eBay 2002 Annual Report Download - page 89

(5) Does not include 323,313 shares of our common stock, with a weighted average exercise price of
$3.00 per share, to be issued upon exercise of outstanding options assumed by us under the X.com
Corporation 1999 Stock Plan, or the X.com Plan, in connection with our acquisition of PayPal in
October 2002, as we cannot make subsequent grants or awards of our equity securities under the
X.com Plan. Prior to our acquisition of PayPal, the stockholders of PayPal approved the X.com Plan.
Our stockholders, however, did not approve the X.com Plan in connection with our acquisition of
PayPal.
(6) Does not include 1,182,373 shares of our common stock, with a weighted average exercise price of
$33.73 per share, to be issued upon exercise of outstanding options assumed by us under the PayPal,
Inc. 2001 Equity Incentive Plan, or the PayPal Plan, in connection with our acquisition of PayPal in
October 2002, as we cannot make subsequent grants or awards of our equity securities under the
PayPal Plan. Prior to our acquisition of PayPal, the stockholders of PayPal approved the PayPal Plan.
Our stockholders, however, did not approve the PayPal Plan in connection with our acquisition of
PayPal.
The only outstanding Non-Plan Grant as of December 31, 2002 relates to an individual compensation
arrangement that was made prior to the initial public oÅering of our Common Stock in 1998. At the time
of this Non-Plan Grant, members of our Board and their aÇliates beneÑcially owned in excess of 90% of
our then outstanding equity and voting interests. This Non-Plan Grant has been previously disclosed in our
initial public oÅering Prospectus Ñled with the SEC on September 25, 1998 under the headings
""Management Ì Director Compensation'' and ""Ì Compensation Arrangements.'' Except as set forth
below, the terms and conditions of this Non-Plan Grant are identical to the terms of our 1997 Stock
Option Plan, a copy of which was Ñled as an exhibit to our S-1 Registration Statement (No. 33-59097)
Ñled in connection with our initial public oÅering.
The outstanding Non-Plan Grant involved the Board's grant of an option to purchase 900,000 shares
of our Common Stock at an exercise price of $1.56 to Mr. Cook upon his joining our Board in June 1998
as an independent director. These options granted to Mr. Cook were non-qualiÑed options and were
immediately exercisable, with a term of 10 years. These options vested as to 25% of the underlying shares
in June 1999 and as to 2.08% of the shares each month thereafter until they fully vested in June 2002.
Mr. Cook exercised 120,000 of these options in May 2002 and exercised an additional 100,000 of these
options in February 2003.
A second Non-Plan Grant involved the Board's grant of an option to purchase 3,600,000 shares of our
Common Stock at an exercise price of $2.50 to Brian Swette upon his joining eBay in August 1998 as
Senior Vice President of Marketing and International. These options granted to Mr. Swette were non-
qualiÑed options with a term of ten years. During 2002, Mr. Swette exercised all options available to him
in connection with his departure from eBay. No options were outstanding under this grant as of
December 31, 2002.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have entered into indemniÑcation agreements with each of our directors and executive oÇcers.
These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware
law, for certain liabilities to which they may become subject as a result of their aÇliation with eBay.
In August 2000, Mr. Webb, our Chief Operating OÇcer, entered into a four-year term loan with us at
an interest rate of 6.37% per annum, with 10%, 15%, 25% and 50% of principal on the loan being due on
each of the Ñrst, second, third and fourth anniversary of the loan's issue date, respectively. The principal
amount on the loan was approximately $2,169,800, which amount represented the principal and accrued
interest due at the end of a one-year term loan entered into in August 1999 between Mr. Webb and us
shortly after his relocation to San Jose as a result of his joining eBay in 1999, and was secured by
Mr. Webb's principal place of residence. In January 2001, we entered into a special retention bonus plan
with Mr. Webb, under which Mr. Webb received bonus payments in August of 2001 and 2002 and
remains eligible to receive bonus payments in August 2003 and 2004 if he is then employed by us.
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