Logitech 2005 Annual Report Download - page 123

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LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Compensation expense is recognized over the vesting period when the exercise price of an option is less
than the fair market value of the underlying stock on the date of grant. Compensation expense of $92,000 was
recorded in fiscal year 2003 for such option grants. This amount was accrued as a liability when the expense was
recognized and subsequently credited to additional paid-in capital upon exercise of the related stock option. No
compensation expense was recognized in fiscal years 2005 and 2004, and no further compensation expense will
be recognized in future periods related to these historical grants.
A summary of activity under the stock option plans is as follows (exercise prices are weighted averages):
Year ended March 31,
2005 2004 2003
Number
Exercise
Price Number
Exercise
Price Number
Exercise
Price
Outstanding, beginning of year .......... 7,164,098 $26 7,737,136 $21 7,787,950 $17
Granted ............................. 1,296,730 $47 1,249,880 $33 1,581,725 $31
Exercised ........................... (1,828,678) $21 (1,577,644) $16 (1,301,845) $ 9
Cancelled or expired ................... (157,819) $36 (245,274) $34 (330,694) $30
Outstanding, end of year ................ 6,474,331 $32 7,164,098 $26 7,737,136 $21
Exercisable, end of year ................ 2,780,590 $25 3,291,734 $19 3,612,857 $13
The following table summarizes information regarding stock options outstanding at March 31, 2005
(exercise prices and contractual lives are weighted averages):
Options Outstanding Options Exercisable
Range of
Exercise Price Number
Exercise
Price
Contractual
Life (years) Number
Exercise
Price
$ 4 – $20.99 1,210,303 $10 4.4 1,054,119 $ 8
$21 – $30.99 1,411,473 $27 6.8 656,725 $28
$31 – $35.99 1,817,282 $33 7.7 571,356 $34
$36 – $45.99 1,215,973 $44 8.4 255,840 $40
$46 – $68.99 819,300 $50 8.2 242,550 $49
$ 4 – $68.99 6,474,331 $32 7.1 2,780,590 $25
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, 2005, 2004 and 2003, were $4.7 million, $5.1 million and $3.4 million.
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 costs for the years ended March 31, 2005, 2004 and
2003 were $1.2 million, $.9 million and $.4 million. The plan’s net pension liability at March 31, 2005 and 2004
was $2.5 million and $1.6 million.
F-20