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[Letterhead]
LUTIN & COMPANY
575 MADISON AVENUE, 10th FLOOR
NEW YORK, NEW YORK 10022
Telephone (212) 605-0335
Facsimile (212) 605-0325
May 1, 2001
By telecopier: 206/266-2901
Mr. Tom A. Alberg
Mr. Jeffrey P. Bezos
Mr. Scott D. Cook
Mr. John L. Doerr
Ms. Patricia Q. Stonesifer
c/o Amazon.com, Inc.
1200 12th Avenue South, Suite 1200
Seattle, Washington 98144-2734
To the members of the board of directors:
On behalf of the Amazon Forum being conducted by the New
York Society of Security Analysts' Committee for Corporate Governance, I
invite each of you to provide information which would support investor
reliance on your performance if you are reelected to another term as a
director of Amazon.com, Inc. A public meeting of the Forum has been
scheduled for 3:00PM on Thursday, May 10th, at the NYSSA conference facility
in New York City to consider any responses you wish to present personally or
in writing.
You are encouraged to present any facts or views you
consider relevant to your candidacy, or to investor evaluations of Amazon's
prospects under your supervision. However, we specifically request your
individual responses to the following issues identified by Forum
participants:
1. Corporate development opportunities: What have you
done, or will you do, to assure effective review of proposed business
combinations, and to control the process in a manner which prevents
managerial bias? If history is a guide, Amazon's survival will be decided
in the consolidation contests which inevitably follow the bursting bubble
phase of every new technology's evolution. In this context, why did Amazon
pursue the recent Borders joint venture, which appears to secure only the
burdens of providing marketing support for a rival bookseller, rather than
more significant opportunities to assemble key resources?
2. Process for strategy definition: What steps have you
taken, or will you take, to assure the board's thorough and objective
consideration of relevant strategic alternatives? This issue was previously
presented to the board, without response, and has grown in importance since
management recently announced plans to change its essential business from
being a merchandiser to being a provider of support services.
3. Board development: What is your view of the number
and range of experience for a board composition which would enable each
member's best performance of a director's duties to shareholders?
4. Executive development: What have you done, or will
you do, to develop the executive management resources required for Amazon's
survival as a profitable business enterprise? Succession planning, the
recruitment of a new chief operating officer, and the separation of chief
executive and board chairman responsibilities are of particular concern.
5. Monitoring performance: On what reports or other
information do you rely for monitoring the operations of the company and
management's progress toward the achievement of strategy and budget goals?
Specific performance measurements, and their definitions, should be
identified.
6. Financial management: On what reports or other
information do you rely to assure the company's financial viability?
Specifically, what internal management reports of creditor relationships do
you receive, and on what information did you rely in your consideration of
the recent controversies about supplier credit. Also, in the context of
recent management statements that negative working capital is a company
goal, please state your view of this and any related financial policies with
citations of the expertise on which you relied.
7. Management representations: What have you done, or
will you do, to assure the reliability of information provided to
investors? Do you support further clarifications of reporting
presentations, such as the recently adopted reconciliations of pro forma and
GAAP income? Have you participated in the process of reviewing and
approving press releases, as described by Mr. Grandinetti at the July 11,
2000 Forum meeting, and, if not, do you intend to do so in the future?
Please report what you have done to investigate the reliability of
management representations which have been the subject of public
controversies, the Forum's previous questions, and recently initiated
shareholder litigation.
8. Compliance and internal controls: What have you done,
or will you do, to assure management compliance with laws and company
policies? Specifically, referring to recent admissions of previously denied
SEC investigations, what are the "strict stock trading policies" which
management stated had been in effect and what, if any, changes have you
supported?
9. Governance policies: What, if any, changes in
governance policies or practices do you advocate to assure the effective
oversight of Amazon shareholder interests? Please identify the sources of
advice and expertise which are available to guide Amazon's board members, as
a group and individually, in the conduct of your duties.
10. Other responsibilities and interests: Please state
your responsibilities with other companies, public or private, and with any
non-business organizations, and describe any direct or indirect
relationships between those entities and Amazon. Please also describe any
other direct or indirect interests you have in companies or organizations
with which Amazon has a relationship of any kind.
Please let me know if you have any questions about these
information requests, or about arrangements for presenting your responses.
Very truly yours,
/s/
Gary Lutin
cc: Mr. Peter F. Brennan
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