10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 30, 2002

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ___________ TO _____________

Commission file number: 1-12696

Plantronics, Inc.
(Exact name of Registrant as Specified in its Charter)

 

Delaware	77-0207692
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

345 Encinal Street
Santa Cruz, California    95060
(Address of Principal Executive Offices including Zip Code)

(831) 426-5858
(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

 

TITLE OF EACH CLASS	NAME OF EACH EXCHANGE ON WHICH REGISTERED
COMMON STOCK, $.01 PAR VALUE	NEW YORK STOCK EXCHANGE
PREFERRED SHARE PURCHASE RIGHTS	NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act:
None

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]     No [     ]

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [     ]

      The aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing price of $22.67 for shares of the Registrant's Common Stock on May 31, 2002 as reported by the New York Stock Exchange, was approximately $722,837,779. In calculating such aggregate market value, shares of Common Stock owned of record or beneficially by officers, directors, and persons known to the Registrant to own more than five percent of the Registrant's voting securities (other than such persons of whom the Registrant became aware only through the filing of a Schedule 13G filed with the Securities and Exchange Commission) were excluded because such persons may be deemed to be affiliates. The Registrant disclaims the existence of control or any admission thereof for any other purpose.

      Number of shares of Common Stock outstanding as of May 31, 2002: 45,925,008.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Registrant's Proxy Statement for its 2002 Annual Meeting of Stockholders to be held on July 17, 2002 are incorporated by reference into Parts II and III of this Annual Report on Form 10-K.

Plantronics, Inc.

FORM 10-K
For The Year Ended March 30, 2002
TABLE OF CONTENTS

Part I.		Page
Item 1.	Business	4
Item 2.	Properties	17
Item 3.	Legal Proceedings	17
Item 4.	Submission of Matters to a Vote of Security Holders	18
Part II.
Item 5.	Market for the Registrant's Common Equity and Related Stockholder Matters	18
Item 6.	Selected Consolidated Financial Data	19
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7a.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 8.	Financial Statements and Supplementary Data	36
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	56
Part III.
Item 10.	Directors and Executive Officers of the Registrant	56
Item 11.	Executive Compensation	56
Item 12.	Security Ownership of Certain Beneficial Owners and Management	56
Item 13.	Certain Relationships and Related Transactions	56
Part IV.
Item 14.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	57
Signatures		61

Plantronics, the logo design, Plantronics and the logo design combined, Clarity, Encore, FreeHand, Mirage, Practica, SoundGuard, StarSet, Supra and TriStar are registered United States trademarks of Plantronics, Inc., .Audio, ClearVox, DuoPro, Quick Disconnect, SoundGuard Plus, the clear color and the gently curved shape of the Plantronics voice tube, and Walker are trademarks of Plantronics, Inc. Certain of the foregoing trademarks are registered trademarks in certain foreign countries. Alertmaster, Ameriphone, and JV-35 are registered trademarks of Ameriphone, Inc. The BLUETOOTH trademarks are owned by Bluetooth SIG, Inc., USA. This report also includes trademarks of companies other than Plantronics.

PART I

This Annual Report on Form 10-K is filed with respect to our fiscal year 2002. Each of our fiscal years ends on the Saturday closest to the last day of March. Our fiscal 2002 ended on March 30, 2002. For purposes of consistent presentation, we have indicated in this report that each fiscal year ended "March 31" of the given year, even though the actual fiscal year end may have been on a different date.

CERTAIN FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, we may from time to time make oral forward-looking statements. These statements may generally be identified by the use of such words as "expect," "anticipate," "believe," "intend," "plan," "will," or "shall," and include, but are not necessarily limited to, all of the statements marked below with an asterisk ("*"). Such forward-looking statements are based on current expectations and entail various risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. For a discussion of such factors, this Annual Report on Form 10-K should be read in conjunction with our 2002 Annual Report to Stockholders and the "Risk Factors Affecting Future Operating Results," commencing on page 24 of this Annual Report on Form 10-K.

ITEM 1. BUSINESS

OVERVIEW

Plantronics, Inc. ("Plantronics,""we," "our," or "us") has been helping people communicate easily and effectively for over 40 years. Our headsets make talking on the telephone a liberating and engaging experience, free from handsets and cords. From our earliest headsets, used during the first moon landing, to our new cordless headsets for office telephones and mobile applications, our focus has not changed. Our mission is to enhance personal communications.

We are a worldwide leading designer, manufacturer and marketer of lightweight communications headsets, telephone headset systems, accessories and related services. In addition, we manufacture and market specialty telephone products, such as telephones for the hearing-impaired and other related products for people with special communications needs.

Plantronics headsets are communications tools, providing freedom from keyboards, freedom to move around and freedom to use your hands while staying "connected." People appreciate the superior sound quality, all-day comfort and reliability that differentiate our headsets from the competition. We apply a variety of technologies to develop superior products that meet the needs of our customers. Plantronics headsets are widely used in call centers, offices and homes, and for mobile and computer applications. Plantronics' commitment to excellence is demonstrated by the audio quality of our digitally-enhanced PC headsets, the reliability of our mobile headsets and the superior comfort of our office and call center solutions. Plantronics' broad compatibility with an extensive range of telephony systems has made us the headset of choice in call centers worldwide.

We are a global company, and sell our broad range of communications products into more than seventy countries through a worldwide network of distributors, original equipment manufacturers (OEMs), retailers and telephony service providers. We have well-developed distribution channels in North America and Europe, where the growth of phone-based customer support, telemarketing activities and deregulation of the telephone companies have led to more widespread use of telephone headsets. Our headsets continue to be widely used in call centers in the Middle East, Africa, Australia, Asia and Latin America, with particular year over year growth in India, as many European companies are setting up call centers in that region.

Plantronics also sells headsets to business, home and office users. These end user groups have been identified as having long-term growth potential. Users in these markets consist of business executives, mobile professionals, agents, brokers, lawyers, accountants, and others whose occupations and/or lifestyle may require extensive use of a telephone or a high degree of multi-tasking while on the telephone.

The use of headsets for mobile and cordless applications has proved to be a growth area for Plantronics during this past fiscal year. These hands-free solutions enable our customers, including mobile professionals in particular, to stay "connected," providing clear calls and lightweight convenience while on the road or in the office. When using our headsets, our customers can experience increased mobility, have both hands free to drive, and when used with voice recognition equipment, freedom from dial pads and keyboards.

Our headsets are purchased by a broad and diverse group of business customers worldwide, including telephone-operating companies, operators of private telephone networks, and governmental agencies. We distribute our products through specialized distributors, large electronics wholesalers, original equipment manufacturers, and retail channels, such as office supply stores, consumer electronics stores, mail order catalogs, warehouse clubs, and office supplies distributors. We sell certain products directly to governmental agencies and also distribute products to the government market through distributors, OEMs and other sales channels. Plantronics products may also be purchased from our website, www.plantronics.com.

INDUSTRY BACKGROUND

GENERAL BACKGROUND

Over the past few years, we broadened our product offerings to target the office, and the emerging mobile and computer markets. The proliferation of desktop computing makes communications headsets a product of choice in many occupations, because they permit the user to be more efficient in an ergonomically comfortable environment. Growing awareness of driver safety and resulting hands-free legislation increased headset adoption for mobile phone users.

Headsets enhance the communications experience through:

MULTI-TASKING BENEFITS that allow people to use a computer, take notes and organize files while talking hands-free;

IMPROVED MOBILITY, for example, being able to talk more easily on a cellular or cordless phone while on the go;

CONTRIBUTING to greater driving safety by enabling a person to have both hands free to drive while talking on a mobile phone;

BETTER SOUND QUALITY for telephone users by reducing background noise;

ERGONOMIC RELIEF from repetitive stress injuries and discomfort associated with placing a telephone handset between the shoulder and neck;

ENABLING EMERGING PC APPLICATIONS, including speech recognition, Internet telephony, gaming, and premium audio quality; and

PROVIDING GREATER PRIVACY than speakerphones.

MARKETS

CALL CENTER AND OFFICE

Plantronics is a leader in the call center and office markets with a broad range of communications headsets including high-quality, ergonomically designed headsets, amplifiers and telephone systems. Plantronics' full line of professional and call center headsets have excellent sound quality, durability and all-day comfort.

Call center agents comprise the largest group of headset users. The call center market represents our most mature market in which we have achieved significant penetration. While the market declined in fiscal 2002, we believe this was a cyclical downturn related to the U.S. recession and the global economic slowdown. Thus, we believe that the long-term secular outlook for modest growth of call center agents expected by most industry analysts remains intact.* The number of call center agents are expected to gradually increase as companies endeavor to compete in the marketplace by (i) focusing on customer service to provide a competitive advantage, (ii) reducing costs through the use of real-time centralized information exchange and customer interaction, and (iii) making greater use of cost-effective direct distribution models. As the benefits of call centers have become more widely recognized and the system cost per agent has declined, the establishment of call centers has spread and continues to spread to smaller organizations and international firms.*

Although our revenues declined in the last twelve months, we believe that the decline is a result of the U.S. recession and global economic slowdown. Nevertheless, the office market, both corporate and small office/home office ("SOHO"), has become increasingly important, and the simultaneous use of telephones and computers by office workers and a growing awareness of the benefits of headsets are factors we believe bode well for the development of this market. Professionals who spend significant time on the telephone have been early adopters of headset products. These professionals include securities brokers, insurance agents, sales executives, credit controllers and purchasing agents. We believe that the level of headset use in the office is low, and that the number of office professionals worldwide who are on the phone two hours or more per day is approximately 200 million, providing a long-term opportunity to increase headset sales to office workers.* Plantronics' cordless headset solutions, when used in an office environment, allow users to enjoy excellent sound quality, comfort, hands-free convenience, and freedom to move around the work place.

Our latest offering for both call center and office applications includes the DuoPro^TM headset family featuring leading edge microphone and speaker quality, and the new DA50 USB-to-headset adapter, which brings Plantronics quality to Voice-over Internet Protocol (VoIP) solutions.

MOBILE AND COMPUTER

Mobile use of headsets, particularly with cellular phones, is growing worldwide. The Plantronics mobile headset line is designed for the freedom and mobility of hands-free communications with the superior sound quality, stability and comfort that set Plantronics' headsets apart. Along with the convenience and ease of phone operation, using a hands-free device while in a motor vehicle is thought to be safer than holding a mobile telephone handset. In fiscal 2002, hands-free legislation was passed in the state of New York and other jurisdictions, requiring drivers to use hands- free devices when they are talking on a mobile phone while operating a motor vehicle. While some municipalities have passed similar laws, no other state in the U.S. has done so. Internationally, a number of countries prohibit using a mobile phone while driving without a headset or hands-free solution; laws similar to those passed in New York. Plantronics' mobile, or M-series, headsets come in a variety of styles, colors and types. Our headsets are designed to strict quality standards, including features that provide the very best user experience. These features include noise-canceling microphones that effectively reduce background noise, flexible earloops for customizable fit, and advanced materials for lightweight comfort. Some of our newest products include the M1000 wireless headset that delivers wireless, hands-free communications with other Bluetooth™ products, such as mobile phones and PDAs. This product delivers the superior sound quality that our customers and the market have come to expect from Plantronics.

Many of our models have inline call answer/end buttons so users do not have to handle or look at their phone, and our noise canceling models facilitate voice enabled features.

Our PC headset product revenues declined year over year and we believe that the PC headset market did not experience growth in fiscal 2002. Long-term, we believe that a number of fundamental factors will increase our customers' need for PC headsets, including Internet multimedia applications such as streaming audio and video, Internet telephony, on-line chat, and video conferencing. Other factors that are presently expected to contribute to growth of this market include new digital media, (CD, MP3, and DVD), broadband growth, speech recognition, new advanced games, and the addition of speech and voice capabilities to both Windows and Office XP. We believe these factors are important over the longer term, but may not contribute to market growth in fiscal 2003. However, in fiscal 2002, we substantially broadened our product line and thus believe we are well positioned to grow in fiscal 2003.*

WALKER AND OTHER SPECIALTY PRODUCTS

With the recent acquisition of Ameriphone in January 2002, we have expanded our product line for our hearing-impaired customers with mild to severe hearing loss and other special communications needs. Many states are supplying these products to their residents, either free of charge or for a nominal fee. As the mean age of the population increases, demand for these types of products is expected to grow. Our premier product, the Clarity® telephone, features volume control circuitry, oversized buttons, a ringer volume control and a light that flashes when the telephone rings. Our specialty products operation provides headsets and other equipment for special applications that are not served by our standard headset product lines.

INDUSTRY SEGMENTS AND FOREIGN OPERATIONS

We are engaged in the design, manufacture, marketing and sales of telecommunications equipment including headsets, telephone headset systems and other specialty telecommunications products. We operate in one business segment. Our operations are organized to focus on three principal markets: call center and office products, mobile and computer products, and other specialty products including products for customers with special communications needs. Because we operate in one segment, all financial segment information required by the Financial Accounting Standards Boards Statement No. 131 (Disclosures about Segments of an Enterprise and Related Information) can be found in the consolidated financial statements and related notes herein commencing on page 36.

In fiscal 2000 and 2001, approximately 34.0% and 31.9% of our net sales were derived from sales to foreign customers, respectively. In fiscal 2002, non-U.S. sales accounted for approximately 31.3% of total net sales. Sales to foreign customers are generally subject to such additional risks as fluctuations in exchange rates, increased tariffs and the imposition of other trade barriers. In fiscal 2002, we engaged in hedging activities to protect our transaction exposure and mitigate exchange rate risks. We hedged our positions in both the Euro and the British Pound Sterling, which constitute the majority of our currency exposure. To the extent that we increase sales to foreign customers, or increase our transactions in foreign currencies, or that we are unsuccessful in our hedging strategies, our results of operations could be materially adversely affected by exchange rate fluctuations.

PRODUCTS

SUMMARY

Our product line consists of lightweight communications headsets, telephone headset systems, headset accessories and services, and specialty telephones and other products for customers with special communications needs. Our headset products incorporate unique features that we believe offer compelling performance advantages:

COMFORT. We believe our focus on ergonomics is critical to our success. We maintain what we believe is the industry's most extensive database for the design of comfortable headsets. Our database includes measurements from over 800 physical molds taken of different ear types. The measurements are digitized and stored in a CAD/CAM database along with critical head contour measurements. In addition, we study weight drag to determine optimum weight distribution on the ear.

SOUND QUALITY. In designing our products, we have conducted headset sound quality (e.g. preference and intelligibility) research on substantially all telephone systems in both listening and speaking modes. We believe we have achieved the industry's best signal-to-noise ratios, the most powerful noise-canceling performance (to block out background sounds in unusually loud environments), and a voice tube design that does not require the microphone boom to be positioned precisely for proper functioning. The voice tube is ideal for most office and call center environments, with the additional benefits of an attractive appearance, easy hygienic replacement, and lighter weight. The clear color and gently curved shape of the Plantronics' voice tube are registered trademarks of Plantronics.

DURABILITY. We have forty years of experience understanding headset durability and have successfully incorporated this knowledge into our product designs that we believe generally last longer than the best comparable competitive products.

In addition to a complete line of industry-leading headsets, headset systems, headset telephones and amplifiers, we also provide headset accessories which include replacement Plantronics' voice tubes, ear cushions, eartips and wind noise suppressors. These replacement parts allow end users to revitalize their headset to maintain maximum performance and comfort. We also sell a full line of accessory products, including handset lifters and in-use indicators, which allow our customers increased mobility and ease of use. In addition, we provide ongoing customer service and support to our customer base.

We believe our customer support and service programs offer competitive advantages because our end users and customers have easy access to Plantronics' superior products and services. We consistently receive high customer satisfaction ratings for our products and services.

HEADSETS

TELEPHONY APPLICATIONS: Headsets for use with corded telephones generally consist of two distinct units. The "top" is the portion that the user wears. This portion is generally associated with the term "headset." The headset top contains the speaker and the microphone and a means to have these in the correct location for comfortable use. The headset "base," often referred to as an amplifier or telephone adapter, interfaces with the telephone or other equipment. The headset base is currently required in most standard telephone applications. Increasingly, the headset interface is being built into the corded telephone or call center call distribution system with which the headset is being used, allowing use of the headset top alone.

MOBILE APPLICATIONS: Many mobile telephones (both cellular and portable units) come with a dedicated standard 2.5mm headset port, permitting the headset to be plugged directly into the telephone handset. On those cellular devices that do not have a standard headset port, we have special versions that fit directly into a non-standard headset port. We also sell adapters that plug into non-standard headset ports to allow standard headsets to work with a phone. As the adoption of headsets increases, we expect that more cordless telephones, cellular telephones and other devices will be equipped with headset interfaces.*

COMPUTER APPLICATIONS: Computers and other electronic equipment generally do not require a separate adapter and our headsets are designed to plug directly to the equipment (either to the computer's analog sound card or, in the case of our digital signal processing (DSP) line, into the USB port of the computer).

HEADSET TOP STYLES: There are four basic headset "top" styles:

Over-the-head headsets with ear cushions. The Supra® headset, still our most popular model, is an over-the-head model available with sound reception in one or both ears. The Encore® headset features all of the qualities of the Supra headset, plus user-controllable tone adjustment and greater adjustability to enhance comfort. The newly introduced DuoPro headset comes in a convertible, over-the-head and over-the-ear configuration. Most of our present models of headsets for use with computers, including our new .Audio™ PC headset line as well as the existing DSP line, are over-the-head style. Several of our headsets for use with mobile telephones, the M110, M114, M170 and M175 models, are also over-the-head headsets (with the M170 and M175 models readily converting to the over-the-ear style).

Over-the-ear headsets with a receiver that rests on either ear. The Mirage® telephone headset uses a miniaturized behind-the-ear capsule. Attached to it is a small disc-shaped receiver that rotates to fit against either ear. The receiver rests gently on the ear, not in it. The M120, M124, M130 and M135 mobile headsets are also designed with the receiver resting on the ear with a comfortable earloop that holds the headset in place. The M1000 Bluetooth headset is an over-the-ear headset. As noted above, the mobile headset models M170 and M175, and the DuoSet telephone headset, convert from over-the-head to the over-the-ear style.

Over-the-ear headsets with an eartip. The TriStar® headset, the industry's lightest commercial telephone headset, features maximum user adjustments for excellent stability, comfort and sound quality. Sound is delivered to the ear by an acoustic eartip that attaches to the comfortable earloop of the headset. The StarSet® headset is the distinctive Plantronics headset that uses a small capsule that fits behind and in the outer portion of the ear. The headset is extremely lightweight, requiring no headband, and the eartip's acoustic coupling provides exceptional sound quality.

Headsets that rest in the outer portion of the ear. The FreeHand® headset offers a functional and lightweight design that allows it to be easily and quickly placed on or removed from its position in the outer portion of the ear with one hand. Its adjustable microphone boom may be rotated for optimum transmit performance. Our M140 and M145 models are versions of the FreeHand headset designed for use with mobile telephones. The receiver of the new M205 earbud style headset rests in the outer part of the ear with the microphone incorporated into the cord leading to the mobile telephone.

As set forth above, we offer a broad line of headset styles that can be worn over the head, in the ear or over either ear. Many of our headsets offer either the proprietary Plantronics voice tube (our most popular solution, suitable for the majority of environments) or a noise-canceling microphone (appropriate for users in loud environments). All telephone-based headsets, in conjunction with their associated amplifiers, are designed for use with substantially all of the different telephone systems currently available.

Basic models include features such as user volume control, a mute switch and the Quick Disconnect™ connector, which allows users to leave the phone without removing their headsets or disconnecting their call. We sell a full range of amplifiers designed to work with substantially all telephone systems. We also sell telephone headset systems that plug directly to the phone line and adapters to allow headsets to connect to mobile telephones.

PLANTRONICS SERVICES AND REPAIR

We support our product offerings with a technical assistance center to assist our customers with technical questions. Our worldwide service center operations provide a quick response to warranty support and out-of-warranty service needs.

We provide our customers a variety of ways they can contact us for their support needs, including:

• Toll-free 800 support with multiple-language capabilities
• Web-based FAQ database
• Web-based question submission
• Live online chat
• Instant call-back support

In addition, we offer online user's manuals, installation guides, software updates, warranty information and our Quick Web and Quick Fax services.

OTHER SPECIALTY PRODUCTS

Walker Equipment, one of our business groups, sells specialty telephones for the mild to severe hearing impaired. Walker's premier product line, the Clarity power telephone with accessories, has an extra loud ringer, an extra large lighted keypad, a light that flashes when the telephone rings, volume control circuitry, as well as other features to assist our hearing impaired customers in communicating effectively. With our recent acquisition of Ameriphone in January 2002, we have expanded our hearing impaired products to include an additional line of telephones and other accessories designed for customers with special communications needs. In addition, Walker sells amplified and noise-canceling handsets for high-noise environments, and a full line of replacement and original equipment handsets for specialized applications, such as: elevators, telephone booths and information kiosks.

Plantronics' Special Products group manufactures custom headsets and other equipment for special applications that are not served by our standard headset product lines. From its first products used for early space efforts, Plantronics Special Products offering has grown to include over 800 different headset models. Customers such as NASA, the Federal Government, and 911 Dispatch Centers rely on Plantronics quality headsets for their most unique communications needs which may include custom headset configurations for specific applications.

PRODUCT DEVELOPMENT

Since our introduction of the original lightweight headset in 1962, enhancing communications has been the primary focus of our development efforts. As we have expanded globally, we have increased the scope of these efforts to support international product needs. We maintain an extensive database of head and ear shapes to assist in the development of our products. Our concern for ergonomics and our efforts to design in comfort and safety have resulted in such product innovations as a conformable loop designed to adapt to the ear, the unique off-the-ear design of our new DuoPro headset, and the SoundGuard Plus^TM system, which increases intelligibility and provides superior sound quality.

In the past fiscal year we have developed and launched a large number of products serving the call center and office, as well as the mobile and computer markets. Such products include the DuoPro convertible headset and the DECT-based CA-40 cordless headset system, for the call center and office; the M205 earbud style headset for the mobile market; and the .Audio (pronounced dot audio) comprehensive line of eight new analog PC headsets, and a new analog PC microphone offering high performance at a low price point for the computer market. We have also invested substantial time and resources in the development of Bluetooth headsets and systems. For example, we recently announced the M1000 wireless headset which delivers wireless, hands-free communications with other Bluetooth products, such as mobile phones and PDA's. The recently announced M1500 Bluetooth headset system is designed to allow users to enjoy the benefits of a cordless Bluetooth headset with their existing mobile phone. The M1500 Bluetooth headset is expected to be commercially available in 2002.*

We believe that new technologies such as VoIP will be deployed at an ever-increasing rate.* To that end, in the fiscal year, we launched the DA-50 USB-to-headset adapter which allows users to connect Plantronics' professional H-top headsets to their computers for VoIP soft phone applications. We will also continue to invest in product development for other emerging technologies as appropriate to our business.

We have a number of product and core technology development programs currently underway, as we plan to further broaden our product line with the goal of creating products that truly enhance personal communications.* We expect this trend to continue in our next fiscal year.* One benefit of this focus on technology has been the creation of a record number of patent disclosures and filings over the past year.

Most of our research and development is carried out by our in-house engineering staff in the United States and England. We supplement our in-house engineering capabilities through selected outside contracting arrangements. Research, development and engineering expenditures were $21.9 million, $27.0 million, and $30.3 million for fiscal years 2000, 2001, and 2002, respectively. We believe that substantial investment in research and development is imperative to maintain and grow our position in the industry and, therefore, intend to increase our spending for research, development and engineering in fiscal 2003 and subsequent fiscal years.*

Our product development efforts are directed toward both enhancing our existing products and developing new products that capitalize on our core technology and expand our product offerings to new user markets. The success of new product introductions is dependent on a number of factors, including appropriate new product selection, timely completion and introduction of new product designs, cost-effective manufacturing of such products, quality of new products, the acceptance of new technologies such as Bluetooth, and general market acceptance of all new products. To be successful in the future, we must be able to develop new products, qualify these products with our customers, successfully introduce these products to the market on a timely basis, and commence and sustain volume production to meet customer demands. Although we have attempted to determine the specific needs of the telephony, mobile, computer, residential and home office user markets, there can be no assurance that the market niches identified will, in fact, materialize or that our existing and future products designed for these markets will gain substantial market acceptance. Further, assuming the markets develop and our products meet customer needs, there is no assurance that such new products can be manufactured cost effectively and in sufficient volumes to meet the potential demand.

The technology of telephone headsets has traditionally evolved slowly. Historically, our product life cycles are three to five years, prior to introduction of the next generation of products, which usually include stylistic changes and quality improvements, but such trends are based on similar technology. Our newer emerging technology products, particularly in the mobile and computer markets, are exhibiting shorter life cycles more in line with the consumer electronics market, and are consequently more sensitive to market trends and fashion. We believe that future changes in technology will come at a faster pace. Our future success will be dependent in part on our ability to develop products that utilize new technologies and to adapt to changing market trends quickly. In addition, to successfully avoid product obsolescence, we will have to monitor technological changes in telephony, as well as users' demands for new technologies. Failure to keep pace with future technological changes could materially adversely affect our revenues and operating results.

