Plantronics 2011 Annual Report Download - page 75

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)
Accumulated unrealized gain (loss) on cash flow hedges, net of tax of $100 and $100,
respectively
Accumulated foreign currency translation adjustments
Accumulated unrealized gain on investments, net of tax
Accumulated other comprehensive income
March 31,
2011
$(3,715)
5,181
7
$ 1,473
2010
$ 2,705
3,567
—
$ 6,272
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.
From time to time, the Board of Directors authorizes plans under which the Company may repurchase shares of its common stock
in the open market, depending on the market conditions.
During fiscal 2009, the Company repurchased in the open market 1,007,500 shares of its common stock which were remaining
under the 1,000,000 repurchase plans each authorized by the Board of Directors on January 25, 2008 and November 10, 2008.
The total cost of these repurchases was $17.8 million with an average price of $17.68 per share.
During fiscal 2010, the Company repurchased in the open market 1,935,100 shares of its common stock which were under repurchase
plans authorized by the Board of Directors on the following dates: November 10, 2008, November 27, 2009 and March 1, 2010
for 1,000,000 each. The total cost of these repurchases was $49.7 million with an average price of $25.66 per share.
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