eBay 2004 Annual Report Download - page 123

eBay Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Stock Unit Plan
We have a deferred stock unit plan under which deferred stock units have been granted to new non-
employee directors elected to our Board of Directors after December 31, 2002. Under this plan, each new
director receives a one-time grant of deferred stock units equal to the result of dividing $150,000 by the fair
market value of our common stock on the date of grant. Each deferred stock unit constitutes an unfunded and
unsecured promise by us to deliver one share of our common stock (or the equivalent value thereof in cash or
property at our election). These deferred stock units vest 25% one year from the date of grant, and at a rate of
2.08% per month thereafter. If the services of the director are terminated at any time, all rights to the unvested
deferred stock units shall also terminate. Deferred stock units are payable following the termination of a
director's tenure as a director. All eBay oÇcers, directors and employees are eligible to receive awards under
the plan, although, to date, awards have been made only to new non-employee directors. As of December 31,
2004, 15,586 units have been awarded under this plan.
Equity Incentive Plans
We have equity incentive plans for directors, oÇcers and employees. Stock options granted under these
plans generally vest 25% one year from the date of grant (or 12.5% six months from the date of grant for grants
to existing employees) and the remainder vest at a rate of 2.08% per month thereafter, and generally expire
10 years from the date of grant. Stock options issued prior to June 1998, were exercisable immediately, subject
to repurchase rights held by us, which lapse over the vesting period. Restricted stock issued under these plans
are subject to repurchase by us at such times as determined by the Board of Directors, typically Ñve years. At
our Annual Meeting of Stockholders held on June 24, 2004, our stockholders approved amendments to certain
of our equity incentive plans to increase the number of shares of common stock that may be issued under the
plans by a total of 48 million shares. At December 31, 2004, 112.8 million shares were available for future
grant.
The following table summarizes activity under our equity incentive plans for the years ended
December 31, 2002, 2003 and 2004 (shares in thousands):
Year Ended December 31,
2002 2003 2004
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
Outstanding at beginning of
period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 140,416 $11.56 148,714 $13.43 138,410 $16.93
Granted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 67,466 13.36 53,388 22.63 43,628 38.27
Exercised ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (39,076) 6.54 (52,288) 12.96 (38,718) 16.17
Cancelled ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (20,092) 13.50 (11,404) 16.18 (6,112) 23.73
Outstanding at end of period ÏÏ 148,714 13.43 138,410 16.93 137,208 23.63
Options exercisable at end of
period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 52,496 $13.15 45,010 $13.92 49,346 $16.77
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