8x8 1998 Annual Report Download - page 45

8X8, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6 -- STOCKHOLDERS' EQUITY:
COMMON STOCK AND PREFERRED STOCK
In July 1997, the Company completed the initial public offering (the Offering) of its Common Stock, selling 4,140,000 shares at $6.50 per
share. Net proceeds to the Company were approximately $24.7 million after deducting related issuance costs. As of the closing date of the
Offering, all of the Preferred Stock outstanding was converted into an aggregate of 3,726,373 shares of Common Stock.
On October 21, 1996, the Company's Board of Directors approved that, effective upon the closing of the Offering, the Company will be
authorized to issue five million shares of undesignated preferred stock. The Board of Directors has the authority to issue the undesignated
preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof.
1987 INCENTIVE STOCK PLAN
In 1987, the Company adopted an Incentive Stock Plan (the 1987 Plan) which was subsequently terminated by the Board of Directors in
January 1992. The Company had reserved 2,962,000 shares of its common stock for issuance under the 1987 Plan. The 1987 Plan provided for
grants of stock purchase rights at prices equal to the fair market value of stock as determined by the Company's Board of Directors. Stock
purchase rights granted under the plan generally vested over five years. During the year ended March 31, 1996, unvested shares aggregating
15,089 were repurchased at prices ranging from $0.10 to $0.40 per share. In January 1992, upon termination, all unissued shares under the
1987 Plan were canceled. At March 31, 1998, all shares of common stock purchased under the 1987 Plan were fully vested.
1992 STOCK OPTION PLAN
In January 1992, the Board of Directors adopted the 1992 Stock Option Plan (the 1992 Plan) and reserved 1,000,000 shares of the Company's
common stock for issuance under this plan. In August 1994, the Board of Directors authorized an increase in the number of shares of the
Company's common stock reserved for issuance under the 1992 Plan to 2,000,000 shares. The 1992 Plan provides for granting incentive and
nonstatutory stock options to employees at prices equal to the fair market value of the stock at the grant dates. Options generally vest over
periods ranging from two to four years. Vesting for certain options accelerates if certain predefined milestones are met.
KEY PERSONNEL PLAN
In July 1995, the Board of Directors adopted the Key Personnel Plan and reserved 2,000,000 shares of the Company's common stock for
issuance under this plan. In June 1996, the Board of Directors authorized an increase in the number of shares of the Company's common stock
reserved for issuance under the Key Personnel Plan to 2,200,000 shares. The Key Personnel Plan provides for granting incentive and
nonstatutory stock options to officers of the Company at prices equal to the fair market value of the stock at the grant dates. Options generally
vest over periods ranging from two to four years. Vesting for certain options accelerated in fiscal 1998 upon the achievement of certain
predefined milestones.
1996 STOCK PLAN
In June 1996, the Board of Directors 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. In June 1997, the Company's shareholders authorized an increase in the number of shares of the Company's
common stock reserved for issuance under the 1996 Plan to 1,500,000 shares. This amount is to be increased annually on the first day of each
of the Company's fiscal years in an amount equal to 5% of the Company's common stock issued and
40