8x8 2001 Annual Report Download - page 75

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rata basis for each month he is so employed, provided that only the second $95,000 payment shall be subject to repayment (at a rate of 16.6%
per month worked less withholding). Employee agrees to notify Company immediately upon his earning wages from a subsequent employer
and his failure to do so will constitute a breach of this Agreement. Employee understands that the Company shall issue a Form W-2 to
Employee for said payments.
(b) Vesting of Stock. On the Effective Date, the Parties agree that for purposes of determining the number of shares of the Company's common
stock which Employee is entitled to purchase from the Company pursuant to the exercise of outstanding options, the Employee shall, as of the
Resignation Date, be vested as to that number of option shares as to which Employee would have been vested under the Stock Option
Agreements had Employee remained employed with the Company through and until January 31, 2001 (the "Vested Option Shares"). Said
vesting shall include vesting under the May 16, 2000 Stock Option Agreement, notwithstanding any vesting requirements or cliff provisions to
is Three Hundred Forty-Five Thousand, Eight Hundred Ninety Two (345,892) shares (see attached Exhibit B). To the extent option shares are
not vested (including any accelerated vesting pursuant to the preceding sentence) on the Resignation Date, they shall be immediately forfeited
back to the Company's Stock Option Plan upon the Resignation Date. The Vested Option Shares shall accelerate and become immediately
exercisable. The exercise of any Vested Option Shares shall continue to be subject to the terms and conditions of the Company's Stock Option
Plan and the Stock Option Agreements. Except as otherwise provided herein, the terms of the Stock Option Agreements remain in full force
and effect. The Company agrees that the Company's "blackout period" shall not apply to Employee, and Employee acknowledges that he must
comply with all applicable securities laws and regulations. Further, to the extent permitted by applicable law, Employee's ISOs shall vest prior
to his NSOs.
(c) Loan. The Company agrees to extend to Employee a loan not to exceed the amount of Eight Hundred Seventy-Three Thousand, Four
Hundred Eighty-Seven Dollars ($873,487.00). The purpose of said loan is to enable Employee to exercise his vested employee stock options.
The terms of the loan are reflected in Exhibit C attached.
(d) COBRA/Benefits. Employee and each eligible dependent who constitutes a qualified beneficiary, as defined in Section 4980B(g)(1) of the
Internal Revenue Code of 1986, as amended, will be eligible to continue applicable benefits coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), within the time period prescribed
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