eBay 2001 Annual Report Download - page 92

eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
Note 13 Ì Preferred Stock:
We are authorized, subject to limitations prescribed by Delaware law, to issue Preferred Stock in one
or more series; to establish the number of shares included within each series; to Ñx the rights, preferences
and privileges of the shares of each wholly unissued series and any related qualiÑcations, limitations or
restrictions; and to increase or decrease the number of shares of any series (but not below the number of
shares of a series then outstanding) without any further vote or action by the stockholders. At
December 31, 2000 and 2001, there were 10 million shares of Preferred Stock authorized for issuance, and
no shares issued or outstanding.
Note 14 Ì Common Stock:
Our CertiÑcate of Incorporation, as amended, authorizes us to issue 900 million shares of common
stock. A portion of the shares outstanding are subject to repurchase over a four-year period from the
earlier of the issuance date or employee hire date, as applicable. At December 31, 2000, there were
7.5 million shares subject to repurchase rights at an average price of $0.12. At December 31, 2001, there
were 772,000 shares subject to repurchase at an average price of $0.36
At December 31, 2001, we had reserved 11.7 million shares of common stock for future issuance for
the exercise of options under the stock option plans and issuance of approximately 1.7 million shares under
the employee stock purchase plan, respectively.
In connection with certain stock option and stock warrant grants, we recorded unearned stock-based
compensation totaling $10.7 million during the year ended December 31, 1999, $187,000 in 2000, and
$4.1 million in 2001. The unearned compensation for 1999 is being amortized over the four-year vesting
periods of the options and the one-year vesting period of the warrant as applicable. The unearned
compensation for 2000, is related to the acquisition of Half.com and was amortized fully over the vesting
period in 2000. The unearned compensation for 2001, is related to the acquisition of Internet Auction and
is being amortized over the 3-year vesting period of the options, which ends in 2002. Amortization expense
totaled approximately $4.8 million during the year ended December 31, 1999, $7.1 million in 2000,
$3.1 million in and 2001. The unearned stock compensation balance at December 31, 2001 was
$2.4 million and will be amortized over the remaining vesting period through 2002.
Note 15 Ì Employee BeneÑt Plans:
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 oÅering period with a maximum duration of two years at 85% of
the lower of the fair market value on the Ñrst day of the applicable oÅering period or on the last day of
the six-month purchase period. Employees may purchase shares having a value not exceeding 10% of their
gross compensation during an oÅering period. During the years ended December 31, 1999, 2000 and 2001,
employees purchased 356,000, 438,000 and 124,000 shares at average prices of $4.02, $8.43 and $43.72 per
share, respectively. At December 31, 2001, approximately 1.7 million shares were reserved for future
issuance. On each January 1, the aggregate number of shares reserved for issuance under the employee
stock purchase plan will be increased automatically by the number of shares purchased under this plan in
the preceding calendar year.
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