8x8 2002 Annual Report Download - page 86

III. Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required
above pursuant to a merger or other corporate transaction.
B. Forms of Consideration . The consideration to be paid for the Shares to be issued upon exercise of an Option, including
the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant). Such consideration may consist of, without limitation, (1) cash, (2) check, (3)
promissory note, (4) other Shares, provided Shares acquired directly from the Company (x) have been owned by the
Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised,
(5) consideration received by the Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods of payment. In making its determination as to
the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company. Notwithstanding the foregoing, the Administrator may permit an Optionee
to exercise his or her Option by delivery of a full-recourse promissory note secured by the purchased Shares. The terms
of such promissory note shall be determined by the Administrator in its sole discretion.
10. Exercise of Option .
A. Procedure for Exercise; Rights as a Shareholder . Any Option granted hereunder shall be exercisable according to the
terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option
Agreement. Except in the case of Options granted to officers, Directors and Consultants, Options shall become
exercisable at a rate of no less than 20% per year over five (5) years from the date the Options are granted. Unless the
Administrator provides otherwise, vesting of Options granted hereunder to officers and Directors shall be suspended
during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in
accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the
Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon
exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in
Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
B. Termination of Relationship as a Service Provider . If an Optionee ceases to be a Service Provider, such Optionee may
exercise his or her Option within thirty (30) days of termination, or such longer period of time as specified in the Option
Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of
the term of the Option as set forth in the Option Agreement). If, on the date of termination, the Optionee is not vested as
to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.
C. Disability of Optionee . If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the
Optionee may exercise his or her Option within six (6) months of termination, or such longer period of time as specified
in the Option Agreement, to the extent the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). If, on the date of termination, the Optionee
is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the
Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option
shall terminate, and the Shares covered by such Option shall revert to the Plan.
D. Death of Optionee . If an Optionee dies while a Service Provider, the Option may be exercised within six (6) months
following Optionee's death, or such longer period of time as specified in the Option Agreement, to the extent that the
Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set forth in
the Option Agreement) by the Optionee's designated beneficiary, provided such beneficiary has been designated prior to
Optionee's death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Optionee,
then such Option may be exercised by the personal representative of the Optionee's estate or by the person(s) to whom
the Option is transferred pursuant to the Optionee's will or in accordance with the laws of descent and distribution. If, at
the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the