Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 116 676K
2: EX-2.01 Agmt & Plan of Merger Between Ebay & Registrant 5 29K
3: EX-2.02 Agmt & Plan of Merger & Reorganization 32 154K
4: EX-3.01 Registrant's Certificate of Incorporation 2 14K
5: EX-3.02 Registrant's Certificate of Designation 15 66K
6: EX-3.05 Registrant's Bylaws 20 92K
7: EX-4.02 Investor Rights Agreement Dated 6/20/97 23 110K
8: EX-10.01 Form of Indemnity Agreement 9 48K
9: EX-10.02 Registrant's 1996 Stock Option Plan 38 129K
10: EX-10.03 Registrant's 1997 Stock Option Plan 41 180K
11: EX-10.04 Registrant's 1998 Equity Incentive Plan 12 73K
12: EX-10.05 Registrant's 1998 Directors Stock Option Plan 5 34K
13: EX-10.06 Registrant's 1998 Employee Stock Purchase Plan 8 54K
14: EX-10.07 Lease Between Connecticut Gen. Life & Registrant 44 169K
15: EX-10.08 Sublease Between Information Storage & Registrant 85 302K
16: EX-10.09 Lease Between Connecticut Gen. Life & Registrant 40± 161K
17: EX-10.10 Imperial Bank Starter Kit Loan & Security Agmt. 10 40K
18: EX-10.11 Intellectual Property Security Agreement 10 33K
19: EX-10.13 License Agmt. Between Thunderstone & Registrant 7 28K
20: EX-10.14 Employment Letter Agr. With Jeffrey Skoll 2 15K
21: EX-10.15 Employment Letter Agr. With Michael Wilson 2 15K
22: EX-10.16 Employment Letter Agr. With Steven Westly 3 18K
23: EX-10.17 Employment Letter Agr. With Gary Bengier 2 16K
24: EX-10.18 Employment Letter Agr. With Margaret C. Whitman 3 20K
25: EX-21.01 List of Subsidiaries 1 8K
26: EX-23.02 Consent of Pricewaterhousecoopers LLP 1 9K
27: EX-27.01 Financial Data Schedule 2 15K
EXHIBIT 10.02
1996 STOCK OPTION PLAN
OF
eBAY, INC.
(AS AMENDED DECEMBER 3, 1997)
1. PURPOSES OF THE PLAN
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The purposes of the 1996 Stock Option Plan (the "Plan") of eBay, Inc.,
a California corporation (the "Company"), are to:
(a) Encourage selected employees, directors and consultants to improve
operations and increase profits of the Company;
(b) Encourage selected employees, directors and consultants to accept
or continue employment or association with the Company or its Affiliates; and
(c) Increase the interest of selected employees, directors and
consultants in the Company's welfare through participation in the growth in
value of the common stock of the Company (the "Common Stock").
Options granted under this Plan ("Options") may be "incentive stock
options" ("ISOs") intended to satisfy the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or "nonqualified
options" ("NQOs").
2. ELIGIBLE PERSONS
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Every person who at the date of grant of an Option is a full-time
employee of the Company or of any Affiliate (as defined below) of the Company is
eligible to receive NQOs or ISOs under this Plan. Every person who at the date
of grant is a consultant to, or non-employee director of, the Company or any
Affiliate (as defined below) of the Company is eligible to receive NQOs under
this Plan. The term "Affiliate" as used in the Plan means a parent or
subsidiary corporation as defined in the applicable provisions (currently
Sections 424(e) and (f), respectively) of the Code. The term "employee"
includes an officer or director who is an employee, of the Company. The term
"consultant" includes persons employed by, or otherwise affiliated with, a
consultant.
3. STOCK SUBJECT TO THIS PLAN
--------------------------
Subject to the provisions of Section 6.1.1 of the Plan, the total
number of shares of stock which may be issued under options granted pursuant to
this Plan shall not exceed 502,000 shares of Common Stock. The shares covered
by the portion of any grant under the Plan which expires unexercised shall
become available again for grants under the Plan.
4. ADMINISTRATION
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(a) This Plan shall be administered by the Board of Directors of the
Company (the "Board") or, either in its entirety or only insofar as required
pursuant to Section 4(b) hereof, by a committee (the "Committee") of at least
two Board members to which administration of the Plan, or of part of the Plan,
is delegated (in either case, the "Administrator").
(b) From and after such time as the Company registers a class of
equity securities under Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), it is intended that this Plan shall be
administered in accordance with the disinterested administration requirements of
Rule 16b-3 promulgated by the Securities and Exchange Commission ("Rule 61b-3"),
or any successor rule thereto.
(c) Subject to the other provisions of this Plan, the Administrator
shall have the authority, in its discretion: (i) to grant Options; (ii) to
determine the fair market value of the Common Stock subject to Options; (iii) to
determine the exercise price of Options granted; (iv) to determine the persons
to whom, and the time or times at which, Options shall be granted, and the
number of shares subject to each Option; (v) to interpret this Plan; (vi) to
prescribe, amend, and rescind rules and regulations relating to this Plan; (vii)
to determine the terms and provisions of each Option granted (which need not be
identical), including but not limited to, the time or times at which Options
shall be exercisable; (viii) with the consent of the optionee, to modify or
amend any Option; (ix) to defer (with the consent of the optionee) the exercise
date of any Option; (x) to authorize any person to execute on behalf of the
Company any instrument evidencing the grant of an Option; and (xi) to make all
other determinations deemed necessary or advisable for the administration of
this Plan. The Administrator may delegate nondiscretionary administrative
duties to such employees of the Company as it deems proper.
(d) All questions of interpretation, implementation, and application
of this Plan shall be determined by the Administrator. Such determinations
shall be final and binding on all persons.
(e) With respect to persons subject to Section 16 of the Exchange Act,
if any, transactions under this Plan are intended to comply with the applicable
conditions of Rule 16b-3, or any successor rule thereto. To the extent any
provision of this Plan or action by the Administrator fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Administrator. Notwithstanding the above, it shall be the
responsibility of such persons, not of the Company or the Administrator, to
comply with the requirements of Section 16 of the Exchange Act; and neither the
Company nor the Administrator shall be liable if this Plan or any transaction
under this Plan fails to comply with the applicable conditions of Rule 16b-3 or
any successor rule thereto, or if any such person incurs any liability under
Section 16 of the Exchange Act.
5. GRANTING OF OPTIONS; OPTION AGREEMENT
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(a) No Options shall be granted under this Plan after ten years from
the date of adoption of this Plan by the Board.
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(b) Each Option shall be evidenced by a written stock option
agreement, in form satisfactory to the Company, executed by the Company and the
person to whom such Option is granted; provided, however, that the failure by
the Company, the optionee, or both to execute such an agreement shall not
invalidate the granting of an Option, although the exercise of each option shall
be subject to Section 6.1.3.
(c) The stock option agreement shall specify whether each Option it
evidences is a NQO or an ISO.
(d) Subject to Section 6.3.3 with respect to ISOs, the Administrator
may approve the grant of Options under this Plan to persons who are expected to
become employees, directors or consultants of the Company, but are not
employees, directors or consultants at the date of approval.
6. TERMS AND CONDITIONS OF OPTIONS
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Each Option granted under this Plan shall be subject to the terms and
conditions set forth in Section 6.1. NQOs shall be also subject to the terms
and conditions set forth in Section 6.2, but not those set forth in Section 6.3.
ISOs shall also be subject to the terms and conditions set forth in Section 6.3,
but not those set forth in Section 6.2.
6.1 Terms and Conditions to Which All Options Are Subject. All
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Options granted under this Plan shall be subject to the following terms and
conditions:
6.1.1 Changes in Capital Structure. Subject to Section 6.1.2, if
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the stock of the Company is changed by reason of a stock split, reverse stock
split, stock dividend, or recapitalization, combination or reclassification,
appropriate adjustments shall be made by the Board in (a) the number and class
of shares of stock subject to this Plan and each Option outstanding under this
Plan, and (b) the exercise price of each outstanding Option; provided, however,
that the Company shall not be required to issue fractional shares as a result of
any such adjustments. Each such adjustment shall be subject to approval by the
Board in its sole discretion.
6.1.2 Corporate Transactions.
----------------------
(a) Dissolution or Liquidation. In the event of the
--------------------------
proposed dissolution or liquidation of the Company, the Administrator shall
notify the Optionee at least thirty (30) days prior to such proposed action. To
the extent it has not been previously exercised, all Options will terminate
immediately prior to the consummation of such proposed action.
