8x8 2011 Annual Report Download - page 63

Cash received from option exercises and purchases of shares under the Purchase Plans for the years ended March 31, 2011,
2010 and 2009 were $2.3 million, $0.4 million and $0.3 million, respectively. The total tax benefit attributable to stock options
exercised in the year ended March 31, 2011 was $0.
The Company did not recognize and does not expect to recognize in the near future any tax benefit related to employee stock-
based compensation cost as a result of the full valuation allowance on its net deferred tax assets and because of its net operating
loss carryforwards.
1996 Employee Stock Purchase Plan
The Company's 1996 Stock Purchase Plan (“Employee Stock Purchase Plan”) was adopted in June 1996 and became effective
upon the closing of the Company's initial public offering in July 1997. The Company suspended the Employee Stock Purchase
Plan in 2003 and reactivated the Employee Stock Purchase Plan in fiscal 2005. Under the Employee Stock Purchase Plan,
500,000 shares of common stock were initially reserved for issuance. At the start of each fiscal year, the number of shares of
common stock subject to the Employee Stock Purchase Plan increases so that 500,000 shares remain available for issuance.
During fiscal 2011, 2010 and 2009, 489,501, 499,969 and 424,470 shares, respectively, were issued under the Employee Stock
Purchase Plan. In May 2006, the Company’ s board of directors approved a ten-year extension of the Employee Stock Purchase
Plan. Stockholders approved a ten-year extension of the Employee Stock Purchase Plan at the 2006 Annual Meeting of
Stockholders held September 18, 2006. The Employee Stock Purchase Plan is effective until 2017.
The Employee Stock Purchase Plan permits eligible employees to purchase common stock through payroll deductions at a
price equal to 85% of the fair market value of the common stock at the beginning of each two year offering period or the end of
a six month purchase period, whichever is lower. When the Employee Stock Purchase Plan was reinstated in fiscal 2005, the
offering period was reduced from two years to one year. The contribution amount may not exceed ten percent of an employee's
base compensation, including commissions, but not including bonuses and overtime. In the event of a merger of the Company
with or into another corporation or the sale of all or substantially all of the assets of the Company, the Employee Stock
Purchase Plan provides that a new 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.
Assumptions Used to Calculate Stock-Based Compensation Expense
The fair value of each of the Company's option grants has been estimated on the date of grant using the Black-Scholes pricing
model with the following assumptions:
2011 2010 2009
Expected volatility 69% - 79%
Expected dividend yield - - -
Risk-free interest rate 1.2% to 2.0% - 1.4% to 3.2%
Weighted average expected option term 4.3 years - 4.6 years
Weighted average fair value of options granted $ 1.45 $ - $ 0.52
Years Ended March 31,
61