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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 14, 1999
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Date of Report
(Date of earliest event
reported)
AMAZON.COM, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 000-22513 91-1646860
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(State or Other (Commission File No.) (IRS Employer
Jurisdiction Identification No.)
of Incorporation)
1200 - 12th AVENUE S., SUITE 1200, SEATTLE, WASHINGTON 98144
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(Address of principal executive offices, including Zip Code)
(206) 266-1000
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(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 14, 1999, pursuant to an Agreement and Plan of Merger dated as of
April 24, 1999 (as amended, the "Merger Agreement"), by and among Amazon.com,
Inc., a Delaware corporation ("Amazon.com"), Amazon.com Auctions, Inc., a
Delaware corporation and wholly owned subsidiary of Amazon.com ("Amazon.com
Auctions"), e-Niche Incorporated, a Delaware corporation ("Exchange.com"), and
the stockholders of Exchange.com, Exchange.com was merged with and into
Amazon.com Auctions, with Amazon.com Auctions being the surviving corporation
(the "Merger").
Exchange.com, founded in July, 1997 and based in Cambridge, Massachusetts,
has developed Internet marketplaces and related communities that bring together
buyers and sellers of rare and hard-to-find items.
Amazon.com issued 946,972 shares of Amazon.com common stock, par value
$.01 per share ("Amazon.com Common Stock"), and assumed all outstanding
Exchange.com options at the closing of the Merger pursuant to the formula set
forth below. On or after the first anniversary of the Merger, Amazon.com may be
required to issue additional shares of Amazon.com Common Stock and make certain
cash payments also as described below.
Pursuant to the terms of the Merger Agreement, at the effective time of
the Merger each outstanding share of Exchange.com common stock, par value $.01
per share ("Exchange.com Common Stock"), including shares of Exchange.com Common
Stock issued upon conversion of outstanding shares of Exchange.com Series A
Preferred Stock and Series C Preferred Stock (together with the Exchange.com
Common Stock, the "Exchange.com Capital Stock"), was converted into the right to
receive that number of shares of Amazon.com Common Stock determined by dividing
(a) 1,041,637 by (b) the total number of shares of Exchange.com Capital Stock
outstanding immediately prior to the effective time on a fully diluted basis,
assuming the exercise of all outstanding options to purchase shares of
Exchange.com Common Stock (the "Exchange Ratio").
In addition, each option to purchase shares of Exchange.com Common Stock
outstanding at the effective time of the Merger was assumed by Amazon.com and
will be treated as an option to purchase that number of shares of Amazon.com
Common Stock equal to the product of the Exchange Ratio and the number of shares
of Exchange.com Common Stock subject to such option.
On or after the first anniversary of the Merger, Amazon.com may be
required to issue additional shares of Amazon.com Common Stock to the
individuals and entities that were stockholders of Exchange.com immediately
prior to the Merger and may also be required to make cash payments to the
holders of Exchange.com stock options
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immediately prior to the Merger who continue to be employed by Amazon.com or a
wholly owned subsidiary thereof (an "Amazon.com Company") on such anniversary
date ("Qualifying Optionholders"). An aggregate of $50 million of Amazon.com
Common Stock and cash may be payable. The number of any shares issued and any
payments made will depend upon the number of employees of Exchange.com who have
accepted employment with an Amazon.com Company and continue to be employed on
the first anniversary date of the Merger. Amazon.com anticipates that any cash
payments to Qualifying Optionholders will be funded from working capital.
All shares of Amazon.com Common Stock issued at the closing of the Merger
have been, and any additional shares to be issued after the first anniversary of
the Merger will be, registered under the Securities Act of 1933, as amended.
The Merger will be accounted for under the purchase method of accounting.
Pursuant to the Merger Agreement, the stockholders of Exchange.com have
agreed to indemnify and hold Amazon.com and its affiliates harmless from losses
that Amazon.com or its affiliates may suffer as a result of (1) any inaccuracy
in, or breach of, any representation or warranty made by Exchange.com or the
stockholders in the Merger Agreement or related agreements, (2) any failure by
Exchange.com or the stockholders to perform their obligations under the Merger
Agreement and related agreements or (3) withholding tax obligations imposed with
respect to merger consideration paid to the stockholders. A total of 104,951
shares of Amazon.com Common Stock issued in connection with the Merger have been
deposited with an escrow agent to secure these indemnification obligations.
