Proposal 4
Amendment and restatement of the 2006 Stock Incentive Plan,
including an increase to the number of shares available for issuance under the
Plan
Proposal
The Board of Directors proposes that
shareholders approve amendments to and the restatement of the Logitech
International S.A. 2006 Stock Incentive Plan (the Plan) to authorize five
million seven hundred fifty thousand (5,750,000) additional shares for issuance
under the Plan, to improve the Companys corporate governance practices, and to
implement other best practices.
Explanation
The Board of Directors believes a key
component of the Companys continued ability to be successful is due to its
talented employee base and that future success depends on the ability to attract
and retain high-caliber employees. The Board believes the continued ability to
grant equity awards is a necessary and essential recruiting and retention tool
for the Company to attract and retain the high-caliber employees, officers and
directors critical to the Companys success.
The 2006 Stock Incentive Plan is the
Companys only active employee equity plan (other than its 2012 Inducement
Equity Plan, all of the authorized shares of which are subject to outstanding
awards, and its Employee Stock Purchase Plans), and as of June 1, 2016 we have
approximately five million shares remaining for issuance under the Plan. We
estimate that this remaining pool will be exhausted before the 2018 Annual
General Meeting despite the fact that, to maximize shareholder value, the
Company actively manages its program to use its equity plan resources as
effectively as possible.
The Compensation Committee anticipates
that the additional shares requested will enable the Company to fund the equity
compensation program through the end of fiscal year 2020, accommodating
anticipated grants relating to the hiring, retention and promotion of employees
and providing reasonable flexibility for acquisitions. The table below sets out
the shares currently available under the plan and if this proposal is
approved:
2006 Stock Incentive Plan
Share Reservation
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Shares
(in
millions)
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Initial shares authorized under the Plan
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14.00
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Additional shares authorized at subsequent Annual General
Meetings
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10.80
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Shares awarded from June 2006 through June 1, 2016, net of
cancellations
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(
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19.79
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)
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Additional shares requested under
this proposal
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5.75
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Total shares available for
issuance at June 1, 2016 (as if proposal approved)
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10.76
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The Board is not proposing an increase
to the Companys conditional capital for Logitechs employee equity incentive
plans. Since 2000, Logitech has used shares held in treasury from its share
repurchase programs to cover its issuance obligations under employee equity
incentive grants, including grants made under the Plan. It expects to continue
to do so.
Logitech has granted equity incentives
to employees since its very earliest days in the 1980s. The use of equity
compensation in part reflects market practice,
especially in Californias Silicon
Valley, where the Company has a significant presence. However, it is also a key
differentiator in attracting and retaining employees in employment markets
outside of the United States where, historically, equity incentive compensation
was not or is not common. The Board of Directors believes that having the
ability to offer equity incentives continues to be a key part of Logitechs
compensation program and the Companys long-term success.
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Proxy Statement
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Agenda Proposals and
Explanations
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Material Changes to the Plan
The following summary highlights the
proposed material changes to the Plan.
●
The number of shares reserved for
future issuance pursuant to awards granted under the Plan has been
increased by five million seven hundred fifty thousand (5,750,000)
additional shares from 24.8 million shares to 30.55 million shares.
●
The Plan has been amended to
impose a minimum vesting period of one year on all awards, except (i) for
certain awards substituted in connection with a corporate transaction and
(ii) for 5% of the number of shares reserved for future issuance under the
Plan as of the date that the Plan amendment becomes
effective.
●
The Plan has been amended to
allow shares that are used to satisfy tax withholding obligations for
awards other than options or SARs to be available for re-issuance under
the Plan.
The following summary of certain
material features of the Plan is qualified in its entirety by reference to the
Plan, which is attached to this proxy statement as Appendix A.
Awards Outstanding under the Plan as
of June 1, 2016
As of June 1, 2016, 5,065,253 shares
were issuable upon exercise of stock options outstanding under the Plan with a
weighted average exercise price of USD 17.90 per share and a weighted average
term of 3.97 years, and an aggregate of 6,972,012 shares were subject to RSUs
and PRSUs outstanding under the Plan with no exercise price. In addition as of
June 1, 2016, there were 5,011,170 shares available for grant under the
Plan.
Key Terms of the Plan at a Glance
The following is a summary of the key
provisions of the Plan, as amended and restated.
Plan Term:
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The
Plan, as amended and restated, will become effective on the date the
shareholders approve the Plan and will continue in effect until terminated
by the board of directors. The proposed amendments will apply to
previously granted awards that are outstanding as well as to awards that
are granted after the effective date of the Plan
amendment.
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Eligible Participants:
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Employees, directors, and consultants of the Company, a
parent, a subsidiary or an affiliate generally are eligible to receive
each type of award offered under the Plan.
Only employees of the Company,
a parent or a subsidiary are eligible to receive incentive stock options
(ISOs) under the Plan.
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Shares Available for
Awards:
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If
the amendments are approved by the shareholders, 30.55 million shares over
the term of the Plan, subject to adjustment in the event of certain
changes in the capitalization of the Company, of which approximately 10.76
million shares will be available for the grant of new awards under the
Plan (based on awards granted through June 1, 2016).
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Award Types:
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(1) Options
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(2) SARs
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(3) Restricted
Shares
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(4) Restricted Stock
Units
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Award Terms:
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Options and SARs will have a term of
no longer than ten years.
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ISO Limits:
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No more than the maximum number of
shares reserved for issuance may be granted as ISOs under the
Plan.
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Proxy
Statement
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Agenda Proposals and
Explanations
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162(m) Share Limits:
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Section 162(m) of the Code
requires, among other things, that the maximum number of shares awarded to
an individual must be approved by the shareholders in order for the awards
granted under the Plan to be eligible for treatment as performance-based
compensation that will not be subject to the USD 1 million limitation on
tax deductibility for compensation paid to certain specified executive
officers.
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Accordingly, the Plan
limits individual awards that are intended to be qualified
performance-based compensation under Section 162(m) of the Code as
follows:
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(1)
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no award of options or SARs covering
more than 6 million of the Companys shares may be granted to an
individual employee in any fiscal year; and
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(2)
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no award of Restricted Shares or
Restricted Stock Units covering more than 4 million of the Companys
shares may be granted to an individual employee in any fiscal
year.
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Minimum Vesting:
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Generally determined by
the administrator within the limits set forth in the Plan. If the
shareholders approve the proposed amendment, then no award granted after
the effective date of the Plan amendment may vest earlier than the first
anniversary of the date of grant, except that 5% of the number of shares
reserved for future issuance under the Plan as of the effective date of
the Plan amendment and substitute awards granted in connection with
certain corporate transactions are not subject to this minimum vesting
requirement.
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Not Permitted:
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The following are not
permitted under the Plan:
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(1)
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Discounted
Options or SARs
Granting options or SARs at a price below fair market
value of the Companys shares on the date of grant.
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(2)
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Repricing
Unless
approved by the shareholders, repricing or reducing the exercise price of
an underwater option or SAR, or exchanging underwater options or SARs for
(i) a new option or SAR with a lower exercise price, (ii) a cash payment
or (iii) any other award.
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(3)
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Recycling of
Shares Subject to Options/SARs
Adding shares back to the number of shares
available for issuance when (i) shares covered by an option or SAR are
surrendered in payment of the option exercise price or in satisfaction of
tax withholding obligations related to exercise or settlement of an option
or SAR, (ii) shares are not issued or delivered as a result of net
settlement of an outstanding SAR or option, and (iii) shares are
repurchased on the open market with the proceeds of the exercise of an
option.
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(4)
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Automatic Vesting
Acceleration Upon Change of Control.
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Summary of the Plan
Administration of the
Plan.
The Board of Directors or the
Compensation Committee, which is made up entirely of independent directors
(collectively referred to herein as the administrator), administers the Plan.
The administrator selects the employees, consultants and directors who will
receive awards, determines the number of shares covered by the awards, and,
subject to the
terms and limitations in the Plan,
establishes the terms, conditions and other provisions of each award agreement.
The administrator may interpret the Plan and establish, amend and rescind any
rules relating to the Plan. The administrator may delegate to a committee of one
or more officers of the Company the ability to grant awards, to the extent
permitted by the Companys corporate governing documents. The administrator also
may adopt
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Agenda Proposals and
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sub-plans and corresponding rules,
procedures and forms of award agreement for the purposes of granting awards to
participants outside the U.S. and complying with non-U.S. laws.
Share
Reserve.
The maximum number of shares
that we have authorized for issuance under the Plan is 30.55 million
shares.
Any award of options or SARs intended
to comply with Section 162(m) of the Code is limited to an aggregate of 6
million shares per individual in a single fiscal year, and any award of
restricted shares or restricted stock units intended to comply with Section
162(m) of the Code is limited to an aggregate of 4 million shares per individual
in a single fiscal year.
Any shares subject to an award that
expires or terminates unexercised or before settlement, is not earned in full or
is forfeited, is settled in cash, or shares used to satisfy tax withholding
obligations for awards other than an option or SAR, will again become available
for issuance under the Plan. Any dividend equivalents credited under the Plan
and paid in cash shall not be applied against the number of shares that may be
issued under the Plan.
The following shares will be counted
against the maximum number of shares reserved for issuance and will not be
returned to the Plan for future issuance: (i) shares covered by an option or a
SAR that are surrendered in payment of the option exercise price or due to tax
withholding at exercise, (ii) shares that are not issued or delivered as a
result of net settlement of an outstanding SAR or option, and (iii) shares that
are repurchased on the open market with the proceeds of the exercise of an
option.
Eligibility.
Only employees of the Company, a parent or a subsidiary are
eligible to receive ISOs. Employees, directors and consultants of the Company, a
parent, a subsidiary or an affiliate are eligible to receive nonstatutory
options, SARs, restricted shares, and restricted stock units. As of June 1,
2016, the Company had approximately 6,400 employees, eight non-employee
directors and approximately 220 consultants eligible to receive awards under the
Plan. Consultants, however, may only be granted awards to the extent permitted
by the Companys corporate governing documents.
Awards.
Awards granted under the Plan may include any of the
following:
Options.
An option is the right to purchase shares of the Company at a fixed
exercise price for a fixed period of time. Each option is evidenced by an award
agreement and is subject to the following terms and conditions:
Number of Options.
The administrator will determine the number of shares subject
to an option granted to any participant.
Exercise Price.
The administrator will determine the exercise price of
options granted under the Plan at the time the options are granted, but the
exercise price generally must be at least equal to the fair market value of a
share of the Company on the date of grant. The fair market value of a share
generally is determined with reference to the closing sale price for a share of
the Company on the day the option is granted on either the SIX Swiss Exchange
(for options denominated in Swiss francs) or the NASDAQ Global Select Market
(for options denominated in U.S. dollars). The fair market value on the date of
grant also may be determined based on an average of trading prices in a period
before or after the date of grant. As of June 1, 2016, the closing price of a
share of the Company was CHF 15.15 on the SIX Swiss Exchange and USD 15.33 on
the NASDAQ Global Select Market.
Exercise of Option; Form of
Consideration.
The administrator determines
when options become exercisable, subject to the minimum vesting requirements
described below and may, in its discretion, accelerate the vesting of
outstanding options under certain circumstances. The means of payment for shares
issued upon exercise of an option is specified in each award agreement. To the
extent permitted by applicable law, the Plan permits payment to be made by cash,
cash equivalents, promissory note, other shares (with some restrictions),
cashless exercise, net exercise, any combination of the prior methods of payment
or any other form of consideration permitted by applicable law.
Term of Option.
The term of an option will be stated in the award agreement.
However, the term of an option may not exceed ten years. No option may be
exercised after the expiration of its term.
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Agenda Proposals and
Explanations
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Termination of
Service.
After termination of service, an
option holder may exercise his or her option for the period of time determined
by the administrator and stated in the award agreement. If no period of time is
stated in a participants award agreement, a participant may exercise the option
within ninety days after such termination, to the extent that the option is
vested on the date of termination (but in no event later than the expiration of
the term of such option as set forth in the award agreement), unless such
participants service terminates due to the participants death or disability,
in which case the participant (or, if the participant has died, the
participants estate, designated beneficiary or the person who acquires the
right to exercise the option by bequest or inheritance) may exercise the option,
to the extent the option was vested on the date of termination (or to the extent
the vesting is accelerated upon the participants death), within one year after
the date of such termination. However, unless a participants service is
terminated for cause, if a participant is prevented from exercising an option
within the applicable post-termination time period due to legal compliance
issues relating to the issuance of shares, the option will remain exercisable
for thirty days after the date on which the Company notifies the participant
that the option is exercisable, but in any event no later than the expiration of
the term of the option.
Stock Appreciation
Rights.
A SAR is the right to receive the
appreciation in the fair market value of shares of the Company between the grant
date and the exercise date, for that number of shares of the Company with
respect to which the SAR is exercised. The Company may pay the appreciation in
cash, shares of the Company with equivalent value, or in some combination
thereof, as determined by the administrator. Each award of SARs is evidenced by
an award agreement specifying the terms and conditions of the award. The
administrator determines the number of shares granted to a service provider
pursuant to an award SARs. The administrator also determines the exercise price
of SARs, the vesting schedule, subject to the minimum vesting requirements
described below, and other terms and conditions of SARs. However, the exercise
price must be at least equal to the fair market value of a share of the Company
on the date of grant, and the term of a SAR may not exceed ten years.
After termination of service, a
participant will be able to exercise the vested portion of his or her SAR for
the period of time determined by the administrator and provided in the award
agreement. If no period of time is provided in a participants award agreement,
a participant or, in the case of participants death, his or her estate or
beneficiary, will generally be able to exercise his or her vested SAR for (i) 90
days after his or her termination for reasons other than death or disability,
and (ii) one year following his or her termination due to death or disability.
In no event may a SAR be exercised after the expiration of its term.
Restricted Shares.
Restricted share awards are awards of shares of the Company
that vest in accordance with terms and conditions established by the
administrator, subject to the minimum vesting requirements described below. Each
award of restricted shares is evidenced by an award agreement specifying the
terms and conditions of the award. Vesting can be conditioned on continued
employment, the passage of time, or performance goals. The administrator will
determine the number of restricted shares granted to any participant. The
administrator also determines the purchase price, if any, of restricted shares
and, unless the administrator determines otherwise, unvested restricted shares
typically will be subject to forfeiture upon the voluntary or involuntary
termination of a participants service for any reason including death or
disability.
Restricted Stock Units (including
Performance-Based
Restricted Stock Units).
Restricted
stock units are awards that represent the right to receive shares of the Company
or cash equal to the value of the shares, or some combination of both as
determined by the administrator, if the restricted stock units vest. Restricted
stock units vest in accordance with terms and conditions established by the
administrator, as set forth in the applicable award agreement and subject to the
minimum vesting requirements describe below. Vesting can be conditioned on
continued employment, the passage of time, or performance goals. Restricted
stock units that are subject to performance goals are referred to as
performance-based restricted stock units. No condition that is subject to
performance goals may be based on performance over a period of less than one
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Proxy Statement
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Agenda Proposals and
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year. The award agreement may provide
for forfeiture or cancellation of the restricted stock units, in whole or in
part, in the event of termination of the participants service.
Minimum One-Year Vesting
Requirement.
No award granted under the Plan
after the effective date of the Plan amendment may vest prior to the first
anniversary of the grant date, except that 5% of the number of shares reserved
for future issuance under the Plan as of the date the Plan amendment becomes
effective is not subject to this minimum vesting requirement. Substitute awards
granted in connection with a corporate transaction are not subject to this
minimum vesting requirement.
Vesting
Acceleration.
The administrator has the
authority to accelerate the vesting of awards in any circumstance, including
upon a participants termination of service for any reason (including death,
disability or retirement) or upon a corporate transaction or change of
control.
162(m) Performance Criteria.
Performance-based awards may, but need not, be based on performance criteria
that satisfy Section 162(m) of the Code. To the extent that awards are intended
to qualify as performance-based compensation under Section 162(m) of the Code,
the performance criteria will be based on the share price appreciation (in the
case of options and SARs) or on one or more of the following criteria (in the
case of restricted shares and restricted stock units): brand
recognition/acceptance, cash flow, cash flow return on investment, contribution
to profitability, cost control, cost positions, cost of capital, customer
satisfaction, development of products, earnings before interest, taxes and
amortization; earnings per share, economic profit, economic value added, free
cash flow, income or net income, income before income taxes, market segment
share, new product innovation, operating income or net operating income,
operating margin or profit margin, operating profit or net operating profit,
process excellence, product cost reduction, product mix, product release
schedules, product ship targets, quality, return on assets or net assets, return
on capital, return on capital employed, return on equity, return on invested
capital, return on operating revenue, return on sales, revenue, sales, share
price performance, strategic alliances, total shareholder return, and working
capital. The performance goals may differ from participant to participant and
from award to award and may be used
in any combination. Any performance
goals may be applied to the Company as a whole, or to a business unit or a
subsidiary, either individually or in any combination, and measured either
annually or cumulatively over a period of years. Performance goals may be
measured, as applicable, in absolute terms or in relative terms (including
against prior years results and/or against a comparison group).
Nontransferability of
Awards.
Unless otherwise determined by
the administrator, awards granted under the Plan are not transferable other than
by will, by beneficiary designation (if such a designation is permitted by the
administrator) or by the laws of descent and distribution, and may be exercised
during the participants lifetime only by the participant. If the administrator
makes an award transferable, the award shall contain such additional terms and
conditions as the administrator deems appropriate.
Adjustments upon Change in
Capitalization.
In the event that the
shares of the Company or other securities change by reason of a stock dividend,
stock split, combination or reclassification of shares, extraordinary dividend
of cash or assets, recapitalization, reorganization or any similar event
affecting the shares of the Company or other securities, the administrator will
make adjustments to the number and kind of the shares of the Company or other
securities subject to the Plan, including the maximum number of shares that may
be issued pursuant to the exercise of an ISO and the annual limits on the number
of shares that may be granted with respect to an ISO award, or subject to awards
previously granted, and the exercise or settlement price of awards previously
granted, in order to reflect the change and to preclude a dilution or
enlargement of benefits under an award.
Adjustments upon Dissolution or
Liquidation.
Effective upon the
consummation of the Companys liquidation or dissolution, any unexercised award
generally will terminate. The administrator may, in its discretion, provide that
a participant will have the right to exercise all or any part of an award,
including shares as to which an award would not otherwise be exercisable, prior
to the consummation of such proposed action.
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Agenda Proposals and
Explanations
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Adjustments upon Merger or Change
in Control.
In the event the Company is a
party to a merger, consolidation or reorganization, or the sale of substantially
all of its assets, then each outstanding award will be subject to the applicable
award agreement, which must provide for one or more of the following: the
continuation, assumption, or substitution of outstanding awards; full
exercisability or vesting of outstanding awards (which may be contingent on the
closing of the transaction); or the cancellation of outstanding awards and the
payment to the holder in cash or shares of an amount equal to the per share
amount that shareholders of the Company are entitled to receive or realize in
connection with the applicable transaction with respect to the number of shares
subject to the applicable award (which payment may be made subject to continued
vesting).
Amendment and Termination of the
Plan.
The Plan will continue in effect
until the Board of Directors terminates it. In addition, the Board of Directors
has the authority to amend, alter, suspend or terminate the Plan, but no
amendment, alteration, suspension or termination may impair the rights of any
participant under an outstanding award, unless agreed otherwise between the
participant and the administrator. The Plan or an award agreement may be
amended, altered, suspended or terminated without consent from the participant
if required to facilitate compliance with applicable laws.
U.S. Federal Tax Consequences
The U.S. federal tax rules applicable
to the Plan under the Code are summarized below. This summary does not include
the tax laws of any municipality or state or any country outside the United
States in which a participant resides or to which he or she may be subject.
Nonstatutory
Options.
An optionee does not recognize
any taxable income at the time he or she is granted a nonstatutory option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Any
taxable income recognized in connection with an option exercise by an employee
is subject to tax withholding. The Companys U.S. operating subsidiary is
generally entitled to a deduction in the same amount as the ordinary income
recognized by the optionee. Upon a disposition of the shares by the
optionee, any difference between the
sale price and the optionees exercise price, to the extent not recognized as
taxable income as provided above, is treated as long-term or short-term capital
gain or loss, depending on the holding period.
Stock Appreciation
Rights.
No taxable income is reportable
when a SAR is granted to a participant. Upon exercise, the participant will
recognize ordinary income in an amount equal to the amount of cash received and
the fair market value of any shares received. Any additional gain or loss
recognized upon any later disposition of the shares would be long-term or
short-term capital gain or loss, depending on the holding period.
Logitech Inc., the Companys U.S.
operating subsidiary, generally will be entitled to a tax deduction in
connection with an award under the Plan in an amount equal to the ordinary
income realized by a participant subject to U.S. taxation and at the time such
participant recognizes such income.
Restricted
Shares.
A participant generally will not
have taxable income at the time an award of restricted shares is granted.
Instead, he or she will recognize ordinary income in the first taxable year in
which his or her interest in the restricted shares becomes either (i) freely
transferable or (ii) no longer subject to substantial risk of forfeiture (e.g.,
vested). However, a holder of restricted shares may elect to recognize income at
the time he or she is granted the award (to the extent it is not vested) in an
amount equal to the fair market value of the shares underlying the award less
any amount paid for the shares on the date the award is granted. Upon the sale
of any shares received, any gain or loss, based on the difference between the
sale price and the fair market value on the settlement date, will be taxed as a
long-term or short-term capital gain or loss, depending on the holding period.
Logitech Inc. generally will be
entitled to a tax deduction equal to the amount of ordinary income recognized by
the participant on the date the shares are freely transferable or no longer
subject to a substantial risk of forfeiture, except to the extent such deduction
is limited by applicable provisions of the Code.
Restricted Stock
Units.
A participant generally will not
have taxable income at the time an award of restricted stock units is granted.
Upon the settlement of the award, the participant normally will recognize
ordinary income
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in the year of receipt in an amount
equal to the cash received and the fair market value of any non-restricted
shares received. Upon the sale of any shares received, any gain or loss, based
on the difference between the sale price and the fair market value on the
settlement date, will be taxed as a long-term or short-term capital gain or
loss, depending on the holding period.
Logitech Inc. generally will be
entitled to a tax deduction equal to the amount of ordinary income recognized by
the participant on the settlement date, except to the extent such deduction is
limited by applicable provisions of the Code.
Performance-Based Compensation
Under Code Section 162(m).
Special rules
limit the deductibility of compensation paid to certain executive officers in
the United States. Under Section 162(m) of the Code, the annual compensation
paid to executive officers in the U.S. may not be deductible to the extent it
exceeds USD 1 million. However, Logitech Inc. can preserve the deductibility of
certain compensation in excess of USD 1 million if the conditions of Section
162(m) of the Code are met. These conditions include shareholder approval of the Plan and setting limits on the
number
of awards that any individual may receive per year. The Plan has been
designed to permit the administrator to grant awards that qualify as
performance-based for purposes of satisfying the conditions of Section 162(m) of
the Code, which permits Logitech Inc. to continue to receive a federal income
tax deduction in connection with such awards.
New Plan Benefits
The amount and timing of awards granted
under the Plan are determined in the sole discretion of the administrator and
therefore cannot be determined in advance. The future awards that would be
received under the Plan by executive officers and other employees are
discretionary and are therefore not determinable at this time.
Historical Grants under the
Plan
The following table shows, for each of
the individuals and groups indicated, the aggregate number of shares subject to
awards that have been granted to the individuals and groups indicated below
under the Plan since its inception through June 1, 2016:
Name of Individual or
Group
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Number of
Shares
Underlying Awards
Granted
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Named Executive Officers
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Guerrino De Luca
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766,151
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Bracken
Darrell
(1)
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1,572,624
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Vincent Pilette
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1,159,298
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Marcel Stolk
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648,568
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L. Joseph Sullivan
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887,061
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Current Executive Officers as a
Group
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5,033,702
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Non-Employee Directors
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Edouard Bugnion
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11,200
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|
Kee-Lock Chua
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97,300
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Sally Davis
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111,300
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Sue Gove
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11,200
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Didier Hirsch
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67,800
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Neil Hunt
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82,800
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Dimitri Panayotopoulos
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22,200
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Lung Yeh
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|
|
11,200
|
|
Current Non-Employee Directors as a
Group
|
|
|
415,000
|
|
All Current Employees, other than
Current Executive Officers, as a Group
|
|
|
10,928,727
|
|
1
|
|
Mr. Darrell was also awarded
1,800,000 shares under a 2012 Inducement Equity Plan upon joining the
Company in April 2012, which are not part of the Plan and are not included in this
table.
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Proxy
Statement
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24
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Agenda Proposals and
Explanations
|
Voting Requirement to Approve
Proposal
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation of the Board
The Board of Directors recommends a
vote
FOR
approval of the proposed amendments to and restatement of the 2006 Stock
Incentive Plan, including the increase by five million seven hundred fifty
thousand (5,750,000) to the number of shares available for issuance under the
Plan.
25
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Proxy Statement
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Agenda Proposals and
Explanations
|
Proposal
5
Release of the Board of
Directors and Executive Officers from Liability for Activities during Fiscal
Year 2016
Proposal
The Board of Directors proposes that
shareholders release the members of the Board of Directors and Executive
Officers from liability for activities during fiscal year 2016.
Explanation
As is customary for Swiss corporations
and in accordance with Article 698, subsection 2, item 5 of the Swiss Code of
Obligations, shareholders are requested to release the members of the Board of
Directors and the Executive Officers from liability for their activities during
fiscal year 2016 that have been disclosed to shareholders. This release from
liability exempts members of the Board of Directors or Executive Officers from
liability claims brought by the Company or its shareholders on behalf of the
Company against any of them for activities carried out during fiscal year 2016
relating to facts that have been disclosed to shareholders. Shareholders that do
not vote in favor of the proposal, or acquire their shares after the vote
without knowledge of the approval of this resolution, are not bound by the
result for a period ending six months after the vote.
Voting Requirement to Approve
Proposal
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions and not counting the votes of any member of the Board
of Directors or of any Logitech executive officers.
Recommendation
The Board of Directors recommends a
vote
FOR
the proposal to release the members of the Board of Directors and Executive
Officers from liability for activities during fiscal year
2016.
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Proxy
Statement
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26
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Agenda Proposals and
Explanations
|
Proposal
6
Elections to the Board
of Directors
Our Board of Directors is presently
composed of ten members. Each director was elected for a one-year term ending at
the closing of the 2016 Annual General Meeting.
At the recommendation of the Nominating
Committee, the Board has nominated the ten individuals below to serve as
directors for a one-year term, beginning in each case as of the Annual General
Meeting on September 7, 2016. Nine of the nominees currently serve as members of
the Board of Directors. Their current terms expire upon the closing of the
Annual General Meeting on September 7, 2016. The other nominee was recommended
by the Nominating Committee of the Board and approved by the Board in June 2016
as a nominee for election to the Board. Dr. Patrick Aebischers candidacy as a nominee
was recommended by our Chairman Emeritus, co-founder and former director, Chief
Executive Officer and Chairman, Mr. Daniel Borel. Mr. Kee-Lock Chua, having
served the Company as a member of the Board for sixteen years, has decided to
retire and not to stand for re-election.
The term of office ends at the closing
of the next Annual General Meeting. There will be a separate vote on each
nominee.
Under Swiss law, Board members may only
be appointed by shareholders. If the individuals below are elected, the Board
will be composed of ten members. The Board has no reason to believe that any of
our nominees will be unwilling or unable to serve if elected as a
director.
For further information on the Board of
Directors, including the current members of the Board, the Committees of the
Board, the means by which the Board exercises supervision of Logitechs
executive officers, and other information, please see Corporate Governance and
Board of Directors Matters below.
6.A Re-election of Dr. Edouard
Bugnion
Proposal:
The Board of Directors proposes that Dr. Edouard Bugnion be re-elected
to the Board for a one-year term ending at the closing of the 2017 Annual
General Meeting.
For biographical information and
qualifications of Dr. Bugnion, please refer to Corporate Governance and Board
of Directors Matters Members of the Board of Directors on page
39.
6.B Re-election of Mr. Bracken
Darrell
Proposal:
The Board of Directors proposes that the Companys President and Chief
Executive Officer, Mr. Bracken Darrell, be re-elected to the Board for a
one-year term ending at the closing of the 2017 Annual General
Meeting.
For biographical information and
qualifications of Mr. Darrell, please refer to Corporate Governance and Board
of Directors Matters Members of the Board of Directors on page
40.
6.C Re-election of Ms. Sally
Davis
Proposal:
The Board of Directors proposes that Ms. Sally Davis be re-elected to
the Board for a one-year term ending at the closing of the 2017 Annual General
Meeting.
For biographical information and
qualifications of Ms. Davis, please refer to Corporate Governance and Board of
Directors Matters Members of the Board of Directors on page
40.
27
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Proxy Statement
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Agenda Proposals and
Explanations
|
6.D Re-election of Mr. Guerrino De
Luca
Proposal:
The Board of Directors proposes that Mr. Guerrino De Luca be re-elected
to the Board for a one-year term ending at the closing of the 2017 Annual
General Meeting.
For biographical information and
qualifications of Mr. De Luca, please refer to Corporate Governance and Board
of Directors Matters Members of the Board of Directors on page
41.
6.E Re-election of Ms. Sue
Gove
Proposal:
The Board of Directors proposes that Ms. Sue Gove be re-elected to the
Board for a one-year term ending at the closing of the 2017 Annual General
Meeting.
For biographical information and
qualifications of Ms. Gove, please refer to Corporate Governance and Board of
Directors Matters Members of the Board of Directors on page 41.
6.F Re-election of Mr. Didier
Hirsch
Proposal:
The Board of Directors proposes that Mr. Didier Hirsch be re-elected to
the Board for a one-year term ending at the closing of the 2017 Annual General
Meeting.
For biographical information and
qualifications of Mr. Hirsch, please refer to Corporate Governance and Board of
Directors Matters Members of the Board of Directors on page 42.
6.G Re-election of Dr. Neil
Hunt
Proposal:
The Board of Directors proposes that Dr. Neil Hunt be re-elected to the
Board for a one-year term ending at the closing of the 2017 Annual General
Meeting.
For biographical information and
qualifications of Dr. Hunt, please refer to Corporate Governance and Board of
Directors Matters Members of the Board of Directors on page
42.
6.H Re-election of Mr. Dimitri
Panayotopoulos
Proposal:
The Board of Directors proposes that Mr. Dimitri Panayotopoulos be
re-elected to the Board for a one-year term ending at the closing of the 2017
Annual General Meeting.
For biographical information and
qualifications of Mr. Panayotopoulos, please refer to Corporate Governance and
Board of Directors Matters Members of the Board of Directors on page
43.
6.I Re-election of Dr. Lung
Yeh
Proposal:
The Board of Directors proposes that Dr. Lung Yeh be re-elected to the
Board for a one-year term ending at the closing of the 2017 Annual General
Meeting.
For biographical information and
qualifications of Dr. Yeh, please refer to Corporate Governance and Board of
Directors Matters Members of the Board of Directors on page 43.
6.J Election of Dr. Patrick
Aebischer
Proposal:
In accordance with the recommendation of the Nominating Committee, the
Board of Directors proposes that Dr. Patrick Aebischer be elected to the Board
for a one-year term ending at the closing of the 2017 Annual General Meeting.
Patrick Aebischer
is the President of the École Polytechnique Fédérale de
Lausanne (EPFL), a position to which he was nominated by the Swiss Federal
Council and that he has held since March 2000, a Professor in Neurosciences at
the EPFL since 2000, and Director of the Neurodegenerative Disease Laboratory at
the Brain Mind Institute, EPFL since 2000. He was re-elected as President of the
EPFL in 2004, 2008 and 2012 and will hold the position through December 2016.
