eBay (EBAY) Notes Icahn Proposal in Proxy Statement

The following commentary was in eBay's (Nasdaq: EBAY) proxy statement for its Annual Meeting of Stockholders with respect to activist investor Carl Icahn. The is only a portion of the Icahn comments made in the proxy, which can be fully accessed here: Q: What should I do if I receive a proxy card from the Icahn Group? A: The Icahn Group has notified us that it intends to nominate two Icahn Group employees for election as directors to the eBay Board of Directors at the Annual Meeting in opposition to the nominees recommended by eBay’s Board and to present the Icahn Proposal at the Annual Meeting. If the Icahn Group proceeds with its alternative nominations or the Icahn Proposal, you may receive proxy solicitation materials from the Icahn Group, including an opposition proxy statement and gold proxy card. eBay is not responsible for the accuracy of any information contained in any proxy solicitation materials used by the Icahn Group or any other statements that it may otherwise make. eBay’s Board does not endorse any Icahn Group nominee and opposes the Icahn Proposal and unanimously recommends that you disregard any proxy card or solicitation materials that may be sent to you by the Icahn Group. Voting to “WITHHOLD” with respect to any of the Icahn Group’s nominees on its proxy card is not the same as voting for the eBay Board’s nominees because a vote to “WITHHOLD” with respect to any of the Icahn Group’s nominees on its proxy card will revoke any proxy you previously submitted. If you have already voted using the gold proxy card, you have every right to change your vote by voting via the Internet or by telephone by following the instructions on the WHITE proxy card, or by completing and mailing the enclosed WHITE proxy card in the enclosed pre-paid envelope. Only the latest validly executed proxy that you submit will be counted — any proxy may be revoked at any time prior to its exercise at the Annual Meeting by following the instructions under “Can I change my vote or revoke my proxy?” If you have any questions or require any assistance with voting your shares, please contact our proxy solicitor, D.F. King & Co., Inc., toll free at (800) 269-6427 or collect at (212) 269-5550. Q: Can I change my vote or revoke my proxy? A: If you are the stockholder of record, you may change your proxy instructions or revoke your proxy at any time before your proxy is voted at the Annual Meeting. Proxies may be revoked by any of the following actions: -- filing a timely written notice of revocation with our Corporate Secretary at our principal executive office (2065 Hamilton Avenue, San Jose, California 95125); -- submitting a new proxy at a later date via the Internet, by telephone, or by mail to our Corporate Secretary at our principal executive office; or -- attending the Annual Meeting and voting in person (attendance at the Annual Meeting will not, by itself, revoke a proxy). -- If your shares are held in a brokerage account by a broker, bank, or other nominee, you should follow the instructions provided by your broker, bank, or other nominee. -- If you have previously signed a proxy card sent to you by the Icahn Group, you may change your vote by voting via the Internet or by telephone by following the instructions on your WHITE proxy card, or by completing and mailing the enclosed WHITE proxy card in the enclosed pre-paid envelope. Submitting a gold proxy card sent to you by the Icahn Group will revoke votes you have previously made via eBay’s WHITE proxy card. Only the latest validly executed proxy that you submit will be counted. Background of the Solicitation: On January 16, 2014, eBay received a notice from the Icahn Group indicating that it intended to nominate two Icahn Group employees to stand for election as directors to the eBay Board of Directors at eBay’s 2014 Annual Meeting. The notice also included a precatory proposal recommending that eBay act expeditiously to engage an investment banking firm to effectuate a spin-off of eBay’s Payments segment into a separately traded company. On January 17, 2014, the Icahn Group notified eBay by letter that it had filed a notice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or HSR Act, to enable the Icahn Group to acquire more than $700 million of eBay’s common stock, including any shares that the Icahn Group may already own. On each of January 17 and January 22, 2014, Carl Icahn and John Donahoe, eBay’s President and Chief Executive Officer, had telephone conversations concerning the Icahn Group’s perspectives on eBay and the upcoming annual meeting. No agreements or understandings resulted from these conversations. On January 22, 2014, in connection with eBay’s earnings release and associated conference call, eBay publicly announced that it had received the notice from the Icahn Group regarding the 2014 Annual Meeting. On February 11, 2014, the Icahn Group delivered to eBay an update to its January 16, 2014 notice that included revised biographical information regarding one of the Icahn Group’s proposed nominees and indicated that the Icahn Group had acquired call options that conferred beneficial ownership of approximately 2.15% of eBay’s outstanding common stock. On February 18, 2014, the Federal Trade Commission granted early termination of the HSR Act waiting period to the Icahn Group. Later that day, the Icahn Group notified eBay by letter that it had exercised its call options resulting in the Icahn Group having beneficial ownership of approximately 2.15% of eBay’s outstanding common stock. On February 22, 2014, Mr. Icahn spoke with Mr. Donahoe by telephone and indicated that absent a negotiated resolution to the Icahn Group’s contested proxy solicitation, the Icahn Group intended to publish an “open letter” to eBay stockholders on the following Monday, February 24, 2014 and make other communications to eBay stockholders through similar means. On February 24, 2014, the Icahn Group issued an “open letter” to eBay stockholders that contained various allegations regarding eBay’s Board and seeking support for the Icahn Proposal. eBay responded later that day with a press release stating that the Board welcomed discussion of the Icahn Proposal and rebutting the allegations contained in the Icahn Group’s letter. On February 26, 2014, the Icahn Group submitted a demand to inspect the Company’s books and records pursuant to Section 220 of the Delaware General Corporation Law (the “Icahn Demand”) and on February 28, 2014 submitted a demand to inspect certain eBay stocklist materials. eBay subsequently offered by letter to provide the Icahn Group with documents responsive to their Section 220 demands. Representatives of the Icahn Group and eBay have engaged in discussions regarding the arrangements to provide such materials. On March 1, 2014, Mr. Donahoe and Mr. Icahn spoke by telephone. Mr. Icahn indicated that he intended to release an “open letter” to eBay stockholders on the following Monday and had considered commencing litigation in the Delaware Court of Chancery to seek access to the materials referenced in the Icahn Demand. Mr. Donahoe and Mr. Icahn subsequently had an in-person meeting on March 4 during which additional representatives of both parties were present. Mr. Donahoe and Mr. Icahn discussed the Icahn Group’s proposal to spin-off PayPal from the rest of eBay’s businesses. In early March 2014, Mr. Donahoe and Mr. Icahn spoke by telephone and subsequently had an in-person meeting during which additional representatives of both parties were present. Throughout January, February and March, the Icahn Group and the Company published various solicitation materials. The Company’s solicitation materials were filed under the cover of Schedule 14A on the date they were first sent to eBay stockholders.

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