EX-2.4
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f13541exv2w4.htm
EXHIBIT 2.4
Exhibit 2.4
EMI ROLLOVER AGREEMENT
This emi rollover Agreement (this “Agreement”) is being executed and
delivered as a deed as of the date set forth below by and among eBay Inc., a Delaware
corporation (the “Purchaser” or “eBay”), Skype Technologies S.A., a limited
company registered under the laws of Luxembourg (the “Company”), and the holder of options
to subscribe for ordinary shares of the Company identified on the signature page hereto
(“Optionholder”).
RECITALS
A. The Purchaser, the Company, and the shareholders and warrantholders of the Company
(collectively, the “Sellers”) have entered into a Sale and Purchase Agreement (the
“Purchase Agreement”), pursuant to which, subject to the terms and conditions thereof, the
Sellers are agreeing to sell to the Purchaser and/or an affiliate of the Purchaser nominated by the
Purchaser, and the Purchaser and/or an affiliate of the Purchaser nominated by the Purchaser is
agreeing to acquire from the Sellers, the entire issued share capital of the Company (the
“Transaction”). Capitalized terms used but not defined herein shall have the meanings given
to them in the Purchase Agreement.
B. Optionholder is a holder of one or more options (“Options”) to subscribe for ordinary
shares in the capital of the Company (“Ordinary Shares”) granted under the UK Rider to the
Skype Stock Option Plan (the “Plan”).
C. Optionholder wishes to release all Options held by Optionholder contingent on Completion in
exchange for the grant of new options (“Replacement eBay Options”) to purchase shares of
common stock of eBay (“eBay Shares”) subject to the terms and conditions set forth in this
Agreement.
Agreement
Part 1. rollover
For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement, intending to be legally bound, agree as follows:
| | 1. | | Optionholder agrees to release his Options in consideration for the grant to
Optionholder of Replacement eBay Options on the terms set out in this Agreement. Although
it is intended that the Replacement eBay Options will meet the requirements of Part 6 of
Schedule 5 to the Income Tax (Earnings and Pensions) Xxx 0000, Optionholder and Purchaser
agree that Purchaser is under no obligation to procure that the Replacement eBay Options
meet such requirements. |
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| | 2. | | Subject to clause 4, each Replacement eBay Option shall be to acquire such number of
eBay Shares as has immediately after the grant of the Replacement eBay Option an aggregate
market value equal to the market value of the Ordinary Shares subject to the Skype Option
immediately before the release of the Skype Options. |
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| | 3. | | Subject to clause 4, each Replacement eBay Option shall have a strike price payable
such that the aggregate strike price payable on the exercise in full of the new
Replacement eBay Option equals the aggregate strike price that would have been payable on
the exercise in full of the Skype Option. |
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| | 4. | | Notwithstanding clauses 2 and 3 above, unless in order to meet the conditions of Part
6 of Schedule 5 to the Income Tax (Earnings and Xxxxxxxx) Xxx 0000 eBay otherwise
decides,: |
| | • | | the number of eBay Shares subject to each Replacement eBay Option will be
determined by multiplying the number of Ordinary Shares that were subject to
such Skype Option immediately prior to the release of the Skype Options by the
Conversion Ratio (as defined below), and rounding the resulting number up to the
nearest whole number of eBay Shares; |
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| | • | | the per share strike price for the eBay Shares issuable upon exercise of each
Replacement eBay Option will be determined by dividing the per share strike
price of Ordinary Shares subject to such Option, as in effect immediately prior
to the release of such Option, by the Conversion Ratio, and rounding the
resulting strike price up to the nearest whole cent. |
| | | | The “Conversion Ratio” means the number determined by dividing: (i)
€2,500,000,000; by (ii) the product of: (A) the Aggregate Outstanding Share Number;
and (B) Completion Purchaser Share Price (adjusted to the extent appropriate to
reflect any stock split, division or subdivision of shares, stock dividend, issuance
of bonus shares, reverse stock split, consolidation of shares, reclassification,
recapitalization or other similar transaction with respect to eBay Shares). |
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| | | | By way of example only, assuming that the Aggregate Outstanding Share Number is
698,430 (the actual number is likely to be this number) and the Completion Purchaser
Share Price is €31.70 (the actual price will only be known at Completion), the
