Item 1.01 Entry into a Material Definitive Agreement.
Offering of 0.50% Convertible Senior Notes due 2024
On November 21, 2019, 8x8, Inc. (the "Company") completed its previously
announced public offering and sale of an additional $75,000,000 aggregate
principal amount of its 0.50% Convertible Senior Notes due 2024 (the "Additional
Notes") at a price to the underwriter of 101.805% less an underwriter's discount
of 2.5%, plus accrued interest from August 1, 2019, pursuant to an underwriting
agreement (the "Underwriting Agreement"), dated November 18, 2019, among the
Company and Morgan Stanley & Co. LLC.
The sale of the Additional Notes was made pursuant to the Company's Registration
Statement on Form S-3 (Registration No. 333-234757), including a prospectus
dated November 18, 2019, filed by the Company with the Securities and Exchange
Commission, pursuant to Rule 424(b)(2) under the Securities Act of 1933, as
amended.
The Additional Notes are the Company's senior unsecured obligations, and were
issued under an indenture, dated as of February 19, 2019 (the "Indenture"),
between the Company and Wilmington Trust, National Association, as trustee (the
"Trustee"). The Additional Notes constitute a further issuance of, and form a
single series with, the Company's outstanding 0.50% Convertible Senior Notes due
2024 issued on February 19, 2019 in the aggregate principal amount of
$287,500,000 (the "Existing Notes" and, together with the additional notes, the
"Notes"). Immediately after giving effect to the issuance of the Additional
Notes, the Company has $362,500,000 aggregate principal amount of 0.50%
Convertible Senior Notes due 2024 outstanding.
Purchasers could elect (an "Unrestricted Election") to receive Notes
("Unrestricted Notes") that are not subject to the same transfer restrictions as
the Existing Notes. Unless purchasers of the Notes elected otherwise, the
Additional Notes were issued with the same restricted CUSIP number, bear the
same restricted legends and are subject to the same transfer restrictions as the
Existing Notes (such restricted new notes, together with the Existing Notes, the
"Restricted Notes"). For purchasers of the Notes who did not make an
Unrestricted Election, such restricted new notes will be fungible with the
Existing Notes for U.S. federal income tax purposes. For purchasers of the notes
offered hereby who made an Unrestricted Election, such Unrestricted Notes are
anticipated to become fungible with the Restricted Notes for U.S. federal income
tax purposes once the Restricted Notes are not subject to transfer restrictions
and are assigned an unrestricted CUSIP number, which is expected to be the same
CUSIP number previously assigned to any Unrestricted Notes.
The Additional Notes bear interest at a rate of 0.50% per year, accruing from
the August 1, 2019 interest payment date of the Existing Notes, payable
semiannually in arrears on February 1 and August 1 of each year, beginning on
February 1, 2020. The Additional Notes will mature on February 1, 2024, unless
earlier converted, redeemed or repurchased in accordance with their terms.
The Notes will be convertible at the option of the noteholders at any time prior
to the close of business on the business day immediately preceding October 1,
2023, only under the following
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circumstances: (1) during any fiscal quarter commencing after the fiscal quarter
ending on June 30, 2019 (and only during such fiscal quarter), if the last
reported sale price of the Company's common stock, par value $0.001 per share
(the "Common Stock"), for at least 20 trading days (whether or not consecutive)
during a period of 30 consecutive trading days ending on, and including, the
last trading day of the immediately preceding fiscal quarter is greater than or
equal to 130% of the conversion price for the Notes on each applicable trading
day; (2) during the five business day period after any five consecutive trading
day period (the "measurement period") in which the trading price (as defined in
the Indenture) per $1,000 principal amount of Notes for each trading day of the
measurement period was less than 98% of the product of the last reported sale
price of the Common Stock and the conversion rate on such trading day; (3) if
the Company calls any or all of the Notes for redemption, at any time prior to
the close of business on the second scheduled trading day immediately preceding
the redemption date; or (4) upon the occurrence of specified corporate events.
On or after October 1, 2023 until the close of business on the second scheduled
trading day immediately preceding the maturity date, holders may convert their
Notes at any time, regardless of the foregoing circumstances. Upon conversion of
a Note, the Company will pay or deliver, as the case may be, cash, shares of
Common Stock or a combination of cash and shares of Common Stock, at the
Company's election.
The conversion rate for the Notes is initially 38.9484 shares of Common Stock
per $1,000 principal amount of the Notes (equivalent to an initial conversion
price of approximately $25.68 per share of Common Stock). The conversion rate
for the Notes will be subject to adjustment in some events but will not be
adjusted for any accrued and unpaid interest. In addition, following certain
corporate events that occur prior to the maturity date or following the
Company's issuance of a notice of redemption, the Company will increase the
conversion rate of the Notes for a holder who elects to convert in connection
with such a corporate event or during the related redemption period in certain
circumstances.
The Company may not redeem the Notes prior to February 4, 2022. The Company may
redeem for cash all or any portion of the Notes, at its option, on or after
February 4, 2022 if the last reported sale price of the Common Stock has been at
least 130% of the conversion price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading day period
(including the last trading day of such period) ending on, and including, the
trading day immediately preceding the date on which the Company provides notice
of redemption at a redemption price equal to 100% of the principal amount of the
notes to be redeemed, plus accrued and unpaid interest to, but excluding, the
redemption date.
Upon the occurrence of certain fundamental changes, the holders of the Notes may
require the Company to repurchase all or a portion of their Notes for cash at a
price equal to 100% of the principal amount of the Notes, plus accrued and
unpaid interest to, but excluding, the fundamental change repurchase date.
The Indenture contains customary terms and covenants, including that upon
certain events of default occurring and continuing, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding may declare the entire principal amount of all the Notes,
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and the interest accrued on such Notes, if any, to be immediately due and
payable. Upon events of default involving specified bankruptcy events involving
the Company, the Notes will be due and payable immediately.
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information required by Item 2.03 relating to the Notes and the Indenture is
contained in Item 1.01 of this Current Report under the section "Offering of
0.50% Convertible Senior Notes due 2024" above and is incorporated herein by
reference.
Item 8.01 Other Events.
On November 18, 2019, the Company issued a press release announcing the pricing
of the Notes. A copy of the press release is attached as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
1.1 Underwriting Agreement, dated as of November 18, 2019, between
8x8, Inc. and Morgan Stanley & Co. LLC
4.1 Indenture, dated as of February 19, 2019, between 8x8, Inc. and
Wilmington Trust, National Association, as trustee (including form
of Note) (incorporated by reference to Exhibit 4.1 to the Current
Report on Form 8-K filed February 19, 2019)
10.1 Form of Capped Call Confirmation
99.1 Press release issued by 8x8, Inc. dated November 18, 2019
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the Inline XBRL document)
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