(b) Merger or Asset Sale. In the event of a merger of the
--------------------
Company with or into another corporation, or the sale of substantially all of
the assets of the Company:
(i) Options. Each Option shall be assumed or an
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equivalent option substituted by the successor corporation (including as a
"successor" any
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purchaser of substantially all of the assets of the Company) or a parent or
subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the Option, the Optionee shall
have the right to exercise the Option as to all of the shares of Common Stock
covered by the Option, including Shares as to which it would not otherwise be
exercisable. It an Option is exercisable in lieu of assumption or substitution
in the event of a merger or sale of assets, the Administrator shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option shall terminate upon the
expiration of such period. For the purposes of this paragraph, the Option shall
be considered assumed if, following the merger or sale of assets, the option
confers the right to purchase or receive, for each share of Common Stock subject
to the Option immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received in
the merger or sale of assets by holders of Common Stock for each share held on
the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares); provided, however, that if such consideration received
in the merger or sale of assets was not solely common stock of the successor
corporation or its parent entity, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the
exercise of the Option, for each Share of Common Stock subject to the Option, to
be solely common stock of the successor corporation or its parent entity equal
in fair market value to the per share consideration received by holders of
Common Stock in the merger or sale of assets.
(ii) Shares Subject to Right of Repurchase. Any Shares
-------------------------------------
subject to a Right of Repurchase of the Company shall be exchanged for the
consideration (whether stock, cash, or other securities or property) received in
the merger or asset sale by the holders of Common Stock for each share held on
the effective date of the transaction, as described in the preceding paragraph.
If in such exchange the Optionee receives shares of stock of the successor
corporation or a parent or subsidiary of such successor corporation, and if the
successor corporation has agreed to assume or substitute for Options as provided
in the preceding paragraph, such exchanged shares shall continue to be subject
to a Right of Repurchase as provided in the Optionee's Stock Option Plan stock
purchase agreement. If, as provided in the preceding paragraph, the Optionee
shall have the right to exercise an Option as to all of the shares of Common
Stock covered thereby, all Shares that are subject to a Right of Repurchase of
the Company shall be released from such Right of Repurchase and shall be fully
vested.
6.1.3 Time of Option Exercise. Subject to Section 5 and Section
-----------------------
6.3.4, Options granted under this Plan shall be exercisable (a) immediately as
of the effective date of the stock option agreement granting the Option, or (b)
in accordance with a schedule related to the date of the grant of the Option,
the date of first employment, or such other date as may be set by the
Administrator (in any case, the "Vesting Base Date") and specified in the
written stock option agreement relating to such Option; provided, however, that
the right to exercise an Option must vest at the rate of at least 20% per year
over five years from the date the Option was granted. In any case, no Option
shall be exercisable until a written stock option agreement in form satisfactory
to the Company is executed by the Company and the optionee.
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6.1.4 Option Grant Date. Except in the case of advance approvals
-----------------
described in Section 5(d), the date of grant of an Option under this Plan shall
be the date as of which the Administrator approves the grant.
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6.1.5 Nonassignability of Option Rights. No Option granted under
---------------------------------
this Plan shall be assignable or otherwise transferable by the optionee except
by will or by the laws of descent and distribution. During the life of the
optionee, an Option shall be exercisable only by the optionee.
6.1.6 Payment. Except as provided below, payment in full, in
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cash, shall be made for all stock purchased at the time written notice of
exercise of an Option is given to the Company, and proceeds of any payment shall
constitute general funds of the Company. At the time an Option is granted or
exercised, the Administrator, in the exercise of its absolute discretion after
considering any tax or accounting consequences, may authorize any one or more of
the following additional methods of payment:
(a) Acceptance of the optionee's full recourse promissory
note for all or part of the Option price, payable on such terms and bearing such
interest rate as determined by the Administrator (but in no event less than the
minimum interest rate specified under the Code at which no additional interest
would be imputed), which promissory note may be either secured or unsecured in
such manner as the Administrator shall approve (including, without limitation,
by a security interest in the shares of the Company); and
(b) Delivery by the optionee of Common Stock already owned
by the optionee for all or part of the Option price, provided the value
(determined as set forth in Section 6.1.11) of such Common Stock is equal on the
date of exercise to the Option price, or such portion thereof as the optionee is
authorized to pay by delivery of such stock; provided, however, that if an
optionee has exercised any portion of any Option granted by the Company by
delivery of Common Stock, the optionee may not, within six months following such
exercise, exercise any Option granted under this Plan by delivery of Common
Stock without the consent of the Administrator.
6.1.7 Termination of Employment.
-------------------------
(a) If for any reason other than death or disability, an
optionee ceases to be employed by the Company or any of its Affiliates (such
event being called a "Termination"), Options held at the date of Termination (to
the extent then exercisable) may be exercised in whole or in part at any time
within three months of the date of such Termination, or such other period of not
less than thirty days after the date of such Termination as is specified in the
Option Agreement (but in no event after the Expiration Date); provided, that if
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such exercise of the Option would result in liability for the optionee under
Section 16(b) of the Exchange Act, then such three-month period automatically
shall be extended until the tenth day following the last date upon which
optionee has any liability under Section 16(b) (but in no event after the
Expiration Date).
(b) If an optionee dies while employed by the Company or
an Affiliate or within the period that the Option remains exercisable after
Termination, Options then held (to the extent then exercisable) may be
exercised, in whole or in part, by the optionee, by the optionee's personal
representative, or by the person to whom the Option is transferred by devise
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or the laws of descent and distribution, at any time within twelve months after
the death of the optionee, or such other period of not less than six months from
the date of Termination as is specified in the Option Agreement (but in no event
after the Expiration Date).
(c) If an optionee ceases to be employed by the Company as
a result of his or her disability, the optionee may, but only within six (6)
months from the date of Termination (and in no event after the Expiration Date),
exercise the Option to the extent otherwise entitled to exercise it at the date
of Termination; provided, however, that if such disability is not a "disability"
as such term is defined in Section 22(e)(3) of the Code, in the case of an ISO
such ISO shall automatically convert to an NQO on the day three months and one
day following such Termination. To the extent that the optionee was not entitled
to exercise the Option at the date of Termination or if the optionee does not
exercise such Option to the extent so entitled within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
(d) For purposes of this Section 6.1.7, "employment"
includes service as a director or as a consultant. For purposes of this Section
6.1.7, an optionee's employment shall not be deemed to terminate by reason of
sick leave, military leave, or other leave of absence approved by the
Administrator, if the period of any such leave does not exceed 90 days or, if
longer, if the optionee's right to reemployment by the Company or any Affiliate
is guaranteed either contractually or by statute.
6.1.8 Repurchase of Stock. At the option of the Administrator,
-------------------
the stock to be delivered pursuant to the exercise of any Option granted to an
employee, director or consultant under this Plan may be subject to a right of
repurchase in favor of the Company with respect to any employee, or director or
consultant whose employment, or director or consulting relationship with the
Company is terminated. Such right of repurchase either:
(a) shall be at the Option exercise price and (i) shall
lapse at the rate of at least 20% per year over five years from the date the
Option is granted (without regard to the date it becomes exercisable), and must
be exercised for cash or cancellation of purchase money indebtedness within 90
days of such termination and (ii) if the right is assignable by the Company, the
assignee must pay the Company upon assignment of the right (unless the assignee
is a 100% owned subsidiary of the Company or is an Affiliated) cash equal to the
difference between the Option exercise price and the value (determined as set
forth in Section 6.1.11) of the stock to be purchased if the Option exercise
price is less than such value; or
(b) shall be at the higher of the Option exercise price or
the value (determined as set forth in Section 6.1.11) of the stock being
purchased on the date of termination, and must be exercised for cash or
cancellation of purchase money indebtedness within 90 days of termination of
employment, and such right shall terminate when the Company's securities become
publicly traded.
Determination of the number of shares subject to any such right
of repurchase shall be made as of the date the employee's employment by,
director's director relationship with,
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or consultant's consulting relationship with, the Company terminates, not as of
the date that any Option granted to such employee, director or consultant is
thereafter exercised.