Prior to his current positions, Dr. Aebischer was a Professor and Director of
the Surgical Research Division and Gene Therapy Center at the University
Hospital of Lausanne, Chairman of the Section of Artificial Organs, Biomaterials
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Proxy
Statement
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28
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Agenda Proposals and
Explanations
|
and Cellular Technology of the Division
of Biology and Medicine at Brown University, and held other positions in medical
sciences at Brown University. Dr. Aebischer is also the founder of three biotech
companies. He currently serves on the Boards of Nestlé S.A., a leading
nutrition, health and wellness company, and Lonza Group Ltd., a leading supplier
to the life-science industries, as well as Chairman of the Advisory Board of the
Novartis Venture Fund. Dr. Aebischer holds a M.D. from the University of Geneva
and University of Fribourg, Switzerland, and three Honorary Doctorate degrees.
He is 61 years old and a Swiss national.
Dr. Aebischer brings senior leadership,
innovation and technology expertise, a global world view and strategic
experience to the Board from his role as the President
of the EPFL, his experience founding
technology companies, and as a member of the senior leadership of leading Swiss
companies.
The Board of Directors has determined
that he will be an independent Director.
Voting Requirement to Approve
Proposals
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation
The Board of Directors recommends a
vote
FOR
the election to the Board of each of the above nominees.
29
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|
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Proxy Statement
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Agenda Proposals and
Explanations
|
Proposal
7
Election of the
Chairman of the Board
Pursuant to the so-called Minder
Ordinance, Swiss law requires that the Chairman of the Board of Directors be
elected on the occasion of each Annual General Meeting for a one-year term
ending at the closing of the following Annual General Meeting.
Proposal
The Board of Directors proposes that
Mr. Guerrino De Luca be re-elected as Chairman of the Board of Directors for a
one-year term ending at the closing of the 2017 Annual General
Meeting.
Voting Requirement to Approve
Proposal
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation
The Board of Directors recommends a
vote
FOR
the election of Mr. Guerrino De Luca as Chairman of the Board of
Directors.
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Proxy
Statement
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30
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Agenda Proposals and
Explanations
|
Proposal
8
Elections to the
Compensation Committee
Our Compensation Committee is presently
composed of three members, each of whom is standing for re-election to the Board
of Directors and to the Compensation Committee. Following the amendment to the
Swiss corporate law on January 1, 2014, the members of the Compensation
Committee are to be elected annually and individually by the shareholders. Only
members of the Board of Directors can be elected as members of the Compensation
Committee.
At the recommendation of the Nominating
Committee, the Board of Directors has nominated the four individuals below to serve as
members of the Compensation Committee for a term of one year. Three of the
nominees currently serve as members of the Compensation Committee and, as
required by our Compensation Committee charter, all of the nominees are
independent in accordance with the requirements of the listing standards of the
Nasdaq Stock Market, the outside director definition of Section 162(m) of the
U.S. Internal Revenue Code of 1986, as amended, the definition of a
non-employee director for purposes of Rule 16b-3 promulgated by the U.S.
Securities and Exchange Commission, and Rule 10C-1(b)(1) of the U.S. Securities
Exchange Act of 1934, as amended.
The term of office ends at the closing
of the next Annual General Meeting. There will be a separate vote on each
nominee.
8.A Re-election of Ms. Sally
Davis
Proposal:
The Board of Directors proposes that Ms. Sally Davis be re-elected to
the Compensation Committee for a one-year term ending at the closing of the 2017
Annual General Meeting.
For biographical information and
qualifications of Ms. Davis, please refer to Corporate Governance and Board of
Directors Matters Members of the Board of Directors on page
40.
8.B Re-election of Dr. Neil
Hunt
Proposal:
The Board of Directors proposes that Dr. Neil Hunt be re-elected to the
Compensation Committee for a one-year term ending at the closing of the 2017
Annual General Meeting.
For biographical information and
qualifications of Dr. Hunt, please refer to Corporate Governance and Board of
Directors Matters Members of the Board of Directors on page 42.
8.C Re-election of Mr. Dimitri
Panayotopoulos
Proposal:
The Board of Directors proposes that Mr. Dimitri Panayotopoulos be
re-elected to the Compensation Committee for a one-year term ending at the
closing of the 2017 Annual General Meeting.
For biographical information and
qualifications of Mr. Panayotopoulos, please refer to Corporate Governance and
Board of Directors Matters Members of the Board of Directors on page
43.
8.D Election of Dr. Edouard
Bugnion
Proposal:
The Board of Directors proposes that Dr. Edouard Bugnion be elected to
the Compensation Committee for a one-year term ending at the closing of the 2017
Annual General Meeting.
For biographical information and
qualifications of Dr. Bugnion, please refer to Corporate Governance and Board
of Directors Matters Members of the Board of Directors on page
39.
Voting Requirement to Approve
Proposals
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation
Our Board of Directors recommends a
vote
FOR
the election to the Compensation Committee of each of the above
nominees.
31
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Proxy Statement
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Agenda Proposals and
Explanations
|
Proposal
9
Approval of
Compensation for the Board of Directors for the 2016 to 2017 Board
Year
Proposal
The Board of Directors proposes that
the shareholders approve a maximum aggregate amount of the compensation of the
Board of Directors of CHF 4,600,000
for the term of office from the Annual General Meeting 2016 until the Annual General
Meeting 2017 (the 2016 2017 Board Year), subject to adjustment for certain
changes in the applicable currency exchange rate.*
Explanation
Pursuant to the so-called Minder
Ordinance, the compensation of the Board of Directors must be subject each year
to a binding shareholder vote, in the manner contemplated by Logitechs Articles
of Incorporation. Article 19 quarter, paragraph 1(a) of Logitechs Articles of
Incorporation allows shareholders to approve the maximum aggregate amount of the
compensation of the Board of Directors for the period up to the next Annual
General Meeting.
Under the Companys Articles of
Incorporation, the compensation of the members of the Board of Directors who do
not have management responsibilities consists of cash payments and shares or
share equivalents. The value of cash compensation and shares or share
equivalents corresponds to a fixed amount, which reflects the functions and
responsibilities assumed. The value of shares or share equivalents is calculated
at market value at the time of grant.
Pursuant to Article 19 bis, paragraph 2
of the Companys Articles of Incorporation, the compensation of the members of
the Board of Directors who have management responsibilities (i.e., executive
members of the Board of Directors) is structured similarly to the compensation
of the members of the Group Management Team.
The proposed maximum amount of CHF
4,600,000 has been determined based on the following non-binding assumptions:
With respect to the eight non-executive members of the Board of
Directors:
●
|
Cash payments of a maximum of
approximately CHF 840,000. Cash payments for non-executive members of the
Board of Directors include annual retainers for Board and committee
service and travel fees.
|
●
|
Share or share equivalent awards
of a maximum of approximately CHF 1,200,000. The value of share or share
equivalent awards corresponds to a fixed amount and the number shares
granted will be calculated at market value at the time of their
grant.
|
●
|
Other payments, including the
Companys contributions to social security, of a maximum of approximately
CHF 260,000.
|
*
|
|
For each decrease of 0.01 in the
exchange rate of the Swiss Franc against the U.S. Dollar below the assumed
level of USD 1.0288 to CHF 1.00, if any, the maximum aggregate amount of
the compensation of the Board of Directors will increase by CHF 22,000 for
the 2016 2017 Board Year. This adjustment reflects the fact that the
compensation of our Chairman, which is included in the maximum aggregate
amount of the compensation for the Board of Directors, is set in U.S.
Dollars.
|
|
Proxy
Statement
|
32
|
Agenda Proposals and
Explanations
|
With respect to executive members of
the Board of Directors:
●
|
Gross base compensation of a
maximum of CHF 515,000.**
|
●
|
Performance-based cash
compensation of a maximum of CHF 1,030,000.** Performance-based cash
compensation in the form of incentive cash payments may be earned under
the Logitech Management Performance Bonus Plan (the Bonus Plan) or other
cash bonuses approved by the Compensation Committee. Payout under the
Bonus Plan is variable, and is based on the achievement of the Companys,
individual employees or other performance goals. The proposed maximum
amount of the performance-based bonus assumes maximum achievement of all
performance goals.
|
●
|
Equity incentive awards of a
maximum of CHF 670,000.** Long-term equity incentive awards are generally
granted in the form of performance-based restricted stock units, or PSUs,
time-based restricted stock units, or RSUs, or other financial instruments
contemplated in the applicable equity plans. The value of PSUs, RSUs or
other financial instruments granted as equity incentive awards is
calculated at market value at the time of their grant. The proposed
maximum amount of the equity incentive awards assumes maximum achievement
of all performance goals and full vesting of all time-based equity
incentive awards.
|
●
|
Other compensation of a maximum
of CHF 85,000.** Other compensation may include tax preparation services
and related expenses, 401(k) savings plan matching contributions, premiums
for group term life insurance and long-term disability
|
insurance,
employers contribution to medical premiums, employers contribution to social
security and Medicare, extended business travel-related expenses, defined
benefit pension plan employment contributions and other awards. The Company
generally does not provide all of these components of other compensation to all
executives each year, but the proposed maximum amount of compensation has been
formulated to provide flexibility to cover these compensation components as
applicable.
The executive member of the Board of
Directors to whom the proposed compensation referred to above applies is Mr.
Guerrino De Luca, the Companys Chairman. In his capacity as a member of the
Group Management Team, Mr. Bracken Darrell is not entitled to compensation for
his services on the Companys Board of Directors.
In the event of a negative vote on this
proposal by shareholders, the Board of Directors will submit an alternative
proposal to the same or a subsequent general meeting.
Voting Requirement to Approve
Proposal
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation
The Board of Directors recommends a
vote
FOR
the approval of the maximum aggregate amount of the compensation of
the members of the Board of Directors of CHF 4,600,000 for the term of office
from the Annual General Meeting 2016 until the Annual General Meeting 2017,
subject to adjustment as set forth in the proposal.
**
|
|
Mr. De Lucas compensation is set in
U.S. Dollars. The estimated amounts in U.S. Dollars used in these
assumptions were converted using an assumed exchange rate of 1 Swiss Franc
to 1.0288 U.S. Dollars based on the 12 month (April 2015 to March 2016)
average exchange rate.
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33
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Proxy Statement
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Agenda Proposals and
Explanations
|
Proposal
10
Approval of
Compensation for the Group Management Team for Fiscal Year 2018
Proposal
The Board of Directors proposes that
the shareholders approve a maximum aggregate amount of the compensation of the
Group Management Team of USD 20,200,000 for fiscal year 2018, subject to
adjustment for certain changes in the applicable currency exchange
rate.*
Explanation
Pursuant to the so-called Minder
Ordinance, the compensation of the Companys Group Management Team must be
subject each year to a binding shareholder vote, in the manner contemplated by
Logitechs Articles of Incorporation. Article 19 quarter, paragraph 1(b) of
Logitechs Articles of Incorporation allows shareholders to approve the maximum
aggregate amount of the compensation of the Group Management Team for the next
fiscal year. As the 2016 Annual General Meeting takes place in the middle of
Logitechs fiscal year 2017, the applicable next fiscal year is fiscal year
2018. This required, binding vote on the compensation of the Group Management
Team is independent from, and comes in addition to, the non-binding, advisory
say-on-pay vote contemplated in Proposal 2.
Logitechs Group Management Team
currently consists of Messrs. Bracken Darrell, President and Chief Executive
Officer, Vincent Pilette, Chief Financial Officer, Marcel Stolk, Senior Vice
President, Consumer Computing Platforms Business Group, and L. Joseph Sullivan,
Senior Vice President, Worldwide Operations.
Logitechs compensation philosophy,
compensation program risks and design, and compensation paid during fiscal year
2016 are set forth in the Compensation Report.
The proposed maximum amount of USD
20,200,000 has been determined based on the following non-binding assumptions
for Logitechs Group Management Team as an aggregate group:
●
|
Gross base salary of a maximum of
USD 2,630,000.
|
●
|
Performance-based cash
compensation of a maximum of USD 5,260,000. Performance-based cash
compensation in the form of incentive cash payments may be earned under
the Logitech Management Performance Bonus Plan (the Bonus Plan) or other
cash bonuses approved by the Compensation Committee. Payout under the
Bonus Plan is variable, and is based on the achievement of the Companys,
individual executives or other performance goals, and for fiscal year
2018 is expected to continue to range from 0% to 200% of the executives
target incentive. The proposed maximum amount of the performance-based
bonus for fiscal year 2018 assumes maximum achievement of all performance
goals.
|
●
|
Equity incentive awards of a
maximum of USD 11,700,000. Long-term equity incentive awards are generally
granted in the form of performance-based restricted stock units, or PSUs,
time-based restricted stock units, or RSUs, or other financial instruments
contemplated in the applicable equity plans. The value of PSUs, RSUs or
other financial instruments granted as equity incentive awards is
calculated at market value at the time of their grant. The proposed
maximum amount of the equity incentive awards assumes maximum achievement
of all performance goals and full vesting of all time-based equity
incentive awards.
|
*
|
|
For each increase of 0.01 in the
exchange rate of the Swiss Franc against the U.S. Dollar above the assumed
level of USD 1.0288 to CHF 1.00, if any, the maximum aggregate amount of
the compensation of the Group Management Team will increase by USD 29,000
for fiscal year 2018. This adjustment reflects the fact that the
compensation of one member of our Group Management Team is set in Swiss
Francs.
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|
Proxy
Statement
|
34
|
Agenda Proposals and
Explanations
|
●
|
Other compensation of a maximum
of USD 610,000. Other compensation includes tax preparation services and
related expenses, 401(k) savings plan matching contributions, premiums for
group term life insurance and long-term disability insurance, employers
contribution to medical premiums, employers contribution to social
security and Medicare, extended business travel-related expenses, defined
benefit pension plan employment contributions and other awards. The
Company generally does not provide all of these components of other
compensation to all executives each year, but the proposed maximum amount
of compensation has been formulated to provide flexibility to cover these
compensation components as applicable.
|
The actual pay-out to the members of
the Group Management Team for fiscal year 2018 will be disclosed in the
Compensation Report in the Invitation and Proxy Statement for the 2018 Annual
General Meeting.
In the event of a negative vote on this
proposal by shareholders, the Board of Directors will submit an alternative
proposal to the same or a subsequent general meeting.
Voting Requirement to Approve
Proposal
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation
The Board of Directors recommends a
vote
FOR
the approval of the maximum aggregate amount of the compensation of
the Group Management Team of USD 20,200,000 for fiscal year 2018, subject to
adjustment as set forth in the proposal.
35
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Proxy Statement
|
Agenda Proposals and
Explanations
|
Proposal
11
Re-election of KPMG AG
as Logitechs Auditors and Ratification of the Appointment of KPMG LLP as
Logitechs Independent Registered Public Accounting Firm for Fiscal Year
2017
Proposal
The Board of Directors proposes that
KPMG AG be re-elected as auditors of Logitech International S.A. for a one-year
term and that the appointment of KPMG LLP as Logitechs independent registered
public accounting firm for fiscal year 2017 be ratified.
Explanation
KPMG AG, upon recommendation of the
Audit Committee of the Board, is proposed for re-election for a further year as
auditors for Logitech International S.A. KPMG AG assumed its first audit mandate
for Logitech during fiscal year 2015.
The Audit Committee has also appointed
KPMG LLP, the U.S. affiliate of KPMG AG, as the Companys independent registered
public accounting firm for the fiscal year ending March 31, 2017 for purposes of
U.S. securities law reporting. Logitechs Articles of Incorporation do not
require that shareholders ratify the appointment of KPMG LLP as the Companys
independent registered public accounting firm. However, Logitech is submitting
the appointment of KPMG LLP to shareholders for ratification as a matter of good
corporate governance. If shareholders do not ratify the appointment, the Audit
Committee will reconsider whether to retain KPMG LLP. Even if the appointment is
ratified, the Audit Committee may, in its discretion, change the appointment
during
the year if the Committee determines
that such a change would be in the best interests of Logitech and its
shareholders.
Information on the fees paid by
Logitech to KPMG AG and KPMG LLP, the Companys auditors and independent
registered public accounting firm for fiscal year 2016, respectively, as well as
further information regarding KPMG AG and KPMG LLP, is set out below under the
heading Independent Auditors and Report of the Audit Committee.
Members of KPMG AG will be present at
the Annual General Meeting, will have the opportunity to make a statement, and
will be available to respond to appropriate questions you may ask.
Voting Requirement to Approve
Proposal
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation
Our Board of Directors recommends a
vote
FOR
the re-election of KPMG AG as auditors of Logitech International S.A. and the
ratification of the appointment of KPMG LLP as Logitechs independent registered
public accounting firm, each for the fiscal year ending March 31,
2017.
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Proxy
Statement
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36
|
Agenda Proposals and
Explanations
|
Proposal
12
Re-election of Ms.
Béatrice Ehlers as Independent Representative
Pursuant to the so-called Minder
Ordinance, Swiss law requires that the independent representative of the
shareholders (Independent Representative) be elected on the occasion of each
Annual General Meeting for a one-year term ending at the closing of the
following Annual General Meeting.
Proposal
The Board of Directors proposes that
Ms. Béatrice Ehlers be re-elected as Independent Representative for a one-year
term ending at the closing of the 2017 Annual General Meeting.
Explanation
Shareholders may either represent their
shares themselves or have them represented by a third party, whether or not a
shareholder, if the latter is given a written proxy. In accordance with Swiss
law, each shareholder may be represented at the general meeting by the
Independent Representative, Ms. Béatrice Ehlers, or by a third-party proxy. Ms.
Ehlers is a notary public and has served as the Independent Representative at
previous annual general meetings.
Under Swiss corporate law, the
Independent Representative must satisfy strict independence requirements. General voting instructions can be given with respect to a particular
general meeting of shareholders with respect to proposals and agenda items that
have not been disclosed in the invitation to the general meeting.
Voting Requirement to Approve
Proposal
The affirmative FOR vote of a
majority of the votes cast in person or by proxy at the Annual General Meeting,
not counting abstentions.
Recommendation
Our Board of Directors recommends a
vote
FOR
the re-election of Ms. Béatrice Ehlers as Independent
Representative.
37
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Proxy Statement
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Corporate Governance and Board of Directors
Matters
|
The Board of Directors is elected by
the shareholders and holds the ultimate decision-making authority within
Logitech, except for those matters reserved by law or by Logitechs Articles of
Incorporation to its shareholders or those that are delegated to the executive
officers under the organizational regulations (also known as by-laws). The Board
makes resolutions through a majority vote of the members present at the
meetings. In the event of a tie, the vote of the Chairman
decides.
Logitechs Articles of Incorporation
set the minimum number of directors at three. We had ten members of the Board of
Directors as of June 30, 2016. If all of the nominees to the Board presented in
Proposal 6 are elected, the Board will have ten members.
Board of Directors
Independence
|
The Board of Directors has determined
that each of our directors and director nominees, other than Bracken Darrell and
Guerrino De Luca, qualifies as independent in accordance with the published
listing requirements of the Nasdaq Stock Market and Swiss corporate governance
best practices guidelines. The Companys independent directors and director
nominees include Edouard Bugnion, Kee-Lock Chua, Sally Davis, Sue Gove, Didier
Hirsch, Neil Hunt, Dimitri Panayotopoulos, Lung Yeh and Patrick Aebischer. The
Nasdaq independence definition includes a series of objective tests, such as
that the director is not an employee of
the company and has not engaged in
various types of business dealings with the company. In addition, as further
required by Nasdaq rules, the Board has made a subjective determination as to
each independent director that no relationships exist which, in the opinion of
the Board, would interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. In making these determinations, the
directors reviewed and discussed information provided by the directors and the
Company with regard to each directors business and personal activities as they
may relate to Logitech and Logitechs management.
|
Proxy
Statement
|
38
|
Corporate Governance and Board of Directors
Matters
|
Members of the Board
of Directors
The members of the Board of Directors,
including their principal occupation, business experience, and qualifications,
are set out below.
Edouard Bugnion
46 Years Old Director since
2015
|
Professor,
School
of Computer and
Communication
Sciences, EPFL
Swiss
and
U.S. national
|
|
Edouard
Bugnion
is a Professor in the School of
Computer and Communication Sciences at the École Polytechnique Fédérale de
Lausanne (EPFL). Prior to joining the EPFL in August 2012, Dr. Bugnion was
a Founder and Chief Technology Officer of Nuova Systems, Inc., a developer
of enterprise data center solutions, from October 2005 to May 2008. Nuova
Systems was funded by and acquired by Cisco Systems, Inc., a worldwide
leader in Internet Protocol-based networking products and services. He
joined Cisco as a Vice President and Chief Technology Officer of Ciscos
Server Access and Virtualization Business Unit from May 2008 to June 2011.
Prior to Nuova, Dr. Bugnion was a Founder of VMware, a leading provider of
cloud and virtualization software and services, where he held many
positions, including Chief Technology Officer, from 1998 to 2005. Dr.
Bugnion holds an Engineering Diplom from ETH Zürich, a Masters degree
from Stanford University and a Ph.D. from Stanford University, all in
Computer Science.
Dr. Bugnions significant
expertise in technology, software and cloud computing, and his experience
founding technology companies and as a member of the senior leadership of
leading technology companies, provides the Board with technology and
product strategy expertise as well as senior leadership.
The Board of Directors has
determined that Dr. Bugnion is an independent Director.
|
|
Kee-Lock Chua
55 Years Old Director since 2000
|
President
and
Chief Executive
Officer,
Vertex Group
Singapore
national
|
|
Kee-Lock Chua
is president and chief executive officer of the Vertex
Group, a Singapore-headquartered venture capital group. Prior to joining
the Vertex Group in September 2008, Mr. Chua was the president and an
executive director of Biosensors International Group, Ltd., a developer
and manufacturer of medical devices used in interventional cardiology and
critical care procedures, from 2006 to 2008. Previously, from 2003 to
2006, Mr. Chua was a managing director of Walden International, a
U.S.-headquartered venture capital firm. From 2001 to 2003, Mr. Chua
served as deputy president of NatSteel Ltd., a Singapore industrial
products company active in Asia Pacific. From 2000 until 2001, Mr. Chua
was the president and chief executive officer of Intraco Ltd., a
Singapore-listed trading and distribution company. Prior to joining
Intraco, Mr. Chua was the president of MediaRing.com Ltd., a
Singapore-listed company providing voice-over-Internet services. He serves
on the Board of Yongmao Holdings Limited (where he is lead independent
director), a publicly traded company in Singapore. Mr. Chua holds a BS
degree in Mechanical Engineering from the University of Wisconsin, and an
MS degree in Engineering from Stanford University in
California.
Mr. Chua has extensive investment
and senior leadership experience, as a venture capitalist in Asia and the
United States, and also as the former Chief Executive Officer of
publicly-traded companies in Asia. He brings to the Board senior
leadership, and financial and global expertise. As a director of public
companies in Asia, and of private companies, he also provides cross-board
experience.
Mr. Chua currently is Chair of
the Nominating Committee and serves on the Audit Committee. The Board of
Directors has determined that he is an independent Director.
Mr. Chua has decided to retire
and not to stand for re-election at the 2016 Annual General
Meeting.
|
39
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
Bracken Darrell
53 Years Old Director since 2013
|
President
and
Chief Executive
Officer,
Logitech
International
S.A.
U.S. national
|
|
Bracken
Darrell
joined Logitech as President in
April 2012 and became Chief Executive Officer in January 2013. Prior to
joining Logitech, Mr. Darrell served as President of Whirlpool EMEA and
Executive Vice President of Whirlpool Corporation, a home appliance
manufacturer and marketing company, from January 2009 to March 2012.
Previously, Mr. Darrell had been Senior Vice President, Operations of
Whirlpool EMEA from May 2008 to January 2009. From 2002 to May 2008, Mr.
Darrell was with P&G (The Procter & Gamble Company), a consumer
brand company, most recently as the President of its Braun GmbH
subsidiary. Prior to rejoining P&G in 2002, Mr. Darrell served in
various executive and managerial positions with General Electric Company
from 1997 to 2002, with P&G from 1991 to 1997, and with PepsiCo Inc.
from 1987 to 1989. Mr. Darrell holds a BA degree from Hendrix College and
an MBA from Harvard University.
In addition to being the
President and Chief Executive Officer of the Company, Mr. Darrell brings
senior leadership, consumer brand marketing and global experience to the
Board.
|
|
Sally Davis
62 Years Old Director since 2007
|
Former
Chief
Executive
Officer,
BT Wholesale
British
national
|
|
Sally Davis
is the former Chief Executive Officer of BT Wholesale,
a division of BT Group responsible for providing telecommunications
services and bandwidth to carriers and service providers globally, a
position she held from 2007 until she retired in August 2011. She was the
Chief Portfolio Officer of British Telecom from 2005 to 2007. She had
previously held senior executive roles within BT since joining the company
in 1999, including President, Global Products, Global Services from 2002
to 2005, President, BT Ignite Applications Hosting from 2001 to 2002 and
Director, Group Internet and Multimedia from 1999 to 2001. Before joining
BT, Ms. Davis held leading roles in several major communications
companies, including Bell Atlantic in the United States and Mercury
Communications in the United Kingdom. Ms. Davis is a member of the Board
of Telenor Group, a global mobile communications services company, and a
member of the Board of CityFibre Infrastructure Holdings PLC, a fibre
optic infrastructure company. She holds a BA degree from and is a Fellow
of University College, London.
Ms. Davis experience as a Chief
Executive of a leading European telecommunications company, and her
significant technology product strategy and product portfolio knowledge,
provides the Board with expertise in senior leadership, technology,
product strategy, and financial management.
Ms. Davis currently is Chair of
the Compensation Committee and serves on the Nominating Committee. The
Board of Directors has determined that she is an independent
Director.
|
|
Proxy
Statement
|
40
|
Corporate Governance and Board of Directors
Matters
|
Guerrino De Luca
63 Years Old Director since 1998
|
Chairman,
Logitech
International S.A.
Italian and
U.S.
national
|
|
Guerrino De Luca
has served as Chairman of the Logitech
Board of Directors since January 2008. Mr. De Luca served as Logitechs
Chief Executive Officer from April 2012 to January 2013 and as acting
President and Chief Executive Officer from July 2011 to April 2012.
Previously, Mr. De Luca served as Logitechs President and Chief Executive
Officer from February 1998, when he joined the Company, to January 2008.
Prior to joining Logitech, Mr. De Luca served as Executive Vice President
of Worldwide Marketing for Apple Computer, Inc., a consumer electronics
and computer company, from February 1997 to September 1997, and as
President of Claris Corporation, a U.S. personal computing software
vendor, from May 1994 to February 1997. Prior to joining Claris, Mr. De
Luca held various positions with Apple in the United States and in Europe.
Mr. De Luca holds a Laurea degree in Electronic Engineering from the
University of Rome, Italy.
As Logitechs Chairman and former
Chief Executive Officer, Mr. De Luca brings significant senior leadership,
industry, strategy, marketing and global experience to the Board and a
deep knowledge of, passion for and commitment to Logitech, its people and
its products.
Mr. De Luca currently is Chairman
of the Board.
|
|
Sue Gove
57 Years Old Director
since 2015
|
President,
Excelsior
Advisors, LLC
U.S.
national
|
|
Sue Gove
is the President of Excelsior Advisors, LLC, a retail
consulting and advisory firm. Prior to founding Excelsior Advisors in
August 2014, Ms. Gove was the President and Chief Executive Officer of
Golfsmith International, a multi-channel specialty golf retailer, from
October 2012 to April 2014 and President from February 2012 to April 2014.
She also served Golfsmith as Chief Operating Officer from September 2008
to October 2012, as Chief Financial Officer from March 2009 to July 2012
and as Executive Vice President from September 2008 to February 2012.
Prior to joining Golfsmith, Ms. Gove was an independent consultant,
serving specialty retail and private equity clients from 2006 to 2008,
which included consultancy for Prentice Capital Management, LP from April
2007 to March 2008 and for Alvarez and Marsal Business Consulting, L.L.C.
from April 2006 to March 2007. Ms. Gove served Zale Corporation, a leading
specialty jewelry retailer, from 1980 to 2006, including as Chief
Operating Officer from August 2002 to March 2006, as Chief Financial
Officer from December 1997 to February 2003 and as a Board member from
September 2004 to March 2006. She currently serves on the Boards of Iconix
Brand Group, a consumer brand licensing and marketing company, and
AutoZone, Inc., a leading retailer and distributor of automotive
replacement parts and accessories. Ms. Gove holds a BBA degree in
Accounting from the University of Texas at Austin.
Ms. Gove has significant
executive experience with international retail, marketing, merchandising
and global operations, and brings to our Board senior leadership,
strategic and financial experience. As a member of other public company
boards, Ms. Gove also provides cross-board experience.
Ms. Gove currently serves on the
Audit Committee. The Board of Directors has determined that she is an
independent Director.
|
41
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
Didier Hirsch
65 Years Old Director since 2012
|
Senior
Vice
President and
Chief Financial
Officer,
Agilent
Technologies,
Inc.
French
national
|
|
Didier Hirsch
is the Senior Vice President and Chief Financial
Officer of Agilent Technologies, Inc., a global leader in life sciences,
diagnostics and applied chemical markets. He has served in his current
position since July 2010 and served in various senior finance positions
with Agilent since 1999. Mr. Hirsch had joined Hewlett-Packard Company in
1989, and served as Director of Finance and Administration of
Hewlett-Packard Europe, Middle East and Africa (EMEA) from 1996 to 1999,
Director of Finance and Administration of Hewlett-Packard Asia Pacific
from 1993 to 1996, and Director of Finance and Administration of
Hewlett-Packard France from 1989 to 1993. Prior to Hewlett-Packard, Mr.
Hirsch worked in finance positions with Valeo Inc., Gemplus S.C.A.,
SGS-Thomson Microelectronics, I.B.H. Holding S.A., Bendix Corporation and
Ford Motor Company. He serves on the Board of Knowles Corporation, a New
York Stock Exchange (NYSE)-listed global supplier of advanced
micro-acoustic, audio processing, and specialty component solutions,
serving the mobile consumer electronics, communications, medical,
military, aerospace and industrial markets. Mr. Hirsch holds an MS degree
in Computer Sciences from Toulouse University and an MS degree in
Industrial Administration from Purdue University.
As Chief Financial Officer of a
leading public technology company, and with significant finance expertise
developed over several decades at technology and manufacturing companies
in the U.S.A., EMEA and Asia Pacific, Mr. Hirsch brings senior leadership,
finance (including U.S. GAAP), technology and global experience to the
Board.
Mr. Hirsch currently is Chair of
the Audit Committee and serves on the Nominating Committee. The Board of
Directors has determined that he is an independent
Director.
|
|
Neil Hunt
54 Years Old Director
since 2010
|
Chief
Product
Officer,
Netflix, Inc.
U.K. and
U.S.
national
|
|
Neil Hunt
is the Chief Product Officer of Netflix, Inc., a
California-based company offering the worlds largest Internet TV service
operating in more than 50 countries worldwide. He has been with Netflix
since 1999, and is responsible for the design, implementation and
operation of the technology at Netflix. Prior to his current position, he
served as Vice President, Internet Engineering at Netflix from 1999 to
2002. From 1997 to 1999, Dr. Hunt was Director of Engineering for Rational
Software, a California-based maker of software development tools, and he
served in engineering roles at predecessor companies from 1991 to 1997.
Dr. Hunt holds a Doctorate in Computer Science from the University of
Aberdeen, U.K. and a Bachelors degree from the University of Durham,
U.K.
Dr. Hunts significant expertise
in technology, product development leadership and strategy, and his
experience as a member of the senior leadership of a leading digital
delivery company, provides the Board with technology, product strategy and
global expertise as well as senior leadership.