Conversion Ratio would be 112.9. Thus, for example, if Optionholder currently holds
Options to purchase 100 Ordinary Shares with a strike price of €1218 per Ordinary
Share, such Options would be exchanged for Replacement eBay Options to purchase
11,290 eBay Shares with a strike price of €10.79 per share. |
| | 5. | | The terms of Optionholder’s Replacement eBay Options shall be governed by the
existing terms of the agreement governing his Skype Options (in conjunction with the rules
of the Plan and the UK Rider to the Plan pursuant to which Optionholder’s Skype Options
were granted) save that: |
| | • | | references to Skype Shares shall be replaced by references to eBay Shares and |
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| | • | | unless the eBay Board decides that the following subparagraphs (A) and (B)
shall not apply, (A) all references to the Company or Issuer shall be construed
as references to eBay; and (B) the eBay Board or any committee thereof will
succeed to the authority and responsibility of the Company’s board of directors
or any committee thereof with respect to each Replacement eBay Option. |
PART 2. SECURITIES LAW ISSUES RELATING TO REPLACEMENT EBAY OPTIONS
| | 6. | | Optionholder may not exercise his/her Replacement eBay Options unless the eBay Shares
issuable upon such exercise are then registered under the United States Securities Act of
1933 (the “Securities Act”) or, if such eBay Shares are not then so registered,
eBay has determined that such exercise and issuance would be exempt from the registration
requirements of the Securities Act. The exercise of Optionholder’s Replacement eBay
Options must also comply with other applicable laws and regulations governing your
Replacement eBay Options, and Optionholder may not exercise Optionholder’s Replacement
eBay Options if eBay determines that such exercise would not be in material compliance
with such laws and regulations. |
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PART 3. TAX
| | 7. | | Without prejudice to the existing provisions relating to tax and social security
contributions applicable to the Options which shall continue to apply to the Replacement
eBay Options, if eBay or any other company within the eBay Group (the companies within the
“eBay Group” for these purposes being determined by eBay’s board of directors or a
committee thereof (the “eBay Board”) is obliged to (or would suffer a disadvantage
if it were not to) account for any amount of tax or social security contributions
(including employer social security contributions) in respect of Optionholder’s
Replacement eBay Options and/or the eBay Shares acquired on the exercise of such
Replacement eBay Options (including the exchange of Optionholder’s Options, the exercise
of and any other dealing in relation to such Replacement eBay Option and the acquisition,
holding and disposal of eBay Shares) (together, the “Tax Liability”), then before
such Replacement eBay Options may be exercised Optionholder must have entered into
arrangements acceptable to the eBay Board to secure that such a payment is made (whether
by paying an amount in respect of eBay’s estimate of the Tax Liability, authorising the
sale of some or all of the eBay Shares on Optionholder’s behalf and the payment to the
eBay Group company of the relevant amount out of the proceeds of sale, withhold all
applicable Tax Liability legally payable by Optionholder from Optionholder’s wages or
other cash compensation paid to Optionholder by eBay or Optionholder’s employer or from
the proceeds of the sale of shares, withhold in shares of common stock (if permissible
under local law) provided that only the amount of shares necessary to satisfy the minimum
withholding amount are withheld, or otherwise). |
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| | 8. | | Optionholder understands and agrees that if eBay so decides such number of eBay
Shares as have a market value (as determined by eBay) equal to 48.68% (or such other
percentage as is equivalent to the total of the highest marginal rate of income tax in the
UK in force at the time of the relevant exercise of eBay Replacement Options plus the
relevant rate of employer’s National Insurance Contributions in force at such time) of the
gain that arises on the exercise by Optionholder of Replacement eBay Options (such gain
being the difference between the total strike price of the such Replacement eBay Options
and the market value (as determined by eBay) of the eBay Shares acquired on exercise of
those eBay Replacement Options) will be deposited into an escrow account (the principal
terms of which are summarised in Exhibit C hereto) pending confirmation of the
extent to which tax and National Insurance Contributions liabilities arise from or in
connection with the exercise of Optionholder’s eBay Replacement Options, including any
liabilities arising in respect of the acquisition, holding or disposal of eBay Shares.
