Plantronics 2008 Annual Report Download - page 76

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10. BANK LINE OF CREDIT
The Company has a $100 million revolving line of credit and a letter of credit sub-facility. Borrowings under the line of credit are
unsecured and bear interest at the London inter-bank offered rate (“LIBOR”) plus 0.75%. The line of credit expires on August 1,
2010. The Company repaid the line of credit in the fourth quarter of fiscal 2007. At March 31, 2007 and 2008, there were no
outstanding balances on the line of credit and $1.4 million and $0.4 million committed under the letter of credit sub-facility,
respectively.
Borrowings under the line of credit are subject to certain financial covenants and restrictions that materially limit the Company’s
ability to incur additional debt and pay dividends, among other matters. The Company is currently in compliance with the financial
covenants under this agreement.
11. COMMITMENTS AND CONTINGENCIES
MINIMUM FUTURE RENTAL PAYMENTS. The Company leases certain equipment and facilities under operating leases expiring
in various years through 2016. Minimum future rental payments under non-cancelable operating leases having remaining terms in
excess of one year as of March 31, 2008 are as follows (in thousands):
Fiscal Year Ending March 31,
2009 $ 5,166
2010 3,923
2011 3,060
2012 930
2013 945
Thereafter 2,293
Total minimum future rental payments $ 16,317
Total rent expense for operating leases was approximately $4.6 million, $5.1 million, and $6.4 million in fiscal 2006, 2007, and 2008,
respectively.
EXISTENCE OF RENEWAL OPTIONS. Certain operating leases provide for renewal options for periods from one to three years. In
the normal course of business, operating leases are generally renewed or replaced by other leases.
CLAIMS AND LITIGATION. The Company is presently engaged in various legal actions arising in the normal course of business
including six class action lawsuits recently filed against the Company alleging that our Bluetooth headsets may cause noise-induced
hearing loss. Shannon Wars et al. vs. Plantronics, Inc. was filed on November 14, 2006 in the United States District Court for the
Eastern District of Texas. Lori Raines, et al. vs. Plantronics, Inc. was filed on October 20, 2006 in the United States District Court,
Central District of California. Kyle Edwards, et al vs. Plantronics, Inc. was filed on October 17, 2006 in the United States District
Court, Middle District of Florida. Ralph Cook vs. Plantronics, Inc. was filed on February 8, 2007 in the United States District Court
for the Eastern District of Virginia. Randy Pierce vs. Plantronics, Inc. was filed on January 10, 2007 in the United States 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 United States
District Court for the Central District of Los Angeles before Judge Fischer. The California State Court case was dismissed by the
plaintiffs. The parties have provided a limited amount of discovery to each other. The defendants have filed a motion to dismiss
which is likely to be heard in mid-August 2008.
On May 13, 2008 a lawsuit was filed against the Company in the United States District Court for the Eastern District of Texas. The
complaint alleges that the Company infringed certain patents owned by Clear With Computers, LLC. These patents involve various
business practices commonly used on Websites such as supply chain and sales methods, sales and marketing systems, and inventory
systems. The complaint seeks various remedies including injunctions, damages, and costs.