Dr. Hunt currently is the
Lead Independent Director and serves on the Compensation Committee. The
Board of Directors has determined that he is an independent
Director.
|
|
Proxy
Statement
|
42
|
Corporate Governance and Board of Directors
Matters
|
Dimitri Panayotopoulos
64 Years
Old Director since 2014
|
Senior
Advisor,
The Boston
Consulting
Group
U.K.
national
|
|
Dimitri
Panayotopoulos
is a Senior Advisor at
The Boston Consulting Group, a global management consulting firm. Prior to
joining The Boston Consulting Group in April 2014, Mr. Panayotopoulos
served with The Procter & Gamble Company (P&G), a consumer brand
company, from 1977 to 2014. At P&G, he served as Vice Chairman and
Advisor to the Chairman & Chief Executive Officer at P&G from July
2013 to January 2014, Vice Chairman of Global Business Units from May 2011
to July 2013, Vice Chairman of Global Household Care Group from July 2007
to May 2011, Group President of Global Fabric Care from July 2004 to July
2007, President of Central and Eastern Europe, Middle East and Africa from
July 2001 to July 2004, and President-Greater China from 1999 to July
2001. Mr. Panayotopoulos served in various executive, managerial and other
positions with P&G in sales, brand management and advertising in
Europe (including Switzerland), Egypt and the Far East from 1977 to 1999.
He serves on the Board of British American Tobacco p.l.c., a London Stock
Exchange (LSE)-listed global tobacco company. Mr. Panayotopoulos holds a
BA degree from Sussex University, U.K.
Mr. Panayotopoulos brings senior
leadership, strategic, financial, consumer brand marketing and global
experience to the Board from his former leadership positions with P&G
in a broad spectrum of regions.
Mr. Panayotopoulos currently
serves on the Compensation Committee. The Board of Directors has
determined that he is an independent Director.
|
|
Lung Yeh
60 Years Old Director
since 2015
|
Managing
Director,
Enspire Capital
U.S. national
|
|
Lung Yeh
is the Managing Director of Enspire Capital, a
Singapore-based venture capital and private equity firm focusing on
technology, media and telecommunications, internet and mobile investments
in Silicon Valley, China, Taiwan, Hong Kong and Singapore. Prior to
joining Enspire Capital in 2004, Dr. Yeh was the Vice President of
Business Development at Centrality Communications, Inc., a leading
provider of GPS semiconductor platforms for high-functional mobile
devices, from 2003 to 2004, a Founder and Chief Executive Officer of Pico
Communications Inc., a provider of integrated Bluetooth and mobile
Internet access and networking solutions, from 1999 to 2003, Vice
President of the Communication and Internet Division of Creative Labs
Ltd., a leader in digital entertainment products, from 1993 to 1998, a
Founder and Chief Executive Officer of ShareVision Technology, Inc., a
desktop videoconferencing technology company, from 1991 to 1993, and
served in various management and technical positions at Apple Inc., NYNEX
and Kodak, from 1985 to 1991. Dr. Yeh holds a BSEE in Communication
Engineering from National Chiao-Tung University and a Ph.D. in Electrical
Engineering from the University of Wisconsin Madison.
Dr. Yeh has extensive investment
and senior leadership experience, as a venture capitalist in Asia and the
United States focused on multimedia, wireless and communications, and also
as the founder and former Chief Executive Officer of several technology
companies. He brings to the Board senior leadership, business development
and global expertise.
The Board of Directors has
determined that Dr. Yeh is an independent
Director.
|
43
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
Other than the current employment and
involvement noted above, no other Logitech Board member currently has material
supervisory, management, or advisory functions outside Logitech. None of the
Companys directors holds any official functions or political posts.
Elections to the
Board of Directors
|
Directors are elected at the Annual
General Meeting of Shareholders, upon proposal of the Board of Directors. The
proposals of the Board of Directors are made following recommendations of the
Nominating Committee.
Shareholder Recommendations and
Nominees
Under our Articles of Incorporation,
one or more registered shareholders who together represent shares representing
at least the lesser of (i) one percent of our issued share capital or (ii) an
aggregate par value of one million Swiss francs may demand that an item be
placed on the agenda of a meeting of shareholders, including a nominee for
election to the Board of Directors. A request to place an item on the meeting
agenda must be in writing, describe the proposal and be received by our Board of
Directors at least 60 days prior to the date of the meeting. Demands by
registered shareholders to place an item on the agenda of a meeting of
shareholders should be sent to: Secretary to the Board of Directors, Logitech
International S.A., EPFL - Quartier de lInnovation, Daniel Borel Innovation
Center, 1015 Lausanne, Switzerland, or c/o Logitech Inc., 7700 Gateway
Boulevard, Newark, CA 94560, USA.
Under the Companys Articles of
Incorporation only registered shareholders are recognized as shareholders of the
company. As a result, beneficial shareholders do not have a right to place an
item on the agenda of a meeting, regardless of the number of shares they hold.
For information on how beneficial shareholders may become registered
shareholders, see Questions and Answers about the Logitech 2016 Annual General
Meeting - If I am not a registered shareholder, can I attend and vote at the
meeting?
If the agenda of a general meeting of
shareholders includes an item calling for the election of directors, any
registered shareholder may propose a candidate for election to the Board of
Directors before or at the meeting.
The Nominating Committee does not have
a policy on consideration of recommendations for candidates to the Board of
Directors from registered shareholders.
The Nominating Committee considers it
appropriate not to have a formal policy for consideration of such
recommendations because the evaluation of potential members of the Board of
Directors is by its nature a case-by-case process, depending on the composition
of the Board at the time, the needs and status of the business of the Company,
and the experience and qualification of the individual. Accordingly, the
Nominating Committee would consider any such recommendations on a case-by-case
basis in their discretion, and, if accepted for consideration, would evaluate
any such properly submitted nominee in consideration of the membership criteria
set forth under Board Composition below. Shareholder recommendations to the
Board of Directors should be sent to the above address.
Board Composition
The Nominating Committee is responsible
for reviewing and assessing with the Board the appropriate skills, experience,
and background sought of Board members in the context of our business and the
then-current membership on the Board. The Nominating Committee has not formally
established any specific, minimum qualifications that must be met by each
candidate for the Board of Directors or specific attributes, qualities or skills
that are necessary for one or more of the members of the Board of Directors to
possess. However, we do not expect or intend that each director will have the
same background, skills, and experience; we expect that Board members will have
a diverse portfolio of backgrounds, skills, and experiences. One goal of this
diversity is to assist the Board as a whole in its oversight and advice
concerning our business and operations.
The review and assessment of Board
candidates and the current membership of the Board by the Nominating Committee
and the Board includes numerous diverse factors, such as: independence; senior
management experience; understanding of and experience in technology, finance,
and marketing; international experience and geographic representation; age; and
gender and ethnic diversity.
|
Proxy
Statement
|
44
|
Corporate Governance and Board of Directors
Matters
|
The priorities and emphasis of the
Nominating Committee and of the Board with regard to these factors change from
time to time to take into account changes in Logitechs business and other
trends, as well as the portfolio of skills and experience of current and
prospective Board members.
Listed below are key skills and
experience that we currently consider important for our directors to have in
light of our current business and structure. We do not expect each director to
possess every attribute. The directors biographies note each directors
relevant experience, qualifications, and skills relative to this
list.
●
|
Senior
Leadership Experience.
Directors who have served
in senior leadership positions are important to Logitech, because they
bring experience and perspective in analyzing, shaping, and overseeing the
execution of important operational and policy issues at a senior
level.
|
●
|
Financial
Expertise.
Knowledge of financial markets,
financing and funding operations, and accounting and financial reporting
processes is important because it assists our directors in understanding,
advising, and overseeing Logitechs structure, financial reporting, and
internal control of such activities.
|
●
|
Industry and
Technical Expertise.
Because we develop and
manufacture hardware and software products, ship them worldwide, and sell
to major consumer electronics distributors and retailers, expertise in
hardware and software, and experience in supply chain, manufacturing and
consumer products is useful
|
|
in understanding the opportunities and
challenges of our business and in providing insight and oversight of
management.
|
●
|
Brand
Marketing Expertise.
Because we are a consumer
products company, directors who have brand marketing experience can
provide expertise and guidance as we seek to maintain and expand brand and
product awareness and a positive reputation.
|
●
|
Global
Expertise.
Because we are a global organization
with research and development, and sales and other offices in many
countries, directors with global expertise, particularly in Europe, the
U.S. and Asia,
can provide a useful business and
cultural perspective
regarding many significant
aspects of our business.
|
Identification and Evaluation of
Nominees for
Directors
Our Nominating Committee uses a variety
of methods for identifying and evaluating nominees for director.
Our Nominating Committee regularly
assesses the
appropriate size and composition of
the Board of Directors, the needs of the Board of Directors and the respective
Committees of the Board of Directors and the qualifications of candidates in
light of these needs.
Candidates may come to the
attention of the Nominating Committee through shareholders, management, current
members of the Board of Directors or search firms. The evaluation of these
candidates may be based solely on information provided to the Committee or may
also include
discussions with persons familiar
with the candidate, an interview of the candidate or other actions the Committee
deems appropriate, including the use of paid third parties
to review candidates.
45
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
Terms of Office of Directors
Each director is elected individually
by a separate vote of shareholders. Until 2012, each director was elected for a
term of three years. At the Companys 2012 Annual General Meeting, shareholders
approved a change such that each director, starting with the directors elected
at the 2012 Annual General Meeting, will be subject to a term of one year. Nine
of our ten directors are being presented for re-election to the Board of
Directors at the 2016 Annual General Meeting, with one director deciding to
retire and not stand for re-election. Each director is eligible for re-election
until his or her seventieth birthday. Directors may not seek reelection after
they have reached 70 years of age or, starting in 2016, have served on the Board
of Directors as a non-employee member
for 12 years, unless the Board of Directors adopts a resolution to the contrary.
A member of the Board who reaches 70 years of age or 12 years of service as a
non-employee member of the Board of Directors during the term of his or her
directorship may remain a director until the expiration of the term. A
directors term of office as Chairman coincides with his or her term of office
as a director. A director may be indefinitely re-elected as Chairman, subject to
the age and tenure limits mentioned above.
The year of appointment and remaining
term of office as of March 31, 2016 for each director are as
follows:
Name
|
Year First
Appointed
|
|
Year Current Term Expires
|
Edouard Bugnion
(1)
|
2015
|
|
Annual General Meeting 2016
|
Kee-Lock Chua
(1)
|
2000
|
|
Annual General Meeting 2016
|
Bracken Darrell
(2)
|
2013
|
|
Annual General Meeting 2016
|
Sally Davis
(1)
|
2007
|
|
Annual General Meeting 2016
|
Guerrino De Luca
(2)
|
1998
|
|
Annual General Meeting 2016
|
Sue
Gove
(1)
|
2015
|
|
Annual General Meeting 2016
|
Didier Hirsch
(1)
|
2012
|
|
Annual General Meeting 2016
|
Neil Hunt
(1)
|
2010
|
|
Annual General Meeting 2016
|
Dimitri Panayotopoulos
(1)
|
2014
|
|
Annual General Meeting 2016
|
Lung Yeh
(1)
|
2015
|
|
Annual General Meeting 2016
|
(1)
|
|
Non-executive member of the
Board of Directors.
|
|
(2)
|
|
Executive member of the Board
of Directors.
|
|
|
Proxy
Statement
|
46
|
Corporate Governance and Board of Directors
Matters
|
Board Responsibilities and
Structure
The Board of Directors is responsible
for supervising the management of the business and affairs of the Company. In
addition to the non-transferable powers and duties of boards of directors under
Swiss law, the Logitech Board of Directors also has the following
responsibilities:
●
|
the signatory power of its
members;
|
●
|
the approval of the budget
submitted by the Chief Executive Officer;
|
●
|
the approval of investments or
acquisitions of more than USD 10 million in the aggregate not included in
the approved budgets;
|
●
|
the approval of any expenditure
of more than USD 10 million not specifically identified in the approved
budgets; and
|
●
|
the approval of the sale or
acquisition, including related borrowings, of the Companys real
estate.
|
The Board of Directors has delegated
the management of the Company to the Chief Executive Officer and the executive
officers, except where Swiss law or the Companys Articles of Incorporation or
Organizational Regulations (By-Laws) provide differently.
Board Leadership
Structure
The Board has since 1997 had a general
practice that the positions of Chairman of the Board and Chief Executive Officer
should be held by separate persons as an aid in the Boards oversight of
management. Since 1997, the Chairman has been a former Chief Executive Officer
of the Company and has served as a full-time senior executive. Logitech believes
that there are advantages to having a former Chief Executive Officer as
Chairman, for matters such as: leadership continuity; day-to-day assistance to
and oversight of the Chief Executive Officer and other executive officers; and
facilitating communications and relations between the Board, the Chief Executive
Officer, and other senior management.
Mr. De Luca, the Companys former Chief
Executive Officer and current Chairman, has served in that role since January
2008. On July 27, 2011, Mr. De Luca assumed the role of acting President and
Chief Executive
Officer, in addition to continuing his
duties as Chairman, at the request of the Board of Directors. The Board
appointed Bracken Darrell as President as of April 9, 2012, and he became the
Chief Executive Officer as of January 1, 2013. The Board considered the holding
of both the Chairman and Chief Executive Officer positions by Mr. De Luca as a
temporary arrangement, and returned to its general practice of the positions
being held by separate persons upon the appointment of Mr. Darrell as Chief
Executive Officer.
The Chairman of the Board is elected by
the shareholders on an annual basis, at the Annual General Meeting of
Shareholders. The Secretary of the Board of Directors is appointed at the Board
meeting coinciding with the Annual General Meeting of Shareholders. As of June
30, 2016, the Secretary was Mr. Bryan Ko, the Companys General
Counsel.
Role of the Chairman and of the
Chief Executive Officer
The Chairman assumes a leading role in
mid- and long-term strategic planning and the selection of top-level management,
and he supports major transaction initiatives of Logitech.
The Chief Executive Officer manages the
day-to-day operations of Logitech, with the support of the other executive
officers. The Chief Executive Officer has, in particular, the following powers
and duties:
●
|
defining and implementing short
and medium term strategies;
|
●
|
preparing the budget, which must
be approved by the Board of Directors;
|
●
|
reviewing and certifying the
Companys annual report;
|
●
|
appointing, dismissing and
promoting any employees of Logitech other than executive officers and the
head of the internal audit function;
|
●
|
taking immediate measures to
protect the interests of the Company where a breach of duty is suspected
from executive officers until the Board has decided on the
matter;
|
47
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
●
|
carrying out Board
resolutions;
|
●
|
reporting regularly to the
Chairman of the Board of Directors on the activities of the business;
|
●
|
preparing supporting documents
for resolutions that are to be passed by the Board of Directors; and
|
●
|
deciding on issues brought to his
attention by executive officers.
|
The detailed authorities and
responsibilities of the Board of Directors, the Chief Executive Officer and the
executive officers are set out in the Companys Articles of Incorporation and
Organizational Regulations. Please refer to
http://ir.logitech.com
for copies of
these documents.
Lead Independent
Director
As appointed by the Board, Dr. Hunt
serves as Lead Independent Director. The responsibilities of the Lead
Independent Director include chairing meetings of the non-executive directors
and serving as the presiding director in performing such other functions as the
Board may direct. The Lead Independent Director is elected annually by the
Independent Directors.
Means by Which the Board of
Directors Supervises Executive Officers
The Board of Directors is regularly
informed on developments and issues in Logitechs business, and monitors the
activities and responsibilities of the executive officers in various
ways.
●
|
At each regular Board meeting the
Chief Executive Officer reports to the Board of Directors on developments
and important issues. The Chief Executive Officer also provides regular
updates to the Board members regarding Logitechs business between the
dates of regular Board meetings.
|
●
|
The offices of Chairman and
Chief Executive Officer are generally separated, to help ensure balance
between leadership of the Board and leadership of the day-to-day
management of Logitech.
|
●
|
Executive officers and other
members of senior management, at the invitation of the Board, attend
portions of meetings of the Board and its Committees to report on the
financial results of Logitech, its operations, performance and outlook,
and on areas of the business within their responsibility, as well as other
business matters. For further information on participation by executive
officers and other members of senior management in Board and Committee
meetings please refer to Board Committees
below.
|
●
|
There are regular quarterly
closed sessions of the non-executive, independent members of the Board of
Directors, led by the Lead Independent Director, where Logitech issues are
discussed without the presence of executive or non-independent members of
the Board or executive officers.
|
●
|
The Board holds quarterly closed
sessions, where all Board members meet without the presence of non-Board
members, to discuss matters appropriate to such sessions, including
organizational structure and the hiring and mandates of executive
officers.
|
●
|
There are regularly scheduled
reviews at Board meetings of Logitech strategic and operational issues,
including discussions of issues placed on the agenda by the non-executive
members of the Board of Directors.
|
●
|
The Board reviews and approves
significant changes in Logitechs structure and organization, and is
actively involved in significant transactions, including acquisitions,
divestitures and major investments.
|
●
|
All non-executive Board members
have access, at their request, to all internal Logitech
information.
|
●
|
The head of the Internal Audit
function reports to the Audit Committee.
|
The Boards Role in Risk
Oversight
One of the Boards functions is
oversight of risk management at Logitech. Risk is inherent in business, and
the Board seeks to understand and advise on risk in conjunction with the
activities of the Board and the Boards Committees.
|
Proxy
Statement
|
48
|
Corporate Governance and Board of Directors
Matters
|
The largest risk in any business
typically is that the products and services it offers will not be met by
customer demand, because of poor strategy, poor execution, lack of
competitiveness, or some combination of these or other factors. The Board
implements its risk oversight responsibilities, at the highest level, through
regular reviews of the Companys business, product strategy and competitive
position, and through management and organizational reviews, evaluations and
succession planning.
Within the broad strategic framework
established by the Board, management is responsible for identifying risk and
risk controls related to significant business activities; mapping the risks to
company strategy; and developing programs and recommendations to determine the
sufficiency of risk identification, the balance of potential risk to potential
reward and the appropriate manner in which to control risk.
The Boards risk oversight role is
implemented at the full Board level, and also in individual Board Committees.
The full Board receives specific reports on enterprise risk management, in which
the identification and control of risk are the primary topics of the discussion.
Presentations and other information for the Board and Board Committees generally
identify and discuss relevant risk and risk control; and the Board members
assess and oversee the risks as a part of their review of the related business,
financial, or other activity of the Company. The Compensation Committee oversees
issues related to the design and risk controls of compensation programs. The
Audit Committee oversees issues related to internal control over financial
reporting and Logitechs risk tolerance in cash-management investments. The
Boards role in oversight does not have a direct impact on the Boards
leadership structure, which is discussed above.
Board Meetings
The Chairman sets the agenda for Board
meetings, in coordination with the Chief Executive Officer. Any member of the
Board of Directors may request that a meeting of the Board be convened. The
directors receive materials in advance of Board meetings allowing them to
prepare for the handling of the items on the agenda.
The Chairman and Chief Executive
Officer recommend executive officers or other members of senior management who,
at the invitation of the Board, attend portions of each quarterly Board meeting
to report on areas of the business within their responsibility. Infrequently,
the Board may also receive reports from external consultants such as executive
search or succession experts or outside legal experts to assist the Board on
matters it is considering.
The Board typically holds regularly
scheduled Board meetings twice each quarter: once for a review and discussion of
the Company, its strategy or both, which
lasts a
full day to a day-and-a-half and in which all
directors participate in person except in special individual
circumstances; and once for a quarterly earnings-related meeting, which
typically lasts for approximately one to
two
hours and in which directors participate in person or by teleconference or video
conference. Additional meetings of the Board may be held by teleconference or
video conference and the duration of such meetings
varies depending on the subject matters considered.
Emergency
Resolutions
In case of emergency, the Chairman of
the Board may have the power to pass resolutions which would otherwise be the
responsibility of the Board. Decisions by the Chairman of the Board made in this
manner are
subject to ratification by the Board
of Directors at its next meeting or by way of written consent. No such emergency
resolutions were passed during fiscal year 2016.
Independent Director
Sessions
The Board of Directors has adopted a
policy of regularly scheduled sessions of Board meetings where the independent
directors meet to consider matters without management or non-independent
directors present. During fiscal year 2016, separate sessions of the independent
directors were held at four separate meetings.
Board Effectiveness
Our Board of Directors performs an
annual self-assessment to evaluate its effectiveness in fulfilling its
obligations.
49
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
Board Committees
The Board has standing Audit,
Compensation, and Nominating Committees to assist the Board in carrying out its
duties. Each of the Board committees is composed entirely of directors that are
independent in accordance with the published listing requirements of the Nasdaq
Stock Market and Swiss corporate governance best practices guidelines. At each
quarterly Board meeting, each applicable Board Committee reports to the full
Board on the substance of the Committees meetings, if any, during the
quarter.
Each Committee has a written charter
approved by the Board. The chair of each Committee determines the Committees
meeting agenda. The Board Committee members receive materials in advance of
Committee meetings allowing them to prepare for the meeting. The Charters of
each Board Committee are available on Logitechs Investor Relations website at
http://ir.logitech.com
. Each of the Audit, Compensation and Nominating Committees
has the authority to engage outside experts, advisors and counsel to the extent
it considers appropriate to assist the Committee in its work. The members of the
Committees are identified in the following table:
Director
|
Audit
|
|
Compensation
|
|
Nominating
|
Edouard Bugnion
|
|
|
|
|
|
Kee-Lock Chua
|
X
|
|
|
|
Chair
|
Bracken Darrell
|
|
|
|
|
|
Sally Davis
|
|
|
Chair
|
|
X
|
Guerrino De Luca
|
|
|
|
|
|
Sue
Gove
|
X
|
|
|
|
|
Didier Hirsch
|
Chair
|
|
|
|
X
|
Neil Hunt
|
|
|
X
|
|
|
Dimitri Panayotopoulos
|
|
|
X
|
|
|
Lung Yeh
|
|
|
|
|
|
|
Proxy
Statement
|
50
|
Corporate Governance and Board of Directors
Matters
|
Attendance at Board, Committee and
Annual Shareholders Meetings
In fiscal year 2016 the Board met
eleven times, nine of which were regularly scheduled meetings. In addition, the
Audit Committee met eight times, the Compensation Committee met five times, and
the Nominating Committee met four times. In addition to its meetings, the Board
took four actions for approval by written consent during fiscal year 2016. We
expect each director to attend each
meeting of the Board and the Committees
on which he or she serves, and also expect them to attend the Annual General
Meeting of shareholders. Nine of our ten directors attended the 2015 Annual
General Meeting. All of the incumbent directors attended at least 75% of the
meetings of the Board and the Committees on which he or she served. Detailed
attendance information for Board and Board Committee meetings during fiscal year
2016 is as follows:
|
Board of
Directors
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating
Committee
|
# of meetings held
|
11
|
|
8
|
|
5
|
|
4
|
Edouard Bugnion
(1)
|
7
|
|
|
|
|
|
|
Kee-Lock Chua
|
8
|
|
7
|
|
|
|
4
|
Bracken Darrell
|
10
|
|
|
|
|
|
|
Sally Davis
(2)
|
9
|
|
4
|
|
5
|
|
4
|
Guerrino De Luca
|
10
|
|
|
|
|
|
|
Sue
Gove
(1)
|
7
|
|
4
|
|
|
|
|
Didier Hirsch
(3)
|
10
|
|
8
|
|
|
|
2
|
Neil Hunt
|
11
|
|
|
|
5
|
|
|
Dimitri Panayotopoulos
(4)
|
10
|
|
|
|
1
|
|
|
Lung Yeh
(1)
|
7
|
|
|
|
|
|
|
(1)
|
|
Dr. Bugnion, Ms.
Gove and Dr. Yeh were elected to the Board as of the Annual General
Meeting on September 9, 2015, and attended all seven of the Board meetings
that were held after that date. Ms. Gove also attended all four of the
Audit Committee meetings that were held after that date.
|
|
(2)
|
|
Ms. Davis ceased to
be a member of the Audit Committee on September 9, 2015. She attended all
four of the Audit Committee meetings that were held on or prior to that
date.
|
|
(3)
|
|
Mr. Hirsch was
appointed to the Nominating Committee as of September 10, 2015, and
attended both of the Nominating Committee meetings that were held after
that date.
|
|
(4)
|
|
Mr. Panayotopoulos
was elected to the Compensation Committee as of the Annual General Meeting
on September 9, 2015, and attended one of the two Compensation Committee
meetings that were held after that
date.
|
51
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
Audit Committee
The Audit Committee is appointed by the
Board to assist the Board in monitoring the Companys financial accounting,
controls, planning and reporting. It is composed of only non-executive,
independent Board members. Among its duties, the Audit Committee:
●
|
reviews the adequacy of the
Companys internal controls and disclosure controls and procedures;
|
●
|
reviews the independence, fee
arrangements, audit scope, and performance of the Companys independent
auditors, and recommends the appointment or replacement of independent
auditors to the Board of Directors;
|
●
|
reviews and approves all
non-audit work to be performed by the independent auditors;
|
●
|
reviews the scope of Logitechs
internal auditing and the adequacy of the organizational structure and
qualifications of the internal auditing staff;
|
●
|
reviews, before release, the
quarterly results and interim financial data;
|
●
|
reviews with management and the
independent auditors the Companys major financial risk exposures and the
steps management has taken to monitor and control those exposures,
including the Companys guidelines and policies with respect to risk
assessment and risk management; and
|
●
|
reviews, before release, the
audited financial statements and Managements Discussion and Analysis of
Financial Condition and Results of Operations and recommends that the
Board of Directors include the audited financial statements in the annual
report made available to shareholders.
|
The Audit Committee currently consists
of Mr. Hirsch, Chairperson, Mr. Chua and Ms. Gove. Following Mr. Chuas
retirement effective as of the 2016 Annual General Meeting, the Board of
Directors expects that Dr. Yeh will be appointed to the Audit Committee. The
Board has determined that each member of the Audit Committee, as well as Dr.
Yeh, meets the independence requirements of the Nasdaq Stock Market listing
standards and the applicable rules and regulations of
the SEC. In addition, the Board has
determined that Mr. Hirsch and Ms. Gove are audit committee financial experts as
defined by the applicable rules and regulations of the SEC.
The Audit Committee met eight times in
fiscal year 2016. Four meetings were held in person on the day prior to the
regularly scheduled quarterly Board meeting, for approximately two to three
hours, and four were held by teleconference, for approximately one to
one-and-a-half hours preceding the Companys quarterly report of financial
results. The Committee received reports and presentations before the meetings in
order to allow them time to prepare adequately. At the Committees invitation,
the Companys Chief Financial Officer, Corporate Controller, Vice President of
Internal Audit and General Counsel or Associate General Counsel attended each
meeting, and representatives from the Companys then-current auditors and
independent registered public accounting firm, KPMG AG and KPMG LLP,
respectively, also attended all eight of the meetings. Other members of
management also participated in certain meetings. Five meetings also included a
separate session with representatives of the auditors and independent registered
public accounting firm and four meetings included separate sessions with the
Chief Financial Officer and with the head of Internal Audit.
Compensation
Committee
The Compensation Committee reviews and
approves, or recommends to the Board for approval, the compensation of executive
officers and non-executive Board members and Logitechs compensation policies
and programs, including share-based compensation programs and other
incentive-based compensation. Within the guidelines established by the Board and
the limits set forth in the Companys employee equity incentive plans, the
Compensation Committee also has the authority to grant equity incentive awards
to employees without further Board approval. The Committee is composed of only
non-executive, independent Board members.
The Compensation Committee currently
consists of Ms. Davis, Chairperson, Dr. Hunt and Mr. Panayotopoulos. The Board
of Directors has determined that each member
|
Proxy
Statement
|
52
|
Corporate Governance and Board of Directors
Matters
|
of the Compensation Committee, as well
as Dr. Bugnion as a nominee for election to the Compensation Committee, meets
the independence requirements of the Nasdaq Stock Market listing
standards.
The Compensation Committee met five
times in fiscal year 2016. At the Committees invitation, the Companys Head of
People & Culture and Head of Total Rewards attended each meeting, and the
Committees independent advisors from Compensia and Agnès Blust Consulting
attended all five meetings. Four of the meetings were held in person and each
meeting lasted for approximately one-and-a-half hours to three hours or more. In
addition to its meetings, the Committee took eleven actions for approval by
written consent during fiscal year 2016.
Please refer to the Companys
Compensation Report for further information on the Compensation Committees
criteria and process for evaluating executive compensation.
Nominating Committee
The Nominating Committee is composed of
at least three members, with each of the members being non-executive,
independent directors. Among its duties, the Nominating Committee:
●
|
evaluates the composition of the
Board of Directors and its Committees, determines future requirements and
makes recommendations to the Board of Directors for approval;
|
●
|
determines on an annual basis the
desired Board qualifications and expertise and conducts searches for
potential directors with these
attributes;
|
●
|
evaluates and makes
recommendations of nominees for election to the Board of Directors; and
|
●
|
evaluates and makes
recommendations to the Board concerning the appointment of directors to
Board Committees and the selection of Board Committee
chairs.
|
The Nominating Committee may and
typically does retain an executive search firm to assist with the identification
and evaluation of prospective Board nominees based on criteria established by
the Committee. For information on the Nominating Committees policies with
respect to director nominations please see Elections to the Board of Directors
above.
The Nominating Committee currently
consists of Mr. Chua, Chairperson, Ms. Davis and Mr. Hirsch. Following Mr.
Chuas retirement effective as of the 2016 Annual General Meeting, the Board of
Directors expects that Ms. Davis will be appointed as the Chairperson of the
Nominating Committee and Dr. Hunt will be appointed to the Committee. The Board
of Directors has determined that each of Mr. Chua, Ms. Davis, Mr. Hirsch and Dr.
Hunt meets the independence requirements of the Nasdaq Stock Market listing
standards. Upon the Committees recommendation of nominees for election to the
Board of Directors, the nominees are presented to the full Board. Nominees are
then selected by a majority of the independent members of the Board. The
Nominating Committee met four times in fiscal year 2016. The meetings were held
in person or by teleconference and lasted approximately half-an-hour to one
hour.
53
|
|
|
Proxy Statement
|
Corporate Governance and Board of Directors
Matters
|
Report of the Audit Committee
|
The Audit Committee is
responsible for overseeing Logitechs accounting and financial reporting
processes and audits of Logitechs financial statements. The Audit Committee
acts only in an oversight capacity and relies on the work and assurances of
management, which has primary responsibility for Logitechs financial statements
and reports, Logitechs internal auditors, as well as KPMG, Logitechs
independent auditors, which is responsible for expressing an opinion on the
conformity of Logitechs audited financial statements to generally accepted
accounting principles and attesting to the effectiveness of Logitechs internal
control over financial reporting.
The Board of Directors has adopted a
written charter for the Audit Committee. A copy of the Charter can be found on
our website at
http://ir.logitech.com
. To view the
charter, select Audit Committee Charter under Corporate
Governance.
The Audit Committee has reviewed and
discussed our audited financial statements for the fiscal year ended March 31,
2016, with our management. In addition, the Audit Committee has discussed with
the independent auditors the matters required to be discussed by Auditing
Standard No. 16 as adopted by the Public Company Accounting Oversight
Board.
The Audit Committee has received the
written disclosures and the letter from the independent accountant required by
applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with the Audit Committee
concerning independence, and has discussed with the independent accountant the
independent accountants independence.
Based on the reviews and discussions
referred to above, the Audit Committee recommended to the Board of Directors
that the audited consolidated financial statements be included in Logitechs
Annual Report on Form 10-K for the fiscal year ended March 31, 2016.
