Amazon.com (AMZN)

Note 8—STOCKHOLDERS’ EQUITY

Preferred Stock

We have authorized 500 million shares of $0.01 par value Preferred Stock. No preferred stock was outstanding for any period presented.

Common Stock

Common shares outstanding plus shares underlying outstanding stock awards totaled 461 million, 446 million, and 435 million at December 31, 2009, 2008 and 2007. These totals include all stock-based awards outstanding, without regard for estimated forfeitures, consisting of vested and unvested awards. Common shares outstanding increased in 2009 due primarily to issuance of stock to acquire Zappos and vesting of restricted stock units.

Stock Repurchase Activity

We did not repurchase any of our common stock in 2009. We repurchased 2.2 million shares of common stock for $100 million in 2008 under the $1 billion repurchase program authorized by our Board of Directors in February 2008. We repurchased 6.3 million shares of common stock for $248 million in 2007 under the $500 million repurchase program authorized by our Board of Directors in August 2006.

In January 2010, our Board of Directors authorized a program to repurchase up to $2 billion of our common stock which replaces the Board’s prior authorization.

Stock Award Plans

Employees vest in restricted stock unit awards over the corresponding service term, generally between two and five years.

Stock Award Activity

We granted restricted stock units representing 6.0 million, 7.3 million, 7.6 million shares of common stock during 2009, 2008, and 2007 with a per share weighted average fair value of $79.24, $72.21, and $47.04.

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The following summarizes our restricted stock unit activity (in millions):

Scheduled vesting for outstanding restricted stock units at December 31, 2009 is as follows (in millions):

As of December 31, 2009, there was $415 million of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis resulting in approximately half of the compensation expected to be expensed in the next twelve months, and has a weighted average recognition period of 1.2 years.

During 2009 and 2008, the fair value of restricted stock units that vested was $551 million and $362 million.

As matching contributions under our 401(k) savings plan, we granted 0.1 million shares of common stock in both 2009 and 2008. Shares granted as matching contributions under our 401(k) plan are included in outstanding common stock when issued.

Common Stock Available for Future Issuance

At December 31, 2009, common stock available for future issuance to employees is 149 million shares.

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