Plantronics 2013 Annual Report Download - page 74

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The line of credit requires the Company to comply with a maximum ratio of funded debt to earnings before interest, taxes,
depreciation and amortization ("EBITDA") and a minimum EBITDA coverage ratio, in each case at each fiscal quarter end and
determined on a rolling four-quarter basis. In addition, the Company and its subsidiaries are required to maintain unrestricted
cash, cash equivalents, and marketable securities plus availability under the Credit Agreement at the end of each fiscal quarter of
at least $200.0 million.
The line of credit contains affirmative covenants, including covenants regarding the payment of taxes and other liabilities,
maintenance of insurance, reporting requirements, and compliance with applicable laws and regulations. The line of credit also
contains negative covenants, among other things, limiting, subject to certain monetary thresholds, the ability of the Company to
incur debt, make capital expenditures, grant liens, make acquisitions, and make investments. The events of default under the line
of credit include payment defaults, cross defaults with certain other indebtedness, breaches of covenants, judgment defaults, and
bankruptcy and insolvency events involving the Company or any of its subsidiaries. The Company was in compliance with all
covenants at March 31, 2013.
11. STOCK PLANS AND STOCK-BASED COMPENSATION
Stock Plans
Stock options granted subsequent to September 2007 vest over a three-year period. Options granted from September 2004 to
September 2007 vested over a four-year period. Restricted stock grants have vesting periods over three or four years, depending
on the size of the grant. The Management Equity Committee is authorized to make option and restricted stock grants to employees
who are not senior executives pursuant to guidelines approved by the Compensation Committee and subject to quarterly reporting
to the Compensation Committee. The Company currently grants options and restricted stock from only the 2003 Stock Plan. The
Company settles stock option exercises and releases of vested restricted stock with newly issued common shares.
2003 Stock Plan
In June 2003, the Board of Directors ("Board") and stockholders adopted the Plantronics, Inc. 2003 Stock Plan ("2003 Stock
Plan"). The 2003 Stock Plan, which will continue in effect until terminated by the Board, allows for the issuance of the Company's
common stock through the granting of non-qualified stock options, restricted stock awards, and restricted stock units. As of
March 31, 2013, there have been 12,900,000 shares of common stock (which number is subject to adjustment in the event of stock
splits, reverse stock splits, recapitalization or certain corporate reorganizations) cumulatively reserved since inception of the 2003
Stock Plan for issuance to employees, directors, and consultants of Plantronics.
Under the 2003 Stock Plan, the exercise price of stock options may not be less than 100% of the fair market value of the Company's
common stock on the date of grant. The term of an option may not exceed 7 years from the date it is granted.
Awards of restricted stock and restricted stock units with a per share or per unit purchase price less than the fair market value on
the grant date that were granted from July 26, 2006 through August 4, 2011 are counted against the total number of shares issuable
under the Plan as 2.5 shares for every 1 share subject thereto. No participant shall receive restricted stock awards in any fiscal
year having an aggregate initial value greater than $2.0 million, and no participant shall receive restricted stock units in any fiscal
year having an aggregate initial value greater than $2.0 million.
At March 31, 2013, options to purchase 2,146,033 shares of common stock and 951,247 shares of unvested restricted stock were
outstanding, and there were 3,121,721 shares available for future grant under the 2003 Stock Plan.
1993 Stock Option Plan
In September 1993, the Board adopted the Plantronics, Inc. 1993 Stock Option Plan ("1993 Stock Option Plan"). Under the 1993
Stock Option Plan, 22,927,726 shares of common stock (which number is subject to adjustment in the event of stock splits, reverse
stock splits, recapitalization, or certain corporate reorganizations) were cumulatively reserved for issuance to employees and
consultants of Plantronics. The 1993 Stock Option Plan, which allowed for the issuance of the Company's common stock through
the granting of incentive stock options as well as non-qualified stock options, had a term of 10 years; therefore, the authority to
grant new options under the 1993 Stock Option Plan expired in September 2003. At March 31, 2013, options to purchase 269,041
shares of common stock remained outstanding under the 1993 Stock Option Plan.
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