eBay 2001 Annual Report Download - page 94

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eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (CONTINUED)
The following table summarizes information about Ñxed stock options outstanding at December 31,
2001, (shares in thousands):
Options Outstanding at Options Exercisable at
December 31, 2001 December 31, 2001
Weighted Weighted Weighted
Number of Average Average Number of Average
Range of Shares Remaining Exercise Shares Exercise
Exercise Prices Outstanding Contractual Life Price Exercisable Price
$0.01 - $2.50 5,941 6.6 years $ 2.17 3,852 $ 2.12
$3.83 - $38.00 1,529 9.1 34.37 96 32.72
$38.18 - $40.06 9,050 9.0 39.98 943 39.88
$41.63 - $60.97 6,427 8.7 51.23 1,435 51.38
$61.09 - $68.00 6,249 9.0 63.94 1,228 65.49
$68.07 - $116.31 5,906 8.0 79.06 2,911 80.05
35,102 8.4 $46.24 10,465 $41.67
Fair value disclosures
We calculated the fair value of each option grant on the date of grant using the Black-Scholes option
pricing model using the following assumptions:
Year Ended December 31,
1999 2000 2001
Risk-free interest rates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.5% 4.9% 3.6%
Expected lives (in years)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3.0 3.0 3.0
Dividend yield ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 0% 0% 0%
Expected volatility ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100% 115% 81%
For options granted prior to our initial public oÅering, the fair value of option grants was determined
using the Black-Scholes option pricing model with a zero volatility assumption. For options granted
subsequent to our initial public oÅering, the fair value of option grants was determined using the Black-
Scholes option pricing model with volatility assumptions based on actual or expected Öuctuations in the
price of our common stock. Generally accepted accounting principles provide companies with the option of
either recognizing the fair value of option grants as an operating expense or disclosing the impact of fair
value accounting in a note to the Ñnancial statements. Consistent with predominant industry practice, we
have elected to disclose the impact of fair value accounting for option grants. Had we elected to recognize
90