STOCK PLANS AND STOCK-BASED COMPENSATION

12 Months Ended

Mar. 28, 2020

Share-based Payment Arrangement [Abstract]

Stock Plans and Stock-Based Compensation

COMPENSATION

2003 Stock Plan

On May 5, 2003, the Board of Directors ("Board") adopted the Plantronics, Inc. 2003 Stock Plan ("2003 Stock Plan") which was approved by the stockholders in June 27, 2003. The 2003 Stock Plan, which will continue in effect until terminated by the Board, allows for the issuance of the Company's common stock through the granting of non-qualified stock options, restricted stock, restricted stock units, and performance shares with performance-based conditions on vesting.  As of March 28, 2020, there have been 18,400,000 shares of common stock (which number is subject to adjustment in the event of stock splits, reverse stock splits, recapitalization or certain corporate reorganizations) cumulatively reserved since inception of the 2003 Stock Plan for issuance to employees, non-employee directors, and consultants of the Company. The Company settles stock option exercises, grants of restricted stock, and releases of vested restricted stock units with newly issued common shares.

The exercise price of stock options may not be less than 100% of the fair market value of the Company's common stock on the date of grant. The term of an option may not exceed 7 years from the date it is granted. Stock options granted to employees vest over a three-year period, and stock options granted to non-employee directors vest over a four-year period.

Restricted stock and restricted stock units under the Company's share-based plans are granted to directors, executives, and employees. The estimated fair value of the restricted stock and restricted stock unit grants is determined based on the market price of Plantronics common stock on the date of grant. Restricted stock and restricted stock units granted to employees generally vest over a three-year period to non-employee directors over a one-year period.

Performance-based restricted stock units ("PSUs") are granted to vice presidents and executives of the Company and contain a market condition based on Total Shareholder Return ("TSR"). The Compensation Committee sets a target and maximum value that each Executive could earn based on an annual comparison of the total stockholder return on the Company's common stock against the iShares S&P North American Tech-Multimedia Networking Index ("Index"), an index the Committee determined appropriate to compare to the total stockholder return on its stock. Performance shares will be delivered in common stock over the vesting period of three-years based on the Company’s actual performance compared to the target performance criteria. Awards granted prior to May 6, 2019 may equal from zero percent (0%) to one hundred fifty percent (150%) of the target award, and awards granted subsequent to May 6, 2019 may equal from zero percent (0%) to two hundred percent (200%) of the target award. The fair value of a performance share with a market condition is estimated on the date of award, using a Monte Carlo simulation model to estimate the total return ranking of the Company’s stock among the Index companies over each performance period.

At March 28, 2020, options to purchase 351,695 shares of common stock and 2,332,440 shares of unvested restricted stock and restricted stock units were outstanding. There were 2,751,827 shares available for future grant under the 2003 Stock Plan.

2002 ESPP

On June 10, 2002, the Board adopted the 2002 Employee Stock Purchase Plan ("ESPP"), which was approved by the stockholders on July 17, 2002, to provide eligible employees with an opportunity to purchase the Company's common stock through payroll deductions. The ESPP qualifies under Section 423 of the Internal Revenue Code. Under the ESPP, which is effective until terminated by the Board, the purchase price of the Company's common stock is equal to 85% of the lesser of the closing price of the common stock on (i) the first day of the offering period or (ii) the last day of the offering period. Each offering period is six months long.  There were 736,184, 138,133, and 156,355, shares issued under the ESPP in Fiscal Years 2020, 2019, and 2018, respectively.  At March 28, 2020, there were 6 shares reserved for future issuance under the ESPP. The total cash received from employees as a result of stock issuances under the ESPP during Fiscal Year 2020 was $11.9 million, net of taxes.

Stock-based Compensation

The following table summarizes the amount of stock-based compensation expense included in the consolidated statements of operations for the periods presented:

	Fiscal Year Ended
(in thousands)	March 28, 2020			March 30, 2019			March 31, 2018
Cost of revenues	$	3,992		$	4,176		$	3,622
Research, development and engineering	16,785			11,699			8,071
Selling, general and administrative	36,318			26,059			22,266
Stock-based compensation expense included in operating expenses	53,103			37,758			30,337
Total stock-based compensation	57,095			41,934			33,959
Income tax benefit	(7,369		)	(9,891		)	(7,880		)
Total stock-based compensation expense, net of tax	$	49,726		$	32,043		$	26,079

Stock Plan Activity

Stock Options

The following is a summary of the Company’s stock option activity during Fiscal Year 2020:

	Options Outstanding
	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)				(in years)	(in thousands)
Outstanding at March 30, 2019	627		$	48.66
Options granted	—		$	—
Options exercised	(19	)	$	39.91
Options forfeited or expired	(256	)	$	51.04
Outstanding at March 28, 2020	352		$	47.39	2.3	$	—
Vested or expected to vest at March 28, 2020	352		$	47.39	2.3	$	—
Exercisable at March 28, 2020	351		$	47.38	2.3	$	—

The total intrinsic value of options exercised during Fiscal Years 2020 was immaterial. The total intrinsic values of options exercised during Fiscal Years 2019, and 2018 were $5.8 million, and $9.4 million, respectively. Intrinsic value is defined as the amount by which the fair value of the underlying stock exceeds the exercise price at the time of option exercise. The total cash received from employees as a result of employee stock option exercises during Fiscal Year 2020 was $0.8 million, net of taxes. There was an immaterial amount of total net tax benefit attributable to stock options exercised during the year ended March 28, 2020.

As of March 28, 2020, the total unrecognized compensation cost related to unvested stock options was immaterial and is expected to be recognized over a weighted average period of 0.1 years.

Restricted Stock

Restricted stock consists of restricted stock awards ("RSAs"), restricted stock units ("RSUs"), and performance-based RSUs ("PSUs"). The following table summarizes the changes in unvested restricted stock and RSUs, for Fiscal Year 2020:

	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested at March 30, 2019	1,473		$	61.64
Granted	1,376		$	33.77
Vested	(648	)	$	58.95
Forfeited	(290	)	$	53.54
Non-vested at March 28, 2020	1,911		$	43.71

The weighted average grant-date fair value of restricted stock is based on the quoted market price of the Company's common stock on the date of grant. The weighted average grant-date fair values of restricted stock granted during Fiscal Years 2020, 2019, and 2018 were $33.77, $68.00, and $52.79, respectively. The total grant-date fair values of restricted stock that vested during Fiscal Years 2020, 2019, and 2018 were $38.2 million, $27.8 million, and $27.8 million, respectively.

As of March 28, 2020, the total unrecognized compensation cost related to non-vested restricted stock awards was $47.3 million and is expected to be recognized over a weighted average period of 1.7 years.

Performance-based Restricted Stock

The following table summarizes the changes in unvested PSUs, for Fiscal Year 2020:

	Number of Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Unvested at March 30, 2019	143		$	70.53
Granted	384		$	57.16
Vested	(20	)	$	36.76
Forfeited	(86	)	$	65.09
Non-vested at March 28, 2020	421		$	61.09

The fair value of a PSU with a market condition is estimated on the date of award, using a Monte Carlo simulation model to estimate the total return ranking of the Company’s stock among the Index companies over each performance period. The weighted average grant-date fair values of PSUs granted during Fiscal Years 2020, 2019, and 2018 were $57.16, $75.43, and $63.28, respectively. The total grant-date fair values of PSUs that vested during Fiscal Years 2020 and 2019 were immaterial. The Company did not have PSUs vested in 2018.

As of March 28, 2020, the total unrecognized compensation cost related to non-vested PSU awards was $12.2 million and is expected to be recognized over a weighted average period of 1.1 years.

Valuation Assumptions

The Company estimates the fair value of stock options and ESPP shares using a Black-Scholes option valuation model.  At the date of grant, the Company estimated the fair value of each stock option grant and purchase right granted under the ESPP using the following weighted average assumptions:

	Employee Stock Options					ESPP
Fiscal Year Ended March 31,	2020	2019	2018			2020			2019			2018
Expected volatility	n/a	n/a	29.1		%	67.0		%	40.8		%	30.5		%
Risk-free interest rate	n/a	n/a	1.7		%	1.7		%	2.4		%	1.5		%
Expected dividends	n/a	n/a	1.2		%	3.1		%	1.1		%	1.2		%
Expected life (in years)	n/a	n/a	4.6			0.5			0.5			0.5
Weighted-average grant date fair value	n/a	n/a	$	12.58		$	6.64		$	14.44		$	11.78

The expected stock price volatility for the years ended March 28, 2020, March 30, 2019, and March 31, 2018 was determined based on an equally weighted average of historical and implied volatility.  Implied volatility is based on the volatility of the Company’s publicly traded options on its common stock with terms of six months or less.  The Company determined that a blend of implied volatility and historical volatility is more reflective of market conditions and a better indicator of expected volatility than using exclusively historical volatility.  The expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules, and expectations of future employee behavior.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option.  The dividend yield assumption is based on the Company's current dividend and the market price of its common stock at the date of grant.