Plantronics 2003 Annual Report Download - page 25

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Employee Stock Purchase Plan. On June 10, 2002, the Board of Directors of Plantronics
approved the 2002 Employee Stock Purchase Plan (the “2002 ESPP”), which was approved
by the stockholders on July 17, 2002, to provide certain employees with an opportunity to
purchase Common Stock through payroll deductions. The plan qualifies under Section 423 of
the Internal Revenue Code. Under the 2002 ESPP plan, which is effective through June 2012,
the purchase price of our Common Stock is equal to 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. Each offering period is six months long.
There were 25,443, 41,889 and 56,806 shares issued under the ESPP in fiscal 2001, 2002, and
2003, respectively.
Senior Executive Stock Ownership Plan. In November 1996, the Board of Directors
approved a Senior Executive Stock Purchase Plan, effective January 1, 1997, to encourage
ownership of our Common Stock by senior executives. This is a voluntary plan in which
executives are encouraged to participate and achieve a target ownership over a five-year period
in annual increments of 20% of target or more. The target ownership is equal to two times the
Chief Executive Officer’s base salary and one times the individual Vice Presidents’ base salary.
To encourage participation, we will sell our Treasury Stock to executives under this voluntary
purchase program. The price will be equal to the greater of: 95% of the price set by the Board
of Directors on an annual basis or 85% of the fair market value of the stock on the date of
transaction. The various vehicles that are available to executives to obtain ownership of
Plantronics’ stock are as follows: 401(k) plan contributions, personal IRA account purchases,
Deferred Compensation Plan contributions, outright purchase of stock or exercising vested
stock options and holding the stock. The discounted price is not applicable to exercising
options and holding stock from such exercises.
Fair Value Disclosures. All options in fiscal 2001, 2002 and 2003 were granted at an
exercise price equal to the market value of Plantronics’ Common Stock at the date of grant.
The fair value of options at date of grant was estimated using the Black-Scholes model. The
following assumptions were used and weighted-average fair values resulted:
Stock Option Plans Employee Stock Purchase Plan
Fiscal Year Ended March 31, Fiscal Year Ended March 31,
2001 2002 2003 2001 2002 2003
Expected dividend yield 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Expected life (in years) 6.0 6.0 6.0 0.5 0.5 0.5
Expected volatility 86.0% 51.0% 59.4% 86.0% 59.0% 46.2%
Risk-free interest rate 5.5% 4.5% 3.4% 6.1% 3.3% 1.2%
Weighted-average
fair value $26.55 $10.50 $9.72 $8.39 $4.92 $3.02
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Notes to Consolidated Financial Statements
Stock option activity under the 1993 Stock Option Plan and the Directors’ Option Plan are
as follows:
Options Outstanding
Shares Weighted
Available Average
for Grant Shares Exercise Price
Balance at March 31, 2000 278,474 7,898,979 $13.88
Options authorized 2,670,000 — —
Options granted (1,720,027) 1,720,027 35.02
Options exercised —(1,516,000) 9.67
Options cancelled 390,984 (390,984) 20.14
Balance at March 31, 2001 1,619,431 7,712,022 19.12
Options authorized 2,000,000 — —
Options granted (2,605,075) 2,605,075 19.61
Options exercised —(127,449) 9.74
Options cancelled 215,982 (215,982) 26.17
Balance at March 31, 2002 1,230,338 9,973,666 19.21
Options authorized 2,000,000 — —
Options granted (1,890,503) 1,890,503 16.33
Options exercised —(502,147) 4.38
Options cancelled 352,614 (352,614) 24.99
Balance at March 31, 2003 1,692,449 11,009,408 19.22
Exercisable at March 31, 2003 6,234,739 $17.94
Significant option groups outstanding at March 31, 2003, and related weighted average prices
and lives are as follows:
Options Outstanding Options Exercisable
Number Weighted Number
Outstanding Average Weighted Exercisable Weighted
as of Remaining Average as of Average
Range of March 31, Contractual Exercise March 31, Exercise
Exercise Price 2003 Life Price 2003 Price
$0.30 - $ 13.90 2,342,350 4.03 $ 7.94 2,113,975 $ 7.30
13.91 - 17.49 3,158,389 8.45 16.74 794,759 16.64
17.50 - 21.75 2,609,026 7.10 20.68 1,590,323 20.79
21.76 - 35.46 2,467,017 7.08 27.73 1,514,504 27.07
35.47 - 55.13 432,626 7.50 40.97 221,178 41.20
$0.30 - $ 55.13 11,009,408 6.85 $19.22 6,234,739 $ 17.94