424B2 1 d424b2.htm PROSPECTUS SUPPLEMENT DATED 07/23/2001 Prospectus Supplement Dated 07/23/2001
 

FILED PURSUANT TO RULE 424(b)(2)
REGISTRATION NO. 333-78797

PROSPECTUS SUPPLEMENT
(To Prospectus dated June 11, 1999)

 

6,543,646 Shares

 
Common Stock
 

 
          We are offering 6,543,646 shares, plus any additional shares required to be delivered as set forth below, of our common stock with this prospectus supplement. Our common stock is quoted on the Nasdaq National Market under the symbol “AMZN.” On July 20, 2001, the reported last bid price of our common stock on the Nasdaq National Market was $16.98 per share.
 
          The purchaser will purchase all the shares of common stock from us at an aggregate purchase price of $100,000,000, resulting in aggregate proceeds to Amazon.com of $100,000,000.
 
          If the average of the last sale price of our common stock on the Nasdaq National Market System, as reported on nasdaq.com, for the five full trading days following the announcement of the Company’s financial results of operations for the period ended June 30, 2001, which we will refer to in this prospectus supplement as the “Five Day Average”, is less than $15.282, then on the second business day following the end of such five-day period, we will deliver to the purchaser, for no additional consideration, a number of shares of our common stock equal to the difference between (i) the number of shares of our common stock determined by dividing $100,000,000 by the Five Day Average and (ii) 6,543,646.
 

 
          Investing in our common stock involves risks that are described under “Business—Additional Factors That May Affect Future Results” beginning on page 30 of our Quarterly Report on Form 10-Q filed July 23, 2001.
 

 
          Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
 

 
Prospectus Supplement dated July 23, 2001
 
TABLE OF CONTENTS
 
 
Prospectus Supplement
     Page
About this Prospectus Supplement      S-1
Use of Proceeds      S-2
Dilution      S-3
Plan of Distribution      S-4
 
Prospectus
     Page
Summary      1
Forward Looking Information      3
How to Obtain More Information      3
Amazon.com      4
Ratio of Earnings to Fixed Charges      4
Use of Proceeds      5
General Description of Securities      5
Description of the Common Stock      5
Description of the Preferred stock      6
Description of the Depositary Shares      6
Description of the Debt Securities      8
Description of the Warrants to Purchase
     Common or Preferred stock
     14
Description of the Stock Purchase Units and
     Stock Purchase Contracts
     15
Description of the Third-Party Warrants      15
Description of the Warrants to Purchase Debt
     Securities
     16
Description of the Foreign Currency
     Exchange Warrants
     17
Description of the Stock Index Warrants      20
Description of the other Warrants      22
Plan of Distribution      24
ERISA Considerations      25
Legal Matters      25
Experts      26
 

 
ABOUT THIS PROSPECTUS SUPPLEMENT
 
          You should read this prospectus supplement along with the accompanying prospectus. These documents contain information you should consider when making your investment decision. You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not authorized anyone else to provide you with different or additional information.
 
          This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or a solicitation of an offer to buy any securities other than the common stock being purchased in this offering. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or a solicitation of an offer to buy the common stock being purchased in this offering in any circumstances in which an offer or solicitation is unlawful.
 
          Information in this prospectus supplement and the accompanying prospectus may change after the date on the front of the applicable document. You should not interpret the delivery of this prospectus supplement or the accompanying prospectus or the sale of the common stock as an indication that there has been no change in our affairs since that date.
 
USE OF PROCEEDS
 
          The net proceeds from the offering, after deducting expenses, will be approximately $99,900,000. We expect to use the net proceeds for general corporate purposes, including, without limitation, to fund our ongoing operations, to expand our core businesses, to invest in new businesses, products and technologies, for capital expenditures, to repurchase outstanding debt and generally to strengthen the Company’s financial position.
 
          Pending the foregoing uses, we will invest the net proceeds from the offering in short-term, interest-bearing investment-grade securities.
 
