8x8 2001 Annual Report Download - page 57

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NETERGY NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
forfeit their right to exercise such options should they resign from the Company within twelve months of the repricing date.
vesting. During fiscal 2001, 2000, and 1999, the Company repurchased 5,982, 46,296, and 257,685 unvested shares, respectively. As of March
31, 2001, all shares were vested.
The Company recorded a deferred compensation charge of approximately $7,267,000 with respect to options repriced and certain additional
options granted in fiscal 1997. In addition, the Company recorded deferred compensation charges of approximately $503,000 and $406,000 in
connection with certain options granted to non-officer employees in fiscal 2001 and 2000, respectively. The Company recognized $753,000,
$161,000, and $416,000 of said amounts as compensation expense in the fiscal years ended March 31, 2001, 2000, and 1999, respectively. The
Company recognizes deferred compensation over the related vesting period of the options (which is generally forty-eight months). At March
31, 2001, the balance of deferred compensation was $174,000. Deferred compensation is subject to reduction for any employee who terminates
employment prior to the expiration of such employee's option vesting period.
Netergy Microelectronics, Inc. 2000 Stock Option Plan
NME's 2000 Stock Option Plan (the NME Plan) was adopted in December 2000 by the NME Board of Directors. The NME Plan provides for
granting incentive stock options (ISOs) to employees and nonstatutory stock options (NSOs) to employees, directors, and consultants of NME.
Options granted under the NME Plan may be granted for periods up to ten years and at prices no less than 85% of the estimated fair value of
the shares on the date of grant as determined by the NME Board of Directors, provided, however, that (i) the exercise price of an ISO and NSO
shall not be less than 100% and 85% of the estimated fair value of the shares on the date of grant, respectively, and (ii) the exercise price of an
ISO and NSO granted to a 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant,
respectively. To date, options granted vest over four years. However, in the event of a change in control (as defined in the NME Plan
document) vesting for certain options will be accelerated.
The following table summarizes information about stock options outstanding at March 31, 2001:
As of March 31, 2001, no options were exercisable, the weighted average remaining contractual life was approximately 9.8 years, and the
weighted average exercise price was $0.50 per share.
Centile, Inc. 2001 Stock Option Plan
Centile's 2001 Stock Option Plan (the Centile Plan) was adopted in March 2001 by the Centile Board of Directors. The Centile Plan provides
for granting incentive stock options (ISOs) to employees and nonstatutory stock options (NSOs) to employees, directors, and consultants of
Centile. Options granted under the Centile Plan may be granted for periods up to ten years and at prices no less than 85% of the estimated fair
and NSO shall not be less than 100% and 85% of the estimated fair value of the shares on the date of grant, respectively, and (ii) the exercise
price of an ISO and NSO granted to a
52
WEIGHTED AVERAGE
SHARES AVAILABLE SHARES SUBJECT TO EXERCISE PRICE
FOR GRANT OPTIONS OUTSTANDING PER SHARE
---------------- ------------------- ----------------
Shares reserved at NME Plan's
inception........................... 5,000,000 -- $ --
Granted............................... (3,572,000) 3,572,000 0.50
Returned to plan...................... 400,000 (400,000) 0.50
---------- ---------
Balance at March 31, 2001............. 1,828,000 3,172,000 $0.50
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