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8X8 INC /DE/
FORM 10-K
(Annual Report)
Filed 05/29/15 for the Period Ending 03/31/15
Address 2125 O'NEL DRIVE
SAN JOSE, CA 95131
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 2015, 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 05/29/15 for the Period Ending 03/31/15 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 2125 O'NEL DRIVE SAN JOSE, CA 95131 4087271885 0001023731 EGHT 4813 - Telephone Communications, Except Radiotelephone Communications Services ...

  • Page 2
    ... 31, 2015 Commission file number 000-21783 (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) 2125 O'Nel Drive San Jose, CA 95131 (Address of Principal Executive Offices...

  • Page 3
    ..., 12, 13 and 14 of Part III incorporate information by reference from the Proxy Statement to be filed within 120 days of March 31, 2015 for the 2015 Annual Meeting of Stockholders. 8X8, INC. INDEX TO ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2015 Part I. Item 1. Item 1A. Item 1B. Item...

  • Page 4
    Part IV. Item 15. Signatures Exhibits and Financial Statement Schedules 80 82

  • Page 5
    ...in the competitive dynamics of the markets in which we compete, customer cancellations and rate of churn, impact of current economic climate and adverse credit markets on our target customers, our ability to scale our business, our reliance on infrastructure of third-party network services providers...

  • Page 6
    ...CAGR of 21.3%.The global web event services market is forecasted by Frost & Sullivan to grow at an 11.0% CAGR from $424 million in 2013 to $712 million in 2018. We address these markets with our Virtual Office, Virtual Contact Center and Virtual Meeting solutions, respectively. Legacy Approaches are...

  • Page 7
    ... Manager integrates with third-party applications, including Salesforce.com, Microsoft Dynamics, NetSuite, Zendesk and many others, to provide integrated applications functionality within our communications and collaboration services. To date, we have been awarded 104 United States patents related...

  • Page 8
    ... using compressed codecs such as G.729a, which typically exhibit less than toll quality MOS scores even under perfect network conditions. Applications Integration. We integrate with third-party applications including Salesforce.com, Microsoft Dynamics, NetSuite, Zendesk, SugarCRM, eAgent and many...

  • Page 9
    ... PCs, IP phones and mobile phones. In addition, our platform integrates with third party applications such as Salesforce.com, NetSuite, Microsoft Dynamics, SugarCRM, Zendesk, eAgent and many others to provide enhanced functionality. Our Services 8x8 Virtual Office 8x8 Virtual Office is a SaaS, cloud...

  • Page 10
    ...and video meetings; Virtual Office Mobile extension - to place and receive VoIP calls and access common Virtual Office services and functions from an iPhone/iPod Touch/iPad/Android mobile handset; Fax - enables users to send and receive unlimited faxes using either a separate phone number for fax or...

  • Page 11
    ...and website leads which are generated from third party lead generation sources and direct web advertising such as Google, or traditional advertising channels such as in-flight magazines and billboards. Sales representatives are paid a base salary or hourly rate and monthly commission for selling our...

  • Page 12
    ... in San Jose, California and have a staff of approximately 100 employees and contractors that provide customer service and technical support to customers. In addition, we have outsourced some customer support activities to third parties. Customers who access our services directly through our website...

  • Page 13
    ..., Zendesk and others. Supporting a variety of standard and custom integration partners and services is essential to our success as a cloud services provider. We currently employ more than 140 individuals in research, development and engineering activities in our facilities in San Jose, California as...

  • Page 14
    ... As of March 31, 2015, our workforce consisted of 565 employees. None of our employees are represented by a labor union or are subject to a collective bargaining arrangement. Executive Officers of the Registrant Our executive officers as of the date of this report are listed below. Vikram Verma...

  • Page 15
    ... and distributed enterprise customers. If we do not help our customers quickly resolve post-deployment issues and provide effective ongoing support, our ability to sell additional functionality and services to existing customers will suffer and our reputation with existing or potential customers...

  • Page 16
    ... challenges building and training an integrated sales force capable of fully addressing the services and features contained in all of the components in our communications and collaboration suite, as well as a staff of expert engineering and customer support personnel capable of addressing the full...

  • Page 17
    .... Competition could decrease our prices, reduce our sales, lower our gross profits or decrease our market share. In addition, our customers are not subject to long-term contractual commitments to purchase our services and can terminate our service and switch to competitors' offerings on short notice...

