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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 2/11/08  Audible Inc                       SC 14D9                2:55   Audible Inc                       RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: SC 14D9     Tender-Offer Solicitation/Recommendation Statement  HTML    353K 
 2: EX-99.(A)(I)  Letter to Stockholders of Audible, Inc Dated      HTML      8K 
                          January 31, 2008                                       

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Schedule 14D-9

SOLICITATION/RECOMMENDATION STATEMENT

UNDER SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

Audible, Inc.

(Name of Subject Company)

Audible, Inc.

(Name of Person(s) Filing Statement)

COMMON STOCK, PAR VALUE $0.01 PER SHARE

(Title of Class of Securities)

05069A302

(CUSIP Number of Class of Securities)

Donald R. Katz

Chief Executive Officer

Audible, Inc.

1 Washington Park - 16th Floor

Newark, New Jersey 07102-3116

(973) 820-0400

(Name, address and telephone number of person authorized to receive

notices and communications on behalf of person(s) filing statement)

with copies to:

Edwin M. Martin, Jr., Esq.

Nancy A. Spangler, Esq.

John E. Depke, Esq.

DLA Piper US LLP

1251 Avenue of the Americas

New York, New York 10020-1104

The name of the subject company is Audible, Inc., a Delaware corporation (“Audible” or the “Company”), and the address of the principal executive offices of the Company is 1 Washington Park—16th Floor Newark, New Jersey 07102-3116. The telephone number of the principal executive offices of the Company is (973) 820-0400.

The title of the class of equity securities to which this Solicitation/Recommendation Statement (this “Statement”) relates is the common stock, par value $0.01 per share, of the Company (“Company Common Stock”). As of January 30, 2008, there were 24,372,756 shares of Company Common Stock outstanding.

Name and Address. The filing person is the subject company. The name, business address and business telephone number of the Company are set forth in Item 1 above.

Tender Offer. This Statement relates to the tender offer by AZBC Holdings, Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of Amazon.com, Inc. (“Amazon”), a Delaware corporation, to purchase all of the outstanding shares of Company Common Stock at a purchase price of $11.50 per share, net to the seller in cash, without interest thereon (the “Offer Price”), subject to withholding of any applicable taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated February 11, 2008 (the “Offer to Purchase”), and in the related Letter of Transmittal (which, together with any amendments or supplements to the Offer to Purchase and the Letter of Transmittal, collectively constitute the “Offer”). The Offer is described in a Tender Offer Statement on Schedule TO (as amended or supplemented from time to time, the “Schedule TO”) filed by Amazon and Purchaser with the Securities and Exchange Commission (the “SEC”) on February 11, 2008.

The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of January 30, 2008 (the “Merger Agreement”), by and among Audible, Amazon and Purchaser. The Merger Agreement provides that, among other things, subject to the satisfaction or waiver of certain conditions, following completion of the Offer, and in accordance with the Delaware General Corporation Law (the “DGCL”), Purchaser will be merged with and into Audible (the “Merger”). Following the consummation of the Merger, Audible will continue as the surviving corporation (the “Surviving Corporation”) and will become a wholly owned subsidiary of Amazon. At the effective time of the Merger (the “Effective Time”), each issued and outstanding share of Company Common Stock (other than shares owned by Amazon, any of its subsidiaries (including Purchaser), Audible or any of its subsidiaries, and shares held by the holders of the Company Common Stock (the “Stockholders”) who properly demand appraisal and comply with the provisions of Section 262 of the DGCL relating to dissenters’ rights of appraisal) will be converted into the right to receive an amount in cash equal to the Offer Price (the “Merger Consideration”), subject to withholding of any applicable taxes. The Merger Agreement is summarized in Section 13 of the Offer to Purchase.

The Schedule TO states that the principal executive offices of each of Amazon and Purchaser are located at 1200 12th Avenue South, Suite 1200, Seattle, WA 98144-2734.

Certain agreements, arrangements or understandings between Audible and certain of its directors and executive officers and between Audible and Amazon and Purchaser are, except as noted below, described in the Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 14f-1 thereunder (the “Information Statement”), which is attached as Annex II to this Statement and incorporated in this Statement by reference. Except as described in this Statement (including in the Exhibits to this Statement) or in the Information Statement or as incorporated in this Statement by reference, to the knowledge of Audible as of the date of this Statement, there are no material agreements, arrangements or

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understandings and no actual or potential conflicts of interest between Audible or its affiliates and (i) Audible’s executive officers, directors or affiliates or (ii) Amazon, Purchaser or their respective executive officers, directors or affiliates.

The Merger Agreement. The summary of the Merger Agreement and the description of the conditions of the Offer contained in Sections 13 and 15, respectively, of the Offer to Purchase, which is being mailed to Stockholders together with this Statement and filed as an exhibit to the Schedule TO, are incorporated in this Statement by reference. Such summary and description are qualified in their entirety by reference to the Merger Agreement, which has been filed with the SEC by the Company on a Form 8-K on January 31, 2008 (the “Form 8-K”) and has been filed as Exhibit (e)(1) to this Statement and is incorporated in this Statement by reference.

The Tender and Support Agreements. The summary of the tender and support agreements, each dated as of January 30, 2008 (collectively, the “Support Agreements”), by and between Amazon and Donald R. Katz and by and among Amazon and Apax Excelsior VI, L.P., Apax Excelsior VI-A C.V., Apax Excelsior VI-B C.V. and Patricof Investment Club III, L.P. (collectively, the “Apax Funds”), contained in Section 13 of the Offer to Purchase, which is being mailed to Stockholders together with this Statement and filed as an exhibit to the Schedule TO, is incorporated in this Statement by reference. Such summary is qualified in its entirety by reference to the individual Support Agreements, which have been filed with the SEC by the Company on the January 31 Form 8-K and have been filed as Exhibits (e)(3) and (e)(4), respectively, to this Statement and are incorporated in this Statement by reference.

Interests of Certain Persons. The directors and executive officers of Audible may be deemed to have interests in the transactions contemplated by the Merger Agreement that are different from or in addition to their interests as Stockholders generally. As described in more detail below, consummation of the Offer will constitute a change in control of Audible for the purpose of determining whether certain benefits are owed to the directors and executive officers of Audible. In addition, certain executive officers of Audible have entered into conditional offer letters to serve as executive officers of Audible following the closing of the Merger. The Board of Directors of Audible (the “Audible Board”) and the special committee of the Audible Board (the “Special Committee”) were aware of these interests and considered them, among other matters, in approving the Merger Agreement and the transactions contemplated by the Merger Agreement.

In connection with the approval by the Audible Board of the Merger Agreement, the Compensation Committee of the Audible Board (comprising only “independent directors” in accordance with the requirements of Rule 14d-10(d)(2) under the Exchange Act and the instructions thereto) unanimously approved, in accordance with the non-exclusive safe harbor provisions contained in Rule 14d-10 under the Exchange Act, applicable aspects of the compensation arrangements of Audible’s employees, directors and other service providers who also may be security holders of Audible as “employment compensation, severance or other employee benefit arrangements” within the meaning of Rule 14d-10(d)(2) under the Exchange Act.

