8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 14, 2005

eBay Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-24821	77-0430924
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2145 Hamilton Avenue, San Jose, California	95125
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (408) 376-7400

Not Applicable
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets

On October 14, 2005, eBay Inc. (“eBay”) completed its previously announced acquisition of the outstanding securities of Skype Technologies S.A., a limited company (société anonyme) registered under the laws of the Grand Duchy of Luxembourg (“Skype”), pursuant to the terms of the Sale and Purchase Agreement dated September 11, 2005 (the “Purchase Agreement”) entered into among eBay, Skype and the shareholders and warrantholders of Skype. Pursuant to the terms of the Purchase Agreement, Skype will become an indirect wholly-owned subsidiary of eBay.

In exchange for the share capital and warrants of Skype, eBay made an initial payment to the sellers of such share capital and warrants consisting of approximately €2.1 billion, or approximately $2.6 billion, which was comprised of approximately $1.3 billion in cash and the value of approximately 32.8 million shares of eBay common stock, plus potential earn out payments tied to the achievement of certain performance targets prior to June 30, 2009. The maximum amount potentially payable under the performance-based earn out is approximately €1.1 billion, or approximately $1.3 billion, and would be payable in cash or eBay stock, at eBay’s discretion, with expected payment dates in 2008 and/or 2009. All dollar amounts herein are based on the Euro-Dollar exchange rate as of October 12, 2005, as compared with the Euro-Dollar exchange rate as of September 9, 2005 used for purposes of calculating the amounts set forth in eBay’s Current Report on Form 8-K filed on September 15, 2005 (the “Original Form 8-K”). In addition, since the filing of the Original Form 8-K, certain options to acquire ordinary shares of Skype have been exercised and the holders of the shares issuable upon exercise of the options have made either a “Fixed Consideration Election” or an “Earn Out Election” as described below.

Skype shareholders and warrantholders were offered the choice between several consideration alternatives for their shares and warrants. Shareholders and warrantholders representing approximately 42% of the Skype shares and warrants chose to receive a single payment in cash and eBay stock at the closing of the acquisition (the “Fixed Consideration Election”). Shareholders and warrantholders representing the remaining 58% of the Skype shares and warrants chose to receive a reduced up-front payment in cash and eBay stock at the closing of the acquisition plus potential future earn-out payments which are based on performance-based targets for active users, gross profit and revenue (the “Earn Out Election”).

The terms and conditions of the earn out payments are set forth in an Earn Out Agreement entered into concurrently with the Purchase Agreement by eBay, Skype and the sellers of the share capital and warrants of Skype who elected to receive the earn out payments. The earn out payments are contingent upon Skype achieving: (a) a net revenue and gross margin-based target; (b) a gross profit-based target; and (c) a target based on the number of active users of Skype’s communication products. Base earn out payments of up to an aggregate of approximately €877 million, or approximately $1.05 billion, weighted equally among the three targets, would be payable if the targets are achieved over any four-quarter period commencing on January 1, 2006 through June 30, 2009. Additional bonus earn out payments of up to an aggregate of approximately €292 million, or approximately $351 million, weighted equally among the three targets, would be payable if Skype exceeds the targets during calendar year 2008. The Earn Out Agreement also provides that certain persons who were officers and directors of Skype prior to the closing of the transaction will continue to be officers and directors of Skype following the closing of the transaction.

The eBay stock to be issued in connection with the acquisition will be subject to certain contractual and other restrictions on resale. Seventy-five percent of the shares of eBay stock to be issued to persons who made the Fixed Consideration Election that are not otherwise deposited into escrow will be subject to contractual restrictions on transfer that will lapse with respect to one-third of such shares on each of the 180th, 360th and 540th day following the closing of the acquisition. All of the shares of eBay stock to be issued to persons who made the Earn Out Election that are included in the up-front payment but are not otherwise deposited into escrow will be subject to contractual restrictions on transfer that will lapse with respect to twenty-five percent of such shares on each of the 180th, 360th, 540th and 720th day following the closing of the acquisition. eBay and the sellers of the share capital and warrants of Skype have entered into a Registration Rights Agreement requiring eBay to file a registration statement on Form S-3 covering the resale of such eBay stock within 75 days following the closing of the acquisition.

