Plantronics 2005 Annual Report Download - page 70

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Our stock price may be volatile and the value of your investment in Plantronics stock could be
diminished.
The market price for our common stock may continue to be affected by a number of factors, including:
)uncertain economic conditions and the decline in investor confidence in the market place;
)the announcement of new products or product enhancements by us or our competitors;
)the loss of services of one or more of our executive officers or other key employees;
)quarterly variations in our or our competitors’ results of operations;
)changes in our published forecasts of future results of operations;
)changes in earnings estimates or recommendations by securities analysts;
)developments in our industry;
)sales of substantial numbers of shares of our common stock in the public market;
)general market conditions; and
)other factors unrelated to our operating performance or the operating performance of our
competitors.
In addition, the stock market has experienced extreme price and volume fluctuations that have affected
the market price of many technology companies in particular, and that have often been unrelated to the
operating performance of these companies. Such factors and fluctuations, as well as general economic,
political and market conditions, such as recessions, could materially adversely affect the market price of
our common stock.
The majority of our revenues come from products currently produced in our facilities in Tijuana,
Mexico.
The majority of our revenues come from products that are produced in our facilities in Tijuana, Mexico.
A fire, flood or earthquake, political unrest or other disaster or condition affecting our facilities could
have a material adverse effect on our business, financial condition and results of operations. The prospect
of such unscheduled interruptions may continue for the foreseeable future and we are unable to predict
their occurrence, duration or cessation. While we have developed a disaster recovery plan and believe we
are adequately insured with respect to these facilities, we may be unable to implement the plan effectively
or to recover under applicable insurance policies.
Changes in stock option accounting rules may adversely impact our operating results prepared in
accordance with generally accepted accounting principles, our stock price and our competitiveness in
the employee marketplace.
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’’) and supersedes 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 Staff’s 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.
42 ⯗Plantronics