Stock Options and Restricted Stock Units. The Merger Agreement provides that the Company will amend any agreement that would provide for the acceleration of vesting of more than 50% of the unvested portion of any award of Company restricted stock units or Company restricted stock by reason of the Offer or the Merger to only 50% of any unvested portion of such award. Any vested restricted stock unit will be converted into the right to receive the Merger Consideration. The summary of the treatment of Company stock options, restricted stock units and restricted stock under the Merger Agreement contained in Section 13 of the Offer to Purchase, which is being mailed to Stockholders together with this Statement and filed as an exhibit to the Schedule TO, is incorporated in this Statement by reference. Such summary is qualified in its entirety by reference to the Merger Agreement.

Representation on the Company’s Board of Directors. The Merger Agreement provides that upon the payment by Amazon or the Purchaser for all shares tendered pursuant to the Offer that represents at least a majority of the shares outstanding, Purchaser shall be entitled to designate such number of directors, rounded up

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to the next whole number, on the Audible Board as is equal to the product of (i) the total number of directors on the Audible Board (after giving effect to the directors elected or designated by Purchaser pursuant to this sentence) multiplied by (ii) the percentage that the aggregate number of shares beneficially owned by Amazon, Purchaser and any of their affiliates bears to the total number of shares then outstanding.

Indemnification; Directors’ and Officers’ Insurance. The summary of directors’ and officers’ indemnification and insurance arrangements under the Merger Agreement contained in Section 13 of the Offer to Purchase, which is being mailed to Stockholders together with this Statement and filed as an exhibit to the Schedule TO, is incorporated in this Statement by reference. Such summary is qualified in its entirety by reference to the Merger Agreement.

Business Arrangement with Amazon. On August 6, 2003, Amazon.com Commerce Services, Inc. (“ACSI”), an affiliate of Amazon, and Audible entered into a Co-Branding, Marketing and Distribution Agreement (the “Marketing Agreement”). Pursuant to the terms of the Marketing Agreement, ACSI and its affiliated companies have the right but not the obligation to maintain links or other navigation tools to a mirror version of Audible’s website. While the mirror site was never built, there are links on certain Amazon.com product pages where the customer is redirected to Audible’s website. In most instances, Amazon is paid a one-time fee for each customer referral, as well as a revenue share on purchases made by referred customers. This arrangement resulted in payments by Audible to Amazon of approximately $550,000 in 2007 and $340,000 in 2006.

Recommendation of the Audible Board. At a meeting of the Special Committee held on January 30, 2008, the Special Committee recommended to the Audible Board that the Offer, the Merger, the Merger Agreement and the transactions contemplated by the Merger Agreement be approved; that Audible enter into the Merger Agreement, substantially in the form distributed to the Special Committee; and that the Merger Agreement and the Support Agreements, and the transactions contemplated thereby, be approved and adopted in all respects. At a meeting held on January 30, 2008, the Audible Board unanimously (i) approved the Offer, the Merger, the Merger Agreement and the transactions contemplated by the Merger Agreement and declared them advisable, fair to and in the best interests of the Stockholders; (ii) authorized Audible to enter into the Merger Agreement; (iii) approved and adopted in all respects the Merger Agreement and the Support Agreements, and the transactions contemplated thereby; (iv) approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Offer and the Merger, for purposes of Section 203 of the DGCL; (v) determined that, if required under Delaware law, the Merger Agreement and the Merger be submitted to a vote of the Stockholders in accordance with Delaware law; and (vi) recommended that the Stockholders accept the Offer and tender their shares of Company Common Stock in the Offer to Purchaser and approve and adopt the Merger Agreement and the Merger.

Background. From time to time, Audible and the Audible Board have, with their legal and financial advisors, reviewed and evaluated strategic opportunities and alternatives with a view towards enhancing Stockholder value. In that connection, over the past several years, Audible and Amazon have from time to time engaged in discussions concerning Amazon’s potential acquisition of, investment in or commercial relationship with Audible. However, these discussions have not previously led to a definitive agreement for a strategic transaction.

On March 23, 2007, the Audible Board adopted resolutions establishing a special committee comprising three members: William H. Washecka, Oren Zeev and Gary L. Ginsberg. The Audible Board determined that each person appointed to the special committee was a disinterested director with regard to any proposed strategic transaction, as such term is used under Delaware law, and an independent director, as such term is defined in the Nasdaq Marketplace Rules. The scope of the authority granted to the special committee by the Audible Board

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included: (i) to engage its own legal and financial advisors and determine their compensation; (ii) to review and evaluate the terms and conditions and to determine the advisability of any transaction; (iii) to consider whether any alternative strategic transactions would be in the best interests of the Company and the Stockholders; (iv) to reject or modify any terms of any strategic transaction; (v) to negotiate any and all terms and definitive agreements with respect to any strategic transactions; (vi) to review and revise any and all documents and other instruments used in connection with any strategic transactions; and (vii) to make a recommendation to the Audible Board as to whether the Company should consummate any strategic transaction. That afternoon, the special committee engaged DLA Piper US LLP (“DLA Piper”), Audible’s outside legal counsel, as its legal counsel.

The special committee considered the qualifications of various investment banking firms, including their experience in advising committees of independent directors. The special committee then proceeded to interview prospective financial advisors, following receipt of signed non-disclosure agreements from several such prospective financial advisors. On April 15, 2007, the special committee determined to retain Allen & Company LLC (“Allen & Company”) as financial advisor to the special committee based on its qualifications, expertise, experience as advisors to special committees and existing familiarity with Audible and its business. The terms of the engagement, including compensation, of Allen & Company were then negotiated and agreed upon and, also on April 15, 2007, Allen & Company and the special committee entered into an engagement letter.

From March 2007 through the end of July 2007, Allen & Company approached 12 potential acquirers that Allen & Company had identified and received permission from the special committee to approach. Allen & Company informed these potential acquirers that an offer of $12.50 per share to purchase all the outstanding shares of Company Common Stock would likely represent an acceptable offer price. No acquisition proposals were received, and communications with these potential acquirers did not progress enough to justify allowing these parties to commence a due diligence review of Audible.

On May 15, 2007, Audible executed an amendment to the Allen & Company engagement letter, which provided that the cash transaction fee to be paid to Allen & Company upon the consummation of a strategic transaction was to be calculated taking into account any indebtedness, cash, cash equivalents and short-term investments of Audible at the effective time of such strategic transaction.

On July 12, 2007, Donald R. Katz, Audible’s Chief Executive Officer, and Jeffrey P. Bezos, the President and Chief Executive Officer of Amazon, had a discussion regarding the status of each company’s business. Mr. Katz discussed with Mr. Bezos whether Amazon would have an interest in purchasing the shares of Company Common Stock held by the Apax Funds. Later that day, Tom Kuhn of Allen & Company mentioned to Mr. Bezos the possibility of a larger strategic business relationship.

On July 20, 2007, Mr. Katz met with Steve Kessel, Senior Vice President of Worldwide Digital Media at Amazon, to discuss the possibility of Amazon’s acquiring the shares of Company Common Stock held by the Apax Funds and to discuss other potential strategic business relationships between Amazon and Audible.

On July 31, 2007, noting that recent communications with Amazon focused on Amazon’s acquisition of the Company Common Stock held by the Apax Funds or the potential for a strategic business relationship between Amazon and Audible, and that no acceptable acquisition proposals had been received from Amazon or another potential acquirer, the Audible Board adopted resolutions to disband the special committee, effective as of August 10, 2007, if such an acceptable acquisition proposal had not been received by that date.

On August 6, 2007, Mr. Katz engaged in a telephone conversation with Jeffrey Blackburn, Senior Vice President of Business Development of Amazon, and Peter Krawiec, Vice President of Corporate Development of Amazon, discussing the possibility of an acquisition of Audible by Amazon.

