XML 27 R14.htm IDEA: XBRL DOCUMENT
v3.22.1

Employee Benefit Plans | 12 Months Ended
--- | ---
Mar. 31, 2022
Share-based Payment Arrangement [Abstract] |
Employee Benefit Plans | Employee Benefit Plans Employee Share Purchase Plans and Stock Incentive Plans As of March 31, 2022, the Company offers the 2006 Employee Share Purchase Plan, as amended and restated (Non-U.S.) ("2006 ESPP)", the 1996 Employee Share Purchase Plan (U.S.), as amended and restated ("1996 ESPP"), and the 2006 Stock Incentive Plan ("2006 Plan") as amended and restated. The 2012 Stock Inducement Equity Plan ("2012 Plan") expired on March 28, 2022. Shares issued to employees as a result of purchases or exercises under these plans are generally issued from shares held in treasury stock. The following table summarizes share-based compensation expense and total income tax benefit recognized for fiscal years 2022, 2021 and 2020 (in thousands):
|  | Years Ended March 31,
|  | 2022 |  | 2021 |  | 2020
Cost of goods sold |  | $ | 6,695 |  |  | $ | 6,438 |  |  | $ | 4,852 |
Marketing and selling |  | 37,796 |  |  | 36,788 |  |  | 26,835 |
Research and development |  | 18,356 |  |  | 14,179 |  |  | 9,273 |
General and administrative |  | 30,632 |  |  | 28,614 |  |  | 13,910 |
Total share-based compensation expense |  | 93,479 |  |  | 86,019 |  |  | 54,870 |
Income tax benefit |  | (26,987) |  |  | (19,472) |  |  | (14,109) |
Total share-based compensation expense, net of income tax benefit |  | $ | 66,492 |  |  | $ | 66,547 |  |  | $ | 40,761 |
As of March 31, 2022, 2021 and 2020, the balance of capitalized stock-based compensation included in inventory was $1.1 million, $1.1 million, and $0.9 million, respectively. The following table summarizes total unamortized share-based compensation expense and the remaining period over which such expense is expected to be recognized, on a weighted-average basis by type of grant (in thousands, except number of months):
|  | March 31, 2022
|  | Unamortized Expense |  | Remaining Months
ESPP |  | $ | 2,341 |  |  | 4
Stock Options |  | 19,746 |  |  | 35
Time-based RSUs |  | 109,637 |  |  | 24
Market-based and performance-based RSUs |  | 36,669 |  |  | 21
Total unamortized share-based compensation expense |  | $ | 168,393 |  |  |
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 offering period, which is generally six months. Subject to continued participation in these plans, purchase agreements are automatically executed at the end of each offering period. An aggregate of 29.0 million shares were reserved for issuance under the 1996 and 2006 ESPP plans. As of March 31, 2022, a total o f 4.1 million sha res were available for new awards under these plans. The 2006 Plan provides for the grant to eligible employees and non-employee directors of stock options, stock appreciation rights, restricted stock and RSUs. Awards under the 2006 Plan may be conditioned on continued employment, the passage of time or the satisfaction of performance and market vesting criteria. The 2006 Plan, as amended, has no expiration date. All stock options under this plan have terms not exceeding ten years and are issued at exercise prices not less than the fair market value on the date of grant. An aggregate of 30.6 million shares were reserved for issuance under the 2006 Plan. As of March 31, 2022, a total of 6.4 million shares were available for new awards under this plan. Time-based RSUs granted to employees under the 2006 Plan generally vest in three to four equal annual installments on the grant date anniversary. Time-based RSUs granted to non-executive board members under the 2006 Plan vest on the grant date anniversary, or if earlier and only if the non-executive board member is not re-elected as a director at such annual general meeting, the date of the next annual general meeting following the grant date. In fiscal years 2022, 2021 and 2020, the Company granted RSUs with both performance and market conditions, which vest at the end of the three-year performance period upon meeting predetermined financial metrics over three years, with the number of shares to be received upon vesting determined based on weighted average constant currency revenue growth rate and the Company's Total Shareholder Return ("TSR") relative to the performance of companies in the Russell 3000 Index for fiscal