In addition to the foregoing, eBay agreed to assume the options to acquire ordinary shares of Skype outstanding as of the closing of the transaction (the “Skype Options”) and convert them into options to acquire approximately 1.9 million shares of eBay stock (the “eBay Options”) pursuant the terms of Option Assumption Agreements or EMI Rollover Agreements entered into between eBay and the holders of options to acquire ordinary shares of Skype in connection with the closing of the transaction.

The foregoing description of the transactions consummated pursuant to the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, the Earn Out Agreement and the Registration Rights Agreement, which are filed as Exhibits 2.1, 2.2 and 10.1, respectively, hereto and are incorporated herein by reference, and the Option Assumption Agreements and EMI Rollover Agreements, forms of which are filed as Exhibits 2.3 and 2.4, respectively, hereto and are incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities

The disclosure set forth in Item 2.01 above is hereby incorporated herein by reference. The eBay stock issued to the sellers of the share capital and warrants of Skype in connection with the Purchase Agreement, as well as the eBay Options into which the Skype Options were converted or exchanged pursuant to the terms of the Option Assumption Agreements or EMI Rollover Agreements, were issued in reliance upon the exemptions from the registration requirements under the Securities Act of 1933, as amended (the

“Securities Act”), pursuant to Section 4(2) thereof and Regulation D and Regulation S thereunder. eBay relied upon representations, warranties, certifications and agreements of the sellers of the share capital and warrants of Skype and the holders of Skype Options, including their agreement with respect to restrictions on resale, in support of the satisfaction of the conditions contained in Section 4(2) of the Securities Act or Regulation D or Regulation S under the Securities Act.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Business Acquired

The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment within 71 calendar days after the date this report on Form 8-K must be filed.

(b) Pro Forma Financial Information

The pro forma financial statements required by Item 9.01(b) of Form 8-K will be filed by amendment within 71 calendar days after the date this report on Form 8-K must be filed.

(d) Exhibits

EXHIBIT
NO.	DESCRIPTION
2.1	Sale and Purchase Agreement dated as of September 11, 2005, by and among eBay Inc., Skype Technologies S.A. and the parties identified on Schedule 1 thereto.*
2.2	Earn Out Agreement dated as of September 11, 2005, by and among eBay Inc., Skype Technologies S.A. and the parties identified on Schedule I thereto.*
2.3	Form of Option Assumption Agreement.
2.4	Form of EMI Rollover Agreement.
10.1	Registration Rights Agreement dated as of September 11, 2005, by and among eBay Inc. and the parties identified on Schedule I thereto.*
99.1	Press Release dated October 14, 2005.

* Previously filed as an exhibit to eBay’s Current Report on Form 8-K filed on September 15, 2005

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	eBay Inc.
October 18, 2005	By:	/s/ Brian H. Levey
		Name: Brian H. Levey
		Title:	Associate General Counsel and Assistant Secretary

EXHIBIT INDEX

EXHIBIT
NO.	DESCRIPTION
2.1	Sale and Purchase Agreement dated as of September 11, 2005, by and among eBay Inc., Skype Technologies S.A. and the parties identified on Schedule 1 thereto.*
2.2	Earn Out Agreement dated as of September 11, 2005, by and among eBay Inc., Skype Technologies S.A. and the parties identified on Schedule I thereto.*
2.3	Form of Option Assumption Agreement.
2.4	Form of EMI Rollover Agreement.
10.1	Registration Rights Agreement dated as of September 11, 2005, by and among eBay Inc. and the parties identified on Schedule I thereto.*
99.1	Press Release dated October 14, 2005.

* Previously filed as an exhibit to eBay’s Current Report on Form 8-K filed on September 15, 2005

EX-2.3

Exhibit 2.3

OPTION ASSUMPTION AGREEMENT

     This Option Assumption Agreement (this “Agreement”) is being executed and delivered as of the date set forth below by and among eBay Inc., a Delaware corporation (the “Purchaser”), 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 Skype Stock Option Plan (the “Plan”).

C. Optionholder wishes to have all Options held by Optionholder assumed by eBay upon Completion of the Transaction, subject to the terms and conditions set forth in this Agreement.

Agreement

     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.

[For Optionholders who are not already entitled to acceleration of vesting in connection with the Transaction only.] In connection with the Transaction and contingent upon the execution of this Agreement by Optionholder, Optionholder will be entitled to acceleration of vesting of 25% of Optionholder’s unvested Options, which accelerated vesting will be spread evenly across the remaining vesting period of Optionholder’s Options. By way of example only, see Schedule 1 for an illustrative example of how the accelerated vesting would be applied.

2.

At Completion, each of Optionholder’s Options that is outstanding and unexercised immediately prior to Completion, whether or not vested, will be converted into and become an option to purchase shares of common stock of eBay (“eBay Shares”) as provided in sub-clause 2.3 of the Purchase Agreement (each such Option being referred to as an “Assumed Option”). Therefore, after Completion:

• all rights to subscribe for Ordinary Shares under Optionholder’s Options will be converted as contemplated by the Purchase Agreement into rights to purchase eBay Shares;

• each Assumed Option may be exercised solely to purchase eBay Shares;

• the number of eBay Shares subject to each Assumed Option will be determined by multiplying the number of Ordinary Shares that were subject to such Assumed Option immediately prior to Completion by the Conversion Ratio (as defined below), and rounding the resulting number up to the nearest whole number of eBay Shares;

•	the per share strike price for the eBay Shares issuable upon exercise of each Assumed Option will be determined by dividing the per share strike price of Ordinary Shares subject to such Option, as in effect immediately prior to Completion, by the Conversion Ratio, and rounding the resulting strike price up to the nearest whole cent;
•	such Assumed Option will be subject to the terms and conditions set out in Schedule 2; and
•	except as provided above and as set forth in Schedule 2, the provisions of such Assumed Option will remain the same as the provisions of Optionholder’s Option.
	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).
	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 an Option to purchase 100 Ordinary Shares with a strike price of €12.20 per Ordinary Share, such Option would be converted into an option to purchase 11,293 eBay Shares with a strike price of €0.11 per share.

3.

Without prejudice to the existing provisions relating to tax and social security contributions applicable to the Options which shall continue to apply to the Assumed 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 Assumed Option and/or the eBay Shares acquired on the exercise of such Assumed Option (including the conversion of Optionholder’s Options, the exercise of and any other dealing in relation to such Assumed Option and the acquisition, holding and disposal of eBay Shares) (together, the “Tax Liability”), then before such Assumed Option 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).

4.

[For non-EMI UK Optionholders only.] If Optionholder is resident in the United Kingdom for tax purposes (a “UK Optionholder”), Optionholder agrees to be bound by the provisions of Schedule 3 to this Agreement. As required under Article 1 of Schedule 3 (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 Act 1992 to pay to and indemnify the relevant member of the eBay Group against an amount equal to pay secondary

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	class 1 national insurance contributions arising on exercise or release of such UK Optionholder’s Assumed Option. In addition, as required under Article 1.6 of Schedule 3, 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 Pensions) Act 2003 in respect of eBay Shares acquired pursuant to this Agreement.
5.	[For non-EMI UK Optionholders only.]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 Assumed 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.
6.	[For certain Optionholders only.]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.
	To exercise vested Options prior to Completion, Optionholder must execute this Agreement as 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 Ian Fulton no later than 18:00 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 Ian Fulton 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 Ian Fulton together with the duly signed signature page to this Agreement. (Full details on 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 Optionholder exercises any vested Options prior to Completion, eBay shall be entitled to satisfy any Tax Liability out of the eBay Shares that Optionholder’s receives in exchange for Optionholder’s Ordinary Shares and that are deposited into escrow pursuant to the terms of the Purchase Agreement.
7.	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 Assumed Options will not be subject to resale restrictions under applicable US securities laws. Optionholder will be provided with additional information about Optionholder’s Assumed Options, including about how to exercise such Assumed Options and receive eBay Shares that are not subject to restrictions on resale, after Completion.
8.	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:

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• Optionholder has the right, power, authority and capacity to enter into, execute, deliver and perform all of Optionholder’s obligations under this Agreement;

• 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;

• 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;

• 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

• eBay may place legends on, and impose other appropriate restrictions with respect to, Optionholder’s Assumed Options as required to comply with applicable securities laws.

9.	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.
10.	[For US Optionholders only.] Optionholder hereby appoints the individual identified on the signature page hereto to serve as Optionholder’s Purchaser Representative (as that term is used in Regulation D of the Securities Act of 1933, as amended) in connection with the Transaction and an investment in eBay Options and eBay Shares. Optionholder hereby acknowledges that: (a) Optionholder will consult with the Purchaser Representative in connection with his or her evaluation of the merits and risks of the Transaction and an investment in eBay Options and eBay Shares; and (b) the Purchaser Representative has disclosed to Optionholder any material relationship between eBay or any of eBay’s affiliates and Purchaser Representative or any of his, her or its affiliates, which currently exists, are contemplated or have existed at any time since September 30, 2003.
11.	If the Transaction is abandoned or the Purchase Agreement is terminated in accordance with its terms, this Agreement will be null and void.
12.	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

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	Agreement (collectively, the “Transaction Documents”).
•	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 advise.
•	Optionholder will make Optionholder’s own legal, tax and accounting analysis with respect to the exchange offer, the Assumed 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.
•	Neither the Options nor the Ordinary Shares have been registered with the Spanish Securities Market Commission (Comisión Nacional del Mercado 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 24/1988, de 28 de julio, del Mercado de Valores), as amended and restated, and supplemental rules enacted thereunder.
•	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.
•	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.

13. Optionholder acknowledges that the contents of this Agreement, the Purchase Agreement, the Earn Out Agreement and their respective attachments (the “Information”) are strictly confidential. Optionholder agree 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.

[Remainder of page intentionally left blank]

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     In witness whereof, the parties hereto have caused this Agreement to be executed and delivered on the day and year written below.

eBay Inc.,
a	Delaware corporation
By:
Skype Technologies S.A.,
	a limited company registered under the
	laws of Luxembourg
By:

[Optionholder’s Signature Page Follows]

Option Assumption 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.

Dated:

Signature of Optionholder

Printed Name of Optionholder

Country of Residence of Optionholder

[For US Optionholders only] Name of
Optionholder’s Investment Advisor

Option Assumption Agreement Signature Page

Schedule 1

Illustrative Examples of Vesting Acceleration

EXAMPLE 1:

Assumptions:

• Options to subscribe for 64 Ordinary Shares

• Vesting start date of 1 January 2005

• Vesting schedule: 1/16^th of the Ordinary Shares subject to the options (“Option Shares”) will vest every quarter

• The Transaction will be completed on October 20, 2005

• At closing 3/16^th or 12 shares will be vested

• Remaining vesting dates until fully vested: 13 (quarterly dates from December 31, 2005 to December 31, 2008)

• Number of Option Shares that would normally vest on each vesting date: 64 Ordinary Shares ÷ 16 vesting dates = 4 Option Shares vest per vesting date

Calculation:

Number of Option Shares that will be subject to the 25% acceleration immediately prior to completion of the Transaction:

25% x number of unvested Option Shares

25% x (64 – 12) = 13 Option Shares will vest immediately prior to completion of the Transaction

Number of Option Shares that are exercisable prior to completion of the Transaction:

Number of Option Shares vested prior to completion + Number of Option Shares subject to 25% accelerated vesting

12 + 13 = 25 Option Shares

Modified number of Option Shares vesting on remaining vesting dates:

Number of Option Shares that would normally vest on each vesting date – (Number of Option Shares accelerated ÷ number of remaining vesting dates)

4 – (13 ÷ 13) = 3 Option Shares will vest on each remaining vesting date

EXAMPLE 2:

Assumptions:

• Option to subscribe for 100 Option Shares

• Vesting start date of 1 September 2004

• Vesting schedule: 1/16^th of the Option Shares subject to the option will vest every quarter

• The Transaction will be completed on October 20, 2005

• At closing 1/3^rd of a quarter plus 4 quarters or 27 (4.333/16 x 100 = 27.08) shares will be vested

• Remaining vesting dates until fully vested: 11 quarters plus 2/3^rd of a quarter (quarterly dates from December 31, 2005 to September 30, 2008)

• Number of Option Shares that would normally vest on each vesting date: 100 Option Shares ÷ 16 vesting dates = 6.25 Option Shares vest per vesting date

Calculations:

Number of Option Shares that will be subject to the 25% acceleration immediately prior to completion of the Transaction:

25% x number of unvested Option Shares

25% x (100 – 27) = (18.25 rounded to) 18 Option Shares will vest immediately prior to completion of the Transaction

Number of Option Shares that are exercisable prior to completion of the Transaction:

Number of Option Shares vested prior to completion + Number of Option Shares subject to 25% accelerated vesting

27 + 18 = 45 Option Shares

Modified number of Option Shares vesting on remaining vesting dates:

Number of Option Shares that would normally vest on each vesting date – (Number of Option Shares accelerated ÷ Number of remaining vesting dates)

6.25 – (18 ÷ 11 2/3^rd ) = 4.71 shares will vest on each remaining vesting date

Schedule 2

Amendments to the terms and conditions of your Assumed Options

Certain capitalized terms used in this Schedule 2 are defined in Section 3 of this Schedule 2. Capitalized terms used but not defined in this Schedule 2 shall have the meanings given to such terms in the Plan and in the main body of the letter agreement to which this Schedule 2 is attached.

IF YOU ARE A RESIDENT OF THE UNITED STATES FOR TAX PURPOSES, A U.S. CITIZEN OR A U.S. GREEN CARD HOLDER:

1.	Notwithstanding anything contained in the Rules of the Plan or in your Option Agreement, the following rules shall apply to your Assumed Option:
1.1	Securities Law Compliance. You may not exercise your Assumed Option 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 your Assumed Option must also comply with other applicable laws and regulations governing your Assumed Option, and you may not exercise your Assumed Option if eBay determines that such exercise would not be in material compliance with such laws and regulations.
1.2	Exercise Period. Subject to Section 1.1 of this Schedule 2, you may exercise the vested portion of your Assumed Option at any time during its Term, provided that such exercise does not contravene eBay’s insider trading policy and occurs during an eBay trading window, which is based, among other things, on when earnings are announced to the public; provided, however, that each year, the vested portion of your Assumed Option shall not be exercisable during the seven-day period following the date that is six weeks after the date of the Company’s annual general meeting for such year.
1.3	Transferability. Your Assumed Option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your lifetime only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your Assumed Option to the extent permitted under local laws.
1.4	Adjustment. Each Assumed Option will, in accordance with its terms, be subject to further adjustment as 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.
1.5	Section 409A Savings Clause. Notwithstanding any provision of this Schedule 2, the Assumption Agreement, your 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 assumption of such option by eBay would result in the Assumed Option being subject to the provisions of Section 409A of the Internal Revenue Code of 1986, as amended, the terms of the Assumed Option shall be amended to the minimum extent necessary such that the Assumed 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 Assumed Option so as to eliminate any fractional shares.

1.6 Other. Save as otherwise provided herein or as otherwise determined by the eBay Board: (A) your Assumed Option shall continue to be governed by the Rules of the Plan and all references to the Company or Issuer in the Rules of the Plan and this Section 1 of Schedule 2 shall be construed as references to eBay; and (B) the eBay Board will succeed to the authority and responsibility of the Company’s board of directors or any committee thereof with respect to each Assumed Option.

IF YOU ARE NOT A RESIDENT OF THE UNITED STATES FOR TAX PURPOSES, A U.S. CITIZEN OR A U.S. GREEN CARD HOLDER:

2.	Notwithstanding anything contained in the Rules of the Plan or in your Option Agreement, the following rules shall apply to your Assumed Option:
2.1	Securities Law Compliance. You may not exercise your Assumed Option unless the eBay Shares issuable upon such exercise are then registered under 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 your Assumed Option must also comply with other applicable laws and regulations governing your Assumed Option, and you may not exercise your Assumed Option if eBay determines that such exercise would not be in material compliance with such laws and regulations.
2.2	Term. You, or your Beneficiary in the event of your death, may not exercise your Assumed Option after its term expires. The term of your Assumed Option expires upon the earliest of the following:

2.2.1	three (3) months after the termination of your Continuous Service for any reason other than Cause, Disability or death, provided that if during any part of such three-month period your Assumed Option is not exercisable solely because of the condition set forth in the preceding paragraph relating to “Securities Law Compliance,” your Assumed Option shall not expire until the earlier of the date the Assumed Option expires in accordance with the Rules of the Plan or until it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service;
2.2.2	the date of termination of Continuous Service if such termination is due to Cause;
2.2.3	twelve (12) months after the termination of your Continuous Service due to your Disability;
2.2.4	twelve (12) months after the termination of your Continuous Service if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates (other than for Cause or Disability); or
2.2.5	the expiration of the Validity Period of the Options.

2.3 Leaves Of Absence. The eBay Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether your Continuous Service shall be considered interrupted in

the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.

2.4	Exercise Period. Subject to Section 2.1 of this Schedule 2, you may exercise the vested portion of your Assumed Option during its Term provided that such exercise does not contravene eBay’s insider trading policy and occurs during an eBay trading window, which is based on when earnings are announced to the public.
2.5	Transferability. Your Assumed Option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your lifetime only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your Assumed Option to the extent permitted under local laws.
2.6	Adjustment. Each Assumed Option will, in accordance with its terms, be subject to further adjustment as 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.
2.7	Other. Save as otherwise provided herein or as otherwise determined by the eBay Board: (A) your Assumed Option shall continue to be governed by the Rules of the Plan and all references to the Company or Issuer in the Rules of the Plan and this Section 2 of Schedule 2 shall be construed as references to eBay; and (B) the eBay Board will succeed to the authority and responsibility of the Company’s board of directors or any committee thereof with respect to each Assumed Option.
3.	Definitions. In this Section 2, the following terms have the following meanings:
3.1	“Cause” means the commission of an act of theft, embezzlement, fraud, dishonesty or a breach of fiduciary duty to the Company or an Affiliate.
3.2	“Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the United States Internal Revenue Code of 1986, as amended, and any other entity which is controlled, directly or indirectly, by the Company
3.3	“Continuous Service” means that the Original Beneficiary’s service with the Company or an Affiliate, whether as an employee, director or consultant, is not interrupted or terminated. The Original Beneficiary’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Original Beneficiary renders service to the Company or an Affiliate as an employee, consultant or director or a change in the entity for which the Original Beneficiary renders such service, provided that there is no interruption or termination of the Original Beneficiary’s Continuous Service. For example, a change in status from an employee of the Company to a consultant of an Affiliate or a director will not constitute an interruption of Continuous Service. The eBay Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted

in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.

3.4 “Disability” means the inability of a natural person to continue to perform services for the Company or any Affiliate of the type previously performed prior to the occurrence of such Disability, whether as a result of physical and/or mental illness or injury, as determined by a physician acceptable to the Company, for a period that is expected to be of a duration of no less than six (6) months.

[For non-EMI UK Optionholders only]

Schedule 3

PAYE and National Insurance rules for UK Optionholders

Capitalized terms used but not defined in this Schedule 3 shall have the meanings given to such terms in the Plan and in the main body of the agreement to which this Schedule 3 is attached.

1.	PAYE and National Insurance
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 Assumed 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 Assumed 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.
1.2	It shall be a condition of the right to exercise all Assumed 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 Assumed 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 Act 1992 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 Assumed 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

(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 Act 1992 as a condition of his right to exercise his Assumed 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 Assumed 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
(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.
1.5	Upon the exercise of an Assumed 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.
1.6	It shall be a term of the grant of an Assumed 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 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 eBay options will be “restricted securities” within the meaning of Regulation S and Rule 144 under the Act and the eBay options (and the eBay Shares issuable upon the exercise of the 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 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 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 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 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 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).

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 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 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 eBay options (and the eBay Shares issuable upon the exercise of the eBay options) cannot be offered, sold or otherwise transferred, assigned, pledged or hypothecated unless such 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 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 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).

EX-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) Act 2003, Optionholder and Purchaser agree that Purchaser is under no obligation to procure that the Replacement eBay Options meet such requirements.
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.
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.
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 Pensions) Act 2003 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;

• 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).

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

• 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).
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 Attorney Act 1971. 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.
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 Act 1992 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 Pensions) Act 2003 in respect of eBay Shares acquired pursuant to this Agreement.
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.
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 Pensions) Act 2003.

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 Ian Fulton 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 Ian Fulton 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 Ian Fulton 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.
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.
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;

• 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;

• 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;

• 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.
16.	If the Transaction is abandoned or the Purchase Agreement is terminated in accordance with its terms, this Agreement will be null and void.
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”).

• 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.

• 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.

• Neither the Options nor the Ordinary Shares have been registered with the Spanish Securities Market Commission (Comisión Nacional del Mercado 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 24/1988, de 28 de julio, del Mercado de Valores), as amended and restated, and supplemental rules enacted thereunder.

• 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.

• 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

6

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.

[Remainder of page intentionally left blank]

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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.

eBay Inc.,
a Delaware corporation
By:
By:
Skype Technologies S.A.,
	a limited company registered under the
	laws of Luxembourg
By:
By:

[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.

Executed as a deed

Signature:

Printed name:

Date:

Country of residence:

In the presence of

Witness signature:

Witness name:

Witness address:

Date:

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
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.
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 Act 1992 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

(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 Act 1992 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
(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.
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.
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.

EX-99.1

Exhibit 99.1

eBay Completes Acquisition of Skype

San Jose, Calif., October 14, 2005 — eBay (Nasdaq: EBAY; www.ebay.com) today completed its previously announced acquisition of Skype, the global Internet communications company.

In accordance with the terms of the acquisition agreement as announced on September 12, 2005, eBay acquired all of the outstanding shares of privately-held Skype for a total up-front consideration of approximately €2.1 billion, or approximately $2.5 billion, plus potential performance-based consideration. The up-front consideration is comprised of approximately $1.3 billion in cash and the value of 32.8 million shares of eBay stock, which are subject to certain restrictions on resale.

The maximum amount potentially payable under the performance-based earn-out is approximately €1.2 billion, or approximately $1.4 billion, and would be payable in cash or eBay stock, at eBay’s discretion, with expected payment to occur in 2008 and/or 2009. Skype shareholders were offered the choice between several consideration options for their shares. Shareholders representing approximately 42% of the Skype shares ultimately chose to receive a single payment in cash and eBay stock at the close of the transaction. Shareholders representing the remaining approximate 58% of the Skype shares chose to receive a reduced up-front payment in cash and eBay stock at the close plus potential future earn-out payments which are based on performance-based goals for active users, gross profit and revenue.

The above-mentioned dollar amounts are approximate, based on an October 12, 2005 exchange rate of €1 to $1.20.

As previously indicated, eBay expects the acquisition to be dilutive to its Q4-05 pro forma and GAAP earnings per share by $0.01 and $0.04 respectively. For the full year 2006, eBay expects the transaction to be dilutive to pro forma and GAAP earnings per share by $0.04 and $0.12 respectively, with breakeven on a pro forma basis expected in the fourth quarter of 2006.

Pro forma earnings per share represents GAAP earnings per share adjusted to exclude certain items, primarily stock based compensation expense, amortization of acquired intangibles and income taxes related to these items.

About eBay Inc.
Founded in 1995, eBay pioneers communities built on commerce, sustained by trust, and inspired by opportunity. eBay enables ecommerce on a local, national and international basis with an array of websites — including the eBay Marketplace, PayPal, Kijiji, Rent.com and Shopping.com — that bring together millions of buyers and sellers every day.

About Skype Technologies SA
Skype, the Global Internet Communications Company™, allows people everywhere to make free, unlimited, superior quality voice calls via its award-winning innovative peer-to-peer software for Windows, Linux, Mac OS X, and Pocket PC platforms. Skype is available in 27 languages and is the fastest growing voice communications offering worldwide. Since its launch in August 2003, Skype has been downloaded more than 182 million times in 225 countries and territories. 59 million people are registered to use Skype’s free services, with more than 3 million people using Skype simultaneously at any one time. Skype earns revenue through its premium service offerings, and has a growing network of global affiliates, and a community of developers working with the Skype APIs. Skype Technologies SA is headquartered in Luxembourg and has offices in London and Estonia. www.skype.com

Forward-Looking Statements
This announcement contains forward-looking statements regarding Skype and the expected impact of the acquisition of Skype on eBay’s financial results. Those statements involve risks and uncertainties, and actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, the reaction of the users of Skype’s services, the future growth of Skype’s user base and public acceptance of Internet voice communication services, rapid technological changes in the Internet voice communications sector, the reaction of competitors to the transaction, global developments in the regulation of Internet voice communication services including those provided by Skype, the possibility that integration of Skype’s offerings following the transaction may be more difficult than expected, and the possibility that entry by Skype and eBay into potential new lines of business will not be successful. More information about potential factors which could affect eBay’s business and financial results is included in eBay’s Annual Report on Form 10-K for the year ended December 31, 2004, the company’s Quarterly Reports on Form 10-Q, and current reports on Form 8-K. All forward-looking statements are based on information available to eBay on the date hereof, and eBay assumes no obligation to update such statements.

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