6.1.9 Withholding and Employment Taxes. At the time of exercise
--------------------------------
of an Option or at such other time as the amount of such obligations becomes
determinable (the "Tax Date"), the optionee shall remit to the Company in cash
all applicable federal and state withholding and employment taxes. If authorized
by the Administrator in its sole discretion after considering any tax or
accounting consequences, an optionee may elect to (i) deliver a promissory note
on such terms as the Administrator deems appropriate, (ii) tender to the Company
previously owned shares of Stock or other securities of the Company, or (iii)
have shares of Common Stock which are acquired upon exercise of the Option
withheld by the Company to pay some or all of the amount of tax that is required
by law to be withheld by the Company as a result of the exercise of such Option,
subject to the following limitations:
(a) Any election pursuant to clause (iii) above by an
optionee subject to Section 16 of the Exchange Act shall either (x) be made at
least six months before the Tax Date and shall be irrevocable; or (y) shall be
made in (or made earlier to take effect in) any ten-day period beginning on the
third business day following the date of release for publication of the
Company's quarterly or annual summary statements of earnings and shall be
subject to approval by the Administrator, which approval may be given at any
time after such election has been made. In addition, in the case of (y), the
Option shall be held at least six months prior to the Tax Date.
(b) Any election pursuant to clause (ii) above, where the
optionee is tendering Common Stock issued pursuant to the exercise of an Option,
shall require that such shares be held at least six months prior to the Tax
Date.
Any of the foregoing limitations may be waived (or additional
limitations may be imposed) by the Administrator, in its sole discretion, if the
Administrator determines that such foregoing limitations are not required (or
that such additional limitations are required) in order that the transaction
shall be exempt from Section 16(b) of the Exchange Act pursuant to Rule 61b-3,
or any successor rule thereto. In addition, any of the foregoing limitations
may be waived by the Administrator, in its sole discretion, if the Administrator
determines that Rule 16b-3, or any successor rule thereto, is not applicable to
the exercise of the Option by the optionee or for any other reason.
Any securities tendered or withheld in accordance with this Section
6.1.9 shall be valued by the Company as of the Tax Date.
6.1.10 Other Provisions. Each Option granted under this Plan may
----------------
contain such other terms, provisions, and conditions not inconsistent with this
Plan as may be determined by the Administrator, and each ISO granted under this
Plan shall include such provisions and conditions as are necessary to qualify
the Option as an "incentive stock option" within the meaning of Section 422 of
the Code. If Options provide for a right of first refusal in favor of the
Company with respect to stock acquired by employees, directors or consultants,
such Options shall provide that the right of first refusal shall terminate upon
the earlier of (i) the
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closing of the Company's initial registered public offering to the public
generally, or (ii) the date ten years after the grant date as set forth in
Section 6.1.4.
6.1.11 Determination of Value. For purposes of the Plan, the
----------------------
value of Common Stock or other securities of the Company shall be determined as
follows:
(a) If the stock of the Company is listed on any
established stock exchange or a national market system, including without
limitation the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System, its fair market value shall be the
closing sales price for such stock or the closing bid if no sales were reported,
as quoted on such system or exchange (or the largest such exchange) for the date
the value is to be determined (or if there are no sales for such date, then for
the last preceding business day on which there were sales), as reported in the
Wall Street Journal or similar publication.
-------------------
(b) If the stock of the Company is regularly quoted by a
recognized securities dealer but selling prices are not reported, its fair
market value shall be the means between the high bid and low asked prices for
the stock on the date the value is to be determined (or if there are no quoted
prices for the date of grant, then for the last preceding business day on which
there were quoted prices).
(c) In the absence of an established market for the
stock, the fair market value thereof shall be determined in good faith by the
Administrator, with reference to the Company's net worth, prospective earning
power, dividend-paying capacity, and other relevant factors, including the
goodwill of the Company, the economic outlook in the Company's industry, the
Company's position in the industry and its management, and the values of stock
of other corporations in the same or a similar line of business.
6.1.12 Option Term. Subject to Section 6.3.5, no Option shall be
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exercisable more than ten years after the date of grant, or such lesser period
of time as is set forth in the stock option agreement (the end of the maximum
exercise period stated in the stock option agreement is referred to in this Plan
as the "Expiration Date").
6.1.13 Exercise Price. The exercise price of any Option granted
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to any person who owns, directly or by attribution under the Code currently
Section 424(d), stock possessing more than ten percent of the total combined
voting power of all classes of stock of the Company or of any Affiliate (a "Ten
Percent Stockholder") shall in no event be less than 110% of the fair market
value (determined in accordance with Section 6.1.11) of the stock covered by the
Option at the time the Option is granted.
6.2 Terms and Conditions to Which Only NQOs Are Subject. Options
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granted under this Plan which are designated as NQOs shall be subject to the
following terms and conditions:
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6.2.1 Exercise Price. Except as set forth in Section 6.1.13, the
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exercise price of a NQO shall be not less than 85% of the fair market value
(determined in accordance with Section 6.1.11) of the stock subject to the
Option on the date of grant.
6.3 Terms and Conditions to Which Only ISOs Are Subject. Options
---------------------------------------------------
granted under this Plan which are designated as ISOs shall be subject to the
following terms and conditions:
6.3.1 Exercise Price. Except as set forth in Section 6.1.13, the
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exercise price of an ISO shall be determined in accordance with the applicable
provisions of the Code and shall in no event be less than the fair market value
(determined in accordance with Section 6.1.11) of the stock covered by the
Option at the time the Option is granted.
6.3.2 Disqualifying Dispositions. If stock acquired by exercise
--------------------------
of an ISO granted pursuant to this Plan is disposed of in a "disqualifying
disposition" within the meaning of Section 422 of the Code, the holder of the
stock immediately before the disposition shall promptly notify the Company in
writing of the date and terms of the disposition and shall provide such other
information regarding the Option as the Company may reasonably require.
6.3.3 Grant Date. If an ISO is granted in anticipation of
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employment as provided in Section 59d), the Option shall be deemed granted,
without further approval, on the date the grantee assumes the employment
relationship forming the basis for such grant, and, in addition, satisfies all
requirements of this Plan for Options granted on that date.
6.3.4 Vesting. Notwithstanding any other provision of this Plan,
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ISOs granted under all incentive stock option plans of the Company and its
subsidiaries may not "vest" for more than $100,000 in fair market value of stock
(measured on the grant date(s)) in any calendar year. For purposes of the
preceding sentence, an option "vests" when it first becomes exercisable. If, by
their terms, such ISOs taken together would vest to a greater extent in a
calendar year, and unless otherwise provided by the Administrator, the vesting
limitation described above shall be applied by deferring the exercisability of
those ISOs or portions of ISOs which have the highest per share exercise prices;
but in no event shall more than $100,000 in fair market value of stock (measures
on the grant date(s)) vest in any calendar year. The ISOs or portions of ISOs
whose exercisability is so deferred shall become exercisable on the first day of
the first subsequent calendar year during which they may be exercised, as
determined by applying these same principles and all other provisions of this
Plan including those relating to the expiration and termination of ISOs. In no
event, however, will the operation of this Section 6.3.4 cause an ISO to vest
before its terms or, having vested, cease to be vested.
6.3.5 Term. Notwithstanding Section 6.1.12, no ISO granted to
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any Ten Percent Stockholder shall be exercisable more than five years after the
date of grant.
7. MANNER OF EXERCISE
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(a) An optionee wishing to exercise an Option shall give written
notice to the Company at its principal executive office, to the attention of the
officer of the Company
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designated by the Administrator, accompanied by payment of the exercise price as
provided in Section 6.1.6. The date the Company receives written notice of an
exercise hereunder accompanied by payment of the exercise price will be
considered as the date such Option was exercised.
(b) Promptly after receipt of written notice of exercise of an
Option, the Company shall, without stock issue or transfer taxes to the optionee
or other person entitled to exercise the Option deliver to the optionee or such
other person a certificate or certificates for the requisite number of shares of
stock. An optionee or permitted transferee of an optionee shall not have any
privileges as a shareholder with respect to any shares of stock covered by the
Option until the date of issuance (as evidenced by the appropriate entry on the
books of the Company or a duly authorized transfer agent) of such shares.
8. EMPLOYMENT OR CONSULTING RELATIONSHIP
-------------------------------------
Nothing in this Plan or any Option granted thereunder shall interfere
with or limit in any way the right of the Company or of any of its Affiliates to
terminate any optionee's employment or consulting at any time, nor confer upon
any optionee any right to continue in the employ of, or consult with, the
Company or any of its Affiliates.
9. FINANCIAL INFORMATION
---------------------
The Company shall provide to each optionee during the period such
optionee holds an outstanding Option, and to each holder of Common Stock
acquired upon exercise of Options granted under the Plan for so long as such
person is a holder of such Common Stock, annual financial statements of the
Company as prepared either by the Company or independent certified public
accountants of the Company. Such financial statements shall include, at a
minimum, a balance sheet and an income statement, and shall be delivered as soon
as practicable following the end of the Company's fiscal year.
