provisions hereof, the transferee shall take such Stock pursuant to all the terms, provisions, conditions, and covenants of this Agreement, and the transferee shall, as a condition precedent to the valid transfer of such Stock to such transferee, be bound, and agree (for and on behalf of himself or herself, his or her legal and personal representatives, his or her assigns, and his or her transferees, direct or indirect) in writing to be bound, by all provisions of this Agreement, including Article 9 in the case of a disposal or transfer from an Employee Shareholder.

ARTICLE 9
GRANT OF IRREVOCABLE PROXY

9.1 Definition of Total Disability. As used in this Agreement, the term "Total Disability" refers to a condition resulting from injury or illness to the Employee Shareholder which prevents the Employee Shareholder from performing the duties he or she has previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days (the "Disability Period"), and Total Disability shall be deemed to occur on the first day following the initial 365 day period (the "Total Disability Date"). In the event that the disabled Employee Shareholder returns to the Company within the Disability Period, but can fully perform the required services for less than thirty (30) days, and then relapses to his or her disability, the Disability Period shall not be considered to have been interrupted. In the event the Company has disability insurance protection on the Employee Shareholder, or the Employee Shareholder has an individual policy, the receipt of such disability insurance payments shall be deemed proof that the Employee Shareholder is disabled, and the waiting period and periods during which such Employee receives disability payments from such insurance, shall be deemed proof of the extent of time the Employee Shareholder has been disabled. Any dispute as to whether or not an Employee Shareholder is "Totally Disabled" and for how long he or she has been disabled as defined in this Agreement, shall be settled by mediation and/or arbitration in accordance with the provisions of this Agreement.

9.2 Grant of Irrevocable Proxy. The Employee Shareholder hereby grants to the Company an irrevocable proxy to vote all of the Stock held by the Employee Shareholder upon or subsequent to his or her death, Total Disability as defined above, or termination of employment with the Company, without regard to when or for what reason, if any, such employment shall terminate. Such proxy is coupled with an interest arising out of the terms of the Agreement, and such continues so long as this Agreement remains in full force and effect.

The irrevocable proxies described in this Article 9 shall remain in effect until the Company has issued and has outstanding shares of Common Stock held of record by 300 stockholders or more and the Common Stock of the Company is quoted on a recognized United States national securities exchange or the over-the-counter market.

This irrevocable proxy is coupled with an interest arising out of the terms of this Agreement, and continues as long as this Agreement remains in full force and effect.

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ARTICLE 10
GENERAL PROVISIONS

10.1 Mediation and Arbitration. All controversies, claims, disputes and matters in question arising out of or relating to this Agreement or the breach thereof, shall be decided by mediation and/or arbitration in accordance with this Article
10.1. The party who seeks resolution of a controversy, claim, dispute or other matter in question shall notify the other party in writing of the existence and subject matter hereof, and shall designate in such notices the names of three prospective mediators, each of whom shall be registered with the Seattle, Washington office of the American Arbitration Association. The recipient party shall select from such list one individual to act as a mediator in the dispute set forth by the notifying party. The parties agree to meet with said mediator in the City of Seattle within two weeks after the recipient party has received notice of the dispute and agree to utilize their best efforts and all expediency to resolve the matters in dispute. The mediation shall not continue longer than one (1) hearing day without the written approval of both parties. Neither party shall be bound by any recommendation of the mediator; however, any agreement reached during mediation shall be final and conclusive.

If the dispute is not resolved by such mediation, it shall be decided by mandatory arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Either party may apply to the American Arbitration Association for a determination of the dispute set forth in the notification thereof by the originating party. The parties agree that the arbitration shall take place in the City of Seattle, and shall be governed by the laws of the State of Washington. The award entered or decision made by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Expense of mediation and/or arbitration shall be shared equally by both parties.

10.2 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties, their spouses, heirs, legal representatives, successors, transferees and assigns.

10.3 Specific Performance. It is agreed that the remedy at law for any breach of this Agreement would be inadequate, and that the aggrieved party shall be entitled to injunctive relief as well as damages for such breach.

10.4 Notices. All notices, offers, acceptance, waivers and other acts under this Agreement shall be in writing and shall be sufficiently given if delivered to the addresses in person or if mailed, postage prepaid, return receipt requested, to the addresses as follows or at any address that such party may designate by written notice to the other:

If to the Company:                  Jeffrey P. Bezos
                                    c/o Chuck Katz
                                    Perkins Coie
                                    1201 Third Avenue, 40th Floor
                                    Seattle, WA 98101-3099


If to Joy Covey                     2432 E. Calhoun
                                    Seattle, WA 98112

10.5 Prior Agreements. This Agreement contains the entire agreement between the parties and supersedes all prior agreements entered into by the parties relative to the subject matter of this Agreement.

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10.6 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Jurisdiction over and venue of any suit arising out of or related to this Agreement shall be exclusively in the state and federal courts of King County, Washington.

10.7 New Shareholders. Nothing in this agreement shall restrict the Company from selling shares of its Stock to third persons on such terms and conditions as the Company's Board of Directors deems appropriate.

10.8 Severability. If for any reason any portion of this Agreement shall be held to be invalid or unenforceable, the holding of invalidity or unenforceability of that portion shall not affect any other portion of this Agreement and the remaining portions of this Agreement shall remain in full force and effect.

10.9 Counsel. The Shareholder acknowledges that he or she is aware of his or her right to have independent counsel review this Agreement concerning his or her rights and obligations under this Agreement prior to his or her execution of it. The Shareholder represents: (i) that he or she has consulted independent counsel, or by executing this Agreement, waives his or her right to consult with an attorney concerning this Agreement; and (ii) that the Shareholder understands the terms of this Agreement and will be bound by this Agreement.

10.10 Investment and Other Warranties. Each Shareholder, by his or her execution of this Agreement, acknowledges and understands that, in connection with the Stock now or hereafter owned by him or her:

(a) the Shareholder has been fully informed as to the circumstances under which he or she is required to hold the Stock pursuant to the requirements of the Securities Act of 1933, as amended (the "Act");

(b) the Company has informed the Shareholder that such Stock is not registered under the Act and may not be transferred or otherwise disposed of unless such Stock is subsequently registered under the Act or unless an exemption from such registration is available; and

(c) the Shareholder has been informed that the Stock is subject to this Agreement and that a restrictive legend, referring to the restrictions set forth herein, has or will be placed upon the certificate(s) evidencing such Stock.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

AMAZON.COM, INC.

By:            Jeff P. Bezos

Name:          ____________________________________

Title:         ____________________________________

Date:          ____________________________________

SHAREHOLDER

Signature:     Joy Covey

Name:          Joy Covey

Title:         CFO

Date:          Jan. 2, 1997

SPOUSAL CONSENT

By execution of this Agreement, _______________________ hereby agrees and consents to all the terms and conditions of this Agreement and agrees to be bound by such terms and conditions, and does hereby appoint his or her spouse as attorney-in-fact in all respects with regard to the Company, its affairs, and interest in the Company's Stock. _______________________ has been informed of his or her right to obtain independent legal counsel concerning this Shareholder's Agreement and the rights and obligations provided for in this Agreement, and by execution of this Agreement, acknowledges having either obtained such independent counsel or having waived the same.

By: _______________________

___________________, Individual

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Exhibit 10.20

AMAZON.COM, INC.

AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(AS OF DECEMBER 20, 1996 FOR AMENDED AND RESTATED GRANTS)

AMAZON.COM, INC., a Delaware corporation (the "Company"), hereby establishes and sets forth the terms of the AMAZON.COM, INC. AMENDED AND RESTATED 1994 STOCK OPTION PLAN (the "Plan"), which for reference purposes shall be dated September 15, 1994.

1. PURPOSE OF PLAN

The purpose of the Plan is to enhance the long-term stockholder value of the Company by offering opportunities to employees, directors, officers, consultants, advisors and independent contractors of the Company and any Affiliate of the Company (as defined below) to participate in the success and growth of the Company and to encourage them to remain in the service of the Company. This Plan will seek to accomplish this purpose by providing for the grant to such persons of options to acquire shares of common stock, $.01 par value per share, of the Company (the "Common Stock"). Options granted hereunder may be issued as "incentive stock options" as such term is defined in Section 422 of the Internal Revenue Code of 1986, as the same may be amended from time to time (the "Code"). The Plan and each such "incentive stock option" are intended to comply with all of the requirements of said Section 422, and of all other provisions of the Code applicable to "incentive stock options" and to plans issuing the same (hereinafter referred to as "Incentive Stock Options"). Options granted hereunder also may be issued as nonqualified stock options not intended to qualify as Incentive Stock Options (hereinafter referred to as "Nonqualified Stock Options").

2. ADMINISTRATION OF THE PLAN

2.1. The Plan shall be administered by the Board of Directors of the Company (the "Board") unless a committee of the Board is appointed in accordance with Section 2.2 or 2.4 below (the Board, or such committee, if appointed, will be referred to in this Plan as the "Administrative Committee").

2.2. The Board may at any time appoint a committee, consisting of not less than two of its members, to administer this Plan on behalf of the Board in accordance with such terms and conditions not inconsistent with this Plan as the Board may prescribe. Once appointed, the committee shall continue to serve until otherwise directed by the Board. From time to time the Board may increase the size of the


committee and appoint additional members, remove members (with or without cause) and appoint new members in their place, fill vacancies however caused, and/or remove all members of the committee and thereafter directly administer this Plan.

2.3. A majority of the members of the Administrative Committee shall constitute a quorum, and, subject to the limitations in this Section 2, all actions of the Administrative Committee shall require the affirmative vote of members who constitute a majority of such quorum. Members of the Administrative Committee may vote on any matters affecting the administration of this Plan or the grant of stock options pursuant to this Plan, except that no such member shall act upon the granting of a stock option to himself or herself (but any such member may be counted in determining the existence of a quorum at any meeting of the Administrative Committee during which action is taken with respect to the granting of a stock option to him or her).

2.4. Notwithstanding the foregoing provisions of this Section 2, if and so long as the Company has registered any class of any equity security pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"), the Board shall consider in selecting the Administrative Committee and the membership of any committee acting as Administrative Committee, with respect to any persons subject or likely to become subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may delegate the responsibility for administering the Plan with respect to designated classes of eligible persons to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate.

2.5. The following provisions shall apply to the Administrative Committee:

2.5.1 The Administrative Committee shall have the authority (a) to administer this Plan in accordance with its express terms; (b) to determine all questions arising in connection with the administration, interpretation, and application of this Plan, including all questions relating to the value of the Common Stock; (c) to correct any defect, supply any information and reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of this Plan; (d) to prescribe, amend and rescind rules and regulations relating to the administration of this Plan; (e) to determine the duration and purposes of leaves of absence which may be granted to participants without constituting a termination of employment for purposes of this Plan; and (f) to make all other determinations necessary or advisable for administration of this Plan.

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2.5.2 Exercise of the foregoing authority by the Administrative Committee shall be consistent with the intent that the Incentive Stock Options issued under this Plan be qualified under the terms of Section 422 of the Code (including any amendments thereto and any similar successor provision).

2.5.3 All determinations made by the Administrative Committee in good faith on matters referred to in this Section 2.5 shall be final, conclusive, and binding upon all persons. The Administrative Committee shall have all powers necessary or appropriate to accomplish its duties under this Plan.

3. ELIGIBILITY

3.1. An individual shall be eligible to participate in this Plan provided that such individual is (a) an employee, director, officer, consultant, agent, advisor or independent contractor of the Company or an Affiliate and (b) selected by the Administrative Committee to receive one or more stock options under this Plan. Each person so selected by the Administrative Committee shall sometimes hereinafter be referred to as an "Optionee." No person shall be eligible to be granted an Incentive Stock Option hereunder unless such person is then a bona fide employee of the Company or an Affiliate.

3.2. As used in this Plan, an "Affiliate" of a corporation shall refer to a "parent corporation" of such corporation as described in Section 424(e) of the Code or a "subsidiary corporation" of such corporation as described in
Section 424(f) of the Code.

3.3. No stock option shall be granted hereunder to any person who is not a resident of the State of Washington unless the Administrative Committee shall have determined, based on the advice of counsel, that the grant of such Incentive Stock Option (and the exercise thereof by the Optionee) will not violate the securities laws of the state where the Optionee resides.

4. AUTHORIZED SHARES

The aggregate number of shares of Common Stock reserved for issuance upon exercise of stock options granted under this Plan shall be Three Million Two Hundred Thousand (3,200,000). This number shall be subject to any adjustment required or permitted pursuant to the provisions of Section 10 below. If any stock option granted under the terms of this Plan shall expire or terminate for any reason without having been exercised in full and/or shares of Common Stock subject to repurchase are repurchased by the Company, the unpurchased shares of Common Stock formerly

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subject to such stock option, or such repurchased shares, shall again be available for purposes of this Plan.

5. OPTION TERMS

5.1. With respect to each stock option to be granted to an Optionee selected by the Administrative Committee in accordance with Section 3 above, the Administrative Committee shall appropriately designate such options as Incentive Stock Options or as Nonqualified Stock Options and shall specify the following terms:

5.1.1 The number of shares of Common Stock subject to such stock option.

5.1.2 The date on which the grant of such stock option shall be effective (the "Date of Grant").

5.1.3 The period of time during which such stock option shall be exercisable, which, in the case of an Incentive Stock Option, shall in no event be more than ten (10) years following its Date of Grant; provided, however, if such Incentive Stock Option is granted to an Optionee who on the Date of Grant owns, either directly or indirectly within the meaning of Section 424(d) of the Code, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate of the Company, the period of time during which such Incentive Stock Option shall be exercisable shall in no event be more than five (5) years following its Date of Grant.

5.1.4 The price or prices at which such stock option shall be exercisable by the Optionee (the "Option Price"); provided, however, that, in the case of an Incentive Stock Option, the Option Price shall in no event be less than the fair market value, on the Date of Grant, of the shares of Common Stock subject thereto; and provided, further, that, if, in the case of an Incentive Stock Option, such Incentive Stock Option is granted to an Optionee who on the Date of Grant owns, either directly or indirectly within the meaning of Section 424(d) of the Code, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate of the Company, then the Option Price shall be at least one hundred ten percent (110%) of the fair market value, on the Date of Grant, of the Common Stock subject thereto.

5.1.5 The Administrative Committee shall have complete discretion with respect to the terms of any vesting schedule pursuant to which the right of the Optionee to exercise such stock option shall be contingent, including, without limitation, discretion (a) to allow full and immediate vesting following the Date of

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Grant of a stock option, (b) to permit partial vesting in stated percentage amounts based on the length of the holding period of the stock option, or (c) to permit full vesting after a stated holding period has passed. Following termination of an Optionee's employment or services with the Company, a stock option that is subject to vesting under this Section 5.1.5 shall not vest further on account of the holding period thereof subsequent to such date of termination unless the Administrative Committee determines otherwise.

5.1.6 Whether shares of Common Stock acquired upon exercise of such stock option will be subject to repurchase in accordance with Section 11 below.

5.1.7 Such other terms and conditions as the Administrative Committee deems advisable and as are consistent with the terms and conditions of this Plan, including, without limitation, any alternate repurchase provisions to those set forth in Section 11 below.

5.2. Notwithstanding any provision of this Section 5 to the contrary, no Incentive Stock Option shall be granted hereunder after the date immediately preceding the tenth (10th) anniversary of the date this Plan is adopted by the Board. Except as expressly provided herein, nothing contained in this Plan shall require that the terms and conditions of stock options granted hereunder be uniform.

5.3. Each stock option shall require that, unless the Common Stock shall at such time be publicly traded, as a condition to exercise by the Optionee of the stock option, the Optionee shall execute and deliver to the Company the Shareholders Agreement in substantially the form attached hereto as Exhibit A, as the same may have been amended through the date of exercise of such stock option, or a counterpart thereof (the "Shareholders Agreement"), together with, unless the Optionee is unmarried, a spousal consent in the form attached hereto, unless the Optionee has previously executed and delivered such documents and they are in effect at the time the Optionee exercises the option.

6. LIMITATION ON EXERCISE OF OPTIONS

To the extent the aggregate fair market value of the Common Stock with respect to which, during any calendar year, one or more Incentive Stock Options under this Plan (and/or one or more options under any other plan maintained by the Company or any of its Affiliates for the granting of options intended to qualify under Section 422 of the Code) are exercisable for the first time by an Optionee exceeds One Hundred Thousand Dollars and 00/100 ($100,000.00) (said value to be determined as of the respective Dates of Grant of such options), such portion in excess of One Hundred Thousand Dollars and 00/100 ($100,000.00) shall be subject to delayed

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exercisability or treated as a Nonqualified Stock Option, as set forth by the Administrative Committee in the agreement(s) evidencing the stock option.

7. EXERCISE OF OPTION

Subject to Section 6 above and any terms of a stock option specified pursuant to Section 5 above, an Optionee or the Qualified Successor of an Optionee pursuant to Sections 8.2 and 8.3 below may exercise a stock option or any part thereof (unless partial exercise is specifically prohibited by the terms of the stock option), by giving written notice thereof to the Company at its principal place of business. Such notice shall include a written representation that the shares to be acquired will be acquired and held for investment, and not for resale or distribution, and shall be accompanied by any documents required by Section 5.3 above. Such notice shall also include full payment of the Option Price to the extent the stock option is so exercised and any withholding tax obligation that may arise in connection with such exercise. Such payment shall be in lawful money of the United States and shall be payable in cash or by certified or cashier's check; provided, however, that in the discretion of the Administrative Committee, such payment may be made, in whole or in part, in shares of Common Stock or in any other form approved by the Administrative Committee. Following the exercise of a stock option, the Administrative Committee shall cause the information statement required by
Section 6039 of the Code to be furnished to the Optionee within the time and in the manner prescribed by law.

