Document:

Exhibit 10.1

 

CANCELLATION AGREEMENT

 

THIS CANCELLATION
AGREEMENT (this “Agreement”), is entered into effective as of July 26, 2019, by and between CBAK Energy
Technology, Inc., a Nevada corporation (the “Company”) and each of the persons listed on the Schedule of Creditors
attached hereto as Exhibit A(individually, a “Creditor” and collectively, the “Creditors”).

 

RECITALS

 

WHEREAS, from
time to time, the Creditors have provided financing to the Company or its subsidiaries, and, as of the date hereof, each of the
Creditors holds outstanding debt in the Company, including both principals and accrued interests, as is set forth opposite such
Creditor’s name on the Schedule of Creditors (collectively, the “Debts”);

 

WHEREAS, the
Company desires to reduce its debt load in order to improve its balance sheet and to enhance its ability to secure additional financing;
and

 

WHEREAS, each
of the Creditors agrees to cancel all of its respective amount of the Debts in exchange for certain amount of shares of common
stock of the Company, calculated at the price of $1.05 per share (the “Exchange Price”), on the terms
set forth herein, and the Company is willing and able to issue shares of common stock to the Creditors on the terms described herein.

 

NOW THEREFORE,
in consideration of the foregoing and the representations, warranties, covenants, and agreements set forth herein, and other good
and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby,
the parties hereto hereby covenant and agree as follows:

 

1. Cancellation
of the Debts; Issuance of the Shares. At the Closing (as defined in Section 2 hereof) and subject to the terms and conditions
of this Agreement, all of the Debts shall be cancelled and the Company shall issue an aggregate of 7,092,219 shares of common
stock, par value $0.001 per share (the “Shares”), calculated at the Exchange Price, to the Creditors as is set
forth opposite such Creditor’s name on the Schedule of Creditors.

 

2. Closing;
Delivery of Shares.

 

(a). The closing of
the cancellation of Debts and the issuance of the Shares shall occur as soon as practicable after the execution of this
Agreement, but in no event later than thirty (30) calendar days from the execution of this Agreement (the “Outside
Date”), at the offices of the Company, or such other place, date and time as set forth in this Agreement or as the
parties hereto may otherwise agree (the “Closing”).

 

(b). At the
Closing, the Company shall use its best efforts to cause the Company’s transfer agent to deliver to each of the
Creditors, by courier or FedEx, stock certificate, or certificates, registered in the name of such Creditor and representing
the amount of Shares as is set forth opposite such Creditor’s name on the Schedule of Creditors.

 

     

     

    

 

3. Representations
and Warranties of Creditor. Each Creditor, severally and not jointly, represents and warrants to the Company with respect
to only itself that, as of the date hereof and as of the date of Closing:

 

(a).Qualification,
Authorization and Enforcement. This Agreement has been duly executed by such Creditor, and when delivered by such Creditor
in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Creditor, enforceable against
it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies
or by other equitable principles of general application.

 

(b).No Conflict.
The execution, delivery, and performance of this Agreement do not and will not: (i) conflict with or violate any law or governmental
order applicable to the Creditor; or (ii) conflict with, result in any breach of, constitute a default (or event which with the
giving of notice or lapse of time or both would become a default) under, require any consent under, or give to others any rights
of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any encumbrance
on any of the assets or properties of the Creditor pursuant to, any contract to which the Creditor is a party or by which any of
such assets or properties is bound or affected.

 

(c).Governmental
Consents and Approvals. The execution, delivery, and performance of this Agreement by the Creditor do not and will not require
any consent, approval, authorization, or other order of, action by, filing with, or notification to, any governmental authority.

 

(d).Purchase Entirely
for Own Account. Creditor is acquiring the Shares for Creditor’s own account for investment purposes only, not as nominee
or agent, and not with a view to, or for sale in connection with, a distribution of the Shares within the meaning of the Securities
Act of 1933, as amended (the “Securities Act”), and Creditor has no present intention of selling, granting any
participation in, or otherwise distributing the same in violation of the Securities Act without prejudice; however, Creditor has
a right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with applicable federal and state
securities laws. Nothing contained herein shall be deemed a representation or warranty by Creditor to hold Shares for any period
of time.

