| · | | We obtain certain raw materials, subassemblies, components and products from single suppliers and alternate sources for these items are not readily available. To date, we have experienced only minor interruptions in the supply of these raw materials, subassemblies, components and products, none of which has significantly affected our results of operations. Current adverse economic conditions could lead to a higher risk of failure of our suppliers to remain in business or to be able to purchase the raw materials, subcomponents and parts required by them to produce and provide to us the parts we need. An interruption in supply from any of our single source suppliers in the future would materially adversely affect our business, financial condition and results of operations.
Most of our suppliers are not obligated to continue to provide us with raw materials, components and subassemblies. Rather, we buy most raw materials, components and subassemblies on a purchase order basis. If our suppliers experience increased demand or shortages, it could affect the availability or cost of needed inventories. In turn, this would affect our ability to manufacture and sell products that are dependent on those raw materials, components and subassemblies. If this occurs and we are not able to pass these increases on to our customers or to achieve operating efficiencies that would offset the increases, it would have a material adverse effect on our business, financial condition and results of operations. | | 20 | |
| | | | | | · | | Prices of raw materials, components and subassemblies may rise. If this occurs and we are not able to pass these increases on to our customers or to achieve operating efficiencies that would offset the increases, it would have a material adverse effect on our business, financial condition and results of operations. | | | | | | · | | Due to the lead times required to obtain certain raw materials, subassemblies, components and products from certain foreign suppliers, we may not be able to react quickly to changes in demand, potentially resulting in either excess inventories of such goods or shortages of the raw materials, subassemblies, components and products. Lead times are particularly long on silicon-based components incorporating radio frequency and digital signal processing technologies and such components are an increasingly important part of our product costs. Failure in the future to match the timing of purchases of raw materials, subassemblies, components and products to demand could increase our inventories and/or decrease our revenues, consequently materially adversely affecting our business, financial condition and results of operations. | | | | | | · | | Most of our suppliers are not obligated to continue to provide us with raw materials, components and subassemblies. Rather, we buy most raw materials, components and subassemblies on a purchase order basis. If our suppliers experience increased demand or shortages, it could affect deliveries to us. In turn, this would affect our ability to manufacture and sell products that are dependent on those raw materials, components and subassemblies. This would materially adversely affect our business, financial condition and results of operations. | | | | | | · | | Although we generally use standard raw materials, parts and components for our products, the high development costs associated with emerging wireless technologies permits us to work with only a single source of silicon chip-sets on any particular new product. We, or our chosen supplier of chip-sets, may experience challenges in designing, developing and manufacturing components in these new technologies which could affect our ability to meet time to market schedules. Due to our dependence on single suppliers for certain chip sets, we could experience higher prices, a delay in development of the chip-set, and/or the inability to meet our customer demand for these new products. Our business, operating results and financial condition could therefore be materially adversely affected as a result of these factors. |
Although we generally use standard raw materials, parts and components for our products, the high development costs associated with emerging wireless technologies permits us to work with only a single source of silicon chip-sets on any particular new product. We, or our chosen supplier of chip-sets, may experience challenges in designing, developing and manufacturing components in these new technologies which could affect our ability to meet time to market schedules. Due to our dependence on single suppliers for certain chip sets, we could experience higher prices, a delay in development of the chip-set, and/or the inability to meet our customer demand for these new products. Our business, operating results, financial condition or cash flows could therefore be materially adversely affected as a result of these factors. The introduction of Bluetooth and other wireless headsets presents many significant manufacturing, marketing and other operational risks and uncertainties, including: developing and marketing these wireless headset products; unforeseen delays or difficulties in introducing and achieving volume production of such products; our dependence on third parties to supply key components, many of which have long lead times; and our ability to forecast demand and customer return rates accurately for this new product category for which relevant data is incomplete or not available. We have longer lead times with certain suppliers than commitments from some of our customers.
We sell our products through various channels of distribution and certain of these channels are becomingthat can be volatile.
We sell substantially all of our products through distributors, retailers, OEM'sOEM’s and telephony service providers. Our existing relationships with these parties are not exclusive and can be terminated by either party without cause. Our channel partners also sell or can potentially sell products offered by our competitors. To the extent that our competitors offer our channel partners more favorable terms, such partners may decline to carry, de-emphasize or discontinue carrying our products. In the future, we may not be able to retain or attract a sufficient number of qualified channel partners. Further, such partners may not recommend, or continue to recommend, our products. In the future, our OEM customers or potential OEM customers may elect to manufacture their own products, similar to those w ewe currently sell to them. The inability to establish or maintain successful relationshipsrelations hips with distributors, OEM's,OEM’s, retailers and telephony service providers or to expand our distribution channels could materially adversely affect our business, financial condition orand results of operations.
As a result of the growth of our mobile headset business, our customer mix is changing and certain OEM'sOEM’s, retailers and wireless carriers are becoming significant. This greater reliance on certain large customers could increase the volatility of our revenues and earnings. In particular, we have several large customers whose order patterns are difficult to predict. Offers and promotions by these customers may result in significant fluctuations of their purchasing activities over time. If we are unable to anticipate the purchase requirements of these customers, our quarterly revenues may be adversely affected and/or we may be exposed to large volumes of inventory that cannot be immediately resold to other customers.
Our distribution channels generally hold inventoriesIn particular, we are obligated to absorb from our retailers products which have failed to sell as expected, and in some instances, such products may be returned to our inventory. Should product returns vary significantly from our estimate, then our allowance for estimated returns, which we record as a reduction of our products, determined in their own business judgmentrevenue, may need to be sufficient to meet their customer's delivery requirements. Such inventory levels are subject to market conditions, business judgment by the reseller and our ability to meet their time-to-ship needs. Rapid reductions by our distributors, OEM's, retailers and other customers in the levels of inventories held in our products could materially adversely affect our business, financial condition or results of operations. We are also exposed to long lead time commitments with certain suppliers for a key component while such exposure is not similarly passed through to our customers. We may be at risk for these components if our customers reject or cancel orders unexpectedly or with inade quate notice.revised.
Our stock price may be volatile and the value of your investment in Plantronics stock could be diminished.
The market price for our common stock may continue to be affected by a number of factors, including: the announcement of new products or product enhancements by us or our competitors; · | | uncertain economic conditions and the decline in investor confidence in the market place; | | | | · | | the announcement of new products or product enhancements by us or our competitors; | | | | · | | the loss of services of one or more of our executive officers or other key employees; | | | | · | | quarterly variations in our or our competitors' results of operations; | | | | · | | changes in our published forecasts of future results of operations; | | | | · | | changes in earnings estimates or recommendations by securities analysts; | | | | · | | developments in our industry; | | | | · | | sales of substantial numbers of shares of our common stock in the public market; | | | | · | | general market conditions; and | | | | · | | other factors unrelated to our operating performance or the operating performance of our competitors. |
In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market price of many technology companies, in particular, and that have often been unrelated to the operating performance of these companies. Such factors and fluctuations, as well as general economic, political and market conditions, such as recessions, could materially adversely affect the market price of our common stock.executive officers or other key employees;
The majority of our revenues come from products currently producedquarterly variations in our facilities in Tijuana, Mexico.
The majorityor our competitors’ results of our revenues come from products that are producedoperations;
changes in our facilities in Tijuana, Mexico. A fire, flood or earthquake, political unrest or other disaster or condition affecting our facilities could have a material adverse effect on our business, financial condition andpublished forecasts of future results of operations. The prospect of such unscheduled interruptions may continue for the foreseeable futureoperations; changes in earnings estimates or recommendations by securities analysts; developments in our industry; and we are unable to predict their occurrence, duration or cessation. While we have developed a disaster recovery plan and believe we are adequately insured with respect to these facilities, we may not be able to implement the plan effectively or on a timely basis or recover under applicable insurance policies. general market conditions.
Our quarterly operating results may fluctuate significantly and are not a good indicator of future performance. Our quarterly operating results have fluctuated significantly in the past and may vary significantly in the future as a result of a number of factors, many of which are out of our control. These factors include: market acceptance and transition of new product introductions, other new products launched in 2004, new products launched in the future, and product enhancements by us or our existing or potential new competitors; difficult general economic conditions, as has been the case with the recent global economic uncertainty and downturn in technology spending, and specific economic conditions prevailing in the communications industry and other technology industries; the prices and performance of our products and those of our existing or potential new competitors; changes in our sales management and sales organization which could result in disruptions among our channel partners; the timing and size of the orders for our products, in particular OEM demand is very volatile and difficult to forecast; our distribution channels reducing their inventory levels; the level and mix of inventory that we hold to meet future demand; slowing sales by our channel partners to their customers which places further pressure on our channel partners to minimize inventory levels and reduce purchases of our products; the near and long-term impact of terrorist attacks and incidents and any military response or uncertainty regarding any military response to those attacks; the shift in sales mix of products we sell to lower margin products; fluctuations in the level of international sales and our exposure to international currency fluctuations in both revenues and expenses; the cost and availability of component devices used in many of our products; manufacturing costs; the level and cost of warranty claims; future changes in existing financial accounting standards or practices or taxation rules or practices; the impact of disruptions in our operations, for any reason, including the recurrence of SARS or other similar event; the impact of seasonality on our various product lines and geographic regions; and adverse outcomes to litigation.
As a result of these and other factors, we believe that period-to-period comparisons of our historical results of operations are not a good predictor of our future performance. If our future operating results are below the expectations of stock market securities analysts or investors, our stock price will likely decline. Changes in stock option accounting rules may adversely impact our operating results prepared in accordance with generally accepted accounting principles, our stock price and our competitiveness in the employee marketplace. Technology companies like ours have a history of using broad based employee stock option programs to hire, incentivize and retain our workforce in a competitive marketplace. Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), allows companies the choice of either using a fair value method of accounting for options, which would result in expense recognition for all options granted, or using an intrinsic value method, as prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), with pro forma disclosure of the impact on net income (loss) of using the fair value option expense recognition method. We have elected to apply APB 25 and accordingly we generally do not recognize any expense with respect to employee stock option s as long as such options are granted at exercise prices equal to the fair value of our common stock on the date of grant. During March 2004 the FASB issued a proposed Statement, “Share-Based Payment, an amendment of FASB Statements No. 123 and 95.” The proposed statement eliminates the treatment for share-based transactions using APB 25 and generally would require share-based payments to employees be accounted for using a fair-value-based method and recognized as expenses in our statements of operations. The proposed standard would require the modified prospective method be used, which would require that the fair value of new awards granted from the beginning of the year of adoption plus unvested awards at the date of adoption be expensed over the vesting term. In addition, the proposed statement encourages companies to use the “binomial” approach to value stock options, as opposed to the Black-Scholes option pricing model that we currently use to estimate the fair value of our options under SFAS 123 disclosure provisions. The effective date the proposed standard is recommending is for fiscal years beginning after December 15, 2004. Should this proposed statement be finalized, it will have a significant impact on our consolidated statement of operations as we will be required to expense the fair value of our stock options rather than disclosing the impact on our consolidated results of operations within our footnotes in accordance with the disclosure provisions of SFAS 123 (see Note 2 of the Notes to the consolidated financial statements). This will result in lower reported earnings per share which could negatively impact our future stock price. In addition, should the proposal be finalized, this could impact our ability to utilize broad based employee stock plans to reward employees and could result in a competitive disadvantage to us in the employee marketplace. We believe that the expected exp ense related to the fair value of our stock options under the Binomial Model as proposed by the FASB will be slightly less than the Black-Scholes valuation approach.* In addition, if stock options are expensed, it is our expectation that our use of restricted stock, restricted stock units and capped stock appreciation rights for employee awards will increase and our use of stock options will decrease. Although it is anticipated that such a change in the types of employee awards that are issued will create less dilution due to fewer aggregate shares issued, it is also expected that the amount of cash received by us from the exercise of stock options will decline. We have significant foreign operations and there are inherent risks in operating abroad.
During our thirdthe first quarter of fiscal year 2004,2005, approximately 38%32% of our net sales were derived from customers outside the United States. In addition, we conduct the majority of our headset assembly operations in our manufacturing facility located in Mexico, and we obtain most of the components and subassemblies used in our products from various foreign suppliers. A fire, flood or earthquake, political unrest or other disaster or condition affecting our facilities could have a material adverse effect on our business, financial condition and results of operations. We also purchase a growing number of turn-key products directly from Asia. The inherent risks of international operations, either in Mexico or in Asia, could materially adversely affect our business, financial condition and results of operations. The types of risks faced in connection with international operations and sales include, among others: | · | | cultural differences in the conduct of business; | | | | | | · | | greater difficulty in accounts receivable collection; | | | | | | · | | unexpected changes in regulatory requirements; | | | | | | · | | tariffs and other trade barriers; | | | | | | · | | economic and political conditions in each country; | | | | | | · | | management and operation of an enterprise spread over various countries; and | | | | | | · | | the burden of complying with a wide variety of foreign laws. |
Our foreign operations put us at risk of loss if there are materialbusiness;
greater difficulty in accounts receivable collection; unexpected changes in currency values as compared to regulatory requirements; tariffs and other trade barriers; economic and political conditions in each country; management and operation of an enterprise spread over various countries; and the U.S. dollar.
Approximately 26%burden of our business is conducted in currencies other than the U.S. dollar. Substantially allcomplying with a wide variety of our sales outside of North America are transacted in the Euro or local currencies. We are therefore exposed to risks associated with fluctuations in exchange rates that can affect our revenue and gross margins and can also generate currency transaction gains and losses.
We administer programs designed to reduce our foreign currency net asset exposure and our economic exposure. However, there can be no assurance that our hedging policy will be effective in reducing transaction and/or economic gains and losses. There can be no assurance that we will not continue to experience currency losses in the future, nor can we predict the effects of future exchange rate fluctuations on future operating results. To the extent that sales to our foreign customers increase or transactions in foreign currencies increase, our business, financial condition and results of operations could be materially adversely affected by exchange rate fluctuations.laws.
Changes in regulatory requirements may adversely impact our gross margins as we comply with such changes or reduce our ability to generate revenues if we are unable to comply.
Our products must meet the requirements set by regulatory authorities in the numerous jurisdictions in which we sell them. As regulations and local laws change, we must , if possible, modify our products to address those changes. Regulatory restrictions may increase the costs to design and manufacture our products, resulting in a decrease in our margins or a decrease in demand for our products if the costs are passed along. Compliance with regulatory restrictions may impactaffect the technical quality and capabilities of our products, reducing their marketability. New legislation prohibiting the use of phones while operating a motor vehicle may reduce demand for our products.
Our success depends on our ability to assimilate new technologies in our products and to properly train our channel partners in the use of those products. The terrorist attacksmarkets for video and voice communications and network systems products are characterized by rapidly changing technology, evolving industry standards and frequent new product introductions. The success of our new products depends on New York City on September 11, 2001, markedseveral factors, including proper new product definition, product cost, timely completion and introduction of new products, proper positioning of new products in relation to our total product portfolio and their relative pricing, differentiation of new products from those of our competitors and market acceptance of these products. Additionally, properly addressing the complexities associated with compatibility issues, channel partner training, technical and sales support as well as field support are also factors that may affect our success in this market. When we take any significant actions regarding our product offerings, or acquire new product off erings, it is important to educate and train our channel partners to avoid any confusion as to the desirability of the new product offering compared to our existing product offerings. We may not identify successful new product opportunities and develop and bring products to market in a turning pointtimely manner or be successful in current U.S. political, militarydeveloping a service provider strategy. Additionally, we cannot assure you that competing technologies developed by others will not render our products or technologies obsolete or noncompetitive. Further, as we introduce new products that can or will render existing products obsolete, these product transition cycles may not go smoothly, causing an increased risk of inventory obsolescence and security strategiesrelationship issues with our channel partners. The failure of our new product development efforts, any inability to service or maintain the necessary third-party interoperability licenses, our inability to properly manage product transition and our inability to enter new markets, such as the service provid er market, would harm our business and results of operations.
Product obsolescence, excess inventory and other asset impairment can negatively affect our results of operations. We operate in a high technology industry which we believe have,is subject to rapid and mayfrequent technology and market demand changes. These changes can often render existing or developing technologies obsolete. In addition, the introduction of new products and any related actions to discontinue existing products can cause existing inventory to become obsolete. These obsolescence issues can require write-downs in inventory value when it is determined that the recorded value of existing inventory is greater than its fair market value. Also, the pace of change in technology development and in the release of new products has increased and is expected to continue to adversely impactincrease. If sales of one of these products have a negative effect on sales of another of our business, both directly and indirectly.
The events of September 11, 2001 and its aftermath contributed to a slowing inproducts, it could significantly increase the economy. We believe that one direct impactinventory levels of the attacks isnegatively impacted product. For each of our products, the reductionpotential exists f or new products to render existing products obsolete, cause inventories of contact center agents inexisting products to increase, cause us to discontinue a product or reduce the travel and leisure industries. We are indirectly affected by the continuing concern of future terrorist attacks on U.S. soil. We are unable to estimate the impact these threats and their consequences have on our business, however, we expect that as these events adversely affect the global economy in general, our financial condition, our operations and our prospects will be similarly adversely affected.
demand for existing products.
We face and might in the future face intellectual property infringement claims that might be costly to resolve. We have from time to time received, and may in the future receive, communications from third parties asserting patent or other intellectual property rights covering our products. In addition, our industry is characterized by uncertain and conflicting intellectual property claims and vigorous protection and pursuit of intellectual property rights or positions which have resulted in significant and protracted and expensive litigation. We cannot assure you that we will prevail in any such litigation, that intellectual property claims will not be made against us in the future or that we will not be prohibited from using the technologies subject to any such claims or be required to obtain licenses and make corresponding royalty payments. In addition, the necessary management attention to, and legal costs associated with, litigation can have a significant adverse effect on our operating r esults and financial condition.
We have intellectual property rights that could be infringed by others and we are potentially at risk of infringement of the intellectual property rights of others.
Our success will depend in part on our ability to protect our copyrights, patents, trademarks, trade dress, trade secrets, and other intellectual property, including our rights to certain domain names. We rely primarily on a combination of nondisclosure agreements and other contractual provisions as well as patent, trademark, trade secret, and copyright laws to protect our proprietary rights. Effective trademark, patent, copyright, and trade secret protection may not be available in every country in which our products and media properties are distributed to customers worldwide.customers. We currently hold 8085 United States patents and additional foreign patents and will continue to seek patents on our inventions when we believe it to be appropriate. The process of seeking patent protection can be lengthy and expensive. Patents may not be issued in response to our applications, and patents that are issuedissue d may be invalidated, circumvented or challenged by others. If we are required to enforce our patents or other proprietary rights through litigation, the costs and diversion of management'smanagement’s attention could be substantial. In addition, the rights granted under any patents may not provide us competitive advantages or be adequate to safeguard and maintain our proprietary rights. Moreover, the laws of certain countries do not protect our proprietary rights to the same extent as do the laws of the United States. If we do not enforce and protect our intellectual property rights, it could materially adversely affect our business, financial condition and results of operations.
We are exposed to potential lawsuits alleging defects in our products and/or hearing loss caused by our products.
The use of our products exposes us to the risk of product liability and hearing loss claims. These claims have in the past been, and are currently being, asserted against us. None of the previously resolved claims have materially affected our business, financial condition orand results of operations, nor do we believe that any of the pending claims will have such an effect.* Although we maintain product liability insurance, the coverage provided under our policies could be unavailable or insufficient to cover the full amount of any such claim. Therefore, successful product liability or hearing loss claims brought against us could have a material adverse effect upon our business, financial condition and results of operations.
Our mobile headsets are used with mobile telephones. There has been continuing public controversy over whether the radio frequency emissions from mobile telephones are harmful to users of mobile phones. We believe that there is no conclusive proof of any health hazard from the use of mobile telephones but that research in this area is incomplete.* We have tested our headsets through independent laboratories and have found that use of our headsets reduces radio frequency emissions at the user'suser’s head to virtually zero. However, if research was to establish a health hazard from the use of mobile telephones or public controversy grows even in the absence of conclusive research findings, there could be an adverse impact on the demand for mobile phones, which reduces demands for headset products. There is also continuing and increasing public controversy over the use of mobile telephones by operators of motor vehicles. While we believe that our products enhance driver safety by permitting a motor vehicle operator to generally be able to keep both hands-free to operate the vehicle, there is no certainty that this is the case and we may be subject to claims arising from allegations that use of a mobile telephone and headset contributed to a motor vehicle accident. We maintain product liability insurance and general liability insurance that we believe would cover any such claims.* However, the coverage provided under our policies could be unavailable or insufficient to cover the full amount of any such claim. Therefore, successful product liability claims brought against us could have a ma terialmaterial adverse effect upon our business, financial condition and results of operations.
We are exposed to potential litigation from third parties which is costly to defend and consumes management’s time and could possibly divert focus away from our business.
From time to time, third parties, including our competitors, may assert intellectual property rights or other commercial claims against us. These claims, if they are asserted, could result in costly litigation and diversion of management's attention regardless of the merit of a claim. In addition, we may not ultimately prevail in any such litigation or be able to license any valid and infringed patents from such third parties on commercially reasonable terms, if at all. Any infringement claim or other litigation against us could materially adversely affect our business, financial condition and results of operations.
While we believe we comply with environmental laws and regulations, we are still exposed to potential risks from environmental matters.
We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. Although we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations, environmental legislation has been enacted and may in the future be enacted or interpreted to create environmental liability with respect to our facilities or operations. We have included in our financial statements a reserve of $1.5 million for possible environmental remediation of the site of one of our previous businesses. While no claims have been asserted against us in connection with this matter, such claims could be a ssertedasserted in the future and any liability that might result could exceed the amount of the reserve.
GivenWe are actively working to gain an understanding of the low trading volumecomplete requirements concerning the removal of certain potentially environmentally sensitive materials from our products to comply with the European Union Directives on Restrictions on certain Hazardous Substances on electrical and electronic equipment (“ROHS”) and on Waste Electrical and Electronic Equipment (“WEEE”). Some of our stock,customers are requesting that we implement these new compliance standards sooner than the legislation would require. While we believe that we will have the resources and ability to fully meet our customers’ requests, and spirit of the ROHS and WEEE directives, if unusual occurrences arise or if we are wrong in our significant shareholders sell their shares inassessment of what it will take to fully comply, there is a short period of time there couldrisk that we will not be an adverseable to meet the aggressive schedule set by our customers or comply with the le gislation as passed by the EU member states. If that were to happen, a material negative effect on our financial results may occur.
While we believe that we currently have adequate control structures in place, we are still exposed to potential risks from recent legislation requiring companies to evaluate controls under Section 404 of the market priceSarbanes Oxley Act of 2002.
We are working diligently toward evaluating our stock.
As of January 23, 2004, we had 45,933,780 shares of common stock outstanding. These sharesinternal controls systems in order to allow management to report on, and our independent registered public accounting firm to attest to, our internal controls, as required by this legislation. We are freely tradable except for approximately 1,018,202 shares held by affiliates of Plantronics. These approximately 1,018,202 shares may be soldperforming the system and process evaluation and testing (and any necessary remediation) required in accordance with Rule 144 under the Securities Act (to the extent permitted by the provisions of Rule 144), or pursuantan effort to an effective registration statement filedcomply with the Securitiesmanagement certification and Exchange Commission.
Approximately 9,542,862 additional shares are subject to outstanding stock options asindependent registered public accounting firm attestation requirements of January 23, 2004. The shares that would be issued upon exerciseSection 404 of stock options have been registered. Accordingly, to the extent that these options vest and shares of our common stock are issued in the future, they may be freely resold by stockholders who are not our affiliates. Our affiliates may resell these shares to the extent permitted by Rule 144 under the SecuritiesSarbanes Oxley Act.
Our stock is not heavily traded. The average daily trading volume of our stock in the third quarter of fiscal 2004 was approximately 296,542 shares per day with a median volume in that period of 273,200 shares per day. Our directors, officers and employees are subject to trading black-out periods which prohibit them from trading in our stock. As a result, we have incurred and expect to incur additional expenses and consumption of this, during open trading periods,management’s time. While we anticipate being able to fully implement the requirements relating to internal controls and particularly when our stock is trading at appreciated values,all other aspects of Section 404 in a timely fashion, we may see an unusual amountcannot be certain as to the timing of tradingcompletion of our stockevaluation, testing and remediation ac tions or the impact of the same on our operations since there is no precedent available by our directors, officers and employees. Saleswhich to measure compliance adequacy. If we are not able to implement the requirements of Section 404 in a substantial number of shares of our common stock intimely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the public market by any of our officers, directorsSecurities Exchange Commission or other stockholdersthe New York Stock Exchange. Any such action could adversely affect the prevailing market price ofeffect our common stock and impair our ability to raise capital t hrough the sale of equity securities.financial results.
Our business could be materially adversely affected if we lose the benefit of the services of Ken Kannappan or other key personnel.
Our success depends to a significant extent upon the services of a limited number of executive officers and other key employees. The unanticipated loss of the services of our president and chief executive officer, Mr. Kannappan, or one or more of our other executive officers or key employees could have a material adverse effect upon our business, financial condition and results of operations.
We also believe that our future success will depend in large part upon our ability to attract and retain additional highly skilled technical, management, sales and marketing personnel. Competition for such personnel is intense. We may not be successful in attracting and retaining such personnel, and our failure to do so could have a material adverse effect on our business, operating results or financial condition.
Future acquisitions involve material risks. We may in the future acquire other companies. There are inherent risks in acquiring other companies or businesses that could materially adversely affect our business, financial condition and results of operations. The types of risks faced in connection with acquisitions include, among others: cultural differences in the conduct of business; difficulties in integration of the operations, technologies, and products of the acquired company; the risk that the consolidation of the acquired company may not produce the enhanced efficiencies or be as successful as we may have anticipated; the risk of diverting management’s attention from normal daily operations of the business; difficulties in integrating the transactions and business information systems of the acquired company; and the potential loss of key employees of the acquired company.
Mergers and acquisitions, particularly those of high-technology companies, are inherently risky, and no assurance can be given that future acquisitions will be successful and will not materially adversely affect our business, operating results or financial condition. We must also manage any acquisition related growth effectively. Failure to manage growth effectively and successfully integrate acquisitions made by us could materially harm our business and operating results. Provisions in our charter documents and Delaware law and our adoption of a stockholder rights plan may delay or prevent a third party from acquiring us, which could decreaseaffect the value of ourprice at which you can sell your stock.
Our boardBoard of directorsDirectors has the authority to issue preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting and conversion rights, of those shares without any further vote or action by the stockholders. The issuance of our preferred stock could have the effect of making it more difficult for a third party to acquire us. In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which could also have the effect of delaying or preventing our acquisition by a third party. Further, certain provisions of our Certificate of Incorporation and bylaws could delay or make more difficult a merger, tender offer or proxy contest, which could adversely affect the market price of our common stock.
Our boardIn 2002, our Board of directorsDirectors adopted a stockholder rights plan, in 2002, pursuant to which we distributed one right for each outstanding share of common stock held by stockholders of record as of April 12, 2002. Because the rights may substantially dilute the stock ownership of a person or group attempting to take us over without the approval of our board of directors, the plan could make it more difficult for a third party to acquire us, or a significant percentage of our outstanding capital stock, without first negotiating with our board of directors regarding such acquisitionacquisition.
The following discusses our exposure to market risk related to changes in interest rates and foreign currency exchange rates. This discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results could vary materially as a result of a number of factors including those set forth in "Risk Factors Affecting Future Operating Results."
INTEREST RATE RISK
At December 31, 2003,June 30, 2004, we had cash and cash equivalents totaling $107.3$211.0 million, compared to $54.7$180.6 million at March 31, 2003.2004. At DecemberJune 30, 2004 and at March 31, 2003,2004, we had no marketable securities compared to $5.0 million at March 31, 2003.securities. Cash equivalents have an original or remaining maturity when purchased of ninety days or less; marketable securities have an original or remaining maturity when purchased of greater than ninety days, but less than one year. We believe we are not currently exposed to significant interest rate risk as our cash was invested in securities or interest bearing accounts with maturities of less than ninety days. The average maturity period for our investments at December 31, 2003,June 30, 2004, was less than three months. The taxable equivalent interest rates locked in on those investments average saverages approximately 1.8%1.7%. Our investment policy requires that we only invest in deposit accounts, certificates of deposit or commercialc ommercial paper with minimum ratings of A1/P1 and money market mutual funds with minimum ratings of AAA.
Our $75 million revolving credit facility and letter of credit subfacility both expire on July 31, 2005. As of January 23,July 30, 2004, we had no cash borrowings under the revolving credit facility and $1.3$2.3 million outstanding under the letter of credit subfacility. If we choose to borrow under this facility in the future and market interest rates rise, then our interest payments would increase accordingly. FOREIGN CURRENCY EXCHANGE RATE RISK
In the thirdfirst quarter of fiscal 2004, 38.2%2005, approximately 32% of our net sales were derived from customers outside the United States, with 25.7%20.5% of total revenues denominated in foreign currencies, predominately the Euro and the Great British Pound. In fiscal year 2002, we implemented a hedging strategy to minimize the effect of these currency fluctuations. Specifically, we began to hedge our European transactionnet monetary asset exposure, hedging both our Euro and Great British Pound positions. However, we can provide no assurance that exchange rate fluctuations will not materially adversely affect our business in the future.
As of December 31, 2003,June 30, 2004, we had foreign currency forward contracts of approximately $6.3€6.2 and $1.3£1.8 million denominated in Euros and Great British Pounds, respectively. These forward contracts hedge against a portion of our forecasted foreign currency-denominated receivables, payables and cash balances. The table below provides information about our financial instruments and underlying transactions that are sensitive to foreign currency exchange rates, including foreign currency forward-exchange contracts and nonfunctional currency-denominated receivables and payables. For example, ifIf these net exposed currency positions are subjected to either a 10% appreciation or 10% depreciation versus the U.S. dollar we could incur a loss of $1.8$0.9 million or a gain of $1.5$0.8 million.
The table below presents the impacteffect on our foreign currency transaction exposure of a hypothetical 10% appreciation and a 10% depreciation of the U.S. dollar against the indicated currencies.
| | | | | | | | | | | | | | | | | | | | | | Net | | (in millions) | | | | | Net | | | | | | | | | | Underlying | Net | FX | | | | | | Underlying | | Net | | FX | | FX | | | | | | | | Foreign | | Exposed | | Gain (Loss) | | Gain (Loss) | | | | Foreign | Exposed | Gain (Loss) | | | USD Value | | Currency | | Long (Short) | | From 10% | | From 10% | | | USD Value | Currency | Long (Short) | From 10% | | | of Net FX | | Transaction | | Currency | | Appreciation | | Depreciation | | | of Net FX | Transaction | Currency | Appreciation | Depreciation | Currency - forward contracts | | Contracts | | Exposures | | Position | | of USD | | of USD | | | Contracts | Exposures | Position | of USD |
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| Euro | | $ | 6.3 | | $ | 13.5 | | $ | 7.2 | | $ | (0.8 | ) | $ | 0.7 | | | $ | 7.5 | | $ | 12.7 | | $ | (5.2 | ) | $ | (0.6 | ) | $ | 0.5 | | Great British Pound | | | 1.3 | | 10.1 | | 8.8 | | (1.0 | ) | | 0.8 | | | | 3.2 | | 6.1 | | (2.9 | ) | | (0.3 | ) | | 0.3 | | | |
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| | | | | | | | | | | | | | | | Net position | | $ | 7.6 | | $ | 23.6 | | $ | 16.0 | | $ | (1.8 | ) | $ | 1.5 | | | $ | 10.7 | | $ | 18.8 | | $ | (8.1 | ) | $ | (0.9 | ) | $ | 0.8 | | | |
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As of December 31, 2003,June 30, 2004, we had foreign currency put and call option contracts of approximately€21.6 €31.3 million and£8.4 million denominated in Euros and Great British Pounds, respectively. As of December 31, 2003, we also had foreign currency put option contracts of approximately €21.6 million and£8.4 £10.9 million denominated in Euros and Great British Pounds, respectively. Collectively our option contracts hedge against a portion of our forecasted foreign denominated sales. The table below provides information about our financial instruments and underlying transactionsforeign currency option contracts that are sensitive to foreign currency exchange rates, including foreign currency option contracts.rates. If these net exposed currency positions are subjected to either a 10% appreciation or 10% depreciation versus the U.S. dollar we could incur a gain of $3.7$5.1 million or a loss of $4.0$5.3 million.
The table below presents the impact on our currency option contracts of a hypothetical 10% appreciation and a 10% depreciation of the U.S. dollar against the indicated option contract type for cash flow hedges: | | | | | | | | | | | | | FX | FX | | | | Gain (Loss) | Gain (Loss) | | | USD Value | From 10% | From 10% | | | of Net FX | Appreciation | Depreciation | Currency - option contracts | | Contracts | of USD | of USD |
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| Call options | | $ | (57.6 | ) | $ | 2.2 | | $ | (4.4 | ) | Put options | | | 54.8 | | | 2.9 | | | (0.9 | ) | | |
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| | | | | | | | | | | | | Net position | | $ | (2.8 | ) | $ | 5.1 | | $ | (5.3 | ) |
December 31, 2003 | | | | | (in millions) | | | | | | | | | | FX | | FX | | | | | | | Gain (Loss) | | Gain (Loss) | | | | USD Value | | From 10% | | From 10% | | | | of Net FX | | Appreciation | | Depreciation | | Currency - option contracts | | Contracts | | of USD | | of USD | |
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| | Call options | | $ | (38.5 | ) | $ | 2.9 | | $ | (3.9 | ) | Put options | | | 37.0 | | | 0.8 | | | (0.1 | ) | | |
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| | | | | | | | | | | | | Net position | | $ | (1.5 | ) | $ | 3.7 | | $ | (4.0 | ) | | |
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(a) Evaluation of disclosure controls and procedures.Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q were effective in ensuring that information required to be disclosed in reports that we file or submit under th ethe Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) Changes in internal control over financial reporting.There was no change in our internal control over financial reporting (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934)that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. At the Annual Meeting, the following six individuals were elected to the Company's Board of Directors.
Nominee | Votes Cast For | Withheld or Against |
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| Patti Hart | 44,764,024 | 1,134,005 | Ken Kannappan | 43,786,317 | 2,111,712 | Trude C. Taylor | 36,318,687 | 9,579,342 | Marvin Tseu | 37,430,923 | 8,467,106 | David A. Wegmann | 43,666,443 | 2,231,586 | Roger Wery | 28,963,804 | 16,934,225 |
c. The following additional proposals were considered at the Annual Meeting and were approved by the vote of the stockholders, in accordance with the tabulation shown below. (1) Proposal to approve an increase of 1,000,000 shares of Common Stock of Plantronics, Inc. issuable under the 2003 Stock Plan. Votes For | Votes Against/Withheld | Abstain | Broker Non-Vote |
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| 35,421,805 | 10,426,030 | 50,194 | -0- |
(2) Proposal to approve amendments to the 2003 Stock Plan to allow a portion of the shares reserved under the 2003 Stock Plan to be issued as restricted stock, restricted stock units and stock appreciation rights.
Votes For | Votes Against/Withheld | Abstain | Broker Non-Vote |
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| 38,662,303 | 7,183,566 | 52,160 | -0- |
(3) Proposal to ratify the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm of Plantronics for fiscal 2005. Votes For | Votes Against/Withheld | Abstain | Broker Non-Vote |
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| 43,375,055 | 2,509,398 | 13,576 | -0- |
(a)Exhibits. The following exhibits are filed as part of this Quarterly Report on Form 10-Q.
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| Exhibit Number | Description of Document | 3.1 | Amended and Restated By-Laws of the Registrant (incorporated herein by reference from Exhibit (3.1) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 21, 2002). | 3.2.1 | Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on January 19, 1994 (incorporated herein by reference from Exhibit (3.1) to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-12696), filed on March 4, 1994). | 3.2.2 | Certificate of Retirement and Elimination of Preferred Stock and Common Stock of the Registrant filed with the Secretary of State of Delaware on January 11, 1996 (incorporated herein by reference from Exhibit (3.3) of the Registrant’s Annual Report on Form 10-K (File No. 001-12696), filed on June 27, 1996). | 3.2.3 | Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on August 7, 1997 (incorporated herein by reference from Exhibit (3.1) to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-12696), filed on August 8, 1997). | 3.2.4 | Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on May 23, 2000 (incorporated herein by reference from Exhibit (4.2) to the Registrant’s Registration Statement on Form S-8 (File No. 001-12696), filed on July 31, 2000). | 3.3 | Registrant’s Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 1, 2002 (incorporated herein by reference from Exhibit (3.6) to the Registrant’s Form 8-A (File No. 001-12696), filed on March 29, 2002). | 4.1 | Preferred Stock Rights Agreement, dated as of March 13, 2002 between the Registrant and Equiserve Trust Company, N.A., including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively (incorporated herein by reference from Exhibit (4.1) to the Registrant’s Form 8-A (File No. 001-12696), filed on March 29, 2002). | 10.1* | Plantronics, Inc. Non-EMEA Quarterly Profit Sharing Plan (incorporated herein by reference from Exhibit (10.1) to the Registrant’s Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.2* | Form of Indemnification Agreement between the Registrant and certain directors and executives and Schedule of Other Documents Omitted (incorporated herein by reference from Exhibit (10.1) to PI Holdings Inc.’s Quarterly Report on Form 10-Q (File No. 33-26770), filed February 9, 1993). | 10.3* | Form of Employment Agreement, Addendum to Employment Agreement and Second Addendum to Employment Agreement between the Registrant and certain executives; and Schedule of Other Documents Omitted (incorporated herein by reference from Exhibit (10.2) to PI Holdings Inc.’s Quarterly Report on Form 10-Q (File No. 33-26770), filed February 9, 1993). | 10.4.1* | Regular and Supplemental Bonus Plan (incorporated herein by reference from Exhibit (10.4(a)) to the Registrant’s Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.4.2* | Overachievement Bonus Plan (incorporated herein by reference from Exhibit (10.4(b)) to the Registrant’s Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.5.1 | Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original).. | 10.5.2 | Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original). | 10.5.3 | Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) | 10.5.4 | Lease Agreement dated July 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) | 10.6 | Lease dated December 7, 1990 between Canyge Bicknell Limited and Plantronics Limited, a subsidiary of the Registrant, for premises located in Wootton Bassett, The United Kingdom (incorporated herein by reference from Exhibit (10.32) to the Registrant’s Registration Statement on Form S-1 (as amended) (File No.33-70744), filed on October 20, 1993). | 10.7* | Amended and Restated 2003 Stock Plan (incorporated herein by reference from the Registrant's Definitive Proxy Statement on Form 14-A (File No. 001-12696), filed on May 26, 2004). | 10.8* | 1993 Stock Option Plan (incorporated herein by reference from Exhibit (10.8) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 21, 2002). | 10.9 1* | 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.29) to the Registrant's Registration Statement on Form S-1 (as amended) (File No. 33-70744), filed on October 20, 1993). | 10.9.2* | Amendment to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (4.4) to the Registrant's Registration Statement on Form S-8 (File No. 333-14833), filed on October 25, 1996). | 10.9.3* | Amendment No. 2 to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.9(a)) to the Registrant's Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). |
ExhibitNumber | | Description of Document |
| 30 | |
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10.9.4 * | Amendment No. 3 to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.9(b)) to the Registrant's Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.9.5* | Amendment No. 4 to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.9.5) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 21, 2002). | 10.10.1* | 2002 Employee Stock Purchase Plan (incorporated herein by reference from Exhibit (10.10.2) to the Registrant's Annual Report on Form 10-K (File Number 001-12696), filed on June 21, 2002). | 10.11.1 | Trust Agreement Establishing the Plantronics, Inc. Annual Profit Sharing/Individual Savings Plan Trust (incorporated herein by reference from Exhibit (4.3) to the Registrant's Registration Statement on Form S-8 (File No. 333-19351), filed on January 7, 1997). | 10.11.2* | Plantronics, Inc. 401(k) Plan, effective as of April 2, 2000 (incorporated herein by reference from Exhibit (10.11) to the Registrant's Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.12* | Resolutions of the Board of Directors of Plantronics, Inc. Concerning Executive Stock Purchase Plan (incorporated herein by reference from Exhibit (4.4) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). |
10.13.1* | Plantronics, Inc. Basic Deferred Compensation Plan, as amended August 8, 1996 (incorporated herein by reference from Exhibit (4.5) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). | 10.13.2 | Trust Agreement Under the Plantronics, Inc. Basic Deferred Stock Compensation Plan (incorporated herein by reference from Exhibit (4.6) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). | 10.13.3 | Plantronics, Inc. Basic Deferred Compensation Plan Participant Election (incorporated herein by reference from Exhibit (4.7) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). | 10.14.1* | Employment Agreement dated as of July 4, 1999 between Registrant and Ken Kannappan (incorporated herein by reference from Exhibit (10.15) to the Registrant's Annual Report on Form 10-K405 (File No. 001-12696), filed on June 1, 2000). | 10.14.2* | Employment Agreement dated as of November 1996 between Registrant and Don Houston (incorporated herein by reference from Exhibit (10.14.2) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.14.3* | Employment Agreement dated as of March 1997 between Registrant and Barbara Scherer (incorporated herein by reference from Exhibit (10.14.4) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.14.4* | Employment Agreement dated as of May 1998 between Registrant and Craig May (incorporated herein by reference from Exhibit (10.14.3) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.14.5* | Employment Agreement dated as of May 2001 between Registrant and Joyce Shimizu (incorporated herein by reference from Exhibit (10.14.5) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.15.1 | Credit Agreement dated as of July 31, 2003 between Registrant and Wells Fargo Bank N.A (incorporated herein by reference from Exhibit (10.1) of the Registrant's Annual Report on Form 10-Q (File No. 001-12696), filed on November 7, 2003). | 31.1 | | | 31.2 | | | 3232.1 | | as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the CEO and CFO | 99.1* | | | | | Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates. |
(b)Reports on Form 8-K
On October 15, 2003,April 27, 2004, the Company furnished a Current Report on Form 8-K reporting under Item 12 of the Company's issuance of a press release announcing its financial results for the quarteryear ended SeptemberMarch 31, 20032004 and including such press release as an exhibit.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PLANTRONICS, INC. | | (Registrant)
| | | | Date: FebruaryAugust 6, 2004 | By: | /s/ Barbara V. Scherer | |
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| | Barbara V. Scherer | | Senior Vice President - Finance and Administration and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer of the Registrant)
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EXHIBITS
The following exhibits are filed as part of this Quarterly Report on Form 10-Q.
ExhibitNumber | |
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| Exhibit Number | Description of Document | 3.1 | Amended and Restated By-Laws of the Registrant (incorporated herein by reference from Exhibit (3.1) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 21, 2002). | 3.2.1 | Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on January 19, 1994 (incorporated herein by reference from Exhibit (3.1) to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-12696), filed on March 4, 1994). | 3.2.2 | Certificate of Retirement and Elimination of Preferred Stock and Common Stock of the Registrant filed with the Secretary of State of Delaware on January 11, 1996 (incorporated herein by reference from Exhibit (3.3) of the Registrant’s Annual Report on Form 10-K (File No. 001-12696), filed on June 27, 1996). | 3.2.3 | Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on August 7, 1997 (incorporated herein by reference from Exhibit (3.1) to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-12696), filed on August 8, 1997). | 3.2.4 | Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on May 23, 2000 (incorporated herein by reference from Exhibit (4.2) to the Registrant’s Registration Statement on Form S-8 (File No. 001-12696), filed on July 31, 2000). | 3.3 | Registrant’s Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 1, 2002 (incorporated herein by reference from Exhibit (3.6) to the Registrant’s Form 8-A (File No. 001-12696), filed on March 29, 2002). | 4.1 | Preferred Stock Rights Agreement, dated as of March 13, 2002 between the Registrant and Equiserve Trust Company, N.A., including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively (incorporated herein by reference from Exhibit (4.1) to the Registrant’s Form 8-A (File No. 001-12696), filed on March 29, 2002). | 10.1* | Plantronics, Inc. Non-EMEA Quarterly Profit Sharing Plan (incorporated herein by reference from Exhibit (10.1) to the Registrant’s Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.2* | Form of Indemnification Agreement between the Registrant and certain directors and executives and Schedule of Other Documents Omitted (incorporated herein by reference from Exhibit (10.1) to PI Holdings Inc.’s Quarterly Report on Form 10-Q (File No. 33-26770), filed February 9, 1993). | 10.3* | Form of Employment Agreement, Addendum to Employment Agreement and Second Addendum to Employment Agreement between the Registrant and certain executives; and Schedule of Other Documents Omitted (incorporated herein by reference from Exhibit (10.2) to PI Holdings Inc.’s Quarterly Report on Form 10-Q (File No. 33-26770), filed February 9, 1993). | 10.4.1* | Regular and Supplemental Bonus Plan (incorporated herein by reference from Exhibit (10.4(a)) to the Registrant’s Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.4.2* | Overachievement Bonus Plan (incorporated herein by reference from Exhibit (10.4(b)) to the Registrant’s Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.5.1 | Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original).. | 10.5.2 | Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original). | 10.5.3 | Lease Agreement dated May 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) | 10.5.4 | Lease Agreement dated July 2004 between Finsa Portafolios, S.A. DE C.V.and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) | 10.6 | Lease dated December 7, 1990 between Canyge Bicknell Limited and Plantronics Limited, a subsidiary of the Registrant, for premises located in Wootton Bassett, The United Kingdom (incorporated herein by reference from Exhibit (10.32) to the Registrant’s Registration Statement on Form S-1 (as amended) (File No.33-70744), filed on October 20, 1993). | 10.7* | Amended and Restated 2003 Stock Plan (incorporated herein by reference from the Registrant's Definitive Proxy Statement on Form 14-A (File No. 001-12696), filed on May 26, 2004). | 10.8* | 1993 Stock Option Plan (incorporated herein by reference from Exhibit (10.8) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 21, 2002). | 10.9 1* | 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.29) to the Registrant's Registration Statement on Form S-1 (as amended) (File No. 33-70744), filed on October 20, 1993). | 10.9.2* | Amendment to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (4.4) to the Registrant's Registration Statement on Form S-8 (File No. 333-14833), filed on October 25, 1996). |
10.9.3* | Amendment No. 2 to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.9(a)) to the Registrant's Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). |
10.9.4 * | Amendment No. 3 to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.9(b)) to the Registrant's Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.9.5* | Amendment No. 4 to the 1993 Director Stock Option Plan (incorporated herein by reference from Exhibit (10.9.5) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 21, 2002). | 10.10.1* | 2002 Employee Stock Purchase Plan (incorporated herein by reference from Exhibit (10.10.2) to the Registrant's Annual Report on Form 10-K (File Number 001-12696), filed on June 21, 2002). | 10.11.1 | Trust Agreement Establishing the Plantronics, Inc. Annual Profit Sharing/Individual Savings Plan Trust (incorporated herein by reference from Exhibit (4.3) to the Registrant's Registration Statement on Form S-8 (File No. 333-19351), filed on January 7, 1997). | 10.11.2* | Plantronics, Inc. 401(k) Plan, effective as of April 2, 2000 (incorporated herein by reference from Exhibit (10.11) to the Registrant's Report on Form 10-K (File No. 001-12696), filed on June 1, 2001). | 10.12* | Resolutions of the Board of Directors of Plantronics, Inc. Concerning Executive Stock Purchase Plan (incorporated herein by reference from Exhibit (4.4) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). |
10.13.1* | Plantronics, Inc. Basic Deferred Compensation Plan, as amended August 8, 1996 (incorporated herein by reference from Exhibit (4.5) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). | 10.13.2 | Trust Agreement Under the Plantronics, Inc. Basic Deferred Stock Compensation Plan (incorporated herein by reference from Exhibit (4.6) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). | 10.13.3 | Plantronics, Inc. Basic Deferred Compensation Plan Participant Election (incorporated herein by reference from Exhibit (4.7) to the Registrant's Registration Statement on Form S-8 (as amended) (File No. 333-19351), filed on March 25, 1997). | 10.14.1* | Employment Agreement dated as of July 4, 1999 between Registrant and Ken Kannappan (incorporated herein by reference from Exhibit (10.15) to the Registrant's Annual Report on Form 10-K405 (File No. 001-12696), filed on June 1, 2000). | 10.14.2* | Employment Agreement dated as of November 1996 between Registrant and Don Houston (incorporated herein by reference from Exhibit (10.14.2) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.14.3* | Employment Agreement dated as of March 1997 between Registrant and Barbara Scherer (incorporated herein by reference from Exhibit (10.14.4) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.14.4* | Employment Agreement dated as of May 1998 between Registrant and Craig May (incorporated herein by reference from Exhibit (10.14.3) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.14.5* | Employment Agreement dated as of May 2001 between Registrant and Joyce Shimizu (incorporated herein by reference from Exhibit (10.14.5) to the Registrant's Annual Report on Form 10-K (File No. 001-12696), filed on June 2, 2003). | 10.15.1 | Credit Agreement dated as of July 31, 2003 between Registrant and Wells Fargo Bank N.A (incorporated herein by reference from Exhibit (10.1) of the Registrant's Annual Report on Form 10-Q (File No. 001-12696), filed on November 7, 2003). | 31.1 | | CEO’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer | 31.2 | | CFO’s Certification Pursuant to Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer | 3232.1 | | Certification Pursuant to 18 U.S.C. Section 1350, Certifications.as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the CEO and CFO | 99.1* | | Audit Committee Charter, as amended on January 9, 2004 | | | Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates. |
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