Plantronics 2002 Annual Report Download - page 45

7 . E M P L O Y E E B E N E F I T S P L A N S
For fiscal 2000, subject to eligibility requirements, substantially all domestic employees
participated in our qualified profit sharing and 401(k) plan. Under the plan, participating
employees received quarterly cash, annual cash and annual deferred profit sharing payments.
All other employees, with the exception of direct labor in Mexico, participated in quarterly
cash profit sharing plans. Domestic employees also had the option of participating in a
salary deferral component of the plan, qualified under Section 401(k) of the Internal
Revenue Code. T he profit sharing benefits were based on Plantronics’ results of operations
before interest and taxes, adjusted for other items. T he percentage of profit distributed
to employees varied by location. T he profit sharing was paid in four quarterly installments,
and for qualified associates, one annual cash payment and an annual deferred payment. Profit
sharing payments were allocated to employees based on each participating employee’s base
salary as a percent of all participants’ base salaries. T he annual profit sharing distributions
were made up of a cash distribution and a tax deferred distribution made to individual
accounts of participants held in trust. T he deferred portion was subject to a two-year vesting
schedule based on an employee’s date of hire. Total annual and quarterly profit sharing
payments were $10.2 million for fiscal 2000.
In fiscal 2001, we amended our qualified profit sharing and 401(k) plan for U.S. employees.
Our profit sharing programs for non-U.S. employees remained unchanged in fiscal 2001 and
fiscal 2002. For fiscal 2001 and thereafter, Plantronics offers two separate compensation
programs: quarterly cash profit sharing equal to 5% of quarterly profit for distribution to
qualified associates, and deferred compensation using the 3% “safe harbor” contribution
under the Internal Revenue Code Sections 401(k)(12) and 401(m)(11). We also increased
the employer matching contribution from 25% under the prior qualified 401(k) plan to
50% of the first 6% of pay contributed to the salary deferral plan. With this amendment,
the annual cash profit sharing payment was eliminated and replaced by a 20% increase
to our associates’ base pay in fiscal 2001. Total quarterly profit sharing payments were
$6.7 million and $2.8 million for fiscal 2001 and 2002, respectively.
8 . C O M M I T M E N T S A N D C O N T I N G E N C I E S
Minimum F uture Rental Payments. We lease certain equipment and facilities under
operating leases expiring in various years through 2015. Minimum future rental
payments under non-cancelable operating leases having remaining terms in excess of
one year as of March 31, 2002, (in thousands):
Fiscal Year End ing M arch 3 1, A m o u n t
2 0 0 3 $2 , 5 3 9
2 0 0 4 2 , 1 2 9
2 0 0 5 1 , 9 3 9
2 0 0 6 1 , 0 8 0
2 0 0 7 6 5 0
T h e r e a f t e r 4 , 0 4 1
Total minimum future rental payments $1 2 , 3 7 8
Total rent expense for operating leases was approximately $1.1 million in fiscal 2000, $1.8
m i l l i o n in fiscal 2001, and $2.5 million in fiscal 2002.
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