The description of the Merger Agreement herein, which is filed as an
exhibit to this Form 8-K, does not purport to be complete and is qualified in
its entirety by the provisions of the Merger Agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
The required financial statements with respect to the Merger listed below
are incorporated herein by reference to Amazon.com's Current Report on Form 8-K
filed May 12, 1999:
e-Niche Incorporated Audited Financial Statements:
(i) Report of PricewaterhouseCoopers LLP, dated May 3, 1999;
(ii) e-Niche Incorporated (a development stage enterprise) Balance
Sheet as of December 31, 1998 and 1997;
(iii) e-Niche Incorporated (a development stage enterprise)
Statement of Operations for the year ended December 31, 1998,
for the period from inception (July 29, 1997) through December
31, 1997 and for the period from inception (July 29, 1997)
through December 31, 1998;
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(iv) e-Niche Incorporated (a development stage enterprise)
Statement of Changes in Stockholders' Equity (Deficit) for the
period from inception (July 29, 1997) through
December 31, 1998;
(v) e-Niche Incorporated (a development stage enterprise)
Statement of Cash Flows for the year ended December 31, 1998,
for the period from inception (July 29, 1997) through December
31, 1997 and for the period from inception (July 29, 1997)
through December 31, 1998; and
(vi) e-Niche Incorporated (a development stage enterprise) Notes to
Financial Statements.
e-Niche Incorporated Condensed Consolidated Financial Statements
(unaudited):
(i) e-Niche Incorporated (a development stage enterprise)
Condensed Consolidated Balance Sheet as of March 31, 1999
(unaudited) and December 31, 1998;
(ii) e-Niche Incorporated (a development stage enterprise)
Condensed Consolidated Statement of Operations for the
three-month periods ended March 31, 1999 and 1998 (unaudited)
and for the period from inception (July 29, 1997) through
March 31, 1999 (unaudited);
(iii) e-Niche Incorporated (a development stage enterprise)
Condensed Consolidated Statement of Cash Flows for the
three-month periods ended March 31, 1999 and 1998 (unaudited)
and for the period from inception (July 29, 1997) through
March 31, 1999 (unaudited); and
(iv) e-Niche Incorporated (a development stage enterprise) Notes to
Condensed Consolidated Financial Statement (unaudited).
(b) Pro Forma Financial Information
Pro forma financial information with respect to the Merger
listed below is incorporated herein by reference to Amazon.com's Current Report
on Form 8-K filed May 12, 1999.
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Pro Forma Combined Condensed Consolidated Financial Statements
(unaudited):
(i) Pro Forma Combined Condensed Consolidated Balance Sheet as
of March 31, 1999 (unaudited);
(ii) Pro Forma Combined Condensed Consolidated Statement of
Operations for the three-month period ended March 31, 1999
(unaudited);
(iii) Pro Forma Combined Condensed Consolidated Statement of
Operations for the year ended December 31, 1998 (unaudited);
and
(iv) Notes to Pro Forma Combined Condensed Consolidated Financial
Statements (unaudited).
(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of April 24, 1999, by
and among Amazon.com, Inc., Amazon.com Auctions, Inc.,
e-Niche Incorporated and the stockholders of e-Niche
Incorporated (including the first and second amendments
thereto).
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
23.2 Consent of PricewaterhouseCoopers LLP, Independent
Accountants
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMAZON.COM, INC.
Dated: May 19, 1999 By /s/ Joy D. Covey
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Joy D. Covey
Chief Financial Officer and Vice
President of Finance and
Administration
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EXHIBIT INDEX
Exhibit Number Description
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2.1 Agreement and Plan of Merger, dated as of April 24, 1999, by
and among Amazon.com, Inc., Amazon.com Auctions, Inc., e-Niche
Incorporated and the stockholders of e-Niche Incorporated
(including the first and second amendments thereto).
23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants
23.2 Consent of PricewaterhouseCoopers LLP, Independent Accountants
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