Logitech 2010 Annual Report Download - page 207

ANNUAl REPORT
195
The dividend yield assumption is based on the Company’s history and future expectations of dividend payouts.
The expected life of these RSUs is the service period at the end of which the RSUs will vest if the performance
conditions are satisfied. The volatility assumption is based on the actual volatility of Logitech’s daily closing share
price over a look-back period of two years. The risk free interest rate is derived from the yield on US Treasury
Bonds for a two year term.
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 fiscal years 2010, 2009
and 2008, were $8.2 million, $8.3 million and $7.0 million.
Defined Benefit Plans
Certain of the Company’s subsidiaries sponsor defined benefit pension plans or non-retirement post-
employment benefits covering substantially all of their employees. Benefits are provided based on employees’
years of service and earnings, or in accordance with applicable employee benefit regulations. The Company’s
practice is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax
regulations.
The Company recognizes the underfunded or overfunded status of defined benefit pension plans and non-
retirement post-employment benefit obligations as an asset or liability in its statement of financial position, and
recognizes changes in the funded status of defined benefit pension plans in the year in which the changes occur
through accumulated other comprehensive loss, which is a component of stockholders’ equity. Each plan’s assets
and benefit obligations are measured as of March 31.
In fiscal year 2009, the Company added a defined benefit pension plan in Japan, and amended the existing
plan in Switzerland. In addition, the restructuring which occurred in the fourth quarter of fiscal year 2009 resulted
in a curtailment of benefits and a settlement transaction related to the terminated employees who participated in
the existing defined benefit pension plans.
The net periodic benefit cost for fiscal years 2010 and 2009 was as follows (in thousands):
Year ended March 31,
2010 2009
Service cost .................................................. $3,983 $2,814
Interest cost .................................................. 1,430 1,520
Expected return on plan assets ................................... (1,200)(1,488)
Amortization of net transition obligation ........................... 4 5
Amortization of net prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 —
Recognized net actuarial loss .................................... 1,239 232
Net periodic benefit cost ........................................ $5,594 $3,083
Additional benefit costs of $3.4 million related to the restructuring were recognized in restructuring expenses
in fiscal year 2009.