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SCHEDULE 14A INFORMATION
(Amendment No. )
Filed by the Registrant | þ | |||
Filed by a Party other than the Registrant | o |
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þ | Preliminary Proxy Statement |
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o | Definitive Proxy Statement |
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o | Soliciting Material under Rule 14a-12 |
eBay Inc.
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o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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1. | To elect three directors to hold office until our 2008 Annual Meeting of Stockholders. |
2. | To approve our eBay Incentive Plan in order to qualify it under Section 162(m) of the Internal Revenue Code. |
3. | To approve an amendment to our Certificate of Incorporation to increase the authorized number of shares of common stock from 1,790,000,000 shares to 3,580,000,000 shares. |
4. | To ratify the selection of PricewaterhouseCoopers LLP as our independent auditors for our fiscal year ending December 31, 2005. |
5. | To consider a stockholder proposal regarding granting of performance-vesting shares to senior executives. |
6. | To consider a stockholder proposal regarding the voting standard for director elections. |
7. | To transact such other business as may properly come before the meeting or any adjournment or postponement of the meeting. |
By Order of the Board of Directors | |
Michael R. Jacobson | |
Secretary |
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Q: | Why am I receiving these materials? |
A: | eBay’s Board of Directors, or the Board, is providing these proxy materials to you in connection with the Board’s solicitation of proxies for use at eBay’s 2005 Annual Meeting of Stockholders, which will take place on June 23, 2005. Stockholders are invited to attend the Annual Meeting and are requested to vote on the proposals described in this proxy statement. |
Q: | What information is contained in these materials? |
A: | The information included in this proxy statement relates to the proposals to be voted on at the Annual Meeting, the voting process, the compensation of directors and our most highly paid executive officers, and certain other required information. eBay’s 2004 Annual Report, which includes eBay’s audited consolidated financial statements, is also enclosed. |
Q: | What proposals will be voted on at the Annual Meeting? |
A: | There are six proposals scheduled to be voted on at the Annual Meeting: |
• | the election of three directors for a three-year term; | |
• | the approval of the eBay Incentive Plan in order to qualify it under Section 162(m) of the Internal Revenue Code; | |
• | the approval of an amendment to our Certificate of Incorporation to increase the authorized number of shares of common stock from 1,790,000,000 shares to 3,580,000,000; | |
• | a stockholder proposal regarding granting of performance-vesting shares to senior executives; and | |
• | a stockholder proposal regarding the voting standard for director elections. |
In addition, stockholders are being asked to ratify the appointment of PricewaterhouseCoopers LLP as our independent auditors for our fiscal year ending December 31, 2005. |
Q: | What are eBay’s Board of Directors’ voting recommendations? |
A: | eBay’s Board recommends that you vote your shares “FOR” each of the nominees to the Board, “FOR” the approval of the amendment to our Certificate of Incorporation, “FOR” the approval of our eBay Incentive Plan and the ratification of the appointment of PricewaterhouseCoopers LLP as our independent auditors, and “AGAINST” the two stockholder proposals. |
Q: | What class of shares is entitled to be voted? How many shares can vote? |
A: | Each share of eBay’s common stock outstanding as of the close of business on April 25, 2005, the record date, is entitled to one vote at the Annual Meeting. At the close of business on April 25, 2005, shares of common stock were outstanding and entitled to vote. |
Q: | What shares owned by me can be voted? |
A: | All shares owned by you as of the close of business on the record date of April 25, 2005 may be voted by you. You may cast one vote per share of common stock that you held on the record date. These shares include shares that are (1) held of record directly in your name, including shares purchased through eBay’s equity incentive plans and (2) held for you as the beneficial owner through a stockbroker, bank or other nominee. |
Q: | What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
A: | Most stockholders of eBay hold their shares through a stockbroker, bank or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and shares owned beneficially. |
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• | Stockholder of Record |
If your shares are registered directly in your name with eBay’s transfer agent, Mellon Investor Services, you are considered the stockholder of record with respect to those shares, and these proxy materials are being sent directly to you by eBay. As the stockholder of record, you have the right to grant your voting proxy directly to eBay or to vote in person at the Annual Meeting. eBay has enclosed a proxy card for you to use. You may also vote on the Internet or by telephone as described below under “How can I vote my shares without attending the Annual Meeting?” |
• | Beneficial Owner |
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you by your broker or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner or nominee, you have the right to direct your broker on how to vote, and you are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting. Your broker or nominee has enclosed a voting instruction card for you to use in directing the broker or nominee regarding how to vote your shares. You may also vote on the Internet or by telephone as described below under “How can I vote my shares without attending the Annual Meeting?” |
