8x8 2016 Annual Report Download - page 78

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
2016, 2015 and 2014, 365,555, 282,062 and 301,303 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 Stockholders held September 18, 2006. The Employee Stock Purchase Plan is effective until August 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:
Years Ended March 31,
2016 2015 2014
Expected volatility 53% 61% 64%
Expected dividend yield - - -
Risk-free interest rate 1.5% to 1.8% 1.4% to 1.9% 0.7% to 2.2%
Weighted average expected option term 5.4 years 6.0 years 6.1 years
Weighted average fair value of options granted $ 4.17 $ 4.14 $ 5.70
The estimated fair value of stock purchase rights granted under the Employee Stock Purchase Plan was estimated using the Black-Scholes pricing model with the
following weighted-average assumptions:
Years Ended March 31,
2016 2015 2014
Expected volatility 43% 49% 40%
Expected dividend yield - - -
Risk-free interest rate 0.39% 0.12% 0.09%
Weighted average expected rights term 0.83 years 0.80 years 0.75 years
Weighted average fair value of rights granted $ 3.25 $ 2.52 $ 2.83
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