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8X8 INC /DE/
FORM 10-K
(Annual Report)
Filed 05/23/02 for the Period Ending 03/31/02
Address 3151 JAY STREET
SANTA CLARA, CA 95054
Telephone 4087271885
CIK 0001023731
Symbol EGHT
SIC Code
4813 - Telephone Communications, Except Radiotelephone
Industry Communications Services
Sector Services
Fiscal Year 03/31
http://www.edgar-online.com
© Copyright 2009, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    8X8 INC /DE/ FORM 10-K (Annual Report) Filed 05/23/02 for the Period Ending 03/31/02 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 3151 JAY STREET SANTA CLARA, CA 95054 4087271885 0001023731 EGHT 4813 - Telephone Communications, Except Radiotelephone Communications Services ...

  • Page 2
    ... 8X8, INC. (Exact name of Registrant as Specified in its Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 77-0142404 (I.R.S. Employer Identification Number) 2445 Mission College Blvd. Santa Clara, CA 95054 (Address of Principal Executive Offices including Zip Code...

  • Page 3
    ... sale price of the Registrant's common stock on the NASDAQ National Market System on May 13, 2002, the aggregate market value of the voting stock held by non-affiliates of the Registrant was $20,798,332. Shares of the Registrant's common stock held by each officer and director and by each person...

  • Page 4
    ... video applications. The Company has three product lines: voice and video semiconductors and related software; software that implements the functionality of a private branch exchange, or PBX, over data networks; and videophones, telephones and communication services that work over broadband networks...

  • Page 5
    ... and communication software and services that work over broadband networks. In January 2002, the Company announced two new consumer products, the DV324 desktop videophone, a videophone for analog phone lines, and the Behind-U privacy peripheral for personal computers. In November 2001, 8x8 announced...

  • Page 6
    ... semiconductors, embedded software, system software, and reference designs, that allow telecommunication equipment OEMs to: i) build voice and video IP phones, ii) build IP-to-analog phone adapter products, and iii) add IP telephony functions to DSL, cable, and wireless modems. Additionally, Netergy...

  • Page 7
    ... design kits for its semiconductor products: 1 1 1 The Media Hub MH2 reference design is a two-line, VoIP gateway based on the Audacity-T2 processor. It supports two analog telephone interfaces, a 10/100 Mbps Ethernet port, and a simple LCD display. The IP phone reference design includes plastics...

  • Page 8
    ... on-site hardware that provides the PBX functionality. TELEPHONY CALL MANAGEMENT SOFTWARE -- Centile's telephony call management software (the iPBX server software, hosted iPBX, or iPBX) uses an IP network for its switching fabric and media connections, and provides the call routing, setup, and...

  • Page 9
    ... sites with a dedicated broadband IP link such as a T1 line. On the customer premise, terminal adapters or IP telephones are connected to the IP link via an IP router and Ethernet hubs or switches. Terminal adapters connect standard analog telephones and fax machines to the IP network. To address...

  • Page 10
    ... Caller ID, call transfers, conference call setup, on-screen directories, contact management, and call logging. It also lets users set up and control their voicemail, listen to messages, set call forwarding numbers and filters, and set up personal speed dial numbers. The Centile Switchboard software...

  • Page 11
    ... supports caller-ID, auto-answer (so the phone can be used as a monitoring device), and 10 configurable speed-dial numbers. BEHIND-U WORKSTATION ALERT SYSTEM -- The Behind-U system consists of an infrared motion sensor that plugs into the keyboard port on a personal computer and associated software...

  • Page 12
    ... features to support multiple "virtual" lines of IP telephony, an integrated Ethernet interface, speakerphone capability, programmable feature buttons and on-hook dialing. The phone is designed to be compatible with other SIP protocol devices. PACKET8 IP VOICE TELEPHONY SERVICE OFFERING -- 8x8 is...

  • Page 13
    ... to engage in early trials of its Packet8 IP communication software platform and services offering for which no customers have been announced. Sales and Marketing 8x8 markets its consumer systems through its direct sales force and third-party resellers. Sales of the products to endusers are also...

  • Page 14
    ... protocol and telephony device support, and new graphical user interface and web-based applications; and enhanced versions of 8x8's eSLEE platform and Packet8 telecommunication services offering. Future developments may also focus on emerging audio and video telephony standards and protocols...

  • Page 15
    .... In March 2002, 8x8 licensed certain Very Long Instruction Word, or VLIW, microprocessor cores, related tools and MPEG4 video compression firmware from STM for use in the Company's Internet protocol, or IP, video communication processor development initiatives. Additionally, 8x8 agreed to license...

