Plantronics 2010 Annual Report Download - page 82

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74
CLAIMS AND LITIGATION. Six class action lawsuits have been filed against the Company alleging that its Bluetooth headsets may
cause noise-induced hearing loss. Shannon Wars et al. vs. Plantronics, Inc. was filed on November 14, 2006 in the U.S. District Court
for the Eastern District of Texas. Lori Raines, et al. vs. Plantronics, Inc. was filed on October 20, 2006 in the U.S. District Court,
Central District of California. Kyle Edwards, et al vs. Plantronics, Inc. was filed on October 17, 2006 in the U.S. District Court,
Middle District of Florida. Ralph Cook vs. Plantronics, Inc. was filed on February 8, 2007 in the U.S. District Court for the Eastern
District of Virginia. Randy Pierce vs. Plantronics, Inc. was filed on January 10, 2007 in the U.S. District Court for the Eastern
District of Arkansas. Bruce Schiller, et al vs. Plantronics, Inc. was filed on October 10, 2006 in the Superior Court of the State of
California in and for the County of Los Angeles. The complaints state that they do not seek damages for personal injury to any
individual. These complaints seek various remedies, including injunctive relief requiring the Company to include certain additional
warnings with its Bluetooth headsets and to redesign the headsets to limit the volume produced, or, alternatively, to provide the user
with the ability to determine the level of sound emitted from the headset. Plaintiffs also seek unspecified general, special, and punitive
damages, as well as restitution. The federal cases have been consolidated for all pre-trial purposes in the U.S. District Court for the
Central District of Los Angeles before Judge Fischer. The California State Court case was dismissed by the plaintiffs. The parties
agreed in principle to settle their claims. The U.S. District Court for the Central District of Los Angeles signed an order approving the
final settlement of the lawsuit entitled In Re Bluetooth Headset Products Liability Litigation brought against Plantronics, Inc.,
Motorola, Inc and GN Netcom, Inc. alleging that the three companies failed to adequately warn consumers of the potential for long
term noise induced hearing loss if they used Bluetooth headsets. The companies contested the claims of the lawsuit but settled the
lawsuit on a nationwide basis for an amount which the Company believes is less than the cost of litigating and winning the lawsuit.
On September 25, 2009, the Court signed a judgment in the case resolving all matters except the issue of outstanding attorneys’ fees,
which will be split among the three defendants. On October 22, 2009, the Court issued an order setting the class counsel’s attorneys’
fees and costs and the incentive award at the maximum amounts agreed to by the parties in their settlement. The objectors to the
settlement have filed a notice of appeal, and the appeal is in process. The Company believes that any loss related to these proceedings
would not be material and have adequately reserved for these costs in the consolidated financial statements.
In addition, the Company is presently engaged in various legal actions arising in the normal course of business. The Company
believes that it is unlikely that any of these actions will have a material adverse impact on its operating results; however, because of
the inherent uncertainties of litigation, the outcome of any of these actions could be unfavorable and could have a material adverse
effect on the Company’s financial condition, results of operations or cash flows.
12. STOCKHOLDERS’ EQUITY
Accumulated Other Comprehensive Income
The components of accumulated other comprehensive income were as follows:
(in thousands) 2009 2010
Accumulated unrealized gain on cash flow hedges, net of tax of $400 and $100, respectively $ 6,334 $ 2,705
Accumulated foreign currency translation adjustments 2,521 3,567
ther comphrensive income $ 8,855 $ 6,272
March 31,
Accumulated o
During the first half of fiscal 2009, the Company recorded further temporary declines in the fair market value of $1.1 million related to
its ARS investments. In the third quarter of fiscal 2009, as a result of changing the classification of the ARS from available-for-sale to
trading securities, the Company recorded an other-than-temporary loss of $4.0 million in Interest and other income (expense), net in
e Consth
(S
olidated statement of operations, which reversed the unrealized losses recorded in Accumulated other comprehensive income.
ee Note 6)
Capital Stock
In March 2002, the Company established a stock purchase rights plan under which stockholders may be entitled to purchase the
Company’s stock or stock of an acquirer of the Company at a discounted price in the event of certain efforts to acquire control of the
Company. The rights expire on the earliest of (a) April 12, 2012, or (b) the exchange or redemption of the rights pursuant to the rights
plan.