8x8 2001 Annual Report Download - page 55

NETERGY NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
number of shares of the Company's common stock in the fourth quarter of fiscal 2001. There were 260,807 Exchangeable Shares issued and
outstanding at March 31, 2001.
1992 Stock Option Plan
The Board of Directors has reserved 3,000,000 shares of the Company's common stock for issuance under the 1992 Stock Option Plan (the
1992 Plan). The 1992 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. Options generally vest over four years.
Key Personnel Plan
In July 1995, the Board of Directors adopted the Key Personnel Plan. The Board of Directors reserved 2,200,000 shares of the Company's
common stock for issuance under this plan. The Key Personnel Plan provides for granting incentive and nonstatutory stock options to officers
of the Company at prices equal to the fair market value of the stock at the grant dates. Options generally vest over four years.
1996 Stock Plan
In June 1996, the Board of Directors adopted the 1996 Stock Plan (the 1996 Plan) and reserved 1,000,000 shares of the Company's common
stock for issuance under this plan. The Company's stockholders subsequently authorized increases in the number of shares of the Company's
common stock reserved for issuance under the 1996 Plan of 500,000 shares in June 1997 and 2,000,000 shares in August 2000. The 1996 Plan
also provides for an annual increase on the first day of each of the Company's fiscal years in an amount equal to 5% of the Company's common
stock issued and outstanding at the end of the immediately preceding fiscal year, subject to certain maximum limitations. This provision
resulted in an increase of 1,000,000, 771,287, and 764,680 shares issuable under the 1996 Plan during the fiscal years ended March 31, 2001,
2000, and 1999, respectively. 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 in July 1997. A total of 150,000
shares of common stock were initially reserved for issuance under the Director Plan. The Company's stockholders subsequently authorized an
increase in the number of shares of common stock reserved for issuance under the Director Plan to 500,000 shares in August 2000. The
Director Plan provides for both discretionary and periodic grants of nonstatutory stock options to non-employee directors of the Company (the
Outside Directors). 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 generally vest over a period of four years. 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.
1999 Nonstatutory Stock Option Plan
In fiscal 2000, the Company's Board of Directors approved the 1999 Nonstatutory Stock Option Plan (the 1999 Plan) with 600,000 shares
initially reserved for issuance thereunder. In fiscal 2001, the number of shares reserved for issuance was increased to 3,600,000 shares by the
Board of Directors. Under the terms of the 1999 Plan, options may not be issued to either officers or directors of the Company provided,
however, that options may be granted to an officer in connection with the officer's initial employment by the Company. Vesting for certain
options accelerates if certain predefined milestones are met.
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