  • Page 16
    ... Authoring Environment (eSAE), which enables carriers and application developers to design innovative new services for converged voice and data networks. The Company may continue to license its communication services platform and video source code to other companies. Such arrangements may enable...

  • Page 17
    ... its initial public offering on July 2, 1997 under the name 8x8, Inc. From that date through April 3, 2000, the Company's common stock, $0.001 par value per share, was traded on the NASDAQ National Market (the NASDAQ) under the symbol "EGHT." From April 4, 2000 through July 18, 2001, the Company...

  • Page 18
    ... to make IP telephones and to voice-enable cable and digital subscriber line, or DSL, modems, wireless devices, and other broadband technologies. Centile develops and markets hosted iPBX solutions that allow service providers to offer to small and medium-sized businesses over broadband networks the...

  • Page 19
    ...services that work over broadband networks, at the parent company level. 8x8 sells videophones that work over normal phone lines and is planning to initiate trials of its IP telephony software and service offering that is designed to enable customers to communicate with IP telephones and videophones...

  • Page 20
    ... value of services, such as training or consulting, on separate sales of these services to other customers. We recognize revenue for maintenance services ratably over the contract term. Our training and consulting services are billed based on hourly rates and we generally recognize revenue as these...

  • Page 21
    ...and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet....sets forth consolidated statement of operations data for each of the years ended March 31, 2002, 2001, and 2000, expressed as the percentage of our total...

  • Page 22
    ...the $12.8 million reported in fiscal 2001. The decrease in product revenues in fiscal 2002 was due to decreases in sales of video monitoring and consumer videophone systems totaling $969,000, resulting from our decision to terminate further development and sales of these product lines in prior years...

  • Page 23
    ... of products that incorporate our technology; A $1.3 million increase in license revenue associated with our embedded IP telephony firmware technology, e.g., Veracity VoIP software and Audacity-T2 based reference design kits marketed by Netergy; The recognition of $309,000 of previously deferred...

  • Page 24
    ... semiconductors and video monitoring systems. Gross profit in fiscal 2002 was also impacted by a decrease in product gross margins due to lower average selling prices realized on sales of our IP telephony semiconductors, and to a lessor extent, an increase in inventory reserves associated with our...

  • Page 25
    ... aided design tools, and increased stock compensation charges of approximately $325,000 related to stock option bonus programs. SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES Selling, general, and administrative expenses consist primarily of personnel and related overhead costs for sales, marketing...

  • Page 26
    ... shares of U|Force common stock for which the Black-Scholes pricing model value of approximately $6.5 million was included in the purchase price. Direct transaction costs related to the merger were approximately $747,000. Additionally, the Company advanced $1.5 million to U|Force upon signing...

  • Page 27
    ..., a privately held, development stage company based in Sophia Antipolis, France, that was developing software for managing voice-over IP networks. The consolidated financial statements reflect the acquisition of Odisei on May 24, 1999 for approximately 2,868,000 shares of 8x8's common stock and...

  • Page 28
    ... sale of equity investments, offset by an increase in interest income resulting from higher average cash equivalent and short-term investment balances as compared to fiscal 2000. INTEREST EXPENSE Interest expense in each of the three years ended March 31, 2002 consisted mainly of charges associated...

  • Page 29
    ... OF CHANGE IN ACCOUNTING PRINCIPLE In November 2000, the Emerging Issues Task Force reached several conclusions regarding the accounting for debt and equity securities with beneficial conversion features, including a consensus requiring the application of the "accounting conversion price" method...

  • Page 30
    ... of a change in accounting principle of $1.1 million, and stock compensation charges of $753,000. Cash provided by investing activities in fiscal 2001 is primarily attributable to net proceeds from the sale of assets and the license of technology associated with our video monitoring product line of...

  • Page 31
    ... of 8x8, Inc. as directed by the Company's Chairman, Joe Parkinson; Chief Executive Officer, Bryan Martin; or Chief Financial Officer, David Stoll. Mr. Parkinson has agreed to personally reimburse 8x8 on a quarterly basis for any losses resulting from his trading activities in order to maintain...

  • Page 32
    .... We anticipate that our operating segments will comprise our reporting units, and, accordingly, annual impairment tests would be performed at the operating segment level. Based on acquisitions completed as of June 30, 2001, application of the goodwill nonamortization provisions of SFAS No. 142...

