Logitech 2004 Annual Report Download - page 21

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Warrants. Logitech has not issued warrants on its shares.
Employee Stock Options and Stock Purchase Plans. Logitech believes equity compensation is an
important part of attracting and retaining high-caliber employees and of aligning the interests of management and
the directors of the Company with the interests of the shareholders. Accordingly, Logitech maintains stock
purchase and stock option plans for its employees.
Under the 1996 Employee Share Purchase Plan, eligible employees may purchase registered 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. Subject to continued participation in these plans, purchase agreements are automatically
exercised at the end of each offering period.
Under the 1996 Stock Plan, the Company may grant to employees options to purchase registered shares or
ADRs, restricted shares, stock appreciation rights, and stock units, which are bookkeeping entries representing
the equivalent of shares. A total of 19,000,000 registered shares and/or ADRs may be issued under this plan.
Options generally vest over four years and remain outstanding for periods not to exceed ten years. Options may
be granted only at exercise prices of at least 100% of the fair market value of the registered shares or ADRs on
the date of grant; restricted shares and stock appreciation rights may be granted at prices less than 100% of the
fair market value of the registered shares on the date of grant; no cash consideration is required to be paid by
employees in connection with the grant of stock units. As of March 31, 2004, Logitech had made no grants of
restricted shares, stock appreciation rights or stock units.
Under the 1988 Stock Option Plan, options to purchase registered shares were granted to employees and
consultants at exercise prices ranging from zero to amounts in excess of the fair market value of the registered
shares on the date of grant. The terms and conditions with respect to options granted were determined by the
Board of Directors who administered this plan. Options generally vest over four years and remain outstanding for
periods not exceeding ten years. Further grants may not be made under this plan.
The Company also maintains one other option plan, for a small number of Asian executives, under which
options were granted at exercise prices below the fair market value of the registered shares on the date of grant.
No further stock options may be granted under this plan.
As of March 31, 2004, there were a total of 7,164,098 registered shares subject to outstanding options
granted under all plans. Each option entitles the holder to purchase one share of Logitech International S.A.
(including shares represented by ADRs) at the strike price. Of these options, 3,291,734 were exercisable, with the
balance subject to continued vesting over time. The exercise price of the currently outstanding options range
from $2.35 to $64.55. Logitech shareholders do not have preferential rights to subscribe to employee options.
Refer to section 5.6 and note 9 to the Consolidated Financial Statements for more information on the
Company’s outstanding stock options.
3. The Board of Directors
The Board of Directors is elected by the shareholders and holds the ultimate decision-making authority of
the Company, except for those matters reserved by law or by the Company’s Articles of Incorporation to its
shareholders or for those that are delegated to the Executive Officers under the Organizational Regulations. 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.
The Company’s Articles of Incorporation set the minimum number of directors at three. The Company had
eight Directors as of May 1, 2004. Two of the Company’s current directors, Mr. Croen and Mr. Pfluger, have
terms that expire at the 2004 Annual General Meeting, and they are not being presented for re-election to the
Board of Directors. There are two candidates, Ms. Ribar and Mr. Okamoto, being presented for election to the
Board of Directors at the 2004 Annual General Meeting.
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