eBay 2004 Annual Report Download - page 83

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 1,234,440 shares of our common stock, with a weighted average exercise price of
$8.95 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, 2004 relates to an individual compensation
arrangement that was made prior to the initial public offering of our Common Stock in 1998. At the time of this
Non-Plan Grant, members of our Board and their affiliates beneficially 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
offering Prospectus filed 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 filed as an
exhibit to our S-1 Registration Statement (No. 33-59097) filed in connection with our initial public offering.
The outstanding 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 $0.39 to Mr. Cook upon his joining our Board in June 1998 as an
independent director. These options granted to Mr. Cook were non-qualified 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 options to
purchase 480,000 shares in 2002 and exercised options to purchase an additional 1,430,000 shares during 2003.
As of December 31, 2004, options to purchase 1,690,000 shares remain outstanding under the Non-Plan Grant.
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 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, 2002, 2003, and 2004. Payment amounts under
Mr. Webb's bonus plan are $355,200 for 2001, $449,900 for 2002, $646,100 for 2003 and $1,154,000 for 2004,
and the terms of the bonus plan allowed those amounts to be used to pay principal and interest owed to us
under the terms of his loan. In August 2001 and August 2002, in accordance with the terms of his loan,
Mr. Webb paid down $355,200 and $449,900, respectively, of principal and accrued interest on the loan. In
January 2003, Mr. Webb prepaid in full the principal and accrued interest on his loan in the amount of
approximately $1,670,800.
In May 2000, Mr. Jordan, our President, PayPal, entered into two four-year term loans with us at an
interest rate of 6.40% per annum, with principal and accrued interest payable on each loan in equal
installments on each anniversary. The principal amounts on the loans were $1,000,000 and $900,000,
respectively, with the loan amounts secured by Mr. Jordan's principal place of residence. In May 2000, we
entered into a special retention bonus plan with Mr. Jordan under which Mr. Jordan received bonus payments
in May of 2001, 2002, 2003, and 2004. Payment amounts under this Mr. Jordan's bonus plan were $314,000
for 2001, $298,000 for 2002, $282,000 for 2003, and $266,000 for 2004, and the terms of the bonus plan
allowed those amounts to pay principal and interest owed to us under the loans described in this paragraph. In
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