10. CONDITIONS UPON ISSUANCE OF SHARES. Shares of Common Stock shall not
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be issued pursuant to the exercise of an Option unless the exercise of such
Option and the issuance and delivery of such shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended (the "Securities Act").
11. NONEXCLUSIVITY OF THE PLAN. The adoption of the Plan shall not be
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construed as creating any limitations on the power of the Company to adopt such
other incentive arrangements as it may deem desirable, including, without
limitation, the granting of stock options other than under the Plan.
12. MARKET STANDOFF. Each Optionee, if so requested by the Company or
---------------
any representative of the underwriters in connection with any registration of
the offering of any securities of the company under the Securities Act shall not
sell or otherwise transfer any shares of Common Stock acquired upon exercise of
Options during the 180-day period following the effective date of a registration
statement of the company filed under the Securities Act; provided, however, that
such restriction shall apply only to the first two registration statements of
the
-11-
Company to become effective under the Securities Act which includes securities
to be sold on behalf of the Company to the public in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restriction
until the end of such 180-day period.
13. AMENDMENTS TO PLAN.
------------------
The Board may at any time amend, alter, suspend or discontinue this
Plan. Without the consent of an optionee, no amendment, alteration, suspension
or discontinuance may adversely affect outstanding Options except to conform
this Plan and ISOs granted under this Plan to the requirements of federal or
other tax laws relating to incentive stock options. No amendment, alternation,
suspension or discontinuance shall require shareholder approval unless (a)
shareholder approval is required to preserve incentive stock option treatment
for federal income tax purposes, or (b) the Board otherwise concludes that
shareholder approval is advisable.
14. EFFECTIVE DATE OF PLAN
----------------------
This Plan shall become effective upon adoption by the Board provided,
however, that no Option shall be exercisable unless and until written consent of
the shareholders of the Company, or approval of shareholders of the Company
voting at a validly called shareholders' meeting, is obtained within 12 months
after adoption by the Board. If such shareholder approval is not obtained
within such time, Options granted hereunder shall terminate and be of no force
and effect from and after expiration of such 12-month period. Options may be
granted and exercised under this Plan only after there has been compliance with
all applicable federal and state securities laws.
Plan adopted by the Board of Directors on____________________________.
Plan approved by Shareholders on_____________________________________.
-12-
EXHIBIT D-3
1996 Stock Option Plan Form of Stock Option Grant
eBAY, INC.
STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
(A) Name of Optionee:
(B) Grant Date:
(C) Number of Shares:
(D) Exercise Price:
(E) Vesting Base Date:
(F) Effective Date:
THIS INCENTIVE STOCK OPTION AGREEMENT (the "Agreement"), is made and
entered into as of the date set forth in Item F above (the "Effective Date")
between eBay, Inc., a California corporation (the "Company") and the person
named in Item A above ("Optionee").
THE PARTIES AGREE AS FOLLOWS:
1. Grant of Option: Vesting Base Date.
-----------------------------------
1.1 Grant. The Company hereby grants to Optionee pursuant to
-----
the Company's Stock Option Plan (the "Plan"), a copy of which is attached to
this Agreement as Exhibit 1, an incentive stock option (the "ISO") to purchase
all or any part of an aggregate of the number of shares (the "ISO Shares") of
the Company's Common Stock (as defined in the Plan) listed in Item C above on
the terms and conditions set forth herein and in the Plan, the terms and
conditions of the Plan being hereby incorporated into this Agreement by
reference.
1.2 Vesting Base Date. The parties hereby establish the date set forth
-----------------
in Item E above as the Vesting Base Date (as defined in Section 5.1 below).
2. Exercise Price. The exercise price for purchase of each share of
--------------
Common Stock covered by this ISO shall be the price set forth in Item D above.
3. Term. Unless otherwise specified on Exhibit 3 attached hereto, if any
----
(the absence of such exhibit indicating that no such exhibit was intended), this
ISO shall expire as provided in Section 6.1.12 of the Plan.
4. Adjustment of ISOs. The Company shall adjust the number and kind
------------------
of shares and the exercise price thereof in certain circumstances in accordance
with the provisions of Section 6.1.1 of the Plan.
5. Exercise of Options.
-------------------
5.1 Vesting; Tune of Exercise. This ISO shall be exercisable
-------------------------
according to the schedule set forth on Exhibit 5.1 attached hereto. Such
schedule shall commence as of the date set forth in Item (E) above (the "Vesting
Base Date").
-1-
5.2 Exercise After Termination of Status as an Employee, Director or
----------------------------------------------------------------
Consultant. In the event of termination of Optionee's continuous status as an
----------
employee, director or consultant, this ISO may be exercised only in accordance
with the provisions of Section 6.1.7 of the Plan.
5.3 Manner of Exercise. Optionee may exercise this ISO, or any
------------------
portion of this ISO, by giving written notice to the Company at its principal
executive office, to the attention of the officer of the Company designated by
the Plan Administrator, accompanied by a copy of the Stock Option Plan Stock
Purchase Agreement in substantially the form attached hereto as Exhibit 5.3
executed by Optionee (or at the option of the Company such other form of stock
purchase agreement as shall then be acceptable to the Company), payment of the
exercise price and payment of any applicable withholding or employment taxes.
The date the Company receives written notice of an exercise hereunder
accompanied by payment will be considered as the date this ISO was exercised.
5.4 Payment. Except as provided in Exhibit 5.4 attached hereto, if
-------
any (the absence of such exhibit indicating that no exhibit was intended),
payment may be made for ISO Shares purchased at the time written notice of
exercise of the ISO is given to the Company, by delivery of cash, check,
previously owned shares of Common Stock (provided that delivery of previously
owned shares may not be made more than once in any six-month period), or a full
recourse promissory note equal to up to 90% of the exercise price and payable
over no more than five years. The proceeds of any payment shall constitute
general funds of the Company.
5.5 Delivery of Certificate. Promptly after receipt of written
-----------------------
notice of exercise of the ISO, the Company shall, without stock issue or
transfer taxes to the Optionee or other person entitled to exercise, deliver to
the Optionee or other person a certificate or certificates for the requisite
number of ISO Shares. An Optionee or Transferee of an Optionee shall not have
any privileges as a shareholder with respect to any ISO Shares covered by the
option until the date of issuance of a stock certificate.
6. Nonassignability ISO. This ISO is not assignable or transferable by
--------------------
Optionee concept by will or by the laws of descent and distribution. During the
life of Optionee, the ISO is exercisable only by the Optionee. Any attempt to
assign, pledge, transfer, hypothecate or otherwise dispose of this ISO in a
manner not herein permitted, and any levy of execution, attachment, similar
process on this ISO, shall be null and void.
7. Company's Repurchase Rights. The ISO Shares arising from exercise of
---------------------------
this ISO shall be subject to a right of repurchase in favor of the Company (the
"Right of Repurchase") to the extent set forth on Exhibit 7 attached hereto (the
absence of such exhibit indicating that no such exhibit was intended and that
the ISO shall be subject to the limitations set forth on Exhibit 5.1). If the
Optionee's employment with the Company terminates before the Right of Repurchase
lapses in accordance with Exhibit 7, the Company may purchase ISO Shares subject
to the Right of Repurchase (either by payment of cash or by cancellation of
purchase money indebtedness) for an amount equal to the price the Optionee paid
for such ISO Shares (exclusive of any taxes
-2-
paid upon acquisition of the stock) by giving notice at any time within the
later of (a) 30 days after the acquisition of the ISO Shares upon option
exercise, or (b) 90 days after such termination of employment that the Company
is exercising its right of repurchase. The Company shall include with such
notice payment in full in cash or by evidence of cancellation of purchase money
indebtedness. The Optionee may not dispose of or transfer ISO Shares while such
shares are subject to the Right of Repurchase and any such attempted transfer
shall be null and void.
