Plantronics 1998 Annual Report Download - page 22

P.14
ANNUAL REPORT . 199 8
PLANTRONICS
Notes TO CONSOLIDATED
FINANCIAL STATEMENTS
NOTE. 10 STOCK OPTION PLANS AND STOCK PURCHASE PLANS:
STOCK OPTION PLAN
In September 1993, the Board of Directors approved the PI Parent Corporation 1993 Stock Plan (the “1993 Stock Plan”).
Under the 1993 Stock Plan, 4,159,242 shares of Common Stock (which number is subject to adjustment in the event
of stock splits, reverse stock splits, recapitalization or certain corporate reorganizations) are reserved for issuance to
employees and consultants of the Company, as approved from time to time by the Compensation Committee of the
Board of Directors. The reserved shares include 980,000 shares which were authorized by the Board of Directors
and approved by the stockholders for issuance in 1997. The 1993 Stock Plan, which has a term of ten years, provides
for incentive as well as nonqualified stock options to purchase shares of Common Stock. The Board of Directors may
terminate the 1993 Stock Plan at any time at its discretion.
Incentive stock options may not be granted at less than 100 percent of the estimated fair market value, as determined
by the Board of Directors, of the Company’s Common Stock at the date of grant and the option term may not exceed
10 years. For holders of 10 percent or more of the total combined voting power of all classes of the Company’s stock,
incentive stock options may not be granted at less than 110 percent of the estimated fair market value of the Common
Stock at the date of grant and the option term may not exceed five years. Nonqualified stock options may be granted at
less than fair market value. Options generally vest over 4 years.
In September 1993 the Compensation Committee of the Board of Directors approved nonqualified options to certain
executive officers to purchase 255,792 shares of Common Stock at an exercise price of $2.74 per share that were granted
upon the completion of the Company’s initial public offering. Compensation related to these options of $0.9 million
based on the $6.25 per share offering price was charged to expense over a four year-vesting period commencing January 1994
as the options were granted for future services. Options to purchase an additional 289,252 shares were granted during
fiscal 1994 to certain executive officers at exercise prices ranging from $2.74 to $7.63 per share. Compensation related
to these options of $0.8 million was charged to expense over a four-year vesting period. As of March 31, 1998, the
total compensation expense was amortized.
DIRECTORS’ STOCK OPTION PLAN
In September 1993, the Board of Directors adopted a Directors’ Stock Option Plan (the “Directors’ Option Plan”)
and reserved 40,000 shares of Common Stock for issuance to non-employee directors of the Company. An additional
20,000 shares were authorized for issuance in 1997 under the Directors’ Option Plan, pursuant to Board of Directors’
and stockholder approval. The Directors’ Option Plan provides that each non-employee director shall be granted an
option to purchase 4,000 shares of Common Stock on the later of the effective date of the Company’s initial public
offering or the date on which the person becomes a director. Thereafter, each non-employee director shall be granted
an option to purchase 1,000 shares of Common Stock each year. At the end of fiscal 1998, options for 45,000 shares
of Common Stock were outstanding under the Directors’ Option Plan. All options were granted at fair market value
and accordingly, had no compensatory impact. Options vest generally over a four-year period.