Exhibit 10.6
September 9, 2013
Darren Hakeman
2125 O'Nel Drive
San Jose, CA 95131
RE: Employment Offer at 8x8, Inc. (Nasdaq: EGHT)
Dear Darren,
On behalf of 8x8, Inc., a Delaware corporation (the "Company"), I am pleased to offer you the position of Senior Vice President of Product and Strategy. The terms of your employment relationship with the Company will be as set forth below and will be subject to the approval of the Company's Chief Executive Officer.
1. Position. You will become Senior Vice President of Product and Strategy. As such, you will have responsibilities as determined by Vikram Verma. Duties and responsibilities are subject to change depending on the needs of the Company.
2. Compensation.
a. Base Salary. You will be paid a yearly rate of $260,000 per year. Your salary will be payable in accordance with the Company's standard payroll policies subject to normal required withholding.
b. Salary Review. Your base salary will be reviewed as part of the Company's normal salary review process.
c. Expenses. You will be reimbursed for all reasonable and necessary business expenses incurred in the performance of your duties as provided in the Company's Employee Handbook.
3. Management Incentive Plan. Starting with FY 2015 (April 1, 2014), while you are Senior Vice President of Product and Strategy you will be eligible to participate in the Company's Management Incentive Plan, with a target annual bonus of 50% of your annual base salary. The Management Incentive Plan will be paid (if minimum targets are met) in the calendar year in which the relevant fiscal year ends, promptly after the completion of each fiscal year's audit.
4. Stock Awards.
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(A) 25% of the TSR Performance Shares can be earned between the grant date and March 31, 2015;
(B) 50% of the TSR Performance Shares can be earned between the grant date and March 31, 2016;
(C) 25% of the TSR Performance Shares can be earned between the grant date and March 31, 2017;
where in each such measurement period, (1) if the performance return on the price per share of Common Stock exceeds the performance return on the NASDAQ Composite Index, (which shall be determined by subtracting the percentage return on the NASDAQ Composite Index from the percentage return on the price per share of the Common Stock), then all of the TSR Performance Shares for such measurement period will be deemed earned and will vest; (2) if the performance return on the price per share of Common Stock is more than 50% lower than the performance return on the NASDAQ Composition Index, then none of the TSR Performance Shares for such measurement period will be deemed earned and will vest; and (3) if the performance return on the price per share of Common Stock is between 0% and 50% lower than the performance return on the NASDAQ Composite Index, then the number of TSR Performance Shares deemed earned and vesting for such measurement period will be reduced by 2% for each 1% by which the performance return on the NASDAQ Composite Index exceeds the performance return on the Common Stock. The performance return on each of the price per share of Common Stock and the NASDAQ Composite Index will be determined in the manner described in SEC Regulation S-K, Item 201(e)(1), which assumes a dollar amount invested in each at the applicable price of the Common Stock and the NASDAQ Composite Index at the
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beginning of the measurement period, and which shall be compared with the dollar value of the investment at the end of the measurement period based on the 30-day trading average price of each of the Common Stock and the NASDAQ Composite Index prior to and through the grant date and the last trading day of each of the relevant measurement periods, as the case may be.
Ex.1 - Assume that for the period from your start date through March 31 2015 the beginning and ending prices per share of Common Stock (determined as provided above) are $9.50 and $12.00, respectively, and the beginning and ending ^IXIC are 3,660 and 3,750, respectively. Assume no dividends are paid by the Company during the period. Therefore, $100 invested in Common Stock at the beginning of the period is worth $126 at the end, a 26% return, and $100 invested in ^IXIC at the beginning of the period is worth $103 at the end, a return of 3%. Therefore, the performance 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 March 31, 2015 you will earn and vest as to 25% of the TSR Performance Shares.
Ex.2 - Assume that for the period from your start date through March 31, 2016, the beginning and ending prices per share of Common Stock (determined as provided above) are $9.50 and $8.00, respectively, and the beginning and ending ^IXIC are 3,660 and 3,250, respectively. Assume no dividends are paid by the Company during the period. Therefore, $100 invested in Common Stock at the beginning of the period is worth $84 at the end, (-16%) return, and $100 invested in ^IXIC at the beginning of the period is worth $89 at the end, (-11%) return. The performance return on the price per share of Common Stock compared with the ^IXIC is (-5%) worse than the performance return on the NASDAQ Composite Index. Therefore, the total number of TSR Performance Shares for the period is reduced by 10% (5% x 2) and 90% of the 50% of the TSR Performance Shares eligible to be earned during such measurement period, or 45% of the total number of TSR Performance Shares will be earned and vest, if you were in continuous service to the Company through March 31, 2016.
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5. Benefits. The Company will make available to you standard vacation, medical and dental insurance benefits. The Company will also make available to you a 401(k) Plan. You are eligible for benefits on the first day of your employment. Medical benefits will start on your date of hire and your dental will start on the first day of the month following your date of hire.
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6. Standard Confidentiality and Inventions Assignment Agreement. Like all Company employees, you will be required to sign the Company's standard Confidential Information and Inventions Assignment Agreement (the "Confidentiality Agreement") relating to protection of the Company's proprietary and confidential information and assignment of inventions.
7. At-Will Employment. You will be an employee-at-will, meaning that either you or the Company may terminate your employment at any time, without notice, for any reason or no reason without further obligation or liability to either party. Such termination will not affect the parties' respective obligations under the Confidentiality Agreement. You will receive the Company's Employee Handbook with all of our policies and procedures on your first day of employment.
8. No Outside Consulting. You agree to not do any outside consulting work for any other person or company while employed full-time at the Company other than with the advance written approval of the Chief Executive Officer of the Company.
9. Background Check. This offer letter is contingent upon the results of a background check and may be rescinded at anytime in the event the background check fails to meet the employment qualifications of the Company.
10. Expiration Date. If not accepted, this offer will expire on September 9, 2013.
11. Start Date. Your employment with the Company will commence on September 9, 2013 or such other date as you and the Company shall agree on in writing (your "Start Date").
Please indicate your acceptance by signing and returning a copy of the signed letter to me via e-mail or facsimile at 408-436-6417.
We welcome you to the team!
Sincerely,
8X8, INC.
By: ____________________________
Vikram Verma
Chief Executive Officer
ACCEPTED:
_____________________________
Darren Hakeman
Date: ________________________