The Company or any related corporation may require an Optionee holding a stock option to pay the Company the amount of any taxes required by any government to be withheld or otherwise deducted and paid with respect to such stock option. Subject to the Plan and applicable law and unless the Administrative Committee determines otherwise, the Optionee may satisfy these withholding obligations, in whole or in part, by paying cash, by electing to have the Company withhold shares of Common Stock from the shares otherwise issuable to such Optionee or by transferring shares of Common Stock to the Company, in such amounts as are equivalent to the fair market value of the withholding obligation. The Company shall have the right to withhold from any shares of Common Stock issuable pursuant to the exercise of a stock option or from any cash amounts otherwise due or to become due from the Company to the Optionee an amount equal to such taxes.

8. TRANSFERABILITY OF OPTIONS

8.1. Except to the extent permitted by Section 422 of the Code and by the Administrative Committee, and except as provided in Sections 8.2, 8.3, and 8.4 below,

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no stock option shall be transferable or exercisable by any person other than the Optionee to whom such stock option was originally granted.

8.2. In the event of the demise of an Optionee while in the employ of the Company, any stock options held by the Optionee shall pass to the person or persons entitled thereto pursuant to the will of the Optionee or applicable laws of descent and distribution (such person or persons are sometimes herein referred to collectively as the "Qualified Successor" of the Optionee). Any right under any stock option which the Optionee could have exercised immediately prior to the date of his or her demise shall, subject to Section 9 below, be exercisable by the Qualified Successor for a period of up to one (1) year following such demise.

8.3. In the event of the demise of an Optionee, following termination of the Optionee's employment or services for the Company on account of Disability, but prior to the expiration of the period of up to one (1) year specified in Section 9.3 below, any right under any stock option which the Optionee could have exercised immediately prior to the date of his or her demise shall, subject to Section 9 below, pass to and be exercisable by the Qualified Successor of the Optionee until the expiration of such period of up to one (1) year following the date of demise of the Optionee. The term "Disability" refers to a condition resulting from injury or illness to the Optionee which prevents the Optionee from performing the duties of the Optionee as previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days. Disability shall be deemed to occur on the first day following the initial 365 day period. In the event that a disabled Optionee returns to the performance of his or her employment or services for the Company within the disability period, but can fully perform the employment or services for less than thirty (30) days, and then relapses to his or her disability, the disability period shall not be considered to have been interrupted.

8.4. In the event of the demise of an Optionee, following termination of the Optionee's employment or services for the Company for any reason other than Disability but prior to the expiration of the three (3) month period specified in Section 9.4 below, any right under any stock option which the Optionee could have exercised immediately prior to the date of his or her demise shall, subject to Section 9 below, pass to and be exercisable by the Qualified Successor of the Optionee until the expiration of such period of up to one (1) year following the date of termination of the Optionee's employment or services with the Company.

8.5. In the event that two or more persons constitute the Qualified Successor of an Optionee, all rights of such Qualified Successor shall be exercisable, if at all, by the unanimous agreement of such persons.

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9. TERMINATION OF OPTIONS

To the extent not earlier exercised, a stock option shall terminate at the earliest of the following dates:

9.1. The date specified in such stock option, which date shall not be extended for any reason;

9.2. A period of up to one (1) year following the date of termination of the Optionee's employment or services on behalf of the Company on account of such Optionee's demise;

9.3. A period of up to one (1) year following the date of termination of the Optionee's employment or services on behalf of the Company on account of such Optionee's Disability, as defined in Section 8.3 above.

9.4. A period of up to three (3) months following the date of termination of the Optionee's employment or services on behalf of the Company for any reason other than the Optionee's demise or Disability;

9.5. The date of any sale, transfer or hypothecation, or any attempted sale, transfer or hypothecation, of such stock option, by the Optionee or his or her Qualified Successor, except as expressly permitted by the Administrative Committee pursuant to Section 8.1;

9.6. The date of filing of a voluntary or involuntary petition under the bankruptcy laws of the United States, or under the insolvency laws of any state, for the estate of the Optionee or his or her Qualified Successor; and

9.7. The date specified in Section 10.2 below for such termination in the event of a Terminating Event (as defined in Section 10.2 below).

10. ADJUSTMENTS TO OPTIONS

10.1. In the event that there is a material alteration in the capital structure of the Company on account of a reorganization, merger, capitalization, stock split, reverse stock split, stock dividend or otherwise, then the Administrative Committee shall make such adjustments to this Plan and to the stock options then outstanding and thereafter granted under this Plan as the Administrative Committee determines to be appropriate and equitable under the circumstances. Such adjustments may include, without limitation (a) a change in the number or kind of shares of stock of the Company covered by such stock options, and/or (b) a change in the Option Price

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payable per share; provided, however, that the aggregate Option Price applicable to the unexercised portion of existing stock options shall not be altered, it being intended that any adjustments made with respect to such stock options shall apply only to the price per share and the number of shares subject thereto. For purposes of this Section 10.1, neither (i) the issuance of additional shares of Common Stock or other securities of the Company in exchange for adequate consideration (including services), nor (ii) the conversion into Common Stock of any securities of the Company now or hereafter outstanding, shall be deemed material alterations in the capital structure of the Company. In the event the Administrative Committee shall determine that the nature of a material alteration in the capital structure of the Company is such that it is not feasible or advisable to make adjustments to this Plan or to the stock options granted hereunder, such event shall be deemed a Terminating Event as defined in Section 10.2 below.

10.2. In the event of (a) the dissolution or liquidation of the Company, (b) a merger or other reorganization of the Company with one or more corporations as a result of which the Company will not be a surviving corporation, (c) the sale of all or substantially all of the assets of the Company or a material division of the Company, (d) a sale or other transfer, pursuant to a tender offer or otherwise, of more than fifty percent (50%) of the then outstanding shares of Common Stock of the Company, (e) an acquisition by the Company resulting in an extraordinary expansion of the Company's business or the addition of a material new line of business, or (f) a material change in the capital structure of the Company that is subject to this Section 10.2 in accordance with the last sentence of Section 10.1 above (any of such events is herein referred to as a "Terminating Event"), the Administrative Committee shall determine whether provision will be made in connection with the Terminating Event for an appropriate assumption of the stock options theretofore granted under this Plan (which assumption may be effected by means of a payment to each Optionee (by the Company or any other person or entity involved in the Terminating Event), in cancellation of the stock options held by him or her, of the difference between the then fair market value of the aggregate number of shares of Common Stock then subject to such stock options and the aggregate exercise price that would have to be paid to acquire such shares) or for substitution of appropriate new options covering stock of a successor corporation to the Company or stock of an Affiliate of such successor corporation. If the Administrative Committee determines that such an appropriate assumption or substitution will be made, the Administrative Committee shall give notice of such determination to the Optionees under this Plan, and the provisions of such assumption or substitution, and any adjustments made (i) to the number and kind of shares subject to the stock options outstanding under this Plan (or to options issued in substitution therefor), (ii) to the Option Prices, and/or (iii) to the terms and

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conditions of the stock options, shall be binding upon such Optionees. If the Administrative Committee determines that no such assumption or substitution will be made, the Administrative Committee shall give notice of such determination to the Optionees, whereupon each Optionee shall have the right for a period of thirty (30) days following such notice to exercise in full or in part any unexercised or unexpired stock options then held by him or her, without regard to any vesting provision to which such stock options may have otherwise been subject pursuant to Section 5.1.5 above. Upon the expiration of said period of thirty (30) days, all stock options then outstanding shall expire to the extent not earlier exercised, and this Plan shall terminate.

11. RIGHT OF REPURCHASE; MARKET STANDOFF; ESCROW

11.1 RIGHT OF REPURCHASE

The Administrative Committee shall have the discretion to authorize the issuance of unvested shares of Common Stock pursuant to the exercise of a stock option. Should the Optionee cease to be employed by or provide services to the Company, then all shares of Common Stock issued upon exercise of a stock option which are unvested at the time of cessation of employment or services shall be subject to repurchase at the exercise price paid for such shares. The terms and conditions upon which such repurchase right shall be exercisable (including the period and procedure for exercise) shall be established by the Administrative Committee and set forth in the agreement evidencing such right.

All of the Company's outstanding repurchase rights under this Section 11.1 are assignable by the Company at any time and shall remain in full force and effect in the event of a Terminating Event; provided that if the Administrative Committee determines that an assumption or substitution of stock options outstanding under the Plan will not be made in connection with the Terminating Event and the vesting of such stock options is therefore accelerated pursuant to Section 10.2, the repurchase rights under this Section 11.1 shall terminate and all shares subject to such terminated rights shall immediately vest in full.

The Administrative Committee shall have the discretionary authority, exercisable either before or after the Optionee's cessation of employment or services, to cancel the Company's outstanding repurchase rights with respect to one or more shares purchased or purchasable by the Optionee under a stock option and thereby accelerate the vesting of such shares in whole or in part at any time.

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11.2 MARKET STANDOFF

In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the "1933 Act"), including the Company's initial public offering, a person shall not sell, or make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to, any shares issued pursuant to a stock option granted under the Plan without the prior written consent of the Company or its underwriters. Such limitations shall be in effect only if and to the extent and for such period of time as may be requested by the Company or such underwriters and agreed to by the Company's officers and directors; provided, however, that in no event shall the weighted average number of days in such period exceed 180 days. The limitations of this paragraph shall in all events terminate two years after the effective date of the Company's initial public offering.

In the event of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the Company's outstanding Common Stock effected as a class without the Company's receipt of consideration, then any new, substituted or additional securities distributed with respect to the purchased shares shall be immediately subject to the provisions of this Section 11.2, to the same extent the purchased shares are at such time covered by such provisions.

In order to enforce the limitations of this Section 11.2, the Company may impose stop-transfer instructions with respect to the purchased shares until the end of the applicable standoff period.

11.3 ESCROW

To ensure that shares of Common Stock acquired upon exercise of a stock option that are subject to any repurchase right, shareholders agreement and/or security for any promissory note will be available for repurchase, the Administrative Committee may require the Optionee to deposit the certificate or certificates evidencing such shares with an agent designated by the Administrative Committee under the terms and conditions of escrow and security agreements approved by the Administrative Committee. If the Administrative Committee does not require such deposit as a condition of exercise of a stock option, the Administrative Committee reserves the right at any time to require the Optionee to so deposit the certificate or certificates in escrow. The Company shall bear the expenses of the escrow.

As soon as practicable after the expiration of any repurchase rights or shareholders agreement, and after full repayment of any promissory note secured by

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the shares in escrow, the agent shall deliver to the Optionee the shares no longer subject to such restrictions and no longer security for any promissory note.

In the event shares held in escrow are subject to the Company's exercise of a repurchase option or shareholders agreement, the notices required to be given to the Optionee shall be given to the agent and any payment required to be given to the Optionee shall be given to the agent. Within thirty (30) days after payment by the Company, the agent shall deliver the shares which the Company has purchased to the Company and shall deliver the payment received from the Company to the Optionee.

In the event of any stock dividend, stock split or consolidation of shares or any like capital adjustment of any of the outstanding securities of the Company, any and all new, substituted or additional securities or other property to which the Optionee is entitled by reason of ownership of shares acquired upon exercise of a stock option shall be subject to any repurchase rights, shareholders agreement, and/or security for any promissory note with the same force and effect as the shares subject to such repurchase rights, shareholders agreement and security interest immediately before such event.

12. TERMINATION AND AMENDMENT

12.1. Unless earlier terminated as provided below, this Plan shall terminate on, and no stock option shall be granted under this Plan after, the tenth (10th) anniversary of the date immediately preceding the date this Plan is adopted by the Board. Such termination shall not affect the rights of the Administrative Committee or the Company under the plan (including but not limited to rights under Section 10 and Section 11 above) with respect to any stock options theretofore granted or shares of Common Stock issued upon exercise thereof.

12.2. The Board may at any time terminate, suspend, or amend the terms of this Plan; provided, however, that, to the extent required by Section 422 of the Code and except as provided in Section 10 above, the Board may not, without prior approval by holders of shares of Common Stock constituting at least a majority of the shares of Common Stock represented in person or by proxy and entitled to vote at the meeting at which such approval is sought:

12.2.1 Increase the aggregate number of shares of Common Stock reserved for issuance upon exercise of stock options granted under this Plan;

12.2.2 Change the class of employees who are eligible to receive Incentive Stock Options under this Plan; or

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12.2.3 Make any change in the terms of this Plan which would cause the Incentive Stock Options granted hereunder to lose their qualification as incentive stock options under Section 422 of the Code.

12.3. No stock option may be granted during any suspension or after termination of this Plan. Amendment, suspension, or termination of this Plan shall not, without the consent of the Optionee, alter or impair any rights or obligations with respect to any stock option theretofore granted or shares of Common Stock acquired upon exercise thereof.

13. OPTION AGREEMENT; LEGEND

Each stock option granted hereunder shall be evidenced by a written agreement executed by the Company and the Optionee. Such agreement shall contain the terms of the stock option as specified pursuant to Section 5 above, together with such other terms, conditions, and provisions not inconsistent with such terms and the conditions of this Plan as the Administrative Committee deems advisable. Such agreement shall also provide that, by accepting a stock option granted under this Plan, the Optionee, for himself or herself, for his or her Qualified Successor, and for his or her heirs, successors, and assigns:

13.1. Recognizes, agrees and acknowledges that no registration statement under the 1933 Act or under any state securities laws, will have been filed as to either the stock option or any shares of Common Stock that may be acquired upon exercise of such stock option;

13.2. Warrants and represents that the stock option and any shares of Common Stock of the Company acquired upon exercise of the option will be acquired and held by the Optionee for the Optionee's own account, for investment purposes only, and not with a view towards the distribution or public offering thereof nor with any present intention of reselling or distributing the same at any particular future time;

13.3. Acknowledges and consents to the appearance of a printed legend on the back of each stock certificate representing shares of Common Stock issued upon exercise of such stock option, which legend shall read as follows:

NOTICE: TRANSFER AND OTHER RESTRICTIONS

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACT (COLLECTIVELY, THE "SECURITIES LAWS"). THE SHARES HAVE

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BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS THE SHARES (I) ARE REGISTERED UNDER THE SECURITIES LAWS, OR (II) ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES LAWS AND THE CORPORATION IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SHARES ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER, AND MAY BE SUBJECT TO REPURCHASE BY THE CORPORATION, PURSUANT TO THE PROVISIONS OF (A) THE CORPORATION'S STOCK OPTION PLAN AND/OR A STOCK OPTION AGREEMENT BETWEEN THE HOLDER AND THE CORPORATION, AND/OR (B) A SHAREHOLDERS AGREEMENT, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE CORPORATION. INFORMATION CONCERNING THESE RESTRICTIONS MAY BE OBTAINED FROM THE CORPORATION OR ITS LEGAL COUNSEL.

13.4. Agrees not to sell, transfer, or otherwise dispose of any shares of Common Stock that may be acquired upon exercise of the stock option unless
(i) there is an effective registration statement under the 1933 Act covering the proposed disposition and compliance with governing state securities laws, (ii) the Optionee delivers to the Company, at the Optionee's expense, a "no-action" letter or similar interpretative opinion, satisfactory in form and substance to the Company, from the staff of each appropriate securities agency, to the effect that such shares may be disposed of by the Optionee in the manner proposed, or
(iii) the Optionee delivers to the Company, at the Optionee's expense, a legal opinion, satisfactory in form and substance to the Company, of legal counsel designated by the Optionee and satisfactory to the Company, to the effect that the proposed disposition is exempt from registration under the 1933 Act and governing state securities laws; and

13.5. Agrees to indemnify the Company and hold it harmless from and against any loss, claim or liability, including attorneys' fees or other legal expenses incurred in the defense thereof, incurred by the Company as a result of any breach by the Optionee of, or any inaccuracy in, any representation, warranty, covenant, or other provision contained in such agreement.

If a registration statement under the 1933 Act is hereafter filed with respect to Incentive Stock Options granted or to be granted hereunder and the shares of Common Stock that may be acquired upon exercise of such stock options, then, following the

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effectiveness thereof, the provisions in agreements representing stock options that would otherwise be required by this Section 13 may, in the discretion of the Administrative Committee, be modified or eliminated.

14. MISCELLANEOUS PROVISIONS

14.1. Nothing contained in this Plan shall obligate the Company to employ an Optionee for any period, nor shall this Plan interfere in any way with the right of the Company to reduce such Optionee's compensation.

14.2. The provisions of this Plan, each stock option issued to an Optionee hereunder, and the agreement evidencing such stock option under Section 13 above shall be binding upon such Optionee, the Qualified Successor of such Optionee, and the heirs, successors, and assigns of such Optionee.

14.3. Where the context so requires, references herein to the singular shall include the plural, and vice versa, and references to a particular gender shall include either or both genders.

14.4. This Plan shall be construed, administered, and enforced in accordance with the laws of the United States, to the extent applicable hereto, as well as the laws of the State of Washington.

