eBay 2008 Annual Report Download - page 112

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 2007 and 2008, certain executives were eligible for 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 and one-half of the grant will vest in March following the end of the
performance period and the remaining half will vest 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 gross compensation during an
offering period. During the years ended December 31, 2006, 2007, and 2008, employees purchased approximately
1.6 million, 2.0 million, and 3.5 million shares at average prices of $27.32, $26.84 and $17.78 per share,
respectively. At December 31, 2008, approximately 3.7 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 Plans
We have a savings plan, which qualifies under Section 401(k) of the Internal Revenue Code. Participating
employees may contribute up to 25% of their annual salary, but not more than statutory limits. In 2006 and 2007, we
contributed one dollar for each dollar a participant contributed, with a maximum contribution of $1,500 per
employee and $2,000 per employee, respectively. In 2008, we contributed one dollar for each dollar a participant
contributed, with a maximum contribution of 4% of each employee’s salary, with a maximum employer contri-
bution of $9,200 per employee. Our non-U.S. employees are covered by various other savings plans. Our expenses
for these plans were $14.9 million in 2006, $20.4 million in 2007 and $34.2 million in 2008.
Deferred Stock Unit Plan
Since December 31, 2002, we have granted deferred stock units to non-employee directors (other than Pierre
Omidyar) elected to our Board of Directors with each new director receiving 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.
Beginning with our 2008 annual meeting of stockholders, we have granted deferred stock units to each non-
employee director (other than Mr. Omidyar) equal to the result of dividing $110,000 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). Each
deferred stock unit award granted to a new non-employee director upon election to the Board vests 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. In addition, directors may elect to
receive, in lieu of annual retainer and committee chair fees and at the time these fees would otherwise be payable
(i.e., on a quarterly basis in arrears for services provided), fully vested deferred stock units with an initial value
equal to the amount based on the fair market value of common stock at the date of grant. Deferred stock units are
payable following the termination of a director’s tenure as a director. As of December 31, 2008, there were
approximately 98,000 deferred stock units outstanding under our equity plans.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)