 

(e).Investor Status.
Creditor is not a registered broker-dealer under Section 15 of the Securities Exchange Act of 1934 (the “Exchange Act”)
or an entity engaged in a business that would require it to be so registered. Creditor has such experience in business and financial
matters that it is capable of evaluating the merits and risks of an investment in the Shares. Creditor acknowledges that an investment
in the Shares is speculative and involves a high degree of risk. If such Creditor is a U.S. Person (as such term is defined in
Rule 902(k) of Regulation S), at the time such Creditor was offered the Shares, it was, and at the date hereof it is, an “accredited
investor” as defined in Rule 501(a) under the Securities Act, and such Creditor has completed and executed the Creditor Questionnaire
attached as Exhibit B to this Agreement.

 

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(f).Regulation
S. If such Creditor is not a U.S. Person, such Creditor (i) acknowledges that the certificate(s) representing or evidencing
the Shares contain a customary restrictive legend restricting the offer, sale or transfer of any Shares except in accordance with
the provisions of Regulation S, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration,
(ii) agrees that all offers and sales by such Creditor of Shares shall be made pursuant to an effective registration statement
under the Securities Act or pursuant to an exemption from, or a transaction not subject to the registration requirements of, the
Securities Act, (iii) represents that the offer to purchase the Shares was made to such Creditor outside of the United States,
and such Creditor was, at the time of the offer and will be, at the time of the sale and is now, outside the United States, (iv)
has not engaged in or directed any unsolicited offers to purchase Shares in the United States, (v) is neither a U.S. Person nor
a Distributor (as such terms are defined in Rule 902(k) and 902(d), respectively, of Regulation S), (vi) has purchased the Shares
for its own account and not for the account or benefit of any U.S. Person, (vii) is the sole beneficial owner of the Shares specified
on signature pages hereto opposite its name and has not pre-arranged any sale with an investor in the United States, and (ix) is
familiar with and understands the terms and conditions and requirements contained in Regulation S, specifically, without limitation,
each Creditor understands that the statutory basis for the exemption claimed for the sale of the Shares would not be present if
the sale, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions
of the Securities Act. Such Creditor has completed and executed the Creditor Questionnaire attached as Exhibit B to this
Agreement.

 

(g). Access
to Information. Creditor has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares and the
merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense
that is necessary to make an informed investment decision with respect to the investment.

 

(h).Independent
Investment Decision. Creditor has independently evaluated the merits of its decision to purchase the Shares pursuant to the
this Agreement, and such Creditor confirms that it has not relied on the advice of any other Creditor’s business and/or legal
counsel in making such decision. Creditor understands that nothing in the Agreement or any other materials presented to Creditor
in connection with the purchase and sale of the Shares constitutes legal, tax or investment advice. Creditor has consulted such
legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase
of the Shares.

 

(i).Restricted
Securities. Creditor understands and acknowledges that:

 

i. the
Shares are characterized as “restricted securities” under the U.S. federal securities laws and will bear a customary
restrictive legend inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in
certain limited circumstances;

 

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ii. the
Shares have not been registered under the Securities Act or any state securities laws and are being offered and sold in reliance
upon specific exemptions from the registration requirements of the Securities Act and state securities laws, and the Company is
relying upon the truth and accuracy of, and Creditor’s compliance with, the representations, warranties, covenants, agreements,
acknowledgments and understandings of Creditor contained in this Agreement in order to determine the availability of such exemptions
and the eligibility of Creditor to acquire the Shares; and

 

iii. the
Shares must be held indefinitely unless such Shares are registered under the Securities Act or applicable state securities laws,
or an exemption from registration is available.

 

(j).No Registration
Rights. Creditor further understands that there are no registration rights associated with the Shares being acquired pursuant
to this Agreement.

 

4. Representations
and Warranties of the Company. The Company hereby represents and warrants to each of the Creditors that, as of the date hereof
and as of the date of Closing:

 

(a).Qualification,
Authorization and Enforcement. The Company is duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, with the requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. The Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations there under.
The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the
Company in connection therewith. This Agreement has been duly executed by the Company and, when delivered in accordance with the
terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable
principles of general application.

 

(b).No Conflicts. The execution,
delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s articles of incorporation,
bylaws or other organizational or charter documents as in effect on the date hereof, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company is a party or by which
any property or asset of the Company is bound or affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected; except
in the case of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be expected
to result in a material adverse effect.