15. EFFECTIVE DATE OF PLAN

This Plan shall be effective upon adoption of a resolution of the Board approving this Plan. This Plan shall be subject to approval, within twelve (12) months before or after the date this Plan is adopted by the Board, by holders of shares of Common Stock constituting at least a majority of the shares of Common Stock represented in person or by proxy and entitled to vote at the meeting at which such approval is sought. The Plan shall also be subject to the requirement of RCW 21.20.310(10) that the Administrator of Securities of the Department of Licensing of the State of Washington be provided with notification of the adoption of this Plan. No stock option granted hereunder shall be exercisable until such shareholder approval and notification requirements have been satisfied. If either of these requirements is not satisfied by August 1,1995, this Plan, and any stock options granted hereunder prior to such date, shall be void.

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AMAZON.COM, INC.

AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(AS OF DECEMBER 20, 1996 FOR NEW GRANTS)

AMAZON.COM, INC., a Delaware corporation (the "Company"), hereby establishes and sets forth the terms of the AMAZON.COM, INC. AMENDED AND RESTATED 1994 STOCK OPTION PLAN (the "Plan"), which for reference purposes shall be dated September 15, 1994.

1. PURPOSE OF PLAN

The purpose of the Plan is to enhance the long-term stockholder value of the Company by offering opportunities to employees, directors, officers, consultants, advisors and independent contractors of the Company and any Affiliate of the Company (as defined below) to participate in the success and growth of the Company and to encourage them to remain in the service of the Company. This Plan will seek to accomplish this purpose by providing for the grant to such persons of options to acquire shares of common stock, $.01 par value per share, of the Company (the "Common Stock"). Options granted hereunder may be issued as "incentive stock options" as such term is defined in Section 422 of the Internal Revenue Code of 1986, as the same may be amended from time to time (the "Code"). The Plan and each such "incentive stock option" are intended to comply with all of the requirements of said Section 422, and of all other provisions of the Code applicable to "incentive stock options" and to plans issuing the same (hereinafter referred to as "Incentive Stock Options"). Options granted hereunder also may be issued as nonqualified stock options not intended to qualify as Incentive Stock Options (hereinafter referred to as "Nonqualified Stock Options").

2. ADMINISTRATION OF THE PLAN

2.1. The Plan shall be administered by the Board of Directors of the Company (the "Board") unless a committee of the Board is appointed in accordance with Section 2.2 or 2.4 below (the Board, or such committee, if appointed, will be referred to in this Plan as the "Administrative Committee").

2.2. The Board may at any time appoint a committee, consisting of not less than two of its members, to administer this Plan on behalf of the Board in accordance with such terms and conditions not inconsistent with this Plan as the Board may prescribe. Once appointed, the committee shall continue to serve until otherwise directed by the Board. From time to time the Board may increase the size of the


committee and appoint additional members, remove members (with or without cause) and appoint new members in their place, fill vacancies however caused, and/or remove all members of the committee and thereafter directly administer this Plan.

2.3. A majority of the members of the Administrative Committee shall constitute a quorum, and, subject to the limitations in this Section 2, all actions of the Administrative Committee shall require the affirmative vote of members who constitute a majority of such quorum. Members of the Administrative Committee may vote on any matters affecting the administration of this Plan or the grant of stock options pursuant to this Plan, except that no such member shall act upon the granting of a stock option to himself or herself (but any such member may be counted in determining the existence of a quorum at any meeting of the Administrative Committee during which action is taken with respect to the granting of a stock option to him or her).

2.4. Notwithstanding the foregoing provisions of this Section 2, if and so long as the Company has registered any class of any equity security pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"), the Board shall consider in selecting the Administrative Committee and the membership of any committee acting as Administrative Committee, with respect to any persons subject or likely to become subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may delegate the responsibility for administering the Plan with respect to designated classes of eligible persons to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate.

2.5. The following provisions shall apply to the Administrative Committee:

2.5.1 The Administrative Committee shall have the authority (a) to administer this Plan in accordance with its express terms; (b) to determine all questions arising in connection with the administration, interpretation, and application of this Plan, including all questions relating to the value of the Common Stock; (c) to correct any defect, supply any information and reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of this Plan; (d) to prescribe, amend and rescind rules and regulations relating to the administration of this Plan; (e) to determine the duration and purposes of leaves of absence which may be granted to participants without constituting a termination of employment for purposes of this Plan; and (f) to make all other determinations necessary or advisable for administration of this Plan.

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2.5.2 Exercise of the foregoing authority by the Administrative Committee shall be consistent with the intent that the Incentive Stock Options issued under this Plan be qualified under the terms of Section 422 of the Code (including any amendments thereto and any similar successor provision).

2.5.3 All determinations made by the Administrative Committee in good faith on matters referred to in this Section 2.5 shall be final, conclusive, and binding upon all persons. The Administrative Committee shall have all powers necessary or appropriate to accomplish its duties under this Plan.

3. ELIGIBILITY

3.1. An individual shall be eligible to participate in this Plan provided that such individual is (a) an employee, director, officer, consultant, agent, advisor or independent contractor of the Company or an Affiliate and (b) selected by the Administrative Committee to receive one or more stock options under this Plan. Each person so selected by the Administrative Committee shall sometimes hereinafter be referred to as an "Optionee." No person shall be eligible to be granted an Incentive Stock Option hereunder unless such person is then a bona fide employee of the Company or an Affiliate.

3.2. As used in this Plan, an "Affiliate" of a corporation shall refer to a "parent corporation" of such corporation as described in Section 424(e) of the Code or a "subsidiary corporation" of such corporation as described in
Section 424(f) of the Code.

3.3. No stock option shall be granted hereunder to any person who is not a resident of the State of Washington unless the Administrative Committee shall have determined, based on the advice of counsel, that the grant of such Incentive Stock Option (and the exercise thereof by the Optionee) will not violate the securities laws of the state where the Optionee resides.

4. AUTHORIZED SHARES

The aggregate number of shares of Common Stock reserved for issuance upon exercise of stock options granted under this Plan shall be Three Million Two Hundred Thousand (3,200,000). This number shall be subject to any adjustment required or permitted pursuant to the provisions of Section 10 below. If any stock option granted under the terms of this Plan shall expire or terminate for any reason without having been exercised in full and/or shares of Common Stock subject to repurchase are repurchased by the Company, the unpurchased shares of Common Stock formerly

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subject to such stock option, or such repurchased shares, shall again be available for purposes of this Plan.

5. OPTION TERMS

5.1. With respect to each stock option to be granted to an Optionee selected by the Administrative Committee in accordance with Section 3 above, the Administrative Committee shall appropriately designate such options as Incentive Stock Options or as Nonqualified Stock Options and shall specify the following terms:

5.1.1 The number of shares of Common Stock subject to such stock option.

5.1.2 The date on which the grant of such stock option shall be effective (the "Date of Grant").

5.1.3 The period of time during which such stock option shall be exercisable, which, in the case of an Incentive Stock Option, shall in no event be more than ten (10) years following its Date of Grant; provided, however, if such Incentive Stock Option is granted to an Optionee who on the Date of Grant owns, either directly or indirectly within the meaning of Section 424(d) of the Code, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate of the Company, the period of time during which such Incentive Stock Option shall be exercisable shall in no event be more than five (5) years following its Date of Grant.

5.1.4 The price or prices at which such stock option shall be exercisable by the Optionee (the "Option Price"); provided, however, that, in the case of an Incentive Stock Option, the Option Price shall in no event be less than the fair market value, on the Date of Grant, of the shares of Common Stock subject thereto; and provided, further, that, if, in the case of an Incentive Stock Option, such Incentive Stock Option is granted to an Optionee who on the Date of Grant owns, either directly or indirectly within the meaning of Section 424(d) of the Code, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or an Affiliate of the Company, then the Option Price shall be at least one hundred ten percent (110%) of the fair market value, on the Date of Grant, of the Common Stock subject thereto.

5.1.5 The Administrative Committee shall have complete discretion with respect to the terms of any vesting schedule pursuant to which the right of the Optionee to exercise such stock option shall be contingent, including, without limitation, discretion (a) to allow full and immediate vesting following the Date of

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Grant of a stock option, (b) to permit partial vesting in stated percentage amounts based on the length of the holding period of the stock option, or (c) to permit full vesting after a stated holding period has passed. Following termination of an Optionee's employment or services with the Company, a stock option that is subject to vesting under this Section 5.1.5 shall not vest further on account of the holding period thereof subsequent to such date of termination unless the Administrative Committee determines otherwise.

5.1.6 Whether shares of Common Stock acquired upon exercise of such stock option will be subject to repurchase in accordance with Section 11 below.

5.1.7 Such other terms and conditions as the Administrative Committee deems advisable and as are consistent with the terms and conditions of this Plan, including, without limitation, any alternate repurchase provisions to those set forth in Section 11 below.

5.2. Notwithstanding any provision of this Section 5 to the contrary, no Incentive Stock Option shall be granted hereunder after the date immediately preceding the tenth (10th) anniversary of the date this Plan is adopted by the Board. Except as expressly provided herein, nothing contained in this Plan shall require that the terms and conditions of stock options granted hereunder be uniform.

5.3. Each stock option shall require that, unless the Common Stock shall at such time be publicly traded, as a condition to exercise by the Optionee of the stock option, the Optionee shall execute and deliver to the Company the Shareholders Agreement in substantially the form attached hereto as Exhibit A, as the same may have been amended through the date of exercise of such stock option, or a counterpart thereof (the "Shareholders Agreement"), together with, unless the Optionee is unmarried, a spousal consent in the form attached hereto, unless the Optionee has previously executed and delivered such documents and they are in effect at the time the Optionee exercises the option.

6. LIMITATION ON EXERCISE OF OPTIONS

To the extent the aggregate fair market value of the Common Stock with respect to which, during any calendar year, one or more Incentive Stock Options under this Plan (and/or one or more options under any other plan maintained by the Company or any of its Affiliates for the granting of options intended to qualify under Section 422 of the Code) are exercisable for the first time by an Optionee exceeds One Hundred Thousand Dollars and 00/100 ($100,000.00) (said value to be determined as of the respective Dates of Grant of such options), such portion in excess of One Hundred Thousand Dollars and 00/100 ($100,000.00) shall be subject to delayed

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exercisability or treated as a Nonqualified Stock Option, as set forth by the Administrative Committee in the agreement(s) evidencing the stock option.

7. EXERCISE OF OPTION

Subject to Section 6 above and any terms of a stock option specified pursuant to Section 5 above, an Optionee or the Qualified Successor of an Optionee pursuant to Sections 8.2 and 8.3 below may exercise a stock option or any part thereof (unless partial exercise is specifically prohibited by the terms of the stock option), by giving written notice thereof to the Company at its principal place of business. Such notice shall include a written representation that the shares to be acquired will be acquired and held for investment, and not for resale or distribution, and shall be accompanied by any documents required by Section 5.3 above. Such notice shall also include full payment of the Option Price to the extent the stock option is so exercised and any withholding tax obligation that may arise in connection with such exercise. Such payment shall be in lawful money of the United States and shall be payable in cash or by certified or cashier's check; provided, however, that in the discretion of the Administrative Committee, such payment may be made, in whole or in part, in shares of Common Stock or in any other form approved by the Administrative Committee. Following the exercise of a stock option, the Administrative Committee shall cause the information statement required by
Section 6039 of the Code to be furnished to the Optionee within the time and in the manner prescribed by law.

The Company or any related corporation may require an Optionee holding a stock option to pay the Company the amount of any taxes required by any government to be withheld or otherwise deducted and paid with respect to such stock option. Subject to the Plan and applicable law and unless the Administrative Committee determines otherwise, the Optionee may satisfy these withholding obligations, in whole or in part, by paying cash, by electing to have the Company withhold shares of Common Stock from the shares otherwise issuable to such Optionee or by transferring shares of Common Stock to the Company, in such amounts as are equivalent to the fair market value of the withholding obligation. The Company shall have the right to withhold from any shares of Common Stock issuable pursuant to the exercise of a stock option or from any cash amounts otherwise due or to become due from the Company to the Optionee an amount equal to such taxes.

8. TRANSFERABILITY OF OPTIONS

8.1. Except to the extent permitted by Section 422 of the Code and by the Administrative Committee, and except as provided in Sections 8.2, 8.3, and 8.4 below,

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no stock option shall be transferable or exercisable by any person other than the Optionee to whom such stock option was originally granted.

8.2. In the event of the demise of an Optionee while in the employ of the Company, any stock options held by the Optionee shall pass to the person or persons entitled thereto pursuant to the will of the Optionee or applicable laws of descent and distribution (such person or persons are sometimes herein referred to collectively as the "Qualified Successor" of the Optionee). Any right under any stock option which the Optionee could have exercised immediately prior to the date of his or her demise shall, subject to Section 9 below, be exercisable by the Qualified Successor for a period of up to one (1) year following such demise.

8.3. In the event of the demise of an Optionee, following termination of the Optionee's employment or services for the Company on account of Disability, but prior to the expiration of the period of up to one (1) year specified in Section 9.3 below, any right under any stock option which the Optionee could have exercised immediately prior to the date of his or her demise shall, subject to Section 9 below, pass to and be exercisable by the Qualified Successor of the Optionee until the expiration of such period of up to one (1) year following the date of demise of the Optionee. The term "Disability" refers to a condition resulting from injury or illness to the Optionee which prevents the Optionee from performing the duties of the Optionee as previously performed, and could be reasonably expected to perform on behalf of the Company, for a period of 365 consecutive days. Disability shall be deemed to occur on the first day following the initial 365 day period. In the event that a disabled Optionee returns to the performance of his or her employment or services for the Company within the disability period, but can fully perform the employment or services for less than thirty (30) days, and then relapses to his or her disability, the disability period shall not be considered to have been interrupted.

8.4. In the event of the demise of an Optionee, following termination of the Optionee's employment or services for the Company for any reason other than Disability but prior to the expiration of the three (3) month period specified in Section 9.4 below, any right under any stock option which the Optionee could have exercised immediately prior to the date of his or her demise shall, subject to Section 9 below, pass to and be exercisable by the Qualified Successor of the Optionee until the expiration of such period of up to one (1) year following the date of termination of the Optionee's employment or services with the Company.

8.5. In the event that two or more persons constitute the Qualified Successor of an Optionee, all rights of such Qualified Successor shall be exercisable, if at all, by the unanimous agreement of such persons.

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9. TERMINATION OF OPTIONS

To the extent not earlier exercised, a stock option shall terminate at the earliest of the following dates:

9.1. The date specified in such stock option;

9.2. A period of up to one (1) year following the date of termination of the Optionee's employment or services on behalf of the Company on account of such Optionee's demise;

9.3. A period of up to one (1) year following the date of termination of the Optionee's employment or services on behalf of the Company on account of such Optionee's Disability, as defined in Section 8.3 above.

9.4. A period of up to three (3) months following the date of termination of the Optionee's employment or services on behalf of the Company for any reason other than the Optionee's demise or Disability; provided, that with respect to employees of the Company, and unless the Administrative Committee at any time determines otherwise, "termination of the Optionee's services" for purposes of this Section 9.4 shall mean any reduction in the Optionee's regular hours of employment to less than thirty (30) hours per week; and

9.5. The date of any sale, transfer or hypothecation, or any attempted sale, transfer or hypothecation, of such stock option, by the Optionee or his or her Qualified Successor, except as expressly permitted by the Administrative Committee pursuant to Section 8.1.

9.6 The date specified in Section 10.2 below for such termination in the event of a Terminating Event (as defined in Section 10.2 below).

10. ADJUSTMENTS TO OPTIONS

10.1. In the event that there is a material alteration in the capital structure of the Company on account of a reorganization, merger, capitalization, stock split, reverse stock split, stock dividend or otherwise, then the Administrative Committee shall make such adjustments to this Plan and to the stock options then outstanding and thereafter granted under this Plan as the Administrative Committee determines to be appropriate and equitable under the circumstances. Such adjustments may include, without limitation (a) a change in the number or kind of shares of stock of the Company covered by such stock options, and/or (b) a change in the Option Price payable per share; provided, however, that the aggregate Option Price applicable to

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the unexercised portion of existing stock options shall not be altered, it being intended that any adjustments made with respect to such stock options shall apply only to the price per share and the number of shares subject thereto. For purposes of this Section 10.1, neither (i) the issuance of additional shares of Common Stock or other securities of the Company in exchange for adequate consideration (including services), nor (ii) the conversion into Common Stock of any securities of the Company now or hereafter outstanding, shall be deemed material alterations in the capital structure of the Company. In the event the Administrative Committee shall determine that the nature of a material alteration in the capital structure of the Company is such that it is not feasible or advisable to make adjustments to this Plan or to the stock options granted hereunder, such event shall be deemed a Terminating Event as defined in
Section 10.2 below.

