Amazon.com 2000 Annual Report Download - page 63

Note 10—STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
The Company has authorized 500,000,000 shares of $0.01 par value Preferred Stock. No preferred stock
shares were outstanding during 2000, 1999 or 1998.
Common Stock
On June 1, 1998, the Company effected a 2-for-1 stock split in the form of a stock dividend to
stockholders of record on May 20, 1998. On January 4, 1999, the Company effected a 3-for-1 stock split in the
form of a stock dividend to the stockholders of record on December 18, 1998. On September 1, 1999, the
Company effected a 2-for-1 stock split in the form of a stock dividend to stockholders of record on August 12,
1999. Accordingly, the accompanying consolidated financial statements reflect these stock splits.
Stock Option Plans
The Company’s stock option plans consist of the 1999 Nonofficer Employee Stock Option Plan, the 1997
Stock Incentive Plan and the Amended and Restated 1994 Stock Option Plan. Shares reserved under these
Plans at December 31, 2000 consist of 40 million shares in the 1999 Nonofficer Employee Stock Option Plan,
80 million shares in the 1997 Stock Incentive Plan and 58 million shares in the 1994 Stock Option Plan. Any
shares of common stock available for issuance under the Amended and Restated 1994 Stock Option Plan, up to
a maximum of 21,025,075 shares, that are not issued under that plan may be added to the aggregate number of
shares available for issuance under the 1997 Stock Incentive Plan. In connection with certain acquisitions in
1998 and 1999, the Company assumed outstanding options to purchase common stock originally issued under
the acquired companies’ stock option plans. The Company’s stock option plans as well as the assumed stock
option plans are hereby collectively referred to as the ‘‘Plans.’’
Generally, the Company’s Board of Directors grants options 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. Generally, outstanding options granted on
or subsequent to December 20, 1996 have a term of 10 years from the date of grant; however, certain
nonqualified stock options were granted in 1999 and 2000 with terms of approximately 15 and 20 years.
Subject to Internal Revenue Service limitations, options granted under the Company’s plans prior to April 1999
and granted under certain assumed plans generally became exercisable immediately. Options granted under the
Plans since April 1999 generally vest and become exercisable in accordance with the following vesting
schedule: 20% after year one, 20% after year two and 5% at the end of each quarter for years three through
five. Certain options were granted during 2000 that vest and become exercisable in accordance with the
following schedule: 50% after year one and 50% after year two. Shares issued upon exercise of options that are
unvested are restricted and subject to repurchase by the Company at the exercise price upon termination of
employment or services and such restrictions lapse over the original vesting schedule. At December 31, 2000,
approximately 920,000 shares of restricted common stock, which includes restricted shares issued in connection
with acquisitions, were subject to repurchase.
AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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