years 2022 and 2021 and NASDAQ-100 Index for fiscal year 2020 over the same three years period. The Company presents shares granted and vested at 100 percent of the target of the number of stock units that may potentially vest. The aggregate fair value of shares that actually vested during the year is based on the actual number of stock units vested during the year based on the achievement of the financial metrics over the performance period. Under the 2012 Plan, stock options and RSUs may be granted to eligible employees to serve as an inducement to enter into employment with the Company. Awards under the 2012 Plan may be conditioned on continued employment, the passage of time or the satisfaction of market stock performance criteria, based on individually written employment offer letter. An aggregate of 1.8 million shares were reserved for issuance under the 2012 Plan, and all of the reserved shares had been issued before the 2012 Plan expired on March 28, 2022. The estimates of share-based compensation expense require a number of complex and subjective assumptions including stock price volatility, employee exercise patterns, probability of achievement of the set performance condition, dividend yield, related tax effects and the selection of an appropriate fair value model. The grant date fair value of the awards using the Black-Scholes-Merton option-pricing valuation model and Monte-Carlo simulation method is determined with the following assumptions and values:
|  | Stock Options |  | Employee Stock Purchase Plans
|  | Years Ended March 31, |  | Years Ended March 31,
|  | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Dividend yield |  | 1.18 | % |  | * |  | * |  | 1.03 | % |  | 1.04 | % |  | 1.74 | %
Risk-free interest rate |  | 1.99 | % |  | * |  | * |  | 0.27 | % |  | 0.10 | % |  | 1.81 | %
Expected volatility |  | 34 | % |  | * |  | * |  | 35 | % |  | 47 | % |  | 24 | %
Expected life (years) |  | 6.2 |  | * |  | * |  | 0.5 |  | 0.5 |  | 0.5
Weighted average grant date fair value per share |  | $ | 25.88 |  | * |  | * |  | $ | 23.55 |  | $ | 24.67 |  | $ | 9.35
* Not applicable as no stock options were granted for fiscal year 2021 and 2020.
RSUs with Market Conditions |  | Years Ended March 31,
|  | 2022 |  | 2021 |  | 2020
Dividend yield |  | 0.78 | % |  | 1.24 | % |  | 1.76 | %
Risk-free interest rate |  | 0.31 | % |  | 0.21 | % |  | 2.11 | %
Expected volatility |  | 37 | % |  | 31 | % |  | 30 | %
Expected life (years) |  | 3.0 |  | 3.0 |  | 3.0
The dividend yield assumption is based on the Company's history and future expectations of dividend payouts. The unvested RSUs or unexercised options are not eligible for these dividends. The expected life is based on the purchase offerings periods expected to remain outstanding for employee stock purchase plan, or the performance period for RSUs with market conditions. The expected life for stock options represents the estimated period of time until option exercise. Since the Company has limited historical stock option exercise experience, the Company used the simplified method in estimating the expected life, which is calculated as the average of the sum of the vesting term and the original contractual term of the stock options. Expected volatility is based on historical volatility using the Company's daily closing prices, or including the volatility of components of the NASDAQ 100 index or the Russell 3000 Index for market-based RSUs, over the expected life. The Company considers the historical price volatility of its shares as most representative of future volatility. The risk-free interest rate assumptions are based upon the implied yield of U.S. Treasury zero-coupon issues appropriate for the expected life of the Company's share-based awards. For RSUs with performance conditions, the Company estimates the probability and timing of the achievement of the set performance condition at the time of the grant based on the historical financial performance and the financial forecast in the remaining performance period and reassesses the probability in subsequent periods when actual results or new information become available. A summary of the Company's stock option activities under all stock plans for fiscal years 2022, 2021 and 2020 is as follows:
|  | Number of Shares |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value |  |  |  |
