PLANTRONICS INC /CA/, S-3/A, 1999-01-13

PLANTRONICS INC /CA/
S-3/A, 1999-01-13
TELEPHONE & TELEGRAPH APPARATUS

Previous: NUTRITION FOR LIFE INTERNATIONAL INC, 10-K405, 1999-01-13

Next: SALOMON BROTHERS WORLDWIDE INCOME FUND INC, N-30D, 1999-01-13

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1999

REGISTRATION NO. 333-70333

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

PLANTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 77-0207692
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>

345 ENCINAL STREET
SANTA CRUZ, CALIFORNIA 95060
(831) 426-5858
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

S. KENNETH KANNAPPAN,
CHIEF EXECUTIVE OFFICER AND PRESIDENT
PLANTRONICS, INC.
345 ENCINAL STREET
SANTA CRUZ, CALIFORNIA 95060
(831) 426-5858
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

<TABLE>
<S> <C>
HENRY P. MASSEY, JR., ESQ. PETER E. WILLIAMS III, ESQ.
ERIC JOHN FINSETH, ESQ. JUSTIN L. BASTIAN, ESQ.
MICHAEL DE ANGELIS, ESQ. BRIAN D. MCALLISTER, ESQ.
WILSON SONSINI GOODRICH & ROSATI MORRISON & FOERSTER LLP
PROFESSIONAL CORPORATION 755 PAGE MILL ROAD
650 PAGE MILL ROAD PALO ALTO, CA 94304
PALO ALTO, CA 94304 (650) 813-5600
(650) 493-9300
</TABLE>

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

EXPLANATORY NOTE

This Registration Statement contains two prospectuses. The first prospectus
relates to an underwritten public offering of Common Stock of the Registrant by
Louise M. Cecil, Robert S. Cecil and Citigroup Foundation. The second prospectus
relates to the offer and sale by the Registrant to Louise M. Cecil of up to
349,678 shares of Common Stock of the Registrant pursuant to the exercise by her
of certain employee stock options transferred to her by gift by Robert S. Cecil.
The sale of shares by the Registrant to Mrs. Cecil pursuant to the second
prospectus will occur prior to the resale of shares, including the shares so
issued and sold to Mrs. Cecil, contemplated by the first prospectus.

<PAGE> 3

The information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JANUARY 13, 1999

P R O S P E C T U S
1,550,000 SHARES

[PLANTRONICS LOGO]
COMMON STOCK
------------------------

All of the shares of Plantronics common stock are being offered by the
selling stockholders identified in this prospectus. Plantronics will not receive
any of the proceeds from the offering.

Our common stock trades on the New York Stock Exchange under the symbol
"PLT." On January 12>, 1999, the last reported sale price of our common stock on
the New York Stock Exchange was $82 5/16 per share.

INVESTING IN THE COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 8 OF THIS PROSPECTUS.
------------------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -----
<S> <C> <C>
Public Offering Price.......................... $ $
Underwriting Discount.......................... $ $
Proceeds to Selling Stockholders............... $ $
</TABLE>

The underwriters may also purchase up to an additional 232,500 shares from
one of the selling stockholders at the public offering price, less the
underwriting discount, within 30 days from the date of this prospectus to cover
over-allotments.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

The shares of common stock will be ready for delivery in New York, New York
on or about , 1999.
------------------------

MERRILL LYNCH & CO. SALOMON SMITH BARNEY
HAMBRECHT & QUIST MCDONALD INVESTMENTS INC.
------------------------

The date of this prospectus is , 1999.
<PAGE> 4

INSIDE FRONT COVER

2
<PAGE> 5

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary..................................................... 4
Risk Factors................................................ 8
Use of Proceeds............................................. 17
Price Range of Common Stock................................. 17
Dividend Policy............................................. 17
Capitalization.............................................. 18
Selected Consolidated Financial Data........................ 19
Management's Discussion and Analysis of Financial Condition
and
Results of Operations..................................... 20
Business.................................................... 29
Management.................................................. 37
Ownership of Common Stock by Selling Stockholders and
Management................................................ 41
Underwriting................................................ 43
Information Incorporated by Reference....................... 45
How to Get Information About Plantronics.................... 46
Legal Matters............................................... 46
Experts..................................................... 46
Index to Consolidated Financial Statements.................. F-1
</TABLE>

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

FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. These forward-looking statements are subject to risks,
uncertainties, and assumptions about Plantronics, including, among other things:

- anticipated trends in our business, including trends in the call center,
office, mobile, computer and residential market segments;

- our intention to develop and introduce new products;

- our anticipated growth and growth strategies; and

- anticipated levels of headset adoption.

We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties, and assumptions, the forward-looking
events discussed in this prospectus might not occur.
-------------------------

You should rely only on the information contained in this prospectus. We
have not, and the selling stockholders and the underwriters have not, authorized
any other person to provide you with different information. If anyone provides
you with different or inconsistent information, you should not rely on it. We
are not, and the selling stockholders and the underwriters are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information appearing in this
prospectus is accurate as of the date on the front cover of this prospectus
only. Our business, financial condition, results of operations and prospectus
may have changed since that date.
-------------------------

Plantronics, the logo design, Plantronics and the logo design together,
Clarity, Encore, FreeHand, Mirage, PLX, SoundGuard, StarSet, Supra and TriStar
are registered United States trademarks of Plantronics, Inc. CHS132 (and
family), CT-901, DuoSet, Headset Switcher, Practica, Quick Disconnect,
SoundGuard Plus, the clear color and curvature of the Plantronics voice tube,
and Vista are trademarks of Plantronics, Inc. Certain of the foregoing
trademarks are registered trademarks in certain foreign countries. This
prospectus also includes trademarks of companies other than Plantronics.

3
<PAGE> 6

SUMMARY

This summary may not contain all the information that may be important to
you. You should read the entire prospectus, including the financial data and
related notes, before making an investment decision. The terms "Plantronics",
"our company" and "we" as used in this prospectus refer to "Plantronics, Inc."
and its subsidiaries and predecessors as a combined entity, except where it is
made clear that such term means only the parent company. All share and per share
data in this prospectus has been adjusted to reflect a 2-for-1 split of our
common stock in September 1997. Our fiscal year end is the Saturday closest to
March 31. For purposes of presentation, we have shown our accounting year ending
on March 31 and our quarterly periods ending on the respective month end.

PLANTRONICS, INC.

Plantronics introduced the first lightweight communications headset in
1962. Since that time we have established ourselves as a world-leading designer,
manufacturer and marketer of lightweight communications headset products. We
manufacture a broad line of headsets designed for use with substantially all of
the different telephone systems currently in use. Our products are designed to
increase the productivity, effectiveness and comfort of telephone use. We
believe our customers and end-users recognize our headsets for their sound
quality, comfort, reliability and industry-leading safety. Historically, we have
sold products primarily for use in the call center market segment, but in recent
years we have been increasingly leveraging our expertise to become a leading
headset supplier to the office, mobile and residential market segments. Our
products are available through a global network of distributors, original
equipment manufacturers, retailers and telephony service providers.

The largest group of headset users is call center agents who are on the
phone throughout their work day. As the benefits of call centers become more
widely recognized and the system cost per agent declines, the establishment of
call centers is spreading to smaller organizations and international firms. The
office market segment, both corporate and small office/home office, has become
increasingly important for headset sales over the last five years. The
increasing and simultaneous use of telephones and computers by office workers
and a growing awareness of the benefits of headsets have contributed to the
growth of this market segment. Additional headset demand is emerging in the
mobile, computer and residential market segments.

Benefits of headset use include:

- hands-free communication to perform various tasks such as using a
computer, taking notes, organizing files, driving a car and completing
household chores;

- improved sound quality;

- relief of the repetitive stress and discomfort associated with placing a
handset between the shoulder and neck; and

- greater privacy than speakerphones.

We intend to extend our position as a leading worldwide supplier of
lightweight communications headsets and to promote increased headset use
globally. Our strategy to achieve these goals includes:

- extending our headset product leadership;

- driving headset adoption in the office, mobile, computer and residential
market segments;

- leveraging and strengthening our distribution channels; and

- driving stockholder value through low cost manufacturing.

Our product line consists of lightweight communications headsets, headset
accessories and services and specialty telephone products. Headsets consist of
two distinct units: the "top" and the "base." The top is the portion that the
user wears and that includes the speaker and microphone; and the base, or
amplifier adapter, interfaces with the telephone or other communications
equipment. We manufacture a broad line of headset top styles which can be worn
over the head, in the ear or on the ear. Our headsets offer either a voice tube
(our most popular style, suitable for the majority of environments) or a noise-
canceling microphone (for users working in very loud environments).
4
<PAGE> 7

Our headsets incorporate unique features that we believe offer compelling
performance advantages relative to competing products, including:

- greater comfort through the use of an extensive database of human factors
for the ergonomic design of headsets;

- better sound quality with what we believe are the industry's best
signal-to-noise ratios, the most powerful noise canceling performance and
the industry's only voice tube design; and

- increased durability and longer product life.

We sell our products to over 250 customers in more than 60 countries
through a network of distributors, original equipment manufacturers, retailers
and telephony service providers.

RECENT DEVELOPMENTS

We have called for the redemption, effective January 15, 1999, of all of
our 10% Senior Notes Due 2001. The aggregate outstanding principal amount of
these notes at that date will be approximately $65.1 million. The aggregate
redemption price including accrued interest will be approximately $69.6 million
plus expenses, which we will pay out of available cash. We will take a net
extraordinary charge of approximately $1.2 million, or approximately $0.07 per
diluted share, in the fourth quarter of our fiscal year ending March 31, 1999 in
connection with this transaction. This charge represents an early repayment fee
of approximately $1.3 million, the write-off of $0.4 million of unamortized debt
issuance costs, and estimated expenses of $0.3 million, net of taxes. Based on
current interest rates and the alternative of investing the cash, we expect the
transaction to increase diluted earnings per share by approximately $0.10 on an
annual pro forma basis.

Effective January 4, 1999, S. Kenneth Kannappan was promoted to Chief
Executive Officer of our company, succeeding Robert S. Cecil in that capacity,
and was appointed to our Board of Directors. Mr. Kannappan joined our company in
February 1995 and has held a number of executive management positions, including
President and Chief Operating Officer. Mr. Kannappan has been assuming
increasing responsibilities for our day-to-day operations since his March 1998
appointment as President and Chief Operating Officer. Mr. Cecil, who is 63,
continues to serve as Chairman of the Board of Directors and to be employed by
Plantronics on less than a full-time basis, providing guidance principally in
the areas of long-term strategy, management goals, recruitment of key executives
and budgetary matters. Mr. Cecil has advised us that he is suffering from a
serious illness, but that he believes it is currently stable. Although we and
Mr. Cecil believe he is presently able to perform effectively in his continuing
role as Chairman with us, his illness is unpredictable. Should his condition
deteriorate, he may have to reduce or possibly terminate his relationship with
us.

On January 12, 1999, we announced our unaudited financial results for our
third fiscal quarter ended December 31, 1998. We reported that net sales
increased 16.2% to $72.0 million compared to $62.0 million for our quarter ended
December 31, 1997. Gross profit for this quarter increased 22.3% to $41.0
million (57.0% of net sales), compared to $33.6 million (54.1% of net sales) for
our quarter ended December 31, 1997. Net income for this quarter increased 38.4%
to $14.4 million, compared to $10.4 million for our quarter ended December 31,
1997. Diluted earnings per share increased 38.6% to $0.79 for the quarter ended
December 31, 1998, compared to $0.57 for our quarter ended December 31, 1997.
These quarterly results are not necessarily indicative of the results that may
be expected for fiscal year 1999 or any future period.

HOW TO REACH US

Our principal executive offices are located at 345 Encinal Street, Santa
Cruz, California 95060. Our telephone number at that address is (831) 426-5858.
Plantronics is incorporated in Delaware.
5
<PAGE> 8

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered:
Citigroup Foundation....................... 1,000,000 shares
Robert S. Cecil............................ 432,822 shares
Louise M. Cecil............................ 117,178 shares
Total.............................. 1,550,000 shares(1)
Shares Outstanding After the
Offering................................... 17,265,906 shares(1)
Use of Proceeds.............................. Plantronics will not receive any proceeds
from this offering. However, Plantronics
will receive $855,617 upon the exercise of
certain options to purchase 550,000 shares
of common stock to be sold by the selling
stockholders in this offering. We intend
to use such proceeds, net of expenses of
this offering, for working capital and
general corporate purposes.
Risk Factors................................. See "Risk Factors" for a discussion of
factors you should carefully consider
before deciding to invest in our common
stock.
NYSE Symbol.................................. "PLT"
</TABLE>

- ---------------
(1) Includes 550,000 shares to be issued to Robert S. and Louise M. Cecil upon
their exercise of certain stock options. If the underwriters' over-allotment
option is exercised in full, Louise M. Cecil will exercise stock options
for, and sell, an additional 232,500 shares. Shares outstanding after this
offering is based on the number of shares actually outstanding as of
December 31, 1998, and excludes 2,421,833 shares of common stock reserved
for issuance at December 31, 1998 under our stock incentive plans, less the
550,000 shares to be issued to Mr. and Mrs. Cecil and sold in this offering.
6
<PAGE> 9

SUMMARY CONSOLIDATED FINANCIAL DATA

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
----------------------------------------
AS
ACTUAL PRO FORMA(1) ADJUSTED(2)
-------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.................. $ 95,100 $ 28,450 $ 29,306
Working capital............................ 122,994 57,099 58,088
Total assets............................... 189,597 122,560 123,416
Long-term debt............................. 65,050 -- --
Total stockholders' equity................. 76,177 74,945 75,934
</TABLE>

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

(1) Pro forma for the redemption on January 15, 1999 of our 10% Senior Notes Due
2001 as if such redemption had occurred on September 30, 1998. The
redemption includes a prepayment premium of $1.3 million, the write-off of
$0.4 million of unamortized debt issuance costs, and estimated expenses of
$0.3 million. Net redemption expenses less related tax benefits are expected
to total $1.2 million. This transaction will be reported as an extraordinary
item in the fourth quarter of our fiscal year ending March 31, 1999.

(2) As adjusted to reflect (i) the pro forma calculation described in footnote 1
above, (ii) approximately $1.2 million to be received by Plantronics from
the exercise of options to purchase 550,000 shares of common stock held by
Robert S. and Louise M. Cecil, and (iii) estimated expenses of the offering
payable by Plantronics of approximately $0.3 million, less related tax
benefits.
7
<PAGE> 10

RISK FACTORS

Investing in our common stock will provide you with an equity ownership
interest in Plantronics. As a Plantronics shareholder, you may be subject to
risks inherent in our business. The performance of your shares will reflect the
performance of our business relative to, among other things, our competition,
general economic and market conditions and industry conditions. The value of
your investment may increase or decline and could result in a loss. You should
carefully consider the following factors as well as other information contained
in this prospectus before deciding to invest in our common stock.

DEPENDENCE ON CALL CENTER MARKET SEGMENT

We have historically derived, and continue to derive, a substantial
majority of our net sales from the call center market segment. This market
segment has grown significantly in recent years as new call centers have
proliferated and existing call centers have expanded. While we believe this
market segment is continuing to grow, in the future this growth could slow or
revenues from this market segment could decline due to various factors. For
example, technological advances such as automated interactive voice response
systems could reduce or eliminate the need for call center agents in certain
applications. In addition, consumer resistance to telemarketing could adversely
affect growth in the call center market segment. Due to our reliance on the call
center market segment, 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.

FAILURE OF THE OFFICE, MOBILE, COMPUTER AND RESIDENTIAL MARKET SEGMENTS TO
DEVELOP

While the call center market segment is still the most significant part 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 market segments. These communications headset market segments are
relatively new and undeveloped. Moreover, we do not have extensive experience in
selling headset products to customers in these market segments. If the demand
for headsets in these market segments fails to develop, or develops slower than
we currently anticipate, or if we are unable to effectively market our products
to customers in these market segments, it would have a material adverse effect
on the potential demand for our products and on our business, financial
condition and results of operations.

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY

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

- changes in demand for our products;

- timing and size of orders from customers;

- cancellations or delays of deliveries of components and subassemblies by
our suppliers;

8
<PAGE> 11

- variances in the timing and amount of engineering and operating expenses;

- distribution channel volume variations;

- delays in shipments of our products;

- product returns and customer credits;

- new product introductions by us or our competitors;

- entrance of new competitors;

- increases in the costs of our components and subassemblies;

- price erosion;

- changes in the mix of products sold by us;

- seasonal fluctuations in demand; and

- general economic conditions.

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.

WE MUST MATCH PRODUCTION TO DEMAND

Historically, we have seen steady increases in customer demand for our
products and have generally been able to increase production to meet that
demand. However, the demand for our products is dependent on many factors and
such demand is inherently difficult to forecast. Significant unanticipated
fluctuations in demand could cause the following operating problems, among
others:

- If demand increases beyond that forecasted, we would have to rapidly
increase production. We depend on suppliers to provide additional volumes
of components

9
<PAGE> 12

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 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.

- 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.

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

WE DEPEND ON OUR SUPPLIERS

We buy components and subassemblies from a variety of suppliers and
assemble them into finished products. The cost, quality, and availability of
such components are essential to the successful production and sale of our
products. Obtaining components and subassemblies entails various risks,
including the following:

- Prices of 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.

- We obtain certain subassemblies and components 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
components and subassemblies, none of which has significantly affected
our results of operations. However, 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.

- Most of our suppliers are not obligated to continue to provide us with
components and subassemblies. Rather, we buy most 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 components and subassemblies. This would materially
adversely affect our business, financial condition and results of
operations.

10
<PAGE> 13

THE HEADSET MARKET IS HIGHLY COMPETITIVE

The market for our products is highly competitive. We compete with a
variety of companies in various segments of the communications headset market.
In the call center segment, the largest market segment in which we compete, our
two largest competitors, GN Netcom and ACS Wireless, Inc., recently merged to
form a single company. Although it is unclear how this merger will affect us,
the merged entity will have a broader product offering and greater marketing
presence than either of the two entities had separately. Moreover, the economies
of scale that may result from the merger could lead to increased pricing
pressures in our market.

We also 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 market segments. As these market
segments mature, we will face increased competition from consumer electronics
companies and other 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 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. 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; WE MUST RESPOND TO CHANGING CUSTOMER
REQUIREMENTS AND 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 several 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 market segments, 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 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.

11
<PAGE> 14

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. We anticipate
that the technology used in hands-free communications devices, including our
products, will begin to evolve more rapidly in the future. We believe that this
is particularly true of the office, mobile and residential market segments,
which may require us to develop new headset technologies to support cordless and
wireless operation and to interface with new communications and computing
devices. As a result, 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 products or new
products in a timely manner in response to changing market conditions or
customer requirements, it will materially and adversely affect our business,
financial condition and results of operations.