Submitted by the Audit Committee of
the Board
Didier Hirsch, Chairperson
Kee-Lock
Chua
Sue Gove
63
|
|
|
Proxy Statement
|
Section 16(a) Beneficial Ownership Reporting
Compliance
|
Section 16 of the
Exchange Act requires Logitechs directors, executive officers and any persons
who own more than 10% of Logitechs shares, to file initial reports of ownership
and reports of changes in ownership with the SEC. Such persons are required by
SEC regulation to furnish Logitech with copies of all Section 16(a) forms that
they file. As a matter of practice, our administrative staff assists our
executive officers and directors in preparing initial ownership reports and
reporting ownership changes, and typically files these reports on their
behalf.
We believe that all
Section 16(a) filing requirements were met in fiscal year 2015, with the
exceptions noted below:
●
|
A late Form 4 report was filed
for Neil Hunt on September 3, 2015 to report the forfeiture of shares to
satisfy tax withholding obligations arising out of the vesting of
restricted stock units on August 31,
2015.
|
|
Proxy
Statement
|
64
|
Compensation Report for Fiscal Year
2016
|
This Compensation Report
has been designed to comply with both the proxy statement rules under U.S.
securities laws and Swiss regulations. For Swiss law purposes, this Report is
supplemented by a Remuneration Report prepared in compliance with the Ordinance
against excessive compensation in stock exchange listed companies in Switzerland
(the Minder Ordinance). This Report is an integrated part of our Annual
Report, Invitation, and Proxy Statement for our 2016 Annual General
Meeting.
Compensation Discussion and Analysis
|
This Compensation
Discussion and Analysis is intended to assist our shareholders in understanding
our executive compensation program by providing an overview of our executive
compensation-related policies, practices, and decisions for fiscal year 2016. It
also explains how we determined the material elements of compensation for our
Chief Executive Officer, our Chief Financial Officer, and the three executive
officers (other than our Chief Executive Officer and Chief Financial Officer)
who were our most highly-compensated executive officers for fiscal year 2016,
and who we refer to as our Named Executive Officers. For fiscal year 2016, our
Named Executive Officers were:
●
|
Guerrino De Luca,
our Executive Chairman;
|
●
|
Bracken Darrell,
our President and Chief Executive Officer;
|
●
|
Vincent Pilette,
our Chief Financial Officer;
|
●
|
Marcel Stolk, our
Senior Vice President, CCP Business Group; and
|
●
|
L. Joseph Sullivan,
our Senior Vice President, Worldwide
Operations.
|
The Compensation
Committee believes the design of our executive compensation programs has and
will continue to meet our goal of providing our executives with
market-competitive compensation packages that provide for above market rewards
when Logitech outperforms both our internal goals and the overall market, and
limited rewards when Logitechs performance does not meet these objectives.
Overall, our Compensation Committee has developed executive compensation
programs that it believes will provide an incentive to drive the Companys
performance and reward both our shareholders and our
executives.
Fiscal Year 2016
Business Highlights
Logitech had a successful fiscal year
2016. Despite significant currency headwinds, we delivered our best annual
retail sales growth in five years by introducing innovative new products that
enabled us to grow market share in nearly all of our product categories.
Disciplined cost and working capital management led to strong profitability and
cash flow from operations. Please see the section entitled
Managements Discussion and Analysis of Financial Condition
and Results of Operations
in our Annual
Report for a more detailed discussion of our fiscal year 2016 financial
results.
65
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
Executive Compensation Highlights
Consistent with our
strong performance and compensation philosophy, the Compensation Committee took
the following compensation actions for our executive officers for fiscal year
2016:
Named Executive Officer
|
FY 2016 Base
Salary
Increase
from FY 2015
|
|
FY 2016 Annual
Bonus as a
Percentage
of
Target Bonus
|
|
FY 2016
Annual
Time-Based
Restricted Stock
Units Award
(Grant
Date
Fair Value)
|
|
FY 2016
Annual
Performance-Based
Restricted Stock
Units Award
(Grant
Date Fair Value)
|
Guerrino De Luca
|
|
0%
|
|
|
135%
|
|
|
$193,091
|
|
|
|
$301,150
|
|
Bracken Darrell
|
|
0%
|
|
|
135%
|
|
|
$1,930,803
|
|
|
|
$3,011,471
|
|
Vincent Pilette
|
|
20%
|
|
|
145%
|
|
|
$965,402
|
|
|
|
$1,003,824
|
|
Marcel Stolk
|
|
0%
|
|
|
135%
|
|
|
$286,567
|
|
|
|
$451,738
|
|
L.
Joseph Sullivan
|
|
4%
|
|
|
140%
|
|
|
$231,704
|
|
|
|
$361,401
|
|
Emphasis on Variable
and Performance-Based Compensation
The annual compensation
of our executive officers varies from year to year based on our corporate
financial and operational results and individual performance. Our executive
compensation program emphasizes variable performance-based pay over fixed
pay and seeks to balance short-term and long-term incentives as well as
performance-based and time-based incentives. In fiscal year 2016, the majority
of the target total direct compensation of our CEO consisted of
performance-based pay, including cash awarded under our annual bonus plan and
long-term incentives in the form of
performance-based equity
awards for which value is based on achievement of performance criteria. Fixed
pay, primarily consisting of base salary, made up only 12% of our CEOs target
total direct compensation in fiscal year 2016, while variable pay, consisting of
both annual bonus and long-term equity incentives, made up 88% of his target
total direct compensation. This same philosophy was applied to our other
executive officers. The following charts show the percentages of target variable
pay versus target fixed pay for fiscal year 2016:
|
Proxy
Statement
|
66
|
Compensation Report for Fiscal Year
2016
|
Executive Compensation Best
Practices
We strive to maintain
sound executive compensation policies and practices, including
compensation-related corporate governance standards, consistent with our
executive compensation philosophy. We have the following executive compensation
policies and practices in place, including both those that we have implemented
to drive performance and those that either prohibit or minimize behaviors that
we do not believe serve our shareholders long-term interests:
What We Do
✓
|
Compensation Committee Independence
Our Board of Directors maintains a
Compensation Committee comprised solely of independent
directors.
|
|
|
✓
|
Compensation Committee Advisor Independence
The
Compensation Committee engages and retains its own independent advisors
and reviews their independence.
|
|
|
✓
|
Annual
Compensation Review
The
Compensation Committee conducts an annual review of our executive
compensation philosophy and strategy, including a review of the
compensation peer group and other information used for comparative
purposes.
|
|
|
✓
|
Compensation-Related Risk Assessment
The Compensation Committee
conducts an annual evaluation of our compensation programs, policies, and
practices, which are designed to ensure that they reflect an appropriate
level of risk-taking but do not encourage our employees to take excessive
or unnecessary risks that could have a material adverse impact on the
Company.
|
|
|
✓
|
Emphasize
Performance-based Incentive Compensation
The Compensation Committee designs our executive compensation program to
use performance-based short-term and long-term incentive compensation
awards to align the interests of our executive officers with the interests
of our shareholders.
|
|
|
✓
|
Emphasize
Long-Term Equity Compensation
The Compensation
Committee uses equity awards to deliver long-term incentive compensation
opportunities to our executive officers. These
equity
|
|
awards vest or may
be earned over multi-year periods, which better serves our long-term value
creation goals and retention objectives.
|
|
|
✓
|
Limited
Executive Perquisites
We do not
provide perquisites or other personal benefits to our executive officers.
The executive officers participate in our health and welfare benefit
programs on the same basis as all of our
employees.
|
|
|
✓
|
Stock
Ownership Policy
We maintain a
stock ownership policy for our directors and executive officers which
requires each of them to own a specified amount of our registered shares
as a multiple of their salary or annual board retainer.
|
|
|
✓
|
Compensation Recovery Policy
We have adopted a policy that provides for the
recoupment of bonus and other incentive compensation and equity
compensation from our executive officers resulting from fraud or
intentional misconduct of an executive officer or if the executive officer
knew of the fraud or misconduct.
|
|
|
✓
|
Double-Trigger Change of Control Arrangements in
Equity Award Agreements
The
post-employment equity compensation arrangements for our executive
officers are based on a double-trigger arrangement that provides for
acceleration of time-based equity only in the event of (i) a change in
control of the Company and (ii) a qualifying termination of employment. As
noted below, we do not have any cash payment related to termination of
employment or change of control.
|
|
|
✓
|
Prohibition on
Hedging and Pledging
Under our Insider
Trading Policy, we prohibit our executive officers from hedging any
Company securities owned by them and from pledging any Company securities
as collateral for a loan owned by them as collateral for a
loan.
|
|
|
✓
|
Succession Planning
Our Board of Directors reviews on
an annual basis our succession strategies and plans for our most critical
positions.
|
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What We Do Not Do
✕
|
No Severance or Change of Control
Arrangements
To comply with the Minder Ordinance we have terminated
all severance and change of control arrangements (other than acceleration
of vesting of equity awards as provided in our equity award agreements)
for executive officers, including members of our Group Management Team
(Messrs. Darrell, Pilette, Stolk and Sullivan).
|
|
|
✕
|
No Special Retirement
Programs
Other than our Section 401(k) plan and our Swiss
Pension plan generally available to all employees in the U.S. and
Switzerland, respectively, we do not offer defined benefit or contribution
retirement plans or arrangements for our executive
officers.
|
|
|
✕
|
No Tax Gross-Ups or
Payments
We do not provide any gross-ups or tax payments in
connection with any compensation element for our executive officers, other
than for our standard relocation benefits. This means we do not provide
any excise tax gross-up or tax reimbursement in connection with any
change of control payments or benefits.
|
|
|
✕
|
No Unearned Dividends
We do not pay dividends or dividend equivalents on
unvested or unearned restricted stock unit or performance-based restricted
stock unit awards.
|
|
|
✕
|
No Stock Option
Repricing
We do not reprice options to purchase our registered
shares without shareholder
approval.
|
Say-on-Pay
Logitech has been a leader in providing
our shareholders with an opportunity for advisory votes on compensation.
Beginning in 2009, Logitech voluntarily submitted its compensation philosophy,
policies, and procedures to a shareholder advisory vote. Our voluntary practice
is now a requirement under the U.S. securities laws that provides shareholders
the ability to periodically cast advisory votes on executive compensation, and
is reflected in the proposals for our 2016 Annual General Meeting. We remain
committed to providing clear and thorough disclosure on our executive
compensation practices and actions, and our Compensation Committee will
carefully consider the voting results.
Beginning in 2015, in compliance with
the Minder Ordinance, we instituted annual binding shareholder votes on the
aggregate compensation amounts for our directors and for members of our Group
Management Team consistent with the compensation structure that shareholders
approved in amendments to our Articles of Incorporation at our 2014 Annual
General Meeting.
At our 2015 Annual General Meeting,
more than 80% of the votes cast on our annual Say-on-Pay proposal supported the
compensation of our named executive officers. The Compensation Committee was
mindful of shareholder support for our pay-for-performance compensation
philosophy in maintaining our general compensation practices and setting fiscal
year 2016 compensation for our executive officers. For more information
regarding our annual Say-on-Pay proposal for fiscal year 2016, see
Proposal 2 Advisory vote to approve
executive compensation
.
Compensation
Philosophy and Guiding Principles
|
We have designed our executive
compensation program to:
●
|
Provide compensation sufficient
to attract and retain the level of talent needed to create and manage an
innovative, high growth global company in highly competitive and rapidly
evolving markets;
|
●
|
Support a performance-oriented
culture;
|
●
|
Maintain a balance between fixed
and variable compensation and place a significant portion of total
compensation at risk based on the Companys performance, while maintaining
controls over inappropriate risk-taking by factoring in both annual and
long-term performance;
|
●
|
Provide a balance between
short-term and long-term objectives and
results;
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●
|
Align executive compensation with
shareholders interests by tying a significant portion of compensation to
increasing share value; and
|
●
|
Reflect the executives role and
past performance through base salary and short-term cash incentives, and
his or her potential for future contribution through long-term equity
incentive awards.
|
However, while compensation is a
central part of attracting, retaining, and motivating the best executives and
employees, we believe it is not the sole or exclusive reason why exceptional
executives or employees choose to join and stay at Logitech, or why they work
hard to achieve results for our shareholders. In this regard, both the
Compensation Committee and management believe that providing a working
environment and opportunities in which executives and employees can develop,
express their individual potential, and make a difference are also a key part of
Logitechs success in attracting, motivating, and retaining executives and
employees.
The Compensation Committee periodically
reviews and analyzes market trends and the prevalence of various compensation
delivery vehicles and adjusts the design and operation of our executive
compensation program from time to time as it deems necessary and appropriate. In
designing and implementing the various elements of our executive compensation
program, the Compensation Committee considers market and industry practices, as
well as our compensation structures tax efficiency and its impact on our
financial condition. While the Compensation Committee considers all of these
factors in its deliberations, it places no formal weighting on any one
factor.
The Compensation Committee evaluates
our compensation philosophy and program objectives on an annual basis or more
frequently as circumstances require.
Compensation-Setting
Process
|
Role of the Compensation
Committee
The Compensation Committee, among its
other responsibilities, establishes our overall compensation philosophy and
reviews and approves our executive compensation program, including the specific
compensation of our executive officers. The Compensation Committee has the
authority to retain special counsel and other advisors, including compensation
consultants, to assist in carrying out its responsibilities. The Compensation
Committees authority, duties, and responsibilities are described in its
charter, which is reviewed annually and updated as warranted. The charter is
available on our Company website at
http://ir.logitech.com
.
While the Compensation Committee
determines our overall compensation philosophy and approves the compensation of
our executive officers, it considers the recommendations of its compensation
consultants and other advisors, as well as our CEO, our CFO, our head of People
& Culture, and our compensation department. The Compensation Committee makes
all final decisions regarding executive compensation, including base salary
levels, target annual cash bonus
opportunities, actual cash bonus payments, and long-term incentives in the form
of equity awards. The Compensation Committee meets on a regularly-scheduled
basis and at other times as needed. The Compensation Committee periodically
reviews compensation matters with our Board of Directors. The chair of the
Compensation Committee reports to the Board of Directors on the activities of
the Compensation Committee at quarterly board meetings and the minutes of the
Compensation Committee meetings are available to the members of the Board of
Directors.
Before the beginning of each fiscal
year, the Compensation Committee reviews our executive compensation program to
assess whether our compensation elements, actions, and decisions (i) are
properly coordinated, (ii) are aligned with our vision, mission, values, and
corporate goals, (iii) provide appropriate short-term and long-term incentives
for our executive officers, (iv) achieve their intended purposes, and (v) are
competitive with the compensation of executives in comparable positions at the
companies
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with which we compete for executive
talent. Following this assessment, the Compensation Committee makes any
necessary or appropriate modifications to our existing plans and arrangements or
adopts new plans or arrangements.
The Compensation Committee also
conducts an annual review of our executive compensation strategy to ensure that
it is appropriately aligned with our business strategy and achieving our desired
objectives. Further, the Compensation Committee reviews market trends and
changes in competitive compensation practices, as further described below.
The factors considered by the
Compensation Committee in determining the compensation of our executive officers
for fiscal year 2016 included:
●
|
Each individual executives
performance;
|
●
|
Each individual executives
skills, experience, qualifications and
marketability;
|
●
|
The Companys performance against
financial goals and objectives;
|
●
|
The Companys performance
relative to both industry competitors and its compensation peer
group;
|
●
|
The positioning of the amount of
each executives compensation in a ranking of peer
compensation;
|
●
|
The compensation practices of the
Companys peer group; and
|
●
|
The recommendations of our CEO
(except with respect to his own compensation and the compensation of our
Executive Chairman) as described below.
|
The Compensation Committee did not
weight these factors in any predetermined or formulaic manner in making its
decisions. The members of the Compensation Committee considered this information
in light of their individual experience, knowledge of the Company, knowledge of
each executive officer, knowledge of the competitive market, and business
judgment in making their decisions regarding executive compensation and our
executive compensation program.
As part of this process, our Executive
Chairman works closely with the Compensation Committee in determining the
compensation of our CEO. The Compensation Committee, in consultation with the
other non-employee members of the Board of Directors, also evaluates the
performance of our Executive Chairman and our CEO each year and makes all
decisions regarding their base salary adjustments, target annual cash bonus
opportunities, actual cash bonus payments, and
long-term incentives in the form of equity awards. Our Executive Chairman and our CEO are
not present during any of the deliberations regarding their own
compensation.
Role of our CEO
Our CEO works closely with the
Compensation Committee in determining the compensation of our other executive
officers, excluding our Executive Chairman. Typically, our CEO works with the
Compensation Committee to recommend the structure of the annual bonus plan, and
to identify and develop corporate performance objectives for such plan, and to
evaluate actual performance against the selected measures. Our CEO also works
with the Compensation Committee to determine the appropriate form and
performance goals for our equity compensation program.
At the beginning of each year, our CEO
reviews the prior years performance of our executive officers who report to him
and then makes recommendations to the Compensation Committee for each element of
compensation. Using his evaluation of each executive officers performance and
taking into consideration historical compensation awards to our executive
officers and our corporate performance during the preceding year, these
recommendations cover base salary adjustments, target annual cash bonus
opportunities, actual bonus payments, and long-term incentives in the form of
equity awards for each of our executive officers (other than himself and our
Executive Chairman) based on our results, the individual executive officers
contribution to these results, and his or her performance toward achieving his
or her individual performance goals. The Compensation Committee then reviews
these
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recommendations and makes decisions as
to the target total direct compensation of each executive officer, as well as
each individual compensation element.
While the Compensation Committee
considers our CEOs recommendations, as well as the competitive market analysis
prepared by its compensation consultants, these recommendations and market data
serve as only two of several factors in making its decisions with respect to the
compensation of our executive officers. Ultimately, the Compensation Committee
applies its own business judgment and experience to determine the individual
compensation elements and amount of each element for our executive officers.
Moreover, no executive officer participates in the determination of the amounts
or elements of his or her own compensation.
Role of Compensation
Consultants
Pursuant to its charter, the
Compensation Committee has the authority to engage its own legal counsel and
other advisors, including compensation consultants, as it determines in its sole
discretion, to assist in carrying out its responsibilities. The Compensation
Committee makes all determinations regarding the engagement, fees, and services
of these advisors, and any such advisor reports directly to the Compensation
Committee. The Compensation Committee may replace its compensation consultant or
hire additional advisors at any time.
In fiscal year 2016, pursuant to this
authority, the Compensation Committee engaged Compensia, Inc., a U.S.
compensation consulting firm, and Agnès Blust Consulting, a Swiss compensation
consulting firm. The Compensation Committee engages compensation consultants to
provide information, analysis, and other assistance relating to our executive
compensation program on an ongoing basis. The nature and scope of the services
provided to the Compensation Committee by the independent compensation
consultants in fiscal year 2016 were as follows:
●
|
reviewed and recommended updates
to the compensation peer group;
|
●
|
provided advice with respect to
compensation best practices and market trends for executive officers and
members of our Board of Directors;
|
●
|
conducted an analysis of the
levels of overall compensation and each element of compensation for our
executive officers;
|
●
|
conducted an analysis of the
levels of overall compensation and each element of compensation for the
members of our Board of Directors;
|
●
|
assisted in our equity
compensation strategy and proposal for an equity compensation plan pool
increase; and
|
●
|
provided legislative updates and
ad hoc advice and support throughout the
year.
|
The independent compensation
consultants attend Compensation Committee meetings as requested and also
communicate with the Compensation Committee outside of meetings. The
compensation consultants report to the Compensation Committee rather than to
management, although the compensation consultants typically meet with members of
management, including our CEO and members of our executive compensation staff,
for purposes of understanding proposals that management may make to the
Compensation Committee.
The Compensation Committee has assessed
the independence of the compensation consultants taking into account, among
other things, the six independence-related factors as set forth in Exchange Act
Rule 10C-1 issued by the SEC under the Dodd-Frank Act and the enhanced
independence standards and factors set forth in the applicable listing standards
of the Nasdaq Stock Market, and has concluded that its relationship with each
independent compensation consultant and the work of each of them on behalf of
the Compensation Committee has not raised any conflict of interest. Compensia
and Agnès Blust Consulting have not provided any other services to us and have
received no compensation other than with respect to the services described
above.
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Compensation Peer Group
As part of its deliberations, the
Compensation Committee considers competitive market data on executive
compensation levels and practices and a related analysis of such data. This data
is drawn from a select group of peer companies developed by the Compensation
Committee, as well as compensation survey data.
For fiscal year 2016, at the direction
of the Compensation Committee, the compensation consultant evaluated the
existing compensation peer group and used the criteria set forth in the
following table to objectively identify companies for inclusion in the
group:
Criteria
|
Rationale
|
Industry
|
We compete for talent with
companies in the following industries:
●
Technology
●
Consumer Products
|
Financial Scope
|
Our Named Executive Officer
compensation should be similar to senior managers at companies that have
comparable financial characteristics including revenues and market
capitalization.
|
Other Factors
|
As appropriate, utilize
additional refinement criteria (objective or subjective) such as revenue
growth, profitability, valuation, headcount, or business model.
U.S. publicly traded companies.
Although we are a Swiss company, in certain circumstances we compete for executive management talent with technology
companies in the United States, and particularly in the high-technology
area of Silicon Valley.
|
Based on these criteria, the
Compensation Committee selected the following peer group of 16 publicly-traded
companies, which it subsequently approved and then used as a reference when
making compensation decisions with respect to setting compensation for fiscal
year 2016:
Belden Inc.
|
JDS Uniphase
|
Polycom, Inc.
|
Brocade Communications
Systems, Inc.
|
Knowles
Corporation
|
Synaptics
Inc.
|
Diebold,
Incorporated
|
Lexmark International,
Inc.
|
Trimble Navigation
Limited
|
Garmin Ltd.
|
NETGEAR, Inc.
|
VeriFone Systems,
Inc.
|
GoPro, Inc.
|
Plantronics,
Inc.
|
Zebra Technologies
Corporation
|
Hasbro, Inc.
|
|
|
The following table sets forth the
revenue and market capitalization of the fiscal 2016 compensation peer group as
of March 2015 as compared to the same data for Logitech:
(in millions)
|
|
Revenue
|
|
Market
Capitalization
|
75
th
Percentile
|
|
|
$
|
2,514
|
|
|
|
|
$
|
5,288
|
|
|
50
th
Percentile
|
|
|
|
1,804
|
|
|
|
|
|
3,384
|
|
|
25
th
Percentile
|
|
|
|
1,325
|
|
|
|
|
|
2,166
|
|
|
Logitech
|
|
|
|
2,137
|
|
|
|
|
|
2,423
|
|
|
Percentile Rank
|
|
|
|
58%
|
|
|
|
|
|
30%
|
|
|
The table reflects available revenue
information for four quarters as of March 3, 2015 and 30-day average market
capitalization as of March 3, 2015, as provided by Compensia.
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The market analysis provided by
Compensia, and considered by the Compensation Committee in its review of our
executive officers compensation, compares Logitech to multiple sources of data:
the compensation peer group described above, a broad custom survey of similarly
sized technology companies, and a broad custom survey of technology companies
that are larger than Logitech (the next tier). The broad technology survey
data, which is necessary to provide market data where we do not have publicly
disclosed information from our peers, consists of 75 companies that participated
in the Radford survey with comparable revenue and market profile to the
compensation peer group. The next tier data, which provides the Compensation
Committee a view of the compensation levels for larger companies from which we
compete for talent, consists of 21 technology companies with annual revenue and
market cap a tier
higher than Logitechs peer group
selection criteria; revenue between ~$4 billion and $16 billion and a market cap
between ~$6 billion and $45 billion.
The Compensation Committee believes
that information regarding the compensation practices at other companies is
useful in at least two respects. First, the Compensation Committee recognizes
that our compensation policies and practices must be competitive in the
marketplace. Second, this information is useful in assessing the reasonableness
and appropriateness of individual executive compensation elements and of our
overall executive compensation packages. This information is only one of several
factors (as described above) that the Compensation Committee considers, however,
in making its decisions with respect to the compensation of our executive
officers.
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Compensation Elements
The three primary elements of our
executive compensation programs are (1) base salary, (2) annual cash bonus
opportunities, and (3) long-term incentives in the form of equity awards, as
described below:
Compensation Element
|
|
What This Element Rewards
|
|
Purpose and Key Features of
Element
|
Base salary
|
|
●
Individual performance, level of experience, and
contributions.
|
|
●
Provides competitive level of fixed compensation determined by the
market value of the position, with actual base salaries established based
on the facts and circumstances of each executive officer and each
individual position.
|
Annual cash bonuses
|
|
●
Achievement of pre-established corporate performance objectives
(for fiscal year 2016, focused on growing revenue and profitability), as
well as management objectives and individual contributions.
|
|
●
Motivates executive officers to achieve above target
performance
●
Generally, performance levels are established to incentivize our
executive officers to achieve or exceed performance objectives. For fiscal
year 2016, payouts for corporate performance objectives could range from
0% to 200%, depending on actual
achievement.
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Compensation Element
|
|
What This Element Rewards
|
|
Purpose and Key Features
of
Element
|
Long-term incentives/equity
awards
|
|
●
Achievement of corporate performance objectives designed to enhance
long-term shareholder value and attract, retain, motivate, and reward
executive officers over extended periods for achieving important corporate
objectives.
|
|
●
Provide a variable at risk pay opportunity that aligns executive
and shareholder interests through annual equity awards that vest over
multiple years.
●
Because the ultimate value of these equity awards is directly
related to the market price of our registered shares, and the awards are
only earned over an extended period of time subject to vesting, they serve
to focus management on the creation and maintenance of long-term
shareholder value.
●
Performance-based equity links compensation to key financial
metrics, such as growth and profitability, that require strong performance
for target or any substantial vesting to occur, and provides an
extraordinary payout if performance significantly exceeds that of the
objective or the benchmark group.
●
Vesting requirements promote
retention.
|
Our executive officers also participate
in the standard employee benefit plans available to most of our employees. Each
of these compensation elements is discussed in greater detail below, including a
description of the particular elements, how each element fits into our overall
executive compensation program and a discussion of the amounts of compensation
paid to our executive officers in fiscal year 2016 under each of these elements.
Base Salary
We believe that a competitive base
salary is a necessary element of our executive compensation program, so that we
can attract and retain a stable management team. Base salaries for our executive
officers are also intended to be competitive with those received by other
individuals in similar positions at the companies with which we compete for
talent, as well as equitable across the executive team.
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Generally, we establish the initial
base salaries of our executive officers through arms-length negotiation at the
time we hire the individual executive officer, taking into account his or her
position, qualifications, experience, prior salary level, competitive and market
considerations, and the base salaries of our other executive officers.
Thereafter, the Compensation Committee reviews the base salaries of our
executive officers annually and makes adjustments to base salaries as it
determines to be necessary or appropriate.
In fiscal year 2016, the Compensation
Committee reviewed the base salaries of our executive officers, taking into
consideration a competitive market analysis performed by Compensia, the scope of
each executive officers role, and the recommendations of our CEO (except with
respect to his own base salary and the
base salary of our Executive Chairman),
as well as the other factors described above. Following this review, the
Compensation Committee set the base salaries of our executive officers at levels
that it believed were appropriate to maintain their competitiveness and provided
a base salary increase to Messrs. Darrell, Pilette and Sullivan. The
Compensation Committee approved a base salary increase for Mr. Darrell from
$825,000 to $875,000. However, Mr. Darrell declined the increase and his base
salary remained unchanged for fiscal year 2016. Due to his outstanding
performance since joining the Company, the Compensation Committee decided to
provide a base salary increase to Mr. Pilette to bring his target total cash
compensation in line with executives in comparable positions in the top quartile
of our peer group and after taking into consideration the competitive market for
high performing CFOs in Silicon Valley.
The base salaries of our executive
officers for fiscal year 2016 were as follows:
Named Executive Officer
|
|
Fiscal Year 2016
Base
Salary
|
|
Fiscal Year 2015
Base
Salary
|
|
Percentage
Adjustment
|
Guerrino De Luca
|
|
|
$
|
500,000
|
|
|
|
$
|
500,000
|
|
|
|
0
|
%
|
|
Bracken Darrell
|
|
|
$
|
825,000
|
|
|
|
$
|
825,000
|
|
|
|
0
|
%
|
|
Vincent Pilette
(1)
|
|
|
$
|
600,000
|
|
|
|
$
|
500,000
|
|
|
|
20
|
%
|
|
Marcel Stolk
|
|
|
CHF 523,510
|
|
|
|
CHF 523,510
|
|
|
|
0
|
%
|
|
L.
Joseph Sullivan
|
|
|
$
|
442,500
|
|
|
|
$
|
427,500
|
|
|
|
4
|
%
|
|
(1) The base salary increase for Mr.
Pilette was effective September 1, 2016
The base salaries of our executive
officers during fiscal year 2016 are set forth in the 2016 Summary Compensation
Table below.
Annual Cash Bonuses
We use annual bonuses to motivate our
executive officers to achieve our short-term financial and operational
objectives while making progress towards our longer-term growth and other goals.
Consistent with our executive compensation philosophy, these annual bonuses are
intended to help us to deliver a competitive total compensation opportunity to
our executive officers. Annual cash bonuses are entirely performance-based, are
not guaranteed, and may vary materially from year-to-year.
Typically, the Compensation Committee
establishes cash bonus opportunities pursuant to a formal cash bonus plan that
measures and rewards our executive officers for our actual corporate and their
individual performance over our fiscal year. The cash bonus plan is designed to
pay above-target bonuses when we exceed our annual corporate objectives and
below-target bonuses or no bonus when we do not achieve these
objectives.
In fiscal year 2016, the Compensation
Committee determined cash bonus opportunities for our executive officers
pursuant to the cash bonus plan for fiscal year 2016 under the Logitech
Management Performance Bonus Plan (the Bonus Plan). Under the Bonus Plan, the
Compensation Committee had the authority to select the performance measures and
related target levels applicable to the annual cash bonus opportunities for our
executive officers.
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Target Bonus
Opportunities
For fiscal year 2016, the target annual
cash bonus opportunities for each of our executive officers under the Bonus
Plan, expressed as a percentage of his or her annual base salary, were as
follows:
Named Executive
Officer
|
|
Annual
Base
Salary
|
|
Target
Bonus
Opportunity
(as a percentage of
base salary)
|
|
Target
Bonus
Opportunity ($)
|
Guerrino De Luca
|
|
|
$500,000
|
|
|
|
100
|
%
|
|
|
|
$500,000
|
|
Bracken Darrell
|
|
|
$825,000
|
|
|
|
125
|
%
|
|
|
|
$1,031,250
|
|
Vincent Pilette
|
|
|
$600,000
|
|
|
|
100
|
%
|
|
|
|
$600,000
|
|
Marcel Stolk
|
|
|
CHF 523,510
|
|
|
|
80
|
%
|
|
|
|
CHF 418,808
|
|
L. Joseph Sullivan
|
|
|
$442,500
|
|
|
|
75
|
%
|
|
|
|
$331,875
|
|
In setting the amount of the target
annual cash bonus opportunities, the Compensation Committee takes into account
competitive market data and the individuals role and contribution to
performance. In review of Mr. Pilettes compensation, the Compensation Committee
decided to increase his target annual cash bonus opportunity for fiscal year
2016 from 80% to 100% of base salary to bring his target total cash compensation
in line with executives in comparable positions in the top quartile of our peer
group and in consideration of the competitive market for high performing CFOs in
Silicon Valley. No changes were made to the target annual cash bonus
opportunities for the other executive officers for fiscal year 2016.
Corporate Performance
Objectives
For purposes of the Bonus Plan, the
Compensation Committee selected Revenue and Non-GAAP Operating Income as the
corporate performance measures for fiscal year 2016. Each of these corporate
performance measures was equally weighted. The Compensation Committee believed
these performance measures were appropriate for our business because they
provided a balance between growing our business, generating revenue, managing
our expenses, and increasing profitability, which it believes most directly
influences long-term shareholder value. The Compensation Committee established
target performance levels for each of these
measures at levels that it believed to
be challenging, but attainable, through the successful execution of our
Board-approved annual operating plan.
