8-K Filing: Plantronics Subsidiary Entered Turn-Key Purchase Agreement With Park 20/20

On December 12, 2014, Plantronics BV (“PLTBV”), a Dutch wholly-owned subsidiary of Plantronics, Inc. (“Plantronics” or “the Company”), entered into a Turnkey Purchase Agreement (“Agreement”) with Park 20/20 C.V., a limited partnership under Dutch law (“Park”) and Park 20/20 Plantronics C.V., a limited partnership under Dutch law formed by Park or its affiliates for purposes of the Agreement (the “Vendor”) for the purchase of certain real property in Hoofddorp, The Netherlands (“Property”). The purchase of the Property includes rights and obligations for construction of a building (“Building”) on the Property. The Building will be used primarily for general commercial and office activities and will replace office space currently leased by PLTBV. The Company expects Building construction to commence in May 2015, with an expected completion date in June 2016. The preliminary purchase price of €11.0 million ($13.6 million)1, excluding value added tax (“VAT”), for the Property and Building will be paid in cash. VAT is estimated at €2.3 million ($2.8 million). The preliminary purchase price is based on an expected Building gross floor area of 3,531 square meters and 54 parking spaces and, based on the final gross floor area of the Building, may be adjusted upon completion. The purchase price will be linked to the Dutch consumer price index (“Dutch CPI”) from January 1, 2014 until construction is completed and ownership of the Property and Building is transferred. An initial deposit of €1.3 million ($1.8 million) was paid in the Company's first quarter of fiscal year 2015. The remaining purchase price will be paid in periodic installments as construction progresses, with the first installment payment of €2.9 million ($3.6 million), excluding VAT estimated at €0.6 million ($0.8 million), expected to be paid in April 2015. As security for the fulfillment of PLTBV's obligations, PLTBV will provide a written bank guarantee for the benefit of the Vendor of an amount up to 10% of the preliminary purchase price plus VAT, but excluding the deposit and first installment of the purchase price. The bank guarantee will terminate on payment of the last purchase price installment and will be reduced during the construction period by the amount of installment payments actually paid. The Agreement includes provisions standard and customary for the purchase of real property in The Netherlands including, without limitation, representations and warranties by Park regarding (i) environmental matters, (ii) taxes and (iii) pending and prospective litigation. An English translation of the material provisions of the Agreement will be filed with Plantronics' Quarterly Report on Form 10-Q for the third quarter of fiscal year 2015. 1 All amounts under the Agreement are due and payable in Euros. For convenience of reporting in this Current Report on Form 8-K, the Company has converted Euros to US Dollars (“USD”) for payments using foreign exchange rates at or near the relevant transaction dates. The USD-converted amounts may differ based on fluctuations in the Euro to USD exchange rate at the time billings are rendered and payments are made. The Company estimated VAT at 21% based on the currently enacted rate in The Netherlands.