WE DEPEND ON OUR DISTRIBUTION CHANNELS

We sell substantially all of our products through distributors, original
equipment manufacturers ("OEMs"), retailers and telephony service providers. Our
existing relationships with these parties are nonexclusive 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. 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.

WE DEPEND ON S. KENNETH KANNAPPAN AND OTHER KEY PERSONNEL

Our success depends to a significant extent upon the services of a limited
number of executive officers and other key employees. On January 4, 1999, S.
Kenneth Kannappan was promoted to Chief Executive Officer of our company,
succeeding Robert S. Cecil in that capacity, and was appointed to our Board of
Directors. Mr. Kannappan joined our company in February 1995 and has held a
number of executive management positions, including President and Chief
Operating Officer. Mr. Kannappan has been assuming increasing responsibilities
for our day-to-day operations since his March 1998 appointment as President and
Chief Operating Officer. The unanticipated loss of the services of 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.

12
<PAGE> 15

CITICORP VENTURE CAPITAL RETAINS SIGNIFICANT CONTROL

After this offering, our largest stockholder, Citicorp Venture Capital,
Ltd. ("CVC"), will beneficially own 4,509,168 shares of our common stock
(excluding any shares that may be owned by employees of CVC or its affiliates),
which will represent approximately 26.1% of the outstanding common stock. We
also have an agreement with CVC under which it is entitled to have up to three
of its designees serve on our Board of Directors, depending on the level of
CVC's continuing stock ownership. Messrs. Robert F. B. Logan, M. Saleem Muqaddam
and John Mowbray O'Mara are currently serving as CVC's designees under that
agreement. Accordingly, CVC has the ability to exert substantial influence on
the full Board of Directors, which currently consists of eight members. In
addition, our bylaws contain provisions that require a supermajority vote of the
Board of Directors to approve certain transactions, including amendments of our
Certificate of Incorporation and bylaws, mergers and sales of substantial
assets, acquisitions of other companies and sales of capital stock. These
provisions may have the effect of giving a small number of directors the ability
to block such transactions.

FUTURE SALES OF OUR COMMON STOCK BY CITICORP VENTURE CAPITAL, MR. AND MRS. CECIL
OR MANAGEMENT MAY DEPRESS OUR STOCK PRICE

Upon completion of this offering, we will have outstanding 17,265,906
shares of common stock (based upon shares outstanding as of December 31, 1998),
assuming no exercise of the underwriters' over-allotment option and no exercise
of outstanding options after December 31, 1998 other than exercises by Mr. and
Mrs. Cecil as described elsewhere in this prospectus. All of these shares will
be freely tradable except for 4,509,168 shares held by CVC and 433,254 shares
held by our executive officers and directors. These 4,942,422 shares, as well as
an additional 1,906,666 shares subject to outstanding stock options at December
31, 1998 held by executive officers, directors and Mrs. Cecil, are subject to
lockup agreements with the underwriters and cannot be sold for a period of 90
days after the offering without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated. In addition, the holders of these shares or
options may only sell their shares in reliance on Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act"), or pursuant to an effective
registration statement filed with the Securities and Exchange Commission.
Certain of our current stockholders, including CVC and certain of our officers,
directors and key employees, also have contractual rights to require Plantronics
to register their shares for public sale. Sales of a substantial number of
shares of common stock in the public market following the offering, as well as
sales of shares issued upon exercise of stock options, by any of the officers,
directors or other stockholders mentioned above could adversely affect the
prevailing market price of the common stock and impair our ability to raise
capital through the sale of equity securities.

13
<PAGE> 16

RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS

Approximately 30.7% and 30.2% of our net sales in fiscal 1998 and the six
months ended September 30, 1998, respectively, were derived from customers
outside the United States. In addition, we conduct substantially all 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. The inherent risks of international operations,
particularly in Mexico, 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 difference 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

- burden of complying with a wide variety of foreign laws.

A significant portion of our business is conducted in currencies other than
the U.S. dollar. As a result, fluctuations in exchange rates creates risk to us
in both the sale of our products and our purchase of supplies. Fluctuations in
the value of the currencies in which we conduct our business relative to the
U.S. dollar have caused and will continue to cause currency transaction gains
and losses. Although we do not currently engage in any hedging activities to
mitigate exchange rate risks, we continually evaluate programs to reduce our
foreign currency exposure. However, 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. In
addition, we cannot predict the potential consequences to our business of the
adoption of the Euro as a common currency in Europe.

WE DEPEND ON OUR PRINCIPAL MANUFACTURING FACILITY

Substantially all 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.

FAILURE OF ELECTRONIC SYSTEMS TO RECOGNIZE THE YEAR 2000

14
<PAGE> 17

applications and systems could fail or create erroneous results when addressing
dates on and after January 1, 2000. Our products do not address or utilize dates
in their operation, and, accordingly, our products should not fail due to the
year 2000 problem. However, we use and depend on information technology systems
(including business information computer systems and design and manufacturing
computer systems) and other machinery and equipment that includes embedded date
sensitive technology. We also depend on the proper functioning of date sensitive
electronic systems of third parties, such as customers and suppliers. The
failure of any of these systems to appropriately interpret the year 2000 could
have a material adverse effect on our business, financial condition and results
of operations. We are undertaking efforts to ensure that our business systems
and those of our suppliers and customers are compliant with the requirements of
the year 2000. However, our year 2000 program may not be effective or we may not
be able to implement it in a timely and cost-effective manner. Our year 2000
efforts may not, therefore, ensure against disruptions caused by the approach or
advent of the year 2000. The year 2000 problem is potentially very widespread,
and it is not possible to determine all the potential risks that we may face.
Our inability to remedy our own year 2000 problems or the failure of third
parties to do so may cause business interruptions or shutdowns, financial loss,
regulatory actions, harm to our reputation and exposure to liability.

RISKS OF INADEQUATE PROTECTION OF INTELLECTUAL PROPERTY AND INFRINGEMENT OF
RIGHTS OF OTHERS

Our success will depend in part on our ability to protect our proprietary
technology. 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. We currently hold 33 United
States patents and additional foreign patents and intend to 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. 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.

PRODUCT LIABILITY EXPOSURE

15
<PAGE> 18

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 STOCK PRICE MAY BE VOLATILE

The market price for our common stock may 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 earnings estimates or recommendation 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. In addition, stock prices for many
companies 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, may materially adversely affect the market price
of our common stock.

ENVIRONMENTAL MATTERS

We are subject to various federal, state, local and foreign environmental
laws and regulation, 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.

EFFECTS OF ANTITAKEOVER PROVISIONS

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 antitakeover 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.

16
<PAGE> 19

USE OF PROCEEDS

We will not receive any proceeds from the sale of common stock in this
offering. However, in connection with the related exercise of stock options by
two of the selling stockholders, we will receive $855,617 ($1,491,504 if the
underwriters' over-allotment option is exercised in full), representing the
aggregate exercise price of such options after deducting estimated expenses of
the offering. We intend to use the net option exercise proceeds for working
capital and general corporate purposes. We also expect to receive a tax
deduction as a result of these option exercises in an amount equal to the fair
market value of the stock subject to the options on the exercise date less the
exercise prices of the options.

PRICE RANGE OF COMMON STOCK

Our common stock has been trading publicly on the New York Stock Exchange
under the symbol "PLT" since January 20, 1994. The table below sets forth the
range of quarterly high and low closing sales prices for our common stock on the
New York Stock Exchange during the calendar quarters indicated.

<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
1996
First Quarter.................................. $18 7/8 $16 3/16
Second Quarter................................. 20 1/4 17 11/16
Third Quarter.................................. 19 3/4 18 1/2
Fourth Quarter................................. 22 1/2 18 5/16
1997
First Quarter.................................. 24 7/8 21 1/2
Second Quarter................................. 25 3/16 20 3/8
Third Quarter.................................. 39 25 3/32
Fourth Quarter................................. 40 7/8 35 3/8
1998
First Quarter.................................. 42 3/4 39 1/4
Second Quarter................................. 51 1/2 39 13/16
Third Quarter.................................. 64 9/16 45 3/4
Fourth Quarter................................. 86 48 5/16
1999
First Quarter (through January 12, 1999)....... 86 3/4 82 5/16
</TABLE>

On January 12, 1999, the closing sale price of our common stock as reported
by the New York Stock Exchange was $82 5/16 per share. As of December 31, 1998,
there were approximately 99 stockholders of record of our common stock.

DIVIDEND POLICY

Plantronics has not paid any dividends in recent years. We currently intend
to retain any earnings for use in our business and do not anticipate paying any
cash dividends in the foreseeable future. In addition, our bank line of credit
restricts us from paying cash dividends on shares of our capital in an amount
greater than 50% of our cumulative net income (net of cumulative losses) for the
period commencing February 19, 1997 through the date of declaration.

17
<PAGE> 20

CAPITALIZATION

The following table sets forth our capitalization as of September 30, 1998,
(i) on an actual basis, (ii) on a pro forma basis to reflect the redemption on
January 15, 1999 of our 10% Senior Notes Due 2001 as if such redemption occurred
on September 30, 1998 and (iii) on an as adjusted basis to reflect the pro forma
calculations set forth in (ii) above and the proceeds received in connection
with this offering from the exercise of options held by certain of the selling
stockholders (assuming the underwriters' over-allotment option is not
exercised), less estimated offering expenses payable by us. This information
should be read in conjunction with our consolidated financial statements and the
notes thereto appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
--------------------------------------
PRO AS
ACTUAL FORMA(1) ADJUSTED(1)(2)
-------- -------- --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Long-term debt............................ $ 65,050 $ -- $ --
-------- -------- --------
Stockholders' equity:
Common stock, $0.01 par value per share;
40,000,000 shares authorized,
16,550,563 shares issued and
outstanding, actual; 16,550,563
shares issued and outstanding, pro
forma; 17,100,563 shares issued and
outstanding, as adjusted(3).......... 177 177 182
Additional paid-in capital.............. 70,684 70,684 71,885
Cumulative translation adjustment....... (891) (891) (891)
Retained earnings....................... 41,439 40,207 39,990
-------- -------- --------
111,409 110,177 111,166
Less: Treasury stock (common: 1,121,160
shares) at cost...................... (35,232) (35,232) (35,232)
-------- -------- --------
Total stockholders' equity........... 76,177 74,945 75,934
-------- -------- --------
Total capitalization............ $141,227 $ 74,945 $ 75,934
======== ======== ========
</TABLE>

- -------------------------
(1) The redemption of Senior Notes includes an early repayment premium of $1.3
million, the write-off of unamortized debt issuance costs of $0.4 million
and estimated expenses of $0.3 million. Net redemption expenses less related
tax benefits are approximately $1.2 million.

(2) Reflects the $1.2 million to be received in connection with this offering
from the exercise of 550,000 options held by Robert S. and Louise M. Cecil,
less offering expenses payable by us estimated at $0.3 million. Net offering
expenses less related tax benefits are approximately $0.2 million.

(3) Excludes 4,273,290 shares of common stock reserved for issuance as of
September 30, 1998 under our stock incentive plans. Options to purchase
550,000 of these shares (782,500 if the underwriters' over-allotment option
is exercised in full) will be exercised by Robert S. and Louise M. Cecil in
connection with this offering.

18
<PAGE> 21

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents our selected consolidated financial data for,
and as of the end of, each of the periods indicated. The selected consolidated
financial data for, and as of the end of, the fiscal years ended March 31, 1997
and 1998 and the consolidated statement of operations data for the fiscal year
ended March 31, 1996 have been derived from our audited consolidated financial
statements included elsewhere in this prospectus. The selected consolidated
balance sheet data for March 31, 1996 have been derived from our audited
consolidated financial statements not included in this prospectus. The selected
consolidated financial data for the six months ended September 30, 1997 and 1998
have been derived from our unaudited financial statements, and, in the opinion
of our management, include all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of our financial position and
results of operations. The selected consolidated financial data, including our
operating results for the six months ended September 30, 1998, are not
necessarily indicative of the results that may be expected for fiscal year 1999
or any future period. The selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our consolidated financial statements and notes
included elsewhere in this prospectus.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEARS ENDED MARCH 31, SEPTEMBER 30,
------------------------------ -------------------
1996 1997 1998 1997 1998
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net sales.......................... $182,959 $195,307 $236,112 $110,562 $141,210
Cost of sales...................... 86,887 90,567 108,514 50,959 64,089
-------- -------- -------- -------- --------
Gross profit....................... 96,072 104,740 127,598 59,603 77,121
-------- -------- -------- -------- --------
Operating expenses:
Research, development and
engineering................... 13,718 14,503 17,543 8,384 9,005
Selling, general and
administrative................ 34,845 39,898 47,682 22,842 27,862
-------- -------- -------- -------- --------
Total operating expenses...... 48,563 54,401 65,225 31,226 36,867
-------- -------- -------- -------- --------
Operating income................... 47,509 50,339 62,373 28,377 40,254
Interest expense, including
amortization of debt issuance
costs............................ 7,140 7,104 6,984 3,493 3,588
Interest and other income, net..... (1,385) (1,722) (2,243) (1,102) (1,693)
-------- -------- -------- -------- --------
Income before income taxes......... 41,754 44,957 57,632 25,986 38,359
Income tax expense................. 16,284 15,286 18,443 8,315 12,275
-------- -------- -------- -------- --------
Net income......................... $ 25,470 $ 29,671 $ 39,189 $ 17,671 $ 26,084
======== ======== ======== ======== ========
Basic earnings per common share.... $ 1.53 $ 1.75 $ 2.38 $ 1.07 $ 1.58
======== ======== ======== ======== ========
Shares used in basic per share
calculations..................... 16,593 17,003 16,481 16,450 16,494
======== ======== ======== ======== ========
Diluted earnings per common
share............................ $ 1.42 $ 1.67 $ 2.15 $ 0.98 $ 1.43
======== ======== ======== ======== ========
Shares used in diluted per share
calculations..................... 17,964 17,792 18,223 18,086 18,291
======== ======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
MARCH 31,
------------------------------ SEPTEMBER 30,
1996 1997 1998 1998
-------- -------- -------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................ $ 26,787 $ 42,262 $ 64,901 $ 95,100
Working capital.......................... 48,554 63,341 98,759 122,994
Total assets............................. 108,661 127,241 165,475 189,597
Long-term debt........................... 65,050 65,050 65,050 65,050
Total stockholders' equity............... 1,415 20,882 53,436 76,177
</TABLE>

19
<PAGE> 22

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

RESULTS OF OPERATIONS

The following table sets forth items, for the periods indicated, from our
Consolidated Statements of Operations as a percentage of net sales.

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEARS ENDED MARCH 31, SEPTEMBER 30,
----------------------- --------------
1996 1997 1998 1997 1998
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net sales............................. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales......................... 47.5 46.4 46.0 46.1 45.4
----- ----- ----- ----- -----
Gross profit.......................... 52.5 53.6 54.0 53.9 54.6
----- ----- ----- ----- -----
Operating expenses:
Research, development and
engineering...................... 7.5 7.4 7.4 7.6 6.4
Selling, general and
administrative................... 19.0 20.4 20.2 20.6 19.7
----- ----- ----- ----- -----
Total operating expenses......... 26.5 27.8 27.6 28.2 26.1
----- ----- ----- ----- -----
Operating income...................... 26.0 25.8 26.4 25.7 28.5
Interest expense...................... 3.9 3.7 3.0 3.2 2.5
Interest and other income, net........ (0.7) (0.9) (1.0) (1.0) (1.2)
----- ----- ----- ----- -----
Income before income taxes............ 22.8 23.0 24.4 23.5 27.2
Income tax expense.................... 8.9 7.8 7.8 7.5 8.7
----- ----- ----- ----- -----
Net income............................ 13.9% 15.2% 16.6% 16.0% 18.5%
===== ===== ===== ===== =====
</TABLE>

SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997

Net Sales. Net sales for the six months ended September 30, 1998 increased
by 27.7% to $141.2 million, compared to $110.6 million for the six months ended
September 30, 1997. Domestic sales for the six months ended September 30, 1998
increased by 26.4% to $98.6 million, compared to $78.0 million for the six
months ended September 30, 1997. Domestic sales increased in all distribution
channels, with the highest percentage increase occurring in the OEM and retail
channels. International sales increased by 30.9% to $42.6 million for the six
months ended September 30, 1998,

20
<PAGE> 23

compared to $32.6 million for the six months ended September 30, 1997. Most of
this growth occurred in Europe and Canada, with sales in the Asia Pacific/Latin
America region growing at a slower rate, reflecting the continuing economic
slowdown in Asia.

Gross Profit. Gross profit for the six months ended September 30, 1998
increased by 29.4% to $77.1 million (54.6% of net sales), compared to $59.6
million (53.9% of net sales) for the six months ended September 30, 1997. The
increase in gross profit mainly reflects the overall increase in net sales. In
addition, we continued to focus on reducing product costs through design and
manufacturing efficiencies and by obtaining lower costs from suppliers.

Research, Development and Engineering. Research, development and
engineering expenses for the six months ended September 30, 1998 increased 7.4%
to $9.0 million (6.4% of net sales) compared to $8.4 million (7.6% of net sales)
for the six months ended September 30, 1997. The absolute dollar increase in
these expenses reflects increased investment in new product development and
technologies, in particular, for products designed for the office market
segment.

Selling, General and Administrative. Selling, general and administrative
expenses in the six months ended September 30, 1998 increased by 22.0% to $27.9
million (19.7% of net sales), compared to $22.8 million (20.6% of net sales) for
the six months ended September 30, 1997. The overall increase in selling,
general and administrative expenses in the six months ended September 30, 1998
was primarily from costs associated with higher worldwide unit sales and related
variable expenses, such as sales commissions and employee profit sharing, as
well as the expansion of sales and marketing programs. General and
administrative expenses also increased due to the addition of two senior
corporate executive positions. In addition, we increased our provision for
doubtful accounts in light of general economic conditions, particularly
international conditions.

Operating Income. Operating income increased by 41.9% to $40.3 million
(28.5% of net sales) for the six months ended September 30, 1998, compared to
operating income of $28.4 million (25.7% of net sales) for the six months ended
September 30, 1997. The increase in operating income as a percentage of net
sales was primarily due to: (i) higher net sales, (ii) the increase in gross
margin and (iii) a focused effort to limit the growth of operating expenses
relative to sales growth.

Interest Expense. For the six months ended September 30, 1998, interest
expense increased by 2.7% to $3.6 million, compared to $3.5 million for the six
months ended September 30, 1997.

