exv10w03



 







    Exhibit 10.03



 




    eBay
    Inc.



 




    1997
    STOCK OPTION PLAN



 




    As
    Adopted June 20, 1997

    (As Amended December 3, 1997 and January 10,
    2007)



 


 



    1.  PURPOSE.  The purpose of
    this Plan is to provide incentives to attract, retain and
    motivate eligible persons whose present and potential
    contributions are important to the success of the Company, its
    Parent and Subsidiaries, by offering them an opportunity to
    participate in the Company’s future performance through
    awards of Options. Capitalized terms not defined in the text are
    defined in Section 21 hereof. This Plan is intended to be a
    written compensatory benefit plan within the meaning of
    Rule 701 promulgated under the Securities Act.



 



    2.  SHARES SUBJECT TO THE PLAN.



 



    2.1  Number of
    Shares Available.  Subject to
    Sections 2.2 and 16 hereof, the total number of Shares
    reserved and available for grant and issuance pursuant to this
    Plan will be Two Million One Hundred Ninety-Eight Shares or such
    lesser number of Shares as permitted under
    Section 260.140.45 of Title 10 of the California Code
    of Regulations. Subject to Sections 2.2 and 16 hereof,
    Shares that are subject to issuance upon exercise of an Option
    but cease to be subject to such Option for any reason other than
    exercise of such Option will be available for grant and issuance
    in connection with future Options under this Plan. At all times
    the Company will reserve and keep available a sufficient number
    of Shares as will be required to satisfy the requirements of all
    outstanding Options granted under this Plan.



 



    2.2  Adjustment of Shares.



 



    (a) In the event that any dividend or other distribution,
    reorganization, merger, consolidation, combination, repurchase,
    or exchange of Common Stock or other securities of the Company,
    or other change in the corporate structure of the Company
    affecting the Company’s Common Stock (other than an Equity
    Restructuring) occurs such that an adjustment is determined by
    the Committee (in its sole discretion) to be appropriate in
    order to prevent dilution or enlargement of the benefits or
    potential benefits intended to be made available under the Plan,
    then the Committee shall, in such manner as it may deem
    equitable, adjust the number and class of Common Stock which may
    be delivered under the Plan, the purchase price per Share and
    the number of Shares covered by each Option which has not yet
    been exercised, and the numerical limits of Section 2.1.



 



    (b) In connection with the occurrence of any Equity
    Restructuring, and notwithstanding anything to the contrary in
    Sections 2.2(a) and 16, the number and type of
    securities subject to each outstanding Option and the exercise
    price thereof will be equitably adjusted by the Committee. The
    adjustments provided under this Section 2.2(b) shall be
    nondiscretionary and shall be final and binding on the affected
    Participant and the Company.



 



    3.  ELIGIBILITY.  ISOs (as
    defined in Section 5 hereof) may be granted only to
    employees (including officers and directors who are also
    employees) of the Company or of a Parent or Subsidiary of the
    Company. NQSOs (as defined in Section 5 hereof) may be
    granted to employees, officers, directors and consultants of the
    Company or of any Parent or Subsidiary of the Company; provided
    such consultants render bona fide services not in connection
    with the offer and sale of securities in a capital-raising
    transaction. A person may be granted more than one Option under
    this Plan.



 



    4.  ADMINISTRATION.



 



    4.1  Committee
    Authority.  This Plan will be administered by
    the Committee or the Board acting as the Committee. Subject to
    the general purposes, terms and conditions of this Plan, and to
    the direction of the













 






    Board, the Committee has full power to implement and carry out
    this Plan. Without limitation, the Committee has the
    authority to:



 



    (a) construe and interpret this Plan, any Stock Option
    Agreement or Exercise Agreement (each as defined in
    Section 5 hereof) and any other agreement or document
    executed pursuant to this Plan;



 



    (b) prescribe, amend and rescind rules and regulations
    relating to this Plan;



 



    (c) select persons to receive Options;



 



    (d) determine the form and terms of Options;



 



    (e) determine the number of Shares or other consideration
    subject to Options;



 



    (f) determine whether Options will be granted singly, in
    combination with, in tandem with, in replacement of, or as
    alternatives to, any Options granted under this Plan or any
    awards under any other incentive or compensation plan of the
    Company or any Parent or Subsidiary of the Company;



 



    (g) grant waivers of Plan or Option conditions;



 



    (h) determine the vesting and exercisability of Options;



 



    (i) correct any defect, supply any omission, or reconcile
    any inconsistency in this Plan, any Option or any Stock Option
    Agreement or Exercise Agreement (each as defined in
    Section 5 hereof);



 



    (j) determine whether an Option has been earned; and



 



    (k) make all other determinations necessary or advisable
    for the administration of this Plan.



