def14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ Preliminary Proxy Statement
¨ Confidential, for Use of the Commission only
(as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
¨ Definitive Additional Materials
¨ Soliciting Material Pursuant to Section 240.14a-12
PLANTRONICS, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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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): |
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Proposed maximum aggregate value of transaction: |
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Fee paid previously with preliminary materials. |
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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. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
Ken Kannappan
President and Chief Executive Officer
June 14, 2005
Dear Fellow Stockholders:
People want the freedom of being wireless. They want to hear and
be heard clearly. Our growth over the past year occurred largely
because of our successful investments in wireless headsets. As
phones, MP3 players, and portable gaming devices broadly
incorporate wireless headset technology, the opportunities for
Plantronics increase. Over the coming year, we intend to invest
heavily in stylish products that deliver innovative sound and
create new solutions through wireless entertainment and
communications convergence. To promote our new and existing
wireless products, we will broaden our marketing program in
support of these new opportunities. The innovation that
Plantronics is known for will be communicated like never before.
Our goal is to increase stockholder value. To achieve this
objective, we must be able to attract and retain world class
talent in an increasingly competitive environment. At the same
time, we are trying to balance our need for excellent people
against the cost to stockholders of equity incentive programs.
In each of the last two years, we limited our request for an
increase in the number of shares of common stock issuable under
our 2003 Stock Plan to 1 million shares, down from
2 million shares, 3 years ago.
We request your approval of four key proposals at our Annual
Meeting. First, we seek the election of six members to our Board
of Directors. Second, we seek ratification and approval of an
increase of 1.3 million shares in the common stock issuable
under the 2003 Stock Plan. Third, we seek ratification and
approval of an increase of 200,000 shares in the common stock
issuable under the 2002 Employee Stock Purchase Plan. Finally,
we ask that you ratify the appointment of PricewaterhouseCoopers
LLP as our independent registered public accounting firm for
fiscal 2006.
Each of the proposals is discussed in greater detail in the
following Proxy Statement. Thank you for your support of
Plantronics.
Very truly yours,
Ken Kannappan
Proxy Statement
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PRINCIPAL EXECUTIVE OFFICES
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PLACE OF MEETING
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Plantronics, Inc. Headquarters
345 Encinal Street
Santa Cruz, CA 95060 |
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Essex House
160 Central Park South
New York, New York 10019
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held July 21, 2005
To the Stockholders:
Our 2005 Annual Meeting of Stockholders will be held on
Thursday, July 21, 2005 at 11:00 a.m., EDT, at the
Essex House, 160 Central Park South, New York, New York 10019.
Our Board of Directors is soliciting proxies for the Annual
Meeting. This Proxy Statement contains important information for
you to consider when deciding how to vote on the matters brought
before the Annual Meeting. We ask that you please read it
carefully.
The purpose of the Annual Meeting is to:
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Elect six (6) Directors to serve until the next Annual
Meeting and until their successors are duly elected and
qualified. |
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Ratify and approve an increase of 1.3 million shares in the
common stock issuable under the 2003 Stock Plan. |
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3. |
Ratify and approve an increase of 200,000 shares in the Common
Stock issuable under the 2002 Employee Stock Purchase Plan. |
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Ratify the appointment of PricewaterhouseCoopers LLP as
independent registered public accounting firm of Plantronics for
fiscal 2006. |
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Transact such other business as may properly come before the
Annual Meeting or any adjournment thereof. |
The foregoing items of business are more fully described in the
Proxy Statement accompanying this Notice.
Only Plantronics stockholders of record at the close of business
on May 25, 2005 are entitled to vote at the Annual Meeting.
To assure your representation at the Annual Meeting, you are
urged to mark, sign, date and return the enclosed proxy card as
promptly as possible. We enclose a postage-prepaid envelope for
that purpose. You may also cast your vote by telephone or over
the Internet as instructed on the enclosed proxy card. Any
stockholder of record attending the Annual Meeting may vote in
person, even if she or he has returned a proxy, or voted by
telephone or over the Internet.
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BY ORDER OF THE BOARD OF DIRECTORS |
Rich Pickard
Secretary
Santa Cruz, California
June 14, 2005
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
REQUESTED TO VOTE YOUR SHARES AS PROMPTLY AS POSSIBLE. PLEASE
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES. ALTERNATIVELY, YOU MAY VOTE OVER THE INTERNET
OR BY TELEPHONE, AS INSTRUCTED ON THE PROXY CARD.
TABLE OF CONTENTS
PROXY STATEMENT
FOR 2005 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
Your vote is very important. Our Board of Directors is
soliciting proxies for the 2005 Annual Meeting of Stockholders.
This Proxy Statement contains important information for you to
consider when deciding how to vote on the matters brought before
the Annual Meeting. Please read it carefully.
This Proxy Statement, the form of proxy and the 2005 Annual
Report to Stockholders will be mailed to stockholders of record
at the close of business on May 25, 2005, on or about
June 14, 2005. The Annual Report is not a part of this
Proxy Statement. Our principal executive offices are located at
345 Encinal Street, Santa Cruz, California. Our telephone number
at that location is (800) 544-4660.
The Annual Meeting will be held at 11:00 a.m. EDT on
Thursday, July 21, 2005 at the Essex House,
160 Central Park South, New York, New York 10019.
Lunch for stockholders will immediately follow the Annual
Meeting. Please follow the instructions provided on the Proxy
Card or via our telephone or internet voting services to
indicate if you plan to attend the Annual Meeting in person or
plan to attend the Stockholder lunch.
Plantronics will pay the costs of soliciting proxies from
stockholders. We have engaged The Proxy Advisory Group of
Strategic Stock Surveillance, LLC to assist us in the
solicitation of proxies from brokers, bank nominees and other
institutional owners, for a fee of $7,500, plus customary
disbursements. We may also reimburse brokerage firms and other
persons representing beneficial owners of shares for their
expenses in forwarding the voting materials to the beneficial
owners. Directors, officers and regular employees may solicit
proxies on behalf of Plantronics, without additional
compensation, personally or by telephone.
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING
Who Can Vote?
The Board of Directors set May 25, 2005 as the record date
for the Annual Meeting. All stockholders of record who owned
Plantronics common stock at the close of business on
May 25, 2005 may attend and vote at the Annual Meeting or
any adjournments thereof. Each stockholder is entitled to one
vote for each share of common stock held on all matters to be
voted on. At the close of business on the record date, there
were 47,040,397 shares of common stock outstanding.
How Many Votes Are Required to Hold the Annual Meeting?
The required quorum for the transaction of business at the
Annual Meeting is a majority of shares of common stock issued
and outstanding on the record date. Shares that are voted
FOR, AGAINST 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 (the Votes Cast)
with respect to such matter.
How Are Abstentions and Broker Non-Votes Treated?
While there is no definitive statutory or case law authority in
Delaware as to the proper treatment of abstentions, the Company
believes that abstentions should be counted for purposes of
determining both (i) the presence or absence of a quorum
for the transaction of business and (ii) the total number
of Votes Cast with respect to a proposal (other than the
election of Directors). In the absence of a controlling
precedent to the contrary, the Company intends to treat
abstentions in this manner. Accordingly, abstentions will have
the same effect as a vote against the proposal as to which the
abstention is made.
Pursuant to regulations promulgated by the New York Stock
Exchange (NYSE), brokers and other nominees
that are NYSE member organizations are prohibited from voting in
favor of proposals relating to
equity compensation plans unless they receive specific
instructions from the beneficial owner of the shares to vote in
that manner. Therefore, for any of your shares held through a
broker or other nominee who is a NYSE member organization, such
shares will only be voted in favor of Proposals Two and Three if
you have provided specific voting instructions to your broker or
other nominee to vote your shares in favor of that proposal.
Otherwise, Broker non-votes will not have any effect on the
outcome of the voting on a Proposal.
How Many Votes Are Required to Pass a Proposal?
A plurality of the votes cast is required to elect Directors.
This means that the nominees who receive the greatest number of
votes for each open seat will be elected.
A vote is withheld when a properly executed proxy is marked
WITHHELD FROM ALL NOMINEES or for all nominees except as noted
above for the election of one or more Directors.
The affirmative vote of a majority of the votes present or
represented and entitled to vote is required for all other
matters.
How Does the Board Recommend I Vote on the Proposals?
The Board recommends votes:
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FOR each of the nominees for the Board of Directors listed in
this Proxy Statement. |
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FOR the ratification and approval of an increase of
1.3 million shares in the common stock issuable under the
2003 Stock Plan. |
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FOR the ratification and approval of an increase of 200,000
shares in the common stock issuable under the 2002 Employee
Stock Purchase Plan. |
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FOR the appointment of PricewaterhouseCoopers LLP, independent
registered public accounting firm, to audit the consolidated
financial statements of Plantronics for its fiscal 2006. |
What Does it Mean to Vote by Proxy?
By giving your proxy, you give someone else the right to vote
your shares in accordance with your instructions. In this way,
you assure that your vote will be counted even if you are unable
to attend the Annual Meeting. In this case, we are asking you to
give your proxy to Ken Kannappan, our President and Chief
Executive Officer, Barbara Scherer, our Senior Vice
President Finance & Administration, and
Chief Financial Officer, and Rich Pickard, our Vice
President Legal, General Counsel and Secretary, and
each of them individually (the Proxyholders).
If you give your proxy but do not include specific instructions
on how to vote, the Proxyholders will vote your shares for the
election of the Boards nominees, for ratification and
approval of an increase of 1.3 million shares in the common
stock issuable under the 2003 Stock Plan, for ratification and
approval of an increase of 200,000 shares in the common stock
issuable under the 2002 Employee Stock Purchase Plan and for the
ratification of the appointment of the independent registered
public accounting firm.
What Is the Difference Between Holding Shares as a
Stockholder of Record and as a Beneficial Owner?
Most Plantronics stockholders hold their shares through a
stockbroker, bank or other nominee rather than directly in their
own name. As summarized below, there are some distinctions
between shares held of record and those owned beneficially.
Stockholder of Record. If your shares are
registered directly in your name with Equiserve,
Plantronics transfer agent, you are considered, with
respect to those shares, the stockholder of record, and these
proxy materials are being sent directly to you by Plantronics.
As the stockholder of record, you have the right to grant your
voting proxy directly to the Proxyholders or to vote in person
at the Annual Meeting. Plantronics has enclosed or sent a proxy
card for you to use.
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Beneficial Owner. If your shares are held in a
stock brokerage account or by a bank or other nominee, you are
considered the beneficial owner of shares held in street
name, and these proxy materials are being forwarded to you
by your broker or nominee which is considered, with respect to
those shares, the stockholder of record. As the beneficial
owner, you have the right to direct your broker how to vote and
are also invited to attend the Annual Meeting. HOWEVER, SINCE
YOU ARE NOT THE STOCKHOLDER OF RECORD, YOU MAY NOT VOTE THESE
SHARES IN PERSON AT THE ANNUAL MEETING UNLESS YOU OBTAIN A
SIGNED PROXY FROM THE RECORD HOLDER GIVING YOU THE RIGHT TO VOTE
THE SHARES. Your broker or nominee has enclosed or provided a
voting instruction card for you to use in directing the broker
or nominee how to vote your shares.
How Can I Vote?
Plantronics is offering stockholders of record four methods of
voting:
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You may indicate your vote on the enclosed proxy card by signing
and dating the card where indicated and mailing the card in the
enclosed prepaid envelope; |
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You may vote by telephone; |
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You may vote over the Internet; and |
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Finally, you may also vote in person at the Annual Meeting. |
Each stockholder is entitled to one vote for each share of
common stock on all matters presented at the Annual Meeting.
Stockholders do not have the right to cumulate their votes for
the election of Directors.
Electronic voting by telephone or over the Internet may depend
on whether you are a stockholder of record or hold your shares
as a beneficial owner as discussed above in the answer to the
question: What is the difference between holding shares as
a stockholder of record and as a beneficial owner?
Stockholders of record may vote electronically by
telephone or over the Internet by following the instructions
included with their proxy card. Stockholders whose shares are
registered in the name of a bank or brokerage firm may be
eligible to vote electronically over the Internet or by
telephone. A large number of banks and brokerage firms are
participating in the ADP Investor Communication Services online
program. This program provides eligible stockholders the
opportunity to vote over the Internet or by telephone. Voting
forms will provide instructions for stockholders whose bank or
brokerage firm is participating in ADPs program.
Stockholders not wishing to vote electronically over the
Internet or whose proxy voting form does not reference Internet
or telephone voting information should complete and return the
enclosed paper proxy voting card. Signing and returning the
proxy card or submitting the proxy over the Internet or by
telephone does not affect the right to vote in person at the
Annual Meeting.
All shares entitled to vote and represented by properly
completed proxies received before the Annual Meeting and not
revoked will be voted at the Annual Meeting as you instructed.
If you do not indicate how your shares should be voted on a
matter, the shares represented by your properly completed proxy
voting card will be voted as the Board of Directors recommends.
How Can I Vote My Shares in Person at the Annual Meeting?
Stockholders of Record. Shares held directly in
your name as the stockholder of record may be voted in person at
the Annual Meeting. If you choose to do so, please bring the
enclosed proxy card or proof of identification.
Beneficial Owners. Shares held in street name may
be voted in person by you only if you obtain a signed proxy from
the stockholder of record giving you the right to vote the
shares.
EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING, WE
RECOMMEND THAT YOU ALSO SUBMIT YOUR PROXY AS DESCRIBED ABOVE SO
THAT YOUR VOTE WILL BE COUNTED IF YOU LATER DECIDE NOT TO ATTEND
THE MEETING.
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What Happens if Additional Proposals are Presented at the
Annual Meeting?
Other than the election of Directors and the three other
proposals described in this Proxy Statement, we do not expect
any matters to be presented for a vote at the Annual Meeting. If
you grant a proxy, the persons named as Proxyholders (Ken
Kannappan, our President and Chief Executive Officer, Barbara
Scherer, our Senior Vice President
Finance & Administration, and Chief Financial Officer,
and Rich Pickard, our Vice President Legal, General
Counsel and Secretary) will have the discretion to vote your
shares on any additional matters properly presented for a vote
at the Annual Meeting. Under our By-laws, the deadline for
notifying us of any additional proposals to be presented at the
Annual Meeting has passed and, accordingly, stockholders may not
present proposals at the Annual Meeting.
Can I Change My Vote?
You may change your proxy instructions at any time prior to the
vote at the Annual Meeting. For shares held directly in your
name, you may accomplish this by executing a new proxy bearing a
later date (which automatically revokes the earlier proxy) and
delivering it to the Secretary of the Company at or prior to the
taking of the vote at the Annual Meeting or by attending the
Annual Meeting and voting in person. Attendance at the Annual
Meeting will not cause your previously granted proxy to be
revoked unless you specifically so request. For shares held
beneficially by you, you may accomplish this by timely
submitting new voting instructions to your broker or nominee.
How Can I Contact Plantronics to Request Materials or
Information Referred to in these Questions and Answers?
You may contact us:
Plantronics,
Inc.
345
Encinal Street
Santa
Cruz, CA 95060
Attn:
Investor Relations
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By calling (831) 426-5858 or (800) 544-4660 and asking
for Investor Relations. |
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By leaving a message on our Website at: |
http://www.plantronics.com/north america/en US/forms/ir request.jhtml
We encourage you to conserve natural resources, as well as
reduce printing and mailing costs, by signing up for
electronic delivery of our stockholder communications
materials. By signing up for electronic delivery, you can
receive our proxy materials and stockholder communications as
soon as they are available without waiting for them to arrive in
the mail. You can also reduce the number of bulky documents in
your personal files, eliminate duplicate mailings, conserve
natural resources and help us reduce our printing and mailing
costs. To sign up for electronic delivery:
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Stockholder of Record. If you are a stockholder of record
(you hold your Plantronics shares in your own name through
Plantronics transfer agent, Equiserve, or you have stock
certificates), visit www.eproxyvote.com/plt to enroll. |
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Beneficial Owner. If you are a beneficial owner (your
shares are held by a brokerage firm, a bank or a trustee), visit
www.proxyvote.com to enroll. |
Your electronic delivery enrollment will be effective until
canceled. If you have questions about electronic delivery,
please call Plantronics Investor Relations at the numbers
set forth above.
What Is householding?
We may send a single set of proxy materials and other
stockholder communications to any household at which two or more
stockholders reside. This process is called
householding. This reduces duplicate mailings,
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saves printing and postage costs as well as natural resources.
Proxy materials and other stockholder communications to you may
be householded based on your prior express or implied consent.
If your proxy materials are being householded and you wish to
receive separate copies of the Proxy Statement and/or Annual
Report, or if you are receiving multiple copies and would like
to receive a single copy, you may contact our Investor Relations
office by mail, telephone or the Internet, as described above.
If you received a householded mailing this year and you would
like to have additional copies mailed to you or you would like
to opt out of this practice for future mailings, please submit
your request via e-mail to general.counsel@plantronics.com, by
telephone at (800) 544-4660 or in writing to
Plantronics Corporate Secretary at 345 Encinal Street,
Santa Cruz, CA 95060.
Voting by Participants in Plantronics 401(k) Plan.
If a stockholder is a participant in the Plantronics 401(k)
Plan, the proxy card will serve as a voting instruction for the
trustees of that plan. If shares of common stock in the 401(k)
Plan are not voted by returning the proxy card representing such
shares, those shares will be voted by the trustees in the same
proportion as the shares properly voted.
Deadline for Receipt of Stockholder Proposals for 2006 Annual
Meeting of Stockholders.
A stockholder wishing to submit a proposal considered for
inclusion in the proxy statement and form of proxy relating to
the 2006 Annual Meeting of Stockholders must submit it in the
form of a written proposal, and it must be received by
Plantronics by the end of the business day on February 14,
2006.
A stockholder wishing to make a proposal at the 2006 Annual
Meeting of Stockholders must submit a written proposal that is
received by Plantronics no later than April 30, 2006.
Date of Our Fiscal Year End.
This Proxy Statement provides information about the matters to
be voted on at the Annual Meeting and also additional
information about Plantronics, its Officers and Directors. Some
of the information is stated as of the end of fiscal 2005 and
some information is provided as of a more current date. Each of
our fiscal years end on the Saturday closest to the last day of
March. Our fiscal 2005 ended on April 2, 2005. For purposes
of consistent presentation, we have indicated in this Proxy
Statement that each fiscal year ended March 31
of the given year, even though the actual fiscal year end may
have been on a different calendar date.
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CORPORATE GOVERNANCE
Strong corporate governance is an integral part of
Plantronics core values. Our Companys corporate
governance policies and procedures are available on the
corporate governance portal of the Companys investor
relations website,
http://www.plantronics.com/north america/en US/investor/index.jhtml.
The corporate governance portal includes the Companys
Corporate Governance Guidelines, Board Committee Charters,
Worldwide Code of Business Conduct and Ethics, Whistleblower
Policy, Stockholder Access to Board of Directors Policy and
Director Candidates Nomination Policy.
We provide below specific information regarding certain
corporate governance practices.
Worldwide Code of Business Conduct and Ethics
The Company has a Worldwide Code of Business Conduct and Ethics
which applies to all employees, Senior Officers, and Directors.
Any waiver of any provision of the Code for a Director or
Executive Officer of the Company must be approved in writing by
the Board and promptly disclosed to our stockholders. For
further information see the corporate governance portal of the
Companys investor relations website,
http://www.plantronics.com/north america/en US/investor/index.jhtml.
Whistleblower Policy
The Plantronics Audit Committee has established a whistleblower
hotline and website available to all employees, stockholders,
and the general public for the anonymous submission of suspected
violations including but not limited to accounting, internal
controls, or auditing matters, conflicts of interest, fraud,
harassment, policy violations, environmental violations,
substance abuse, theft and workplace violence. For further
information see the corporate governance portal of the
Companys investor relations website,
http://www.plantronics.com/north america/en US/investor/index.jhtml.
Stockholder Access to Board of Directors Policy
The Companys Stockholder Access to the Board of Directors
Policy outlines methods by which shareholders may communicate
with Directors. Stockholders may communicate directly with the
full Board, the Presiding director, the non-management Directors
as a group, or with specified individual Directors by any one of
several methods. Communications marked confidential will not be
screened prior to delivery to the addressed parties. For further
information see the corporate governance portal of the
Companys investor relations website,
http://www.plantronics.com/north america/en US/investor/index.jhtml.
Formation of a Qualified Legal Compliance Committee
The Audit Committee was designated by the Board of Directors to
act as a Qualified Legal Compliance Committee
(QLCC). Please see the description of this
QLCC under the heading Audit Committee on page 10.
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PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A Board of six Directors is to be elected at the 2005 Annual
Meeting of Stockholders. Two of the nominees listed below are
standing for election. Four of the nominees listed below are
standing for re-election. Unless otherwise instructed, the
Proxyholders will vote the proxies received by them for
Plantronics six nominees named below. If any nominee of
Plantronics is unable or declines to serve as a Director at the
time of the Annual Meeting of Stockholders, the proxies will be
voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy. We are not aware of any
nominee who will be unable or will decline to serve as a
Director. The term of office for each person elected as a
Director will continue until the next Annual Meeting of
Stockholders or until a successor has been elected and qualified.
The names of the nominees and certain information about them as
of June 3, 2005 are set forth below:
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Director | |
Name of Nominee |
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Positions With Plantronics |
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Marv Tseu(1)(2)(4)
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57 |
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Director and Chairman of the Board |
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1999 |
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Ken Kannappan
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45 |
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Director, President and Chief Executive Officer |
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1999 |
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Gregg Hammann(1)(2)(5)
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42 |
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Director |
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2005 |
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Marshall Mohr(2)(5)
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49 |
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Director |
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2005 |
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Trude Taylor(3)(4)
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84 |
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Director |
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1989 |
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Roger Wery(4)
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44 |
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Director |
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2001 |
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Member of the Nominating and Corporate Governance Committee |
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Member of the Audit Committee |
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Member of the Compensation Committee |
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Member of the Mergers and Acquisitions Committee |
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(5) |
Appointed to the Board of Directors in 2005 and standing for
election. |
The Board of Directors currently consists of seven
(7) members. Effective May 20, 2005, David Wegmann
retired from the Board after 17 years of service. Effective
July 21, 2005, Patti Hart will step down from her position
as a member of our Board of Directors and not stand for
re-election for personal reasons.