DILUTION
 
          Our net tangible book value as of June 30, 2001 was $(1,582,826), or $(4.37) per share of common stock. Net tangible book value per share is determined by dividing our net tangible book value (total tangible assets less total liabilities) by the number of outstanding shares of common stock at that date. After giving effect to the sale of the 6,543,646 shares of our common stock offered hereby at a price of $15.282 per share and after deducting estimated offering expenses, our net tangible book value at June 30, 2001 would have been $(1,482,926), or $(4.02) per share. The effect of the offering represents an immediate increase in net tangible book value to existing stockholders of $0.35 per share and an immediate dilution to purchasers of common stock in this offering of $19.30 per share. The following table illustrates the per share dilution:
 
Price per share      $  15.282  
Net tangible book value per share as of June 30, 2001      $   (4.37 )
Increase per share attributable to the new investor      $     0.35  
Net tangible book value per share after this offering      $   (4.02 )
Net tangible book value dilution per share to the new investor      $ (19.30 )
 
          The above discussion and table assume no exercise of stock options or warrants outstanding as of June 30, 2001. As of June 30, 2001, there were options outstanding to purchase a total of 42,297,491 shares of common stock at a weighted average exercise price of $12.4308 per share under our Amended and Restated 1994 Stock Option Plan, our 1997 Stock Incentive Plan, our 1999 Non-Officer Employee Stock Option Plan, and the option plans of acquired companies and a maximum of 88,150,826 additional shares were reserved for the future grant of options under such plans. To the extent that any of these options are exercised, there will be further dilution to the new investor.
 
PLAN OF DISTRIBUTION
 
          Under the terms and subject to the conditions contained in a common stock purchase agreement dated July 23, 2001, we have agreed to sell 6,543,646 shares of our common stock to America Online, Inc. plus any additional shares required to be delivered pursuant to the next paragraph.
 
          If the Five Day Average is less than $15.282, then on the second business day following the end of such five-day period, we will deliver to the purchaser, for no additional consideration, a number of shares of our common stock equal to the difference between (i) the number of shares of our common stock determined by dividing $100,000,000 by the Five Day Average and (ii) 6,543,646.
 
          Pursuant to the common stock purchase agreement, America Online, Inc. has agreed, for two years from the date hereof, not to sell, transfer or otherwise dispose of the shares of our common stock sold hereby or any interest therein, provided that hedging transactions and certain other transfers are excepted from such agreement. These restrictions on transfer will terminate if we undergo a change of control or if certain commercial agreements between America Online, Inc. and us are terminated as a result of our material breach or become terminable pursuant to certain other provisions. After the expiration of the two year period, America Online, Inc. may freely transfer the shares of our common stock sold hereby, provided that, subject to certain exceptions, such sales will be subject to volume limitations unless structured as block sales meeting certain price and size requirements.
 
          America Online, Inc. has agreed, until the second anniversary of the date hereof, that neither it nor its affiliates will acquire beneficial ownership of shares of our capital stock, or securities convertible or exchangeable for shares of our capital stock if, after giving effect to such acquisition, America Online, Inc. and its affiliates would own in excess of 5% of such class of our capital stock and that neither it nor its affiliates will otherwise publicly seek to commence a merger, asset sale or other change of control transaction affecting us. These restrictions will terminate if we enter into an agreement with respect to a change of control transaction affecting us, if a third party makes an unsolicited public offer with respect to a change of control transaction affecting us, if we undergo a change of control, or if certain commercial agreements between America Online, Inc. and us are terminated as a result of our material breach or become terminable pursuant to certain other provisions. These restrictions will be suspended during any period in which (i) we have engaged an investment banker for the purpose of seeking a change of control transaction and have solicited three or more offers, (ii) we have publicly announced that we are exploring a change of control transaction or similar strategic alternatives, (iii) a third party offer with respect to change of control transaction affecting us has become publicly known and we have not rejected it, or (iv) a third party has launched and not terminated a tender offer with respect to shares of our common stock.