<SUBMISSION>
<ACCESSION-NUMBER>0001023731-02-000009
<TYPE>DEF 14A
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<PERIOD>20020723
<FILING-DATE>20020606
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>8X8 INC /DE/
<CIK>0001023731
<ASSIGNED-SIC>3674
<IRS-NUMBER>770142404
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0331
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<FILE-NUMBER>000-21783
<FILM-NUMBER>02671804
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2445 MISSION COLLEGE BLVD
<CITY>SANTA CLARA
<STATE>CA
<ZIP>95054
<PHONE>4087271885
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2445 MISSION COLLEGE BLVD
<CITY>SANTA CLARA
<STATE>CA
<ZIP>95054
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>8X8 INC
<DATE-CHANGED>19961023
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>NETERGY NETWORKS INC
<DATE-CHANGED>20000912
</FORMER-COMPANY>
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<title>060602 DEF14A DOC</title>
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<BODY LINK="#0000ff" VLINK="#800080">
<font FACE="Times New Roman" SIZE="3">


<font size="3"><B><p align="center">
                            SCHEDULE 14A INFORMATION<br>
</B>
<B><P ALIGN="CENTER">Proxy Statement Pursuant to Section 14(a) of the
Securities<BR>
Exchange Act of 1934</P></B>
<P>Filed by the Registrant
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;
<FONT FACE="Wingdings">&#253;</FONT>

<P>Filed by a party other than the Registrant   <FONT FACE="Wingdings">&#168;</FONT>
<P>Check the appropriate box:<br>
<br>
<DIR>
<FONT FACE="Wingdings">&#168;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Preliminary Proxy Statement<br>

<FONT FACE="Wingdings">&#168;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Confidential, for the use of the Commission
only (as permitted by &#9;Rule 14a-6(e)(2))<BR>


<FONT FACE="Wingdings">&#253;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Definitive Proxy Statement<BR>

<FONT FACE="Wingdings">&#168;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Definitive Additional Materials<BR>

<FONT FACE="Wingdings">&#168;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Soliciting Material Pursuant to &sect; 240.14(a)-11(c) or to &sect; 240.14(a)-12</P>


</DIR>

<font size="5"><B><U><p align="center">
                      &#9;&#9;&#9;&#9;  8X8, INC.&#9;&#9;&#9;&#9;</P>
</U></B></font>
<font size="2">
           (Name of Registrant as Specified in its Charter)<br>
<br>
<br>

<font size="3">
<P>Payment of Filing Fee (Check the appropriate box):</P>

<DIR>
<P><FONT FACE="Wingdings">&#253;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No fee required.

<p><FONT FACE="Wingdings">&#168;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) &#9;and 0-11.

<DIR>

<OL START=1>

<p><LI>Title of each class of securities to which transaction applies:</P>

<p><LI>Aggregate number of securities to which transaction  applies:

<p><LI>Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

<p><LI>Proposed maximum aggregate value of  transaction:

<p><LI>Total fee paid:

</OL>

</DIR>

<p><FONT FACE="Wingdings">&#168;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fee paid previously by written preliminary materials.</P>


<p><FONT FACE="Wingdings">&#168;</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously.  Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.


<DIR>

<OL START=1>

<p><LI>Amount Previously Paid:</P>

<p><LI>Form, Schedule or Registration Statement No.:</P>

<p><LI>Filing Party:</P>

<p><LI>Date Filed:</P>

</OL>

</DIR>
</DIR>

<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>
<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>

<P ALIGN="CENTER"><IMG SRC="logo.gif"></P>
<FONT SIZE=2><B><P ALIGN="CENTER">8X8, INC.</P>
</B><P><HR WIDTH="22%" SIZE=0></P>
<FONT SIZE=2><B><P ALIGN="CENTER">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</P>
<P ALIGN="CENTER">TO BE HELD JULY 23, 2002</P>
</B><P>TO THE STOCKHOLDERS:</P>
<P ALIGN="JUSTIFY">NOTICE IS HEREBY GIVEN that the annual meeting of
stockholders of 8x8, Inc., a Delaware corporation (the "Company"), will be held
on Tuesday, July 23, 2002 at 1:30 p.m., local time, at the offices of the
Company at 2445 Mission College Boulevard, Santa Clara, California 95054, for
the following purposes:</P>
<OL>
<OL>

<P ALIGN="JUSTIFY"><LI>To elect six directors to serve for the ensuing year or
until their successors are elected and duly qualified;</LI></P>
<P ALIGN="JUSTIFY"><LI>To ratify the appointment of PricewaterhouseCoopers LLP
as independent accountants of the Company for the fiscal year ending March 31,
2003;</LI></P>
<P ALIGN="JUSTIFY"><LI>To approve amendment of the Company's 1996 Director
Option Plan (the "Director Plan") to (i) increase the aggregate number of shares
of common stock authorized for issuance under such plan by 500,000 shares, from
500,000 shares to 1,000,000 shares, and (ii) provide for an increase in the
number of shares granted as non-discretionary option grants under the Director
Plan;</LI></P>
<P ALIGN="JUSTIFY"><LI>To transact such other business as may properly come
before the meeting and any adjournment or postponement of the
meeting.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY">These items of business are more fully described in the proxy
statement accompanying this notice. Only stockholders of record at the close of
business on May 31, 2002 are entitled to notice of and to vote at the
meeting.</P>
<P ALIGN="JUSTIFY">All stockholders are cordially invited to attend the annual
meeting in person. However, to assure your representation at the meeting, you
are urged to mark, sign, date and return the enclosed proxy card as promptly as
possible in the enclosed self-addressed envelope. Any stockholder attending the
annual meeting may vote in person even if he or she has previously returned a
proxy.</P>

<p align="right"> THE BOARD OF DIRECTORS OF 8X8, INC.</P>

<P>Santa Clara, California<BR>
June 13, 2002</P>

<P ALIGN="CENTER">
<TABLE BORDER CELLSPACING=2 CELLPADDING=7 WIDTH=624>
<TR><TD VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">YOUR VOTE IS IMPORTANT</P>
<P ALIGN="JUSTIFY">IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU
ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS
POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.</B></FONT></TD>
</TR>
</TABLE></P>

<FONT SIZE=2>
<P ALIGN="CENTER"><IMG SRC="logo.gif"></P>
<B><P ALIGN="CENTER">8X8, INC.</P>
</B><P><HR WIDTH="22%" SIZE=0></P>
<B><P ALIGN="CENTER">PROXY STATEMENT</P></B>
<FONT SIZE=2><B><P ALIGN="CENTER">INFORMATION CONCERNING SOLICITATION AND
VOTING</P>
<P>GENERAL</P>
</B><P ALIGN="JUSTIFY">The enclosed proxy is solicited on behalf of the board of
directors of 8x8, Inc., or the Company, for use at the 2002 annual meeting of
stockholders to be held July 23, 2002 at 1:30 p.m., local time, or at any
adjournment thereof, for the purposes set forth in this proxy statement. The
annual meeting of stockholders will be held at the offices of the Company at
2445 Mission College Boulevard, Santa Clara, California 95054. The telephone
number of the Company's offices is (408)&nbsp;727-1885.</P>
<P ALIGN="JUSTIFY">These proxy solicitation materials and the Company's Annual
Report on Form 10-K for the year ended March&nbsp;31, 2002 (the Company's fiscal
2002), including financial statements, were mailed on or about June
13, 2002, to all
stockholders entitled to vote at the annual meeting.</P>
<B><P>RECORD DATE AND VOTING SECURITIES</P>
</B><P ALIGN="JUSTIFY">Stockholders of record at the close of business on May
31, 2002 (the "Record Date") are entitled to notice of and to vote at the annual
meeting. At the Record Date, 28,237,122 shares of the Company's common stock
were issued and outstanding having an equivalent number of votes.</P>
<B><P>REVOCABILITY OF PROXIES</P>
</B><P ALIGN="JUSTIFY">Any proxy given in connection with this solicitation may
be revoked by the person giving it at any time before its use by delivering to
the Secretary of the Company at or before the taking of the vote at the annual
meeting a written notice of revocation or a duly executed proxy bearing a later
date or by attending the annual meeting and voting in person.</P>
<B><P>VOTING AND SOLICITATION</P>
</B><P ALIGN="JUSTIFY">Each stockholder holding common stock is entitled to one
vote for each share of the Company's common stock they hold on all matters
presented at the annual meeting. Stockholders do not have the right to cumulate
their votes in the election of directors.</P>
<P ALIGN="JUSTIFY">Shares of the Company's common stock represented by properly
executed proxies will, unless such proxies have been previously revoked, be
voted in accordance with the instructions indicated thereon. In the absence of
specific instructions to the contrary, properly executed proxies will be voted:
(i)&nbsp;FOR the election of each of the Company's nominees for director;
(ii)&nbsp;FOR ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants for the Company for the period ending March&nbsp;31,
2003; and (iii)&nbsp;FOR the amendment of the Director Plan to increase the
aggregate number of shares of Common Stock authorized for issuance under such
plan by 500,000 shares, from 500,000 shares to 1,000,000 shares and provide for
an increase in the number of shares granted as non-discretionary option grants
under the plan. No business other than that set forth in the accompanying Notice
of Annual Meeting of Stockholders is expected to come before the annual meeting.
Should any other matter requiring a vote of stockholders properly arise, the
persons named in the enclosed form of proxy will vote such proxy in accordance
with the recommendation of the board of directors.</P>
<P ALIGN="JUSTIFY">The Company will bear the cost of soliciting proxies. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation materials to such beneficial owners. Solicitation of proxies by
mail may be supplemented by telephone, telegram, facsimile or personal
solicitation by directors, officers or regular employees of the Company. No
additional compensation will be paid to such persons for such services.</P>
<B><P>&nbsp;</P>
<P>QUORUM; ABSTENTIONS; BROKER NON-VOTES</P>
</B><P ALIGN="JUSTIFY">The required quorum for the transaction of business at
the annual meeting is a majority of the votes eligible to be cast by holders of
shares of the Company's common stock issued and outstanding on the Record Date.
Shares that are voted "FOR," "AGAINST," "WITHHELD" or "ABSTAIN" are treated as
being present at the meeting for purposes of establishing a quorum and are also
treated as shares entitled to vote at the annual meeting with respect to such
matter.</P>
<P ALIGN="JUSTIFY">Abstentions shall be counted for purposes of determining both
(i)&nbsp;the presence or absence of a quorum for the transaction of business and
(ii)&nbsp;the total number of shares entitled to vote with respect to a proposal
(other than the election of directors). Accordingly, abstentions will have the
same effect as a vote against the proposal.</P>
<P ALIGN="JUSTIFY">In instances where brokers are prohibited from exercising
discretionary authority for beneficial holders who have not returned a proxy
(so-called "broker non-votes"), those shares will be counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
but will not be counted for purposes of determining the number of shares
entitled to vote. Thus, a broker non-vote will not affect the outcome of the
voting on a proposal.</P>
<B><P ALIGN="CENTER">PROPOSAL ONE:</P>
<P ALIGN="CENTER">ELECTION OF DIRECTORS</P>
<P>NOMINEES</P>
</B><P ALIGN="JUSTIFY">The Company's board of directors consists of six
directors who are to be elected at this annual meeting. Proxies cannot be voted
for a greater number of persons than the number of nominees named. Each of the
directors elected at the annual meeting will hold office until the annual
meeting of stockholders in 2003 or until his successor has been duly elected and
qualified. Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's six nominees named below, all of whom are
currently directors of the Company. In the event that any nominee of the Company
becomes unable or declines to serve as a director at the time of the annual
meeting, the proxy holders will vote the proxies for any substitute nominee who
is designated by the current board of directors to fill the vacancy. It is not
expected that any nominee listed below will be unable or will decline to serve
as a director.</P>
<P ALIGN="JUSTIFY">In January 2000, the Company entered into a strategic
relationship with STMicroelectronics NV, or STM, which included STM acquiring
shares of the Company's common stock and obtaining the right to nominate a
qualified representative to serve on the Company's board of directors so long as
STM holds at least 10% of the Company's outstanding common stock. STM currently
holds 13.1% of the Company's common stock. Therefore, the Company has selected
STM's nominee, Christos Lagomichos, for re-election to the Company's board of
directors. For further discussion of the Company's relationship with STM, please
see the section of this proxy statement entitled "Certain Relationships and
Related Party Transactions." </P>
<P>The names of the nominees and certain information about each of them are set
forth below.</P></FONT>

<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=654>
<TR><TD WIDTH="33%" VALIGN="BOTTOM" HEIGHT=37>
<FONT SIZE=2><B><P>NAME
</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=37>