SALES AND DISTRIBUTION

We have a well-established multilevel worldwide distribution network. Our principal customers are distributors, retailers, telephony service providers, and OEM partners.

Specialized headset distributors represent our largest distribution channel. These distributors generally sell on a national basis. Electronics wholesalers represent our second largest channel. They typically offer a wide variety of products from multiple vendors to both resellers and end users. These distribution channels generally maintain inventory of our products, and our revenues may be affected by our distributors' fluctuating inventory levels even when market demand is stable. In fiscal 2002, we continued to successfully reduce our order lead times as well as our inventory levels in the channel.

The retail channel consists of office supply and consumer electronics retailers, consumer products and office supply distributors, and catalog and mail order companies. Retailers primarily sell headsets to corporate customers, small businesses, small offices and home offices.

Call center OEMs and manufacturers of automatic call distributor systems (ACDs) and other telecommunications and computer equipment also utilize Plantronics headsets. Call center equipment OEMs do not typically manufacture their own peripheral products, and therefore distribute our headsets under their own private label, or as a Plantronics branded product.

Mobile telephone OEMs include both manufacturers of mobile telephone handsets and wireless carriers operating cellular, PCS, GSM and other mobile telephone networks. They do not manufacture headsets, but increasingly will distribute our headsets on a co-branded basis, as a Plantronics branded product or under their own private labels.

Computer OEMs include both manufacturers of computer hardware (including personal computers and specialized components and accessories for personal computers) and software suppliers (such as suppliers of voice recognition systems for use with personal computers). Many companies do not typically manufacture headsets but look to us for bundling our headsets with their products. Currently most of the OEM bundling is done on a Plantronics-labeled basis, with some of the OEMs doing so on a privately labeled or co-branded basis.

The telephony service provider channel is comprised of former Regional Bell Operating Companies and other telephone service providers that purchase headsets from us for use by their own agents. Certain of these service providers also resell headsets to their customers.

We also make direct sales to certain government agencies, including NASA and the FAA. In addition, certain of our distributors are authorized resellers under a GSA schedule price list and sell our products to government customers pursuant to that agreement.

We maintain a direct sales force worldwide to provide ongoing customer support and service globally. We also retain commissioned manufacturers' representatives to assist in selling through the retail channel.

BACKLOG

Our backlog of unfilled orders was $17.3 million on March 31, 2002 compared to $16.6 million at the end of fiscal 2001. The increase in backlog compared to the prior year was due to the acquisition of Ameriphone. We include in backlog all purchase orders scheduled for delivery over the next twelve months. As part of our commitment to customer service, our goal has been to ship products to meet customers' requested shipment dates. The majority of our orders are fulfilled within two to five business days. Our backlog is occasionally subject to cancellation or rescheduling by the customer on short notice with little or no penalty. We do not believe our backlog as of any particular date is indicative of actual sales for any future period and therefore should not be used as a measure of future revenue.

COMPETITION

We compete in several different markets, specifically the call center and office, mobile and computer and other specialty markets. There are a number of different competitors in each of these market niches. We believe the principal competitive factors in each market are product features, comfort and fit, product reliability, customer service and support, reputation, distribution, ability to meet delivery schedules, warranty terms, product life, and price. We believe that our brand name recognition, high quality reputation, distribution network, responsive customer service and support programs, large user base and extensive number of product variations, together with our comprehensive experience in designing safe, comfortable and reliable products, and dealing with regulatory agencies, are key factors necessary in maintaining our position as a leading supplier of lightweight communications headsets.

In the call center user market, we face different competitors depending on the channel of distribution and the geographic location. We anticipate that we may face additional indirect competition in this market from technological advances such as wireless and Bluetooth systems. Although we have historically competed very successfully in the call center market, there can be no assurance that we will be able to continue our leadership position in that market.

The office market, including both traditional and small or home office, and residential markets, involves the sale of headsets for connection to single-line or office telephone systems, cellular and cordless telephones and computers. There is indirect competition from speakerphones. Certain competitors in the call center user market also sell headsets for use in the office market.

Competitors in the mobile market generally come from outside the call center market. They include the mobile phone manufacturers who typically outsource phone accessories like headsets, and companies that focus primarily on the mobile and/or cordless phone accessories markets. There is indirect competition from hands-free car kits that also allow users to drive with both hands on the wheel. Important competitive factors in the mobile market include product styling, product reliability, product features, competitive pricing, sound quality, comfort and fit, ability to meet delivery schedules, customer service and support, reputation, distribution, warranty terms, and product life.

In the computer market, we compete for business in both the retail channel and through OEMs. We face competition principally from established computer peripheral vendors. These vendors have established relationships with their distribution channels, enabling them to gain broad and deep global distribution. There is indirect competition from stand-alone microphones and loudspeakers for use with computers. Competition through the retail channel is based upon differentiated retail packaging, superior microphone and speaker performance, price and headset style and color. Competition for OEM business is based upon offering highly accurate microphones optimized to the OEM's software or system, unique styling, competitive pricing, and consistent quality with low defect rates.

The residential market involves the sale of headsets, telephones and other specialty products for use by the hearing impaired and other customers with special communications needs, and single and multi-line corded and cordless headset telephone solutions. This market is principally served by the retail channel and through certain OEMs. Our competition in the residential market comes principally from competitors in the mobile and computer markets and, in the case of our Walker Clarity telephones for the hearing impaired, from certain niche market manufacturers of similar products.

As we develop new generations of products and enter new markets, including the developing business and home office user markets, we anticipate facing additional competition from companies that currently do not offer communications headsets. Such companies may be larger, offer broader product lines and have substantially greater financial resources. Such competition could negatively affect pricing and gross margins. We believe that our experience in design and manufacture of comfortable and well-fitting headsets, and excellent acoustics will assist us in our efforts to sell headset products in the face of this new competition.* However, there is no assurance that we will be able to compete successfully.

We believe that the following key factors enable us to maintain our position as a leading supplier of lightweight communications headsets:

• brand name recognition;
• high quality reputation;
• large, diverse distribution networks;
• strong customer service;
• diverse product offerings;
• ability to design safe and reliable products; and
• an understanding of regulations.

Although we believe we compete successfully with respect to these factors, if we do not compete successfully, it could materially adversely affect our business, financial condition and results of operations.

MANUFACTURING AND SOURCES OF MATERIALS

The majority of our manufacturing operations consist of assembly and testing, most of which is performed at our facility in Mexico. We have substantially smaller manufacturing operations in California, Tennessee and the United Kingdom. In addition, we outsource the manufacture of a limited number of products to third parties, typically in China.

We purchase the components for our headset products, including proprietary semi-custom integrated circuits, amplifier boards and other electrical components, from suppliers in Asia, the United States, Mexico, and Europe. Raw materials are procured to forecast. The majority of our components and subassemblies used in our manufacturing operations are obtained, or are reasonably available, from dual-source suppliers.

We procure materials to meet forecasted customer requirements. Special products and large orders are quoted for delivery after receipt of orders at specific lead times. Since most manufacturing occurs prior to the receipt of purchase orders, we maintain minimum levels of finished goods based on market demand in addition to inventories of raw materials, work in process and subassemblies and components.

ENVIRONMENTAL MATTERS

We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. We believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations. We have included in our financial statements a reserve of $1.5 million for possible environmental remediation related to one of our discontinued businesses. While no claims have been asserted against us in connection with this matter, there can be no assurance that such claims will not be asserted in the future or that any resulting liability will not exceed the amount of the reserve. It is possible that future environmental legislation may be enacted or current environmental legislation may be interpreted to create environmental liability with respect to our facilities or operations.

INTELLECTUAL PROPERTY

We maintain a program of seeking patent protection for our technology. As of May 31, 2002, we had forty-one United States patents in force, expiring in 2002 to 2019. Some of these patents are also issued in certain foreign countries.

Our success will depend in part on our ability to obtain patents and preserve other intellectual property rights covering the design and operation of our products. We intend to continue to seek patents on our inventions when appropriate. The process of seeking patent protection can be lengthy and expensive, and there can be no assurance that patents will be issued for currently pending or future applications or that our existing patents or any new patents issued will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to us. We may be subjected to, or may initiate, litigation or patent office interference proceedings, which may require significant financial and management resources. The failure to obtain necessary licenses or other rights or the advent of litigation arising out of any such intellectual property claims could have a material adverse effect on our operations.

We own registered trademarks with respect to the Plantronics and Ameriphone names, the Plantronics logo design and the names of many of our products and product features, including, but not limited to, our Alertmaster™ , Encore, FreeHand, JV-35, Mirage, Practica®, O90, SoundGuard®, StarSet®, Supra, and TriStar products and features. We currently have United States and foreign trademark applications pending in connection with certain new products and product features. We have such trademark registrations in place on some or all of those marks in the United States and a number of countries throughout the world. We claim common law trademark rights in many of our products and/or product features. We also attempt to protect our trade secrets and other proprietary information through comprehensive security measures, including agreements with customers and suppliers, and proprietary information agreements with employees and consultants. We also intend to seek copyright registrations in the future. We own a number of domain name registrations and intend to seek more. There can be no assurance that our existing or future copyright registrations, trademarks, trade secrets or domain names will be of sufficient scope or strength or provide meaningful protection or any commercial advantage to us.

EMPLOYEES

On March 31, 2002, we employed 2,361 people worldwide, including 1,613 in our manufacturing facility in Tijuana, Mexico. No employees are currently covered by collective bargaining agreements or are members of any labor organization as far as we are aware. We have not experienced any work stoppages and believe that our employee relations are good.

Set forth below is certain information regarding the senior management and executive officers of Plantronics and their ages as of May 31, 2002.

NAME	AGE	POSITION
Owen Brown	55	Vice President - Development and Chief Technology Officer
Benjamin Brussell	41	Vice President - Corporate Development
Lyndall Fry	45	Vice President - Quality
Brad Guenther	46	Vice President - Finance
Don Houston	48	Senior Vice President - Sales
Ken Kannappan	42	President and Chief Executive Officer
Steve Krug	44	President - Walker Equipment Division
Jean-Claude Malraison	55	Managing Director - Europe, Middle East & Africa
Craig May	42	President - Call Center and Office Division and Senior Vice President - Marketing and Development
Richard Pickard	49	Vice President - Legal, General Counsel and Secretary
Barbara Scherer	46	Senior Vice President - Finance & Administration and Chief Financial Officer
Joyce Shimizu	47	President - Mobile Communications Division
Neil Snyder	50	President - Computer Audio Systems Division
Terry Walters	53	Vice President - Operations

MR. BROWN was appointed Vice President - Development and Chief Technology Officer in July 1999. Prior to joining Plantronics, Mr. Brown worked for Omnipoint Technologies, Inc., as the Product Development Director from 1996 to 1998 and as Vice President, Products and Technology at JRC International, Inc., from 1994 to 1996. He received his Bachelor's degree in Engineering Physics at McMaster University of Canada and went on to receive his Masters degree in Electrical Engineering from the same institution.

MR. BRUSSELL joined Plantronics in March 1998 as Vice President - - Corporate Development and reports directly to the President and Chief Executive Officer. Prior to joining Plantronics, Mr. Brussell was Vice President, Corporate Development at Storage Technology Corporation, a leading provider of enterprise and network information storage systems, from March 1992 to March 1998. From June 1990 until March 1992, Mr. Brussell acted as a consultant to Storage Technology Corporation and other technology and health care industry companies. From January 1985 to June 1990, Mr. Brussell held various positions with Solomon Brothers, the last of which was Vice President, Corporate Finance, Technology Group. Mr. Brussell has a Bachelor of Arts degree in Math/Economics from Wesleyan University and a Masters degree in Management from M.I.T. Sloan School of Management. Mr. Brussell is a director of Dot Hill Systems Corporation, a manufacturer of high performance data storage systems.

MS. FRY joined Plantronics in August of 1998 and is the Vice President of Quality. Prior to joining Plantronics, Ms. Fry was with Siemens A.G. for fourteen years, most recently as the Head of Quality Assurance with the Siemens Wireless Terminals Division in Austin, Texas, from 1993 to 1998. Ms. Fry has over fifteen years of manufacturing, materials and quality experience. Ms. Fry received a Bachelor of Arts from the University of California, Irvine and an M.B.A. in International Business from the College of Notre Dame.

MR. GUENTHER joined Plantronics in May 1993 as Director of Finance. Mr. Guenther was promoted to Corporate Controller in March 1998 and then to Vice President of Finance, Corporate Controller in July 1999. Prior to joining Plantronics, Mr. Guenther spent eleven years with Hewlett Packard Corporation in various financial positions and two years with Chevron in their accounting/management training program and in internal audit. Mr. Guenther received a Bachelor of Science degree in Accounting from Santa Clara University and a Masters of Business Administration from the University of Arizona.

MR. HOUSTON joined Plantronics in November 1996 as Vice President of Sales and was promoted to Senior Vice President - Sales in March 1998. From February 1995 through November 1996, Mr. Houston served as Vice President - Worldwide Sales for Proxima Corporation, a designer, developer, manufacturer and marketer of multimedia projection products. From 1985 until January of 1995, Mr. Houston held a number of positions at Calcomp, Inc., which is engaged in the business of manufacturing computer peripherals for the CAD and graphic market, including Regional Sales Manager and Vice President of Sales, Service and Marketing. Prior to 1985, Mr. Houston held various sales and marketing management positions with IBM Corporation. Mr. Houston is a graduate of the University of Arizona with a Bachelor of Science degree in Business/Marketing.

MR. KANNAPPAN joined Plantronics in February 1995 as Vice President - Sales, responsible for OEM Sales and the Asia Pacific/Latin America markets for Plantronics, Inc. He was promoted to Vice President - Sales, responsible for the United States, Asian and Latin American markets in September 1995. He was promoted to Managing Director of our Plantronics Limited subsidiary in England in March 1996. In March 1997, Mr. Kannappan returned from England and was promoted to Senior Vice President responsible for Plantronics' Worldwide Operations, our Mobile and Walker Equipment businesses and Plantronics Limited. In March 1998, Mr. Kannappan was promoted to President and Chief Operating Officer. In January 1999, he was promoted to Chief Executive Officer and appointed to the Board of Directors. Prior to joining Plantronics, Mr. Kannappan was Senior Vice President of Investment Banking for Kidder, Peabody & Co. Incorporated, where he was employed from August 1985 through January 1995. Mr. Kannappan has a Bachelor of Arts degree in Economics from Yale University and a Masters of Business Administration from Stanford University. Mr. Kannappan is also a Director of Mattson Technology, Inc., a supplier of advanced process equipment for the semiconductor industry, and Integrated Device Technology, Inc., a manufacturer of communications integrated circuits.

MR. KRUG joined Plantronics in December 1996 as President, Walker Equipment Corporation, then a wholly owned subsidiary of Plantronics. Walker Equipment Corporation was merged into, and became a division of Plantronics in 1997. Mr. Krug is responsible for all activities of this handset and specialty phone products division. Prior to joining Plantronics, Mr. Krug was Executive Vice President and General Manager of BEL-Tronics, Ltd., a consumer electronics firm, from 1994 to 1996. Mr. Krug also served as Chief Executive Officer and Director of Almor Corporation from 1993 to 1994. Prior to that, he held progressively responsible positions in general management and strategic marketing and technology with FLIR Systems, Inc. (an affiliate company of Hughes Aircraft Company - 1990 to 1993) and Hughes Aircraft Company (1978 to 1990). Mr. Krug received his Bachelor degrees in Management Science and Applied Mathematics from University of California, San Diego and has done non-degreed work at Stanford University, MIT and University of California, San Diego.

MR. MALRAISON joined Plantronics in July 1999 as the Managing Director - Europe, Middle East & Africa. Mr. Malraison is resident in the Swindon, England and Hoofddorp, the Netherlands offices of Plantronics and is responsible for our European, Middle East and African sales and operations. Mr. Malraison received his Engineering degree at the Institute Superior D'Electronic Du Nord in France. Prior to joining Plantronics, Mr. Malraison spent twenty-eight years with IBM in a number of roles, most recently as Vice President, Business Partners, EMEA.

MR. MAY joined Plantronics in May 1998 as Vice President - Marketing. In July 1999, Mr. May was promoted to Senior Vice President - Marketing and Development. In Fall 1999, Mr. May's responsibilities expanded to include President of the Call Center and Office Division. Prior to joining Plantronics, Mr. May was most recently with Siemens Business Communications Systems, Inc., as Director of Product Management, Desktops and Mobility, from October 1993 to May 1998. Prior to that position, Mr. May served on special assignment to the President of Siemens Business Communications Systems, Inc., from July 1993 to October 1993. From June 1992 to July 1993, Mr. May was ROLM Executive Delegate for Siemens AG, Private Networks Group, Desktop Products, Munich, Germany. Mr. May held a number of positions with ROLM from July 1987 to June 1992, such as Director of Systems Planning, Manager of New Product Planning and Senior Product Manager. From 1981 to June 1987, Mr. May worked for ROLM, an IBM Company, and Shell Oil Company in various product manager and engineering positions of increasing authority. Mr. May has a Bachelor of Science degree in Electrical Engineering from the University of Houston.

MR. PICKARD joined Plantronics in June 2001 as Vice President - Legal, General Counsel and Secretary. Prior to joining Plantronics, Mr. Pickard spent 14 years at ZiLOG, a semiconductor manufacturer in Campbell, CA, all as General Counsel and Secretary and culminating as Senior Vice President, General Counsel and Secretary. Before that, Mr. Pickard worked as Corporate Counsel at NEC Electronics, Inc., and in private practice at Crosby, Heafey, Roach & May and Graham & James. Mr. Pickard received his law degree from the College of William and Mary and his undergraduate degree from Williams College.

MS. SCHERER joined Plantronics in March 1997, and in April 1997 was named Vice President - Finance & Administration and Chief Financial Officer. In March 1998, Ms. Scherer was promoted to Senior Vice President - Finance & Administration and Chief Financial Officer. Prior to joining us, Ms. Scherer held various executive management positions in the data storage industry spanning a nine year period. She also worked in strategic planning with one of the leading consulting firms for two years prior to that. Ms. Scherer is a graduate of the University of California, Santa Barbara and received her Masters from the Yale School of Organization and Management.

MS. SHIMIZU joined Plantronics in July 1983, and was promoted to President of the Mobile Communications Division in 1999. From 1995 to 1999, Ms. Shimizu was the Senior Marketing Director for the Computer and Mobile Systems Division, the predecessor to the Mobile Communications Division. Ms. Shimizu was named to that position in 1995. Prior to that, Ms. Shimizu held various positions in our marketing and sales organizations. Ms. Shimizu received an MBA from the Monterey Institute of International Studies and a Bachelor's degree in Japanese from University of California, Los Angeles.

MR. SNYDER joined Plantronics as Vice President and General Manager of the Computer Audio Systems Division in November 1998. Mr. Snyder was promoted to President of the Computer Audio Systems Division in July 1999. Before joining Plantronics, Mr. Snyder was the General Manager of the Zip Aftermarket group at Iomega Corporation from 1997 to 1998. Prior to that Mr. Snyder has held various executive positions at Colordesk, Ltd., Gold Disk Inc., and Borland International. Mr. Snyder attended the Rochester Institute of Technology and Michigan State University.

MR. WALTERS has been the Vice President - Operations since April 2000 and is responsible for the worldwide operations of Plantronics. Mr. Walters joined Plantronics in September 1997 as Vice President New Product Introduction and more recently directed development of Plantronics e-commerce business before his current assignment. Prior to joining Plantronics, Mr. Walters spent twenty-four years in Silicon Valley firms developing and manufacturing computer systems. Mr. Walters holds both a Bachelor of Science degree and a Masters degree in Industrial Operations from Bradley University.

Executive officers serve at the discretion of the Board of Directors and senior management serves at the discretion of the President and Chief Executive Officer. There are no family relationships between any of the directors and executive officers of Plantronics.

ITEM 2. PROPERTIES

Our principal executive offices are located in Santa Cruz, California. As of May 31, 2002, we owned or leased a total of approximately 487,000 square feet of manufacturing, administrative, engineering and office facilities, including: (i) approximately 185,770 square feet of research and development, light assembly operations, and warehouse and administrative facilities in Santa Cruz, California, approximately 40,000 square feet of which are leased to third parties as office and warehouse space; (ii) 8,375 square feet of light assembly and administrative facilities in Chattanooga, Tennessee under a lease expiring in 2005; (iii) 15,720 square feet of light assembly and administrative facilities in Garden Grove, California; (iv) approximately 215,000 square feet for assembly and related operations in Tijuana, Mexico, under several leases expiring in 2002, 2004 and 2005, each with options to renew; (v) approximately 48,684 square feet for research and development, assembly operations, sales and administration in Wootton Bassett, England under leases expiring in 2015; (vi) approximately 13,924 square feet for administrative facilities in Hoofddorp, The Netherlands, under a lease expiring in 2005; and (vii) smaller leased or rented facilities in Australia, Brazil, France, China, Germany, Hong Kong, Italy, Japan, Spain and Taiwan. We believe that our existing properties are suitable and adequate for our business. We believe that our premises have sufficient capacity available for expansion over the next few years.* We are currently engaging in a long-term space planning process with respect to our Santa Cruz, California headquarters facilities and our Tijuana, Mexico manufacturing plant. We believe that these facilities are unlikely to support all of our requirements for capacity over a mid to longer term planning horizon and are, therefore, evaluating our alternatives.

ITEM 3. LEGAL PROCEEDINGS

We are presently engaged in a lawsuit filed in the Superior Court in Santa Clara County, California by GN Hello Direct, Inc., a former Plantronics retail catalog distributor that was acquired by our single largest competitor, GN Netcom. GN Hello Direct makes various claims associated with the termination of the distribution relationship between Plantronics and Hello Direct, including that Hello Direct has suffered approximately $11 million in damages as a result of that termination. We consider Hello Direct's claims to be without merit. We will defend the claims vigorously and have filed counterclaims against Hello Direct for, among other claims, breach of contract and material misrepresentations related to our entering into that contract.

We are also involved in various other legal actions arising in the normal course of our business. We believe that it is unlikely that any of these actions will have a material adverse impact on our operating results.* However, because of the inherent uncertainties of litigation, the outcome of any of these actions could be unfavorable and could have a material adverse effect on our financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the security holders of Plantronics during the fourth quarter of the fiscal year ended March 31, 2002.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Our Common Stock is publicly traded on the New York Stock Exchange. The following table sets forth the range of closing sales prices for each period indicated.

	Low	High
Fiscal 2001       First Quarter       Second Quarter       Third Quarter       Fourth Quarter Fiscal 2002       First Quarter       Second Quarter       Third Quarter       Fourth Quarter	$ 26.83 34.00 36.00 16.00   $ 16.72 16.45 16.30 19.01	$ 39.50 50.73 50.88 54.99   $ 25.09 23.36 26.04 27.35

We paid no cash dividends during fiscal 2001 and 2002, and we have no current intention to pay cash dividends. Our Credit Agreement with a major bank restricts us from paying cash dividends on shares of our Common Stock to the extent that the aggregate amount of all such dividends paid or declared and Common Stock repurchased in any four consecutive fiscal quarter period (including the quarter in which any such cash dividends are declared or paid or any such Common Stock is repurchased) exceeds 50% of our cumulative consolidated net income reported in the eight consecutive fiscal quarter periods ending with the fiscal quarter immediately preceding the date of declaration of such dividend.

The information regarding the shares of our Common Stock authorized for issuance under our equity compensation plans under the caption "Equity Compensation Plan Information" in our 2002 Proxy Statement is incorporated herein by reference.

As of May 31, 2002, there were 114 holders of record of our Common Stock.

ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA

                                                               Fiscal Year Ended March 31,
                                                   -------------------------------------------------------
                                                     1998        1999        2000       2001       2002
                                                   ---------  -----------  ---------  ---------  ---------
                                                            (in thousands, except earnings per share)
STATEMENT OF OPERATIONS DATA:
Net sales........................................ $ 233,220  $   282,546  $ 309,143  $ 390,748  $ 311,181
Income before extraordinary item.................    39,189       55,253     64,517     73,550     36,248
Extraordinary loss, net of taxes.................        --        1,049         --         --         --
                                                   ---------  -----------  ---------  ---------  ---------
Net income....................................... $  39,189  $    54,204  $  64,517  $  73,550  $  36,248
                                                   =========  ===========  =========  =========  =========
Diluted net income per common share:
   Income before extraordinary item.............. $    0.72  $      1.01  $    1.22  $    1.38  $    0.74
   Extraordinary loss, net of taxes..............        --         0.02         --         --         --
                                                   ---------  -----------  ---------  ---------  ---------
   Net income.................................... $    0.72  $      0.99  $    1.22  $    1.38  $    0.74
                                                   =========  ===========  =========  =========  =========
   Shares used in diluted per share calculations.    54,669       54,846     53,019     53,263     49,238


                                                                           March 31,
                                                   -------------------------------------------------------
                                                     1998        1999        2000       2001       2002
                                                   ---------  -----------  ---------  ---------  ---------
                                                                          (in thousands)
BALANCE SHEET DATA:
Total assets..................................... $ 164,743  $   141,828  $ 168,307  $ 227,877  $ 201,058
Long-term debt...................................    65,050           --         --         --         --

                                                 Quarter Ended
                                      ------------------------------------------
                                      June 30,   Sept. 30,  Dec. 31,   Mar. 31,
                                        2000       2000       2000       2001
                                      ---------  ---------  ---------  ---------
                                       (in thousands, except earnings per share)
QUARTERLY DATA (UNAUDITED):
Net sales........................... $  98,135  $ 101,495  $ 102,901  $  88,217
Gross profit........................    55,040     55,616     55,624     43,522
Net income.......................... $  20,104  $  20,740  $  21,308  $  11,398
Diluted net income per common share. $    0.38  $    0.39  $    0.40  $    0.22



                                                 Quarter Ended
                                      ------------------------------------------
                                      June 30,   Sept. 30,   Dec 31,   Mar. 31,
                                        2001       2001       2001       2002
                                      ---------  ---------  ---------  ---------
                                       (in thousands, except earnings per share)
QUARTERLY DATA (UNAUDITED):
Net sales........................... $  77,790  $  75,297  $  79,867  $  78,227
Gross profit........................    36,744     35,649     37,257     38,195
Net income.......................... $   8,108  $   6,838  $  10,507  $  10,795
Diluted net income per common share. $    0.16  $    0.14  $    0.21  $    0.22

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CERTAIN FORWARD-LOOKING INFORMATION

This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. In addition, we may from time to time make oral forward-looking statements. These statements may generally be identified by the use of such words as "expect," "anticipate," "believe," "intend," "plan," "will," or "shall," and include, but are not necessarily limited to, all of the statements marked below with an asterisk ("*"). Such forward-looking statements are based on current expectations and entail various risks and uncertainties. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors, including but not limited to the following: the call center, mobile, computer and residential markets not developing as we expect; and a failure to respond adequately to either changes in technology or customer preferences. For a discussion of such factors, this Annual Report on Form 10-K should be read in conjunction with our 2002 Annual Report to Stockholders and the "Risk Factors Affecting Future Operating Results," commencing on page 24 of this Annual Report on Form 10-K. The following discussions titled "Annual Results of Operations" and "Financial Condition" should be read in conjunction with those risk factors, the consolidated financial statements and related notes included elsewhere herein.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's Discussion and Analysis of Financial Condition and Results of Operations are based upon Plantronics' consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances; the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

REVENUE RECOGNITION. Plantronics recognizes revenue net of estimated product returns, expected payments to resellers for customer programs including cooperative advertising and marketing development funds, volume rebates, and special pricing programs. Product returns are provided for at the time revenue is recognized, based on historical return rates, at what stage the product is in its expected life cycle, and assumptions regarding the rate of sell-through to end users from our various channels, which again, is based on historical sell-through rates. Should these product lives vary significantly from our estimates, or should a particular selling channel experience a higher than estimated return rate, or a slower sell-through rate causing inventory build-up, then our estimated returns, which net against revenue, may need to be revised. Reductions to revenue for expected and actual payments to resellers for volume rebates and pricing protection are based on actual expenses incurred during the period and on estimates for what is due to resellers for estimated credits earned during the period. If market conditions were to decline, Plantronics may take action to increase promotional programs resulting in incremental reductions in revenue at the time the incentive is offered based on our estimate of inventory in the channel that is subject to such pricing actions.

ACCOUNTS RECEIVABLE. We perform ongoing credit evaluations of our customers' financial condition and generally require no collateral from our customers. Plantronics maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of our customers should deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

INVENTORY. Plantronics maintains reserves for estimated excess and obsolete inventory based on projected future shipments using historical selling rates, and taking into account market conditions, inventory on-hand, purchase commitments, product development plans and life expectancy, and competitive factors. If markets for Plantronics' products and corresponding demand were to decline, then additional reserves may be deemed necessary.

Plantronics provides for the estimated cost of warranties at the time revenue is recognized. While Plantronics engages in extensive product quality programs and processes, and is ISO 9000 certified, our warranty obligation is affected by product failure rates and material usage levels. Should actual failure rates and material usage differ from our estimates, revisions to the warranty obligation may be required.

GOODWILL AND INTANGIBLES. Our business acquisitions typically result in goodwill and intangible assets, which affect the amount of future amortization expense and possible impairment charges that we may incur. The determination of the value of goodwill and intangible assets, as well as the useful life of amortizable intangible assets, requires management to make estimates and assumptions that affect our financial statements. For example, we perform an annual impairment review of goodwill based on the fair value of the reporting unit to which it relates. Should the actual or expected revenue of a reporting unit significantly decline, we may be required to record an impairment charge.

DEFERRED TAXES. Plantronics records its deferred tax assets at the amounts estimated to be realizable. While Plantronics has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the value of the corresponding assets, in the event Plantronics were to determine that it would not be able to realize all or part of its net deferred tax assets in the future, then an adjustment would be required.

ANNUAL RESULTS OF OPERATIONS

NET SALES. Net sales in fiscal 2002 decreased 20.4% to $311.2 million compared to $390.7 million in fiscal 2001, which in turn increased 26.4% compared to fiscal 2000 net sales of $309.1 million. Our fiscal years ended March 31, 2002 and 2001 both contained 52 weeks versus 53 weeks for fiscal year 2000.

Domestic sales decreased 19.8% to $213.7 million in fiscal 2002, compared to an increase of 30.6% to $266.3 million in fiscal 2001 from fiscal year 2000. Revenues decreased in all major U.S. channels, including U.S. distribution, OEM and retail. We believe the decline was due to the recession in the U.S. and the severe cutbacks in IT and telecom equipment spending.

International sales accounted for approximately 31.3% of total net sales in fiscal 2002, down from 31.9% of total net sales in fiscal 2001 and 34.0% in fiscal 2000. International sales in fiscal 2002 decreased 21.7% to $97.5 million compared to $124.5 million in fiscal 2001, which in turn increased 18.3% compared to the prior fiscal year. The decrease in fiscal 2002 was experienced in each of the European, Asia Pacific/Latin American and Canadian regions and reflects the lagging economy.

Fiscal year 2002 was a challenging year for Plantronics. Compared to the prior year, on a worldwide basis, revenues declined in all major geographies and channels. While our mobile business grew, revenues declined in all other product markets. The growth in our mobile business reflects modest overall market growth and, in our opinion, our improved market position. Our overall business continues to be impacted by a slowdown in global telecom and IT spending. We recognize that although certain economic indicators have improved, the overall economic environment remains uncertain and we remain uncertain concerning the overall demand for our products in the current economic environment.

Our net revenues for the year were affected by an accounting change mandated by the Emerging Issues Task Force of the Financial Accounting Standards Board, "EITF 00-25," since incorporated into "EITF 01- 9" (Note 2 to the audited financial statements), and our recent acquisition of Ameriphone in our fourth fiscal quarter (Note 11 to the audited financial statements). Revenues generated in our core call center and office market rebounded somewhat in the fourth quarter, but were down substantially when compared to the prior year. Based on the sequential rebound in our core business and other indicators, we are cautiously optimistic that order rates will begin to increase in the upcoming fiscal year.*

GROSS PROFIT. Gross profit in fiscal 2002 decreased 29.5% to $147.9 million (47.5% of net sales), compared to $209.8 million (53.7% of net sales) in fiscal 2001. Gross profit in fiscal 2001 increased 16.8% compared to gross profit of $179.6 million (58.1% of net sales) in fiscal 2000. The decrease in gross profit as a percent of net sales in fiscal 2002 mainly reflects a shift to lower margin products, particularly our mobile products. Lower sales volume resulted in fixed overhead costs being spread over a smaller number of units, causing gross margin to decline. We also increased our warranty provision and our provision for excess and obsolete inventory during the year, reflecting our emphasis on more consumer-oriented products with higher return rates and more volatile demand.

RESEARCH, DEVELOPMENT AND ENGINEERING. Research, development and engineering expenses in fiscal 2002 increased 12.2% to $30.3 million (9.7% of net sales), compared to $27.0 million (6.9% of net sales) in fiscal 2001. Research, development and engineering expenses in fiscal 2001 increased 23.5% compared to $21.9 million (7.1% of net sales) in fiscal 2000. The increase in these expenses reflects our continued investment in new product development including Bluetooth and other wireless technologies, and a general broadening of our product line in each of our markets. While the development costs spent on Bluetooth products did not produce revenues in fiscal 2002, we expect to begin to see a contribution to revenues in fiscal 2003.*

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative expenses in fiscal 2002 decreased 5.6% to $76.3 million (24.5% of net sales), compared to $80.8 million (20.7% of net sales) in fiscal 2001. Selling, general and administrative expenses in fiscal 2001 increased 25.3% compared to $64.5 million (20.9% of net sales) in fiscal 2000. The overall decrease in the level of spending during fiscal year 2002 was consistent with the decline in revenues. Overall, we were successful at reducing expenses and focusing on certain sales and marketing programs that we believe will give us a positive return on investment including programs capitalizing on the recent cell phone legislation and carrier safety campaigns.* General and administrative expenses increased as a percentage of net sales from the prior year mainly driven by higher legal expenses, the addition of Ameriphone's general and administrative expenses and the decline in revenues.

OPERATING INCOME. Operating income in fiscal 2002 decreased 59.5% to $41.3 million (13.3% of net sales), compared to $102.0 million (26.1% of net sales) in fiscal 2001. Operating income in fiscal 2001 increased 9.3% compared to $93.3 million (30.2% of net sales) in fiscal 2000. The decrease in operating income over the past fiscal year was primarily driven by lower net sales and the corresponding decrease in gross profit.

INTEREST AND OTHER INCOME, NET. Interest and other income in fiscal 2002 increased $1.8 million to $1.9 million compared to $0.1 million in fiscal 2001, which in turn decreased $1.5 million compared to $1.6 million in fiscal 2000. The increase in interest and other income in fiscal 2002 was primarily attributable to reductions of foreign exchange losses due to more favorable exchange rates and the implementation of a hedging program in fiscal 2002. The decrease in interest and other income in fiscal 2001 was primarily attributable to foreign exchange losses of $2.2 million from declining British Pound Sterling and Euro values.

INCOME TAX EXPENSE. In fiscal 2002, 2001, and 2000, income tax expense was $7.0 million, $28.6 million, and $30.4 million, respectively. During fiscal 2002, the successful completion of a routine tax audit and a reassessment of reserves related to R&D tax credits resulted in a favorable tax adjustment of $5.1 million accounting for $0.11 in earnings per share. Excluding this favorable tax adjustment, our overall effective tax rates were 28%, 28% and 32% for fiscal years 2002, 2001, and 2000, respectively.

FINANCIAL CONDITION

OPERATING ACTIVITIES. During the fiscal year ended March 31, 2002, we generated $76.8 million of cash from operating activities, due primarily to $36.2 million in net income, an income tax benefit of $1.1 million associated with the exercise of stock options, decreases of $12.6 and $14.5 million in accounts receivable and inventory, respectively, and an increase of $2.5 million in accounts payable. In comparison, we generated $68.3 million in cash from operating activities for the fiscal year ended March 31, 2001, due mainly to $73.6 million in net income, an income tax benefit of $16.6 million associated with the exercise of stock options, offset by increases of $8.1 and $14.5 million in accounts receivable and inventory, respectively.

INVESTING ACTIVITIES. During fiscal 2002, we purchased marketable securities of $27.3 million and received proceeds from maturities of marketable securities of $23.1 million. Expenditures for capital assets of $11.4 million were incurred principally in tooling for new products, furniture and fixtures, and leasehold improvements for facilities expansion. In January 2002, we purchased Ameriphone, a leading supplier of amplified telephones and other solutions to address the needs of individuals with hearing impairment and other special needs. The net cash expended for this acquisition was $10.4 million.

FINANCING ACTIVITIES. In the fiscal year ended March 31, 2002, we repurchased 3,581,421 shares of our Common Stock for $72.1 million at an average price of $20.10 per share, and reissued through employee benefit plans 133,110 shares of our Treasury Stock for $2.5 million. As of March 31, 2002, we remained authorized to repurchase approximately 140,200 shares under all repurchase plans. We received $1.2 million in proceeds from the exercise of stock options during the fiscal year ended March 31, 2002.

LIQUIDITY AND CAPITAL RESOURCES. Our primary cash requirements have been and will continue to be to fund capital expenditures, mainly for tooling for new products and leasehold improvements for facilities improvements and expansion, and for the repurchase of our Common Stock. As of March 31, 2002, we had working capital of $96.7 million, including $60.3 million of cash and cash equivalents and marketable securities, compared with working capital of $136.8 million, including $73.9 million of cash and cash equivalents and marketable securities, as of March 31, 2001.

In November 2001, we renewed our revolving credit facility with a major bank at $75 million, including a $10 million letter of credit subfacility. The renewed facility and subfacility both expire on January 15, 2003. As of March 31, 2002, we had no cash borrowings under the revolving credit facility or under the letter of credit subfacility. The terms of the credit facility contain covenants that materially limit our ability to incur debt, make capital expenditures and pay dividends, among other matters. These covenants may adversely affect our financial position to the extent we cannot comply with them. We are currently in compliance with the covenants under this agreement.

Beginning in the first quarter of fiscal year 2002, we entered into foreign currency forward-exchange contracts, which typically mature in one month, to hedge the exposure to foreign currency fluctuations of expected foreign currency-denominated receivables, payables and cash balances. We record on the balance sheet at each reporting period the fair value of our forward-exchange contracts and record any fair value adjustments in results of operations. Gains and losses associated with currency rate changes on the contracts are recorded in results of operations, as other income (expense), offsetting transaction gains and losses on the related assets and liabilities.

The following table summarizes our contractual obligations that were reasonably likely to occur as of March 31, 2002, and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

CONTRACTUAL OBLIGATIONS                               Payments Due by Period
                                                 Less than    1 - 3      4 - 5     After 5
March 31, 2002                          Total     1 year      years      years      years
(in thousands)                        ---------  ---------  ---------  ---------  ---------

Operating leases.................... $  12,378  $   2,539  $   4,068  $   1,730  $   4,041
Unconditional purchase obligations..    19,833     19,833
Forward exchange contracts..........     4,100      4,100
                                      ---------  ---------  ---------  ---------  ---------
Total contractual cash obligations.. $  36,311  $  26,472  $   4,068  $   1,730  $   4,041
                                      =========  =========  =========  =========  =========

We believe that our current cash balance and cash to be provided by operations, together with available borrowing capacity under our revolving credit facility and letter of credit subfacility, will be sufficient to fund operations for at least the next twelve months.* However, any projections of future financial needs and sources of working capital are subject to uncertainty. See "Certain Forward-Looking Information" and "Risk Factors Affecting Future Operating Results" for factors that could affect our estimates of future financial needs and sources of working capital.

RISK FACTORS AFFECTING FUTURE OPERATING RESULTS

Investors or potential investors in our stock should carefully consider the risks described below. The performance of our stock will reflect the performance of our business relative to, among other things, our competition, general economic and market conditions, and industry conditions. You should carefully consider the following factors in connection with any investment in our stock. Our business, financial condition and results of operations could be materially adversely affected if any of the risks occur. Should any or all of the following risks materialize, the trading price of our stock could decline and an investor could lose all or part of his or her investment.

THE CONTINUING GLOBAL ECONOMIC SLOWDOWN COULD RESULT IN A FURTHER REDUCTION IN OVERALL DEMAND FOR OUR PRODUCTS AND POTENTIAL UNCOLLECTABLE CUSTOMER RECEIVABLES, BOTH OF WHICH WOULD MATERIALLY ADVERSELY AFFECT OUR RESULTS.

While our markets have not exhibited highly cyclical behavior historically, our sales are affected by overall economic activity. If these trends are worse or last longer than presently anticipated, this could cause us not to meet the levels of sales required to achieve our projected financial results, which could in turn materially adversely affect the market price of our stock. Also, if the overall economy continues to slow further this could affect the financial health of certain purchasers of our products, potentially resulting in the failure of such purchasers to pay amounts that they owe to us. Due to the lagging economy, the credit risks relating to these resellers/customers have increased. We are in the process of implementing programs to assist us in monitoring and mitigating these risks, but there can be no assurance that such programs will be effective in reducing our credit risks. We also continue to monitor credit exposures from weakened financial conditions in certain geographic regions and the impact that such conditions may have on the worldwide economy. We have recently experienced some increased defaults by our customers on their accounts payable. Although these losses have not been significant, future payment defaults by customers could harm our business and have a material adverse effect on our operating results and financial condition.

A SUBSTANTIAL PORTION OF OUR SALES COME FROM THE CALL CENTER MARKET AND A DECLINE IN DEMAND IN THAT MARKET COULD MATERIALLY ADVERSELY AFFECT OUR RESULTS.

We have historically derived, and continue to derive, a substantial portion of our net sales from the call center market. This market had been growing steadily as new call centers have proliferated and existing call centers have expanded. In fiscal 2002, our sales in the call center market were below the level of sales in that market compared to the prior year. We do not believe that our decreasing sales are a result of market share gains by our competitors but, instead, believe that the sales slowdown is due to reduction in the level of overall market demand. While we believe that the call center market will grow in future periods, this growth could slow or revenues from this market could continue to decline in response to various factors. For example, consumer resistance to telemarketing could materially adversely affect growth in the call center market. A continued deterioration in general economic conditions could result in a reduction in the establishment of new call centers and in capital investments to expand or upgrade existing centers, and we believe this is in fact negatively affecting our business. Because of our reliance on the call center market, we will be affected more by changes in the rate of call center establishment and expansion and the communications products that call center agents use, than would a company serving a broader market. Any decrease in the demand for call centers and related headset products could cause a decrease in the demand for our products, which would materially adversely affect our business, financial condition and results of operations.

WE ARE COUNTING ON THE OFFICE, MOBILE, COMPUTER AND RESIDENTIAL MARKETS TO DEVELOP, AND WE COULD BE MATERIALLY ADVERSELY AFFECTED IF THEY DO NOT DEVELOP AS WE EXPECT.

While the call center market is still a substantial portion of our business, we believe that our future prospects will depend in large part on the growth in demand for headsets in the office, mobile, computer and residential markets. These communications headset markets are relatively new and undeveloped. Moreover, we do not have extensive experience in selling headset products to customers in these markets. If the demand for headsets in these markets fails to develop, or develops more slowly than we currently anticipate, or if we are unable to effectively market our products to customers in these markets, it would have a material adverse effect on the potential demand for our products and on our business, financial condition and results of operations. These headset markets are also subject to general economic conditions and if there is a continued slowing of national or international economic growth and the recession continues longer than we anticipated, these markets may not materialize to the levels we require to achieve our anticipated financial results, which could in turn materially adversely affect the market price of our stock.

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY DUE TO A NUMBER OF CAUSES OUTSIDE OUR CONTROL.

Our quarterly results of operations may vary significantly in the future for a variety of reasons, including the following:

• general economic conditions, compounded by the events on and following September 11^th;
• changes in demand for our products;
• insolvency of purchasers of our products or failure of purchasers of our products to pay amounts due to us;
• timing and size of orders from customers;
• price erosion;
• cancellations, inability to ramp production or delays in deliveries of components and subassemblies by our suppliers;
• changes in the mix of products sold by us;
• variances in the timing and amount of engineering and operating expenses;
• distribution channel mix variations;
• changes in the levels of cooperative advertising or market development funding required by retail resellers of our products;
• delays in shipments of our products;
• material product returns and customer credits;
• new product introductions by us or our competitors;
• entrance of new competitors;
• changes in actual or target inventory levels of our channel partners;
• increases in the costs of our raw materials, components and subassemblies; and
• seasonal fluctuations in demand and linearity of sales within the quarter.

Each of the above factors is difficult to forecast and thus could have a material adverse effect on our business, financial condition and results of operations.

We generally ship most orders during the quarter in which they are received, and, consequently, we do not have a significant backlog of orders. As a result, quarterly net sales and operating results depend primarily on the volume and timing of orders received during the quarter. It is difficult to forecast orders for a given quarter. Since a large portion of our operating expenses, including rent, salaries and certain manufacturing expenses, are fixed and difficult to reduce or modify, if net sales do not meet our expectations, our business, financial condition and results of operations could be materially adversely affected.

Our operating results can also vary substantially in any period depending on the mix of products sold and the distribution channels through which they are sold. In the event that sales of lower margin products, or sales through lower margin distribution channels, in any period represent a disproportionate share of total sales during such period, our operating results would be materially adversely affected.

We believe that period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied upon as indicative of future operating results. In addition, our operating results in a future quarter or quarters may fall below the expectations of securities analysts or investors, and, as a result, the price of our Common Stock might fall.

IF WE DO NOT MATCH PRODUCTION TO DEMAND, WE WILL BE AT RISK OF LOSING BUSINESS OR OUR GROSS MARGINS COULD BE MATERIALLY ADVERSELY AFFECTED.

Historically, we have generally been able to increase production to meet increasing demand. However, the demand for our products is dependent on many factors and such demand is inherently difficult to forecast. We have experienced sharp fluctuations in demand, especially for headsets for wireless and cellular phones. In addition, current global events, such as the U.S. military efforts in Afghanistan, the continuing terrorist scare in the U.S., and ongoing anthrax concerns may cause the economy to be more volatile, making it more difficult to match supply and demand in the marketplace. Significant unanticipated fluctuations in demand could cause the following operating problems, among others:

• If forecasted demand does not develop, we could have excess production or excess capacity. Excess production could result in higher inventories of finished products, components and subassemblies. If we were unable to sell these inventories, we would have to write off some or all of our inventories of obsolete products and unusable components and subassemblies. Excess manufacturing capacity could lead to higher production costs and lower margins.

• Significant reduction in production levels to address decreases in demand may leave us unprepared to meet a rapid increase in demand for our products.

• If demand increases beyond that forecasted, we would have to rapidly increase production. We depend on suppliers to provide additional volumes of components and subassemblies, and, therefore, might not be able to increase production rapidly enough to meet unexpected demand. This could cause us to fail to meet customer expectations. There could be short-term losses of sales while we are trying to increase production. If customers turn to competitive sources of supply to meet their needs, there could be a long-term impact on our revenues.

• Rapid increases in production levels to meet unanticipated demand could result in higher costs for components and subassemblies, increased expenditures for freight to expedite delivery of required materials, and higher overtime costs and other expenses. These higher expenditures could lower our profit margins. Further, if production is increased rapidly, there may be decreased manufacturing yields, which may also lower our margins.

Any of the foregoing problems could materially adversely affect our business, financial condition and results of operations.

WE DEPEND ON OUR SUPPLIERS AND FAILURE OF OUR SUPPLIERS TO PROVIDE QUALITY COMPONENTS OR SERVICES IN A TIMELY MANNER COULD ADVERSELY AFFECT OUR RESULTS.

Our growth and ability to meet customer demands depend in part on our capability to obtain timely deliveries of raw materials, components, subassemblies and products from our suppliers. We buy raw materials, components and subassemblies from a variety of suppliers and assemble them into finished products. We also have certain of our products manufactured for us by third party suppliers. The cost, quality, and availability of such goods are essential to the successful production and sale of our products. Obtaining raw materials, components, subassemblies and finished products entails various risks, including the following:

• We obtain certain raw materials, subassemblies, components and products from single suppliers, and alternate sources for these items are not readily available. To date, we have experienced only minor interruptions in the supply of these raw materials, subassemblies, components and products, none of which has significantly affected our results of operations. Current adverse economic conditions could lead to a higher risk of failure of our suppliers to remain in business or to be able to purchase the raw materials, subcomponents and parts required by them to produce and provide to us the parts we need. An interruption in supply from any of our single source suppliers in the future would materially adversely affect our business, financial condition and results of operations.

• Prices of raw materials, components and subassemblies may rise. If this occurs and we are not able to pass these increases on to our customers or to achieve operating efficiencies that would offset the increases, it would have a material adverse effect on our business, financial condition and results of operations.

• Due to the lead times required to obtain certain raw materials, subassemblies, components and products from certain foreign suppliers, we may not be able to react quickly to changes in demand, potentially resulting in either excess inventories of such goods or shortages of the raw materials, subassemblies, components and products. Relative to sales, inventory levels remained high through the first quarter of fiscal 2002, but have been on the decline since that time. Failure in the future to match the timing of purchases of raw materials, subassemblies, components and products to demand would materially adversely affect our business, financial condition and results of operations.

• Most of our suppliers are not obligated to continue to provide us with raw materials, components and subassemblies. Rather, we buy most raw materials, components and subassemblies on a purchase order basis. If our suppliers experience increased demand or shortages, it could affect deliveries to us. In turn, this would affect our ability to manufacture and sell products that are dependent on those raw materials, components and subassemblies. This would materially adversely affect our business, financial condition and results of operations.