Optionholder appoints any director of eBay and/or any person nominated by them as
Optionholder’s attorney and authorises such attorney to execute, sign and submit any
document (including the escrow agreement) and to do anything on Optionholder’s behalf as
Optionholder’s attorney considers may be necessary or desirable in connection with the
exercise of Optionholder’s eBay Replacement Options and the terms and conditions set out
in this document. All powers of attorney and authorities on the terms conferred by this
document are given by way of security for the performance of Optionholder’s obligations
and are irrevocable in accordance with section 4 of the Powers of Xxxxxxxx Xxx 0000. The
execution of this document constitutes Optionholder’s undertaking to ratify and confirm
any action properly taken on my behalf by Optionholder’s attorney appointed under this
document. |
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| | 9. | | If Optionholder is resident in the United Kingdom for tax purposes (a “UK
Optionholder”), Optionholder agrees to be bound by the provisions of Schedule
1 to this Agreement. As required under Article 1 of Schedule 1 (PAYE and
National Insurance rules for UK Optionholders) to this Agreement, each UK Optionholder
shall, under paragraph 3A of Schedule 1 Social Security Contributions and Benefits Xxx
0000 to pay to and indemnify the relevant member of the eBay Group against an amount equal
to pay secondary class 1 national insurance contributions arising |
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| | | | on exercise or release of such UK Optionholder’s Replacement eBay Option. In
addition, as required under Article 1.6 of Schedule 1, each UK Optionholder is required
to enter into an election with S Technologies Limited or the relevant eBay Group member
under section 431(1) of the Income Tax (Earnings and Xxxxxxxx) Xxx 0000 in respect of
eBay Shares acquired pursuant to this Agreement. |
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| | 10. | | The Company or S Technologies Limited (or, if appropriate, the other relevant member
of the eBay Group) will account to HM Revenue & Customs under PAYE for any income tax or
national insurance contributions (if any) arising on any gain made when UK Optionholder’s
Replacement eBay Option is exercised or released in whole or part in accordance with
Articles 1.1 to 1.4 of Schedule 1. Each UK Optionholder shall enter into such
arrangements as the eBay Board requires to ensure that any liabilities for which such UK
Optionholder is obliged to account to a member of the eBay Group under Schedule 1
to this Agreement, are accounted for to the satisfaction of eBay, the Company, S
Technologies Limited or the relevant eBay Group member. |
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| | 11. | | Notwithstanding any provision of the Agreement, Optionholder’s Option Agreement, the
Plan, the Purchase Agreement or any other agreement or document, in the event any term,
condition or feature of the Skype Option or the manner of the exchange of such option by
eBay would result in the Replacement eBay Option being subject to the provisions of
Section 409A of the Internal Revenue Code of 1986, as amended, the terms of the
Replacement eBay Option shall be amended to the minimum extent necessary such that the
Replacement eBay Option shall not be subject to the provisions of such Section 409A. Such
adjustments shall include, for example, rounding down the number of eBay Shares subject to
the Replacement eBay Option so as to eliminate any fractional shares. |
PART 4. GENERAL INCLUDING OPTIONHOLDER REPRESENTATIONS
| | 12. | | Optionholder may exercise Optionholder’s vested Options in anticipation of
Completion, subject to compliance with applicable securities laws. If Optionholder
exercises any Options prior to Completion: (a) the Skype Shares that Optionholder receives
upon exercise will automatically be sold to eBay in exchange for the consideration elected
to be received by Optionholder in accordance with the terms set forth in the Purchase
Agreement; and (b) Optionholder will be deemed to be a party to, and will be bound by the
terms of, the Purchase Agreement, the Registration Rights Agreement and, if Optionholder
has checked the box on the accompanying Exercise Notice electing to receive the Earn Out
Consideration in the event Optionholder exercises any Options prior to Completion, the
Earn Out Agreement. Optionholder understands, agrees and directs that cash and/or eBay
Shares equal to 48.68% of the gain that arises on the exercise of the vested Options which
Optionholder exercises (such gain being the difference between the total strike price of
the relevant vested Options and the market value (as determined by eBay) of the Skype
Shares acquired on exercise of those vested Options) will be deposited into an escrow
account (the principal terms of which are summarised in Exhibit C hereto) pending
confirmation of the extent to which tax and National Insurance Contributions liabilities
arise from or in connection with the exercise of Optionholder’s vested Options, including
any liabilities arising in respect of the acquisition, holding or disposal of Skype Shares
and eBay Shares. Optionholder confirms that, by agreeing and directing that cash and
shares be deposited in the escrow account in accordance with the above, Optionholder
intends to make good any income tax and national insurance liabilities arising within the
meaning of section 222 Income Tax (Earnings and Xxxxxxxx) Xxx 0000. |
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| | | | To exercise vested Options prior to Completion, Optionholders must execute this
Agreement as |
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| | | | well as completing and executing the accompanying Exercise Notice and ensure that faxed
or scanned copies of the original duly signed signature page to this Agreement and the
full original completed and signed Exercise Notice are received by Xxx Xxxxxx no later
than 12.00 noon Luxembourg time on October 10, 2005. The original duly signed signature
page to this Agreement and the full original completed and signed Exercise Notice must
be received by Xxx Xxxxxx no later than 18.00 Luxembourg time on October 11, 2005.