  • Page 33
    ...compliance under the Nasdaq National Market minimum bid price listing standard prior to July 9, 2002, we intend to apply for a transfer to the Nasdaq Smallcap Market. However, there is no guarantee that the Nasdaq Staff would accept our transfer application, in which case our stock would be delisted...

  • Page 34
    ..., the allocation between international and domestic sales, the percentage of direct sales and sales to resellers, and manufacturing and component costs. The markets for our products are characterized by falling average selling prices. We expect that, as a result of competitive pressures and other...

  • Page 35
    ...must continue to design, develop, manufacture, and sell new and enhanced semiconductor and IP telephony software products and services... the size of the network deployment; the complexity of our customers' network environments; our customers' skill sets; the hardware and software configuration and ...

  • Page 36
    ... with these products as well as with future products in order to meet our customers' requirements. In some cases, we may be required to modify our product designs to achieve a sale, which may result in a longer sales cycle, increased research and development expense, and reduced operating margins...

  • Page 37
    ... States and internationally. As of the date of this filing we hold forty-nine United States patents and have a number of United States and foreign patent applications pending. We cannot predict whether such pending patent applications will result in issued patents. We may not be able to protect our...

  • Page 38
    ... for voice communications could render our products obsolete Circuit-switched telephony networks feature very high reliability, with a guaranteed quality of service. In addition, such networks have imperceptible delay and consistently satisfactory audio quality. Emerging broadband IP networks, such...

  • Page 39
    ... third party manufacturers for packaging and testing of our semiconductors. We do not have long-term purchase agreements with our contract manufacturers ...decline Sales to customers outside of the United States during the years ended March 31, 2002, 2001 and 2000 were 61%, 69% and 47% of total ...

  • Page 40
    ... with respect to patents or proprietary rights, general market conditions, changes in financial estimates by securities analysts, and other factors which could be unrelated to, or outside our control. The stock market has from time to time experienced significant price and volume fluctuations...

  • Page 41
    .... at the direction of the Company's Chairman, Joe Parkinson; Chief Executive Officer, Bryan Martin; or Chief Financial Officer, David Stoll. Mr. Parkinson has agreed to personally reimburse 8x8 on a quarterly basis for any losses resulting from his trading activities in order to maintain a minimum...

  • Page 42
    ...of their operations and their cash flows for each of the three years in the period ended March 31, 2002 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents...

  • Page 43
    ...subordinated debentures...-6,238 Total liabilities...5,606 17,513 Contingently redeemable common stock...813 -Commitments and contingencies (Note 8) Stockholders' equity: Preferred stock, $0.001 par value: Authorized: 5,000,000 shares; Issued and outstanding: 1 share at March 31, 2002 and March 31...

  • Page 44
    ... cost of revenues...Gross profit...Operating expenses: Research and development...Selling, general and administrative...In-process research and development...Amortization of intangibles...Restructuring charge...Total operating expenses...Loss from operations...Other income, net...Interest expense...

  • Page 45
    ...60 ---Repurchase of common stock and Exchangeable Shares...--- (1,040,089) (1) (521) 8 ---Deferred compensation related to stock options...----551 -202 --Value of beneficial conversion feature associated with the convertible subordinated debentures...----1,081 ----Change in unrealized loss on...

  • Page 46
    ... stock...Gain on sale of investments, net...Non-cash restructuring charges...Other...Changes in assets and liabilities, net of effects of businesses acquired and sold: Accounts receivable...Inventory...Other current and noncurrent assets...Accounts payable...Accrued compensation...Accrued warranty...

  • Page 47
    ... the acquisition of U|Force...$ -- $ 44,586 Public stock received in exchange for furniture and equipment...$ -- $ 412 Issuance of shares in connection with the acquisition of Odisei 13,267 The accompanying notes are an integral part of these consolidated financial statements. 8X8, INC. NOTES...

  • Page 48
    ... (OEMs) of telephones, terminal adapters, and other edge devices and to other semiconductor companies. Netergy's technologies are used to make IP telephones and to voice-enable cable and digital subscriber line modems, wireless devices, and other broadband technologies. Centile develops and markets...

  • Page 49
    ... the software products, the license and consulting revenue is recognized using contract accounting. Revenue from maintenance agreements is recognized ratably over the term of the maintenance agreement, which in most instances is one year. The Company recognizes royalties upon notification of sale by...

