LOGITECH INTERNATIONAL SA - Shareholder.com

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Table of Contents LOGITECH INTERNATIONAL S.A. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) As a result of adopting SFAS 123R, basic earnings per share for fiscal year 2007 was $0.08 per share lower and diluted earnings per share for fiscal year 2007 was $0.07 per share lower. For fiscal year 2007, $0.7 million of share based compensation was capitalized to inventory. For fiscal years 2006 and 2005, no sharebased compensation cost was capitalized to inventory. As of March 31, 2007, total compensation cost related to non-vested stock options not yet recognized was $29.2 million, which is expected to be recognized over the next 36 months on a weighted-average basis. Pro Forma Information Prior to the adoption of SFAS 123R, the Company provided the disclosures required under SFAS 123, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosures.” No employee share-based compensation expense was reflected in the results of operations for fiscal years 2006 and 2005 for employee stock option awards as all options were granted with an exercise price equal to the market value of the underlying common stock on the date of grant. The employee stock purchases were deemed non-compensatory under the provisions of APB 25. If the Company had used SFAS 123 to account for share-based compensation expense for fiscal years 2006 and 2005, net income and net income per share would have been as follows (in thousands except per-share amounts): Option Valuation Year ended March 31, 2006 2005 Net income: As reported $ 181,105 $ 149,266 Total share-based compensation expense using the fair value method (19,896 ) (24,507 ) Tax benefit 5,014 5,998 Pro forma net income $ 166,223 $ 130,757 Basic net income per share: As reported $ 1.00 $ .84 Pro forma $ .92 $ .74 Diluted net income per share: As reported $ .92 $ .77 Pro forma $ .84 $ .67 The fair value of employee stock options granted and shares purchased under the Company’s employee purchase plans was estimated using the Black-Scholes-Merton option-pricing valuation model applying the following assumptions and values: Year ended March 31, Purchase Plans Stock Option Plans 2007 2006 2005 2007 2006 2005 Dividend yield 0% 0% 0% 0% 0% 0% Expected life 6 months 6 months 6 months 3.9 years 3.7 years 3.5 years Expected volatility 33% 26% 33% 40% 47% 58% Risk-free interest rate 4.98% 3.67% 2.06% 4.75% 4.16% 3.15% Expected forfeitures 0% 0% 0% 8% 0% 0% Weighted average grant-date fair value of options granted $ 5.87 $ 4.21 $ 3.13 $ 8.11 $ 7.47 $ 5.11 F-17
Table of Contents LOGITECH INTERNATIONAL S.A. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The dividend yield assumption is based on the Company’s history and future expectations of dividend payouts. The Company has not paid dividends since 1996. The expected option life represents the weighted-average period the stock options or purchase offerings are expected to remain outstanding. The expected life is based on historical settlement rates, which the Company believes are most representative of future exercise and post-vesting termination behaviors. Expected share price volatility is based on historical volatility using daily prices over the term of past options or purchase offerings. The Company considers historical share price volatility as most representative of future stock option volatility. The risk-free interest rate assumptions are based upon the implied yield of U.S. Treasury zero-coupon issues appropriate for the term of the Company’s stock options or purchase offerings. SFAS 123R requires the Company to estimate forfeitures at the time of grant and to revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate pre-vesting option forfeitures and records share-based compensation expense only for those awards that are expected to vest. For purposes of calculating pro forma information under SFAS 123 for periods prior to April 1, 2006, forfeitures were recognized as they occurred. Option Activity A summary of activity under the stock option plans is as follows (exercise prices are weighted averages): The total pretax intrinsic value of options