For purposes of the Bonus Plan, the
corporate performance measures were to be calculated as follows:
●
|
Revenue meant Retail Net Sales
measured in constant currency (CC), which excludes the impact of
currency exchange rate fluctuations. The target constant currency sales
are calculated by translating sales in each local currency at the forecast
exchange rate for that currency at the beginning of the performance
period. The actual revenue in the performance period is translated in each
local currency using the same forecast exchange rate to determine the
performance achievement against the performance target. For additional
information regarding constant currency sales, please refer to the
section entitled Managements Discussion and Analysis of Financial
Condition and Results of Operations in our Annual Report;
and
|
●
|
Non-GAAP Operating Income meant
GAAP Operating Income from continuing operations, excluding share-based
compensation expense, amortization of other intangible assets,
restructuring charges (credits), other restructuring-related charges,
one-time special charges and other
items.
|
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The threshold, target, and maximum
levels of achievement for each corporate performance measure and their
respective payment levels were as follows:
Corporate Performance
Measure
|
Threshold
Performance
Level
|
|
Threshold
Payment
Level
|
|
Target
Performance
Level
|
|
Target
Payment
Level
|
|
Maximum
Performance
Level
|
|
Maximum
Payment
Level
|
Revenue CC
|
95%
|
|
25%
|
|
100%
|
|
100%
|
|
103%
|
|
200%
|
Non-GAAP Operating Income
|
84%
|
|
50%
|
|
100%
|
|
100%
|
|
133%
|
|
200%
|
For any bonus payment to be made under
the fiscal year 2016 Bonus Plan, the threshold performance requirements had to
be met for each of the corporate performance measures. In the event of actual
performance between the threshold and target, and
target and maximum, performance levels,
the payment amount was to be calculated ratably between each designated segment
on a linear basis.
The Compensation Committee established
the following target levels for each of the corporate performance measures under
the Bonus Plan:
Corporate Performance
Measure
|
Weighting
|
|
Fiscal Year 2016
Target
Level
|
Revenue CC
|
50%
|
|
|
$1,895M
|
|
Non-GAAP Operating Income
|
50%
|
|
|
$150M
|
|
Individual and Business Group
Performance
For executive officers who are business
group or regional leaders we factor in financial metrics with respect to their
areas of responsibility, which the Compensation Committee believes are critical
to driving long-term shareholder value. As a result, Mr. Stolks target annual
cash bonus opportunity was based 50% on achievement of the corporate performance
measures described above and 50% on measures specific to the performance of the
business group for which he is responsible.
In addition to the corporate
performance objectives, 25% of the annual cash bonuses for our executive
officers, other than our CEO and our Executive Chairman, can be adjusted based
on each executive officers individual performance and other factors as reviewed
and assessed by our CEO.
2016 Performance Results and Bonus
Decisions
For fiscal year 2016, the Compensation
Committee determined that our actual achievement with respect to the corporate
financial objectives under the Bonus Plan was as follows:
Corporate Performance
Measure
|
|
Weighting
|
|
Fiscal Year 2016
Target
Level
|
|
Fiscal Year 2016
Actual
Result
|
|
Fiscal Year
2016
Funding
Percentage
|
Revenue CC
|
|
|
50
|
%
|
|
|
|
$1,895M
|
|
|
|
$1,934M
|
|
|
163%
|
Non-GAAP Operating Income
|
|
|
50
|
%
|
|
|
|
$150M
|
|
|
|
$179M
|
|
|
158%
|
Calculated Result
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160%
|
Adjusted Result
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135%
|
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The actual achievement under the Bonus
Plan produced a funding percentage based on the corporate performance measures
at a 160% level. While the Committee recognized the significant challenge in
achieving both 9% Revenue growth and substantially higher-than-expected
operating profitability, the Committee also took into consideration other
accomplishments that positively impacted the Bonus Plan funding percentage
results such as the divestiture of Lifesize and the exit of the OEM business. As
a result, and based on managements recommendation, the Committee determined to
lower the funding percentage based on corporate performance to a 135% level. The
Committee believed that this level took
account of both the strong results produced by the Company and the executive
officers and the effect of factors that were not fully determinable when the
Bonus Plan design for fiscal year 2016 was approved.
Based on its review of our overall
corporate and business group performance, and taking into account the CEOs
recommendations with respect to individual performance for the executive
officers, other than himself and the Executive Chairman, the Compensation
Committee approved bonus payments as follows for our executive officers for
fiscal year 2016:
Named Executive
Officer
|
|
Target Annual
Cash
Bonus
Opportunity
|
|
Actual Annual
Cash
Bonus
Payment
|
|
Percentage of
Target
Annual
Cash Bonus
Opportunity
|
Guerrino De Luca
|
|
|
$500,000
|
|
|
|
$675,000
|
|
|
135%
|
Bracken Darrell
|
|
|
$1,031,250
|
|
|
|
$1,392,188
|
|
|
135%
|
Vincent Pilette
|
|
|
$600,000
|
|
|
|
$870,000
|
|
|
145%
|
Marcel Stolk
|
|
|
CHF 418,808
|
|
|
|
CHF 565,391
|
|
|
135%
|
L. Joseph Sullivan
|
|
|
$331,875
|
|
|
|
$464,625
|
|
|
140%
|
The Compensation Committee determined
that the bonus amount for:
●
|
Messrs. De Luca and Darrell
reflected the achievement of the corporate performance measures described
above.
|
●
|
Mr. Pilette appropriately
reflected his strong performance in reducing operating expenses,
reorganizing and managing the Finance organization and contributing to the
strong performance of the Company and various strategic initiatives
including the divestiture of Lifesize and the acquisition of
Jaybird.
|
●
|
Mr. Stolk reflected the
achievement of the corporate performance measures described above and
business group performance for which he is
responsible.
|
●
|
Mr. Sullivan reflected his
performance in cost and inventory management and managing the worldwide
operations of the Company.
|
The annual cash bonuses paid to our
executive officers for fiscal year 2016 are set forth in the 2016 Summary
Compensation Table below.
Long-Term Incentive Compensation
We use long-term incentive compensation
in the form of equity awards to motivate our executive officers by providing
them with the opportunity to build an equity interest in the Company and to
share in the potential appreciation of the value of our registered shares. We
use performance-based restricted stock unit (PSU) and restricted stock unit
(RSU) awards that may be settled for shares of our common stock as the
principal vehicles for delivering long-term incentive compensation opportunities
to our executive officers. The Compensation Committee views equity awards,
whether the awards are subject to time-based vesting requirements or are to be
earned based on the attainment of specific performance objectives, as inherently
variable since the grant date fair
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value of these awards may not
necessarily be indicative of their value when, and if, our registered shares
underlying these awards are ever earned or purchased. The Compensation Committee
further believes these awards enable us to attract and retain key talent in our
industry and aligns our executive officers interests with the long-term
interests of our shareholders. The Compensation Committee uses PSUs and RSUs
because they are less dilutive than stock options.
At the beginning of fiscal year 2016,
the Compensation Committee approved equity awards for our executive officers in
recognition of our financial results and each executive officers individual
performance for fiscal year 2015 and expected future contributions. In
determining the amount of each executive officers equity award, the
Compensation Committee took into consideration the recommendations of our CEO
(except with respect to his own equity award and the Executive Chairmans equity
award), as well as the factors described above. The Compensation Committee
considers the dilutive
effect of our long-term incentive
compensation practices, and the overall impact that these equity awards, as well
as awards to other employees, will have on shareholder value. The Compensation
Committee also considered the existing equity holdings of each executive
officer, including the current economic value of their unvested equity awards
and the ability of these unvested holdings to satisfy our retention objectives.
The equity awards for our executive
officers were composed of 60% performance-based RSUs (PSUs) and 40% time-based
RSUs that may be settled for our registered shares, except for Mr. Pilette, who
received his award as 50% PSUs and 50% time-based RSUs. During fiscal year 2015,
the Compensation Committee, as part of its risk analysis, determined that
certain roles within our finance department, including our CFO, should receive
more of their equity in time-based RSUs than awards based on financial results.
The equity awards granted to our executive officers in fiscal year 2016 were as
follows:
|
|
Performance Share
Units
|
|
Restricted Stock
Units
|
Named Executive Officer
|
|
Number
of
Shares
|
|
Grant Date
Fair Value
|
|
Number
of
Shares
|
|
Grant Date
Fair Value
|
Guerrino De Luca
|
|
|
22,382
|
|
|
$301,150
|
|
|
14,922
|
|
|
$193,091
|
Bracken Darrell
|
|
|
223,818
|
|
|
$3,011,471
|
|
|
149,212
|
|
|
$1,930,803
|
Vincent Pilette
|
|
|
74,606
|
|
|
$1,003,824
|
|
|
74,606
|
|
|
$965,402
|
Marcel Stolk
|
|
|
33,574
|
|
|
$451,738
|
|
|
22,382
|
|
|
$286,567
|
L.
Joseph Sullivan
|
|
|
26,860
|
|
|
$361,401
|
|
|
17,906
|
|
|
$231,704
|
Performance-Based
RSUs
The PSU awards granted to our executive
officers in fiscal year 2016 were to be earned based on two performance measures
50% on Logitechs relative total shareholder return (TSR) and 50% on
achievement of a Non-GAAP Operating Margin metric. Prior to fiscal year 2016,
the PSU awards were based solely on TSR. However, beginning in fiscal year 2016,
the Compensation Committee included a Non-GAAP Operating Margin metric to the
PSU awards based on its belief that measuring a companys performance with
multiple metrics provides a more complete picture of the Companys performance.
Relative TSR
The PSUs under this portion of the
award are performance-based compensation because Logitechs relative total
shareholder return performance must be at or above the minimum threshold
percentile against the Nasdaq-100 Index over the three-year performance period
in order for the executive officer to earn any shares from the PSU award. If, at
the end of the performance period, threshold performance is achieved, the number
of shares in which the executive officer vests is pro-rated according to the
Companys actual level of performance.
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The Compensation Committee believes
this measure is well aligned to shareholders' interest as it focuses on relative
share performance against other mid- to large-size technology
companies.
For purposes of the PSUs, relative TSR
reflects (i) the aggregate change in the 30-day average closing of Logitech
shares against the companies in the Nasdaq-100
Index, and (ii) the value (if any)
returned to shareholders in the form of dividends or similar distributions,
assumed to be reinvested in shares when paid, each at the beginning and the end
of a three-year performance period.
The vesting structure of the fiscal
year 2016 PSUs is summarized below:
Percentile Rank of Logitech TSR Against Nasdaq-100 Index
TSR
|
Percentage of
Shares that
Vest
|
Below 30
th
Percentile Rank (threshold)
|
|
0%
|
|
30
th
Percentile Rank
|
|
50%
|
|
50
th
Percentile Rank (target)
|
|
100%
|
|
75
th
Percentile Rank and Above (maximum)
|
|
150%
|
|
The vested percentage attributable to a
TSR Percentile Rank between the 30
th
and 50
th
percentiles,
or between the 50
th
and 75
th
percentiles, is determined by
straight-line interpolation.
Non-GAAP Operating
Margin
The PSUs under this portion of the
award are eligible to vest only if Logitech achieves a target level of Non-GAAP
Operating Margin over four consecutive trailing quarters during the three-year
performance period. Non-GAAP Operating Margin is defined as Logitechs
four-consecutive-quarter cumulative Non-GAAP Operating Income (as reported by
the Company in or at the time of its quarterly earnings press release furnished
to the SEC and/or submitted to the SIX Swiss Stock Exchange), excluding OEM and
Lifesize results, divided by Logitechs four-consecutive-quarter cumulative Net
Sales (as similarly reported by the Company) excluding OEM and Lifesize results.
Provided the performance requirement is achieved within the three-year
timeframe, the award will vest over three years.
PSUs Vesting in Fiscal Year
2016
The PSUs granted in April 2013
completed the 3-year measurement period on March 31, 2016 and vested on April
15, 2016 at 150% of target. The amount vesting was dependent on Logitechs Total
Shareholder Return (TSR) relative to the NASDAQ 100 over the performance period
from April 1, 2013 through March 31, 2016 and Logitechs percentile ranking. Our
average stock price at
the beginning of the period was $6.86
and our ending average stock price was $16.98 (assuming dividends were
reinvested). Therefore, for this period our TSR was 147.43% and our stock
performed above the 90th percentile which resulted in a 150% payout.
For the PSUs granted in March and April
2015, the target level of 9% Non-GAAP Operating Margin was achieved over the
four quarters of fiscal year 2016. Therefore, 100% of the shares of those PSUs
are eligible to vest and one-third of the shares vested on May 15, 2016. The
remaining two-thirds of the award will vest thereafter in equal annual
installments over the next two years.
Restricted Stock Unit
Awards
The RSU awards granted to our executive
officers in fiscal year 2016 were subject to a time-based vesting requirement
and have a four-year vesting period, in four equal annual installments based on
the continued service of the executive officer on each such vesting
date.
The equity awards granted to our
executive officers in fiscal year 2016 are set forth in the 2016 Summary
Compensation Table and the 2016 Grants of Plan-Based Awards Table
below.
Welfare and Health
Benefits
We maintain a tax-qualified retirement
plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the
Code), for our employees in the U.S., including our executive officers, that
provides them with an opportunity to save for retirement on a tax-advantaged
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basis. We intend for this plan to
qualify under Sections 401(a) and 501(a) of the Code so that contributions by
employees to the plan, and income earned on plan contributions, are not taxable
to employees until distributed from the plan. In addition, all contributions are
deductible by us when made.
All participants interests in their
deferrals are 100% vested when contributed under the plan. In fiscal year 2016,
we made matching contributions into the Section 401(k) plan for our employees,
including our executive officers. Under the plan, pre-tax contributions are
allocated to each participants individual account and are then invested in
selected investment alternatives according to the participants
directions.
In compliance with the Swiss federal
pension law, we maintain a Cash Balance pension plan for our employees in
Switzerland, including Mr. Stolk, with employee and employer contributions,
which provides benefits in case of retirement, death or disability due to
sickness.
In addition, we provide other benefits
to our executive officers on the same basis as all of our full-time employees.
These benefits include health, dental and vision benefits, health and dependent
care flexible spending accounts, short-term and long-term disability insurance,
accidental death and dismemberment insurance, and basic life insurance coverage.
We provide vacation and other paid holidays to all employees, including our
executive officers. We also offer our employees the opportunity to participate
in the Logitech Employee Share Purchase Plans.
We design our employee benefits
programs to be affordable and competitive in relation to the market, as well as
compliant with applicable laws and practices. We adjust our employee benefits
programs as needed based on regular monitoring of applicable laws and practices,
the competitive market and our employees needs.
Deferred Compensation
Plan
Eligible employees, including our
executive officers based in the United States, may also participate in the
Logitech Inc. Deferred Compensation Plan and a predecessor plan, which are
unfunded and unsecured plans that allow employees of Logitech Inc., the Logitech
subsidiary in the United States, who earn more than a threshold amount the
opportunity to defer U.S. taxes on up to 80% of their base salary and up to 90%
of their bonus or commission compensation.
Under the plan, compensation may be
deferred until termination of employment or other specified dates chosen by the
participants, and deferred amounts are credited with earnings based on
investment benchmarks chosen by the participants from a number of mutual funds
selected by Logitech Inc.s 401(k) and Deferred Compensation Committee. The
earnings credited to the participants are intended to be funded solely by the
plan investments. Logitech does not make contributions to this plan. Information
regarding executive officer participation in the deferred compensation plans can
be found in the “Non-Qualified Deferred Compensation Table for Fiscal Year 2016” below.
Because the executive officers do not
receive preferential or above-market rates of return under the deferred
compensation plan, earnings under the plan are not included in the Summary
Compensation table, but are included in the Non-Qualified Deferred Compensation
Table below.
Perquisites and Other Personal
Benefits
Currently, we do not view perquisites
or other personal benefits as a significant component of our executive
compensation program. Accordingly, Logitechs executive officer benefit programs
are substantially the same as for all other eligible employees. All future
practices with respect to perquisites or other personal benefits will be
approved and subject to periodic review by the Compensation
Committee.
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Employment
Arrangements
We have extended written employment
agreements or offer letters or both to each of our executive officers, including
our CEO and our other executive officers. Each of these arrangements was
approved on our behalf by our Board of Directors or the Compensation Committee,
as applicable. We believe that these arrangements were appropriate to induce
these individuals to forego other employment opportunities or leave their
current employer for the uncertainty of a demanding position in a new and
unfamiliar organization.
In filling these executive positions,
our Board of Directors or the Compensation Committee, as applicable, was aware
that it would be necessary to recruit or retain candidates with the requisite
experience and skills to manage a growing business in a dynamic environment.
Accordingly, it recognized that it would need to develop competitive
compensation packages to attract or retain qualified candidates in a
highly-competitive labor market. At the same time, our Board of Directors or the
Compensation Committee, as applicable, was sensitive to the need to integrate
new executive officers into the executive compensation structure that it was
seeking to develop, balancing both competitive and internal equity
considerations.
Each of these employment arrangements
provides for at will employment and sets forth the initial compensation
arrangements for the executive officer, including an initial base salary, a
target annual cash bonus opportunity, and, in some instances, a recommendation
for an equity award.
Post-Employment
Compensation
|
In 2015, to comply with the Minder
Ordinance, we eliminated all change of control and severance arrangements with
our executive officers, including all members of our Group Management Team.
However, the Company continues to grant double trigger change of control
arrangements with respect to time-based vesting in equity award agreements, and
double trigger change of control equity vesting acceleration arrangements in
outstanding equity awards remain in effect.
The purpose of the Change of Control
provisions in equity award agreements is to support retention in the event of a
prospective change of control. The RSU and PSU award agreements for our
executive officers generally provide for the acceleration of vesting of the RSUs
and PSUs subject to the award agreements if the executive officer is subject to
an involuntary termination within 12 months after a change of control because
his or her employment is terminated without cause or the executive resigns for
good reason (a double trigger).
In the event of an involuntary
termination within 12 months after a change of control with respect to awards
granted before fiscal year 2015:
●
|
All unvested shares subject to
the RSUs will vest in full.
|
●
|
100% of the shares subject to the
PSUs will vest if the change of control occurred within 1 year after the
grant date of the PSUs. If the change of control occurs more than 1 year
after the grant date of the PSUs, the number of shares subject to the PSU
that will vest will be determined by applying the performance criteria
under the PSUs as if the performance period had ended on the date of the
change of control.
|
In the event of an involuntary
termination within 12 months after a change of control with respect to awards
granted in fiscal year 2015 or later:
●
|
All RSUs and PSUs containing
time-based elements would accelerate in full with respect to shares that
are subject to time-based vesting.
|
●
|
No shares subject to
performance-based vesting requirements would
accelerate.
|
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To determine the level of acceleration
of equity awards that may be provided in connection with a change of control,
the Compensation Committee considered the requirements of the Minder Ordinance,
the impact on shareholders, and market practices.
Logitech does not provide any payments
to reimburse its executive officers for additional taxes incurred (also known as
gross-ups) in connection with a change of control.
For a summary of the post-employment
compensation arrangements with our executive officers, see
Potential Payments upon
Termination or Change in Control
below.
Other Compensation
Policies
|
Stock Ownership
Policy
We believe that stock ownership by our
directors and executive officers is important to link the risks and rewards
inherent in stock ownership of these individuals and our shareholders. The
Compensation Committee
has adopted a stock ownership policy
that requires our executive officers to own a minimum number of our registered
shares. These mandatory ownership levels are intended to create a clear standard
that ties a portion of these individuals net worth to the performance of our
stock price. The current ownership levels are as follows:
Named Executive Officer
|
|
Minimum Required Level of
Stock
Ownership
|
Chief Executive Officer
|
|
5x
Base Salary
|
Chief Financial Officer
|
|
3x
Base Salary
|
Other Executive Officers
|
|
2x
Base Salary
|
Equity interests that count toward the
satisfaction of the ownership guidelines include shares owned outright by the
executive officer and 50% of vested, unexercised stock options. Newly hired or
promoted executives have five years from the date of the commencement of their
appointment to attain these ownership levels. The CEO must hold 100% of his
after-tax shares until the ownership requirements are met. The other executive
officers must hold at least 50% of their after-tax shares until the ownership
requirements are met. If an executive officer does not meet the applicable
guideline by the end of the five-year period, the executive officer will have
50% of the after-tax value of any earned bonuses under the Leadership Team Bonus
Program paid in fully vested Logitech shares. Our CEO and each of our other
executive officers have either currently satisfied his or her required stock
ownership levels or have remaining time to achieve the required levels of
ownership.
Additionally, we have instituted stock
ownership guidelines for our non-employee directors. For information regarding
these guidelines, see the section entitled Security Ownership - Share Ownership
Guidelines above.
Compensation Recovery
Policy
In June 2010, the Compensation
Committee adopted a policy regarding the recovery of compensation paid to an
executive officer or the principal accounting officer of the Company (a
clawback). Under the terms of the policy we may recover bonus amounts, equity
awards or other incentive compensation awarded or paid within the prior three
years to a covered officer if the Compensation Committee determines the
compensation was based on any performance goals that were met or exceeded as a
result, in whole or in part, of the officers fraud or misconduct, or the
officer knew at the time of the existence of fraud or misconduct that resulted
in performance goals being met or exceeded, and a lower amount would otherwise
have been awarded or paid to the officer. In addition, under the policy Logitech
may recover gains realized on the exercise of stock options or on the sale of
vested shares by an executive officer or the principal accounting officer if,
within three years after the date of the gains or sales, Logitech discloses the
need for a significant financial restatement, other than a financial restatement
solely because of revisions to U.S. GAAP,
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and the Compensation Committee
determines that the officers fraud or misconduct caused or partially caused the
need for the restatement, or the covered officer knew at the time of the
existence of fraud or misconduct that resulted in the need for such
restatement.
In addition, our 2006 Stock Incentive
Plan and our Management Performance Bonus Plan provide that awards under the
plans are suspended or forfeited if the plan participant, whether or not an
executive officer:
●
|
has committed an act of
embezzlement, fraud or breach of fiduciary
duty;
|
●
|
makes an unauthorized disclosure
of any Logitech trade secret or confidential information;
or
|
●
|
induces any customer to breach a
contract with Logitech.
|
Any decision to suspend or cause a
forfeiture of any award held by an executive officer under the 2006 Stock
Incentive Plan or the Management Performance Bonus Plan is subject to the
approval of the Board of Directors. The Compensation Committee will amend the
policy, as necessary, to comply with the final SEC rules regarding claw-back
policies required by the Dodd-Frank Wall Street Reform and Consumer Protection
Act.
Equity Award Grant
Practices
Determination of long-term equity
incentive awards
The Compensation Committee is
responsible for approving which executive officers should receive equity
incentive awards, when the awards should be made, the vesting schedule, and the
number of shares or other rights to be granted. Long-term equity incentive
awards to executive officers may be granted only by the Compensation Committee
or the full Board of Directors. The Compensation Committee regularly reports its
activity, including approvals of grants, to the Board.
Timing of grants
Long-term equity incentive award grants
to executive officers are typically and predominantly approved at regularly
scheduled, predetermined meetings of the
Compensation Committee. These meetings
are generally scheduled at least 18 months in advance and take place before the
regularly scheduled, predetermined meetings of the full Board. On limited
occasions, grants may be approved at an interim meeting of the Compensation
Committee or by written consent, for the purpose of approving the hiring and
compensation package for newly hired or promoted executives.
In fiscal year 2016, grants were made
to non-executive new hires and promoted employees through regularly scheduled
monthly written consents of the Compensation Committee or approval by the CEO
pursuant to authority delegated to him by the Compensation Committee. We do not
have any program, plan, or practice to select equity compensation grant dates in
coordination with the release of material non-public information, nor do we time
the release of information for the purpose of affecting value. We do not
backdate options or grant options retroactively.
Derivatives Trading, Hedging, and
Pledging Policies
We have adopted a policy prohibiting
our employees, including our executive officers, and members of our Board of
Directors from speculating in our equity securities, including the use of short
sales, sales against the box or any equivalent transaction involving our
equity securities. In addition, they may not engage in any other hedging
transactions, such as cashless collars, forward sales, equity swaps and other
similar or related arrangements, with respect to the securities that they hold.
Finally, no employee, including an executive officer or member of our Board of
Directors may acquire, sell, or trade in any interest or position relating to
the future price of our equity securities.
We also have adopted a policy
prohibiting the pledging of our securities by our employees, including our
executive officers, and members of our Board of Directors.
85
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
Tax and Accounting
Considerations
Accounting and Tax Treatment of
Executive Compensation
Favorable accounting and tax treatment
of the various elements of our executive compensation program is a relevant
consideration in its design.
However, the Company and the
Compensation Committee have placed a higher priority on structuring flexible
compensation programs to promote the recruitment, retention, and performance of
our officers than on maximizing tax deductibility. Section 162(m) of the Code,
as amended (the Tax Code), places a limit of $1 million on the amount of
compensation that Logitech may deduct in any one year with respect to certain
executive officers. The Compensation Committee has the ability through the use
of the Logitech International S.A. 2006 Stock Incentive Plan to grant awards
that
qualify as performance-based
compensation exempt from that $1 million limitation but, to maintain
flexibility in compensating executive officers in a manner designed to promote
varying corporate goals, the Compensation Committee has not adopted a policy
requiring all compensation to be deductible, and has in the past and will in the
future make compensation awards that do not qualify to be exempt from the $1
million limitation when it believes that it is appropriate to meet its
compensation objectives.
In addition to considering the tax
consequences, the Compensation Committee considers the accounting consequences,
including the impact of the Financial Accounting Standard Boards Accounting
Standards Codification Section 718, on its decisions in determining the forms of
different equity awards.
Compensation Risks
Assessment
|
The Compensation Committee conducts an
annual review, with the assistance of its compensation consultant, of Logitechs
compensation programs to assess the risks associated with their design and
associated risk controls. The Compensation Committee reviews in particular the
following compensation programs and associated practices:
●
|
Equity awards granted under the
2006 Stock Incentive Plan.
|
●
|
Management Performance Bonus
Plan.
|
●
|
Employee Performance Bonus
Plan.
|
●
|
Sales Commission
Plans.
|
●
|
Change of Control
Agreements.
|
As in past years, based on its March
2016 review, the Compensation Committee has concluded that our compensation
policies and practices do not create risks that are reasonably likely to have a
material adverse effect on the Company.
|
Proxy
Statement
|
86
|
Compensation Report for Fiscal Year
2016
|
Report of the
Compensation Committee
The Logitech Compensation Committee,
which is composed solely of independent members of the Logitech Board of
Directors, assists the Board in fulfilling its responsibilities with regard to
compensation matters. The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis section of this Compensation Report with
management. Based on this review and discussion, the Compensation Committee
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in Logitechs 2016 Invitation and Proxy Statement and
Annual Report.
Compensation
Committee
Sally Davis, Chairperson
Neil
Hunt
Dimitri Panayotopoulos
87
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
Summary Compensation
Table for Fiscal Year 2016
The following table provides
information regarding the compensation and benefits earned during fiscal years
2016, 2015, and 2014 by our named executive officers. For more information,
please refer to the Compensation Disclosure and Analysis, as well as the
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based
Awards Table.
Name and
Principal
Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards
($)
(1)
|
|
Option
Awards
($)
|
|
Non-equity
Incentive
Plan
Compensation
($)
(2)
|
|
Changes
in
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All
Other
Compensation
($)
(3)
|
|
Total
($)
|
Guerrino De
Luca
(4)
|
|
FY16
|
|
500,000
|
|
|
|
494,241
|
|
|
|
|
675,000
|
|
|
|
|
|
22,820
|
|
|
1,692,061
|
Chairman of the Board
|
|
FY15
|
|
500,000
|
|
|
|
427,389
|
|
|
|
|
565,000
|
|
|
|
|
|
18,994
|
|
|
1,511,383
|
|
|
FY14
|
|
500,000
|
|
460,000
|
|
2,684,200
|
|
|
|
|
575,000
|
|
|
|
|
|
15,764
|
|
|
4,234,964
|
Bracken
Darrell
(5)
|
|
FY16
|
|
825,000
|
|
|
|
4,942,274
|
|
|
|
|
1,392,188
|
|
|
|
|
|
49,875
|
|
|
7,209,337
|
President and Chief
|
|
FY15
|
|
825,000
|
|
|
|
4,408,594
|
|
|
|
|
1,165,313
|
|
|
|
|
|
27,531
|
|
|
6,426,438
|
Executive Officer
|
|
FY14
|
|
750,000
|
|
|
|
3,279,270
|
|
|
|
|
862,500
|
|
|
|
|
|
13,767
|
|
|
4,905,537
|
Vincent
Pilette
(6)
|
|
FY16
|
|
557,308
|
|
|
|
1,969,226
|
|
|
|
|
870,000
|
|
|
|
|
|
65,680
|
|
|
3,462,214
|
Chief Financial
Officer
|
|
FY15
|
|
500,000
|
|
|
|
2,701,247
|
|
|
|
|
560,000
|
|
|
|
|
|
16,816
|
|
|
3,778,063
|
|
|
FY14
|
|
286,538
|
|
|
|
5,067,550
|
|
|
|
|
512,000
|
|
|
|
|
|
2,673
|
|
|
5,868,761
|
Marcel
Stolk
(7)
|
|
FY16
|
|
538,587
|
|
|
|
738,305
|
|
|
|
|
581,674
|
|
|
|
|
|
100,056
|
|
|
1,958,622
|
Senior Vice
President,
|
|
FY15
|
|
564,558
|
|
345,091
|
|
826,097
|
|
|
|
|
546,492
|
|
|
|
|
|
104,583
|
|
|
2,386,821
|
CCP Business Group
|
|
FY14
|
|
535,714
|
|
|
|
1,100,100
|
|
|
|
|
589,643
|
|
|
|
|
|
105,517
|
|
|
2,330,974
|
L. Joseph
Sullivan
|
|
FY16
|
|
442,385
|
|
|
|
593,105
|
|
|
|
|
464,625
|
|
|
|
|
|
22,364
|
|
|
1,522,479
|
Senior Vice
President,
|
|
FY15
|
|
427,500
|
|
|
|
545,602
|
|
|
|
|
362,306
|
|
|
|
|
|
17,687
|
|
|
1,353,095
|
Worldwide Operations
|
|
FY14
|
|
415,000
|
|
|
|
733,400
|
|
|
|
|
385,950
|
|
|
|
|
|
14,418
|
|
|
1,548,768
|
(1)
|
|
These amounts do not represent
the actual economic value realized by the named executive officer. Under
SEC rules, the values reported in the Stock Awards column reflect the
aggregate grant date fair value of grants stock awards to each of the
listed officers in the fiscal years shown. The key assumptions and
methodology of valuation of stock awards and stock options are presented
in Note 5 to the Consolidated Financial Statements included in Logitechs
Annual Report to Shareholders. No stock options were granted to our named
executive officers during fiscal years 2014, 2015 or
2016.
|
|
|
|
For FY16: The amount shown
includes an aggregate grant date fair value of the shares issuable for
PSUs granted in fiscal year 2016 at target achievement. Assuming the
highest level of performance is achieved, the maximum possible value of
the PSUs allocated in FY16, using the market value of our shares on the
grant date of the PSUs, was: (a) in the case of Mr. De Luca, $399,519; (b)
in the case of Mr. Darrell, $3,995,151; (c) in the case of Mr. Pilette
$1,331,717; (d) in the case of Mr. Stolk, $599,296; and (e) in the case of
Mr. Sullivan, $479,451.
|
|
|
|
For FY15: The amount shown
includes an aggregate grant date fair value of the shares issuable for
PSUs granted in fiscal year 2015 at target achievement. Assuming the
highest level of performance is achieved, the maximum possible value of
the PSUs allocated in FY15, using the market value of our shares on the
grant date of the PSUs, was: (a) in the case of Mr. De Luca, $402,062; (b)
in the case of Mr. Darrell, $4,147,341; (c) in the case of Mr. Pilette
$1,851,528; (d) in the case of Mr. Stolk, $779,949; and (e) in the case of
Mr. Sullivan, $518,509.
|
|
|
|
For FY14: The amount shown
includes an aggregate grant date fair value of the shares issuable for
PSUs granted in fiscal year 2014 at target achievement. Assuming the
highest level of performance is achieved, the maximum possible value of
the PSUs allocated in FY14, using the market value of our shares on the
grant date of the PSUs, was: (a) in the case of Mr. De Luca, $315,450; (b)
in the case of Mr. Darrell, $2,839,050; (c) in the case of Mr. Stolk,
$946,350; and (d) in the case of Mr. Sullivan,
$630,900.
|
|
Proxy
Statement
|
88
|
Compensation Report for Fiscal Year
2016
|
(2)
|
|
Except as noted below,
reflects amounts earned under the Logitech Management Performance Bonus
Plan. This non-equity incentive plan compensation was earned during the
applicable fiscal year but, for executive officers, was paid during the
next fiscal year in accordance with the terms of the Logitech Management
Performance Bonus Plan.
|
|
(3)
|
|
Details regarding the various
amounts included in this column are provided in the following table
entitled All Other Compensation.
|
|
(4)
|
|
Mr. De Luca received a bonus
of $460,000 and an RSU grant of 250,000 shares in fiscal year 2014 in
recognition for his service as Logitechs acting Chief Executive Officer
from July 2011 through January 2013.
|
|
(5)
|
|
Mr. Darrell declined his
salary increase for fiscal year 2016 as described above in Compensation
Disclosure and AnalysisCompensation ElementsBase
Salary.
|
|
(6)
|
|
Mr. Pilette joined the Company
as Chief Financial Officer on September 3, 2013.
|
|
(7)
|
|
Mr. Stolks fiscal year 2016
compensation amounts in Swiss Francs were converted using the 12 month
average (April 2015 to March 2016) exchange rate of 1 Swiss Franc to
1.0288 U.S. Dollars. Mr. Stolks fiscal year 2015 compensation amounts in
Swiss Francs were converted using the 12 month average (April 2014 to
March 2015) exchange rate of 1 Swiss Franc to 1.0784 U.S. Dollars. Mr.
