Plantronics 2014 Annual Report Download - page 74

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12. EMPLOYEE BENEFIT PLANS
The Company has a defined contribution benefit plan under Section 401(k) of the Internal Revenue Code, which covers substantially
all U.S. employees. Eligible employees may contribute pre-tax amounts to the plan through payroll withholdings, subject to certain
limitations. Under the plan, the Company currently matches 50% of the first 6% of employees' compensation and provides a non-
elective Company contribution equal to 3% of base salary. All matching contributions are currently 100% vested immediately.
The Company reserves the right to modify its policies at any time, including increasing, decreasing, or eliminating contribution
matching and vesting requirements. Total Company contributions in fiscal years 2014, 2013, and 2012 were $4.2 million, $4.0
million, and $3.8 million, respectively.
13. FOREIGN CURRENCY DERIVATIVES
The Company's foreign currency derivatives consist primarily of foreign currency forward exchange contracts, option contracts,
and cross-currency swaps. The derivatives expose the Company to credit risk to the extent the counterparties may be unable to
meet the terms of the derivative instrument. The Company's maximum exposure to loss due to credit risk that it would incur if
parties to derivative contracts failed completely to perform according to the terms of the contracts was equal to the carrying value
of the Company's derivative assets as of March 31, 2014. The Company seeks to mitigate such risk by limiting its counterparties
to large financial institutions. In addition, the Company monitors the potential risk of loss with any one counterparty resulting
from this type of credit risk on an ongoing basis.
The Company enters into master netting arrangements with counterparties when possible to mitigate credit risk in derivative
transactions. A master netting arrangement may allow each counterparty to net settle amounts owed between Plantronics and the
counterparty as a result of multiple, separate derivative transactions. As of March 31, 2014, the Company has International Swaps
and Derivatives Association (ISDA) agreements with three applicable banks and financial institutions which contain netting
provisions. Plantronics has elected to present the fair value of derivative assets and liabilities within the Company's consolidated
balance sheet on a gross basis even when derivative transactions are subject to master netting arrangements and may otherwise
qualify for net presentation. However, the following tables provide information as if the Company had elected to offset the asset
and liability balances of derivative instruments, netted in accordance with various criteria in the event of default or termination
as stipulated by the terms of netting arrangements with each of the counterparties. For each counterparty, if netted, the Company
would offset the asset and liability balances of all derivatives at the end of the reporting period. Derivatives not subject to master
netting agreements are not eligible for net presentation. As of March 31, 2014 and March 31, 2013, no cash collateral had been
received or pledged related to these derivative instruments.
Offsetting of Financial Assets/Liabilities under Master Netting Agreements with Derivative Counterparties
As of March 31, 2014:
Gross Amount of
Derivative Assets
Presented in the
Consolidated Balance
Sheets
Gross Amounts Not Offset in the Consolidated Balance Sheet
that are Subject to Master Netting Agreements
(in thousands)
Gross Amount of Eligible
Offsetting Recognized
Derivative Liabilities Cash Collateral Received
Net Amount of
Derivative
Assets
Derivatives subject to
master netting agreements $ 473 $ (473) $ — $ —
Derivatives not subject to
master netting agreements 654 654
Total $ 1,127 $ 654
Gross Amount of
Derivative Liabilities
Presented in the
Consolidated Balance
Sheets
Gross Amounts Not Offset in the Consolidated Balance Sheet
that are Subject to Master Netting Agreements
(in thousands)
Gross Amount of Eligible
Offsetting Recognized
Derivative Assets Cash Collateral Received
Net Amount of
Derivative
Liabilities
Derivatives subject to
master netting
agreements $ (1,428) $ 473 $ — $ (955)
Derivatives not subject to
master netting
agreements (1,455) (1,455)
Total $ (2,883) $ (2,410)