  • Page 18
    ...not may be acquired by larger companies that would allocate greater resources to our competitors' research and development programs. In addition, there is no guarantee that our research and development efforts will succeed, or that our new products and services will enable us to maintain or grow our...

  • Page 19
    ... of data transferred, processed and stored by us, the number of locations where our service is being accessed, and the volume of communications managed by our services have in some cases, and may in the future, expand rapidly. In addition, we will need to appropriately scale our internal business...

  • Page 20
    ...incur significant costs and possible service interruption in connection with doing so. In addition, any financial difficulties, such as bankruptcy or foreclosure, faced by our third-party data center operators, or any of the service providers with which we or they contract, may have negative effects...

  • Page 21
    ... to resolve issues. We may incur significant network support and maintenance costs in order to meet these guarantees. We have in the past and may in the future experience network failures, software bugs or other problems that interrupt service or impair call quality. If these problems are severe...

  • Page 22
    ...March 12, 2015, the Federal Communications Commission, or FCC, released an order that would prevent broadband Internet access providers from degrading or otherwise disrupting a broad range of services provisioned over consumers' and enterprises' broadband Internet access lines. A number of providers...

  • Page 23
    ... in one location or on one set of servers, we have the ability to provide continuity of service. We actively monitor our network for cyber threats and implement protective measures periodically. We conduct vulnerability assessments and penetration testing and engage in remedial action based on such...

  • Page 24
    ...to gain access to our customers' data or to our data. CPNI includes information such as the phone numbers called by a consumer, the frequency, duration, and timing of such calls, and any services/features purchased by the consumer, such as call waiting, call forwarding, and caller ID, in addition to...

  • Page 25
    ... terms, could force us to cease using such technology and offering products and services incorporating such technology. We have recently been named as defendants in four patent infringement lawsuits. On February 22, 2011, we were named a defendant in a lawsuit, Bear Creek Technologies, Inc. v. 8x8...

  • Page 26
    .... As of March 31, 2015, we had been awarded 104 United States patents, of which we expect to expire between 2015 and 2042. We have additional United States and foreign patents pending. We cannot predict whether such pending patent applications will result in issued patents, and if they do...

  • Page 27
    ...by us or our competitors; market acceptance of new or existing services and features; the mix of our customer base and sales channels; the mix of services sold; the number of additional customers, on a net basis; the amount and timing of costs associated with recruiting, training and integrating new...

  • Page 28
    ..., privacy, and billing issues, the provision of 9-1-1 emergency service and the quality of service we provide to our customers. The failure of our products and services to comply, or delays in compliance, with various existing and evolving standards could delay or interrupt volume production of...

  • Page 29
    ... we partner with to interface with the public switch telephone network . The FCC reformed the system under which regulated providers of telecommunications services compensate each other for various types of traffic, including VoIP traffic that terminates on the PSTN and applied new call signaling...

  • Page 30
    ...providers and others involved in handling 911 calls the same liability protections when handling 911 calls from interconnected VoIP users as from mobile or wired telephone service users. The applicability of the liability protections to our national call center service is unclear at the present time...

  • Page 31
    ... and challenges associated with sales of our cloud communications and collaboration services to customers outside North America are different in some ways from those associated with sales in North America, and we have a limited history addressing those risks and meeting those challenges. Our current...

  • Page 32
    ...); providing access to operator assistance, directories and directory enquiry services, offering contracts with minimum terms, providing and publishing certain information transparently, providing itemized billing, protecting customer information (including personal data); porting phone numbers upon...

  • Page 33
    ... stockholders; the requirement that a special meeting of stockholders may be called only by a majority vote of our Board of Directors, the Chairman of our Board of Directors, our Chief Executive Officer or by stockholders holdings shares of our common stock representing in the aggregate a majority...

  • Page 34
    ... by certain employee stock plans) or (iii) the transaction is approved by the board of directors and by the stockholders at an annual or special meeting by a vote of 66 2/3% of the outstanding voting stock (excluding shares held or controlled by the interested stockholder). These provisions in our...

  • Page 35
    ... on the same day regarding the same patent asserted in the complaint filed against 8x8. On April 16, 2015, we were named as a defendant in a lawsuit, Slocumb Law Firm v. 8x8, Inc. The Slocumb Law Firm alleges that it purchased certain business services from us that did not perform as advertised...

  • Page 36
    ... the cumulative total stockholder return over a five year period assuming the investment of $100 on March 31, 2010 in each of 8x8's common stock, the NASDAQ Composite Index and the NASDAQ Telecommunications Index. The graph is furnished, not filed, and the historical return cannot be indicative of...

