8x8 2016 Annual Report Download - page 33

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Decreasing telecommunications rates and increasing regulatory charges may diminish or eliminate our competitive pricing advantage versus legacy
providers.
Decreasing telecommunications rates may diminish or eliminate the competitive pricing advantage of our services, while increased regulation and the imposition of
additional regulatory funding obligations at the federal, state and local level could require us to either increase the retail price for our services, thus making us less
competitive, or absorb such costs, thus decreasing our profit margins. International and domestic telecommunications rates have decreased significantly over the
last few years in most of the markets in which we operate, and we anticipate these rates will continue to decline in all of the markets in which we do business or
expect to do business. Users who select our services to take advantage of the current pricing differential between traditional telecommunications rates and our rates
may switch to traditional telecommunications carriers if such pricing differentials diminish or disappear, however, and we will be unable to use such pricing
differentials to attract new customers in the future. Continued rate decreases would require us to lower our rates to remain competitive and would reduce or
possibly eliminate any gross profit from our services. In addition, we may lose subscribers for our services.
Certain provisions in our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment .
Our restated certificate of incorporation and amended and restated bylaws contain provisions that could have the effect of delaying or preventing changes in control
or changes in our management without the consent of our board of directors, including, among other things:
no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and
voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death
or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;
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