 



    4.2  Committee
    Discretion.  Any determination made by the
    Committee with respect to any Option will be made in its sole
    discretion at the time of grant of the Option or, unless in
    contravention of any express term of this Plan or Option, and
    subject to Section 5.9 hereof, at any later time, and such
    determination will be final and binding on the Company and on
    all persons having an interest in any Option under this Plan.
    The Committee may delegate to one or more officers of the
    Company the authority to grant Options under this Plan.



 



    5.  OPTIONS.  The Committee
    may grant Options to eligible persons and will determine whether
    such Options will be Incentive Stock Options within the meaning
    of the Code (“ISOs”) or Nonqualified
    Stock Options (“NQSOs”), the number of
    Shares subject to the Option, the Exercise Price of the Option,
    the period during which the Option may be exercised, and all
    other terms and conditions of the Option, subject to the
    following:



 



    5.1  Form of Option
    Grant.  Each Option granted under this Plan
    will be evidenced by an Agreement which will expressly identify
    the Option as an ISO or an NQSO (“Stock Option
    Agreement”), and will be in such form and contain
    such provisions (which need not be the same for each
    Participant) as the Committee may from time to time approve, and
    which will comply with and be subject to the terms and
    conditions of this Plan.



 



    5.2  Date of Grant.  The date
    of grant of an Option will be the date on which the Committee
    makes the determination to grant such Option, unless otherwise
    specified by the Committee. The Stock Option Agreement and a
    copy of this Plan will be delivered to the Participant within a
    reasonable time after the granting of the Option.



 



    5.3  Exercise Period.  Options
    may be exercisable immediately (subject to repurchase pursuant
    to Section 10 hereof) or may be exercisable within the
    times or upon the events determined by the Committee as set
    forth in the Stock Option Agreement governing such Option;
    provided, however, that no Option will be exercisable after the
    expiration of ten (10) years from the date the Option is
    granted; and provided further that no ISO granted to a person
    who directly or by attribution owns more than ten percent (10%)
    of the total combined voting power of all classes of stock of
    the Company or of any Parent or Subsidiary of the Company
    (“Ten Percent Shareholder”) will be
    exercisable after the expiration of five (5) years from the
    date the ISO is granted. The Committee may provide for Options
    to become exercisable at one time or from time to time,
    periodically or otherwise, in such number of Shares or
    percentage of Shares as the Committee determines. Subject to
    earlier termination of the Option as provided herein, each
    Participant who is not an officer, director or consultant of the
    Company or of a Parent or Subsidiary of the Company shall have
    the right to exercise an




    

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    Option granted hereunder at the rate of at least twenty percent
    (20%) per year over five (5) years from the date such
    Option is granted.



 



    5.4  Exercise Price.  The
    Exercise Price of an Option will be determined by the Committee
    when the Option is granted and may not be less than eighty five
    percent (85%) of the Fair Market Value of the Shares on the date
    of grant; provided that (a) the Exercise Price of an ISO
    will not be less than one hundred percent (100%) of the Fair
    Market Value of the Shares on the date of grant and (b) the
    Exercise Price of any Option granted to a Ten Percent
    Shareholder will not be less than one hundred ten percent (110%)
    of the Fair Market Value of the Shares on the date of grant.
    Payment for the Shares purchased must be made in accordance with
    Section 6 hereof.



 



    5.5  Method of
    Exercise.  Options may be exercised only by
    delivery to the Company of a written stock option exercise
    agreement (the “Exercise Agreement”) in
    a form approved by the Committee (which need not be the same for
    each Participant), stating the number of Shares being purchased,
    the restrictions imposed on the Shares purchased under such
    Exercise Agreement, if any, and such representations and
    agreements regarding Participant’s investment intent and
    access to information and other matters, if any, as may be
    required or desirable by the Company to comply with applicable
    securities laws, together with payment in full of the Exercise
    Price, and any applicable taxes, for the number of Shares being
    purchased.



 



    5.6  Termination.  Subject to
    earlier termination pursuant to Sections 16 or 17 hereof
    and notwithstanding the exercise periods set forth in the Stock
    Option Agreement, exercise of an Option will always be subject
    to the following:



 



    (a) If the Participant is Terminated for any reason except
    death, Disability or Cause, then the Participant may exercise
    such Participant’s Options, only to the extent that such
    Options are exercisable on the Termination Date and such Options
    must be exercised by the Participant, if at all, as to all or
    some of the Vested Shares calculated as of the Termination Date,
    within three (3) months after the Termination Date (or
    within such shorter time period, not less than thirty
    (30) days after the Termination Date, or such longer time
    period not exceeding five (5) years after the Termination
    Date as may be determined by the Committee, with any exercise
    after three (3) months after the Termination Date deemed to
    be an NQSO), but in any event, no later than the expiration date
    of the Options.



