8x8 2015 Annual Report Download - page 81

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Utilization of the Company's net operating loss and tax credit carryforwards can become subject to a substantial annual limitation due to the
ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Such an annual limitation
could result in the expiration or elimination of the net operating loss and tax credit carryforwards before utilization. The Company has performed
an analysis of its changes in ownership under Section 382 of the Internal Revenue Code. Management currently believes that the Section 382
limitation will not limit utilization of the carryforwards prior to their expiration, with the exception of certain acquired loss and tax credit
carryforwards of Contactual, Inc.
10. EMPLOYEE BENEFIT PLAN
401(k) Savings Plan
In April 1991, the Company adopted a 401(k) savings plan (the "Savings Plan") covering substantially all of its U.S. employees. Eligible
employees may contribute to the Savings Plan from their compensation up to the maximum allowed by the Internal Revenue Service. In January
2007, the Company reactivated the employer matching contribution. The matching contribution is 100% of each employee's contributions in
each year, not to exceed $1,500 per annum. The matching 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 shares outstanding used in calculating basic and diluted net income
per share (in thousands, except share and per share data):
74
Years Ended March 31,
2015
2014
2013
(In Thousands, Except Per Share Amounts)
Numerator:
Income from continuing operations
$
1,926
$
1,598
$
13,450
Income from discontinued operations, net
of income tax provision
-
916
489
Net income available to common stockholders
$
1,926
$
2,514
$
13,939
Denominator:
Common shares
89,071
78,310
71,390
Denominator for basic calculation
89,071
78,310
71,390
Employee stock options
2,088
2,927
2,958
Employee restricted purchase rights
493
421
352
Denominator for diluted calculation
91,652
81,658
74,700
Income per share
-
continuing operations:
Basic
$
0.02
$
0.02
$
0.19
Diluted
$
0.02
$
0.02
$
0.18
Income per share
-
discontinued operations:
Basic
$
0.00
$
0.01
$
0.01
Diluted
$
0.00
$
0.01
$
0.01
Net income per share:
Basic
$
0.02
$
0.03
$
0.20
Diluted
$
0.02
$
0.03
$
0.19