Both Mr. Hammann and Mr. Mohr were appointed by the
full Board of Directors upon recommendation by the Nominating
and Governance Committee, in accordance with the charter and
principles of that Committee. Mr. Hammann was appointed by
the Board of Directors on January 14, 2005. Mr. Mohr
was appointed by the Board of Directors on June 2, 2005. As
of July 21, 2005, the size of the Board of Directors will
be reduced to six (6) members.
The Nominating and Corporate Governance Committee is now
interviewing candidates for one additional Board position. When
that process is completed, it is the Board of Directors
intention to appoint one highly qualified individual to fill one
additional position as a member of the Companys Board of
Directors, bringing the expected size of the Board of Directors
to seven (7) members.
Vote Required
If a quorum is present in person or represented by proxy at the
2005 Annual Meeting of Stockholders, the six nominees receiving
the highest number of votes will be elected to the Board of
Directors. Votes withheld from any nominee will be counted for
purposes of determining the presence or absence of a quorum for
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transaction of business at the Annual Meeting, but will have no
other legal effect upon the election of Directors under Delaware
law.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS
VOTE FOR THE NOMINEES LISTED ABOVE.
Business Experience of Directors
Mr. Tseu was elected to the Board of Directors in 1999 and
serves as Chair of the Board and the Presiding Director of
executive sessions. Since October 2002, Mr. Tseu has served
as the Chief Executive Officer and a founder of Active
Reasoning, Inc., an early stage private company that produces
resource management software to help enterprises manage their IT
operations. Since November 2001, Mr. Tseu has also been a
consulting venture partner with ComVentures, LLP, a venture
capital firm focusing on communications companies. From February
2001 to July 2001, Mr. Tseu was Chief Executive Officer of
Method Networks, Inc., an Internet technology company helping
enterprises automate the management of their Internet networks.
From October 1999 to October 2000, Mr. Tseu was President
and Chief Executive Officer of SiteSmith, Inc., a provider of
outsourced Internet site operations that he co-founded. From
August 1998 to July 1999, Mr. Tseu served as President of
Structured Internetworks, Inc., a company engaged in the design
and marketing of bandwidth allocation products.
Mr. Kannappan has served as President and Chief Executive
Officer of Plantronics and as a member of the Board of Directors
since 1999. He joined Plantronics in February 1995 as Vice
President of Sales. He has held various executive positions
within Plantronics managing our European Sales, Operations, and
our Mobile Communications and Walker Equipment business groups
prior to being promoted to President and Chief Operating Officer
in 1998. For more than ten years, prior to joining Plantronics,
Mr. Kannappan was Senior Vice President of Investment
Banking for Kidder, Peabody & Co. Incorporated. Mr.
Kannappan has a Bachelor of Arts degree in Economics from Yale
University and a MBA from Stanford University.
Mr. Kannappan is a member of the Board of Directors of
Mattson Technology, Inc., a supplier of advanced process
equipment for the semiconductor industry, and the Chairman of
the Board of Directors of Integrated Device Technology, Inc., a
manufacturer of communications integrated circuits.
Mr. Hammann was appointed a member of the Board of
Directors in January 2005 and is standing for election. He has
been Chairman, President and CEO of Nautilus, a leading
manufacturer of health and fitness products, since 2003.
Previously, he held leadership positions at Levi Strauss &
Company, including Chief Customer Officer and President of the
Americas, and at Coca-Cola Company where he was Vice President,
Fountain CMG, and Officer and Director of Strategic Issues.
Mr. Hammann also has held management positions at Famous
Footwear, The Rayovac Corporation, and Procter & Gamble.
Mr. Hammann graduated from the University of Iowa.
Mr. Hammann has an MBA from the University of Wisconsin and
Director Certification from UCLA.
Mr. Mohr was appointed a member of the Board of Directors
in June 2005 and is standing for election. He has been Vice
President and Chief Financial Officer of Adaptec, a leading
provider of data storage solutions, since July 2003. Prior to
joining Adaptec, Inc., Mr. Mohr was managing partner of
PricewaterhouseCoopers West Region Technology Industry
Group and was responsible for the firms more than
400-person Silicon Valley accounting and audit advisory
practice. Mr. Mohr held a variety of positions at
PricewaterhouseCoopers during his 22 years of service.
Mr. Mohr is a CPA licensed in the states of California and
Michigan and holds a Bachelors of Business Administration degree
from Western Michigan University. Mr. Mohr is a member of
the Board of Directors of Atheros Communications, Inc., a
leading developer of semiconductor system solutions for wireless
communications products. Mr. Mohr also serves as the
Chairman of Atheros, Inc.s Audit Committee.
Mr. Taylor has been a member of the Board of Directors
since 1989. He has been a private investor since 1987 and a
principal in TC Associates, a management consulting firm, since
1984. Earlier in his career, Mr. Taylor was Chairman of the
Board of Directors, President and Chief Executive Officer of
Electronic
8
Memories and Magnetics Corporation, a manufacturer of computer
peripherals. Mr. Taylor is currently a Director of several
privately held corporations.
Mr. Wery has been a member of the Board of Directors since
2001. He is a Director and employee of Pittiglio Rabin Todd
& McGrath (PRTM), a management consulting firm
that provides consulting services to technology-centric
companies. He advises telecommunications services and equipment
providers, as well as computer and semiconductor companies. He
assists senior management of these organizations in formulating
and implementing growth strategies, as well as enterprise-wide
performance improvement initiatives. Mr. Wery joined PRTM
in April 2000. PRTM has a consulting agreement with Plantronics
under which it has provided management consulting services to
Plantronics since fiscal 2001, although Mr. Wery has not
been directly involved in providing such services since the 2001
fiscal year. See Independence of Directors on
page 12. Prior to joining PRTM, Mr. Wery was an
Executive Vice President of Adventis (previously Renaissance
Worldwide, Inc.), an international consultancy, and also spent
six years with Mercer Management, a consulting arm of Marsh
& McLennan Company.
Board Meetings and Committees
The Board of Directors of Plantronics held a total of eight
meetings, and acted by unanimous written consent eight times,
during the fiscal year ended March 31, 2005. The Directors
met three times in executive sessions without Mr. Kannappan
present. The Board of Directors has three formal committees, an
Audit Committee, a Compensation Committee and a Nominating and
Corporate Governance Committee. The Board of Directors also has
an informal Mergers & Acquisitions Committee (M&A
Committee). This M&A Committee was formed in March
2005 to advise management during the early stages of merger and
acquisition activity. Any merger or acquisition transaction that
involves the transfer of $5 million or more of
consideration will be reviewed by the Board of Directors prior
to completion. Each of the three formal committees of the Board
have adopted a written charter which is available at the
Corporate Governance Portal of the Companys investor
relations website,
http://www.plantronics.com/north america/en US/
investor/index.jhtml.
Each Director attended more than 75% of the meetings of the
Board of Directors and more than 75% of the meetings of the
committees upon which that Director served.
Board of Directors Education
On March 8 and 9, 2005 our entire Board of Directors and certain
members of our senior management actively participated in an
8-hour program on corporate governance and Director education.
The program was accredited by Institutional Shareholder
Services. Topics included:
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Emerging Trends in Shareholder Activism |
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An Overview of Audit Committee Best Practices (including
Section 404) |
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Compensation Committees: Small and Mid-Sized Company
Compensation Issues and Executive Compensation Trends |
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Director Liability and D&O Insurance. Emerging Trends in a
Post-Sarbanes-Oxley, Post-Enron, Post-WorldCom Environment |
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M&A Activity: The Directors Role |
As a result of this educational program, we further enhanced our
corporate governance policies and procedures. On an annual
basis, Directors will participate in continuing education
programs.
Board of Directors Attendance at Annual Meetings
The Company recognizes that Directors attendance at annual
meetings can provide investors with an opportunity to
communicate with directors about issues affecting the company.
We encourage all of our Directors to attend the Plantronics
annual meeting each year. In the event that a Director cannot
attend in
9
person, the Company encourages Directors to attend
telephonically. In fiscal 2005, two Directors attended the
July 21, 2004 Annual Meeting of Plantronics in person and
one director attended telephonically.
Audit Committee
The Audit Committee consisted of Directors Tseu, Taylor and
Wegmann (Chair) until March 8, 2005. From March 8,
2005 until May 20, 2005, it consisted of Directors Tseu,
Wegmann, and Hammann. From May 20, 2005 until June 2,
2005, it consisted of Directors Tseu and Hammann. From
June 2, 2005 to the present, it has consisted of Directors
Tseu, Hammann, and Mohr (Chair). The Audit Committee met six
times during fiscal 2005. Additionally, this Committee met
informally three times during fiscal year 2005 to monitor the
Companys progress towards complying with Section 404
of the Sarbanes-Oxley Act. This Committee is responsible for
overseeing actions taken by Plantronics financial
reporting staff, internal control processes, and hiring
independent registered public accounting firm, among other
matters. The Board of Directors has determined that each member
of the Audit Committee is, and has been at all times during the
2005 fiscal year, independent as defined under the
NYSE listing standards and that Director Tseu is an audit
committee financial expert, as that term has been defined by the
Securities and Exchange Commission (SEC). A report
of the Audit Committee is attached to this Proxy Statement as
Appendix A.
The Audit Committee was designated by the Board of Directors to
act as a Qualified Legal Compliance Committee (QLCC)
The QLCC was created to review any report made directly, or
otherwise made known to the QLCC by attorneys employed or
retained by the Company or its subsidiaries of a material
violation of US federal or state securities or other law. The
QLCC may receive and consider reports, investigate them, retain
material experts or counsel to assist or advise them and make
recommendations of an appropriate response. The QLCC may notify
the SEC of any material violation.
Compensation Committee
The Compensation Committee consisted of Directors Hart, Taylor
(Chair) and Wegmann, until May 20, 2005 and from
May 20, 2005 to the present has consisted of Directors Hart
and Taylor, each of whom meet the requirements for independence
as defined under the NYSE listing standards. The Compensation
Committee met four times during fiscal 2005. This Committee is
responsible for determining salaries, incentives and other forms
of compensation for directors, officers and other highly
compensated employees of Plantronics and administers various
incentive compensation and benefit plans. A report of the
Compensation Committee is attached to this Proxy Statement as
Appendix B.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee consisted of
Directors Tseu (Chair), Wegmann, and Wery from April 1,
2004 to March 8, 2005 and since March 8, 2005 has
consisted of Directors Tseu and Hammann, each of whom meet the
requirements for independence as defined under NYSE listing
standards. The Nominating and Corporate Governance Committee
held two meetings during fiscal 2005 at which each Committee
member was present. The Nominating and Corporate Governance
Committee is responsible under the direction of the Board for
identifying and interviewing potential additions or replacement
members of the Board and assists the Board in determining the
appropriate governance guidelines for the Board, management and
the company.
The Board of Directors currently consists of
seven (7) members. Effective May 20, 2005, David
Wegmann retired from the Board after 17 years of service.
Effective July 21, 2005, Patti Hart will step down from her
position as a member of our Board of Directors and not stand for
re-election for personal reasons.
Both Mr. Hammann and Mr. Mohr were appointed by the
full Board of Directors upon recommendation by the Nominating
and Governance Committee, in accordance with the charter and
principles of that Committee. Mr. Hammann was appointed to
the Board of Directors on January 14, 2005. Mr. Mohr
was appointed to the Board of Directors on June 2, 2005. As
of July 21, 2005, the size of the Board of Directors will
be reduced to six (6) members.
10
Generally, the Nominating and Corporate Governance Committee
will review the qualifications of any candidates who have been
properly recommended or nominated by a stockholder, as well as
those candidates who have been identified by management,
individual members of the Board of Directors or, if the
Nominating and Corporate Governance Committee determines, a
search firm. Such review may, in the Nominating and Corporate
Governance Committees discretion, include a review solely
of information provided to the Nominating and Corporate
Governance Committee or may also include discussions with
persons familiar with the candidate, an interview with the
candidate or other actions that the Nominating and Governance
Committee deems proper, including the retention of third parties
to review potential candidates.
Stockholders wishing to recommend persons for consideration by
the Nominating and Corporate Governance Committee as nominees
for election to the Board can do so by writing to the Secretary
of Plantronics at its principal executive offices giving each
such persons name, biographical data and qualifications,
not less than 20 days prior to the Annual Meeting. Any such
recommendation should be accompanied by a written statement from
the person recommended of his or her consent to be named as
nominee and, if nominated and elected, to serve as a Director.
Plantronics By-laws also contain a similar procedure for
stockholder nomination of Directors. Additional information
regarding director nominations can be found in our Corporate
Governance Guidelines which are posted on the corporate
governance portal of our investor relations website,
http://www.plantronics.com/north america/en US/investor/index.html.
In its evaluation of Director candidates, including the members
of the Board of Directors eligible for re-election, the
Committee will consider the current size and composition of the
Board of Directors, the needs of the Board of Directors and the
respective committees of the Board of Directors and the
qualifications of candidates in light of these needs as well as
such other factors as the Committee may consider appropriate.
The Nominating and Corporate Governance Committee has not
formally established any specific, minimum qualifications that
must be met by each candidate for the Board of Directors or
specific qualities or skills that are necessary for one or more
of the members of the Board of Directors to possess.
The Nominating and Corporate Governance Committee is now
interviewing candidates for one additional Board of Directors
position. When that process is completed, it is the Board of
Directors of Directors intention to appoint one highly
qualified individual to fill one additional position as a member
of the Companys Board of Directors of Directors, bringing
the expected size of the Board of Directors to
seven (7) members.
The Nominating and Corporate Governance Committee has retained a
professional search firm, Spencer Stuart, to assist in its
search efforts by assisting in the identification of candidates,
performing background research and coordinating the interview
process.
Compensation of Directors
In fiscal 2005, each Director of Plantronics, other than
Mr. Kannappan, received a retainer fee of $5,000 per
quarter, and the Chair of the Board received a quarterly
retainer fee of $10,000. Directors also were entitled to
reimbursement of expenses incurred in connection with attendance
at Board and committee meetings.
Each Director also received a fee of $1,000 for attendance at
each regularly scheduled quarterly meeting of the Board and each
executive session of the Board that is not on the same date as a
regularly scheduled quarterly meeting of the Board, and the
Chair of the Board received a fee of $2,000 for attendance at
each such meeting.
Each member of the Compensation Committee received $1,000 for
attendance at each regularly scheduled committee meeting, and
the Chair of the Compensation Committee received $2,000 for
attendance at each such meeting.
Each quarter, the Audit Committee reviews and approves in a
telephonic or regular committee meeting Plantronics
quarterly and year-to-date financial statements prior to public
disclosure. The Audit Committee members do not receive
compensation for their attendance at telephonic meetings. For
all other meetings of
11
the Audit Committee, each member received $1,000 for their
attendance, and the Chair of the Audit Committee received $2,000
for attendance at each such meeting.
Members of the Nominating and Corporate Governance Committee,
including the Chair, receive $1,000 in each quarter in which
there is an active search underway for a new member of the Board
and for attendance at each meeting of this committee. The Chair
of the Nominating and Corporate Governance Committee receives no
further remuneration.
Members of the M&A Committee do not receive additional
compensation for attendance at meetings or participation on this
Committee.
Each non-employee Director of Plantronics is entitled to
participate in Plantronics 2003 Stock Plan (the
Plan), which was approved by stockholders at our
2003 Annual Meeting and as subsequently amended and approved at
our 2004 Annual Meeting. Pursuant to the Plan, on
January 15, 2005, Directors Hart, Taylor, Tseu, Wegmann and
Wery each received an option to purchase 3,000 shares of common
stock at an exercise price of $41.13 per share, the then current
fair market value of our common stock. In addition, on
January 14, 2005, Mr. Hammann received an option to
purchase 12,000 shares of Common Stock at the exercise price of
$41.13 as a result of being appointed as a new Director of
Plantronics. On June 2, 2005, Mr. Mohr received an
option to purchase 12,000 shares of Common Stock at the exercise
price of $34.50 as a result of being appointed as a new
Director of Plantronics.
Director Independence
The Board of Directors has determined that, except for
Mr. Kannappan, each of the current Directors and Directors
nominated for election are independent under the rules of the
New York Stock Exchange (as well as Rule 10A-3(b) of the
Securities Exchange Act in the case of Audit Committee members).
In determining Director independence, the Board of Directors
reviewed not only relationships between the Director and the
Company, but also relationships between the Company and the
organizations with which the Director is affiliated. After
considering the relevant facts and circumstances, the Board of
Directors determined that none of these individuals has a
material relationship with the Company (either directly or as a
partner, shareholder, or officer of an organization that has a
relationship with the Company), other than as a Director of the
Company, and that each of these Directors is free from any
relationship with the Company that would impair the
Directors ability to exercise independent judgment. Marv
Tseu is the Chair of the Board and presides at executive
sessions of independent Directors.
Mr. Wery is a Director and employee of the consulting firm,
Pittiglio Rabin Todd & McGrath (PRTM) which entered
into a consulting agreement (the Agreement) with
Plantronics in June 2000 for the provision of certain management
consulting services. Mr. Wery is not, and has not since
fiscal year 2001, been involved in the services provided under
the Agreement. In fiscal 2003, PRTM billed Plantronics
$1,115,649 for further work under the Technology and Product
Development Improvement Project. In fiscal 2004, PRTM billed
Plantronics $15,910 for further work under the Technology and
Product Development Improvement Project. In fiscal 2005, PRTM
billed Plantronics $65,160.27 for further work under the
Technology and Product Development Improvement Project. Others
within PRTM provided the service to Plantronics to assist with
the improvement of the Companys new product development
process. Finally, the compensation paid to PRTM by Plantronics
in each of fiscal years 2003, 2004 and 2005 was less than 1% of
PRTMs consolidated gross revenues for each such fiscal
year. The Board of Directors has determined, after careful
consideration of these circumstances, that Mr. Wery is
independent.
The Board of Directors has also determined that each member of
the Audit Committee, the Compensation Committee and the
Nominating and Corporate Governance Committee meets the
independence requirements applicable to those committees
prescribed by the NYSE and the SEC. The Board of Directors has
further determined that Director Marv Tseu is an audit
committee financial expert as such term is defined in
Item 401(h) of Regulation S-K promulgated by the SEC.
12
PROPOSAL TWO
APPROVAL OF AN INCREASE OF 1.3 MILLION SHARES OF COMMON
STOCK
ISSUABLE UNDER THE 2003 STOCK PLAN
Proposal
This is a proposal to ratify and approve an increase of
1.3 million shares in the common stock issuable under the
2003 Stock Plan (the Plan), so that we can use it to
achieve the Companys goals.
Our Board of Directors (the Board) has approved the
increase of 1.3 million shares in the common stock issuable
under the Plan, subject to approval from our stockholders at the
Annual Meeting. Our named executive officers and directors have
an interest in this proposal as each of them is eligible to
receive grants under the Plan.
Plantronics is seeking stockholder approval for an amendment of
the Plan to increase the number of shares issuable under the
Plan by 1.3 million shares. These 1.3 million shares
would only be used for the grant of the stock options under the
Plan. If the Stockholders approve this Proposal Two, then the
Plan will also be amended to provide that the underlying shares
to which the exercise of a stock appreciation right relates be
counted against the Plan share reserve if the stock appreciation
right is to be settled in shares of common stock. As of
April 30, 2005 there remained 195,610 shares available for
future awards under the Plan. As of April 30, 2005, options
to purchase 8,542,312 shares of the Companys common stock
were outstanding. These options had a weighted average exercise
price of $25.72 and a weighted average remaining contractual
life of 6.23 years. Subject to stockholder approval of the
increase of 1.3 million shares, there would then be
1,495,610 shares available for issuance under the Plan.
Our current plan is to grant options covering approximately
1.3 million shares during fiscal 2005. Each year, we
experience some cancellation of outstanding awards as a result
of employee termination or participants not otherwise satisfying
the vesting requirements for such awards. Based on our
historical cancellation rates, we anticipate cancellation of
options covering approximately 300,000 shares. If that
assumption proves correct, the resulting level of net grants
covering 1 million shares would amount to approximately
2.1% of the common shares outstanding as May 25, 2005. This
level of anticipated usage is down substantially from fiscal
2002 and we have been reducing it each year since then with the
goal of operating in the range of 2.0 2.5%. In
fiscal 2006, we believe we will achieve our goal of operating
within the target range per annum.
We believe strongly that the increase of shares issuable under
the Plan is essential to our continued success. Our employees
are our most valuable assets. Our Board has determined that it
is in the best interest of Plantronics and our stockholders to
increase the shares issuable under the Plan. The Board believes
that grants of stock options and other awards available under
the Plan help create long-term equity participation in
Plantronics and thereby assist us in attracting, retaining,
motivating and rewarding employees and directors. The Board
believes that to remain competitive with other technology
companies with regard to its long-term incentive plans, we must
continue to provide employees with some level of equity
compensation and that an inability to offer equity incentives to
new and current employees would put Plantronics at a competitive
disadvantage with respect to attracting and retaining qualified
personnel.
