8x8 1998 Annual Report Download - page 46

8X8, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
outstanding at the end of the immediately preceding fiscal year subject to certain maximum limitations. The 1996 Plan provides for granting
incentive and nonstatutory stock options to employees at prices equal to the fair market value of the stock at the grant dates as determined by
the Company's Board of Directors. Options generally vest over a period of not more than five years.
1996 DIRECTOR OPTION PLAN
The Company's 1996 Director Option Plan (the Director Plan) was adopted in June 1996 and became effective upon the closing of the Offering.
A total of 150,000 shares of common stock have been reserved for issuance under the Director Plan. The Director Plan provides for the grant of
nonstatutory stock options to certain nonemployee directors of the Company (the Outside Directors). The Director Plan provides that each
Outside Director will be granted a nonstatutory stock option to purchase 16,000 shares of common stock on the date upon which such person
first becomes an Outside Director or, if later, on the effective date of the Director Plan. Thereafter, each Outside Director will be automatically
granted an option to purchase 4,000 shares of common stock on the date such Outside Director is reelected to the Board of Directors, if on such
date, such Outside Director will have served on the Company's Board of Directors for at least six months. The Director Plan provides that each
option will become exercisable in monthly installments over a period of one year from the date of grant. The exercise price per share of all
options granted under the Director Plan will be equal to the fair market value of a share of the Company's common stock on the date of grant.
Options granted to Outside Directors under the Director Plan have a ten year term, or shorter upon termination of an Outside Director's status
as a director. If not terminated earlier, the Director Plan will have a term of ten years.
Option activity under the stock option plans is summarized as follows:
41
WEIGHTED
OPTIONS SHARES SUBJECT AVERAGE EXERCISE
AVAILABLE FOR TO OPTIONS PRICE
GRANT OUTSTANDING PER SHARE
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Balance at March 31, 1995.................. 880,185 1,098,350 $2.38
Increase in options available for grant.... 2,000,000 -- --
Granted.................................... (2,973,550) 2,973,550 $2.50
Exercised.................................. -- (246,389) $2.48
Returned to plan........................... 1,264,754 (1,264,754) $2.49
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Balance at March 31, 1996.................. 1,171,389 2,560,757 $2.46
Increase in options available for grant.... 1,200,000 -- --
Granted.................................... (4,947,462) 4,947,462 $1.68
Exercised.................................. -- (2,188,265) $0.50
Cancellation of options available for
grant.................................... (75) -- --
Returned to plan........................... 3,028,804 (3,028,804) $2.32
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Balance at March 31, 1997.................. 452,656 2,291,150 $2.83
Increase in options available for grant.... 650,000 -- --
Granted.................................... (1,273,665) 1,273,665 $7.92
Exercised.................................. -- (413,033) $0.50
Returned to plan........................... 291,918 (291,918) $4.73
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Balance at March 31, 1998.................. 120,909 2,859,864 $5.26
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Options exercisable at March 31, 1998...... -- 776,576 $3.82
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