<FONT SIZE=2><B><P ALIGN="CENTER">AGE
</B></FONT></TD>
<TD WIDTH="39%" VALIGN="BOTTOM" HEIGHT=37>

<FONT SIZE=2><B><P>PRINCIPAL OCCUPATION
</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM" HEIGHT=37>

<FONT SIZE=2><B><P>DIRECTOR SINCE
</B></FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>Dr. Bernd Girod&#9;</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">44</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP" HEIGHT=30>

<FONT SIZE=2><P>Professor of Electrical Engineering, Information Systems
Laboratory, Stanford University
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">1996</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>Major General Guy L. Hecker, Jr.&#9;</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">70</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP" HEIGHT=30>

<FONT SIZE=2><P>President, Stafford, Burke and Hecker, Inc.<BR>
   Retired, United States Air Force
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">1997</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>Christos Lagomichos&#9;</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">47</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP" HEIGHT=30>

<FONT SIZE=2><P>Vice President and General Manager, Set-Top Box Division,
STMicroelectronics, Inc.
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>Bryan R. Martin&#9;</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">34</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP" HEIGHT=30>

<FONT SIZE=2><P>President and Chief Executive Officer, 8x8, Inc.
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">2001</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>Joe Parkinson&#9; </FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">56</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP" HEIGHT=30>

<FONT SIZE=2><P>Chairman of the Board, 8x8, Inc.
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P>William P. Tai&#9;</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">39</FONT></TD>
<TD WIDTH="39%" VALIGN="TOP" HEIGHT=30>

<FONT SIZE=2><P>General Partner, Charles River Ventures
</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=30>
<FONT SIZE=2><P ALIGN="CENTER">1994</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">Except as indicated below, each nominee or
incumbent director has been engaged in the principal occupation set forth above
during the past five years. There are no family relationships between any
directors or executive officers of the Company. </P>
<I><P ALIGN="JUSTIFY">Dr. Bernd Girod </I>has served as a director of the
Company since November 1996 and has served as a director of Netergy
Microelectronics, Inc. since January 2001. Dr. Girod is Professor of Electrical
Engineering and (by courtesy) Computer Science in the Information Systems
Laboratory of Stanford University, a position he has held since 1999. He was
Chaired Professor of Telecommunications in the Electrical Engineering Department
of the University of Erlangen-Nuremberg from 1993 to 1999. His research
interests are in the areas of networked multimedia systems, video signal
compression, and 3-D image analysis and synthesis. Prior visiting or regular
faculty positions include MIT and Georgia Tech. He has been involved with
several startup ventures as founder, director, investor, or advisor, among them
Polycom, Vivo Software and RealNetworks. Dr. Girod received a M.S. in Electrical
Engineering from the Georgia Institute of Technology and a Doctoral degree from
the University of Hanover, Germany. Dr. Girod is a Fellow of the Institute of
Electrical and Electronics Engineers.</P>
<I><P ALIGN="JUSTIFY">Major General Guy L. Hecker, Jr. </I>has served as a
director of the Company since August 1997 and has served as a director of
Netergy since December 2000. He has served as the President of Stafford, Burke
and Hecker, Inc., a consulting firm based in Alexandria, Virginia, since 1982.
Prior to his retirement from the Air Force in 1982, Major General Hecker's most
recent positions included Director of the Air Force Office of Legislative
Liaison and an appointment in the Office of the Deputy Chief of Staff, Research,
Development and Acquisition for the Air Force. Earlier, he served as a pilot and
commander in both fighter and bomber aircraft units, including command of a
bomber wing and an air division. During his Air Force career, Major General
Hecker was awarded a number of military decorations, including the Air Force
Distinguished Service Medal, the Silver Star, the Legion of Merit (awarded
twice) and the Distinguished Flying Cross. Major General Hecker received a B.A.
from The Citadel, an M.A. in International Relations from George Washington
University, an honorary Ph.D. in military science from The Citadel and completed
the management development program at Harvard Business School.</P>
<I><P ALIGN="JUSTIFY">Christos Lagomichos </I>has served as a director of the
Company since June 2000. Mr. Lagomichos has been Vice President and General
Manager of the Set-Top Box Division of STMicroelectronics, Inc., a subsidiary of
STM, since July 1997. In December 1996, Mr. Lagomichos was promoted to Director
of STM's PPG/Semicustom Products Division for the Americas, and was subsequently
promoted to Worldwide General Manager of the Division in May 1997. From October
1989 through December 1996, Mr. Lagomichos served as Product Marketing Manager
of STM's Semicustom Business Unit. From 1985 through 1988, he served in various
technical roles in STM's Munich design center. Mr. Lagomichos holds an
engineering degree from the Technical University of Munich.</P>
<I><P ALIGN="JUSTIFY">Bryan R. Martin </I>has served as President and Chief
Executive Officer and as a director of the Company since February 2002. From
February 2001 to February 2002 he served as President and Chief Operating
Officer and a director of the Company. He has served as a director of Netergy
Microelectronics, Inc., a subsidiary of the Company, since January 2001 and of
Centile, Inc., a subsidiary of the Company, since March 2001. He served as
Senior Vice President, Engineering Operations from July 2000 to February 2001
and as the Company's Chief Technical Officer from August 1995 to August 2000. He
also served as a director of the Company from January 1998 through July 1999. In
addition, Mr. Martin served in various technical roles for the Company from
April 1990 to August 1995. He received a B.S. and an M.S. in Electrical
Engineering from Stanford University.</P>
<I><P ALIGN="JUSTIFY">Joe Parkinson </I>has been Chairman of the Board of the
Company since November 2000, and served as its Chief Executive Officer from
January 2001 to February 2002. He was Chairman and Chief Executive Officer of
Netergy Microelectronics, Inc., a subsidiary of the Company, from November 2000
to January 2001. From October 1999 through August 2000, he served on the board
of directors of a private company, Photobit Corporation, and from June 2000
through August 2000 served as Photobit's President and Chief Executive Officer.
From October 1998 through September 1999, Mr. Parkinson served as Chairman of
the Board of Diamonex, Incorporated, also a private company. He also served as
Chairman of the Board and Chief Executive Officer of the Company from June 1995
to January 1998. He previously served as Chairman of the Board and Chief
Executive Officer of Micron Technology, Inc. He currently serves on the board of
directors of Tulane University and of several private companies. Mr. Parkinson
received a B.A. from Columbia College, a J.D. from Tulane University, and a
L.L.M. in Taxation from New York University.</P>
<I><P ALIGN="JUSTIFY">William P. Tai </I>has served as a director of the Company
since April 1994. In June 2002, Mr. Tai joined Charles River Ventures as a
general partner. Mr. Tai also serves as a general partner and managing director
of funds managed by Institutional Venture Partners. Mr. Tai currently serves on
the boards of directors of imGO Limited, a Hong Kong listed company that focuses
on investments in the wireless sector, Microtune, Inc., a provider of broadband
wireless components, Transmeta Corporation, a provider of hardware and software
technologies for mobile computers, as well as several privately held companies.
Mr. Tai received a B.S. in Electrical Engineering from the University of
Illinois and an M.B.A. from Harvard Business School.</P>
<B><P>VOTE REQUIRED AND RECOMMENDATION</P>
</B><P ALIGN="JUSTIFY">The six nominees receiving the highest number of
affirmative votes of the shares entitled to vote on this matter shall be elected
as directors. Votes withheld from any director will be counted for purposes of
determining the presence or absence of a quorum but are not counted as
affirmative votes. A broker non-vote will be counted for purposes of determining
the presence or absence of a quorum, but, under Delaware law, it will have no
other legal effect upon the election of directors. </P>
<B><P ALIGN="JUSTIFY">The board of directors unanimously recommends voting "FOR"
the nominees set forth above. </P>
<P>BOARD MEETINGS AND COMMITTEES</P>
</B><P ALIGN="JUSTIFY">The board of directors of the Company held a total of
eleven meetings during the fiscal year ended March&nbsp;31, 2002. No incumbent
director attended fewer than 75% of the total number of meetings of the board of
directors and committees of the board of directors upon which such director
served during fiscal 2002. The board of directors has an audit committee and a
compensation committee. The board of directors does not have a nominating
committee or any committee performing similar functions. </P>
<P ALIGN="JUSTIFY">The audit committee currently consists of Dr. Girod, Mr.
Hecker and Mr.Tai. The audit committee reviews the Company's financial controls,
evaluates the scope of the annual audit, reviews audit results, consults with
management and the Company's independent auditors prior to the presentation of
financial statements to stockholders and, as appropriate, initiates inquiries
into aspects of the Company's financial affairs. This committee held four
meetings during fiscal 2002.</P>
<P ALIGN="JUSTIFY">The compensation committee currently consists of Dr. Girod
and Mr. Tai. The compensation committee makes recommendations to the board of
directors concerning the compensation for the Company's officers and directors
and the administration of the Company's stock option and employee stock purchase
plans. This committee held no meetings during fiscal 2002.</P>
<B><P>COMPENSATION OF DIRECTORS</P>
</B><P ALIGN="JUSTIFY">Cash remuneration for non-employee directors consists of
a $1,000 fee for attendance of meetings of the Company's Board of Directors. In
addition, directors are reimbursed for reasonable expenses incurred in attending
board and committee meetings upon approval of such reimbursement by the board of
directors. Non-employee directors are also eligible for discretionary and non-discretionary grants
of stock options under the 1996 Director Plan (the
"Director Plan") and the 1996 Stock Option Plan (the "1996 Plan"). Under an
amendment to the Director Plan approved by the Company's stockholders in August
2000, non-employee directors receive a non-discretionary option grant of 40,000
shares upon their initial election to the board of directors and receive annual
grants of 15,000 shares upon their re-election to the board. The initial non-discretionary grant
vests annually over a period of four years and subsequent
non-discretionary grants vest monthly over a period of forty-eight months.
Grants are not made upon re-election in cases where the initial term is shorter
than six months. In April 2002 the board reassessed its compensation policy and
determined that another increase in non-discretionary grants to non-employee
directors was warranted. As a result of this reevaluation, the board increased
the amount of the non-discretionary option grant upon re-election of a non-employee director to the
board to 25,000 shares. As detailed in Proposal Three,
the board is asking Company stockholders to approve changes to the compensation
of its non-employee directors under the Director Plan.</P>
<P ALIGN="JUSTIFY">In addition, upon termination of service as a director of the
Company or upon a Change in Control (as defined below) of the Company, each of
the non-employee directors and their immediate families will be eligible for
medical insurance coverage for life, subject to the director reimbursing the
cost of such coverage to the Company. However, if an individual commences
coverage under another plan, coverage under the Company's medical insurance will
be discontinued. In addition, upon a Change in Control of the Company any
unvested non-employee director options shall become fully vested. For these
purposes, a Change in Control is defined as a transaction or series of
transactions, including by merger or consolidation of the Company into or with
any other entity or corporation or the merger or consolidation of any other
corporation into or with the Company, in which any person, entity or group of
persons and/or entities acting in concert acquire(s) shares of the Company's
stock representing 50% or more of the outstanding voting power of the Company,
including voting shares issued or issuable upon conversion of any convertible
security outstanding on the date of such transaction including, without
limitation, stock options.</P>
<P ALIGN="JUSTIFY">Under the foregoing policies, each of Dr. Girod, Mr. Hecker
and Mr. Tai received an option to purchase 15,000 shares of the Company's common
stock upon their re-election to the Company's board of directors on July 17,
2001 at an exercise price of $1.28.
On November 20, 2001, each of Messrs. Girod, Hecker, and Tai
also received a discretionary option grant to purchase 1,000 shares of the
Company's common stock under the 1996 Plan at an exercise price of $0.96. On
January 30, 2002, each of Messrs. Girod, Hecker, and Tai received an additional
discretionary option grant to purchase 25,000 shares of the Company's common
stock under the Director Plan at an exercise price of $1.18. The above noted
exercise prices represented the fair market value of the Company's stock on the
date of grant. These grants will vest monthly for forty-eight months subject to
their continued service as a director of the Company.</P>
<P ALIGN="JUSTIFY">Under a policy of STM, Mr. Lagomichos does not receive option
grants in connection with his service on the board, nor does he receive the
$1,000 per meeting payment for attending meetings of the Company's board of
directors.</P>
<P ALIGN="JUSTIFY">Directors who are also employees do not receive any
additional compensation for their services as members of the board of
directors.</P>
<B><P ALIGN="CENTER">ADDITIONAL INFORMATION</P>
<P>EXECUTIVE OFFICERS</P>
</B><P>The following table sets forth certain information regarding the
executive officers of the Company not shown in the table of the nominees for
director above:</P></FONT>

<TABLE CELLSPACING=0 BORDER=1 CELLPADDING=7 WIDTH=661>
<TR><TD WIDTH="31%" VALIGN="TOP">
<FONT SIZE=2><B><P>NAME
</B></FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">

<FONT SIZE=2><B><P ALIGN="CENTER">AGE
</B></FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">

<FONT SIZE=2><B><P ALIGN="CENTER">POSITION
</B></FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">