• Although we generally use standard raw materials, parts and components for our products, the high development costs associated with emerging wireless technologies permits us to work with only a single source supplier of silicon chip-sets. We, or our chosen supplier of chip-sets, may experience challenges in designing, developing and manufacturing components in these new technologies which could affect our ability to meet time to market schedules and could materially adversely affect our business, operating results and financial condition.

WE SELL OUR PRODUCTS THROUGH VARIOUS CHANNELS OF DISTRIBUTION AND A FAILURE OF THOSE CHANNELS TO OPERATE AS WE EXPECT COULD DECREASE OUR REVENUES.

We sell substantially all of our products through distributors, retailers, OEMs and telephony service providers. Our existing relationships with these parties are not exclusive and can be terminated by either party without cause. Our channel partners also sell or can potentially sell products offered by our competitors. To the extent that our competitors offer our channel partners more favorable terms, such partners may decline to carry, de-emphasize or discontinue carrying our products. In the future, we may not be able to retain or attract a sufficient number of qualified channel partners. Further, such partners may not recommend, or continue to recommend, our products. In the future, our OEM customers or potential OEM customers may elect to manufacture their own products, similar to those we currently sell to them. The inability to establish or maintain successful relationships with distributors, OEMs, retailers and telephony service providers or to expand our distribution channels could materially adversely affect our business, financial condition or results of operations.

Our distribution channels generally hold inventories of our products, determined in their own business judgment to be sufficient to meet their customer's delivery requirements. Such inventory levels are subject to market conditions, business judgment by the reseller and our ability to meet their time-to-ship needs. Rapid reductions by our distributors, OEMs, retailers and other customers in the levels of inventories held in our products could materially adversely affect our business, financial condition or results of operations.

We generally offer our customers certain credit terms, allowing them to pay for products purchased from us between thirty and sixty days or more after we ship the products. Our receipt of payment for our products depends on the financial liquidity of those customers. If significant customers, or a significant number of customers, experience liquidity problems, this could affect our ability to collect our accounts receivable, which could materially adversely affect our business, financial condition or results of operations.

WE HAVE STRONG COMPETITORS AND WILL LIKELY FACE ADDITIONAL COMPETITION IN THE FUTURE.

The markets for our products are highly competitive. We compete with a variety of companies in the various markets for communications headsets. Our single largest competitor is GN Netcom, a subsidiary of GN Great Nordic Ltd., a Danish telecommunications conglomerate. GN Great Nordic reported revenues of 7.32 billion Danish Krone (approximately U.S. $868 million) for their fiscal year ending December 31, 2001, while GN Netcom's revenues for the same period were 1,930 million Danish Krone (approximately U.S. $232 million). GN Netcom has made several acquisitions over the years. We believe the acquisitions of Hello Direct and Jabra have provided GN Netcom with a broader mobile product line and greater marketing presence than they had prior to these acquisitions.

We currently operate principally in a multilevel distribution model - we sell most of our products to distributors who, in turn, resell to dealers or end-customers. GN Netcom's acquisitions indicate it may be moving towards a direct sales model. While we believe that our business and our customers benefit from our current distribution structure, if GN Netcom or other competitors sell directly, they may offer lower prices which could materially adversely affect our business and results of operations. In the face of current economic downturn, we are seeing lower prices from our competitors, particularly GN Netcom.

Logitech International S.A., a manufacturer and seller of computer accessory products, acquired Labtec Inc., a Vancouver, Washington-based provider of, among other products, headsets for use with computers, in March 2001. Following this acquisition, Labtec gained greater resources with which to compete with us than it had prior to its being acquired by Logitech.

We anticipate that we will face additional competition from companies that currently do not offer communications headsets. This is particularly true in the office, mobile computer and residential markets. On September 11, 2001, Sony Corporation and Telefonaktiebolaget LM Ericsson announced a merger of their mobile business worldwide including telephone accessories such as telephone headsets and adapters. They subsequently announced the launch of the Joint Venture's first product, a Bluetooth communications device which shipped in November 2001. We anticipate other competition from consumer electronics companies that currently manufacture and sell mobile phones or computer peripheral equipment. These new competitors are likely to be larger, offer broader product lines, bundle or integrate with other products communications headset tops and bases manufactured by them or others, offer products containing bases that are incompatible with our headset tops and have substantially greater financial, marketing and other resources than we do.

We anticipate that we will also face additional competition from companies, principally located in the Far East, which offer very low cost headset products, including products which are modeled on or direct copies of our products. These new competitors are likely to offer very low cost products which may result in price pressure in the market. If market prices are substantially reduced by such new entrants into the headset market, our business, financial condition or results of operations could be materially adversely affected.

We believe that the market for lightweight communications headsets is showing some signs of commoditization. In particular, we believe that our competitors, especially GN Netcom, are increasingly choosing to compete on price. While this has long been true of competitors from the Far East, we think the trend is accelerating and that customers are also more receptive to lower cost products, even when the quality, service or total value of the offer may be notably lower as well.

Historically, our expertise in acoustics and design has allowed us to design, develop and manufacture products with the levels of sound quality enabling us to meet the needs of our customers. Due to technological advances, including but not limited to better digital signal processing, our current and future competitors may be able to develop products with the same or better audio quality at lower costs. These technological advances may allow current and future competitors to compete more effectively in terms of product quality or price that could materially adversely affect our business and results of operations.

We believe that important competitive factors for us are product reliability, product features, customer service and support, reputation, distribution, ability to meet delivery schedules, warranty terms, product life and price. If we do not compete successfully with respect to any of these or other factors it could materially adversely affect our business, financial condition and results of operations. Further, if we do not successfully develop and market products that compete successfully with those of our competitors, it would materially adversely affect our business, financial condition and results of operations.

NEW PRODUCT DEVELOPMENT IS RISKY AND WE WILL BE MATERIALLY ADVERSELY AFFECTED IF WE DO NOT RESPOND TO CHANGING CUSTOMER REQUIREMENTS AND NEW TECHNOLOGIES.

Our product development efforts historically have been directed toward enhancement of existing products and development of new products that capitalize on our core capabilities. The success of new product introductions is dependent on a number of factors, including the proper selection of new product features, timely completion and introduction of new product designs, cost-effective manufacture of such products, quality of new products and market acceptance. To be successful in the future, we must develop new products, qualify these new products, successfully introduce these products to the market on a timely basis, and commence and sustain low-cost, volume production to meet customers' demands. Although we attempt to determine the specific needs of headset users in our target markets, because almost all of our sales are indirect, we may not always be able to timely and accurately predict end user requirements. As a result, our products, specifically, our range of Bluetooth products, may not be timely developed, designed to address current or future end user requirements, offered at competitive prices or accepted, which could materially adversely affect our business, financial condition and results of operations. Moreover, we generally incur substantial research and development costs before the technical feasibility and commercial viability of a new product can be ascertained. Accordingly, revenues from new products may not be sufficient to recover the associated development costs.

Historically, the technology used in lightweight communications headsets has evolved slowly. New products have primarily offered stylistic changes and quality improvements, rather than significant new technologies. The technology used in hands-free communications devices, including our products, is evolving more rapidly now than it has historically and we anticipate that this trend may accelerate. We believe this is particularly true for our newer emerging technology products especially in the mobile, computer markets, residential and certain parts of the office market. We believe products designed to serve these markets generally exhibit shorter lifecycles and are increasingly based on open standards and protocols. The end markets served are much larger than the traditional call center market. This combination of factors may lead to increased commoditization, as a greater number of competitors attempt to introduce products, or reverse engineer our products and offer similar but lower quality products at lower price points.

Our success depends upon our ability to enhance existing products, to respond to changing market requirements, and to develop and introduce in a timely manner new products that keep pace with technological developments. If we are unable to develop and introduce enhanced or new products in a timely manner in response to changing market conditions or customer requirements, it will materially adversely affect our business, financial condition and results of operations.

Due to the historically slow evolution of our products, we have generally been able to phase out obsolete products without significant impact to our operating margins. However, as we develop new generations of products more quickly, we expect that the pace of product obsolescence will increase concurrently. The disposition of inventories of obsolete products may result in reductions to our operating margins and materially adversely affect our earnings and results of operations.

INCREASED ADOPTION OF SPEECH-ACTIVATED AND VOICE INTERACTIVE SOFTWARE PRODUCTS BY BUSINESSES COULD LIMIT OUR ABILITY TO GROW IN THE CALL CENTER MARKET.

We are seeing a proliferation of speech-activated and voice interactive software in the market place. We may experience a decline in our sales to the call center market if businesses increase their adoption of the speech-activated and voice interactive software as an alternative to customer service agents. Should this trend continue, it could cause a net reduction in call center agents and our revenues to this market segment could decline rather than grow in future years.

CHANGES IN REGULATORY REQUIREMENTS MAY ADVERSELY IMPACT OUR GROSS MARGINS AS WE COMPLY WITH SUCH CHANGES OR REDUCE OUR ABILITY TO GENERATE REVENUES IF WE ARE UNABLE TO COMPLY.

Our products must meet the requirements set by regulatory authorities in the numerous jurisdictions in which we sell them. As regulations and local laws change, we must modify our products to address those changes. Regulatory restrictions may increase the costs to design and manufacture our products, resulting in a decrease in demand for our products if the costs are passed along or a decrease in our margins. Compliance with regulatory restrictions may impact the technical quality and capabilities of our products, reducing their marketability.

WE HAVE SIGNIFICANT FOREIGN OPERATIONS AND THERE ARE INHERENT RISKS IN OPERATING ABROAD.

During fiscal 2002, approximately 31.3% of our net sales were derived from customers outside the United States. Approximately 31.9% of our net sales in fiscal 2001 were derived from customers outside the United States, compared with approximately 34.0% of our net sales in fiscal 2000. In addition, we conduct the majority of our headset assembly operations in our manufacturing facility located in Mexico, and we obtain most of the components and subassemblies used in our products from various foreign suppliers. We also purchase a growing number of turn-key products directly from Asia. The inherent risks of international operations, either in Mexico or in Asia, could materially adversely affect our business, financial condition and results of operations. The types of risks faced in connection with international operations and sales include:

• cultural differences in the conduct of business;
• greater difficulty in accounts receivable collection;
• unexpected changes in regulatory requirements;
• tariffs and other trade barriers;
• economic and political conditions in each country;
• management and operation of an enterprise spread over various countries; and
• the burden of complying with a wide variety of foreign laws.

OUR FOREIGN OPERATIONS PUT US AT RISK OF LOSS IF THERE ARE MATERIAL CHANGES IN CURRENCY VALUES AS COMPARED TO THE U.S. DOLLAR.

A significant portion of our business is conducted in currencies other than the U.S. dollar. Substantially all of our sales throughout Europe are transacted in local currencies. We are therefore exposed to risks associated with fluctuations in exchange rates that can affect our revenue and gross margins and can also generate currency transaction gains and losses. In our prior fiscal year, the value of major European currencies dropped against the U.S. dollar, which adversely impacted our revenue and gross margin, and also resulted in currency transaction losses. To date, we have partially but not fully reflected that change in currency value in our selling prices. In order to maintain a competitive price for our products in Europe, we may reduce our current prices further, resulting in a lower margin on products sold in Europe. Continued change in the values of European currencies or changes in the values of other foreign currencies could have a material adverse effect on our business, financial condition and results of operations.

In our current fiscal year we have introduced programs designed to reduce our foreign currency net asset exposure and have successfully reduced transaction gains and losses that are accounted for in other income/expense. However, there can be no assurance that our hedging policy will be effective in continuing to reduce transaction gains and losses. Moreover, our economic exposure to foreign currency fluctuations has not changed and revenues and margins can be adversely impacted by such fluctuations. There can be no assurance that we will not continue to experience currency losses in the future, nor can we predict the effects of future exchange rate fluctuations on future operating results. To the extent that sales to our foreign customers increase or transactions in foreign currencies increase, our business, financial condition and results of operations could be materially adversely affected by exchange rate fluctuations.

THE TERRORIST ATTACKS ON NEW YORK CITY ON SEPTEMBER 11, 2001, MARKED A TURNING POINT IN CURRENT U.S. POLITICAL, MILITARY AND SECURITY STRATEGIES WHICH WE BELIEVE HAS, AND MAY CONTINUE TO, ADVERSELY IMPACT OUR BUSINESS, BOTH DIRECTLY AND INDIRECTLY.

The events of September 11^th, and the U.S. military efforts in Afghanistan, have contributed to a further slowing in the economy with additional layoffs in other industries resulting in a negative effect on our business. We believe that one direct impact of the attacks is the reduction of call center agents in the travel and leisure industries. We are indirectly affected by the continuing concern on future terrorist attacks on U.S. soil, as well as concerns of the anthrax infection on the American and international public. We are unable to estimate the impact these events and their consequences have on our business, however, given the magnitude of these unprecedented events and the possible subsequent effects, we expect that there has been and may likely be an adverse impact to our financial condition, our operations and our prospects as these events adversely affect the global economy in general.

IF THERE ARE PROBLEMS THAT AFFECT OUR PRINCIPAL MANUFACTURING FACILITY IN MEXICO, WE COULD FACE LOSSES IN REVENUES OR MATERIAL INCREASES IN COSTS OF OUR OPERATIONS.

The majority of our manufacturing operations are currently performed in a single facility in Tijuana, Mexico. A fire, flood or earthquake, political unrest or other disaster or condition affecting our facility could have a material adverse effect on our business, financial condition and results of operations. While we have developed a disaster recovery plan and believe we are adequately insured with respect to this facility, we may not be able to implement the plan effectively or on a timely basis or recover under applicable insurance policies.

WE HAVE INTELLECTUAL PROPERTY RIGHTS THAT COULD BE INFRINGED BY OTHERS AND WE ARE POTENTIALLY AT RISK OF INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.

Our success will depend in part on our ability to protect our copyrights, patents, trademarks, trade dress, trade secrets, and similar intellectual property, including our rights to certain domain names. We rely primarily on a combination of nondisclosure agreements and other contractual provisions as well as patent, trademark, trade secret, and copyright laws to protect our proprietary rights. Effective trademark, patent, copyright, and trade secret protection may not be available in every country in which our products and media properties are distributed to customers worldwide. We currently hold forty-one United States patents and additional foreign patents and will continue to seek patents on our inventions when we believe it to be appropriate. The process of seeking patent protection can be lengthy and expensive. Patents may not be issued in response to our applications, and patents that are issued may be invalidated, circumvented or challenged by others. If we are required to enforce our patents or other proprietary rights through litigation, the costs and diversion of management's attention could be substantial. In addition, the rights granted under any patents may not provide us competitive advantages or be adequate to safeguard and maintain our proprietary rights. Moreover, the laws of certain countries do not protect our proprietary rights to the same extent as do the laws of the United States. If we do not enforce and protect our intellectual property rights, it could materially adversely affect our business, financial condition and results of operations.

From time to time, third parties, including our competitors, may assert patent, copyright and other intellectual property rights against us. Such claims, if they are asserted, could result in costly litigation and diversion of management's attention regardless of the merit of a claim. In addition, we may not ultimately prevail in any such litigation or be able to license any valid and infringed patents from such third parties on commercially reasonable terms, if at all. Any infringement claim or other litigation against us could materially adversely affect our business, financial condition and results of operations.

WE ARE EXPOSED TO POTENTIAL LAWSUITS ALLEGING DEFECTS IN OUR PRODUCTS.

The use of our products exposes us to the risk of product liability claims. Product liability claims have in the past been, and are currently being, asserted against us. None of the previously resolved claims have materially affected our business, financial condition or results of operations, nor do we believe that any of the pending claims will have such an effect.* Although we maintain product liability insurance, the coverage provided under our policies could be unavailable or insufficient to cover the full amount of any such claim. Therefore, successful product liability claims brought against us could have a material adverse effect upon our business, financial condition and results of operations.

Our mobile headsets are used with mobile telephones. There has been continuing public controversy over whether the radio frequency emissions from mobile telephones are harmful to users of mobile phones. We believe that there is no conclusive proof of any health hazard from the use of mobile telephones but that research in this area is incomplete. We have tested our headsets through independent laboratories and have found that use of our headsets reduces radio frequency emissions at the user's head to virtually zero. However, if research was to establish a health hazard from the use of mobile telephones or public controversy grows even in the absence of conclusive research findings, there could be an adverse impact on the demand for our mobile headsets.

There is also continuing and increasing public controversy over the use of mobile telephones by operators of motor vehicles. While we believe that our products enhance driver safety by permitting a motor vehicle operator to generally be able to keep both hands-free to operate the vehicle, there is no certainty that this is the case and we may be subject to claims arising from allegations that use of a mobile telephone and headset contributed to a motor vehicle accident. We maintain product liability insurance and general liability insurance that we believe would cover any such claims. However, the coverage provided under our policies could be unavailable or insufficient to cover the full amount of any such claim. Therefore, successful product liability claims brought against us could have a material adverse effect upon our business, financial condition and results of operations.

WHILE WE BELIEVE WE COMPLY WITH ENVIRONMENTAL LAWS AND REGULATIONS, WE ARE STILL EXPOSED TO POTENTIAL RISKS FROM ENVIRONMENTAL MATTERS.

We are subject to various federal, state, local and foreign environmental laws and regulations, including those governing the use, discharge and disposal of hazardous substances in the ordinary course of our manufacturing process. Although we believe that our current manufacturing operations comply in all material respects with applicable environmental laws and regulations, environmental legislation has been enacted and may in the future be enacted or interpreted to create environmental liability with respect to our facilities or operations. We have included in our financial statements a reserve of $1.5 million for possible environmental remediation of the site of one of our previous businesses. While no claims have been asserted against us in connection with this matter, such claims could be asserted in the future and any liability that might result could exceed the amount of the reserve.

WE HAVE RECENTLY ACQUIRED A COMPANY AND EXPECT TO MAKE FUTURE ACQUISITIONS AND ACQUISITIONS INVOLVE MATERIAL RISKS

On January 2, 2002, we acquired Ameriphone, Inc., a California corporation, in a cash transaction. We may in the future, in order to address the need to develop new products and technologies, and enter new markets, acquire other companies. There are inherent risks in the acquisition of another company that could materially adversely affect our business, financial condition and results of operations. The types of risks faced in connection with acquisitions include:

• cultural differences in the conduct of business;
• difficulties in integration of the operations, technologies, and products of the acquired company;
• the risk of diverting management's attention from normal daily operations of the business;
• potential difficulties in completing projects associated with purchased in-process research and development;
• risks of entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;
• the abilities of representatives, distributors, OEM customers and other resellers which are retained by the acquired company or customers of the acquired company;
• differences in the business information systems of the companies;
• difficulties in integrating the transactions and business information systems of the acquired company; and
• the potential loss of key employees of the acquired company.

Mergers and acquisitions, particularly those of high-technology companies, are inherently risky, and no assurance can be given that the Ameriphone or future acquisitions will be successful and will not materially adversely affect our business, operating results or financial condition. We must also manage any such growth effectively. Failure to manage growth effectively and successfully integrate acquisitions made by us could materially harm our business and operating results.

OUR BUSINESS COULD BE MATERIALLY ADVERSELY AFFECTED IF WE LOSE THE BENEFIT OF THE SERVICES OF KEN KANNAPPAN OR OTHER KEY PERSONNEL.

Our success depends to a significant extent upon the services of a limited number of executive officers and other key employees. The unanticipated loss of the services of our president and chief executive officer, Mr. Kannappan, or one or more of our other executive officers or key employees could have a material adverse effect upon our business, financial condition and results of operations.

We also believe that our future success will depend in large part upon our ability to attract and retain additional highly skilled technical, management, sales and marketing personnel. Competition for such personnel is intense. We may not be successful in attracting and retaining such personnel, and our failure to do so could have a material adverse effect on our business, operating results or financial condition.

OUR STOCK PRICE MAY BE VOLATILE AND YOUR INVESTMENT IN PLANTRONICS STOCK COULD BE LOST.

The market price for our Common Stock may continue to be affected by a number of factors, including 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, including factors unrelated to our operating performance or the operating performance of our competitors. Stock prices for many companies, particularly in the technology sector, have experienced wide fluctuations that have often been unrelated to the operating performances of such 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.

PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW AND OUR ADOPTION OF A STOCKHOLDER RIGHTS PLAN MAY DELAY OR PREVENT ACQUISITION OF US, WHICH COULD DECREASE THE VALUE OF OUR STOCK.

Our board of directors has the authority to issue preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting and conversion rights, of those shares without any further vote or action by the stockholders. The issuance of our preferred stock could have the effect of making it more difficult for a third party to acquire us. In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which could also have the effect of delaying or preventing our acquisition by a third party. Further, certain provisions of our Certificate of Incorporation and bylaws could delay or make more difficult a merger, tender offer or proxy contest, which could adversely affect the market price of our Common Stock.

Our board of directors recently adopted a stockholders right plan pursuant to which we distributed one right for each outstanding share of Common Stock held by stockholders of record as of April 12, 2002. Because the rights may substantially dilute the stock ownership of a person or group attempting to take us over without the approval of our board of directors, the plan could make it more difficult for a third party to acquire us, or a significant percentage of our outstanding capital stock, without first negotiating with our board of directors regarding such acquisition.

WE HAVE SEVERAL SIGNIFICANT STOCKHOLDERS, AND GIVEN THE LOW TRADING VOLUME OF OUR STOCK, IF THEY SELL THEIR SHARES IN A SHORT PERIOD OF TIME WE COULD SEE AN ADVERSE EFFECT ON THE MARKET PRICES OF OUR STOCK.

As of May 31, 2002, we had 45,925,008 shares of Common Stock outstanding. These shares are freely tradable except for approximately 14,039,795 shares held by affiliates of Plantronics (including Citicorp Venture Capital ("CVC") and the directors and officers of Plantronics). These approximately 14,039,795 shares may be sold in reliance on Rule 144 under the Securities Act, or pursuant to an effective registration statement filed with the Securities and Exchange Commission.

Some of our current stockholders, including CVC and certain of our directors, also have certain contractual rights to require us to register their shares for public sale. On June 11, 2002, CVC requested that we register up to 1,000,000 shares for resale by CVC. We expect to file a registration statement shortly to register the resale of such shares.

Approximately 9,822,013 additional shares are subject to outstanding stock options as of May 31, 2002. The issuance of these shares upon exercise of stock options has been registered. Accordingly, to the extent that these shares vest and are issued in the future, they may be freely resold by stockholders who are not our affiliates. Our affiliates may resell these shares to the extent permitted by Rule 144 under the Securities Act.

Our stock is not heavily traded. The average daily trading volume of our stock in fiscal year 2002 was approximately 305,544 shares per day with a median volume in that period of 255,100 shares per day. Sales of a substantial number of shares of our Common Stock in the public market by any of our officers, directors or other stockholders could adversely affect the prevailing market price of our Common Stock and impair our ability to raise capital through the sale of equity securities.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discusses our exposure to market risk related to changes in interest rates and foreign currency exchange rates. This discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results could vary materially as a result of a number of factors including those set forth in "Risk Factors Affecting Future Operating Results" beginning on page 24.

INTEREST RATE RISK

At March 31, 2002, we had cash and cash equivalents totaling $43.0 million, compared to $60.5 million at March 31, 2001. At March 31, 2002, we had marketable securities totaling $17.3 million compared to $13.4 million at March 31, 2001. Cash equivalents have an original maturity of ninety days or less; marketable securities have an original maturity of greater than ninety days, but less than one year. We believe we are not currently exposed to significant interest rate risk as the majority of our cash and marketable securities were invested in securities or interest bearing accounts with maturities of less than ninety days. The average maturity period for our marketable securities at March 31, 2002 was eight months. The interest rates locked in on those investments ranged from 2.0% to 2.6%. Our investment policy requires that we only invest in deposit accounts, certificates of deposit or commercial paper with minimum ratings of A1/P1 and money market mutual funds with minimum ratings of AAA.

In fiscal 2002, we renewed our revolving credit facility and letter of credit subfacility with a major bank at $75 million. The revolving credit facility and letter of credit subfacility both expire in January 2003. As of March 31, 2002, we have no cash borrowings under the revolving credit facility or under the letter of credit subfacility. If we choose to borrow under this facility in the future, and market interest rates rise, then our interest payments would increase accordingly.

FOREIGN CURRENCY EXCHANGE RATE RISK

Approximately 31.3% of our revenue was realized outside of the United States, with approximately 20.2% denominated in foreign currencies, predominately the British Pound Sterling and the Euro. During fiscal years 2000 and 2001 we did not engage in any hedging activities. In fiscal 2002, we implemented a hedging strategy to minimize the effect of these currency fluctuations. Specifically, we began to hedge our European transaction exposure, hedging both our British Pound Sterling and Euro positions. However, we have no assurance that exchange rate fluctuations will not materially adversely affect our business in the future.

The table below provides information about our financial instruments and underlying transactions that are sensitive to FX rates, including foreign currency forward-exchange contracts and nonfunctional currency-denominated receivables and payables. The net amount that is exposed to changes in foreign currency rates is then subjected to a 10% change in the value of the foreign currency versus the U.S. dollar. We believe we have no material sensitivity to changes in foreign currency rates on our net exposed financial instrument position.

The table below presents the impact on our earnings of a 10% appreciation and a 10% depreciation of the U.S. dollar against the indicated currencies:

March 31, 2002
(in millions)                          Net
                                    Underlying     Net          FX           FX
                                     Foreign     Exposed    Gain (Loss)  Gain (Loss)
                         USD Value   Currency   Long (Short) From 10%     From 10%
                         of Net FX  Transaction  Currency   Appreciation Depreciation
Currency                 Contracts   Exposures   Position     of USD       of USD
- -----------------------  ---------  ----------  ----------  -----------  -----------
Euro................... $     3.0  $      6.7  $      3.7  $      (0.4) $       0.3
British pound sterling.       1.1         1.1          --           --           --
                         ---------  ----------  ----------  -----------  -----------
Total.................. $     4.1  $      7.8  $      3.7  $      (0.4) $       0.3
                         =========  ==========  ==========  ===========  ===========

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

PLANTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)

                                                                    March 31,
                                                               ----------------------
                                                                  2001        2002
                                                               ----------  ----------
ASSETS
Current assets:
   Cash and cash equivalents................................. $   60,544  $   43,048
   Marketable securities.....................................     13,385      17,262
   Accounts receivable, net..................................     54,808      43,838
   Inventory, net............................................     48,235      36,103
   Deferred income taxes.....................................      7,110       5,866
   Other current assets......................................      1,449       2,452
                                                               ----------  ----------
       Total current assets..................................    185,531     148,569
Property, plant and equipment, net...........................     32,683      35,700
Intangibles, net.............................................        787       4,584
Goodwill, net................................................      6,084       9,542
Other assets.................................................      2,792       2,663
                                                               ----------  ----------
       Total assets.......................................... $  227,877  $  201,058
                                                               ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable.......................................... $   10,836  $   14,071
   Accrued liabilities.......................................     25,398      25,868
   Income taxes payable......................................     12,519      11,961
                                                               ----------  ----------
       Total current liabilities.............................     48,753      51,900
Deferred tax liability.......................................      6,077       7,165
                                                               ----------  ----------
       Total liabilities.....................................     54,830      59,065
                                                               ----------  ----------
Commitments and contingencies (note 8)

Stockholders' equity:
   Common stock, $0.01 par value per share; 100,000 shares
     authorized, 59,098 shares and 59,226 shares issued
     at 2001 and 2002, respectively..........................        591         592
   Additional paid-in capital................................    148,188     152,194
   Accumulated other comprehensive loss......................     (1,172)     (1,203)
   Retained earnings.........................................    207,626     243,874
                                                               ----------  ----------
                                                                 355,233     395,457
   Less: Treasury stock (common: 9,919 and 13,368
   at 2001 and 2002, respectively) at cost...................   (182,186)   (253,464)
                                                               ----------  ----------
       Total stockholders' equity............................    173,047     141,993
                                                               ----------  ----------
       Total liabilities and stockholders' equity............ $  227,877  $  201,058
                                                               ==========  ==========

The accompanying notes are an integral part of these consolidated financial statements.

PLANTRONICS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share)

                                                            Fiscal Year Ended March 31,
                                                        -----------------------------------
                                                           2000        2001         2002
                                                        ----------  -----------  ----------
Net sales............................................. $  309,143  $   390,748  $  311,181
Cost of sales.........................................    129,513      180,946     163,336
                                                        ----------  -----------  ----------
   Gross profit.......................................    179,630      209,802     147,845
                                                        ----------  -----------  ----------
Operating expenses:
   Research, development and engineering..............     21,868       26,999      30,303
   Selling, general and administrative................     64,457       80,789      76,273
                                                        ----------  -----------  ----------
     Total operating expenses.........................     86,325      107,788     106,576
                                                        ----------  -----------  ----------
Operating income......................................     93,305      102,014      41,269
Interest and other income, net........................      1,573          138       1,931
                                                        ----------  -----------  ----------
Income before income taxes............................     94,878      102,152      43,200
Income tax expense....................................     30,361       28,602       6,952
                                                        ----------  -----------  ----------
Net income............................................ $   64,517  $    73,550  $   36,248
                                                        ==========  ===========  ==========

Net income per share - basic.......................... $     1.30  $      1.49  $     0.77
                                                        ==========  ===========  ==========

Shares used in basic per share calculations...........     49,515       49,213      47,304
                                                        ==========  ===========  ==========

Net income per share - diluted........................ $     1.22  $      1.38  $     0.74
                                                        ==========  ===========  ==========

Shares used in diluted per share calculations.........     53,019       53,263      49,238
                                                        ==========  ===========  ==========

The accompanying notes are an integral part of these consolidated financial statements.

PLANTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

                                                                    Fiscal Year Ended March 31,
                                                                -----------------------------------
                                                                   2000        2001         2002
                                                                ----------  -----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.................................................... $   64,517  $    73,550  $   36,248
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation and amortization..........................      6,651        9,443       9,464
       Deferred income taxes..................................     (6,493)      (1,406)      1,028
       Income tax benefit associated with stock options.......     15,098       16,574       1,106
       Loss (gain) on disposal of fixed assets................        (12)          38         142
   Changes in assets and liabilities, excluding
       effects of acquisition:
     Accounts receivable, net.................................       (991)      (8,050)     12,559
     Inventory, net...........................................    (14,863)     (14,483)     14,532
     Other current assets.....................................      6,277          (58)        316
     Other assets.............................................       (119)        (270)        (27)
     Accounts payable.........................................      1,994         (611)      2,531
     Accrued liabilities......................................        172       (7,209)       (517)
     Income taxes payable.....................................     11,273          736        (558)
                                                                ----------  -----------  ----------
Cash provided by operating activities.........................     83,504       68,254      76,824
                                                                ----------  -----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from maturities of marketable securities..........      3,800       17,750      23,143
   Purchase of marketable securities..........................     (8,800)     (25,885)    (27,271)
   Capital expenditures and other assets......................    (17,588)     (17,393)    (11,368)
   Acquisition of Ameriphone, net of cash acquired............         --           --     (10,416)
                                                                ----------  -----------  ----------
Cash used for investing activities............................    (22,588)     (25,528)    (25,912)
                                                                ----------  -----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Purchase of treasury stock.................................    (72,613)     (40,050)    (72,082)
   Proceeds from sale of treasury stock.......................      2,094        2,781       2,516
   Proceeds from exercise of stock options....................      6,875       15,097       1,189
   Other......................................................         --         (281)        (31)
                                                                ----------  -----------  ----------
Cash used for financing activities                                (63,644)     (22,453)    (68,408)
                                                                ----------  -----------  ----------
Net increase (decrease) in cash and cash equivalents..........     (2,728)      20,273     (17,496)
Cash and cash equivalents at beginning of year................     42,999       40,271      60,544
                                                                ----------  -----------  ----------
Cash and cash equivalents at end of year...................... $   40,271  $    60,544  $   43,048
                                                                ==========  ===========  ==========
SUPPLEMENTAL DISCLOSURES
 Cash paid for:
   Interest................................................... $       62  $        93  $      112
   Income taxes............................................... $   13,150  $    14,257  $   11,778

The accompanying notes are an integral part of these consolidated financial statements.

PLANTRONICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share amounts)

                                                                  Accumulated
                                                                    Other                              Total
                                    Common Stock      Additional   Compre-                             Stock-
                                 -------------------   Paid-In     hensive    Retained    Treasury    holders'
                                   Shares     Amount   Capital       Loss     Earnings     Stock       Equity
                                 -----------  ------  ----------  ----------  ---------  ----------  ----------
Balance at March 31, 1999....... 50,395,329  $  555  $   91,053  $     (891) $  69,559  $  (70,871) $   89,405
                                 -----------  ------  ----------  ----------  ---------  ----------  ----------
Net income......................         --      --          --          --     64,517          --      64,517
Exercise of stock options.......  2,180,493      21       6,854          --         --          --       6,875
Income tax benefit associated
  with stock options............         --      --      15,098          --         --          --      15,098
Purchase of treasury stock...... (3,802,500)     --          --          --         --     (72,613)    (72,613)
Sale of treasury stock..........    123,291      --       1,350          --         --         744       2,094
                                 -----------  ------  ----------  ----------  ---------  ----------  ----------
Balance at March 31, 2000....... 48,896,613     576     114,355        (891)   134,076    (142,740)    105,376
                                 -----------  ------  ----------  ----------  ---------  ----------  ----------
Net income......................         --      --          --          --     73,550          --      73,550
Foreign currency
  translation adjustments.......         --      --          --        (281)        --          --        (281)
                                                                                                     ----------
Comprehensive income............                                                                        73,269
                                                                                                     ----------
Exercise of stock options.......  1,516,000      15      15,082          --         --          --      15,097
Income tax benefit associated
  with stock options............         --      --      16,574          --         --          --      16,574
Purchase of treasury stock...... (1,333,100)     --         --           --         --     (40,050)    (40,050)
Sale of treasury stock..........     99,925      --       2,177          --         --         604       2,781
                                 -----------  ------  ----------  ----------  ---------  ----------  ----------
Balance at March 31, 2001....... 49,179,438     591     148,188      (1,172)   207,626    (182,186)    173,047
                                 -----------  ------  ----------  ----------  ---------  ----------  ----------
Net income......................         --      --          --          --     36,248          --      36,248
Foreign currency
  translation adjustments.......         --      --          --         (31)        --          --         (31)
                                                                                                     ----------
Comprehensive income............                                                                        36,217
                                                                                                     ----------
Exercise of stock options.......    127,449       1       1,188          --         --          --       1,189
Income tax benefit associated
  with stock options............         --      --       1,106          --         --          --       1,106
Purchase of treasury stock...... (3,581,421)     --          --          --         --     (72,082)    (72,082)
Sale of treasury stock..........    133,110      --       1,712          --         --         804       2,516
                                 -----------  ------  ----------  ----------  ---------  ----------  ----------
Balance at March 31, 2002....... 45,858,576  $  592  $  152,194  $   (1,203) $ 243,874  $ (253,464) $  141,993
                                 ===========  ======  ==========  ==========  =========  ==========  ==========

The accompanying notes are an integral part of these consolidated financial statements.

PLANTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY

Plantronics, Inc. ("Plantronics," "we," "our," or "us"), introduced the first lightweight communications headset in 1962. Since that time, we have become a worldwide leading designer, manufacturer and marketer of lightweight communications headset products.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MANAGEMENT'S USE OF ESTIMATES AND ASSUMPTIONS. The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the accounts of Plantronics and its subsidiary companies. Intercompany transactions and balances have been eliminated upon consolidation.

FISCAL YEAR. Our fiscal year end is the Saturday closest to March 31. For purposes of presentation, we have indicated our accounting year ending on March 31. Results of operations for the fiscal year 2000 included 53 weeks. Results of operations for the fiscal year 2001 and 2002 included 52 weeks.

CASH AND CASH EQUIVALENTS AND MARKETABLE SECURITIES. We consider all highly liquid investments with an original maturity of ninety days or less at the date of purchase to be cash equivalents. Investments maturing between three and twelve months from the date of purchase are classified as marketable securities.

Management determines the appropriate classification of investment securities at the time of purchase and re-evaluates that designation as of each balance sheet date. As of March 31, 2002, investment securities were classified as held-to-maturity, as we intended, and had the ability to, hold these securities to maturity. Held-to-maturity securities are stated at amortized cost, which approximates fair market value.

The estimated fair values of cash equivalents and marketable securities are based on quoted market prices. As of March 31, 2002, we had $17.3 million in marketable securities. As of the dates below, our cash and cash equivalents consisted of the following:

                                                               March 31,
                                                        ------------------------
                                                           2001         2002
                                                        -----------  -----------             
                                                            (in thousands)
Cash.................................................. $     6,884  $     7,511
Cash equivalents......................................      53,660       35,537
                                                        -----------  -----------
Cash and cash equivalents............................. $    60,544  $    43,048
                                                        ===========  ===========

INVENTORY. Inventory is stated at the lower of cost or market. Cost is computed using standard cost, which approximates actual cost on a first-in, first-out basis. We periodically review for excess and obsolete inventories and reduce carrying amounts to estimated net realizable value.

DEPRECIATION AND AMORTIZATION. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are principally calculated using the straight-line method over the estimated useful lives of the respective assets. In accordance with our adoption of SFAS No. 142, "Goodwill and Other Intangible Assets," goodwill is not amortized, for periods subsequent to April 1, 2001, but is tested annually for impairment, or more often as deemed necessary. Identified intangible assets are amortized over their estimated economic lives, which range from three to seven years.

REVENUE RECOGNITION. Revenue is recognized net of estimated product returns, exchanges, credits for price protection, volume rebates, and sales incentive credits given to customers in excess of the fair value of benefits received when products are shipped or upon delivery to customers, depending on the terms of the sale, and when collectibility is reasonably assured. We also provide for the estimated cost of repair or replacement products under warranty at the time of sale.

ADVERTISING COSTS. We expense all advertising costs as incurred. Advertising expense, which includes corporate and the fair value of cooperative advertising, for the years ended March 31, 2000, 2001 and 2002 was $4.3 million, $6.7 million, and $2.5 million, respectively. Advertising expense for prior fiscal years has been restated in accordance with EITF 01-9 (see Recent Accounting Pronouncements section below).

CONCENTRATION OF CREDIT RISK. Financial instruments that potentially subject Plantronics to concentrations of credit risk consist principally of cash equivalents, marketable securities and trade receivables. Our cash investment policies limit investments to those that are short-term and low risk. Cash equivalents have an original maturity of ninety days or less; marketable securities have an original maturity of greater than ninety days, but less than one year. Concentrations of credit risk with respect to trade receivables are generally limited due to the large number of customers that comprise our customer base, and their dispersion across different geographies and markets. We perform ongoing credit evaluations of our customers' financial condition and generally require no collateral from our customers. We maintain an allowance for uncollectible accounts receivable based upon expected collectibility of all accounts receivable.

FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying value of our financial instruments, including cash, cash equivalents, marketable securities, accounts receivable, accrued expenses and liabilities, approximate fair value due to their short maturities.

INCOME TAXES. We account for income taxes under the liability method, which recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax basis of assets and liabilities and their financial statement reported amounts. We account for tax credits as a reduction of tax expense in the year in which the credits reduce taxes payable.

FOREIGN OPERATIONS AND CURRENCY TRANSLATION. The functional currency of the Mexican manufacturing operations and European sales and logistics headquarters is the U.S. dollar. Accordingly, all revenues and cost of sales related to foreign operations are recorded using the U.S. dollar as functional currency. The functional currency of our foreign sales and marketing and research and development operations is the local currency of the respective operations. The assets and liabilities of the subsidiaries whose functional currencies are other than the U.S. dollar are translated into U.S. dollars at the current exchange rate in effect at the balance sheet date. Income and expense items are translated using the average exchange rate for the period. Cumulative translation adjustments are included in accumulated other comprehensive income (loss), which is reflected as a separate component of stockholders' equity. Foreign currency transaction gains and losses are included in the results of operations.

EARNINGS PER SHARE. Basic Earnings Per Share ("EPS") is computed by dividing net income available to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Basic EPS excludes the dilutive effect of stock options. Diluted EPS gives effect to all dilutive potential common shares outstanding during a period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased using the proceeds from the exercise of stock options.

Following is a reconciliation of the numerators and denominators of the basic and diluted EPS:

                                                            Fiscal Year Ended March 31,
                                                           2000        2001         2002
                                                        ----------  -----------  ----------
                                                      (in thousands, except earnings per share)
Net income............................................ $   64,517  $    73,550  $   36,248
                                                        ==========  ===========  ==========

Weighted average shares-basic.........................     49,515       49,213      47,304
Effect of dilutive securities-employee stock options..      3,504        4,050       1,934
                                                        ----------  -----------  ----------
Weighted average shares-diluted.......................     53,019       53,263      49,238
                                                        ==========  ===========  ==========
Net earnings per common share-basic................... $     1.30  $      1.49  $     0.77
                                                        ==========  ===========  ==========
Net earnings per common share-diluted................. $     1.22  $      1.38  $     0.74
                                                        ==========  ===========  ==========

COMPREHENSIVE INCOME. Comprehensive income includes charges or credits to equity that are not the result of transactions with owners. Cumulative other comprehensive loss, as presented in the accompanying consolidated balance sheets, consists of foreign currency translation adjustments.

STOCK-BASED COMPENSATION. Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans based on the fair value of options granted. We have elected to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations, and to provide additional disclosures with respect to the pro forma effects of adoption had we recorded compensation expense as provided in SFAS 123 (see note 10 to the audited financial statements).

RECENT ACCOUNTING PRONOUNCEMENTS. In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 141 ("SFAS 141"), "Business Combinations." SFAS 141 requires the purchase method of accounting for business combinations initiated after June 30, 2001, eliminates the pooling-of-interests method, and changes the criteria to recognize intangible assets apart from goodwill. The adoption of SFAS 141 in fiscal year 2002 did not have a significant impact on our financial position and results of operations.

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS 142 requires, among other things, the discontinuance of goodwill amortization and the testing for impairment of goodwill at least annually. The adoption of SFAS 142 in the first quarter of the fiscal year ending March 31, 2002, did not have a material effect on our financial position and results of operations for fiscal 2002.

On October 3, 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144 supercedes SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS 144 addresses financial accounting and reporting for the (a) recognition and measurement of the impairment of long-lived assets to be held and used and (b) measurement of long-lived assets to be disposed of by sale. SFAS 144 requires testing long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Methods for testing impairment include estimates of future cash flows and fair value. Additionally, SFAS 144 expands the scope of discontinued operations to include all components of an entity with operations that (1) can be distinguished from the rest of the entity and (2) will be eliminated from the ongoing operations of the entity in a disposal transaction. SFAS 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001. We do not expect the adoption of SFAS 144 to have a significant impact on our financial statements.

In 2001, the FASB's Emerging Issues Task Force released Issue No. 00-25, since incorporated into "EITF 01-9," "Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor's Products" ("EITF 01-9"), which Plantronics adopted in January 2002. EITF 01-9 requires that consideration paid by a vendor to a reseller should be classified on the vendor's income statement as a reduction of revenue unless a separate identifiable benefit is received by the vendor, the fair value of the benefit can be reasonably estimated and the consideration does not exceed such value. We determined that various promotional consideration paid to distributors and retailers, which were historically classified as sales and marketing expense, should be reclassified as a reduction of revenues to comply with EITF 01-9. Financial information for all periods presented has been reclassified to comply with the new requirements.  For our fiscal years ending 2000, 2001 and 2002, the effect was to reduce revenues by $5.9 million, $10.3 million and $9.3 million, respectively, offset by an equivalent reduction in selling, general and administrative expense.  There is no impact on operating margin, net income or EPS for this accounting change. 

RECLASSIFICATIONS. Certain reclassifications have been made to prior year balances in order to conform to the current year presentation.

3. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS

                                                               March 31,
                                                        ------------------------
                                                           2001         2002
                                                        -----------  -----------             
                                                            (in thousands)
Accounts receivable, net:
   Accounts receivable from customers................. $    70,697  $    58,195
   Less: sales returns, promotions and rebates........     (13,216)     (11,347)
   Less: allowance for doubtful accounts..............      (2,673)      (3,010)
                                                        -----------  -----------
                                                       $    54,808  $    43,838
                                                        ===========  ===========

Inventory, net:
   Finished goods..................................... $    27,741  $    23,576
   Work in process....................................       1,280          831
   Purchased parts....................................      22,984       18,068
   Less: allowance for excess and obsolete inventory..      (3,770)      (6,372)
                                                        -----------  -----------
                                                       $    48,235  $    36,103
                                                        ===========  ===========

Property, plant and equipment:
   Land............................................... $     4,693  $     4,693
   Buildings and improvements (useful life 7-30 years)      14,692       16,350
   Machinery and equipment (useful life 2-10 years)...      49,891       52,747
                                                        -----------  -----------
                                                            69,276       73,790
   Less: accumulated depreciation.....................     (36,593)     (38,090)
                                                        -----------  -----------
                                                       $    32,683  $    35,700
                                                        ===========  ===========

Accruals:
   Employee benefits.................................. $     9,730  $    11,008
   Accrued advertising and sales and marketing........       1,756        1,938
   Warranty accrual...................................       6,619        6,420
   Accrued other......................................       7,293        6,502
                                                        -----------  -----------
                                                       $    25,398  $    25,868
                                                        ===========  ===========

4. DEBT

We have an unsecured revolving credit facility with a major bank for $75 million that matures on January 15, 2003. Any principal outstanding bears interest at our choice of prime rate minus 1% or LIBOR plus 0.875%, depending on the rate choice and performance level ratios. There were no borrowings outstanding under the facility at March 31, 2002. The revolving credit facility includes certain covenants that materially limit our ability to incur debt and pay dividends, among other matters. We were in compliance with the terms of the covenants as of March 31, 2002.

5. COMMON AND TREASURY STOCK

On June 29, 2000, our Board of Directors approved a three-for-one split of our Common Stock, effected as a stock dividend. All stockholders of record on July 18, 2000 (the "Record Date") received two additional shares for each share owned on the Record Date. Shares resulting from the split were distributed by the transfer agent on August 8, 2000. All share and per-share numbers contained herein for all periods presented reflect this stock split, unless otherwise noted.

As of the beginning of fiscal 2000, there were 1,357,221 shares of Common Stock authorized for repurchase under our stock repurchase plan. During fiscal 2000, the Board of Directors authorized Plantronics to repurchase an additional 3,000,000 shares of Common Stock. During fiscal 2000, we repurchased 3,802,500 shares of our Common Stock in the open market at a total cost of $72.6 million, and an average price of $19.09 per share. Through our employee benefit plans, we reissued 123,291 shares for proceeds of $2.1 million. Shares repurchased in fiscal year 2000 that exceeded the additional 3,000,000 shares pertained to authorizations from prior years.

During fiscal 2001, the Board of Directors authorized Plantronics to repurchase an additional 1,500,000 shares of Common Stock. During fiscal 2001, we repurchased 1,333,100 shares of our Common Stock in the open market at a total cost of $40.1 million, and an average price of $30.02 per share. Through our employee benefit plans, we reissued 99,925 shares for proceeds of $2.8 million.

During fiscal 2002, the Board of Directors authorized Plantronics to repurchase an additional 3,000,000 shares of Common Stock. During fiscal 2002, we repurchased 3,581,421 shares of our Common Stock in the open market at a total cost of $72.1 million, and an average price of $20.10 per share. Through our employee benefit plans, we reissued 133,110 shares for proceeds of $2.5 million. Shares repurchased in fiscal year 2002 that exceeded the additional 3,000,000 shares pertained to authorizations from prior years. As of March 31, 2002, there were 140,200 remaining shares authorized for repurchase under all repurchase authorizations.

Preferred Stock Rights Agreements. On March 13, 2002, Plantronics' Board of Directors adopted a Preferred Stock Rights Agreement under which we declared a dividend of one right to purchase one one-thousandth (0.001) share of Plantronics' Series A Participating Preferred Stock for each outstanding share of Common Stock. The rights will separate from the Common Stock and become exercisable following (i) the tenth (10^th) day (or such later date as may be determined by the Board of Directors) after a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership of 15% or more of the Common Stock then outstanding or (ii) the tenth (10^th) business day (or such later date as may be determined by the Board of Directors) after a person or group announces a tender or exchange offer, the consummation of which would result in ownership by a person or group of 15% or more of the then outstanding Common Stock. Each right will entitle the holder to purchase from Plantronics for an exercise price of $170.00, the "Exercise Price," subject to adjustments, one one-thousandth (0.001) of a share of Series A Preferred Stock with economic terms similar to that of one share of Common Stock. If an acquirer (an "Acquiring Person") obtains 15% or more of Plantronics' Common Stock, then each Right (other than Rights owned by an Acquiring Person or its affiliates) will entitle the holder thereof to purchase, for the Exercise Price, a number of shares of Plantronics' Common Stock having a then-current market value of twice the Exercise Price. The Rights expire on the earliest of (a) April 12, 2012 or (b) the exchange or redemption of the Rights described above. Rights will not have any voting rights.

6. INCOME TAXES

Income tax expense for fiscal 2000, 2001 and 2002 consisted of the following:

                                                Fiscal Year Ended March 31,
                                              --------------------------------
                                                 2000       2001       2002
                                              ----------  ---------  ---------
                                                        (in thousands)
Current:
   Federal.................................. $   29,130  $  23,132  $   2,782
   State....................................      2,419      1,900     (2,310)
   Foreign..................................      5,305      4,976      5,446

Deferred:
   Federal..................................     (6,349)    (1,371)       940
   State....................................       (144)       (35)        94
                                              ----------  ---------  ---------
                                             $   30,361  $  28,602  $   6,952
                                              ==========  =========  =========

Pre-tax earnings of the foreign subsidiaries were $28.1 million, $34.5 million and $24.0 million for fiscal years 2000, 2001 and 2002, respectively. Cumulative earnings of foreign subsidiaries that have been permanently reinvested as of March 31, 2002 totaled $116 million.

The following is a reconciliation between statutory federal income taxes and the total provision for taxes on pre-tax income:

                                                Fiscal Year Ended March 31,
                                              --------------------------------
                                                 2000       2001       2002
                                              ----------  ---------  ---------
                                                        (in thousands)
Tax expense at statutory rate............... $   33,208  $  35,753  $  15,120
Foreign operations taxed at different rates.     (4,422)    (7,451)    (2,956)
Foreign tax credit..........................         --     (2,097)      (181)
State taxes, net of federal benefit.........      1,572      1,900        273
R&D credit..................................       (460)      (640)    (3,049)
Favorable tax assessment....................         --         --     (2,562)
Other, net..................................        463      1,137        307
                                              ----------  ---------  ---------
                                             $   30,361  $  28,602  $   6,952
                                              ==========  =========  =========

Deferred tax assets and liabilities represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Significant components of our deferred tax assets and liabilities are as follows:

                                                                March 31,
                                                          --------------------
                                                            2001       2002
                                                          ---------  ---------
                                                              (in thousands)
Current assets (liabilities):
   Accruals and other reserves.......................... $   6,878  $   4,790
   Other deferred tax assets............................       232      1,076
                                                          ---------  ---------
                                                         $   7,110  $   5,866
Non-current assets (liabilities):
   Deferred gains on sales of properties................ $  (2,413) $  (2,413)
   Unremitted earnings of certain subsidiaries..........    (3,357)    (3,064)
   Deferred state tax...................................       567        730
   Other deferred tax liabilities.......................      (874)    (2,418)
                                                          ---------  ---------
                                                         $  (6,077) $  (7,165)

Total net deferred tax assets (liabilities)............. $   1,033  $  (1,299)
                                                          =========  =========

7. EMPLOYEE BENEFIT PLANS

For fiscal 2000, subject to eligibility requirements, substantially all domestic employees participated in our qualified profit sharing and 401(k) plan. Under the plan, participating employees received quarterly cash, annual cash and annual deferred profit sharing payments. All other employees, with the exception of direct labor in Mexico, participated in quarterly cash profit sharing plans. Domestic employees also had the option of participating in a salary deferral component of the plan, qualified under Section 401(k) of the Internal Revenue Code. The profit sharing benefits were based on Plantronics' results of operations before interest and taxes, adjusted for other items. The percentage of profit distributed to employees varied by location. The profit sharing was paid in four quarterly installments, and for qualified associates, one annual cash payment and an annual deferred payment. Profit sharing payments were allocated to employees based on each participating employee's base salary as a percent of all participants' base salaries. The annual profit sharing distributions were made up of a cash distribution and a tax deferred distribution made to individual accounts of participants held in trust. The deferred portion was subject to a two-year vesting schedule based on an employee's date of hire. Total annual and quarterly profit sharing payments were $10.2 million for fiscal 2000.

In fiscal 2001, we amended our qualified profit sharing and 401(k) plan for U.S. employees. Our profit sharing programs for non-U.S. employees remained unchanged in fiscal 2001 and fiscal 2002. For fiscal 2001 and thereafter, Plantronics offers two separate compensation programs: quarterly cash profit sharing equal to 5% of quarterly profit for distribution to qualified associates, and deferred compensation using the 3% "safe harbor" contribution under the Internal Revenue Code Sections 401(k)(12) and 401(m)(11). We also increased the employer matching contribution from 25% under the prior qualified 401(k) plan to 50% of the first 6% of pay contributed to the salary deferral plan. With this amendment, the annual cash profit sharing payment was eliminated and replaced by a 20% increase to our associates' base pay in fiscal 2001. Total quarterly profit sharing payments were $6.7 million and $2.8 million for fiscal 2001 and 2002, respectively.

8. COMMITMENTS AND CONTINGENCIES

MINIMUM FUTURE RENTAL PAYMENTS. We lease certain equipment and facilities under operating leases expiring in various years through 2015. Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of March 31, 2002, (in thousands):

                                                Amount
Fiscal Year Ending March 31,                  ----------                      
  2003...................................... $    2,539
  2004......................................      2,129
  2005......................................      1,939
  2006......................................      1,080
  2007......................................        650
  Thereafter................................      4,041
                                              ----------
Total minimum future rental payments........ $   12,378
                                              ==========

Total rent expense for operating leases was approximately $1.1 million in fiscal 2000, $1.8 million in fiscal 2001, and $2.5 million in fiscal 2002.

EXISTENCE OF RENEWAL OPTIONS. Certain operating leases provide for renewal options for periods from one to three years. In the normal course of business, operating leases are generally renewed or replaced by other leases.

CLAIMS AND LITIGATION. We are presently engaged in a lawsuit filed in the Superior Court in Santa Clara County, California by Hello Direct (now GN Hello Direct), a former Plantronics distributor which was acquired by Plantronics' competitor, GN Netcom. The lawsuit makes various claims associated with the termination of the distribution relationship between Plantronics and Hello Direct, including that Hello Direct has suffered approximately $11 million in damages as a result of the termination. We believe Hello Direct's claims are without merit and we have filed a counter-claim against them.

Although we cannot presently determine the outcome of these claims and other such claims arising in the normal course of business, we believe the ultimate resolution of these claims is not likely to have a material adverse effect on our financial position, results of operations or cash flows. If not successful in defending our claims, however, the resulting outcome could have a material adverse impact on our business, future operating results or cash flows.

9. SEGMENTS AND ENTERPRISE-WIDE DISCLOSURES

SEGMENTS. We are engaged in the design, manufacture, marketing and sales of telecommunications equipment including headsets, telephone headset systems, and other specialty telecommunications products. Plantronics considers itself to operate in one business segment.

PRODUCTS AND SERVICES. We organize our operations to focus on three principal markets: call center and office products, mobile and computer products, and other specialty products. The following table presents net revenue by market:

                                                Fiscal Year Ended March 31,
                                                 2000       2001       2002
                                              ----------  ---------  ---------
                                                        (in thousands)
Net revenues from unaffiliated customers:
   Call center and office................... $  275,796  $ 313,707  $ 237,505
   Mobile and computer......................     20,247     62,688     61,387
   Other specialty products.................     13,100     14,353     12,289
                                              ----------  ---------  ---------
                                             $  309,143  $ 390,748  $ 311,181
                                              ==========  =========  =========

MAJOR CUSTOMERS. No customer accounted for 10% or more of total revenue for fiscal year 2000, 2001 or 2002.

GEOGRAPHIC INFORMATION. In geographical reporting, revenues are attributed to the geographical location of the sales and service organizations. The following table presents net revenues and long-lived assets by geographic area:

                                                Fiscal Year Ended March 31,
                                                 2000       2001       2002
                                              ----------  ---------  ---------
                                                        (in thousands)
Net revenues from unaffiliated customers:
   United States............................ $  203,905  $ 266,271  $ 213,655
   International............................    105,238    124,477     97,526
                                              ----------  ---------  ---------
                                             $  309,143  $ 390,748  $ 311,181
                                              ==========  =========  =========

Long-lived assets:
   United States............................ $   15,371  $  19,980  $  23,267
   International............................      8,206     12,703     12,433
                                              ----------  ---------  ---------
                                             $   23,577  $  32,683  $  35,700
                                              ==========  =========  =========

10. STOCK OPTION PLANS AND STOCK PURCHASE PLANS

EMPLOYEE STOCK OPTION PLAN. In September 1993, the Board of Directors approved the PI Parent Corporation 1993 Stock Option Plan (the "1993 Stock Option Plan"). Under the 1993 Stock Option Plan, 20,927,726 shares of Common Stock (which number is subject to adjustment in the event of stock splits, reverse stock splits, recapitalization or certain corporate reorganizations) are reserved cumulatively since inception for issuance to employees and consultants of Plantronics, as approved by the Compensation Committee of the Board of Directors and the Stock Option Plan Committee (comprised of the CEO and a representative of the Finance, Human Resources, and Legal departments). The reserved shares include 2,550,000 and 2,000,000 shares, which were authorized by the Board of Directors and approved by the stockholders for issuance in fiscal years 2001 and 2002, respectively. The 1993 Stock Plan, which has a term of ten years, provides for incentive stock options as well as nonqualified stock options to purchase shares of Common Stock. The Board of Directors may terminate the 1993 Stock Option Plan at any time at its discretion.

Incentive stock options may not be granted at less than 100% of the estimated fair market value of our Common Stock at the date of grant, as determined by the Board of Directors, and the option term may not exceed ten years. For holders of 10% or more of the total combined voting power of all classes of our stock, incentive stock options may not be granted at less than 110% 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, provided, however, that all stock options granted on or after May 16, 2001, may not be granted at less than 100% of the estimated fair market value of our Common Stock at the date of grant.

Options granted prior to June 1999 generally vest over a four-year period and those options granted subsequent to June 1999 generally vest over a five-year period. In July 1999, the Stock Option Plan Committee was authorized to make option 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.

DIRECTORS' STOCK OPTION PLAN. In September 1993, the Board of Directors adopted a Directors' Stock Option Plan (the "Directors' Option Plan") and reserved 300,000 shares of Common Stock (which number is subject to adjustment in the event of stock splits, reverse stock splits, recapitalization or certain corporate reorganizations) for issuance to non-employee directors of Plantronics. The reserved shares include 120,000 shares, which were authorized by the Board of Directors and approved by the stockholders for issuance in fiscal year 2001. The Directors' Option Plan provides that each non-employee director shall be granted an option to purchase 12,000 shares of Common Stock on the date which the person becomes a new director. Annually thereafter, each continuing non-employee director shall be automatically granted an option to purchase 3,000 shares of Common Stock. At the end of fiscal year 2002, options for 222,000 shares of Common Stock were outstanding under the Directors' Option Plan. All options were granted at fair market value and generally vest over a four-year period.

Stock option activity under the 1993 Stock Plan and the Directors' Stock Option Plan are as follows:

                                                 Options Outstanding
                                                 -----------------------
                                                               Weighted
                                       Shares                   Average
                                     Available                 Exercise
                                     for Grant      Shares       Price
                                    ------------ ------------  ---------
Balance at March 31, 1999..........   2,805,824    7,552,122  $    8.40
   Options Granted.................  (2,634,375)   2,634,375      21.55
   Options Exercised...............          --   (2,180,493)      3.15
   Options Cancelled...............     107,025     (107,025)     15.40
                                    ------------ ------------
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
                                    ============ ============
Exercisable at March 31, 2002...................   5,067,160
                                                 ============

Significant option groups outstanding at March 31, 2002, 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        2002         Life         Price         2002        Price
- ----------------- ------------ ------------  ------------ ------------  ----------
$ 0.30-$ 11.50...   2,072,166         3.67    $     5.00    2,072,166   $    5.00
 12.13-  17.49...   2,283,790         8.03         16.15      802,425       14.00
 17.89-  21.75...   2,521,671         7.89         20.85    1,078,873       20.71
 21.88-  35.46...   2,647,907         8.14         27.74      978,381       27.00
 36.00-  55.13...     448,132         8.49         40.96      135,315       41.01
                  ------------                            ------------
$ 0.30-$ 55.13...   9,973,666         7.14    $    19.21    5,067,160   $   14.98
                  ============                            ============

EMPLOYEE STOCK PURCHASE PLAN. On April 23, 1996, the Board of Directors of Plantronics approved the 1996 Employee Stock Purchase Plan (the "ESPP"), which was approved by the stockholders on August 6, 1996, to provide certain employees with an opportunity to purchase Common Stock through payroll deductions. The plan is a qualified plan under applicable IRS guidelines and certain highly compensated employees are excluded from participation. Under the ESPP plan effective through August 1999, the purchase price of the Common Stock was equal to 95% of the market price of the Common Stock immediately before the beginning of the applicable participation period and there was a six month holding period requirement for stock purchased. Under the ESPP plan effective beginning September 1999, the purchase price of the Common Stock is equal to 85% of the market price of the Common Stock immediately before the beginning of the applicable participation period and there is no required holding period. Each participation period is six months long.

There were 38,193, 25,443, and 41,889 shares issued under the ESPP in fiscal 2000, 2001, and 2002, 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 and holding vested stock options. The discounted price is not applicable to exercising and holding of vested stock options.

FAIR VALUE DISCLOSURES. All options in fiscal 2000, 2001 and 2002 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,
                                2000      2001      2002         2000      2001      2002
                              --------- --------- ---------    --------- --------- ---------

Expected dividend...........         0%        0%        0%           0%        0%        0%
Expected life (in years)....       6.0       6.0       6.0          0.5       0.5       0.5
Expected volatility.........      42.0%     86.0%     51.0%        42.0%     86.0%     59.0%
Risk-free interest rate.....       5.9%      5.5%      4.5%         6.1%      6.1%      3.3%

Weighted-average fair value. $   10.89 $   26.55 $   10.50    $    3.80 $    8.39 $    4.92

Volatility is a measure of the amount by which a price has fluctuated over an historical period. The higher the volatility, the more the returns on the stock can be expected to vary. The risk free interest rate is the rate on a U.S. Treasury bill or bond that approximates the expected life of the option.

Had compensation expense for our stock option and stock purchase plans been determined based on the methods prescribed by SFAS 123, our net income and net income per share would have been as follows:

                                  Fiscal Year Ended March 31,
                                 2000        2001        2002
                              ----------  ----------  ----------
                            (in thousands, except earnings per share)

Net income:
   As reported.............. $   64,517  $   73,550  $   36,248
   Pro forma................ $   56,879  $   61,427  $   20,749
Diluted net income per share
   As reported.............. $     1.22  $     1.38  $     0.74
   Pro forma................ $     1.07  $     1.15  $     0.42

11. ACQUISITION

On January 2, 2002, we acquired 100% of the capital stock of privately held Ameriphone, Inc. ("Ameriphone") of Garden Grove, CA, to strengthen our product line in the hearing-impaired market for specialized telephones and other equipment. The results of Ameriphone's operations have been included in the consolidated financial statements since that date. Ameriphone is a leading supplier of amplified telephones and other solutions to address the needs of individuals with hearing impairment and other special needs. Ameriphone joined Plantronics' Walker business group, a leading supplier of amplified telephones, specialty handsets and communication test equipment, in serving the special needs market.

The aggregate purchase price was $10.4 million, net of cash acquired. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. We obtained third-party valuations of inventory, goodwill and intangible assets from an independent valuation firm.

                                         January 2,
                                            2002
                                         ----------
                                         (in thousands)

   Current assets.......................    $5,555
   Property, plant and equipment........       503
   In-process research and development..       100
   Intangible assets....................     4,500
   Goodwill.............................     3,250
                                         ----------
   Total assets acquired................    13,908
                                         ----------
   Liabilities assumed..................    (3,492)
                                         ----------
   Net assets acquired...................  $10,416
                                         ==========

$0.1 million was assigned to in-process research and development assets which was written off at the date of acquisition. This write- off is included in research and development costs. Acquired intangible assets of $4.5 million included developed technology ($2.0 million, 7 year useful life), customer contracts ($1.3 million, 7 year useful life), patents and trademarks ($1.0 million, 7 year useful life), and non-compete agreements ($0.2 million, 5 year useful life).

The following unaudited pro forma summary presents our results of operations assuming the Ameriphone acquisition had been consummated at the beginning of the period:

                           March 31,
                     --------------------
                       2001       2002
                     ---------  ---------
        (in thousands, except per share amounts)
Revenue............ $ 402,916  $ 320,307
Net income.........    74,401     37,510
Diluted EPS........ $    1.40  $    0.76

12. GOODWILL AND INTANGIBLES

During the first quarter of fiscal year 2002, we early-adopted Statement of Financial Accounting Standards No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets." In accordance with SFAS 142, we discontinued goodwill amortization in April 2001.

The following table presents net income on a comparable basis, after adjustment for goodwill amortization:

                                          Fiscal Year Ended March 31,
                                        2000         2001          2002
                                      ---------    ---------    ----------
                                   (in thousands, except earnings per share)
Reported net income................ $   64,517   $   73,550   $    36,248
 Add back : goodwill amortization..        174          695            --
                                      ---------    ---------    ----------
 Adjusted net income............... $   64,691   $   74,245   $    36,248
                                      =========    =========    ==========
Basic earnings per share:
 As reported....................... $     1.30   $     1.49   $      0.77
 As adjusted....................... $     1.31   $     1.51   $      0.77

Diluted earnings per share:
 As reported....................... $     1.22   $     1.38   $      0.74
 As adjusted....................... $     1.22   $     1.39   $      0.74

Aggregate amortization expense on intangibles for fiscal 2001 and 2002 was $0.4 million and $0.6 million, respectively. The following table presents information on acquired intangible assets (in thousands):

                                             March 31, 2001                  March 31, 2002

                                     Gross Carrying   Accumulated    Gross Carrying   Accumulated
                                         Amount       Amortization       Amount       Amortization
                                     --------------  --------------  --------------  --------------
Intangible assets
Technology......................... $          460  $         (192) $        2,460  $         (417)
State contracts....................                             --           1,300             (46)
Patents............................                             --             700             (25)
Customer lists.....................            533            (222)            533            (400)
Trademarks.........................                             --             300             (11)
Workforce in place.................            278             (70)             --              --
Non-compete agreements.............                             --             200             (10)
In-process research and development             96             (96)            196            (196)
                                     --------------  --------------  --------------  --------------
Total.............................. $        1,367  $         (580) $        5,689  $       (1,105)
                                     ==============  ==============  ==============  ==============


Estimated amortization expense
Fiscal Year Ending March 31,
  2003............................................. $          902
  2004............................................. $          654
  2005............................................. $          654
  2006............................................. $          654
  2007............................................. $          644

The following table summarizes the changes in the carrying amount of goodwill during the fiscal year 2001 and 2002:

                                      2001       2002
                                    ---------  ---------
                                    (in thousands)
Balance, April 1.................. $   6,779  $   6,084
  Acquisition.....................        --      3,250
  Amortization....................      (695)        --
  Reclassification of intangible..        --        208
                                    ---------  ---------
Balance, March 31................. $   6,084  $   9,542
                                    =========  =========

13. FOREIGN CURRENCY HEDGING

Beginning in the first quarter of fiscal year 2002, we entered into foreign currency forward-exchange contracts, which typically mature in one month, to hedge the exposure to foreign currency fluctuations of expected foreign currency-denominated receivables, payables and cash balances. We record on the balance sheet at each reporting period the fair value of our forward-exchange contracts and record any fair value adjustments in results of operations. Gains and losses associated with currency rate changes on the contracts are recorded in results of operations, as other income (expense), offsetting transaction gains and losses on the related assets and liabilities.

During the first quarter of fiscal year 2002, we adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," which did not have a material impact on our financial position.

As of March 31, 2002, we had approximately $4.1 million of foreign currency forward-exchange contracts outstanding, in the Euro and British Pound Sterling, as a hedge against our forecasted foreign currency-denominated receivables, payables and cash balances. The following table summarizes our net currency position, and approximate U.S. dollar equivalent, at March 31, 2002:

(in thousands)               USD
          Local Currency  Equivalent  Position  Maturity
         --------------  ----------  --------  --------
EUR              3,388    $   3,000    Sell     1 month
GBP                774    $   1,100    Sell     1 month

Foreign currency transaction losses, net of the effect of hedging activity, for fiscal 2000, 2001 and 2002 were $0.8 million, $2.2 million and $0.4 million, respectively.

MANAGEMENT'S REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING

TO OUR STOCKHOLDERS

The management of Plantronics, Inc. has the responsibility for preparing the accompanying consolidated financial statements and for their integrity and objectivity. The statements were prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include amounts that are based on management's best estimates and judgments. Management also prepared the other information in this annual report and is responsible for its accuracy and consistency with the consolidated financial statements.

We maintain an effective internal control structure. It consists, in part, of organizational arrangements with clearly defined lines of responsibility and delegation of authority, and comprehensive systems and control procedures. We believe this structure provides reasonable assurance that transactions are executed in accordance with management authorization, and that they are appropriately recorded in order to permit preparation of financial statements in conformity with generally accepted accounting principles and to adequately safeguard, verify and maintain accountability of assets. Although no cost-effective internal control system will preclude all errors and irregularities, we believe our controls as of March 31, 2002, provide reasonable assurance that the financial statements are reliable and that our assets are reasonably safeguarded.

To assure the effective administration of internal control, we carefully select and train our employees, develop and disseminate written policies and procedures, provide appropriate communication channels, and foster an environment conducive to the effective functioning of controls. We maintain an active Standards of Conduct program intended to provide that employees adhere to the highest standards of personal and professional integrity.

The Audit Committee of the Board of Directors consists of three directors who are not employees and who are, in the opinion of the Board of Directors, free from any relationship that would interfere with the exercise of independent judgment as an Audit Committee member. The Audit Committee annually recommends to the Board independent auditors for appointment, subject to stockholder ratification. Pursuant to stockholder approval at last year's annual meeting, PricewaterhouseCoopers LLP was selected as our independent accountants. The Audit Committee met during the year with representatives of management and our independent accountants to review our financial reporting process and our controls to safeguard assets. Our independent accountants at all times have full and free access to the Audit Committee.

The accounting firm of PricewaterhouseCoopers LLP has performed an independent audit of our financial statements. Management has made available to PricewaterhouseCoopers LLP all of the financial records of Plantronics and related data, as well as the minutes of stockholders' and directors' meetings. Furthermore, management believes that all representations made to PricewaterhouseCoopers LLP during its audit were valid and appropriate. The accounting firm's report appears below.

/S/ Ken Kannappan
Ken Kannappan
President and Chief Executive Officer /S/ Barbara Scherer
Barbara Scherer
Senior Vice President--Finance &
Administration and Chief Financial Officer

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF PLANTRONICS, INC.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Plantronics, Inc. and its subsidiaries at March 31, 2002 and March 31, 2001 and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2002, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in item 14(a) of the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/S/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
San Jose, California
April 18, 2002

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no disagreements with accountants on any matter of accounting principles and practices or financial disclosure.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding the identification and business experience of our directors under the caption "Nominees" under the main caption "Proposal One -- Election of Directors" in our definitive 2002 Proxy Statement for the annual meeting of stockholders to be held on July 17, 2002, as filed with the Securities and Exchange Commission on or about June 24, 2002, is incorporated herein by this reference. For information regarding the identification and business experience of our executive officers, see "Executive Officers" at the end of Item 1 in Part I of this Annual Report on Form 10-K. Information concerning filing requirements applicable to our executive officers and directors under the caption "Compliance With Section 16(a) of the Exchange Act" in our 2002 Proxy Statement is incorporated herein by this reference.

ITEM 11. EXECUTIVE COMPENSATION

The information under the captions "Executive Compensation" and "Compensation of Directors" in our 2002 Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information under the captions "Equity Compensation Plan Information" and "Security Ownership of Principal Stockholders and Management" under the main caption "Additional Information" in the 2002 Proxy Statement are incorporated herein by this reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information under the caption "Certain Transactions" in the 2002 Proxy Statement is incorporated herein by this reference.

With the exception of the information specifically incorporated by reference from the 2002 Proxy Statement in Parts II and III of this Annual Report on Form 10-K, the 2002 Proxy Statement shall not be deemed to be filed as part of this report.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this Annual Report on Form 10-K:

(1) Financial Statements. See Item 8.

(2) Financial Statement Schedules.

PLANTRONICS, INC.
SCHEDULE II: VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
(IN THOUSANDS)

                                       Balance   Charged to
                                         at      Expenses               Balance
                                      Beginning  or Other               at End
                                       of Year   Accounts   Deductions  of Year
                                      ---------  ---------  ---------  ---------
Allowance for doubtful accounts:
 Year ended March 31, 2000.......... $   2,326  $     205  $    (387) $   2,144

 Year ended March 31, 2001..........     2,144      1,433       (904)     2,673

 Year ended March 31, 2002..........     2,673      1,032       (695)     3,010

Inventory reserves:
 Year ended March 31, 2000..........     6,043        159     (2,484)     3,718

 Year ended March 31, 2001..........     3,718      1,328     (1,276)     3,770

 Year ended March 31, 2002..........     3,770      6,137     (3,535)     6,372

Warranty reserves:
 Year ended March 31, 2000..........     6,588      5,623     (4,717)     7,494

 Year ended March 31, 2001..........     7,494      7,336     (8,211)     6,619

 Year ended March 31, 2002..........     6,619      9,045     (9,244)     6,420

(3) Exhibits. The exhibits listed under Item 14(c) hereof are filed with, or incorporated by reference into, this Annual Report on Form 10-K.

(b) Reports on Form 8-K.On April 11, 2002, Plantronics filed the Form 8-K with the SEC regarding a press release issued by Plantronics on March 15, 2002 announcing that the Board of Directors of Plantronics approved the adoption of a Stockholder Rights Plan.

(c) Exhibits. The following exhibits are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K:

Exhibit Number	Description of Document
3.1	Amended and Restated By-Laws of the Registrant.
3.2.1	Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on January 19, 1994 (incorporated herein by reference to Exhibit (3.1) to the Registrant's Quarterly Report on Form 10-Q, SEC File Number 1-12696, for the fiscal quarter ended December 25, 1993, filed on March 4, 1994).
3.2.2	Certificate of Retirement and Elimination of Preferred Stock and Common Stock of the Registrant filed with the Secretary of State of Delaware on January 11, 1996 (incorporated herein by reference to Exhibit (3.3) of the Registrant's Annual Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 30, 1996, filed on June 27, 1996).
3.2.3	Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on August 7, 1997 (incorporated herein by reference to Exhibit (3.1) to the Registrant's Quarterly Report on Form 10-Q, SEC File Number 1-12696, for the fiscal quarter ended June 28, 1997, filed on August 8, 1997).
3.2.4	Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on May 23, 2000 (incorporated herein by reference to Exhibit (4.2) to the Registrant's Registration Statement on Form S-8, No. 33-70744, filed on July 31, 2000).
3.3	Registrant's Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 1, 2002 (incorporated herein by reference to Exhibit (3.6) to the Registrant's Form 8-A filed on March 29, 2002).
4.1	Preferred Stock Rights Agreement, dated as of March 13, 2002 between the Registrant and Equiserve Trust Company, N.A., including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively (incorporated herein by reference to Exhibit (4.1) to the Registrant's Form 8-A filed on March 29, 2002).
10.1	Plantronics, Inc. Non-EMEA Quarterly Profit Sharing Plan (incorporated herein by reference to Exhibit (10.1) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.2	Form of Indemnification Agreement between the Registrant and certain directors and executives and Schedule of Other Documents Omitted (incorporated herein by reference to Exhibit (10.1) to PI Holdings Inc.'s Quarterly Report on Form 10-Q for the fiscal quarter ended December 26, 1992, SEC File Number 33-26770, filed February 9, 1993).
10.3	Form of Employment Agreement, Addendum to Employment Agreement and Second Addendum to Employment Agreement between the Registrant and certain executives; and Schedule of Other Documents Omitted (incorporated herein by reference to Exhibit (10.2) to PI Holdings Inc.'s Quarterly Report on Form 10-Q for the fiscal quarter ended December 26, 1992, SEC File Number 33-26770, filed February 9, 1993).
10.4.1	Regular and Supplemental Bonus Plan (incorporated herein by reference to Exhibit (10.(4(a)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.4.2	Overachievement Bonus Plan (incorporated herein by reference to Exhibit (10.(4(b)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.5	Board Designation Agreement dated as of October 22, 1993 between the Registrant and Citicorp Venture Capital, Ltd. (incorporated herein by reference to Exhibit (10.21) to the Registrant's Registration Statement on Form S-1 (as amended), No. 33-70744, filed October 20, 1993).
10.6	Lease Agreement dated July 1993 between Inmobiliara Mexhong S.A. de C.V. and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) (incorporated herein by reference to Exhibit (10.30) to the Registrant's Registration Statement on Form S-1 (as amended), No. 33-70744, filed on October 20, 1993).
10.7	Lease dated December 7, 1990 between Canyge Bicknell Limited and Plantronics Limited, a subsidiary of the Registrant, for premises located in Wootton Bassett, England (incorporated herein by reference to Exhibit (10.32) to the Registrant's Registration Statement on Form S-1 (as amended), No.33-70744, filed on October 20, 1993).
10.8*	1993 Stock Option Plan.
10.9.1*	1993 Director Stock Option Plan (incorporated herein by reference to Exhibit (10.29) to the Registrant's Registration Statement on Form S-1 (as amended), SEC File Number 33-70744, filed on October 20, 1993).
10.9.2*	Amendment Effective as of April 23, 1996 to the 1993 Director Stock Option Plan (incorporated herein by reference to Exhibit (4.4) to the Registrant's Registration Statement on Form S-8, SEC File Number 333-14833, filed on October 25, 1996).
10.9.3*	Amendment No. 2 effective as of November 4, 1996 to the 1993 Director Stock Option Plan (incorporated herein by reference to Exhibit (10.(9(a)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.9.4*	Amendment No. 3 to the 1993 Director Stock Option Plan effective as of June 29, 2000 (incorporated herein by reference to Exhibit (10.9(b)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.9.5*	Amendment No. 4 to the 1993 Director Stock Option Plan.
10.10.1	1996 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit (4.5) to the Registrant's Registration Statement on Form S-8, SEC File Number 333-14833, filed on October 25, 1996).
10.10.2	2002 Employee Stock Purchase Plan.
10.11.1	Trust Agreement Establishing the Plantronics, Inc. Annual Profit Sharing/Individual Savings Plan Trust (incorporated herein by reference to Exhibit (4.3) to the Registrant's Registration Statement on Form S-8, SEC File Number 333-19351, filed on January 7, 1997).
10.11.2*	Plantronics, Inc. 401(k) Plan, effective as of April 2, 2000 (incorporated herein by reference to Exhibit (10.11) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.12*	Resolutions of the Board of Directors of Plantronics, Inc. Concerning Executive Stock Purchase Plan (incorporated herein by reference to Exhibit (4.4) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.13.1*	Plantronics, Inc. Basic Deferred Compensation Plan, as amended August 8, 1996 (incorporated herein by reference to Exhibit (4.5) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.13.2	Trust Agreement Under the Plantronics, Inc. Basic Deferred Stock Compensation Plan (incorporated herein by reference to Exhibit (4.6) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.13.3	Plantronics, Inc. Basic Deferred Compensation Plan Participant Election (incorporated herein by reference to Exhibit (4.7) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.14*	Employment Agreement dated as of July 4, 1999 between Registrant and Ken Kannappan (incorporated herein by reference to Exhibit (10.15) of the Registrant's Annual Report on Form 10-K405, SEC File Number 1-12696, for the fiscal year ended April 1, 2000, filed on June 1, 2000).
10.15.1	Credit Agreement dated as of November 29, 1999 between Registrant and Wells Fargo Bank N.A (incorporated herein by reference to Exhibit (10.16) of the Registrant's Annual Report on Form 10-K405, SEC File Number 1-12696, for the fiscal year ended April 1, 2000, filed on June 1, 2000).
10.15.2	First Amendment to Credit Agreement, dated as of November 27, 2000 (incorporated herein by reference to Exhibit (10.15) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.15.3	Second Amendment to Credit Agreement, dated as of November 1, 2001 (incorporated herein by reference to Exhibit (10.15) to the Registrant's Report on Form 10-Q, SEC File Number 1-12696, for the fiscal year ended December 31, 2001, filed on February 12, 2002).
21	Subsidiaries of the Registrant.
23	Consent of PricewaterhouseCoopers LLP, Independent Accountants.
*	Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PLANTRONICS, INC.

June 21, 2002

By:  /s/ S. Kenneth Kannappan

S. Kenneth Kannappan

Chief Executive Officer

Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature	Title	Date
/s/ S. Kenneth Kannappan (S. Kenneth Kannappan)	President, Chief Executive Officer and Director (Principal Executive Officer)	June 21, 2002
/s/ Barbara V. Scherer (Barbara V. Scherer)	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	June 21, 2002
/s/ Marvin Tseu (Marvin Tseu)	Chairman of the Board and Director	June 21, 2002
/s/ Patti Hart (Patti Hart)	Director	June 21, 2002
/s/ Robert F.B. Logan (Robert F.B. Logan)	Director	June 21, 2002
/s/ M. Saleem Muqaddam (M. Saleem Muqaddam)	Director	June 21, 2002
/s/ John M. O'Mara (John M. O'Mara)	Director	June 21, 2002
/s/ Trude C. Taylor (Trude C. Taylor)	Director	June 21, 2002
/s/ David A. Wegmann (David A. Wegmann)	Director	June 21, 2002
/s/ Roger Wery (Roger Wery)	Director	June 21, 2002

EXHIBITS INDEX

Exhibit Number	Description of Document
3.1	Amended and Restated By-Laws of the Registrant.
3.2.1	Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on January 19, 1994 (incorporated herein by reference to Exhibit (3.1) to the Registrant's Quarterly Report on Form 10-Q, SEC File Number 1-12696, for the fiscal quarter ended December 25, 1993, filed on March 4, 1994).
3.2.2	Certificate of Retirement and Elimination of Preferred Stock and Common Stock of the Registrant filed with the Secretary of State of Delaware on January 11, 1996 (incorporated herein by reference to Exhibit (3.3) of the Registrant's Annual Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 30, 1996, filed on June 27, 1996).
3.2.3	Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on August 7, 1997 (incorporated herein by reference to Exhibit (3.1) to the Registrant's Quarterly Report on Form 10-Q, SEC File Number 1-12696, for the fiscal quarter ended June 28, 1997, filed on August 8, 1997).
3.2.4	Certificate of Amendment of Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of Delaware on May 23, 2000 (incorporated herein by reference to Exhibit (4.2) to the Registrant's Registration Statement on Form S-8, No. 33-70744, filed on July 31, 2000).
3.3	Registrant's Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock filed with the Secretary of State of the State of Delaware on April 1, 2002 (incorporated herein by reference to Exhibit (3.6) to the Registrant's Form 8-A filed on March 29, 2002).
4.1	Preferred Stock Rights Agreement, dated as of March 13, 2002 between the Registrant and Equiserve Trust Company, N.A., including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively (incorporated herein by reference to Exhibit (4.1) to the Registrant's Form 8-A filed on March 29, 2002).
10.1	Plantronics, Inc. Non-EMEA Quarterly Profit Sharing Plan (incorporated herein by reference to Exhibit (10.1) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.2	Form of Indemnification Agreement between the Registrant and certain directors and executives and Schedule of Other Documents Omitted (incorporated herein by reference to Exhibit (10.1) to PI Holdings Inc.'s Quarterly Report on Form 10-Q for the fiscal quarter ended December 26, 1992, SEC File Number 33-26770, filed February 9, 1993).
10.3	Form of Employment Agreement, Addendum to Employment Agreement and Second Addendum to Employment Agreement between the Registrant and certain executives; and Schedule of Other Documents Omitted (incorporated herein by reference to Exhibit (10.2) to PI Holdings Inc.'s Quarterly Report on Form 10-Q for the fiscal quarter ended December 26, 1992, SEC File Number 33-26770, filed February 9, 1993).
10.4.1	Regular and Supplemental Bonus Plan (incorporated herein by reference to Exhibit (10.(4(a)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.4.2	Overachievement Bonus Plan (incorporated herein by reference to Exhibit (10.(4(b)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.5	Board Designation Agreement dated as of October 22, 1993 between the Registrant and Citicorp Venture Capital, Ltd. (incorporated herein by reference to Exhibit (10.21) to the Registrant's Registration Statement on Form S-1 (as amended), No. 33-70744, filed October 20, 1993).
10.6	Lease Agreement dated July 1993 between Inmobiliara Mexhong S.A. de C.V. and Plamex, S.A. de C.V., a subsidiary of the Registrant, for premises located in Tijuana, Mexico (translation from Spanish original) (incorporated herein by reference to Exhibit (10.30) to the Registrant's Registration Statement on Form S-1 (as amended), No. 33-70744, filed on October 20, 1993).
10.7	Lease dated December 7, 1990 between Canyge Bicknell Limited and Plantronics Limited, a subsidiary of the Registrant, for premises located in Wootton Bassett, England (incorporated herein by reference to Exhibit (10.32) to the Registrant's Registration Statement on Form S-1 (as amended), No.33-70744, filed on October 20, 1993).
10.8*	1993 Stock Option Plan.
10.9.1*	1993 Director Stock Option Plan (incorporated herein by reference to Exhibit (10.29) to the Registrant's Registration Statement on Form S-1 (as amended), SEC File Number 33-70744, filed on October 20, 1993).
10.9.2*	Amendment Effective as of April 23, 1996 to the 1993 Director Stock Option Plan (incorporated herein by reference to Exhibit (4.4) to the Registrant's Registration Statement on Form S-8, SEC File Number 333-14833, filed on October 25, 1996).
10.9.3*	Amendment No. 2 effective as of November 4, 1996 to the 1993 Director Stock Option Plan (incorporated herein by reference to Exhibit (10.(9(a)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.9.4*	Amendment No. 3 to the 1993 Director Stock Option Plan effective as of June 29, 2000 (incorporated herein by reference to Exhibit (10.9(b)) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.9.5*	Amendment No. 4 to the 1993 Director Stock Option Plan.
10.10.1	1996 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit (4.5) to the Registrant's Registration Statement on Form S-8, SEC File Number 333-14833, filed on October 25, 1996).
10.10.2	2002 Employee Stock Purchase Plan.
10.11.1	Trust Agreement Establishing the Plantronics, Inc. Annual Profit Sharing/Individual Savings Plan Trust (incorporated herein by reference to Exhibit (4.3) to the Registrant's Registration Statement on Form S-8, SEC File Number 333-19351, filed on January 7, 1997).
10.11.2*	Plantronics, Inc. 401(k) Plan, effective as of April 2, 2000 (incorporated herein by reference to Exhibit (10.11) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.12*	Resolutions of the Board of Directors of Plantronics, Inc. Concerning Executive Stock Purchase Plan (incorporated herein by reference to Exhibit (4.4) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.13.1*	Plantronics, Inc. Basic Deferred Compensation Plan, as amended August 8, 1996 (incorporated herein by reference to Exhibit (4.5) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.13.2	Trust Agreement Under the Plantronics, Inc. Basic Deferred Stock Compensation Plan (incorporated herein by reference to Exhibit (4.6) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.13.3	Plantronics, Inc. Basic Deferred Compensation Plan Participant Election (incorporated herein by reference to Exhibit (4.7) to the Registrant's Registration Statement on Form S-8 (as amended), SEC File Number 333-19351, filed on March 25, 1997).
10.14*	Employment Agreement dated as of July 4, 1999 between Registrant and Ken Kannappan (incorporated herein by reference to Exhibit (10.15) of the Registrant's Annual Report on Form 10-K405, SEC File Number 1-12696, for the fiscal year ended April 1, 2000, filed on June 1, 2000).
10.15.1	Credit Agreement dated as of November 29, 1999 between Registrant and Wells Fargo Bank N.A (incorporated herein by reference to Exhibit (10.16) of the Registrant's Annual Report on Form 10-K405, SEC File Number 1-12696, for the fiscal year ended April 1, 2000, filed on June 1, 2000).
10.15.2	First Amendment to Credit Agreement, dated as of November 27, 2000 (incorporated herein by reference to Exhibit (10.15) to the Registrant's Report on Form 10-K, SEC File Number 1-12696, for the fiscal year ended March 31, 2001, filed on June 1, 2001).
10.15.3	Second Amendment to Credit Agreement, dated as of November 1, 2001 (incorporated herein by reference to Exhibit (10.15) to the Registrant's Report on Form 10-Q, SEC File Number 1-12696, for the fiscal year ended December 31, 2001, filed on February 12, 2002).
21	Subsidiaries of the Registrant.
23	Consent of PricewaterhouseCoopers LLP, Independent Accountants.
*	Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.

EX-3

AMENDED AND RESTATED

BY-LAWS

OF

PLANTRONICS, INC.

a Delaware corporation

1. ARTICLE

OFFICES

1. Registered Office

The registered office of the corporation in the State of Delaware shall be located at 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of the corporation's registered agent at such address shall be The Corporation Trust Company. The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors.

2. Other Offices

The corporation may also have offices at such other places, both within and without the State of Delaware, as the board of d may from time to time determine or the business of the corporation may require.

2. ARTICLE 

MEETINGS OF STOCKHOLDERS

1. Place and Time of Meetings

An annual meeting of the stockholders shall be held each year within one hundred twenty (120) days after the close of the immediately preceding fiscal year of the corporation for the purpose of electing directors and conducting such other proper business as may come before the meeting. The date, time and place of the annual meeting shall be determined by the president of the corporation; provided, that if the president does not act, the board of directors shall determine the date, time and place of such meeting.

2. Special Meetings

Special meetings of stockholders may be called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by the board of directors, the chairman of the board of directors, the president or the holders of twenty percent (20%) or more of the outstanding Common Stock of the corporation. No business may be conducted at a special meeting other than the business brought before the meeting by the Board of Directors, the chairman of the board of directors, the president or the holders of twenty percent (20%) or more of the outstanding Common Stock of the corporation, as the case may be.

3. Place of Meetings

The board of directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation.

4. Notice

Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall be delivered, either personally or by mail, by or at the direction of the board of directors, the president or the secretary, and if mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation.

5. Stockholders List

The officer having charge of the stock ledger of the corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

6. Quorum

The holders of the outstanding shares of capital stock representing a majority of the voting power of the corporation, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by law or by the certificate of incorporation. If a quorum is not present, the holders of the shares representing a majority of the voting power present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. When a specified item of business requires a vote by a class or series (if the corporation shall then have outstanding shares of more than one class or series) voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum (as to such class or series) for the transaction of such item of business. When a quorum is once present to commence a meeting of stockholders, it is not broken by the subsequent withdrawal of any stockholder or their proxies.

7. Adjourned Meetings

When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record day is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

8. Vote Required

When a quorum is present, the affirmative vote of the holders of the shares representing a majority of the voting power present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question. Where a separate vote by class may be required, the affirmative vote of the majority of shares of such class present in person or represented by proxy at the meeting shall be the act of such class.

9. Voting Rights

Except as otherwise provided by the General Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article 6 hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of Common Stock held by such stockholder.

10. Proxies

Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.

11. Prohibitions on Action by Written Consent

Unless otherwise provided in the certificate of incorporation, no action may be taken by the stockholders of the corporation pursuant to a written consent in lieu of an annual or special meeting of the stockholders of the corporation.

12. Advance Notice of Stockholder Nominations

Nominations of persons for election to the board of directors of the corporation may be made at a meeting of stockholders by or at the direction of the board of directors or by any stockholder of the corporation entitled to vote in the election of directors at the meeting who complies with the notice procedures set forth in this Section. Such nominations, other than those made by or at the direction of the board of directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the corporation not less than twenty (20) days prior to the meeting; provided, however, that in the event less than thirty (30) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person, if any, whom the stockholder proposes to nominate for election or re-election as a director: (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the corporation which are beneficially owned by such person, (iv) any other information relating to such person that is required by law to be disclosed in solicitations of proxies for election of directors, and (v) such person's written consent to being named as a nominee and to serving as a director if elected; and (b) as to the stockholder giving the notice: (i) the name and address, as they appear on the corporation's books, of such stockholder, (ii) the class and number of shares of the corporation which are beneficially owned by such stockholder, and (iii) a description of all arrangements or understandings between such stockholder and each nominee and any other person or persons (naming such person or persons) relating to the nomination. At the request of the board of directors any person nominated by the board of directors for election as a director shall furnish to the Secretary of the corporation that information required to be set forth in the stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this Section. The chairman of the meeting shall, if the facts warrant, determine and declare at the meeting that a nomination was not made in accordance with the procedures prescribed by these bylaws, and if he should so determine, he shall so declare at the meeting and the defective nomination shall be disregarded.

13. Advance Notice of Stockholder Business

At the annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be: (a) as specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (b) otherwise properly brought before the meeting by or at the direction of the board of directors, or (c) otherwise properly brought before the meeting by a stockholder. Business to be brought before the meeting by a stockholder shall not be considered properly brought if the stockholder has not given timely notice thereof in writing to the Secretary of the corporation. To be timely, a stockholder's notice must be delivered to the principal executive offices of the corporation not less than forty five (45) days prior to the date on which the corporation first mailed proxy materials for the prior year's annual meeting; provided, however, that if the corporation's annual meeting of stockholders occurs on a date more than thirty (30) days earlier or later than the corporation's prior year's annual meeting, then the corporation's board of directors shall determine a date a reasonable period prior to the corporation's annual meeting of stockholders by which date the stockholders notice must be delivered and publicize such date in a filing pursuant to the Securities Exchange Act of 1934, as amended, or via press release. Such publication shall occur at least ten (10) days prior to the date set by the Board of Directors. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address of the stockholder proposing such business, (iii) the class and number of shares of the corporation, which are beneficially owned by the stockholder, (iv) any material interest of the stockholder in such business, and (v) any other information that is required by law to be provided by the stockholder in his capacity as proponent of a stockholder proposal. Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section. The chairman of the annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section, and, if he should so determine, he shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted.

3. ARTICLE

DIRECTORS

1. General Powers

The business and affairs of the corporation shall be managed by or under the direction of the board of directors.

2. Number, Election and Term of Office

The authorized number of directors constituting the board of directors shall be six (6). This number may be changed by an amendment to these by-laws adopted by (a) the vote of 66-2/3% of the outstanding Common Stock of the corporation or (b) by a resolution of the board of directors adopted by the affirmative vote of at least 66-2/3% of such authorized number of directors. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term expires. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article 3. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

3. Removal and Resignation

Any director or the entire board of directors may be removed at any time, with or without cause, by the holders of the shares representing a majority of the voting power of the corporation then entitled to vote at an election of directors. Whenever the holders of any class or series are entitled to elect one or more directors by the provisions of the corporation's certificate of incorporation, the provisions of this section shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as whole. Any director may resign at any time upon written notice to the corporation.

4. Vacancies
1. Vacancies in the unexpired term of any directorship shall be filled as follows:
1. If such vacancy has resulted from the death, resignation or removal of a director that was designated by Citicorp Venture Capital, Ltd. ("CVC") to serve on the Board of Directors pursuant to the terms of that certain Board Designation Agreement between the Company and CVC (a "CVC Designee"), such vacancy shall be filled by a majority of the remaining CVC Designees then in office, though such directors may constitute less than a quorum; or
2. If such vacancy has resulted from the death, resignation or removal of a director that is not a CVC Designee, such vacancy shall be filled by a majority of those remaining directors then in office that are neither (x) a CVC Designee or (y) the Chief Executive Officer of the corporation, though such directors may constitute less than a quorum; provided, however, that if the Chief Executive Officer of the corporation is the sole remaining director that is not a CVC Designee, the Chief Executive Officer shall fill any such vacancy.
2. Newly created directorships resulting from any increase in the authorized number of directors shall be filled by a majority of the directors then in office.
3. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided.


5. Regular Meetings

Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

6. Special Meetings and Notice

Special meetings of the board of directors for any purpose or purposes may be called at any time by the president or any two (2) directors. Notice of the date, time and place of special meetings shall be delivered personally, by telephone, facsimile, telegram, electronic mail or other comparable communication equipment to each director or sent by first-class mail, charges prepaid, addressed to each director at that director's address as it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. If the notice is delivered personally or by telephone, facsimile, telegram, electronic mail or other comparable communication equipment, it shall be delivered at least twenty-four (24) hours before the time of the holding of the meeting. Any notice given personally or by telephone, facsimile, telegram, electronic mail or other comparable communication equipment may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting.

7. Quorum, Required Vote and Adjournment
1. A majority of the total number of directors shall constitute a quorum for the transaction of business. Except as otherwise set forth in clause (b), the vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the board of directors. If a quorum shall not be present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
2. The affirmative vote of at least 66 2/3% of the directors then in office shall be required to adopt a resolution necessary to:
1. amend, alter or repeal any provisions of the certificate of incorporation or by-laws of the corporation;
2. sell, lease or convey all or substantially all of the property or business of the corporation or permit any Subsidiary to sell, lease or convey all or substantially all of the property or business of such Subsidiary (other than to the corporation or another Subsidiary in a consolidation or merger in which the corporation is the surviving person) or permit any Subsidiary to consolidate or merge with any other corporation (other than the corporation or a Subsidiary in a consolidation or merger in which the corporation or such Subsidiary is the surviving person), or voluntarily liquidate, dissolve or wind up the corporation;
3. issue or sell, or agree to issue or sell, or permit any Subsidiary to issue or sell, its capital stock or any securities consisting of or containing any options or rights to acquire any shares of capital stock or any securities convertible or exchangeable or exercisable for any of its capital stock, other than any issuance of capital stock (A) pursuant to any stock split or dividend effected by the corporation on a pro-rata basis to all stockholders, (B) pursuant to a dividend on shares of Common Stock that is paid in shares of capital stock of the corporation on a pro-rata basis to all stockholders or (C) upon the exercise of rights or options under the 1993 Option Plan.
4. enter into any stock option plan, other than the 1993 Stock Option Plan dated as of September 25, 1993 or amend any stock option plan to increase the number of shares issuable thereunder; or
5. acquire the business or assets of, or enter into any joint venture or partnership with, any Person (except the corporation may acquire the business or assets of, or enter into any joint venture or partnership with, any Subsidiary) or permit any Subsidiary to acquire the business or assets of, or enter into any joint venture or partnership with, any Person (except any Subsidiary may acquire the business or assets of any other Subsidiary or enter into any joint venture or partnership with the Corporation or any other Subsidiary) if the aggregate amount of all expenditures incurred by the corporation (on a consolidated basis) in its then current fiscal year in connection with acquisitions or investments in joint ventures or partnerships would, after giving effect to expenditures to be incurred by the corporation (on a consolidated basis) in such fiscal year in connection with such proposed acquisition or investment in joint venture or partnership, exceed $10 million.

For purposes of this clause (b), the following terms shall have the following respective meanings:

"Person" shall mean and include an individual, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

"Subsidiary" shall mean any corporation, at least a majority of the total combined voting power of all classes of stock having general voting power of which shall, at the time as of which any determination is being made, be owned by the corporation either directly or through one or more Subsidiaries.

8. Committees

Subject to the voting requirements set forth in Article 3, the board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these by-laws shall have and may exercise the powers of the board of directors in the management and affairs of the corporation except as otherwise limited by law. The board of directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.

9. Committee Rules

Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. In the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 8 of this Article 3, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in place of any such absent or disqualified member.

10. Communications Equipment

Members of the board of directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting.

11. Waiver of Notice and Presumption of Assent

Any member of the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action.

12. Action by Written Consent

Unless otherwise restricted by the certificate of incorporation, any action required or permitted to be taken at any meeting of the board of directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the board or committee.

4. ARTICLE

OFFICERS

1. Number

The officers of the corporation shall be elected by the board of directors and shall consist of a president, one or more vice-presidents, a secretary, a treasurer, and such other offices and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible.

2. Election and Term of Office

The officers of the corporation shall be elected annually by the board of directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

3. Removal

Any officer or agent elected by the board of directors may be removed by the board of directors whenever in its judgment the best interests of the corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

4. Vacancies

Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term by the board of directors then in office.

5. Compensation

Compensation of all officers shall be fixed by the board of directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation.

6. The President

The president shall be the chief executive officer of the corporation; shall preside at all meetings of the stockholders and board of directors at which he or she is present; subject to the powers of the board of directors, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors are carried into effect. The president shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the board of directors or as may be provided in these by-laws.

7. Vice-Presidents

The vice-president, or if there shall be more than one, the vice- presidents in the order determined by the board of directors, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the president or these by-laws, from time to time, prescribe.

8. The Secretary and Assistant Secretaries

The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose. Under the president's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by- laws or by law; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe; and shall have custody of the corporate seal of the corporation. The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary. The board of directors may give general authority to any other officer to affix the seal of the corporation and to attest the affixing by his or her signature. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the president, or secretary may, from time to time, prescribe.

9. The Treasurer and Assistant Treasurer

The treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the president and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the president or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of the office of treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors, shall in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the president or treasurer may, from time to time, prescribe.

10. Other Officers, Assistant Officers and Agents

Officers, assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors.

11. Absence or Disability of Officers

In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.

5. ARTICLE

INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS

1. Nature of Indemnity

Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer, of the corporation or is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless by the corporation to the fullest extent which it is empowered to do so by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the corporation to provide broader indemnification rights than said law permitted the corporation to provide prior to such amendment) against all expense, liability and loss (including attorneys' fees actually and reasonably incurred by such person in connection with such proceeding and such indemnification shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in Section 2 hereof, the corporation shall indemnify any such person seeking indemnification in connection with a proceeding initiated by such person only if such proceeding was authorized by the board of directors of the corporation. The right to indemnification conferred in this Article 5 shall be a contract right and, subject to Sections 2 and 5 hereof, shall include the right to be paid by the corporation the expenses incurred in defending any such proceeding in advance of its final disposition. The corporation may, by action of its board of directors, provide indemnification to employees and agents of the corporation with the same scope and effect as the foregoing indemnification of directors and officers.

2. Procedure for Indemnification of Directors and Officers

Any indemnification of a director or officer of the corporation under Section 1 of this Article 5 or advance of expenses under Section 5 of this Article 5 shall be made promptly, and in any event within thirty (30) days, upon the written request of the director or officer. If a determination by the corporation that the director or officer is entitled to indemnification pursuant to this Article 5 is required, and the corporation fails to respond within sixty (60) days to a written request for indemnity, the corporation denies a written request for indemnification or advancing of expenses, in whole or in part, of if payment in full pursuant to such request is not made within thirty (30) days, the right to indemnification or advances as granted by this Article 5 shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any, has been tendered to the corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the corporation. Neither the failure of the corporation (including its board of directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the corporation (including its board of directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

3. Article Not Exclusive

The rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this Article 5 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the certificate of incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise.

4. Insurance

The corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee, fiduciary, or agent of the corporation or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, whether or not the corporation would have the power to indemnify such person against such liability under this Article 5.

5. Expenses

Expenses incurred by any person described in Section 1 of this Article 5 in defending a proceeding shall be paid by the corporation in advance of such proceeding's final disposition upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the board of directors deems appropriate.

6. Employees and Agents

Persons who are not covered by the foregoing provisions of this Article 5 and who are or were employees or agents of the corporation, or who are or were serving at the request of the corporation as employees or agents of another corporation, partnership, joint venture, trust or other enterprise, may be indemnified to the extent authorized at any time or from time to time by the board of directors.

7. Contract Rights

The provisions of this Article 5 shall be deemed to be a contract right between the corporation and each director or officer who serves in any such capacity at any time while this Article 5 and the relevant provisions of the General Corporation Law of the State of Delaware or other applicable law are in effect, and any repeal or modification of this Article 5 or any such law shall not affect any rights or obligations then existing with respect to any state of facts or proceeding then existing.

8. Merger or Consolidation

For purposes of this Article 5, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article 5 with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

5. ARTICLE

CERTIFICATES OF STOCK

1. Form

Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such president, vice-president, secretary or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate of certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation.

2. Lost Certificate

The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates previously issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.

3. Fixing a Record Date for Stockholder Meetings

In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the board of directors may fix a new record date for the adjournment meeting.

4. Fixing a Record Date for Other Purposes

In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to written action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto.

5. Registered Stockholders

Prior to the surrender to the corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner.

6. Subscriptions for Stock

Unless otherwise provided for in the subscription agreement, subscriptions for shares all be paid in full at such time, or in such installments and at such times, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation.


7. ARTICLE

GENERAL PROVISIONS

1. Dividends

Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created.

2. Checks, Drafts or Orders

All checks, drafts, or other orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof.

3. Contracts

The board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

4. Loans

The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. No loans shall be made or contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by resolution of the board of directors. Such authority may be general or confined to specific instances.

5. Fiscal Year

The fiscal year of the corporation shall be fixed by resolution of the board of directors.

6. Voting Securities Owned By Corporation

Voting securities in any other corporation held by the corporation shall be voted by the president or the secretary, unless the board of directors specifically confers authority to vote with respect there to, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.

7. Inspection of Books and Records

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of Delaware or at its principal place of business.

8. Section Headings

Section headings in these by-laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

9. Inconsistent Provisions

In the event that any provision of these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

8. ARTICLE

AMENDMENTS

Except as set forth in the next sentence, these by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by a majority vote. The provisions set forth in Article 3, Section 2, Article 3, Section 7(b) and this Article 8 may only be amended, altered or repealed upon the affirmative of at least 66 2/3% of the directors then in office. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of the same powers.

EX-10

PLANTRONICS, INC.

1993 STOCK OPTION PLAN

1. Purposes of the Plan. The purposes of this Stock Option Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants of the Company and its Subsidiaries and to promote the success of the Company's business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant.
2. Definitions. As used herein, the following definitions shall apply:
1. "Administrator" means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof.
2. "Applicable Laws" means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Options are granted under the Plan.
3. "Board" means the Board of Directors of the Company.
4. "Code" means the Internal Revenue Code of 1986, as amended.
5. "Committee" means the Compensation Committee appointed by the Board in accordance with Section 4 hereof.
6. "Common Stock" means the Common Stock of the Company.
7. "Company" means Plantronics Inc., a Delaware corporation.
8. "Consultant" means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity and who is compensated for such services and who does not render such services as an Employee.
9. "Director" means a member of the Board of Directors of the Company.
10. "Disability" means total and permanent disability as defined in Section 22(e)(3) of the Code.
11. "Employee" means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by contract (including certain Company policies) or statute. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181^st day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company.
12. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
13. "Fair Market Value" means, as of any date, the value of Common Stock determined as follows:
1. If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the New York Stock Exchange (NYSE), its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
2. If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination; or
3. In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator in conjunction with a qualified independent appraiser.
14. "Incentive Stock Option" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
15. "Nonstatutory Stock Option" means an Option not intended to qualify as an Incentive Stock Option.
16. "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
17. "Option" means a stock option granted pursuant to the Plan.
18. "Option Agreement" means a written or electronic agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan.
19. "Optioned Stock" means the Common Stock subject to an Option.
20. "Optionee" means an Employee or Consultant who receives an outstanding Option, or in the event of death or disability, such individual's estate or personal representative, granted under the Plan.
21. "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the Code.
22. "Plan" means this 1993 Stock Option Plan.
23. "Section 16(b)" means Section 16(b) of the Securities Exchange Act of 1934, as amended.
24. "Service Provider" means an Employee or Consultant.
25. "Share" means a share of the Common Stock, as adjusted in accordance with Section 11 below.
26. "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the Plan, the maximum aggregate number of Shares which may be subject to option and sold under the Plan is 20,927,726 Shares. The Shares may be authorized but unissued, or reacquired Common Stock, or both. If an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of either an Option, shall not be returned to the Plan and shall not become available for future distribution under the Plan.
4. Administration of the Plan.
1. The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws.
2. Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion:
1. to determine the Fair Market Value of the Common Stock, in accordance with Section 2(m) of the Plan;
2. to select the Service Providers to whom Options may from time to time be granted hereunder;
3. to determine the number of Shares to be covered by each such award granted hereunder;
4. to approve forms of agreement for use under the Plan;
5. to determine the terms and conditions, of any Option granted hereunder. Such terms and conditions are subject to the provisions of this Plan and may include, but are not limited to, the time or times when Options may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;
6. to determine whether and under what circumstances an Option may be settled in cash under subsection 9(e) instead of Common Stock;
7. to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws;
8. to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option that number of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; and
9. to construe and interpret the terms of the Plan and awards granted pursuant to the Plan.
3. Effect of Administrator's Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees.
5. Eligibility.
1. Nonstatutory Stock Options may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
2. Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.
3. Neither the Plan nor any Option shall confer upon any Optionee any right with respect to continuing the Optionee's relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company's right to terminate such relationship at any time, with or without cause.
4. The following limitations shall apply to grants of Options:
1. No Service Provider shall be granted in any fiscal year of the Company, options to purchase more than 500,000 shares, or 1,000,000 shares, if such Service Provider is a new hire;
2. The foregoing limitations set forth in this Section 5(d) are intended to satisfy the requirements applicable to Options intended to qualify as "performance-based compensation" (within the meaning of Section 162(m) of the Code) and are subject to an automatic proportionate increase in the event of an increase to either the Shares issuable pursuant to the Plan or to the Shares issuable pursuant to a particular Option under Sections 3 and 11 herein. In the event the Administrator determines that such limitations are not required to qualify an Option as performance-based compensation, the Administrator may modify or eliminate such limitations.
6. Term of Plan. The Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
1. The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:
1. In the case of an Incentive Stock Option
1. granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.
2. granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.
2. In the case of a Nonstatutory Stock Option
1. granted to a Service Provider who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of the grant.
2. granted to any other Service Provider, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.
3. Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction, provided that shareholders' approval has been obtained for all such grants.
2. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of (1) cash, (2) check, (3) other Shares which (x) in the case of Shares acquired upon exercise of an Option, have been owned by the Optionee for more than six months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (4) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (5) any combination of the foregoing methods of payment, or (6) such other consideration and method of payment for the issuance of Shares to the extent permitted under Applicable Laws. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company.
9. Exercise of Option.
1. Procedure for Exercise; Rights as a Shareholder.
1. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement, but in no case prior to the first anniversary of the date the Option is granted. An Option may not be exercised for a fraction of a Share.
2. An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and allowable under Section 8(b) of the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 11 of the Plan.
3. Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.
2. Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement (of at least thirty (30) days) to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for ninety (90) days following the Optionee's termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
3. Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee's Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement (of at least six (6) months) to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee's termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
4. Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee's estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee's termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee's estate or, if none, by the person(s) entitled to exercise the Option under the Optionee's will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.
5. Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.
10. Limited Transferability of Options: Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee, provided however, the Compensation Committee, or its designee, are authorized to consider and approve applications from the Optionee to grant limited transferability of identified and vested Nonstatutory Stock Options to any member of the Optionee's immediate family, or ex-spouse, or to a trust or partnership whose beneficiaries are members of the Optionee's immediate family. Following the transfer as authorized hereunder, any such Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer. For purposes of this Section 10, an Optionee's immediate family shall mean the Optionee's spouse, children and grandchildren. Moreover, the Administrator, in its sole discretion and subject to such terms and conditions as it deems advisable, may allow the Optionee to designate a beneficiary in writing, such beneficiary being a member of the Optionee's immediate family, as defined herein, and in the event such a beneficiary designation is allowed and made, the beneficiary so designated shall have absolute authority to exercise such option, whether nonqualified stock option or incentive stock option, to the extent the option is vested.
11. Adjustments Upon Changes in Capitalization, Merger or Asset Sale.
1. Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company. The conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option.
2. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee at least thirty (30) days prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until fifteen (15) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option will terminate immediately prior to the consummation of such proposed action.
3. Merger or Asset Sale. In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, the Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option shall be fully exercisable for a period of not less than thirty (30) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received
12. Time of Granting Options. The date of grant of an Option shall, for all purposes, be the date on which the Administrator makes the determination granting such Option, or such other date as is determined by the Administrator. Notice of the determination shall be given to each Service Provider to whom an Option is so granted within a reasonable time after the date of such grant.
13. Amendment and Termination of the Plan.
1. Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan, but no amendment, alteration, suspension or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent.
2. Shareholder Approval. The Board shall obtain shareholder approval with respect to any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
3. Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator's ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination.
14. Conditions Upon Issuance of Shares.
1. Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.
2. Investment Representations. As a condition to the exercise of an Option, the Administrator may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
15. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
16. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
17. Shareholder Approval. The Plan shall be subject to approval by the shareholders of the Company within twelve (12) months after the date the Plan is adopted and within twelve (12) months after the date of any increase in the number of Shares available for issuance pursuant to the Plan, to the extent required by Section 422 of the Code and the regulations thereunder. Such shareholder approval shall be obtained in the degree and manner required under Applicable Laws.

EX-10

EXHIBIT 10.9.5

1993 DIRECTOR STOCK OPTION PLAN

AMENDMENT No. 4

The 1993 Director Stock Option Plan (the "Plan") is amended effective as of March 13, 2002, as follows:

That Section 9 of the Plan is hereby amended in its entirety to read as follows (new language in bold):

"9. Limited Transferability of Options: The option may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. Notwithstanding the foregoing, the Administrator, in its sole discretion and subject to such terms as it deems adviseable, may allow the Optionee to designate a beneficiary in writing, and in the event such a beneficiary designation is allowed and made, the beneficiary so designated shall have absolute authority to exercise such option, whether nonqualified stock option or incentive stock option, to the extent the option is vested."

EX-10

PLANTRONICS, INC.

2002 EMPLOYEE STOCK PURCHASE PLAN

1. Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section  423 of the Internal Revenue Code of 1986, as amended. The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code.
2. Definitions.
1. "Board" shall mean the Board of Directors of the Company.
2. "Code" shall mean the Internal Revenue Code of 1986, as amended.
3. "Common Stock" shall mean the Common Stock of the Company.
4. "Company" shall mean Plantronics, Inc., a Delaware corporation, and any Designated Subsidiary of the Company.
5. "Compensation" shall mean all base straight time gross earnings, exclusive of payments for overtime, shift premium, incentive compensation, incentive payments, bonuses, commissions, car allowances, profit-sharing and other compensation.
6. "Designated Subsidiary" shall mean any Subsidiary that has been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.
7. "Employee" shall mean any individual who is an Employee of the Company for tax purposes whose customary employment with the Company is at least twenty (20) hours per week and more than five (5) months in any calendar year. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company. Where the period of leave exceeds ninety (90) days and the individual's right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave.
8. "Enrollment Date" shall mean the first day of each Offering Period.
9. "Exercise Date" shall mean the last day of each Offering Period.
10. "Fair Market Value" shall mean, as of any date, the value of Common Stock determined as follows:
1. If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the New York Stock Exchange (NYSE), its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day on the date of such determination, as reported in The Wall Street Journal or such other source as the Board deems reliable, or;
2. If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the Common Stock on the date of such determination, as reported in The Wall Street Journal or such other source as the Board deems reliable, or;
3. In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board.
11. "Offering Period" shall mean a period of approximately six (6) months during which an option granted pursuant to the Plan may be exercised. The duration of Offering Periods may be changed pursuant to Section 4 of this Plan.
12. "Plan" shall mean this Employee Stock Purchase Plan.
13. "Purchase Price" shall mean an amount equal to 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided, however, that the Purchase Price may be adjusted by the Board pursuant to Section 20.
14. "Reserves" shall mean the number of shares of Common Stock covered by each option under the Plan which have not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option.
15. "Subsidiary" shall mean a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary.
16. "Trading Day" shall mean a day on which national stock exchanges and the NYSE System are open for trading.
3. Eligibility.
1. Any Employee who shall be employed by the Company on a given Enrollment Date shall be eligible to participate in the Plan..
2. Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and /or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its subsidiaries accrues at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the fair market value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive Offering Periods with a new Offering Period commencing on or around February 1 and August 1 of each year, or on such other date as the Board shall determine, and continuing thereafter until terminated in accordance with Section 20 hereof ; provided, however, that the first Offering Period under the Plan shall commence on the first Trading Day on or after August 1, 2002 and end on the last Trading Day on or before January 31, 2003, and the second Offering Period hereunder shall commence on the first Trading Day on or after February 1, 2003 and end on the last Trading Day on or before July 31, 2003. The Board shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without stockholder approval if such change is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering Period to be affected thereafter.
5. Participation.
1. Enrollment. An eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions to this Plan and filing it with the Company's payroll office prior to the applicable Enrollment Date.
2. Payroll Deductions. Payroll deductions for a participant shall commence on the first payday following the Enrollment Date and shall end on the last payday in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
1. At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount not less than one percent (1.0%) and not exceeding ten percent (10.0%) of the Compensation which he or she receives on each pay day during the Offering Period.
2. All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A participant may not make any additional payments into such account.
3. A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof, or may, on one occasion during the Offering Period, decrease (but not increase) the rate of his or her payroll deductions during the Offering Period by completing and filing with the Company a new subscription agreement authorizing a change in payroll deduction rate. The change in rate shall be effective as soon as possible after the Company's receipt of the new subscription agreement. A participant's subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
4. Notwithstanding the foregoing, to the extent necessary to comply with Section  423(b)(8) of the Code and Section 3(b) hereof, a participant's payroll deductions may be decreased to zero percent (0%) at any time during an Offering Period. Payroll deductions shall recommence at the rate provided in such participant's subscription agreement at the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof.
5. At the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each eligible Employee participating in such Offering Period shall be granted an option to purchase on the Exercise Date of such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company's Common Stock determined by dividing such Employee's payroll deductions accumulated prior to such Exercise Date and retained in the Participant's account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall an Employee be permitted to purchase during each Offering Period more than 1,000 shares (subject to any adjustment pursuant to Section 19), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The Employee may accept the grant of such option by turning in a completed and signed subscription agreement to the Company on or prior to the first day of the Offering Period. The administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of the Company's Common Stock an employee may purchase during an Offering Period. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The option shall expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. Fractional shares may be purchased subject to the limitations set forth in Section 3(b). Any payroll deductions accumulated in a participant's account which are in excess of the amounts permissible for the purchase of shares authorized under Setion 3(b), shall be returned to the participant no later than the Exercise Date of the relevant Offering Period. During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option.
10. Withdrawal.
1. A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company in the form of Exhibit B to this Plan. All of the participant's payroll deductions credited to his or her account shall be paid to such participant promptly after receipt of notice of withdrawal and such participant's option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new subscription agreement.
2. A participant's withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.
11. Termination of Employment. Upon a participant's ceasing to be an Employee for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant's account during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15 hereof, and such participant's option shall be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant's customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice.
12. Interest. No interest shall accrue on the payroll deductions of a participant in the Plan.
13. Stock.
1. Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of the Company's Common Stock which shall be made available for sale under the Plan shall be 200,000 shares. If, on a given Exercise Date, the number of shares with respect to which options are to be exercised exceeds the number of shares then available under the Plan, the Company shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.
2. The participant shall have no interest or voting right in shares covered by his option until such option has been exercised.
3. Shares to be delivered to a participant under the Plan shall be registered in the name of the participant or in the name of the participant and his or her spouse.
14. Administration. The Plan shall be administered by the Board or a committee of members of the Board appointed by the Board. The Board or its committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Board or its committee shall, to the full extent permitted by law, be final and binding upon all parties.
15. Designation of Beneficiary.
1. A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant's account under the Plan in the event of such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.
2. Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
16. Transferability. Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.
17. Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts shall be maintained for each participant in the Plan. Statements of account shall be given to participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset Sale.
1. Changes in Capitalization. Subject to any required action by the stockholders of the Company, the Reserves, the maximum number of shares each participant may purchase per Offering Period (pursuant to Section 7), as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.
2. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the "New Exercise Date"), and shall terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board. The New Exercise Date shall be before the date of the Company's proposed dissolution or liquidation. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.
3. Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the "New Exercise Date"). The New Exercise Date shall be before the date of the Company's proposed sale or merger. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.
20. Amendment or Termination.
1. The Board of Directors of the Company may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19 hereof, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Board of Directors on any Exercise Date if the Board determines that the termination of the Offering Period or the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 19 and Section 20 hereof, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any other applicable law, regulation or stock exchange rule), the Company shall obtain shareholder approval in such a manner and to such a degree as required.
2. Without stockholder consent and without regard to whether any participant rights may be considered to have been "adversely affected," the Board (or its committee) shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its sole discretion advisable which are consistent with the Plan.
3. In the event the Board determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to:
1. altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;
2. shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and
3. allocating shares.
4. Such modifications or amendments shall not require stockholder approval or the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares.
1. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.
2. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
23. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 20 hereof.

EXHIBIT A

PLANTRONICS, INC.

2002 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

Original Application Enrollment Date:

Change in Payroll Deduction Rate

Change of Beneficiary(ies)

1. _____________________________________ hereby elects to participate in the Plantronics, Inc., 2002 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and subscribes to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of ____% of my Compensation on each payday (from 1 to 10%) during the Offering Period in accordance with the Employee Stock Purchase Plan.
3. I understand that said payroll deductions shall be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Employee Stock Purchase Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option.
4. I have received a copy of the complete Employee Stock Purchase Plan. I understand that my participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the Plan. I understand that my ability to exercise the option under this Subscription Agreement is subject to stockholder approval of the Employee Stock Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase Plan should be issued in the name(s) of (Employee or Employee and Spouse only): ______________________________.
6. I understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Enrollment Date (the first day of the Offering Period during which I purchased such shares), I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares. I hereby agree to notify the Company in writing within 30 days after the date of any disposition of shares and I will make adequate provision for Federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Common Stock. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at any time after the expiration of the 2- year holding period, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair market value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Employee Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Employee Stock Purchase Plan:

NAME: (Please print) (First) (Middle) (Last)

Relationship
(Address)

Employee's Social

Security Number: &# 9;

Employee's Address:

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated: ________________________

Signature of Employee

Spouse's Signature (If beneficiary other than spouse)

EXHIBIT B

PLANTRONICS, INC.

2002 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

The undersigned participant in the Offering Period of the Plantronics, Inc., 2002 Employee Stock Purchase Plan which began on ___________, ______ (the "Enrollment Date") hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.

Name and Address of Participant:

Signature:

Date:

EX-21

EXHIBIT 21

PLANTRONICS SUBSIDIARIES

Ameriphone, Inc.

Emtel, S.A.

Frederick Electronics Corporation

Pacific Plantronics, Inc.

Plamex, S.A. de C.V.

Plantronics A.G.

Plantronics Acoustics Italia, S.r.l.

Plantronics B.V.

Plantronics Canada Limited

Plantronics e-Commerce, Inc.

Plantronics France S.A.R.L.

Plantronics Futurecomms, Inc.

Plantronics GmbH

Plantronics Holdings Limited

Plantronics International do Brasil, Ltda.

Plantronics Japan Ltd.

Plantronics Limited

Plantronics Nordic AB

Plantronics Pty. Ltd.

Plantronics Singapore Pte. Ltd.

Plantronics Spain, S.L.

EX-23

EXHIBIT 23

Consent of PricewaterhouseCoopers LLP, Independent Accountants

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 033-81980, 333-14833, 333-42664, 333-19351, 333- 61003, and 333-67094) and Form S-3 (Nos. 333-67781 and 333-77631) of Plantronics, Inc. of our report dated April 18, 2002 relating to the financial statements and financial statement schedules, which appear in this Form 10- K.

/s/ PricewaterhouseCoopers LLP

- ----------------------------------

/s/ PricewaterhouseCoopers LLP

San Jose, California

June 1, 2002