Stolks fiscal year 2014 compensation amounts in Swiss Francs were
converted using the 12 month average (April 2013 to March 2014) exchange
rate of 1 Swiss Franc to 1.13 U.S. Dollars. In January 2015, Mr. Stolk
received a special retention bonus of CHF 320,000 (or $345,091 in U.S.
Dollars) in recognition of his leadership role in helping transform
Logitech.
|
ALL OTHER COMPENSATION TABLE
Name
|
|
Year
|
|
Tax
Preparation
Services
($)
|
|
401(k)
($)
(1)
|
|
Group
Term
Life
Insurance
($)
|
|
Relocation
or
Travel
in lieu of
Relocation
($)
(2)
|
|
Defined
Benefit
Pension
Plan
Employer
Contrib.
($)
(3)
|
|
Other
Awards
($)
|
|
Total
($)
|
Guerrino De Luca
|
|
FY16
|
|
|
|
|
|
|
7,565
|
|
|
|
15,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,820
|
|
|
FY15
|
|
|
|
|
|
|
7,800
|
|
|
|
11,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,994
|
|
|
FY14
|
|
|
|
|
|
|
7,650
|
|
|
|
8,114
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,764
|
Bracken Darrell
|
|
FY16
|
|
|
33,695
|
|
|
|
6,998
|
|
|
|
9,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49,875
|
|
|
FY15
|
|
|
12,181
|
|
|
|
8,559
|
|
|
|
6,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,531
|
|
|
FY14
|
|
|
1,525
|
|
|
|
7,650
|
|
|
|
4,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,767
|
Vincent Pilette
|
|
FY16
|
|
|
|
|
|
|
8,835
|
|
|
|
4,947
|
|
|
|
51,898
|
|
|
|
|
|
|
|
|
|
|
65,680
|
|
|
FY15
|
|
|
|
|
|
|
8,473
|
|
|
|
2,946
|
|
|
|
1,672
|
|
|
|
|
|
|
|
3,725
|
|
|
16,816
|
|
|
FY14
|
|
|
|
|
|
|
1,731
|
|
|
|
942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,673
|
Marcel Stolk
|
|
FY16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,056
|
|
|
|
|
|
|
100,056
|
|
|
FY15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104,583
|
|
|
|
|
|
|
104,583
|
|
|
FY14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,517
|
|
|
|
|
|
|
105,517
|
L. Joseph Sullivan
|
|
FY16
|
|
|
983
|
|
|
|
8,101
|
|
|
|
13,280
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,364
|
|
|
FY15
|
|
|
|
|
|
|
7,673
|
|
|
|
9,592
|
|
|
|
|
|
|
|
|
|
|
|
422
|
|
|
17,687
|
|
|
FY14
|
|
|
|
|
|
|
7,650
|
|
|
|
6,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,418
|
(1)
|
|
Represents 401(k) savings plan
matching contributions, which are available to all of our regular
employees who are on our U.S. payroll.
|
|
(2)
|
|
Represents costs associated
with Mr. Pilettes extended business travel.
|
|
(3)
|
|
Represents the matching
contributions to the Logitech Employee Pension Fund in Switzerland for Mr.
Stolk, which are available to all of our similarly-situated regular
employees who are on our Swiss payroll.
|
89
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
Grants of Plan-Based
Awards Table for Fiscal Year 2016
The following table sets forth certain
information regarding grants of plan-based awards to each of our executive
officers during fiscal year 2016. For more information, please refer to the
Compensation Disclosure and Analysis.
|
|
|
|
|
|
|
|
|
|
|
Estimated Future
Payouts
Under Non-Equity
Incentive Plan Awards
(1)
|
|
Estimated Future Payouts
Under Equity
Incentive
Plan Awards
|
|
All
Other
Stock
Awards:
Number
of Shares
of
Stock
or Units
(#)
(3)
|
|
Grant
Date
Fair
Value
($)
(4)
|
Name
|
|
Type
|
|
Grant
Date
(MM/DD/YY)
|
|
Approval
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Actual
($)
(2)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
Guerrino De
Luca
|
|
RSU
|
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,922
|
|
|
193,091
|
|
|
PSU
|
(5)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
5,596
|
|
|
11,191
|
|
|
16,787
|
|
|
|
|
|
|
153,317
|
|
|
PSU
|
(6)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
11,191
|
|
|
11,191
|
|
|
11,191
|
|
|
|
|
|
|
147,833
|
|
|
FY16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
n/a
|
|
|
n/a
|
|
|
187,500
|
|
|
500,000
|
|
1,000,000
|
|
675,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bracken
Darrell
|
|
RSU
|
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
149,212
|
|
|
1,930,803
|
|
|
PSU
|
(5)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
55,955
|
|
|
111,909
|
|
|
167,864
|
|
|
|
|
|
|
1,533,153
|
|
|
PSU
|
(6)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
111,909
|
|
|
111,909
|
|
|
111,909
|
|
|
|
|
|
|
1,478,318
|
|
|
FY16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
n/a
|
|
|
n/a
|
|
|
386,719
|
|
|
1,031,250
|
|
2,062,500
|
|
1,392,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent
Pilette
|
|
RSU
|
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74,606
|
|
|
965,402
|
|
|
PSU
|
(5)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
18,652
|
|
|
37,303
|
|
|
55,955
|
|
|
|
|
|
|
511,051
|
|
|
PSU
|
(6)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
37,303
|
|
|
37,303
|
|
|
37,303
|
|
|
|
|
|
|
492,773
|
|
|
FY16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
n/a
|
|
|
n/a
|
|
|
225,000
|
|
|
600,000
|
|
1,200,000
|
|
870,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marcel
Stolk
|
|
RSU
|
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,382
|
|
|
286,567
|
|
|
PSU
|
(5)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
8,394
|
|
|
16,787
|
|
|
25,181
|
|
|
|
|
|
|
229,982
|
|
|
PSU
|
(6)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
16,787
|
|
|
16,787
|
|
|
16,787
|
|
|
|
|
|
|
221,756
|
|
|
FY16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
n/a
|
|
|
n/a
|
|
|
161,576
|
|
|
430,870
|
|
861,739
|
|
581,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L. Joseph
Sullivan
|
|
RSU
|
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,906
|
|
|
231,704
|
|
|
PSU
|
(5)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
6,715
|
|
|
13,430
|
|
|
20,145
|
|
|
|
|
|
|
183,991
|
|
|
PSU
|
(6)
|
|
|
04/15/15
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
13,430
|
|
|
13,430
|
|
|
13,430
|
|
|
|
|
|
|
177,410
|
|
|
FY16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonus
|
|
|
|
n/a
|
|
|
n/a
|
|
|
124,453
|
|
|
331,875
|
|
663,750
|
|
464,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The amounts in these columns
reflect potential payouts with respect to each applicable performance
period for the fiscal year 2016 bonus programs under the Bonus Plan
described in Compensation Discussion and Analysis
above.
|
|
(2)
|
|
The amounts in this column
reflect actual payouts with respect to each applicable performance period
for the fiscal year 2016 bonus programs under the Bonus Plan. The actual
payout amounts are reflected in the Non-Equity Incentive Plan Compensation
column of the Summary Compensation Table for fiscal year
2016.
|
|
(3)
|
|
RSUs vest at a rate of 25% per
year over four years, on each yearly anniversary of the grant
date.
|
|
(4)
|
|
These amounts do not represent
the actual economic value realized by the named executive officer. Amounts
in this column represent the grant date fair value of RSUs calculated in
accordance with Accounting Standards Codification (ASC) 718 but does not
include any reduction for estimated forfeitures. For performance-based
RSUs (PSUs) based on Total Shareholder Return (TSR), that number is
calculated by multiplying the value determined using the Monte Carlo
method by the target number of units awarded. For RSUs and PSUs based on
Non-GAAP Operating Income Margin, that number is calculated based on the
closing price of Logitech shares on the grant date multiplied by the
number of shares granted, adjusted for dividend yield. The key assumptions
for the valuation of the PSUs are presented in Note 5 to the Consolidated
Financial Statements included in Logitechs Annual Report to Shareholders
and Annual Report on Form 10-K for fiscal year
2016.
|
|
Proxy
Statement
|
90
|
Compensation Report for Fiscal Year
2016
|
(5)
|
|
Represents PSUs based on TSR.
All shares subject to the PSU vesting conditions are unvested. The actual
amount, if any, of shares that will vest under the PSU grants will not be
known until March 31, 2018. The actual amount, if any, that may vest
depends on Logitechs TSR performance versus the Nasdaq-100 Index TSR
benchmark over the performance period.
|
|
(6)
|
|
Represents PSUs based on
Non-GAAP Operating Income Margin. All shares subject to the PSU have
achieved the performance vesting condition. One-third of the shares vested
under the PSU grants on May 15, 2016. The remaining two-thirds of the
shares will vest in two equal installments on April 15, 2017 and April 15,
2018.
|
|
(7)
|
|
Mr. Stolks bonus amounts were
converted using the 12 month average (April 2015 to March 2016) exchange
rate of 1 Swiss Franc to 1.0288 U.S.
Dollars.
|
Narrative Disclosure to Summary Compensation
Table and Grants of Plan-Based Awards Table
|
Employment Agreements and Offer
Letters
We have entered into employment
agreements or offer letters with each of our named executive officers. The
employment agreements and offer letters generally provide that the compensation
of the named executive officer is subject to the sole discretion of the
Compensation Committee or the Board of Directors. The compensation earned by the
named executive officers in fiscal year 2016 was not the result of any terms of
their employment agreements or offer letters.
Performance-Based Vesting
Conditions
Please refer to Compensation
Disclosure and AnalysisCompensation ElementsAnnual Cash Bonuses for a discussion of the performance measures applicable to the Bonus
Plan during fiscal year 2016. In addition, please refer to Compensation
Disclosure and AnalysisCompensation ElementsLong-Term Incentive Compensation
for a discussion of performance measures under the PSUs granted to executive
officers during fiscal year 2016.
91
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
Outstanding Equity Awards at Fiscal
Year 2016 Year-End Table
The following table provides
information regarding outstanding equity awards for each of our named executive
officers as of March 31, 2016. This table includes unexercised and unvested
stock options, unexercised and unvested performance stock options, unvested
PSUs, and unvested RSUs.
Unless otherwise specified, options and
RSUs vest at a rate of 25% per year on each of the first four anniversaries of
the grant date. The market value for stock options, including Premium Priced
Options or
PPOs and Performance Stock Options or
PSOs, is calculated by taking the difference between the closing price of
Logitech shares on the Nasdaq Global Select Market on the last trading day of
the fiscal year ($15.91 on March 31, 2016) and the option exercise price, and
multiplying it by the number of outstanding options. The market value for stock
awards (RSUs and PSUs) is determined by multiplying the number of shares subject
to such awards by the closing price of Logitech shares on the Nasdaq Global
Select Market on the last trading day of the fiscal year.
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
Name
|
|
Grant
Date
(MM/DD/YY)
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Option
Exercise
Price ($)
/
Share
|
|
Option
Expiration
Date
(MM/DD/YY)
|
|
Market
Value
of
Unexercised
Options
($)
|
|
Number
of
Shares
or
Units of
Stock
That
Have Not
Vested
(#)
|
|
Market
Value of
Shares or
Units
of
Stock
That
Have Not
Vested
($)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
(#)
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
(1)
|
Guerrino De Luca
|
|
04/01/06
|
|
|
100,000
|
|
|
|
|
|
20.05
|
|
|
04/01/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/02/07
|
|
|
50,000
|
|
|
|
|
|
27.95
|
|
|
04/02/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/01/08
|
|
|
15,000
|
|
|
|
|
|
26.67
|
|
|
04/01/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/01/09
|
|
|
15,000
|
|
|
|
|
|
10.64
|
|
|
04/01/19
|
|
|
79,050
|
|
|
|
|
|
|
|
|
|
|
|
|
01/04/13
|
|
|
65,000
|
|
|
65,000
|
|
|
7.83
|
|
|
01/04/23
|
|
|
1,050,400
|
|
|
|
|
|
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
159,100
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
(3)
|
|
477,300
|
|
|
|
|
|
|
04/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,804
|
|
|
155,982
|
|
19,608
|
|
311,963
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,922
|
|
|
237,409
|
|
11,191
|
|
178,049
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,191
|
(4)
|
|
178,049
|
|
|
|
|
|
|
Total
|
|
|
245,000
|
|
|
65,000
|
|
|
|
|
|
|
|
|
1,129,450
|
|
|
75,917
|
|
|
1,207,839
|
|
30,799
|
|
490,012
|
Bracken Darrell
|
|
04/16/12
|
|
|
375,000
|
|
|
125,000
|
|
|
8.03
|
|
|
04/16/22
|
|
|
3,940,000
|
|
|
|
|
|
|
|
|
|
|
|
|
04/16/12
|
|
|
400,000
|
|
|
|
|
|
14.05
|
|
|
04/16/22
|
|
|
744,000
|
|
|
|
|
|
|
|
|
|
|
|
|
04/16/12
|
|
|
|
|
|
400,000
|
|
|
16.06
|
|
|
04/16/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/16/12
|
|
|
|
|
|
400,000
|
|
|
20.08
|
|
|
04/16/22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/16/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
397,750
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88,500
|
|
|
1,408,035
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270,000
|
(3)
|
|
4,295,700
|
|
|
|
|
|
|
04/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,130
|
|
|
1,608,978
|
|
202,260
|
|
3,217,957
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
149,212
|
|
|
2,373,963
|
|
111,909
|
|
1,780,472
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
111,909
|
(4)
|
|
1,780,472
|
|
|
|
|
|
|
Total
|
|
|
775,000
|
|
|
925,000
|
|
|
|
|
|
|
|
|
4,684,000
|
|
|
745,751
|
|
|
11,864,898
|
|
314,169
|
|
4,998,429
|
|
Proxy
Statement
|
92
|
Compensation Report for Fiscal Year
2016
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
Name
|
|
Grant
Date
(MM/DD/YY)
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Option
Exercise
Price ($)
/
Share
|
|
Option
Expiration
Date
(MM/DD/YY)
|
|
Market
Value
of
Unexercised
Options
($)
|
|
Number
of
Shares
or
Units of
Stock
That
Have Not
Vested
(#)
|
|
Market
Value of
Shares or
Units
of
Stock
That
Have Not
Vested
($)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
(#)
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
(1)
|
Vincent Pilette
|
|
09/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,333
|
|
|
928,078
|
|
|
|
|
|
|
03/25/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,657
|
|
|
1,315,073
|
|
55,105
|
|
876,721
|
|
|
03/25/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,105
|
(4)
|
|
876,721
|
|
|
|
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74,606
|
|
|
1,186,981
|
|
37,303
|
|
593,491
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,303
|
(4)
|
|
593,491
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
308,004
|
|
|
4,900,344
|
|
92,408
|
|
1,470,211
|
Marcel Stolk
|
|
01/04/13
|
|
|
112,500
|
|
|
112,500
|
|
|
7.55
|
(2)
|
|
01/04/23
|
|
|
1,880,803
|
|
|
|
|
|
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
477,300
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
(3)
|
|
1,431,900
|
|
|
|
|
|
|
04/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,018
|
|
|
302,576
|
|
38,037
|
|
605,169
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,382
|
|
|
356,098
|
|
16,787
|
|
267,081
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,787
|
(4)
|
|
267,081
|
|
|
|
|
|
|
Total
|
|
|
112,500
|
|
|
112,500
|
|
|
|
|
|
|
|
|
1,880,803
|
|
|
178,187
|
|
|
2,567,874
|
|
54,824
|
|
872,250
|
L. Joseph Sullivan
|
|
10/02/06
|
|
|
22,500
|
|
|
|
|
|
21.61
|
|
|
10/02/16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/02/07
|
|
|
50,000
|
|
|
|
|
|
30.09
|
|
|
10/02/17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/01/08
|
|
|
50,000
|
|
|
|
|
|
22.59
|
|
|
10/01/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/04/13
|
|
|
|
|
|
112,500
|
|
|
7.83
|
|
|
01/04/23
|
|
|
909,000
|
|
|
|
|
|
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
318,200
|
|
|
|
|
|
|
04/15/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
(3)
|
|
954,600
|
|
|
|
|
|
|
04/15/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,917
|
|
|
141,869
|
|
17,835
|
|
283,755
|
|
|
05/14/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,900
|
|
|
62,049
|
|
7,800
|
|
124,098
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,906
|
|
|
284,884
|
|
13,430
|
|
213,671
|
|
|
04/15/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,430
|
(4)
|
|
213,671
|
|
|
|
|
|
|
Total
|
|
|
122,500
|
|
|
112,500
|
|
|
|
|
|
|
|
|
909,000
|
|
|
124,153
|
|
|
1,975,274
|
|
39,065
|
|
621,524
|
(1)
|
|
The actual
conversion, if any, of the PSUs based on TSR granted in each of fiscal
years 2014, 2015 and 2016 into Logitech shares following the conclusion of
the 3-year performance period will range between 50% and 150% of that
target amount, depending upon Logitechs TSR performance versus the
Nasdaq-100 index TSR benchmark over the performance period. The actual
conversion, if any, of the remaining PSUs granted in fiscal year 2015 and
2016 is dependent on the achievement of non-GAAP operating
margin.
|
|
(2)
|
|
The exercise price
of the option as granted (as split-adjusted) is 7.25 Swiss Francs per
share and 7.55 US Dollars per share. Amounts in Swiss Francs were
converted using the exchange rate of 1 Swiss Franc to 1.0415 U.S. Dollars
as of March 31, 2016.
|
|
(3)
|
|
The actual
conversion of the PSUs based on TSR granted in fiscal year 2014 into
Logitech shares was 150% of that target amount, based on Logitechs TSR
performance versus the Nasdaq-100 index TSR benchmark from April 1, 2013
to March 31, 2016, which was ratified by the Compensation Committee
subsequently in April 2016.
|
|
(4)
|
|
One-third of the
PSUs based on non-GAAP operating margin granted in March and April 2015
vested subsequently in May 2016 as the performance goal was achieved as of
March 31, 2016 and confirmed by the Compensation Committee in May 2016.
The remaining two thirds will vest in equal annual increments over 2 years
on the second and third anniversaries of the grant
dates.
|
93
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
Option Exercises and Stock Vested Table
for Fiscal Year 2016
The following table provides the number
of shares acquired and the value realized upon exercise of stock options and the
vesting of PSUs and RSUs during fiscal year 2016 by each of our named executive
officers.
|
|
Option
Awards
|
|
|
Stock
Awards
|
Name
|
|
Number
of
Shares
Acquired
on Exercise
(#)
|
|
Value
Realized
on
Exercise
($)
(1)
|
|
Number
of
Shares
Acquired
on Vesting
(#)
|
|
Value
Realized
on
Vesting
($)
(2)
|
Guerrino De Luca
|
|
|
|
|
|
|
|
133,268
|
|
|
1,873,067
|
|
Bracken Darrell
|
|
|
|
|
|
|
|
102,960
|
|
|
1,472,769
|
|
Vincent Pilette
|
|
|
|
|
|
|
|
85,886
|
|
|
1,251,302
|
|
Marcel Stolk
|
|
|
|
|
|
|
|
32,340
|
|
|
475,174
|
|
L. Joseph Sullivan
|
|
186,250
|
|
|
900,949
|
|
|
29,273
|
|
|
422,748
|
|
(1)
|
|
The value realized
equals the difference between the option exercise price and the fair
market value of Logitech shares on the date of exercise, multiplied by the
number of shares for which the option was exercised.
|
|
(2)
|
|
Based on the
closing trading price of Logitech shares on the Nasdaq Global Select
Market on the date of vesting of underlying awards.
|
|
Pension Benefits Table for Fiscal Year
2016
|
Marcel Stolk, Senior Vice President,
Consumer Computing Platforms Business Group, is a participant in Logitechs
Swiss Pension plan, which is a benefit offered to all eligible Swiss employees.
No other executive officers are beneficiaries under any pension plan benefits
maintained by Logitech.
Name
|
Plan Name
|
|
Number of
Years
of
Credited
Service
(#)
|
|
Present
Value
of
Accumulated
Benefit
($)
|
Guerrino De Luca
|
n/a
|
|
n/a
|
|
|
|
Bracken Darrell
|
n/a
|
|
n/a
|
|
|
|
Vincent Pilette
|
n/a
|
|
n/a
|
|
|
|
Marcel Stolk
|
Logitech Employee Pension Fund
|
|
5.00
|
|
866,180
|
|
L.
Joseph Sullivan
|
n/a
|
|
n/a
|
|
|
|
|
Proxy
Statement
|
94
|
Compensation Report for Fiscal Year
2016
|
Non-qualified Deferred Compensation
Table for Fiscal Year 2016
The following table sets forth
information regarding the participation by our named executive officers in the
Logitech Inc. U.S. Deferred Compensation Plan during fiscal year 2016 and at
fiscal year-end.
Name
|
|
Executive
Contributions
in Last
Fiscal
Year
($)
(1)
|
|
Logitech
Contributions
in
Last
Fiscal Year
($)
|
|
Aggregate
Earnings
in
Last
Fiscal Year
($)
(2)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance
at
Last
Fiscal Year
End
($)
|
Guerrino De Luca
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bracken Darrell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vincent Pilette
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marcel Stolk
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L.
Joseph Sullivan
|
|
158,630
|
|
|
|
|
(1,007
|
)
|
|
|
|
740,936
|
|
(1)
|
|
Amounts are
included in the Summary Compensation table in the Salary column for
fiscal year 2016. All contributions were made under the Logitech Inc.
Deferred Compensation Plan.
|
|
(2)
|
|
These amounts are
not included in the Summary Compensation table because plan earnings were
not preferential or above market.
|
|
Narrative Disclosure to Non-Qualified Deferred
Compensation Table
|
Please refer to Compensation
Disclosure and AnalysisCompensation ElementsDeferred Compensation Plan for a
discussion of the Logitech Inc. U.S. Deferred Compensation Plan, effective
January 1, 2009.
Payments upon Termination or Change in
Control
|
We have entered into agreements that
provide for payments under certain circumstances in the event of termination of
employment of our executive officers. These agreements include:
●
|
PSU, RSU, and PSO award
agreements that provide for the accelerated vesting of the shares subject
to the award agreements under certain circumstances described
below.
|
●
|
Employment agreements with
Bracken Darrell, Vincent Pilette, Joseph Sullivan and Marcel Stolk, under
which each of them is entitled to receive a twelve or nine-month notice
period if we terminate his employment or if he
resigns.
|
Other than the agreements above, there
are no agreements or arrangements for the payment of compensation to a named
executive officer in the event of his involuntary termination with or without
cause.
There are no agreements providing for
payment of any consideration to any non-executive member of the Board of
Directors upon termination of his or her services with the Company.
Change of Control Severance
Agreements
Each of our executive officers had
executed a change of control severance agreement with Logitech. These agreements
have been terminated in compliance with the Minder Ordinance.
PSU and RSU Award
Agreements
The PSU and RSU award agreements for
named executive officers provide for the acceleration of vesting of the equity
awards subject to the award agreements if the named executive officer is subject
to an involuntary termination within 12 months after a change of control
95
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
because his or her employment is
terminated without cause or the executive resigns for good reason. In the event
of such an involuntary termination following a change of control:
●
|
All shares subject to the RSUs
will vest;
|
●
|
100% of the shares subject to the
PSUs granted in fiscal year 2014 will vest if the change of control
occurred within one year after the grant date of the PSUs. If the change
of control occurred more than one year after the grant date of the PSUs,
the number of shares subject to the PSU that will vest will be determined
by applying the performance criteria under the PSUs as if the performance
period had ended on the date of the change of control;
and
|
●
|
The time-based vesting of PSU
awards based on the achievement of a non-GAAP Operating Margin metric will
accelerate if the performance-based vesting conditions have been
attained.
|
Tables of Potential Payments Upon
Termination or Change in Control
The table below estimates the amount of
compensation that would be paid in the event of an involuntary termination of a
named executive officer without cause after a change in control, assuming that
each of the terminations was effective as of March 31, 2016, subject to the
terms of the PSO, PSU and RSU award agreements with each of the listed executive
officers. As of December 2015, we do not have any cash payment related to
termination of employment or change of control in compliance with the Minder
Ordinance.
As of March 31, 2016, no compensation
amounts were payable to any named executive officer in the event of a mutual
agreement to terminate employment, whether upon retirement or
otherwise.
The price used for determining the
value of accelerated vesting of outstanding and unvested equity awards in the
tables below was the closing price of Logitechs shares on the Nasdaq Global
Select Market on March 31, 2016, the last business day of the fiscal year, of
$15.91 per share.
POTENTIAL PAYMENTS UPON INVOLUNTARY
TERMINATION
AFTER CHANGE IN CONTROL
Name
|
Value of
Accelerated
Equity
Awards
(1)
|
Guerrino De Luca
|
1,446,489
|
|
Bracken Darrell
|
14,997,748
|
|
Vincent Pilette
|
4,900,344
|
|
Marcel Stolk
|
3,550,905
|
|
L.
Joseph Sullivan
|
2,452,574
|
|
(1)
|
|
Represents, as of March 31, 2016,
the aggregate intrinsic value (market value less exercise price) of
unvested options and the aggregate market value of shares underlying all
unvested RSUs and PSUs, in each case held by the named executive officer
as of March 31, 2016 that are subject to acceleration according to the
terms of an equity award agreement. For the PSUs granted April 15, 2013,
as of March 31, 2016 the performance condition was at a level which would
have produced a payout percentage of 150%, therefore, 150% of such value
was attributed to the shares subject to such PSUs. For the PSUs granted
March 25, 2015 and April 15, 2015 based on Non-GAAP Operating Margin, the
performance condition was achieved as of March 31, 2016, therefore, 100%
of such value was attributed to the shares subject to such
PSUs.
|
|
|
Proxy
Statement
|
96
|
Compensation Report for Fiscal Year
2016
|
Compensation of Non-Employee
Directors
For fiscal year 2016, the compensation
of the members of the Board of Directors that are not Logitech employees, or
non-employee directors, was determined by the Compensation Committee, consisting
entirely of independent directors, and recommended to the full Board for
approval.
The general policy is that compensation
for non-employee directors should consist of a mix of cash and equity-based
compensation. For fiscal year 2016, to assist the Compensation Committee in its
annual review of director compensation, Compensia provided director pay practices and compensation data compiled from the annual
reports and proxy statements of companies within our compensation peer
group.
For fiscal year 2016, cash compensation
of non-employee directors consists solely of annual retainers based on Board and
committee service and payment for travel days in connection with attendance at
Board meetings. Non-employee directors also receive an annual RSU grant based on
a fixed market value. These annual RSU grants have generally been made on the
day after our Annual General Meeting with a vesting date of August 31 prior to
the next Annual General Meeting.
Directors who are Logitech employees do
not receive any
compensation for their service on
the Board of Directors.
Non-employee director
compensation currently consists of the following elements:
|
|
|
|
Amount
|
|
Amount (CHF)
|
|
($)
(1)
|
Annual cash retainer
|
60,000
|
|
|
61,728
|
|
An
additional annual cash retainer for the lead independent
director
|
20,000
|
|
|
20,576
|
|
Annual retainer for the Audit Committee chair
|
40,000
|
|
|
41,152
|
|
Annual retainer for the Compensation Committee
chair
|
40,000
|
|
|
41,152
|
|
Annual retainer for the Nominating Committee chair
|
11,000
|
|
|
11,317
|
|
Annual retainer for non-chair Audit Committee
members
|
15,000
|
|
|
15,432
|
|
Annual retainer for non-chair Compensation Committee
members
|
15,000
|
|
|
15,432
|
|
Annual retainer for Nominating Committee members
|
5,000
|
|
|
5,144
|
|
Annual retainer for Lifesize Board
members
(2)
|
15,000
|
|
|
15,432
|
|
Annual RSU grant
|
150,000
|
|
|
154,320
|
|
Compensation for the number of travel days
spent traveling to attend Board and
|
|
|
|
|
|
committee meetings, per day
rate
|
2,500
|
|
|
2,572
|
|
Reimbursement of reasonable expenses for non-local travel
(business class)
|
|
|
|
|
|
(1)
|
|
Amounts in Swiss
Francs were converted using the 12 month average (April 2015 to March
2016) exchange rate of 1 Swiss Franc to 1.0288 U.S.
Dollars.
|
|
(2)
|
|
Lifesize retainer
has been eliminated from the non-employee director compensation program as
of December 2015 and was prorated for the 2015-2016 board year due to the
divestiture of Lifesize.
|
Non-employee Board members may elect to
receive their Board fees in shares, net of withholdings at the market price on
the date of the Annual General Meeting. Any such shares are to be issued under
the 2006 Stock Incentive Plan.
The following table summarizes the
total compensation earned or paid by Logitech during fiscal year 2016 to
continuing members of the Board of Directors who were not executive officers as
of March 31, 2016. Because the table is based on Logitechs fiscal year, and
annual service for purposes of Board compensation is measured between the dates
of Logitechs Annual
97
|
|
|
Proxy Statement
|
Compensation Report for Fiscal Year
2016
|
General Meetings, usually held in
September each year, the amounts in the table do not necessarily align with the
description of Board compensation above.