Q: | Can I attend the Annual Meeting? |
A: | You are invited to attend the Annual Meeting if you are a stockholder of record or a beneficial owner as of April 25, 2005. If you are a stockholder of record you must bring proof of identification. If you hold your shares through a stock broker or other nominee, you will need to provide proof of ownership by bringing either a copy of the voting instruction card provided by your broker or a copy of a brokerage statement showing your share ownership as of April 25, 2005. If you do not attend the Annual Meeting, you can listen to a webcast of the proceedings at eBay’s investor relations site athttp://investor.ebay.com. |
Q: | How can I vote my shares in person at the Annual Meeting? |
A: | Shares held directly in your name as the stockholder of record may be voted in person at the Annual Meeting. If you choose to vote in person, please bring the enclosed proxy card and proof of identification. Even if you plan to attend the Annual Meeting, eBay recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the Annual Meeting. Shares held in street name through a brokerage account or by a bank or other nominee may be voted in person by you if you obtain a signed proxy from the record holder giving you the right to vote the shares. |
Q: | How can I vote my shares without attending the Annual Meeting? |
A: | Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct your vote without attending the Annual Meeting by Internet, by telephone or by completing and mailing your proxy card or voting instruction card in the enclosed pre-paid envelope. Please refer to the enclosed materials for details. |
Q: | Can I change my vote? |
A: | You may change your proxy instructions at any time before your proxy is voted at the Annual Meeting. Proxies may be revoked by any of the following actions: (1) filing a written notice of revocation with our Corporate Secretary at our principal executive office (2145 Hamilton Avenue, San Jose, California 95125); (2) filing a properly executed proxy showing a later date with our Corporate Secretary at our principal executive office; or (3) attending the Annual Meeting and voting in person (attendance at the meeting will not, by itself, revoke a proxy). |
Q: | How are votes counted? |
A: | In the election of directors, you may vote “FOR” all of the nominees or your vote may be “WITHHELD” with respect to one or more of the nominees. For the approval of the eBay Incentive Plan, the approval of the amendment to the Certificate of Incorporation, the ratification of the selection of PricewaterhouseCoopers LLP, and the stockholder proposals, you may vote “FOR”, “AGAINST” or “ABSTAIN.” If you “ABSTAIN”, it has the same effect as a vote “AGAINST.” If you sign and return your proxy card or broker voting instruction card without giving specific voting instructions, your shares will be voted as recommended by our Board of Directors, except that in the case of a broker voting instruction card, your broker may only vote on those matters over which the broker has discretionary voting power. |
Q: | Who will count the votes? |
A: | A representative of ADP Investor Communication Services will tabulate the votes and act as the inspector of election. |
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Q: | What is the quorum requirement for the Annual Meeting? |
A: | The quorum requirement for holding the Annual Meeting and transacting business is a majority of the outstanding shares entitled to be voted. The shares may be present in person or represented by proxy at the Annual Meeting. Both abstentions and broker non-votes are counted as present for the purpose of determining the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to the matter on which the broker has expressly not voted. |
Q: | What is the voting requirement to approve each of the proposals? |
A: | In the election for directors, the three persons receiving the highest number of “FOR” votes will be elected. The proposal to approve the eBay Incentive Plan, the proposal to ratify the selection of the auditors, and the stockholder proposals each require the affirmative “FOR” vote of a majority of those shares present and entitled to vote to be approved. The proposal to amend the Certificate of Incorporation requires the affirmative “FOR” vote of a majority of the shares of common stock outstanding as of April 25, 2005. If you are a beneficial owner and do not provide the stockholder of record with voting instructions, your shares may constitute broker non-votes, as described above in “What is the quorum requirement for the Annual Meeting?” in this section. |
Q: | What are broker non-votes and what effect do they have on the proposals? |
A: | Generally, broker non-votes occur when shares held by a broker in “street name” for a beneficial owner are not voted with respect to a particular proposal because (1) the broker has not received voting instructions from the beneficial owner and (2) the broker lacks discretionary voting power to vote those shares. A broker is entitled to vote shares held for a beneficial owner on routine matters, such as the election of our directors and the ratification of the appointment of PricewaterhouseCoopers LLP as independent auditors, without instructions from the beneficial owner of those shares. On the other hand, a broker may not be entitled to vote shares held for a beneficial owner on certain non-routine items, such as, the approval of the eBay Incentive Plan and the two stockholder proposals, absent instructions from the beneficial owner of such shares. Broker non-votes count for purposes of determining whether a quorum exists but do not count as entitled to vote with respect to individual proposals. Because approval of Proposal 3 (amendment of the Certificate of Incorporation) requires the affirmative vote of a majority of all outstanding shares, broker non-votes have the same effect as a vote “AGAINST” that proposal. For the proposals requiring the affirmative vote of those shares present and entitled to vote, broker non-votes will not affect the outcome of the vote. |
Q: | What does it mean if I receive more than one proxy or voting instruction card? |
A: | It means your shares are registered differently or are in more than one account. Please provide voting instructions for all proxy and voting instruction cards you receive. |
Q: | Where can I find the voting results of the Annual Meeting? |
A: | eBay will announce preliminary voting results at the Annual Meeting and publish final results in eBay’s quarterly report on Form 10-Q for the second quarter of 2005. |
Q: | Who will bear the cost of soliciting votes for the Annual Meeting? |
A: | eBay will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. eBay will provide copies of these proxy materials to banks, brokerage houses, fiduciaries and custodians holding in their names shares of our common stock beneficially owned by others so that they may forward these proxy materials to the beneficial owners. eBay has retained the services of Georgeson Shareholder Communications Inc., a professional proxy solicitation firm, to aid in the solicitation of proxies. Georgeson may solicit proxies by personal interview, mail, telephone and electronic communications. eBay estimates that it will pay Georgeson its customary fee, estimated to be approximately $8,500, plus reasonable out-of-pocket expenses incurred in the process of soliciting proxies. In addition, eBay may reimburse brokerage firms and other persons representing beneficial owners of shares for their expenses in forwarding solicitation material to such beneficial owners. Solicitations may also be made by personal interview, telephone and electronic communication by directors, officers and other employees of eBay, but we will not additionally compensate our directors, officers or other employees for these services. |
Q: | May I propose actions for consideration at next year’s Annual Meeting or nominate individuals to serve as directors? |
A: | You may submit proposals for consideration at future annual stockholder meetings. In order for a stockholder proposal to be considered for inclusion in the proxy materials for our 2006 annual meeting of stock- |
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holders your proposal must be received by our Corporate Secretary no later than January 9, 2006. A stockholder proposal or a nomination for director that is received after this date will not be included in our proxy statement and proxy but will otherwise be considered at the 2006 annual meeting so long as it is submitted to our Corporate Secretary no earlier than March 25, 2006, and no later than April 24, 2006. We advise you to review our Bylaws, which contain this and other requirements with respect to advance notice of stockholder proposals and director nominations. Our Bylaws were filed with the Securities and Exchange Commission, or SEC, as an exhibit to our quarterly report on Form 10-Q on November 13, 1998, which can be viewed by visiting our investor relations website athttp://investor.ebay.com/edgar.cfmand may also be obtained by writing to our Corporate Secretary at our principal executive office (2145 Hamilton Avenue, San Jose, California 95125). | |
Q: | How can I get electronic access to the Proxy Statement and Annual Report? |
A: | This proxy statement and our 2004 Annual Report may be viewed online on our investor relations website athttp://investor.ebay.com/annual.cfm. You can also elect to receive an email that will provide an electronic link to future annual reports and proxy statements rather than receiving paper copies of these documents. Choosing to receive your proxy materials electronically will save us the cost of printing and mailing documents to you. You can choose to receive future proxy materials electronically by visitinghttp://investor.ebay.com/adp.cfm. If you choose to receive future proxy materials electronically, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your choice to receive proxy materials electronically will remain in effect until you contact eBay Investor Relations and tell us otherwise. You may visit our investor relations website athttp://investor.ebay.comor contact eBay Investor Relations by mail to 2145 Hamilton Avenue, San Jose, California 95125 or by telephone at 866-696-3229. |
Q: | How do I obtain a separate set of proxy materials if I share an address with other stockholders? |
A: | To reduce expenses, in some cases, we are delivering one set of proxy materials to certain stockholders who share an address, unless otherwise requested. A separate proxy card is included in the proxy materials for each of these stockholders. If you reside at such an address and wish to receive a separate copy of the proxy materials, including our annual report, you may contact eBay Investor Relations at the website, address, or phone number in the previous paragraph. You may also contact eBay Investor Relations if you would like to receive separate proxy materials in the future or if you are receiving multiple copies of our proxy materials and would like to receive only one copy in the future. |
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Shares Beneficially | ||||||||
Owned(1) | ||||||||
Name of Beneficial Owner | Number | Percent | ||||||
Pierre M. Omidyar(2) | 215,336,568 | 16.0 | % | |||||
Jeffrey S. Skoll(3) | 90,578,494 | 6.7 | ||||||
Margaret C. Whitman(4) | 31,230,684 | 2.3 | ||||||
Maynard G. Webb, Jr.(5) | 1,532,916 | * | ||||||
Jeffrey D. Jordan(6) | 1,473,151 | * | ||||||
Matthew J. Bannick(7) | 486,149 | * | ||||||
William C. Cobb(8) | 802,583 | * | ||||||
Fred D. Anderson(9) | 6,000 | * | ||||||
Philippe Bourguignon(10) | 516,250 | * | ||||||
Scott D. Cook(11) | 2,209,256 | * | ||||||
Robert C. Kagle(12) | 3,728,336 | * | ||||||
Dawn G. Lepore(13) | 351,250 | * | ||||||
Richard T. Schlosberg, III(14) | 3,200 | * | ||||||
Thomas J. Tierney(15) | 22,750 | * | ||||||
All directors and executive officers as a group (21 persons)(16) | 263,368,256 | 19.3 |
* | Less than one percent. |
(1) | This table is based upon information supplied by officers, directors and principal stockholders and Schedules 13D and 13G filed with the Securities and Exchange Commission. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of April 1, 2005 are deemed to be outstanding for the purpose of computing the percentage ownership of the person holding those options, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The percentage of beneficial ownership is based on 1,348,840,742 shares of our common stock outstanding as of April 1, 2005. Amounts have been adjusted to reflect the two-for-one stock split effective on February 16, 2005. | |
(2) | Mr. Omidyar is our Founder and Chairman of the Board. Includes 490,000 shares held by his spouse as to which he disclaims beneficial ownership. The address for Mr. Omidyar is 2145 Hamilton Avenue, San Jose, California 95125. | |
(3) | Mr. Skoll is a former officer and director of the company. The address for Mr. Skoll is c/o Seiler & Company, LLP, 1100 Marshall Street, Redwood City, CA 94063, Attn: James G.B. DeMartini, III. | |
(4) | Ms. Whitman is our President and Chief Executive Officer. Includes 7,646,842 shares held by the Griffith R. Harsh, IV & Margaret C. Whitman TTEES of Sweetwater Trust U/ A/ D 10/15/99, 1,330,046 shares held by the Griffith R. Harsh, IV, TTEE, GRH 2003 GRAT, and 1,330,046 shares held by the Margaret C. Whitman TTEE, MCW 2003 GRAT, 4,000,000 shares held by the Griffith R. Harsh, IV, TTEE, GRH 2004 GRAT and 4,000,000 shares held by the Margaret C. Whitman TTEE, MCW 2004 GRAT and 2,000,000 shares held by the Griffith R. Harsh, IV, TTEE GRH 2005 GRAT and 2,000,000 shares held by the Margaret C. Whitman TTEE, MCW 2005 GRAT. In addition, it includes (a) 4,792 shares held by Griffith Rutherford Harsh IV Custodian Griffith Rutherford Harsh V UTMA California as to which Ms. Whitman’s spouse is custodian for the trust and as to which Ms. Whitman disclaims beneficial ownership and (b) 4,792 shares held by Griffith Rutherford Harsh IV Custodian William Whitman Harsh UTMA California as to which Ms. Whitman’s spouse is custodian for the trust and as to which Ms. Whitman disclaims beneficial ownership. Includes 4,954,166 shares Ms. Whitman has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Ms. Whitman is c/o eBay Inc., 2145 Hamilton Avenue, San Jose, California 95125. |
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(5) | Mr. Webb is our Chief Operating Officer. Includes 1,432,916 shares Mr. Webb has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Webb is c/o eBay Inc., 2145 Hamilton Avenue, San Jose, California 95125. | |
(6) | Mr. Jordan is our President, PayPal. Includes 1,432,951 shares Mr. Jordan has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Jordan is c/o eBay Inc., 2145 Hamilton Avenue, San Jose, California 95125. | |
(7) | Mr. Bannick is our President, eBay International. Includes 465,001 shares Mr. Bannick has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Bannick is c/o eBay Inc., 2145 Hamilton Avenue, San Jose, California 95125. | |
(8) | Mr. Cobb is our President, eBay North America. Includes 768,583 shares Mr. Cobb has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Cobb is c/o eBay Inc., 2145 Hamilton Avenue, San Jose, California 95125. | |
(9) | The address for Mr. Anderson is c/o eBay Inc., 2145 Hamilton Avenue, San Jose, California 95125. |
(10) | Includes 514,250 shares Mr. Bourguignon has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Bourguignon is c/o eBay Inc., 2145 Hamilton Avenue, San Jose, California 95125. |
(11) | Includes 2,046,250 shares Mr. Cook has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Cook is c/o Intuit, Inc., 2535 Garcia Avenue, Mountain View, California 94043. |
(12) | Includes 356,250 shares Mr. Kagle has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Kagle is c/o Benchmark Capital, 2480 Sand Hill Road, Suite 200, Menlo Park, California 94025. |
(13) | Includes 311,250 shares Ms. Lepore has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Ms. Lepore is c/o drugstore.com, inc., 13920 S.E. Eastgate Way #300, Bellevue, WA 98005. |
(14) | The address for Mr. Schlosberg is 9901 IT-10 West, Suite 800, San Antonio, TX 78230. |
(15) | Includes 18,750 shares Mr. Tierney has the right to acquire pursuant to outstanding options exercisable within 60 days. The address for Mr. Tierney is c/o The Bridgespan Group, 535 Boylston Street, 10th Floor, Boston, MA 02116 |
(16) | Includes 17,211,430 shares subject to options exercisable within 60 days. |
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• | the performance measures based on business criteria and target levels of performance; and | |
• | a formula for calculating a participant’s award based on actual performance compared to the pre-established performance goals. |
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• | raising capital; | |
• | providing equity incentives to employees, officers, or directors; | |
• | establishing strategic relationships with other companies; and | |
• | expanding our business or product lines through the acquisition of other businesses or products. |
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Year Ended | ||||||||
December 31, | ||||||||
2003 | 2004 | |||||||
Audit Fees | $ | 1,548 | $ | 3,757 | ||||
Audit-Related Fees | 720 | 1,617 | ||||||
Tax Fees | 65 | — | ||||||
Total | $ | 2,333 | $ | 5,374 | ||||
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• | discussed with PwC the overall scope of and plans for their audit; | |
• | reviewed, upon completion of the audit, the financial statements to be included in the Form 10-K and management’s report on internal control over financial reporting and discussed the financial statements and eBay’s internal control over financial reporting with management; | |
• | conferred with PwC and with senior management of eBay regarding the scope, adequacy and effectiveness of internal accounting and financial reporting controls (including eBay’s internal control over financial reporting) in effect; | |
• | instructed PwC that the independent auditors are ultimately accountable to the Board of Directors and the Audit Committee, as representatives of the stockholders; | |
• | discussed with PwC the results of their audit, including PwC’s assessment of the quality and appropriateness, not just acceptability, of the accounting principles applied by eBay, the reasonableness of significant judgments, the nature of significant risks and exposures, the adequacy of the disclosures in the financial statements as well as other matters required to be communicated under generally accepted auditing standards, including the matters required by the Statement on Auditing Standards No. 61 (Communications with Audit Committees); and | |
• | obtained from PwC in connection with the audit a timely report relating to eBay’s annual audited financial statements describing all critical accounting policies and practices to be used, all alternative treatments of financial information within generally accepted accounting principles that were discussed with management, ramifications of the use of such alternative disclosures and treatments, the treatment preferred by PwC, and any material written communications between PwC and management. |
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AUDIT COMMITTEE | |
Fred D. Anderson | |
Robert C. Kagle* | |
Dawn G. Lepore | |
Richard T. Schlosberg, III** |
* | A member until September 9, 2004. |
** | A member since September 9, 2004. |
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Name | Age | Position | ||||
Margaret C. Whitman | 48 | President and Chief Executive Officer | ||||
Elizabeth L. Axelrod | 43 | Senior Vice President, Human Resources | ||||
Matthew J. Bannick | 40 | President, eBay International | ||||
William C. Cobb | 48 | President, eBay North America | ||||
John Donahoe | 44 | President, eBay Business Unit | ||||
Rajiv Dutta | 43 | Senior Vice President and Chief Financial Officer | ||||
Henry Gomez | 41 | Senior Vice President, Corporate Communications & Government Relations | ||||
Michael R. Jacobson | 50 | Senior Vice President Legal Affairs, General Counsel and Secretary | ||||
Jeffrey D. Jordan | 46 | President, PayPal | ||||
Eskander E. Kazim | 39 | Senior Vice President, New Ventures | ||||
Lynn M. Reedy | 49 | Senior Vice President, Product, Development and Architecture | ||||
Scott Thompson | 47 | Senior Vice President, Chief Technology Officer, PayPal | ||||
Maynard G. Webb, Jr. | 49 | Chief Operating Officer |
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Long-Term and | |||||||||||||||||||||||||
Other Compensation | |||||||||||||||||||||||||
Annual Compensation | Number of | ||||||||||||||||||||||||
Securities | |||||||||||||||||||||||||
Name and | Fiscal | Other Annual | Underlying | All Other | |||||||||||||||||||||
2004 Principal Positions | Year | Salary(1) | Bonus(2) | Compensation(3) | Options(4) | Compensation(5) | |||||||||||||||||||
Margaret C. Whitman | 2004 | $ | 994,052 | $ | 1,553,480 | (6) | $ | 357,535 | 1,200,000 | $ | 3,164 | ||||||||||||||
President and | 2003 | 843,823 | 1,159,132 | (6) | 377,496 | 2,200,000 | 3,164 | ||||||||||||||||||
Chief Executive Officer | 2002 | 250,008 | 329,698 | (6) | 336,654 | 1,200,000 | 1,980 | ||||||||||||||||||
Maynard G. Webb, Jr. | 2004 | 620,203 | 1,880,279 | (7) | 35,335 | 650,000 | 1,009 | ||||||||||||||||||
Chief Operating Officer | 2003 | 582,007 | 1,266,601 | (7) | — | 1,100,000 | 1,009 | ||||||||||||||||||
2002 | 531,250 | 837,154 | (7) | — | 600,000 | 1,104 | |||||||||||||||||||
Jeffrey D. Jordan | 2004 | 494,284 | 937,038 | (8) | — | 440,000 | 2,290 | ||||||||||||||||||
President, PayPal | 2003 | 439,345 | 858,793 | (8) | — | 600,000 | 790 | ||||||||||||||||||
2002 | 345,102 | 739,762 | (8) | — | 540,000 | 672 | |||||||||||||||||||
Matthew J. Bannick | 2004 | 474,258 | 944,950 | (9) | — | 440,000 | 2,257 | ||||||||||||||||||
President, | 2003 | 423,084 | 596,264 | (9) | — | 600,000 | 2,257 | ||||||||||||||||||
eBay International | 2002 | 334,086 | 472,540 | (9) | 15,987 | 560,000 | 2,173 | ||||||||||||||||||
William C. Cobb | 2004 | 419,674 | 1,026,146 | (10) | 10,796 | 300,000 | 2,173 | ||||||||||||||||||
President, | 2003 | 382,519 | 368,899 | (10) | — | 500,000 | 2,173 | ||||||||||||||||||
eBay North America | 2002 | 312,185 | 240,390 | (10) | — | 500,000 | 2,173 |
(1) | Effective March 1, 2004, all eligible employees of eBay, including certain of the Named Executive Officers, received an annual salary increase representing: (i) in the case of Ms. Whitman, a salary of $995,016 per annum; (ii) in the case of Mr. Webb, a salary of $625,008 per annum; (iii) in the case of Mr. Jordan, a salary of $500,016 per annum; (iv) in the case of Mr. Bannick, a salary of $480,000 per annum; and (v) in the case of Mr. Cobb, a salary of $415,008 per annum. In addition, Mr. Cobb received a salary increase to $450,000 per annum effective October 1, 2004. Total salary amounts reported are lower than these annual salaries because lower salaries were in effect for portions of 2004. | |
(2) | All 2004 bonuses represent amounts paid in 2004 and 2005 for services rendered in 2004, all 2003 bonuses represent amounts paid in 2003 and 2004 for services rendered in 2003, and all 2002 bonuses represent amounts paid in 2002 and 2003 for services rendered in 2002. | |
(3) | Represents: (i) in the case of Ms. Whitman for 2004, personal use of eBay’s corporate aircraft, valued at the incremental cost of such use to the company ($229,145), and an additional $128,390 bonus granted by the Compensation Committee in 2005 to cover any income taxes relating to such aircraft use; (ii) in the case of Ms. Whitman for 2003, personal use of eBay’s corporate aircraft, valued at the incremental cost of such use to the company ($307,496), and an additional $70,000 bonus granted by the Compensation Committee in 2004 to cover any income taxes relating to such aircraft use; (iii) in the case of Ms. Whitman for 2002, her personal use of eBay’s corporate aircraft ($171,693), valued at the incremental cost of such use to the company, and of a corporate aircraft from an unaffiliated third-party vendor, which is valued at actual invoiced amounts ($74,961); and an additional $90,000 bonus granted by the Compensation Committee in 2003 to cover any income taxes relating to such aircraft use; (iv) in the case of Mr. Webb for 2004, personal use of eBay’s corporate aircraft, valued at the incremental cost of such use to the company ($28,070), and an additional $7,265 bonus granted by the Compensation Committee in 2005 to cover any income taxes relating to such aircraft use; (v) in the case of Mr. Bannick for 2002, costs associated with family transportation while |
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Mr. Bannick worked out of our European offices during the summer of 2002; and (vi) in the case of Mr. Cobb for 2004, personal use of eBay’s corporate aircraft, valued at the incremental cost of such use to the company. |
Prior to 2004, eBay calculated the cost of the personal use of its corporate aircraft using the Standard Industrial Fare Level (SIFL) tables prescribed under applicable IRS regulations. Beginning in 2004, eBay calculated the value of the personal use of its corporate aircraft by estimating the incremental cost to the company of such use. The calculation of incremental cost is based on the weighted average cost of fuel, maintenance expenses, parts and supplies, landing fees, ground services, catering and crew expenses associated with such use. Had eBay used the IRS’s SIFL tables to calculate the value of the personal use of its corporate aircraft by Ms. Whitman, Mr. Webb, and Mr. Cobb in 2004, such use would have been valued at $154,267, $13,050, and $7,070, respectively. Because eBay has determined that this incremental cost methodology produces generally higher amounts than use of the SIFL calculation method, the incremental cost methodology has also been used to calculate the value of personal use of corporate aircraft by Ms. Whitman for 2003 and 2002. Prior annual reports and proxy statements reflected the value of Ms. Whitman’s personal use of corporate aircraft in 2003 and 2002 using the SIFL calculation method, and valued such use at $115,857 and $58,101, respectively. |
(4) | Amounts have been adjusted to reflect all prior stock splits, including eBay’s two-for-one stock split that occurred on February 16, 2005. | |
(5) | Represents, in the case of each of the Named Executive Officers, insurance premiums we paid with respect to group life insurance for their benefit and matching contributions under our 401(k) Plan (subject to the maximum of $1,500 per annum). | |
(6) | Represents amounts paid to Ms. Whitman under eBay’s Management Incentive Plan. | |
(7) | Represents (i) for 2004, $726,279 paid under eBay’s Management Incentive Plan and $1,154,000 paid under Mr. Webb’s special retention plan; (ii) for 2003, $620,501 paid under eBay’s Management Incentive Plan and $646,100 paid under Mr. Webb’s special retention plan; and (iii) for 2002, $387,254 paid under eBay’s Management Incentive Plan and $449,900 paid under Mr. Webb’s special retention plan. See “Certain Relationships and Related Transactions,” below | |
(8) | Represents (i) for 2004, $462,948 for 2004 paid under eBay’s Management Incentive Plan, $472,025 under Mr. Jordan’s special retention plans and an additional $2,065 bonus granted by the Compensation Committee in 2005; (ii) for 2003, $361,505 for 2003 paid under eBay’s Management Incentive Plan and $497,288 under Mr. Jordan’s special retention plans; and (iii) for 2002, $202,212 paid under eBay’s Management Incentive Plan, $522,550 paid under Mr. Jordan’s special retention plans and $15,000 paid pursuant to our discretionary reward program. See “Certain Relationships and Related Transactions,” below. | |
(9) | Represents (i) for 2004, $444,950 paid under eBay’s Management Incentive Plan, and $500,000 paid under Mr. Bannick’s special retention plan; (ii) for 2003, $346,264 paid under eBay’s Management Incentive Plan, and $250,000 paid under Mr. Bannick’s special retention plan; and (iii) for 2002, $207,540 paid under eBay’s Management Incentive Plan, $250,000 paid under Mr. Bannick’s special retention plan and $15,000 paid pursuant to our discretionary reward program. See “Certain Relationships and Related Transactions,” below. |
(10) | Represents (i) for 2004, $392,211 paid under eBay’s Management Incentive Plan, $350,000 paid under Mr. Cobb’s special retention plans, a performance bonus of $280,000 granted by the Compensation Committee in 2004, and an additional $3,935 bonus granted by the Compensation Committee in 2005; (ii) for 2003, $298,899 paid under eBay’s Management Incentive Plan, and $70,000 paid under Mr. Cobb’s special retention plan; and (iii) for 2002, $170,390 paid under eBay’s Management Incentive Plan and $70,000 paid under Mr. Cobb’s special retention plan. See “Certain Relationships and Related Transactions,” below. |
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Potential Realizable | ||||||||||||||||||||||||
Value at Assumed | ||||||||||||||||||||||||
Number of | Percentage of | Annual Rates of Stock | ||||||||||||||||||||||
Securities | Total Options | Price Appreciation for | ||||||||||||||||||||||
Underlying | Granted to | Exercise | Option Term(4) | |||||||||||||||||||||
Options | Employees | Price Per | Expiration | |||||||||||||||||||||
Name | Granted(1) | during 2004(2) | Share(3) | Date | 5% | 10% | ||||||||||||||||||
Margaret C. Whitman | 1,200,000 | 2.8 | % | $ | 34.62 | 3/1/14 | $ | 26,123,025 | $ | 66,200,874 | ||||||||||||||
Maynard G. Webb, Jr | 650,000 | 1.5 | 34.62 | 3/1/14 | 14,149,972 | 35,858,807 | ||||||||||||||||||
Jeffrey D. Jordan | 440,000 | 1.0 | 34.62 | 3/1/14 | 9,578,443 | 24,273,654 | ||||||||||||||||||
Matthew J. Bannick | 440,000 | 1.0 | 34.62 | 3/1/14 | 9,578,443 | 24,273,654 | ||||||||||||||||||
William C. Cobb | 300,000 | 0.7 | 34.62 | 3/1/14 | 6,530,756 | 16,550,219 |
(1) | Options granted in 2004 were granted under the 2001 Plan. All options granted in 2004 to the Named Executive Officers were granted by our Board, are nonqualified stock options and are subject to a four-year vesting schedule, vesting 12.5% after six months and 1/48 per month thereafter. Amounts have been adjusted to reflect the two-for-one stock split effective on February 16, 2005. |
(2) | Based on options to purchase 42,964,094 shares of our common stock granted to employees in 2004. |
(3) | Options were granted at an exercise price equal to the fair market value of our common stock, as determined by the Board of Directors on the date of grant. The exercise prices per share listed in the table above are rounded to the nearest cent. The exercise per share has been adjusted to reflect the two-for-one stock split effective on February 16, 2005. |
(4) | Reflects the value of the stock option on the date of grant assuming (i) for the 5% column, a 5% annual rate of appreciation in our common stock over the ten-year term of the option and (ii) for the 10% column, a 10% annual rate of appreciation in our common stock over the ten-year term of the option, in each case without discounting to net present value and before income taxes associated with the exercise. The 5% and 10% assumed rates of appreciation are based on the rules of the SEC and do not represent our estimate or projection of the future common stock price. The amounts in this table may not necessarily be achieved. |
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Number of Securities | ||||||||||||||||||||||||
Underlying | Value of Unexercised | |||||||||||||||||||||||
Shares | Unexercised Options | In-The-Money Options(3) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise(1) | Realized(2) | Exercisable(#) | Unexercisable(#) | Exercisable($) | Unexercisable($) | ||||||||||||||||||
Margaret C. Whitman | — | $ | — | 4,162,500 | 3,437,500 | $ | 179,531,119 | $ | 125,116,931 | |||||||||||||||
Maynard G. Webb, Jr. | 1,400,000 | 43,896,366 | 1,188,124 | 1,321,876 | 47,708,954 | 44,076,742 | ||||||||||||||||||
Jeffrey D. Jordan | 800,000 | 22,358,985 | 1,268,368 | 852,500 | 51,442,810 | 28,386,063 | ||||||||||||||||||
Matthew J. Bannick | 791,660 | 17,813,071 | 298,334 | 858,334 | 10,427,623 | 28,640,760 | ||||||||||||||||||
William C. Cobb | 466,000 | 14,259,643 | 633,166 | 670,834 | 25,564,447 | 23,015,857 |
(1) | Amounts have been adjusted to reflect the two-for-one stock split effective on February 16, 2005. |
(2) | Value realized is based on the fair market value of our common stock on date of exercise minus the exercise price and does not necessarily reflect proceeds actually received by the officer. |
(3) | Calculated using the fair market value of our common stock on December 31, 2004 ($58.17), as adjusted to reflect the two-for-one stock split effective February 16, 2005, less the exercise price of the option. |
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(c) | |||||||||||||
(a) | (b) | Number of Securities Remaining | |||||||||||
Number of Securities to be | Weighted Average | Available for Future Issuance | |||||||||||
Issued upon Exercise of | Exercise Price of | under Equity Compensation | |||||||||||
Outstanding Options, | Outstanding Options, | Plans (Excluding Securities | |||||||||||
Plan Category | Warrants and Rights | Warrants and Rights | Reflected in Column(a)) | ||||||||||
Equity compensation plans approved by securityholders | 134,119,868 | $24.08 | 122,712,098 | (1) | |||||||||
Equity compensation plans not approved by securityholders | 1,690,000 | (2)(3)(4)(5)(6) | 0.39 | — | |||||||||
Total | 135,809,868 | $23.79 | 122,712,098 | ||||||||||
(1) | Includes 5,987,748 shares of our common stock remaining available for future issuance under our 1998 Employee Stock Purchase Plan, as amended, or the ESPP, as of December 31, 2004. Our ESPP contains an “evergreen” provision that automatically increases, on each January 1, the number of securities available for issuance under the ESPP by the number of shares purchased under the ESPP in the preceding calendar year. An aggregate amount of 1,212,252 shares was purchased under the ESPP in 2004. None of our other plans has an “evergreen” provision. |
(2) | Does not include 396 shares of our common stock, with a weighted average exercise price of $0.27 per share, to be issued upon exercise of outstanding options assumed by us under the Billpoint, Inc. 1999 Stock Option Plan, or the Billpoint Plan, in connection with our acquisition of Billpoint in 1999, as we cannot make subsequent grants or awards of our equity securities under the Billpoint Plan. Prior to our acquisition of Billpoint, the stockholders of Billpoint approved the Billpoint Plan. Our stockholders, however, did not approve the Billpoint Plan in connection with our acquisition of Billpoint. |