 



    (b) If the Participant is Terminated because of
    Participant’s death or Disability (or the Participant dies
    within three (3) months after Participant’s
    Termination other than for Cause), then Participant’s
    Options may be exercised, only to the extent that such Options
    are exercisable by Participant on the Termination Date and must
    be exercised by Participant (or Participant’s legal
    representative or authorized assignee), if at all, as to all or
    some of the Vested Shares calculated as of the Termination Date,
    within twelve (12) months after the Termination Date (or
    within such shorter time period, not less than six
    (6) months after the Termination Date, or such longer time
    period not exceeding five (5) years after the Termination
    Date as may be determined by the Committee, with any exercise
    after (i) three (3) months after the Termination Date
    when the Termination is for any reason other than the
    Participant’s death or disability, within the meaning of
    Code Section 22(e)(3), or (ii) twelve (12) months
    after the Termination Date when the Termination is because of
    Participant’s disability, within the meaning of Code
    Section 22(e)(3), deemed to be an NQSO), but in any event
    no later than the expiration date of the Options.



 



    (c) If the Participant is terminated for Cause, then
    Participant’s Options shall expire on such
    Participant’s Termination Date, or at such later time and
    on such conditions as are determined by the Committee.



 



    5.7  Limitations on
    Exercise.  The Committee may specify a
    reasonable minimum number of Shares that may be purchased on
    exercise of an Option, provided that such minimum number will
    not prevent Participant from exercising the Option for the full
    number of Shares for which it is then exercisable.



 



    5.8  Limitations on ISOs.  The
    aggregate Fair Market Value (determined as of the date of grant)
    of Shares with respect to which ISOs are exercisable for the
    first time by a Participant during any calendar year (under this
    Plan or under any other incentive stock option plan of the
    Company or any Parent or Subsidiary of




    

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    the Company) will not exceed $100,000. If the Fair Market Value
    of Shares on the date of grant with respect to which ISOs are
    exercisable for the first time by a Participant during any
    calendar year exceeds $100,000, then the Options for the first
    $100,000 worth of Shares to become exercisable in such calendar
    year will be ISOs and the Options for the amount in excess of
    $100,000 that become exercisable in that calendar year will be
    NQSOs. In the event that the Code or the regulations promulgated
    thereunder are amended after the Effective Date (as defined in
    Section 17 hereof) to provide for a different limit on the
    Fair Market Value of Shares permitted to be subject to ISOs,
    then such different limit will be automatically incorporated
    herein and will apply to any Options granted after the effective
    date of such amendment.



 



    5.9  Modification, Extension or
    Renewal.  The Committee may modify, extend or
    renew outstanding Options and authorize the grant of new Options
    in substitution therefor, provided that any such action may not,
    without the written consent of a Participant, impair any of such
    Participant’s rights under any Option previously granted.
    Any outstanding ISO that is modified, extended, renewed or
    otherwise altered will be treated in accordance with
    Section 424(h) of the Code. Subject to Section 5.10
    hereof, the Committee may reduce the Exercise Price of
    outstanding Options without the consent of Participants affected
    by a written notice to them; provided, however, that the
    Exercise Price may not be reduced below the minimum Exercise
    Price that would be permitted under Section 5.4 hereof for
    Options granted on the date the action is taken to reduce the
    Exercise Price.



 



    5.10  No
    Disqualification.  Notwithstanding any other
    provision in this Plan, no term of this Plan relating to ISOs
    will be interpreted, amended or altered, nor will any discretion
    or authority granted under this Plan be exercised, so as to
    disqualify this Plan under Section 422 of the Code or,
    without the consent of the Participant affected, to disqualify
    any ISO under Section 422 of the Code.



 



    6.  PAYMENT FOR SHARE PURCHASES.



 



    6.1  Payment.  Payment for
    Shares purchased pursuant to this Plan may be made in cash (by
    check) or, where expressly approved for the Participant by the
    Committee and where permitted by law:



 



    (a) by cancellation of indebtedness of the Company to the
    Participant;



 



    (b) by surrender of shares that: (i) either
    (A) have been owned by the Participant for more than six
    (6) months and have been paid for within the meaning of SEC
    Rule 144 (and, if such shares were purchased from the
    Company by use of a promissory note, such note has been fully
    paid with respect to such shares) or (B) were obtained by
    the Participant in the public market and (ii) are clear of
    all liens, claims, encumbrances or security interests;
    (c) by tender of a full recourse promissory note having
    such terms as may be approved by the Committee and bearing
    interest at a rate sufficient to avoid imputation of income
    under Sections 483 and 1274 of the Code; provided, however,
    that Participants who are not employees or directors of the
    Company will not be entitled to purchase Shares with a
    promissory note unless the note is adequately secured by
    collateral other than the Shares.