|  | (In thousands) |  |  |  | (Years) |  | (In thousands) |  |  |  |
Outstanding, March 31, 2019 |  | 2,607 |  |  |  |  |  |  |  |  |  |  |
Exercised |  | (573) |  |  |  |  |  |  | $ | 19,339 |  |  |  |  |
Canceled or expired |  | (65) |  |  |  |  |  |  |  |  |  |  |
Outstanding, March 31, 2020 |  | 1,969 |  |  |  |  |  |  |  |  |  |  |
Exercised |  | (1,347) |  |  |  |  |  |  | $ | 68,596 |  |  |  |  |
Outstanding, March 31, 2021 |  | 622 |  |  | $ | 34 |  |  | 7.1 |  | $ | 43,625 |  |  |  |  |
Granted |  | 842 |  |  | $ | 80 |  |  |  |  |  |  |  |  |
Exercised |  | (71) |  |  | $ | 39 |  |  |  |  | $ | 5,573 |  |  |  |  |
Outstanding, March 31, 2022 |  | 1,393 |  |  | $ | 62 |  |  | 8.3 |  | $ | 21,830 |  |  |  |  |
Vested and exercisable, March 31, 2022 |  | 551 |  |  | $ | 34 |  |  | 6.0 |  | $ | 22,006 |  |  |  |  |
As of March 31, 2022, the exercise price of outstanding options ranged from $8 to $80 per share option. The tax benefit realized for the tax deduction from options exercised during fiscal years 2022, 2021 and 2020 was $1.2 million, $0.6 million and $0.1 million, respectively. A summary of the Company's time-based, market-based and performance-based RSU activities for fiscal years 2022, 2021 and 2020 is as follows:
|  | Number of Shares |  | Weighted-Average Grant Date Fair Value |  | Weighted-Average Remaining Vesting Period |  | Aggregate Fair Value |  |  |  |
|  | (In thousands) |  |  |  | (Years) |  | (In thousands) |  |  |  |
Outstanding, March 31, 2019 |  | 4,421 |  |  | $ | 29 |  |  |  |  |  |  |  |  |
Granted—time-based |  | 1,431 |  |  | $ | 38 |  |  |  |  |  |  |  |  |
Granted—market and performance-based |  | 365 |  |  | $ | 40 |  |  |  |  |  |  |  |  |
Vested |  | (1,705) |  |  |  |  |  |  | $ | 76,389 |  |  |  |  |
Canceled or expired |  | (561) |  |  |  |  |  |  |  |  |  |  |
Outstanding, March 31, 2020 |  | 3,951 |  |  | $ | 36 |  |  |  |  |  |  |  |  |
Granted—time-based |  | 1,046 |  |  | $ | 60 |  |  |  |  |  |  |  |  |
Granted—market and performance-based |  | 303 |  |  | $ | 67 |  |  |  |  |  |  |  |  |
Vested |  | (1,444) |  |  |  |  |  |  | $ | 168,816 |  |  |  |  |
Canceled or expired |  | (213) |  |  |  |  |  |  |  |  |  |  |
Outstanding, March 31, 2021 |  | 3,643 |  |  | $ | 45 |  |  |  |  |  |  |  |  |
Granted—time-based |  | 868 |  |  | $ | 103 |  |  |  |  |  |  |  |  |
Granted—market and performance-based |  | 203 |  |  | $ | 124 |  |  |  |  |  |  |  |  |
Vested |  | (1,463) |  |  | $ | 40 |  |  |  |  | $ | 133,977 |  |  |  |  |
Canceled or expired |  | (205) |  |  | $ | 62 |  |  |  |  |  |  |  |  |
Outstanding, March 31, 2022 |  | 3,046 |  |  | $ | 68 |  |  | 1.2 |  | $ | 233,797 |  |  |  |  |
The RSUs outstanding as of March 31, 2022 above include 0.8 million shares with both market-based and performance-based vesting conditions. The tax benefit realized for the tax deduction from RSUs that vested during fiscal years 2022, 2021 and 2020 was $25.2 million, $16.3 million and $12.1 million, respectively. 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 2022, 2021 and 2020, were $13.9 million, $10.6 million and $8.6 million, respectively. 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 overfunded or underfunded status of defined benefit pension plans and non-retirement post-employment benefit obligations as an asset or liability in its consolidated balance sheets and recognizes changes in the funded status of defined benefit pension plans in the year in which the changes occur through accumulated other comprehensive income (loss), which is a component of shareholders' equity. Each plan's assets and benefit obligations are remeasured as of March 31 each year. The net periodic benefit cost of the defined benefit pension plans and the non-retirement post-employment benefit obligations for fiscal years 2022, 2021 and 2020 was as follows (in thousands):
|  | Years Ended March 31,
|  | 2022 |  | 2021 |  | 2020
Service costs |  | $ | 14,693 |  |  | $ | 12,121 |  |  | $ | 11,008 |
Interest costs |  | 920 |  |  | 1,047 |  |  | 1,055 |
Expected return on plan assets |  | (2,930) |  |  | (2,535) |  |  | (2,616) |
Amortization: |  |  |  |  |  |
Net prior service credit recognized |  | (465) |  |  | (467) |  |  | (435) |
Net actuarial loss (gain) recognized |  | (2,158) |  |  | 2,144 |  |  | 1,386 |