<FONT SIZE=2><P>Dr. Barry Andrews&#9;
</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">

<FONT SIZE=2><P ALIGN="CENTER">36
</FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">

<FONT SIZE=2><P>Vice President, Engineering and Chief Technical Officer
</FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">

<FONT SIZE=2><P>Dr. Theodore Beck&#9;
</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">

<FONT SIZE=2><P ALIGN="CENTER">34
</FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">

<FONT SIZE=2><P>Vice President, Manufacturing and Vice President, Operations,
Netergy Microelectronics, Inc.
</FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">

<FONT SIZE=2><P>Dr. Philip Bednarz&#9;
</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">

<FONT SIZE=2><P ALIGN="CENTER">36
</FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">

<FONT SIZE=2><P>Chairman and Chief Executive Officer, Netergy Microelectronics,
Inc.
</FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">

<FONT SIZE=2><P>Christopher Peters&#9;
</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">

<FONT SIZE=2><P ALIGN="CENTER">39
</FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">

<FONT SIZE=2><P>Corporate Development Officer
</FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">

<FONT SIZE=2><P>Huw Rees&#9;
</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">

<FONT SIZE=2><P ALIGN="CENTER">41
</FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">

<FONT SIZE=2><P>Chairman and Chief Executive Officer, Centile, Inc.
</FONT></TD>
</TR>
<TR><TD WIDTH="31%" VALIGN="TOP">
<FONT SIZE=2><P>David M. Stoll&#9;</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP">

<FONT SIZE=2><P ALIGN="CENTER">33
</FONT></TD>
<TD WIDTH="59%" VALIGN="TOP">

<FONT SIZE=2><P>Chief Financial Officer, Vice President, Finance and
Secretary
</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><I><P ALIGN="JUSTIFY">Dr. Barry Andrews </I>was appointed Vice
President, Engineering and Chief Technical Officer of the Company in February
2001. From December 2000 to February 2001, he served as Director of Customer
Premise Equipment &amp; Gateway Development of the Company. From January 1996 to
December 2000, Dr. Andrews served as Video R&amp;D Manager and Senior Software
Engineer of the Company. He received a B.A.Sc. in Engineering Science from Simon
Fraser University, a M.S. in Electrical Engineering, a M.S. in Statistics, and a
Ph.D. in Electrical Engineering from Stanford University.</P>
<I><P ALIGN="JUSTIFY">Dr. Theodore Beck </I>has been Vice President,
Manufacturing of the Company since May 1999. He has also served as Vice
President, Operations of Netergy Microelectronics, Inc. since December 2000.
From July 1997 to May 1999, he served as Manufacturing Manager and as Director
of Manufacturing of the Company. Dr. Beck joined the Company in December 1996 as
Manufacturing Engineer for Systems Products. Dr. Beck received a B.S. in
Electrical Engineering from the University of Texas at Austin, as well as a M.S.
in Manufacturing Systems Engineering and a Ph.D. in Electrical Engineering, both
from Stanford University.</P>
<I><P ALIGN="JUSTIFY">Dr. Philip Bednarz </I>has been Chairman and Chief
Executive Officer of Netergy Microelectronics, Inc. since January 2001. He
served as President and Chief Operating Officer of Netergy Microelectronics from
November 2000 to January 2001. He served as Vice President, Engineering of the
Company from February 2000 to November 2000. From October 1995 to February 2000
he served in various technical roles including Director of Advanced Technology
and Director of System Software. Dr. Bednarz holds five U.S. patents. He earned
his undergraduate degree from the University of Michigan, and a M.S. and a Ph.D.
from Stanford University, all in Electrical Engineering. </P>
<I><P ALIGN="JUSTIFY">Christopher Peters</I> has served as the Company's
Corporate Development Officer and as a member of the board of directors of
Centile, Inc. since October 2001. From September 2000 to October 2001, Mr.
Peters was Vice President of Business Development for Kinetic Tide, Inc. Prior
to Kinetic Tide, Mr. Peters was Vice President of Sales for 8x8 from July 1997,
and Vice President of Business Development from July 1999 to June 2000. Between
January 1995 and July 1997, he served as 8x8's East Coast Sales Manager and then
as Director of North American OEM Sales. He worked for Media Vision Technology,
Inc., a manufacturer of PC multimedia products, from December 1993 through
January 1995, where he was an OEM sales manager and director of OEM Sales. He
also worked for NCR Microelectronics from 1985 to 1993 in various technical and
marketing roles. He received a B.S.E.E. from Colorado State University.</P>
<I><P ALIGN="JUSTIFY">Huw Rees</I> has served as the Chairman and Chief
Executive Officer of Centile, Inc. since July 2001 and has been a member of
Centile, Inc.'s board of directors since March 2001. From February 2001 to July
2001, he served as Vice President, Sales of the Company. Additionally, he served
as Vice President, Sales and Business Development of Centile from March 2001 to
July 2001. He served as Vice President, Sales of the Solutions Group of the
Company from August 2000 until February 2001 and as Director, North American
Sales of the Company from April 1999 to August 2000. He previously worked at
Mitel Corporation as Sales Manager of the Western Region. He received a B.Sc.
(Hons) from the University of Manchester, Institute of Science and Technology in
Electrical and Electronic Engineering and a M.B.A. from the University of
LaVerne.</P>
<I><P ALIGN="JUSTIFY">David M. Stoll</I> has been Chief Financial Officer of the
Company since January 2000. He was named Acting Chief Financial Officer, Vice
President, Finance and Secretary of the Company in August 1999. Mr. Stoll served
as the Company's Corporate Controller from November 1996 to August 1999. Prior
to joining the Company, Mr. Stoll served as a Finance Manager for Maxtor
Corporation and held various positions at PricewaterhouseCoopers LLP. He
received a B.A. from Santa Clara University.</P>
<B><P>EXECUTIVE COMPENSATION</P>
</B><P ALIGN="JUSTIFY">The following table sets forth all compensation received
for services rendered to the Company in all capacities during the fiscal years
ended March&nbsp;31, 2002, 2001 and 2000 by the Company's Chief Executive
Officers and the Company's other four most highly compensated executive officers
whose salary and bonus for such fiscal year exceeded $100,000 and who served as
executive officers of the Company on March 31, 2002 (collectively, the "Named
Executive Officers"). </P>
<B><P ALIGN="CENTER">Summary Compensation Table</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=6 WIDTH=623>
<TR><TD WIDTH="29%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">Name and Principal Position</B></FONT></TD>
<TD WIDTH="11%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">Fiscal Year</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">Salary ($)</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">Bonus ($)</B></FONT></TD>
<TD WIDTH="17%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">Long Term Compensation</P>
<P ALIGN="CENTER">Securities Underlying Options (#)</B></FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">All Other Compensation ($) (1)</B></FONT></TD>
</TR>

<TR><TD WIDTH="29%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P>Bryan R. Martin (2),&#9;<BR>
President and Chief Executive Officer
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=52>

<FONT SIZE=2><P ALIGN="CENTER">2002<BR>
                  2001<BR>
                   2000
</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">225,865<BR>
                 193,104<BR>
                 190,008</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT"> -<BR>
                 8,667<BR>
                 50,000</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">101,000<BR>
                     780,413<BR>
                     35,000</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">1,798<BR>
                     1,984<BR>
                     1,941</FONT></TD>
</TR>
<TR><TD WIDTH="29%" VALIGN="TOP" HEIGHT=52>

<FONT SIZE=2><P>Joe Parkinson (3),&#9;<BR>
Chairman and Chief Executive Officer
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=52>

<FONT SIZE=2><P ALIGN="CENTER">2002<BR>
                               2001
</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">200,769<BR>
                 54,308</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">-<BR>
                 -</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">101,000<BR>
                     800,000</P>
                         </FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=52>
<FONT SIZE=2><P ALIGN="RIGHT">1,736<BR>
                     60</P>
                         </FONT></TD>
</TR>

<TR><TD WIDTH="29%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P>Huw Rees (4),&#9;<BR>
Chairman and Chief Executive Officer, Centile, Inc.
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=48>

<FONT SIZE=2><P ALIGN="CENTER">2002<BR>
                  2001
</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">211,496<BR>
                 237,864</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">-<BR>
                 692</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">151,000<BR>
                     195,000</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">1,779<BR>
                 1,751</FONT></TD>
</TR>

<TR><TD WIDTH="29%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P>Dr. Philip Bednarz (5),&#9;<BR>
Chairman, President and Chief Executive Officer, Netergy Microelectronics,
Inc.
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=48>

<FONT SIZE=2><P ALIGN="CENTER">2002<BR>
   2001
</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">190,731<BR>
        168,555</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">7,021<BR>
                 4,000</P>
                     </FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">101,000<BR>
                 100,000</P>
                         </FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">1,752<BR>
                 1,795
                         </FONT></TD>
</TR>

<TR><TD WIDTH="29%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P>Dr. Theodore Beck (6),&#9;<BR>
Vice President, Operations, Netergy Microelectronics, Inc.
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=48>

<FONT SIZE=2><P ALIGN="CENTER">2002<BR>
   2001 <BR>
   2000
</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">190,731<BR>
            165,654<BR>
                 144,263</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">5,840<BR>
                     -<BR>
                     -</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">101,000<BR>
                     100,000<BR>
                     37,000</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=48>
<FONT SIZE=2><P ALIGN="RIGHT">1,752<BR>
                 1,764<BR>
                 1,713</FONT></TD>
</TR>
<TR><TD WIDTH="29%" VALIGN="TOP" HEIGHT=53>

<FONT SIZE=2><P>Dr. Barry Andrews (7),&#9;<BR>
Chief Technology Officer and Vice President, Engineering
</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=53>

<FONT SIZE=2><P ALIGN="CENTER">2002<BR>
   2001
</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=53>
<FONT SIZE=2><P ALIGN="RIGHT"> 190,731<BR>
                 137,599</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=53>
<FONT SIZE=2><P ALIGN="RIGHT">-<BR>
                  5,333</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=53>
<FONT SIZE=2><P ALIGN="RIGHT">163,000<BR>
                     133,256</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=53>
<FONT SIZE=2><P ALIGN="RIGHT">1,752<BR>
                 1,682</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>________</P>
<OL>

<P ALIGN="JUSTIFY"><LI>Consists of Company contributions to the 8x8, Inc.
401(k) plan and premiums paid with respect to term life insurance on behalf of
the Named Executive Officer.</LI></P>
<P ALIGN="JUSTIFY"><LI>Mr. Martin was named Chief Executive Officer of the
Company in February 2002.</LI></P>
<P ALIGN="JUSTIFY"><LI>Mr. Parkinson was named Chairman of the board and an
officer of the Company in November 2000. He served as Chief Executive Officer of
the Company from February 2001 to February 2002.</LI></P>
<P ALIGN="JUSTIFY"><LI>Mr. Rees became an officer of the Company in February
2001. Mr. Rees' fiscal 2001 salary consisted of a base salary of $157,864 and
sales commissions of $80,000. Mr. Rees' fiscal 2002 compensation package did not
include a commission plan. Therefore, his fiscal 2002 salary included base
salary only.</LI></P>
<P ALIGN="JUSTIFY"><LI>Dr. Bednarz became an officer of the Company in December
2000.</LI></P>
<P ALIGN="JUSTIFY"><LI>Dr. Beck became an officer of the Company in May
1999.</LI></P>
<P ALIGN="JUSTIFY"><LI>Dr. Andrews became an officer of the Company in February
2001.</LI></P>
<P ALIGN="JUSTIFY"><LI>In fiscal 2001, Mr. Rees was also granted an option to
purchase 300,000 shares of Centile, Inc. common stock at an exercise price of
$0.43 per share.</LI></P>
<P ALIGN="JUSTIFY"><LI>In fiscal 2001, Dr. Bednarz and Dr. Beck were each also
granted an option to purchase 200,000 shares of Netergy Microelectronics, Inc.
common stock at an exercise price of $0.50 per share.</LI></P></OL>

