Logitech 2006 Annual Report Download - page 38

holders of ADSs the same economic and voting interest in Logitech as if they were a holder of Logitech
registered shares. However, because The Bank of New York actually owns the Logitech registered shares
underlying the Logitech ADSs, ADS holders must rely on The Bank of New York to exercise the rights of a
shareholder by instructing the depositary in writing the manner in which they wish to vote or exercise their rights
as shareholders. The depositary, subject to Swiss laws and the Company’s Articles of Incorporation, is required
to vote or exercise such rights as instructed. Each ADS entitles its owner to dividends declared, if any, in respect
of Logitech registered shares underlying the ADSs, subject to the terms of the Deposit Agreement. Any cash
dividends by Logitech to its shareholders paid in Swiss francs will be converted by the depositary to U.S. dollars
and paid by the depositary to holders of ADSs, net of conversion expenses, and in accordance with the Deposit
Agreement. As of March 31, 2006, according to the records of The Bank of New York, approximately
17,132,636 ADSs were outstanding in the United States.
2.5 Bonus Certificates
The Company has not issued certificates or equity securities that provide financial rights in consideration for
services rendered or claims waived (referred to as “bonus certificates,” “bons de jouissance,” or
“Genussscheine”).
2.6 Limitations on Transferability and Nominee Registration
The Company maintains a share register that lists the names of the registered owners and beneficiaries of
the shares. Registration in the Company’s share register occurs upon request and is not subject to any condition.
Shareholders can be entered into the share register with voting rights even if they are holding their shares for the
account of a third party (nominee registration).
Refer to section 6.1 for the conditions of exercise of the shareholders’ voting rights.
2.7 Conversion and Option Rights
Conversion Rights. In June 2001, Logitech issued through its wholly owned subsidiary Logitech (Jersey)
Ltd. CHF 170.0 million ($95.6 million based on exchange rates at date of issuance) aggregate principal amount
of its 1% convertible bonds. The convertible bonds were issued in denominations of CHF 5,000 at par value, with
interest at 1.00% payable annually, and final redemption in June 2006 at 105%, representing a yield to maturity
of 1.96%. On August 31, 2005, the Company exercised its right to call the convertible bonds for early
redemption in accordance with the terms of the bonds. As of November 11, 2005, all outstanding bonds had been
presented for conversion into 5,448,693 Logitech registered shares at the conversion price of CHF 31.20 per
share ($23.72 based on exchange rates at November 11, 2005). The conversion was satisfied through delivery of
treasury shares.
Logitech has not issued any other bonds.
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 Stock Plan, the Company may grant to employees and directors, options to purchase
registered shares or ADSs, restricted shares, stock appreciation rights, and stock units, which are bookkeeping
entries representing the equivalent of shares. A total of 38,000,000 registered shares and/or ADSs 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
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