 



    (d) by waiver of compensation due or accrued to the
    Participant for services rendered;



 



    (e) provided that a public market for the Company’s
    stock exists:



 



    (1) through a “same day sale” commitment from the
    Participant and a broker-dealer that is a member of the National
    Association of Securities Dealers (an “NASD
    Dealer”) whereby the Participant irrevocably elects
    to exercise the Option and to sell a portion of the Shares so
    purchased to pay for the Exercise Price, and whereby the NASD
    Dealer irrevocably commits upon receipt of such Shares to
    forward the Exercise Price directly to the Company; or



 



    (2) through a “margin” commitment from the
    Participant and an NASD Dealer whereby the Participant
    irrevocably elects to exercise the Option and to pledge the
    Shares so purchased to the NASD Dealer in a margin account as
    security for a loan from the NASD Dealer in the amount of the
    Exercise Price, and whereby the NASD Dealer irrevocably commits
    upon receipt of such Shares to forward the Exercise Price
    directly to the Company; or



 



    (f) by any combination of the foregoing.



 



    6.2  Loan Guarantees.  The
    Committee may help the Participant pay for Shares purchased
    under this Plan by authorizing a guarantee by the Company of a
    third-party loan to the Participant.




    

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    7.  WITHHOLDING TAXES.  



 



    7.1  Withholding
    Generally.  Whenever Shares are to be issued
    in satisfaction of Options granted under this Plan, the Company
    may require the Participant to remit to the Company an amount
    sufficient to satisfy federal, state and local withholding tax
    requirements prior to the delivery of any certificate or
    certificates for such Shares. Whenever, under this Plan,
    payments in satisfaction of Options are to be made in cash, such
    payment will be net of an amount sufficient to satisfy federal,
    state, and local withholding tax requirements.



 



    7.2  Stock Withholding.  When,
    under applicable tax laws, the Participant incurs tax liability
    in connection with the exercise or vesting of any Option that is
    subject to tax withholding and the Participant is obligated to
    pay the Company the amount required to be withheld, the
    Committee may in its sole discretion allow the Participant to
    satisfy the minimum withholding tax obligation by electing to
    have the Company withhold from the Shares to be issued that
    number of Shares having a Fair Market Value equal to the minimum
    amount required to be withheld, determined on the date that the
    amount of tax to be withheld is to be determined. All elections
    by a Participant to have Shares withheld for this purpose will
    be made in accordance with the requirements established by the
    Committee and be in writing in a form acceptable to the
    Committee.



 



    8.  PRIVILEGES OF STOCK
    OWNERSHIP.  



 



    8.1  Voting and Dividends.  No
    Participant will have any of the rights of a shareholder with
    respect to any Shares until the Shares are issued to the
    Participant. After Shares are issued to the Participant, the
    Participant will be a shareholder and have all the rights of a
    shareholder with respect to such Shares, including the right to
    vote and receive all dividends or other distributions made or
    paid with respect to such Shares; provided, that the Participant
    will have no right to retain such stock dividends or stock
    distributions with respect to Unvested Shares that are
    repurchased pursuant to Section 10 hereof. The Company will
    comply with Section 260.140.1 of Title 10 of the
    California Code of Regulations with respect to the voting rights
    of Common Stock.



 



    8.2  Financial
    Statements.  The Company will provide
    financial statements to each Participant prior to such
    Participant’s purchase of Shares under this Plan, and to
    each Participant annually during the period such Participant has
    Options outstanding, or as otherwise required under
    Section 260.140.46 of Title 10 of the California Code
    of Regulations. Notwithstanding the foregoing, the Company will
    not be required to provide such financial statements to
    Participants when issuance is limited to key employees whose
    services in connection with the Company assure them access to
    equivalent information.



 



    9. TRANSFERABILITY.  Options
    granted under this Plan, and any interest therein, will not be
    transferable or assignable by Participant, and may not be made
    subject to execution, attachment or similar process, otherwise
    than by will or by the laws of descent and distribution. During
    the lifetime of the Participant an Option will be exercisable
    only by the Participant or Participant’s legal
    representative and any elections with respect to an Option may
    be made only by the Participant or Participant’s legal
    representative.