Settlement |  | — |  |  | — |  |  | (97) |
Total net periodic benefit cost |  | $ | 10,060 |  |  | $ | 12,310 |  |  | $ | 10,301 |
The components of net periodic benefit cost other than the service costs component are included in other income (expense), net in the consolidated statements of operations. The changes in projected benefit obligations for fiscal years 2022 and 2021 were as follows (in thousands):
|  | Years Ended March 31,
|  | 2022 |  | 2021
Projected benefit obligations, beginning of the year |  | $ | 202,348 |  |  | $ | 160,914 |
Service costs |  | 14,693 |  |  | 12,121 |
Interest costs |  | 920 |  |  | 1,047 |
Plan participant contributions |  | 6,092 |  |  | 4,733 |
Actuarial (gains) losses |  | (31,198) |  |  | 15,762 |
Benefits paid |  | (3,904) |  |  | (3,947) |
Transfer of prior vested benefits |  | 14,963 |  |  | 7,556 |
Administrative expense paid |  | (130) |  |  | (130) |
Currency exchange rate changes and other |  | 3,767 |  |  | 4,292 |
Projected benefit obligations, end of the year |  | $ | 207,551 |  |  | $ | 202,348 |
The accumulated benefit obligation for all defined benefit pension plans as of March 31, 2022 and 2021 was $178.5 million and $171.2 million, respectively. Actuarial gains related to the change in the benefit obligation for the Company's pension plans for fiscal year 2022 was primarily due to an increase in discount rate. Actuarial losses related to the change in benefit obligation for fiscal year 2021 was primarily due to the decrease in the discount rate. The following table presents the changes in the fair value of defined benefit pension plan assets for fiscal years 2022 and 2021 (in thousands):
|  | Years Ended March 31,
|  | 2022 |  | 2021
Fair value of plan assets, beginning of the year |  | $ | 128,061 |  |  | $ | 98,010 |
Actual return on plan assets |  | (2,156) |  |  | 11,706 |
Employer contributions |  | 10,877 |  |  | 8,064 |
Plan participant contributions |  | 6,092 |  |  | 4,733 |
Benefits paid |  | (3,904) |  |  | (3,947) |
Transfer of prior vested benefits |  | 14,963 |  |  | 7,556 |
Administrative expenses paid |  | (130) |  |  | (130) |
Currency exchange rate changes |  | 2,315 |  |  | 2,069 |
Fair value of plan assets, end of the year |  | $ | 156,118 |  |  | $ | 128,061 |
The Company's investment objectives are to ensure that the assets of its defined benefit plans are invested to provide an optimal rate of investment return on the total investment portfolio, consistent with the assumption of a reasonable risk level, and to ensure that pension funds are available to meet the plans' benefit obligations as they become due. The Company believes that a well-diversified investment portfolio will result in the highest attainable investment return with an acceptable level of overall risk. Investment strategies and allocation decisions are also governed by applicable governmental regulatory agencies. The Company's investment strategy with respect to its largest defined benefit plan, which is available only to Swiss employees, is to invest per the following allocation: 33% in equities, 28% in bonds, 28% in real estate, 4% in cash and cash equivalents and the remaining in other investments. The Company can invest in real estate funds, commodity funds, and hedge funds depending upon economic conditions. The following tables present the fair value of the defined benefit pension plan assets by major categories and by levels within the fair value hierarchy as of March 31, 2022 and 2021 (in thousands):
|  | March 31,
|  | 2022 |  | 2021
|  | Level 1 |  | Level 2 |  |  |  | Total |  | Level 1 |  | Level 2 |  |  |  | Total
Cash and cash equivalents |  | $ | 16,317 |  |  | $ | — |  |  |  |  | $ | 16,317 |  |  | $ | 21,715 |  |  | $ | — |  |  |  |  | $ | 21,715 |
Equity securities |  | 48,591 |  |  | — |  |  |  |  | 48,591 |  |  | 38,437 |  |  | — |  |  |  |  | 38,437 |
Debt securities |  | 38,513 |  |  | — |  |  |  |  | 38,513 |  |  | 31,034 |  |  | — |  |  |  |  | 31,034 |
Real estate funds |  | 25,146 |  |  | 13,077 |  |  |  |  | 38,223 |  |  | 20,802 |  |  | 8,341 |  |  |  |  | 29,143 |
Hedge funds |  | — |  |  | 8,076 |  |  |  |  | 8,076 |  |  | — |  |  | 2,730 |  |  |  |  | 2,730 |
Other |  | 6,034 |  |  | 364 |  |  |  |  | 6,398 |  |  | 4,704 |  |  | 298 |  |  |  |  | 5,002 |