10.2. In the event of (a) the dissolution or liquidation of the Company, (b) a merger or other reorganization of the Company with one or more corporations as a result of which the Company will not be a surviving corporation, (c) the sale of all or substantially all of the assets of the Company, or (d) a sale or other transfer, pursuant to a tender offer or otherwise, of more than fifty percent (50%) of the then outstanding shares of Common Stock of the Company (any of such events is herein referred to as a "Terminating Event"), the Administrative Committee shall determine whether provision will be made in connection with the Terminating Event for an appropriate assumption of the stock options theretofore granted under this Plan (which assumption may be effected by means of a payment to each Optionee (by the Company or any other person or entity involved in the Terminating Event), in cancellation of the stock options held by him or her, of the difference between the then fair market value of the aggregate number of shares of Common Stock then subject to such stock options and the aggregate exercise price that would have to be paid to acquire such shares) or for substitution of appropriate new options covering stock of a successor corporation to the Company or stock of an Affiliate of such successor corporation. If the Administrative Committee determines that such an assumption or substitution will be made, the Administrative Committee shall give notice of such determination to the Optionees under this Plan, and the provisions of such assumption or substitution, and any adjustments made (i) to the number and kind of shares subject to the stock options outstanding under this Plan (or to options issued in substitution therefor), (ii) to the Option Prices, and/or (iii) to the terms and conditions of the stock options, shall be binding upon such Optionees. Any such determination shall be made in the sole discretion of the Administrative Committee and shall be final, conclusive and binding on all Optionees. If the Administrative Committee, in its sole discretion, determines that no such assumption or substitution will be made, the Administrative Committee shall give notice of such determination to the Optionees, whereupon each Optionee

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shall have the right for a period of thirty (30) days following such notice to exercise in full or in part any unexercised or unexpired stock options then held by him or her, without regard to any contingent vesting provision to which such stock options may have otherwise been subject pursuant to Section 5.1.5 above. Upon the expiration of said period of thirty (30) days, all stock options then outstanding shall expire to the extent not earlier exercised, and this Plan shall terminate.

11. RIGHT OF REPURCHASE; MARKET STANDOFF; ESCROW

11.1 RIGHT OF REPURCHASE

The Administrative Committee shall have the discretion to authorize the issuance of unvested shares of Common Stock pursuant to the exercise of a stock option. Should the Optionee cease to be employed by or provide services to the Company, then all shares of Common Stock issued upon exercise of a stock option which are unvested at the time of cessation of employment or services shall be subject to repurchase at the exercise price paid for such shares. The terms and conditions upon which such repurchase right shall be exercisable (including the period and procedure for exercise) shall be established by the Administrative Committee and set forth in the agreement evidencing such right.

All of the Company's outstanding repurchase rights under this Section 11.1 are assignable by the Company at any time and shall remain in full force and effect in the event of a Terminating Event; provided that if the Administrative Committee determines that an assumption or substitution of stock options outstanding under the Plan will not be made in connection with the Terminating Event and the vesting of such stock options is therefore accelerated pursuant to Section 10.2, the repurchase rights under this Section 11.1 shall terminate and all shares subject to such terminated rights shall immediately vest in full.

The Administrative Committee shall have the discretionary authority, exercisable either before or after the Optionee's cessation of employment or services, to cancel the Company's outstanding repurchase rights with respect to one or more shares purchased or purchasable by the Optionee under a stock option and thereby accelerate the vesting of such shares in whole or in part at any time.

11.2 MARKET STANDOFF

In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the "1933 Act"), including the Company's initial public offering, a person shall not sell, or make any short sale of, loan, hypothecate,

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pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to, any shares issued pursuant to a stock option granted under the Plan without the prior written consent of the Company or its underwriters. Such limitations shall be in effect only if and to the extent and for such period of time as may be requested by the Company or such underwriters and agreed to by the Company's officers and directors; provided, however, that in no event shall the weighted average number of days in such period exceed 180 days. The limitations of this paragraph shall in all events terminate two years after the effective date of the Company's initial public offering.

In the event of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the Company's outstanding Common Stock effected as a class without the Company's receipt of consideration, then any new, substituted or additional securities distributed with respect to the purchased shares shall be immediately subject to the provisions of this Section 11.2, to the same extent the purchased shares are at such time covered by such provisions.

In order to enforce the limitations of this Section 11.2, the Company may impose stop-transfer instructions with respect to the purchased shares until the end of the applicable standoff period.

11.3 ESCROW

To ensure that shares of Common Stock acquired upon exercise of a stock option that are subject to any repurchase right, shareholders agreement and/or security for any promissory note will be available for repurchase, the Administrative Committee may require the Optionee to deposit the certificate or certificates evidencing such shares with an agent designated by the Administrative Committee under the terms and conditions of escrow and security agreements approved by the Administrative Committee. If the Administrative Committee does not require such deposit as a condition of exercise of a stock option, the Administrative Committee reserves the right at any time to require the Optionee to so deposit the certificate or certificates in escrow. The Company shall bear the expenses of the escrow.

As soon as practicable after the expiration of any repurchase rights or shareholders agreement, and after full repayment of any promissory note secured by the shares in escrow, the agent shall deliver to the Optionee the shares no longer subject to such restrictions and no longer security for any promissory note.

In the event shares held in escrow are subject to the Company's exercise of a repurchase option or shareholders agreement, the notices required to be given to the Optionee shall be given to the agent and any payment required to be given to the

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Optionee shall be given to the agent. Within thirty (30) days after payment by the Company, the agent shall deliver the shares which the Company has purchased to the Company and shall deliver the payment received from the Company to the Optionee.

In the event of any stock dividend, stock split or consolidation of shares or any like capital adjustment of any of the outstanding securities of the Company, any and all new, substituted or additional securities or other property to which the Optionee is entitled by reason of ownership of shares acquired upon exercise of a stock option shall be subject to any repurchase rights, shareholders agreement, and/or security for any promissory note with the same force and effect as the shares subject to such repurchase rights, shareholders agreement and security interest immediately before such event.

12. TERMINATION AND AMENDMENT

12.1. Unless earlier terminated as provided below, this Plan shall terminate on, and no stock option shall be granted under this Plan after, the tenth (10th) anniversary of the date immediately preceding the date this Plan is adopted by the Board. Such termination shall not affect the rights of the Administrative Committee or the Company under the Plan (including but not limited to rights under Section 10 and Section 11 above) with respect to any stock options theretofore granted or shares of Common Stock issued upon exercise thereof.

12.2. The Board may at any time terminate, suspend, or amend the terms of this Plan; provided, however, that, to the extent required by Section 422 of the Code and except as provided in Section 10 above, the Board may not, without prior approval by holders of shares of Common Stock constituting at least a majority of the shares of Common Stock represented in person or by proxy and entitled to vote at the meeting at which such approval is sought:

12.2.1 Increase the aggregate number of shares of Common Stock reserved for issuance upon exercise of stock options granted under this Plan;

12.2.2 Change the class of employees who are eligible to receive Incentive Stock Options under this Plan; or

12.2.3 Make any change in the terms of this Plan which would cause the Incentive Stock Options granted hereunder to lose their qualification as incentive stock options under Section 422 of the Code.

12.3. No stock option may be granted during any suspension or after termination of this Plan. Amendment, suspension, or termination of this Plan shall

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not, without the consent of the Optionee, alter or impair any rights or obligations with respect to any stock option theretofore granted or shares of Common Stock acquired upon exercise thereof.

13. OPTION AGREEMENT; LEGEND

Each stock option granted hereunder shall be evidenced by a written agreement executed by the Company and the Optionee. Such agreement shall contain the terms of the stock option as specified pursuant to Section 5 above, together with such other terms, conditions, and provisions not inconsistent with such terms and the conditions of this Plan as the Administrative Committee deems advisable. Such agreement shall also provide that, by accepting a stock option granted under this Plan, the Optionee, for himself or herself, for his or her Qualified Successor, and for his or her heirs, successors, and assigns:

13.1. Recognizes, agrees and acknowledges that no registration statement under the 1933 Act or under any state securities laws, will have been filed as to either the stock option or any shares of Common Stock that may be acquired upon exercise of such stock option;

13.2. Warrants and represents that the stock option and any shares of Common Stock of the Company acquired upon exercise of the option will be acquired and held by the Optionee for the Optionee's own account, for investment purposes only, and not with a view towards the distribution or public offering thereof nor with any present intention of reselling or distributing the same at any particular future time;

13.3. Acknowledges and consents to the appearance of a printed legend on the back of each stock certificate representing shares of Common Stock issued upon exercise of such stock option, which legend shall read as follows:

NOTICE: TRANSFER AND OTHER RESTRICTIONS

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES ACT (COLLECTIVELY, THE "SECURITIES LAWS"). THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS THE SHARES (I) ARE REGISTERED UNDER THE SECURITIES LAWS, OR (II) ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES LAWS AND THE CORPORATION IS PROVIDED AN

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OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE SHARES ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER, AND MAY BE SUBJECT TO REPURCHASE BY THE CORPORATION, PURSUANT TO THE PROVISIONS OF (A) THE CORPORATION'S STOCK OPTION PLAN AND/OR A STOCK OPTION AGREEMENT BETWEEN THE HOLDER AND THE CORPORATION, AND/OR (B) A SHAREHOLDERS AGREEMENT, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE CORPORATION. INFORMATION CONCERNING THESE RESTRICTIONS MAY BE OBTAINED FROM THE CORPORATION OR ITS LEGAL COUNSEL.

13.4. Agrees not to sell, transfer, or otherwise dispose of any shares of Common Stock that may be acquired upon exercise of the stock option unless
(i) there is an effective registration statement under the 1933 Act covering the proposed disposition and compliance with governing state securities laws, (ii) the Optionee delivers to the Company, at the Optionee's expense, a "no-action" letter or similar interpretative opinion, satisfactory in form and substance to the Company, from the staff of each appropriate securities agency, to the effect that such shares may be disposed of by the Optionee in the manner proposed, or
(iii) the Optionee delivers to the Company, at the Optionee's expense, a legal opinion, satisfactory in form and substance to the Company, of legal counsel designated by the Optionee and satisfactory to the Company, to the effect that the proposed disposition is exempt from registration under the 1933 Act and governing state securities laws; and

13.5. Agrees to indemnify the Company and hold it harmless from and against any loss, claim or liability, including attorneys' fees or other legal expenses incurred in the defense thereof, incurred by the Company as a result of any breach by the Optionee of, or any inaccuracy in, any representation, warranty, covenant, or other provision contained in such agreement.

If a registration statement under the 1933 Act is hereafter filed with respect to Incentive Stock Options granted or to be granted hereunder and the shares of Common Stock that may be acquired upon exercise of such stock options, then, following the effectiveness thereof, the provisions in agreements representing stock options that would otherwise be required by this Section 13 may, in the discretion of the Administrative Committee, be modified or eliminated.

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14. MISCELLANEOUS PROVISIONS

14.1. Nothing contained in this Plan shall obligate the Company to employ an Optionee for any period, nor shall this Plan interfere in any way with the right of the Company to reduce such Optionee's compensation.

14.2. The provisions of this Plan, each stock option issued to an Optionee hereunder, and the agreement evidencing such stock option under Section 13 above shall be binding upon such Optionee, the Qualified Successor of such Optionee, and the heirs, successors, and assigns of such Optionee.

14.3. Where the context so requires, references herein to the singular shall include the plural, and vice versa, and references to a particular gender shall include either or both genders.

14.4. This Plan shall be construed, administered, and enforced in accordance with the laws of the United States, to the extent applicable hereto, as well as the laws of the state of Washington.

15. EFFECTIVE DATE OF PLAN

This Plan shall be effective upon adoption of a resolution of the Board approving this Plan. This Plan shall be subject to approval, within twelve (12) months before or after the date this Plan is adopted by the Board, by holders of shares of Common Stock constituting at least a majority of the shares of Common Stock represented in person or by proxy and entitled to vote at the meeting at which such approval is sought. The Plan shall also be subject to the requirement of RCW 21.20.310(10) that the Administrator of Securities of the Department of Licensing of the State of Washington be provided with notification of the adoption of this Plan. No stock option granted hereunder shall be exercisable until such shareholder approval and notification requirements have been satisfied. If either of these requirements is not satisfied by August 1,1995, this Plan, and any stock options granted hereunder prior to such date, shall be void.

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EXHIBIT 10.21

AMAZON.COM, INC.

1997 STOCK OPTION PLAN

SECTION 1. PURPOSE

The purpose of the Amazon.com, Inc. 1997 Stock Option Plan (the "Plan") is to enhance the long-term stockholder value of Amazon.com, Inc., a Delaware corporation (the "Company"), by offering opportunities to employees, directors, officers, consultants, agents, advisors and independent contractors of the Company and its Subsidiaries (as defined in Section 2) to participate in the Company's growth and success, and to encourage them to remain in the service of the Company and its Subsidiaries and to acquire and maintain stock ownership in the Company.

SECTION 2. DEFINITIONS

For purposes of the Plan, the following terms shall be defined as set forth below:

2.1 BOARD

      "Board" means the Board of Directors of the Company.

2.2   CAUSE

      "Cause" means dishonesty, fraud, misconduct, unauthorized use or

disclosure of confidential information or trade secrets, or conviction or confession of a crime punishable by law (except minor violations), in each case as determined by the Plan Administrator, and its determination shall be conclusive and binding.

2.3 CODE

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

2.4 COMMON STOCK

"Common Stock" means the common stock, par value $.01 per share, of the Company.

2.5 CORPORATE TRANSACTION

"Corporate Transaction" means any of the following events:

(a) Consummation of any merger or consolidation of the Company in which the Company is not the continuing or surviving corporation, or pursuant to which shares of the Common Stock are converted into cash, securities or other property (other than a merger of the Company in which the holders of Common Stock immediately prior to the


merger have the same proportionate ownership of capital stock of the surviving corporation immediately after the merger);

(b) Consummation of any sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all of the Company's assets other than a transfer of the Company's assets to a majority-owned subsidiary corporation (as the term "subsidiary corporation" is defined in Section 8.3) of the Company; or

(c) Approval by the holders of the Common Stock of any plan or proposal for the liquidation or dissolution of the Company.

Ownership of voting securities shall take into account and shall include ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the date of adoption of the Plan) under the Exchange Act.

2.6 DISABILITY

"Disability" means "disability" as that term is defined for purposes of
Section 22(e)(3) of the Code.

2.7 EARLY RETIREMENT

"Early Retirement" means early retirement as that term is defined by the Plan Administrator from time to time for purposes of the Plan.

2.8 EXCHANGE ACT

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.9 FAIR MARKET VALUE

The "Fair Market Value" shall be as established in good faith by the Plan Administrator or (a) if the Common Stock is listed on the Nasdaq National Market, the average of the high and low per share sales prices for the Common Stock as reported by the Nasdaq National Market for a single trading day or (b) if the Common Stock is listed on the New York Stock Exchange or the American Stock Exchange, the average of the high and low per share sales prices for the Common Stock as such price is officially quoted in the composite tape of transactions on such exchange for a single trading day. If there is no such reported price for the Common Stock for the date in question, then such price on the last preceding date for which such price exists shall be determinative of the Fair Market Value.

2.10 GRANT DATE

"Grant Date" means the date the Plan Administrator adopted the granting resolution. If, however, the Plan Administrator designates in a resolution a later date as the date an Option is to be granted, then such later date shall be the "Grant Date."

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2.11 INCENTIVE STOCK OPTION

"Incentive Stock Option" means an Option to purchase Common Stock granted under Section 7 with the intention that it qualify as an "incentive stock option" as that term is defined in Section 422 of the Code.

2.12 NONQUALIFIED STOCK OPTION

"Nonqualified Stock Option" means an Option to purchase Common Stock granted under Section 7 other than an Incentive Stock Option.

2.13 OPTION

"Option" means the right to purchase Common Stock granted under
Section 7.

2.14 OPTIONEE

"Optionee" means (i) the person to whom an Option is granted; (ii) for an Optionee who has died, the personal representative of the Optionee's estate, the person(s) to whom the Optionee's rights under the Option have passed by will or by the applicable laws of descent and distribution, or the beneficiary designated in accordance with Section 9; or (iii) person(s) to whom an Option has been transferred in accordance with Section 9.

2.15 PLAN ADMINISTRATOR

"Plan Administrator" means the Board or any committee of the Board designated to administer the Plan under Section 3.1.

2.16 RETIREMENT

"Retirement" means retirement as of the individual's normal retirement date as that term is defined by the Plan Administrator from time to time for purposes of the Plan.

2.17  SECURITIES ACT

      "Securities Act" means the Securities Act of 1933, as amended.

2.18  SUBSIDIARY

      "Subsidiary," except as provided in Section 8.3 in connection with

Incentive Stock Options, means any entity that is directly or indirectly controlled by the Company or in which the Company has a significant ownership interest, as determined by the Plan Administrator, and any entity that may become a direct or indirect parent of the Company.

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SECTION 3. ADMINISTRATION

3.1 PLAN ADMINISTRATOR

The Plan shall be administered by the Board or a committee or committees (which term includes subcommittees) appointed by, and consisting OF two or more members of, the Board. If and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, the Board shall consider in selecting the Plan Administrator and the membership of any committee acting as Plan Administrator, with respect to any persons subject or likely to become subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee directors" as contemplated by Rule 16b-3 under the Exchange Act. The Board may delegate the responsibility for administering the Plan with respect to designated classes of eligible persons to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate. Committee members shall serve for such term as the Board may determine, subject to removal by the Board at any time.

3.2 ADMINISTRATION AND INTERPRETATION BY THE PLAN ADMINISTRATOR

Except for the terms and conditions explicitly set forth in the Plan, the Plan Administrator shall have exclusive authority, in its discretion, to determine all matters relating to Options under the Plan, including the selection of individuals to be granted Options, the type of Options, the number of shares of Common Stock subject to an Option, all terms, conditions, restrictions and limitations, if any, of an Option and the terms of any instrument that evidences the Option. The Plan Administrator shall also have exclusive authority to interpret the Plan and may from time to time adopt, and change, rules and regulations of general application for the Plan's administration. The Plan Administrator's interpretation of the Plan and its rules and regulations, and all actions taken and determinations made by the Plan Administrator pursuant to the Plan, shall be conclusive and binding on all parties involved or affected. The Plan Administrator may delegate administrative duties to such of the Company's officers as it so determines.