8. Company's Right of First Refusal.
--------------------------------
8.1 Right of First Refusal. In the event that the Optionee proposes
----------------------
to sell, pledge, or otherwise transfer any ISO Shares or any interest in such
shares to any person or entity, the Company shall have a right of first refusal
(the "Right of First Refusal") with respect to such ISO Shares. If Optionee
desires to transfer ISO Shares, Optionee shall give a written notice (the
"Transfer Notice") to the Company describing fully the proposed transfer,
including the number of ISO Shares proposed to be transferred, the proposed
transfer price, and the name and address of the proposed transferee. The
Transfer Notice shall be signed both by Optionee and by the proposed transferee
and must constitute a binding commitment of both such parties for the transfer
of such ISO Shares. The Company may elect to purchase all but not less than
all, of the ISO Shares subject to the Transfer Notice by delivery of a notice of
exercise of the Company's Right of first Refusal within 30 days after the date
the Transfer Notice is delivered to the Company. The purchase price paid by the
Company shall be the price per share equal to the proposed per share transfer
price, and shall be paid to the Optionee within 60 days after the date the
Transfer Notice is received by the Company, unless a longer period for payment
was offered by the proposed transferee, in which case the Company shall pay the
purchase price within such longer period. The Company's rights under this
Section 8.1 shall be freely assignable, in whole or in part. Notwithstanding
the foregoing, the Right of First Refusal does not apply to a transfer of shares
by gift or devise to the Optionee's immediate family (i.e., parents, spouse or
children or to a trust for the benefit of the Optionee or any of the Optionee s
immediate family members), but does apply to any subsequent transfer of such
shares by such immediate family members.
8.2 Transfer of ISO Shares. If the Company fails to exercise the
----------------------
Right of First Refusal within 30 days after the date the Transfer Notice is
delivered to the Company, the Optionee may, not later than 75 days following
delivery to the Company of the Transfer Notice, conclude a transfer of the ISO
Shares subject to the Transfer Notice on the terms and conditions described in
the Transfer Notice. Any proposed transfer on terms and conditions different
from those described in the Transfer Notice, as well as any subsequent proposed
transfer by the Optionee, shall again be subject to the Right of First Refusal
and shall require compliance by the Optionee with the procedure described in
Section 8.1 of this Agreement. If the Company exercises the Right of First
Refusal, the parties shall consummate the sale of ISO Shares on the terms, other
than price, as applicable under Section 8.1, set forth in the Transfer Notice;
provided, however, in the event the Transfer Notice provides for payment for the
ISO Shares other than in cash, the Company shall have the option of paying for
the ISO Shares by paying in cash the present value of the consideration
described in the Transfer Notice; and further provided that if the value of
noncash consideration is to be paid and the Optionee disagrees with the value
determined by the Company, the Optionee may request an independent appraisal by
an appraiser
-3-
acceptable to the Optionee and the Company, the costs of such appraisal to be
borne equally by the Optionee and the Company.
8.3 Binding Effect. The Right of First Refusal shall inure to the
--------------
benefit of the successors and assigns of the Company and shall be binding upon
any transferee of ISO Shares other than a transferee acquiring ISO Shares in a
transaction where the Company failed to exercise the Right of First Refusal (a
"Free Transferee") or a transferee of a Free Transferee.
8.4 Termination of Company's Right of first Refusal. Notwithstanding
-----------------------------------------------
anything in this Section 8, the Company shall have no Right of First Refusal,
and Optionee shall have no obligation to comply with the procedures in Sections
8.1 through 8.3 after the earlier of (i) the closing of the Company's initial
public offering to the public generally, or (ii) the date ten (10) years after
the Effective Date.
9. Marker Standoff. Optionee hereby agrees that if so requested by the
---------------
Company or any representative of the underwriters in connection with any
registration of the offering of the securities of the Company under the
Securities Act of 1933, as amended (the "Securities Act"), Optionee shall not
sell or otherwise transfer the ISO Shares for a period of 180 days following the
effective date of a Registration Statement filed under the Securities Act;
provided that such restrictions shall only apply to the first two registration
statements of the Company to become effective under the Securities Act which
include securities to be sold on behalf of the Company in an underwritten public
offering under the Securities Act. The Company may impose stop-transfer
instructions with respect to the ISO Shares subject to the foregoing
restrictions until the end of each such 180-day period.
10. Restriction on Issuance of Shares.
---------------------------------
10.1 Legality of Issuance. The Company shall not be obligated to sell
--------------------
or issue any ISO Shares pursuant to this Agreement if such sale or issuance, in
the opinion of the Company and the Company's counsel, might constitute a
violation by the Company of any provision of law, including without limitation
the provisions of the Securities Act.
10.2 Registration or Qualification of Securities. The Company may,
-------------------------------------------
but shall not be required to, register or qualify the sale of this ISO or any
ISO Shares under the Securities Act or any other applicable law. The Company
shall not be obligated to take any affirmative action in order to cause the
grant or exercise of this option or the issuance or sale of any ISO Shares
pursuant thereto to comply with any law.
11. Restriction on Transfer. Regardless whether the sale of the ISO
-----------------------
Shares has been registered under the Securities Act or has been registered or
qualified under the securities laws of any state, the Company may impose
restrictions upon the sale, pledge, or other transfer of ISO Shares (including
the placement of appropriate legends on stock certificates) if, in the judgment
of the Company and the Company's counsel, such restrictions are necessary or
desirable in order to achieve compliance with the provisions of the Securities
Act, the securities laws of any state, or any other law, or if the Company does
not desire so have a trading market develop for its
-4-
securities.
12. Stock Certificate. Stock certificates evidencing ISO Shares may bear
-----------------
such restrictive legends as the Company and the Company's counsel deem necessary
or advisable under applicable law or pursuant to this Agreement.
13. Disqualifying Dispositions. If Stock acquired by exercise of this ISO
--------------------------
is disposed of within two years after the Effective Date or within one year
after date of such exercise (as determined under Section 5.3 of this Agreement),
the Optionee immediately prior to the disposition shall promptly notify the
Company in writing of the date and terms of the disposition and shall provide
such other information regarding the disposition as the Company may reasonably
require.
14. Representations, Warranties, Covenants, and Acknowledgments of
--------------------------------------------------------------
Optionee Upon Exercise of ISO. Optionee hereby agrees that in the event that
-----------------------------
the Company and the Company's counsel deem it necessary or advisable in the
exercise of their discretion, the issuance of ISO Shares may be conditioned upon
certain representations, warranties, and acknowledgments by the person
exercising the ISO (the "Purchaser"), including, without limitation, those set
forth in Sections 14.1 through 14.8 inclusive:
14.1 Investment. Purchaser is acquiring the ISO Shares for
----------
Purchaser's own account, and not for the account of any other person. Purchaser
is acquiring the ISO Shares for investment and not with a view to distribution
or resale thereof except in compliance with applicable laws regulating
securities.
14.2 Business Experience. Purchaser is capable of evaluating the
-------------------
merits and risks of Purchaser's investment in the Company evidenced by purchase
of the ISO Shares.
14.3 Relation to Company. Purchaser is presently an officer,
-------------------
director, or other employee of, or consultant to the Company, and in such
capacity has become personally familiar with the business, affairs, financial
condition, and results of operations of the Company.
14.4 Access to Information. Purchaser has had the opportunity to ask
---------------------
questions of, and to receive answers from, appropriate executive officers of the
Company with respect to the terms and conditions of the transaction contemplated
hereby and with respect to the business, affairs, financial condition, and
results of operations of the Company. Purchaser has had access to such
financial and other information as is necessary in order for Purchaser to make a
fully-informed decision as to investment in the Company by way of purchase of
the ISO Shares, and has had the opportunity to obtain any additional information
necessary to verify any of such information to which Purchaser has had access.
14.5 Speculative Investment. Purchaser's investment in the Company
----------------------
represented by the ISO Shares is highly speculative in nature and is subject to
a high degree of risk of loss in whole or in part. The amount of such
Investment is within Purchaser's risk capital means and is not so great in
relation to Purchaser's total financial resources as would jeopardize
-5-
the personal financial needs of Purchaser or Purchaser's family in the event
such investment were lost in whole or in part.
14.6 Registration. Purchaser must bear the economic risk of
------------
investment for an indefinite period of time because the sale to Purchaser of the
ISO Shares has not been registered under the Securities Act and the ISO Shares
cannot be transferred by Purchaser unless such transfer is registered under the
Securities Act or an exemption from such registration available. The Company
has made no agreements, covenants, or undertakings whatsoever to register the
transfer of any of the ISO Shares under the Securities Act. The Company has
made no representations, warranties, or covenants whatsoever as to whether any
exemption from the Securities Act, including without limitation any exemption
for limited sales in routine brokers' transactions pursuant to Rule 144, will be
available; if the exemption under Rule 144 is available at all, it may not be
available until at least two years after payment of cash for the ISO Shares and
not then unless: (i) a public trading market then exists in the Company's common
stock: (ii) adequate information as to the Company's financial and other affairs
and operations is then available to the public; and (iii) all other terms and
conditions of Rule 144 have been satisfied. Purchaser understands that the
resale provisions of Rule 701 will not apply until 90 days after the Company
becomes subject to the reporting obligations of the Securities Exchange Act of
1934 (typically 90 days after the effective date of an initial public offering).
