Plantronics 1999 Annual Report Download - page 18

note 4. DEBT:
During 1999, the Company retired $65.1 million of 10% subordinated debentures due in 2001.The Company
paid a premium to debenture holders, and the transaction resulted in an extraordinary loss of approximately
$1.0 million ($0.06 per diluted share), net of income tax benefits of $0.7 million.The transaction was paid
out of available cash.
Effective November 30, 1998, the Company increased its revolving unsecured credit facility with Bank of
America from $20.0 million to $30.0 million.The facility expires on November 29, 1999.The facility
includes a $10.0 million letter-of-credit subfacility. Principal outstanding bears interest at the Company’s
choice of the Bank of America base rate, the offshore rate or a CD rate plus a margin ranging from 0.000%
to 1.375%, depending on the rate choice and performance level ratios.There were no borrowings outstanding
under the facility at March 31, 1999, however, at that date $2.3 million, associated with inventory purchases
and other matters, was committed under the letter-of-credit subfacility.The revolving credit facility includes
covenants relating to, among other things, the maintenance of a maximum net funded debt ratio, a minimum
tangible net worth ratio and a minimum interest coverage ratio.The Company was in compliance with the
terms of the covenants as of March 31, 1999.
The revolving credit facility also expressly restricts the ability of the Company to incur additional indebted-
ness (including contingent liabilities and guarantees), grant additional liens, redeem stock, dispose of and
acquire assets, incur lease obligations, and make investments, including loans, joint ventures, and acquisitions
of other businesses.The Company is permitted to pay cash dividends on shares of its capital stock in an
amount not to exceed 50% of the Company’s cumulative net income (net of cumulative losses) for the period
commencing February 19, 1997 through the date of declaration.
note 5. COMMON AND TREASURY STOCK:
In July 1997, the Company’s stockholders approved an increase in the authorized shares of Common Stock
of Plantronics, Inc., to 40,000,000. On September 2, 1997, the Company effected a two-for-one stock split
in the form of a stock dividend to stockholders of record as of August 18, 1997. All share, per share, Common
Stock, and capital in excess of par value amounts herein have been restated to reflect the effect of this split.
On January 8, 1999, the Company filed with the Securities Exchange Commission a Registration Statement
on Form S-3 for the sale by certain stockholders in an underwritten offering of 1,250,000 shares of
Common Stock. Plantronics did not receive any proceeds from this offering, other than approximately
$0.8 million (net of offering expenses) received upon the exercise of options to purchase 443,548 shares
of Common Stock by two of the stockholders selling in the offering.The offering increased outstanding
shares by 443,548.
During fiscal 1999, the Board of Directors authorized the Company to repurchase a total of 1,000,000
shares of Common Stock. During fiscal 1999, the Company repurchased 735,593 shares of its Common
Stock in the open market at a total cost of $46.4 million and 29,301 shares for proceeds of $1.3 million
were reissued through employee benefit plans.
page 16 PLANTRONICS ANNUAL REPORT 1999
Notes to consolidated financial statements