On August 10, 2007, because no acceptable acquisition proposal had been received by Audible, the special committee disbanded.

On August 13, 2007, Audible executed a Non-Disclosure Agreement with Amazon to facilitate Amazon’s due diligence review in connection with a possible acquisition of Audible. Subsequently, the companies engaged in further conversations regarding a possible acquisition and Amazon’s due diligence process with respect to Audible.

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On October 18, 2007, Mr. Katz met with Messrs. Bezos, Kessel and Krawiec at Amazon’s headquarters in Seattle, Washington. During the meeting, the parties discussed the possibility of Amazon acquiring the Company Common Stock held by the Apax Funds as well as a possible business combination of Audible and Amazon.

From October 19, 2007 to December 2, 2007, representatives of Audible, Allen & Company and Amazon engaged in further telephonic discussions relating to the possibility of further negotiations regarding a possible acquisition. During this period, the parties also discussed the due diligence process in connection with a possible acquisition. In these discussions, Audible indicated to Amazon that Audible was unwilling to give Amazon full due diligence access until Amazon made a formal proposal at an acceptable price.

During November 2007, Mr. Katz engaged in correspondence with management of the Apax Funds regarding the registration of the shares of Company Common Stock held by the Apax Funds, pursuant to certain contractual registration rights that were granted to the Apax Funds at the time of their acquisition of these shares of Company Common Stock from Audible. On November 30, 2007, Adil Haque and Jason Wright of Apax Managers, Inc., the general partner and beneficial owner of the shares of Company Common Stock held by the Apax Funds, engaged in a telephone conversation with Mr. Katz and formally requested the registration of the resale of the shares of Company Common Stock held by the Apax Funds. Pursuant to this request, Audible filed a registration statement on Form S-3 with the SEC on December 6, 2008, and the registration statement was declared effective by the SEC on December 17, 2007.

On December 1, 2007, Mr. Katz sent e-mail correspondence to Messrs. Krawiec and Kessel, discussing the potential synergies involved in a business combination of Audible and Amazon.

On December 3, 2007, William H. Mitchell, Audible’s Chief Financial Officer, engaged in a telephone conversation with a member of Amazon’s Corporate Development department regarding Audible’s historical business model and prospects.

On December 7, 2007, Mr. Mitchell sent e-mail correspondence to a member of Amazon’s Corporate Development department, containing certain financial projections of Audible.

During the period from December 18, 2007 to December 26, 2007, Audible continued to respond to Amazon’s specific due diligence inquiries, but remained unwilling to provide full due diligence access to Amazon until a formal proposal was made at an acceptable price.

On December 27, 2007, Mr. Krawiec called Mr. Katz to inform him that Amazon management had authorized an offer to acquire Audible at a price of $11.00 per share.

On December 27, 2007 and December 28, 2007, Mr. Katz held informal conversations with members of the Audible Board to discuss Amazon’s proposal to purchase all the outstanding shares of Company Common Stock for $11.00 per share. The Audible Board informally instructed Mr. Katz to respond to Amazon that an $11.00 per share offer price was inadequate and that Audible would be more receptive to a firm offer of $11.50 per share.

On December 28, 2007, Mr. Katz informed Mr. Krawiec by telephone that the Audible Board did not consider the $11.00 per share proposal adequate. Mr. Katz further informed Amazon that the Audible Board would be receptive to recommending to the Stockholders a firm proposal with a per share price of $11.50, and upon receipt of such a proposal would allow commencement of a full due diligence review of Audible by Amazon.

During the period from December 29, 2007 to December 31, 2007, Messrs. Katz and Krawiec engaged in a number of telephone conversations and email communications, in which Mr. Krawiec indicated that Amazon might be willing to consider increasing its offer by up to $0.50 per share if justified by the results of Amazon’s due diligence review of Audible and Audible’s fourth quarter financial performance.

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On December 30, 2007, the Audible Board held a telephonic meeting. All of the directors were in attendance other than Oren Zeev. The Audible Board discussed Amazon’s interest in acquiring Audible and the status of price negotiations between the parties.

In late December 2007, Mr. Kuhn engaged in a number of telephone conversations with Jeffrey Sechrest of Lazard Frères & Co. LLC (“Lazard”), Amazon’s financial advisor, to discuss the offer price and the transaction process.

On January 2, 2008, the Audible Board held a telephonic meeting that was attended by representatives of DLA Piper and Allen & Company. After a discussion by DLA Piper of the legal standards applicable to the Audible Board’s consideration of Amazon’s acquisition proposal, the members of the Audible Board listened to, and asked questions relating to, Allen & Company’s financial analyses of Amazon’s offer. Representatives of Allen & Company indicated that, subject to finalizing its analyses and the review and approval of its internal fairness committee, Allen & Company would likely be able, if requested by the Audible Board, to conclude, based on and subject to various assumptions, qualifications and limitations that would be set forth in its written opinion, that a price of $11.50 per share in cash was fair to the Company’s Stockholders from a financial point of view. Following Allen & Company’s presentation, the Audible Board determined that an $11.00 per share offer price was inadequate and that the Audible Board would authorize Amazon’s further due diligence of Audible only following the receipt of a formal offer from Amazon of $11.50 per share of Company Common Stock.

On January 4, 2008, Mr. Krawiec telephoned Mr. Katz and agreed to increase the offer price to $11.50 per share. Mr. Krawiec indicated that the offer price was subject to confirmatory due diligence of Audible, which would include meetings with Audible management. On January 5, 2008, Mr. Kuhn telephoned Mr. Sechrest and orally confirmed the offer price of $11.50 per share.

Between January 3, 2008 and January 30, 2008, numerous discussions occurred among representatives of DLA Piper and Debevoise & Plimpton LLP (“Debevoise & Plimpton”), Amazon’s legal counsel. These discussions related to the structure of the transaction, the scope of the representations, warranties and covenants to be contained in the merger agreement, the conditions under which Amazon would be obligated to close the tender offer, the ability of the Audible Board to withdraw its recommendation of the tender offer and the merger, and the obligation of the Company to pay, under certain circumstances, Amazon’s transaction expenses and a termination fee.

Between January 7, 2008 and January 18, 2008, representatives of Amazon, Debevoise & Plimpton and PricewaterhouseCoopers LLP, Amazon’s tax advisors, conducted a due diligence review of the Company in a data room maintained at the offices of DLA Piper located at 1251 Avenue of the Americas, New York, NY 10020.

On January 9, 2008, Audible executed an amendment to the Allen & Company engagement letter in order to extend the term of Allen & Company’s engagement.

On January 10, 2008, Debevoise & Plimpton delivered to Dechert LLP, counsel to the Apax Funds, a draft tender and support agreement among Amazon and the Apax Funds. The draft tender and support agreement contemplated, among other things, that the Apax Funds would agree to tender their shares of Company Common Stock into the Offer.

On January 13, 2008, Debevoise & Plimpton, on behalf of Amazon, delivered a draft merger agreement to DLA Piper, on behalf of Audible. The draft merger agreement contemplated, among other things, a two-step transaction in which Amazon would commence a tender offer for all of the outstanding shares of Company Common Stock, followed by a merger in which all remaining Stockholders, other than those exercising appraisal rights, would receive the same consideration. The purchase of shares tendered pursuant to the Offer would be conditioned upon the receipt by Amazon of a majority of the outstanding Company Common Stock.