SECTION 4. STOCK SUBJECT TO THE PLAN

4.1 AUTHORIZED NUMBER OF SHARES

Subject to adjustment from time to time as provided in Section 10.1, a maximum of 4 million shares of Common Stock shall be available for issuance under the Plan, except that any shares of Common Stock that, as of the date the Plan is approved by the Company's stockholders, are available for issuance under the Company's Amended and Restated 1994 Stock Option Plan (or that thereafter become available for issuance under that Plan in accordance with its terms as in effect on such date) and that are not issued under that Plan shall be added to the aggregate number of shares available for issuance under the Plan. Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares.

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4.2 LIMITATIONS

Subject to adjustment from time to time as provided in Section 10.1, not more than 250,000 shares of Common Stock may be made subject to Options under the Plan to any individual in the aggregate in any one fiscal year of the Company, except that the Company may make additional one-time grants of up to 1 million shares to newly hired individuals, such limitation to be applied in a manner consistent with the requirements of, and only to the extent required for compliance with, the exclusion from the limitation on deductibility of compensation under Section 162(m) of the Code.

4.3 REUSE OF SHARES

Any shares of Common Stock that have been made subject to an Option that cease to be subject to the Option (other than by reason of exercise of the Option to the extent it is exercised for shares) and/or shares of Common Stock subject to repurchase which are subsequently repurchased by the Company, shall again be available for issuance in connection with future grants of Options under the Plan; provided, however, that for purposes of Section 4.2, any such shares shall be counted in accordance with the requirements of Section 162(m) of the Code.

SECTION 5. ELIGIBILITY

Options may be granted under the Plan to those officers, directors and employees of the Company and its Subsidiaries as the Plan Administrator from time to time selects. Options may also be granted to consultants, agents, advisors and independent contractors who provide services to the Company and its Subsidiaries.

SECTION 6. AWARDS

6.1 FORM AND GRANT OF OPTIONS

The Plan Administrator shall have the authority, in its sole discretion, to determine the type or types of awards to be made under the Plan. Such awards may consist of Incentive Stock Options and/or Nonqualified Stock Options. Options may be granted singly or in combination.

6.2 ACQUIRED COMPANY OPTION AWARDS

Notwithstanding anything in the Plan to the contrary, the Plan Administrator may grant Options under the Plan in substitution for awards issued under other plans, or assume under the Plan awards issued under other plans, if the other plans are or were plans of other acquired entities ("Acquired Entities") (or the parent of an Acquired Entity) and the new Option is substituted, or the old award is assumed, by reason of a merger, consolidation, acquisition of property or of stock, reorganization or liquidation (the "Acquisition Transaction"). In the event that a written agreement pursuant to which the Acquisition Transaction is completed is approved by the Board and said agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, said terms and conditions shall be deemed to be the action of the Plan Administrator without any further action by the Plan

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Administrator, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Optionees.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS

7.1 GRANT OF OPTIONS

The Plan Administrator is authorized under the Plan, in its sole discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock Options, which shall be appropriately designated.

7.2 OPTION EXERCISE PRICE

The exercise price for shares purchased under an Option shall be as determined by the Plan Administrator, but shall not be less than 100% of the Fair Market Value of the Common Stock on the Grant Date with respect to Incentive Stock Options.

7.3 TERM OF OPTIONS

The term of each Option shall be as established by the Plan Administrator or, if not so established, shall be 10 years from the Grant Date.

7.4 EXERCISE AND VESTING OF OPTIONS

The Plan Administrator shall establish and set forth in each instrument that evidences an Option the time at which or the installments in which the Option shall vest and become exercisable, which provisions may be waived or modified by the Plan Administrator at any time. If not so established in the instrument evidencing the Option, the Option will be immediately exercisable and the shares subject to the Option will vest according to the following schedule, which may be waived or modified by the Plan Administrator at any time:

 Period of Optionee's Continuous Employment
     or Service With the Company or Its
                Subsidiaries                          Percent of Total Option
             From the Grant Date                          That Is Vested
             -------------------                          --------------
                After 1 year                                    20%
                After 2 years                                   40%
Each three-month period completed thereafter             An additional 5%
                After 5 years                                  100%

Any unvested shares acquired upon exercise of an Option shall be subject to repurchase by the Company upon termination of the Optionee's employment or services in accordance with the provisions of Section 13.1.

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To the extent that the right to purchase shares has accrued thereunder, an Option may be exercised from time to time by written notice to the Company, in accordance with procedures established by the Plan Administrator, setting forth the number of shares with respect to which the Option is being exercised and accompanied by payment in full as described in Section 7.5. The Plan Administrator may determine at any time that an Option may not be exercised as to less than 100 shares at any one time for vested shares and any number in its discretion for unvested shares (or the lesser number of remaining shares covered by the Option).

To the extent required by the Plan Administrator, as a condition to exercise by the Optionee of an Option, the Optionee shall execute and deliver to the Company a Shareholders Agreement in substantially the form in use at the time of exercise, unless either (i) the Optionee has previously executed and delivered such Shareholder Agreement and it is in effect at the time the Optionee exercises the Option or (ii) such Shareholders Agreement is no longer in effect with respect to other holders of Common Stock.

7.5 PAYMENT OF EXERCISE PRICE

The exercise price for shares purchased under an Option shall be paid in full to the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased. Such consideration must be paid in cash or by check or, unless the Plan Administrator in its sole discretion determines otherwise, either at the time the Option is granted or at any time before it is exercised, a combination of cash and/or check (if any) and one or both of the following alternative forms: (a) tendering (either actually or, if and so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) Common Stock already owned by the Optionee for at least six months (or any shorter period necessary to avoid a charge to the Company's earnings for financial reporting purposes) having a Fair Market Value on the day prior to the exercise date equal to the aggregate Option exercise price or (b) if and so long as the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, delivery of a properly executed exercise notice, together with irrevocable instructions, to (i) a brokerage firm designated by the Company to deliver promptly to the Company the aggregate amount of sale or loan proceeds to pay the Option exercise price and any withholding tax obligations that may arise in connection with the exercise and
(ii) the Company to deliver the certificates for such purchased shares directly to such brokerage firm, all in accordance with the regulations of the Federal Reserve Board. In addition, the exercise price for shares purchased under an Option may be paid, either singly or in combination with one or more of the alternative forms of payment authorized by this Section 7.5, by (y) a promissory note delivered pursuant to Section 12 or (z) such other consideration as the Plan Administrator may permit.

7.6 POST-TERMINATION EXERCISES

The Plan Administrator shall establish and set forth in each instrument that evidences an Option whether the Option will continue to be exercisable, and the terms and conditions of such exercise, if an Optionee ceases to be employed by, or to provide services to, the Company or its Subsidiaries, which provisions may be waived or modified by the Plan Administrator at any time. If not so established in the instrument evidencing the Option, the Option will be exercisable

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according to the following terms and conditions, which may be waived or modified by the Plan Administrator at any time.

In case of termination of the Optionee's employment or services other than by reason of death or Cause, the Option shall be exercisable, to the extent of the number of shares vested at the date of such termination, only (a) within one year if the termination of the Optionee's employment or services is coincident with Retirement, Early Retirement at the Company's request or Disability or (b) within three months after the date the Optionee ceases to be an employee, director, officer, consultant, agent, advisor or independent contractor of the Company or a Subsidiary if termination of the Optionee's employment or services is for any reason other than Retirement, Early Retirement at the Company's request or Disability, but in no event later than the remaining term of the Option. Any Option exercisable at the time of the Optionee's death may be exercised, to the extent of the number of shares vested at the date of the Optionee's death, by the personal representative of the Optionee's estate, the person(s) to whom the Optionee's rights under the Option have passed by will or the applicable laws of descent and distribution or the beneficiary designated pursuant to Section 9 at any time or from time to time within one year after the date of death, but in no event later than the remaining term of the Option. Any portion of an Option that is not vested on the date of termination of the Optionee's employment or services shall terminate on such date, unless the Plan Administrator determines otherwise. In case of termination of the Optionee's employment or services for Cause, the Option shall automatically terminate upon first notification to the Optionee of such termination, unless the Plan Administrator determines otherwise. If an Optionee's employment or services with the Company are suspended pending an investigation of whether the Optionee shall be terminated for Cause, all the Optionee's rights under any Option likewise shall be suspended during the period of investigation.

With respect to employees, unless the Plan Administrator at any time determines otherwise, "termination of the Optionee's employment or services" for purposes of the Plan (including without limitation this Section 7 and Section 13) shall mean any reduction in the Optionee's regular hours of employment to less than thirty (30) hours per week. A transfer of employment or services between or among the Company and its Subsidiaries shall not be considered a termination of employment or services. The effect of a Company-approved leave of absence on the terms and conditions of an Option shall be determined by the Plan Administrator, in its sole discretion.

SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS

To the extent required by Section 422 of the Code, Incentive Stock Options shall be subject to the following additional terms and conditions:

8.1 DOLLAR LIMITATION

To the extent the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time during any calendar year (under the Plan and all other stock option plans of the Company) exceeds $100,000, such portion in excess of $100,000 shall be subject to delayed exercisability or treated as a Nonqualified Stock Option as set forth by the Plan Administrator in the agreement(s)

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evidencing the Option. In the event the Optionee holds two or more such Options that become exercisable for the first time in the same calendar year, such limitation shall be applied on the basis of the order in which such Options are granted.

8.2 10% STOCKHOLDERS

If an individual owns more than 10% of the total voting power of all classes of the Company's stock, then the exercise price per share of an Incentive Stock Option shall not be less than 110% of the Fair Market Value of the Common Stock on the Grant Date and the Option term shall not exceed five years. The determination of 10% ownership shall be made in accordance with
Section 422 of the Code.

8.3 ELIGIBLE EMPLOYEES

Individuals who are not employees of the Company or one of its parent corporations or subsidiary corporations may not be granted Incentive Stock Options. For purposes of this Section 8.3, "parent corporation" and "subsidiary corporation" shall have the meanings attributed to those terms for purposes of
Section 422 of the Code.

8.4 TERM

The term of an Incentive Stock Option shall not exceed 10 years.

8.5 EXERCISABILITY

To qualify for Incentive Stock Option tax treatment, an Option designated as an Incentive Stock Option must be exercised within three months after termination of employment for reasons other than death, except that, in the case of termination of employment due to total disability, such Option must be exercised within one year after such termination. Employment shall not be deemed to continue beyond the first 90 days of a leave of absence unless the Optionee's reemployment rights are guaranteed by statute or contract. For purposes of this
Section 8.5, "total disability" shall mean a mental or physical impairment of the Optionee that is expected to result in death or that has lasted or is expected to last for a continuous period of 12 months or more and that causes the Optionee to be unable, in the opinion of the Company, to perform his or her duties for the Company and to be engaged in any substantial gainful activity. Total disability shall be deemed to have occurred on the first day after the Company has furnished its opinion of total disability to the Plan Administrator.

8.6 TAXATION OF INCENTIVE STOCK OPTIONS

In order to obtain certain tax benefits afforded to Incentive Stock Options under Section 422 of the Code, the Optionee must hold the shares issued upon the exercise of an Incentive Stock Option for two years after the Grant Date of the Incentive Stock Option and one year from the date of exercise. An Optionee may be subject to the alternative minimum tax at the time of exercise of an Incentive Stock Option. The Plan Administrator may require an Optionee to give the Company prompt notice of any disposition of shares acquired by the exercise of an Incentive Stock Option prior to the expiration of such holding periods.

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8.7 PROMISSORY NOTES

The amount of any promissory note delivered pursuant to Section 12 in connection with an Incentive Stock Option shall bear interest at a rate specified by the Plan Administrator but in no case less than the rate required to avoid imputation of interest (taking into account any exceptions to the imputed interest rules) for federal income tax purposes.

SECTION 9. ASSIGNABILITY

No Option granted under the Plan may be assigned, pledged or transferred by the Optionee other than by will or by the applicable laws of descent and distribution, and, during the Optionee's lifetime, such Option may be exercised only by the Optionee or a permitted assignee or transferee of the Optionee (as provided below). Notwithstanding the foregoing, and to the extent permitted by
Section 422 of the Code, the Plan Administrator, in its sole discretion, may permit such assignment, transfer and exercisability and may permit an Optionee to designate a beneficiary who may exercise the Option after the Optionee's death; provided, however, that any Option so assigned or transferred shall be subject to all the same terms and conditions contained in the instrument evidencing the Option.

                             SECTION 10. ADJUSTMENTS

10.1  ADJUSTMENT OF SHARES

      In the event that, at any time or from time to time, a stock dividend,

stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company's corporate or capital structure results in (a) the outstanding shares, or any securities exchanged therefor or received in their place, being exchanged for a different number or class of securities of the Company or of any other corporation or (b) new, different or additional securities of the Company or of any other corporation being received by the holders of shares of Common Stock of the Company, then the Plan Administrator shall make proportional adjustments in (i) the maximum number and kind of securities subject to the Plan as set forth in Section 4.1, (ii) the maximum number and kind of securities that may be made subject to Options to any individual as set forth in Section 4.2, and (iii) the number and kind of securities that are subject to any outstanding Option and the per share price of such securities, without any change in the aggregate price to be paid therefor. The determination by the Plan Administrator as to the terms of any of the foregoing adjustments shall be conclusive and binding.

10.2 CORPORATE TRANSACTION

Except as otherwise provided in the instrument that evidences the Option, in the event of a Corporate Transaction, the Plan Administrator shall determine whether provision will be made in connection with the Corporate Transaction for an appropriate assumption of the Options theretofore granted under the Plan (which assumption may be effected by means of a payment to each Optionee (by the Company or any other person or entity involved in the Corporate Transaction), in exchange for the cancellation of the Options held by such Optionee, of the

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difference between the then Fair Market Value of the aggregate number of shares of Common Stock then subject to such Options and the aggregate exercise price that would have to be paid to acquire such shares) or for substitution of appropriate new options covering stock of a successor corporation to the Company or stock of an affiliate of such successor corporation. If the Plan Administrator determines that such an assumption or substitution will be made, the Plan Administrator shall give notice of such determination to the Optionees, and the provisions of such assumption or substitution, and any adjustments made
(i) to the number and kind of shares subject to the outstanding Options (or to the options in substitution therefor), (ii) to the exercise prices, and/or (iii) to the terms and conditions of the stock options, shall be binding on the Optionees. Any such determination shall be made in the sole discretion of the Plan Administrator and shall be final, conclusive and binding on all Optionees. If the Plan Administrator, in its sole discretion, determines that no such assumption or substitution will be made, the Plan Administrator shall give notice of such determination to the Optionees, and each Option that is at the time outstanding shall automatically accelerate so that each such Option shall, immediately prior to the specified effective date for the Corporate Transaction, become 100% vested and exercisable, except that such acceleration will not occur if, in the opinion of the Company's outside accountants, it would render unavailable "pooling of interest" accounting for a Corporate Transaction that would otherwise qualify for such accounting treatment. All such Options shall terminate and cease to remain outstanding immediately following the consummation of the Corporate Transaction, except to the extent assumed by the successor corporation or an affiliate thereof.

10.3 FURTHER ADJUSTMENT OF OPTIONS

Subject to Section 10.2, the Plan Administrator shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation or change in control of the Company, as defined by the Plan Administrator, to take such further action as it determines to be necessary or advisable, and fair and equitable to Optionees, with respect to Options. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Options so as to provide for earlier, later, extended or additional time for exercise and other modifications, and the Plan Administrator may take such actions with respect to all Optionees, to certain categories of Optionees or only to individual Optionees. The Plan Administrator may take such action before or after granting Options to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation or change in control that is the reason for such action.

10.4 LIMITATIONS

The grant of Options will in no way affect the Company's right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

SECTION 11. WITHHOLDING

The Company may require the Optionee to pay to the Company the amount of any withholding taxes that the Company is required to withhold with respect to the grant or exercise

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of any Option. Subject to the Plan and applicable law, the Plan Administrator may, in its sole discretion, permit the Optionee to satisfy withholding obligations, in whole or in part, by paying cash, by electing to have the Company withhold shares of Common Stock or by transferring shares of Common Stock to the Company, in such amounts as are equivalent to the Fair Market Value of the withholding obligation. The Company shall have the right to withhold from any shares of Common Stock issuable pursuant to an Option or from any cash amounts otherwise due or to become due from the Company to the Optionee an amount equal to such taxes. The Company may also deduct from any Option any other amounts due from the Optionee to the Company or a Subsidiary.

SECTION 12. LOANS, INSTALLMENT PAYMENTS AND LOAN GUARANTEES

To assist an Optionee (including an Optionee who is an officer or a director of the Company) in acquiring shares of Common Stock pursuant to an Option granted under the Plan, the Plan Administrator, in its sole discretion, may authorize, either at the Grant Date or at any time before the acquisition of Common Stock pursuant to the Option, (a) the extension of a loan to the Optionee by the Company, (b) the payment by the Optionee of the purchase price, if any, of the Common Stock in installments, or (c) the guarantee by the Company of a loan obtained by the Optionee from a third party. The terms of any loans, installment payments or loan guarantees, including the interest rate and terms of repayment, will be subject to the Plan Administrator's discretion. Loans, installment payments and loan guarantees may be granted with or without security. The maximum credit available is the purchase price, if any, of the Common Stock acquired, plus the maximum federal and state income and employment tax liability that may be incurred in connection with the acquisition.