 

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(c).Filings, Consents and Approvals.
The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or
registration with, any United States or People’s Republic of China court or other federal, state, local or other governmental
authority or other person in connection with the execution, delivery and performance by the Company of this Agreement, other than
(i) filings if required by state securities laws, (ii) if required, the filing with NASDAQ of an applicable additional shares listing
application or notification relating to the Shares issuable hereunder, (iii) if required, the filing of a Notice of Sale of Securities
on Form D with the Securities and Exchange Commission under Regulation D of the Securities Act, (iv) the filings required in accordance
with the Exchange Act and (v) those that have been made or obtained prior to the date of this Agreement.

 

(d).Issuance of Shares. The Shares
are duly authorized and, when issued and paid for in accordance with the terms and conditions of this Agreement, will be validly
issued, fully paid and non assessable, free and clear of all liens imposed by the Company. There are no subscriptions, warrants,
rights of first refusal or other restrictions on transfer relative to, or options exercisable with respect to, the Shares. The
Shares are not the subject of any present or, to the Company’s knowledge, threatened suit, action, arbitration, administrative
or other proceeding, and the Company knows of no reasonable grounds for the institution of any such proceedings.

 

5. Amounts
Repaid in Full. For and in consideration of the issuance of the Shares to the Creditors, the Debts shall be deemed to be repaid
in full, and the Company shall have no further obligations in connection with the Debts.

 

6. Release
by the Creditors. Upon receipt of the Shares, each Creditor releases and discharges the Company, the Company’s subsidiaries,
Company’s and each of its subsidiaries’ officers, directors, principals, control persons, past and present employees,
insurers, successors, and assigns (“Company Parties”) from all actions, cause of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, extents, executions, claims, and demands whatsoever, in law, admiralty or equity, which against
Company Parties such Creditor ever had, now have or hereafter can, shall or may, have for, upon, or by reason of any matter, cause
or thing whatsoever, whether or not known or unknown, from the beginning of the world to the day of the date of this release relating
to the Debts. Each of the Creditors represents and warrants that no other person or entity has any interest in the matters released
herein, and that it has not assigned or transferred, or purported to assign or transfer, to any person or entity all or any portion
of the matters released herein.

 

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7. Fees,
Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all transfer agent fees (including, without limitation, any fees required for same-day processing of any
instruction letter delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of
any Shares to the Creditors.

 

8. General
Provisions.

 

(a).Governing
Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of the State of New
York without regard to the choice of law principles thereof. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the State of New York located in The City of New York, Borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or therewith or with any transaction contemplated hereby or thereby,
and hereby irrevocably waives any objection that such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

(b).Termination.
This Agreement may be terminated prior to Closing:

 

i. by
written agreement of the Creditors and the Company; or

 

ii. by
either the Company or an Creditor (as to itself but no other Creditor) upon written notice to the other, if the Closing shall not
have taken place by 6:30 p.m. Eastern time on the Outside Date; provided, that the right to terminate this Agreement under
this Section 8(b) shall not be available to any person whose failure to comply with its obligations under this Agreement has been
the cause of or resulted in the failure of the Closing to occur on or before such time.

 

Upon a termination in
accordance with this Section 8(b), the Company and terminating Creditor(s) shall not have any further obligation or liability (including
as arising from such termination) to the other and no Creditor will have any liability to any other Creditor under this Agreement
as a result here from and there from.

 

(c).Notices.
All notices or other communications required or permitted by this Agreement shall be writing and shall be deemed to have been duly
received:

 

i. if
given by facsimile or electronic version, when transmitted and the appropriate telephonic or electronic confirmation received if
transmitted on a business day and during normal business hours of the recipient, and otherwise on the next business day following
transmission;

 

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ii. if
given by certified or registered mail, return receipt requested, postage prepaid, three business days after being deposited in
the U.S. mails; and

 

iii. if
given by courier or other means, when received or personally delivered, and, in any such case, addressed as indicated herein, or
to such other addresses as may be specified by any such party to the other party pursuant to notice given by such party in accordance
with the provisions of this Section.

 

(d).Further Assurances.
The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably
be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

 

(e).Successors
and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties.

 

 

(f).No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person, except as otherwise set forth
in Section 6.

 

(g).Modification
and Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and
the Creditor(s) holding a majority of the Shares. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right.

 

(h).Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate
such substitute provision in this Agreement.

 

(i).Entire Agreement.
This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and supersede all prior
agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.

 

(j).Headings.
The headings used in this Agreement are for convenience of reference only and shall not be deemed to limit, characterize or in
any way affect the interpretation of any provision of this Agreement.

 

(k).Survival.
The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Shares,
until the second anniversary of the date hereof.