14.7 Public Trading. None of the Company's securities is presently
--------------
publicly traded, and the Company has made no representation, covenant, or
agreement as to whether there will be a public market for any of its securities.
14.8 Tax Advice. The Company has made no warranties or
----------
representations to Purchaser with respect to the income tax consequences of the
transactions contemplated by the agreement pursuant to which the ISO Shares will
be purchased and Purchaser is in no manner relying on the Company or its
representatives for an assessment of such tax consequences.
15. Assignment: Binding Effect. Subject to the limitations set forth in
---------------------------
this Agreement, this Agreement shall be binding upon and inure to the benefit of
the executors, administrators, heirs, legal representatives, and successors of
the parties hereto; provided, however, that Optionee may not assign any of
Optionee's rights under this Agreement.
16. Damages. Optionee shall be liable to the Company for all costs and
-------
damages, including incidental and consequential damages, resulting from a
disposition of ISO Shares which is not in conformity with the provisions of this
Agreement.
17. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of California excluding those laws that
direct the application of the laws of another jurisdiction.
18. Notices. All notices and other communications under this Agreement
-------
shall be in writing. Unless and until the Optionee is notified in writing to
the contrary, all notices, communications, and documents directed to the Company
and related to the Agreement, if not
-6-
delivered by hand, shall be mailed, addressed as follows:
eBay, Inc.
2005 Hamilton Ave., Suite 270
San Jose, CA 95125
Attention: President
Unless and until the Company is notified in writing to the contrary, all
notices, communications, and documents intended for the Optionee and related to
this Agreement, if not delivered by hand, shall be mailed to Optionee's last
known address as shown on the Company's books. Notices and communications shall
be mailed by first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All mailings and
deliveries related to this Agreement shall be deemed received when actually
received, if by hand delivery, and two business days after mailing, if by mail.
19. Arbitration.
------------
Any and all disputes or controversies arising out of this Agreement
shall be finally settled by arbitration conducted in Santa Clara County in
accordance with the then existing rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrators may be entered in any
count having jurisdiction thereof; provided that nothing in this Section 19
shall prevent a party from applying to a court of competent jurisdiction to
obtain temporary relief pending resolution of the dispute through arbitration.
The parties hereby agree that service of any notices in the course of such
arbitration at their respective addresses as provided for in Section 18 shall be
valid and sufficient.
20. Entire Agreement.
----------------
Company and Optionee agree that this Agreement (including its attached
Exhibits) is the complete and exclusive statement between Company and Optionee
regarding its subject matter and supersedes all prior proposals, communications,
and agreements of the parties (including Company's letter to Optionee setting
forth the proposed terms of employment), whether oral or written, regarding the
grant of stock options or issuances of shares to Optionee.
IN WITNESS WHEREOF, the parties have executed this Incentive Stock
Option Agreement as of the Effective Date.
eBAY, INC.
By:
Title:
The Optionee hereby accepts and agrees to be bound by all of the terms and
conditions of this Agreement and the Plan.
-7-
Optionee ___________________
Dated: _____________________
Optionee's spouse indicates by the execution of this Incentive Stock Option
Agreement his or her consent to be bound by the terms thereof as to his or her
interests, whether as community property or otherwise, if any, in the option
granted hereunder, and in any ISO Shares purchased pursuant to this Agreement.
____________________________
Optionee's Spouse
-8-
EXHIBITS
--------
Exhibit 1 Stock Option Plan
Exhibit 3 Expiration of Incentive Stock Option
(if applicable)
Exhibit 5.1
(Standard Vesting) Time of Exercise
Exhibit 5.3 Stock Option Plan Stock Purchase Agreement
EXHIBIT 5.1 OF THE INCENTIVE STOCK
OPTION AGREEMENT
The ISO shall be exercisable with respect to all of the ISO Shares
from and after the Effective Date subject to the Right of Repurchase set forth
in Exhibit 7.
Initialed by: eBay, Inc.
By: ___________________________
Title: ________________________
Optionee: _____________________
EXHIBIT 7 OF THE INCENTIVE STOCK
OPTION AGREEMENT
All of the ISO Shares are subject to the Right of Repurchase. The
Right of Repurchase shall expire with respect to twenty-five percent (25%) of
the total number of ISO Shares twelve months after the Vesting Base Date, and
thereafter, with respect to an additional 1/48 of the ISO Shares on the first
day of each month after the twelve month anniversary of the Vesting Base Date,
so that the Right of Repurchase shall have expired with respect to all of the
ISO Shares on and after January 2, 2001.
Executed by: eBay, Inc.
By: _________________________
Title: ______________________
Optionee: ___________________
Exhibit D-4
1996 Stock Option Plan Form of Stock Option Exercise Agreement
eBAY, INC.
STOCK OPTION PLAN
STOCK PURCHASE AGREEMENT
------------------------
(A) Name of Purchaser: _____________________
(B) Number of Plan Shares:__________________
(C) Exercise Price:_________________________
(D) Purchase Price:_________________________
(E) Date of Option Agreement:_______________
(F) Effective Date:_________________________
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the date set forth in Item F above (the "Effective Date") between
eBay, Inc., a California corporation (the "Company"), and the person named in
Item A above (the "Purchaser").
THE PARTIES AGREE AS FOLLOWS:
1. Purchase of Shares. Pursuant to the Company's Stock Option Plan (the
------------------
"Plan") and to a stock option agreement ("Option Agreement") between the parties
dated the date set forth in Item E above, the Company hereby sells to Purchaser,
and Purchaser hereby buys from the Company, that number of shares (the "Plan
Shares") of the Company's Common Stock (as defined in the Plan) set forth in
Item B above on the terms and conditions set forth herein and in the Plan and
the Option Agreement, the terms and conditions of the Plan and the Option
Agreement being hereby incorporated into this Agreement by reference.
2. Purchase Price. Purchaser shall purchase the Plan Shares from the
--------------
Company, and the Company shall sell the Plan Shares to Purchaser, at a price per
share as set forth in Item C above (the "Exercise Price"), for a total purchase
price as set forth in Item D above (the "Purchase Price").
3. Manner of Payment. Purchase shall pay the Purchase Price of the Plan
-----------------
Shares by delivery of cash, check, previously owned shares of Common Stock
(provided that delivery of previously owned shares may not be made more than
once in any six-month period), or a full recourse promissory note equal to up to
90% of the Purchase Price and payable over no more than five years (or in the
manner set forth in Exhibit 5.4 to the Option Agreement evidencing the option,
the absence of any Exhibit 5.4 indicating that no such exhibit was intended).
EXHIBIT 5.3 to
INCENTIVE STOCK OPTION AGREEMENT
4. Company's Right of Repurchase Upon Termination of Employment. The
------------------------------------------------------------
Plan Shares are subject to a right of repurchase in favor of the Company (the
"Right of Repurchase") to the extent set forth on Exhibit 7 of the Option
Agreement (the absence of Exhibit 7 in the
Option Agreement indicating that no such exhibit was intended). If the
Purchaser's employment, consulting or service as a director with the Company
terminates before the Right of Repurchase lapses in accordance with Exhibit 7 of
the Option Agreement, the Company may purchase stock subject to the Right of
Repurchase (either by payment of cash or by cancellation of purchase money
indebtedness) for an amount equal to the price the Optionee paid for such Plan
Shares (exclusive of any taxes paid upon acquisition of the stock) by giving
notice at any time within the later of (a) 30 days after the acquisition of the
Plan Shares upon option exercise, or (b) 90 days after such termination of
employment that the Company is exercising its right of repurchase. The Company
shall include with such notice payment in full in cash or by evidence of
cancellation of purchase money indebtedness. The Purchaser may not dispose of or
transfer Plan Shares while such shares are subject to the Right of Repurchase
and any such attempted transfer shall be null and void.
5. Company's Right of First Refusal Respecting Plan Shares.
-------------------------------------------------------
5.1 Right of First Refusal. In the event that Purchaser proposes to
----------------------
sell, pledge, or otherwise transfer any Plan Shares or any interest in such
shares to a bona-fide third party offeror, the Company shall have a right of
first refusal (the "Right of First Refusal") with respect to such Plan Shares.