 



    10.  RESTRICTIONS ON SHARES.  



 



    10.1  Right of First
    Refusal.  At the discretion of the Committee,
    the Company may reserve to itself
    and/or its
    assignee(s) in the Stock Option Agreement a right of first
    refusal to purchase all Shares that a Participant (or a
    subsequent transferee) may propose to transfer to a third party,
    unless otherwise not permitted by Section 25102(o) of the
    California Corporations Code, provided, that such right of first
    refusal terminates upon the Company’s initial public
    offering of Common Stock pursuant to an effective registration
    statement filed under the Securities Act.



 



    10.2  Right of Repurchase.  At
    the discretion of the Committee, the Company may reserve to
    itself
    and/or its
    assignee(s) in the Stock Option Agreement a right to repurchase
    Unvested Shares held by a Participant following such
    Participant’s Termination at any time within ninety
    (90) days after Participant’s Termination Date (or in
    the case of securities issued upon exercise of an Option after
    the Participant’s Termination Date, within ninety
    (90) days after the date of such exercise) for cash
    and/or
    cancellation of purchase money indebtedness, at the
    Participant’s Exercise Price, provided, that to the extent
    the Participant is not an officer, director or consultant of the
    Company or of a Parent or Subsidiary of the Company such right
    to




    

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    repurchase Unvested Shares lapses at the rate of at least twenty
    percent (20%) per year over five (5) years from the date of
    grant of the Option.



 



    10.2  Right of Repurchase.  At
    the discretion of the Committee, the Company may reserve to
    itself
    and/or its
    assignee(s) in the Stock Option Agreement a right to repurchase
    Shares held by a Participant following such Participant’s
    Termination at any time within ninety (90) days after
    Participant’s Termination Date (or in the case of
    securities issued upon exercise of an Option after the
    Participant’s Termination Date, within ninety
    (90) days after the date of such exercise) for cash
    and/or
    cancellation of purchase money indebtedness, at: (a) with
    respect to Vested Shares, the Fair Market Value of such Shares
    on Participant’s Termination Date, provided, that such
    right to repurchase Vested Shares terminates when the
    Company’s securities become publicly traded; or
    (b) with respect to Unvested Shares, the Participant’s
    Exercise Price, provided, that to the extent the Participant is
    not an officer, director or consultant of the Company or of a
    Parent or Subsidiary of the Company such right to repurchase
    Unvested Shares at the Exercise Price lapses at the rate of at
    least twenty percent (20%) per year over five (5) years
    from the date of grant of the Option.



 



    11.  CERTIFICATES.  All
    certificates for Shares or other securities delivered under this
    Plan will be subject to such stock transfer orders, legends and
    other restrictions as the Committee may deem necessary or
    advisable, including restrictions under any applicable federal,
    state or foreign securities law, or any rules, regulations and
    other requirements of the SEC or any stock exchange or automated
    quotation system upon which the Shares may be listed or quoted.



 



    12.  ESCROW; PLEDGE OF
    SHARES.  To enforce any restrictions on a
    Participant’s Shares, the Committee may require the
    Participant to deposit all certificates representing Shares,
    together with stock powers or other instruments of transfer
    approved by the Committee, appropriately endorsed in blank, with
    the Company or an agent designated by the Company to hold in
    escrow until such restrictions have lapsed or terminated, and
    the Committee may cause a legend or legends referencing such
    restrictions to be placed on the certificates. Any Participant
    who is permitted to execute a promissory note as partial or full
    consideration for the purchase of Shares under this Plan will be
    required to pledge and deposit with the Company all or part of
    the Shares so purchased as collateral to secure the payment of
    Participant’s obligation to the Company under the
    promissory note; provided, however, that the Committee may
    require or accept other or additional forms of collateral to
    secure the payment of such obligation and, in any event, the
    Company will have full recourse against the Participant under
    the promissory note notwithstanding any pledge of the
    Participant’s Shares or other collateral. In connection
    with any pledge of the Shares, Participant will be required to
    execute and deliver a written pledge agreement in such form as
    the Committee will from time to time approve. The Shares
    purchased with the promissory note may be released from the
    pledge on a pro rata basis as the promissory note is paid.



 



    13.  EXCHANGE AND BUYOUT OF
    OPTIONS.  The Committee may, at any time or
    from time to time, authorize the Company, with the consent of
    the respective Participants, to issue new Options in exchange
    for the surrender and cancellation of any or all outstanding
    Options. The Committee may at any time buy from a Participant an
    Option previously granted with payment in cash, shares of Common
    Stock of the Company (including restricted stock) or other
    consideration, based on such terms and conditions as the
    Committee and the Participant may agree.



 



    14.  SECURITIES LAW AND OTHER REGULATORY
    COMPLIANCE.  This Plan is intended to comply
    with Section 25102(o) of the California Corporations Code.
    Any provision of this Plan which is inconsistent with
    Section 25102(o) shall, without further act or amendment by
    the Company or the Board, be reformed to comply with the
    requirements of Section 25102(o). An Option will not be
    effective unless such Option is in compliance with all
    applicable federal and state securities laws, rules and
    regulations of any governmental body, and the requirements of
    any stock exchange or automated quotation system upon which the
    Shares may then be listed or quoted, as they are in effect on
    the date of grant of the Option and also on the date of exercise
    or other issuance. Notwithstanding any other provision in this
    Plan, the Company will have no obligation to issue or deliver
    certificates for Shares under this Plan prior to
    (a) obtaining any approvals from governmental agencies that
    the Company determines are necessary or advisable,
    and/or
    (b) compliance with any exemption, completion of any
    registration or other qualification of such Shares under any
    state or federal law or ruling of any governmental body that the
    Company determines to be necessary or advisable. The Company
    will be under no obligation to register the Shares with the SEC
    or to effect compliance with the exemption, registration,
    qualification or listing requirements of any state securities
    laws, stock exchange or automated quotation system, and the
    Company will have no liability for any inability or failure to
    do so.




    

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    15.  NO OBLIGATION TO
    EMPLOY.  Nothing in this Plan or any Option
    granted under this Plan will confer or be deemed to confer on
    any Participant any right to continue in the employ of, or to
    continue any other relationship with, the Company or any Parent
    or Subsidiary of the Company or limit in any way the right of
    the Company or any Parent or Subsidiary of the Company to
    terminate Participant’s employment or other relationship at
    any time, with or without cause.



 



    16.  CORPORATE TRANSACTIONS.  



 



    16.1  Assumption or Replacement of Options by
    Successor or Acquiring Company.  In the event
    of (a) a dissolution or liquidation of the Company,
    (b) a merger or consolidation in which the Company is not
    the surviving corporation (other than a merger or
    consolidation with a wholly-owned subsidiary, a reincorporation
    of the Company in a different jurisdiction, or other transaction
    in which there is no substantial change in the shareholders of
    the Company or their relative stock holdings and the Options
    granted under this Plan are assumed, converted or replaced by
    the successor or acquiring corporation, which assumption,
    conversion or replacement will be binding on all Participants),
    (c) a merger in which the Company is the surviving
    corporation but after which the shareholders of the Company
    immediately prior to such merger (other than any shareholder
    which merges with the Company in such merger, or which owns or
    controls another corporation which merges, with the Company in
    such merger) cease to own their shares or other equity interests
    in the Company, or (d) the sale of all or substantially all
    of the assets of the Company, any or all outstanding Options may
    be assumed, converted or replaced by the successor or acquiring
    corporation (if any), which assumption, conversion or
    replacement will be binding on all Participants. In the
    alternative, the successor or acquiring corporation may
    substitute equivalent Options or provide substantially similar
    consideration to Participants as was provided to shareholders
    (after taking into account the existing provisions of the
    Options). The successor or acquiring corporation may also issue,
    in place of outstanding Shares of the Company held by the
    Participant, substantially similar shares or other property
    subject to repurchase restrictions and other provisions no less
    favorable to the Participant than those which applied to such
    outstanding Shares immediately prior to such transaction
    described in this Section 16.1. In the event such successor
    or acquiring corporation (if any) does not assume or substitute
    Options, as provided above, pursuant to a transaction described
    in this Section 16.1, then notwithstanding any other
    provision in this Plan to the contrary, the vesting of such
    Options will accelerate and the Options will become exercisable
    in full prior to the consummation of such event at such times
    and on such conditions as the Committee determines, and if such
    Options are not exercised prior to the consummation of the
    corporate transaction, they shall terminate in accordance with
    the provisions of this Plan.



 



    16.2  Other Treatment of
    Options.  Subject to any greater rights
    granted to Participants under the foregoing provisions of this
    Section 16, in the event of the occurrence of any
    transaction described in Section 16.1 hereof, any
    outstanding Options will be treated as provided in the
    applicable agreement or plan of merger, consolidation,
    dissolution, liquidation or sale of assets.