Information regarding compensation paid
to and the option and stock awards held by Guerrino De Luca and Bracken Darrell,
the members of the Board of Directors
that are Logitech executive officers as
of fiscal year-end 2016, are presented in the Summary Compensation Table and the
Outstanding Equity Awards at Fiscal Year-End Table,
respectively.
NON-EMPLOYEE DIRECTOR COMPENSATION TABLE FOR
FISCAL YEAR 2016
Name
|
|
Fees Earned
in
Cash
($)
(1)
|
|
Stock
Awards
($)
(2)
|
|
Total
($)
|
|
Daniel Borel
(3)(4)
|
|
25,720
|
|
|
|
|
25,720
|
|
Matthew Bousquette
(3)
|
|
54,441
|
|
|
|
|
54,441
|
|
Edouard Bugnion
(4)
|
|
41,152
|
|
|
150,880
|
|
192,032
|
|
Kee-Lock Chua
|
|
107,767
|
|
|
151,200
|
|
258,966
|
|
Sally Davis
(6)
|
|
141,460
|
|
|
150,880
|
|
292,340
|
|
Sue
Gove
(5)
|
|
60,442
|
|
|
151,200
|
|
211,642
|
|
Didier Hirsch
|
|
121,313
|
|
|
151,200
|
|
272,512
|
|
Neil Hunt
(6)
|
|
116,169
|
|
|
151,200
|
|
267,368
|
|
Dimitri Panayotopoulos
(4)
|
|
86,162
|
|
|
150,880
|
|
237,042
|
|
Monika Ribar
(3)
|
|
38,580
|
|
|
|
|
38,580
|
|
Lung Yeh
(5)
|
|
51,440
|
|
|
151,200
|
|
202,640
|
|
(1)
|
|
Amounts in Swiss
Francs were converted using the 12 month average (April 2015 to March
2016) exchange rate of 1 Swiss Franc to 1.0288 U.S.
Dollars.
|
|
(2)
|
|
Amounts shown do
not reflect compensation actually received by the director. Instead, the
amount shown is the aggregate grant date fair value of stock-related
awards in fiscal year 2016 computed in accordance with ASC Topic 718 --
Compensation -- Stock Compensation, disregarding forfeiture assumptions.
The market value used to calculate the aggregate value for fiscal year
2016 was $13.50 or CHF 13.14 per share.
|
|
(3)
|
|
Daniel Borel,
Matthew Bousquette and Monika Ribar did not stand for re-election as
directors at the Annual General Meeting in September
2015.
|
|
(4)
|
|
Elected to receive
their Board fees in shares.
|
|
(5)
|
|
Edouard Bugnion,
Sue Gove and Lung Yeh were first elected as directors at the Annual
General Meeting in September 2015.
|
|
(6)
|
|
Board fees include
prorated Lifesize retainer due to the divestiture of Lifesize in December
2015.
|
|
The following table presents additional
information with respect to the equity awards held as of March 31, 2016 by
members of the Board of Directors who were not executive officers as of fiscal
year-end.
In 2010, Logitech began granting RSUs
instead of stock options to continuing non-employee directors. The RSUs granted
since fiscal year 2010 fully vest on approximately the one-year anniversary date
of the grant.
The market value for stock options is
calculated by taking the difference between the closing price of Logitech shares
on the Nasdaq Global Select Market on the last trading day of the fiscal year
($15.91 on March 31, 2016) and the option exercise price, and multiplying it by
the number of outstanding options. The market value for RSUs is determined by
multiplying the number of shares subject to the award by the closing price of
Logitech shares on the Nasdaq Global Select Market on the last trading day of
the fiscal year.
|
Proxy
Statement
|
98
|
Compensation Report for Fiscal Year
2016
|
Certain of the options as granted have
exercise prices denominated in Swiss Francs. The U.S. Dollar exercise price in
the table below for such options is based on an exchange rate of 1 Swiss Franc
to 1.0415 U.S. Dollars as of March 31, 2016.
OUTSTANDING EQUITY AWARDS FOR NON-EMPLOYEE
DIRECTORS AT FISCAL 2016
YEAR-END
|
|
Option
Awards
|
|
Stock Awards
|
Name
|
|
Grant Date
(MM/DD/YY)
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
|
Option
Exercise
Price /
Share
($)
|
|
Market
Value
of
Unexercised
Options
($)
|
|
Number of
Shares
or
Units of
Stock That
Have
Not
Vested
(#)
(1)
|
|
Market
Value
of
Shares or
Units of
Stock
That
Have
Not
Vested
($)
|
Edouard Bugnion
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
Kee-Lock Chua
|
|
06/16/06
|
|
15,000
|
|
|
|
|
19.43
|
|
|
|
|
|
|
|
|
|
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
Sally Davis
|
|
06/20/07
|
|
30,000
|
|
|
|
|
35.88
|
(2)
|
|
|
|
|
|
|
|
|
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
Sue Gove
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
Didier Hirsch
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
Neil Hunt
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
Dimitri Panayotopoulos
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
Lung Yeh
|
|
09/10/15
|
|
|
|
|
|
|
|
|
|
|
|
11,200
|
|
|
178,192
|
|
(1)
|
|
Unless otherwise
indicated, the shares subject to these stock awards vest in full on August
31, 2016.
|
|
(2)
|
|
The exercise price
of the option as granted is 34.45 Swiss Francs per share.
|
|
99
|
|
|
Proxy Statement
|
Equity Compensation Plan
Information
|
The following table summarizes the
shares that may be issued upon the exercise of options (including PSOs and
PPOs), RSUs, PSUs, and other rights under our employee equity compensation plans
as of March 31, 2016. These plans include the 1996 Employee Share Purchase Plan
(U.S.) and 2006 Employee Share
Purchase Plan (Non-U.S.) (together, the
ESPPs), 2006 Stock Incentive Plan and 2012 Stock Inducement Equity Plan. The
table also includes shares that may be issued upon the exercise of outstanding
options under the 1996 Stock Plan (this plan terminated in
2006).
Plan Category
|
|
(a)
Number of
Securities
to be Issued Upon
Exercise of Outstanding
Options,
Warrants
and Rights
(#)
|
|
(b)
Weighted
Average Exercise
Price of
Outstanding
Options, Warrants
and Rights
(1)
|
|
(c)
Number
of
Securities
Remaining
Available for
Future Issuance
Under
Equity
Compensation
Plans (Excluding
Securities
Reflected
in
Column(a))
(#)
|
Equity Compensation Plans
|
|
|
|
|
|
|
|
|
|
|
|
Approved by Security Holders
|
|
9,129,879
|
(2)
|
|
|
$20
|
|
|
|
15,026,710
|
|
Equity Compensation Plans
|
|
|
|
|
|
|
|
|
|
|
|
Not Approved by Security
Holders
|
|
1,725,000
|
(3)
|
|
|
14
|
|
|
|
0
|
|
Total
|
|
10,854,879
|
|
|
|
$18
|
|
|
|
15,026,710
|
|
(1)
|
|
The weighted
average exercise price is calculated based solely on outstanding
options.
|
|
(2)
|
|
Includes options
and rights to acquire shares outstanding under our 1996 Employee Share
Purchase Plan (U.S.), 2006 Employee Share Purchase Plan (Non-U.S.), 2006
Stock Incentive Plan and 1996 Stock Plan (which plan terminated in
2006).
|
|
(3)
|
|
Includes options
and rights to acquire shares outstanding under our 2012 Stock Inducement
Equity Plan adopted under the Nasdaq rules.
|
|
2012 Stock Inducement Equity Plan
Under the 2012 Stock Inducement Equity
Plan, stock options and RSUs may be granted to eligible employees to serve as
inducement material to enter into employment with the Company. Awards under the
2012 Stock Inducement Equity Plan may be conditioned on continued employment,
the passage of time or the satisfaction of performance vesting criteria, based
on individual written employment offer letters. The 2012 Stock Inducement Equity
Plan has an expiration date of March 31, 2022. As of March 31, 2016, an
aggregate of 1,800,000 shares was reserved for issuance under the 2012 Stock
Inducement Equity Plan. As of March 31, 2016, no shares were available for
issuance under this plan.
2006 Stock Incentive Plan
The Logitech International S.A. 2006
Stock Incentive Plan provides for the grant to eligible employees and
non-employee members of the Board of Directors of stock options, stock
appreciation rights, restricted stock, and restricted stock units. As of March
31, 2016, Logitech has granted stock options (including PSOs), RSUs, and PSUs
under the 2006 Stock Incentive Plan and has made no grants of restricted shares
or stock appreciation rights. Stock options granted under the 2006 Stock
Incentive Plan generally 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 Stock Incentive Plan may be conditioned on
continued employment, the passage of time, or the satisfaction of performance
vesting criteria. As of
|
Proxy
Statement
|
100
|
Equity Compensation Plan
Information
|
March 31, 2016, an aggregate of 24.8 million shares is
reserved for issuance under the 2006 Stock Incentive Plan. As of March 31, 2016,
a total of 7,827,223 shares were available for issuance under this plan.
1996 Stock Plan
Under the 1996 Stock Plan, Logitech
granted options for shares. Options issued under the 1996 Stock 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. Logitech made no grants of restricted
shares, stock appreciation rights, or stock units under the 1996 Stock Plan. No
further awards will be granted under the 1996 Stock Plan.
Each option issued under the 1996 Stock
Plan entitles the holder to purchase one share of Logitech International S.A. at
the exercise price.
Employee Share Purchase Plans
Logitech maintains two employee share
purchase plans, one for employees in the United States and one for employees
outside the United States. The plan for
employees outside the United States is
named the 2006 Employee Share Purchase Plan (Non-U.S.), or 2006 ESPP, and was
approved by the Board of Directors in June 2006. The plan for employees in the
United States is named the 1996 Employee Share Purchase Plan (U.S.), or 1996
ESPP. The 1996 ESPP was the worldwide plan until the adoption of the 2006 ESPP
in June 2006. Under both plans, eligible employees may purchase shares with up
to 10% of their earnings at the lower of 85% of the fair market value at the
beginning or the end of each six-month offering period. Purchases under the
plans are limited to a fair value of $25,000 in any one year, calculated in
accordance with U.S. tax laws. During each offering period, payroll deductions
of employee participants are accumulated under the share purchase plan. Subject
to continued participation in these plans, purchase agreements are automatically
executed at the end of each offering period. A total of 29 million shares have
been reserved for issuance under both the 1996 and 2006 ESPPs. As of March 31,
2016, a total of 7,199,487 shares were available for issuance under these plans.
****************
101
|
|
|
Proxy Statement
|
LOGITECH INTERNATIONAL S.A.
2006
STOCK INCENTIVE PLAN
The following constitute the terms and
conditions of the Logitech International S.A. 2006 Stock Incentive Plan, as
amended and restated on September 7, 2016. These terms and conditions apply to
all Awards granted under the Plan on or after September 7, 2016 as well as to
all outstanding Awards granted under the Plan prior to September 7,
2016.
1.
|
|
Purposes of the
Plan
. The purposes of this Plan
are:
|
●
|
to attract and retain the best
available personnel for positions of substantial
responsibility,
|
●
|
to provide additional incentive
to Employees, Consultants and Directors, and
|
●
|
to promote the success of the
Companys business.
|
2.
|
|
Definitions
. As used herein, the
following definitions shall apply:
|
(a)
Administrator
means the Board or any
of its Committees as shall be administering the Plan, in accordance with Section
4 of the Plan.
(b)
Affiliate
means any entity other than
a Subsidiary, if the Company and/or one or more Subsidiaries own not less than
50% of such entity.
(c)
Applicable Laws
means the
requirements relating to the administration of stock plans under Swiss laws,
U.S. state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Shares are listed or quoted and
the applicable laws governing the grant of Awards and the issuance of Shares
pursuant to Awards in any foreign country or jurisdiction where Awards are, or
will be, granted under the Plan.
(d)
Award
means any award of an Option, a
SAR, a Restricted Share or a Restricted Stock Unit under the Plan.
(e)
Award Agreement
means an agreement
between the Participant and the Company setting forth the terms and conditions
of an Award. Each Award Agreement shall be subject to the terms and conditions
of the Plan.
(f)
Board
means the Board of Directors of
the Company.
(g)
Code
means the U.S. Internal Revenue
Code of 1986, as amended.
(h)
Committee
means a Committee appointed
by the Board in accordance with Section 4 of the Plan.
(i)
Company
means Logitech International
S.A., a company incorporated under the laws of Switzerland, and any successor
thereto.
(j)
Consultant
means a consultant or
adviser who provides bona fide services to the Company, a Parent, a Subsidiary
or an Affiliate as an independent contractor.
(k)
Corporate Transaction
has the meaning
ascribed to it in Section 16 of the Plan.
(l)
Director
means a member of the Board.
(m)
Disability
means total and permanent disability as defined in Section 22(e)(3) of
the Code with respect to Incentive Stock Options. With respect to all other
Awards, Disability means that a Participant is unable to carry out the
responsibilities and functions of the position held by the Participant by reason
of any medically determined physical or mental impairment for a period of not
less than ninety (90) consecutive days; a Participant shall not be considered to
have incurred a Disability unless he or she furnishes proof of such impairment
sufficient to satisfy the Administrator in its discretion.
(n)
Employee
means any person, including
officers and Directors, providing services to the Company or any Parent,
Subsidiary or Affiliate as an employee. Neither service as a Director nor
payment of a directors fee by the Company shall be sufficient to constitute
employment by the Company.
(o)
Exchange Act
means the U.S.
Securities Exchange Act of 1934, as amended.
|
Proxy
Statement
|
102
|
(p)
Fair Market Value
means, as of any
given date, (a) if the Shares are publicly traded and the date in question is a
market trading day, the value of a Share determined as the closing sales price
for the Shares (or the closing bid, if no sales were reported) as quoted on the
SIX Swiss Exchange or the Nasdaq Global Select Market or on such other exchange
or system on which the Shares are traded, as reported in such source as the
Administrator deems reliable, or, if the date in question is not a market
trading day, the closing price or bid, if applicable, as so reported for the
last market trading day preceding the day in question, except that Fair Market
Value may, if designated by the Administrator, also mean the average of the
closing sales prices for the Shares as so quoted or reported over a period of
not more than 30 days before and/or after the date in question; or (b) if the
Shares are not publicly traded, the value of a Share determined by the
Administrator acting in good faith. Such determination shall be conclusive and
binding on all persons.
(q)
Incentive Stock Option
shall mean an
option described in Section 422 of the Code.
(r)
Nonstatutory Stock Option
shall mean
an option other than an option described in Section 422 of the Code.
(s)
Option
means an Incentive Stock
Option or a Nonstatutory Stock Option granted pursuant to the Plan.
(t)
Parent
means a parent corporation,
whether now or hereafter existing, as defined in Section 424(e) of the Code.
(u)
Participant
means an Employee,
Consultant or Director who holds an outstanding Award.
(v)
Performance Criteria
means any one or
more of the following performance criteria, either individually, alternatively
or in any combination, applied to either the Company as a whole or to a business
unit or Subsidiary, either individually, alternatively or in any combination,
and measured either annually or cumulatively over a period of years, on an
absolute basis or relative to a pre-established target, to previous years
results or to a designated comparison group, in each case as specified by the
Administrator in the Award: (i) brand recognition/ acceptance, (ii) cash flow,
(iii) cash flow return on
investment, (iv) contribution to
profitability, (v) cost control, (vi) cost positions, (vii) cost of capital,
(viii) customer satisfaction, (ix) development of products, (x) earnings before
interest, taxes and amortization, (xi) earnings per share, (xii) economic
profit, (xiii) economic value added, (xiv) free cash flow, (xv) income or net
income, (xvi) income before income taxes, (xvii) market segment share, (xviii)
new product innovation, (xix) operating income or net operating income, (xx)
operating margin or profit margin, (xxi) operating profit or net operating
profit, (xxii) process excellence, (xxiii) product cost reduction, (xxiv)
product mix, (xxv) product release schedules, (xxvi) product ship targets,
(xxvii) quality, (xxviii) return on assets or net assets, (xxix) return on
capital, (xxx) return on capital employed, (xxxi) return on equity, (xxxii)
return on invested capital, (xxxiii) return on operating revenue, (xxxiv) return
on sales, (xxxv) revenue, (xxxvi) sales, (xxxvii) share price performance,
(xxxviii) strategic alliances, (xxxix) total shareholder return, and (xl)
working capital.
(w)
Plan
means this Logitech
International S.A. 2006 Stock Incentive Plan, as amended from time to time.
(x)
Restricted Share
means Shares, the
grant, issuance, retention and/or vesting of which is subject to such conditions
as are expressed in the agreement evidencing the Award of Restricted Shares.
(y)
Restricted Stock Unit
means a
bookkeeping entry representing the equivalent of one Share, as awarded under the
Plan, the grant, issuance, retention and/or vesting of which is subject to such
conditions as are expressed in the agreement evidencing the Award of Restricted
Stock Units.
(z)
SAR
means a right to receive, in cash
or stock (as determined by the Committee and set out in the Award Agreement
evidencing the SAR), value with respect to a specific number of Shares equal to
or otherwise based on the excess of (i) the market value of a Share at the time
of exercise over (ii) the exercise price of the right, subject to such terms and
conditions as are expressed in the agreement evidencing the SAR.
(aa)
Service
means service as a Service
Provider. Service shall not terminate solely as a result of a Service Providers
change in status from Director or
103
|
|
|
Proxy Statement
|
Consultant to Employee or
from Employee to Consultant or Director. Service shall not terminate in the case
of transfers between locations of the Company or among the Company, any Parent,
any Subsidiary, any Affiliate or any successor. The Administrator, in its sole
discretion, shall determine all questions relating to termination of Service for
purposes of an Award, including whether a particular leave of absence
constitutes a termination of Service.
(bb)
Service Provider
means a
Director, Consultant or Employee.
(cc)
Share
means a registered share of the
Company, as adjusted in accordance with Section 15 of the Plan.
(dd)
Subsidiary
means a subsidiary
corporation, whether now or hereafter existing, as defined in Section 424(f) of
the Code.
(ee)
Unrestricted Share Pool
means a
number of Shares equal to five percent (5%) of the number of Shares that are
available for the grant of Awards hereunder as of the 2016 Amendment Date,
subject to adjustment as provided in Section 15 of the Plan.
(ff)
2016 Amendment Date
means September
7, 2016.
3.
Shares Subject to the Plan
.
(a)
Basic Limitation
. Subject to
adjustment as provided in Section 15 of the Plan, the maximum aggregate number
of Shares that may be subject to Awards and issued under the Plan is thirty
million five hundred fifty thousand (30,550,000)
1
Shares, all of
which may be issued upon exercise of Incentive Stock Options. The Shares may be
authorized but unissued, conditionally issued or acquired
Shares.
(b)
Shares Returned to Reserve
. Any Shares
subject to an Award which for any reason expires or terminates unexercised or
before settlement, is not earned in full or is forfeited, is settled in cash, or
Shares that are tendered by the Participant or withheld by the Company to
satisfy any tax withholding obligations with respect to an Award other than an
Option or a SAR (or any other Award that is not a full value Award) shall again
become available for issuance under the Plan. The following Shares shall be
counted against the maximum number of Shares available for issuance pursuant to
Section 3(a) hereof and shall not be returned to the Plan: (i) Shares covered by
an Option or SAR which are surrendered in payment of the Option exercise price
or in satisfaction of tax withholding obligations incident to the exercise or
settlement of an Option or SAR; (ii) Shares that are not issued or delivered as
a result of the net settlement of an outstanding SAR or Option; or (iii) Shares
that are repurchased on the open market with the proceeds of the exercise of an
Option. To the extent permitted by Applicable Laws, Shares issued in assumption
of, or in substitution for, any outstanding awards of any entity acquired in any
form of combination by the Company or any Subsidiary or Affiliate shall not be
counted against Shares available for grant pursuant to this Plan. Anything in
this Section 3(b) to the contrary notwithstanding, no Shares may again be
optioned, granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an incentive stock option under Section 422 of the
Code.
(c)
Dividend Equivalents
. Any
dividend equivalents credited under the Plan and paid in cash shall not be
applied against the number of Shares that may be issued under the
Plan.
1
|
|
This number reflects the initial
reserve of 7,000,000 million shares, a 2 for 1 share / ADR split effective
July 14, 2006, a 3,500,000 share increase authorized by the Board on June
23, 2009 and by shareholders on September 1, 2009, a 7,300,000 share
increase authorized by the Board on June 27, 2012, as amended on August 9,
2012, and by shareholders on September 5, 2012, and a 5,750,000 share
increase authorized by the Board on July 7, 2016, and by shareholders on
September 7, 2016.
|
|
Proxy
Statement
|
104
|
4.
Administration of the Plan
.
(a)
Procedure
.
(i)
Multiple Administrative Bodies
. The
Plan may be administered by different Committees with respect to different
groups of Service Providers.
(ii)
Section 162(m)
. To the extent that the
Administrator determines it to be desirable to qualify Awards granted hereunder
as qualified performance-based compensation within the meaning of Section
162(m) of the Code, the Plan shall be administered by a Committee of two or more
outside directors within the meaning of Section 162(m) of the Code.
(iii)
Rule 16b-3
. To the extent desirable to
qualify transactions hereunder as exempt under Rule 16b-3 of the Exchange Act,
the Plan shall be administered by a Committee of two or more non-employee
directors within the meaning of Rule 16b-3.
(iv)
Other Administration
. Other than as
provided above or in Section 4(c) below, the Plan shall be administered by (A)
the Board or (B) a Committee, which committee shall be constituted to satisfy
Applicable Laws.
(b)
Powers of the Administrator
. Subject
to the express provisions and limitations set forth in this Plan and, in the
case of a Committee, subject to the specific duties delegated by the Board to
such Committee, the Administrator shall be authorized and empowered to do all
things necessary or desirable, in its sole discretion, in connection with the
administration of the Plan, including, without limitation, the
following:
(i) to determine the Fair Market Value
of the Shares, in accordance with Section 2(l) of the Plan;
(ii) to select the Employees,
Consultants and Directors to whom Awards may be granted hereunder, to determine
the timing of any such Awards, and to grant Awards;
(iii) to determine whether and to what
extent Options, SARs, Restricted Shares or Restricted Stock Units, or any
combination thereof, are granted hereunder;
(iv) to determine the number of Shares
to be covered by each Award granted hereunder;
(v) to approve and amend forms of Award
Agreements or other documents evidencing Awards made under the Plan (which need
not be identical);
(vi) to grant Awards under this Plan
and determine the terms and conditions, not inconsistent with the terms of the
Plan, of any Award granted hereunder. Such terms and conditions include, but are
not limited to, the exercise price, the time or times when Awards may be
exercised or vest (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Award or Shares relating thereto, based in each case on
such factors as the Administrator, in its sole discretion, shall
determine;
(vii) to construe and interpret the
terms of the Plan and awards granted pursuant to the Plan;
(viii) to establish, adopt, rescind or
revise any rules and regulations as it may deem necessary or advisable to
administer the Plan, including adopting sub-plans to the Plan or special terms
for Award Agreements, for the purposes of complying with non-U.S. laws and/or
taking advantage of tax favorable treatment for Awards granted to Participants
outside the United States (as further set forth in Section 4(d)) as it may deem
necessary or advisable to administer the Plan;
(ix) to modify or amend any Award
(subject to Section 20(c) of the Plan), including the discretionary authority to
accelerate the exercisability or vesting of all or part of any Award or to
extend the post-termination exercisability period of Options;
(x) to authorize any person to execute
on behalf of the Company any instrument required to effect the grant of an Award
previously granted by the Administrator;
(xi) to allow Participants to satisfy
withholding tax obligations by electing to have the Company withhold from the
Shares to be issued upon exercise or settlement of an Award that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined. All elections by
a Participant
105
|
|
|
Proxy Statement
|
to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and
(xii) to make all other determinations
and decisions deemed necessary or advisable for administering the Plan.
(c)
Delegation of Authority
. To the extent
permitted by Applicable Laws and the Companys corporate governing documents,
the Board or the Committee may from time to time delegate to one or more
officers of the Company the authority to grant Awards to Employees and
Consultants who are not Directors and are not considered executive officers of
the Company under Section 16 of the Exchange Act. Any delegation hereunder shall
be subject to the restrictions and limits that the Board or Committee specifies
at the time of such delegation, and the Board or the Committee as applicable may
at any time rescind the authority so delegated or appoint a new delegate. At all
times, the delegate appointed under this Section 4(c) shall serve in such
capacity at the satisfaction and discretion of the Board or the Committee.
(d)
Non-U.S. Participants
.
Notwithstanding any provision of the Plan to the contrary, to comply with the
laws in countries outside the United States in which the Company and its
Subsidiaries and Affiliates operate or in which Service Providers work or
reside, the Administrator, in its sole discretion, shall have the power and
authority to: (i) determine which Service Providers outside the United States
shall be eligible to participate in the Plan; (ii) modify the terms and
conditions of any Award granted to Service Providers outside the United States;
(iii) establish sub-plans and modify exercise procedures and other terms and
procedures and rules, to the extent such actions may be necessary or advisable,
including adoption of rules, procedures or sub-plans applicable to particular
Subsidiaries or Affiliates or Participants in particular locations;
provided, however
, that no such sub-plans and/or modifications shall take precedence over
Section 3 of the Plan or otherwise require shareholder approval; and (iv) take
any action, before or after an Award is granted, that it deems advisable to
obtain approval or comply with any necessary local governmental regulatory
exemptions or approvals. Without limiting
the generality of the foregoing, the
Administrator is specifically authorized to adopt rules, procedures and
sub-plans with provisions that limit or modify rights on eligibility to receive
an Award under the Plan or on death, disability, retirement or other termination
of Service, available methods of exercise or settlement of an Award, payment of
income, social insurance contributions and payroll taxes, the shifting of
employer tax liability to the Participant, the withholding procedures and
handling of any Share certificates or other indicia of ownership.
Notwithstanding the foregoing, the Board may not take any actions hereunder, and
no Awards shall be granted, that would violate Applicable Laws.
(e)
Effect of Administrators Decision
.
The Administrators decisions, determinations and interpretations shall be final
and binding on all Participants and any other holders of Awards.
5.
Eligibility
. Only Employees of the
Company, a Parent or Subsidiary shall be eligible to be granted Incentive Stock
Options. Subject to Section 4(d) of the Plan, Employees, Consultants (to the
extent permitted by the Companys corporate governing documents) and Directors
shall be eligible to be granted Nonstatutory Stock Options, SARs, Restricted
Shares or Restricted Stock Units. If otherwise eligible, an Employee, Consultant
or Director who has been granted an Award may be granted additional Awards at
the sole discretion of the Administrator.
6.
Limitations
.
(a)
No Right to Continued Employment, Future
Grants
. Neither the Plan nor any Award
shall confer upon a Participant any right with respect to continuing the
Participants employment with the Company or a Subsidiary thereof, nor shall
they interfere in any way with the Participants right or the Companys or any
Subsidiarys right to terminate such employment at any time, with or without
cause. A Participants rights, if any, in respect of or in connection with any
Award is derived solely from the discretionary decision of the Company to permit
the individual to participate in the Plan and to benefit from a discretionary
Award. By accepting an Award under the Plan, a Participant expressly
acknowledges that there is no obligation on the part of the Company to continue
the Plan and/or grant any additional Awards.
|
Proxy
Statement
|
106
|
(b)
Annual Covered Employee Grant Limits
.
The following limitations shall apply to grants of Awards that are intended to
constitute qualified performance-based compensation under Section 162(m) of
the Code:
(i) No Employee shall be granted, in
any fiscal year of the Company, Options or SARs covering more than six million
(6,000,000) Shares in the aggregate.
(ii) No Employee shall be granted, in
any fiscal year of the Company, Restricted Shares or Restricted Stock Units
covering more than four million (4,000,000) Shares in the aggregate.
(iii) The foregoing limitations shall
be adjusted proportionately in connection with any change in the Companys
capitalization as described in Section 15.
(c)
Minimum Vesting Requirements and
Discretionary Vesting Acceleration
Authority
. Except for Awards granted in
substitution for outstanding awards in connection with a corporate transaction
or Awards relating to Shares in the Unrestricted Share Pool, Awards granted after the
2016 Amendment Date shall vest no earlier than the first anniversary of the date
of grant; provided, however, that the Committee shall have the discretion to
accelerate the vesting or exercisability of an Award in any circumstance,
including upon a Corporate Transaction or change in control of the Company or
the termination of the Participants Service for any reason, including the
Participants death, Disability or retirement.
7.
Effective Date
. The Plan was adopted
by the Board of Directors on June 15, 2006 and became effective on June 16,
2006, upon approval of the Plan by the shareholders of the Company. The Plan
shall continue in effect until no Shares remain available for issuance under the
Plan (including, for the avoidance of any doubt, Shares that remain available
for issuance under Awards outstanding under the Plan) or until terminated under
Section 20 of the Plan, if earlier. Awards that are outstanding as of the
termination of the Plan shall remain in force according to the terms of the Plan
and the applicable Award Agreement.
8.
Options
(a)
Stock Option Agreement
. Each grant of
an Option under the Plan shall be evidenced by an agreement between the
Participant and the Company in such form
(including by electronic
communications) and such terms, conditions and restrictions as may be approved
by the Administrator (the
Stock Option
Agreement
). Such Option shall be subject to
all applicable terms of the Plan and may be subject to any other terms that are
not inconsistent with the Plan. The Stock Option Agreement shall specify whether
the Option is an Incentive Stock Option or a Nonstatutory Stock Option. The
provisions of the various Stock Option Agreements entered into under the Plan
need not be identical.
(b)
Number of Shares
. Each Stock Option
Agreement shall specify the number of Shares subject to the Option and shall
provide for the adjustment of such number in accordance with Section 15.
(c)
Option Exercise Price
. The per Share
exercise price for which one Share may be purchased upon exercise of an Option
shall be determined by the Administrator and set out in the Stock Option
Agreement; provided that the per Share exercise price shall in no event be less
than 100% of the Fair Market Value of a Share on the date of grant.
(d)
Exercisability and Term
. Each Stock
Option Agreement shall specify the date or event when all or any installment of
the Option is to become exercisable. The Stock Option Agreement shall also
specify the term of the Option; provided that the term of an Option shall in no
event exceed 10 years from the date of grant. Anything in this Section 8(d) to
the contrary notwithstanding, Options shall be subject to the minimum vesting
requirement set forth in Section 6(c). Options may be awarded in combination
with SARs, and such an Award may provide that the Options will not be
exercisable unless the related SARs are forfeited.
(e)
Buyout Provisions
. Subject to Section
20(b), the Administrator may at any time (a) offer to buy out for a payment in
cash or cash equivalents an Option previously granted or (b) authorize a
Participant to elect to cash out an Option previously granted, in either case at
such time and based upon such terms and conditions as the Administrator shall
establish.
(f)
Option Exercise
Consideration
. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. Such
consideration may consist
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entirely of: (i) cash, (ii) cash
equivalents, (iii) full-recourse promissory note, (iv) other Shares that have a
fair market value on the date of surrender equal to the aggregate exercise price
of the Shares as to which said Option shall be exercised; (v) consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan, (vi) the amount attributable to the fair
market value of Shares withheld under a net exercise arrangement, (vii) any
combination of the foregoing methods of payment; or (viii) such other
consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws. If the Company is subject to Section 13(k) of the
Exchange Act, and if the Participant is a Director or executive officer of the
Company, he or she may pay the exercise price with a promissory note only to the
extent permitted by Section 13(k).
(g)
No Rights as Shareholder
. No
Participant shall have any rights as a shareholder with respect to any Shares
subject to Options until such Shares have been issued.
(h)
Termination of Participants Service
.
Upon termination of a Participants Service, the Participant (or any person
having the right to exercise the Option after his or her death) may exercise his
or her Option within such period of time as is specified in the Stock Option
Agreement to the extent that he or she is entitled to exercise it on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Stock Option Agreement). In the absence of a
specified time in the Stock Option Agreement, the Option shall remain
exercisable for ninety (90) days following the termination of the Participants
Service for any reason other than death or Disability, and the Option shall
remain exercisable for one (1) year following the termination of the
Participants Service for reason of death or Disability. Notwithstanding the
foregoing, other than where a Participants Service is terminated for cause (as
determined by the Administrator), if the exercise of an Option within the
applicable time periods set forth above or in the Stock Option Agreement, as
applicable, is prevented as a result of the provisions set forth in Section
21(a) regarding legal compliance with respect to the issuance of Shares, the
Option shall remain exercisable until thirty (30) days after the date
the Participant is no longer prevented
from exercising the Option. If, on the date of termination of Service, the
Participant is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination of Service, the Participant does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
9.
Restricted Shares
.
(a)
Restricted Stock Agreement
. Each grant
of Restricted Shares under the Plan shall be evidenced by an agreement between
the Participant and the Company in such form (including by electronic
communications) and such terms, conditions and restrictions as may be approved
by the Administrator (the
Restricted Stock
Agreement
).
Such Restricted Shares shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Restricted Stock Agreements entered into under the
Plan need not be identical.
(b)
Payment for Awards
. Restricted Shares
may be granted, sold or awarded under the Plan for such purchase price, if any,
or consideration as the Administrator may determine, including (without
limitation) cash, cash equivalents, property, full-recourse promissory notes,
past services and future services. If the Company is subject to Section 13(k) of
the Exchange Act, and if the Participant is a Director or executive officer of
the Company, he or she may pay for Restricted Shares with a promissory note only
to the extent permitted by Section 13(k). Subject to Section 20(b), within the
limitations of the Plan, the Committee may accept the cancellation of
outstanding Options in return for the grant of Restricted Shares.
(c)
Vesting
. The grant, issuance,
retention and/or vesting of Shares under Restricted Share Awards shall be at
such time and in such installments as determined by the Administrator or under
criteria established by the Administrator. The Administrator shall have the
right, but shall not be required, to make the timing of the grant and/or the
issuance, ability to retain and/or vesting of Shares under Restricted Share
Awards subject to continued employment, passage of
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time and/or performance goals as deemed
appropriate by the Administrator. Performance goals applicable to Restricted
Share Awards that are intended to constitute qualified performance-based
compensation under Section 162(m) of the Code shall be based on the Performance
Criteria. The Administrator shall determine the level of achievement against any
performance goals, without regard to whether they are based on Performance
Criteria, and such determination shall be final and binding. For a Restricted
Share Award that is intended to constitute qualified performance-based
compensation under Section 162(m) of the Code, the Administrator shall identify
in writing the target for the performance goals that are based on Performance
Criteria at the time the Restricted Share Award is granted, and no later than
the earlier of (i) the date ninety (90) days after the commencement of the
applicable performance period or (ii) the date on which twenty-five percent
(25%) of the performance period has elapsed, and, in any event, at a time when
the outcome of the Performance Criteria remains substantially uncertain.
Anything in this Section 9(c) to the contrary notwithstanding, a Restricted
Stock Agreement shall be subject to the minimum vesting requirement set forth in
Section 6(c) of the Plan; provided that any vesting acceleration shall not be
given effect if it causes a Restricted Share Award that is intended to
constitute qualified performance-based compensation under Section 162(m) to
fail to so qualify.
(d)
Voting and Dividend Rights
. The
holders of Restricted Shares awarded under the Plan shall have the same voting,
dividend and other rights as the Companys other shareholders. A Restricted
Stock Agreement, however, may require that the holders of Restricted Shares
invest any cash dividends received in additional Restricted Shares. Such
additional Restricted Shares shall be subject to the same conditions and
restrictions as the Award with respect to which the dividends were paid.
(e)
Termination of Employment
. The
Restricted Stock Agreement may provide for the forfeiture or cancellation of the
Restricted Share Award, in whole or in part, in the event of the termination of
Service of the Participant to whom it was granted.
10.
Stock Appreciation Rights
.
(a)
SAR Agreement
. Each grant of a SAR
under the Plan shall be evidenced by an agreement between the Participant and
the Company in such form (including by electronic communications) and such
terms, conditions and restrictions as may be approved by the Administrator (the
SAR Agreement
). Such SAR shall be subject to all applicable terms of the Plan and may
be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various SAR Agreements entered into under the Plan need not be
identical.
(b)
Number of Shares and Exercise Price
.
Each SAR Agreement shall specify the number of Shares to which the SAR pertains
and shall provide for the adjustment of such number in accordance with Section
15. Each SAR Agreement shall specify the exercise price; provided that the
exercise price shall in no event be less than 100% of the Fair Market Value of a
Share on the date of grant.
(c)
Exercisability and Term
. Each SAR
Agreement shall specify the date when all or any installment of the SAR is to
become exercisable. The SAR Agreement shall also specify the term of the SAR;
provided that the term of a SAR shall in no event exceed 10 years from the date
of grant. Anything in this Section 10(c) to the contrary notwithstanding, SARs
shall be subject to the minimum vesting requirement set forth in Section 6(c) of
the Plan. SARs may be awarded in combination with Options, and such an Award may
provide that the SARs will not be exercisable unless the related Options are
forfeited. A SAR may be included in an Incentive Stock Option only at the time
of grant but may be included in a Nonstatutory Stock Option at the time of grant
or thereafter. A SAR granted under the Plan may provide that it will be
exercisable only in the event of a Change in Control.
(d)
Exercise of SARs
. Upon exercise of a
SAR, the Participant (or any person having the right to exercise the SAR after
his or her death) shall receive from the Company consideration in the form of
(a) Shares, (b) cash or (c) a combination of Shares and cash, as set out in the
SAR Agreement or as the Administrator shall determine. Each SAR Agreement shall
specify the amount and/or Fair Market Value of the consideration that the
Participant will receive upon exercising the SAR; provided that the
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aggregate consideration shall not
exceed the amount by which the Fair Market Value (on the date of exercise) of
the Shares subject to the SAR exceeds the exercise price of the SAR. A SAR
Agreement may provide for the automatic exercise of a SAR on (i) the date when
the SAR expires if the exercise price of the SAR is less than the Fair Market
Value of the Shares subject to the SAR on such date but any portion of the SAR
has not yet been exercised, or (ii) an earlier date.
(e)
No Rights as Shareholder
. No
Participant shall have any rights as a shareholder with respect to any Shares
covered by SARs until such Shares, if any, have been issued.
(f)
Termination of Participants Service
.
Upon termination of a Participants Service, the Participant (or any person
having the right to exercise the SAR after his or her death) may exercise his or
her SAR within such period of time as is specified in the SAR Agreement to the
extent that he or she is entitled to exercise it on the date of termination (but
in no event later than the expiration of the term of such SAR as set forth in
the SAR Agreement). In the absence of a specified time in the SAR Agreement, the
SAR shall remain exercisable for ninety (90) days following the termination of
the Participants Service for any reason other than death or Disability, and the
Option shall remain exercisable for one (1) year following the termination of
the Participants Service for reason of death or Disability. If, on the date of
termination of Service, the Participant is not entitled to exercise his or her
entire SAR, the Shares covered by the unexercisable portion of the SAR shall
revert to the Plan. If, after termination of Service, the Participant does not
exercise his or her SAR within the time specified by the Administrator, the SAR
shall terminate, and the Shares covered by such SAR shall revert to the Plan.
11.
Restricted Stock Units
.
(a)
Restricted Stock Unit Agreement
. Each
grant of Restricted Stock Units under the Plan shall be evidenced by an
agreement between the Participant and the Company in such form (including by
electronic communications) and such terms, conditions and restrictions as may be
approved by the Administrator (the
Restricted
Stock Unit Agreement
). Such Restricted Stock
Units shall be subject to all applicable terms of the
Plan and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various
Restricted Stock Unit Agreements entered into under the Plan need not be
identical.
(b)
Payment for Awards
. To the extent that
an Award is granted in the form of Restricted Stock Units, no cash consideration
shall be required of the Participant.
(c)
Vesting Conditions
. The grant,
issuance, retention and/or vesting of Shares under Restricted Stock Unit Awards
shall be at such time and in such installments as determined by the
Administrator or under criteria established by the Administrator. The
Administrator shall have the right, but shall not be required, to make the
timing of the grant and/or the issuance, ability to retain and/or vesting of
Shares under Restricted Stock Unit Awards subject to continued employment,
passage of time and/or performance goals as deemed appropriate by the
Administrator; provided, however, that performance goals applicable to
Restricted Stock Unit Awards that are intended to constitute qualified
performance-based compensation under Section 162(m) of the Code shall be based
on Performance Criteria. The Administrator shall determine the level of
achievement against any performance goals, without regard to whether they are
based on the Performance Criteria and such determination shall be final and
binding. For a Restricted Stock Unit Award that is intended to constitute
qualified performance-based compensation under Section 162(m) of the Code, the
Administrator shall identify in writing the target for the performance goals
that are based on Performance Criteria at the time the Restricted Stock Unit
Award is granted, and no later than the earlier of (i) the date ninety (90) days
after the commencement of the applicable performance period or (ii) the date on
which twenty-five percent (25%) of the performance period has elapsed, and, in
any event, at a time when the outcome of the Performance Criteria remains
substantially uncertain. Anything in this Section 11(c) to the contrary
notwithstanding, a Restricted Stock Unit Agreement shall be subject to the
minimum vesting requirement set forth in Section 6(c) of the Plan; provided that
any accelerated vesting shall not be given effect if it causes a Restricted
Stock Unit Award that is intended to constitute qualified performance-based
compensation under Section 162(m) to fail to so qualify.
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(d)
Voting and Dividend Equivalent Rights
.
The holders of Restricted Stock Units shall have no voting rights. Prior to
settlement or forfeiture, any Restricted Stock Unit awarded under the Plan may,
at the Administrators discretion, carry with it a right to dividend
equivalents. Such right entitles the Participant to be credited with an amount
equal to all cash dividends paid on one Share while the Restricted Stock Unit is
outstanding. Dividend equivalents may be converted into additional Restricted
Stock Units. Settlement of dividend equivalents may be made in the form of cash,
in the form of Shares, or in a combination of both. Any dividend equivalents
credited to Restricted Stock Units shall be subject to the same conditions
(including, without limitation, performance conditions, if any) and restrictions
as the Restricted Stock Units to which they attach.
(e)
Form and Time of Settlement of Restricted
Stock Units
. Settlement of vested
Restricted Stock Units may be made in the form of (i) cash, (ii) Shares or (iii)
any combination of both, as set out in the Restricted Stock Unit Agreement or as
the Administrator shall determine. The actual number of Restricted Stock Units
eligible for settlement may be larger or smaller than the number included in the
original Award, based on predetermined performance factors. Methods of
converting Restricted Stock Units into cash may include (without limitation) a
method based on the average Fair Market Value of Shares over a series of trading
days. Vested Restricted Stock Units may be settled in a lump sum or in
installments. The distribution may occur or commence when all vesting conditions
applicable to the Restricted Stock Units have been satisfied or have lapsed, or
it may be deferred to any later date. The amount of a deferred distribution may
be increased by an interest factor or by dividend equivalents. Until an Award of
Restricted Stock Units is settled, the number of such Restricted Stock Units
shall be subject to adjustment pursuant to Section 15.
(f)
Death of Recipient
. Any Award of
Restricted Stock Units that becomes payable after the Participants death shall
be distributed to the Participants estate or, to the extent the Participant is
permitted by the Administrator (in its sole discretion) to designate a
beneficiary and has done so, to the Participants designated beneficiary or
beneficiaries, provided, however, that the Administrator shall retain the
discretion
to determine whether any beneficiary
designation shall be given effect in the case of any question of the validity
and/or enforceability of such designation.
(g)
Termination of Employment
. The
Restricted Stock Unit Agreement may provide for the forfeiture or cancellation
of the Restricted Share Award, in whole or in part, in the event of the
termination of Service of the Participant to whom it was granted.
(h)
Creditors Rights
. A holder of
Restricted Stock Units shall have no rights other than those of a general
creditor of the Company. Restricted Stock Units represent an unfunded and
unsecured obligation of the Company, subject to the terms and conditions of the
applicable Restricted Stock Unit Agreement.
12.
Evaluation of Performance
Criteria
. The Administrator may appropriately adjust any evaluation of
performance under a Performance Criteria to exclude any of the following events
that occurs during a performance period: (i) asset write-downs, (ii) litigation
or claim judgments or settlements, (iii) the effect of changes in tax law,
accounting principles or other such laws or provisions affecting reported
results, (iv) accruals for reorganization and restructuring programs and (v) any
unusual, infrequently occurring or non-recurring event, item, transaction or
development as determined in accordance with accounting principles and/or as
described in managements discussion and analysis of financial condition and
results of operations appearing in the Companys annual report for the
applicable year. Notwithstanding satisfaction or completion of any Performance
Criteria, to the extent specified at the time of grant of an Award, the number
of Shares, Options, SARs, Restricted Shares, Restricted Stock Units or other
benefits granted, issued, retainable and/or vested under an Award on account of
satisfaction of such Performance Criteria may be reduced by the Administrator on
the basis of such further considerations as the Administrator in its sole
discretion shall determine.
13.
Suspension or Termination of Awards
.
If at any time (including after a notice of exercise has been delivered) the
Administrator reasonably believes that a Participant, other than an independent
Director, has committed an act of misconduct as described in this Section 13,
the Administrator may suspend the Participants right
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to exercise any Award, pending a
determination of whether an act of misconduct has been committed. If the
Administrator determines that a Participant, other than an independent Director,
has committed an act of embezzlement, fraud or breach of fiduciary duty, or if a
Participant makes an unauthorized disclosure of any trade secret or confidential
information of the Company or any of its Subsidiaries, or induces any customer
to breach a contract with the Company or any of its Subsidiaries, neither the
Participant nor his or her estate shall be entitled to exercise unexercised
Options or SARs or continue vesting in Restricted Shares or Restricted Stock
Units, and any unexercised Options and SARs, unvested Restricted Shares and
unvested and/or vested but not yet settled Restricted Stock Units shall be
forfeited. Any determination by the Administrator with respect to the foregoing
shall be final, conclusive and binding on all interested parties. For any
Participant who is a Vice President or above the determination of the
Administrator shall be subject to the approval of the Board.
14.
Non-Transferability of Awards
. Unless
determined otherwise by the Administrator, an Award may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will, by beneficiary designation or by the laws of descent or distribution and
may be exercised, during the lifetime of the Participant, only by the
Participant. If the Administrator makes an Award transferable, such Award shall
contain such additional terms and conditions as the Administrator deems
appropriate.
15.
Adjustments Upon Changes in Capitalization
.
(a)
Changes in Capitalization
. In the
event of a declaration of a stock dividend, stock split, combination or
reclassification of shares, extraordinary dividend of cash and/or assets,
recapitalization, reorganization or any similar event affecting the Shares or
other securities of the Company, the Administrator shall appropriately and
equitably adjust the number and kind of Shares or other securities which are
subject to this Plan, including the maximum number of Shares that may be issued
pursuant to the exercise of Incentive Stock Options, the limitations set forth
in Section 6(b), or the number of Shares subject to any Awards previously
granted, and/or
the exercise or settlement prices of
such Awards, in order to reflect such change and thereby preclude a dilution or
enlargement of benefits under an Award.
(b)
No Rights
. The existence of
outstanding Awards shall not affect in any way the right or power of the Company
or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the Companys
capital structure or its business, or any merger or consolidation of the Company
or any issuance of Shares or other securities or subscription rights thereto, or
any issuance of bonds, debentures, preferred or prior preference securities
ahead of or affecting the Shares or other securities of the Company or the
rights thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise. Further, except
as expressly provided in this Plan (i) the issuance by the Company of shares or
any class of securities convertible into shares of any class, for cash,
property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefore, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, (ii) the payment
of a dividend in property other than Shares, or (iii) the occurrence of any
similar transaction, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number of Shares subject to Options or other Awards previously granted or the
purchase price per Share.
(c)
No Fractional Shares
. No right to
purchase fractional Shares shall result from any adjustment in Options or SARs
pursuant to this Section 15. In case of any such adjustment, the Shares subject
to the Option or SAR shall be rounded down to the nearest whole share.
(d)
Dissolution or Liquidation
. In the
event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Participant as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its discretion
may provide for a Participant to have the right to exercise an Option or SAR
until ten (10) days prior to such transaction
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as to all of the Shares covered
thereby, including Shares as to which the Option or SAR would not otherwise be
exercisable. In addition, the Administrator may provide that any forfeiture
condition applicable to any Shares issued under the Plan shall lapse as to all
such Shares, provided the proposed dissolution or liquidation takes place at the
time and in the manner contemplated. To the extent it has not been previously
exercised, an Option or SAR will terminate immediately prior to the consummation
of such proposed action.
16.
Merger, Reorganization or Asset Sale
.
In the event the Company is a party to a merger, consolidation or
reorganization, or the sale of substantially all of the assets of the Company (a
Corporate Transaction
), then each outstanding Award shall be subject to the
agreement evidencing the Corporate Transaction. Such agreement shall provide for
one or more of the following:
(a) The continuation of outstanding
Awards by the Company (if the Company is the surviving corporation).
(b) The assumption of outstanding
Awards by the surviving corporation or its parent.
(c) The substitution by the surviving
corporation or its parent of new awards for outstanding Awards.
(d) Full exercisability of outstanding
Options and SARs and full vesting of the Shares subject to them, followed by the
cancellation of such Options and SARs. The full exercisability of outstanding
Options and SARs and full vesting of such Shares, and any exercise of
outstanding Options and SARs, shall be contingent on the closing of the merger,
reorganization, consolidation or asset sale.
(e) The cancellation of outstanding
Options and SARs and a payment to the holding Participants equal to the excess
of (i) the per Share amount that shareholders are entitled to receive or realize
in connection with the applicable transaction with respect to the number of
Shares subject to such Options and SARs (whether or not such Options and SARs
are then exercisable or such Shares are then vested) as of the closing date of
such merger, reorganization, consolidation or asset sale, over (ii) their
Exercise Price. Such payment shall be made in the form of cash, cash
equivalents, or securities of the surviving corporation or its parent with a
Fair Market
Value equal to the required amount.
Such payment may be made in installments and may be deferred until the date or
dates when such Options and SARs would have become exercisable or such Shares
would have vested. Such payment may be subject to vesting based on the
Participants continuing Service, provided that the vesting schedule shall not
be less favorable to the Participant than the schedule under which such Options
and SARs would have become exercisable or such Shares would have vested. If the
Exercise Price of the Shares subject to such Options and SARs exceeds the Fair
Market Value of such Shares, then such Options and SARs may be cancelled without
making a payment to the Participants. For purposes of this Subsection (e), the
Fair Market Value of any security shall be determined without regard to any
vesting conditions that may apply to such security.
(f) The cancellation of outstanding
Restricted Stock Units and a payment to the Participants equal to the Fair
Market Value of the Shares subject to such Restricted Stock Units (whether or
not such Restricted Stock Units are then vested) as of the closing date of such
merger or consolidation. Such payment shall be made in the form of cash, cash
equivalents, or securities of the surviving corporation or its parent with a
Fair Market Value equal to the required amount. Such payment may be made in
installments and may be deferred until the date or dates when such Restricted
Stock Units would have vested. Such payment may be subject to vesting based on
the Participants continuing Service, provided that the vesting schedule shall
not be less favorable to the Participant than the schedule under which such
Stock Units would have vested. For purposes of this Subsection (f), the Fair
Market Value of any security shall be determined without regard to any vesting
conditions that may apply to such security.
For the avoidance of any doubt, nothing
in this Section 16 is intended, or shall be construed, to provide for automatic
vesting acceleration of any Award upon a Corporate Transaction or other change
in control of the Company without additional action by the Committee.
17.
Date of Grant
. The date of grant of an
Award shall be, for all purposes, the date on which the Administrator makes the
determination granting such Award, or such other later date as is determined by
the Administrator.
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Notice of the determination shall be
provided to each Participant within a reasonable time after the date of such
grant.
18.
Tax Withholding
. The Company or any
Subsidiary or Affiliate shall have the authority and the right to deduct or
withhold (by any means set forth herein or in an Award Agreement), or require a
Participant to remit to the Company or a Subsidiary or Affiliate, an amount
sufficient to satisfy federal, state, local and foreign income tax, social
insurance, payroll tax, fringe benefits tax, payment on account or other
tax-related items related to participation in the Plan and legally applicable to
Participant and required by Applicable Laws to be withheld. The Administrator
may, in its discretion and in satisfaction of the foregoing requirement, allow a
Participant to elect to have the Company withhold Shares otherwise issuable
under an Award (or allow the tender of Shares previously acquired by the
Participant) having a fair market value equal to the amount required to be
withheld. The Company shall not be required to issue Shares or to recognize the
disposition of such Shares until any withholding obligations on the part of the
Company, a Subsidiary or an Affiliate are satisfied.
19.
Unfunded Plan
. Insofar as it provides
for Awards, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants who are granted Awards under this Plan,
any such accounts will be used merely as a bookkeeping convenience. The Company
shall not be required to segregate any assets which may at any time be
represented by Awards, nor shall this Plan be construed as providing for such
segregation, nor shall the Company or the Administrator be deemed to be a
trustee of securities or cash to be awarded under the Plan.
20.
Amendment and Termination of the Plan
.
(a)
Amendment and Termination
. The Board
may at any time amend, alter, suspend or terminate the Plan.
(b)
Shareholder Approval
. The Company
shall obtain shareholder approval of any Plan amendment to the extent necessary
and desirable to comply with Applicable Laws, including the requirements of any
exchange or quotation system on which the Shares are listed or quoted. Such
shareholder approval, if required,
shall be obtained in such a manner and
to such a degree as is required by Applicable Laws. Notwithstanding any
provision in this Plan to the contrary, absent approval of the shareholders of
the Company,
(i) No Option or SAR may be amended to
reduce the exercise price of such Option or SAR below the Fair Market Value of
the Shares as of the date the Option or SAR was granted, and
(ii) Except as permitted by Section 15,
and at any time when the then-current fair market value of a Share is less than
the Fair Market Value of a Share on the date that an outstanding Option or SAR
was granted, such outstanding Option or SAR may not be cancelled or surrendered
in exchange for (A) cash, (B) an Option or SAR having an exercise price that is
less than the Fair Market Value of a Share on the date that the original Option
or SAR was granted, or (C) any other Award.
(c)
Effect of Amendment or Termination
. No
amendment, alteration, suspension or termination of the Plan shall impair the
rights of any Participant under an existing Award, unless mutually agreed
otherwise between the Participant and the Administrator, which agreement must be
in writing and signed by the Participant and the Company. Anything to the
contrary notwithstanding, any amendment, alteration, suspension or termination
of the Plan (or an amendment to an outstanding Award) to facilitate compliance
with Applicable Laws shall not require consent from any Participant or any other
beneficiary.
21.
Conditions Upon Issuance of Shares
.
(a)
Legal Compliance
. Shares shall not be
issued under the Plan unless the issuance and delivery of such Shares shall
comply with Applicable Laws, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b)
Investment Representations
. As a
condition to the issuance of Shares under the Plan, the Company may require the
Participant to represent and warrant at the time of any such issuance that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
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Proxy
Statement
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114
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22.
Liability of Company
.
(a)
Inability to Obtain Authority;
Tax
Consequences
. The Company shall not be liable to a Participant or other
persons as to: (a) the non-issuance or sale of Shares as to which the Company
has been unable to obtain from any regulatory body having jurisdiction the
authority deemed by the Companys counsel to be necessary to the lawful issuance
and sale of any Shares hereunder; and (b) any tax consequence expected, but not
realized, by any Participant or other person due to the receipt, exercise or
settlement of any Option or other Award granted under this Plan.
(b)
Grants Exceeding Allotted Shares
. If
the number of Shares covered by an Award exceeds, as of the date of grant, the
number of Shares that may be issued under the Plan without additional
shareholder approval, such Award shall be void with respect to such excess
Shares, unless shareholder approval of an amendment sufficiently increasing the
number of Shares subject to the Plan is timely obtained in accordance with
Section 20(b) of the Plan.
23.
Clawback/Recovery
. All Awards granted
under the Plan will be subject to recoupment in accordance with any clawback
policy that the Company is required to adopt pursuant to the listing standards
of any national securities exchange or association on which the Companys
securities are listed or as is otherwise required by the Dodd-Frank Wall Street
Reform and Consumer Protection Act or other Applicable Laws. In addition, the
Administrator may impose such other clawback, recovery or recoupment provisions
on an Award as the Administrator determines necessary or appropriate, including
but not limited to a reacquisition right in respect of previously acquired
Shares or other cash or property upon the occurrence of cause (as determined by
the Administrator).
24.
Section 409A
. To the extent
applicable, the Plan and Award Agreements shall be interpreted in accordance
with Section 409A of the Code and U.S. Department of Treasury regulations and
other interpretive guidance issued thereunder, including without limitation any
such regulations or other guidance that may be issued after the Plan effective
date. Notwithstanding any provision of the Plan to the contrary, in the event
that the Administrator determines that any Award may be subject to Section 409A
of the Code and related U.S. Department of Treasury guidance (including such
U.S. Department of Treasury guidance as may be issued after the Plan effective
date), the Administrator may adopt such amendments to the Plan and the
applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other
actions, that the Administrator determines are necessary or appropriate to (a)
exempt the Award from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the Award, or (b) comply with
the requirements of Section 409A of the Code and related U.S. Department of
Treasury guidance and thereby avoid the application of any penalty taxes under
such Section, but the Company shall not be under any obligation to make any such
amendment. Nothing in this Plan shall provide a basis for any person to take
action against the Company or any Subsidiary or Affiliate based on matters
covered by Section 409A of the Code, including the tax treatment of any Award
granted or Shares issued or amount paid under the Plan, and neither the Company
nor any of its Subsidiaries or Affiliates shall under any circumstances have any
liability to any Participant or his or her estate or any other party for any
taxes, penalties or interest due on Awards granted under this Plan, including
taxes, penalties or interest imposed under Section 409A of the
Code.
115
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Proxy Statement
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This Response Coupon is solicited
on
behalf of the Board of Directors of
Logitech International
S.A.
The Board recommends a vote
For
each of Proposals 1-12
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«ZustellAdrZeilen»
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Shareholder
«DomAdrKurzAdrEinzeilig»
Number of shares
«Stimmberechtigt»
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Response Coupon for the 28
th
Annual General
Meeting of LOGITECH INTERNATIONAL S.A.
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Wednesday, September 7, 2016 14:00
(registration starts at 13:30)
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SwissTech Convention Center, EPFL -
Lausanne, Switzerland
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Voting instructions, orders of
admission cards and of publications, and changes of address can be
submitted either with this form or online.
We
encourage you to utilize our online voting option in order to reduce the
mailing costs incurred by our company and to help reduce our carbon
footprint. For online registration / voting, please go to the website:
gvmanager.ch/logitech
and
input your
personal, one-time code
noted here: «UserName»-«UserPassword»
If you do
not wish to vote online, please complete, sign and return both sides of
this form by September 1, 2016 in the enclosed postage-paid return
envelope. When voting by mail, this response coupon is valid only when
signed and dated.
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Participation:
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☐
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Option 1: I/we will personally
attend the Annual General Meeting and ask you to send me/us an admission
card in my/our name(s).
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☐
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Option 2:
I/we hereby authorize the
person named below to act as my/our proxy to represent me/us at the Annual
General Meeting and ask you to send an admission card directly to such
person:
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Name and address of
proxy:
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☐
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Option 3: I/we authorize the
Independent Representative, Ms. Béatrice Ehlers, Notary Public, Rue
Caroline 1, P.O. Box 6035, 1002 Lausanne, Switzerland, to represent me/us
at the Annual General Meeting.
If you wish
to issue any specific voting instructions, please complete the reverse
side of this form.
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We invite you to visit the Investors
section of our website for more information.
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Please print your email address in
the space provided below. If you provide us with your email address, we
may be able, in the future, to send you additional shareholder
communication via email. We will not intentionally share, sell or
distribute your email address, except as required by law or company
policy.
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Name:
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Email Address:
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Date:
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Signature:
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Instructions for the Independent
Representative
Please tick only one box per item
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For
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Against
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Abstain
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1.
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Approval of the Annual Report, the consolidated financial
statements and the statutory financial statements of Logitech
International S.A. for fiscal year 2016
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☐
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☐
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☐
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2.
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Advisory vote to approve executive compensation
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☐
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☐
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☐
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3.
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Appropriation of retained earnings and declaration of
dividend
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☐
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☐
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☐
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4.
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Amendment and restatement of the 2006 Stock Incentive
Plan, including an increase to the number of shares available for issuance
under the Plan
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☐
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☐
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☐
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5.
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Release of the Board of Directors and Executive Officers
from liability for activities during fiscal year 2016
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☐
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☐
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☐
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6.
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Elections to the Board of
Directors
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☐
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☐
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6.A.
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Re-election of Dr. Edouard
Bugnion
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☐
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☐
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☐
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6.B.
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Re-election of Mr. Bracken
Darrell
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☐
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☐
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☐
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6.C.
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Re-election of Ms. Sally
Davis
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☐
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☐
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☐
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6.D.
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Re-election of Mr. Guerrino De
Luca
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☐
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☐
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☐
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6.E.
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Re-election of Ms. Sue Gove
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☐
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☐
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☐
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6.F.
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Re-election of Mr. Didier
Hirsch
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☐
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☐
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☐
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6.G.
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Re-election of Dr. Neil
Hunt
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☐
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☐
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☐
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6.H.
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Re-election of Mr. Dimitri
Panayotopoulos
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☐
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☐
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6.I.
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Re-election of Dr. Lung Yeh
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☐
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☐
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6.J.
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Election of Dr. Patrick Aebischer
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☐
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☐
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☐
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7.
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Election of the Chairman of the Board
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☐
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☐
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8.
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Elections to the Compensation
Committee
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☐
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☐
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8.A.
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Re-election of Ms. Sally
Davis
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☐
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☐
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☐
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8.B.
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Re-election of Dr. Neil
Hunt
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☐
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☐
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☐
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8.C.
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Re-election of Mr. Dimitri
Panayotopoulos
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☐
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☐
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☐
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8.D.
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Election of Dr. Edouard Bugnion
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☐
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☐
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9.
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Approval of Compensation for the Board of Directors for
the 2016 to 2017 Board Year
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☐
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☐
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☐
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10.
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Approval of Compensation for the Group Management Team
for Fiscal Year 2018
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☐
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☐
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☐
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11.
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Re-election of KPMG AG as Logitechs auditors and
ratification of the appointment of KPMG LLP as Logitechs independent
registered public accounting firm for fiscal year 2017
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☐
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☐
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☐
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12.
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Re-election of Ms. Béatrice Ehlers as Independent
Representative
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☐
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☐
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☐
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If additional proposals or amended proposals in connection
with the above proposals are formulated at the Annual General Meeting, I
instruct the Independent Representative to vote in favor of the
recommendations of the Board (For), against the proposals (Against) or
abstain (Abstain) as follows:
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☐
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☐
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☐
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To the extent that you do not give
specific voting instructions with respect to one or several of the above
proposals, by signing this form you instruct the Independent Representative to
exercise your vote in favor of the recommendations of the Board of Directors on
the corresponding proposals contained in the Invitation and Proxy Statement as
well as on new proposals and amended proposals that could be formulated during
the course of the Annual General Meeting.