                      SECTION 13. REPURCHASE RIGHTS; ESCROW

13.1  REPURCHASE RIGHTS

      The Plan Administrator shall have the discretion to authorize the issuance

of unvested shares of Common Stock pursuant to the exercise of an Option. In the event of termination of the Optionee's employment or services, all shares of Common Stock issued upon exercise of an Option which are unvested at the time of cessation of employment or services shall be subject to repurchase at the exercise price paid for such shares. The terms and conditions upon which such repurchase right shall be exercisable (including the period and procedure for exercise) shall be established by the Plan Administrator and set forth in the agreement evidencing such right.

All of the Company's outstanding repurchase rights under this Section 13.1 are assignable by the Company at any time and shall remain in full force and effect in the event of a Corporate Transaction; provided that if the vesting of Options is accelerated pursuant to Section 10.2, the repurchase rights under this Section 13.1 shall terminate and all shares subject to such terminated rights shall immediately vest in full.

The Plan Administrator shall have the discretionary authority, exercisable either before or after the Optionee's cessation of employment or services, to cancel the Company's outstanding

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repurchase rights with respect to one or more shares purchased or purchasable by the Optionee under an Option and thereby accelerate the vesting of such shares in whole or in part at any time.

13.2 ESCROW

To ensure that shares of Common Stock acquired upon exercise of an Option that are subject to any repurchase right, stockholders agreement and/or security for any promissory note will be available for repurchase, the Plan Administrator may require the Optionee to deposit the certificate or certificates evidencing such shares with an agent designated by the Plan Administrator under the terms and conditions of escrow and security agreements approved by the Plan Administrator. If the Plan Administrator does not require such deposit as a condition of exercise of an Option, the Plan Administrator reserves the right at any time to require the Optionee to so deposit the certificate or certificates in escrow. The Company shall bear the expenses of the escrow.

As soon as practicable after the expiration of any repurchase rights or stockholders agreement, and after full repayment of any promissory note secured by the shares in escrow, the agent shall deliver to the Optionee the shares no longer subject to such restrictions and no longer security for any promissory note.

In the event shares held in escrow are subject to the Company's exercise of a repurchase option or stockholders agreement, the notices required to be given to the Optionee shall be given to the agent and any payment required to be given to the Optionee shall be given to the agent. Within 30 days after payment by the Company, the agent shall deliver the shares which the Company has purchased to the Company and shall deliver the payment received from the Company to the Optionee.

In the event of any stock dividend, stock split or consolidation of shares or any like capital adjustment of any of the outstanding securities of the Company, any and all new, substituted or additional securities or other property to which the Optionee is entitled by reason of ownership of shares acquired upon exercise of an Option shall be subject to any repurchase rights, stockholders agreement, and/or security for any promissory note with the same force and effect as the shares subject to such repurchase rights, stockholders agreement and/or security interest immediately before such event.

SECTION 14. MARKET STANDOFF

In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company's initial public offering, a person shall not sell, or make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to, any shares issued pursuant to an Option granted under the Plan without the prior written consent of the Company or its underwriters. Such limitations shall be in effect only if and to the extent and for such period of time as may be requested by the Company or such underwriters and agreed to by the Company's officers and directors; provided, however, that in no event shall the weighted

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average number of days in such period exceed 180 days. The limitations of this paragraph shall in all events terminate two years after the effective date of the Company's initial public offering.

In the event of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the Company's outstanding Common Stock effected as a class without the Company's receipt of consideration, then any new, substituted or additional securities distributed with respect to the purchased shares shall be immediately subject to the provisions of this Section 14, to the same extent the purchased shares are at such time covered by such provisions.

In order to enforce the limitations of this Section 14, the Company may impose stop-transfer instructions with respect to the purchased shares and any new, substituted or additional securities distributed with respect to the purchased shares until the end of the applicable standoff period.

                SECTION 15. AMENDMENT AND TERMINATION OF PLAN

15.1  AMENDMENT OF PLAN

      The Plan may be amended only by the Board in such respects as it shall

deem advisable; however, to the extent required for compliance with Section 422 of the Code or any applicable law or regulation, stockholder approval will be required for any amendment that will (a) increase the total number of shares as to which Options may be granted under the Plan, (b) modify the class of persons eligible to receive Options, or (c) otherwise require stockholder approval under any applicable law or regulation.

15.2 TERMINATION OF PLAN

The Board may suspend or terminate the Plan at any time. The Plan will have no fixed expiration date; provided, however, that no Incentive Stock Options may be granted more than 10 years after the earlier of the Plan's adoption by the Board and approval by the stockholders.

15.3 CONSENT OF OPTIONEE

The amendment or termination of the Plan shall not, without the consent of the Optionee, impair or diminish any rights or obligations under any Option theretofore granted under the Plan.

Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Optionee, be made in a manner so as to constitute a "modification" that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option.

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                               SECTION 16. GENERAL

16.1  OPTION AGREEMENTS

      Options granted under the Plan shall be evidenced by a written agreement

that shall contain such terms, conditions, limitations and restrictions as the Plan Administrator shall deem advisable and that are not inconsistent with the Plan.

16.2 CONTINUED EMPLOYMENT OR SERVICES; RIGHTS IN OPTIONS

None of the Plan, participation in the Plan or any action of the Plan Administrator taken under the Plan shall be construed as giving any person any right to be retained in the employ of the Company or limit the Company's right to terminate the employment or services of any person.

16.3 REGISTRATION

The Company shall be under no obligation to any Optionee to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under state securities laws, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made. The Company may issue certificates for shares with such legends and subject to such restrictions on transfer and stop-transfer instructions as counsel for the Company deems necessary or desirable for compliance by the Company with federal and state securities laws.

Inability of the Company to obtain, from any regulatory body having jurisdiction, the authority deemed by the Company's counsel to be necessary for the lawful issuance and sale of any shares hereunder or the unavailability of an exemption from registration for the issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the nonissuance or sale of such shares as to which such requisite authority shall not have been obtained.

As a condition to the exercise of an Option, the Company may require the Optionee to represent and warrant at the time of any such exercise or receipt that such shares are being purchased or received only for the Optionee's own account and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any relevant provision of the aforementioned laws. At the option of the Company, a stop-transfer order against any such shares may be placed on the official stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or otherwise transferred, unless an opinion of counsel is provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from registration. The Plan Administrator may also require such other action or agreement by the Optionee as may from time to time be necessary to comply with the federal and state securities laws.

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16.4 NO RIGHTS AS A STOCKHOLDER

No Option shall entitle the Optionee to any dividend, voting or other right of a stockholder unless and until the date of issuance under the Plan of the shares that are the subject of such Option, free of all applicable restrictions.

16.5 COMPLIANCE WITH LAWS AND REGULATIONS

Notwithstanding anything in the Plan to the contrary, the Board, in its sole discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan to Optionees who are officers or directors subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect to other Optionees. Additionally, in interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an "incentive stock option" within the meaning of Section 422 of the Code.

16.6 NO TRUST OR FUND

The Plan is intended to constitute an "unfunded" plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Optionee, and no Optionee shall have any rights that are greater than those of a general unsecured creditor of the Company.

16.7 SEVERABILITY

If any provision of the Plan or any Option is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Option under any law deemed applicable by the Plan Administrator, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Plan Administrator's determination, materially altering the intent of the Plan or the Option, such provision shall be stricken as to such jurisdiction, person or Option, and the remainder of the Plan and any such Option shall remain in full force and effect.

SECTION 17. EFFECTIVE DATE

The Plan's effective date is the date on which it is adopted by the Board, so long as it is approved by the Company's stockholders at any time within 12 months of such adoption.

Adopted by the Board on February 25, 1997 and approved by the Company's stockholders on February 25, 1997.

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PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS

 Date of
Adoption/                                                    Date of
Amendment/                                                 Stockholder
Adjustment           Section       Effect of Amendment      Approval
----------           -------       -------------------      --------

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EXHIBIT 10.22

AMAZON.COM, INC.

AMENDED AND RESTATED
INCENTIVE STOCK OPTION LETTER AGREEMENT

TO: Sheldon Kaphan

This Amended and Restated Incentive Stock Option Letter Agreement (this "Agreement") amends and supersedes paragraph 2(c) of the Employment Agreement between you and the Company dated October 24, 1994, regarding the grant to you of a stock option (the "Option") for the purchase of 709,568 shares (the "Option Shares") of the Common Stock of Amazon.com, Inc., a Delaware corporation (the "Company") at an exercise price of $.001471 per share (reflects stock split effected on November 23, 1996).

The terms of the Option are as set forth in this Agreement and in the Company's Amended and Restated 1994 Stock Option Plan (the "Plan"), a copy of which is attached. This Agreement is limited by and subject to the express terms and provisions of the Plan. Unless otherwise provided in this Agreement, defined terms will have the meaning given to such terms in the Plan.

1. DATE OF GRANT: The Option is granted effective as of October 24, 1994.

2. STATUS OF OPTION: The Option is intended to be an incentive stock option as described in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), but the Company does not represent or warrant that the Option qualifies as such.

3. TERM: Your right to exercise each vesting installment of the Option will expire five years after the vesting date for that installment, unless sooner terminated as a result of termination of your employment or services with the Company or upon a Terminating Event, as described in the Plan and Section 12 of this Agreement.

4. VESTING: The Option shall vest according to the schedule set forth in Section 2(c)(i) of your Employment Agreement, a copy of which is attached hereto as Exhibit A and incorporated herein by reference. Any Option Shares that have not yet vested according to the schedule set forth in Exhibit A shall be considered "Unvested Shares." Upon cessation of your employment or services on behalf of the Company for any reason, no further vesting of the Option will occur and any unvested portion of the Option will terminate.


4.1 ACCELERATION OF VESTING SCHEDULE: In the event (i) the Company enters into a purchase and sale agreement whereby substantially all of the Company's assets will be sold to an unrelated thirty party or (ii) more than ninety-five percent (95%) of the total issued and outstanding shares of the Company are to be sold pursuant to a stock transfer agreement to an unrelated third party (herein an "Accelerating Event"), any installments of the option not yet vested shall conditionally vest and the Employee will have the right to exercise such installment(s) of the option subject to the following:

(a) Exercise. The terms and conditions of the Employee's right to exercise any installment as set forth herein shall remain the same except that the exercise must occur concurrent with the successful consummation of the Accelerating Event.

(b) Failure to Exercise or Consummate. In the event the Employee fails to exercise any installment of the option concurrent with the consummation of the Accelerating Event, or, for whatever reason, the Accelerating Event is not consummated, the Employee's right to exercise the conditionally vested shares expire and the vesting schedule as set forth in Exhibit A shall control the date of the Employee's right to exercise the next installment of the option.

(c) Accelerating Event. Accelerating Event shall not include (i) corporate reorganizations where shareholders of the successor company(s) are substantially the same as the Company's shareholders and/or (ii) the assignment of shares of stock in the Company among family members, whether for estate planning or otherwise.

5. RIGHT TO EXERCISE: The Option shall be immediately exercisable for any or all of the Option Shares, subject to your agreement that any unvested shares of stock purchased upon exercise are subject to the Company's repurchase rights set forth in paragraph 6 below. Notwithstanding the foregoing, the aggregate fair market value of the stock with respect to which you may exercise the Option for the first time during any calendar year, together with any other incentive stock options which are exercisable by you for the first time under any Company plan during any such year, as determined in accordance with Section 422 of the Code, shall not exceed $100,000 (the "$100,000 Exercise Limitation"). To the extent the exercisability of the Option is deferred by reason of the $100,000 Exercise Limitation, the deferred portion of the Option will first become exercisable in the first calendar year or years thereafter in which the $100,000 Exercise Limitation would not be contravened.

6. COMPANY REPURCHASE RIGHT:

(a) By executing this Agreement, you hereby grant to the Company an option (the "Repurchase Option") to repurchase any Option Shares that remain Unvested Shares on the earlier of (i) the date you cease to be employed by or provide services to the Company (including a parent or subsidiary of the Company) for any reason whatsoever, including, without limitation, termination with or without cause, death or permanent disability and (ii) the date you or your legal representative attempts to sell, exchange, transfer, pledge or

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otherwise dispose of any Unvested Shares (other than pursuant to a Terminating Event, as that term is defined in Section 10.2 of the Plan).

(b) The Company may exercise the Repurchase Option by giving you written notice within 60 days after (i) such termination of employment or services (or exercise of the Option, if later) or (ii) the Company has received notice of the attempted disposition. If the Company fails to give notice within such 60-day period, the Repurchase Option shall terminate, unless you and the Company have extended the time for the exercise of the Repurchase Option. The Repurchase Option must be exercised, if at all, for all the Unvested Shares, except as you and the Company otherwise agree.

(c) Payment to you by the Company shall be made in cash within 30 days after the date of the mailing of the written notice of exercise of the Repurchase Option. For purposes of the foregoing, cancellation of any indebtedness you owe to the Company shall be treated as payment to you in cash to the extent of the unpaid principal and any accrued interest canceled. The purchase price per share being repurchased by the Company shall be an amount equal to your original cost per share, as adjusted as provided in the Plan. You shall deliver the shares of stock being repurchased to the Company at the same time as the Company delivers the purchase price to you.

(d) You hereby authorize and direct the Company's Chief Financial Officer or transfer agent to transfer to the Company any Unvested Shares as to which the Repurchase Option is exercised.

(e) The Company shall have the right to assign the Repurchase Option at any time, whether or not the Repurchase Option is then exercisable, to one or more persons as may be selected by the Company.

(f) The Repurchase Option shall remain in full force and effect in the event of a Terminating Event, provided that if the Administrative Committee determines that an assumption or substitution of options outstanding under the Plan will not be made in connection with the Terminating Event and the vesting of such options is therefore accelerated pursuant to Section 10.2 of the Plan, the Repurchase Option shall terminate and all Unvested Shares shall immediately vest in full.

(g) Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate your employment or services on behalf of the Company, for any reason, with or without cause.

(h) Subject to the terms and conditions of this Agreement, the Unvested Shares may not be sold, transferred, pledged, encumbered or disposed of under any circumstances, whether voluntarily, by operation of law, by gift or by the applicable laws of descent and distribution. Any attempted transfer of any Unvested Shares in conflict with this Agreement shall be null and void.

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7. MARKET STANDOFF: By executing this Agreement, you hereby agree that, in connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the federal Securities Act of 1933, as amended (the "Securities Act"), including the Company's initial public offering, you shall not sell or make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose of or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to, any Option Shares without the prior written consent of the Company or its underwriters. Such limitations (the "Market Standoff") shall be in effect only if and to the extent and for such period of time as may be requested by the Company or such underwriters and agreed to by the Company's officers and directors; provided, however, that in no event shall the weighted average number of days in such period exceed 180 days. The Market Standoff shall in all events terminate two years after the effective date of the Company's initial public offering. In order to enforce the Market Standoff, the Company may impose stop-transfer instructions with respect to the Option Shares until the end of the applicable standoff period.

8. SHAREHOLDERS AGREEMENT: By accepting the Option you hereby agree to execute, on the date you exercise the Option, a shareholders agreement (the "Shareholders Agreement") in the form in use at such time (unless at such time the Company's Common Stock is publicly traded or the Shareholders Agreement has otherwise terminated), whereby under certain circumstances you grant the Company and certain of its other shareholders a right of first offer to purchase the Option Shares and agree not to dispose of the Option Shares until after December 31, 1999 without the Company's prior consent.

9. CAPITAL ADJUSTMENTS: In the event of any stock dividend, stock split or consolidation of shares or any like capital adjustment of any of the outstanding securities of the Company, any and all new, substituted or additional securities or other property to which you are entitled by reason of ownership of the Option Shares shall be immediately subject to this Agreement and shall be included in the definition of the Option Shares for all purposes and shall be subject to the Repurchase Option, the Shareholders Agreement, the Market Standoff and other terms of this Agreement. While the aggregate repurchase price for Unvested Shares shall remain the same after each such event, the repurchase price per Unvested Share upon execution of the Repurchase Option shall be appropriately adjusted.

10. METHOD OF EXERCISE: The Option may be exercised by written notice to the Company, in form and substance satisfactory to the Company, which must state the election to exercise the Option, the number of shares of stock for which the Option is being exercised and such other representations and agreements as to your investment intent with respect to such shares as may be required pursuant to the provisions of this Agreement and the Plan. The written notice must be accompanied by full payment of the exercise price for the number of shares of stock being purchased.

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11. FORM OF PAYMENT: The Option exercise price may be paid, in whole or in part, (i) in cash, by check, or by cash equivalent, or (ii) by any other form of payment permitted by the Plan Administrator.

12. EARLY TERMINATION: The Option will terminate in its entirety three months after cessation of employment or services on behalf of the Company or its affiliated companies, unless cessation is due to (i) disability, in which case the Option shall terminate one year after cessation of employment or services on behalf of the Company, or (ii) death, in which case the Option will terminate one year after death.

13. LIMITED TRANSFERABILITY: The Option is not transferable except by will or by the applicable laws of descent and distribution. During your lifetime only you can exercise the Option. The Plan provides for exercise of the Option by the personal representative of your estate or the beneficiary thereof following your death.