 



    16.3  Assumption of Options by the
    Company.  The Company, from time to time, also
    may substitute or assume outstanding options granted by another
    company, whether in connection with an acquisition of such other
    company or otherwise, by either (a) granting an Option
    under this Plan in substitution of such other company’s
    option, or (b) assuming such option as if it had been
    granted under this Plan if the terms of such assumed option
    could be applied to an Option granted under this Plan. Such
    substitution or assumption will be permissible if the holder of
    the substituted or assumed option would have been eligible to be
    granted an Option under this Plan if the other company had
    applied the rules of this Plan to such grant. In the event the
    Company assumes an option granted by another company, the terms
    and conditions of such option will remain unchanged
    (except that the exercise price and the number and nature
    of shares issuable upon exercise of any such option will be
    adjusted appropriately pursuant to Section 424(a) of the
    Code). In the event the Company elects to grant a new Option
    rather than assuming an existing option, such new Option may be
    granted with a similarly adjusted Exercise Price.



 



    17.  ADOPTION AND SHAREHOLDER
    APPROVAL.  This Plan will become effective on
    the date that it is adopted by the Board (the
    “Effective Date”). This Plan will be
    approved by the shareholders of the Company (excluding Shares
    issued pursuant to this Plan), consistent with applicable laws,
    within twelve (12) months before or after the Effective
    Date. Upon the Effective Date, the Board may grant Options
    pursuant to this Plan; provided, however, that:




    

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    (a) no Option may be exercised prior to initial shareholder
    approval of this Plan, and (b) no Option granted pursuant
    to an increase in the number of Shares approved by the Board
    shall be exercised prior to the time such increase has been
    approved by the shareholders of the Company. In the event that
    initial shareholder approval is not obtained within twelve
    (12) months before or after this Plan is adopted by the
    Board, all Options granted hereunder will be canceled.



 



    18.  TERM OF PLAN/GOVERNING
    LAW.  Unless earlier terminated as provided
    herein, this Plan will terminate ten (10) years from the
    Effective Date or, if earlier, the date of shareholder approval.
    This Plan and all agreements hereunder shall be governed by and
    construed in accordance with the laws of the State of California.



 



    19.  AMENDMENT OR TERMINATION OF
    PLAN.  Subject to Section 5.9 hereof, the
    Board may at any time terminate or amend this Plan in any
    respect, including without limitation amendment of any form of
    Stock Option Agreement or instrument to be executed pursuant to
    this Plan; provided, however, that the Board will not, without
    the approval of the shareholders of the Company, amend this Plan
    in any manner that requires such shareholder approval pursuant
    to Section 25102(o) of the California Corporations Code or
    the Code or the regulations promulgated thereunder as such
    provisions apply to ISO plans.



 



    20.  NONEXCLUSIVITY OF THE
    PLAN.  Neither the adoption of this Plan by
    the Board, the submission of this Plan to the shareholders of
    the Company for approval, nor any provision of this Plan will be
    construed as creating any limitations on the power of the Board
    to adopt such additional compensation arrangements as it may
    deem desirable, including, without limitation, the granting of
    stock options or any other equity awards outside of this Plan,
    and such arrangements may be either generally applicable or
    applicable only in specific cases.



 



    21.  DEFINITIONS.  As used in
    this Plan, the following terms will have the following meanings:



 



    “Board” means the Board of Directors of the
    Company.



 



    “Cause” means Termination because of
    (i) any willful material violation by the Participant of
    any law or regulation applicable to the business of the Company
    or a Parent or Subsidiary of the Company, the Participant’s
    conviction for or guilty plea to, a felony or a crime involving
    moral turpitude or any willful perpetration by the Participant
    of a common law fraud, (ii) the Participant’s
    commission of an act of personal dishonesty which involves a
    personal profit in connection with the Company or any other
    entity having a business relationship with the Company,
    (iii) any material breach by the Participant of any
    material provision of any agreement or understanding between the
    Company or a Parent or Subsidiary of the Company and the
    Participant regarding the terms of the Participant’s
    service as an employee, director or consultant to the Company or
    a Parent or Subsidiary of the Company, including without
    limitation, the willful and continued failure or refusal of the
    Participant to perform the material duties required of such
    Participant as an employee, director or consultant of the
    Company or a Parent or Subsidiary of the Company, other than as
    a result of having a Disability, or a breach of any applicable
    invention assignment and confidentiality agreement or similar
    agreement between the Company or a Parent or Subsidiary of the
    Company and the Participant, (iv) Participant’s
    intentional disregard of the policies of the Company or a Parent
    or Subsidiary of the Company so as to cause loss, damage or
    injury to the property, reputation or employees of the Company
    or a Parent or Subsidiary of the Company, or (v) any other
    misconduct by the Participant which is materially injurious to
    the financial condition or business reputation of, or is
    otherwise materially injurious to, the Company or a Parent or
    Subsidiary of the Company.



 



    “Code” means the Internal Revenue Code of 1986,
    as amended.



 



    “Committee” means the committee appointed by
    the Board to administer this Plan, or if no committee is
    appointed, the Board.