We measure compensation expense for our employee stock
compensation plans under the intrinsic value method of
accounting prescribed by APB Opinion No. 25,
Accounting for Stock Issued to Employees
(APB 25). In December 2004, the Financial
Accounting Standards Board (FASB) issued SFAS
No. 123 (revised 2004), Share-Based Payment
(SFAS 123R), which replaces SFAS No. 123,
Accounting for Stock-Based Compensation
(SFAS 123) is expected to supersede
APB 25. SFAS 123R requires all share-based payments to
employees, including grants of employee stock options, to be
recognized in the financial statements based on their fair
values, beginning with the first annual period after
June 15, 2005, with early adoption encouraged. On
March 29, 2005, the SEC issued SAB 107, which provides
the SEC Staffs views regarding interactions between
FAS 123R and certain SEC rules and regulations and provides
interpretations of the valuation of share-based payments for
public companies. The Company is currently
13
evaluating FAS 123R and SAB 107 to determine the fair
value method to measure compensation expense, the appropriate
assumptions to include in the fair value model, the transition
method to use upon adoption and the period in which to adopt the
provisions of FAS 123R. The impact of the adoption of
FAS 123R cannot be reasonably estimated at this time due to
the factors discussed above as well as the unknown level of
share-based payments granted in future years. However, such a
change 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.
Summary of the 2003 Stock Plan
The following is a summary of the principal features of the Plan
and its operation. The following summary is qualified in its
entirety by reference to the Plan as set forth in
Appendix C, attached hereto.
Purposes. The purposes of the Plan are to attract and
retain the best available personnel for positions of substantial
responsibility, to provide additional incentive for directors
and employees of Plantronics, and to promote the success of
Plantronics business.
Administration. The Plan is administered by the Board of
Directors or any committee of individuals appointed by the Board
of Directors, referred to as the administrator. The
administrator may make any determinations deemed necessary or
advisable for the Plan.
The administrator has full power to select the individuals to
whom awards will be granted, to make any combination of awards
to any participant and to determine the specific terms of each
grant, subject to the provisions of the Plan. The interpretation
and construction of any provision of the Plan by the
administrator will be final and conclusive.
Term of the Plan. The Plan became effective as of
September 24, 2003, and will continue for a term of
10 years unless sooner terminated by the Board of Directors.
Eligibility. Nonstatutory stock options may be granted to
employees, directors and consultants of Plantronics or its
parent or subsidiary (each referred to herein as a
participant); provided, that, non-employee
directors may only receive automatic non-employee director stock
option grants (described below). As of April 30, 2005 there
were 1,160 employees and six (6) directors entitled to
receive grants under the Plan. Incentive stock options may only
be granted to employees of Plantronics or its parent or
subsidiary companies. Stock appreciation rights, restricted
stock awards and restricted stock units may be granted only to
employees and consultants of Plantronics and its parent or
subsidiary companies.
Shares Subject to the Plan. If stockholders approve
Proposal Two, a total of 3,300,000 shares of
Plantronics Common Stock will be reserved for issuance
under the Plan. As of April 30, 2005, 195,610 shares of
Common Stock were available for issuance under the Plan. Shares
added to the Plan as the result of Stockholders approving this
Proposal Two would only be able to be used for awards of stock
options. Plantronics may not issue more than 20% of the one
million shares added to the Plan at the 2004 Annual Meeting for
awards of restricted stock, restricted stock units and capped
stock appreciation rights and no more than 20% of the one
million shares originally reserved for issuance under the Plan
pursuant to awards of restricted stock and restricted stock
units.
Stock Options. Each option granted under the Plan is to
be evidenced by a written award agreement between Plantronics
and the participant and is subject to the following additional
terms and conditions:
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(a) Maximum Grant. An individual may not be granted
options to purchase more than 500,000 shares during any fiscal
year. Notwithstanding this limit, in connection with such
individuals initial employment with Plantronics, he or she
may be granted options to purchase up to an additional 500,000
shares. |
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(b) Grants to Non-Employee Directors. Plantronics
may grant only nonstatutory stock options to its non-employee
directors. Each non-employee director will be granted an initial
option to purchase 12,000 shares of Common Stock when such
person first becomes a director of the Company. Thereafter, each
non-employee director will be granted an option to purchase
3,000 additional shares of Common |
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Stock on January 15 of each year, provided the non-employee
director will continue to be a non-employee director of the
Company through the applicable date and if, on such date, the
eligible director will have served on the Board of Directors for
at least six (6) months. Options granted to non-employee
directors expire seven (7) years after the date of grant.
In the event a non-employee director ceases to be a director as
a result of his or her death, disability or retirement, any
options granted to such director following the 2004 Annual
Meeting will remain exercisable, to the extent vested on the
date of such termination, for up to one year following such
termination. Each option is evidenced by an award agreement
between Plantronics and the director to whom such option is
granted. Other than the option grants described in this
paragraph, non-employee directors will not be eligible to
receive other awards pursuant to the Plan. In addition, in the
event of a merger of Plantronics with or into another
corporation or a change of control (as defined in
the Plan) in which a non-employee director is terminated or
asked to resign, options granted to such non-employee director
will vest and be exercisable with respect to 100% of the shares
subject to such option immediately prior to such merger or
change of control. |
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(c) Exercise of the Option. The administrator
determines when options become exercisable, however, options
generally are not exercisable until at least 12 months have
passed following the date of the option grant. An option is
exercised by giving written notice of exercise to Plantronics,
specifying the number of full shares of Common Stock to be
purchased and tendering payment of the purchase price to
Plantronics. The acceptable methods of payment for shares issued
upon exercise of an option are set forth in the award agreement
and may consist of (1) cash, (2) check,
(3) certain shares of Common Stock, (4) the delivery
of a properly executed exercise notice together with such other
documentation as the administrator and the broker, if
applicable, will require to effect a cash-less exercise of the
option and delivery to Plantronics of the amount of sale or loan
proceeds required to pay the exercise price, (5) any
combination of the foregoing methods, or (6) such other
consideration and method of payment permitted under applicable
law; provided, however, that the issuance of a promissory note
is not a permissible method of payment. |
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(d) Exercise Price. The exercise price of options
granted under the Plan is determined on the date of grant. The
exercise price of incentive stock options and nonstatutory stock
option must be at least 100% of the fair market value per share
at the time of grant. An incentive stock option granted to a 10%
stockholder may not have an exercise price less than 110% of the
fair market value per share of the Common Stock at the time of
grant. The fair market value of a share of Common Stock will be
the closing sales price for such stock (or the closing bid, if
no sales were reported) as quoted on The New York Stock Exchange
on the date of grant. |
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(e) Termination. If the participants
directorship, employment or consulting relationship with
Plantronics (or its parent or subsidiary corporations) is
terminated for any reason, including death or total and
permanent disability, options may be exercised after such
termination as to all of the shares as to which the participant
was entitled to exercise at the date of such termination. The
options may be exercised after termination within the period of
time as is specified in the award agreement. If such period of
time is not specified in the award agreement, then such period
of time will equal 3 months in the case of termination
other than upon death, disability or, for options granted after
the 2004 Annual Meeting, retirement and 12 months in the
case of termination upon death, disability or, for options
granted after the 2004 Annual Meeting, retirement.
Notwithstanding the foregoing, all options must be exercised
prior to the expiration of the term of an option as set forth in
the award agreement. |
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(f) Term and Termination of Options. At the time an
option is granted, the administrator determines the period
within which the option may be exercised. In no event may the
term of an option be longer than 7 years. No person may
exercise an option after the expiration of its term. An option
granted to a participant who, at the time such option is
granted, owns more than 10% of the voting power of all classes
of stock of Plantronics, may not have a term of more than
5 years. |
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(g) Other Provisions. The award agreement may
contain such other terms, provisions and conditions not
inconsistent with the Plan as the administrator may determine. |
15
Stock Appreciation Rights. Each stock appreciation right
granted under the Plan will be evidenced by an award agreement
between Plantronics and the participant and is subject to the
following additional terms and conditions:
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(a) Maximum Grant. An individual may not be granted
stock appreciation rights to purchase more than 500,000 shares
during any fiscal year. Notwithstanding this limit, in
connection with such individuals initial employment, he or
she may be granted stock appreciation rights to purchase up to
an additional 500,000 shares. |
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(b) Exercise of the Stock Appreciation Right. The
administrator determines when stock appreciation rights become
exercisable, however, stock appreciation rights generally are
not exercisable until at least 12 months have passed following
the date of grant. A stock appreciation right is exercised by
giving written notice of exercise to Plantronics and specifying
the number of shares of Common Stock to which the award is being
exercised. Plantronics can pay the appreciation in either cash
or shares of Common Stock. |
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(d) Exercise Price. The administrator determines the
exercise price of stock appreciation rights on the date of
grant, which must be at least 100% of the fair market value per
share at the time of grant. |
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(e) Payment. Upon exercise of a stock appreciation
right, a participant will be entitled to receive payment from
Plantronics in an amount determined by multiplying: |
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The difference between the fair market value of a share on the
date of exercise over the exercise price; times |
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The number of shares with respect to which the stock
appreciation right is exercised. |
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In no event, however, may the payment exceed 100% of the
exercise price associated with the stock appreciation right. At
the discretion of the administrator, the payment may be in cash,
in shares of equivalent value, or in some combination thereof. |
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(f) Termination. If the participants
directorship, employment or consulting relationship with
Plantronics is terminated for any reason, including death or
total and permanent disability, stock appreciation rights may be
exercised after such termination as to all of the shares as to
which the participant was entitled to exercise at the date of
such termination. The stock appreciation rights may be exercised
after termination within the period of time as is specified in
the award agreement. If such period of time is not so specified,
then such period of time will equal 3 months in the case of
termination other than upon death, disability or, for options
granted after the 2004 Annual Meeting, retirement and
12 months in the case of termination upon death, disability
or, for options granted after the 2004 Annual Meeting,
retirement. Notwithstanding the foregoing, all stock
appreciation rights must be exercised prior to the expiration of
their term as set forth in the award agreement. |
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(g) Term and Termination of Stock Appreciation
Rights. At the time a stock appreciation right is granted,
the administrator determines the period within which the stock
appreciation right may be exercised, which in no event will be
longer than 7 years from the date of grant. |
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(h) Other Provisions. The award agreement may
contain such other terms, provisions and conditions not
inconsistent with the Plan as the administrator may determine. |
Restricted Stock Awards. Each restricted stock award
granted under the Plan is to be evidenced by an award agreement
between Plantronics and the participant and is subject to the
following additional terms and conditions:
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(a) Limitation. The maximum aggregate initial value
of a grant to a participant is $600,000, except that the initial
grant to a new employee will not have an aggregate initial value
greater than $1,000,000. |
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(b) Termination. Subject to the terms of an
agreement between Plantronics and a participant, if the
participants directorship, employment or consulting
relationship with Plantronics is terminated for any reason,
including death or total and permanent disability, Plantronics
may repurchase any unvested |
16
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stock obtained by the participant pursuant to a restricted stock
award. Unless the administrator provides otherwise, the purchase
price of the repurchased shares will equal the price originally
paid, if any, for such shares by the participant. |
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(c) Term of Restricted Stock Awards. The
administrator determines the period during which a restricted
stock award will vest, which period must be at least 1 year
from the date of grant. In addition, if a restricted stock award
is not subject to the achievement of performance goals, then
such award will fully vest over a period of at least
3 years from the grant date. |
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|
(d) Other Provisions. The restricted stock award
agreement may contain such other terms, provisions and
conditions not inconsistent with the Plan as may be determined
by the administrator. |
Restricted Stock Units. Restricted stock units are awards
that will result in a payment to a participant only if the
performance goals or other vesting criteria established by the
administrator are achieved or the awards otherwise vest. Each
award of restricted stock units will be evidenced by an award
agreement between Plantronics and the participant and is subject
to the following additional terms and conditions:
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(a) Limitation. The maximum aggregate initial value
of a grant to a participant is $600,000, except that the initial
grant to a new employee will not have an aggregate initial value
greater than $1,000,000. |
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(b) Term of Restricted Stock Awards. The
administrator will establish organizational, individual
performance goals or other vesting criteria in its discretion,
which, depending on the extent to which they are met, will
determine the number and/or the value of restricted stock units
to be paid out to participants. The vesting period must be at
least 1 year from the date of grant, provided that if an
award is not subject to the achievement of performance goals,
then such award will fully vest over a period of at least
3 years from the grant date. |
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(c) Other Provisions. The award agreement may
contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the
administrator. |
Nontransferability of Awards. Awards granted under the
Plan are generally not transferable by a participant, however,
the administrator may grant limited transferability of
identified and vested awards (i) by will, (ii) by the
laws of descent and distribution, or (iii) to family
members (as such term is defined in the general instructions to
Form S-8 under the Securities Act of 1933, or any successor
thereto) through gifts or domestic relations orders, as
permitted by the instructions to Form S-8 of the Securities
Act of 1933.
Adjustments Upon Changes in
Capitalization, Dissolution, Liquidation, Merger or Change of
Control.
Changes in Capitalization. Subject to any required action
by the stockholders of Plantronics, in the event that
Plantronics Common Stock changes by reason of any stock
split, reverse stock split, stock dividend, combination,
reclassification or other similar change in our capital
structure effected without the receipt of consideration,
appropriate adjustments will be made in the number of shares of
Common Stock subject to the Plan, the number of shares of Common
Stock subject to any outstanding award under the Plan, the
exercise price of any such outstanding award, and any per-person
or other share limits under the Plan. The Board will make any
such adjustment and its determination in that respect will be
final, binding and conclusive.
Dissolution or Liquidation. In the event of a liquidation
or dissolution, any unexercised award will terminate. The
administrator may, in its sole discretion, provide that a
participant will have the right to exercise all or any part of
his or her award, including shares as to which the award would
not otherwise be exercisable. In addition, the administrator may
provide that any Company repurchase option applicable to any
shares purchased upon exercise of an award will lapse as to all
such shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated.
Merger or Change of Control. In connection with a merger
of Plantronics with or into another corporation, or a
change of control, as defined in the Plan, each
outstanding award will be assumed or substituted for by the
successor corporation (or a parent or subsidiary or such
successor corporation). If there is no assumption or
substitution of outstanding awards, the administrator will
notify the participant that he or she has the right to exercise
his or her options, rights to purchase restricted stock, and
stock appreciation rights
17
as to all of the shares subject to the award for a period of
15 days from the date of such notice and that the award
will terminate upon the expiration of such period; moreover, all
restrictions on restricted stock and all performance goals or
other vesting requirements for restricted stock units will lapse.
Amendment and Termination of the Plan. The Board may
amend the Plan at any time or from time to time or may terminate
the Plan without approval of the stockholders; provided,
however, that stockholder approval is required for any amendment
to the Plan for which stockholder approval would be required
under applicable law or regulation (including the requirements
of The New York Stock Exchange), as in effect at the time.
However, the Board may not, without the approval of the
stockholders, (i) materially increase the number of shares
issuable under the Plan (unless such increase is made as an
adjustment to a change in Plantronics capitalization),
(ii) materially modify the requirements for eligibility to
participate in the Plan, or (iii) reprice options or stock
appreciation rights. The Plan will terminate on
September 23, 2013, unless terminated sooner by the Board.
Any award outstanding under the Plan at the time of its
termination will remain outstanding until they expire by their
terms.
Federal Tax Aspects
The following paragraphs are a summary of the general federal
income tax consequences to U.S. taxpayers and Plantronics of
awards granted under the Plan. Tax consequences for any
particular individual may be different.
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Nonstatutory Stock Options. |
No taxable income is reportable when a nonqualified stock option
with an exercise price equal to the fair market value of the
Companys stock is granted to a participant. Upon exercise,
the participant will recognize ordinary income in an amount
equal to the excess of the fair market value (on the exercise
date) of the shares purchased over the exercise price of the
option. Any additional gain or loss recognized upon any later
disposition of the shares would be capital gain or loss.
No taxable income is reportable when an incentive stock option
is granted or exercised (except for purposes of the alternative
minimum tax, in which case taxation is the same as for
nonstatutory stock options). If the participant exercises the
option and then later sells or otherwise disposes of the shares
more than two years after the grant date and more than one year
after the exercise date, the difference between the sale price
and the exercise price will be taxed as capital gain or loss. If
the participant exercises the option and then later sells or
otherwise disposes of the shares before the end of the two-or
one-year holding periods described above, he or she generally
will have ordinary income at the time of the sale equal to the
fair market value of the shares on the exercise date (or the
sale price, if less) minus the exercise price of the option.
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Stock Appreciation Rights. |
No taxable income is reportable when a stock appreciation right
with an exercise price equal to the fair market value of the
Companys stock is granted to a participant. Upon exercise,
the participant will recognize ordinary income in an amount
equal to the amount of cash received and the fair market value
of any shares received. Any additional gain or loss recognized
upon any later disposition of the shares would be capital gain
or loss.
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Restricted Stock and Restricted Stock Units. |
A participant generally will not have taxable income at the time
an award of restricted stock or restricted stock units are
granted. Instead, he or she will recognize ordinary income in
the first taxable year in which his or her interest in the
shares underlying the award becomes either (a) freely
transferable or (b) no longer subject to substantial risk
of forfeiture. However, the recipient of a restricted stock
award (but not an award of restricted stock units) may elect to
recognize income at the time he or she receives the award in an
amount
18
equal to the fair market value of the shares underlying the
Award (less any cash paid for the shares) on the date the award
is granted.
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Tax Effect for the Company. |
The Company generally will be entitled to a tax deduction in
connection with an award under the Plan in an amount equal to
the ordinary income realized by a participant and at the time
the participant recognizes such income (for example, the
exercise of a nonstatutory stock option). Special rules limit
the deductibility of compensation paid to Plantronics
Chief Executive Officer and to each of its four most highly
compensated executive officers. Under Section 162(m) of the
Code, the annual compensation paid to any of these specified
executives will be deductible only to the extent that it does
not exceed $1,000,000. However, Plantronics can preserve the
deductibility of certain compensation in excess of $1,000,000 if
the conditions of Section 162(m) are met. The Plan has been
designed to permit the administrator to grant options and stock
appreciation rights that qualify as performance-based for
purposes of satisfying the conditions of Section 162(m),
thereby permitting Plantronics to continue to receive a federal
income tax deduction in connection with such awards.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL
INCOME TAXATION UPON PARTICIPANTS AND THE COMPANY WITH RESPECT
TO THE GRANT AND EXERCISE OF AWARDS UNDER THE PLAN. IT DOES NOT
PURPORT TO BE COMPLETE, AND DOES NOT DISCUSS THE TAX
CONSEQUENCES OF A SERVICE PROVIDERS DEATH OR THE
PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR
FOREIGN COUNTRY IN WHICH THE SERVICE PROVIDER MAY RESIDE.
Vote Required
Approval of the increase of 1.3 million shares of common
stock issuable under the Plan requires the affirmative vote of
the holders of a majority of the shares of the Companys
common stock that are present in person or by proxy and entitled
to vote at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR RATIFICATION AND APPROVAL OF AN INCREASE OF
1.3 MILLION SHARES OF COMMON STOCK ISSUABLE UNDER THE 2003
STOCK PLAN.
19
Number of Awards Granted to Employees, Consultants, and
Directors
The number of awards that an employee, director or consultant
may receive under the Plan is in the discretion of the
Compensation Committee of the Board of Directors and therefore
cannot be determined in advance. To date, only restricted stock
awards and stock options have been granted under the Plan.
The following table sets forth (a) the aggregate number of
shares subject to options granted under the Plan during the
fiscal year ended March 31, 2005, (b) the average per
share exercise price of such options, and (c) the fair
market value of the number of unvested restricted stock award
shares at year end based on the market value of Plantronics
common stock at April 2, 2005 of $37.75.
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Number of | |
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Restricted | |
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Average Per Share | |
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Number of | |
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Restricted Stock | |
|
Stock Award | |
Name of Individual or Group Position |
|
Exercise Price | |
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Options Granted | |
|
Awards Granted | |
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Value(5) | |
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Ken Kannappan
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$ |
40.48 |
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50,000 |
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12,500 |
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$ |
436,503 |
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Director, President and CEO |
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Philip Vanhoutte(1)
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0 |
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5,000 |
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188,750 |
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Managing Director EMEA |
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Barbara Scherer
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$ |
40.48 |
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35,000 |
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6,000 |
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209,513 |
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Senior Vice President Finance &
Administration and CFO |
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Don Houston
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$ |
40.48 |
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30,000 |
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5,000 |
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174,594 |
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Senior Vice President Sales |
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Joyce Shimizu
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$ |
40.48 |
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25,000 |
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4,000 |
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139,675 |
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Vice President Strategic Portfolio &
Product Management |
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Executive Group(2)
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$ |
40.48 |
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140,000 |
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32,500 |
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1,149,035 |
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Non-Executive Director Group(3)
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$ |
41.13 |
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27,000 |
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0 |
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0 |
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Non-Executive Officer Employee Group(4)
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$ |
40.11 |
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1,366,450 |
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28,000 |
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1,020,194 |
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(1) |
On September 22, 2003, Philip Vanhoutte received an option
to purchase 150,000 shares of Common Stock at the exercise price
of $25.84 as a result of joining Plantronics. |
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(2) |
The Executive Group is composed of the Named Executive Officers. |
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(3) |
The Non-Executive Director Group is composed of all Plantronics
Board of Directors except Ken Kannappan. |
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(4) |
The Non-Executive Officer Employee Group is composed of all
Plantronics employees worldwide minus the Executive Group. The
Non-Executive Officer Employee Group average per share exercise
price is calculated as a weighted average. |
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(5) |
Based on market value of Plantronics common stock at
April 2, 2005 of $37.75, multiplied by the number of
unvested restricted stock award shares at year end. There were
no restricted stock awards in fiscal 2003 or 2004. |
20
PROPOSAL THREE
APPROVAL OF A 200,000 SHARE INCREASE IN SHARES ISSUABLE
UNDER
THE 2002 EMPLOYEE STOCK PURCHASE PLAN
Plantronics is seeking stockholder approval of an amendment of
the 2002 Employee Stock Purchase Plan (the 2002
ESPP) to increase the number of shares issuable under
the 2002 ESPP. The 2002 ESPP was adopted by the Board of
Directors and approved by Plantronics stockholders in July
2002. The 2002 ESPP originally authorized the issuance of
200,000 shares. As of April 30, 2005, 62,791 shares were
available for future purchases. Without a further increase, the
Plan would run out of shares. Therefore, we believe an increase
is prudent to make available sufficient shares for issuance
under this plan on an ongoing basis. On May 6, 2005, the
Board of Directors approved an increase of 200,000 shares
issuable under the 2002 ESPP, subject to stockholder approval.
The Board of Directors believes that the 2002 ESPP is an
important component of our total employee benefit package and
that it is in the best interest of Plantronics and our
stockholders for the stockholders to approve the proposed
increase in shares available for purchase by employees under the
2002 ESPP. If our stockholders approve the increase of shares
under the 2002 ESPP, the total number of shares of Common Stock
available for future purchases under the 2002 ESPP will be
262,791.
The following is a summary of the principal features of the 2002
ESPP and its operation. The following summary is qualified in
its entirety by reference to the 2002 ESPP as set forth in
Appendix D, attached hereto.
General. The purpose of our 2002 ESPP is to provide
employees with an opportunity to purchase our common stock
through payroll deductions.
Administration. The 2002 ESPP may be administered by the
Board of Directors or a committee appointed by the Board of
Directors, referred to as the administrator. All questions of
interpretation or application of the 2002 ESPP are determined by
our Board of Directors or its appointed committee, and its
decisions are final, conclusive and binding upon all
participants.
Term of the Plan. The 2002 ESPP became effective
June 10, 2002, the date that it was adopted by our Board of
Directors, and will continue for a term of 10 years unless
sooner terminated by the Board of Directors.
Eligibility. Each of our employees or the employees of
our designated subsidiaries who is customarily employed for at
least 20 hours per week and more than 5 months in a
calendar year is eligible to participate in the 2002 ESPP. The
exceptions to this guideline are that no employee shall be
granted an option under the 2002 ESPP (i) to the extent
that, immediately after the grant, such employee would own 5% of
either the voting power or value of our stock or any of our
subsidiaries, or (ii) to the extent that his or her rights
to purchase stock under all of our employee stock purchase plans
or those of our subsidiaries accrues at a rate which exceeds
$25,000 worth of stock (determined at the fair market value of
the shares at the time such option is granted) for each calendar
year.
Shares Subject to the Plan. The maximum number of shares
of our common stock available for sale under the 2002 ESPP as of
April 30, 2005 is 62,791 shares, subject to adjustment upon
changes in capitalization as described below. On May 6,
2005, the Board of Directors approved an increase of 200,000
shares issuable under the 2002 ESPP, subject to stockholder
approval.
Offering Period. The 2002 ESPP is implemented by
consecutive offering periods lasting approximately 6 months
in duration with a new offering period commencing on February 1
and August 1 of each year. To participate in the 2002 ESPP, each
eligible employee must authorize payroll deductions pursuant to
the 2002 ESPP. Such payroll deductions may not exceed 10% of a
participants compensation. Compensation is defined as base
straight time gross earnings, but exclusive of payments for
overtime, shift premium, incentive compensation, incentive
payments, bonuses, commissions, car allowances, profit-sharing
and other compensation. Our Board of Directors has the power to
change the duration of future offering periods without
stockholder approval if such change is announced at least
15 days prior to the scheduled beginning of the first
offering period to be affected thereafter. Once an employee
becomes a participant in the 2002 ESPP, our
21
common stock will automatically be purchased under the 2002 ESPP
at the end of each offering period, unless the participant
withdraws or terminates employment earlier.
Purchase Price. Shares of our common stock may be
purchased under the 2002 ESPP at a purchase price not less than
85% of the lesser of the fair market value of our common stock
on (i) the first day of the offering period or
(ii) the last day of the offering period. The fair market
value of our common stock on any relevant date will be the
closing price per share as reported on the New York Stock
Exchange, or the mean of the closing bid and asked prices, if no
sales were reported, as quoted on such exchange or reported in
The Wall Street Journal.
Payment of Purchase Price; Payroll Deductions. The
purchase price of the shares is accumulated by payroll
deductions throughout each offering period. The number of shares
of our common stock a participant may purchase in each offering
period is determined by dividing the total amount of payroll
deductions withheld from the participants compensation
during that offering period by the purchase price; provided,
however, that a participant may not purchase more than 1,000
shares each offering. During the offering period, a participant
may discontinue his or her participation in the employee stock
purchase plan, and may, on one occasion during the offering
period, decrease (but not increase) the rate of payroll
deductions in an offering period within limits set by the
administrator.
All payroll deductions made for a participant are credited to
the participants account under the 2002 ESPP, are withheld
in whole percentages only and are included with our general
funds. Funds received by us pursuant to exercises under the 2002
ESPP are also used for general corporate purposes. A participant
may not make any additional payments into his or her account.
Withdrawal. Generally, a participant may withdraw from an
offering period at any time by written notice without affecting
his or her eligibility to participate in future offering
periods. However, once a participant withdraws from a particular
offering period, that participant may not participate again in
the same offering period. To participate in a subsequent
offering period, the participant must deliver to us a new
subscription agreement.
Transferability. Neither payroll deductions credited to a
participants account nor any rights with regard to the
exercise of an option or to receive shares under the 2002 ESPP
may be assigned, transferred, pledged or otherwise disposed of
in any way other than by will, the laws of descent and
distribution.
Termination of Employment. Upon termination of a
participants employment for any reason, including
disability or death, his or her option and participation in the
2002 ESPP will terminate. At such time, the payroll deductions
credited to the participants account (to the extent not
used to make a purchase of our common stock) will be returned to
him or her or, in the case of death, to the person or persons
entitled thereto as provided in the 2002 ESPP.
Adjustments upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.
Changes in Capitalization. Subject to any required action
by our stockholders, the number of shares reserved under the
2002 ESPP, the number of shares that may be added to the 2002
ESPP on an annual basis, the maximum number of shares that may
be purchased during any offering period, as well as the price
per share of common stock covered by each option under the 2002
ESPP which has not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number of issued
shares of common stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of
the common stock, or any other increase or decrease in the
number of shares of common stock effected without receipt of
consideration by us; provided, however, that conversion of any
of our convertible securities shall not be deemed to have been
effected without receipt of consideration. Such
adjustment shall be made by our Board of Directors, whose
determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by
us of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the
number or price of shares of common stock subject to an option.
22
Dissolution or Liquidation. In the event of our proposed
dissolution or liquidation, the Board of Directors shall shorten
any offering periods then in progress by setting a new exercise
date and any offering periods shall end on the new exercise
date. The new exercise date shall be prior to the dissolution or
liquidation. If the Board of Directors shortens any offering
periods then in progress, the Board of Directors shall notify
each participant in writing, at least 10 business days prior to
the new exercise date, that the exercise date has been changed
to the new exercise date and that the option will be exercised
automatically on the new exercise date, unless the participant
has already withdrawn from the offering period.
Merger or Asset Sale. In the event of a proposed sale of
all or substantially all of our assets or the merger of us with
or into another corporation, each option under the 2002 ESPP
shall be assumed or an equivalent option shall be substituted by
such successor corporation or a parent or subsidiary of such
successor corporation. In the event the successor corporation
refuses to assume or substitute for the options, the Board of
Directors shall shorten any offering periods then in progress by
setting a new exercise date and any offering periods shall end
on the new exercise date. The new exercise date shall be prior
to the date of the sale or merger. If the Board of Directors
shortens any offering periods then in progress, the Board of
Directors shall notify each participant in writing, at least 10
business days prior to the new exercise date, that the exercise
date has been changed to the new exercise date and that the
option will be exercised automatically on the new exercise date,
unless the participant has already withdrawn from the offering
period.
Amendment and Termination of the Plan. Our Board of
Directors may at any time terminate or amend the 2002 ESPP. An
offering period may be terminated by the Board of Directors at
the end of any offering period if the Board of Directors
determines that termination of the 2002 ESPP is in our best
interests and the best interests of our stockholders. Generally,
no such termination can affect options previously granted. No
amendment shall be effective unless it is approved by the
holders of a majority of the votes cast at a duly held
stockholders meeting, if such amendment would require
stockholder approval in order to comply with Section 423 of
the Code.
Certain Federal Income Tax Information. The following
brief summary of the effect of federal income taxation upon the
participant and us with respect to the shares purchased under
the 2002 ESPP does not purport to be complete, and does not
discuss the tax consequences of a participants death or
the income tax laws of any state or foreign country in which the
participant may reside.
The 2002 ESPP, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of
Sections 421 and 423 of the Code. Under these provisions,
no income will be taxable to a participant until the shares
purchased under the 2002 ESPP are sold or otherwise disposed of.
Upon sale or other disposition of the shares, the participant
will generally be subject to tax in an amount that depends upon
the holding period. If the shares are sold or otherwise disposed
of more than 2 years from the first day of the applicable
offering period and 1 year from the applicable date of
purchase, the participant will recognize ordinary income
measured as the lesser of (a) the excess of the fair market
value of the shares at the time of such sale or disposition over
the purchase price, or (b) an amount equal to 15% of the
fair market value of the shares as of the first day of the
applicable offering period. Any additional gain will be treated
as long-term capital gain. If the shares are sold or otherwise
disposed of before the expiration of these holding periods, the
participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date
the shares are purchased over the purchase price. Any additional
gain or loss on such sale or disposition will be long-term or
short-term capital gain or loss, depending on how long the
shares have been held from the date of purchase. We generally
are not entitled to a deduction for amounts taxed as ordinary
income or capital gain to a participant except to the extent of
ordinary income recognized by participants upon a sale or
disposition of shares prior to the expiration of the holding
periods described above.
Vote Required
The affirmative vote of a majority of the shares present in
person or by proxy and entitled to vote at the Annual Meeting
will be required to approve the amendment to the 2002 ESPP.
23
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE FOR APPROVAL OF A 200,000 SHARE
INCREASE IN SHARES ISSUABLE UNDER THE 2002 EMPLOYEE STOCK
PURCHASE PLAN.
Number of Shares Purchased by Certain Individuals and
Groups
Given that the number of shares of common stock that may be
purchased under the 2002 ESPP is determined, in part, on the
stocks market value on the first and last day of the
offering period and given that participation in the 2002 ESPP is
voluntary on the part of employees, the actual number of shares
that may be purchased by any individual is not determinable. For
illustrative purposes, the following table sets forth
(a) the number of Shares that were purchased during fiscal
2005 under the 2002 ESPP, and the (b) average price per
Share purchase price paid for such Shares.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares | |
|
Average Per Share | |
Name of Individual or Group |
|
Purchased | |
|
Purchase Price | |
|
|
| |
|
| |
Ken Kannappan
Director, President and CEO
|
|
|
1,253 |
|
|
$ |
32.25 |
|
Philip Vanhoutte
Managing Director EMEA
|
|
|
0 |
|
|
|
|
|
Barbara Scherer
Senior Vice President Finance & Administration
and CFO
|
|
|
410 |
|
|
$ |
32.24 |
|
Don Houston
Senior Vice President Sales
|
|
|
0 |
|
|
|
|
|
Joyce Shimizu
Vice President Strategic Portfolio & Product
Management
|
|
|
0 |
|
|
|
|
|
All executive officers, as a group(1)
|
|
|
4,893 |
|
|
$ |
32.18 |
|
All directors who are not executive officers, as a group(2)
|
|
|
0 |
|
|
|
|
|
All employees who are not executive officers, as a group(3)
|
|
|
66,605 |
|
|
$ |
32.20 |
|
|
|
(1) |
The Executive Group is composed of all the Executive Officers. |
|
(2) |
The Non-Executive Director Group is composed of all Plantronics
Board of Directors except Ken Kannappan. Directors who are not
employees of the Company are not eligible to participate in the
ESPP. |
|
(3) |
The Non-Executive Officer Employee Group is composed of all
Plantronics employees worldwide minus the Executive Group. The
Non-Executive Officer Employee Group average per share exercise
price is calculated as a weighted average. |
24
Equity Compensation Plan Information
The following table sets forth information with respect to
Plantronics equity compensation plans as of the end of the
most recently completed fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) | |
|
(b) | |
|
(c) | |
|
|
| |
|
| |
|
| |
|
|
|
|
|
|
Number of securities | |
|
|
|
|
|
|
remaining available for | |
|
|
Number of securities to | |
|
Weighted-average | |
|
future issuance under | |
|
|
be issued upon exercise | |
|
exercise price of | |
|
equity compensation plans | |
|
|
of outstanding options, | |
|
outstanding options, | |
|
(excluding securities | |
Plan Category |
|
warrants and rights | |
|
warrants and rights | |
|
reflected in column (a)) | |
|
|
| |
|
| |
|
| |
Equity compensation plans approved by security holders(1)
|
|
|
8,483,363 |
|
|
$ |
25.62 |
|
|
|
268,485 |
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
8,483,363 |
|
|
$ |
25.62 |
|
|
|
268,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Includes the 1993 Stock Option Plan, the 1993 Director Stock
Option Plan, and the 2003 Stock Plan, but does not include the
2002 ESPP and the additional 1.3 million shares for which
stockholder approval is being sought at this Annual Meeting for
the 2003 Stock Plan. |
25
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected
PricewaterhouseCoopers LLP
(PricewaterhouseCoopers), independent
registered public accounting firm, to audit the consolidated
financial statements of Plantronics for fiscal 2006. The Board
of Directors recommends that stockholders vote for ratification
of such appointment. If this Proposal is not approved, the Audit
Committee will reconsider its selection.
PricewaterhouseCoopers has audited Plantronics financial
statements annually since 1988. Their Audit Partner rotation on
the Plantronics account has been more frequent than required by
professional standards for various reasons, including the
relocation in 2002 of the prior Audit Partner. A representative
of PricewaterhouseCoopers will be available at the Annual
Meeting to respond to questions. The PricewaterhouseCoopers
representative will have an opportunity to make a statement at
the Annual Meeting if they desire to do so.
Audit and Related Fees
The following is a summary of pre-approved fees and services
approved by the Audit Committee and performed by our external
auditors for the years ended March 31, 2005 and 2004.
Audit Fees. The aggregate fees billed to us in each of
fiscal 2005 and fiscal 2004 for professional services rendered
by PricewaterhouseCoopers LLP for (i) the audit of our
annual financial statements included in our Form 10-K;
(ii) review of our interim financial statements included in
the quarterly reports on Form 10-Q; (iii) services
relating to comfort letters; (iv) services rendered by
PricewaterhouseCoopers LLP in connection with the compliance
work relating to Section 404 of the 2002 Sarbanes Oxley Act
and (v) consents and assistance in connection with other
filings and public offering documents filed with the Securities
and Exchange Commission were:
|
|
|
|
|
Fiscal Year ended March 31, 2004
|
|
$ |
324,086 |
|
|
Fiscal Year ended March 31, 2005
|
|
$ |
1,838,521 |
|
Amounts are accumulated based on the fiscal year for which the
service is provided and not the year in which the services are
rendered. Certain amounts have been estimated pending completion
of statutory audits or accumulation of actual billing
information.
Audit-Related Fees. The aggregate fees billed to us in
fiscal 2005 for professional services rendered by
PricewaterhouseCoopers LLP for Section 404. Report Advisory
fees, were:
|
|
|
|
|
Fiscal Year ended March 31, 2004
|
|
$ |
|
|
|
Fiscal Year ended March 31, 2005
|
|
$ |
92,277 |
|
Tax Fees. The aggregate fees billed to us in each of
fiscal 2005 and fiscal 2004 for professional services rendered
by PricewaterhouseCoopers LLP for tax compliance, tax advice and
tax planning were:
|
|
|
|
|
Fiscal Year ended March 31, 2004
|
|
$ |
164,548 |
|
|
Fiscal Year ended March 31, 2005
|
|
$ |
352,276 |
|
All Other Fees. The aggregate fees billed to us in each
of fiscal 2005 and fiscal 2004 for products and services
provided by PricewaterhouseCoopers LLP, except those included
above under the captions Audit Fees,
Audit-Related Fees and Tax Fees were:
|
|
|
|
|
Fiscal Year ended March 31, 2004
|
|
$ |
43,961 |
|
|
Fiscal Year ended March 31, 2005
|
|
$ |
70,531 |
|
26
Our Audit Committee believes that the services rendered by
PricewaterhouseCoopers that led to the fees detailed under the
captions Audit Fees, Tax Fees and
All Other Fees are compatible with maintaining
PricewaterhouseCoopers independence.
Our Audit Committee has adopted pre-approval policies or
procedures, so that all fees for expected services to be
rendered by our independent registered public accounting firm
are pre-approved by the Audit Committee. All of the services
performed by PricewaterhouseCoopers referenced above were
pre-approved by our Audit Committee.
Vote Required
Approval of the ratification of the appointment of
PricewaterhouseCoopers as independent registered public
accounting firm requires the affirmative vote of the holders of
a majority of the shares of the Companys common stock that
are present in person or by proxy and entitled to vote at the
Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
27
ADDITIONAL INFORMATION
Security Ownership of Principal Stockholders and
Management
The following table sets forth certain information with respect
to beneficial ownership of common stock of Plantronics as of
April 30, 2005 as to (i) each person who is known by
Plantronics to own beneficially more than 5% of the outstanding
shares of common stock, (ii) each Director and each nominee
for Director of Plantronics, (iii) the Chief Executive
Officer and each of the four other most highly compensated
executive officers of Plantronics (the Chief Executive Officer
and such other officers collectively the Named
Executive Officers), and (iv) all Directors and
Named Executive Officers as a group. Except as otherwise
indicated, we believe that the beneficial owners of the common
stock listed below have sole investment and voting power with
respect to such shares, subject to community property laws.
Security Ownership of Principal Stockholders and
Management
|
|
|
|
|
|
|
|
|
|
|
Amount and | |
|
|
|
|
Nature of | |
|
|
|
|
Beneficial | |
|
Percentage of | |
Name and Address of Beneficial Owner (1) |
|
Ownership (2) | |
|
Class (3) | |
|
|
| |
|
| |
PRIMECAP Fund Inc.(4)
225 South Lake Ave., Suite 400
Pasadena, CA 91101-3005
|
|
|
5,877,950 |
|
|
|
12.3 |
% |
FMR Corp.(5)
82 Devonshire Street,
Boston, Massachusetts 02109
|
|
|
3,612,290 |
|
|
|
7.5 |
% |
Ken Kannappan
|
|
|
932,351 |
|
|
|
1.9 |
|
David Wegmann
|
|
|
630,823 |
|
|
|
1.3 |
|
Barbara Scherer
|
|
|
393,905 |
|
|
|
* |
|
Don Houston
|
|
|
288,587 |
|
|
|
* |
|
Trude Taylor
|
|
|
213,364 |
|
|
|
* |
|
Joyce Shimizu
|
|
|
154,750 |
|
|
|
* |
|
Philip Vanhoutte
|
|
|
57,500 |
|
|
|
* |
|
Marv Tseu
|
|
|
31,124 |
|
|
|
* |
|
Patti Hart
|
|
|
25,124 |
|
|
|
* |
|
Roger Wery
|
|
|
22,124 |
|
|
|
* |
|
Gregg Hammann
|
|
|
12,000 |
|
|
|
* |
|
Marshall Mohr(6)
|
|
|
0 |
|
|
|
* |
|
All Directors and all Executive Officers as a group
(21 persons)
|
|
|
3,219,054 |
|
|
|
6.4 |
|
|
|
(1) |
Unless otherwise indicated, the address for each person and
entity named in the table is c/o Plantronics, Inc., 345 Encinal
Street, Santa Cruz, CA 95060. |
|
(2) |
Includes stock underlying stock options held by Directors and
Named Executive Officers that are exercisable within
60 days of April 30, 2005, as follows:
Mr. Kannappan, 896,266 shares; Mr. Wegmann, 28,124
shares; Ms. Scherer, 382,916 shares; Mr. Houston,
282,499 shares; Mr. Taylor, 19,124 shares;
Ms. Shimizu, 150,750 shares; Mr. Vanhoutte, 52,500;
Mr. Tseu, 25,124 shares; Ms. Hart, 25,124 shares;
Mr. Wery, 22,124 shares; Mr. Hammann, 12,000 shares,
and Mr. Mohr, 0 shares. All Directors and all Executive
Officers as a group (21 persons), 2,325,385 shares. |
|
(3) |
For each person and group included in the table, percentage
ownership is calculated by dividing the number of shares
beneficially owned by such person or group as described above by
the sum of the 47,885,060 shares of common stock outstanding on
April 30, 2005 and the number of shares of common |
28
|
|
|
stock that such person or group had the right to acquire on or
within 60 days of April 30, 2005 as set forth in
footnote (2) above. |
|
(4) |
PRIMECAP Fund, Inc. claims sole dispositive power as to the
5,877,950 shares. Information provided herein is based solely
upon PRIMECAP Fund, Inc.s Schedule 13G dated
December 31, 2004. |
|
(5) |
FMR Corp. claims sole dispositive power as to the 3,612,290
shares. Information provided herein is based solely upon FMR
Corp.s Schedule 13G dated February 14, 2005. |
|
(6) |
On June 2, 2005, Mr. Mohr received an option to
purchase 12,000 shares of Common Stock at the exercise price of
$34.50 as a result of being appointed as a new Director of
Plantronics. |
Executive Compensation
The following table sets forth the compensation paid by
Plantronics during fiscal 2003, 2004 and 2005 to the Chief
Executive Officer and each of the four other most highly
compensated executive officers of Plantronics (the CEO and such
other officers collectively the Named Executive
Officers). Plantronics 2005 fiscal year contained
52 weeks, while Plantronics 2004 fiscal year contained
53 weeks which is the primary reason that base salary
decreased in comparison to fiscal 2004 for the officers named
below. None received an increase in their base pay during the
last review cycle, which was in October 2004, and none received
an increase in the target level of their bonus relative to their
base pay.
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Compensation | |
|
Long Term Compensation | |
|
|
|
|
|
|
| |
|
| |
|
|
|
|
|
|
|
|
|
|
Securities | |
|
All Other | |
Name and Principal |
|
Fiscal | |
|
|
|
Other Annual | |
|
Restricted Stock | |
|
Underlying | |
|
Compensation | |
Position |
|
Year | |
|
Salary(1) | |
|
Bonus (2) | |
|
Compensation (3) | |
|
Awards (4) | |
|
Options | |
|
(5) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Ken Kannappan
|
|
|
2005 |
|
|
$ |
500,002 |
|
|
$ |
519,716 |
|
|
$ |
8,420 |
|
|
$ |
436,503 |
|
|
|
50,000 |
|
|
$ |
14,217 |
|
|
Director, President |
|
|
2004 |
|
|
|
509,617 |
|
|
|
500,246 |
|
|
|
12,801 |
|
|
|
0 |
|
|
|
100,000 |
|
|
|
12,868 |
|
|
and CEO |
|
|
2003 |
|
|
|
500,002 |
|
|
|
499,359 |
|
|
|
10,462 |
|
|
|
0 |
|
|
|
150,000 |
|
|
|
13,057 |
|
Philip Vanhoutte(6)
|
|
|
2005 |
|
|
|
295,324 |
|
|
|
213,847 |
|
|
|
96,576 |
|
|
|
188,750 |
|
|
|
0 |
|
|
|
23,460 |
|
|
Managing Director |
|
|
2004 |
|
|
|
147,300 |
|
|
|
111,188 |
|
|
|
47,872 |
|
|
|
0 |
|
|
|
150,000 |
|
|
|
12,321 |
|
|
EMEA |
|
|
2003 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Barbara Scherer
|
|
|
2005 |
|
|
|
264,216 |
|
|
|
274,633 |
|
|
|
10,455 |
|
|
|
209,513 |
|
|
|
35,000 |
|
|
|
16,297 |
|
|
Senior Vice President |
|
|
2004 |
|
|
|
269,297 |
|
|
|
264,345 |
|
|
|
10,956 |
|
|
|
0 |
|
|
|
40,000 |
|
|
|
15,622 |
|
|
Finance & Administration |
|
|
2003 |
|
|
|
248,982 |
|
|
|
231,056 |
|
|
|
10,462 |
|
|
|
0 |
|
|
|
45,000 |
|
|
|
13,672 |
|
|
and CFO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Don Houston
|
|
|
2005 |
|
|
|
259,560 |
|
|
|
269,794 |
|
|
|
14,501 |
|
|
|
174,594 |
|
|
|
30,000 |
|
|
|
16,144 |
|
|
Senior Vice President |
|
|
2004 |
|
|
|
264,552 |
|
|
|
259,688 |
|
|
|
15,901 |
|
|
|
0 |
|
|
|
30,000 |
|
|
|
14,613 |
|
|
Sales |
|
|
2003 |
|
|
|
245,769 |
|
|
|
208,332 |
|
|
|
14,059 |
|
|
|
0 |
|
|
|
40,000 |
|
|
|
14,216 |
|
Joyce Shimizu
|
|
|
2005 |
|
|
|
262,419 |
|
|
|
204,803 |
|
|
|
13,940 |
|
|
|
139,675 |
|
|
|
25,000 |
|
|
|
12,554 |
|
|
Vice President Strategic |
|
|
2004 |
|
|
|
266,441 |
|
|
|
195,563 |
|
|
|
15,854 |
|
|
|
0 |
|
|
|
25,000 |
|
|
|
12,429 |
|
|
Portfolio & Product Mgt. |
|
|
2003 |
|
|
|
244,039 |
|
|
|
161,261 |
|
|
|
12,164 |
|
|
|
0 |
|
|
|
30,000 |
|
|
|
12,219 |
|
|
|
(1) |
Includes perquisites only where the aggregate amount thereof
equals the lesser of $50,000 or 10% of the salary plus bonus for
the executive officer. Includes perquisites only where the
aggregate amount thereof equals the lesser of $50,000 or 10% of
the salary plus bonus for the executive officer. |
|
(2) |
Amounts shown are the sum of the components ad: |
|
|
|
|
a) |
the following contributions by Plantronics under the Quarterly
Profit Sharing Plan for each executive in fiscal 2003, 2004 and
2005 respectively: Mr. Kannappan ($30,904, $46,867,
$52,766), Mr. Vanhoutte ($0, $13,216, $31,581),
Ms. Scherer ($16,078, $24,766, $27,883), Mr. Houston
($15,795, $24,330, $27,392), and Ms. Shimizu ($15,907,
$24,504, $27,587); |
|
|
b) |
the following contributions by Plantronics under the Over
Achievement Bonus Plan for each executive in fiscal 2003, 2004,
2005 respectively: Mr. Kannappan ($0, $36,677, $50,248),
Mr. Vanhoutte ($0, $10,453, $29,742), Ms. Scherer ($0,
$19,381, $26,552), Mr. Houston ($0, $19,040, $26,084), and
Ms. Shimizu ($0, $19,176, $26,041). |
29
|
|
|
|
c) |
the following contributions by Plantronics under the Quarterly
Executive Bonus Plan for each executive in fiscal 2003, 2004,
2005 respectively: Mr. Kannappan ($146,412, $145,851,
$145,851), Mr. Vanhoutte ($0, $46,730, $90,966),
Ms. Scherer ($73,937, $77,072, $77,072), Mr. Houston
($70,192, $75,714, $75,714), and Ms. Shimizu ($102,411,
$108,305, $108,931); and |
|
|
d) |
the following contributions by Plantronics under the
Supplemental Bonus Plan for each executive in fiscal 2003, 2004,
2005 respectively: Mr. Kannappan ($272,043, $270,851,
$270,851), Mr. Vanhoutte ($0, $40,789, $61,558),
Ms. Scherer ($141,041, $143,126, $143,126),
Mr. Houston ($122,345, $140,604, $140,604), and
Ms. Shimizu ($42,943, $43,578, $42,244). |
|
|
(3) |
Includes contributions for the Defined Compensation Program, a
supplemental benefit program available only to vice presidents
and above to reimburse participants for items such as medical
co-payments, legal or financial planning services, and a car
allowance. |
|
(4) |
Based on market value of Plantronics common stock at
April 2, 2005 of $37.75, multiplied by the number of
unvested restricted stock award shares at year end. There were
no restricted stock awards in fiscal 2003 or 2004. |
|
(5) |
Amounts shown include company contributions or other allocations
to defined contribution plans for benefits such as employer
401(K) match payments, pension contributions, and insurance
premiums. |
|
(6) |
Philip Vanhoutte joined the Company effective September 1,
2003. Mr. Vanhouttes Other Annual
Compensation includes items such as a housing allowance
and car allowance. |
Option Grants
The following table shows information concerning stock options
granted to the Named Executive Officers during the fiscal year
2005.
Option Grants in Fiscal 2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual Grants(1) | |
|
|
|
|
|
|
| |
|
|
|
|
Number | |
|
|
|
Potential Realizable Value | |
|
|
of | |
|
% of Total | |
|
|
|
at Assumed Annual Rates | |
|
|
Securities | |
|
Options | |
|
Exercise | |
|
|
|
of Stock Price Appreciation | |
|
|
Underlying | |
|
Granted to | |
|
Or Base | |
|
|
|
for Option Term(2) | |
|
|
Options | |
|
Employees in | |
|
Price | |
|
Expiration | |
|
| |
Name |
|
Granted(#) | |
|
Fiscal Year | |
|
($/sh) | |
|
Date(s) | |
|
5% | |
|
10% | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Ken Kannappan
|
|
|
50,000 |
|
|
|
3.3 |
% |
|
$ |
40.48 |
|
|
|
09/22/11 |
|
|
$ |
823,971 |
|
|
$ |
1,920,203 |
|
Philip Vanhoutte
|
|
|
0 |
|
|
|
0 |
% |
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
Barbara Scherer
|
|
|
35,000 |
|
|
|
2.3 |
% |
|
$ |
40.48 |
|
|
|
09/22/11 |
|
|
|
576,780 |
|
|
|
1,344,142 |
|
Don Houston
|
|
|
30,000 |
|
|
|
2.0 |
% |
|
$ |
40.48 |
|
|
|
09/22/11 |
|
|
|
494,383 |
|
|
|
1,152,122 |
|
Joyce Shimizu
|
|
|
25,000 |
|
|
|
1.6 |
% |
|
$ |
40.48 |
|
|
|
09/22/11 |
|
|
|
411,986 |
|
|
|
960,102 |
|
|
|
(1) |
These options were granted pursuant to Plantronics 2003
Stock Plan. The option exercise prices were at the fair market
value of Plantronics common stock on the date of grant. All
options expire 7 years from the date of grant, are
generally not transferable by the participant (other than by
will or the laws of descent and distribution, or to family
members), and are exercisable during the participants
lifetime only by the Participant. The options become exercisable
at the rate of 25% of the total grant 12 months after the date
of grant and 2.08% of the total grant each month thereafter. The
options are fully vested at 4 years from the date of grant,
if the executive is employed with Plantronics as of that date. |
|
(2) |
Potential realizable values are net of exercise price, but
before taxes associated with exercise. The amounts represent
certain assumed rates of appreciation only, based on SEC rules,
applied for the entire 7 year term of the options. Actual gains,
if any, on stock option exercises are dependent on the future
performance of the common stock, overall market conditions, the
option holders continued employment through the vesting
period, and the date of exercise and sale of the option shares.
The amounts reflected in this table may not necessarily be
achieved and do not reflect Plantronics estimate of future
stock price growth. |
30
Aggregated Option Exercises and Values
The following table sets forth certain information regarding
option exercises in fiscal 2005 and the value of options held by
the Named Executive Officers.
Aggregated Option Exercises in the Last Fiscal Year and
Fiscal Year End Option Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities | |
|
Value of Unexercised In-the- | |
|
|
|
|
|
|
Underlying Unexercised | |
|
Money Options at April 2, | |
|
|
Shares | |
|
|
|
Options At April 2, 2005 | |
|
2005(1) | |
|
|
Acquired on | |
|
Value | |
|
| |
|
| |
Name |
|
Exercise(#) | |
|
Realized ($) | |
|
Exercisable | |
|
Unexercisable | |
|
Exercisable | |
|
Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Ken Kannappan
|
|
|
200,000 |
|
|
$ |
7,169,989 |
|
|
|
863,933 |
|
|
|
243,667 |
|
|
$ |
13,278,224 |
|
|
$ |
4,007,239 |
|
Philip Vanhoutte
|
|
|
0 |
|
|
|
0 |
|
|
|
45,000 |
|
|
|
105,000 |
|
|
|
535,950 |
|
|
|
1,250,550 |
|
Barbara Scherer
|
|
|
0 |
|
|
|
0 |
|
|
|
375,166 |
|
|
|
64,834 |
|
|
|
7,637,197 |
|
|
|
1,013,501 |
|
Don Houston
|
|
|
0 |
|
|
|
0 |
|
|
|
275,749 |
|
|
|
54,251 |
|
|
|
4,983,773 |
|
|
|
862,650 |
|
Joyce Shimizu
|
|
|
76,000 |
|
|
|
1,684,243 |
|
|
|
143,500 |
|
|
|
45,000 |
|
|
|
1,300,805 |
|
|
|
720,456 |
|
|
|
(1) |
Based on market value of Plantronics common stock at
April 2, 2005 of $37.75, minus the exercise price (where
the exercise price of a given option is greater than $37.75, the
value of such option was calculated as zero). |
10b5-1 Trading Plans
Plantronics permits our Officers and Directors to adopt trading
plans under Rule 10b5-1 promulgated under the Securities
Exchange Act of 1934, as amended (the Exchange Act),
which allows stockholders to establish prearranged written plans
to buy or sell shares or exercise stock options in accordance
with predetermined formulas. Rule 10b5-1 plans allow
stockholders to buy or sell shares of Plantronics common stock
according to their plan on a regular basis (for example, weekly
or monthly or in accordance with another predetermined formula),
regardless of any subsequent nonpublic information they receive.
As of April 30, 2005, any officers who previously entered
into 10b5-1 Trading Plans had terminated all such plans.
Employment Agreements and Change-in-Control Arrangements
In July 1999, Plantronics entered into a three-year employment
agreement with Ken Kannappan, Chief Executive Officer. This
employment agreement superceded the employment agreement entered
into between Plantronics and Mr. Kannappan in March 1996.
The term of the current agreement automatically extends, after
its initial three-year term, for additional one-year periods
unless either Plantronics or Mr. Kannappan gives advance
notice of termination. Mr. Kannappans contract is
expected to renew in the ordinary course. The agreement provided
for an initial annual base salary of $375,000, payable in
installments on Plantronics regular payroll schedule.
Mr. Kannappans performance is reviewed annually by
the Compensation Committee, and his base salary is adjusted
annually based upon that review in the discretion of the
committee. His current base salary is approximately $500,000 per
year. The Agreement provides also for receipt by
Mr. Kannappan of profit sharing payments under
Plantronics profit sharing plan. The agreement also
provides for performance bonuses of up to 83.3% of base salary
if Plantronics meets certain performance targets established by
the Board. A portion of the bonus is payable quarterly with the
remainder payable after the close of the fiscal year and the
release of financial results. Mr. Kannappan is also
eligible to participate in the Companys Over Achievement
Bonus plan. A description of this Plan is provided on
page B-2 of Appendix B to this Proxy Statement.
Pursuant to the Over Achievement Bonus Plan, Mr. Kannappan
received $50,248 for fiscal year 2005.
Pursuant to Mr. Kannappans employment agreement, in
the event that (i) Plantronics terminates
Mr. Kannappans employment (other than for cause),
including voluntary resignation by Mr. Kannappan because of
a constructive discharge; or (ii) Mr. Kannappan
terminates his employment voluntarily; or
(iii) Mr. Kannappans employment terminates
because of death or disability, he (or his beneficiaries in the
case of death) will receive for a period of 2 years from
the date of termination of employment (a) continued
31
cash compensation payments equal to 75% of the average of the
cash compensation earned in the four full fiscal quarters
immediately preceding the date of termination of employment, and
(b) continuation of certain fringe benefits. Under the
agreement, a termination is for cause only if such
termination results from gross misconduct that is materially
injurious to Plantronics. Cash compensation as used
above means base salary, profit sharing, and incentive bonuses
earned in the applicable four fiscal quarters, even if the
amounts are paid in subsequent periods. If his employment
terminates from death or disability, his benefits will be offset
to the extent of any disability or death benefits payable under
any Plantronics employee benefit plan. For a period of
36 months following Mr. Kannappans termination
of employment with Plantronics, Mr. Kannappan may not
perform services for any direct competitor of Plantronics and
may not solicit any of Plantronics employees to become
employed by any other business enterprise. However, absent
special circumstances, covenants not to compete are generally
unenforceable under California law.
Under Mr. Kannappans employment agreement,
Plantronics has agreed to indemnify Mr. Kannappan to the
fullest extent permitted by law so long as Mr. Kannappan acts in
good faith. Failure by Plantronics to provide such
indemnification is deemed to be a breach of the employment
agreement and may be deemed a termination of
Mr. Kannappans employment other than for cause.
Mr. Houston joined Plantronics in November 1996 as
Vice-President Sales, and entered into an employment
agreement with Plantronics at that time. The agreement provides
that if, within 2 years of a change of control of
Plantronics, Mr. Houstons employment is terminated
other than for cause, or he is constructively discharged, or his
employment terminates due to death or disability, he, or his
beneficiaries, will receive continuation of base salary and
fringe benefits for 6 months or up to 12 months if he
is unable to obtain subsequent employment. For purposes of the
agreement, fringe benefits exclude bonus, profit sharing,
deferred compensation or incentive compensation plans. If
Mr. Houstons employment is terminated for cause, he
will receive no benefits except as may be provided by
Plantronics employee benefit plans generally. Under the
agreement, a termination is for cause only if such
termination results from gross misconduct that is materially
injurious to Plantronics. The agreement also contains a two-year
non-compete covenant which takes effect upon termination of
Mr. Houstons employment. However, such covenants are
generally unenforceable under California law absent special
circumstances.
Ms. Scherer and Ms. Shimizu entered into employment
agreements with Plantronics in March 1997 and May 2001,
respectively. Those agreements are substantially similar to the
agreement with Mr. Houston and have been filed with the SEC.
Mr. Vanhoutte joined Plantronics Ltd., a Plantronics
subsidiary, as Managing Director, effective 12 June 2003 and
signed a Service Agreement at that time. The Service Agreement
covers normal employment terms and conditions and permits
immediate dismissal for a number of enumerated provisions that
would constitute for cause termination. In addition,
the employment may be terminated by either party by giving
six (6) months notice. Once this notice is given, the
Company may terminate Mr. Vanhoutte by paying him
twelve (12) months base salary if termination occurs
in the second twelve (12) months of employment or
six (6) months of base salary if the termination
occurs thereafter. If Mr. Vanhoutte is terminated for
cause, he still receives six (6) months base salary.
The Service Agreement also contains a six (6) month
covenant not to compete.
Compensation Committee Interlocks and Insider
Participation
No Compensation Committee interlocks exist.
32
Companys Stock Performance
Set forth below is a line graph comparing the annual percentage
change in the cumulative return to the stockholders of
Plantronics common stock with the cumulative return of the NYSE
Stock Market index and a peer group index for the period
commencing on the morning of March 31, 2000 and ending on
April 2, 2005. The information contained in the performance
graph shall not be deemed to be soliciting material
or to be filed with the SEC, nor shall such
information be incorporated by reference into any future filing
under the Exchange Act, except to the extent that Plantronics
specifically incorporates it by reference into such filing.
The graph assumes that $100 was invested on the morning of
March 31, 2000 in Plantronics common stock and in each
index (based on prices from the close of trading on
March 31, 2000), and that dividends, if any, were
reinvested. No cash dividends have been declared or paid on
Plantronics common stock in the relevant period.
Under the assumptions stated above, over the period from
March 31, 2000 to April 2, 2005 the total return on an
investment in Plantronics would have been 178.4% as compared to
104.1% for the NYSE/AMEX/NASDAQ Stock Market index (U.S.
Companies only) and 92.5% for the NYSE/AMEX/NASDAQ
Communications Equipment Stocks index shown below. Past
performance is no indication of future value and stockholder
returns over the indicated period should not be considered
indicative of future returns.
33
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
Plantronics, Inc.
Produced on 05/18/2005 including data to 04/02/2005
Prepared by CRSP (www.crsp.uchicago.edu), Center for Research in
Security Prices, Graduate School of Business, The University of
Chicago. Used with permission. All rights reserved.
34
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires
Plantronics Executive Officers and Directors, and persons
who own more than ten percent of a registered class of
Plantronics equity securities, to file reports of
ownership and changes in ownership with the Securities Exchange
Commission and the New York Stock Exchange. Executive Officers,
Directors and greater than ten percent stockholders are required
by Securities Exchange Commission regulation to furnish
Plantronics with copies of all Section 16(a) forms they
file. Based solely on its review of the copies of such forms
received by it, or written representations from certain
reporting persons, Plantronics believes that, during fiscal
2005, all filing requirements applicable to its Executive
Officers and Directors were complied with, except that a
Form 4 was not timely filed by Richard R. Pickard for a
stock option grant issued on September 15, 2003.
OTHER MATTERS
Plantronics knows of no other matters to be submitted at the
Annual Meeting. If any other matters properly come before the
Annual Meeting, it is the intention of the persons named in the
enclosed form of proxy to vote the shares they represent as the
Board may recommend.
|
|
|
For the Board of Directors |
|
|
|
|
Rich Pickard |
|
Secretary |
Dated: June 14, 2005
35
APPENDIX A
REPORT OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The following is the Audit Committees report submitted to
the Board of Directors for the fiscal year ended March 31,
2005.
The Audit Committee of the Board of Directors has:
|
|
|
|
|
Reviewed and discussed Plantronics audited financial
statements for the fiscal year ended March 31, 2005 with
Plantronics management, which has primary responsibility
for the financial statements; |
|
|
|
Discussed with PricewaterhouseCoopers LLP, Plantronics
independent registered public accounting firm, the materials
required to be discussed by Statement of Auditing Standard 61; |
|
|
|
Reviewed the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independent Standards
Board No. 1 and has discussed with PricewaterhouseCoopers LLP
regarding its independence; and |
|
|
|
Considered whether the provision of non-audit services as noted
under Proposal Four is compatible with maintaining
PricewaterhouseCoopers LLP independence, and has determined that
such provision of non-audit services is compatible. |
The Board of Directors determined that each member of the Audit
Committee is, and has been at all times during the 2005 fiscal
year, independent as defined under the NYSE listing
standards and Plantronics independence guidelines. Each member
of the Audit Committee also satisfies the SECs additional
independence requirement for members of the Audit Committees.
The Board of Directors has further determined that Director Marv
Tseu is an audit committee financial expert as such
term is defined in Item 401(h) of Regulation S-K
promulgated by the SEC.
Based on the foregoing review and discussion, the Audit
Committee recommended to the Board of Directors that the audited
financial statements be included in Plantronics 2005
Annual Report on Form 10-K.
|
|
|
The Audit Committee |
|
|
Marv Tseu |
|
Gregg Hammann |
A-1
APPENDIX B
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS
The Compensation Committee (the Committee) of the
Board of Directors is responsible for reviewing and approving
Plantronics executive compensation policies and the
compensation paid to the executive officers. The Committee also
advises Plantronics management on the compensation
policies in place for all non-executive personnel. The Committee
is comprised of the members named below, all of whom are
independent Directors.
The Committee furnished the following report describing
compensation policies and rationale applicable to
Plantronics executive officers for the fiscal year ended
March 31, 2005. The information contained in such report
shall not be deemed to be soliciting material or to
be filed with the SEC, nor shall such information be
incorporated by reference into any future filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that Plantronics specifically incorporates
it by reference into such filing.
Compensation Policies. Plantronics basic
compensation philosophy is that compensation should be tied to
performance. The structure of Plantronics compensation
program is designed to link executive compensation to the
performance of Plantronics as well as to the individual
contribution of each executive and to make a certain portion of
each executives compensation variable as opposed to fixed.
Plantronics performance-based compensation program is a
total system consisting of base salary and at risk
incentives that reward executives for the achievement of
performance levels designed to enhance the value of Plantronics
stock. A significant portion of each executives
compensation is dependent upon meeting certain financial goals
of Plantronics and individual performance objectives.
The guiding principles of the Plantronics executive
compensation program are to (i) provide a total
compensation package that will attract highly qualified
executives to Plantronics, motivate such individuals to perform
at their highest levels, reward outstanding performance, and
retain executives whose skills are essential for building
Plantronics business and long-term stockholder value;
(ii) establish annual incentives for executives that are
directly tied to the overall financial performance of
Plantronics as well as to individual performance goals; and
(iii) implement short and long-term incentives to focus
executives on managing Plantronics from the perspective of an
owner with an equity stake in the business and align executive
compensation with benefits realized by Plantronics
stockholders.
There are four basic components of Plantronics
compensation program: (i) base salary; (ii) incentive
bonuses which reward executives for achievement against
pre-established goals; (iii) long-term incentive stock
options that align executive compensation incentives with the
interests of Plantronics stockholders; and
(iv) compensation and employee benefits generally available
to employees of Plantronics, such as Plantronics
nonqualified cash quarterly profit sharing plan and qualified
defined contribution savings plan, including a non-elective
employer contribution (safe harbor) of 3% of base salary and a
matching of 50% of the first 6% of compensation under
Section 401(k) of the Internal Revenue Code.
During the 2005 fiscal year, the Compensation Committee hired a
third party consultant to examine the total cash and equity
components of the compensation package that Plantronics provides
to its executives to determine if such compensation was
competitive. The consultant examined West Coast, nationwide and
worldwide surveys in areas where Plantronics competes for
executive talent to compare the base salaries, bonuses, and
stock options to those of peer and slightly smaller companies.
The Compensation Committee used this data to make adjustments to
executive compensation to achieve Plantronics overall
goals.
Base Salaries. Base salaries for Plantronics
executive officers are determined by evaluating each
executives scope of responsibility, prior experience and
salary history with a focus on such executives past
performance with Plantronics and/or expected contribution to
Plantronics future success. For reference, Plantronics
used the third party consultants survey data to assist the
Compensation Committee, the Chief Executive Officer and
Plantronics Human Resources department in analyzing
competitive salary information to determine appropriate salary
levels for Plantronics executives. After analyzing the
surveys, the Chief Executive Officer recommended an annual
salary increase budget for approval by the Compensation
Committee and further recommended salary increases within such
budget for the individual executives
B-1
because based on market data, a salary increase was not
required. For fiscal 2005, the chief executive officer, all of
his direct reports and all vice-presidents and above at
Plantronics received no base salary increases but instead
received restrictive stock awards in lieu of base salary
increases. The process for determination of the Chief Executive
Officers compensation, including base salary, is set forth
below.
Incentive Bonus Awards. Under Plantronics Regular
and Supplemental Bonus Plan for fiscal 2005, incentive cash
payments (Regular and Supplemental bonuses) were based on
achievement of individual, team and company objectives. A
portion of the bonus awards earned under the plans described
below were paid on a quarterly basis during fiscal 2005 while
fourth quarter and Supplemental Bonus awards were paid in the
first quarter of fiscal 2006 after the close of the 2005 fiscal
year. The plan is composed of two programs consisting of a
Regular Bonus Plan and a Supplemental Bonus Plan. Each plan is
designed to reward the performance of certain officers, subject
to the approval of the Compensation Committee, and certain key
employees designated by the Chief Executive Officer.
Under the Regular Bonus Plan, a participant becomes eligible to
earn up to a certain percentage of base salary based upon
achievement of individual objectives, as determined by the
supervisor, department Vice President, and/or the CEO. Payments
pursuant to the Regular Bonus Plan are made on a quarterly basis
25% of the bonus target percentage each quarter times the
individual performance score.
Target base salary for the Supplemental Bonus Plan is computed
based on actual salary earned for the year. Actual payment is
based on individual, team and company performance scores. Such
bonuses are paid on a quarterly basis to the eligible
participants who must be employed by Plantronics on the day the
bonus is paid. If not employed on the payment date, the
participant shall not be entitled to any funds. If the
participant dies, or is disabled and therefore unable to work
during the relevant quarter or prior to the payment date, the
participant will be treated as being employed on the payment
date and the participant or the participants estate will
be entitled to the portion of the quarterly bonus actually
earned on a pro rata basis using the time actually worked during
the relevant quarter.
Under the Supplemental Bonus Plan, a participant becomes
eligible to earn up to a certain percentage of base salary upon
achievement of objectives. Objectives include both company
performance targets as well as individual performance
objectives. Payments under the Supplemental Bonus Plan are paid
after the close of the fiscal year and only on the basis of
relative achievement against the Board approved plan for
adjusted net income excluding one-time gains/losses from sales
of capital assets and write-offs. Should the fiscal year
adjusted net income be less than the Board-approved plan,
Supplemental Bonus payments will be reduced proportionately,
i.e. 95% achievement of net income funds a pool equal to 95% of
target bonuses. Each participant receives payment only to the
extent of actual accomplishment of individual objectives.
Maximum pay out for any individual is 100% of target.
Supplemental Bonus amounts are payable within ninety days after
completion of Plantronics audited financial statements at
fiscal year end to participants who continue to be employed by
Plantronics on the payment date. If not employed on the payment
date, the participant does not receive any funds. If the
participant dies, or is disabled and therefore unable to work
during the fiscal year or prior to the payment date, the
participant will be treated as being employed on the payment
date and the participant or the participants estate will
be entitled to the portion of the Supplemental Bonus actually
earned on a pro rata basis using the time actually worked during
the fiscal year. Plantronics achieved the Board approved plan
for net income in its 2005 fiscal year, and accordingly, the
Supplemental Bonus pool was fully funded.
In fiscal 2001, the Compensation Committee established an Over
Achievement Bonus Plan for the purpose of rewarding corporate
and individual performance in excess of annual targeted
objectives. To receive bonus funds from the pool, Plantronics
must have surpassed its annual targets and a participating
executive must also have achieved greater than 90% weighted
average individual performance scores on his or her goals and
objectives during the fiscal year. The Board determined that it
was appropriate to offer this plan in fiscal 2005. Based upon
the year end results for fiscal 2005, a pool totaling
approximately $1.6 million was established based on the
companys performance vs. plan in fiscal 2005. Of this
pool, 80% was set aside for payments to eligible participants
under the Over Achievement Bonus Plan in fiscal 2005. Each
individual participant who satisfies the 90% weighted average
individual performance scores on his or her goals and
B-2
objectives during the fiscal year receives a portion of the pool
that is established by computing a percentage of their base
salary times their weighted average individual performance
scores. The cost of this bonus has been accrued into the
financial results for fiscal 2005 although the payments were not
made until May 2005. From the total pool, the CEO can award up
to 20% to employees at any level in the company whose
exceptional performance in fiscal year 2005 warrants such
recognition.
Stock Options. Plantronics provides long-term incentives
to executive officers through its 1993 Stock Option Plan,
adopted by the Board of Directors in September 1993, as
subsequently amended and through its 2003 Stock Plan adopted by
the Board of Directors in May 2003 and ratified by stockholders
on June 27, 2003. The 1993 Stock Option Plan expired on
September 23, 2003. The 2003 Stock Plan took effect on
September 24, 2003. The 1993 Stock Option Plan and the 2003
Stock Plan shall together be referred to as the Stock Plan. To
attract and retain highly qualified executives and to align the
interests of the executives with the interests of
Plantronics stockholders, stock options constitute a
significant portion of Plantronics incentive compensation
program. Options granted under the 1993 Stock Option Plan
incorporate vesting schedules to encourage employees to remain
with Plantronics. Generally, in granting options to executives,
the Compensation Committee takes into consideration the
individuals position with Plantronics, responsibilities,
past performance and future potential to influence the long-term
growth and profitability of Plantronics, as well as the
individuals existing equity interest in Plantronics,
giving primary weight to position, responsibilities and
performance.
Restricted Stock. In September 2004, the Compensation
Committee received a report from a third party consultant hired
to examine the total cash and equity components of the
compensation package that Plantronics provides to its
executives. At their September, 2004 meeting, the Compensation
Committee examined the results of the report and the methods of
providing raises to the CEO and certain of his direct reports.
The Committee discussed the pros and cons of providing raises in
the form of cash versus restricted stock. At the conclusion of
this discussion, the Compensation Committee concluded that they
should not award merit raises to the CEO or his direct reports.
Rather, a decision was made to issue restricted stock to the CEO
and certain of his direct reports in lieu of merit raises. This
was thought to begin to better align the cash and equity
components of compensation of Plantronics executives with
the compensation packages afforded to executives at peer
companies. Vesting of this restricted stock was to occur pro
rata on a quarterly basis over a 5 year vesting period from
the date of the grants. The price of the restricted stock in all
grants made on September 22, 2004 to the CEO and those
certain direct reports receiving grants was par value of $0.01
Compensation of Chief Executive Officer. In making
compensation decisions with respect to the Chief Executive
Officer, the Compensation Committee refers to
Mr. Kannappans Employment Agreement (described in
this Proxy Statement under the caption Additional
Information Employment Agreements and Change-in-Control
Arrangements), and also generally applies the compensation
philosophy described above.
Mr. Kannappans current annual base salary is
approximately $500,000. He did not receive a raise in base
salary in fiscal 2005. Mr. Kannappan received 100% of the
target bonus amount for fiscal 2005 under Plantronics
Regular and Supplemental Bonus Plans. Mr. Kannappans
fiscal 2005 bonus was determined (pursuant to his Employment
Agreement) in accordance with Plantronics Regular,
Supplemental and Over Achievement Bonus Plans approved by the
Board of Directors On September 22, 2004, Plantronics
issued Mr. Kannappan an option to purchase 50,000 shares of
Plantronics common stock at an option price of $40.48 per share.
B-3
Tax Deductibility of Executive Compensation. Beginning in
1994, Section 162 of the Internal Revenue Code of 1986, as
amended (the Code), limits the federal income tax
deductibility of compensation, other than performance-based
compensation within the meaning of Section 162(m), paid to
Plantronics Chief Executive Officer and to each of the
other four most highly compensated executive officers.
Plantronics may deduct such compensation only to the extent that
during any fiscal year the compensation paid to any such
individual does not exceed $1,000,000. Based on
Plantronics current compensation plans and policies,
Plantronics and the Committee believe that, for the near future,
there is little risk that Plantronics will lose any material tax
deduction for executive compensation.
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Members of the Compensation Committee: |
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Patti Hart |
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Trude Taylor |
B-4
APPENDIX C
PLANTRONICS, INC.
AMENDED AND RESTATED 2003 STOCK PLAN
Section 1. Purposes and
Definitions
1.1 Purposes of the Plan.
The purposes of this 2003 Stock Plan are:
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(A) to attract and retain the best available personnel for
positions of substantial responsibility, |
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(B) to provide additional incentive to Employees, Directors
and Consultants, and |
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(C) to promote the success of the Companys business. |
1.2 The Plan permits the grant of
Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock Awards, Stock Appreciation Rights, and Restricted Stock
Units, as determined by the Administrator at the time of grant.
1.3 Definitions. As used
herein, the following definitions shall apply:
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(A) Administrator means the Board or any
Committees as shall be administering the Plan, in accordance
with Section 2.2. |
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(B) Applicable Laws means the requirements
relating to the administration of equity based awards under U.S.
state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction where Awards are, or will be,
granted under the Plan. |
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(C) Award means, individually or collectively,
a grant under the Plan of Options, Restricted Stock Awards,
SARs, and Restricted Stock Units. |
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(D) Award Agreement means the written or
electronic agreement setting forth the terms and provisions
applicable to each Award granted under the Plan and shall
include an Option Agreement and a Restricted Stock Award
Agreement, as applicable. The Award Agreement is subject to the
terms and conditions of the Plan. |
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(E) Board means the Board of Directors of the
Company. |
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(F) Change in Control means the occurrence of
any of the following events: |
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(i) Any person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner (as defined in Rule 13d3 of
the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total
voting power represented by the Companys then outstanding
voting securities; or |
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(ii) The consummation of the sale or disposition by the
Company of all or substantially all of the Companys assets; |
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(iii) A change in the composition of the Board occurring
within a two-year period, as a result of which fewer than a
majority of the Directors are Incumbent Directors.
Incumbent Directors means Directors who either
(A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or nomination
(but will not include an individual whose election or nomination
is in connection with an actual or threatened proxy contest
relating to the election of Directors to the Company); or |
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(iv) The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at
least |
C-1
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fifty percent (50%) of the total voting power represented by the
voting securities of the Company or such surviving entity or its
parent outstanding immediately after such merger or
consolidation. |
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(G) Code means the Internal Revenue Code of
1986, as amended. |
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(H) Committee means a committee of individuals
appointed by the Board in accordance with Section 2.2. |
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(I) Common Stock means the common stock of the
Company. |
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(J) Company means Plantronics, Inc., a Delaware
corporation. |
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(K) Consultant means any natural person,
including an advisor, engaged by the Company or a Parent or
Subsidiary to render services to such entity. |
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(L) Director means a member of the Board. |
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(M) Disability means total and permanent
disability as defined in Section 22(e)(3) of the Code. |
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(N) Employee means any person, including
Officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company. Neither service as a Director nor
payment of a Directors fee by the Company shall be
sufficient to constitute employment by the Company. |
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(O) Exchange Act means the Securities Exchange
Act of 1934, as amended. |
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(P) Fair Market Value means, as of any date,
the value of Common Stock determined as follows: |
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(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the New York Stock Exchange (NYSE), its Fair Market
Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such
exchange or system for the day of determination, as reported in
The Wall Street Journal or such other source as the
Administrator deems reliable; |
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(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not
reported, the Fair Market Value of a Share of Common Stock shall
be the mean between the high bid and low asked prices for the
Common Stock on the day of determination, as reported in The
Wall Street Journal or such other source as the
Administrator deems reliable; or |
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(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good
faith by the Administrator. |
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(Q) Fiscal Year means the fiscal year of the
Company. |
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(R) Incentive Stock Option means an Option
intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations
promulgated thereunder. |
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(S) Nonstatutory Stock Option means an Option
not intended to qualify as an Incentive Stock Option. |
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(T) Notice of Grant means a written or
electronic notice evidencing certain terms and conditions of the
grant of an individual Option or a Restricted Stock Award. The
Notice of Grant is part of the agreement evidencing the terms
and conditions of a specific grant. |
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(U) Officer means a person who is an officer of
the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated
thereunder. |
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(V) Option means a stock option granted
pursuant to the Plan, as evidenced by a Notice of Grant. |
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(W) Option Agreement means an agreement between
the Company and a Participant evidencing the terms and
conditions of an individual Option grant. The Option Agreement
is subject to the terms and conditions of the Plan. |
C-2
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(X) Optioned Stock means the Common Stock
subject to an Award. |
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(Y) Outside Director means a Director who is
not an Employee. |
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(Z) Parent means a parent
corporation, whether now or hereafter existing, as defined
in Section 424(e) of the Code. |
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(AA) Participant means the holder of an
outstanding Award granted under the Plan. |
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(BB) Plan means this 2003 Stock Plan, as
amended and restated. |
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(CC) Restricted Stock means shares of Common
Stock acquired pursuant to a grant of Restricted Stock Award or
the early exercise of an Option. |
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(DD) Restricted Stock Award means a grant of
Restricted Stock pursuant to the Plan, as evidenced by a Notice
of Grant. |
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(EE) Restricted Stock Award Agreement means a
written agreement between the Company and a Participant
evidencing the terms and restrictions applying to stock granted
under a Restricted Stock Award. The Restricted Stock Award
Agreement is subject to the terms and conditions of the Plan and
the Notice of Grant. |
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(FF) Restricted Stock Unit means an Award
granted to a Participant pursuant to Section 6. |
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(GG) Retirement unless otherwise defined in the
Award Agreement or in a written employment, services or other
agreement between the Participant and the Company or any Parent
or Subsidiary of the Company, will have such meaning as the
Administrator may determine, or, if not so defined, will mean
termination of Participants status as a Service Provider
after he or she reaches age 55 and has completed at least ten
(10) years of employment or service with the Company or any
Parent or Subsidiary of the Company; provided, however, that
with respect to Outside Directors who are granted Options
pursuant to Section 3.2 hereof, Retirement will
mean termination of an Outside Directors status as a
Director when (i) the Outside Directors age is 55 or
over and he or she has continuously been a Director for at least
seven (7) years on the date of such termination or
(ii) the Outside Director has continuously been a Director
for at least ten (10) years from the date of such
termination. |
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(HH) Rule 16b-3 means Rule 16b-3 of
the Exchange Act or any successor to Rule 16b-3, as in
effect when discretion is being exercised with respect to the
Plan. |
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(II) Section 16(b) means
Section 16(b) of the Exchange Act. |
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(JJ) Securities Act means the Securities Act of
1933, as amended. |
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(KK) Service Provider means an Employee,
Director or Consultant. |
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(LL) Share means a share of the Common Stock,
as adjusted in accordance with Section 7.4. |
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(MM) Stock Appreciation Right or
SAR means an Award, granted alone or in connection
with an Option, that pursuant to Section 5 is designated as
an SAR. |
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(NN) Subsidiary means a subsidiary
corporation, whether now or hereafter existing, as defined
in Section 424(f) of the Code. |
Section 2. Administration
2.1 Stock Subject to the
Plan.
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(A) Subject to the provisions of Section 7.4, the
maximum aggregate number of Shares that may be optioned and sold
under the Plan is 2,000,000 Shares. Notwithstanding the
foregoing, the Company may not grant more than 20% of the
1,000,000 Shares initially reserved for issuance hereunder
pursuant to Restricted Stock Awards and Restricted Stock Units
and it may not grant more than 20% of the 1,000,000 Shares added
to the Plan on July 21, 2004, pursuant to Restricted Stock
Awards, Restricted Stock Units and Stock Appreciation Rights,
subject to stockholder approval. |
C-3
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(B) Shares will not be deemed to have been issued pursuant
to the Plan with respect to any portion of an Award that is
settled in cash. With respect to SARs, all underlying Shares to
which the exercise of a SAR relates actually issued pursuant to
a SAR as will cease to be available under the Plan if the SAR is
settled in Shares. If the exercise price of an Award is paid by
tender to the Company, or attestation to the ownership, of
Shares owned by the Participant, the number of Shares available
for issuance under the Plan will be reduced by the gross number
of Shares for which the Award is exercised. |
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(C) If an Award expires or becomes unexercisable without
having been exercised in full, or is otherwise surrendered to
the Company prior to having been exercised in full, the
unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the
Plan has terminated); provided, however, that Shares that have
actually been issued under the Plan, whether upon exercise of an
Award, shall not be returned to the Plan and shall not become
available for future distribution under the Plan, except that if
Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become
available for future grant under the Plan. |
2.2 Administration of the
Plan.
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(i) Multiple Administrative Bodies. Different
Committees with respect to different groups of Service Providers
may administer the Plan. |
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(ii) Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Awards as
performance based compensation within the meaning of
Section 162(m) of the Code, the Plan shall be administered
by a Committee of two or more outside directors
within the meaning of Section 162(m) of the Code. |
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(iii) Rule 16b-3. To the extent desirable to
qualify transactions hereunder as exempt under Rule 16b-3,
the transactions contemplated hereunder shall be structured to
satisfy the requirements for exemption under Rule 16b-3. |
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(iv) Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or
(B) a Committee, which committee shall be constituted to
satisfy Applicable Laws. |
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(B) Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject
to the specific duties delegated by the Board to such Committee,
the Administrator shall have the authority, in its discretion: |
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(i) to determine the Fair Market Value; |
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(ii) to select the Service Providers to whom Awards may be
granted hereunder; |
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(iii) to determine the number of shares of Common Stock to
be covered by each Award granted hereunder; |
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(iv) to approve forms of agreement for use under the Plan; |
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(v) to determine the terms and conditions of any Award in
accordance with the provisions of the Plan; provided, however,
that the Administrator will not permit any Participant to issue
a promissory note in order to exercise or otherwise acquire
Shares pursuant to an Award; |
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(vi) to construe and interpret the terms of the Plan and
Awards granted pursuant to the Plan; |
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(vii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of satisfying
applicable foreign laws; |
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(viii) to modify or amend each Award (subject to
Section 7.6(C)), including the discretionary authority to
extend the post-termination exercisability period of Awards
longer than is otherwise provided for in the Plan; |
C-4
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(ix) to allow Participants to satisfy withholding tax
obligations by electing to have the Company withhold from the
Shares to be issued upon exercise of an Award that number of
Shares having a Fair Market Value equal to the minimum amount
required to be withheld. The Fair Market Value of the Shares to
be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by the
Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator
may deem necessary or advisable; |
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(x) to authorize any person to (i) make decisions,
determinations and interpretations on behalf of the
Administrator to the extent allowed under Applicable Laws, and
(ii) execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by
the Administrator; and |
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(xi) to make all other determinations deemed necessary or
advisable for administering the Plan. |
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(C) Effect of Administrators Decision. The
Administrators decisions, determinations and
interpretations, and those of any person authorized by the
Administrator to make decisions, determinations and
interpretations on behalf of the Administrator, shall be final
and binding on all Participants and any other holders of Awards. |
2.3 Eligibility.
Nonstatutory Stock Options may be granted to Service
Providers provided, that, Outside Directors may only be granted
Nonstatutory Stock Options granted pursuant to Section 3.2.
Incentive Stock Options may be granted only to Employees. Stock
Appreciation Rights, Restricted Stock Awards and Restricted
Stock Units may be granted only to Employees and Consultants.
Section 3. Stock Options
3.1 Limitations.
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(A) Each Option shall be designated in the Award Agreement
as either an Incentive Stock Option or a Nonstatutory Stock
Option. However, notwithstanding such designation, to the extent
that the aggregate Fair Market Value of the Shares with respect
to which Incentive Stock Options are exercisable for the first
time by the Participant during any calendar year (under all
plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 3.1, Incentive Stock
Options shall be taken into account in the order in which they
were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares
is granted. |
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(B) The following limitations shall apply to grants of
Options: |
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(i) No Participant shall be granted, in any Fiscal Year of
the Company, Options to purchase more than 500,000 Shares. |
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(ii) In connection with his or her initial employment, a
Participant may be granted Options to purchase up to an
additional 500,000 Shares, which shall not count against the
limit set forth in Section 3.1(B)(i). |
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(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the
Companys capitalization as described in Section 7.4. |
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(iv) If an Option is cancelled in the same Fiscal Year of
the Company in which it was granted (other than in connection
with a transaction described in Section 7.4), the cancelled
Option will be counted against the limits set forth in Sections
3.1(B)(i) and (ii). |
C-5
3.2 Grants of Options to Outside
Directors.
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(A) Procedure for Grants. All grants of Options to
Outside Directors under this Plan shall be automatic and
non-discretionary and shall be made strictly in accordance with
the following provisions: |
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(i) No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the
number of Shares to be covered by Options granted to Outside
Directors. |
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(ii) All Options granted pursuant to this Section shall be
Nonstatutory Stock Options and, except as otherwise provided
herein, shall be subject to the other terms and conditions of
the Plan. |
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(iii) Each person who first becomes an Outside Director
following the effective date of this Plan shall be automatically
granted an option to purchase 12,000 Shares (the First
Option) on the date on which such person first becomes an
Outside Director, whether through election by the stockholders
of the Company or appointment by the Board to fill a vacancy. |
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(iv) After the First Option has been granted to an Outside
Director, such Outside Director shall thereafter be
automatically granted an Option to purchase 3,000 Shares (a
Subsequent Option) on January 15 of each year,
provided the Outside Director will continue to be an Outside
Director through the applicable date and, if on such date, he or
she shall have served on the Board for at least the preceding
six (6) months. |
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(v) Notwithstanding the provisions of subsections
(iii) and (iv) hereof, in the event that a grant would
cause the number of Shares subject to outstanding Awards plus
the number of Shares previously purchased upon exercise of an
Award to exceed the number of Shares available for issuance
under the Plan, then each such automatic grant shall be for that
number of Shares determined by dividing the total number of
Shares remaining available for grant by the number of Outside
Directors on the automatic grant date. Any further grants shall
then be deferred until such time, if any, as additional Shares
become available for grant under the Plan through action of the
stockholders to increase the number of Shares which may be
issued under the Plan or through cancellation or expiration of
Options previously granted hereunder. |
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(B) The terms of an Option granted to an Outside Director
shall be as follows: |
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(i) the term of the Option shall be seven (7) years; |
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(ii) the Option shall be exercisable only while the Outside
Director remains a Director; provided, however, that for Options
granted under this Section 3.2 on or after July 21,
2004, if an Outside Director ceases to be a Director as a result
of the Outside Directors death, Disability or Retirement,
the Outside Director may exercise his or her Option granted
pursuant to this Section 3.2 within one year of such
termination (but in no event later than the expiration of the
term of such Option as set forth in the Award Agreement) and if
on the date of such termination the Outside Director is not
vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option will revert to the Plan; |
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(iii) the exercise price per Share shall be 100% of the
Fair Market Value per Share on the date of grant of the Option;
and |
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(iv) subject to accelerated vesting upon a merger or Change
in Control as specified in Section 7.4(C), the Option shall
vest and become exercisable as to 25% of the Shares subject to
the Option on the first anniversary of the date of grant of the
Option and shall vest and become exercisable as to 6.25% of the
Shares subject to the Option at the end of each three-month
period thereafter, if on such dates Participant has remained in
continuous status as a Director. |
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(C) The Plan shall not confer upon any Outside Director any
right with respect to continuation of service as a Director or
nomination to serve as a Director, nor shall it interfere in any
way with any rights which the Director or the Company may have
to terminate his or her directorship at any time. |
C-6
3.3 Term of Option. The term
of each Option shall be stated in the Award Agreement and shall
be seven (7) years from the date of grant or such shorter
term as may be provided in the Award Agreement. Moreover, in the
case of an Incentive Stock Option granted to a Participant who,
at the time the Option is granted, owns stock representing more
than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years
from the date of grant or such shorter term as may be provided
in the Award Agreement.
3.4 Option Exercise Price and
Consideration.
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(A) Exercise Price. The per Share exercise price for
the Shares to be issued pursuant to exercise of an Option shall
be determined by the Administrator, subject to the following: |
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(i) In the case of an Incentive Stock Option |
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(1) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market
Value per Share on the date of grant. |
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(2) granted to any Employee other than an Employee
described in Section 3.4(A)(i)(1), the per Share exercise
price shall be no less than 100% of the Fair Market Value per
Share on the date of grant. |
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(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant. |
3.5 Waiting Period and Exercise
Dates. At the time an Option is granted, the Administrator
shall fix the period within which the Option may be exercised
and shall determine any conditions that must be satisfied before
the Option may be exercised.
3.6 Form of Consideration.
The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of
payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of
consideration at the time of grant. Such consideration may
consist, subject to Applicable Laws, entirely of:
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(A) cash; |
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(B) check; |
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(C) other Shares, including reservation by the Company of
Shares issuable to the Participant upon exercise of an Option,
which have a Fair Market Value on the date of surrender or
reservation equal to the aggregate exercise price of the Shares
as to which such Option shall be exercised; |
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(D) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with
the Plan; |
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(E) a reduction in the amount of any Company liability to
the Participant, including any liability attributable to the
Participants participation in any Company sponsored
deferred compensation program or arrangement; |
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(F) any combination of the foregoing methods of payment; or |
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(G) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws;
provided, however, that the issuance of a promissory note will
not be a permissible form of consideration under the Plan. |
3.7 Exercise of Option.
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(A) Procedure for Exercise; Rights as a Stockholder.
Any Option granted hereunder shall be exercisable according
to the terms of the Plan and at such times and under such
conditions as determined |
C-7
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by the Administrator and set forth in the Award Agreement. An
Option may not be exercised for a fraction of a Share. |
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(i) An Option shall be deemed exercised when the Company
receives: (x) written or electronic notice of exercise (in
accordance with the Award Agreement) from the person entitled to
exercise the Option, and (y) full payment for the Shares
with respect to which the Option is exercised (together with
applicable withholding taxes). Full payment may consist of any
consideration and method of payment authorized by the
Administrator and permitted by the Award Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the
name of the Participant or, if requested by the Participant, in
the name of the Participant and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of
the Company), no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after
the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in
Section 7.4. |
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(ii) Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised. |
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(B) Termination of Relationship as a Service Provider.
If a Participant ceases to be a Service Provider, other than
upon the Participants death or Disability, the Participant
may exercise his or her Option within such period of time as is
specified in the Award Agreement to the extent that the Option
is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the
Award Agreement). In the absence of a specified time in the
Award Agreement, the Option shall remain exercisable for three
(3) months following the Participants termination.
If, on the date of termination, the Participant is not vested as
to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after
termination, the Participant does not exercise his or her Option
within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to
the Plan. |
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(C) Disability of Participant. If a Participant
ceases to be a Service Provider as a result of the
Participants Disability, the Participant may exercise his
or her Option within such period of time as is specified in the
Award Agreement (of at least six (6) months) to the extent
the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set
forth in the Award Agreement). In the absence of a specified
time in the Award Agreement, the Option shall remain exercisable
for twelve (12) months following the Participants
termination. If, on the date of termination, the Participant is
not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If,
after termination, the Participant does not exercise his or her
Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to
the Plan. |
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(D) Death of Participant. If a Participant dies
while a Service Provider, the Option may be exercised following
the Participants death within such period of time as is
specified in the Award Agreement to the extent that the Option
is vested on the date of death (but in no event may the option
be exercised later than the expiration of the term of such
Option as set forth in the Award Agreement), by the
Participants designated beneficiary, provided such
beneficiary has been designated prior to the Participants
death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Participant, then such
Option may be exercised by the personal representative of the
Participants estate or by the person(s) to whom the Option
is transferred pursuant to the Participants will or in
accordance with the laws of descent and distribution. In the
absence of a specified time in the Award Agreement, the Option
shall remain exercisable for twelve (12) months following
the Participants death. If, at the time of death, a
Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If the Option is not so exercised |
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within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the Plan. |
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(E) Retirement of Participant. If a Participant
ceases to be a Service Provider as a result of his or her
Retirement, the Participant may exercise his or her Option
within such period of time as is specified in the Award
Agreement, to the extent the Option is vested on the date of
Retirement (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Award Agreement, for
Options granted on or after July 21, 2004, the Option shall
remain exercisable for twelve (12) months following the
Participants termination. If, on the date of Retirement,
the Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after his or her Retirement, the
Participant does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan. |
Section 4. Restricted Stock
Awards
4.1 Restricted Stock Awards.
Restricted Stock Awards may be issued either alone, in
addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Restricted Stock
Awards under the Plan, it shall advise the offeree in writing or
electronically, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must
accept such offer. The offer shall be accepted by execution of a
Restricted Stock Purchase Agreement in the form determined by
the Administrator.
4.2 Term of Restricted Stock
Awards. The term of each Restricted Stock Award shall be
stated in the Restricted Stock Award Agreement. Shares of Common
Stock issued pursuant to a Restricted Stock Award may, in the
discretion of the Administrator, vest over the
Participants period of Service or upon attainment of
specified performance objectives. Notwithstanding the foregoing,
subject to Section 7.4(C), a Restricted Stock Award may not
vest at a rate faster than one year following the date of grant.
If a Restricted Stock Award is not subject to achievement of
performance goals then, subject to Section 7.4(C), such
award willfully vest over a period of at least three
(3) years from the date of grant.
4.3 Limitation on Restricted
Stock Award Grants. No Participant shall receive Restricted
Stock Awards in any Fiscal Year of the Company having an
aggregate initial value greater than $600,000, except that
Restricted Stock Awards granted to a new Employee in the Fiscal
Year of the Company in which his or her service as an Employee
first commences shall not have an aggregate initial value
greater than $1,000,000.
4.4 Repurchase Option.
Unless the Administrator determines otherwise, the
Restricted Stock Award Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary
termination of the Participants service with the Company
for any reason (including death or Disability). Unless the
Administrator determines otherwise, the purchase price for
Shares repurchased pursuant to the Restricted Stock Award
Agreement shall be the original price paid by the Participant
and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse as
the Restricted Stock Award vests.
4.5 Other Provisions. The
Restricted Stock Award Agreement shall contain such other terms,
provisions and conditions not inconsistent with the Plan as may
be determined by the Administrator in its sole discretion.
4.6 Rights as a Stockholder.
Once the Restricted Stock Award is exercised, the
Participant shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase
is entered upon the records of the duly authorized transfer
agent of the Company. No adjustment will be made for a dividend
or other right for which the record date is prior to the date
the Restricted Stock Award is exercised, except as provided in
Section 7.4.
4.7 Cancellation of Restricted
Stock Award. On the date set forth in the Restricted Stock
Award Agreement, all unearned or unvested Restricted Stock shall
be forfeited to the Company.
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Section 5. Stock
Appreciation Rights
5.1 Stock Appreciation
Rights.
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(A) Grant of SARs. Subject to the terms and
conditions of the Plan, a SAR may be granted to Service
Providers at any time and from time to time as will be
determined by the Administrator, in its sole discretion. |
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(B) Number of Shares. The Administrator will have
complete discretion to determine the number of SARs granted to
any Service Provider, provided that during any Fiscal Year, no
Participant will be granted SARs covering more than 500,000
Shares. Notwithstanding the foregoing limitation, in connection
with a Participants initial service as an Employee, an
Employee may be granted SARs covering up to an additional
500,000 Shares. |
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(C) Exercise Price and Other Terms. The
Administrator will have complete discretion to determine the
terms and conditions of SARs granted under the Plan, subject to
the provisions of the Plan and the following limitations: |
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(i) the term of an SAR may not exceed seven (7) years
from the date of grant; |
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(ii) the exercise price of an SAR must be at least 100% of
the Fair Market Value per Share on the date of grant; and |
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(iii) the maximum payment any Participant may be entitled
to receive pursuant to subsection (F) below shall not
exceed 100% of the exercise price of the underlying SAR. |
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(D) SAR Agreement. Each SAR grant will be evidenced
by an Award Agreement that will specify the exercise price, the
term of the SAR, the conditions of exercise, and such other
terms and conditions as the Administrator, in its sole
discretion, will determine. |
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(E) Expiration of SARs. An SAR granted under the
Plan will expire upon the date determined by the Administrator,
in its sole discretion, and set forth in the Award Agreement;
provided, that, the term of the SAR shall not exceed seven
(7) years. Notwithstanding the foregoing, the rules of
Sections 3.7(B), (C), and (D) also will apply to SARs. |
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(F) Payment of SAR Amount. Subject to the limitation
set out in Section 5.1 (C)(iii) above, upon the exercise of
an SAR, a Participant will be entitled to receive payment from
the Company in an amount determined by multiplying: |
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(i) The difference between the Fair Market Value of a Share
on the date of exercise over the exercise price; times |
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(ii) The number of Shares with respect to which the SAR is
exercised. At the discretion of the Administrator, the payment
upon SAR exercise may be in cash, in Shares of equivalent value,
or in some combination thereof. |
Section 6. Restricted Stock
Units
6.1 Grant of Restricted Stock
Units. Restricted Stock Units may be granted to Service
Providers at any time and from time to time, as will be
determined by the Administrator, in its sole discretion. The
Administrator will have complete discretion in determining the
number of Restricted Stock Units granted to each Participant,
provided that during any Fiscal Year no Participant will receive
Restricted Stock Units having an initial value greater than
$600,000, except that Restricted Stock Units granted in
connection with a Participants initial service as an
Employee shall not have an aggregate initial value greater than
$1,000,000.
6.2 Value of Restricted Stock.
Each Restricted Stock Unit will have an initial value that
is established by the Administrator on or before the date of
grant.
6.3 Vesting. Subject to
Section 7.4(C), a Restricted Stock Unit may not vest at a
rate faster than one year following the date of grant. If a
Restricted Stock Unit is not subject to achievement of
performance goals
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then, subject to Section 7.4(C), such award willfully vest
over a period of at least three (3) years from the date of
grant
6.4 Performance Objectives and
Other Terms. The Administrator will set performance
objectives (including, without limitation, continued service) in
its discretion which, depending on the extent to which they are
met, will determine the number or value of Restricted Stock
Units that will be paid out to the Participants. The time period
during which the performance objectives must be met will be
called the Performance Period. Each Award of
Restricted Stock Units will be evidenced by an Award Agreement
that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its sole discretion,
will determine.
6.5 Earning of Restricted Stock
Units. After the applicable Performance Period has ended,
the holder of Restricted Stock Units will be entitled to receive
a payout of the number of Restricted Stock Units earned by the
Participant over the Performance Period, to be determined as a
function of the extent to which the corresponding performance
objectives or other vesting provisions have been achieved. After
the grant of a Restricted Stock Unit, the Administrator, in its
sole discretion, may reduce or waive any performance objectives
or other vesting provisions for such Restricted Stock Unit.
6.6 Form and Timing of Payment
of Restricted Stock Units. Payment of earned Restricted
Stock Units will be made as soon as practicable after the
expiration of the applicable Performance Period. The
Administrator, in its sole discretion, may pay earned Restricted
Stock Units in the form of cash, in Shares (which have an
aggregate Fair Market Value equal to the value of the earned
Restricted Stock Units at the close of the applicable
Performance Period) or in a combination thereof.
6.7 Cancellation of Restricted
Stock Units. On the date set forth in the Award Agreement,
all unearned or unvested Restricted Stock Units will be
forfeited to the Company, and again will be available for grant
under the Plan.
Section 7. General
Provisions
7.1 Term of Plan. Subject to
Section 7.11, the Plan shall become effective on
September 24, 2003. It shall continue in effect for a term
of ten (10) years unless terminated earlier under
Section 7.6.
7.2 Transferability of Awards.
Unless determined otherwise by the Administrator, an Award
may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. If the
Administrator, in its sole discretion, makes an Award
transferable, such Award may only be transferred (i) by
will, (ii) by the laws of descent and distribution, or
(iii) to family members (as such term is defined in the
general instructions to Form S-8 under the Securities Act of
1933, or any successor thereto) through gifts or domestic
relations orders, as permitted by the instructions to
Form S-8 of the Securities Act of 1933.
7.3 Leaves of Absence.
Unless the Administrator provides otherwise, vesting of
Awards granted hereunder will be suspended during any unpaid
leave of absence. A Service Provider will not cease to be an
Employee in the case of (i) any leave of absence approved
by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, or any Subsidiary.
For purposes of Incentive Stock Options, no such leave may
exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract.
If reemployment upon expiration of a leave of absence approved
by the Company is not so guaranteed, then three (3) months
following the 91st day of such leave any Incentive Stock Option
held by the Participant will cease to be treated as an Incentive
Stock Option and will be treated for tax purposes as a
Nonstatutory Stock Option.
7.4 Adjustments Upon Changes in
Capitalization, Merger or Change in Control.
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(A) Changes in Capitalization. Subject to any
required action by the stockholders of the Company, the number
of Shares that have been authorized for issuance under the Plan
but as to which no Awards have yet been granted or which have
been returned to the Plan upon cancellation or expiration of |
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an Award, and the number of Shares as well as the price per
Share covered by each outstanding Award, and the numerical Share
limits in Sections 2, 3, 4, 5, and 6, shall be
proportionately adjusted for any change in, or increase or
decrease in the number of issued Shares, resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other change, or
increase or decrease in the number of issued Shares, effected
without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the
Company shall not be deemed to have been effected without
receipt of consideration. The Board shall make such
adjustment, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Shares subject to an Award. |
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(B) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the
Administrator shall notify each Participant as soon as
practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for
the Participant to have the right to exercise his or her Award
prior to such transaction as to all of the Shares covered
thereby, including Shares as to which the Award would not
otherwise be exercisable. In addition, the Administrator may
provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Award shall lapse as to all
such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, or earned, an Award
will terminate immediately prior to the consummation of such
proposed action. |
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(C) Merger or Change in Control. |
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(i) Options and Restricted Stock Awards. In the
event of a merger of the Company with or into another
corporation, or a Change in Control, each outstanding Award
shall be assumed or an equivalent award substituted by the
successor corporation or a Parent or Subsidiary of the successor
corporation. |
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(1) In the event that the successor corporation refuses
to assume or substitute for the Award, the Participant shall
fully vest in and have the right to exercise his or her Option,
Restricted Stock Award, or Stock Appreciation Right as to all of
the Shares, including Shares as to which it would not otherwise
be vested or exercisable, and all restrictions on Restricted
Stock will lapse and all performance goals or other vesting
criteria with respect to Restricted Stock Units will be deemed
achieved at target levels and all other terms and conditions
met. In addition, if an Option, Restricted Stock Award, or Stock
Appreciation Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or Change
in Control, the Administrator shall notify the Participant in
writing or electronically that the Option, Restricted Stock
Award, or Stock Appreciation Right shall be fully vested and
exercisable for a period of not less than fifteen (15) days
from the date of such notice, and the Option, Restricted Stock
Award, or Stock Appreciation Right shall terminate upon the
expiration of such period. |
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(2) For the purposes of this Section 7.4(C)(i), an
Award shall be considered assumed if, following the merger or
Change in Control, the Award confers the right to purchase or
receive, for each Share subject to the Award immediately prior
to the merger or Change in Control (and in the case of
Restricted Stock Units, for each implied share determined by
dividing the value of the Restricted Stock Unit by the per Share
consideration received by holders of Common Stock in the merger
or Change in Control), an amount of consideration (whether
stock, cash, or other securities or property) equal to the fair
market value of the consideration received in the merger or
Change in Control by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the
merger or Change in Control is not solely common stock of the
successor corporation or its Parent, the Administrator may, with
the consent of the successor |
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corporation, provide for the consideration to be received
upon the exercise of the Option, Restricted Stock Award, or
Stock Appreciation Right, for each Share subject to such Award
(or in the case of Restricted Stock Units, the number of implied
shares determined by dividing the value of the Restricted Stock
Units by the per Share consideration received by holders of
Common Stock in the merger or Change in Control), to be solely
common stock of the successor corporation or its Parent equal in
fair market value to the per Share consideration received by
holders of Common Stock in the merger or Change in Control. |
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(3) Notwithstanding anything in
Section 7.4(C)(i)(2) to the contrary, an Award that vests,
is earned or paid-out upon the satisfaction of one or more
performance goals will not be considered assumed if the Company
or its successor modifies any of such performance goals without
the Participants consent; provided, however, a
modification to such performance goals only to reflect the
successor corporations post-merger or post-asset sale
corporate structure will not be deemed to invalidate an
otherwise valid Award assumption. |
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(D) Outside Director Option Grants. Notwithstanding
anything in Section 7.4(C)(i) to the contrary, in the event
of a merger of the Company with or into another corporation, or
a Change in Control, in which an Outside Director is terminated
or asked to resign, Options granted to such Outside Director
under Section 3.2 shall vest 100% immediately prior to such
merger or Change in Control. In the event of a merger or Change
in Control in which an Outside Director is not terminated or
asked to resign, such Outside Directors Options granted
under Section 3.2 shall be treated under the terms of
Section 7.4(C)(i). |
7.5 Date of Grant. The date
of grant of an Award shall be, for all purposes, the date on
which the Administrator makes the determination granting such
Award or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to
each Participant within a reasonable time after the date of such
grant.
7.6 Amendment and Termination of
the Plan.
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(A) Amendment and Termination. The Board may at any
time amend, alter, suspend or terminate the Plan. |
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(B) Stockholder Approval. The Company shall obtain
stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws.
Additionally, notwithstanding anything in the Plan to the
contrary, the Board may not, without the approval of the
Companys stockholders: |
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(i) materially increase the number of shares of Common
Stock issuable under the Plan, except for permissible
adjustments in the event of certain changes in the
Companys capitalization; |
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(ii) materially modify the requirements for eligibility to
participate in the Plan, or |
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(iii) reprice Options issued under the Plan by lowering the
exercise price of a previously granted award, by canceling
outstanding Options and issuing replacements, or by otherwise
replacing existing Options with substitute Options with a lower
exercise price. |
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(C) Effect of Amendment or Termination. No
amendment, alteration, suspension or termination of the Plan
shall impair the rights of any Participant, unless mutually
agreed otherwise between the Participant and the Administrator,
which agreement must be in writing and signed by the Participant
and the Company. Termination of the Plan shall not affect the
Administrators ability to exercise the powers granted to
it hereunder with respect to Awards granted under the Plan prior
to the date of such termination. |
7.7 Conditions Upon Issuance of
Shares.
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(A) Legal Compliance. Shares shall not be issued
pursuant to the exercise of an Award unless the exercise of such
Award and the issuance and delivery of such Shares shall comply
with Applicable Laws and shall be further subject to the
approval of counsel for the Company with respect to such
compliance. |
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(B) Investment Representations. As a condition to
the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of
any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required. |
7.8 Inability to Obtain
Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is
deemed by the Companys counsel to be necessary to the
lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue
or sell such Shares as to which such requisite authority shall
not have been obtained.
7.9 Reservation of Shares.
The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
7.10 Participants
Relationship with Company. Neither the Plan nor any Award
shall confer upon the Participant any right with respect to
continuing the Participants relationship as a Service
Provider with the Company, nor shall they interfere in any way
with the Participants right or the Companys right to
terminate such relationship at any time, with or without cause.
7.11 Stockholder Approval.
The Plan shall be subject to approval by the stockholders of
the Company within twelve (12) months after the date the
Plan is adopted. Such stockholder approval shall be obtained in
the manner and to the degree required under Applicable Laws.
END OF PLAN
C-14
APPENDIX D
PLANTRONICS, INC.
2002 EMPLOYEE STOCK PURCHASE PLAN.
(Board Approval: June 10, 2002)
(Shareholders Approval: July 17, 2002)
1. Purpose. The purpose of the Plan is to provide
employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an Employee Stock
Purchase Plan under Section 423 of the Internal
Revenue Code of 1986, as amended. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of
that section of the Code.
2. Definitions.
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(a) Board shall mean the Board of Directors of
the Company. |
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(b) Code shall mean the Internal Revenue Code
of 1986, as amended. |
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(c) Common Stock shall mean the Common Stock of
the Company. |
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(d) Company shall mean Plantronics, Inc., a
Delaware corporation, and any Designated Subsidiary of the
Company. |
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(e) Compensation shall mean all base straight
time gross earnings, exclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses,
commissions, car allowances, profit-sharing and other
compensation. |
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(f) Designated Subsidiary shall mean any
Subsidiary that has been designated by the Board from time to
time in its sole discretion as eligible to participate in the
Plan. |
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(g) Employee shall mean any individual who is
an Employee of the Company for tax purposes whose customary
employment with the Company is at least twenty (20) hours
per week and more than five (5) months in any calendar
year. For purposes of the Plan, the employment relationship
shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Company.
Where the period of leave exceeds ninety (90) days and the
individuals right to reemployment is not guaranteed either
by statute or by contract, the employment relationship shall be
deemed to have terminated on the 91st day of such leave. |
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(h) Enrollment Date shall mean the first day of
each Offering Period. |
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(i) Exercise Date shall mean the last day of
each Offering Period. |
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(j) Fair Market Value shall mean, as of any
date, the value of Common Stock determined as follows: |
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(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without
limitation the New York Stock Exchange (NYSE), its Fair Market
Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day on the date
of such determination, as reported in The Wall Street Journal
or such other source as the Board deems reliable, or; |
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(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not
reported, its Fair Market Value shall be the mean of the closing
bid and asked prices for the Common Stock on the date of such
determination, as reported in The Wall Street Journal or
such other source as the Board deems reliable, or; |
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(iii) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined
in good faith by the Board. |
D-1
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(k) Offering Period shall mean a period of
approximately six (6) months during which an option granted
pursuant to the Plan may be exercised. The duration of Offering
Periods may be changed pursuant to Section 4 of this Plan. |
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(l) Plan shall mean this Employee Stock
Purchase Plan. |
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(m) Purchase Price shall mean an amount equal
to 85% of the Fair Market Value of a share of Common Stock on
the Enrollment Date or on the Exercise Date, whichever is lower;
provided, however, that the Purchase Price may be adjusted by
the Board pursuant to Section 20. |
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(n) Reserves shall mean the number of shares of
Common Stock covered by each option under the Plan which have
not yet been exercised and the number of shares of Common Stock
which have been authorized for issuance under the Plan but not
yet placed under option. |
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(o) Subsidiary shall mean a corporation,
domestic or foreign, of which not less than 50% of the voting
shares are held by the Company or a Subsidiary, whether or not
such corporation now exists or is hereafter organized or
acquired by the Company or a Subsidiary. |
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(p) Trading Day shall mean a day on which
national stock exchanges and the NYSE System are open for
trading. |
3. Eligibility.
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(a) Any Employee who shall be employed by the Company on a
given Enrollment Date shall be eligible to participate in the
Plan. |
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(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under
the Plan (i) to the extent that, immediately after the
grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of
the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five
percent (5%) or more of the total combined voting power or value
of all classes of the capital stock of the Company or of any
Subsidiary, or (ii) to the extent that his or her rights to
purchase stock under all employee stock purchase plans of the
Company and its subsidiaries accrues at a rate which exceeds
twenty-five thousand dollars ($25,000) worth of stock
(determined at the fair market value of the shares at the time
such option is granted) for each calendar year in which such
option is outstanding at any time. |
4. Offering Periods. The Plan shall be implemented
by consecutive Offering Periods with a new Offering Period
commencing on or around February 1 and August 1 of
each year, or on such other date as the Board shall determine,
and continuing thereafter until terminated in accordance with
Section 20 hereof; provided, however, that the first
Offering Period under the Plan shall commence on the first
Trading Day on or after August 1, 2002 and end on the last
Trading Day on or before January 31, 2003, and the second
Offering Period hereunder shall commence on the first Trading
Day on or after February 1, 2003 and end on the last
Trading Day on or before July 31, 2003. The Board shall
have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to
future offerings without stockholder approval if such change is
announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period to be affected thereafter.
5. Participation.
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(a) Enrollment. An eligible Employee may become a
participant in the Plan by completing a subscription agreement
authorizing payroll deductions to this Plan and filing it with
the Companys payroll office prior to the applicable
Enrollment Date. |
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(b) Payroll Deductions. Payroll deductions for a
participant shall commence on the first payday following the
Enrollment Date and shall end on the last payday in the Offering
Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10
hereof. |
D-2
6. Payroll Deductions.
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(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made
on each pay day during the Offering Period in an amount not less
than one percent (1.0%) and not exceeding ten percent (10.0%) of
the Compensation which he or she receives on each pay day during
the Offering Period. |
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(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be
withheld in whole percentages only. A participant may not make
any additional payments into such account. |
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(c) A participant may discontinue his or her participation
in the Plan as provided in Section 10 hereof, or may, on
one occasion during the Offering Period, decrease (but not
increase) the rate of his or her payroll deductions during the
Offering Period by completing and filing with the Company a new
subscription agreement authorizing a change in payroll deduction
rate. The change in rate shall be effective as soon as possible
after the Companys receipt of the new subscription
agreement. A participants subscription agreement shall
remain in effect for successive Offering Periods unless
terminated as provided in Section 10 hereof. |
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(d) Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and
Section 3(b) hereof, a participants payroll
deductions may be decreased to zero percent (0%) at any time
during an Offering Period. Payroll deductions shall recommence
at the rate provided in such participants subscription
agreement at the beginning of the first Offering Period which is
scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10
hereof. |
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(e) At the time the option is exercised, in whole or in
part, or at the time some or all of the Companys Common
Stock issued under the Plan is disposed of, the participant must
make adequate provision for the Companys federal, state,
or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common
Stock. At any time, the Company may, but shall not be obligated
to, withhold from the participants compensation the amount
necessary for the Company to meet applicable withholding
obligations, including any withholding required to make
available to the Company any tax deductions or benefits
attributable to sale or early disposition of Common Stock by the
Employee. |
7. Grant of Option. On the Enrollment Date of each
Offering Period, each eligible Employee participating in such
Offering Period shall be granted an option to purchase on the
Exercise Date of such Offering Period (at the applicable
Purchase Price) up to a number of shares of the Companys
Common Stock determined by dividing such Employees payroll
deductions accumulated prior to such Exercise Date and retained
in the Participants account as of the Exercise Date by the
applicable Purchase Price; provided that in no event shall an
Employee be permitted to purchase during each Offering Period
more than 1,000 shares (subject to any adjustment pursuant
to Section 19), and provided further that such purchase
shall be subject to the limitations set forth in
Sections 3(b) and 12 hereof. Exercise of the option shall
occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof.
The Employee may accept the grant of such option by turning in a
completed and signed subscription agreement to the Company on or
prior to the first day of the Offering Period. The administrator
may, for future Offering Periods, increase or decrease, in its
absolute discretion, the maximum number of shares of the
Companys Common Stock an employee may purchase during an
Offering Period. Exercise of the option shall occur as provided
in Section 8 hereof, unless the participant has withdrawn
pursuant to Section 10 hereof. The option shall expire on
the last day of the Offering Period.
8. Exercise of Option. Unless a participant
withdraws from the Plan as provided in Section 10 hereof,
his or her option for the purchase of shares shall be exercised
automatically on the Exercise Date, and the maximum number of
shares subject to option shall be purchased for such participant
at the applicable Purchase Price with the accumulated payroll
deductions in his or her account. Fractional shares may be
purchased subject to the limitations set forth in
Section 3(b). Any payroll deductions accumulated in a
D-3
participants account which are in excess of the amounts
permissible for the purchase of shares authorized under
Section 3(b), shall be returned to the participant no later
than the Exercise Date of the relevant Offering Period. During a
participants lifetime, a participants option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each
Exercise Date on which a purchase of shares occurs, the Company
shall arrange the delivery to each participant, as appropriate,
the shares purchased upon exercise of his or her option.
10. Withdrawal.
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(a) A participant may withdraw all but not less than all
the payroll deductions credited to his or her account and not
yet used to exercise his or her option under the Plan at any
time by giving written notice to the Company in the form of
Exhibit B to this Plan. All of the participants
payroll deductions credited to his or her account shall be paid
to such participant promptly after receipt of notice of
withdrawal and such participants option for the Offering
Period shall be automatically terminated, and no further payroll
deductions for the purchase of shares shall be made for such
Offering Period. If a participant withdraws from an Offering
Period, payroll deductions shall not resume at the beginning of
the succeeding Offering Period unless the participant delivers
to the Company a new subscription agreement. |
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(b) A participants withdrawal from an Offering Period
shall not have any effect upon his or her eligibility to
participate in any similar plan which may hereafter be adopted
by the Company or in succeeding Offering Periods which commence
after the termination of the Offering Period from which the
participant withdraws. |
11. Termination of Employment. Upon a
participants ceasing to be an Employee for any reason, he
or she shall be deemed to have elected to withdraw from the Plan
and the payroll deductions credited to such participants
account during the Offering Period but not yet used to exercise
the option shall be returned to such participant or, in the case
of his or her death, to the person or persons entitled thereto
under Section 15 hereof, and such participants option
shall be automatically terminated. The preceding sentence
notwithstanding, a participant who receives payment in lieu of
notice of termination of employment shall be treated as
continuing to be an Employee for the participants
customary number of hours per week of employment during the
period in which the participant is subject to such payment in
lieu of notice.
12. Interest. No interest shall accrue on the
payroll deductions of a participant in the Plan.
13. Stock.
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(a) Subject to adjustment upon changes in capitalization of
the Company as provided in Section 19 hereof, the maximum
number of shares of the Companys Common Stock which shall
be made available for sale under the Plan shall be
300,000 shares. If, on a given Exercise Date, the number of
shares with respect to which options are to be exercised exceeds
the number of shares then available under the Plan, the Company
shall make a pro rata allocation of the shares remaining
available for purchase in as uniform a manner as shall be
practicable and as it shall determine to be equitable. |
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(b) The participant shall have no interest or voting right
in shares covered by his option until such option has been
exercised. |
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(c) Shares to be delivered to a participant under the Plan
shall be registered in the name of the participant or in the
name of the participant and his or her spouse. |
14. Administration. The Plan shall be administered
by the Board or a committee of members of the Board appointed by
the Board. The Board or its committee shall have full and
exclusive discretionary authority to construe, interpret and
apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every
finding, decision and determination made by the Board or its
committee shall, to the full extent permitted by law, be final
and binding upon all parties.
D-4
15. Designation of Beneficiary.
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(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from
the participants account under the Plan in the event of
such participants death subsequent to an Exercise Date on
which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to
receive any cash from the participants account under the
Plan in the event of such participants death prior to
exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall
be required for such designation to be effective. |
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(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the
death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of
such participants death, the Company shall deliver such
shares and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or
administrator has been appointed (to the knowledge of the
Company), the Company, in its discretion, may deliver such
shares and/or cash to the spouse or to any one or more
dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such
other person as the Company may designate. |
16. Transferability. Neither payroll deductions
credited to a participants account nor any rights with
regard to the exercise of an option or to receive shares under
the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent
and distribution or as provided in Section 15 hereof) by
the participant. Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that
the Company may treat such act as an election to withdraw funds
from an Offering Period in accordance with Section 10
hereof.
17. Use of Funds. All payroll deductions received or
held by the Company under the Plan may be used by the Company
for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained
for each participant in the Plan. Statements of account shall be
given to participating Employees at least annually, which
statements shall set forth the amounts of payroll deductions,
the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.
19. Adjustments upon Changes in Capitalization,
Dissolution, Liquidation, Merger or Asset Sale.
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(a) Changes in Capitalization. Subject to any
required action by the stockholders of the Company, the
Reserves, the maximum number of shares each participant may
purchase per Offering Period (pursuant to Section 7), as
well as the price per share and the number of shares of Common
Stock covered by each option under the Plan which has not yet
been exercised shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been
effected without receipt of consideration. Such
adjustment shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of
shares of Common Stock subject to an option. |
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(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Offering
Period then in progress shall be shortened by setting a new
Exercise Date (the New Exercise Date), and shall
terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the
Board. The New Exercise Date shall be before the date of the
Companys proposed dissolution or liquidation. The Board
shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the
Exercise Date for the |
D-5
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participants option has been changed to the New Exercise
Date and that the participants option shall be exercised
automatically on the New Exercise Date, unless prior to such
date the participant has withdrawn from the Offering Period as
provided in Section 10 hereof. |
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(c) Merger or Asset Sale. In the event of a proposed
sale of all or substantially all of the assets of the Company,
or the merger of the Company with or into another corporation,
each outstanding option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the
option, the Offering Period then in progress shall be shortened
by setting a new Exercise Date (the New Exercise
Date). The New Exercise Date shall be before the date of
the Companys proposed sale or merger. The Board shall
notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the
Exercise Date for the participants option has been changed
to the New Exercise Date and that the participants option
shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof. |
20. Amendment or Termination.
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(a) The Board of Directors of the Company may at any time
and for any reason terminate or amend the Plan. Except as
provided in Section 19 hereof, no such termination can
affect options previously granted, provided that an Offering
Period may be terminated by the Board of Directors on any
Exercise Date if the Board determines that the termination of
the Offering Period or the Plan is in the best interests of the
Company and its stockholders. Except as provided in
Section 19 and Section 20 hereof, no amendment may
make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent
necessary to comply with Section 423 of the Code (or any
other applicable law, regulation or stock exchange rule), the
Company shall obtain shareholder approval in such a manner and
to such a degree as required. |
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(b) Without stockholder consent and without regard to
whether any participant rights may be considered to have been
adversely affected, the Board (or its committee)
shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during
an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars,
permit payroll withholding in excess of the amount designated by
a participant in order to adjust for delays or mistakes in the
Companys processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that
amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the
participants Compensation, and establish such other
limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent
with the Plan. |
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(c) In the event the Board determines that the ongoing
operation of the Plan may result in unfavorable financial
accounting consequences, the Board may, in its discretion and,
to the extent necessary or desirable, modify or amend the Plan
to reduce or eliminate such accounting consequence including,
but not limited to: |
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(i) altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change
in Purchase Price; |
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(ii) shortening any Offering Period so that Offering Period
ends on a new Exercise Date, including an Offering Period
underway at the time of the Board action; and |
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(iii) allocating shares. |
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(d) Such modifications or amendments shall not require
stockholder approval or the consent of any Plan participants. |
D-6
21. Notices. All notices or other communications by
a participant to the Company under or in connection with the
Plan shall be deemed to have been duly given when received in
the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares.
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(a) Shares shall not be issued with respect to an option
unless the exercise of such option and the issuance and delivery
of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares may then be listed, and
shall be further subject to the approval of counsel for the
Company with respect to such compliance. |
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(b) As a condition to the exercise of an option, the
Company may require the person exercising such option to
represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is
required by any of the aforementioned applicable provisions of
law. |
23. Term of Plan. The Plan shall become effective
upon the earlier to occur of its adoption by the Board of
Directors or its approval by the stockholders of the Company. It
shall continue in effect for a term of ten (10) years
unless sooner terminated under Section 20 hereof.
END OF PLAN
D-7
DETACH HERE
This PROXY is solicited
on behalf of the Board of Directors of
PLANTRONICS,
INC.
2005 ANNUAL MEETING OF STOCKHOLDERS
July 21, 2005
The undersigned stockholder of PLANTRONICS, INC., a Delaware corporation, hereby acknowledges
receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, each dated June 14,
2005, and hereby appoints Ken Kannappan, Barbara Scherer, and Rich Pickard, and each of them,
proxies and attorneys-in-fact, with full power to each of substitution, on behalf and in the name
of the undersigned, to represent the undersigned at the 2005 Annual Meeting of Stockholders of
PLANTRONICS, INC. to be held on July 21, 2005 at 11:00 a.m. EDT, at the Essex House, 160 Central
Park South, New York, New York 10019, and at any adjournment or adjournments thereof, and to vote
all shares of Common Stock with the undersigned would be entitled to vote if then and there
personally present, on the matters set forth on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, WILL BE
VOTED FOR EACH OF THE NOMINEES FOR THE BOARD OF DIRECTORS LISTED IN THIS PROXY STATEMENT, FOR
THE RATIFICATION AND APPROVAL OF AN INCREASE OF 1.3 MILLION SHARES IN THE COMMON STOCK ISSUABLE
UNDER THE 2003 STOCK PLAN, FOR THE RATIFICATION AND APPROVAL OF AN INCREASE OF 200,000 SHARES
IN THE COMMON STOCK ISSUABLE UNDER THE 2002 EMPLOYEE STOCK PURCHASE PLAN, FOR THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, TO AUDIT THE
CONSOLIDATED FINANCIAL STATEMENTS OF PLANTRONICS FOR ITS FISCAL 2006, AND AS SAID PROXY HOLDERS
DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERTY COME BEFORE THE MEETING.
To vote through the Internet or by telephone, please see the instructions on the backside of
this card. To vote by mail, please sign and date this card on the reverse and mail promptly in the
enclosed postage-paid envelope.
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SEE REVERSE
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SEE REVERSE |
SIDE
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CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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SIDE |
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PLANTRONICS, INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
Voter Control Number
Your vote is important. Please vote immediately
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Vote-by-Internet: |
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Vote-by-Telephone: |
1.
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Log on to the Internet and go to
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1. |
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Call toll-free: 1-877-PRX-VOTE |
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http://www.exproxyvote.com.plt
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(1-877-779-8683) |
2.
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Enter your Voter Control Number listed above
and follow the easy steps out lined on the
secured website.
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O
R
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2. |
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Enter your Voter Control Number
listed above and follow the easy
recorded instructions. |
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If you are vote over the Internet or by Telephone, please do not mail your card.
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
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Please mark
votes as in
this example. |
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The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
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1. |
Election of Directors.
Nominees. (01) Marv Tseu; (02) Ken Kannappan; (03) Gregg Hammann; (04) Marshall Mohr; (05)
Trude Taylor; and (06) Roger Wery. |
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WITHHELD |
FOR ALL
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FROM ALL |
NOMINEES
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NOMINEES |
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¨
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For all nominees except as noted above |
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2.
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Proposal to
ratify and approve
an increase of 1.3
million shares in
the common stock
issuable under the
2003 Stock Plan.
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FOR
¨
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AGAINST
¨
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ABSTAIN
¨ |
3.
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Proposal to
ratify and approve
an increase of
200,000 shares in
the Common Stock
issuable under the
2002 Employee Stock
Purchase Plan.
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FOR
¨
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AGAINST
¨
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ABSTAIN
¨ |
4.
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Proposal to
ratify the
appointment of
PricewaterhouseCoopers
LLP as the
independent
registered public
accounting firm of
the Company for
fiscal 2006.
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FOR
¨
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AGAINST
¨
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ABSTAIN
¨ |
And, in their discretion, upon such other matter or matters which may properly come before the
Annual Meeting of any adjournment or adjournments thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ¨
(This Proxy should be marked, dated and signed by the stockholder(s) exactly as his or
her name appears hereon, and returned promptly in the enclosed envelope. Persons signing in a
fiduciary capacity should
so indicate. If shares are held by joint tenants or as community
property, both should sign.) The signer(s) hereby revoke all proxies heretofore given by the
signer(s) to vote at said Annual Meeting or any adjournment thereof.
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MARK HERE FOR IF YOU PLAN TO ATTEND THE ANNUAL MEETING IN
PERSON
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¨ |
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MARK HERE IF YOU PLAN TO ATTEND THE STOCKHOLDER LUNCH
IMMEDIATELY FOLLOWING THE CONCLUSION OF THE ANNUAL MEETING
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Signature: _______________________ Date: _________ Signature: __________________________ Date: ______