14. NOTICE OF DISQUALIFYING DISPOSITION: To obtain certain tax benefits afforded to incentive stock options under Section 422 of the Code, an optionee must hold the shares issued upon the exercise of an incentive stock option for two years after the date of grant of the option and one year from the date of exercise. An optionee may be subject to the alternative minimum tax at the time of exercise. Tax advice should be obtained when exercising any option and prior to the disposition of the shares issued upon the exercise of any option. By executing this Agreement, you hereby agree to promptly notify the Company's Chief Financial Officer if you dispose of any of the Option Shares within one year from the date you exercise all or part of the Option or within two years of the date of grant of the Option.

15. REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO
SECTION 13 OF THE PLAN, WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. By accepting the Option, you hereby acknowledge that you have read Section 13 of the Plan and that you are hereby making the representations and acknowledgments to the Company, and entering into the indemnity and other obligations to the Company, therein specified.

16. BINDING EFFECT: This Agreement shall inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns.

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Please execute the following Acceptance and Acknowledgment and return it to the undersigned.

Very truly yours,

AMAZON.COM, INC.

By Joy Covey

Its CFO

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ACCEPTANCE AND ACKNOWLEDGMENT

I, a resident of the State of Washington, accept the incentive stock option described in this Agreement and in Amazon.com, Inc.'s Amended and Restated 1994 Stock Option Plan, and acknowledge receipt of a copy of this Agreement and a copy of the Plan. I have read and understand the Plan, including the provisions of Section 13, and I hereby make the representations, warranties and acknowledgments, and undertake the indemnity and other obligations, therein specified. As a condition to my exercise of this stock option, I agree to execute the Company's Shareholders Agreement and Stock Purchase Agreement in effect at such time.

Dated:   January 14, 1997



      000-00-0000                                 Sheldon J. Kaphan
- ---------------------                 -------------------------------------
Taxpayer I.D. Number                              Sheldon J. Kaphan

                                      Address   7748 32nd Ave NE
                                               ----------------------------
                                                Seattle, WA  98115
                                      -------------------------------------

By his or her signature below, the spouse of the Optionee, if such Optionee is legally married as of the date of his or her execution of this Agreement, acknowledges that he or she has read this Agreement and the Plan and is familiar with the terms and provisions thereof, and agrees to be bound by all the terms and conditions of this Agreement and the Plan.

Dated:

Spouse's Signature


Printed Name

By his or her signature below, the Optionee represents that he or she is not legally married as of the date of execution of this Agreement.

Dated:   January 14, 1997
        ------------------------

                                        Sheldon J. Kaphan
                             -------------------------------------
                                       Optionee's Signature

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EXHIBIT 10.23

AMAZON.COM, INC.

NONQUALIFIED STOCK OPTION LETTER AGREEMENT

TO: Tom A. Alberg Date of Grant: December 6, 1995

We are pleased to inform you that you have been selected by the Board of Directors (the "Board") of Amazon.com, Inc. (the "Company") to receive a nonqualified stock option for the purchase of 10,000 shares of the Company's Common Stock at an exercise price of $2.00 per share.

TERM: The term of the option is five years from date of grant, unless sooner terminated.

VESTING: The option will vest and become exercisable according to the following schedule:

Date on and After Which                             Exercisable Portion
 Option is Exercisable                                of Total Option
 ---------------------                                ---------------
     Date of Grant                                     4,000 Shares
Date of Grant + 2 Years                         An additional 3,000 Shares
Date of Grant + 4 Years                         An additional 3,000 Shares

EXERCISE: During your lifetime only you can exercise the option. The option may be exercised by the personal representative of your estate, by the beneficiary you have designated on forms prescribed by and filed with the Company, or the beneficiary of your estate following your death. You may use the Notice of Exercise of Nonqualified Stock Option in the form attached to this Agreement when you exercise the option.

The Board of Directors may, in its sole discretion at the time of exercise, determine that the exercise of this option is subject to your execution of a Shareholders Agreement, in the form in use at the time of exercise, whereby under certain circumstances, you grant to specified persons a right to purchase the shares acquired by you upon exercise of the option.

PAYMENT FOR SHARES: The option may be exercised by the delivery of:

(a) Cash, personal check (unless, at the time of exercise, the Company determines otherwise), bank certified or cashier's check;

(b) Unless the Board in its sole discretion determines otherwise, shares of the capital stock of the Company held by you for a period of at least six months having a fair market value at the time of exercise, as determined in good faith by the Board, equal to the exercise price; or


(c) After such time as the Company may have its common stock publicly traded on a national securities exchange or other national trading market, a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds to pay the exercise price.

WITHHOLDING TAXES: As a condition to the exercise of the option, you must make such arrangements as the Company may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such exercise. The Company has the right to retain without notice sufficient shares of stock to satisfy the withholding obligation. To the extent permitted or required by the Company, you may satisfy the withholding obligation by electing to have the Company or a related corporation withhold from the shares to be issued upon exercise that number of shares having a fair market value equal to the amount required to be withheld. If you are subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), you must comply with certain requirements in order to make such election.

TERMINATION: If your relationship with the Company as an advisor, consultant or member of the Board ceases for any reason, and unless by its terms the option sooner terminates or expires, then you may exercise, for a six-month period, that portion of the option which is exercisable at the time of such cessation, but the option will terminate at the end of such period following such cessation as to all shares for which it has not theretofore been exercised. Any portion of the option which is not exercisable at the time of such cessation shall terminate upon such cessation.

TRANSFERABILITY OF OPTION: This option and the rights and privileges conferred hereby may not be transferred, assigned, pledged or hypothecated in any manner by you (whether by operation of law or otherwise) other than by will or by the applicable laws of descent and distribution and shall not be subject to execution, attachment or similar process. This option is personal to you and is exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this option or of any right or privilege conferred hereby, contrary to the provisions hereof, or the sale or levy or any attachment or similar process upon the rights and privileges conferred hereby will be null and void. Notwithstanding the foregoing, to the extent permitted by applicable law and regulation, the Company, in its sole discretion, may permit you to (i) during your lifetime, designate a person who may exercise the option after your death by giving written notice of such designation to the Company (such designation may be changed from time to time by you by giving written notice to the Company revoking any earlier designation and making a new designation) or (ii) transfer the option and the rights and privileges conferred hereby.

NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights and privileges under the option pass will be, or have any of the rights or privileges of, a shareholder of the Company with respect to any of the shares issuable upon the exercise of this option unless and until this option has been exercised.

-2-

CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you any right to continue in the employ or other relationship of the Company or of a related corporation, or to interfere in any way with the right of the Company or of any such related corporation to terminate your employment or other relationship with the Company at any time.

ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class of shares covered by this option and the exercise price per share thereof (but not the total price), will all be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock of the Company resulting from a split-up or consolidation of shares or any like capital adjustment, or the payment of any stock dividend.

(A) EFFECT OF LIQUIDATION OR REORGANIZATION:

(1) Cash, Stock or Other Property for Stock. Except as provided in subsection (a)(2), upon a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation of the Company, as a result of which the shareholders of the Company receive cash or other property in exchange for or in connection with their shares of Common Stock and will hold less than 50% of the voting securities of the acquiring entity, this option will terminate, but you will have the right immediately prior to any such merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to exercise your option in whole or in part whether or not the vesting requirements set forth in this agreement have been satisfied.

(2) Conversion of Options on Stock for Stock Exchange. If the shareholders of the Company receive capital stock of another corporation ("Exchange Stock") in exchange for their shares of Common Stock in any transaction involving a merger, consolidation, acquisition of property or stock, separation or reorganization, this option will be converted into an option to purchase shares of Exchange Stock. The amount and price of converted options will be determined by adjusting the amount and price of this option in the same proportion as used for determining the number of shares of Exchange Stock that holders of shares of Common Stock are entitled to receive in such merger, consolidation, acquisition of property or stock, separation or reorganization. If, as a result of such transaction, the shareholders of the Company immediately prior to the transaction will hold less than 50% of the voting securities of the acquiring entity immediately after the transaction, the converted option will be fully vested whether or not the vesting requirements set forth in this agreement have been satisfied; provided, however, that such acceleration will not occur if, in the opinion of the Company's independent accountants, such acceleration would render unavailable "pooling of interests" accounting treatment for any reorganization, merger or consolidation of the Company for which pooling of interests accounting treatment is sought by the Company.

(B) FRACTIONAL SHARES

In the event of any adjustment in the number of shares covered by this option, any fractional shares resulting from such adjustment will be disregarded and the option will cover only the number of full shares resulting from such adjustment.

-3-

(C) DETERMINATION OF BOARD TO BE FINAL

All adjustments referred to herein will be made by the Board of Directors, and its determination as to what adjustments will be made, and the extent thereof, will be final, binding and conclusive.

SECURITIES REGULATION: Shares will not be issued pursuant to this option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto complies with all relevant provisions of law, including, without limitation, any applicable state securities laws, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed.

As a condition to the exercise of this option, the Company may require you to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any relevant provision of the aforementioned laws. At the option of the Company, a stop-transfer order against any shares of stock may be placed on the official stock books and records of the Company, and a legend indicating that the stock may not be pledged, sold or otherwise transferred, unless an opinion of counsel is provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates in order to assure exemption from registration. The Company may also require such other action or agreement by you as may from time to time be necessary to comply with the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE HEREUNDER.

Should any of the Company's capital stock of the same class as the stock subject to this option be listed on a national securities exchange, all shares issued hereunder if not previously listed on such exchange will be authorized by that exchange for listing thereon prior to the issuance thereof.

-4-

Please execute the Acceptance and Acknowledgment set forth below on the enclosed copy of this Agreement and return it to the undersigned.

Very truly yours,

AMAZON.COM, INC.


By Jeff P. Bezos
Its President

-5-

ACCEPTANCE AND ACKNOWLEDGMENT

I, a resident of the State of Washington, accept the nonqualified stock option described herein. I have read and understand the Agreement.

Dated: December 6, 1995

      000-00-0000                                  Tom A. Alberg
- --------------------------                     ---------------------
 Taxpayer I.D. Number                              Tom A. Alberg


                                        Address     3404 East Ward
                                                ----------------------------
                                                  Seattle, WA  98112
                                        ------------------------------------

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

By her signature below, the spouse of the Optionee, if such Optionee is legally married as of the date of his execution of this Agreement, acknowledges that she has read this Agreement and is familiar with the terms and provisions thereof, and agrees to be bound by all the terms and conditions of this Agreement.

Dated: December 6, 1995

Judith Beck
Spouse's Signature

Judith Beck
Printed Name

By his signature below, the Optionee represents that he is not legally married as of the date of execution of this Agreement.

Dated: December 6, 1995


Optionee's Signature

NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION

To: Amazon.com, Inc.

I, a resident of the State of Washington, hereby exercise my nonqualified stock option granted by Amazon.com, Inc. (the "Company") on December 6, 1995, and notify the Company of my desire to purchase ________ shares of Common Stock of the Company (the "Securities") at the exercise price of $__________ per share which were offered to me pursuant to said option.

I hereby represent and warrant that (1) I have been furnished with all information which I deem necessary to evaluate the merits and risks of the purchase of the Securities; (2) I have had the opportunity to ask questions and receive answers concerning the information received about the Securities and the Company; and (3) I have been given the opportunity to obtain any additional information I deem necessary to verify the accuracy of any information obtained concerning the Securities and the Company.

I am aware that the Securities have not been registered under the Federal Securities Act of 1933 (the "1933 Act") or any state securities laws, pursuant to exemption(s) from registration. I understand that the reliance by the Company on such exemption(s) is predicated in part upon the truth and accuracy of the statements by me in this Notice of Exercise.

I hereby represent and warrant that I am purchasing the Securities for my own personal account for investment and not with a view to the sale or distribution of all or any part of the Securities.

I understand that because the Securities have not been registered under the 1933 Act, I must continue to bear the economic risk of the investment for an indefinite time and the Securities cannot be sold unless the Securities are subsequently registered or an exemption from registration is available.

I agree that I will in no event sell or distribute all or any part of the Securities unless (1) there is an effective registration statement under the 1933 Act and applicable state securities laws covering any such transaction involving the Securities or (2) the Company receives an opinion of my legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.

I consent to the placing of a legend on my certificate(s) for the Securities stating that the Securities have not been registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Securities until the Securities may be legally resold or distributed.

I understand that at the present time Rule 144 of the Securities and Exchange Commission ("SEC") may not be relied on for the resale or distribution of the Securities by me.


I understand that the Company has no obligation to me to register the Securities with the SEC and has not represented to me that it will register the Securities.

I AM ADVISED, PRIOR TO MY PURCHASE OF THE SECURITIES, THAT NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING MATERIALS HAVE BEEN REVIEWED BY ANY ADMINISTRATOR UNDER THE SECURITIES ACT OF 1933, THE WASHINGTON STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES ACT (THE "ACTS") AND THAT THE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY OF THE ACTS AND THEREFORE CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER THE ACTS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

         Dated:
                ---------------

- -------------------------------         ----------------------------------
Taxpayer I.D. Number                                Tom A. Alberg

                                        Address
                                               ---------------------------
                                        ----------------------------------
                                        ----------------------------------


RECEIPT

_________________________ hereby acknowledges receipt from ______________ in payment for ______________ shares of Common Stock of Amazon.com, Inc., a Washington corporation, of $_____________ in the form of

[ ] Cash

[ ] Check (personal, cashier's or bank certified)

[ ] __________ shares of the Company's Common Stock, fair market value $_______ per share held by the Optionee for a period of at least six months

[ ] Copy of irrevocable instructions to Broker


Date: _______________ For: Amazon.com, Inc.


EXHIBIT 10.24

AMAZON.COM, INC.

NONQUALIFIED STOCK OPTION LETTER AGREEMENT

TO: Tom A. Alberg Date of Grant: December 6, 1995

We are pleased to inform you that you have been selected by the Board of Directors (the "Board") of Amazon.com, Inc. (the "Company") to receive a nonqualified stock option for the purchase of 10,000 shares of the Company's Common Stock at an exercise price of $4.00 per share.

TERM: The term of the option is five years from date of grant, unless sooner terminated.

VESTING: The option will vest and become exercisable according to the following schedule:

Date on and After Which                             Exercisable Portion
 Option is Exercisable                                of Total Option
 ---------------------                                ---------------
     Date of Grant                                     4,000 Shares
Date of Grant + 2 Years                         An additional 3,000 Shares
Date of Grant + 4 Years                         An additional 3,000 Shares

EXERCISE: During your lifetime only you can exercise the option. The option may be exercised by the personal representative of your estate, by the beneficiary you have designated on forms prescribed by and filed with the Company, or the beneficiary of your estate following your death. You may use the Notice of Exercise of Nonqualified Stock Option in the form attached to this Agreement when you exercise the option.

The Board of Directors may, in its sole discretion at the time of exercise, determine that the exercise of this option is subject to your execution of a Shareholders Agreement, in the form in use at the time of exercise, whereby under certain circumstances, you grant to specified persons a right to purchase the shares acquired by you upon exercise of the option.

PAYMENT FOR SHARES: The option may be exercised by the delivery of:

(a) Cash, personal check (unless, at the time of exercise, the Company determines otherwise), bank certified or cashier's check;

(b) Unless the Board in its sole discretion determines otherwise, shares of the capital stock of the Company held by you for a period of at least six months having a fair market value at the time of exercise, as determined in good faith by the Board, equal to the exercise price; or


(c) After such time as the Company may have its common stock publicly traded on a national securities exchange or other national trading market, a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or loan proceeds to pay the exercise price.

WITHHOLDING TAXES: As a condition to the exercise of the option, you must make such arrangements as the Company may require for the satisfaction of any federal, state or local withholding tax obligations that may arise in connection with such exercise. The Company has the right to retain without notice sufficient shares of stock to satisfy the withholding obligation. To the extent permitted or required by the Company, you may satisfy the withholding obligation by electing to have the Company or a related corporation withhold from the shares to be issued upon exercise that number of shares having a fair market value equal to the amount required to be withheld. If you are subject to Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), you must comply with certain requirements in order to make such election.

TERMINATION: If your relationship with the Company as an advisor, consultant or member of the Board ceases for any reason, and unless by its terms the option sooner terminates or expires, then you may exercise, for a six-month period, that portion of the option which is exercisable at the time of such cessation, but the option will terminate at the end of such period following such cessation as to all shares for which it has not theretofore been exercised. Any portion of the option which is not exercisable at the time of such cessation shall terminate upon such cessation.

TRANSFERABILITY OF OPTION: This option and the rights and privileges conferred hereby may not be transferred, assigned, pledged or hypothecated in any manner by you (whether by operation of law or otherwise) other than by will or by the applicable laws of descent and distribution and shall not be subject to execution, attachment or similar process. This option is personal to you and is exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this option or of any right or privilege conferred hereby, contrary to the provisions hereof, or the sale or levy or any attachment or similar process upon the rights and privileges conferred hereby will be null and void. Notwithstanding the foregoing, to the extent permitted by applicable law and regulation, the Company, in its sole discretion, may permit you to (i) during your lifetime, designate a person who may exercise the option after your death by giving written notice of such designation to the Company (such designation may be changed from time to time by you by giving written notice to the Company revoking any earlier designation and making a new designation) or (ii) transfer the option and the rights and privileges conferred hereby.

NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights and privileges under the option pass will be, or have any of the rights or privileges of, a shareholder of the Company with respect to any of the shares issuable upon the exercise of this option unless and until this option has been exercised.