<B><P>Option Grants in Fiscal 2002</P>
</B><P>The following table provides information with respect to stock option
grants to each of the Named Executive Officers during the fiscal year ended
March&nbsp;31, 2002:</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=6 WIDTH=630>
<TR><TD WIDTH="21%" VALIGN="BOTTOM" HEIGHT=94><P></P></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=94>
<FONT SIZE=2><B>
<P ALIGN="CENTER">Number of Securities Underlying</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=94>
<FONT SIZE=2><B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">Percent of Total Options Granted to Employees</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=94>
<FONT SIZE=2><B>
<P ALIGN="CENTER">Exercise or</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=94><P></P></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=94>
<FONT SIZE=2><B><P ALIGN="CENTER">&nbsp;</P>
<P ALIGN="CENTER">Potential Realizable<BR>
Value at Assumed<BR>
Annual Rates of Stock<BR>
Price Appreciation for</B></FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="16%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">Options</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">In Fiscal</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">Base Price</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM">
<FONT SIZE=2><B><P ALIGN="CENTER">Expiration</B></FONT></TD>
<TD WIDTH="25%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><B><P ALIGN="CENTER">Option Term (2)</B></FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="BOTTOM" HEIGHT=25>
<FONT SIZE=2><B><P ALIGN="CENTER">Name</B></FONT></TD>
<TD WIDTH="16%" VALIGN="BOTTOM" HEIGHT=25>
<FONT SIZE=2><B><P ALIGN="CENTER">Granted (#)(3)</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=25>
<FONT SIZE=2><B><P ALIGN="CENTER">Year (1)</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=25>
<FONT SIZE=2><B><P ALIGN="CENTER">($/share) (4)</B></FONT></TD>
<TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=25>
<FONT SIZE=2><B><P ALIGN="CENTER">Date</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=25>
<FONT SIZE=2><B><P ALIGN="CENTER">5% ($)</B></FONT></TD>
<TD WIDTH="13%" VALIGN="BOTTOM" HEIGHT=25>
<FONT SIZE=2><B><P ALIGN="CENTER">10% ($)</B></FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P>Bryan R. Martin&#9;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">1,000<BR>
100,000</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="CENTER">*<BR>
                  2.0</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$ 0.96<BR>
 1.18</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">11/20/11<BR>
1/30/12</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$604<BR>
74,210</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$1,530<BR>
188,062</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P>Joe Parkinson&#9;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">1,000<BR>
100,000</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="CENTER">*<BR>
                  2.0</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$ 0.96<BR>
 1.18</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">11/20/11<BR>
1/30/12</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$604<BR>
74,210</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=28>
<FONT SIZE=2><P ALIGN="RIGHT">$1,530<BR>
188,062</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP">
<FONT SIZE=2><P>Huw Rees&#9;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">1,000<BR>
150,000</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">*<BR>
                  3.0</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ 0.96<BR>
 1.18</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">11/20/11<BR>
1/30/12</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$604<BR>
111,314</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$1,530<BR>
282,092</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P>Dr. Philip Bednarz&#9;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">1,000<BR>
100,000</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="CENTER">*<BR>
                  2.0</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$ 0.96<BR>
 1.18</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">11/20/11<BR>
1/30/12</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$604<BR>
74,210</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$1,530<BR>
188,062</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P>Dr. Theodore Beck&#9;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">1,000<BR>
100,000</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="CENTER">*<BR>
                  2.0</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$ 0.96<BR>
 1.18</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">11/20/11<BR>
1/30/12</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$604<BR>
74,210</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=33>
<FONT SIZE=2><P ALIGN="RIGHT">$1,530<BR>
188,062</FONT></TD>
</TR>
<TR><TD WIDTH="21%" VALIGN="TOP">
<FONT SIZE=2><P>Dr. Barry Andrews&#9;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">63,000<BR>
100,000</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">1.3<BR>
                  2.0</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ 0.96<BR>
 1.18</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">11/20/11<BR>
1/30/12</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$38,640<BR>
74,210</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$98,460<BR>
188,062</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>________</P>
<P>* less than 0.1%.</P>
<OL>

<P ALIGN="JUSTIFY"><LI>The Company granted options representing  4,901,073 shares to employees
during fiscal 2002.</LI></P>

<P ALIGN="JUSTIFY"><LI>Potential gains are net of the exercise price, but before
taxes associated with the exercise. The 5% and 10% assumed annual rates of
compounded stock appreciation are mandated by the rules of the Securities and
Exchange Commission and do not represent the Company's estimate or projection of
the future Company common stock price. Actual gains, if any, on stock option
exercises are dependent on the future financial performance of the Company,
overall market conditions and the option holders' continued employment through
the vesting period. There can be no assurance that the potential realizable
values shown in this table will be achieved.</LI></P>
<P ALIGN="JUSTIFY"><LI>The options were granted under the Company's 1996 Stock
Plan and vest at a rate of 1/48<SUP>th</SUP> of the shares at the end of each
month, subject to continued service as an employee, consultant or director. The
term of each option is ten years. The exercise price of each option granted
equaled the fair market value of the common stock of the Company on the date of
grant. See information provided under the heading "Employment Contracts and
Termination of Employment and Change-In-Control Arrangements" for circumstances
that would give rise to an acceleration of vesting for outstanding options held
by the Named Executive Officers.</LI></P>
<P ALIGN="JUSTIFY"><LI>The exercise price for each option may be paid in cash,
in shares of common stock valued at fair market value on the exercise date or
through a cashless exercise procedure involving a same day sale of the purchased
shares.</LI></P></OL>

<B><P>&nbsp;</P>
<P>Option Exercises in Fiscal 2002 and the Value of In-the-Money Options at
March 31, 2002</P>
</B><P ALIGN="JUSTIFY">None of the Named Executive Officers in the Summary
Compensation Table exercised any stock options during the fiscal year ended
March 31, 2002. The following table provides information with respect to the
value of stock options held as of March&nbsp;31, 2002 by each of the Named
Executive Officers:</P>
<B><P ALIGN="CENTER">Aggregated Fiscal Year End Option Values</P></B></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=6 WIDTH=497>
<TR><TD WIDTH="28%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><B><P ALIGN="CENTER">Number of Securities Underlying Unexercised
Options at Fiscal Year End(#)</B></FONT></TD>
<TD WIDTH="36%" VALIGN="BOTTOM" COLSPAN=2>
<FONT SIZE=2><B><P ALIGN="CENTER">Value of Unexercised In-the-Money Options at
Fiscal Year End ($)(1)</B></FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">Name</B></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">Exercisable</B></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">Unexercisable</B></FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">Exercisable</B></FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><B><P ALIGN="CENTER">Unexercisable</B></FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT SIZE=2><P>Bryan R. Martin&#9;</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">329,355</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">642,058</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9;-</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$&#9; -</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT SIZE=2><P>Joe Parkinson</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">418,833</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">482,167</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9; -</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;-</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT SIZE=2><P>Huw Rees (2)</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">86,119</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">289,881</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;-</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;-</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT SIZE=2><P>Dr. Philip Bednarz (3)</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">206,109</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">204,891</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;-</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;-</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP">
<FONT SIZE=2><P>Dr. Theodore Beck (3)</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">119,433</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">164,567</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;-</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;-</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P>Dr. Barry Andrews</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">76,330</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">249,847</FONT></TD>
<TD WIDTH="17%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">225</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">2,398</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>________</P>
<OL>

<P ALIGN="JUSTIFY"><LI>The value of unexercised options is based upon the
difference between the exercise price and the closing price on the Nasdaq
National Market on March 28, 2002 (the last trading day prior to our fiscal year
end) of $0.86, multiplied by the number of shares underlying the
option.</LI></P>
<P ALIGN="JUSTIFY"><LI>At March 31, 2002, Mr. Rees had an unexercised option to
purchase 300,000 shares of Centile, Inc.'s common stock at $0.43 per share, of
which 75,000 were exercisable and 225,000 were not exercisable. </LI></P>
<P ALIGN="JUSTIFY"><LI>At March 31, 2002, Dr. Bednarz and Dr. Beck each had an
unexercised option to purchase 200,000 shares of Netergy Microelectronics,
Inc.'s common stock at $0.50 per share, of which 62,499 were exercisable and
137,501 were not exercisable.</LI></P></OL>

<B><P>EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS</P>
</B><P ALIGN="JUSTIFY">In March 2002 the board of directors authorized the
Company to open securities trading accounts and make investments in other
classes of securities that may generate higher returns than the currently low
yields on governmental and corporate debt securities and money market funds. The
amount allocated for such investments was $1.0 million to be invested on behalf
of 8x8, Inc. as directed by the Company's Chairman, Joe Parkinson; Chief
Executive Officer, Bryan Martin; or Chief Financial Officer, David Stoll. Mr.
Parkinson has agreed to personally reimburse 8x8, Inc. on a quarterly basis for
any losses resulting from his trading activities in order to maintain a minimum
investment account balance of $1.0 million. The board has been assured of Mr.
Parkinson's ability to cover any such losses. As part of the arrangement, the
Company's board of directors has expressed its intent, but not obligation, to
pay Mr. Parkinson a quarterly bonus in an amount equal to 25% of the profits
attributable to investments made on the Company's behalf by Mr. Parkinson to the
extent such a bonus exceeds his salary for the corresponding period. The Company
or Mr. Parkinson can terminate this arrangement at any time, subject to the
terms of an agreement between Mr. Parkinson and the Company. </P>
<P ALIGN="JUSTIFY">In February 2001, the board of directors authorized a
severance arrangement for Joe Parkinson which provides for a one-year severance
and one-year option vesting (hereinafter referred to as the "Severance
Provisions") in the event of termination of either employment or service as a
director (whichever is later) or a Change in Control. The Severance Provisions
are subject to a forty-eight month vesting period, which commenced on November
17, 2000, the initial date of Mr. Parkinson's employment. If Mr. Parkinson's
immediate family moves to California with the intent that the children will
attend school in California, Mr. Parkinson will be considered fully vested in
the Severance Provisions. The severance is payable, and options shall vest,
month by month, commencing upon the voluntary or involuntary termination of
employment or service as a director (whichever is later), conditioned on Mr.
Parkinson not competing with the Company and being available for consulting (to
the extent it does not interfere with his job responsibilities at a new company,
in the discretion of the Chairman of the board of directors of the Company).
Notwithstanding the above, in the event of a change in control before the
expiration of the applicable severance period, all remaining severance would be
paid, and all unvested options would vest.</P>
<P ALIGN="JUSTIFY">In January and February 2001, the Company's board of
directors authorized severance arrangements with Dr. Beck, Dr. Bednarz, Mr.
Martin, Mr. Stoll and two other executives of Netergy Microelectronics, Inc.
which provide for one year of severance benefits and option vesting. The
severance is payable month by month, commencing upon the voluntary or
involuntary termination of the executive, conditioned on the individual not
competing with the Company and being available for consulting to the extent it
does not interfere with his job responsibilities at a new company, in the
discretion of the Chairman of the board of directors of the Company. If the
Company is sold before the expiration of the twelve month severance period, all
remaining severance would be paid, and all remaining unvested options would
vest, as of the closing of the sale of the Company. The executives will also be
entitled to continued coverage under the Company's medical plan for the
severance period.</P>
<P ALIGN="JUSTIFY">Pursuant to the terms of the Netergy Microelectronics, Inc.
2000 Stock Option Plan, the initial options grants to Dr. Bednarz, Dr. Beck, Dr.
Girod and Mr. Hecker for the purchase Netergy Microelectronics, Inc. common
stock will vest immediately upon a Change in Control of Netergy
Microelectronics, Inc.</P>
<P ALIGN="JUSTIFY">Notwithstanding the arrangements discussed above, in the
event an individual or corporate entity and any related parties cumulatively
acquire at least 35% of the Company's fully diluted stock, all stock options
held by officers under any 8x8, Inc. stock option plan shall vest immediately
without regard to the term of the option. In addition, in such an event, each
officer shall be entitled to one year of severance pay and continuing medical
benefits for life after leaving the Company, provided that such medical benefits
shall cease should such officer accept employment with a competing company.</P>
<B><P>CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS </P>
</B><I><P>Agreements with STMicroelectronics</P>
</I><P ALIGN="JUSTIFY">In the quarter ended March 31, 2000, the Company entered
into a strategic relationship with STM. Under various agreements, STM purchased
shares of the Company's common stock and was granted certain related rights,
licensed certain of the Company's intellectual property and engaged the Company
to jointly develop products that enable voice and other multimedia services over
internet protocol networks. In addition, STM and the Company entered into a
cross license agreement in March 2002 that is more fully described below.</P>
<I><P ALIGN="JUSTIFY">Stock Purchase and Related Rights. </I>As part of the
arrangement, STM purchased 3.7 million shares of 8x8's common stock for $27.75
million. STM's share ownership currently represents 13.1% of our outstanding
common stock making them the Company's largest shareholder. STM has been granted
certain registration rights that expire upon the earlier of the date that STM
can sell the remaining shares it holds in any three-month period under Rule 144,
or February 2007. The registration rights allow STM to:</P>

<UL>
<P ALIGN="JUSTIFY"><LI>require us to file a registration statement with the U.S.
Securities and Exchange Commission covering the resale of some or all of the 3.7
million shares still held by STM, subject to certain conditions; and</LI></P>
<P ALIGN="JUSTIFY"><LI>participate in future registration statements, including
a registered public offering involving an underwriting, subject to certain
conditions and limitations. </LI></P></UL>

