EBay seeks OK for staff option exchange program

NEW YORK, March 10 (Reuters) - EBay Inc (EBAY.O) is asking
its stockholders to approve a one-time program to let employees
exchange their "underwater" stock options for restricted stock
units at a set ratio, according to a U.S. regulatory filing.

The proposed program was a result of the "significant
decline in our stock price in light of the global financial and
economic crisis," eBay said in a filing with the Securities and
Exchange Commission.

Stock options provide incentives to employees to work hard
and share in profits, but such options lose value when the
market price of the stock falls below the exercise price, which
puts them "underwater."

The online auctioneer said its officers, including Chief
Executive John Donahoe, board members and former employees
would not be allowed to take part in the exchange.

EBay does not know when the exchange will begin, but has
until April 2010 to do so with approval from stockholders.
The company is scheduled to hold its annual shareholders
meeting on April 29.

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