On January 14, 2008, the Audible Board met via telephone conference to discuss the progress of the potential transaction. Messrs. Katz and Mitchell and Helene Godin, Audible’s general counsel, presented the Audible Board with a progress report detailing Amazon’s due diligence of Audible. Later in the meeting, Allen &

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Company discussed with the Audible Board changes in Audible’s public market valuation and their impact on premiums represented by Amazon’s proposed offer price of $11.50 per share. Representatives of DLA Piper then discussed with the Audible Board the status of the merger agreement and other documentation relating to the proposed transaction.

On January 15, 2008, representatives of Amazon, Debevoise & Plimpton, Lazard and DLA Piper attended a management presentation given by representatives of Audible at the offices of DLA Piper. The management presentations included a summary of Audible’s business strategy, historical financial performance and projected financial performance.

On January 16, 2008, representatives of Amazon attended further management presentations given by representatives of Audible in Newark, New Jersey. The presentations included a description of the technical capabilities of the Audible service and website, as well as follow-up questions and discussions relating to the January 15, 2008 management presentation and Amazon’s due diligence process.

On January 20, 2008, in light of the progress made in connection with the proposed acquisition by Amazon, the Audible Board adopted resolutions constituting a Special Committee of the Audible Board comprising all of the directors of Audible other than Mr. Katz. The scope of the authority granted to the Special Committee by the Audible Board was identical to the scope provided in the March 23, 2007 resolutions. The Audible Board determined that each person appointed to the Special Committee was a disinterested director with regard to the proposed transaction, as such term is used under Delaware law, and an independent director, as such term is defined in the Nasdaq Marketplace Rules.

Also on January 20, 2008, representatives of Allen & Company discussed with the Audible Board its financial analyses and presentation regarding the proposed acquisition of Audible by Amazon, copies of which had previously been provided to the members of the Audible Board. Allen & Company then orally presented the basis upon which it would deliver its opinion to the Special Committee, to the effect that the consideration of $11.50 per share in cash to be received by the Stockholders pursuant to the Offer and the Merger was fair from a financial point of view to such Stockholders. In addition, representatives of DLA Piper presented to the Audible Board a detailed summary of the obligations of the Audible Board in connection with its review and potential approval of the proposed acquisition by Amazon and its review of the merger agreement and other documentation relating to the proposed transaction. Following the Allen & Company and DLA Piper presentations, the Audible Board engaged in a detailed discussion of the proposed acquisition of Audible by Amazon.

On January 22, 2008, Debevoise & Plimpton delivered to DLA Piper a draft tender and support agreement between Amazon and Donald R. Katz. The draft tender and support agreement contemplated, among other things, that Mr. Katz would agree to tender his shares of Company Common Stock into the Offer.

On January 29, 2008, the Board of Directors of Amazon adopted resolutions approving and declaring advisable the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby.

On January 30, 2008, the Special Committee held a telephonic meeting to discuss Amazon’s acquisition proposal. Representatives of DLA Piper and Allen & Company also participated in the meeting. A representative of DLA Piper provided an update on the status of Amazon’s offer and provided a summary of the Merger Agreement and the Support Agreements. DLA Piper representatives responded to questions from members of the Special Committee relating to the terms of the Merger Agreement.

Allen & Company then discussed with the Special Committee its updated financial analyses and presentation, copies of which had previously been provided to the members of the Special Committee. Allen & Company then orally delivered its opinion to the Special Committee to the effect that, based upon and subject to

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the assumptions, qualifications and limitations set forth in Allen & Company’s written opinion described under “Item 8—Opinions of the Special Committee’s Financial Advisors,” as of January 30, 2008, the consideration of $11.50 in cash per share to be received by the Stockholders pursuant to the Offer and the Merger was fair from a financial point of view to such Stockholders. Allen & Company responded to questions from members of the Special Committee. Allen & Company delivered its written opinion after the conclusion of the meeting.

Following a discussion of the matters presented by the Special Committee’s legal and financial advisors, the Special Committee unanimously adopted resolutions recommending that the Audible Board approve and declare advisable the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby. At that point, the meeting convened as a meeting of the Audible Board. The Audible Board, by unanimous action of the directors present voted to adopt resolutions approving and declaring advisable the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby, and to recommend to the Stockholders that they accept the Offer and tender their shares of Company Common Stock in the Offer and approve and adopt the Merger Agreement and the Merger.

On the evening of January 30, 2008, Audible, Amazon and Purchaser executed the Merger Agreement. Simultaneously with the execution of the Merger Agreement, Mr. Katz and the Apax Funds entered into the Support Agreements with Amazon, obligating them, among other things, to tender their shares of the Company Common Stock into the Offer.

On the morning of January 31, 2008, Audible and Amazon issued a joint press release announcing the execution of the Merger Agreement and the terms of the proposed acquisition of Audible by Amazon.

Reasons for the Recommendation of the Audible Board. In reaching its recommendation described in the first paragraph of this Item 4, the Audible Board considered a number of factors, including the following:

1.    Audible’s Operating and Financial Condition and Prospects. The Audible Board considered the business, operations, properties and assets, financial condition, cash flows, business strategy and prospects of the Company as well as the risks and costs involved in achieving those prospects, the nature of the industry in which Audible operates and competes, related industry trends, and general economic and market conditions, both short-term and long-term. The Audible Board considered the historical and potential impacts of competition in the markets in which the Company operates, including the potential impact that new market entrants with greater resources may have on its business. Among other things, the Audible Board considered the risks attendant to achieving Audible’s strategic goals, which risks include, but are not limited to, the risk factors set forth in the Registration Statement on Form S-3/A (File No. 333-147858) filed with the SEC on December 13, 2007.

2.    Transaction Financial Terms and Premium to Market Price. The Audible Board considered the relationship of the Offer Price and the Merger Consideration to the current and historical market prices of the Company Common Stock. The Offer Price and Merger Consideration of $11.50 per share of Company Common Stock to be paid in the Offer and the Merger, although lower than the highest price at which the Company Common Stock has historically traded, represents (A) a premium of 27% on a market capitalization basis and 42% on an enterprise value basis over $9.03, the closing price of Company Common Stock on the NASDAQ Global Market on January 29, 2008, and (B) a premium of 8% over $10.67, the three-month volume weighted average stock price of Company Common Stock as of January 29, 2008.

3.    Effect of Transaction Structure on Minority Stockholders; Appraisal Rights. The Audible Board considered that all Stockholders would receive the same consideration in the Offer and the Merger. The Audible Board considered that Stockholders who object to the Merger would be entitled to obtain “fair value” for their Company Common Stock if they exercise and perfect their appraisal rights under Delaware law.

4.    Cash Consideration; Certainty of Value. The Audible Board considered that the form of consideration to be paid to the Stockholders in the Offer and the Merger would be cash, thereby providing Stockholders with the certainty of value of their consideration compared to stock or other consideration and with the ability to

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realize immediate value for their investment as compared to equity securities, which are subject to fluctuations in value, or other less liquid consideration.

