8x8 2002 Annual Report Download - page 99

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
Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
11. Limited Transferability of Options . Unless determined otherwise by the Administrator, Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and
may be exercised during the lifetime of the Optionee, only by the Optionee. If the Administrator in its sole discretion makes an
Option transferable, such Option may only be transferred by (i) will, (ii) the laws of descent and distribution, (iii) instrument to
an inter vivos or testamentary trust in which the Option is to be passed to beneficiaries upon the death of the Optionee, or (iv)
gift to a member of Optionee's immediate family (as such term is defined in Rule 16a-1(e) of the Exchange Act). In addition,
any transferable Option shall contain additional terms and conditions as the Administrator deems appropriate.
12. Adjustments Upon Changes in Capitalizati on, Merger or Change in Control .
A. Changes in Capitalization . Subject to any required action by the shareholders of the Company, the number and type of
Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Option, and the number and type of Shares
covered by each outstanding Option, as well as the price per Share covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number or type of issued Shares resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company.
The conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt
of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be
made with respect to, the number, type or price of Shares subject to an Option.
B. Dissolution or Liquidation . In the event of the proposed dissolution or liquidation of the Company, the Administrator
shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until
fifteen (15) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which
the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase
option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been