  • Page 37
    ... Purchases of Equity Securities The activity under the Repurchase Plans for the three months ended March 31, 2015 is summarized as follows: Total Number of Shares Purchased Total Number of Shares Purchased January 1 - January 31, 2015 February 1 - February 28, 2015 March 1 - March 31, 2015 Total 666...

  • Page 38
    (1) Increase due to Board of Director's authorization of the 2015 Repurchase Plan. 33

  • Page 39
    ... leading provider of VoIP and SaaS communication solutions in the cloud for SMBs and mid-market and distributed enterprises. We deliver a broad suite of SaaS services including hosted cloud telephony, virtual contact center, and virtual meeting to in-office and mobile devices through its proprietary...

  • Page 40
    ... these markets through a variety of additional methods including strategic alliances, partners and acquisitions. To support these initiatives and strengthen our business, we intend to continue investing in research and development and sales and marketing at rates comparable to the third and fourth...

  • Page 41
    ... for a product or service by considering multiple factors including, but not limited to: 4 the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and analysis of pricing history of new arrangements...

  • Page 42
    ...the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations. The carrying ... approximately $1.5 million, as certain California net operating losses will not be utilized as they have expired in fiscal 2015. During the fourth quarters of fiscal...

  • Page 43
    ... Stock Plan, 1996 Director Option Plan, the 2006 Stock Plan, the 2003 Contactual Plan, the 2012 Equity Incentive Plan, the 2013 New Employee Inducement Incentive Plan and stock purchase rights under the 1996 Employee Stock Purchase Plan (collectively "Equity Compensation Plans") under the provisions...

  • Page 44
    ... of months in the period divided by the simple average number of business customers during the period. (3) Business customer service revenue churn is calculated by dividing the service revenue lost from business customers (after the expiration of 30-day trial) during the period by the simple average...

  • Page 45
    ... for fiscal 2015. We expect growth in the number of business customers and average monthly service revenue per customer to continue to grow in fiscal ...shipment and the customer's service address (in thousands): Years Ended March 31, 2014 92% 97% 7% 2% 1% 1% 100% 100% 2015 Americas (principally US)...

  • Page 46
    ...of service revenue for fiscal 2015 from fiscal 2014 was primarily due to a $3.5 million increase in third party network service expenses, a $1.5 million increase in payroll and related expenses, a $1.0 million increase in depreciation, and a $0.3 million increase in stock-based compensation expenses...

  • Page 47
    ... deployment engineering. Such costs also include outsourced customer service call center operations, sales commissions, as well as trade show, advertising and other marketing and promotional expenses. The increase in sales and marketing expenses for fiscal 2015 from fiscal 2014 was primarily due to...

  • Page 48
    ... as certain California net operating losses carryforwards having expired in fiscal 2015. We recorded an income tax provision of $2.2 ...expire at various dates between 2016 and 2035. In addition, at March 31, 2015, we had research and development credit carryforwards for federal and state tax reporting...

  • Page 49
    ... us to raise up to an additional $123.7 million from the sale of new securities of ours. Please refer to Part I, Item 1A, Risk Factors "We may need to raise additional capital to support our future operations." 2015 to 2014 Net cash provided by operating activities for fiscal 2015 was $21.2 million...

  • Page 50
    ... 48 - $ 17,376 Capital leases Office leases Purchase obligations Third party customer support provider Third party network service providers Open purchase orders We lease our headquarters facility in San Jose, California under an operating lease agreement that expires in October 2019. The lease is...

  • Page 51
    ...million. The agreement requires a 150-day notice to terminate. At March 31, 2015, the total remaining obligation under the contract was $2.2 million. We entered into contracts with multiple vendors for third party network service which expire on various dates in fiscal 2016 through 2018. At March 31...

  • Page 52
    ... set forth therein. Also in our opinion, 8x8, Inc., maintained, in all material respects, effective internal control over financial reporting as of March 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of...

  • Page 53
    ... 2014 Common stock, $0.001 par value: Authorized: 200,000,000 shares; Issued and outstanding: 88,065,528 shares and 88,525,015 shares at March 31, 2015 and 2014, respectively Additional paid-in capital Accumulated other comprehensive (loss) income Accumulated deficit Total stockholders' equity Total...

  • Page 54
    ... SHARE AMOUNTS) Years Ended March 31, 2015 2014 148,208 $ 116,607 $ 14,205 11,990 162,413 128,597 Service revenue Product revenue Total revenue Operating expenses: Cost of service revenue Cost of product revenue Research and development Sales and marketing General and administrative Gain on patent...

