Logitech 2001 Annual Report Download - page 37

ON
LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair value of the grants under the purchase plans and stock option plans was estimated using the Black-Scholes
valuation model with the following assumptions and values:
Year ended March 31,
Purchase Plans Stock Option Plans
2001 2000 1999 2001 2000 1999
Dividend yield........................................ 0 0 0 0 0 0
Expected life ......................................... 6 months 6 months 6 months 2.7 years 2.5 years 3.0 years
Expected volatility ................................. 70% 50% 48% 66% 55% 47%
Risk-free interest rate............................ 4.25% 6.5% 4.875% 4.25% 6.5% 4.875%
Weighted average fair value of grant .... $90.00 $19.00 $21.00 $138.00 $31.50 $20.00
The above pro forma amounts include compensation expense based on the fair value of options vesting during the
years ended March 31, 2001, 2000 and 1999. As provided by SFAS 123, these calculations exclude the effects of options
granted prior to April 1, 1996 when SFAS 123 became effective. Accordingly, these amounts are not representative of the
effects of computing stock option compensation expense using the fair value method for future periods.
In 2001 and 1999, the Company granted 540 and 86,220 options with exercise prices less than the fair market value
of the underlying stock at the date of grant. The weighted average exercise price of the 2001 option grants was zero, and
the weighted average fair value was $335.22. The weighted average exercise price of the 1999 option grants was $44.50,
and the weighted average fair value was $63.
Pension Plans
Defined Contribution Plans
Certain of the Company's subsidiaries have defined contribution employee benefit plans covering all or a portion of
their employees. Contributions to these plans are discretionary for certain plans and are based on specified or statutory
requirements for others. The charges to expense for these plans for the years ended March 31, 2001, 2000 and 1999,
were $1,275,000, $1,214,000, $1,170,000.
Defined Benefit Plan
One of the Company's subsidiaries sponsors a noncontributory defined benefit pension plan covering substantially all
of its employees. Retirement benefits are provided based on employees' years of service and earnings. The Company's
practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax
regulations.
Net pension cost for the years ended March 31, 2001, 2000, and 1999 were $193,000, $340,000, and $339,000. The
plan’s net pension liability at March 31, 2001 and 2000 was $375,000 and $625,000.
Note 11 — Income Taxes:
The Company is incorporated in Switzerland but operates in various countries with differing tax laws and rates.
Further, a substantial portion of the Company's income before taxes and the provision for income taxes are generated
primarily outside of Switzerland. Consequently, the weighted average expected tax rate may vary from period to period to
reflect the generation of taxable income in different tax jurisdictions.
The provision for income taxes consists of the following:
Year ended March 31,
2001 2000 1999
(In thousands)
Current:
Swiss ....................................................................................................... $ 852 $ 986 $ 268
Foreign..................................................................................................... 10,641 6,549 2,836
Deferred:
Swiss ....................................................................................................... —59
Foreign..................................................................................................... 593 (24) (1,903)