Optionholders should also consider whether it is appropriate to place an “X” in
paragraph (f) of Exhibit A to this Agreement and to the Exercise Notice. If it is
appropriate for an Optionholder to place an “X” in paragraph (f) of Exhibit A to this
Agreement then the Optionholder must ensure that Exhibit A is delivered to Xxx Xxxxxx
together with the duly signed signature page to this Agreement. (Full details of the
delivery methods of this Agreement and the Exercise Notice are contained in the
Frequently Asked Questions as well as in the cover letter that Optionholders should have
already received.) If an Optionholder exercises any vested Options prior to Completion,
eBay shall be entitled to satisfy any Tax Liability out of the eBay Shares that
Optionholder receives in exchange for Optionholder’s Ordinary Shares and that are
deposited into escrow pursuant to the terms of the Purchase Agreement and in any of the
other ways specified in the Exercise Notice and the Plan. Furthermore, 48.68% of the
eBay Shares that Optionholder receives in exchange for Optionholder’s Ordinary Shares
will be subject to the escrow account as described in paragraph 8 and Exhibit C
hereto. |
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| | 13. | | After Completion, eBay will be filing certain documents with the United States
Securities and Exchange Commission and providing certain disclosures to Optionholder.
Once those documents are filed, the eBay Shares that Optionholder receives upon exercise
of Optionholder’s vested Replacement eBay Options will not be subject to resale
restrictions under applicable US securities laws. Optionholder will be provided with
additional information about Optionholder’s Replacement eBay Options, including about how
to exercise such Replacement ebay Options and receive eBay Shares that are not subject to
restrictions on resale, after Completion. |
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| | 14. | | If Optionholder is a resident of any country other than the United States,
Optionholder warrants to (and agree with) eBay and the Company as set forth in Exhibit
A hereto. If Optionholder is a resident of the United States, Optionholder warrants
to (and agree with) eBay and the Company as set forth in Exhibit B hereto. In
addition, Optionholder warrants to (and agree with) eBay and the Company that: |
| | • | | Optionholder has the right, power, authority and capacity to enter into,
execute, deliver and perform all of Optionholder’s obligations under this
Agreement; |
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| | • | | this Agreement: (a) has been duly and validly executed by Optionholder; and (b)
constitutes a valid and binding obligation of Optionholder, enforceable against
Optionholder in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and to general
equitable principles; |
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| | • | | neither the execution, delivery or performance of this Agreement, nor the
consummation of any of the transactions contemplated by this Agreement, will: (a)
result in any violation or breach of any agreement or other instrument to which
Optionholder is a party or by which Optionholder is bound; or (b) result in a
violation of any legal requirement or order to which Optionholder is subject; |
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| | • | | no authorization, consent or approval of, or notice to, any person or entity is
required to be obtained or given by Optionholder in connection with the execution,
delivery or performance of this Agreement; and |
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| | • | | eBay may place legends on, and impose other appropriate restrictions with
respect to, Optionholder’s Replacement eBay Options as required to comply with
applicable securities laws. |
| | 15. | | This Agreement shall be governed by and construed in accordance with English law.
