eBay 1998 Annual Report Download - page 46

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46
consequently recognized $0.67 per share, or an aggregate $429,000, as general and administrative expense in the
year ended December 31, 1998.
In July 1998, the Board adopted, and in August 1998 the Company’ s stockholders approved, the Directors Plan
and reserved a total of 600,000 shares of the Company’ s Common Stock for issuance thereunder. Members of the
Board who are not employees of the Company, or any parent, subsidiary or affiliate of the Company, are eligible to
participate in the Directors Plan. The option grants under the Directors Plan are automatic and nondiscretionary, and
the exercise price of the options must be 100% of the fair market value of the Common Stock on the date of grant.
Each eligible director will initially be granted an option to purchase 90,000 shares (an “Initial Grant”) on the date
such director first becomes a director (the “Effective Date”). At each Annual Meeting of the Company, each eligible
director will automatically be granted an additional option to purchase 15,000 shares if such director has served
continuously as a member of the Board since the date of such director’ s Initial Grant or, if such director was
ineligible to receive an Initial Grant, since the Effective Date. In March 1999, the Board amended the Directors Plan
to provide that no such grants would be made to eligible directors at the 1999 Annual Meeting. The Board is
considering other changes to the Directors Plan in light of the proposed changes in the accounting for this type of
plan. The term of such options is ten years, provided that they will terminate seven months following the date on
which the director ceases to be a director of or a consultant to the Company (12 months if the termination is due to
death or disability). All options granted under the Directors Plan will vest as to 25% of the shares on the first
anniversary of the date of grant and as to 2.08% of the shares each month thereafter, provided the optionee continues
as a member of the Board or as a consultant to the Company.