Sample Business Contracts


Shareholder's Agreement - Amazon.com Inc.

Shareholder Forms


                            SHAREHOLDER'S AGREEMENT
                                       OF
                                AMAZON.COM, INC.

THIS SHAREHOLDER'S AGREEMENT (this "Agreement"), is made and entered into as of
this 18 day of March, 1997, by and between Amazon.com, Inc. (the "Company"),
a Delaware corporation, and Frederick Ayre (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:     FA

______   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.



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<PAGE>   2
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.

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





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<PAGE>   3
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.

                 (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.





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<PAGE>   4
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.

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.





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<PAGE>   5
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





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<PAGE>   6
Shareholder's Agreement between the Shareholder and the Company dated
_______________, 19___, a copy of which is on file in the office of the
Company.

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





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<PAGE>   7
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.

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.





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<PAGE>   8
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.





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<PAGE>   9
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    Frederick Ayre:                   12566 SE 53rd St.
                                           ----------------------------------
                                           Bellevue, WA  98006             
                                           ----------------------------------

                                           ----------------------------------

                                           ----------------------------------

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





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<PAGE>   10
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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<PAGE>   11
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.

AMAZON.COM, INC.

By:                   Joy Covey                            
            -------------------------------------
Name:                 Joy Covey                            
            -------------------------------------
Title:                Chief Financial Officer              
            -------------------------------------
Date:   
            -------------------------------------

SHAREHOLDER

Signature:            Frederick Ayre                       
            -------------------------------------
Name:                 Frederick Ayre                       
            -------------------------------------
Title:                VP, Editorial                        
            -------------------------------------
Date:                 3/18/97                     
            -------------------------------------

SPOUSAL CONSENT

By execution of this Agreement,       Mary-Susan Ayre         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.     Mary-Susan Ayre     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:    Mary-Susan Ayre      
                                             --------------------------------

                                         Mary-Susan Ayre, Individual
                                         ------------------------------------





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