The delivery of a signed copy of this Agreement by facsimile transmission or by email in .pdf format shall be sufficient to bind the parties to the terms of this Agreement.
Optionholder agrees to execute and/or cause to be delivered to eBay and the Company such
other instruments and documents, and to take such other actions, as eBay or the Company
may reasonably request for the purpose of carrying out or evidencing any of the actions
contemplated by this Agreement. If Optionholder has received this Agreement or any other
document related to the Transaction translated into a language other than English and if
the translated version is different than the English version, the English version will
control. |
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| | 16. | | If the Transaction is abandoned or the Purchase Agreement is terminated in accordance
with its terms, this Agreement will be null and void. |
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| | 17. | | Optionholder acknowledges that: |
| | • | | Optionholder has received and read the following information carefully: (a) a
copy of an Information Statement describing the Transaction, together with the
attachments thereto; (b) a list of Frequently Asked Questions regarding the effect
of the Transaction on Optionholder’s Options; and (c) copies of the Purchase
Agreement and the Earn Out Agreement (collectively, the “Transaction
Documents”). |
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| | • | | Neither the Company nor eBay is providing Optionholder with any financial,
investment or tax advice regarding the Transaction, and neither this Agreement nor
any of the other documentation provided to Optionholder in connection with the
Transaction constitutes such advice. |
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| | • | | Optionholder will make Optionholder’s own legal, tax and accounting analysis
with respect to the exchange offer, the Replacement eBay Options and the eBay
Shares. Optionholder is advised to discuss the financial impact of the Transaction
on Optionholder with Optionholder’s financial and/or tax advisors. |
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| | • | | Neither the Options nor the Ordinary Shares have been registered with the
Spanish Securities Market Commission (Comisión Nacional del Xxxxxxx de Valores) and
therefore they may not be offered in Spain except in circumstances which do not
constitute a public offer of securities in Spain within the meaning of article
30bis of the Spanish Securities Market Law of 28 July 1988 (Ley 00/0000, xx 00 xx
xxxxx, xxx Xxxxxxx xx Xxxxxxx), as amended and restated, and supplemental rules
enacted thereunder. |
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| | • | | This offer to enter into this Agreement does not constitute an offering for
securities for which a public offering prospectus is required in Luxembourg.
Accordingly, no such prospectus has been prepared by the offeror and no approval
has been sought with or given by the Commission de Surveillance du Secteur
Financier. |
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| | • | | In Japan this offer is exempted from the Securities Registration Statement
filing requirement under Art. 4, Para. 1 of the Japan Securities and Exchange Law. |
| | 18. | | Optionholder acknowledges that the contents of this Agreement, the Purchase
Agreement, the |
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| | | | Earn Out Agreement and their respective attachments (the “Information”) are strictly
confidential. Optionholder agrees to hold the Information in strict confidence and
agrees not to disclose, copy, reproduce or distribute any of it to any person other than
to Optionholder’s professional advisers who strictly need access to it for the purposes
of advising Optionholder on the entry into this Agreement, the Purchase Agreement or the
Earn Out Agreement, and only to the extent that they need that access, and on the basis
that they themselves will not disclose, copy, reproduce or distribute it to any other
person. |
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In witness whereof, the parties hereto have caused this Agreement to be executed and
delivered as a deed on the day and year written below.
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| | | eBay Inc., | | |
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[Optionholder’s Signature Page Follows]
EMI Rollover Agreement Signature Page
In witness whereof, the parties hereto have caused this Agreement to be executed and
delivered on the day and year written below.
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IMPORTANT NOTE: The witness must be over the age of 18 and must not be your spouse.
EMI Rollover Agreement Signature Page
Schedule 1
PAYE and National Insurance rules for UK Optionholders
Capitalized terms used but not defined in this Schedule 1 shall have the meanings given to
such terms in the Plan and in the main body of the agreement to which this Schedule 1 is
attached.
| 1. | | PAYE and National Insurance |
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| 1.1 | | Notwithstanding anything contained in the Rules of the Plan (in particular Article
14.5), it shall be a condition of the right to exercise an Replacement eBay Option that the
Original Beneficiary shall pay to and indemnify the relevant member of the eBay Group against
the full amount of any and all liability to UK Pay As You Earn income tax, employee national
insurance contributions which are attributable to the exercise of the Replacement eBay Option
and which are primarily liabilities of or which arise in respect of the Original Beneficiary
but which the Company or the relevant eBay Group company is or may become liable to discharge.
