Logitech 2007 Annual Report Download - page 134

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
these plans, purchase agreements are automatically executed at the end of each offering period. A total of
12,000,000 shares have been reserved for issuance under both the 1996 and 2006 ESPP plans. As of March 31,
2007, a total of 1,479,217 shares were available for issuance under these plans.
On June 16, 2006, Logitech’s shareholders approved adoption of the 2006 Stock Incentive Plan (the “2006
Plan”) with an expiration date of June 16, 2016. The Plan replaces the 1996 Stock Plan (“1996 Plan”). The 2006
Plan provides for the grant to eligible employees and non-employee directors of stock options, stock appreciation
rights, restricted stock and restricted stock units, which are bookkeeping entries reflecting the equivalent of
shares. Stock options granted under the 2006 Plan generally will vest over four years, will have terms not
exceeding ten years and will be issued at exercise prices not less than the fair market value on the date of grant.
Awards under the 2006 Plan may be conditioned on continued employment, the passage of time or the
satisfaction of performance vesting criteria. An aggregate of 14,000,000 shares is reserved for issuance under the
2006 Plan. As of March 31, 2007, a total of 12,006,900 shares were available for issuance under this plan.
Under the 1996 Plan, the Company granted options for shares. Options issued under the 1996 Plan generally
vest over four years and remain outstanding for periods not to exceed ten years. Options were granted at exercise
prices of at least 100% of the fair market value of the shares on the date of grant. The Company made no grants
of restricted shares, stock appreciation rights or stock units under the 1996 Plan. No further awards will be
granted under the 1996 Plan.
Under the 1988 Stock Option Plan, options to purchase shares were granted to employees and consultants at
exercise prices ranging from zero to amounts in excess of the fair market value of the shares on the date of grant.
The terms and conditions with respect to options granted were determined by the Board of Directors who
administered this plan. Options generally vested over four years and remained outstanding for periods not
exceeding ten years. Further grants may not be made under this plan and as of March 31, 2007, there were no
options outstanding under this plan.
Impact of SFAS 123R Adoption
Effective April 1, 2006, the Company adopted SFAS 123R using the modified prospective method, which
requires the measurement and recognition of compensation expense based on estimated fair values for all share-based
payment awards made to employees and directors, including stock options and share purchases under the 2006 ESPP
and 1996 ESPP. The following table summarizes the share-based compensation expense and related tax benefit
recognized in accordance with SFAS 123R for fiscal year 2007 (in thousands). In accordance with APB 25 and related
previous accounting standards, no share-based compensation expense was recognized for fiscal years 2006 and 2005.
Year Ended
March 31, 2007
Cost of goods sold ...................................................... $ 2,077
Share – based compensation expense included in gross profit .................... 2,077
Operating expenses:
Marketing and selling ............................................... 7,167
Research and development ............................................ 3,151
General and administrative ........................................... 7,069
Share-based compensation expense included in operating expenses ............... 17,387
Total share-based compensation expense related to employee stock options and
employee stock purchases .............................................. 19,464
Tax benefit ............................................................ 4,526
Share-based compensation expense related to employee stock options and employee
stock purchases, net of tax .............................................. $14,938
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