eBay 2011 Annual Report Download - page 126

(1) Stock repurchase activity excludes broker commissions.
These repurchased shares were recorded as treasury stock and were accounted for under the cost method. No repurchased shares have been
retired.
Our stock repurchase programs may be limited or terminated at any time without prior notice. Stock repurchases under these programs may
be made through a variety of open market and privately negotiated transactions, including structured stock repurchase transactions or other
derivative transactions, at times and in such amounts as management deems appropriate and will be funded from our working capital or other
financing alternatives. The timing and actual number of shares repurchased will depend on a variety of factors including corporate and regulatory
requirements, price, other market conditions and management's determination as to the appropriate use of our cash. The programs are intended to
comply with the volume, timing and other limitations set forth in Rule 10b-18 under the Securities Exchange Act of 1934.
In addition to the above, we withhold shares from employees to satisfy minimum statutory tax obligations in conjunction with nonvested
shares under our equity incentive plans, which are included in treasury stock.
Note 17 – Stock-Based and Employee Savings Plans
Equity Incentive Plans
We have equity incentive plans under which we grant equity awards, including stock options, restricted stock units, nonvested shares and
performance-based restricted stock units, to our directors, officers and employees. At December 31, 2011 , 626.4 million shares were authorized
under our equity incentive plans and 54.8 million shares were available for future grant.
All stock options granted under these plans generally vest 12.5% six months from the date of grant (or 25% one year from the date of grant
for grants to new employees) with the remainder vesting at a rate of 2.08% per month thereafter, and generally expire seven to ten
years from the
date of grant. The cost of stock options is determined using the Black-Scholes option pricing model on the date of grant.
Restricted stock units and nonvested shares are granted to eligible employees under our equity incentive plans. In general, restricted stock
units and nonvested shares vest in equal annual installments over a period of one to five years, are subject to the employees' continuing service to
the Company and do not have an expiration date. The cost of restricted stock units and nonvested shares is determined using the fair value of our
common stock on the date of grant.
In 2011 , 2010 and 2009 , certain executives were eligible to receive performance-based restricted stock units. The number of restricted
stock units ultimately received depends on our business performance against specified performance targets set by the Compensation Committee. If
the performance criteria are satisfied, the performance-based restricted stock units will be granted, with one-half of the grant vesting in March
following the end of the performance period and the remaining one-half vesting one year later.
Employee Stock Purchase Plan
We have an employee stock purchase plan for all eligible employees. Under the plan, shares of our common stock may be purchased over an
offering period with a maximum duration of two years at 85% of the lower of the fair market value on the first day of the applicable offering
period or on the last day of the six-month purchase period. Employees may purchase shares having a value not exceeding 10% of their eligible
compensation during an offering period. During the years ended 2011 , 2010 , and 2009 , employees purchased approximately 3.4 million , 4.7
million and 4.4 million shares under this plan at average prices of $23.55 , $13.55 and $12.82 per share, respectively. At December 31, 2011 ,
approximately 3.8 million shares of common stock were reserved for future issuance. Our employee stock purchase plan contains an “evergreen”
provision that automatically increases, on each January 1, the number of shares reserved for issuance under the employee stock purchase plan by
the number of shares purchased under this plan in the preceding calendar year.
Employee Savings Plan
We have a savings plan, which qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may
F-34
Shares
Repurchased
Average Price
per Share (1)
Value of Shares
Repurchased
Remaining
Amount
Authorized
Balance at January 1, 2011
1,880
$
29.94
$
56,293
$
1,943,707
Repurchase of common stock
33,600
31.64
1,063,185
(1,063,185
)
Balance at December 31, 2011
35,480
$
31.55
$
1,119,478
$
880,522