 



    “Company” means eBay, Inc. or any successor or
    acquiring corporation.



 



    “Disability” means a disability, whether
    temporary or permanent, partial or total, as determined by the
    Committee.



 



    “Equity Restructuring” means a non-reciprocal
    transaction (i.e. a transaction in which the Company does not
    receive consideration or other resources in respect of the
    transaction approximately equal to and in exchange for the
    consideration or resources the Company is relinquishing in such
    transaction) between the Company and its stockholders, such as a
    stock split, spin-off, rights offering, nonrecurring stock
    dividend or




    

    8








 






    recapitalization through a large, nonrecurring cash dividend,
    that affects the shares of the Company’s Common Stock (or
    other securities of the Company) or the share price of the
    Company’s Common Stock (or other securities) and causes a
    change in the per share value of the Shares underlying
    outstanding Options.



 



    “Exercise Price” means the price at which a
    holder of an Option may purchase the Shares issuable upon
    exercise of the Option.



 



    “Fair Market Value” means, as of any date, the
    value of a share of the Company’s Common Stock determined
    as follows:



 



    (a) if such Common Stock is then quoted on the Nasdaq
    National Market, its closing price on the Nasdaq National Market
    on the date of determination as reported in The Wall Street
    Journal;



 



    (b) if such Common Stock is publicly traded and is then
    listed on a national securities exchange, its closing price on
    the date of determination on the principal national securities
    exchange on which the Common Stock is listed or admitted to
    trading as reported in The Wall Street Journal;



 



    (c) if such Common Stock is publicly traded but is not
    quoted on the Nasdaq National Market nor listed or admitted to
    trading on a national securities exchange, the average of the
    closing bid and asked prices on the date of determination as
    reported by The Wall Street Journal (or, if not so
    reported, as otherwise reported by any newspaper or other source
    as the Board may determine); or



 



    (d) if none of the foregoing is applicable, by the
    Committee in good faith.



 



    “Option” means an award of an option to
    purchase Shares pursuant to Section 5 hereof.



 



    “Parent” means any corporation (other than the
    Company) in an unbroken chain of corporations ending with the
    Company if each of such corporations other than the Company owns
    stock possessing fifty percent (50%) or more of the total
    combined voting power of all classes of stock in one of the
    other corporations in such chain.



 



    “Participant” means a person who receives an
    Option under this Plan.



 



    “Plan” means this eBay, Inc. 1997 Stock Option
    Plan, as amended from time to time.



 



    “SEC” means the Securities and Exchange
    Commission.



 



    “Securities Act” means the Securities Act of
    1933, as amended.



 



    “Shares” means shares of the Company’s
    Common Stock reserved for issuance under this Plan, as adjusted
    pursuant to Sections 2 and 16 hereof, and any successor
    security.



 



    “Subsidiary” or “Subsidiaries”
    means any corporation or corporations (other than the Company)
    in an unbroken chain of corporations beginning with the Company
    if each of the corporations other than the last corporation in
    the unbroken chain owns stock possessing fifty percent (50%) or
    more of the total combined voting power of all classes of stock
    in one of the other corporations in such chain.



 



    “Termination” or “Terminated”
    means, for purposes of this Plan with respect to a Participant,
    that the Participant has for any reason ceased to provide
    services as an employee, officer, director or consultant to the
    Company or a Parent or Subsidiary of the Company. A Participant
    will not be deemed to have ceased to provide services in the
    case of (i) sick leave, (ii) military leave, or
    (iii) any other leave of absence approved by the Committee,
    provided that such leave is for a period of not more than ninety
    (90) days, unless reinstatement (or, in the case of an
    employee with an ISO, reemployment) upon the expiration of such
    leave is guaranteed by contract or statute or unless provided
    otherwise pursuant to formal policy adopted from time to time by
    the Company and issued and promulgated in writing. In the case
    of any Participant on (i) sick leave, (ii) military
    leave or (iii) an approved leave of absence, the Committee
    may make such provisions respecting suspension of vesting of the
    Option while the Participant is on leave from the Company or a
    Parent or Subsidiary of the Company as the Committee may deem
    appropriate, except that in no event may an Option be exercised
    after the expiration of the term set forth in the Stock Option
    Agreement. The Committee will have sole discretion to determine
    whether a Participant has ceased to provide services and the
    effective date on which the Participant ceased to provide
    services (the “Termination Date”).



 



    “Unvested Shares” means “Unvested
    Shares” as defined in Section 2.2 of the Stock Option
    Agreement.



 



    “Vested Shares” means “Vested Shares”
    as defined in Section 2.2 of the Stock Option Agreement.




    

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