eBay 1999 Annual Report Download - page 72

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Note 11—Related Party Transactions:
Notes receivable from stockholders
At December 31, 1998, the Company held notes receivable from employees, officers and a director totaling
$1.1 million, $11,000 of which was outstanding at December 31, 1999. Notes receivable from stockholders
represent amounts owed to the Company from the exercise of stock options. These full recourse notes are secured
by Common Stock and bear interest at a rate of 8% per annum. Interest is due and payable on December 1st of
each year, and the principal is due on or before December 1, 2002.
Notes receivable from officer
At December 31, 1999, the Company held a note receivable from an officer of the Company totaling
$2.1 million. The note bears interest at a rate of 5.43% per annum and is secured by a Deed of Trust, assigned to
the Company. All outstanding principal and interest are due and payable in 2000.
Professional services
In connection with the recruitment of its Chief Executive Officer, the Company engaged the services of an
executive search firm affiliated with a holder of the Company’s Series B Mandatorily Redeemable Convertible
Preferred Stock. During 1998, the Company paid fees for services performed of $93,000 and issued
46,248 shares of Series B Mandatorily Redeemable Convertible Preferred Stock with a fair value on the date
earned of $93,000. The amount paid for the services and the fair value of the shares are included in general and
administrative expenses in the consolidated statement of income for the year ended December 31, 1998.
Note 12—Preferred Stock and Convertible Preferred Stock:
Preferred Stock
The Company is authorized, subject to limitations prescribed by Delaware law, to provide for the issuance
of Preferred Stock in one or more series, to establish from time to time the number of shares included within
each series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any
qualifications, limitations or restrictions thereon, and to increase or decrease the number of shares of any such
series (but not below the number of shares of such series then outstanding) without any further vote or action by
the stockholders. At December 31, 1998, and 1999 there were 5,000,000 and 10,000,000 shares of Preferred
Stock authorized for issuance, and no shares issued or outstanding.
Convertible Preferred Stock
Convertible Preferred Stock prior to the initial public offering at September 24, 1998 was composed of the
following (in thousands):
Shares Liquidation
Redemption
Authorized Outstanding Amount Amount
Series A . ............................ 1,676 1,676 $1,000 $ —
Series B . ............................ 1,415 1,415 6,300 5,093
Undesignated . ......................... 2,909 — — —
6,000 3,091 $7,300 $5,093
eBAY INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
67