  • Page 50
    ... are used for equipment and software and five years for furniture and fixtures. Amortization of leasehold improvements is computed using the shorter of the remaining facility lease term or the estimated useful life of the improvements. Property and equipment at March 31, 2002 and 2001 was comprised...

  • Page 51
    ...under Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for StockBased Compensation," (SFAS 123) the Company provides pro forma disclosure of net income and earnings per share. COMPREHENSIVE LOSS Comprehensive loss, as defined, includes all changes in equity (net assets) during...

  • Page 52
    ... equity instruments were not included in the computations of net loss per share because the effect on the calculations would be anti-dilutive (in thousands): Common stock options...Warrants...Convertible subordinated debentures...Unvested restricted common stock... Year Ended March 31 2002...

  • Page 53
    ...acquisition of all of the outstanding stock of U|Force, Inc. (U|Force) on June 30, 2000 for a total purchase price of $46.8 million. U|Force, based in Montreal, Canada, was a developer of IP-based software applications and a provider of professional services. U|Force was also developing a Java-based...

  • Page 54
    .... In developing cash flow projections, revenues were forecasted based on relevant factors, including aggregate revenue growth rates for the business as a whole, characteristics of the potential market for the technology, and the anticipated life of the technology. Projected annual revenues for the...

  • Page 55
    ...S.A. (Odisei), a privately held, development stage company based in Sophia Antipolis, France, that was developing software for managing voice-over IP networks. The consolidated financial statements reflect the acquisition of Odisei for approximately 2,868,000 shares of the Company's common stock and...

  • Page 56
    ... improvements and $560,000 related to computer equipment, furniture, and software. The loss on sale of assets of $567,000 was attributable to the sale of office, computer, and other equipment of the Montreal office. The Company received common stock of the purchaser valued at approximately $412,000...

  • Page 57
    ...equity instruments for consideration per share that is less than the five day average closing bid price of the Company's common stock preceeding such issuance. All of the warrants expire in December 2002. Using the Black-Scholes pricing model, the Company determined that the debt discount associated...

  • Page 58
    ...sale of certain assets comprising the Company's video monitoring business (the Business) to Interlogix. The assets sold included certain accounts receivable, inventories, technical information, machinery, equipment, contract rights, intangibles, records, and supplies. Concurrently with the execution...

  • Page 59
    .... as directed by the Company's Chairman, Joe Parkinson; Chief Executive Officer, Bryan Martin; or Chief Financial Officer, David Stoll. Mr. Parkinson has agreed to personally reimburse 8x8, Inc. on a quarterly basis for any losses resulting from his trading activities in order to maintain a minimum...

  • Page 60
    ...Change in valuation allowance...2,302 29,027 3,125 Non-deductible compensation...(4) 256 55 Foreign rate differences...(30) 1 66 Other...7 (451) 261 15 $ 17 $ 120 NOTE 8 -- COMMITMENTS AND CONTINGENCIES Leases The Company leases its primary facility in Santa Clara... 2002, future minimum annual ...

  • Page 61
    ... to increase the authorized number of shares of common stock to 100,000,000 shares from 40,000,000 shares. Exchangeable Shares and Preferred Stock In conjunction with the acquisition of U|Force (see Note 2), the Company agreed to issue up to 2,107,780 shares of 8x8 common stock upon the exchange or...

  • Page 62
    ... 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...

  • Page 63
    ... groups outstanding at March 31, 2002 and related weighted average exercise price and contractual life information for 8x8, Inc.'s stock option plans are as follows: Options Outstanding Weighted Weighted Average Average Exercise Remaining Range of Exercise Price Contractual Prices Shares Per Share...

  • Page 64
    ...Weighted Average Exercise Price Per Share ---------0.50 0.50 0.50 0.50 -0.50 0.50 As of March 31, 2002, 900,302 options were exercisable, the weighted average remaining contractual life was 8.2 years, and the weighted average exercise price was $0.50 per share. Centile, Inc. 2001 Stock Option Plan

  • Page 65
    ... exercise date will be set for each option under the plan which exercise date will occur before the date of the merger or asset sale. Certain pro forma disclosures The Company accounts for its stock plans in accordance with the provisions of APB Opinion No. 25. Had compensation cost for the Company...

  • Page 66
    ... on the date of grant using the Black-Scholes pricing model with the following assumptions: Expected volatility...Expected dividend yield...Risk-free interest rate...Weighted average expected option term...Weighted average fair value of options Year Ended March 31 2002 2001 2000 135% 141% 70...

  • Page 67
    ...periods presented. Shared support service functions such as human resources, facilities management, and other infrastructure support and overhead are allocated between the segments. Accounting policies are applied consistently to the segments, where applicable. The Company's reportable segments have...

  • Page 68
    ...March 31 2002 2001 2000 Revenues: Netergy...$ Centile...Corporate and Other...13,350 $ 15,850 $ 16,308 260 198 70 1,081 2,180 9,006 Total revenues...$ 14... 25,384 The majority of the Company's long-lived assets were located in the United States. Long-lived assets consist primarily of property ...

  • Page 69
    ... represented more than 10% of our total revenues in fiscal 2002. These customers represented 13%, 13% and 12% of our total revenues, respectively. During the fiscal years ended March 31, 2001 and 2000, no customer accounted for 10% or more of total revenues. 8X8, INC. SCHEDULE II -- VALUATION AND...

  • Page 70
    ... 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Certain information required by Part III is omitted from this Report on Form 10-K in that the Registrant will file its definitive Proxy Statement for its Annual Meeting of Stockholders (the 2002...

  • Page 71
    ... two initial projects. One project provides for the joint development of a voice-enabled chipset for cable modems and cable television set-top boxes. STM Inc. is not required to pay the Company any engineering fees associated with the development efforts necessary to support this project, which is...

  • Page 72
    ...debentures. On February 14, 2002, we filed a Current Report on Form 8-K also dated February 14, 2002 announcing that Bryan Martin had been named Chief Executive Officer of 8x8, Inc. and that Joe Parkinson, our former Chief Executive Officer, would continue as Chairman of 8x8's Board of Directors. We...

  • Page 73
    ... caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Clara, State of California, on May 23, 2002. 8X8, INC. By: /s/ BRYAN R. MARTIN Bryan R. Martin, President & Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY...

  • Page 74
    2.1 (c) Stock Exchange Agreement, dated as of May 13, 1999, by and among 8x8, Inc. (the Registrant), Odisei S.A. and the Security Holders named therein and the agreements related thereto. Share Exchange Agreement, dated as of May 19, 2000, by and among the Registrant, U|Force, all of the ...

  • Page 75
    ..., and form of Stock Option Agreement. Centile, Inc. 2001 Stock Option Plan, as amended, and form of Stock Option Agreement. Investment Agreement dated April 1, 2002 by and between the Registrant and Joe Parkinson. Subsidiaries of Registrant. Consent of Independent Accountants. Power of Attorney...

  • Page 76
    ... by reference to exhibits filed in response to Item 14 (a), "Exhibits," of the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1998. (c) Incorporated by reference to identically numbered exhibits filed in response to Item 7, "Exhibits," of the Registrant's Report on Form...

  • Page 77
    ...and LX Tools in order to make, have manufactured, commercialize, sell and otherwise dispose of 8x8 LX Chips and 8x8 software. The license granted herein includes any patents, trade secrets, copyrights or other intellectual property owned by ST or its Affiliates now or in the future applicable to the...

  • Page 78
    ...in object code form only. 7. 8x8 Code. Subject to the terms and conditions herein, 8x8 is to provide ST with its H.263 and future H26L video codec firmware ported for execution on the LX Technology (including, if any, H.263 or H.26L codec firmware targeted for operation on a system host processor in...

  • Page 79
    ... standard currently known as the Joint Video Team (JVT) initiative. ST and 8X8 agree to negotiate in good faith on a case-by-case basis the terms and conditions under which such a license may be provided for future cores and future codecs. Technical Support . Each party will provide the other with...

  • Page 80
    ... Code infringes the IP Rights of a third party ("ST Infringement Claim"), provided that: (i) ST gives written notice to 8x8 within ten (10) business days of notice of such ST Infringement Claim; (ii) ST allows 8x8 at its expense through attorneys of its own choice, to exclusively defend or control...

  • Page 81
    .... 8x8 and ST will use reasonable efforts to issue a mutually agreeable joint press release. Otherwise, neither party shall make any announcement or press release regarding this Agreement or any terms thereof without the other Party's prior written consent. However, either party is free to file with...

  • Page 82
    ... address as the Party shall have specified by prior written notice: ST: ST Microelectronics, Inc. at 1310 Electronics Drive Carrollton, TX 75006 USA. Attention: General Counsel; and 8x8: 8x8, Inc. 2445 Mission College Blvd. Santa Clara, California 95054 Attention: Chief Financial Officer. Waiver...

  • Page 83
    ... bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; II. If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not...

  • Page 84
    ...(f) of the Code. 3. Stock Subject to the Plan . Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares that may be...constituted to comply with Applicable Laws. B. Powers of the Administrator . Subject to the provisions of the Plan and, in the case of a Committee, ...

  • Page 85
    ... 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...

  • Page 86
    ... 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...

  • Page 87
    ..., 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 effective date of the Change in Control, become fully exercisable with respect to the total number of shares of Common Stock at the time subject to ...

  • Page 88
    ... to purchase Common Stock of Netergy Microelectronics, Inc. (the "Company"), subject to the terms and conditions of the Plan and this Option Agreement, as follows: Name Date of Grant Vesting Commencement Date Exercise Price per Share Total Number of Shares Granted Total Exercise Price Type of Option...

  • Page 89
    ... grants to the Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option") to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the "Exercise Price"), and subject to the terms and conditions of the...

  • Page 90
    ...for such shares would constitute a violation of any Applicable Law. 2. Non-Transferability of Option . This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of...

  • Page 91
    ...Company upon any change in the residence address indicated below. OPTIONEE NETERGY MICROELECTRONICS, INC. Signature By Print Name Title Residence Address EXHIBIT A 2000 STOCK OPTION PLAN EXERCISE NOTICE Netergy Microelectronics, Inc. 2445 Mission College Blvd. Santa Clara, CA 95054 Attention...

  • Page 92
    ...transfer of such Shares except in accordance with the terms of this Section. G. Termination of Right of First Refusal . The Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control...

  • Page 93
    ...not be modified adversely to the Optionee's interest except by means of a writing signed by the Company and Optionee. Submitted by: OPTIONEE Accepted by: NETERGY MICROELECTRONICS, INC. Signature By Print Name Title Address: 2445 Mission College Blvd Address Santa Clara, CA 95054 Date Received

  • Page 94
    ... directly with a market maker (as said term is defined under the Securities Exchange Act of 1934); and, in the case of an affiliate,... Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than...

  • Page 95
    ... laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Options are granted under the Plan. C. " Board " means the Board of Directors of the Company. D. " Change in Control " means the...

  • Page 96
    ... bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; II. If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not...

  • Page 97
    ...Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option...

  • Page 98
    ... 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...

  • Page 99
    ... 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...

  • Page 100
    ... option shall automatically accelerate so that each such option shall, immediately prior to the effective date of the Change in Control, become fully exercisable with respect to the total number of shares of Common Stock at the time subject to such option and may be exercised for any or all of those...

  • Page 101
    ... Plan and this Option Agreement, as follows: Name Date of Grant Vesting Commencement Date Exercise Price per Share Total Number of Shares Granted Total Exercise Price Type of Option Incentive Stock Option Nonstatutory Stock Option Term/Expiration Date Vesting Schedule and Limitations : The Option...

  • Page 102
    ... grants to the Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option") to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the "Exercise Price"), and subject to the terms and conditions of the...

  • Page 103
    ...for such shares would constitute a violation of any Applicable Law. 2. Non-Transferability of Option . This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of...

  • Page 104
    ... Holder's bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which...

  • Page 105
    ...transfer of such Shares except in accordance with the terms of this Section. G. Termination of Right of First Refusal . The Right of First Refusal shall terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to the general public, or (ii) a Change in Control...

  • Page 106
    ...signed by the Company and Optionee. Submitted by: OPTIONEE Accepted by: CENTILE, INC. Signature By Print Name Title Address: 2445 Mission College Blvd Address Santa Clara, CA 95054 Date Received EXHIBIT... a deferred sale, for or until an increase or decrease in the market price of the ...

  • Page 107
    ... Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof...

  • Page 108
    ... and 3 above, and the funds returned to the bank account of 8x8 immediately. Agreed: 8x8, Inc. By: /s/ Bryan Martin Bryan Martin, CEO Joe Parkinson, Employee /s/ Joe Parkinson Joe Parkinson EXHIBIT 21.1 SUBSIDIARIES OF REGISTRANT Name 3044007 Nova Scotia Company 3044869 Nova Scotia Company Centile...

  • Page 109
    ...) and Form S-8 (Nos. 333-30943, 333-50519, 333-41594, 333-49410 and 333-66296) of 8x8, Inc. of our report dated April 29, 2002 relating to the consolidated financial statements and financial statement schedule, which appears in this Form 10-K. PricewaterhouseCoopers LLP San Jose, California May 21...