 

(l).Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same Agreement. A facsimile or PDF copy of this Agreement shall be deemed an original.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF,
the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date
first above written.

  

	 	COMPANY:
	 	 
	 	CBAK ENERGY TECHNOLOGY, INC.
	 	 	 
	 	By:	
        /s/
Wenwu Wang

	 	 	Name: Wenwu Wang
	 	 	Title: Chief Financial Officer

  

[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK

SIGNATURE PAGE FOR CREDITORS FOLLOWS]

 

     

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date
first above written.

 

	 	 	CREDITORS
	 	 
	 	 	/s/ Yunfei Li
	 	 	Name: Yunfei Li
	 	 
	 	 	/s/ Dawei Li
	 	 	Name: Dawei Li
	 	 	 
	 	 	Asia EVK New Energy Auto Limited
	 	 	 
	 	By:	/s/ Mu Li
	 	 	Name: Mu Li
	 	 	Title: Authorized Signatory for and on behalf of Asia EVK New Energy Auto Limited

  

     

     

    

 

Exhibit A

Schedule of Creditors

 

	Name	 	Debt Amount ($)	 	 	Number of Shares	 
	Yunfei Li	 	 	3,084,970	 	 	 	2,938,067	 
	Dawei Li	 	 	1,453,953	 	 	 	1,384,717	 
	ASIA EVK NEW ENERGY AUTO LIMITED	 	 	2,907,907	 	 	 	2,769,435	 
	Total	 	 	7,446,830	 	 	 	7,092,219	 

 

     

     

    

 

EXHIBIT B

Regulation S Representation Letter

 

Date: ______________

 

		Re:	Company Name: CBAK Energy Technology, Inc. (the “Company”)

Number of Shares of Common Stock of the Company: __________ (collectively, the “Shares”)

 

Ladies and Gentlemen:

 

Pursuant to certain Cancellation Agreement
between the undersigned and the Company, dated as of ___________, 2019, the undersigned hereby represents, warrants and covenants
to the Company as follows:

  

		1.	The
undersigned is not a “U.S. Person,” as such term is defined in Regulation S (“Regulation S”) promulgated
under the Securities Act of 1933, as amended (the “Securities Act”).

 

		2.	No offer or sale of the Shares was made to the undersigned
in the United States.

 

		3.	The undersigned is not acquiring the Shares for the
account or on behalf of any U.S. Person.

 

		4.	The undersigned has not made any prearrangement to
transfer the Shares to a U.S. Person or to return the Shares to the United States securities markets (which includes short sales
in the United States within the applicable “distribution compliance period,” as defined in Regulation S (hereinafter
referred to as the “Restricted Period”) to be covered by delivery of the Company’s Shares) and is not
acquiring the Shares as part of any plan or scheme to evade the registration requirements of the Securities Act.

 

		5.	All offers and sales of the Shares by the undersigned
in the United States or to U.S. Persons or otherwise whether prior to the expiration or after the expiration of the applicable
Restricted Period shall be made only pursuant to a registration of the Shares under the Securities Act or an exemption from registration,
and in compliance with Regulation S.

 

     

     

    

 

		6.	The undersigned is not a “distributor,”
as defined in Regulation S. However, if the undersigned should be deemed to be a distributor prior to reselling the Shares to
a non-U.S. Person during the Restricted Period, the undersigned will send a notice to each new purchaser of Shares that such new
purchaser is subject to the restrictions of Regulation S during the Restricted Period.

 

		7.	The undersigned is not an “underwriter”
or “dealer” (as such terms are defined in the Securities Act), and the acquisition of the Shares by the undersigned
is not a transaction (or part of a series of transactions) that is part of any plan or scheme to evade the registration provisions
of the Securities Act.

 

		8.	The undersigned does not have a short position in
any securities of the Company and will not have a short position in such securities at any time prior to the expiration of the
Restricted Period.

 

		9.	If at any time after the expiration of the Restricted
Period, the undersigned wishes to transfer or attempts to transfer the Shares to a U.S. Person, the undersigned agrees to notify
the Company if at such time it is an “affiliate” of the Company or is then acting as an “underwriter,”
“dealer,” or “distributor” as to such securities (as such terms are defined in the Securities Act or the
regulations promulgated thereunder, including but not limited to, Regulation S), or if such transfer is being made as part of
a plan or scheme to evade the registration provisions of the Securities Act.

 

		10.	The undersigned acknowledges that the undersigned
may only be able to resell the Shares pursuant to the provisions of Regulation S and otherwise pursuant to the Securities Act,
and that it may not be possible for the undersigned to liquidate its investment in the Shares. The undersigned is prepared, therefore,
to hold its, his or her Shares in the Company indefinitely.

 

     

     

    

 

IN WITNESS WHEREOF,
the undersigned has executed this Regulation S Representation Letter as of the date first set forth above.

     

	 	 	                                         
	 	 	Name: Yunfei Li
	 	 	 
	 	 	 
	 	 	Name: Dawei Li
	 	 
	 	 	Asia EVK New Energy Auto Limited
	 	 	 
	 	By:	                               
	 	 	Name: Mu Li
	 	 	Title: Authorized Signatory for and on behalf of Asia EVK New Energy Auto LimitedExhibit

Exhibit 10.1

EMPLOYEE BONUS PLAN
Adopted June 2019 

Proprietary and Confidential 
For 8x8 Internal Use Only

8x8 Employee Bonus Plan

		
	I.
	Introduction

A.Applicability
		
	1.
	This 8x8 Employee Bonus Plan (the “Plan”) applies to full-time and part-time employees of 8x8, Inc. and its subsidiaries and affiliates (collectively, the “Company”) who are approved for participation in the Plan (the “Participants”) by the Plan Administrator (defined below).  Any employee who (a) is a participant in the Company Sales Compensation Plan, (b) begins employment with the Company after the last day of an applicable Plan Period (defined below), or (c) is a temporary employee or an intern is not eligible to participate in the Plan, unless approved in writing by the Plan Administrator (in its sole discretion). The Plan Administrator has sole discretion to determine whether participation in the Plan will be offered to employees and whether an employee will be a Participant. The “Plan Administrator” is, in accordance with the terms of 8x8, Inc. Board of Directors (the “Board”) Compensation Committee (the “Compensation Committee”) Charter and Compensation Guidelines, (i) the Board with respect to adoption of the Plan and (ii) the Compensation Committee with respect to amendment, termination, direct oversight and administration of the Plan for all Participants.  The Compensation Committee delegates the implementation and administration of the Plan to the CEO (or its designee) with respect to all Participants who are not otherwise Executive Vice Presidents (EVP) or Senior Vice Presidents (SVP) reporting directly to the CEO.  For purposes of the Plan, the term “administration” includes, without limitation, determining who is a Participant, setting Bonus Targets (defined below), determining whether Company Financial Performance Factors and/or Individual Performance Factors have been achieved and approving payouts for Participants.

		
	2.
	To the extent permitted by applicable law, the Company reserves the right to (in its sole discretion) amend, modify, suspend or terminate the Plan, in whole or in part, at any time, with or without notice, including, without limitation, to comply with applicable local laws, rules and regulations.  Such changes will not amount to an act or omission which entitles the Participant to assert that his or her terms of employment have been breached and to bring his or her employment to an end, with or without notice.  In addition, nothing in the Plan shall be deemed to constitute a term of employment between the Participant and the Company.  Payment(s) made in any Plan Period is no guarantee of payment(s) in future Plan Periods.

B.Objectives of the Plan
The objectives of the Plan are to reward Participants for corporate results, to retain key talent and to establish a meaningful link between corporate results and employee rewards.

Proprietary and Confidential 
For 8x8 Internal Use Only

8x8 Employee Bonus Plan

		
	II.
	Bonus Plan Elements

A.Bonus Target
A bonus target (which means the target cash bonus that a Participant is eligible to receive during a Plan Period, the “Bonus Target”) will be established for each Participant by the Company in its sole discretion and does not constitute a guarantee of or entitlement to a bonus payment.  Bonus Targets are determined by position level and are typically calculated as a percentage of the Participant’s eligible earnings paid during the Plan Period.  A “Plan Period” may be the Company’s fiscal quarter (“Plan Quarter”) or fiscal year (which, as of the date of the Plan’s adoption,  runs from April 1st through March 31st) (the “Plan Year”), as applicable.  Eligible earnings include base salary paid during the applicable Plan Period, but do not include expense reimbursements, equity compensation, superannuation/pension, payments from third parties such as disability insurance providers, over-time wages, shift differential, bonus payments (including bonuses paid under the Plan), long-term incentives, spot bonuses, awards, special one-time incentive payments, 13th-month pay, commissions and any other variable compensation.  Bonus Targets may be reviewed and revised in the sole discretion of the Plan Administrator (to the extent permitted by applicable law) in accordance with the terms of the Plan.
A Participant’s actual bonus payment (if any) may vary from his or her Bonus Target at the Company’s sole discretion and is subject to the terms of the Plan.
B.Bonus Pool
Bonus Targets for all Participants will be aggregated to determine the Company’s total Bonus Target amount (the “Target Bonus Pool”) for the applicable Plan Period.  In accordance with the terms of the Plan, if the Company meets or exceeds the minimum performance threshold for an applicable Plan Period, the Plan will be funded with an amount equal to the total amount of bonuses payable to Participants (the “Bonus Pool”) based on the achieved Company Financial Performance Factor (defined below) for the applicable Plan Period.  For Director, Sr. Director, Vice President (VP), Group Vice President (GVP), SVP and EVP level employees (except for the Chief Financial Officer), bonus payments will also be based on achievement of individual performance targets (the “Individual Performance Factor”).  
C.     Company Performance
At the start of the applicable Plan Period, the applicable Plan Administrator will determine the Company financial performance metrics and the corresponding attainment level (“Company Financial Performance Factor”) used to determine Bonus Pool funding. 
Based on the achieved Company Financial Performance Factor for an applicable Plan Period, the Bonus Pool funding may vary from 0% to 100% of the Target Bonus Pool for Q1, Q2 and Q3 of the fiscal year and from 0% to 200% of the Target Bonus Pool for Q4 of the fiscal year. 
The Company Financial Performance Factor will set minimum and maximum Bonus Pool funding thresholds. The achieved Company Financial Performance Factor must meet at least the minimum funding threshold during an applicable Plan Period in order fund the Bonus Pool.  If the Company performs below the minimum threshold for an applicable Plan Period, the Bonus Pool will not be funded for such Plan Period.
D.    Bonus Pool Allocation and Individual Awards
Bonus payments (if any) are based on achievement relative to the Company Financial Performance Factor and, as applicable, Individual Performance Factor(s).   
Bonus payments will be calculated as follows:
FY Quarter 1, Quarter 2, Quarter 3
Step 1: Determine the Participant’s quarterly Bonus Target.

Proprietary and Confidential 
For 8x8 Internal Use Only

8x8 Employee Bonus Plan

	
					
	Participant’s Earnings 
for Plan Quarter
	X
	Participant’s Bonus Target %
	=
	Participant’s Bonus Target Amount (qtr)

Step 2: Determine the portion of the quarterly Bonus Pool payable to each Participant for Company performance:
	
							
	Bonus Target Amount (qtr)
(Foundation thru Sr. Manager)
	X
	Company Financial 
Performance Factor
	=
	Bonus Payment 
for Plan Quarter

	Bonus Target Amount (qtr)
(Dir, Sr. Dir VP, GVP, SVP, EVP)
	X
	Individual Performance Factor
	X
	Company Financial 
Performance Factor
	=
	Bonus Payment
for Plan Quarter

	Bonus Target Amount (qtr)
(CFO and CEO)
	X
	Company Financial  Performance Factor
	=
	Bonus Payment
for Plan Quarter

FY Quarter 4
Step 1: Determine the Participant’s annual Bonus Target.
	
					
	Participant’s Earnings 
for Plan Year
	X
	Participant’s Bonus Target %
	=
	Participant’s Bonus Target Amount (yr)

Step 2: Determine the portion of the annual Bonus Pool payable to each Participant for Company performance:
	
							
	Bonus Target Amount (yr)
(Foundation thru Sr. Manager)
	X
	Company Financial 
Performance Factor
	=
	Bonus Amount
for Plan Year

	Bonus Target Amount (yr)
(Dir, Sr. Dir VP, GVP, SVP, EVP)
	X
	Individual Performance Factor
	X
	Company Financial 
Performance Factor
	=
	Bonus Amount
for Plan Year

	Bonus Target Amount (yr)
(CFO and CEO)
	X
	Company Financial  Performance Factor
	=
	Bonus Amount
for Plan Year

Step 3: Determine the Participant’s quarterly (Q4) Bonus Payment.
	
					
	Bonus Amount for Plan Year
	-
	Bonus Payments for Q1, Q2 & Q3
	=
	Bonus Payment for Plan Quarter (Q4)

The aggregate total of bonuses payable to all Participants under the Plan for an applicable Plan Period shall not exceed the Bonus Pool determined as described in the Plan.
Any bonus payable to a Participant under the Plan is a one-time discretionary award and, as such, does not constitute a contractual entitlement and shall not be considered as “salary” in any circumstance and shall not, in particular, be included in calculations for notice, severance or any other benefits under any applicable plan, policy, or agreement (unless required by applicable local law).

Proprietary and Confidential 
For 8x8 Internal Use Only

8x8 Employee Bonus Plan

		
	III.
	Additional Terms and Conditions

A.Plan Participation and Plan Integration
These terms and conditions govern all 8x8 Employee Bonus Plan payments made to Participants and the Plan supersedes and replaces eligibility for and/or participation in all previous employee bonus plans, as well as all agreements and all other previous or contemporaneous oral or written statements by the Company on this subject.
Participation in the Plan for a certain Plan Year (or Plan Quarter) does not guarantee continuation of the Plan or participation in the Plan in another Plan Year (or Plan Quarter).  In addition, payment of a bonus for a certain Plan Year (or Plan Quarter) does not guarantee payment of a bonus in any other Plan Year (or Plan Quarter).
B.Earning a Bonus Payment
Bonuses awarded under the Plan are intended to encourage employee retention and are not earned until paid to the Participant.  Subject to applicable local laws, a Participant must be employed by the Company, and not have given notice of intent to resign or received notice of termination by the Company, on the bonus payment date in order to be eligible to earn a bonus.  If a Participant’s employment is terminated by the Company or the employee resigns or receives a notice of termination before the bonus Payment date, no bonus shall have been earned and there shall be no pro rata payment. 
C.Form and Timing of Payment
Bonuses will not be earned until after financial results for the applicable Plan Period are determined by the Company and the Bonus Pool amount has been approved for funding by the Board (“Funding Approval”).  If the Plan minimum funding conditions are met and the Bonus Pool is funded, bonuses (if any) will be paid to the Participant in a lump sum cash payment in the first payroll after the Funding Approval and no later than 2-1/2 months following the close of the applicable Plan Quarter.  Payment will be made in the Participant’s local currency at the time of payment and subject to required payroll deductions and tax withholdings.  Notwithstanding any provision of the Plan to the contrary, bonuses may be paid in shares of the Company’s common stock in the sole discretion of the Compensation Committee with respect to any or all Participants.  Any shares of common stock paid in lieu of cash pursuant to the Plan shall be issued pursuant to, and shall be subject to the terms and conditions of, the Company’s Amended and Restated 2012 Equity Incentive Plan (or any successor plan), including, without limitation, the withholding provisions thereof.
From time to time, errors may occur in the amount of the bonus payment.  If an error results in an underpayment of the bonus (as determined by the Company in its sole discretion), the Company will make a reconciliation payment promptly.  If an error results in an overpayment of the bonus (as determined by the Company in its sole discretion), the Company reserves the right to recover the overpayment from the Participant’s salary, bonus payments or any other compensation, subject to applicable local laws.  Subject to applicable local law, by participating in the Plan, Participants expressly consent to the Company deducting amounts from their compensation to recover an overpayment, including without limitation as a result of a restatement of the Company’s financial statements affecting the Company Financial Performance Factors.
Further, if the Company determines that a Participant has committed an act of embezzlement, fraud, dishonesty, violation of applicable law or breach of fiduciary duty or other Company policy or procedure, including without limitation the Company’s Employee Handbook and Code of Business Conduct and Ethics, such Participant may not be eligible to earn a bonus under the Plan and may be subject to disciplinary action, including but not limited to termination, and if such act contributed to an obligation to restate the Company’s financial statements, the Participant shall be required to repay to the Company, in cash and upon demand, any bonus payment received under the Plan in connection with each fiscal year in which the Company’s financial statements were restated. 
D.New Hires
Employees hired into a bonus-eligible position (as described in the employee’s offer letter or employment contract) who begin employment on or before the last day of a Plan Quarter or Plan Year, and who meet all 

Proprietary and Confidential 
For 8x8 Internal Use Only

8x8 Employee Bonus Plan

other participation criteria, are eligible to participate in the Plan for that quarter or year, as applicable, and would be paid, if applicable performance factors are met in accordance with the Plan, on a pro-rata basis.
Employees hired into a bonus-eligible position (as described in the employee’s offer letter or employment contract) who begin employment after the last day of a Plan Quarter or Plan Year are not eligible to participate in the Plan for that quarter or year, as applicable, unless the Plan Administrator (in its sole discretion) approves in writing an exception.
E.Transfers
The following guidelines will apply to internal Company transfers that occur on or before the last day of a Plan Quarter or Plan Year:
		
	•
	If a Participant transfers from one bonus-eligible position to another bonus-eligible position during a Plan Quarter and has a different Bonus Target upon transfer, the Participant’s Bonus Target Amount for the quarter will be determined using the higher of the Bonus Target percentage in effect during the Plan Quarter.