  • Page 55
    8X8, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (IN THOUSANDS) Years Ended March 31, 2015 2014 2013 1,926 $ 2,514 $ 13,939 (26) (2,513) (613) $ (41...adjustment Comprehensive (loss) income $ $ The accompanying notes are an integral part of these consolidated financial statements. 50

  • Page 56
    ... Issuance of common stock under stock plans Cost of issuance of common stock Repurchase of common stock Stock-based compensation expense Income tax benefit from stockbased compensation Unrealized investment loss Foreign currency translation adjustment Net income Balance at March 31, 2015 151 (26...

  • Page 57
    ... payments Repurchase of common stock Tax benefit from stock-based compensation Proceeds from (cost of) issuance of common stock, net of issuance costs Proceeds from issuance of common stock under employee stock plans Net cash (used in) provided by financing activities Effect of exchange rate changes...

  • Page 58
    52

  • Page 59
    ... of VoIP technology and SaaS (Software as a service) communication solutions in the cloud for SMBs and mid-market and distributed enterprises. The Company delivers a broad suite of SaaS services to in-office and mobile devices spanning cloud telephony, virtual contact center and virtual meeting...

  • Page 60
    ... for a product or service by considering multiple factors including, but not limited to: 4 the price list established by its management which is typically based on general pricing practices and targeted gross margin of products and services sold; and analysis of pricing history of new arrangements...

  • Page 61
    ... and money market funds. At March 31, 2015 and 2014, all investments were classified as available-for-sale and reported at fair value, based either upon quoted prices in active markets, quoted prices in less active markets, or quoted market prices for similar investments, with unrealized gains and...

  • Page 62
    ... Income. Construction in progress primarily relates to costs to acquire or internally develop software for internal use not fully completed as of March 31, 2015. ACCOUNTING FOR LONG-LIVED ASSETS The Company reviews the recoverability of its long-lived assets, such as property and equipment, definite...

  • Page 63
    ... from its customers. At March 31, 2015 and 2014, no customer accounted for more than 10% of accounts receivable. The Company outsources the manufacturing of its hardware products to independent contract manufacturers. The inability of any contract manufacturer to fulfill supply requirements of the...

  • Page 64
    ... Stock Plan, 1996 Director Option Plan, the 2006 Stock Plan, the 2003 Contactual Plan, the 2012 Equity Incentive Plan, the 2013 New Employee Inducement Incentive Plan and stock purchase rights under the 1996 Employee Stock Purchase Plan (collectively "Equity Compensation Plans") under the provisions...

  • Page 65
    ... a group of executives with vesting that is contingent on both market performance and continued service. For the market-based restricted performance stock units issued during the fiscal year ended March 31, 2015: 4 the number of shares of the Company's stock to be received at vesting if applicable...

  • Page 66
    .... Dilutive potential common shares include outstanding stock options and employee restricted purchase rights. DEFERRED RENT In April 2012, the Company entered into an 87-month lease agreement for its new headquarters. Under the terms of the lease agreement: 4 the Company received a three month rent...

  • Page 67
    ... that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation - Stock Compensation , as it relates to such awards. ASU 2014-12 is effective for...

  • Page 68
    ... equivalents, and available-for-sale investments were (in thousands): Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term Costs Gain Loss Fair Value...of March 31, 2015 Cash Level 1: Money market funds Mutual funds Subtotal Level 2: Commercial paper Corporate debt Municipal ...

  • Page 69
    ... funds Mutual funds Subtotal Level 2: Commercial paper Corporate debt Municipal securities Asset backed securities International government securities Subtotal Total $ Gross Gross Cash and Amortized Unrealized Unrealized Estimated Cash Short-Term Long-Term Costs Gain Loss Fair Value Equivalents...

  • Page 70
    .../domains Total acquired identifiable intangible assets $ At March 31, 2015, annual amortization of ...acquisitions Decrease in goodwill related to disposal of discontinued operations Foreign currency translation Balance as of March 31, 2014 Foreign currency translation Balance as of March 31, 2015...

  • Page 71
    ...546) (142) 339 $ 660 $ 452 2015 Balance at beginning of year Accruals for warranties Settlements Changes in estimate Balance at end of year Leases $ $ The Company leases its headquarters facility in San Jose, California under an operating lease agreement that expires in October 2019. The lease is...