5.    Audible’s Financial Advisors’ Fairness Opinion. The Audible Board considered the presentation from the Special Committee’s financial advisors, Allen & Company, and the written opinion of Allen & Company, dated January 30, 2008 (the “Fairness Opinion”), to the effect that, as of such date, based upon and subject to the considerations and assumptions set forth therein, the $11.50 per share of Company Common Stock to be received by Stockholders pursuant to the Offer and the Merger is fair, from a financial point of view, to such Stockholders. A copy of the written Fairness Opinion, setting forth the procedures followed, the matters considered and the assumptions made by Allen & Company in arriving at its opinion, is attached as Annex I to this Statement and is incorporated in this Statement by reference. Stockholders are urged to read the Fairness Opinion in its entirety. The Fairness Opinion was provided for the information and assistance of the Special Committee in connection with its consideration of the Offer and the Merger. The Fairness Opinion addresses only the fairness from a financial point of view of the consideration to be received by Stockholders in the Offer and the Merger and does not constitute recommendations to any Stockholder as to whether to tender shares in the Offer or to vote in favor of the Merger. The Special Committee and the Audible Board were aware that Audible’s financial advisor becomes entitled to certain fees described in Item 5 contingent upon the consummation of the Offer.

6.    Strategic Alternatives. The Audible Board considered trends in the industry in which Audible operates and the strategic alternatives available to Audible, including the alternative to remain an independent public company, as well as the risks and uncertainties associated with such alternatives. The Audible Board considered the results of the process that had been conducted by Allen & Company to assist the Special Committee in its evaluation of strategic alternatives.

7.    Certainty of Closing. The Audible Board considered the reasonable likelihood of the consummation of the transactions contemplated by the Merger Agreement in light of the limited conditions in the Merger Agreement to the obligations of Purchaser to accept and pay for the Company Common Stock tendered in the Offer and to complete the Merger and pay the Merger Consideration. The Audible Board also considered that Amazon has demonstrated its financial capacity (and, accordingly, that of Purchaser) to consummate the Offer and the Merger by having sufficient funds readily accessible to consummate the transactions contemplated by the Merger Agreement and pay applicable fees and expenses.

8.    Timing of Completion. The Audible Board considered the anticipated timing of the consummation of the transactions contemplated by the Merger Agreement, and the structure of the transaction as a cash tender offer for all of the shares of Company Common Stock, which should allow those Stockholders who tender their shares in the Offer to receive the transaction consideration in a relatively short timeframe, followed by the Merger in which all Stockholders will receive the same consideration as received by Stockholders who tender their shares in the Offer.

9.    Alternative Transactions. The Audible Board considered that under the terms of the Merger Agreement, although Audible is prohibited from soliciting alternative acquisition proposals (each a “Takeover Proposal”) from third parties, prior to the acceptance by Purchaser of any shares of Company Common Stock for payment pursuant to the Offer, Audible may furnish information to, and participate in discussions or negotiations with, any individual or entity that delivers an unsolicited Takeover Proposal if the Audible Board determines in good faith, after consultation with its outside legal counsel and a financial advisor of nationally recognized reputation, that the failure to furnish such information or participate in such discussions or negotiations is reasonably likely to breach its fiduciary duties to the Stockholders under applicable law and that such Takeover Proposal would reasonably be expected to lead to a transaction that, if consummated, would be more favorable to Stockholders than the transactions contemplated by the Merger Agreement, taking into account all of the terms and conditions of such Takeover Proposal and those of the Merger Agreement (including any proposal by Amazon to amend the terms of the Merger Agreement), and is reasonably capable of being consummated on the

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terms so proposed, taking into account all financial, regulatory, legal and other aspects of such proposal (a “Superior Proposal”). The Audible Board further considered Audible’s rights and obligations under the Merger Agreement in the event that Audible or its representatives receive a Superior Proposal and the terms and conditions under which Audible would be permitted to provide information, participate in discussions or negotiate such Superior Proposal (or a combination of the foregoing). The Audible Board considered such provisions in light of Amazon’s right to terminate the Merger Agreement and the ensuing obligations of Audible to pay to Amazon, under certain circumstances, up to $3.5 million for the expenses incurred by Amazon and Purchaser in connection with the Offer, the Merger and the Merger Agreement and a termination fee of $10 million. The foregoing terms and conditions are summarized in Section 13 of the Offer to Purchase. Such summary is qualified in its entirety by reference to the Merger Agreement. The Audible Board considered the effect of these provisions of the Merger Agreement. The Audible Board also considered the views of Allen & Company expressed in this regard. The Audible Board also considered the contacts that Audible had with various third parties regarding a potential transaction involving Audible and the fact that Audible had engaged in a vigorous exploration of its strategic options, which did not result in any acquisition proposals other than the Amazon proposal, as described above in the “Background” section of this Item 4.

10.    Negotiations and Terms of the Merger Agreement. The Audible Board considered the efforts of the Audible Board, the Special Committee, Company management and their legal and financial advisors to negotiate the Offer Price and a definitive Merger Agreement in the best interests of and favorable to the Company and the Stockholders as reflected by the financial and other terms and conditions of the Merger Agreement, including that (1) neither the Offer nor the Merger is subject to a financing condition, (2) Amazon has demonstrated its (and Purchaser’s) financial capacity to consummate the Offer and the Merger and the other transactions contemplated by the Merger Agreement by having available sufficient funds to consummate such transactions, (3) the conditions to the Offer are specific and limited and, in the Audible Board’s judgment, are likely to be satisfied, and (4) subject to compliance with the terms and conditions of the Merger Agreement, Audible is permitted to terminate the Merger Agreement and the Audible Board can change its recommendation in order to approve an alternative transaction proposed by another person that qualifies as a Superior Proposal, upon the payment of a termination fee of $10 million and reimbursement for out-of-pocket expenses of Amazon, Purchaser and their affiliates of up to $3.5 million, and its belief that such termination fee and expense reimbursement were reasonable in comparison with termination fees and expense reimbursement payable in other similar transactions and would not preclude another person from making a competing proposal. The Audible Board considered the Offer Price and the Merger Agreement and determined that they resulted from arms’-length negotiations between the Audible Board and Amazon. The Audible Board believes that the Offer Price of $11.50 in cash for each share of Company Common Stock represented the highest per share consideration that could be obtained.

11.    Ability to Change Recommendation. The Audible Board considered the provisions in the Merger Agreement that permit the Audible Board to withhold, withdraw or modify in a manner adverse to Purchaser the Audible Board’s recommendation to the Stockholders that they accept the Offer and tender their shares in the Offer and approve and adopt the Merger Agreement and the Merger, provided that certain specified conditions are satisfied, including that the Audible Board will have determined in good faith (after having taken into account the advice of the Company’s outside legal counsel and a financial advisor of nationally recognized reputation) that the failure to so withhold, withdraw or modify the Audible Board’s recommendation is reasonably likely to breach its fiduciary duties to Stockholders under applicable law.

The Audible Board also considered a variety of risks and other potentially negative factors of the Offer, the Merger, the Merger Agreement and the other transactions contemplated thereby, including the following;

1.    No Continued Investment. The Audible Board considered that the nature of the transaction as a cash transaction would prevent Stockholders from being able to participate in any value creation that Audible and its business ventures may generate in the future, as well as any potential future appreciation in the market value of Company Common Stock.

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2. Tax Treatment. The Audible Board considered that gains from the transactions contemplated by the Merger Agreement would be taxable to Stockholders for U.S. federal income tax purposes. The Audible Board also considered that gains from any appraisal proceeding could be taxable for U.S. federal income tax purposes to the Stockholders who perfect their appraisal rights.

3. Conditions to Closing. The Audible Board considered the conditions to the obligation of Purchaser to accept for payment and to pay for the Company Common Stock tendered in the Offer and to complete the Merger and pay the Merger Consideration and the possibility that such conditions might not be satisfied, including as a result of events outside of Audible’s control.

