Logitech 2010 Annual Report Download - page 204

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Under the 1996 ESPP and 2006 ESPP plans, eligible employees may purchase shares at the lower of 85% of the
fair market value at the beginning or the end of each six-month offering period. Subject to continued participation
in these plans, purchase agreements are automatically executed at the end of each offering period. A total of
16,000,000 shares have been reserved for issuance under both the 1996 and 2006 ESPP plans. As of March 31, 2010,
a total of 2,772,075 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 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 will generally
vest over three years for non-executive Directors and over four years for employees. All stock options under this
plan 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 17,500,000 shares was reserved for issuance
under the 2006 Plan. As of March 31, 2010, a total of 5,664,605 shares were available for issuance under this plan.
The Company assumed the LifeSize Communications, Inc. 2003 Stock Option Plan as part of its acquisition
of LifeSize in December 2009. Under this plan, the Company may issue options to purchase Logitech shares to
employees of LifeSize. As of March 31, 2010, a total of 215,813 shares were available for issuance under this plan.
The following table summarizes the share-based compensation expense and related tax benefit recognized for
fiscal years 2010 and 2009 (in thousands).
Year Ended
March 31,
2010 2009
Cost of goods sold ......................................................... $3,073 $3,163
Share-based compensation expense included in gross profit ........................ 3,073 3,163
Operating expenses:
Marketing and selling ................................................... 9,201 7,989
Research and development................................................ 4,902 4,488
General and administrative ............................................... 8,631 8,863
Share-based compensation expense included in
operating expenses...................................................... 22,734 21,340
Total share-based compensation expense related to employee
stock options, RSUs and employee stock purchases ............................ 25,807 24,503
Tax benefit ............................................................... 5,768 3,102
Share-based compensation expense related to employee stock
options, RSUs and employee stock purchases, net of tax ........................ $20,039 $21,401
As of March 31, 2010 and 2009, $0.9 million and $0.8 million of share-based compensation cost was capitalized
to inventory. As of March 31, 2010, total compensation cost related to non-vested stock options not yet recognized
was $53.8 million, which is expected to be recognized over the next 31 months on a weighted-average basis.