If Purchaser desires to transfer Plan Shares, Purchaser shall give a written
notice (the "Transfer Notices") to the Company describing fully the proposed
transfer, including the number of Plan Shares proposed to be transferred, the
proposed transfer price, and the name and address of the bona-fide third party
offeror. The Transfer Notice shall be signed both by Purchaser and by the bona-
fide third party offeror and must constitute a binding commitment of both such
parties for the transfer of such Plan Shares. The Company may elect to purchase
the Plan Shares subject to the Transfer Notice by delivery of a notice of
exercise of the Company's Right of First Refusal within 30 days after the date
the Transfer Notice is delivered to the Company. The purchase price paid by the
Company shall be the price per share equal to the proposed per share transfer
price, and shall be paid to the Purchaser within 60 days after the date the
Transfer Notice is received by the Company, unless a longer period for payment
was offered by the bona-fide third party offeror, in which case the Company
shall pay the purchase price within such longer period. The Company's rights
under this Section 5.1 shall be freely assignable, in whole or in part.
Notwithstanding the foregoing, the Right of First Refusal does not apply to a
transfer of Plan Shares by gift or devise to the Purchaser's immediate family
(i.e., parents, spouse or children or to a trust for the benefit of the
Purchaser or any of the Purchaser's immediate family members), but does apply to
any subsequent transfer of such Plan Shares by such immediate family members.
5.2 Transfer of Plan Shares. If the Company fails to exercise the
-----------------------
Right of First Refusal within 30 days after the date the Transfer Notice is
delivered to the Company, Purchaser may, not later than 75 days following
delivery to the Company of the Transfer Notice, conclude a transfer of the Plan
Shares subject to the Transfer Notice on the terms and conditions described in
the Transfer Notice. Any proposed transfer on terms and conditions different
from those described in the Transfer Notice, as well as any subsequent proposed
transfer by Purchaser, shall again be subject to the Company's Right of First
Refusal and shall require compliance by Purchaser with the procedure described
in Section 5.1 of this Agreement. If the Company
2
exercises the Right of First Refusal, the parties shall consummate the sale of
Plan Shares on the terms, other than price, as applicable under Section 5.1, set
forth in the Transfer Notice, subject; provided, however, in the event the
Transfer Notice provides for payment for the Plan Shares other than in cash, the
Company shall have the option of paying for the Plan Shares by paying in cash
the present value of the consideration described in the Transfer Notice; and
further provided that if the value of noncash consideration is to be paid, and
the Optionee disagrees with the value determined by the Company, the Optionee
may request an independent appraisal by an appraiser acceptable to the Optionee
and the Company, the costs of such appraisal to be borne equally by the Optionee
and the Company. If, at the time of exercise of the right of first refusal, any
notes are outstanding which represent any portion of the Purchase Price of the
Plan Shares, the repurchase price shall be paid first by cancellation of any
obligation for accrued but unpaid interest under such notes, next by
cancellation of principal under such notes, and finally by payment of cash.
5.3 Binding Effect of Right of First Refusal. The Company's Right of
----------------------------------------
First Refusal shall inure to the benefit of the successors and assigns of the
Company and shall be binding upon any transferee of Plan Shares other than a
transferee acquiring Plan Shares in a transaction where the Company failed to
exercise the Right of First Refusal (a "Free Transferee") or a transferee of a
Free Transferee.
5.4 Termination of Company's Rift of First Refusal. Notwithstanding
----------------------------------------------
anything in this Section 5, the Company shall have no Right of First Refusal,
and Purchaser shall have no obligation to comply with the procedures in Sections
5.1 through 5.3, after the earlier of (a) the closing of the Company's initial
registered public offering to the public generally, or (b) the date ten (10)
years after the Effective Date of the Option Agreement.
6. Stock Certificate Restrictive Legends. Stock certificates evidencing
-------------------------------------
Plan Shares may bear such restrictive legends as the Company and the Company's
counsel deem necessary or advisable under applicable law or pursuant to this
Agreement.
7. Representations, Warranties, Covenants, and Acknowledgments of
--------------------------------------------------------------
Purchaser. Purchaser hereby represents, warrants, covenants, acknowledges, and
---------
agrees that:
7.1 Investment. Purchaser is acquiring the Plan Shares for
----------
Purchaser's own account, and not for the account of any other person. Purchaser
is acquiring the Plan Shares for investment and not with a view to distribution
or resale thereof except in compliance with applicable laws regulating
securities.
7.2 Business Experience. Purchaser is capable of evaluating the
-------------------
merits and risks of Purchaser's investment in the Company evidenced by the
purchase of the Plan Shares.
7.3 Relation of Company. Purchaser is presently an officer,
----------------------
director, or employee of, or consultant to, the Company and in such capacity has
become personally familiar with the business, affairs, financial condition, and
results of operations of the Company.
3
7.4 Access to Information. Purchaser has had the opportunity to ask
---------------------
questions of, and to receive answers from, appropriate executive officers of the
Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
condition, and results of operations of the Company. Purchaser has had access to
such financial and other information as is necessary in order for Purchaser to
make a fully-informed decision as to investment in the Company by way of
purchase of the Plan Shares, and has had the opportunity to obtain any
additional information necessary to verify any of such information to which
Purchaser has had access. Purchaser acknowledges that all financial information
concerning the Company that has been or will be provided to Purchaser is
Confidential Information within the meaning of the Employee Confidential
Information and Inventions Agreement between Purchaser and the Company and is
subject to the obligation of confidentiality and other restrictions and
limitations set forth therein.
7.5 Speculative Investment. Purchaser's investment in the Company
----------------------
represented by the Plan Shares is highly speculative in nature and is subject to
a high degree of risk of loss in whole or in part. The amount of such
investment is within Purchaser's risk capital means and is not so great in
relation to Purchaser's total financial resources as would jeopardize the
personal financial needs of Purchaser or Purchaser's family in the event such
investment were lost in whole or in part.
7.6 Registration. Purchaser may bear the economic risk of investment
------------
for an indefinite period of time because the sale to Purchaser of the Plan
Shares has not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and the Plan Shares cannot be transferred by Purchaser unless
such transfer is registered under the Securities Act or an exemption from such
registration is available. The Company has made no agreements, covenants or
undertakings whatsoever to register the transfer of any of the Shares under the
Securities Act. The Company has made no representations, warranties, or
covenants whatsoever as to whether any exemption from the Securities Act,
including without limitation any exemption for limited sales in routine brokers'
transactions pursuant to Rule 144, will be available; if the exemption under
Rule 144 is available at all, it will not be available until at least two years
after payment of cash for the Plan Shares and not then unless: (a) a public
trading market then exists in the Company's common stock; (b) adequate
information as to the Company's financial and other affairs and operations is
then available to the public; and (c) all other terms and conditions of Rule 144
have been satisfied. Purchaser understands that the resale provisions of Rule
701 will not apply until 90 days after the Company becomes subject to the
reporting obligations of the Securities Exchange Act of 1934 (typically upon the
effective date of an initial public offering).
7.7 Public Trading. None of the Company's securities is presently
---------------
publicly traded, and the Company has made no representation, covenant, or
agreement as to whether there will be a public market for any of its securities.
7.8 Tax Advice. The Company has made no warranties or
----------
representations to Purchaser with respect to the income tax consequences of the
transactions contemplated by this Agreement and Purchaser is in no manner
relying on the Company or its representatives for an assessment of such tax
consequences. If the Plan Shares are subject to a Right of Repurchase
4
favor of the Company or if Purchaser could be subject to suit under Section
16(b) of the Securities Exchange Act of 1934 with respect to the purchase and
sale of Plan Shares, Purchaser shall execute and deliver to the Company a copy
of the Acknowledgment and Statement of Decision Regarding Election Pursuant to
Section 83(b) of the Internal Revenue Code (the "Acknowledgment") attached
hereto as Exhibit 7A and a copy of the Election Pursuant to Section 83(b) of the
Code, attached hereto as Exhibit 7B, if Purchaser has indicated in the
Acknowledgment his or her decision to make such an election. Purchaser will
consult with his or her tax advisor to determine if there is a comparable
election to file in the state of his or her residence and whether such filing is
desirable under the circumstances.
8. Binding Effect. Subject to the limitations set forth in this
--------------
Agreement, this Agreement shall be binding upon, and inure to the benefit of,
the executors, administrators, heirs, legal representatives, successors, and
assigns of the parties hereto.