4. Potential Conflicts of Interest. The Audible Board was aware of the potential conflicts of interest between Audible, on the one hand, and the executive officers of Audible, on the other hand, as a result of the transactions contemplated by the Merger Agreement (as described above in “Item 3. Past Contacts, Transactions, Negotiations and Agreements”).

5. Limited Recourse. The Audible Board considered the fact that the liability of Purchaser and its affiliates to Audible in the event of any breach by Purchaser of the Merger Agreement is limited as Amazon and Purchaser are not subject to a reverse termination fee.

6. Effects of Failure to Consummate the Offer and the Merger. The Audible Board considered that, if the Offer and the Merger and the other transactions contemplated by the Merger Agreement are not consummated, (1) Audible’s directors, officers and other employees will have expended considerable time and effort and will have experienced significant distractions from their work during the pendency of the transaction, including their work in finalizing Audible’s outstanding financial statements and periodic reports, (2) Audible will have incurred significant transaction and opportunity costs attempting to consummate the transactions, and Audible may have lost customers, vendors, business partners and employees after the announcement of the Offer, (3) the market’s perception of Audible’s prospects could be adversely affected, potentially resulting in a loss of customers, vendors, business partners and employees, (4) the trading price of the Company Common Stock could be adversely affected and (5) the Company is not to receive any reverse termination fee and, therefore, will have to absorb all of its costs and expenses incurred in connection with such proposed transactions.

7. Termination Fee and Expenses. The Audible Board considered the restrictions that the Merger Agreement imposes on the ability of Audible and its advisors and other representatives to solicit competing proposals for strategic transactions, and provisions in the Merger Agreement that require Audible to pay a termination fee and expense reimbursement under certain circumstances (including the potential effect of such termination fee and expense reimbursement in deterring other potential acquirors from proposing alternative transactions, although the Audible Board believes that the risk of such deterrence is mitigated by the process to solicit proposals for strategic transactions described above).

8. Risks Pending Closing. The Audible Board considered the risk that during the time between execution and consummation of the transactions contemplated by the Merger Agreement, Audible’s business prospects could change materially, in ways both adverse and beneficial to Purchaser, and that the price per share of Company Common Stock offered by Purchaser is fixed at $11.50 regardless of such changes (so long as there is no material adverse effect on the Company), and that during such time Audible will be required to operate in the ordinary course and subject to other restrictions as provided in the Merger Agreement, which may delay or prevent Audible from undertaking business opportunities that may arise prior to the completion of the Offer and the Merger. The Audible Board also considered the potential disruption to the Company’s business operations and staffing as preparations are made for closing, and that such disruptions may delay further Audible’s efforts to finalize its outstanding financial statements and periodic reports.

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The foregoing includes the material factors considered by the Audible Board. In view of its many considerations, the Audible Board did not find it practical to, and did not, quantify or otherwise assign relative weights to the various individual factors considered. In addition, individual members of the Audible Board may have given different weights to the various factors considered. After weighing all of these considerations, the Audible Board determined to approve and declare advisable the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby and recommend that Stockholders accept the Offer and tender their shares in the Offer and approve and adopt the Merger Agreement and the Merger.

Intent to Tender. After reasonable inquiry and to the best of Audible’s knowledge, each executive officer and director of the Company currently intends, subject to compliance with applicable law, including Section 16(b) of the Exchange Act, to tender all shares of Company Common Stock held of record or beneficially owned by such person to Purchaser in the Offer (including any shares of Company Common Stock purchased by such person by exercising stock options).

Allen & Company is acting as the Special Committee’s financial advisor in connection with the Offer and the Merger. Pursuant to the terms of the engagement letter executed with Allen & Company, Audible has agreed to pay to Allen & Company, contingent upon completion of the Offer, a cash transaction fee for its financial advisory services equal to 1.2% of aggregate consideration payable to the Stockholders in the Offer and the Merger, which, based on the $11.50 per share price to be paid to Stockholders, implies a transaction fee of approximately $3.6 million. In addition, Audible agreed that if it requested from Allen & Company an opinion as to the fairness from financial point of view of the Offer and the Merger to the Stockholders, upon delivery of such opinion in writing, Audible would pay to Allen & Company a cash fee of $750,000, with such fee to be creditable against the cash transaction fee described above. Audible paid the $750,000 cash fee to Allen & Company on January 31, 2008. Pursuant to the engagement letter, Audible has also agreed to reimburse Allen & Company’s expenses and indemnify Allen & Company against certain liabilities arising out of the engagement.

Allen & Company, as part of its investment banking business, is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. In the ordinary course of business, Allen & Company and its affiliates may actively trade or hold the securities of Audible and Amazon for its own account or for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities. Furthermore, Allen & Company and its affiliates may maintain relationships with Audible, Amazon and their respective affiliates.

Except as set forth above, neither Audible nor any person acting on its behalf has employed, retained or compensated any other person to make solicitations or recommendations to Stockholders on its behalf concerning the Offer or the Merger, except that such solicitations or recommendations may be made by directors, officers or employees of Audible, for which services no additional compensation will be paid.

Other than as set forth below, to the Company’s knowledge after reasonable inquiry, no transactions in the Company Common Stock have been effected during the past 60 days by the Company or by any executive officer, director, affiliate or the subsidiary of the Company.

Pursuant to the terms of Donald R. Katz’s Rule 10b5-1 plan, which provides for dispositions of his Company Common Stock from time to time, on December 3, 2007, Mr. Katz sold 5,500 shares of Company Common Stock at prices ranging from $11.59 to $11.88 per share, and on January 2, 2008, he sold 5,500 shares of Company Common Stock at prices ranging from $8.75 to $9.07 per share.

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Pursuant to the terms of William H. Mitchell’s Rule 10b5-1 plan, which provides for dispositions of his Company Common Stock from time to time, on December 27, 2007, Mr. Mitchell sold 500 shares of Company Common Stock at a price of $8.96 per share, and on January 28, 2008, he sold 500 shares of Company Common Stock at a price of $8.79 per share.

On January 2, 2008, Mr. Katz was granted 20,000 restricted stock units, each of which represents a contingent right to receive one share of Company Common Stock, was granted an option to purchase 60,000 shares of Company Common Stock at a exercise price of $8.83 per share and acquired 3,333 shares of Company Common Stock pursuant to the settlement of vested restricted stock units. On January 29, 2008, Mr. Katz, pursuant to the terms of his employment agreement dated January 2, 2007, was awarded 25,000 shares of Company Common Stock in connection with meeting 2007 performance targets, which shares are issuable upon the earlier of the closing date of the Merger and the filing of Audible’s annual report on Form 10-K for the year ended December 31, 2007.

On January 2, 2008, Glenn Rogers acquired 16,650 shares of Company Common Stock as a settlement of vested restricted stock units, and 6,601 shares of Company Common Stock were withheld by Audible at a price of $9.00 per share to satisfy certain tax withholding obligations in connection with such settlement. On January 4, 2008, Mr. Rogers forfeited 30,374 restricted stock units in connection with his resignation from Audible. Also on January 4, 2008, Audible caused the acceleration of 72,024 restricted stock units in connection with Mr. Rogers’ resignation from Audible. Such accelerated restricted stock units will be settled in shares of Company Common Stock upon the earlier of June 13, 2008 or a change of control (including the closing of the Offer).

Except as set forth in this Statement, Audible is not undertaking or engaged in any negotiations in response to the Offer that relate to, or would result in: (i) a tender offer for or other acquisition of Audible’s securities by Audible, any subsidiary of Audible or any other person; (ii) any extraordinary transaction, such as a merger, reorganization or liquidation, involving Audible or any of its subsidiaries; (iii) any purchase, sale or transfer of a material amount of assets of Audible or any of its subsidiaries; or (iv) any material change in the present dividend rates or policy, or indebtedness or capitalization of Audible. Except as set forth in this Statement or the Offer to Purchase, there are no transactions, Audible Board resolutions or agreements in principle or signed contracts in response to the Offer that relate to, or would result in, one or more of the events referred to in the preceding sentence.

Anti-takeover Statute. As a Delaware corporation, Audible is subject to Section 203 of the DGCL (“Section 203”). In general, Section 203 would prevent an “interested stockholder” (generally defined as a person beneficially owning 15% or more of a corporation’s voting stock) from engaging in a “business combination” (as defined in Section 203) with a Delaware corporation for three years following the time such person became an interested stockholder unless: (i) before such person became an interested stockholder, the board of directors of the corporation either approved the transaction in which the stockholder became an interested stockholder or approved the business combination, (ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding for purposes of determining the number of shares outstanding those shares held by directors who are also officers and by employee stock plans that do not allow plan participants to determine confidentially whether to tender shares), or (iii) following the transaction in which such person became an interested stockholder, the business combination is (x) approved by the board of directors of the corporation and (y) authorized at a meeting of stockholders by the affirmative vote of the holders of at least 66 2/3% of the outstanding voting stock of the corporation not owned by the interested

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stockholder. In accordance with the provisions of Section 203, the Audible Board has approved the Merger Agreement, as described in Item 4 above, and therefore, the restrictions of Section 203 are inapplicable to the Offer and the Merger and the other transactions contemplated under the Merger Agreement.

Appraisal Rights. No appraisal rights are available in connection with the Offer. However, if the Merger is completed, Stockholders who did not tender their shares in the Offer and, if a vote of Stockholders is taken to adopt the Merger Agreement, did not vote in favor of the Merger, will have certain rights under the DGCL in connection with the Merger to dissent and demand appraisal of, and to receive payment in cash of the fair value of, their shares. Stockholders who perfect such rights by complying with the procedures set forth in Section 262 of the DGCL will have the fair value of their shares as of the Effective Time (likely exclusive of any element of value arising from the accomplishment or expectation of the Merger) determined by the Delaware Court of Chancery and will be entitled to receive a cash payment equal to such fair value from the Surviving Corporation. In addition, such dissenting Stockholders will be entitled to receive payment of a fair rate of interest from the date of completion of the Merger on the amount determined to be the fair value of their shares. No holder of dissenting shares will be entitled to receive any Merger Consideration in respect of such dissenting shares unless and until such holder shall have failed to perfect or shall have effectively withdrawn or lost such holder’s right to seek appraisal of its dissenting shares under the DGCL, and any dissenting Stockholder will be entitled to receive only the payment provided by Section 262 of the DGCL with respect to the dissenting shares owned by such dissenting Stockholder. If any person who otherwise would be deemed a dissenting Stockholder fails properly to perfect or effectively withdraws or loses the right to seek appraisal with respect to any dissenting shares, such dissenting shares will thereupon be treated as though such dissenting shares had been converted into the right to receive the Merger Consideration.

The foregoing summary is not intended to be complete and is qualified in its entirety by reference to Section 262 of the DGCL. Failure to follow the steps required by Section 262 of the DGCL for perfecting appraisal rights may result in the loss of such rights.

Regulatory Approvals. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the rules that have been promulgated thereunder by the United States Federal Trade Commission (the “FTC”), certain acquisitions may not be consummated unless certain information has been furnished to the Antitrust Division of the United States Department of Justice (the “Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The purchase of shares of Company Common Stock by Amazon or Purchaser pursuant to the Offer and the Merger is subject to these requirements, including the submission of a filing under the HSR Act by each of Amazon and Audible. Amazon intends to make the requisite filing as soon as practicable following the commencement of the Offer, and Audible intends to make the requisite filing as soon as practicable following the Amazon filing, but in any event within 10 days thereafter. The initial waiting period applicable to the purchase of shares of Company Common Stock pursuant to the Offer is 15 days following Amazon’s filing. Prior to such time, however, the Antitrust Division or the FTC may extend the waiting period by requesting additional information or documentary material from the parties (a “second request”). If a second request is made, the waiting period will be extended until 11:59 p.m., New York City time, on the tenth day after substantial compliance by Amazon with such request. Thereafter, such waiting period can be extended only by court order or by agreement of the parties. The Antitrust Division and the FTC scrutinize the legality under the antitrust laws of transactions, such as the acquisition of shares of Company Common Stock by Amazon or Purchaser pursuant to the Offer and the Merger. At any time, whether before or after the consummation of the Offer or the Merger, the Antitrust Division or the FTC could take such action under the antitrust laws of the United States as it deems necessary or desirable in the public interest, including seeking to enjoin the purchase of shares of Company Common Stock pursuant to the Offer or the Merger or seeking divestiture of the shares so acquired or divestiture of substantial assets of Amazon or Audible. Individual states of the United States or private parties may also bring legal actions under the antitrust laws of the United States. Audible does not, and Amazon has advised Audible that it does not, believe that the consummation of the Offer or the Merger will result in a violation of any applicable antitrust laws. There can be no assurance, however, that a challenge to the Offer or the Merger on antitrust grounds will not be made or, if such a challenge is made, what the outcome would be.

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Other than the filings under the HSR Act and certain filings with foreign antitrust and competition authorities, none of Amazon, Purchaser or Audible is aware of any filings, approvals or other actions by or with any governmental authority or administrative or regulatory agency that would be required for Amazon’s or Purchaser’s acquisition or ownership of the Company Common Stock.

Section 14(f) Information Statement. The Information Statement attached as Annex II hereto is being furnished in connection with the possible designation by Purchaser, pursuant to the Merger Agreement, of certain persons to be appointed to the Audible Board other than at a meeting of Stockholders and the information therein is incorporated in this Statement by reference.

Short-Form Merger Provisions. Under Section 253 of the DGCL, if Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the outstanding shares of Company Common Stock, Purchaser will be able to effect the Merger after consummation of the Offer as a short-form merger without a vote of Stockholders.

Opinion of Allen & Company. Allen & Company has acted as financial advisor to the Special Committee with respect to the Offer and the Merger. In connection with Allen & Company’s engagement as financial advisor, the Special Committee requested that Allen & Company evaluate the fairness, from a financial point of view, of the Offer Price to be paid to the Stockholders. On January 30, 2008, Allen & Company delivered its oral opinion, subsequently confirmed in writing, to the Special Committee to the effect that, as of the date of its opinion and based upon and subject to the qualifications, limitations and assumptions set forth therein, the Offer Price was fair, from a financial point of view, to the Stockholders.

This summary of Allen & Company’s written opinion is qualified in its entirety by reference to the full text of Allen’s written opinion, dated January 30, 2008, attached as Annex I. You are urged to, and should, read Allen & Company’s written opinion carefully and in its entirety. Allen & Company’s written opinion addresses only the fairness, from a financial point of view, of the Offer Price to the Stockholders, as of the date of Allen & Company’s written opinion, and does not constitute a recommendation to any Stockholder as to how such Stockholder should vote or act on any matter relating to the Offer and the Merger.

In arriving at its opinion, Allen & Company, among other things:

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In connection with its review, Allen & Company did not assume any responsibility for independent verification of any of the information utilized in its analyses and relied upon and assumed the accuracy and completeness of all of the financial, accounting, tax and other information that was available to Allen & Company from public sources, that was provided to them by Audible or its representatives, or that was otherwise reviewed by Allen & Company. With respect to the projected business information and financial results that Allen & Company reviewed, Allen & Company was advised by Audible’s management, and Allen & Company assumed, that such forecasts had been reasonably prepared in good faith reflecting the best currently available estimates and judgments of Audible’s management as to its future financial performance. Allen & Company assumed no responsibility for such forecasts or the assumptions on which they were based.

Allen & Company also assumed, with Audible’s consent, that the Offer and Merger would be consummated in accordance with the terms and conditions set forth in the draft Merger Agreement and the draft agreements ancillary thereto that it reviewed. Allen & Company neither conducted a physical inspection of the properties and facilities of Audible nor, except as specifically set forth in the opinion, made or obtained any evaluations or appraisals of the assets or liabilities of Audible, or conducted any analysis concerning the solvency of Audible. Allen & Company’s opinion addressed only the fairness, from a financial point of view, of the Offer Price to the Stockholders, and did not address any other aspect or implication of the Offer and Merger or any other agreement, arrangement or understanding entered into in connection with the Offer and Merger or otherwise. Allen & Company’s opinion is necessarily based upon information made available to it as of the date of its opinion, and upon financial, economic, market and other conditions as they existed and could be evaluated on the date of Allen & Company’s opinion. Allen & Company’s opinion did not address the relative merits of the Offer and Merger as compared to other business strategies that might be available to Audible, nor did it address Audible’s underlying business decision to proceed with the Offer and Merger. Allen & Company’s opinion also did not express an opinion about the fairness of any compensation payable to any of Audible’s officers, directors or employees in connection with the Offer and Merger, relative to the compensation payable to the Stockholders.

In preparing its opinion, Allen & Company performed a number of financial and comparative analyses, including those further described below. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Allen & Company believes that its analyses must be considered as a whole and that selecting portions of its analyses and of the factors considered by it, without considering all analyses and factors, could create a misleading view of the processes underlying its opinion. No company or transaction used in the analyses performed by Allen & Company as a comparison is identical to Audible or the contemplated Offer and Merger. In addition, Allen & Company may have given some analyses more or less weight than other analyses, and may have deemed various assumptions more or less probable than other assumptions, so that the range of valuation resulting from any particular analysis described below should not be taken to be Allen & Company’s view of the actual value of Audible. The analyses performed by Allen & Company are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of businesses or assets do not purport to be appraisals or to necessarily reflect the prices at which businesses or assets may actually be sold. The analyses performed were prepared solely as part of Allen & Company’s analysis of the fairness, from a financial point of view, of the Offer Price, to the Stockholders, and were provided to the Special Committee in connection with the delivery of Allen & Company’s opinion.

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The following is a summary of material financial analyses performed by Allen & Company in connection with the preparation of its opinion, and reviewed with the Special Committee and the Audible Board at a meeting held on January 30, 2008. Certain of the following summaries of financial analyses that were performed by Allen & Company include information presented in tabular format. In order to understand fully the material financial analyses that were performed by Allen & Company, the tables should be read together with the text of each summary. The tables alone do not constitute a complete description of the material financial analyses.

Allen & Company used the following methodologies to determine that the $11.50 Offer Price to be paid to the Stockholders represented equity values per share and EBITDA multiples that were in line with the results derived from the following valuation analyses: (1) comparable company premiums analysis; (2) discounted cash flow analysis (“DCF”); (3) comparable precedent transactions analysis and (4) comparable company multiples analysis.

(1) Comparable Company Premiums Analysis. Allen & Company analyzed and examined the transaction premiums paid in all completed acquisitions of domestic companies, excluding financial institutions, which were acquired from January 1, 2002 through January 29, 2008. Allen & Company found that the Offer Price of $11.50 represented a premium to Audible’s market price within the range of estimated premiums paid in comparable mergers and acquisitions.

Allen & Company also compared the Offer Price to various measures relating to Audible’s market capitalization and enterprise value. These measures included (a) the closing price on January 29, 2008; (b) the 30-day average closing prices; (c) the 60-day average closing prices; (d) the 90-day average closing prices; (e) the 6-month average closing prices; (f) the 12-month average closing prices and (e) the 24-month average closing prices. For all relevant measurement periods, Allen & Company calculated that the Offer Price represented a premium to market capitalization which ranged from 3.5%—32.3% and a premium to enterprise value which ranged from 4.9%—50.9%.

(2) Discounted Cash Flow Analysis. Allen & Company’s Discounted Cash Flow (“DCF”) approach was based upon certain financial projections and estimates for the fiscal years ending 2008-2011, which were derived from two sources: (a) Wall Street research and (b) Audible’s management. Allen & Company’s analyses utilized the projected cash flows of Audible discounted back to present value based on a range of risk-adjusted discount rates.

(a) Wall Street Research. Using a range of terminal forward EBITDA multiples ranging from 8.0x – 12.0x and discount rates ranging from 14%—18%, Allen & Company determined that the Offer Price of $11.50 fell within the range of calculated DCF equity values of $9.72 to $13.24 per share of Company Common Stock based on Wall Street analyst valuations.

(b) Company Management. Using a range of terminal forward EBITDA multiples ranging from 8.0x – 12.0x and discount rates ranging from 14%—18%, Allen & Company determined that the Offer Price of $11.50 fell below the range of calculated DCF equity values of $15.38 to $21.99 per share of Company Common Stock based on Audible management estimates.

(3) Comparable Precedent Transactions Analysis. Allen & Company reviewed selected precedent transactions within the e-commerce sector that had announcement dates between 2004 and 2008 and that had publicly disclosed information or industry analyst estimates from which purchase price multiples could be derived. Transactions analyzed included:

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As indicated by the chart below, Allen & Company determined that the Offer Price implies enterprise value multiples for the Company that were in line with the range of multiples paid in comparable transactions in the e-commerce sector, based on Allen & Company’s review of Wall Street Consensus and Company management estimates.

(4) Comparable Company Multiples Analysis. Allen & Company analyzed and examined EBITDA multiples for companies within the e-commerce sector that Allen & Company deemed comparable to Audible. Specifically, Allen & Company analyzed the common stock prices and market multiples of the following comparable publicly traded companies:

Allen & Company calculated the ratio of enterprise value to EBITDA on a projected calendar year basis for 2007, 2008 and 2009 for each of the six companies identified above. Utilizing the numbers obtained from publicly available information, Reuters consensus estimates and Audible press releases, Allen & Company determined that the Offer Price implied EBITDA multiples either above or in line with the range of multiples of the comparable publicly traded companies in the e-commerce sector.

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Allen & Company’s opinion and presentation to the Special Committee was one of many factors that the Special Committee took into account in making its decision. Consequently, the analyses described above should not be viewed as determinative of the opinion of the Special Committee in determining the fairness, from a financial point of view, of the Offer Price to the Stockholders.

Pursuant to an engagement letter dated April 15, 2007 and amended thereafter on May 15, 2007 and January 9, 2008 (collectively, the “Engagement Letter”), the Special Committee engaged Allen & Company to assist Audible in a possible sale or disposition of all or substantially all of the equity or assets of Audible. Allen & Company’s services under the Engagement Letter included (i) acting as Audible’s financial advisor, (ii) initiating or continuing disc