Logitech 2014 Annual Report Download - page 263

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A summary of the Company’s stock option activity for fiscal years 2014, 2013 and 2012 is as follows (in
thousands, except per share data; exercise prices are weighted averages):
Years Ended March 31,
2014 2013 2012
Shares Exercise Price Shares Exercise Price Shares Exercise Price
Outstanding, beginning of year. . . . . 13,684 $16 13,034 $19 16,312 $19
Granted. . . . . . . . . . . . . . . . . . . . . — $— 3,718 $ 8 — $—
Exercised . . . . . . . . . . . . . . . . . . . (551) $ 9 (389) $ 6 (316) $ 8
Cancelled or expired . . . . . . . . . . (3,317) $15 (2,679) $20 (2,962) $22
Outstanding, end of year . . . . . . . . . . 9,816 $16 13,684 $16 13,034 $19
Exercisable, end of year. . . . . . . . . . . 7,056 $19 9,355 $19 10,867 $20
The total pretax intrinsic value of stock options exercised during the fiscal years 2014, 2013 and 2012
was $2.0 million, $1.1 million and $0.8 million, respectively, and the tax benefit realized for the tax deduction
from options exercised during those periods was $0.5 million, $0.3 million and $0.2 million, respectively. The
total fair value of options exercisable as of March 31, 2014, 2013 and 2012 was $42.8 million, $60.5 million and
$76.0 million, respectively.
The fair value of employee stock options granted and shares purchased under the Company’s employee
purchase plans was estimated using the Black-Scholes-Merton option-pricing valuation model applying the
following assumptions and values.
Purchase Plans Stock Option Plans Premium Priced Options
Market-based
Stock Option Plan
Fiscal Years Ended
March 31,
Fiscal Years Ended
March 31,
Fiscal Years Ended
March 31,
Fiscal Years Ended
March 31,
2014 2013 2012 2014 2013 2012 2014 2013 2012 2014 2013 2012
Dividend yield . . . . . . . . . . 0.43% 0% 0% n/a 0% n/a n/a 0% n/a n/a 0% n/a
Risk-free interest rate . . . . 0.07% 0.09% 0.13% n/a 1.20% n/a n/a 2.00% n/a n/a 1.93% n/a
Expected volatility . . . . . . 36% 47% 52% n/a 46% n/a n/a 46% n/a n/a 44% n/a
Expected life (years) . . . . . 0.5 0.5 0.5 n/a 6.0 n/a n/a 7.0 n/a n/a 6.0 n/a
Weighted average
fair value . . . . . . . . . . . $2.46 $2.14 $2.96 n/a $3.64 n/a n/a $2.52 n/a n/a $2.58 n/a
The dividend yield assumption is based on the Company’s history and future expectations of dividend
payouts. In September 2012, the Company’s shareholders approved, and the Company paid, a one-time cash
dividend of CHF 125.7 million ($133.5 million in U.S. Dollars), out of retained earnings to Logitech’s existing
shareholders. The dividend qualified as a distribution of qualifying additional paid-in-capital. In May 2013, the
Company announced its plan to issue an annual dividend on a recurring basis. In September 2013, the Company’s
shareholders approved, and the Company paid, a cash dividend of CHF 33.7 million ($36.1 million in U.S. dollars)
to the existing shareholders. The unvested or unexercised options and RSUs are not eligible for these dividends. The
expected option life represents the weighted- average period the stock options or purchase offerings are expected to
remain outstanding. The expected life is based on historical settlement rates, which the Company believes are most
representative of future exercise and post- vesting termination behaviors. Expected share price volatility is based
on historical volatility using the Company’s daily closing prices over the term of past options or purchase offerings.
Note 5 — Employee Benefit Plans (Continued)
ANNUAl REPORT
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