8x8 2006 Annual Report Download - page 65

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1992 Stock Option Plan
The Board reserved 2,000,000 shares of the Company's common stock for issuance under the 1992 Stock Option
Plan (the 1992 Plan). The 1992 Plan expired in fiscal 2003.
1996 Stock Plan
In June 1996, the Board adopted the 1996 Stock Plan (the 1996 Plan) and reserved 1,000,000 shares of the
Company's common stock for issuance under this plan. The Company's stockholders subsequently authorized
increases in the number of shares of the Company's common stock reserved for issuance under the 1996 Plan of
500,000 shares in June 1997 and 2,000,000 shares in August 2000. The 1996 Plan also provides for an annual
increase in the number of shares reserved for issuance under the 1996 Plan on the first day of the Company's fiscal
year in an amount equal to 5% of the Company's common stock issued and outstanding at the end of the
immediately preceding fiscal year, subject to a maximum annual increase of 1,000,000 shares. The annual increase
was 1,000,000 shares in each of fiscal 2006, 2005 and 2004. To date, this provision has resulted in increases in
shares reserved for issuance under the 1996 Plan totaling 7,535,967. The 1996 Plan provides for granting incentive
stock options to employees and nonstatutory stock options to employees, directors or consultants. The stock option
price of incentive stock options granted may not be less than the determined fair market value at the date of grant.
Options generally vest over four years and expire ten years after grant. The 1996 Plan expires in June 2006.
1996 Director Option Plan
The Company's 1996 Director Option Plan (the Director Plan) was adopted in June 1996 and became effective in
July 1997. A total of 150,000 shares of common stock were initially reserved for issuance under the Director Plan.
The Company's stockholders subsequently authorized an increase in the number of shares of common stock reserved
for issuance under the Director Plan to 500,000 shares in August 2000, and 1,000,000 in July 2002. The Director
Plan provides for both discretionary and periodic grants of nonstatutory stock options to non-employee directors of
the Company (the Outside Directors). The exercise price per share of all options granted under the Director Plan will
be equal to the fair market value of a share of the Company's common stock on the date of grant. Options generally
vest over a period of four years. Options granted to Outside Directors under the Director Plan have a ten year term,
or shorter upon termination of an Outside Director's status as a director. The Director Plan expires in June 2006.
1999 Nonstatutory Stock Option Plan
In fiscal 2000, the Board approved the 1999 Nonstatutory Stock Option Plan (the 1999 Plan) with 600,000 shares
initially reserved for issuance thereunder. In fiscal 2001, the number of shares reserved for issuance was increased to
3,600,000 shares by the Board. Under the terms of the 1999 Plan, options may not be issued to either officers or
directors of the Company provided, however, that options may be granted to an officer in connection with the
officer's initial employment by the Company. Options generally vest over four years and expire ten years after grant.
The 1999 Plan has not been approved by the stockholders of the Company. In May 2006, the Board cancelled the
1999 Plan, and no new grants may be made from the 1999 Plan.
2006 Stock Plan
In May 2006, the Board approved the Company’s 2006 Stock Plan (the 2006 Plan) to replace the 1996 Plan, the
Director Option Plan and the 1999 Plan. The 2006 Plan provides for option and restricted stock grants to employees,
directors and consultants of the Company. The 2006 Plan must be approved by the stockholders of the Company
before it can become effective.