8x8 2002 Annual Report Download - page 98

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(i) the effective date of the Plan, or (ii) the date of the most recent Board approval of an increase in the number of shares
reserved for issuance under the Plan.
8. Term of Option . The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at
the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock
of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter
term as may be provided in the Option Agreement.
9. Option Exercise Price and Consideration .
A. Exercise Price . The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as
is determined by the Administrator, but shall be subject to the following:
I. In the case of an Incentive Stock Option
A. granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the
exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.
B. granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.
II. In the case of a Nonstatutory Stock Option
A.
granted to a Service Provider who, at the time of grant of such Option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary,
the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.
B. granted to any other Service Provider, the per Share exercise price shall be no less than 85% of the Fair
Market Value per Share on the date of grant.
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