  • Page 72
    ... Third Party Network Service Provider Commitments The Company entered into contracts with multiple vendors for third party network service which expire on various dates in fiscal 2016 through 2018. At March 31, 2015, future minimum annual payments under these third party network service contracts...

  • Page 73
    ... on the same day regarding the same patent asserted in the complaint filed against 8x8. On April 16, 2015, the Company was named as a defendant in a lawsuit, Slocumb Law Firm v. 8x8, Inc. The Slocumb Law Firm alleges that it purchased certain business services from the Company that did not perform...

  • Page 74
    8. STOCKHOLDERS' EQUITY 1996 Stock Plan In June 1996, the Company's board of directors adopted the 1996 Stock Plan ("1996 Plan"). A total of 12,035,967 shares were reserved for issuance under the 1996 Plan prior to its expiration in June 2006. As of March, 31, 2015, there are no shares available for...

  • Page 75
    ...2,634 - $ 9,347 $ 7,595 $ 2,634 Stock Options, Stock Purchase Right and Restricted Stock Unit Activity Stock Option activity under all the Company's stock option plans since March 31, 2012, is summarized as follows: Weighted Average Exercise Number of Price Shares Per Share 6,034,335 $ 1.90 932...

  • Page 76
    ... at March 31, 2014 Granted Vested Forfeited Balance at March 31, 2015 2.52 1.93 1.50 Restricted Stock Unit activity since June 22, 2012 is summarized as follows: Weighted Average Remaining Contractual Term (in Years) Number of Shares Balance at June 22, 2012 Granted Vested Forfeited Balance at...

  • Page 77
    ...,303 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...

  • Page 78
    ... $15.7 million. The stock repurchase activity as of March 31, 2015 is summarized as follows: Weighted Average Price Per Share 7.82 $ 7.38 $ Shares Repurchased Repurchase of common stock under 2014 Repurchase Plan Repurchase of common stock under 2015 Repurchase Plan Total (1) Amount excludes...

  • Page 79
    The total purchase prices of the common stock repurchased and retired were reflected as a reduction to consolidated stockholders' equity during the period of repurchase. In fiscal 2015, 2014 and 2013, the Company also withheld 15,053, 50,400, 73,751, respectively, shares related to tax withholdings ...

  • Page 80
    ... taxes. In addition, at March 31, 2015, the Company had research and development credit carryforwards for federal and California tax reporting purposes of approximately $3.3 million and $5.1 million, respectively. The federal income tax credit carryforwards will expire at various dates between 2021...

  • Page 81
    ... expense in 2015, 2014 and 2013 was $0.7 million, $0.4 million and $0.3 million, respectively. The Savings Plan does not allow employee contributions to be invested in the Company's common stock. 11. NET INCOME PER SHARE The following is a reconciliation of the weighted average number of common...

  • Page 82
    ...is as follows (in thousands): March 31, 2015 2014 8,348 $ 6,305 1,411 1,087 489 319 10,248 $ 7,711 North America Europe Asia-Pacific $ $ 13. ACQUISITION Voicenet Solutions Limited On November 11, 2013, the Company entered into a share purchase agreement with the shareholders and optionholders of...

  • Page 83
    ...party entered into two separate license agreements with its customers; therefore, the Company earned an additional $1.0 million each under the patent purchase agreement for fiscal 2015 and 2013. Under the terms and conditions of the patent purchase agreement, the Company has retained certain limited...

  • Page 84
    ...with the shareholders of DXI Limited, API Telecom Limited, Easycallnow Limited, and RAS Telecom Limited (collectively, "DXI"), for the purchase of the entire share capital of DXI. DXI provides SaaS for call center solution workflows. The total aggregate purchase price was approximately $25.5 million...

  • Page 85
    ...expenses: Cost of service revenue Cost of product revenue Research and development Sales and marketing General and administrative Gain on patent sale Total operating expenses Income (loss) from operations Other income net Income (loss) from continuing operations before provision (benefit) for income...

  • Page 86
    ... in Item 8 of this Annual Report on Form 10-K. ITEM 9B. OTHER INFORMATION On May 26, 2015, we, together with 8x8 UK Investments Limited, our wholly-owned subsidiary, entered into a share purchase agreement with the shareholders of DXI Limited, API Telecom Limited, Easycallnow Limited and RAS Telecom...

  • Page 87
    ... be presented in our definitive proxy statement for our 2015 Annual Meeting of Stockholders to be held on or about July 23, 2015, which information is incorporated into this report by reference. In addition, descriptions of our equity compensation plans are set forth in Part II, Item 8 "FINANCIAL...