(3) | Does not include 26,884 shares of our common stock, with a weighted average exercise price of $9.53 per share, to be issued upon exercise of outstanding options assumed by us under the Half.com, Inc. 1999 Equity Compensation Plan, or the Half.com Plan, in connection with our acquisition of Half.com in 2000, as we cannot make subsequent grants or awards of our equity securities under the Half.com Plan. Prior to our acquisition of Half.com, the stockholders of Half.com approved the Half.com Plan. Our stockholders, however, did not approve the Half.com Plan in connection with our acquisition of Half.com. |
(4) | Does not include 780 shares of our common stock, with a weighted average exercise price of $0.19 per share, to be issued upon exercise of outstanding options assumed by us under the Confinity, Inc. 1999 Stock Plan, or the Confinity 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 Confinity Plan. The Confinity Plan was assumed by PayPal in connection with its merger with Confinity in 2000. Prior to our acquisition of PayPal and PayPal’s merger with Confinity, the stockholders of Confinity approved the Confinity Plan. Our stockholders, however, did not approve the Confinity Plan in connection with our acquisition of PayPal. |
(5) | Does not include 165,994 shares of our common stock, with a weighted average exercise price of $0.76 per share, to be issued upon exercise of outstanding options assumed by us under the X.com Corporation 1999 Stock Plan, or the X.com 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 X.com Plan. 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. |
“— Compensation Arrangements.” Except as set forth below, the terms and
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COMPENSATION COMMITTEE | |
Philippe Bourguignon | |
Robert C. Kagle | |
Thomas J. Tierney |
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• | one late Form 3 was filed by Douglas Jeffries, our Principal Accounting Officer, on August 27, 2004 to report Mr. Jeffries becoming a Section 16 reporting individual as of August 5, 2004, and two late Form 4 reports were filed on August 27, 2004 to show purchases of eBay stock made by Mr. Jeffries on August 10, 2004 and August 12, 2004; and | |
• | one late Form 3 was filed by Eskander E. Kazim, our Senior Vice President, New Ventures, on December 20, 2004 to report Mr. Kazim becoming a Section 16 reporting individual as of December 7, 2004 and one late Form 4 report was filed on December��20, 2004 to report a stock option granted to Mr. Kazim on December 10, 2004. |
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By Order of the Board of Directors | |
Michael R. Jacobson | |
Secretary |
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3. | Administration. |
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Margaret C. Whitman, | |
President and Chief Executive Officer |
Michael R. Jacobson, Secretary
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PRELIMINARY COPY
eBay Inc.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 23, 2005
The undersigned hereby appoints MARGARET C. WHITMAN, RAJIV DUTTA AND MICHAEL R. JACOBSON, and each of them, as attorneys and proxies of the undersigned, with full power of substitution, to vote all shares of stock of eBay Inc. that the undersigned may be entitled to vote at the Annual Meeting of Stockholders of eBay Inc. to be held on June 23, 2005, at 8:00 a.m. Pacific time at the Silicon Valley Conference Center, El Camino Room, 2161 N. First Street, San Jose, California 95131 for the purposes listed on the reverse side and at any and all continuations and adjournments of that meeting, with all powers that the undersigned would possess if personally present, upon and in respect of the instructions indicated on the reverse side, with discretionary authority as to any and all other matters that may properly come before the meeting.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE THAT IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
Table of Contents
PRELIMINARY COPY
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SAN JOSE, CA 95125
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Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return to eBay Inc., c/o ADP, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | EBAY03 | KEEP THIS PORTION FOR YOUR RECORDS | ||
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eBay Inc.
1. | Election of three directors to hold office until our 2008 Annual Meeting of Stockholders. Nominees: 01) Fred D. Anderson, 02) Scott D. Cook and 03) Robert C. Kagle |
Vote on Proposals
The Board of Directors recommends a vote “FOR” Proposals 2, 3 and 4. | For | Against | Abstain | |||||
2. | To approve our eBay Incentive Plan in order to qualify it under Section 162(m) of the Internal Revenue Code. | o | o | o | ||||
3. | To approve an amendment to our Certificate of Incorporation to increase the authorized number of shares of common stock from 1,790,000,000 to 3,580,000,000 shares. | o | o | o | ||||
4. | To ratify the selection of PricewaterhouseCoopers LLP as our independent auditors for our fiscal year ending December 31, 2005. | o | o | o |
For All | Withhold All | For All Except | To withhold authority to vote, mark “For All Except” and write the nominee’s number on the line below. | |||
o | o | o | ||||
The Board of Directors recommends a vote “AGAINST” Proposals 5 and 6. | For | Against | Abstain | |||||
5. | Stockholder proposal regarding granting of performance-vesting shares to senior executives. | o | o | o | ||||
6. | Stockholder proposal regarding the voting standard for director elections. | o | o | o |
Yes | No | |||
HOUSEHOLDING ELECTION– Please indicate if you consent to receive certain future investor communications in a single package per household. | o | o |
Signature [PLEASE SIGN WITHIN BOX] | Date |
Signature (Joint Owners) | Date |