exercised during the year ended March 31, 2007 was $72.0 million. The tax benefit realized for the tax deduction from options exercised for fiscal year 2007 was $16.5 million. The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2007 (exercise prices and contractual lives are weighted averages, and aggregate intrinsic values are in thousands): F-18 Number 2007 Year ended March 31, 2006 2005 Exercise Exercise Price Number Price Number Outstanding, beginning of year 21,607,944 $ 10 25,897,324 $ 8 28,656,392 $ 7 Granted 2,555,200 $ 22 3,451,470 $ 19 5,186,920 $ 12 Exercised (4,599,180 ) $ 7 (6,476,232 ) $ 7 (7,314,712 ) $ 5 Cancelled or expired (688,242 ) $ 13 (1,264,618 ) $ 10 (631,276 ) $ 9 Outstanding, end of year 18,875,722 $ 12 21,607,944 $ 10 25,897,324 $ 8 Exercisable, end of year 10,436,970 $ 9 10,509,818 $ 7 11,122,360 $ 6 Range of Exercise Price Number Options Outstanding Options Exercisable Exercise Contractual Aggregate Intrinsic Exercise Contractual Price Life (years) Value Number Price Life (years) Exercise Price Aggregate Intrinsic Value $ 1.00 -$7.49 3,650,650 $ 5 4.0 $ 82,953 3,443,650 $ 5 3.9 $ 78,599 $ 7.50 -$8.99 4,771,104 $ 8 5.6 93,172 3,552,524 $ 8 5.2 69,458 $ 9.00 -$11.99 4,003,946 $ 11 6.5 66,375 2,304,682 $ 11 5.9 38,451 $ 12.00 -$20.49 3,843,898 $ 18 8.1 38,750 1,036,156 $ 16 7.6 11,766 $ 20.50 -$29.99 2,606,124 $ 22 9.3 14,979 99,958 $ 22 8.5 611 $ 1.00 -$29.99 18,875,722 $ 12 6.5 $ 296,229 10,436,970 $ 9 5.2 $ 198,885
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LOGITECH INTERNATIONAL SA FORM 20-F
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Table of Contents Part I TABLE OF C
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Table of Contents PART I ITEM 1. ID
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Table of Contents Customer Service
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Table of Contents jurisdictions. Lo
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Page 35 and 36: Table of Contents We base our estim
Page 37 and 38: Table of Contents Share-Based Compe
Page 39 and 40: Table of Contents disclosures assoc
Page 41 and 42: Table of Contents sales growth in a
Page 43 and 44: Table of Contents The decrease in n
Page 45 and 46: Table of Contents Gross Profit Gros
Page 47 and 48: Table of Contents The Company’s n
Page 49 and 50: Table of Contents During fiscal yea
Page 51 and 52: Table of Contents Purchase Obligati
Page 53 and 54: Table of Contents (1) Beneficial ow
Page 55 and 56: Table of Contents SWX Swiss Exchang
Page 57 and 58: Table of Contents D. Selling Shareh
Page 59 and 60: Table of Contents Withholding Tax U
Page 61 and 62: Table of Contents If the U.S. dolla
Page 63 and 64: Table of Contents (d) Changes in In
Page 65 and 66: Table of Contents ITEM 17. FINANCIA
Page 67 and 68: Table of Contents SIGNATURES The re
Page 69 and 70: Table of Contents REPORT OF THE IND
Page 71 and 72: Table of Contents LOGITECH INTERNAT
Page 75 and 76: Table of Contents Note 1 — The Co
Page 79 and 80: Table of Contents Impairment of Lon
Page 83: Table of Contents LOGITECH INTERNAT
Page 97 and 98: Table of Contents Note 17 — Inter
Page 101 and 102: LOGITECH INTERNATIONAL S.A. LIST OF
Page 103 and 104: CONSENT OF INDEPENDENT REGISTERED P
Page 105 and 106: REPORT ON CORPORATE GOVERNANCE Logi
Page 107 and 108: An additional 40 million shares hav
Page 109 and 110: The Company has not issued non-voti
Page 111 and 112: Trustees of the Santa Fe Institute,
Page 113 and 114: is responsible for leading the tran
Page 115 and 116: (4) Mr. Okamoto will retire from th
Page 117 and 118: Compensation Committee The Compensa
Page 119 and 120: the Chairman and the Chief Executiv
Page 121 and 122: eight years at Weiser Lock, a divis
Page 123 and 124: During 2007, stock option grants to
Page 125 and 126: proceedings that may arise by reaso
Page 127 and 128: 5.7 Additional Fees and Remuneratio
Page 129 and 130: Shareholders is sent and re-opens o
Page 131 and 132: Independent Registered Public Accou
Page 133 and 134: LOGITECH INTERNATIONAL S.A. Consoli
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I, Mark J. Hawkins, certify that: C
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