We have called for the redemption, effective January 15, 1999, of all of
our 10% Senior Notes Due 2001. We will take a net extraordinary charge of
approximately $1.2 million, or approximately $0.07 per diluted share, in the
fourth quarter of fiscal 1999 in connection with this transaction. This charge
represents an early repayment fee of approximately $1.3 million and estimated
expenses, net of taxes. Based on current interest rates and the alternative of
investing the cash, we expect the transaction to increase diluted earnings per
share by approximately $0.10 on an annual pro forma basis.

Interest and Other Income. Interest and other income for the six months
ended September 30, 1998 increased by 53.6% to $1.7 million, compared to $1.1
million for the six months ended September 30, 1997. The increase was primarily
attributable to interest income derived from increases in cash and cash
equivalents.

21
<PAGE> 24

FISCAL YEARS ENDED MARCH 31, 1998, 1997 AND 1996

Net Sales. Net sales in fiscal 1998 increased 20.9% to $236.1 million,
compared to $195.3 million in fiscal 1997, which increased 6.7% over fiscal 1996
net sales of $183.0 million. In fiscal 1998 and fiscal 1997, net sales increased
both domestically and internationally. Domestic sales in fiscal 1998 increased
20.7% to $163.7 million from fiscal 1997, following an increase of 1.3% to
$135.7 million in fiscal 1997 over fiscal 1996 sales of $134.0 million. Our
growth in fiscal 1998 was primarily due to growth in the distribution channels,
substantial growth in small and large call centers, increased acceptance of
headsets in the office market segment, and new products. The increase in
domestic sales in fiscal 1997 was partially offset by a decline in sales to
Lucent Technologies, reflecting that customer's decision to reduce inventory
levels and to close certain retail outlets.

International sales, predominantly in Europe, increased by 21.4% to $72.4
million in fiscal 1998 compared to $59.6 million in fiscal 1997, which in turn
increased by 21.7% over fiscal 1996 sales of $49.0 million. International sales
accounted for 30.7%, 30.5% and 26.8%, respectively, of net sales in fiscal 1998,
fiscal 1997 and fiscal 1996. International sales grew more rapidly in Europe
than in the Asia Pacific/Latin America region in fiscal 1998 compared to fiscal
1997. Higher international sales in fiscal 1997 compared to fiscal 1996
primarily resulted from the expansion of sales in new geographic markets and
investment in customer focused marketing programs.

Gross Profit. Our gross profit increased 21.8% to $127.6 million (54.0% of
net sales) in fiscal 1998 compared to $104.7 million (53.6% of net sales) in
fiscal 1997, following an increase of 9.0% from $96.1 million (52.5% of net
sales) in fiscal 1996. The $31.5 million improvement in gross profit over the
three-year period was primarily due to additional revenues, improved
manufacturing efficiencies, and material and logistics cost reduction programs.
These initiatives, coupled with lower costs resulting from higher sales volumes,
enabled us to improve our gross margin by 1.5% over the three years.

Research, Development and Engineering. Research, development and
engineering expense increased 21.0% to $17.5 million (7.4% of net sales) in
fiscal 1998, compared to $14.5 million (7.4% of net sales) in fiscal 1997, which
in turn increased 5.7% from $13.7 million (7.5% of net sales) in fiscal 1996.
These expenses increased by approximately $3.0 million in fiscal 1998 compared
to fiscal 1997 and by $0.8 million in fiscal 1997 compared to fiscal 1996 due to
the creation of an engineering development team in Europe during fiscal 1997 and
its subsequent growth in fiscal 1998. In addition, in fiscal 1998 we increased
spending associated with new product development teams.

Selling, General and Administrative. Selling, general and administrative
expenses increased 19.5% to $47.7 million (20.2% of net sales) in fiscal 1998,
compared to $39.9 million (20.4% of net sales) in fiscal 1997, following an
increase of 14.5% to $34.8 million (19.0% of net sales) in fiscal 1996. These
expenses increased by $7.8 million in fiscal 1998 compared to fiscal 1997 due
principally to variable costs associated with higher unit sales worldwide,
increases in market research and planned increases in general and administrative
costs, including investments in a new business information system that was
implemented in the first quarter of fiscal 1998. The increase in spending in
fiscal 1997 compared to fiscal 1996 was primarily due to additional staffing in
sales and marketing worldwide and increased spending on international marketing
communications programs.

Operating Income. Operating income increased by 23.9% to $62.4 million
(26.4% of net sales) in fiscal 1998 compared to $50.3 million (25.8% of net
sales) in fiscal 1997, following an increase of 6.0% over $47.5 million (26.0%
of net sales) in fiscal 1996. In

22
<PAGE> 25

fiscal 1998, the increase in net sales was the primary reason for the increase
in operating income, together with continuing improvements in gross margin. In
addition, although operating expenses increased in fiscal 1998 compared to
fiscal 1997, they decreased slightly as a percentage of sales. Although
operating income in fiscal 1997 was $2.8 million higher than in fiscal 1996,
operating income as a percentage of sales declined slightly from the earlier
year, as sales grew at a slower rate than operating expenses.

Interest Expense. Interest expense was $7.0 million in fiscal 1998, $7.1
million in fiscal 1997 and $7.1 million in fiscal 1996. Included in interest
expense in fiscal 1998, fiscal 1997 and fiscal 1996 was $0.4 million, $0.5
million and $0.5 million, respectively, in non-cash deferred debt issuance costs
related to our 10% Senior Notes Due 2001 and revolving credit facility.

Interest and Other Income. Interest and other income increased by 30.3% to
$2.2 million in fiscal 1998 compared to $1.7 million in fiscal 1997, which in
turn increased by 24.3% compared to $1.4 million in fiscal 1996. The primary
reason for the increase was the growth in cash and cash equivalents over the
three year period.

Income Tax Expense. In fiscal 1998, fiscal 1997 and fiscal 1996, income tax
expense was $18.4 million, $15.3 million and $16.3 million, respectively,
representing effective tax rates of 32%, 34% and 39% respectively. The overall
effective tax rate fell over these periods due to the faster relative increase
in income in countries with tax rates lower than the United States.

23
<PAGE> 26

QUARTERLY RESULTS OF OPERATIONS

The following table presents certain unaudited quarterly financial
information for each of the eight quarters in the two-year period ended
September 30, 1998. In the opinion of our management, this information has been
presented on the same basis as the Consolidated Financial Statements appearing
elsewhere in this prospectus and includes all adjustments (consisting only of
normal recurring accruals) required to present fairly the financial results
presented herein. Results of operations for any previous quarter are not
necessarily indicative of results for any future quarter.
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------------
DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997 1997
------------ --------- -------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net sales................... $50,309 $52,293 $54,023 $56,539
Cost of sales............... 23,548 24,147 24,956 26,003
------- ------- ------- -------
Gross profit................ 26,761 28,146 29,067 30,536
------- ------- ------- -------
Operating expenses:
Research, development and
engineering............. 3,637 4,133 3,989 4,395
Selling, general and
administrative.......... 10,020 10,525 11,467 11,375
------- ------- ------- -------
Total operating
expenses.............. 13,657 14,658 15,456 15,770
------- ------- ------- -------
Operating income............ 13,104 13,488 13,611 14,766
Interest expense, including
amortization of debt
issuance costs............ 1,763 1,790 1,754 1,737
Interest and other income,
net....................... (542) (504) (356) (744)
------- ------- ------- -------
Income before income
taxes..................... 11,883 12,202 12,213 13,773
Income tax expense.......... 4,040 4,149 3,908 4,407
------- ------- ------- -------
Net income.................. $ 7,843 $ 8,053 $ 8,305 $ 9,366
======= ======= ======= =======
Basic earnings per common
share..................... $ 0.48 $ 0.49 $ 0.51 $ 0.57
======= ======= ======= =======
Shares used in basic per
share calculations........ 16,256 16,323 16,399 16,500
======= ======= ======= =======
Diluted earnings per common
share..................... $ 0.44 $ 0.45 $ 0.47 $ 0.51
======= ======= ======= =======
Shares used in diluted per
share calculations........ 17,640 17,736 17,820 18,356
======= ======= ======= =======

<CAPTION>
QUARTER ENDED
---------------------------------------------------
DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1997 1998 1998 1998
------------ --------- -------- -------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net sales................... $62,017 $63,533 $70,060 $71,150
Cost of sales............... 28,464 29,091 31,897 32,192
------- ------- ------- -------
Gross profit................ 33,553 34,442 38,163 38,958
------- ------- ------- -------
Operating expenses:
Research, development and
engineering............. 4,591 4,568 4,470 4,535
Selling, general and
administrative.......... 12,330 12,510 14,102 13,760
------- ------- ------- -------
Total operating
expenses.............. 16,921 17,078 18,572 18,295
------- ------- ------- -------
Operating income............ 16,632 17,364 19,591 20,663
Interest expense, including
amortization of debt
issuance costs............ 1,755 1,736 1,736 1,852
Interest and other income,
net....................... (447) (694) (485) (1,208)
------- ------- ------- -------
Income before income
taxes..................... 15,324 16,322 18,340 20,019
Income tax expense.......... 4,903 5,225 5,869 6,406
------- ------- ------- -------
Net income.................. $10,421 $11,097 $12,471 $13,613
======= ======= ======= =======
Basic earnings per common
share..................... $ 0.63 $ 0.67 $ 0.76 $ 0.82
======= ======= ======= =======
Shares used in basic per
share calculations........ 16,547 16,476 16,474 16,513
======= ======= ======= =======
Diluted earnings per common
share..................... $ 0.57 $ 0.61 $ 0.68 $ 0.74
======= ======= ======= =======
Shares used in diluted per
share calculations........ 18,383 18,243 18,213 18,341
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------------
DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31,
1996 1997 1997 1997 1997 1998
------------ --------- -------- ------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
AS A PERCENTAGE OF NET
SALES:
Net sales................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............... 46.8 46.2 46.2 46.0 45.9 45.8
------- ------- ------- ------- ------- -------
Gross profit................ 53.2 53.8 53.8 54.0 54.1 54.2
------- ------- ------- ------- ------- -------
Operating expenses:
Research, development and
engineering............. 7.3 7.9 7.4 7.8 7.4 7.2
Selling, general and
administrative.......... 19.9 20.1 21.2 20.1 19.9 19.7
------- ------- ------- ------- ------- -------
Total operating
expenses.............. 27.2 28.0 28.6 27.9 27.3 26.9
------- ------- ------- ------- ------- -------
Operating income............ 26.0 25.8 25.2 26.1 26.8 27.3
Interest expense............ 3.5 3.5 3.3 3.1 2.8 2.7
Interest and other
income net................ (1.1) (1.0) (0.7) (1.4) (0.7) (1.1)
------- ------- ------- ------- ------- -------
Income before income
taxes..................... 23.6 23.3 22.6 24.4 24.7 25.7
Income tax expense.......... 8.0 7.9 7.2 7.8 7.9 8.2
------- ------- ------- ------- ------- -------
Net income.................. 15.6% 15.4% 15.4% 16.6% 16.8% 17.5%
======= ======= ======= ======= ======= =======

<CAPTION>
QUARTER ENDED
------------------------
JUNE 30, SEPTEMBER 30,
1998 1998
-------- -------------
<S> <C> <C>
AS A PERCENTAGE OF NET
SALES:
Net sales................... 100.0% 100.0%
Cost of sales............... 45.5 45.2
------- -------
Gross profit................ 54.5 54.8
------- -------
Operating expenses:
Research, development and
engineering............. 6.4 6.4
Selling, general and
administrative.......... 20.1 19.4
------- -------
Total operating
expenses.............. 26.5 25.8
------- -------
Operating income............ 28.0 29.0
Interest expense............ 2.5 2.6
Interest and other
income net................ (0.7) (1.7)
------- -------
Income before income
taxes..................... 26.2 28.1
Income tax expense.......... 8.4 9.0
------- -------
Net income.................. 17.8% 19.1%
======= =======
</TABLE>

24
<PAGE> 27

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

As of September 30, 1998, we had working capital of $123.0 million,
including $95.1 million of cash and cash equivalents, compared with working
capital of $98.8 million, including $64.9 million of cash and cash equivalents,
as of March 31, 1998. During the six months ended September 30, 1998, we
generated $40.0 million of cash from operating activities, due primarily to
$26.1 million in net income, decreases in inventory and increases in income
taxes payable. In comparison, we generated $16.8 million in cash from operating
activities for the six months ended September 30, 1997.

Net cash provided by operating activities was $39.2 million, $34.6 million
and $26.9 million in fiscal 1998, 1997 and 1996, respectively. Cash and cash
equivalents increased to $64.9 million at March 31, 1998 from $42.3 million at
March 31, 1997, and from $26.8 million at March 31, 1996. Net cash provided by
operating activities included net income of $39.2 million, $29.7 million and
$25.5 million in fiscal 1998, 1997 and 1996, respectively. Net cash provided by
operating activities in fiscal 1998 also included cash generated by increases in
accrued liabilities and deferred income taxes, which were primarily offset by
increases in inventory and accounts receivable. Net cash provided by operating
activities in fiscal 1997 also included cash generated by increases in deferred
income taxes, offset by an increase in inventory and a decrease in income taxes
payable. Net cash provided by operating activities in fiscal 1996 also included
cash generated as a result of increases in income taxes payable offset by an
increase in accounts receivable.

We have a $30.0 million revolving credit facility, including a $10.0
million letter of credit subfacility, with a major bank, both of which expire in
November 1999. As of September 30, 1998, we had no cash borrowings under the
revolving credit facility and $1.3 million outstanding under the letter of
credit subfacility. The amounts outstanding under the letter of credit
subfacility were principally associated with purchases of inventory. 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 us to the extent we cannot comply with
them.

After the redemption of the 10% Senior Notes Due 2001, 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
12 months.

Investing Activities

Capital expenditures of $1.5 million in the six months ended September 30,
1998 were incurred principally in tooling to expand manufacturing capacity and
investments in computer and telephone equipment. Capital expenditures were $5.9
million, $8.2 million and $3.9 million in fiscal 1998, 1997 and 1996,
respectively. The decrease in capital expenditures in fiscal 1998 from fiscal
1997 was caused by the completion of a significant upgrade to our business
information systems which occurred primarily in fiscal 1997 and was completed in
the first quarter of fiscal 1998.

Financing Activities

In the six months ended September 30, 1998, we sold 19,510 shares of our
treasury stock for approximately $0.8 million and repurchased 178,000 shares of
our common stock for approximately $10.6 million. As of September 30, 1998,
approximately 10,000 shares

25
<PAGE> 28

remained available under the repurchase plan authorized in the third quarter of
fiscal 1998. During the second quarter of fiscal 1999 our Board of Directors
approved a plan to repurchase up to an additional 500,000 shares of common
stock. The total shares available for repurchase under the two plans as of
September 30, 1998 was approximately 510,000 shares.

We received $1.5 million in proceeds from the exercise of stock options
during the six months ended September 30, 1998. In July 1998, our stockholders
approved an increase of 1,300,000 shares of common stock issuable under our 1993
Stock Plan (the "1993 Stock Plan"). This increased the maximum aggregate number
of shares which may be optioned and sold under the 1993 Stock Plan to 5,459,242
shares.

In fiscal 1998, we repurchased 317,600 shares of our common stock for $13.2
million, received $1.2 million in proceeds from the exercise of stock options
and realized $1.3 million from the sale of 51,072 shares of treasury stock.
During fiscal 1997, we repurchased 701,226 shares of our common stock for $12.9
million and realized $1.8 million in proceeds from the exercise of stock options
and $0.1 million from the sale of 5,084 shares of treasury stock. During fiscal
1996, financing activities consisted of the receipt of $0.8 million in stock
option exercise proceeds.

YEAR 2000

STATE OF READINESS

We have established a worldwide year 2000 task force, led by an Executive
Steering Committee of our senior management, including representatives of each
of our business segments and corporate functions, to oversee and regularly
review the status of our year 2000 compliance plan. Through our year 2000 task
force, we are proceeding with implementation of a formal year 2000 compliance
program. The compliance program addresses three key elements: (i) internal
infrastructure, addressing internal hardware and software and non-information
technology systems; (ii) supplier readiness, addressing the

26
<PAGE> 29

preparedness of our suppliers of goods and services; and (iii) customer
readiness, addressing the preparedness of our customer support and the
preparedness of our customers to transact business with us. In each of those
compliance areas, we are systematically performing a global risk assessment,
conducting testing, implementing upgrades, communicating with and assisting
suppliers and customers in raising awareness of the year 2000 issues and
developing contingency plans to mitigate known and unknown year 2000 risks. The
status of our compliance efforts in those three areas is set forth below:

Internal Infrastructure. We are assessing all internal applications
and computer software and hardware. Our key business information systems
have been made year 2000 compliant. Resources have been assigned to address
other applications, such as product testing and product design hardware and
software, based upon our determination of how critical each of those
systems is to our business operations and the time required to bring them
into full year 2000 compliance. We currently expect that all our critical
business information systems and other critical applications will be fully
year 2000 compliant by June 1999.

Supplier Readiness. This program focuses on minimizing the risks
associated with supplier year 2000 issues in two areas: (i) the suppliers'
business capability to continue providing products and services in and
after the year 2000 and (ii) the year 2000 readiness of products supplied
to us for our use. Requests for information and certification of compliance
have been and are being sent to our principal and critical suppliers. The
year 2000 task force is monitoring responses from suppliers and following
up where necessary and appropriate. We expect that we will have
certification from our principal and critical suppliers of goods and
services by July 1999.

Customer Readiness. This program focuses on ensuring that customers
are aware of the year 2000 issues and that customers are capable of placing
orders for our products, receiving products ordered and paying our invoices
for products sold and delivered. Requests for information and certification
of year 2000 compliance have been sent to our major customers. The year
2000 task force will follow up with customers where necessary and
appropriate. We expect that we will have certification from our principal
customers by August 1999.

Costs to Address Year 2000 Issues

We currently estimate that the aggregate cost of our year 2000 compliance
efforts will be approximately $1.2 million, of which approximately $0.3 million
has been incurred to date. The costs consist principally of (i) fees paid to
outside consultants and software programmers, (ii) purchase of telephone PBX
systems which require upgrades to be year 2000 compliant and (iii) purchase of
software and software upgrades to meet the year 2000 issue. The funds expended
and to be expended are being funded through operating cash flows. Approximately
$0.5 million of the total cost, related to the purchase of fixed assets, will be
capitalized, with the balance expensed as incurred.

Risks of the Year 2000 Issues

We currently believe that our internal year 2000 compliance efforts will be
successful and there will be no material impact to us by reason of the failure
or malfunction of any systems owned or operated by us or third parties with whom
we do business. However, our year 2000 program may not be effective or we may
not be able to implement it in a timely and cost-effective manner. Our year 2000
efforts may not, therefore, ensure against

27
<PAGE> 30

disruptions caused by the approach or advent of the year 2000. The year 2000
problem is potentially very widespread, and it is not possible to determine all
the potential risks that we may face. Our inability to remedy our own year 2000
problems or the failure of third parties to do so may cause business
interruptions or shutdowns, financial loss, regulatory actions, harm to our
reputation and exposure to liability.

Contingency Plans

We are developing contingency plans to mitigate the potential disruptions
that may result from the year 2000 issue. We expect to substantially complete
our contingency planning by July 1999. These plans may include identifying and
securing alternate suppliers of ingredients, containers, packaging materials and
utilities, adjusting manufacturing facility production, shutdown and start-up
schedules, stockpiling of finished product inventories and other measures
considered appropriate by management. Once developed and approved, contingency
plans, and the related cost estimates, will be continually refined as additional
information becomes available.

28
<PAGE> 31

BUSINESS

OVERVIEW

INDUSTRY BACKGROUND

Headsets are used in call centers, offices, cars and homes and with various
terminal devices such as wireline, cellular and cordless telephones and
computers. Specifically, headsets:

- allow people to have both hands free to use a computer, take notes,
organize files, drive a car, complete household tasks or perform other
tasks while they talk on the telephone;

- provide increased sound quality to telephone users by reducing background
noise;

- relieve the repetitive stress and discomfort associated with placing a
telephone handset between the shoulder and neck; and

- provide greater privacy than speakerphones.

The largest group of headset users are call center agents who are on the
telephone throughout their work day. The number of call center agents has grown
as companies have sought to (i) focus on customer service to provide a
competitive advantage, (ii) reduce costs through the use of real-time
centralized information exchange and customer interaction, and (iii) make
greater use of cost-effective direct distribution models. As the benefits of
call centers become more widely recognized and the system cost per agent
declines, the establishment of call centers is spreading to smaller
organizations and international firms. Agent productivity in call centers is
important in minimizing costs and reducing customer wait time, and, therefore,
the ability to effectively and simultaneously use a telephone and keyboard is
critical. As the call center market segment has grown, the benefits of headsets
have become widely recognized as an essential component of a productive and safe
workplace.

The office market segment, both corporate and small office/home office
("SOHO"), has become an increasingly important market segment for headsets over
the last five years. The increasing and simultaneous use of telephones and
computers by office workers and a growing awareness of the benefits of headsets
have contributed to the growth of this market segment. 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

29
<PAGE> 32

of headset use in the office is low, providing a long-term opportunity to
increase headset sales to office workers.

Headset demand is also emerging in the mobile, computer and residential
market segments. Drivers increasingly seek the hands-free benefits of headsets,
as the use of mobile phones in cars continues to grow worldwide. Headsets are
also an important interface for computerized speech recognition programs, which
broaden the application of headsets from voice to written communication by
substituting voice for keyboard entry. Finally, the availability of low-cost
cordless phones with headset ports is beginning to facilitate headset adoption
in the residential market segment by individuals who want the ability to perform
multiple tasks while speaking on the telephone.

PLANTRONICS' STRATEGY

We intend to extend our position as a leading worldwide supplier of
lightweight communications headsets and to promote increased headset use
globally. Our strategy to achieve these goals includes:

Extend Headset Product Leadership. Since introducing the first lightweight
communications headset in 1962, we have developed the knowledge and
expertise to provide our customers with leading products and services. We
intend to focus on maintaining the highest standards of excellence in
comfort, ease of use, sound quality, durability, style and service. By
focusing on these core strengths relative to our existing and new market
segments, we plan to continue to be an industry leader in customer and end-
user satisfaction.

Drive Headset Adoption. We intend to work to increase awareness of our
headsets and to provide products people require to make their lives easier
and more productive. We will continue to educate potential users on the
benefits of headsets, to leverage the Plantronics brand name and to design
headsets appropriate for use in the environments in which prospective users
are operating. Accordingly, we are currently expanding our advertising and
promotional activities and are working with key OEMs and other channel
partners to facilitate the adoption of our products in the office, mobile,
computer and residential markets. We believe that the level of adoption of
headsets in these new market segments is low, providing a long-term
opportunity to increase our headset sales.

Strengthen Distribution Channels. Historically, we have developed and
maintained diverse distribution channel relationships to meet the different
purchasing requirements of our customers. We intend to leverage the
relationships we have developed with our existing channel partners,
including the leading telecommunications equipment manufacturers,
distributors, retailers, and contract stationers, to increase the rate of
headset adoption and sales. For example, we have recently increased co-
marketing activities with many of our channel partners. To capitalize on
new market segment opportunities, we intend to selectively broaden our
distribution. Thus, we have recently initiated relationships with leading
mobile phone service providers and distributors of mobile phones and
accessories.

Drive Stockholder Value Through Low Cost Manufacturing. We seek to provide
the highest value products while maintaining a focus on reducing
manufacturing and materials costs. Through a combination of (i) working
with suppliers to reduce component costs, (ii) redesigning products to
lower manufacturing costs, and (iii) reducing overhead as a percent of
revenue, we believe we are the low cost

30
<PAGE> 33

producer in our principal market segments. We intend to maintain our focus
on minimizing manufacturing costs where possible. We believe this strategy
allows us to realize attractive profit margins and, when necessary, to
match competitors on price.

PRODUCTS AND TECHNOLOGY

Our product line consists of lightweight communications headsets, headset
accessories and services, and specialty telephone products. Our headsets
incorporate unique features that we believe offer compelling performance
advantages:

Comfort. 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. We believe our focus on
ergonomics has been critical to our success in designing products which are
more comfortable, including our more recent adjustable Encore and TriStar
product families.

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 cancelling performance (to block out background sounds in unusually
loud environments) and the only design (the trademark clear and curved
Plantronics Voice Tube) (the "Voice Tube") which does not require the
microphone boom to be positioned precisely for proper functioning and is
ideal for most office and call center environments. The Voice Tube design
has the additional benefits of a more attractive appearance, easy hygienic
replacement, and lighter weight. The Encore product family also
incorporates what we believe is the industry's only tone control in a
headset top.

Durability. We have over 30 years of experience understanding headset
durability and have successfully incorporated this knowledge into certain
product designs which we believe last one-and-a-half to two times longer
than the best comparable competitive products.

In addition to the features incorporated into our products, we provide
service, support, supplies and accessories. We believe our customer support and
service program provides our end users and customers with easier access to
Plantronics and is an important competitive advantage.

Headsets consist of two distinct units: the "top" and the "base." The top
is the portion that the user wears and that includes the speaker and microphone;
and the base, or amplifier adapter, interfaces with the telephone or other
communications equipment. Tops account for approximately two-thirds of our
business, while bases comprise the remaining one-third. Both units are required
in most applications; however, in some applications, the interface is built into
the telephone, computer or other communications equipment with which the headset
is being used, removing the need for an adapter.

31
<PAGE> 34

We manufacture a broad line of headset top styles, which can be worn over
the head, in the ear or on either ear. Each headset offers either a Voice Tube
(our most popular solution, suitable for the majority of environments) or a
noise-canceling microphone (appropriate for users in very loud environments).
All telephone-based headset tops, in conjunction with their associated bases,
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 quick-disconnect, which allows users to leave the phone
without removing their headsets or disconnecting their call.

Our principal headset top styles and major products in each category are as
follows:

<TABLE>
<CAPTION>
DESCRIPTION FEATURES
PRODUCT ----------- --------
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------
Over-the-Head Headsets with Ear Cushions
- ------------------------------------------------------------------------------------------------------
SUPRA Our most popular headset, ideal for Engineered for sound quality and
phone-intensive jobs and call center durability. Sound reception in one or
environments. both ears.
ENCORE Also used in call centers; designed User-controllable tone adjustment and
for near-universal fit and all-day powerful noise cancelling performance.
comfort.
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Behind-the-Ear Headsets
- ------------------------------------------------------------------------------------------------------
MIRAGE Uses a miniaturized behind-the-ear Rests gently on the ear, not in the
capsule with an adjustable receiver. ear. Can be worn on either ear.
STARSET Has an acoustic eartip that fits Ultra-lightweight, with an acoustic
gently in the outer portion of the seal
ear. to block out unwanted background
noise.
TRISTAR Stylish design for phone intensive Feather-weight ( 1/2 ounce), with
jobs and call center environments. maximum user adjustments designed for
stability, comfort and sound quality.
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
In-the-Outer-Portion-of-the-Ear Headset
- ------------------------------------------------------------------------------------------------------
FREEHAND Designed for business professionals, Small and unobtrusive, easy to put on
this headset features a small earbud and take off.
which rests comfortably in the ear.
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Convertible Headset
- ------------------------------------------------------------------------------------------------------
DUOSET Appropriate for business professionals Easily convertible from over-the-head
who want a headband for longer calls to over-the-ear for greater
as well as an over-the-ear headset for versatility.
intermittent phone use.
- ------------------------------------------------------------------------------------------------------
</TABLE>

32
<PAGE> 35

We sell a full range of adapters or "bases" designed to work with
substantially all telephone systems. Our adapters include the following:

- Vista Universal Modular Adapter -- compatible with single or multi-line
telephones; features the SoundGuard Plus system, which provides volume
control for improved audio comfort and clarity.

- Plug Prong Adapter -- designed for automatic call distribution systems.

- Headset Switcher Multimedia Adapter -- allows for use with a telephone or
computer by simply flipping a switch.

- E-10 Adapter (an in-line amplifier) -- designed for use directly on the
telephone line to reduce desk clutter.

- Mobile Phone Adapters -- designed for use with cellular and PCS phones
lacking built-in headset ports.

Headset accessories include replacement voice tubes, training cords, ear
cushions, eartips, in-use indicators, theft protection devices and background
noise suppressors. These products allow end users to revitalize their headset
tops to maintain maximum performance and comfort. We support our product
offering with a service center which addresses consumer questions and provides
access to our full suite of product offerings and refurbishment accessories.

Through our Walker Equipment Division we also manufacture and sell
specialty telephone products including amplified telephones and handsets and
telephone amplifier accessories for the hearing-impaired and line test
equipment. The Walker Equipment Division sells special amplified and
noise-canceling handsets for high-noise environments, as well as for entry and
elevator phones and for use in telephone booths and information kiosks. In
addition, the Clarity telephone is a full-featured, single line telephone
designed for hearing-impaired users. It features volume control circuitry,
oversized buttons, a ringer volume control and a light that flashes when the
telephone rings.

33
<PAGE> 36

CUSTOMERS, SALES AND MARKETING

Our customers are primarily distributors, OEM partners and telephony
service providers who primarily sell our products in the call center and office
end-user market segments. Additionally, we sell into retail channels primarily
for the office market segment. We sell products to over 250 customers in more
than 60 countries. The following table lists selected customers from each of our
four primary distribution channels. Each customer is among the top five (by
revenue) in the channel identified.

<TABLE>
<CAPTION>
CUSTOMER CHANNEL
-------- -------
- ---------------------------------------------------------------------------------------------
<S> <C>
Ameritech Services, Inc. Telephony service provider
Aspect Telecommunications Corporation OEM
Boise Cascade Office Products Retailer
Bosch Telecom, GmbH OEM
British Telecommunications plc Telephony service provider
Deutsche Telekom AG Telephony service provider
Ericsson Business Networks AB OEM
GBH Distributing, Inc. Distributor
Graybar Electric Company, Inc. Distributor
GTE Communication Systems Corporation Telephony service provider
Lucent Technologies, Inc. OEM
Office Depot, Inc. Retailer
Rocom Group Limited Distributor
Sencommunications, Inc. Distributor
Siemens AG OEM
SKC Communications Products, Inc. Distributor
SP Richards Co. Retailer
Staples, Inc. Retailer
United Stationers Supply Co. Retailer
</TABLE>

Specialized headset distributors represent our largest distribution
channel. These distributors generally sell on a national basis, and the bulk of
their revenues are from headset sales. Electronics wholesalers represent our
second largest channel. They typically offer a wide variety of products from
multiple vendors to both resellers and end users.

OEMs supply to their customers automatic call distributor systems and other
telecommunications and computer equipment that utilize headsets. OEMs do not
typically manufacture their own headsets, and therefore they often distribute
Plantronics headsets on a private label or co-branded basis.

The telephony service provider channel is comprised of former Regional Bell
Operating Companies and Post, Telephone and Telegraph companies which purchase
headsets from us for use by their own agents. Certain of these service providers
also resell headsets to their customers.

The retail channel encompasses office supply and consumer electronics
retailers, warehouse clubs, consumer products and office supply distributors,
and catalog and mail

34
<PAGE> 37

order companies. Retailers primarily sell headsets to small businesses, small
offices and home offices. This channel is currently our fastest growing area of
distribution.

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
under that agreement.

We maintain a sales force in the United States and in various overseas
countries to provide ongoing customer support and service. We also employ
manufacturers' representatives to assist in selling through the retail channel.

RESEARCH AND DEVELOPMENT

Since we introduced the original lightweight communications headset in
1962, the headset end-user has been the primary focus of our design efforts. We
maintain an extensive database of head and ear shapes to assist in the
development of our products. Our concern for "human factors" and our efforts to
design in comfort and safety have resulted in such product innovations as a
behind-the-ear capsule (containing both microphone and receiver) designed to fit
all users comfortably and the SoundGuard Plus system, which provides volume
control and improved audio comfort and quality.

We have a number of product development programs currently underway,
including a new generation of headset systems, computer and mobile products, a
wireless product family and several programs to both capitalize on and improve
our core technology. We supplement our in-house engineering capabilities through
selected contracting arrangements.

Research, development and engineering expenditures were $17.5 million,
$14.5 million and $13.7 million for fiscal years 1998, 1997, and 1996,
respectively. For the six months ended September 30, 1998, research, development
and engineering spending amounted to $9.0 million. We believe that investment in
research and development is important for us to maintain our position in the
industry and, therefore, intend to increase our spending for research,
development and engineering in subsequent fiscal years.

MANUFACTURING

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

Finished goods are generally manufactured to meet forecasted customer
requirements. Special products and large orders submitted with short lead times
are manufactured to order. Since most manufacturing occurs prior to the receipt
of purchase orders, Plantronics maintains an inventory of finished goods in
addition to inventories of raw materials, work in process and subassemblies and
components.

Plantronics purchases components for its headset products, including
semi-custom integrated circuits, amplifier boards and other electrical
components, from suppliers in the United States, Mexico, Asia and Europe.
Although most of the items purchased are obtained, or are reasonably available,
from numerous sources, certain products and components are currently procured
only from single suppliers in order to obtain volume pricing.

35
<PAGE> 38

COMPETITION

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. Although we believe we compete successfully with respect to these
factors, 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. 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.

FACILITIES

Our principal offices are located in Santa Cruz, California. We own three
buildings totaling approximately 160,000 square feet, of which approximately
31,500 square feet is leased to third parties through the year 2000. Our primary
production facilities are leased premises located in Tijuana, Mexico. Our Walker
Equipment Division leases offices and a small production facility in Ringgold,
Georgia. We also lease sales and administrative offices in various foreign
countries.

36
<PAGE> 39

MANAGEMENT

The following table sets forth certain information, as of January 4, 1999,
with respect to the directors and executive officers of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Robert S. Cecil.............. 63 Chairman of the Board of Directors
S. Kenneth Kannappan......... 39 Chief Executive Officer, President and Director
Benjamin Brussell............ 38 Vice President -- Corporate Development
Donald S. Houston............ 44 Senior Vice President -- Sales
David Huddart................ 49 Senior Vice President -- Engineering and
Technology
Farhad Kashani............... 45 Senior Vice President -- Operations
John A. Knutson.............. 53 Vice President -- Legal, Senior General Counsel
and Secretary
H. Craig May................. 38 Senior Vice President -- Marketing
Barbara V. Scherer........... 42 Senior Vice President -- Finance and
Administration and Chief Financial Officer
Robert F.B. Logan(1)......... 66 Director
M. Saleem Muqaddam(1)........ 52 Director
John Mowbray O'Mara(2)....... 71 Director
Trude C. Taylor(2)........... 77 Director
J. Sidney Webb(2)............ 79 Director
David A. Wegmann(1).......... 52 Director
</TABLE>

- -------------------------
(1) Member of the Audit Committee

(2) Member of the Compensation Committee.

Mr. Cecil has served as Chairman of the Board of Directors since September
1993 and served as Chief Executive Officer of Plantronics from March 1992
through December 1998. Mr. Cecil, continues to be employed by Plantronics on
less than a full time basis, providing guidance principally in the areas of
long-term strategy, management goals, recruitment of key executives and
budgetary matters. Mr. Cecil has advised us that he is suffering from a serious
illness, but that he believes it is currently stable. Although we and Mr. Cecil
believe he is presently able to perform effectively in his continuing role as
Chairman with us, his illness is unpredictable. Should his condition
deteriorate, he may have to reduce or possibly terminate his relationship with
us. From March 1992 to March 1998, Mr. Cecil also served as President of the
Company. Mr. Cecil has a Bachelor of Science degree in Engineering from the
United States Naval Academy, and a Masters of Business Administration in Finance
from the Harvard Graduate School of Business Administration. Mr. Cecil also
serves on the Board of Directors of GT Group Telecom Inc., a Canadian company
which is a competitive local exchange carrier.

Mr. Kannappan serves as Chief Executive Officer and President and is a
director of Plantronics. He joined the Company in February 1995 as Vice
President -- Sales, responsible for OEM Sales and Asia Pacific/Latin America
Markets. He was promoted to Vice President -- Sales, responsible for United
States, Asian and Latin American Sales in September 1995. He was promoted to
Managing Director -- Plantronics Limited 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, Mobile Division,
Walker Division and Plantronics Limited. In March 1998, Mr. Kannappan was
promoted to President and Chief Operating Officer. Prior to joining

37
<PAGE> 40

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.

Mr. Brussell joined the Company in March 1998 as Vice
President -- Corporate Development. From March 1992 to March 1998 Mr. Brussell
was Vice President, Corporate Development at Storage Technology Corporation, a
leading provider of enterprise and network information storage systems. 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 Salomon
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 Box Hill Systems Corporation, a
manufacturer of high performance data storage systems.

Mr. Houston joined the Company in November 1996 as Vice President -- Sales
and was promoted to Senior Vice President -- Sales in March 1998. From March
1995 through October 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 most recently 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. Huddart was appointed Vice President -- Engineering and Technology in
April 1996, and became Senior Vice President -- Engineering and Technology in
March 1998. He joined Plantronics Limited in September 1994 as Engineering
Manager. From February 1994 to September 1994, Mr. Huddart was Engineering
Director of DHCL Ltd. and from June 1991 through February 1994 he was the
Technical Marketing and Sales Director for IST Laboratories Ltd., a developer of
electronic substrate interconnections. Mr. Huddart has a Bachelor of Science
degree from the University of North London Polytechnic and a Management Diploma
from Ashridge Management College.

Mr. Kashani joined the Company in February 1998 as Senior Vice President --
Operations. From August 1997 to February 1998, Mr. Kashani was Vice President of
Operations, Service and Quality with Wyse Technology, USA, and from December
1996 to July 1997, he was Vice President of Operations, Wyse Technology, Hsin
Chu, Taiwan. From 1994 to 1996, Mr. Kashani was Vice President of Operations,
Wyse Technology, USA; and from 1990 to 1994 he was Vice President of Operations
for Link Technologies, a subsidiary of Wyse Technology. Mr. Kashani has a
Bachelor of Science degree in Agricultural Engineering from Pahlavi University
and a Masters of Business Administration from the Iran Center for Management
Studies.

Mr. Knutson has served as Vice President -- Legal, Senior General Counsel
and Secretary since March 1994. Mr. Knutson was Managing Partner of the law firm
of Kenney, Burd, Knutson & Markowitz, San Francisco, California, from January
1991 until shortly before joining the Company. From August 1979 until December
1990, he practiced law with the law firm of Fisher & Hurst, San Francisco,
California, as a partner from April

38
<PAGE> 41

1982 to December 1986, and as Managing Partner from January 1987 to December
1990. After graduating from the University of California -- Hastings College of
Law with a Juris Doctorate degree and being admitted to the California Bar in
1974, Mr. Knutson practiced law in San Francisco with the Law Offices of Garrett
McEnerney until August 1979.

Mr. May joined the Company in May 1998 as Senior Vice
President -- Marketing. Mr. May was most recently with Dell Computer Corporation
from March 1998 to May 1998, responsible for Program Management of the Work
Stations Business Unit. Prior to that Mr. May was with Siemens Business
Communication Systems, Inc., as Director of Product Management, Desktops and
Mobility, from October 1993 to March 1998. Mr. May has a Bachelor of Science
degree in Electrical Engineering from the University of Houston.

Ms. Scherer joined the Company 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. From October 1996 until March 1997,
Ms. Scherer was Senior Vice President and Chief Financial Officer at Stream
Logic Corporation, a developer and manufacturer of data management products.
Before that she was Senior Vice President of Operations from April 1996 until
October 1996. StreamLogic Corporation filed voluntarily for protection under
Chapter 11 of the Federal Bankruptcy Code in June 1997. Prior to her employment
with StreamLogic Corporation, she held various positions spanning a nine year
career with Micropolis Corporation, a disk drive manufacturer, including, from
1995 until April 1996, Vice President -- Finance, Chief Financial Officer and
Treasurer. Ms. Scherer was a consultant with BCG from 1985 to 1987 and a Senior
Financial Analyst with ARCO from 1983 to 1985. Ms. Scherer is a graduate of the
University of California at Santa Barbara and received a Masters of Business
Administration from Yale School of Organization and Management.

Mr. Logan has more than 30 years of senior executive experience. Most
recently, he was chairman and CEO of Banc One Arizona and Bank One Arizona from
April 1995 to March 1996. From May 1993 to March 1995 he served as director of
Banc One Arizona and from January 1990 to April 1993 he was President and Chief
Operating Officer of Valley National, the predecessor of Bank One Arizona. Prior
to 1990 Mr. Logan was President and Chief Executive Officer of Alexander
Hamilton Life Insurance Company, Chief Financial Officer for Continental Grain
Company of New York, and Executive Vice President of the Merchant Banking Group
at Citicorp. Mr. Logan currently is a director of EABC, a broadcasting company,
York International Corporation, an air conditioning and refrigeration products
manufacturer, and Banc One Capital Partners, an investment partnership.

Mr. Muqaddam has served as a Vice President of CVC and its affiliated
investment companies since 1989. Previously he spent 15 years with Citibank,
N.A. and its affiliates in senior management positions. Mr. Muqaddam is a
director of Pamida Holdings Corporation, Chromcraft Remington Inc. and Fairwood
Corporation.

Mr. O'Mara has been a management consultant since May 1993. From May 1990
to May 1993, he served as Chairman of the Executive Committee of Quality Care
Systems, Inc., a provider of computer-based "expert" medical cost containment
systems. From August 1988 through December 1989, Mr. O'Mara served as Chairman
of the Board of Directors and Chief Executive Officer of Global Natural
Resources, Inc. Prior to 1988, Mr. O'Mara spent 22 years as an investment
banker, serving most recently as Managing

39
<PAGE> 42

Director for Chase Investment Bank, a subsidiary of Chase Manhattan Bank, N.A.
Mr. O'Mara is a director of Baldwin & Lyons, Inc. and The Midland Company.

Mr. Taylor has been a private investor since 1987 and a principal in TC
Associates, a management consulting firm, since 1984. He served as a director of
the Company's former operating subsidiary, Plantronics, Inc., from 1969 until
its merger into the Company in January 1994. He was Chairman of the Board of
Directors and a Director of Zehntel, Inc., a manufacturer of automated test
equipment and a former subsidiary of Plantronics, Inc. from 1984 to 1987, Chief
Executive Officer of Zehntel, Inc. from 1984 to 1985 and Chairman of the Board
of Directors, President and Chief Executive Officer of Electronic Memories and
Magnetics Corporation, a manufacturer of computer peripherals, from 1969 until
1984. He is also a director of Dense PAC Microsystems, Inc. and Xylan
Corporation.

Mr. Webb has been Chairman of the Board of Directors of The Titan
Corporation since 1984. The Titan Corporation designs, manufactures and installs
high technology information and electronic products and systems for government,
commercial and international clients. Mr. Webb was a director of the Company's
former operating subsidiary, Plantronics, Inc., from 1983 to 1989, and rejoined
the boards of directors of that corporation and the Company in January 1990. He
was a private investor and consultant from 1981 to 1984. Prior to that, he was
Vice Chairman of TRW, Inc. until 1981. He is currently a director of EIP
Microwave, Inc., Titan Corp. and Microfocus.

Mr. Wegmann has been a private investor since August 1988. Prior to that,
he was a Vice President of CVC.

Executive officers serve at the discretion of the Board of Directors. There
are no family relationships between any of the directors and executive officers
of the Company.

40
<PAGE> 43

OWNERSHIP OF COMMON STOCK BY
SELLING STOCKHOLDERS AND MANAGEMENT

The following table sets forth certain information with respect to the
beneficial ownership of the common stock as of December 31, 1998 and as adjusted
to reflect the sale of the 1,550,000 shares of common stock offered hereby by
the selling stockholders by (i) each selling stockholder, (ii) Citicorp Venture
Capital, Ltd., (iii) each director of Plantronics, (iv) certain executive
officers of Plantronics, and (v) all directors and executive officers of
Plantronics as a group. Except as otherwise noted, the stockholders named in the
table have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO NUMBER OF OWNED AFTER
OFFERING(1) SHARES OFFERING(1)(2)
------------------- BEING -------------------
NUMBER PERCENT OFFERED NUMBER PERCENT
--------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Citigroup Foundation(3)........ 1,000,000 6.0% 1,000,000 -- --
Citicorp Center
153 East 53rd St.,
3rd Floor
New York, NY 10043
Robert S. and Louise M.
Cecil........................ 1,072,244 6.0% 550,000(4) 522,244 2.9%
337 Encinal Street
Santa Cruz, CA 95060
Citicorp Venture Capital,
Ltd.(5)...................... 4,509,168 27.0% -- 4,509,168 26.1%
399 Park Avenue,
14th Floor
New York, NY 10043
S. Kenneth Kannappan........... 93,312 * -- 93,312 *
Robert F.B. Logan.............. 3,500 * -- 3,500 *
M. Saleem Muqaddam............. 6,500 * -- 6,500 *
John Mowbray O'Mara............ 14,500 * -- 14,500 *
Trude C. Taylor................ 98,080 * -- 98,080 *
J. Sidney Webb(6).............. 29,200 * -- 29,200 *
David A. Wegmann............... 298,092 1.8% -- 298,092 1.7%
Donald S. Houston.............. 36,390 * -- 36,390 *
John A. Knutson................ 14,883 * -- 14,883 *
Barbara V. Scherer............. 38,810 * -- 38,810 *
All directors and executive
officers as a group (15
persons)..................... 1,734,413 9.6% 550,000(5) 1,184,413 6.6%
</TABLE>

- -------------------------
* Less than one percent.

(1) Includes stock subject to stock options held by directors and executive
officers that are exercisable within 60 days of December 31, 1998, as
follows: Mr. and Mrs. Cecil, 1,072,244 shares; Mr. Logan, 2,000 shares; Mr.
Muqaddam, 6,500 shares; Mr. O'Mara, 6,500 shares; Mr. Taylor, 6,500 shares;
Mr. Webb, 6,500 shares; Mr. Wegmann, 6,500 shares; Mr. Houston, 31,250
shares; Mr. Kannappan, 86,485 shares; Mr. Knutson, 12,863 shares, Ms.
Scherer, 36,667 shares; and all directors and officers as a group (15
persons), 1,301,159 shares (751,159 after the offering). Percent
calculations are based on 16,715,906 shares of common stock outstanding on
December 31, 1998.

41
<PAGE> 44

(2) Assumes the exercise by Mr. and Mrs. Cecil of options to purchase 432,822
shares and 117,178 shares, respectively. Assumes no exercise of the
underwriters' over-allotment option.

(3) Citigroup Foundation is a private charitable foundation affiliated with
Citigroup. The shares being offered by the foundation were acquired by gift
from Citicorp Venture Capital, Ltd.

(4) Of the shares offered by Robert S. and Louise M. Cecil, 432,822 shares will
be purchased by Mr. Cecil from the Company upon the exercise of employee
stock options and 117,178 shares will be purchased by Mrs. Cecil from the
Company upon the exercise of employee stock options transferred to her by
Mr. Cecil. If the underwriters' over-allotment option is exercised in full,
Mrs. Cecil will exercise stock options for, and sell, an additional 232,500
shares.

(5) Citicorp Venture Capital, Ltd. is a wholly-owned subsidiary of Citibank,
N.A., which is in turn an indirect wholly-owned subsidiary of Citigroup.

(6) Includes 22,700 shares held in the name of the Webb Family Trust.

42
<PAGE> 45

UNDERWRITING

Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement") among Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Salomon Smith Barney Inc., Hambrecht & Quist LLC and McDonald
Investments Inc. (the "Underwriters"), the Company and the Selling Stockholders,
the Selling Stockholders have agreed to sell to the Underwriters, and each of
the Underwriters severally and not jointly has agreed to purchase from the
Selling Stockholders, the number of shares of common stock set forth opposite
its name below.

<TABLE>
<CAPTION>
NUMBER OF
SHARES
UNDERWRITER ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..........................
Salomon Smith Barney Inc............................
Hambrecht & Quist LLC...............................
McDonald Investments Inc............................
---------
Total................................. 1,550,000
=========
</TABLE>

In the Purchase Agreement, the several Underwriters have agreed, subject to
the terms and conditions set forth therein, to purchase all of the shares of
common stock being sold pursuant to such agreement if any of the shares of
common stock being sold pursuant to such agreement are purchased. In the event
of a default by an Underwriter, the Purchase Agreement provides that, in certain
circumstances, the purchase commitments of nondefaulting Underwriters may be
increased or the Purchase Agreement may be terminated.

The Underwriters have advised the Company and the Selling Stockholders that
the Underwriters propose initially to offer the shares of common stock to the
public at the public offering price set forth on the cover page of this
prospectus, and to certain dealers at such price less a concession not in excess
of $ per share of common stock. The Underwriters may allow, and such dealers
may reallow, a discount not in excess of $ per share of common stock on
sales to certain other dealers. After the public offering, the public offering
price, concession and discount may be changed.

One of the Selling Stockholders has granted an option to the Underwriters,
exercisable for 30 days after the date of this prospectus, to purchase up to an
aggregate of 232,500 additional shares of common stock at the public offering
price set forth on the cover page of this prospectus, less the underwriting
discount. The Underwriters may exercise this option solely to cover
over-allotments, if any, made on the sale of the common stock offered hereby. To
the extent that the Underwriters exercise this option, each Underwriter will be
obligated, subject to certain conditions, to purchase a number of additional
shares of common stock proportionate to such Underwriter's initial amount
reflected in the foregoing table.

43
<PAGE> 46

The following table shows the per share and total public offering price,
underwriting discount to be paid by the Selling Stockholders to the Underwriters
and the proceeds to the Selling Stockholders. This information is presented
assuming either no exercise or full exercise by the Underwriters of their
over-allotment option.

<TABLE>
<CAPTION>
WITHOUT WITH
PER SHARE OPTION OPTION
--------- ------- ------
<S> <C> <C> <C>
Public Offering Price...................... $ $ $
Underwriting Discount...................... $ $ $
Proceeds to the Selling Stockholders....... $ $ $
</TABLE>

The expenses of this offering (exclusive of the underwriting discount) are
estimated at $350,000 and are payable by the Company.

The shares of common stock are being offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part.

The Company, the Company's executive officers and directors, all of the
Selling Stockholders and certain other existing stockholders have agreed,
subject to certain exceptions, not to directly or indirectly (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of
or otherwise dispose of or transfer any shares of common stock or securities
convertible into or exchangeable or exercisable for or repayable with common
stock, whether now owned or thereafter acquired by the person executing the
agreement or with respect to which the person executing the agreement thereafter
acquires the power of disposition, or file a registration statement under the
Securities Act with respect to the foregoing or (ii) enter into any swap or
other agreement that transfers, in whole or in part, the economic consequence of
ownership of the common stock whether any such swap or transaction is to be
settled by delivery of common stock or other securities, in cash or otherwise,
without the prior written consent of Merrill Lynch on behalf of the Underwriters
for a period of 90 days after the date of this prospectus.

The common stock is listed on the New York Stock Exchange under the symbol
"PLT."

Because more than ten percent of the net proceeds of the offering will be
paid to Citigroup Foundation, an affiliate of Salomon Smith Barney Inc. (a
member of the National Association of Securities Dealers, Inc. ("NASD")
participating in this offering), this offering will be conducted in accordance
with NASD Conduct Rule 2710(c)(8).

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including certain liabilities under
the Securities Act, or to contribute to payments the Underwriters may be
required to make in respect thereof.

Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the Underwriters and
certain selling group members to bid for and purchase the common stock. As an
exception to these rules, the Underwriters are permitted to engage in certain
transactions that stabilize the price of the common stock. Such transactions
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the common stock.

44
<PAGE> 47

If the Underwriters create a short position in the common stock in
connection with the offering, i.e., if they sell more shares of common stock
than are set forth on the cover page of this prospectus, the Underwriters may
reduce that short position by purchasing common stock in the open market. The
Underwriters may also elect to reduce any short position by exercising all or
part of the over-allotment option described above.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases.

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
the Company nor any of the Underwriters makes any representation that the
Underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

INFORMATION INCORPORATED BY REFERENCE

This prospectus incorporates by reference the following documents and
information, all of which Plantronics has filed in the past with the SEC:

- Plantronics' Annual Report on Form 10-K for the fiscal year ended March
28, 1998.

- Plantronics' Quarterly Report on Form 10-Q for the quarterly period ended
June 27, 1998.

- Plantronics' Quarterly Report on Form 10-Q for the quarterly period ended
September 26, 1998.

- Plantronics' Current Report on Form 8-K dated January 12, 1999.

- Item 1 of Plantronics' Registration Statement on Form 8-A, filed on
December 20, 1993, as amended on January 14, 1994 and November 7, 1997
(which in turn incorporate by reference the description of Plantronics'
common stock set forth in Plantronics' Registration Statement on Form S-1
(Reg. No. 33-70744), filed on October 20, 1993, as amended by Amendment
No. 1, filed on November 30, 1993, Amendment No. 2, filed on December 27,
1993, and Amendment No. 3, filed on January 18, 1994).

All documents, if any, which Plantronics files under Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this prospectus but
prior to the termination of the offering shall be deemed to be incorporated by
reference in this prospectus and to be part of this prospectus from the date of
filing of such documents.

Plantronics will provide without charge to each person to whom a copy of
this prospectus is delivered, upon written or oral request, a copy of the
information that has been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Direct any request for such
copies to John A. Knutson, Vice President -- Legal, Senior General Counsel and
Secretary, Plantronics, Inc., 345 Encinal Street, Santa Cruz, California 95060,
Tel: (831) 426-5858.

45
<PAGE> 48

HOW TO GET INFORMATION ABOUT PLANTRONICS

Plantronics is subject to the informational requirements of the Exchange
Act and therefore files reports, proxy and information statements and other
information with the SEC. You can inspect many of such reports, proxy and
information statements and other information on the SEC's internet website at
http://www.sec.gov.

You can also inspect and copy such reports, proxy and information
statements and other information at the SEC's Public Reference Room, 450 Fifth
Street, N.W., Washington, D.C. 20549. You can obtain information on the
operation of the Public Reference Room by calling the SEC at tel:
1-800-SEC-0330. You can also inspect and copy such reports, proxy and
information statements and other information may also be inspected and copied at
the following Regional Offices of the SEC: New York Regional Office, Seven World
Trade Center, Suite 1300, New York, New York 10048; and Chicago Regional Office,
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Plantronics' common stock is listed on the NYSE, and you can inspect such
reports, proxy and information statements and other information at the offices
of the NYSE, 20 Broad Street, New York, New York 10005.

This prospectus constitutes part of a registration statement on Form S-3
filed by Plantronics with the SEC under the Securities Act. This prospectus does
not contain all of the information set forth in the registration statement. For
further information with respect to Plantronics and the shares, you should refer
to the registration statement either at the SEC's website or at the addresses
set forth in the preceding paragraph. Statements in this prospectus concerning
any document filed as an exhibit to this prospectus are not necessarily
complete, and, in each instance, you should refer to the copy of such document
which has been filed as an exhibit to the registration statement. Each such
statement is qualified in its entirety by such reference.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for Plantronics and the selling stockholders by Wilson Sonsini Goodrich &
Rosati, Professional Corporation, Palo Alto, California. Certain legal matters
relating to this offering will be passed upon for the underwriters by Morrison &
Foerster LLP, Palo Alto, California.

EXPERTS

The consolidated balance sheets as of March 31, 1997 and 1998 and the
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended March 31, 1998, included in the
prospectus have been included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

46
<PAGE> 49

PLANTRONICS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................... F-2
Consolidated Balance Sheets................................. F-3
Consolidated Statements of Operations....................... F-4
Consolidated Statements of Stockholders' Equity (Deficit)... F-5
Consolidated Statements of Cash Flows....................... F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>

F-1
<PAGE> 50

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 statements of operations, of cash flows and of stockholders' equity
present fairly, in all material respects, the financial position of Plantronics,
Inc. and its subsidiaries at March 31, 1997 and 1998 and the results of their
operations and their cash flows for each of the three years in the period ended
March 31, 1998, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards 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 the opinion expressed
above.

/s/ PricewaterhouseCoopers LLP

San Jose, California
April 17, 1998

F-2
<PAGE> 51

PLANTRONICS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
MARCH 31,
-------------------- SEPTEMBER 30,
1997 1998 1998
-------- -------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................ $ 42,262 $ 64,901 $ 95,100
Accounts receivable, net................. 36,981 41,550 45,063
Inventory................................ 20,042 29,741 21,931
Deferred income taxes.................... 2,840 2,130 2,130
Other current assets..................... 909 1,774 1,488
-------- -------- --------
Total current assets............. 103,034 140,096 165,712
Property, plant and equipment, net......... 18,970 21,255 20,531
Other assets............................... 5,237 4,124 3,354
-------- -------- --------
Total assets..................... $127,241 $165,475 $189,597
======== ======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable......................... $ 9,578 $ 8,327 $ 5,171
Accrued liabilities...................... 20,441 26,629 28,351
Income taxes payable..................... 9,674 6,381 9,196
-------- -------- --------
Total current liabilities........ 39,693 41,337 42,718
Deferred tax liabilities................... 1,616 5,652 5,652
Long-term debt............................. 65,050 65,050 65,050
-------- -------- --------
Total liabilities................ 106,359 112,039 113,420
-------- -------- --------
Commitments and contingencies (note 8)
Stockholders' equity:
Common stock, $0.01 par value per share;
40,000 shares authorized, 16,366,
16,449 and 16,551 (unaudited) shares
issued and outstanding................ 171 174 177
Additional paid-in capital............... 58,217 63,816 70,684
Cumulative translation adjustment........ (891) (891) (891)
Retained earnings (deficit).............. (23,834) 15,355 41,439
-------- -------- --------
33,663 78,454 111,409
Less: Treasury stock (common: 696, 963
and 1,121 (unaudited) shares) at
cost.................................. (12,781) (25,018) (35,232)
-------- -------- --------
Total stockholders' equity....... 20,882 53,436 76,177
-------- -------- --------
Total liabilities and
stockholders' equity.......... $127,241 $165,475 $189,597
======== ======== ========
</TABLE>

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

F-3
<PAGE> 52

PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except earnings per share)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED MARCH 31, SEPTEMBER 30,
------------------------------ -------------------
1996 1997 1998 1997 1998
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales...................... $182,959 $195,307 $236,112 $110,562 $141,210
Cost of sales.................. 86,887 90,567 108,514 50,959 64,089
-------- -------- -------- -------- --------
Gross profit................. 96,072 104,740 127,598 59,603 77,121
-------- -------- -------- -------- --------
Operating expenses:
Research, development and
engineering............... 13,718 14,503 17,543 8,384 9,005
Selling, general and
administrative............ 34,845 39,898 47,682 22,842 27,862
-------- -------- -------- -------- --------
Total operating
expenses.......... 48,563 54,401 65,225 31,226 36,867
-------- -------- -------- -------- --------
Operating income............... 47,509 50,339 62,373 28,377 40,254
Interest expense, including
amortization of debt issuance
costs........................ 7,140 7,104 6,984 3,493 3,588
Interest and other income,
net.......................... (1,385) (1,722) (2,243) (1,102) (1,693)
-------- -------- -------- -------- --------
Income before income taxes..... 41,754 44,957 57,632 25,986 38,359
Income tax expense............. 16,284 15,286 18,443 8,315 12,275
-------- -------- -------- -------- --------
Net income..................... $ 25,470 $ 29,671 $ 39,189 $ 17,671 $ 26,084
======== ======== ======== ======== ========
Basic earnings per common
share........................ $ 1.53 $ 1.75 $ 2.38 $ 1.07 $ 1.58
======== ======== ======== ======== ========
Shares used in basic per share
calculations................. 16,593 17,003 16,481 16,450 16,494
======== ======== ======== ======== ========
Diluted earnings per common
share........................ $ 1.42 $ 1.67 $ 2.15 $ 0.98 $ 1.43
======== ======== ======== ======== ========
Shares used in diluted per
share calculations........... 17,964 17,792 18,223 18,086 18,291
======== ======== ======== ======== ========
</TABLE>

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

F-4
<PAGE> 53

PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK ADDITIONAL CUMULATIVE ACCUMULATED STOCKHOLDERS'
------------------- PAID-IN TRANSLATION EQUITY TREASURY EQUITY
SHARES AMOUNT CAPITAL ADJUSTMENT (DEFICIT) STOCK (DEFICIT)
---------- ------ ---------- ----------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT MARCH 31, 1995...... 16,418,642 $165 $54,652 $(558) $(78,975) $ -- $(24,716)
Stock option compensation
amortization................. -- -- 231 -- -- -- 231
Exercise of stock options...... 359,270 4 759 -- -- -- 763
Foreign currency translation
adjustment................... -- -- -- (333) -- -- (333)
Net income..................... -- -- -- -- 25,470 -- 25,470
---------- ---- ------- ----- -------- -------- --------
BALANCE AT MARCH 31, 1996...... 16,777,912 169 55,642 (891) (53,505) -- 1,415
Stock option compensation
amortization................. -- -- 146 -- -- -- 146
Exercise of stock options...... 284,442 2 1,832 -- -- -- 1,834
Income tax benefit associated
with stock options........... -- -- 597 -- -- -- 597
Purchase of treasury stock..... (701,226) -- -- -- -- (12,873) (12,873)
Sale of treasury stock......... 5,084 -- -- -- -- 92 92
Net income..................... -- -- -- -- 29,671 -- 29,671
---------- ---- ------- ----- -------- -------- --------
BALANCE AT MARCH 31, 1997...... 16,366,212 171 58,217 (891) (23,834) (12,781) 20,882
Stock option compensation
amortization................. -- -- (225) -- -- -- (225)
Exercise of stock options...... 348,958 3 1,220 -- -- -- 1,223
Income tax benefit associated
with stock options........... -- -- 4,279 -- -- -- 4,279
Purchase of treasury stock..... (317,600) -- -- -- -- (13,162) (13,162)
Sale of treasury stock......... 51,072 325 -- -- 925 1,250
Net income..................... -- -- -- -- 39,189 -- 39,189
---------- ---- ------- ----- -------- -------- --------
BALANCE AT MARCH 31, 1998...... 16,448,642 174 63,816 (891) 15,355 (25,018) 53,436
Exercise of stock options
(unaudited).................. 260,411 3 1,524 -- -- -- 1,527
Income tax benefit associated
with stock options (unaudited)... -- -- 4,929 -- -- -- 4,929
Purchase of treasury stock
(unaudited).................. (178,000) -- -- -- -- (10,568) (10,568)
Sale of treasury stock
(unaudited).................. 19,510 -- 415 -- -- 354 769
Net income (unaudited)......... -- -- -- -- 26,084 -- 26,084
---------- ---- ------- ----- -------- -------- --------
BALANCE AT SEPTEMBER 30, 1998
(unaudited).................. 16,550,563 $177 $70,684 $(891) $ 41,439 $(35,232) $ 76,177
========== ==== ======= ===== ======== ======== ========
</TABLE>

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

F-5
<PAGE> 54

PLANTRONICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED MARCH 31, SEPTEMBER 30,
----------------------------- ------------------
1996 1997 1998 1997 1998
------- -------- -------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from operations.................. $25,470 $ 29,671 $ 39,189 $17,671 $ 26,084
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization of
property and equipment............. 2,367 2,935 3,632 1,772 2,272
Deferred income taxes................ (745) 2,789 4,746 -- --
Other non-cash charges, net.......... 758 649 (225) -- --
Changes in assets and liabilities:
Accounts receivable.................. (8,310) 1,624 (5,024) (3,633) (4,164)
Provision for doubtful accounts...... 575 (50) 455 110 651
Inventory............................ (1,150) (2,035) (9,699) (3,465) 7,810
Other current assets................. (426) 318 (865) 301 286
Other assets......................... 471 (459) 1,113 499 770
Accounts payable..................... 2,206 1,194 (1,251) 1,300 (3,156)
Accrued liabilities.................. 2,271 (251) 6,188 1,705 1,722
Income taxes payable................. 3,413 (1,769) 986 565 7,744
------- -------- -------- ------- --------
Cash provided by operating activities..... 26,900 34,616 39,245 16,825 40,019
------- -------- -------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................... (3,903) (8,195) (5,917) (3,946) (1,548)
------- -------- -------- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock.............. -- (12,880) (13,162) (116) (10,568)
Proceeds from sale of treasury stock.... -- 99 1,250 567 769
Proceeds from exercise of stock
options.............................. 763 1,835 1,223 625 1,527
------- -------- -------- ------- --------
Cash provided by (used for) financing
activities.............................. 763 (10,946) (10,689) 1,076 (8,272)
------- -------- -------- ------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH... (333) -- -- -- --
------- -------- -------- ------- --------
Net increase in cash and cash
equivalents............................. 23,427 15,475 22,639 13,955 30,199
Cash and cash equivalents at beginning of
period.................................. 3,360 26,787 42,262 42,262 64,901
------- -------- -------- ------- --------
Cash and cash equivalents at end of
period.................................. $26,787 $ 42,262 $ 64,901 $56,217 $ 95,100
======= ======== ======== ======= ========
Supplemental disclosures:
Cash paid for:
Interest................................ $ 6,608 $ 6,577 $ 6,550 $ 3,267 $ 3,262
Income taxes............................ $13,557 $ 14,192 $ 12,439 $ 8,850 $ 5,764
Noncash operating and financing
activities:
Income tax benefit associated with stock
options.............................. $ -- $ 597 $ 4,279 $ -- $ 4,929
</TABLE>

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

F-6
<PAGE> 55

PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY

Plantronics, Inc. (the "Company"), introduced the first lightweight
communications headset in 1962. Since that time, the Company has established
itself as a world-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 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 in consolidation.

Fiscal Year

The Company's fiscal year end is the Saturday closest to March 31. For
purposes of presentation, the Company has indicated its accounting year ending
on March 31 or the month-end for interim quarterly periods. Results of
operations for fiscal years 1996, 1997 and 1998 each included 52 weeks.

Cash, Cash Equivalents and Short-Term Investments

The Company considers all highly liquid investments with a maturity of 90
days or less at the date of purchase to be cash equivalents. Pursuant to the
provisions of Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities," management determines
the appropriate classification of debt and equity securities at the time of
purchase, and reassesses the classification at each reporting date. At March 31,
1998, all of the Company's short-term investments, consisting primarily of fixed
maturity debt securities, have been classified as "held to maturity." Under this
classification, the investments are recorded at amortized cost. The Company's
cash and cash equivalents consist of the following:

<TABLE>
<CAPTION>
MARCH 31,
------------------
1997 1998
------- -------
(IN THOUSANDS)
<S> <C> <C>
Cash....................................................... $ 5,106 $ 9,662
Cash equivalents........................................... 37,156 55,239
------- -------
Cash and cash equivalents............................. $42,262 $64,901
======= =======
</TABLE>

F-7
<PAGE> 56
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Inventory

Inventory is stated at the lower of cost, determined on the first-in,
first-out method, or market.

Depreciation and Amortization

Depreciation and amortization of property, plant and equipment are
principally calculated using the straight-line method over the estimated useful
lives of the respective assets.

Deferred Debt Issuance Costs

Debt issuance costs are assigned to the various debt instruments and
amortized over the shorter of the terms of the respective debt agreements or an
estimated period the debt will be outstanding.

Revenue Recognition

Revenue is recognized when products are shipped. Provision is made for
estimated potential customer returns and warranty costs at the time of shipment.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash equivalents and trade
receivables. The Company's cash investment policies limit investments to those
that are short-term and low risk. Concentrations of credit risk with respect to
trade receivables are generally limited due to the large number of customers
comprising the Company's customer base and their dispersion across many
different geographic areas. The Company performs ongoing credit evaluations of
the financial condition of its customers and, generally, requires no collateral
from its customers. The Company maintains an allowance for uncollectible
accounts receivable based upon expected collectibility of all accounts
receivable.

Fair Value of Financial Instruments

The carrying values of the Company's financial instruments, including cash,
cash equivalents, accounts receivable, accrued expenses and liabilities,
approximate fair value due to their short maturities. The fair value of
long-term debt, including the current portion, was estimated by management based
on current rates offered on the open market for debt of the same remaining
maturities. The fair value of the long-term debt was not materially different
from the carrying value of $65.1 million at March 31, 1998.

Income Taxes

The Company accounts 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. Tax credits are
accounted for as a reduction of tax expense in the year in which the credits
reduce taxes payable.

F-8
<PAGE> 57
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Foreign Operations and Currency Translation

The Company has foreign assembly and manufacturing operations in Mexico,
light assembly, research and development and sales and marketing in the United
Kingdom, an international finance, customer service and logistics headquarters
in the Netherlands, and sales offices in Canada, Asia, Europe, Australia and
South America. For fiscal 1997 and 1998, the functional currency of all foreign
operations was the US dollar. For fiscal 1996, the functional currency of all
foreign operations was the US dollar, with the exception of the operation
located in the United Kingdom. Accordingly, gains or losses arising from the
translation of foreign currency statements and transactions, except for the
operation in the United Kingdom in fiscal 1996, are included in determining
consolidated results of operations. Aggregate exchange gains (losses) for fiscal
1996, 1997 and 1998 were $0.3 million, $0.4 million and ($0.2) million,
respectively. Gains or losses arising from the translation of the United Kingdom
statements prior to fiscal 1997 were recorded as a separate component of
stockholders' equity.

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. The Company has 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 the
Company recorded compensation expense as provided in SFAS 123 (see Note 10).

Earnings per Share

Effective December 27, 1997 the Company adopted Statement of Financial
Accounting Standards No. 128 "Earnings per Share," ("SFAS 128"). The new
standard requires presentation of both basic EPS and diluted EPS on the face of
the income statement. Basic EPS, which replaces primary EPS, is computed by
dividing net income available to common stockholders (numerator) by the weighted
average number of shares of common stock outstanding (denominator) during the
period. Unlike the computation of primary EPS, basic EPS excludes the dilutive
effect of stock options. Diluted EPS replaces fully diluted EPS and gives effect
to all dilutive potential common stock outstanding during a period.

F-9
<PAGE> 58
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following is a reconciliation of the numerators and denominators of the
basic and diluted EPS computations for the periods presented below:

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED MARCH 31, SEPTEMBER 30,
--------------------------- -----------------
1996 1997 1998 1997 1998
------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT (UNAUDITED)
PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Numerator for earnings per common
share -- net income............... $25,470 $29,671 $39,189 $17,671 $26,084
------- ------- ------- ------- -------
Denominator for basic earnings per
common share...................... 16,593 17,003 16,481 16,450 16,494
------- ------- ------- ------- -------
Effect of dilutive securities....... 1,371 789 1,742 1,636 1,797
------- ------- ------- ------- -------
Denominator for diluted earnings per
common share...................... 17,964 17,792 18,223 18,086 18,291
------- ------- ------- ------- -------
Net income per common share:
Basic............................... $ 1.53 $ 1.75 $ 2.38 $ 1.07 $ 1.58
======= ======= ======= ======= =======
Diluted............................. $ 1.42 $ 1.67 $ 2.15 $ 0.98 $ 1.43
======= ======= ======= ======= =======
</TABLE>

COMPREHENSIVE INCOME

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
130"). This statement is effective for the Company's fiscal year ending March
31, 1999. The statement establishes presentation and disclosure requirements for
reporting comprehensive income. Comprehensive income includes charges or credits
to equity that are not the result of transactions with owners. Other than net
income, the only element of comprehensive income for all periods presented was
in fiscal 1996 and consisted of a foreign currency translation adjustment of
$0.3 million. Total comprehensive income for fiscal 1996 was $25.8 million.
Total comprehensive income was the same as net income for all other periods
presented.

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures About Segments of an
Enterprise and Related Information" ("SFAS 131"). The statement requires the
Company to report certain information about operating segments in its annual
financial statements. It also establishes standards for related disclosures
about products and services, geographic areas and major customers. The Company
will adopt SFAS 131 beginning in fiscal 1999 and does not expect such adoption
to have a material effect on the consolidated financial statement disclosures.

F-10
<PAGE> 59
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Interim Financial Information

The accompanying consolidated balance sheet as of September 30, 1998 and
the consolidated statements of operations and of cash flows for the six months
ended September 30, 1997 and September 30, 1998 are unaudited. In the opinion of
management, such unaudited financial statements have been prepared on the same
basis as the audited financial statements referred to above and include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the Company's results of operations for the interim
periods. The data disclosed in the notes to the consolidated financial
statements as of such dates and for such periods are unaudited.

3. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS:

<TABLE>
<CAPTION>
MARCH 31,
-------------------- SEPTEMBER 30,
1997 1998 1998
-------- -------- -------------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C>
ASSETS
ACCOUNTS RECEIVABLE:
Accounts receivable from customers....... $ 38,278 $ 43,302 $ 47,466
Allowance for doubtful accounts.......... (1,297) (1,752) (2,403)
-------- -------- --------
$ 36,981 $ 41,550 $ 45,063
======== ======== ========
INVENTORY:
Finished goods........................... $ 11,056 $ 13,224 $ 12,010
Work in process.......................... 1,647 4,431 2,152
Purchased parts.......................... 7,339 12,086 7,769
-------- -------- --------
$ 20,042 $ 29,741 $ 21,931
======== ======== ========
PROPERTY, PLANT AND EQUIPMENT:
Land..................................... $ 4,693 $ 4,693 $ 4,693
Buildings and improvements (useful life
10-30 years).......................... 9,104 9,486 9,901
Machinery and equipment (useful life 2-8
years)................................ 25,949 31,484 32,617
-------- -------- --------
39,746 45,663 47,211
Less accumulated depreciation............ (20,776) (24,408) (26,680)
-------- -------- --------
$ 18,970 $ 21,255 $ 20,531
======== ======== ========
ACCRUALS:
Interest................................. $ 1,394 $ 1,386 $ 1,382
Employee benefits and other.............. 19,047 25,243 26,969
-------- -------- --------
$ 20,441 $ 26,629 $ 28,351
======== ======== ========
</TABLE>

F-11
<PAGE> 60
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. DEBT

Long-term debt, consisting of Senior Notes, was $65.1 million at the end of
fiscal 1996, 1997 and 1998. These Senior Notes are general unsecured obligations
of the Company that bear interest, payable semiannually, at a rate of 10% per
annum and will mature on January 15, 2001. The Senior Notes are redeemable, at
the Company's option, in whole or in part, at any time on or after January 15,
1999. Redemption prior to January 15, 2001 will be at a premium.

The Senior Note Indenture contains certain covenants that, among other
things, limit the ability of the Company and its subsidiaries to incur
indebtedness, pay dividends, issue preferred stock of subsidiaries, engage in
transactions with affiliates, create liens, engage in mergers and
consolidations, or make certain asset sales and investments. The Senior Note
Indenture also provides that holders of the Senior Notes have the right to
require that the Company repurchase their Senior Notes in the event of a "change
in control" and contain various customary events of default.

The Company has a one-year $20.0 million revolving unsecured credit
facility with Bank of America. The facility expires on February 17, 1999. The
facility includes a $10.0 million letter of credit subfacility. Combined
borrowings and commitments under both facilities cannot exceed $20.0 million.
Principal outstanding bears interest at the Company's choice of the Bank of
America base rate, the offshore rate or a CD rate plus a margin ranging from
0.000% to 1.375%, depending on the rate choice and performance level ratios.
There were no borrowings outstanding under the revolving credit facility at
March 31, 1998, however, at that date $2.3 million, associated with inventory
purchases and other matters, was committed under the letter of credit
subfacility. The revolving credit facility includes covenants relating to, among
other things, the maintenance of a maximum net funded debt ratio, a minimum
tangible net worth ratio and a maximum interest coverage ratio. The Company was
in compliance with the terms of the covenants as of March 31, 1998.

The revolving credit facility also expressly restricts the ability of the
Company to incur additional indebtedness (including contingent liabilities and
guarantees), grant additional liens, dispose of and acquire assets, incur lease
obligations, and make investments, including loans, joint ventures, and
acquisitions of other businesses. The Company is permitted to pay cash dividends
on shares of its capital stock in an amount not to exceed 50% of the Company's
cumulative net income (net of cumulative losses) for the period commencing
February 19, 1997 through the date of declaration.

5. COMMON AND TREASURY STOCK

Effect of Increase in Stock and Stock Split

In July 1997, the Company's stockholders approved an increase in the
authorized shares of Common Stock of Plantronics, Inc. to 40,000,000. On
September 2, 1997, the Company effected a two-for-one stock split in the form of
a stock dividend to stockholders of record as of August 18, 1997. All share, per
share, and capital in excess of par value amounts herein have been restated to
reflect the effect of this split.

During fiscal 1998 the Company purchased 317,600 shares of its Common Stock
in the open market at a total cost of $13.2 million and 51,072 shares were
reissued for $1.3 million.

F-12
<PAGE> 61
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES

Income tax expense for fiscal 1996, 1997 and 1998 consisted of the
following:

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
-----------------------------
1996 1997 1998
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Federal
Current........................................ $13,586 $ 8,744 $10,109
Deferred....................................... (827) 2,789 4,746
State............................................ 1,622 1,854 1,472
Foreign.......................................... 1,903 1,899 2,116
------- ------- -------
$16,284 $15,286 $18,443
======= ======= =======
</TABLE>

Pre-tax earnings of the foreign subsidiaries were $2.8 million, $8.2
million and $15.7 million for fiscal years 1996, 1997 and 1998, respectively.
Cumulative earnings of foreign subsidiaries which have been permanently
reinvested as of March 31, 1998 totaled $5.5 million.

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

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
-----------------------------
1996 1997 1998
------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
Tax expense at statutory rate.................... $14,614 $15,735 $20,171
Foreign operations taxed at different rates...... 910 (971) (4,364)
State taxes, net of federal benefit.............. 1,054 1,204 1,476
Other, net....................................... (294) (682) 1,160
------- ------- -------
$16,284 $15,286 $18,443
======= ======= =======
</TABLE>

F-13
<PAGE> 62
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Deferred tax liabilities (assets) 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 the Company's
deferred tax liabilities and assets are as follows:

<TABLE>
<CAPTION>
MARCH 31,
------------------
1997 1998
------- -------
(IN THOUSANDS)
<S> <C> <C>
Deferred gains on sales of properties...................... $ 2,740 $ 2,476
Deferred state tax......................................... -- 314
Unremitted earnings of certain subsidiaries................ -- 5,749
Other deferred tax liabilities............................. 333 1,111
------- -------
Gross deferred tax liabilities........................... 3,073 9,650
------- -------
Accruals and other reserves................................ (2,748) (5,670)
Deferred state tax deduction............................... (635) --
Other deferred tax assets.................................. (914) (458)
------- -------
Gross deferred tax assets................................ (4,297) (6,128)
------- -------
Total net deferred tax (assets) liabilities................ $(1,224) $ 3,522
======= =======
</TABLE>

7. EMPLOYEE BENEFIT PLANS

Subject to eligibility requirements, substantially all domestic employees
are covered by quarterly cash and annual deferred profit sharing plans. United
States employees also have the option of participating in a salary deferral plan
qualified under Section 401(k) of the Internal Revenue Code. The Quarterly
Profit Sharing Plan benefits are paid on the basis of profitability and the
relationship of each participating employee's base salary as a percent of all
participants' base salaries. The Annual Profit Sharing Plan benefits are based
on 10% of the Company's results of operations before interest and taxes,
adjusted for other items, minus quarterly profit sharing cash distributions and
administrative expenses, and are allocated to employees based on the
relationship of each participating employee's base salary as a percent of all
participants' base salaries. The Annual Profit Sharing Plan distributions
include a cash distribution and a tax deferred distribution made to individual
accounts of participants held in trust. The deferred portion is subject to a two
year vesting schedule based on an employee's date of hire. Total annual and
quarterly profit sharing contributions were $5.4 million, $5.5 million and $6.9
million for fiscal 1996, 1997 and 1998, respectively.

F-14
<PAGE> 63
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. COMMITMENTS AND CONTINGENCIES

Minimum Future Rental Payments

The Company leases certain equipment and facilities under operating leases
expiring in various years through and after 2003. Minimum future rental payments
for the next five years under non-cancelable operating leases having remaining
terms in excess of 1 year as of March 31, 1998:

<TABLE>
<CAPTION>
AMOUNT
--------------
(IN THOUSANDS)
<S> <C>
1999............................................. $1,253
2000............................................. 1,118
2001............................................. 864
2002............................................. 420
2003............................................. 412
------
Total minimum future rental payments............. $4,067
======
</TABLE>

Rent expense for operating leases was approximately $1.1 million in fiscal
1996, $1.1 million in fiscal 1997 and $1.3 million in fiscal 1998.

Existence of Renewal Options

Certain operating leases provide for renewal options for periods from 1 to
3 years. In the normal course of business, operating leases are generally
renewed or replaced by other leases.

Claims and Litigation

In the opinion of management, litigation, contingent liabilities and claims
against the Company arising in the ordinary course of business are not expected
to involve any judgments or settlements which would be material to the Company's
consolidated financial condition or results of operations.

9. INDUSTRY SEGMENT AND FOREIGN OPERATIONS DATA

Business Segment

The Company operates in one industry segment and is engaged in developing,
manufacturing, marketing and servicing telecommunications equipment. No one
customer accounted for 10% or more of total revenue from consolidated sales for
fiscal year 1996, 1997 or 1998.

Geographic Segments

In geographical reporting, revenues are attributed to the geographical
location of the sales and service organizations, and costs directly and
indirectly incurred in generating revenues are similarly assigned.

F-15
<PAGE> 64
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
--------------------------------
1996 1997 1998
-------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
NET REVENUES FROM UNAFFILIATED CUSTOMERS:
United States............................... $133,957 $135,664 $163,684
International............................... 49,002 59,643 72,428
-------- -------- --------
$182,959 $195,307 $236,112
======== ======== ========
OPERATING INCOME:
United States............................... $ 35,365 $ 37,036 $ 44,916
International............................... 12,144 13,303 17,457
-------- -------- --------
$ 47,509 $ 50,339 $ 62,373
======== ======== ========
IDENTIFIABLE ASSETS:
United States............................... $ 91,400 $ 97,138 $121,627
International............................... 17,261 30,103 43,848
-------- -------- --------
$108,661 $127,241 $165,475
======== ======== ========
Intercompany transfers........................ $ 18,057 $ 49,575 $ 69,261
</TABLE>

Intercompany Transfers

The geographical reporting classification reflects the international
restructuring completed in fiscal 1997. The establishment of Plantronics B.V.
changed the ownership of inventory and the methodology of intercompany
transfers. In fiscal 1996 intercompany transfers were from the US to Europe.
Starting in the last quarter of fiscal 1996 intercompany transfers are from
Plantronics B.V. to the US and Japan. Intercompany transfers are at arm's length
prices sufficient to recover a reasonable profit.

10. STOCK OPTION PLANS AND STOCK PURCHASE PLANS

Stock Option Plan

In September 1993, the Board of Directors approved the PI Parent
Corporation 1993 Stock Plan (the "1993 Stock Plan"). Under the 1993 Stock Plan,
4,159,242 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 for issuance to employees and
consultants of the Company, as approved from time to time by the Compensation
Committee of the Board of Directors. The reserved shares include 980,000 shares
which were authorized by the Board of Directors and approved by the stockholders
for issuance in 1997. The 1993 Stock Plan, which has a term of ten years,
provides for incentive as well as nonqualified stock options to purchase shares
of Common Stock. The Board of Directors may terminate the 1993 Stock Plan at any
time at its discretion.

Incentive stock options may not be granted at less than 100 percent of the
estimated fair market value, as determined by the Board of Directors, of the
Company's Common Stock at the date of grant and the option term may not exceed
10 years. For holders of 10 percent or more of the total combined voting power
of all classes of the Company's stock, incentive stock options may not be
granted at less than 110 percent of the estimated

F-16
<PAGE> 65
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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. Options generally vest over 4 years.

In September 1993 the Compensation Committee of the Board of Directors
approved nonqualified options to certain executive officers to purchase 255,792
shares of Common Stock at an exercise price of $2.74 per share that were granted
upon the completion of the Company's initial public offering. Compensation
related to these options of $0.9 million based on the $6.25 per share offering
price was charged to expense over a four-year vesting period commencing January
1994 as the options were granted for future services. Options to purchase an
additional 289,252 shares were granted during fiscal 1994 to certain executive
officers at exercise prices ranging from $2.74 to $7.63 per share. Compensation
related to these options of $0.8 million was charged to expense over a four-year
vesting period. As of March 31, 1998, the total compensation expense was
amortized.

Directors' Stock Option Plan

In September 1993, the Board of Directors adopted a Directors' Stock Option
Plan (the "Directors' Option Plan") and reserved 40,000 shares of Common Stock
for issuance to non-employee directors of the Company. An additional 20,000
shares were authorized for issuance in 1997 under the Directors' Option Plan,
pursuant to Board of Directors' and stockholder approval. The Directors' Option
Plan provides that each non-employee director shall be granted an option to
purchase 4,000 shares of Common Stock on the later of the effective date of the
Company's initial public offering or the date on which the person becomes a
director. Thereafter, each non-employee director shall be granted an option to
purchase 1,000 shares of Common Stock each year. At the end of fiscal 1998,
options for 45,000 shares of Common Stock were outstanding under the Directors'
Option Plan. All options were granted at fair market value and accordingly, had
no compensatory impact. Options vest generally over a four-year period.

F-17
<PAGE> 66
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
SHARES --------------------------
AVAILABLE WEIGHTED
FOR GRANT SHARES AVERAGE PRICE
--------- --------- -------------
<S> <C> <C> <C>
BALANCE AT MARCH 31, 1995................. 106,780 3,094,526 $ 3.45
Granted................................. (206,820) 206,820 $16.22
Exercised............................... -- (359,270) $ 2.13
Canceled................................ 158,794 (158,794) $ 4.35
--------- --------- ------
BALANCE AT MARCH 31, 1996................. 58,754 2,783,282 $ 4.52
Authorized.............................. 1,000,000
Granted................................. (631,588) 631,588 $19.80
Exercised............................... -- (284,442) $ 6.45
Canceled................................ 111,048 (111,048) $ 6.49
--------- --------- ------
BALANCE AT MARCH 31, 1997................. 538,214 3,019,380 $ 7.46
Granted................................. (654,500) 654,500 $27.37
Exercised............................... -- (348,958) $ 3.49
Canceled................................ 233,010 (233,010) $18.53
--------- --------- ------
BALANCE AT MARCH 31, 1998................. 116,724 3,091,912 $11.29
========= ========= ======
EXERCISABLE AT MARCH 31, 1998............. 1,884,602
=========
</TABLE>

Significant option groups outstanding at March 31, 1998 and related
weighted average prices and lives are as follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------ ----------------------
NUMBER WEIGHTED NUMBER
OUTSTANDING AVERAGE WEIGHTED EXERCISABLE WEIGHTED
AS OF REMAINING AVERAGE AS OF AVERAGE
MARCH 31, CONTRACTUAL EXERCISE MARCH 31, EXERCISE
RANGE OF EXERCISE PRICE 1998 LIFE PRICE 1998 PRICE
----------------------- ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$ 0.90 - $ 0.90......... 732,944 5.49 $ 0.90 732,944 $ 0.90
2.74 - 2.74......... 814,161 5.81 2.74 814,161 2.74
3.13 - 18.44......... 736,177 7.58 14.70 321,956 11.00
18.63 - 41.69......... 808,630 9.18 26.22 15,541 19.72
--------- ---- ------ --------- ------
$ 0.90 - $41.69......... 3,091,912 7.04 $11.29 1,884,602 $ 3.57
========= ==== ====== ========= ======
</TABLE>

Fair Value Disclosures

All options in fiscal 1996, 1997 and 1998 were granted at an exercise price
equal to the fair market value of the Company's Common Stock at the date of
grant. The weighted average fair value at date of grant for options granted
during 1996, 1997 and 1998 were $5.43, $6.34 and $9.79 per share, respectively.
The fair value of options at date of grant was estimated using the Black-Scholes
model with the following assumptions for 1996; divided yield of 0%, an expected
life of 5 years, expected volatility of 24% and risk free interest rates of
5.9%. For 1997 the assumptions were: dividend yield of 0%, an expected

F-18
<PAGE> 67
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

life of 5 years, expected volatility of 17% and risk free interest rates of
6.6%. For 1998 the assumptions were: dividend yield of 0%, an expected life of 5
years, expected volatility of 28% and risk free interest rates of 5.6%.

Had compensation expense for the Company's stock-based compensation plans
been determined based on the methods prescribed by SFAS No. 123, the Company's
net income and net income per share would have been as follows:

<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
------------------------------------------
1996 1997 1998
---------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
NET INCOME:
As reported........................ $25,470 $29,671 $39,189
Pro forma.......................... $25,390 $29,044 $37,381
NET INCOME PER SHARE:
As reported........................ $ 1.42 $ 1.67 $ 2.15
Pro forma.......................... $ 1.41 $ 1.63 $ 2.05
</TABLE>

Employee Stock Purchase Plan

On April 23, 1996 the Board of Directors of the Company 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, the purchase price of the
Common Stock will equal 95% of the market price of the Common Stock immediately
before the beginning of the applicable participation period. Each participation
period is 6 months long. Once purchased, the shares are restricted for 6 months.
During fiscal 1997, 581 shares were issued under the plan. The fair value of the
employee's purchase rights was estimated using the Black-Scholes model with the
following assumptions: dividend yield of 0%, an expected life of 6 months,
expected volatility of 17%, and risk free interest rates of 6.6%. The weighted-
average fair value of these purchase rights granted in fiscal 1997 was $2.27.
During fiscal 1998, 2,021 shares were issued under the plan. The fair value of
the employee's purchase rights was estimated using the Black-Scholes model with
the following assumptions: dividend yield of 0%, an expected life of 6 months,
expected volatility of 28%, and risk free interest rates of 5.6%. The
weighted-average fair value of these purchase rights granted in fiscal 1998 was
$4.85.

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 the
Company's Common Stock by senior executives. This is a voluntary plan in which
executives are encouraged to participate and achieve a target ownership over a 5
year period in annual increments of 20% 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, the
Company's Treasury Stock will be sold by the Company to executives under this
voluntary purchase program. The price will be equal to the greater

F-19
<PAGE> 68
PLANTRONICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 the Company's
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.

11. SUBSEQUENT EVENTS (UNAUDITED)

Redemption of Senior Notes

On December 1, 1998 the Company announced its intention to redeem its 10%
Senior Notes Due 2001, effective January 15, 1999. The aggregate amount of
Senior Notes outstanding at that date will be $65,050,000. The aggregate
redemption price, including a 2% early redemption premium and accrued interest,
will be $69,603,500, which will be paid out of available cash. This transaction
will be reported as an extraordinary item in the fourth quarter of the Company's
1999 fiscal year financial statements.

Stock Option Plan

On July 30, 1998 the Company's stockholders approved an increase of
1,300,000 shares of common stock issuable under the 1993 Stock Plan.

Unsecured Credit Facility

Effective November 30, 1998, the Company increased its revolving unsecured
credit facility with Bank of America from $20.0 million to $30.0 million. The
facility expires on November 29, 1999. The facility includes a $10.0 million
letter of credit subfacility. Combined borrowings and commitments under both
facilities cannot exceed $30.0 million. All other terms and conditions of the
facility remain unchanged.

F-20
<PAGE> 69
APPENDIX - DESCRIPTION OF GRAPHICS

INSIDE FRONT COVER

COMPANY LOGO
Caption: "OFFICE AND CALL CENTER"

Photograph: Four persons in office environment viewing computer screens and
wearing Plantronics headsets.
Subcaption: "PRODUCTIVITY: Headsets free up users' hands for computer work or
other tasks."

Photograph: One person in call center environment viewing computer screen and
wearing a Plantronics headset.
Subcaption: "COMFORT: Headsets allow users to maintain a natural posture while
working."

Caption: "HEADSETS PROVIDE HANDS-FREE COMMUNICATIONS."

Photograph: Person driving a car and wearing a Plantronics headset.
Subcaption: "CLEAN, SAFE COMMUNICATIONS: Headsets enhance driver safety and
offer office-quality sound."

Photograph: Person delivering a package and using a cell phone with a
Plantronics headset.
Subcaption: "OVER THE HEAD"

Photograph: Person working outside using cell phone with a Plantronics headset.
Subcaption: "OVER THE EAR"
Subcaption: "MULTITASK: With a headset, there's no need to stop for a phone call
while working at home or on the run."

CAPTION: "MOBILE AND HOME"

INSIDE BACK COVER

COMPANY LOGO

Photograph: Two persons viewing computer screens while wearing Plantronics
headsets.

Graphic: Picture of ENCORE(R) headset.
Caption: "Encore(R) features tone control and a powerful noise-canceling
design."

Graphic: Picture of TRISTAR(R) headset.
Caption: "Feather-light at less than one-half ounce, with an acoustic seal
engineered for optimum sound quality."

Graphic: Picture of DUOSET(TM) headset.
Caption: "Easily converts from over-the-head to over-the-ear to accommodate the
user's preference."

Graphic: Picture of MIRAGE(R) headset.
Caption: "Easy on and off, rests gently on the ear."

Graphic: Picture of SUPRA(R) headset.
Caption: "Our most popular design. Durable model with adjustable headband and
cushioned receiver."

Graphic: Picture of FREEHAND(R) headset.
Caption: "Ultralightweight model designed for fast, easy on and off."

Caption: "Plantronics(R) offers a full line of headsets to meet different user
preferences in the call center, office, mobile, and residential market
segments. Most models are available with many options and accessories,
including voice tube or noise-canceling microphones and single or dual
receivers."
<PAGE> 70

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

1,550,000 SHARES

[PLANTRONICS LOGO]

COMMON STOCK

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

P R O S P E C T U S
----------------------

MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
HAMBRECHT & QUIST
MCDONALD INVESTMENTS INC.

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 71

SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED JANUARY 13, 1999

P R O S P E C T U S

[PLANTRONICS LOGO]

UP TO 349,678 SHARES OF COMMON STOCK

WHICH PLANTRONICS MAY SELL UNDER THIS PROSPECTUS

Plantronics, Inc. may offer and sell up to 349,678 shares of Plantronics
common stock to you under this prospectus. Plantronics will only sell these
shares if, and to the extent, you exercise your options to purchase the shares
of Plantronics common stock.

If and when you exercise the options, in whole or in part, Plantronics will
issue shares to you at a per share price equal to the per share exercise price
under the option agreements which govern the options. Examine the option
agreements which cover the options you wish to exercise in order to determine
the applicable per share exercise price.

INVESTING IN THE COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 3 OF THIS PROSPECTUS.

<TABLE>
<CAPTION>
PER SHARE PRICE: TOTAL PRICE:
---------------- ------------
<S> <C> <C> <C>
252,165 of your options: $ 0.90 $226,948.50
97,513 of your options: $2.735 $266,698.06
-----------
Total: 349,678 of your options: $493,646.56
</TABLE>

Plantronics common stock is listed on the New York Stock Exchange under the
ticker symbol "PLT". On January 12, 1999, the last reported sale price on the
NYSE of one share of Plantronics common stock was $82 5/16.

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

The date of this prospectus is , 1999
<PAGE> 72

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Plantronics' Address........................................ 2
Forward-Looking Statements.................................. 2
Risk Factors................................................ 3
Information Incorporated by Reference....................... 12
How to Get Information About Plantronics.................... 12
Legal Matters............................................... 13
Experts..................................................... 13
</TABLE>

PLANTRONICS' ADDRESS

Plantronics' principal executive offices are located at 345 Encinal Street,
Santa Cruz, California 95060. Plantronics' telephone number at that location is
(831) 426-5858.

FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated herein by reference contain
forward-looking statements. Plantronics bases these statements on its current
expectations, estimates and projections about its industry. Either the beliefs
of management, or assumptions made by management, form the basis for those
expectations, estimates and projections. The safe harbor created by Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 generally protects Plantronics from liability for these statements. You can
often recognize such forward-looking statements by words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," variations of
such words, and similar expressions.

These forward-looking statements do not guarantee future performance and
are subject to risks, uncertainties and assumptions that are difficult to
predict. The Risk Factors section immediately following this paragraph sets
forth some of such risks and uncertainties. The documents incorporated by
reference may also set forth risks and uncertainties. These risks and
uncertainties could cause actual results to differ materially and adversely from
those discussed in the forward-looking statements. Plantronics undertakes no
obligation to publicly update any of these forward-looking statements to reflect
new information or future events.

2
<PAGE> 73

RISK FACTORS

DEPENDENCE ON CALL CENTER MARKET SEGMENT

FAILURE OF THE OFFICE, MOBILE, COMPUTER AND RESIDENTIAL MARKET SEGMENTS TO
DEVELOP

OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY

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

- changes in demand for our products;

- timing and size of orders from customers;

- cancellations or delays of deliveries of components and subassemblies by
our suppliers;

- variances in the timing and amount of engineering and operating expenses;

- distribution channel volume variations;

3
<PAGE> 74

- delays in shipments of our products;

- product returns and customer credits;

- new product introductions by us or our competitors;

- entrance of new competitors;

- increases in the costs of our components and subassemblies;

- price erosion;

- changes in the mix of products sold by us;

- seasonal fluctuations in demand; and

- general economic conditions.

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 MUST MATCH PRODUCTION TO DEMAND

- 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.

4
<PAGE> 75

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

WE DEPEND ON OUR SUPPLIERS

THE HEADSET MARKET IS HIGHLY COMPETITIVE

5
<PAGE> 76

NEW PRODUCT DEVELOPMENT IS RISKY; WE MUST RESPOND TO CHANGING CUSTOMER
REQUIREMENTS AND TECHNOLOGIES

6
<PAGE> 77

WE DEPEND ON OUR DISTRIBUTION CHANNELS

WE DEPEND ON S. KENNETH KANNAPPAN AND OTHER KEY PERSONNEL

CITICORP VENTURE CAPITAL RETAINS SIGNIFICANT CONTROL

7
<PAGE> 78

FUTURE SALES OF OUR COMMON STOCK BY CITICORP VENTURE CAPITAL, MR. AND MRS. CECIL
OR MANAGEMENT MAY DEPRESS OUR STOCK PRICE

RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS

- cultural difference 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

- burden of complying with a wide variety of foreign laws.

8
<PAGE> 79

foreign currency exposure. However, 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. In
addition, we cannot predict the potential consequences to our business of the
adoption of the Euro as a common currency in Europe.

WE DEPEND ON OUR PRINCIPAL MANUFACTURING FACILITY

FAILURE OF ELECTRONIC SYSTEMS TO RECOGNIZE THE YEAR 2000

Many existing electronic systems, including computer systems, use only the
last two digits to refer to a year. Therefore, these systems may recognize a
date using "00" as 1900 rather than the year 2000. If not corrected, many
computer and other electronic applications and systems could fail or create
erroneous results when addressing dates on and after January 1, 2000. Our
products do not address or utilize dates in their operation, and, accordingly,
our products should not fail due to the year 2000 problem. However, we use and
depend on information technology systems (including business information
computer systems and design and manufacturing computer systems) and other
machinery and equipment that includes embedded date sensitive technology. We
also depend on the proper functioning of date sensitive electronic systems of
third parties, such as customers and suppliers. The failure of any of these
systems to appropriately interpret the year 2000 could have a material adverse
effect on our business, financial condition and results of operations. We are
undertaking efforts to ensure that our business systems and those of our
suppliers and customers are compliant with the requirements of the year 2000.
However, our year 2000 program may not be effective or we may not be able to
implement it in a timely and cost-effective manner. Our year 2000 efforts may
not, therefore, ensure against disruptions caused by the approach or advent of
the year 2000. The year 2000 problem is potentially very widespread, and it is
not possible to determine all the potential risks that we may face. Our
inability to remedy our own year 2000 problems or the failure of third parties
to do so may cause business interruptions or shutdowns, financial loss,
regulatory actions, harm to our reputation and exposure to liability.

RISKS OF INADEQUATE PROTECTION OF INTELLECTUAL PROPERTY AND INFRINGEMENT OF
RIGHTS OF OTHERS

9
<PAGE> 80

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.

PRODUCT LIABILITY EXPOSURE

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 STOCK PRICE MAY BE VOLATILE

The market price for our common stock may 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 or our executive
officers or other key employees, quarterly variations in our or our competitors'
results of operations, changes in earnings estimates or recommendation 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. In addition, stock prices for many
companies 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, may materially adversely affect the market price
of our common stock.

ENVIRONMENTAL MATTERS

10
<PAGE> 81

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.

EFFECTS OF ANTITAKEOVER PROVISIONS

11
<PAGE> 82

INFORMATION INCORPORATED BY REFERENCE

This prospectus incorporates by reference the following documents and
information, all of which Plantronics has filed in the past with the SEC:

- Plantronics' Annual Report on Form 10-K for the fiscal year ended March
28, 1998.

- Plantronics' Quarterly Report on Form 10-Q for the quarterly period ended
June 27, 1998.

- Plantronics' Quarterly Report on Form 10-Q for the quarterly period ended
September 26, 1998.

- Plantronics' Current Report on Form 8-K dated January 12, 1999.

- Item 1 of Plantronics' Registration Statement on Form 8-A, filed on
December 20, 1993, as amended on January 14, 1994 and November 7, 1997
(which in turn incorporates by reference the description of Plantronics'
common stock set forth in Plantronics' Registration Statement on Form S-1
(Reg. No. 33-70744), filed on October 20, 1993, as amended by Amendment
No. 1, filed on November 30, 1993, Amendment No. 2, filed on December 27,
1993, and Amendment No. 3, filed on January 18, 1994).

All documents, if any, which Plantronics subsequently files under Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
prospectus but prior to the termination of the offering described in this
prospectus shall be deemed to be incorporated by reference in this prospectus
and to be part of this prospectus from the date of filing of such documents.

Plantronics will provide without charge to each person to whom a copy of
this prospectus is delivered, upon written or oral request, a copy of the
information that has been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Direct any request for such
copies to John A. Knutson, Vice President - Legal, Senior General Counsel and
Secretary, Plantronics, Inc., 345 Encinal Street, Santa Cruz, California 95060,
Tel: (831) 426-5858.

HOW TO GET INFORMATION ABOUT PLANTRONICS

12
<PAGE> 83

No one is authorized to give any information or to make any representations
not contained in this prospectus in connection with any offering made by this
prospectus. If given or made, you must not rely on such information or
representations as having been authorized by Plantronics or by any other person.
This prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any security other than the shares offered hereby. This prospectus
also does not constitute an offer to sell or a solicitation of an offer to buy
any of the shares offered hereby to any person in any jurisdiction in which it
is unlawful to make such an offer or solicitation. Neither delivery of this
prospectus, nor any sale or offer to sell shares hereunder, shall under any
circumstances create any implication that there has been no change in the
affairs of Plantronics since the date of this prospectus or that the information
contained in this prospectus is correct as of any time subsequent to the date of
this prospectus.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for Plantronics by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California.

EXPERTS

The financial statements incorporated in this prospectus by reference to
Plantronics' Annual Report on Form 10-K for the fiscal year ended March 28, 1998
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of such firm as experts in
auditing and accounting.

13
<PAGE> 84

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth costs and expenses, other than underwriting
discounts and commissions, payable by the Registrant in connection with the sale
of Common Stock being registered. All amounts are estimates except the
registration fee and the NASD filing fee.

<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
---------
<S> <C>
Registration Fee............................................ $ --
NASD Filing Fee............................................. 15,584
Printing.................................................... 75,000
Legal Fees and Expenses..................................... 175,000
Accounting Fees and Expenses................................ 75,000
Transfer Agent Fees......................................... 2,000
Miscellaneous............................................... 7,416
--------
Total............................................. $350,000
========
</TABLE>

ITEM 15. INDEMNIFICATION

Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers. This may under certain circumstances include indemnification for
liabilities arising under the Securities Act as well as for expenses incurred in
that regard. Article Nine of the Registrant's Certificate of Incorporation and
Article V of the Registrant's By-laws provide for indemnification of its
directors, officers, employees and other agents to the maximum extent permitted
by the Delaware General Corporation Law. The Registrant has also entered into
Indemnification Agreements with its officers and directors.

In addition, the Registrant is party to a Registration Agreement with
Citicorp Venture Capital, Ltd. and certain other stockholders, officers,
directors and key employees. The Registration Agreement grants certain holders
of the Registrant's common stock, including the selling stockholder, the right
to demand registration of their shares, and to participate in other
registrations which the Registrant may undertake. The Registrant filed this
prospectus with the SEC in order to fulfill its contractual obligations under
the Registration Agreement. Under the Registration Agreement, the Registrant has
agreed to indemnify the selling stockholders, and the selling stockholders have
agreed to indemnify the Registrant, against certain liabilities in connection
with this registration.

II-1
<PAGE> 85

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- --------
<C> <S>
1.1* Form of Purchase Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, as to Legality of Securities Being Registered.
10.1 Amended and Restated Registration Agreement dated December
29, 1989, as amended, between the Registrant and certain
stockholders of the Registrant (incorporated by reference to
Exhibit 10.1 to the Registrant's Registration Statement on
Form S-3, Reg. No. 333-67781, filed November 23, 1998).
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1).
</TABLE>

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

* Previously filed.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.

Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 15 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

The undersigned registrant hereby undertakes that:

- For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and

- For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.

II-2
<PAGE> 86

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant,
Plantronics, Inc., a corporation organized and existing under the laws of the
State of Delaware, certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
pre-effective Amendment No. 1 to this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Santa Cruz,
State of California, on January 13, 1999.

PLANTRONICS, INC.

By: /s/ JOHN A. KNUTSON

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

John A. Knutson

Vice President -- Legal, Senior

General Counsel and Secretary

Pursuant to the requirements of the Securities Act, this pre-effective
Amendment No. 1 to this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ KEN KANNAPPAN* Chief Executive Officer, January 13, 1999
- ------------------------------- President and Director
S. Kenneth Kannappan (Principal Executive Officer)

/s/ BARBARA V. SCHERER* Senior Vice President--Finance January 13, 1999
- ------------------------------- & Administration, and Chief
Barbara V. Scherer Financial Officer (Principal
Financial Officer, Principal
Accounting Officer)

/s/ ROBERT S. CECIL* Chairman of the Board of January 13, 1999
- ------------------------------- Directors
Robert S. Cecil

/s/ ROBERT F.B. LOGAN* Director January 13, 1999
- -------------------------------
Robert F.B. Logan

/s/ M. SALEEM MUQADDAM* Director January 13, 1999
- -------------------------------
M. Saleem Muqaddam

/s/ JOHN MOWBRAY O'MARA* Director January 13, 1999
- -------------------------------
John Mowbray O'Mara

/s/ TRUDE C. TAYLOR* Director January 13, 1999
- -------------------------------
Trude C. Taylor

/s/ J. SIDNEY WEBB* Director January 13, 1999
- -------------------------------
J. Sidney Webb

/s/ DAVID A. WEGMANN* Director January 13, 1999
- -------------------------------
David A. Wegmann

*By: /s/ JOHN A. KNUTSON January 13, 1999
- -------------------------------
John A. Knutson
(Attorney-in-Fact)
</TABLE>

II-3
<PAGE> 87

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF DOCUMENT PAGE
- ------- ---------------------------------------------------- ------------
<C> <S> <C>
1.1* Form of Purchase Agreement.
5.1 Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation, as to Legality of
Securities Being Registered.
10.1 Amended and Restated Registration Agreement dated
December 29, 1989, as amended, between the
Registrant and certain stockholders of the
Registrant (incorporated by reference to Exhibit
10.1 to the Registrant's Registration Statement on
Form S-3, Reg. No. 333-67781, filed November 23,
1998).
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Wilson Sonsini Goodrich & Rosati,
Professional Corporation (included in Exhibit 5.1).
</TABLE>

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

* Previously filed.

<PAGE> 1

EXHIBIT 5.1

[WSGR LETTERHEAD]

January 13, 1998

Plantronics, Inc.
345 Encinal Street
Santa Cruz, California 95060

and

The Selling Stockholders (as defined herein)

Re: Registration Statement on Form S-3 (Reg. No. 333-70333)
-------------------------------------------------------

Ladies and Gentlemen:

We have examined the Registration Statement on Form S-3 (Reg. No.
333-70333) filed by Plantronics, Inc. (the "Company") with the Securities and
Exchange Commission on January 8, 1999 and Amendment No. 1 thereto to be filed
on or around January 13, 1999 (such registration statement, as it may be further
amended from time to time, the "Registration Statement") in connection with the
registration under the Securities Act of 1933, as amended, of (i) the issuance
by the Company of up to 349,678 shares of the Company's Common Stock to Louise
M. Cecil upon the exercise by Mrs. Cecil of certain options (the "Louise Cecil
Option Shares"), and (ii) the resale of 1,550,000 shares of the Company's Common
Stock (plus up to an additional 232,500 shares subject to an over-allotment
option granted to the underwriters) (all such shares to be resold the "Resale
Shares") by certain stockholders of the Company. The Resale Shares are to
include (i) 1,000,000 currently outstanding shares of the Company's Common Stock
held by Citigroup Foundation (the "Foundation Shares"), (ii) 432,822 shares of
the Company's Common Stock issuable by the Company to Robert S. Cecil upon the
exercise by Mr. Cecil of certain options (such 432,822 shares, together with the
Louise Cecil Option Shares, collectively the "Cecil Option Shares") (Citigroup
Foundation and Mr. and Mrs. Cecil collectively the "Selling Stockholders"), and
(iii) up to all of the Louise Cecil Option Shares. All of the Cecil Option
Shares are to be issued under the Company's 1993 Stock Plan, as amended to date
(the "Plan"). As your counsel in connection with this transaction, we have
examined the proceedings taken and/or proposed to be taken, as applicable, in
connection with said sale and issuance of the Foundation Shares and the Cecil
Option Shares.

It is our opinion that (i) the Foundation Shares are, and (ii) the
Cecil Option Shares, when issued and sold in the manner referred to in the Plan
and pursuant to the agreements which accompany option grants under the Plan,
will be, legally and validly issued by the Company, fully paid and
nonassessable.

We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement, including the prospectus constituting a part thereof.

Very truly yours,

WILSON SONSINI GOODRICH & ROSATI,
Professional Corporation

/s/ Wilson Sonsini Goodrich & Rosati

By: HPM

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectuses
constituting part of this Registration Statement on Form S-3 of Plantronics,
Inc. of our report dated April 17, 1998 which appears in the Company's 1998
Annual Report to Stockholders, which is incorporated by reference in the
Company's Annual Report on Form 10-K for the fiscal year ended March 28, 1998.
We also consent to the references to us under the headings "Experts" in such
Prospectuses.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

San Jose, California
January 8, 1999