<P ALIGN="JUSTIFY">In addition, STM has preemptive rights that allow STM to
purchase additional shares of common stock from the Company or receive rights to
acquire shares of 8x8 common stock, in proportion to their ownership percentage,
to the extent that shares of 8x8 common stock or rights to acquire 8x8 common
stock are issued in connection with financing activities. STM's preemptive
rights terminate on the later of the date that it owns less than 10% of 8x8's
outstanding common stock or February 2003. Further, so long as STM holds at
least 10% of 8x8's outstanding common stock, the Company is obligated to
nominate one qualified nominee selected by STM for election to 8x8's board of
directors. Christos Lagomichos, vice president and general manager of the Set-Top Box Division of
STM's subsidiary, STMicroelectronics, Inc., was selected as
a nominee by STM and currently serves on 8x8's board of directors.</P>
<I><P ALIGN="JUSTIFY">License and Development Agreements</I>. Under a non-exclusive, royalty-bearing
license agreement entered into in the quarter ended
March 31, 2000 in conjunction with the stock purchase and rights agreements
discussed above, the Company provided a subsidiary of STM, STMicroelectronics,
Inc., or STM Inc., with rights to use certain of its voice-over-internet-protocol
semiconductor and embedded software technology. STM Inc. is required to
pay royalties based on a percentage of the net sales price of products sold by
STM Inc. that incorporate the licensed technology.</P>
<P ALIGN="JUSTIFY">Under a separate development agreement that was also executed
in the quarter ended March 31, 2000, the Company and STM Inc. established a
framework for the joint development of semiconductor products and defined two
initial projects. One project provides for the joint development of a voice-enabled chipset
for cable modems and cable television set-top boxes. STM Inc. is
not required to pay the Company any engineering fees associated with the
development efforts necessary to support this project, which is still ongoing.
STM Inc. is required to pay certain per-unit royalties based upon shipments of
products that may eventually result from this development effort. The other
project involves the integration of certain of our voice-over-internet protocol
technology into products intended to be used in various internet telephony
applications including digital subscriber line, or DSL, modems and internet
protocol telephones. In May 2000 STM Inc. paid us $1.0 million associated with
this project; $500,000 for engineering fees associated with the development
effort and $500,000 of prepaid royalties. We have substantially completed our
obligations under this project and STM Inc. is currently marketing and selling a
product resulting from this joint development effort. STM Inc. is required to
pay us additional per-unit royalties based upon shipments of this product only
if cumulative royalties owed eventually exceed the balance of prepaid royalties.
Should STM Inc. elect to have us provide extended product maintenance and
support, they are required to pay us additional fees of which a portion will be
considered prepaid royalties. </P>
<P ALIGN="JUSTIFY">In March 2002, the Company licensed certain Very Long
Instruction Word, or VLIW, microprocessor cores, related tools and MPEG4 video
compression firmware from STM for use in the Company's Internet protocol, or IP,
video communication processor development initiatives. Additionally, the Company
agreed to license STM certain of its existing and future H.263 and H.26L video
compression/decompression firmware implementations for use with STM's
semiconductor products. The licenses are non-exclusive, non-transferable and
non-assignable and provide for the sharing of updates and enhancements to the
licensed technology, subject to certain limitations. The agreement includes
provisions that allow the Company to manufacturing semiconductor devices that
contain the VLIW microprocessor cores at STM or at other third-party fabrication
facilities. The Company is required to pay STM per-unit royalties based upon
shipments of products that incorporate the VLIW technology. In addition, STM is
required to pay the Company certain per-unit royalties based upon shipments of
STM semiconductor products that contain the Company's video technology.</P>
<B><P>COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION </P>
</B><P ALIGN="JUSTIFY">The compensation committee of the board of directors
currently consists of Dr. Girod and Mr. Tai. Neither individual was, at any time
since the formation of the Company, an officer or employee of the Company. No
executive officer of the Company serves as a member of the board of directors or
compensation committee of any entity that has one or more executive officers
serving as a member of the Company's board of directors or compensation
committee. The employee directors of the Company, Messrs. Martin and Parkinson,
participated in deliberations of the Company's board of directors concerning
executive officer compensation during fiscal 2002.</P>
<B><P>REPORT OF THE AUDIT COMMITTEE</P>
</B><P ALIGN="JUSTIFY">The audit committee of the Company's board of directors
(the "Audit Committee") is comprised of three directors, and operates under a
written charter adopted by the board of directors. Each member of the Audit
Committee is "independent," as such term is defined under the Nasdaq National
Market listing standards.</P>
<P ALIGN="JUSTIFY">The Audit Committee oversees the Company's financial
reporting process on behalf of the board of directors. Management is responsible
for the Company's internal controls, financial reporting process and compliance
with laws, regulations and ethical business standards. The Company's independent
accountants, PricewaterhouseCoopers LLP ("PWC"), are responsible for performing
an independent audit of the Company's consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The Audit Committee's responsibility is to monitor and oversee these
processes. In this capacity, the Audit Committee provides advice, counsel, and
direction to management and PWC on the basis of the information it receives,
discussions with management and PWC, and the experience of the Audit Committee's
members in business, financial and accounting matters.</P>
<P ALIGN="JUSTIFY">The Audit Committee has reviewed and discussed the Company's
audited consolidated financial statements with the Company's management. The
Audit Committee also discussed and reviewed with PWC all matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees). The Audit Committee has met with PWC, with and without management
present, to discuss the overall scope of their audit, the results of their
examinations, their evaluation of the Company's internal controls and the
overall quality of the Company's financial reporting. Furthermore, the Audit
Committee has discussed the Company's critical accounting policies with
management and PWC.</P>
<P ALIGN="JUSTIFY">The Audit Committee has received from PWC a formal written
statement describing all relationships between PWC and the Company that might
bear on the independence of PWC consistent with Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), discussed with
them any relationships that may impact their objectivity and independence,
considered the compatibility of non-audit services with the independence of PWC,
and in so doing has satisfied itself as to the independence of PWC. Fees for
audit and non-audit services provided by PWC in fiscal 2002 are summarized as
follows:</P>
<I><P ALIGN="JUSTIFY">Audit Fees</I>. During the fiscal year ended March 31,
2002, the aggregate fees billed, or to be billed, by PWC for the audit of the
Company's consolidated financial statements for such fiscal year and for the
reviews of the Company's interim financial statements included in the Company's
Forms 10-Q for the fiscal year ended March 31, 2002 were $103,000. </P>
<I><P ALIGN="JUSTIFY">Financial Information Systems Design and Implementation
Fees.</I> During the fiscal year ended March 31, 2002, PWC billed no fees for
information technology consulting services. </P>
<I><P ALIGN="JUSTIFY">All Other Fees.</I> During the fiscal year ended March 31,
2002, the aggregate fees billed by PWC for professional services other than
audit fees were $89,000, $55,000 of which were billed in connection with tax
related services and $34,000 of which were billed for services such as
performance of statutory audits for international subsidiaries, consulting on
accounting standards and the review of registration statements. </P>
<P ALIGN="JUSTIFY">Based on these reviews and discussions, the Audit Committee
recommended to the board of directors, and the board of directors has approved,
that the Company's audited consolidated financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31,
2002.</P>
<P ALIGN="JUSTIFY">The Audit Committee relies without independent verification
on the information provided to them and on the representations made by
management and PWC. Accordingly, the Audit Committee's oversight does not
provide an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit
Committee's considerations and discussions referred to above do not assure that
the audit of the Company's financial statements has been carried out in
accordance with generally accepted auditing standards, that the financial
statements are presented in accordance with generally accepted accounting
principles or that PWC is in fact "independent" as required by the Nasdaq
National Market. </P>
<P ALIGN="JUSTIFY">Submitted by the following members of the Audit
Committee:</P>

<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<P ALIGN="JUSTIFY">&#9;&#9;Dr. Bernd Girod<BR>
                   &#9;&#9;Guy Hecker<BR>
                   &#9;&#9;William P. Tai</P>

</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>&nbsp;</P>
<B><P>REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS</P>
</B><P ALIGN="JUSTIFY">This report of the compensation committee of the
Company's board of directors (the "Compensation Committee") on executive
compensation is required by the Securities and Exchange Commission. It shall not
be deemed to be incorporated by reference by any general statement incorporating
this proxy statement by reference into any filing under the Securities Act of
1933, as amended, or under the Securities Exchange Act of 1934, as amended,
except to the extent that we specifically incorporate this information by
reference. Also, it shall not otherwise be deemed soliciting material or filed
under these Acts.</P>
<P ALIGN="JUSTIFY">The following report describes the Company's compensation
policies and rationales applicable to the Company's executive officers with
respect to compensation paid to such executive officers for fiscal 2002. The
Compensation Committee makes recommendations to the board concerning the
compensation for the Company's executive officers. The board of directors is
responsible for reviewing and approving the Company's compensation policies and
the compensation paid to executive officers, based in part on recommendations of
the Compensation Committee. The Compensation Committee did not meet formally
during fiscal 2002 and compensation decisions during the fiscal year were made
by the full board of directors.</P>
<I><P>Compensation Philosophy</P>
</I><P ALIGN="JUSTIFY">The general philosophy of the Company's compensation
program is to offer executive officers competitive compensation based both on
the Company's performance and on the individual's contribution and performance.
The Company's compensation policies are intended to motivate, reward and retain
highly qualified executives for long-term strategic management and the
enhancement of stockholder value, to support a performance-oriented environment
that rewards achievement of specific internal Company goals and to attract and
retain executives whose abilities are critical to the long-term success and
competitiveness of the Company. There are three main components in the Company's
executive compensation program: i) base salary, ii) incentive bonus and iii)
stock incentives.</P>
<I><P>Base Salary</P>
</I><P ALIGN="JUSTIFY">The salaries of the executive officers, including the
Chief Executive Officer, are generally reviewed annually by the Compensation
Committee and the board of directors with reference to surveys of salaries paid
to executives with similar responsibilities at comparable companies, generally
in the high technology industry and often within the Company's geographic area.
The peer group for each executive officer is composed of executives whose
responsibilities are similar in scope and content. The Company seeks to set
executive compensation levels that are competitive with the average levels of
peer group compensation. Salaries for executive officers are generally
determined on an individual basis by evaluating each executive's scope of
responsibility, performance, prior experience and salary history as well as the
salaries for similar positions at comparable companies. In light of the
Company's efforts to contain expenditures, there were no increases in the
salaries of the Named Executive Officers during fiscal 2002.</P>
<I><P>Incentive Bonus</P>
</I><P ALIGN="JUSTIFY">Annual incentive bonuses for executive officers are
intended to reflect the Compensation Committee's belief that a significant
portion of the annual compensation of each executive officer should be
contingent upon the performance of the Company, as well as the individual
contribution of each officer. The Company and its subsidiaries, Netergy
Microelectronics, Inc. and Centile, Inc., have implemented profit sharing plans
that provide the potential for additional compensation to employees of the
respective entities equal to up to 15% of the applicable entity's quarterly net
income, if approved by the Company's board of directors. Of these amounts, one
third is shared by all employees of the respective entity, one third is shared
by key employees identified by the board of directors, and one third is shared
by officers. During fiscal 2002, Dr. Bednarz and Dr. Beck received profit
sharing bonus payments awarded based upon the net income reported by Netergy
Microelectronics, Inc. for the quarter ended December 31, 2001. Additionally,
officers are eligible for certain discretionary bonuses based on criteria
established by the Company's board of directors and management. No discretionary
bonuses were paid to officers during fiscal 2002. </P>
<I><P>&nbsp;</P>
<P>&nbsp;</P>
<P>Stock Incentives</P>
</I><P ALIGN="JUSTIFY">The Company utilizes stock options as long term
incentives to reward and retain executive officers. The Compensation Committee
believes that this practice links management interests with stockholder
interests and motivates executive officers to make long-term decisions that are
in the best interests of the Company. The Compensation Committee also believes
that executive officers and other key employees should own a significant
percentage of the Company's stock. Generally, stock options vest over four years
after the grant date and optionees must be employed by the Company at the time
of vesting in order to exercise the options. </P>
<P ALIGN="JUSTIFY">The Compensation Committee believes that stock option grants
provide an incentive that focuses the executives' attention on the Company from
the perspective of an owner with an equity stake in the business. Because
options are typically granted with an exercise price equal to the fair market
value of the Company's common stock on the date of grant, the Company's stock
options are tied to the future performance of the Company's common stock and
will provide value to the recipient only when the price of the Company's stock
increases above the exercise price, that is, only to the extent that
stockholders as a whole have benefited. In fiscal 2002, the Compensation
Committee and the Board of Directors considered all of these factors and
authorized the granting of options to executive officers in November 2001 and
January 2002 as part of a company-wide option grant program focusing on employee
retention. </P>
<I><P ALIGN="JUSTIFY">Compensation of the Chief Executive Officers </P>
</I><P ALIGN="JUSTIFY">Bryan R. Martin's annual base salary had been increased
from $190,000 to $225,000 in February 2001 when he was promoted to President and
Chief Operating Officer of the Company. Mr. Martin was promoted to Chief
Executive Officer of the Company in February 2002; however, no corresponding
adjustment was made to his base salary. </P>
<P ALIGN="JUSTIFY">Joe Parkinson served as the Company's Chief Executive Officer
from January 2001 to February 2002. He has served as the Company's Chairman of
the Board since November 2000. Mr. Parkinson's annual base salary during fiscal
2002 was $200,000. </P>
<P ALIGN="JUSTIFY">In November 2001, Mr. Martin and Mr. Parkinson were each
granted an option to purchase 1,000 shares of the Company's common stock at a
price of $0.96 per share, which represented the fair market value of the
Company's stock on the date of said grants. Mr. Martin and Mr. Parkinson were
also each granted an option to purchase 100,000 shares of the Company's common
stock at a price of $1.18 per share in February 2002, which represented the fair
market value of the Company's stock on the date of said grants. These grants
will vest monthly for up to forty-eight months subject to their continued
service as an officer or director of the Company.</P>
<P>Submitted by the following members of the Compensation
Committee:&#9;&#9;&#9;&#9;</P>

<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<P>Dr. Bernd Girod<BR>
William P. Tai</P>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>




<B><P>&nbsp;</P>
<P>STOCK PERFORMANCE GRAPH</P>
</B><P ALIGN="JUSTIFY">The stock performance graph below is required by the
Securities and Exchange Commission. It shall not be deemed to be incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933, as amended, or under
the Securities Exchange Act of 1934, as amended, except to the extent that we
specifically incorporate this information by reference. Also, it shall not
otherwise be deemed soliciting material or filed under these Acts.</P>

<P ALIGN="CENTER"><IMG SRC="graph.gif" WIDTH=716 HEIGHT=396>

<FONT SIZE=2><P ALIGN="JUSTIFY">The graph compares the cumulative total stockholder return for the
Company's common stock with the Nasdaq Stock Market (US) Composite Index and the
Nasdaq Computer Index for the period commencing July 2, 1997 and ending March
31, 2002. The graph assumes that $100 was invested on the date of the Company's
initial public offering, July 2, 1997, and that all dividends for the respective
Nasdaq indexes have been reinvested. The Company has never paid dividends on its
common stock and has no present plans to do so. Historic stock price performance
should not be considered indicative of future stock price
performance.</P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=2 WIDTH=613>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=17><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">7/02/97</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">3/31/98</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">3/31/99</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">3/31/00</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">3/31/01</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">3/31/02</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">8x8, INC.</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">100</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">108</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">59</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">456</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">12</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">13</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">NASDAQ COMPOSITE INDEX</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">100</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">128</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">171</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">318</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">128</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">128</FONT></TD>
</TR>
<TR><TD WIDTH="33%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">NASDAQ COMPUTER INDEX</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">100</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">131</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">221</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">458</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">151</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=17>
<FONT FACE="Arial" SIZE=2><P ALIGN="CENTER">154</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="JUSTIFY">* $100 invested on 7/2/97 in stock or index -
including reinvestment of dividends. Fiscal year ending March 31.</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<B><P>SECURITY OWNERSHIP</P>
</B><P ALIGN="JUSTIFY">The following table sets forth certain information with
respect to the beneficial ownership of the Company's common stock as of May 13,
2002 by (i)&nbsp;each person (or group of affiliated persons) who is known by
the Company to own beneficially 5% or more of the Company's common stock,
(ii)&nbsp;each of the Company's directors nominated for re-election
(iii)&nbsp;each executive officer named in the Summary Compensation Table and
(iv)&nbsp;all directors and officers as a group. Except as indicated in the
footnotes to the table, the persons named in the table have sole voting and
investment power with respect to all shares of Company common stock shown as
beneficially owned by them, subject to community property laws where
applicable.</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=6 WIDTH=600>

<TR><TD WIDTH="54%" VALIGN="BOTTOM">
<FONT SIZE=2>
<P ALIGN="CENTER">Name and Address
</FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">Number of Shares Beneficially Owned
(1)</FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">Percentage of Total Shares </FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>
<FONT SIZE=2><P>STMicroelectronics NV (2)&#9;<BR>
   20 Route de Pre-Bois - ICC Building<BR>
   CH-1215 Geneve 15 Switzerland</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">3,700,000</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">13.1%</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Joe Parkinson (3)(4)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;857,899</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;3.0%</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Bryan R. Martin (4)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;582,408</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;2.0%</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Dr. Philip Bednarz (4)(6)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;265,172</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;*</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Dr. Theodore Beck (4)(6)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;178,615</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;*</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Guy L. Hecker, Jr. (4)(6)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;160,683</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;*</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Dr. Bernd Girod (4)(6)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;148,683</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;*</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Dr. Barry Andrews (4)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;138,248</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;*</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>Huw Rees (4)(7)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;126,058</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;*</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>William P. Tai (4)&#9;</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;123,683</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;*</FONT></TD>
</TR>
<TR><TD WIDTH="54%" VALIGN="TOP"><DIR>

<FONT SIZE=2><P>All directors and officers as a group&#9;<BR>
(11 persons) (4)(5)</DIR>
</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">&#9;&#9;2,804,441</FONT></TD>
<TD WIDTH="23%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">&#9;&#9;9.3%</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>________</P>
<P>*&#9;Less than 1%</P>
<OL>

<P ALIGN="JUSTIFY"><LI>This table is based upon information supplied by
officers, directors and principal stockholders and Schedules 13D and 13G filed
with the Securities and Exchange Commission (the "SEC"). The number of shares of
common stock beneficially owned by each person is determined under rules
promulgated by the SEC. Under such rules, beneficial ownership includes any
shares as to which the person has sole or shared voting power or investment
power, and also includes any shares which the person has the right to acquire
within sixty days after May 13, 2002. Applicable percentages are based upon
28,236,372 voting shares issued and outstanding as of May 13, 2002, and treating
any shares issuable to any holder within 60 days as outstanding for purposes of
computing their percent ownership. </LI></P>
<P ALIGN="JUSTIFY"><LI>One of the Company's directors, Christos Lagomichos,
serves as Vice President and General Manager of the Set-Top Box Division of
STMicroelectronics, Inc., a subsidiary of STMicroelectronics NV. </LI></P>
<P ALIGN="JUSTIFY"><LI>Includes 10,000 shares held by Jarbridge, Inc., of which
Mr. Parkinson is Chairman of the board. Mr. Parkinson disclaims beneficial
ownership of the shares except to the extent of his pecuniary interest
therein.</LI></P>
<P ALIGN="JUSTIFY"><LI>Includes the following number of shares subject to
options that were exercisable at or within 60 days after May 13, 2002: Mr.
Parkinson, 506,395; Mr. Martin, 387,254; Dr. Bednarz, 226,390; Dr. Beck,
135,183; Mr. Hecker, 80,683; Dr. Girod, 98,683; Dr. Andrews, 94,955; Mr. Rees,
108,619; Mr. Tai, 98,683; and all directors and officers as a group,
1,902,537.</LI></P>
<P ALIGN="JUSTIFY"><LI>Although Mr. Lagomichos is an employee of
STMicroelectronics, Inc., we have not included the shares of common stock owned
by STMicroelectronics NV in this amount.</LI></P>
<P ALIGN="JUSTIFY"><LI>Each of Dr. Bednarz, Dr. Beck, Dr. Girod and Mr. Hecker
have been granted options to purchase shares of common stock of Netergy
Microelectronics, Inc., a subsidiary of the Company. The number of shares
subject to options that were exercisable at or within 60 days after May 13, 2002
were as follows: Dr. Bednarz, 74,999; Dr. Beck, 74,999; Dr. Girod, 8,333; Mr.
Hecker, 8,333. The beneficial ownership represented by the above noted options,
individually and in the aggregate, is less than 1% of the 17,000,000 shares of
Netergy Microelectronics, Inc. common stock outstanding at May 13, 2002,
adjusted as required by rules promulgated by the SEC.</LI></P>
<P ALIGN="JUSTIFY"><LI>Mr. Rees has been granted options to purchase shares of
common stock of Centile, Inc., a subsidiary of the Company. The number of shares
subject to said options that were exercisable at or within 60 days after May 13,
2002 were 93,747. The beneficial ownership represented by Mr. Rees' options is
less than 1% of the 25,500,000 shares of Centile, Inc. common stock outstanding
at May 13, 2002, adjusted as required by rules promulgated by the
SEC.</LI></P></OL>

<B><P>EQUITY COMPENSATION PLAN INFORMATION</P>
</B><P ALIGN="JUSTIFY">The following table gives information about the Company's
common stock that may be issued upon the exercise of options, warrants and
rights under all of the Company's existing compensation plans as of March 31,
2002, including the 1992 Stock Option Plan, the Key Personnel Plan, the 1996
Stock Plan (the "1996 Plan"), the 1996 Director Option Plan (the "Director
Plan"), the 1996 Employee Stock Purchase Plan (the "ESPP") and the 1999
Nonstatutory Option Plan (the "1999 Plan"). Additionally, the table includes
information about common stock of two of the Company's subsidiaries, Netergy
Microelectronics, Inc. ("Netergy") and Centile, Inc. ("Centile"), that may be
issued upon the exercise of options under the Netergy 2000 Stock Option Plan
(the "Netergy Plan") and the Centile 2001 Stock Option Plan (the "Centile
Plan"). </P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=637>
<TR><TD WIDTH="32%" VALIGN="BOTTOM" HEIGHT=20><P></P></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=20>
<FONT SIZE=2><B><P ALIGN="CENTER">(a)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=20>
<FONT SIZE=2><B><P ALIGN="CENTER">(b)</B></FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=20>
<FONT SIZE=2><B><P ALIGN="CENTER">(c)</B></FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="BOTTOM" HEIGHT=96>
<FONT SIZE=2><B><P ALIGN="CENTER">Plan Category</B></FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=96>
<FONT SIZE=2><B><P ALIGN="CENTER">Number of Securities to be Issued Upon
Exercise of Outstanding Options, Warrants or Rights (1)</B></FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=96>
<FONT SIZE=2><B><P ALIGN="CENTER">Weighted-Average Exercise Price of Outstanding
Options, Warrants and Rights</B></FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=96>
<FONT SIZE=2><B><P ALIGN="CENTER">Number of Securities Remaining Available for
Future Issuance Under Equity Compensation Plans</B></FONT></TD>
</TR>

<TR><TD WIDTH="32%" VALIGN="BOTTOM" HEIGHT=53>
<FONT SIZE=2><P>8x8, Inc. equity compensation plans approved by security
holders
</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=53>
<FONT SIZE=2><P ALIGN="CENTER">6,917,874</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=53>
<FONT SIZE=2><P ALIGN="CENTER">$2.64</FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=53>
<FONT SIZE=2><P ALIGN="CENTER">195,265(2)(3)</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="BOTTOM" HEIGHT=53>

<FONT SIZE=2><P>8x8, Inc. equity compensation plans not approved by security
holders (4)
</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=53>
<FONT SIZE=2><P ALIGN="CENTER">2,981,952</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=53>
<FONT SIZE=2><P ALIGN="CENTER">$3.68</FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=53>
<FONT SIZE=2><P ALIGN="CENTER">561,754</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="BOTTOM" HEIGHT=36>

<FONT SIZE=2><P>Total for 8x8, Inc. equity compensation plans
</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=36>
<FONT SIZE=2><P ALIGN="CENTER">9,899,826</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=36>
<FONT SIZE=2><P ALIGN="CENTER">$2.95</FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=36>
<FONT SIZE=2><P ALIGN="CENTER">757,019</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="24%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="22%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
<TD WIDTH="23%" VALIGN="BOTTOM" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="BOTTOM">

<FONT SIZE=2><P>Netergy equity compensation plan not approved by security
holders of 8x8, Inc.
</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">3,043,166</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">$0.50</FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">1,956,834</FONT></TD>
</TR>
<TR><TD WIDTH="32%" VALIGN="BOTTOM">

<FONT SIZE=2><P>Centile equity compensation plan not approved by security
holders of 8x8, Inc.
</FONT></TD>
<TD WIDTH="24%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">2,265,000</FONT></TD>
<TD WIDTH="22%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">$0.43</FONT></TD>
<TD WIDTH="23%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="CENTER">2,235,000</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>________</P>
<OL>

<P ALIGN="JUSTIFY"><LI>The number of shares is subject to adjustment for
changes in capitalization for stock splits, stock dividends and similar
events.</LI></P>
<P ALIGN="JUSTIFY"><LI>The 1996 Plan incorporates an evergreen formula pursuant
to which on each April 1, the aggregate number of shares of common stock
reserved for issuance under the 1996 Plan will increase by a number of shares
equal to 5% of the outstanding shares on the preceding day (March 31) up to a
maximum of annual increase of 1,000,000 shares. Additionally, the ESPP
incorporates an evergreen formula pursuant to which on each April 1 the
aggregate number of shares of common stock reserved for issuance under the ESPP
increases so that 500,000 shares remain available for issuance. </LI></P>
<P ALIGN="JUSTIFY"><LI>Of these shares, 83,411 shares remain available for
issuance under the ESPP.</LI></P>
<P ALIGN="JUSTIFY"><LI>Issued under the 1999 Plan, which due to the broad based
nature of the plan does not currently require approval of our stockholders. See
a description of the 1999 Plan below.</LI></P></OL>

<I><P>&nbsp;</P>
<P>1999 Plan</P>
</I><P ALIGN="JUSTIFY">The 1999 Plan was adopted in December 1999 by the
Company's board of directors and provides for the issuance of up to 3,600,000
shares of common stock pursuant to the exercise of options granted under the
plan. The 1999 Plan provides for the granting of nonstatutory stock options
(NSOs) to full and part-time employees and consultants. Under the terms of the
1999 Plan, options may not be issued to either officers or directors of the
Company provided, however, that options may be granted to an officer in
connection with the officer's initial employment by the Company. The exercise
price of options granted under the 1999 Plan is determined by the Company's
board of directors and is generally the fair market value on the date of grant.
Payment of the exercise price may be made in cash, by check, promissory note,
certain other shares of the Company's common stock or through a same day sale
program. Options generally vest over four years and expire ten years after
grant. If an optionee's employment terminates for any reason, the option remains
exercisable for a fixed period of 3 months or such shorter or longer period as
may be fixed by the board of directors. In the event that the Company merges
with or into another corporation, or substantially all of the Company's assets
are sold, the 1999 Plan provides that each outstanding option will be assumed or
substituted for by the successor corporation. If such substitution or assumption
does not occur, each option will fully vest and become exercisable.</P>
<I><P>Netergy and Centile Plans</P>
</I><P ALIGN="JUSTIFY">The Netergy Plan was adopted in December 2000 by the
Netergy board of directors and provides for the issuance of up to 5,000,000
shares of Netergy common stock pursuant to the exercise of options granted under
the plan. The Centile Plan was adopted in March 2001 by the Centile board of
directors and provides for the issuance of up to 4,500,000 shares of Centile
common stock pursuant to the exercise of options granted under the plan. The
Netergy and Centile Plans provide for granting incentive stock options (ISOs) to
full or part-time employees and NSOs to full or part-time employees, directors,
and consultants of the respective companies. Options granted under the Netergy
and Centile Plans may be granted for periods up to ten years and at prices no
less than 85% of the estimated fair value of the shares on the date of grant as
determined by the board of directors, provided, however, that (i) the exercise
price of an ISO and NSO shall not be less than 100% and 85% of the estimated
fair value of the shares on the date of grant, respectively, and (ii) the
exercise price of an ISO and NSO granted to a 10% shareholder shall not be less
than 110% of the estimated fair value of the shares on the date of grant,
respectively. To date, options granted vest over four years. Payment of the
exercise price may be made in cash, by check, promissory note, certain other
shares of the Company's common stock or through a same day sale program. In the
event that Netergy or Centile, as the case may be, merge with or into another
corporation, or sell substantially all of their assets, the Netergy and Centile
Plans provide that each outstanding option will be assumed or substituted for by
the successor corporation. If such substitution or assumption does not occur,
each option will fully vest and become exercisable. In addition, under the
Netergy Plan, in the event of a change in control, vesting for certain options
will be accelerated even if the options are assumed. If an optionee's employment
terminates for any reason, the option remains exercisable for a fixed period of
30 days or such longer period as may be fixed by the applicable board of
directors.</P>
<B><P>SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE</P>
</B><P ALIGN="JUSTIFY">Section&nbsp;16(a) of the Securities Exchange Act of
1934, as amended, requires the Company's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
equity securities to file an initial report of ownership on Form 3 and changes
in ownership on Form 4 or 5 with the SEC and furnish the Company with copies of
all Section&nbsp;16(a) forms that they file. Based solely on its review of the
copies of such forms received by it and written representations from certain
reporting persons, the Company believes that all filing requirements applicable
to its officers, directors and ten percent stockholders were complied with for
the year ended March&nbsp;31, 2002, except Christopher Peters who filed his
initial report of ownership on Form 3 late.</P>
<P>&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<B><P ALIGN="CENTER">PROPOSAL TWO:</P>
<P ALIGN="CENTER">RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS</P>
</B><P ALIGN="JUSTIFY">The board of directors at the recommendation of the Audit
Committee has selected PricewaterhouseCoopers LLP, independent accountants, to
audit the financial statements of the Company for the fiscal year ending March
31, 2003. At the annual meeting, the stockholders are being requested to ratify
the selection of PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP has
served as the Company's independent accountants since 1987. A representative of
PricewaterhouseCoopers LLP is expected to be present at the annual meeting and
will have the opportunity to make a statement if they so desire. The
representative is also expected to be available to respond to appropriate
questions from stockholders. Please see the Report of the Audit Committee on
page 10 of this proxy statement for more information concerning our relationship
with PricewaterhouseCoopers LLP.</P>
<B><P>VOTE REQUIRED AND RECOMMENDATION</P>
</B><P ALIGN="JUSTIFY">Although it is not required to do so, the board of
directors is submitting its selection of the Company's independent accountants
for ratification by the stockholders at the annual meeting in order to ascertain
the view of our stockholders regarding such selection. The affirmative vote of a
majority of the votes entitled to vote on this proposal that are present at the
meeting in person or by proxy will be required to approve this proposal. Broker
non-votes will not be counted as having been represented. Whether the proposal
is approved or defeated, the board of directors may reconsider its selection.
</P>
<B><P ALIGN="JUSTIFY">The board of directors unanimously recommends voting "FOR"
the ratification of the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending March 31, 2003.</P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="CENTER">PROPOSAL THREE:</P>
<P ALIGN="CENTER">AMENDMENTS TO THE 1996 DIRECTOR OPTION PLAN</P>
</B><P ALIGN="JUSTIFY">In April 2002, the board of directors amended the
Director Plan, subject to stockholder approval, to (i) increase the aggregate
number of shares of common stock authorized for issuance under such plan by
500,000 shares, from 500,000 shares to 1,000,000 shares and (ii) provide for an
increase in the number of shares granted as non-discretionary grants under the
Director Plan from 15,000 to 25,000. As of May 30, 2002 an aggregate of 111,000
shares of the Company's common stock remain reserved for issuance under the
Director Plan, not including the proposed increase in the share reserve of
500,000 shares.</P>
<P ALIGN="JUSTIFY">The board of directors believes that the amendment is
necessary to assure that a sufficient reserve of common stock remains available
for issuance under the Director Plan to allow the Company to continue to utilize
equity incentives to attract and retain the services of qualified, non-employee
directors of the Company. In addition, the board of directors believes that the
non-discretionary grants provided for in the amended Director Plan are
consistent with current compensation practices for non-employee directors and
are necessary for the Company to provide sufficient incentives for its non-
employee directors.</P>
<P ALIGN="JUSTIFY">The Company currently intends to register the additional
500,000 shares on a Registration Statement on Form S-8 under the Securities Act
of 1933, as amended, as soon as practicable after receiving stockholder
approval.</P>
<B><P>VOTE REQUIRED AND RECOMMENDATION</P>
</B><P ALIGN="JUSTIFY">The affirmative vote of the holders of a majority of the
shares present in person or represented by proxy and entitled to vote at the
meeting will be required to approve the amendment to the Director Plan.
Abstentions will be counted toward the tabulation of votes cast on proposals
presented to the stockholders and will have the same effect as negative votes.
</P>
<B><P ALIGN="JUSTIFY">The board of directors recommends that the stockholders
vote "FOR" the approval of the amendments to the director plan.</P>
<P>The following is a Summary of the Director Plan</P>
</B><P ALIGN="JUSTIFY">The following summary of the Director Plan is qualified
in its entirety by the specific language of Director Plan, a copy of which will
be made available to any stockholder upon written request.</P>
<I><P ALIGN="JUSTIFY">General</I>. The purpose of the Director Plan is to
attract and retain the best available personnel for service as non-employee, or
"outside" directors of the Company, to provide additional incentive to outside
directors of the Company to serve as directors, and to encourage their continued
service on the board. The Director Plan provides for both discretionary and non-
discretionary grants of nonstatutory stock options. Options granted under the
Directors Plan are not intended to qualify as incentive stock options, as
defined under Section 422 of the Internal Revenue Code. </P>
<I><P ALIGN="JUSTIFY">Administration</I>. The Director Plan may be administered
by the board of directors of the Company or a committee of the board. The board
of directors has the final power to construe and interpret the Director Plan and
options granted under it, and to establish, amend and revoke rules and
regulations for its administration.</P>
<I><P ALIGN="JUSTIFY">Eligibility</I>. The Director Plan provides that options
may be granted only to outside directors of the Company. An "Outside Director"
is defined in the Director Plan as a director of the Company and its
subsidiaries who is not otherwise an employee of the Company or any subsidiary
of the Company.</P>
<I><P ALIGN="JUSTIFY">Share Reserve.</I> The aggregate number of shares of
common stock that may be issued under options granted under the Director Plan,
as amended, is 1,000,000 shares.</P>
<I><P ALIGN="JUSTIFY">Option Grants</I>. The board of directors may make
discretionary option grants to Outside Directors. Non-discretionary grants shall
be made in accordance with the following provisions:</P>
<P ALIGN="JUSTIFY">On the date of an individual's initial election or
appointment to be an Outside Director by the board of directors or stockholders
of the Company, such Outside Director shall automatically be granted an option
(referred to as the "First Option") to purchase 40,000 shares of the Company's
common stock. </P>
<P ALIGN="JUSTIFY">On the day following each annual meeting of stockholders,
commencing with this annual meeting, each person who is then an Outside Director
shall automatically be granted an option to purchase 25,000 shares of common
stock (the "Subsequent Option"); provided, however, that the person must have
served as an Outside Director for the six month period preceding the annual
meeting.</P>
<I><P ALIGN="JUSTIFY">Option Exercise</I>. First Options granted under the
Director Plan vest and become exercisable as to 25% of the shares of common
stock subject to the First Option, on each anniversary of its date of grant,
provided that said Outside Director continues to serve as a director on such
dates. Subsequent Options shall become exercisable as to one forty-eighth
(1/48<SUP>th</SUP>) of the shares of common stock subject to the Subsequent
Option on each one month anniversary of its date of grant for a four-year
period, provided that said Outside Director continues to serve as a director on
such dates. </P>
<I><P ALIGN="JUSTIFY">Exercise Price; Payment</I>. The exercise price of options
granted under the Director Plan shall be equal to 100% of the fair market value
of the common stock on the date such option is granted. The exercise price of
options granted may be paid in (i) in cash or check, (ii) in shares of common
stock of the Company at the time the option is exercised or (iii) pursuant to a
"same-day" sale program which results in the receipt of cash (or check) by the
Company prior to the issuance of shares of the common stock.</P>
<I><P ALIGN="JUSTIFY">Transferability; Term.</I> Under the Director Plan, an
option may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in any manner other than by will or by the laws of descent and
distribution. No option granted under the Director Plan is exercisable by any
person after the expiration of ten years from the date the option is
granted.</P>
<I><P ALIGN="JUSTIFY">Other Provisions</I>. The option agreement may contain
such other terms, provisions and conditions not inconsistent with the Director
Plan as may be determined by the board of directors.</P>
<I><P ALIGN="JUSTIFY">Adjustment Provisions</I>. Upon a Change in Control of the
Company, any unvested non-employee director options shall become fully vested.
For these purposes, a Change in Control is defined as a transaction or series of
transactions, including by merger or consolidation of the Company into or with
any other entity or corporation or the merger or consolidation of any other
corporation into or with the Company, in which any person, entity or group of
persons and/or entities acting in concert acquire(s) shares of the Company's
stock representing 50% or more of the outstanding voting power of the Company,
including voting shares issued or issuable upon conversion of any convertible
security outstanding on the date of such transaction including, without
limitation, stock options. In such event, the option shall be fully exercisable
for 30 days, after which the option will terminate.</P>
<I><P ALIGN="JUSTIFY">Duration, Amendment and Termination</I>. The board of
directors at any time, and from time to time, may amend the Director Plan and/or
some or all outstanding options granted under the Director Plan.</P>
<P ALIGN="JUSTIFY">However, except for adjustments upon changes in stock, as
provided for in the Director Plan, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval
is necessary for the Director Plan to satisfy the requirements of Rule 16b-3
under the Exchange Act or Nasdaq or any securities exchange listing
requirements. Rights and obligations under any option granted before any
amendment of the Director Plan shall not be impaired by such amendment unless
(i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing.</P>
<I><P ALIGN="JUSTIFY">Certain Federal Income Tax Information. </I>Stock options
granted under the Director Plan are subject to federal income tax treatment
pursuant to rules governing options that are not incentive stock options. The
following is only a summary of the effect of federal income taxation upon the
optionee and the Company with respect to the grant and exercise of options under
the Director Plan, does not purport to be complete and does not discuss the
income tax laws of any state or foreign country in which an optionee may
reside.</P>
<P ALIGN="JUSTIFY">Options granted under the Director Plan are nonstatutory
options. An optionee does not recognize any taxable income at the time he or she
is granted a nonstatutory stock option. Upon exercise, the optionee recognizes
taxable income generally measured by the excess of the then fair market value of
the shares over the exercise price. Any taxable income recognized in connection
with an option exercise by an employee of the Company is subject to tax
withholding by the Company. The Company is entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. Upon a disposition of
such shares by the optionee, any difference between the sale price and the
optionee's exercise price, to the extent not recognized as taxable income as
provided above, is treated as long-term or short-term capital gain or loss,
depending on the holding period. </P>
<B><P ALIGN="JUSTIFY">ANNUAL REPORT</P>
</B><P ALIGN="JUSTIFY">A copy of the Company's Annual Report to the Securities
and Exchange Commission on Form 10-K for the fiscal year ended March 31, 2002
has been mailed to stockholders along with this proxy statement. If you have not
received or had access to our Annual Report on Form 10-K, it will be sent to you
without charge upon written request to: Investor Relations, 8x8, Inc., 2445
Mission College Blvd., Santa Clara, CA 95054.</P>
<B><P>DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2003 MEETING</P>
</B><P ALIGN="JUSTIFY">Proposals of stockholders of the Company which are
intended to be presented by such stockholders at the Company's 2003 annual
meeting (the "2003 Meeting") of stockholders must be received by the Company no
later than</FONT><FONT SIZE=2 COLOR="#0000ff"> </FONT><FONT SIZE=2>February 13,
2003 in order that they may be considered for inclusion in the proxy statement
and form of proxy relating to that meeting.</P>
<P ALIGN="JUSTIFY">Alternatively, under the Company's Bylaws, a proposal or a
nomination that the stockholder does not seek to include in our 2003 proxy
statement may be submitted in writing to the Company's Secretary not less than
90 days prior to the 2003 Meeting. Note, however, that in the event we provide
less than 100 days notice or prior public disclosure to stockholders of the date
of the 2003 Meeting, any stockholder proposal or nomination not submitted for
inclusion in the proxy statement must be submitted to the Company's Secretary
not later than the close of business on the tenth day following the day on which
notice of the date of the 2003 Meeting was mailed or public disclosure was made.
For purposes of the above, "public disclosure" means disclosure in a press
release reported by the Dow Jones News Service, Associated Press or a comparable
national news service, or in a document publicly filed by us with the SEC. As
described in our Bylaws, the stockholder submission must include certain
specified information concerning the proposal or nominee, as the case may be,
and information as to the stockholder's ownership of our common stock. If a
stockholder gives notice of such proposal after the deadline computed in
accordance with our Bylaws (the "Bylaw Deadline"), the stockholder will not be
permitted to present the proposal to the stockholders for a vote at the 2003
Meeting.</P>
<P ALIGN="JUSTIFY">The rules of the SEC also establish a different deadline for
submission of stockholder proposals that are not intended to be included in our
proxy statement with respect to discretionary voting (the "Discretionary Vote
Deadline"). The Discretionary Vote Deadline for the 2002 Meeting is April 29,
2003, or the date which is 45 calendar days prior to the anniversary of the
mailing date of this proxy statement. If a stockholder gives notice of such a
proposal after the Discretionary Vote Deadline, our proxy holders will be
allowed to use their discretionary voting authority to vote against the
stockholder proposal when and if the proposal is raised at the 2003 Meeting.</P>
<P ALIGN="JUSTIFY">Because the Bylaw Deadline is not capable of being determined
until we publicly announce the date for our 2003 Meeting, it is possible that
the Bylaw Deadline may occur after the Discretionary Vote Deadline. In such a
case, a proposal received after the Discretionary Vote Deadline but before the
Bylaw Deadline would be eligible to be presented at the 2003 Meeting and we
believe that our proxy holders at such meeting would be allowed to use the
discretionary authority granted by the proxy to vote against the proposal at
such meeting without including any disclosure of the proposal in the proxy
statement relating to such meeting.</P>
<P ALIGN="JUSTIFY">We have not been notified by any stockholder of his, her or
its intent to present a stockholder proposal from the floor at the 2002 annual
meeting. The enclosed proxy grants the proxy holders discretionary authority to
vote on any matter properly brought before the 2002 annual meeting, including
any stockholder proposals received between the date of this proxy statement and
the Bylaw Deadline for the 2002 annual meeting, which is the date 10 days after
the date of notice of the 2002 annual meeting.</P>
<B><P>OTHER MATTERS</P>
</B><P ALIGN="JUSTIFY">The Company knows of no other matters to be submitted at
the annual meeting. If any other matters properly come before the meeting or any
adjournment or postponement thereof, it is the intention of the persons named in
the enclosed form of proxy to vote the shares they represent as the board of
directors may recommend.</P><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>By Order of the Board of Directors</P>
<P>Bryan R. Martin<BR>
   President and Chief Executive Officer</P></DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>Santa Clara, California<BR>
   June 13, 2002</P>

<br>
<br>
<br>
<HR align=center SIZE=2 width="85%">
<br>
<br>
<br>

<B><P ALIGN="CENTER">8X8, INC.</P>
<P ALIGN="CENTER">PROXY FOR ANNUAL MEETING OF STOCKHOLDERS</P>
<P ALIGN="CENTER">TO BE HELD JULY 23, 2002</P>
<P ALIGN="CENTER">THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS</P>
</B><P ALIGN="JUSTIFY">The undersigned stockholder of 8x8, Inc., a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, and hereby appoints Bryan R. Martin
and David Stoll, and each of them, proxies and attorneys-in-fact, with full
power to each of substitution, on behalf of the undersigned, to represent the
undersigned at the annual meeting of stockholders of 8x8, Inc. to be held at the
offices of the Company at 2445 Mission College Boulevard, Santa Clara,
California 95054 on Tuesday, July 23, 2002 at 1:30 p.m., local time, and at any
adjournment or adjournments thereof, and to vote all shares of the Company's
voting securities that the undersigned would be entitled to vote if then and
there personally present, on all matters set forth on the reverse side
hereof.</P>
<B><P ALIGN="JUSTIFY">THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE SPECIFICATIONS MADE HEREIN. IF NO SPECIFICATION IS
INDICATED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR EACH OF THE
PERSONS AND THE PROPOSALS ON THE REVERSE SIDE HEREOF AND FOR SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXYHOLDERS DEEM ADVISABLE.</P>
<P>The Board recommends a vote for election of all nominees and a vote for
approval of all of the proposals.</P>
</B><P>Please mark your vote as indicated in this example. &nbsp;&nbsp;<FONT FACE="Wingdings" SIZE="5">&#253;</FONT> </P>



<P>ELECTION OF DIRECTORS</P>
<P>1.&#9;<U>Nominees</U>:</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=521>
<TR><TD WIDTH="6%" VALIGN="MIDDLE">
<FONT SIZE=2><P>01</FONT></TD>
<TD WIDTH="41%" VALIGN="MIDDLE">
<FONT SIZE=2><P>-- DR. BERND GIROD</FONT></TD>
<TD WIDTH="14%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="MIDDLE">
<FONT SIZE=2><P>02</FONT></TD>
<TD WIDTH="34%" VALIGN="MIDDLE">
<FONT SIZE=2><P>-- GUY L. HECKER, JR.</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="MIDDLE">
<FONT SIZE=2><P>03</FONT></TD>
<TD WIDTH="41%" VALIGN="MIDDLE">
<FONT SIZE=2><P>-- CHRISTOS LAGOMICHOS</FONT></TD>
<TD WIDTH="14%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="MIDDLE">
<FONT SIZE=2><P>04</FONT></TD>
<TD WIDTH="34%" VALIGN="MIDDLE">
<FONT SIZE=2><P>-- BRYAN R. MARTIN</FONT></TD>
</TR>
<TR><TD WIDTH="6%" VALIGN="MIDDLE">
<FONT SIZE=2><P>05</FONT></TD>
<TD WIDTH="41%" VALIGN="MIDDLE">
<FONT SIZE=2><P>-- JOE PARKINSON</FONT></TD>
<TD WIDTH="14%" VALIGN="MIDDLE">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="MIDDLE">
<FONT SIZE=2><P>06</FONT></TD>
<TD WIDTH="34%" VALIGN="MIDDLE">
<FONT SIZE=2><P>-- WILLIAM P. TAI</FONT></TD>
</TR>
</TABLE>
</CENTER></P>


<P ALIGN="CENTER"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=581>
<TR><TD WIDTH="28%" VALIGN="TOP" HEIGHT=55>
<FONT SIZE=2><P>FOR ALL NOMINEES</FONT></TD>
<TD WIDTH="30%" VALIGN="TOP" HEIGHT=55>
<FONT SIZE=2><P>WITHHOLD ALL NOMINEES</FONT></TD>
<TD WIDTH="42%" VALIGN="TOP" HEIGHT=55>
<FONT SIZE=2><P>WITHHOLD AUTHORITY TO VOTE FOR INDIVIDUAL NOMINEES LISTED BY
NUMBER BELOW:</FONT></TD>
</TR>
<TR><TD WIDTH="28%" VALIGN="MIDDLE" HEIGHT=22>
<P></FONT> <FONT FACE="Wingdings" SIZE="5">&#168;</FONT></TD>
<TD WIDTH="30%" VALIGN="MIDDLE" HEIGHT=22>
<P></FONT> <FONT FACE="Wingdings" SIZE="5">&#168;</FONT></TD>
<TD WIDTH="42%" VALIGN="MIDDLE" HEIGHT=22>
<P></FONT> <FONT FACE="Wingdings" SIZE="5">&#168;</FONT>____________________</TD>
</TR>
</TABLE>
</P>



<FONT SIZE=2><P ALIGN="JUSTIFY">2.&#9;PROPOSAL TO RATIFY THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE
FISCAL YEAR ENDING MARCH 31, 2003.</P>


<P ALIGN="CENTER"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=581>
<TR><TD WIDTH="34%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">FOR<BR>
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;
</FONT></TD>
<TD WIDTH="35%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">AGAINST<BR>
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;
</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">ABSTAIN<BR>
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;
</FONT></TD>
</TR>
</TABLE> </P>



<FONT SIZE=2><P ALIGN="JUSTIFY">3.
PROPOSAL TO APPROVE AMENDMENT OF THE COMPANY'S
1996 DIRECTOR OPTION PLAN TO (I) INCREASE THE AGGREGATE NUMBER OF SHARES OF
COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER SUCH PLAN BY 500,000 SHARES, FROM
500,000 SHARES TO 1,000,000 SHARES, AND (II) PROVIDE FOR AN INCREASE IN THE
NUMBER OF SHARES GRANTED AS NON-DISCRETIONARY OPTION GRANTS UNDER THE 1996
DIRECTOR OPTION PLAN. </P>

<P ALIGN="CENTER"><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=581>
<TR><TD WIDTH="34%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">FOR<BR>
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;
</FONT></TD>
<TD WIDTH="35%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">AGAINST<BR>
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;
</FONT></TD>
<TD WIDTH="31%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">ABSTAIN<BR>
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;
</FONT></TD>
</TR>
</TABLE> </P>

<FONT SIZE=2><P ALIGN="RIGHT">&nbsp;</P>

<P>4.&#9;TO VOTE OR OTHERWISE REPRESENT THE SHARES ON ANY AND ALL OTHER BUSINESS
WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR ADJOURNMENTS
THEREOF, ACCORDING TO THEIR DISCRETION AND IN THEIR DISCRETION.</P>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<P>PLACE "X" HERE IF YOU PLAN TO VOTE YOUR SHARES AT THE MEETING
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;</FONT></P>

<FONT SIZE=2>
<P>MARK HERE FOR ADDRESS CHANGE AND NOTE NEW ADDRESS IN SPACE TO THE LEFT
</FONT> <FONT FACE="Wingdings" SIZE="5">&#168;</FONT></P>

<FONT SIZE=2>
<P>Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.</P>


<P>NOTE:&#9;Please sign exactly as name appears on your stock certificate. If
the stock is registered in the names of two or more persons, each should sign.
Executors, administrators, trustees, guardians, attorneys and corporate officers
should insert their titles.</P>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>

<P>
SIGNATURE:______________________________________ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DATE: _________

<P>
SIGNATURE:______________________________________ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DATE: _________


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`
end

</TEXT>
</DOCUMENT>
</SUBMISSION>