  • Page 88
    ... this report. (a)(3) Exhibits. The documents listed on the Exhibit Index appearing in this Report are filed herewith or hereby incorporated by reference. Copies of the exhibits listed in the Exhibit Index will be furnished, upon request, to holders or beneficial owners of the Company's common stock...

  • Page 89
    ... has duly caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Jose, State of California, on May 29, 2015. 8X8, INC. By: /s/ VIKRAM VERMA Vikram Verma, Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENT...

  • Page 90
    ... Reserved Reserved Annual Executive Incentive Plan. Amended and Restated Contactual, Inc. 2003 Stock Option Plan Form of Stock Option Agreement under the Amended and Restated Contactual, Inc. 2003 Stock Option Plan Amended and Restated 2012 Equity Incentive Plan Form of Stock Option Agreement...

  • Page 91
    ...XBRL Taxonomy Extension Presentation Linkbase * Indicates management contract or compensatory plan or arrangement. **Filed herewith. (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) (o) (p) (q) (r) (s) (t) (u) (v) (w) (x) Incorporated by reference to exhibit 3.2 to the Registrant's Report on...

  • Page 92

  • Page 93
    ... in accordance with your Incentive Compensation Plan. In addition you will receive an annual $75,000 bonus tied to MBOs that will be determined by the Chief Executive Officer. 40% will be paid based on quarterly targets and 60% based on annual targets. For FQ4 2015 you will have a commission of...

  • Page 94
    ... to approval by the Board of Directors, you will receive the following awards of stock-based compensation, with the number of shares subject to each award to be calculated by dividing the value of each award stated below based on 30 tradingday average closing price of a share of the Company's Common...

  • Page 95
    ... return on the price per share of Common Stock exceeds the performance return on the NASDAQ Composite Index so if you are in continued service to the Company on June 30, 2016 you will earn and vest as to 25% of the TSR Performance Shares. Ex.2 - Assume that for the period from the grant date...

  • Page 96
    ... to meet this stock ownership threshold. If at any time thereafter, while you remain SVP of Global Sales of the Company, your aggregate share ownership as defined in this Paragraph 4(b) should fall below the threshold, you agree to retain shares as they vest and you acquire them, and not to sell any...

  • Page 97
    ...25 miles from our San Jose, CA location immediately prior to such relocation; or (v) any purported termination of you other than for Cause (as defined below); and E. "Cause" means: (i) any act of personal dishonesty taken by you in connection with your responsibilities in your service to the Company...

  • Page 98
    ... check fails to meet the employment qualifications of the Company. 10. 11. Expiration Date . If not accepted, this offer will expire on January 8, 2015. Start Date . Your new position will be become effective as of January 12, 2015. Please indicate your acceptance by signing and returning a copy of...

  • Page 99

  • Page 100
    EXHIBIT 21.1 SUBSIDIARIES OF REGISTRANT Name Netergy Microelectronics, Inc. Visit, Inc. Contactual, Inc. Zerigo, Inc. Voicenet Solutions Limited 8x8 UK Investments Limited Jurisdiction of Incorporation California, USA California, USA Delaware, USA Colorado, USA United Kingdom United Kingdom

  • Page 101
    ... our report dated May 29, 2015, relating to the consolidated financial statements of 8x8, Inc., and the effectiveness of internal control over financial reporting of 8x8, Inc., appearing in this Annual Report (Form 10-K) for the year ended March 31, 2015. /s/ Moss Adams LLP San Francisco, California...

  • Page 102
    Exhibit 31.1 CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Vikram Verma, certify that: 1. I have reviewed this annual report on Form 10-K of 8x8, Inc.; 2. Based on my knowledge...

  • Page 103

  • Page 104
    Exhibit 31.2 CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, MaryEllen Genovese, certify that: 1. I have reviewed this annual report on Form 10-K of 8x8, Inc.; 2. Based on my ...

  • Page 105

  • Page 106
    ... ACT OF 2002 In connection with the Annual Report on Form 10-K of 8x8, Inc. (the "Company") for the year ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Vikram Verma, Chief Executive Officer of the Company, hereby certify, pursuant to...

  • Page 107
    ... ACT OF 2002 In connection with the Annual Report on Form 10-K of 8x8, Inc. (the "Company") for the year ended March 31, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, MaryEllen Genovese, Chief Financial Officer and Secretary of the Company, hereby...