Total fair value of plan assets |  | $ | 134,601 |  |  | $ | 21,517 |  |  |  |  | $ | 156,118 |  |  | $ | 116,692 |  |  | $ | 11,369 |  |  |  |  | $ | 128,061 |
The funded status of the plans was as follows (in thousands):
|  | Years Ended March 31,
|  | 2022 |  | 2021
Fair value of plan assets |  | $ | 156,118 |  |  | $ | 128,061 |
Less: projected benefit obligations |  | 207,551 |  |  | 202,348 |
Underfunded status |  | $ | (51,433) |  |  | $ | (74,287) |
Amounts recognized on the balance sheet for the plans were as follows (in thousands):
|  | March 31,
|  | 2022 |  | 2021
Current liabilities |  | $ | 1,677 |  |  | $ | 2,738 |
Non-current liabilities |  | 49,756 |  |  | 71,549 |
Total liabilities |  | $ | 51,433 |  |  | $ | 74,287 |
Amounts recognized in accumulated other comprehensive loss related to defined benefit pension plans were as follows (in thousands):
|  | March 31,
|  | 2022 |  | 2021 |  | 2020
Net prior service credits |  | $ | 2,883 |  |  | $ | 3,263 |  |  | $ | 3,647 |
Net actuarial loss |  | (4,304) |  |  | (27,553) |  |  | (22,722) |
Accumulated other comprehensive loss |  | (1,421) |  |  | (24,290) |  |  | (19,075) |
Deferred taxes |  | (2,074) |  |  | 1,090 |  |  | (941) |
Accumulated other comprehensive loss, net of tax |  | $ | (3,495) |  |  | $ | (23,200) |  |  | $ | (20,016) |
The actuarial assumptions for the defined benefit plans were as follows:
|  | Years Ended March 31,
|  | 2022 |  | 2021 |
Benefit Obligations: |  |  |  |  |
Discount rate |  | 1.00% - 6.75% |  | 0.25% - 6.00% |
Estimated rate of compensation increase |  | 2.00% - 10.00% |  | 2.00% - 10.00% |
Cash balance interest credit rate |  | 0.00% - 1.75% |  | 0.00% - 1.75% |
|  | Years Ended March 31,
|  | 2022 |  | 2021 |  | 2020
Periodic Costs: |  |  |  |  |  |
Discount rate |  | 0.25% - 6.00% |  | 0.50% - 6.75% |  | 0.55% - 7.25%
Estimated rate of compensation increase |  | 2.00% - 10.00% |  | 2.25% - 10.00% |  | 2.50% - 10.00%
Expected average rate of return on plan assets |  | 1.00% - 2.25% |  | 1.00% - 2.50% |  | 0.89% - 3.00%
Cash balance interest credit rate |  | 0.00% - 1.75% |  | 0.00% - 1.75% |  | 1.75% - 2.00%
The discount rate is estimated based on corporate bond yields or securities of similar quality in the respective country, with a duration approximating the period over which the benefit obligations are expected to be paid. The Company bases the compensation increase assumptions on historical experience and future expectations. The expected average rate of return for the Company's defined benefit pension plans represents the average rate of return expected to be earned on plan assets over the period that the benefit obligations are expected to be paid, based on government bond notes in the respective country, adjusted for corporate risk premiums as appropriate. The following table reflects the benefit payments that the Company expects the plans to pay in the periods noted (in thousands):
Years Ending March 31, |  |
2023 |  | $ | 12,387 |
2024 |  | 12,700 |
2025 |  | 13,600 |
2026 |  | 12,546 |
2027 |  | 14,362 |
Thereafter |  | 67,605 |
Total expected benefit payments by the plan |  | $ | 133,200 |
The Company expects to contribute $10.1 million to its defined benefit pension plans during fiscal year 2023. Deferred Compensation Plan One of the Company's subsidiaries offers a deferred compensation plan that permits eligible employees to make 100% vested salary and incentive compensation deferrals within established limits. The Company does not make contributions to the plan. The deferred compensation plan's assets consist of marketable securities and are included in other assets on the consolidated balance sheets. The marketable securities were recorded at a fair value of $28.4 million and $24.8 million as of March 31, 2022 and 2021, respectively, based on quoted market prices. The Company also had $28.4 million and $24.8 million in deferred compensation liability as of March 31, 2022 and 2021, respectively. Earnings, gains and losses on deferred compensation investments are included in other income (expense), net and corresponding changes in deferred compensation liability are included in operating expenses and cost of goods sold.

X
- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_CompensationAndEmployeeBenefitPlansTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration