{"id":38500,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/amended-and-restated-incentive-stock-option-letter-agreement.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"amended-and-restated-incentive-stock-option-letter-agreement","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/amended-and-restated-incentive-stock-option-letter-agreement.html","title":{"rendered":"Amended and Restated Incentive Stock Option Letter Agreement &#8211; Amazon.com Inc. and Sheldon Kaphan"},"content":{"rendered":"<pre>\n\n                                AMAZON.COM, INC.\n\n                              AMENDED AND RESTATED\n                    INCENTIVE STOCK OPTION LETTER AGREEMENT\n\n\nTO:      Sheldon Kaphan\n\n         This Amended and Restated Incentive Stock Option Letter Agreement\n(this 'Agreement') amends and supersedes paragraph 2(c) of the Employment\nAgreement between you and the Company dated October 24, 1994, regarding the\ngrant to you of a stock option (the 'Option') for the purchase of 709,568\nshares (the 'Option Shares') of the Common Stock of Amazon.com, Inc., a\nDelaware corporation (the 'Company') at an exercise price of $.001471 per\nshare (reflects stock split effected on November 23, 1996).\n\n         The terms of the Option are as set forth in this Agreement and in the\nCompany's Amended and Restated 1994 Stock Option Plan (the 'Plan'), a copy of\nwhich is attached.  This Agreement is limited by and subject to the express\nterms and provisions of the Plan.  Unless otherwise provided in this Agreement,\ndefined terms will have the meaning given to such terms in the Plan.\n\n         1.      DATE OF GRANT:  The Option is granted effective as of October\n                 24, 1994.\n\n         2.      STATUS OF OPTION:  The Option is intended to be an incentive\nstock option as described in Section 422 of the Internal Revenue Code of 1986,\nas amended (the 'Code'), but the Company does not represent or warrant that the\nOption qualifies as such.\n\n         3.      TERM:  Your right to exercise each vesting installment of the\nOption will expire five years after the vesting date for that installment,\nunless sooner terminated as a result of termination of your employment or\nservices with the Company or upon a Terminating Event, as described in the Plan\nand Section 12 of this Agreement.\n\n         4.      VESTING:  The Option shall vest according to the schedule set\nforth in Section 2(c)(i) of your Employment Agreement, a copy of which is\nattached hereto as Exhibit A and incorporated herein by reference.  Any Option\nShares that have not yet vested according to the schedule set forth in Exhibit\nA shall be considered 'Unvested Shares.'  Upon cessation of your employment or\nservices on behalf of the Company for any reason, no further vesting of the\nOption will occur and any unvested portion of the Option will terminate.\n\n         4.1     ACCELERATION OF VESTING SCHEDULE:  In the event (i) the\nCompany enters into a purchase and sale agreement whereby substantially all of\nthe Company's assets will be sold to an unrelated thirty party or (ii) more\nthan ninety-five percent (95%) of the total issued and outstanding shares of\nthe Company are to be sold pursuant to a stock transfer agreement to an\nunrelated third party (herein an 'Accelerating Event'), any installments of the\noption not yet vested shall conditionally vest and the Employee will have the\nright to exercise such installment(s) of the option subject to the following:\n\n                 (a)      Exercise.  The terms and conditions of the Employee's\nright to exercise any installment as set forth herein shall remain the same\nexcept that the exercise must occur concurrent with the successful consummation\nof the Accelerating Event.\n\n                 (b)      Failure to Exercise or Consummate.  In the event the\nEmployee fails to exercise any installment of the option concurrent with the\nconsummation of the Accelerating Event, or, for whatever reason, the\nAccelerating Event is not consummated, the Employee's right to exercise the\nconditionally vested shares expire and the vesting schedule as set forth in\nExhibit A shall control the date of the Employee's right to exercise the next\ninstallment of the option.\n\n                 (c)      Accelerating Event.  Accelerating Event shall not\ninclude (i) corporate reorganizations where shareholders of the successor\ncompany(s) are substantially the same as the Company's shareholders and\/or (ii)\nthe assignment of shares of stock in the Company among family members, whether\nfor estate planning or otherwise.\n\n         5.      RIGHT TO EXERCISE:  The Option shall be immediately\nexercisable for any or all of the Option Shares, subject to your agreement that\nany unvested shares of stock purchased upon exercise are subject to the\nCompany's repurchase rights set forth in paragraph 6 below.  Notwithstanding\nthe foregoing, the aggregate fair market value of the stock with respect to\nwhich you may exercise the Option for the first time during any calendar year,\ntogether with any other incentive stock options which are exercisable by you\nfor the first time under any Company plan during any such year, as determined\nin accordance with Section 422 of the Code, shall not exceed $100,000 (the\n'$100,000 Exercise Limitation').  To the extent the exercisability of the\nOption is deferred by reason of the $100,000 Exercise Limitation, the deferred\nportion of the Option will first become exercisable in the first calendar year\nor years thereafter in which the $100,000 Exercise Limitation would not be\ncontravened.\n\n         6.      COMPANY REPURCHASE RIGHT:\n\n                 (a)      By executing this Agreement, you hereby grant to the\nCompany an option (the 'Repurchase Option') to repurchase any Option Shares\nthat remain Unvested Shares on the earlier of (i) the date you cease to be\nemployed by or provide services to the Company (including a parent or\nsubsidiary of the Company) for any reason whatsoever, including, without\nlimitation, termination with or without cause, death or permanent disability\nand (ii) the date you or your legal representative attempts to sell, exchange,\ntransfer, pledge or\n\n\n\n                                       -2-\n\n\n\n\notherwise dispose of any Unvested Shares (other than pursuant to a Terminating\nEvent, as that term is defined in Section 10.2 of the Plan).\n\n                 (b)      The Company may exercise the Repurchase Option by\ngiving you written notice within 60 days after (i) such termination of\nemployment or services (or exercise of the Option, if later) or (ii) the\nCompany has received notice of the attempted disposition.  If the Company fails\nto give notice within such 60-day period, the Repurchase Option shall\nterminate, unless you and the Company have extended the time for the exercise\nof the Repurchase Option.  The Repurchase Option must be exercised, if at all,\nfor all the Unvested Shares, except as you and the Company otherwise agree.\n\n                 (c)      Payment to you by the Company shall be made in cash\nwithin 30 days after the date of the mailing of the written notice of exercise\nof the Repurchase Option.  For purposes of the foregoing, cancellation of any\nindebtedness you owe to the Company shall be treated as payment to you in cash\nto the extent of the unpaid principal and any accrued interest canceled.  The\npurchase price per share being repurchased by the Company shall be an amount\nequal to your original cost per share, as adjusted as provided in the Plan.\nYou shall deliver the shares of stock being repurchased to the Company at the\nsame time as the Company delivers the purchase price to you.\n\n                 (d)      You hereby authorize and direct the Company's Chief\nFinancial Officer or transfer agent to transfer to the Company any Unvested\nShares as to which the Repurchase Option is exercised.\n\n                 (e)      The Company shall have the right to assign the\nRepurchase Option at any time, whether or not the Repurchase Option is then\nexercisable, to one or more persons as may be selected by the Company.\n\n                 (f)      The Repurchase Option shall remain in full force and\neffect in the event of a Terminating Event, provided that if the Administrative\nCommittee determines that an assumption or substitution of options outstanding\nunder the Plan will not be made in connection with the Terminating Event and\nthe vesting of such options is therefore accelerated pursuant to Section 10.2\nof the Plan, the Repurchase Option shall terminate and all Unvested Shares\nshall immediately vest in full.\n\n                 (g)      Nothing in this Agreement shall affect in any manner\nwhatsoever the right or power of the Company, or a parent or subsidiary of the\nCompany, to terminate your employment or services on behalf of the Company, for\nany reason, with or without cause.\n\n                 (h)      Subject to the terms and conditions of this\nAgreement, the Unvested Shares may not be sold, transferred, pledged,\nencumbered or disposed of under any circumstances, whether voluntarily, by\noperation of law, by gift or by the applicable laws of descent and\ndistribution.  Any attempted transfer of any Unvested Shares in conflict with\nthis Agreement shall be null and void.\n\n\n\n\n\n                                      -3-\n\n\n\n\n         7.      MARKET STANDOFF:  By executing this Agreement, you hereby\nagree that, in connection with any underwritten public offering by the Company\nof its equity securities pursuant to an effective registration statement filed\nunder the federal Securities Act of 1933, as amended (the 'Securities Act'),\nincluding the Company's initial public offering, you shall not sell or make any\nshort sale of, loan, hypothecate, pledge, grant any option for the purchase of,\nor otherwise dispose of or transfer for value or otherwise agree to engage in\nany of the foregoing transactions with respect to, any Option Shares without\nthe prior written consent of the Company or its underwriters.  Such limitations\n(the 'Market Standoff') shall be in effect only if and to the extent and for\nsuch period of time as may be requested by the Company or such underwriters and\nagreed to by the Company's officers and directors; provided, however, that in\nno event shall the weighted average number of days in such period exceed 180\ndays.  The Market Standoff shall in all events terminate two years after the\neffective date of the Company's initial public offering.  In order to enforce\nthe Market Standoff, the Company may impose stop-transfer instructions with\nrespect to the Option Shares until the end of the applicable standoff period.\n\n         8.      SHAREHOLDERS AGREEMENT:  By accepting the Option you hereby\nagree to execute, on the date you exercise the Option, a shareholders agreement\n(the 'Shareholders Agreement') in the form in use at such time (unless at such\ntime the Company's Common Stock is publicly traded or the Shareholders\nAgreement has otherwise terminated), whereby under certain circumstances you\ngrant the Company and certain of its other shareholders a right of first offer\nto purchase the Option Shares and agree not to dispose of the Option Shares\nuntil after December 31, 1999 without the Company's prior consent.\n\n         9.      CAPITAL ADJUSTMENTS:  In the event of any stock dividend,\nstock split or consolidation of shares or any like capital adjustment of any of\nthe outstanding securities of the Company, any and all new, substituted or\nadditional securities or other property to which you are entitled by reason of\nownership of the Option Shares shall be immediately subject to this Agreement\nand shall be included in the definition of the Option Shares for all purposes\nand shall be subject to the Repurchase Option, the Shareholders Agreement, the\nMarket Standoff and other terms of this Agreement.  While the aggregate\nrepurchase price for Unvested Shares shall remain the same after each such\nevent, the repurchase price per Unvested Share upon execution of the Repurchase\nOption shall be appropriately adjusted.\n\n         10.     METHOD OF EXERCISE:  The Option may be exercised by written\nnotice to the Company, in form and substance satisfactory to the Company, which\nmust state the election to exercise the Option, the number of shares of stock\nfor which the Option is being exercised and such other representations and\nagreements as to your investment intent with respect to such shares as may be\nrequired pursuant to the provisions of this Agreement and the Plan.  The\nwritten notice must be accompanied by full payment of the exercise price for\nthe number of shares of stock being purchased.\n\n\n\n\n\n                                      -4-\n\n\n\n\n         11.     FORM OF PAYMENT:  The Option exercise price may be paid, in\nwhole or in part, (i) in cash, by check, or by cash equivalent, or (ii) by any\nother form of payment permitted by the Plan Administrator.\n\n         12.     EARLY TERMINATION:  The Option will terminate in its entirety\nthree months after cessation of employment or services on behalf of the Company\nor its affiliated companies, unless cessation is due to (i) disability, in\nwhich case the Option shall terminate one year after cessation of employment or\nservices on behalf of the Company, or (ii) death, in which case the Option will\nterminate one year after death.\n\n         13.     LIMITED TRANSFERABILITY:  The Option is not transferable\nexcept by will or by the applicable laws of descent and distribution.  During\nyour lifetime only you can exercise the Option.  The Plan provides for exercise\nof the Option by the personal representative of your estate or the beneficiary\nthereof following your death.\n\n         14.     NOTICE OF DISQUALIFYING DISPOSITION:  To obtain certain tax\nbenefits afforded to incentive stock options under Section 422 of the Code, an\noptionee must hold the shares issued upon the exercise of an incentive stock\noption for two years after the date of grant of the option and one year from\nthe date of exercise.  An optionee may be subject to the alternative minimum\ntax at the time of exercise.  Tax advice should be obtained when exercising any\noption and prior to the disposition of the shares issued upon the exercise of\nany option.  By executing this Agreement, you hereby agree to promptly notify\nthe Company's Chief Financial Officer if you dispose of any of the Option\nShares within one year from the date you exercise all or part of the Option or\nwithin two years of the date of grant of the Option.\n\n         15.     REGISTRATION:  YOUR PARTICULAR ATTENTION IS DIRECTED TO\nSECTION 13 OF THE PLAN, WHICH DESCRIBES CERTAIN IMPORTANT CONDITIONS RELATING\nTO FEDERAL AND STATE SECURITIES LAWS THAT MUST BE SATISFIED BEFORE THE OPTION\nCAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU.  By\naccepting the Option, you hereby acknowledge that you have read Section 13 of\nthe Plan and that you are hereby making the representations and acknowledgments\nto the Company, and entering into the indemnity and other obligations to the\nCompany, therein specified.\n\n         16.     BINDING EFFECT:  This Agreement shall inure to the benefit of\nthe successors and assigns of the Company and be binding upon you and your\nheirs, executors, administrators, successors and assigns.\n\n\n\n\n\n                                      -5-\n\n\n\n\n         Please execute the following Acceptance and Acknowledgment and return\nit to the undersigned.\n\n                                        Very truly yours,\n\n\n\n                                        AMAZON.COM, INC.\n\n\n\n                                        By Joy Covey\n                                          --------------------------------\n\n                                        Its CFO\n                                           -------------------------------\n\n\n\n\n                                      -6-\n\n\n\n\n                         ACCEPTANCE AND ACKNOWLEDGMENT\n\n         I, a resident of the State of Washington, accept the incentive stock\noption described in this Agreement and in Amazon.com, Inc.'s Amended and\nRestated 1994 Stock Option Plan, and acknowledge receipt of a copy of this\nAgreement and a copy of the Plan.  I have read and understand the Plan,\nincluding the provisions of Section 13, and I hereby make the representations,\nwarranties and acknowledgments, and undertake the indemnity and other\nobligations, therein specified.  As a condition to my exercise of this stock\noption, I agree to execute the Company's Shareholders Agreement and Stock\nPurchase Agreement in effect at such time.\n\nDated:   January 14, 1997       \n\n\n\n      [redacted]                                  Sheldon J. Kaphan\n---------------------                 -------------------------------------\nTaxpayer I.D. Number                              Sheldon J. Kaphan\n\n                                      Address   7748 32nd Ave NE           \n                                               ----------------------------\n                                                Seattle, WA  98115         \n                                      -------------------------------------\n\n                                 \n         By his or her signature below, the spouse of the Optionee, if such\nOptionee is legally married as of the date of his or her execution of this\nAgreement, acknowledges that he or she has read this Agreement and the Plan and\nis familiar with the terms and provisions thereof, and agrees to be bound by\nall the terms and conditions of this Agreement and the Plan.\n\n         Dated:  \n                --------------------\n                                                  \n                                      -------------------------------------\n                                               Spouse's Signature\n\n\n                                      -------------------------------------\n                                                   Printed Name\n\n         By his or her signature below, the Optionee represents that he or she\nis not legally married as of the date of execution of this Agreement.\n\n         Dated:   January 14, 1997       \n                 ------------------------\n\n                                                 Sheldon J. Kaphan      \n                                      -------------------------------------\n                                                Optionee's Signature\n\n\n\n\n\n\n                                      -7-\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6645],"corporate_contracts_industries":[9492],"corporate_contracts_types":[9539,9544],"class_list":["post-38500","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-amazoncom-inc","corporate_contracts_industries-retail__books","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38500","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38500"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38500"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38500"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}