		
	•
	If a Participant transfers from a bonus-eligible position to one that is not bonus-eligible during a Plan Quarter (for example, moving to a position that is eligible for sales incentive compensation), the Participant will remain eligible for a bonus in the quarter based on the Participant’s eligible earnings paid during the time the Participant worked in the bonus-eligible position.  Under no circumstances will the employee receive compensation under the Plan and any other incentive plan for the same period of time.

		
	•
	If a Participant transfers from a position that is not bonus-eligible to one that is bonus-eligible during a Plan Quarter (for example, moving from a position that is eligible for sales incentive compensation), the Participant will be eligible for a bonus under the Plan based on the Participant’s eligible earnings paid during the time the Participant worked in the bonus-eligible position.  Under no circumstances will the employee receive compensation under the Plan and any other incentive plan for the same period of time.

The Plan Administrator has the sole discretion to prorate, reduce, offset or eliminate bonuses to account for advances and payouts to employees under any other compensation or incentive plans in effect during the same Plan Period or for other reasons as deemed appropriate (unless prohibited by applicable local law).
F.Leave of Absence. 
Participants on a leave of absence during an applicable Plan Period will remain eligible for a pro-rated bonus under the Plan based on the period of time during the Plan Period which the Participant was not on a leave of absence, subject to the applicable Company leave of absence policy and applicable local laws.
G.Adjustments to Bonus Targets
To the extent permitted by applicable local laws, the Plan Administrator may, in its sole discretion, approve adjustments to Bonus Targets for Participants during the Plan Year.  Any such changes will be communicated to the Participant in writing.  Any bonus payment may be prorated based on the effective date of the change to the Bonus Target as determined by the Plan Administrator.  Any adjustment to a Bonus Target may result in a corresponding adjustment to the Target Bonus Pool.
H.Plan Interpretation and Claims
The Plan shall be interpreted by the Plan Administrator.  The Plan Administrator has the sole discretion to interpret or construe ambiguous, unclear or implied (but omitted) terms and shall resolve all questions regarding interpretation and/or administration of the Plan.
Claims regarding payments under the Plan or the administration of the Plan should be submitted in writing to the Plan Administrator within 90 days of the date on which the Participant first knew (or should have known in the Company’s opinion) of the facts on which the claim is based.  The Plan Administrator shall consider the claim and notify the Participant in writing of the determination of the claim.  To the extent permitted by applicable local law, claims that are not pursued through this procedure shall be treated as having been irrevocably 

Proprietary and Confidential 
For 8x8 Internal Use Only

8x8 Employee Bonus Plan

waived.  To the extent permitted by applicable local law, the determination of the Plan Administrator as to any claim will be final and binding and shall be upheld unless arbitrary or capricious or made in bad faith.
The provisions of the Plan are severable and if any provision is held to be unenforceable by any court of competent jurisdiction then such unenforceability shall not affect the enforceability of the remaining provisions of the Plan, which shall remain in full force and effect.
The Plan shall be construed and interpreted consistent with, and so as to avoid the imputation of any tax, penalty or interest under Section 409A of the United States Internal Revenue Code of 1986, as amended.  To the extent that Section 409A is inapplicable to a Participant, such provisions will be replaced by any equivalent provision of local law.
I.Exceptions and Modifications
All exceptions, adjustments, additions or modifications to the Plan require the written approval of the Plan Administrator.  
All aspects of the Plan (including, without limitation, financial targets, Bonus Targets, performance targets and funding formulas) are entirely discretionary and may be reviewed and revised at any time, with or without advance notice, in the sole discretion of the Plan Administrator (unless prohibited by applicable local law).
J.At Will Employment (U.S. Employees Only)
Participation in the Plan does not constitute an agreement (express or implied) between the Participant and the Company that the Participant will be employed by 8x8 for any specific period of time, or any agreement for continuing or long-term employment, or, with respect to Participants employed by 8x8 in the United States, employment other than at-will, or an expectation that any amount of compensation specified in the Plan will become earned by or due to any Participant.

Proprietary and Confidential 
For 8x8 Internal Use Only

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