9. Damages. Purchaser shall be liable to the Company for all costs and
-------
damages, including incidental and consequential damages, resulting from a
disposition of Plan Shares which is not in conformity with the provisions of
this Agreement.
10. Disqualifying Dispositions of ISO Stock. If stock acquired by
---------------------------------------
exercise of an ISO (as defined in Section 1 of the Plan) is disposed of within
two years after the Effective Date (as defined in the Option Agreement) or
within one year after such exercise, Purchaser immediately prior to the
disposition shall promptly notify the Company in writing of the date and terms
of the disposition and shall provide such other information regarding the
disposition as the Company may reasonably require.
11. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with, the laws of the State of California excluding those laws that
direct the application of the laws of another jurisdiction.
12. Notices. All notices and other communications under this Agreement
-------
shall be in writing. Unless and until Purchaser is notified in writing to the
contrary, all notices, communications, and documents directed to the Company and
related to the Agreement, if not delivered by hand, shall be mailed, addressed
as follows:
eBay, Inc.
2005 Hamilton Ave., Suite 270
San Jose, CA 95125
Attention: President
Unless and until the Company is notified in writing to the contrary, all
notices, communications, and documents intended for Purchaser and related to
this Agreement, if not delivered by hand, shall be mailed to Purchaser's last
known address as shown on the Company's books. Notices and communications shall
be mailed by first class mail, postage prepaid; documents shall be mailed by
registered mail, return receipt requested, postage prepaid. All mailings and
deliveries related to this Agreement shall be deemed received when actually
received, if by hand delivery,
5
and two business days after mailing, if by mail.
13. Arbitration.
------------
Any and all disputes or controversies arising out of this Agreement shall
be finally settled by arbitration conducted in Santa Clara County in accordance
with the then existing rules of the American Arbitration Association, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof; provided that nothing in this Section 13 shall
prevent a party from applying to a court of competent jurisdiction to obtain
temporary relief pending resolution of the dispute through arbitration. The
parties hereby agree that service of any notices in the course of such
arbitration at their respective addresses as provided for in Section 18 shall be
valid and sufficient.
IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the day and year first above written.
eBAY, INC.
By:________________________________
Title:_____________________________
Purchaser hereby accepts and agrees to be bound by all of the terms
and conditions of this Agreement and the Plan.
Purchaser:_________________________
Purchaser's spouse indicates by the execution of this Agreement his or
her consent to be bound by the terms herein as to his or her interests, whether
as community property or otherwise, if any, in the Plan Shares hereby purchased.
Purchaser's Spouse:________________
6
Exhibits
--------
Exhibit 7A Acknowledgment Regarding Election
Pursuant to Section 83(b)
Exhibit 7B Section 83(b) Election
7
ACKNOWLEDGMENT AND STATEMENT
OF DECISION REGARDING ELECTION
PURSUANT TO Section 83(b) OF
THE INTERNAL REVENUE CODE
-------------------------
The undersigned (which term includes the undersigned's spouse), a purchaser
of ________ shares of Common Stock of eBay, Inc., a California corporation (the
"Company") and a party to a Stock Option Plan Stock Purchase Agreement with the
Company (the "Agreement"), hereby states as follows:
1. The undersigned acknowledges receipt of a copy of the Agreement. The
undersigned has carefully reviewed the Agreement.
2. The undersigned either [check as applicable]:
__ (a) has consulted, and has been fully advised by, the
undersigned's own tax advisor, ___________, whose business
address is _________________, regarding the federal, state,
and local tax consequences of purchasing shares under the
Agreement, and particularly regarding the advisability of
making elections pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended, (the "Code"), and pursuant
to the corresponding provisions, if any, of applicable state
laws; or
__ (b) has knowingly chosen not to consult such a tax advisor.
3. The undersigned hereby states that the undersigned has decided [check
as applicable]:
__ (a) to make an election pursuant to Section 83(b) of the Code
(which in the case of shares acquired pursuant to the
exercise of an incentive stock option, is effective for the
purposes described therein) and is submitting to the
Company, together with the undersigned's executed Agreement,
an executed form which is attached as Exhibit_ to the
Agreement; or
__ (b) not to make an election pursuant to Section 83(b) of the
Code.
EXHIBIT 7A
4. Neither the Company nor any subsidiary or representative of the
Company has made any warranty or representation to the undersigned with respect
to the tax consequences of the undersigned's purchase of shares and execution of
the Agreement in connection therewith or of the making or failure to make an
election pursuant to Section 83(b) of the Code or the corresponding provisions,
if any, of applicable state law.
8
5. The undersigned is also submitting to the Company, together with the
Agreement, an executed original of an election, if any is made, of the
undersigned pursuant to provisions of state law corresponding to Section 83(b)
of the Code, if any, which are applicable to the undersigned's purchase of
shares under the Agreement.
Date: ________________ _____________________
Date: ________________ _____________________
[Spouse]
9
ELECTION PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED
-----------------------------------------
(for use in connection with ISO exercise)
The undersigned hereby elects pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended (the "Code") to include in the
undersigned's gross income, with the effect and under the circumstances
described in paragraph 3 below, for the 199_ taxable year the excess (if any) of
(a) the fair market value of the property described below, over (b) the amount
the undersigned paid for such property. The undersigned supplies herewith the
following information in accordance with the Treasury regulations promulgated
under Section 83(b):
1. The undersigned's name, address, and taxpayer identification
(social security) number are:
Name: ____________________________________________________________
Address: _________________________________________________________
__________________________________________________________________
Social Security No.: _____________________________________________
2. The property with respect to which the election is made consists of
common shares of eBay, Inc., a California corporation (the "Company").
3. The property described above was acquired by the undersigned on
______,199_, pursuant to the undersigned's exercise of an incentive stock
option. This filing is therefore made for determing the amount of the
undersigned's adjustment under Section 56(b)(3) of the Code with respect to the
undersigned's purchase of the property. This filing will be effective for
regular income tax purposes in the event that the undersigned makes a
disposition (as defined in Section 424(c) of the Code) of the property within
either period described in Section 422(a)(1) of the Code. The taxable year to
which this election relates is 199_.
4. The above property is subject to a right of repurchase by the Company
at the initial purchase price if the undersigned ceases to be an employee of, or
a consultant to, the Company or an affiliate of the Company.
EXHIBIT 7B
5. The fair market value of the above property at the time of transfer
(determined without regard to any restrictions other than those which by their
terms will never lapse) is $_____ per share.
6. The amount paid for the above property by the undersigned was $______
per share.
10
7. A copy of this election has been furnished to the Company, and a copy
will be filed with the income tax return to the undersigned to which this
election relates.
Dated:______________, 199_
__________________________
(Signature of Purchaser)
11
ELECTION PURSUANT TO SECTION 83(b) OF THE
INTERNAL REVENUE CODE TO INCLUDE IN GROSS INCOME
THE EXCESS OVER THE PURCHASE PRICE, IF ANY,
OF THE VALUE OF PROPERTY TRANSFERRED
IN CONNECTION WITH SERVICES
---------------------------------
The undersigned hereby elects pursuant to Section 83(b) of the
Internal, Revenue Code of 1986, as amended, to include in the undersigned's
gross income for the 199_ taxable year the excess if any) of the fair market
value of the property described below, over the amount the undersigned paid for
such property, and supplies herewith the following information in accordance
with the Treasury regulations promulgated under Section 83(b):
1. The undersigned's name, address and taxpayer identification (social
security) number are:
Name: ____________________________________
Address: ____________________________________
_____________________________________________
Social Security #: __________________________
2. The property with respect to which the election is made consists of
_______ common shares of eBay, Inc., a California corporation (the "Company").
3. The date on which the above property was transferred to the
undersigned was _________, 199_, and the taxable year to which this election
relates is 199_.
4. The above property is subject to a right of repurchase by the Company
at the initial purchase price, if the undersigned ceases to be an employee of,
or a consultant to, the Company or an affiliate of the Company.
5. The fair market value of the above property at the time of transfer
(determined without regard to any restrictions other than those which by their
terms will never lapse) is $___ per share.
6. The amount paid for the above property by the undersigned was $___ per
share.
EXHIBIT 7B
12
7. A copy of this election has been furnished to the Company, and a copy
will be filed with the income tax return of the undersigned to which this
election relates.
Dated:_______, 199_ _________________________
[NAME]
13
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘S-1’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 1/2/01 | | 24 | | | | | None on these Dates |
| Filed on: | | 7/15/98 |
| | 12/3/97 | | 1 |
| List all Filings |
4 Subsequent Filings that Reference this Filing
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