No eBay Option may be exercised until the Original Beneficiary has entered into such
arrangements as the eBay Board or its Delegate may from time to time reasonably require (and
notify to the Original Beneficiary) to ensure that any such liabilities are accounted for to
the satisfaction of eBay, the Company or the relevant eBay Group company. |
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| 1.2 | | It shall be a condition of the right to exercise all Replacement eBay Options granted
under this Agreement that: |
| | (a) | | if so requested by eBay, the Company or any eBay Group company, as soon as
practicable following the grant of an Replacement eBay Option, the relevant eBay Group
company and the Original Beneficiary shall enter into an election in terms satisfactory
to the Inland Revenue under paragraph 3B of Schedule 1 Social Security Contributions and
Benefits Xxx 0000 that the liability of eBay, Skype or any member of the eBay Group to
pay any secondary Class 1 national insurance contributions in respect of gains arising
on the exercise of an Replacement eBay Option shall be transferred to the Original
Beneficiary such that what would otherwise be the liability of the relevant member of
the eBay Group becomes the liability of the Original Beneficiary; and |
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| | (b) | | if so required to enter into an election under Article 1.2(a) above, the
relevant member of the eBay Group and the Original Beneficiary shall agree to do all
acts and things which may be necessary to give effect to the election at Article 1.2(a)
but if such election is not effective, or if the Original Beneficiary is not required to
enter into such an election and in any event, the Original Beneficiary shall agree under
paragraph 3A of Schedule 1 Social Security Contributions and Benefits Xxx 0000 as a
condition of his right to exercise his Replacement eBay Option to pay and indemnify the
relevant member of the eBay Group against any secondary Class 1 national insurance
contributions arising on or in respect of the exercise of the Replacement eBay Option
and will enter into such arrangements as the eBay Board or any Delegate may from time to
time reasonably require (and notify to the Original Beneficiary) to ensure that any such
liability is accounted for to the satisfaction of eBay or the relevant eBay Group member
concerned. |
| 1.3 | | In the event that an election is entered into under Article 1.2(a) above, in order to
discharge his liability resulting from the election at Article 1.2(a) the Original Beneficiary
shall pay to the relevant member of the eBay Group the amount of secondary Class 1 national
insurance contributions and the relevant member of the eBay Group will account to the Inland
Revenue for such liability on behalf of the Original Beneficiary. The Original Beneficiary
must either: |
| | (a) | | deliver a cheque to the relevant eBay Group company for the amount of his
liability together with his Exercise Notice; or |
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| | (b) | | agree that eBay or the relevant eBay Group company may withhold such number of
Plan Shares as are equal in value to the national insurance liability together (where
relevant) with any commission or similar costs to be reasonably and properly incurred by
eBay or any member of the eBay Group upon the disposal of any such Plan Shares on behalf
of the Original Beneficiary to fund the liability. |
| 1.4 | | For the purposes of this Article 1, the relevant eBay Group company may make a best
estimate of all liabilities which an Original Beneficiary is required to pay to or for which
he is liable to indemnify any eBay Group company, such best estimate being the “material
amount”. If the material amount shall exceed the amount payable by or in respect of an
Original Beneficiary the relevant Group Company shall account to such Original Beneficiary for
such excess within thirty days of the determination of the actual amount payable. |
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| 1.5 | | Upon the exercise of an Replacement eBay Option, each Original Beneficiary shall
appoint (irrevocably and by way of security for the performance of his or her obligations
under Articles 1.2 to 1.4 above) eBay (with full power of substitution) as his attorney for
the purpose of signing, in his name and on his behalf, any documents required to implement the
foregoing. |
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| 1.6 | | It shall be a term of the grant of an Replacement eBay Option that an Original
Beneficiary shall, jointly with his employer, enter into an election under section 431(1) of
ITEPA at the time of execution of this Agreement (or at any other time specified by eBay), in
the HM Revenue & Customs approved form if eBay so requires. |
Exhibit A
Warranties and Agreements for Non-US Investors
The Optionholder represents, warrants and certifies to (and agrees with) eBay as follows:
(a) The Optionholder understands that: (i) the exchange of Replacement eBay Options for
Company Options is not being registered under the U.S. Securities Act of 1933, as amended (the
“Act”), but rather is being exchanged pursuant to an exemption from registration set forth
in Regulation S under the Act; (ii) such Replacement eBay Options will be “restricted securities”
within the meaning of Regulation S and Rule 144 under the Act and the Replacement eBay Options (and
the eBay Shares issuable upon the exercise of the Replacement eBay Options) may not be offered or
sold within the United States or to or for the account or benefit of a U.S. Person as defined in
Rule 902 of Regulation S (a “U.S. Person”) unless such offer or sale is registered under
the Act or an exemption from registration is available; (iii) hedging transactions involving the
Replacement eBay Options may not be conducted unless done in compliance with the Act; (iv) eBay’s
reliance on such exemption is predicated on the Optionholder’s representations set forth herein;
and (v) the exchange of Replacement eBay Options has not been approved or reviewed by the U.S.
Securities and Exchange Commission or by any other governmental entity.
(b) The Optionholder: (i) is not a U.S. Person; (ii) is not acquiring any Replacement eBay
Options for the account or benefit of any U.S. Person; and (iii) is not a “distributor” of
securities (as defined in Regulation S) nor a dealer in securities. The country listed on the
signature page hereof is that of the Optionholder’s domicile or residence.
(c) The Optionholder has received and carefully examined the Information Statement and all
attachments thereto, including eBay’s Annual Report on Form 10-K for the fiscal year ended December
31, 2004 (the “Form 10-K”), Quarterly Report on Form 10-Q for the quarter ended June 30,
2005 (the “Form 10-Q”), and proxy statement dated May 16, 2005. The Optionholder has paid
particular attention to the risk factors described in the Form 10-K and Form 10-Q.
(d) The Optionholder has been given the opportunity to ask questions of, and to receive
answers from, persons acting on behalf of the Company and eBay concerning the terms and conditions
of the Transaction, and the business, prospects and financial condition of the Company and the
business, prospects and financial condition of eBay. The Optionholder has also been given the
opportunity to seek independent professional advice concerning the terms and conditions of the
Transaction.
(e) [For Investors in Switzerland] The offer of the exchange of Replacement eBay Options: (i)
is not a public offer of securities in Switzerland; (ii) is made to the Optionholder in its
capacity as Optionholder of the Company in connection with the Transaction only; and (iii) is made
exclusively to Optionholders of the Company that acquire the Replacement eBay options for
investment purposes and not with a view to the distribution thereof.
(f) Please place an “X” on the following blank line if the Optionholder is not an
“accredited investor,” as that term is defined in Rule 501 under the Act (which definition
includes: (i) individuals with a net worth in excess of US dollars $1 million; and (ii) entities
with total assets in excess of US Dollars $5 million which have not been formed for the specific
purpose of acquiring the eBay Shares).
Print name
Exhibit B
Warranties and Agreements for US Investors
The Optionholder represents, warrants and certifies to (and agrees with) eBay as follows:
(a) The Optionholder is aware that: (i) the exchange of Replacement eBay Options for Company
Options will not be registered under the Act, but will instead be completed in reliance on the
exemption from registration set forth in Section 4(2) of the Act and in Regulation D under the Act;
and (ii) the exchange of Replacement eBay Options has not been approved or reviewed by the U.S.
Securities and Exchange Commission or by any other governmental entity.
(b) The Optionholder is aware that the Replacement eBay Options (and the eBay Shares issuable
upon the exercise of the Replacement eBay Options) cannot be offered, sold or otherwise
transferred, assigned, pledged or hypothecated unless such Replacement eBay Options or such eBay
shares, as the case may be, are registered under the Act or unless an exemption from registration
is available.
(c) The Replacement eBay Options will be acquired by the Optionholder for investment purposes
only and for the Optionholder’s own account, and not with a view to, or for resale in connection
with, any unregistered distribution thereof.
(d) The Optionholder has received and carefully examined the Information Statement and all
attachments thereto, including eBay’s Annual Report on Form 10-K for the fiscal year ended December
31, 2004 (the “Form 10-K”), Quarterly Report on Form 10-Q for the quarter ended June 30,
2005 (the “Form 10-Q”), and proxy statement dated May 16, 2005. The Optionholder has paid
particular attention to the risk factors described in the Form 10-K and Form 10-Q.
(e) The Optionholder has been given the opportunity to ask questions of, and to receive
answers from, persons acting on behalf of the Company and eBay concerning the terms and conditions
of the Transaction and the business, prospects and financial condition of the Company and the
business, prospects and financial condition of eBay. The Optionholder has also been given the
opportunity to seek independent professional advice concerning the terms and conditions of the
Transaction.
(f) The Optionholder is knowledgeable, sophisticated and experienced in making, and is
qualified to make, decisions with respect to investments in securities presenting investment
decisions like that involved in the Optionholder’s contemplated investment in the Replacement eBay
Options.
(g) The Optionholder is an “accredited investor,” as that term is defined in Rule 501 under
the Act (which definition includes: (i) individuals with a net worth in excess of $1 million; (ii)
any natural person who has an individual income in excess of $200,000 in each of the two most
recent years, or joint income with that person’s spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same income level in the current year; and
(iii) entities with total assets in excess of $5 million which have not been formed for the
specific purpose of acquiring the eBay Shares).
Exhibit C
Principal terms of the escrow agreement applicable to eBay Shares acquired on the exercise of
Replacement eBay Options
| 1. | | eBay Shares having a market value (as determined by eBay) equal to 48.68% (or such
other percentage as is equivalent to the total of the highest marginal rate of income tax in
the UK in force at the time of the relevant exercise of eBay Replacement Options plus the
relevant rate of employer’s National Insurance Contributions in force at such time) of the
gain made on the exercise of eBay Replacement Options that Optionholder exercises (such gain
being the difference between the total strike price of the relevant eBay Replacement Options
and the market value (as determined by eBay) of the eBay Shares acquired on exercise of those
eBay Replacement Options) shall be deposited into an escrow account pending confirmation of
the tax and National Insurance Contributions implications arising from or in connection with
the grant or exercise of eBay Replacement Options, including any such liabilities arising in
respect of the acquisition, holding or disposal of eBay Shares. The escrow account will be
administered by an independent escrow account agent. |
| |
| 2. | | To the extent that eBay considers that income tax (payable through PAYE) or National
Insurance Contributions liabilities (including any interest or penalties) arise from or in
connection with the grant or exercise of Optionholder’s eBay Replacement Options, including
any liabilities arising in respect of the acquisition, holding or disposal of eBay Shares,
eBay will to that extent instruct the escrow account agent to: (a) release eBay Shares from
the escrow account to eBay, or (b) sell eBay Shares held in the escrow account and release the
proceeds of sale of such eBay Shares to eBay, in order that eBay may account for such income
tax or National Insurance Contributions to HM Revenue & Customs. |
| |
| 3. | | To the extent that eBay is satisfied (i) that income tax (payable through PAYE) or
National Insurance Contributions liabilities do not arise from or in connection with the grant
or exercise of Optionholder’s eBay Replacement Options, including any liabilities arising in
respect of the acquisition, holding or disposal of eBay Shares or (ii) that all such
liabilities have been satisfied by a release from Optionholder’s escrow account in the way
described in paragraph 2 above, eBay will to that extent authorise the escrow account agent to
release eBay Shares from the escrow account to you. |
| |
| 4. | | If the value of eBay Shares held in the escrow account falls with the result that the
value of cash and assets held in the escrow account are insufficient to satisfy payment of
income tax and National Insurance Contributions liabilities which may arise (as referred to in
paragraph 2 above), the Optionholder will remain liable to reimburse eBay for the relevant
income tax and National Insurance Contributions. |
| |
| 5. | | eBay Shares will not be released from the escrow account as a result of any increase
in the eBay Share price which causes the value from time to time of cash and eBay Shares held
in the escrow account to exceed the initial value of cash and eBay Shares transferred into the
escrow account given that the value of eBay Shares may fall as well as rise while they are
held in the escrow account. |