-2-

CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you any right to continue in the employ or other relationship of the Company or of a related corporation, or to interfere in any way with the right of the Company or of any such related corporation to terminate your employment or other relationship with the Company at any time.

ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class of shares covered by this option and the exercise price per share thereof (but not the total price), will all be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock of the Company resulting from a split-up or consolidation of shares or any like capital adjustment, or the payment of any stock dividend.

(A) EFFECT OF LIQUIDATION OR REORGANIZATION:

(1) Cash, Stock or Other Property for Stock. Except as provided in subsection (a)(2), upon a merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation of the Company, as a result of which the shareholders of the Company receive cash or other property in exchange for or in connection with their shares of Common Stock and will hold less than 50% of the voting securities of the acquiring entity, this option will terminate, but you will have the right immediately prior to any such merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation to exercise your option in whole or in part whether or not the vesting requirements set forth in this agreement have been satisfied.

(2) Conversion of Options on Stock for Stock Exchange. If the shareholders of the Company receive capital stock of another corporation ("Exchange Stock") in exchange for their shares of Common Stock in any transaction involving a merger, consolidation, acquisition of property or stock, separation or reorganization, this option will be converted into an option to purchase shares of Exchange Stock. The amount and price of converted options will be determined by adjusting the amount and price of this option in the same proportion as used for determining the number of shares of Exchange Stock that holders of shares of Common Stock are entitled to receive in such merger, consolidation, acquisition of property or stock, separation or reorganization. If, as a result of such transaction, the shareholders of the Company immediately prior to the transaction will hold less than 50% of the voting securities of the acquiring entity immediately after the transaction, the converted option will be fully vested whether or not the vesting requirements set forth in this agreement have been satisfied; provided, however, that such acceleration will not occur if, in the opinion of the Company's independent accountants, such acceleration would render unavailable "pooling of interests" accounting treatment for any reorganization, merger or consolidation of the Company for which pooling of interests accounting treatment is sought by the Company.

(B) FRACTIONAL SHARES

In the event of any adjustment in the number of shares covered by this option, any fractional shares resulting from such adjustment will be disregarded and the option will cover only the number of full shares resulting from such adjustment.

-3-

(C) DETERMINATION OF BOARD TO BE FINAL

All adjustments referred to herein will be made by the Board of Directors, and its determination as to what adjustments will be made, and the extent thereof, will be final, binding and conclusive.

SECURITIES REGULATION: Shares will not be issued pursuant to this option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto complies with all relevant provisions of law, including, without limitation, any applicable state securities laws, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed.

As a condition to the exercise of this option, the Company may require you to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any relevant provision of the aforementioned laws. At the option of the Company, a stop-transfer order against any shares of stock may be placed on the official stock books and records of the Company, and a legend indicating that the stock may not be pledged, sold or otherwise transferred, unless an opinion of counsel is provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates in order to assure exemption from registration. The Company may also require such other action or agreement by you as may from time to time be necessary to comply with the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE HEREUNDER.

Should any of the Company's capital stock of the same class as the stock subject to this option be listed on a national securities exchange, all shares issued hereunder if not previously listed on such exchange will be authorized by that exchange for listing thereon prior to the issuance thereof.

-4-

Please execute the Acceptance and Acknowledgment set forth below on the enclosed copy of this Agreement and return it to the undersigned.

Very truly yours,

AMAZON.COM, INC.

By Jeff P. Bezos
Its President

-5-

ACCEPTANCE AND ACKNOWLEDGMENT

I, a resident of the State of Washington, accept the nonqualified stock option described herein. I have read and understand the Agreement.

Dated: December 6, 1995

        000-00-0000                            Tom A. Alberg
- -------------------------------        ---------------------------------
Taxpayer I.D. Number                            Tom A. Alberg

                                       Address     3404 East Ward
                                              ---------------------------

                                                  Seattle, WA  98112
                                       ------------------------------------

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

By her signature below, the spouse of the Optionee, if such Optionee is legally married as of the date of his execution of this Agreement, acknowledges that she has read this Agreement and is familiar with the terms and provisions thereof, and agrees to be bound by all the terms and conditions of this Agreement.

Dated: December 6, 1995

Judith Beck
Spouse's Signature

Judith Beck
Printed Name

By his signature below, the Optionee represents that he is not legally married as of the date of execution of this Agreement.

Dated: December 6, 1995


Optionee's Signature

NOTICE OF EXERCISE OF NONQUALIFIED STOCK OPTION

To: Amazon.com, Inc.

I, a resident of the State of Washington, hereby exercise my nonqualified stock option granted by Amazon.com, Inc. (the "Company") on December 6, 1995, and notify the Company of my desire to purchase ________ shares of Common Stock of the Company (the "Securities") at the exercise price of $__________ per share which were offered to me pursuant to said option.

I hereby represent and warrant that (1) I have been furnished with all information which I deem necessary to evaluate the merits and risks of the purchase of the Securities; (2) I have had the opportunity to ask questions and receive answers concerning the information received about the Securities and the Company; and (3) I have been given the opportunity to obtain any additional information I deem necessary to verify the accuracy of any information obtained concerning the Securities and the Company.

I am aware that the Securities have not been registered under the Federal Securities Act of 1933 (the "1933 Act") or any state securities laws, pursuant to exemption(s) from registration. I understand that the reliance by the Company on such exemption(s) is predicated in part upon the truth and accuracy of the statements by me in this Notice of Exercise.

I hereby represent and warrant that I am purchasing the Securities for my own personal account for investment and not with a view to the sale or distribution of all or any part of the Securities.

I understand that because the Securities have not been registered under the 1933 Act, I must continue to bear the economic risk of the investment for an indefinite time and the Securities cannot be sold unless the Securities are subsequently registered or an exemption from registration is available.

I agree that I will in no event sell or distribute all or any part of the Securities unless (1) there is an effective registration statement under the 1933 Act and applicable state securities laws covering any such transaction involving the Securities or (2) the Company receives an opinion of my legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.

I consent to the placing of a legend on my certificate(s) for the Securities stating that the Securities have not been registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Securities until the Securities may be legally resold or distributed.

I understand that at the present time Rule 144 of the Securities and Exchange Commission ("SEC") may not be relied on for the resale or distribution of the Securities by me.


I understand that the Company has no obligation to me to register the Securities with the SEC and has not represented to me that it will register the Securities.

I AM ADVISED, PRIOR TO MY PURCHASE OF THE SECURITIES, THAT NEITHER THE OFFERING OF THE SECURITIES NOR ANY OFFERING MATERIALS HAVE BEEN REVIEWED BY ANY ADMINISTRATOR UNDER THE SECURITIES ACT OF 1933, THE WASHINGTON STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES ACT (THE "ACTS") AND THAT THE SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY OF THE ACTS AND THEREFORE CANNOT BE RESOLD UNLESS THEY ARE REGISTERED UNDER THE ACTS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

Dated: ________________

_________________________                 ________________________________

Taxpayer I.D. Number                                 Tom A. Alberg

                                        Address___________________________

                                        __________________________________

                                        __________________________________


RECEIPT

_________________________ hereby acknowledges receipt from ______________ in payment for ______________ shares of Common Stock of Amazon.com, Inc., a Washington corporation, of $_____________ in the form of

[ ] Cash

[ ] Check (personal, cashier's or bank certified)

[ ] __________ shares of the Company's Common Stock, fair market value $_______ per share held by the Optionee for a period of at least six months

[ ] Copy of irrevocable instructions to Broker


Date: ______________ For: Amazon.com, Inc.


EXHIBIT 10.25

AMAZON.COM, INC.

NONQUALIFIED STOCK OPTION LETTER AGREEMENT

TO: Joy D. Covey

We are pleased to inform you that you have been selected by the Board of Directors of Amazon.com, Inc., a Delaware corporation (the "Company"), to receive a stock option (the "Option") for the purchase of 40,000 shares (the "Option Shares") of the Company's Common Stock at an exercise price of $1.50 per share.

The terms of the Option are as set forth in this Agreement and in the Company's Amended and Restated 1994 Stock Option Plan (the "Plan"), a copy of which is attached. This Agreement is limited by and subject to the express terms and provisions of the Plan. Unless otherwise provided in this Agreement, defined terms will have the meaning given to such terms in the Plan.

1. DATE OF GRANT: The Option is granted effective as of December 20, 1996.

2. STATUS OF OPTION: The Option is a nonqualified stock option.

3. TERM: The term of the Option is ten years from the date of grant, unless sooner terminated as a result of termination of your employment or services with the Company or upon a Terminating Event, as described in the Plan and Section 12 of this Agreement.

4. VESTING: The Option shall vest according to the following schedule:

DATE ON AND AFTER WHICH OPTION IS                       Portion of Total Option Which Is
             VESTED                                                  Vested
             ------                                                  ------
        DECEMBER 9, 1997                                              20%
        DECEMBER 9, 1998                                              40%
  Every three months thereafter                                 An additional 5%

Any Option Shares that have not yet vested according to the schedule set forth above shall be considered "Unvested Shares." Upon cessation of your employment or services on behalf of the Company for any reason, no further vesting of the Option will occur and any unvested portion of the Option will terminate.

4.1 ACCELERATION OF VESTING: In the event of a "Transfer of Control" the vesting schedule set forth above shall accelerate automatically by one year for each remaining unvested installment of the Option. Such acceleration shall not be contingent


upon any change in employment status, role, or responsibility level occurring in connection with such an event. For this purpose, a Transfer of Control shall be deemed to have occurred in the event of any of the following events with respect to the Company: (i) the direct or indirect sale or exchange by the stockholders of the Company of all or substantially all of the stock of the Company where the stockholders of the Company before such sale or exchange do not retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock of the Company after such sale or exchange; (ii) a merger in which the Company is not the surviving corporation; (iii) a merger in which the Company is the surviving corporation where the stockholders of the Company before such merger do not retain, directly or indirectly, at least a majority of the beneficial interest in the voting stock of the Company after such merger; (iv) the sale, exchange, or transfer of all or substantially all of the Company's assets; or (v) a liquidation or dissolution of the Company.

5. RIGHT TO EXERCISE: The Option shall be immediately exercisable for any or all of the Option Shares, subject to your agreement that any unvested shares of stock purchased upon exercise are subject to the Company's repurchase rights set forth in paragraph 6 below.

6. COMPANY REPURCHASE RIGHT:

(a) By accepting the Option, you hereby grant to the Company an option (the "Repurchase Option") to repurchase any Option Shares that remain Unvested Shares on the earlier of (i) the date you cease to be employed by or provide services to the Company (including a parent or subsidiary of the Company) for any reason whatsoever, including, without limitation, termination with or without cause, death or permanent disability and (ii) the date you or your legal representative attempts to sell, exchange, transfer, pledge or otherwise dispose of any Unvested Shares (other than pursuant to a Terminating Event, as that term is defined in Section 10.2 of the Plan).

(b) The Company may exercise the Repurchase Option by giving you written notice within 60 days after (i) such termination of employment or services (or exercise of the Option, if later) or (ii) the Company has received notice of the attempted disposition. If the Company fails to give notice within such 60-day period, the Repurchase Option shall terminate, unless you and the Company have extended the time for the exercise of the Repurchase Option. The Repurchase Option must be exercised, if at all, for all the Unvested Shares, except as you and the Company otherwise agree.

(c) Payment to you by the Company shall be made in cash within 30 days after the date of the mailing of the written notice of exercise of the Repurchase Option. For purposes of the foregoing, cancellation of any indebtedness you owe to the Company shall be treated as payment to you in cash to the extent of the unpaid principal and any accrued interest canceled. The purchase price per share being repurchased by the

-2-

Company shall be an amount equal to your original cost per share, as adjusted as provided in the Plan. You shall deliver the shares of stock being repurchased to the Company at the same time as the Company delivers the purchase price to you.

(d) You hereby authorize and direct the Company's Chief Financial Officer or transfer agent to transfer to the Company any Unvested Shares as to which the Repurchase Option is exercised.

(e) The Company shall have the right to assign the Repurchase Option at any time, whether or not the Repurchase Option is then exercisable, to one or more persons as may be selected by the Company.

(f) The Repurchase Option shall remain in full force and effect in the event of a Terminating Event, provided that if the Administrative Committee determines that an assumption or substitution of options outstanding under the Plan will not be made in connection with the Terminating Event and the vesting of such options is therefore accelerated pursuant to Section 10.2 of the Plan, the Repurchase Option shall terminate and all Unvested Shares shall immediately vest in full.

(g) Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate your employment or services on behalf of the Company, for any reason, with or without cause.

(h) Subject to the terms and conditions of this Agreement, the Unvested Shares may not be sold, transferred, pledged, encumbered or disposed of under any circumstances, whether voluntarily, by operation of law, by gift or by the applicable laws of descent and distribution. Any attempted transfer of any Unvested Shares in conflict with this Agreement shall be null and void.

7. MARKET STANDOFF: By accepting the Option, you hereby agree that, in connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the federal Securities Act of 1933, as amended (the "Securities Act"), including the Company's initial public offering, you shall not sell or make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose of or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to, any Option Shares without the prior written consent of the Company or its underwriters. Such limitations (the "Market Standoff") shall be in effect only if and to the extent and for such period of time as may be requested by the Company or such underwriters and agreed to by the Company's officers and directors; provided, however, that in no event shall the weighted average number of days in such period exceed 180 days. The Market Standoff shall in all events terminate two years after the effective date of the Company's initial public offering. In order to enforce the Market Standoff, the Company may impose stop-transfer

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instructions with respect to the Option Shares until the end of the applicable standoff period.

8. SHAREHOLDERS AGREEMENT: By accepting the Option you hereby agree to execute, on the date you exercise the Option, a shareholders agreement (the "Shareholders Agreement") in the form in use at such time (unless at such time the Company's Common Stock is publicly traded or the Shareholders Agreement has otherwise terminated), whereby under certain circumstances you grant the Company and certain of its other shareholders a right of first offer to purchase the Option Shares and agree not to dispose of the Option Shares until after December 31, 1999 without the Company's prior consent.

9. CAPITAL ADJUSTMENTS: In the event of any stock dividend, stock split or consolidation of shares or any like capital adjustment of any of the outstanding securities of the Company, any and all new, substituted or additional securities or other property to which you are entitled by reason of ownership of the Option Shares shall be immediately subject to this Agreement and shall be included in the definition of the Option Shares for all purposes and shall be subject to the Repurchase Option, the Shareholders Agreement, the Market Standoff and other terms of this Agreement. While the aggregate repurchase price for Unvested Shares shall remain the same after each such event, the repurchase price per Unvested Share upon execution of the Repurchase Option shall be appropriately adjusted.

10. METHOD OF EXERCISE: The Option may be exercised by written notice to the Company, in form and substance satisfactory to the Company, which must state the election to exercise the Option, the number of shares of stock for which the Option is being exercised and such other representations and agreements as to your investment intent with respect to such shares as may be required pursuant to the provisions of this Agreement and the Plan. The written notice must be accompanied by full payment of the exercise price for the number of shares of stock being purchased.

11. FORM OF PAYMENT: The Option exercise price may be paid, in whole or in part, (i) in cash, by check, or by cash equivalent, or (ii) by any other form of payment permitted by the Plan Administrator.

12. EARLY TERMINATION: The Option will terminate in its entirety three months after cessation of employment or services on behalf of the Company or its affiliated companies, unless cessation is due to (i) disability, in which case the Option shall terminate one year after cessation of employment or services on behalf of the Company, or (ii) death, in which case the Option will terminate one year after death.

13. LIMITED TRANSFERABILITY: The Option is not transferable except by will or by the applicable laws of descent and distribution. During your lifetime only you can

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exercise the Option. The Plan provides for exercise of the Option by the personal representative of your estate or the beneficiary thereof following your death.

14. REGISTRATION: YOUR PARTICULAR ATTENTION IS DIRECTED TO SECTION 13 OF THE PLAN, WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING TO FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE OPTION CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. By accepting the Option, you hereby acknowledge that you have read Section 13 of the Plan and that you are hereby making the representations and acknowledgments to the Company, and entering into the indemnity and other obligations to the Company, therein specified.

15. BINDING EFFECT: This Agreement shall inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns.

Please execute the following Acceptance and Acknowledgment and return it to the undersigned.

Very truly yours,

AMAZON.COM, INC.

By Jeff P. Bezos

Its

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ACCEPTANCE AND ACKNOWLEDGMENT

I, a resident of the State of Washington, accept the incentive stock option described in this Agreement and in Amazon.com, Inc.'s Amended and Restated 1994 Stock Option Plan, and acknowledge receipt of a copy of this Agreement and a copy of the Plan. I have read and understand the Plan, including the provisions of Section 13, and I hereby make the representations, warranties and acknowledgments, and undertake the indemnity and other obligations, therein specified. As a condition to my exercise of this stock option, I agree to execute the Company's Shareholders Agreement and Stock Purchase Agreement in effect at such time.

Dated as of:  Dec 23, 1996

     000-00-0000                                Joy Covey
- -------------------------              ----------------------------------------
Taxpayer I.D. Number                             ---------------------

                                       Address 2432 E. Calhoun
                                              ---------------------------------
                                           Seattle, WA  98112
                                       ----------------------------------------

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

By his or her signature below, the spouse of the Optionee, if such Optionee is legally married as of the date of his or her execution of this Agreement, acknowledges that he or she has read this Agreement and the Plan and is familiar with the terms and provisions thereof, and agrees to be bound by all the terms and conditions of this Agreement and the Plan.

Dated: