Plantronics 1998 Annual Report Download - page 20

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P.12
ANNUAL REPORT . 199 8
PLANTRONICS
Notes TO CONSOLIDATED
FINANCIAL STATEMENTS
NOTE. 7EMPLOYEE BENEFIT PLANS:
Subject to eligibility requirements, substantially all domestic employees are covered by quarterly cash and annual
deferred profit sharing plans. Employees also have the option of participating in a salary deferral plan qualified under
Section 401(k) of the Internal Revenue Service 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.
NOTE. 8COMMITMENTS 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:
FISCAL YEAR ENDING MARCH ,
(IN THOUSANDS)Amount
1999 $1,253
2000 1,118
2001 864
2002 420
2003 412
Total minimum future rental payments $4,067
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.