Logitech 2010 Annual Report Download

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LOGITECH 2010
Rapport Annuel 2010, Invitation et Document D’Information
Geschäftsbericht 2010, Einladung und Informationsmaterial
2010 Annual Report, Invitation and Proxy Statement
SIX: LOGN-VX
NASDAQ: LOGI
For more information
about Logitech and
its products, please
visit our web site:
www.logitech.com.

Table of contents

  • Page 1
    Rapport Annuel 2010, Invitation et Document D'Information Geschäftsbericht 2010, Einladung und Informationsmaterial 2010 Annual Report, Invitation and Proxy Statement

  • Page 2
    ..., including from companies with significantly greater resources, sales and marketing organizations, installed base and name recognition; as well as those additional factors set forth in Logitech's periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10...

  • Page 3
    ... other countries. All other trademarks are the property of their respective owners. Logitech's annual meeting of shareholders will be held at 14:30 Central European Summer Time, September 8, 2010, at the Palais de Beaulieu in Lausanne, Switzerland. President, Chief Executive Officer Panalpina Group

  • Page 4
    ... in manufacturing and supply chain, and used our innovation engine to continue to bring new, appealing products to market. With these efforts, we positioned ourselves for a return to profitable growth as consumer demand began to improve. In the fourth quarter, we achieved double-digit sales growth...

  • Page 5
    ... TV companion box. For the meeting room screen, we acquired LifeSize Communications, an innovation leader in high-definition (HD) video conferencing. The acquisition gives us a competitive advantage and further positions us to realize a vision for video communication that is as natural and More...

  • Page 6
    ... number of consumers who closely match the profile of the target customer for our brand. Our goal is for China to become one of our top three markets, and we will continue to position our investment in China as one of the in December 2009, Logitech acquired LifeSize communications, an innovator...

  • Page 7
    ... largest markets includes penetrating more high population centers, securing new channel partners, and strengthening relationships with existing partners. We will also prioritize company-wide resources to facilitate an expanded sales force and local investments in product development and marketing...

  • Page 8
    ... to the digital experiences that they care about. Our partners and customers have worked very closely with us this year to achieve our mutual goals, and we are very appreciative. We also wish to thank our Board of Directors for their valuable counsel. And we thank you, our shareholders, for your...

  • Page 9
    ... Shareholders 43 Invitation and Agenda for the Annual General Meeting 44 Questions and Answers About the Logitech 2010 Annual General Meeting 50 Agenda Proposals and Explanations 59 Corporate Governance and Board of Directors Matters 81 Compensation Report Annual Report 115 Management's Discussion...

  • Page 10

  • Page 11
    ... des indications concernant les points qui seront soumis au vote lors de l'Assemblée, la façon dont vous pourrez exercer vos droits de vote, la rémunération des membres du Conseil d'administration et de la direction générale de Logitech ainsi que d'autres informations utiles. Que vous puissiez...

  • Page 12
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  • Page 13
    LOGITECH INTERNATIONAL S.A. Invitation à l'Assemblée générale ordinaire Mercredi 8 septembre 2010 14h30 (l'enregistrement débute à 13h30) Palais de Beaulieu - Lausanne, Suisse ***** ORDRE DU JOUR A. Rapport Rapport d'activité pour l'exercice se terminant au 31 mars 2010 B. Points soumis au ...

  • Page 14
    ... Document d'Information ainsi que les documents qui l'accompagnent vous sont adressés directement, si vos actions sont inscrites au Registre des Actions de Logitech International S.A. ou dans le sous-registre tenu par notre agent de transfert américain, The Bank of New York Mellon Corporation. Qui...

  • Page 15
    ...Invitation et Document d'Information ainsi que notre rapport annuel établi sur la base du formulaire 10-K pour l'exercice 2010 que nous avons déposé auprès de la U.S. Securities and Exchange Commission sont disponibles sur notre site internet à l'adresse http://ir.logitech.com. Nos actionnaires...

  • Page 16
    ... participer à l'Assemblée, nous vous invitons à cocher la case "Option 1" de la carte-réponse et à retourner cette dernière dûment complétée, signée et datée à Logitech au moyen de l'enveloppe affranchie annexée jusqu'au 27 août 2010. Nous vous ferons parvenir une carte d'accès. Si...

  • Page 17
    ... américaine ou canadienne au 16 juillet 2010 peuvent donner des instructions à l'organisation concernée sur la façon dont les droits de vote doivent être exercés. Logitech a pris des mesures pour qu'une société spécialisée dans la fourniture de services à des banques, des trustees et des...

  • Page 18
    ...Est - Eastern Daylight Time). Puis-je changer mes instructions de vote après les avoir données? Vous pouvez révoquer vos instructions et changer ces dernières en tout temps jusqu'au moment du vote final. Vous pouvez donner de nouvelles instructions par internet ou par téléphone (seule la derni...

  • Page 19
    ... valide de la part d'un actionnaire inscrit de faire avant ou lors de l'assemblée des propositions alternatives sur des points figurants à l'ordre du jour de l'Assemblée générale ordinaire 2010. Propositions d'actionnaires pour l'Assemblée générale ordinaire 2011 Un actionnaire inscrit...

  • Page 20
    ... totalisant une valeur nominale d'un million de francs suisses de demander l'inscription d'un point à l'ordre du jour d'une Assemblée générale des actionnaires peut être consultée sur notre site internet à l'adresse http://ir.logitech.com. Vous pouvez aussi contacter le Secrétaire du Conseil...

  • Page 21
    ... l'exercice se terminant le 31 mars 2010 La direction de Logitech International S.A. donnera un rapport sur les opérations de la Société pour l'exercice 2010 lors de l'Assemblée Générale ordinaire. B. POINTS DE L'ORDRE DU JOUR SOUMIS AU VOTE Point 1 Approbation du rapport annuel, du rapport...

  • Page 22
    ... et des comptes statutaires de Logitech International S.A. pour l'exercice 2010. Point 2 Vote consultatif sur les...employés ayant les talents qui sont essentiels au succès de son entreprise dans le long terme. Plus précisément, le programme de rémunération des membres de la direction de Logitech...

  • Page 23
    ...succès de Logitech dans l'embauche, la rétention et la motivation de ses directeurs et employés. La section "Compensation Discussion and Analysis...Logitech tels qu'exposés dans la section "Discussion et Analyse de la rémunération" du rapport de rémunération pour l'exercice 2010. Point 3 Report...

  • Page 24
    ... sans paiement de dividende. Point 4 Modification des statuts afin de mettre en Å"uvre la Loi suisse sur les titres intermédiés Proposition Le Conseil d'administration propose aux actionnaires d'autoriser une modification de l'article 4 des Statuts de Logitech International S.A. afin de mettre en...

  • Page 25
    ... représentées à l'Assemblée générale ordinaire. Recommandation du Conseil Le Conseil d'administration recommande de voter en faveur de la modification de l'article 4 des Statuts de Logitech International S.A. afin de mettre en Å"uvre la Loi suisse sur les titres intermédiés. 15 FRANÇAIS

  • Page 26
    ... voix représentées par Logitech. Recommandation Le Conseil d'administration recommande de voter en faveur de la proposition de donner décharge aux membres du Conseil d'administration et de la Direction pour leur activité pendant l'exercice 2010. Point 6 Elections au Conseil d'administration Le...

  • Page 27
    ... BT en 1999, elle a occupé plusieurs postes de direction au sein de la société, y compris celui de President, Global Products, Global Services de 2002 à 2005, President, BT Ignite Applications Hosting de 2001 à 2002, et Director, Groupe Internet et Multimedia de 1999 à 2001. Avant de rejoindre...

  • Page 28
    ...administration pour une période de trois ans. Neil Hunt est le Chief Product Officer de Netflix, Inc., une société basée en Californie qui est le plus grand fournisseur de services de streaming de films et de télévision par internet et d'envoi de DVD par courrier. Il a rejoint Netflix en 1999...

  • Page 29
    ... mandat de révision pour Logitech en 1988. Des informations sur les honoraires que Logitech a payés à PricewaterhouseCoopers S.A., ainsi que d'autres informations concernant PricewaterhouseCoopers S.A., figurent sous la rubrique "Independent Public Accountants" et "Report of the Audit Committee...

  • Page 30
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  • Page 31
    ...äre: Sie sind herzlich eingeladen, an der ordentlichen Generalversammlung 2010 der Logitech International S.A. teilzunehmen. Die Versammlung findet am Mittwoch, 8. September 2010 um 14:30 Uhr im Palais de Beaulieu, Saal Rom, in Lausanne, Schweiz, statt. Beiliegend finden Sie die Einladung und das...

  • Page 32
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  • Page 33
    LOGITECH INTERNATIONAL S.A. Einladung zur ordentlichen Generalversammlung Mittwoch, 8. September 2010 14:30 Uhr (Türöffnung um 13:30 Uhr) Palais de Beaulieu - Lausanne, Schweiz ***** TRAKTANDENLISTE A. Berichte Geschäftsbericht für das am 31. März 2010 zu Ende gegangene Geschäftsjahr B. Anträ...

  • Page 34
    FRAGEN UND ANTWORTEN BETREFFEND DIE ORDENTLICHE GENERALVERSAMMLUNG 2010 DER LOGITECH INTERNATIONAL S.A. ("LOGITECH") ALLGEMEINE INFORMATION AN ALLE AKTIONÄRINNEN UND AKTIONÄRE Warum erhalte ich diese Einladung und Information? Dieses Dokument soll sowohl dem schweizerischen Gesellschaftsrecht als...

  • Page 35
    ...94555, 6505 Kaiser Drive. Logitechs Telefonnummer in der ...Report Formular 8-K am Dienstag, 14. September 2010, an die Securities and Exchange Commission der Vereinigten Staaten von Amerika übermitteln. Eine Kopie des Formulars 8-K wird auf unserer Website unter http://ir.logitech...WEITERE INFORMATION ...

  • Page 36
    ...2010 im Aktienregister eingetragen sind und sich am Versammlungsort ausweisen können. Kann ich mich an der Versammlung durch eine andere Person vertreten lassen? Ja. Wenn Sie sich nicht durch Logitech oder den unabhängigen Stimmrechtsvertreter vertreten lassen möchten, so wählen Sie bitte Option...

  • Page 37
    ...Information enthalten ist, oder das Stimmmaterial in gedruckter Form anfordern. Die Information enthält Angaben, wie das Stimmmaterial über das Internet...gedruckter Form oder elektronisch per Email zu erhalten. Wie bekomme... August 2010 durchgeführt wird. Der 25. August 2010 ist für Logitech das ...

  • Page 38
    ... Eastern Daylight Time) Stimminstruktionen erteilen. Kann ich eine Instruktion ändern? Sie können Ihre Vollmacht widerrufen und Ihre Instruktionen jederzeit bis zur Abstimmung an der Generalversammlung ändern. Sie können Ihre Instruktionen auf folgende Weisen ändern: Über das Internet oder das...

  • Page 39
    ... und der Gesellschaft weiterzugeben. Wenn Sie Ihre Logitech Aktien über eine Bank oder einen Effektenhä...auch anfragen, sei es schriftlich, per Telefon, Email oder auf sonstige Weise, ihnen Stimminstruktionen zu erteilen...ärsanträge für die Generalversammlung 2010 Gemäss unseren Statuten haben ...

  • Page 40
    ... der Logitech am Verwaltungssitz in der Schweiz oder in den Vereinigten Staaten von Amerika zeitgerecht einzureichen. Zusätzlich können Sie, wenn Sie die Bedingungen der Regel 14a-8 des U.S. Securities Exchange Act von 1934 erfüllen, dem Verwaltungsrat Vorschläge für die Generalversammlung 2011...

  • Page 41
    ... über die Corporate Governance gemäss der SIX Swiss Exchange Richtlinie über Corporate Governance. Der Entschädigungsbericht ist in dieser Einladung enthalten. Kopien des Geschäftsberichtes und der Einladung mit Informationsmaterial sind auf dem Internet auf http://ir.logitech.com abrufbar...

  • Page 42
    ...Jahresrechnung der Logitech International S.A. für das Geschäftsjahr 2010 zu ...Logitech zu genehmigen. Dies geschah vor dem Hintergrund der sich zunehmend bewährenden "best practices in Corporate Governance" in der Schweiz und den Vereinigten Staaten von Amerika. Die Aktionäre genehmigten 2009...

  • Page 43
    ...2010 im Vergleich zum Geschäftsjahr 2009 nicht angehoben und in der Ausgestaltung von Logitech... Compensation Table for Fiscal Year 2010."...2010...Gewinnvortrag zur Verfügung der Generalversammlung zum Ende des Geschäftsjahres 2010 ...Erläuterungen CHF 354,924 CHF CHF CHF - (30,122) 24,510 CHF...

  • Page 44
    Generalversammlung zu unterbreiten. Der zur Verfügung der Generalversammlung 2010 stehende Gewinn besteht aus den kumulierten Gewinnen der Logitech International S.A., der Holdinggesellschaft der Logitech-Gruppe. Der Verwaltungsrat ist weiterhin davon überzeugt, dass es im besten Interesse der ...

  • Page 45
    ... Sie, dass einzig die französische Version der Statuten der Logitech Gültigkeit hat. Notwendige Mehrheit zur Genehmigung Der Antrag ist genehmigt...äftsleitung aus, sofern sie die Geschäftstätigkeit im Geschäftsjahr 2010 betreffen, und auf Tatsachen beruhen, die den Aktionären mitgeteilt wurden...

  • Page 46
    ...eine Praxis, wie sie unter dem schweizerischen Code of Best Practice für Corporate Governance empfohlen ist, um die Kontinuität der Aktivit...Präsident der EPFL Plus, einer schweizerischen Stiftung, die Geldmittel für die Eidgenössische Technische Hochschule in Lausanne sammelt und verwaltet. Herr...

  • Page 47
    ... Chief Portfolio Officer ...Electronic Engineering der Universität Rom, Italien. Er ist 57 Jahre alt und italienischer und amerikanischer Staatsbürger. Als Logitech's Vorsitzender und ehemaliger CEO bringt Herr De Luca bedeutende Erfahrungen in Unternehmensführung, Industrie, Strategie und Marketing...

  • Page 48
    ...Chief Financial Officer von Juni 2005 bis Oktober 2006 sowie Chief Information Officer von Februar 2000 bis Juni 2005. Von Juni 1995 bis Februar 2000 war sie Panalpina Corporate...beantragt, PricewaterhouseCoopers S.A. als Revisionsstelle der Logitech International S.A. für ein weiteres Jahr wiederzuw...

  • Page 49
    ... die Wiederwahl der PricewaterhouseCoopers S.A. als Revisionsstelle der Logitech International S.A. für das am 31. März 2011 endende Geschäftsjahr. VERWALTUNGSRATSANGELEBENHEITEN UND ENTSCHÄDIGUNGSBERICHT Für weitere Information über unseren Verwaltungsrat und für den Entschädigungsbericht...

  • Page 50
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  • Page 51
    ... your voting rights, information concerning Logitech's compensation of its Board members and executive officers and other relevant information. Whether or not you plan to attend the Annual General Meeting, your vote is important. Thank you for your continued support of Logitech. Guerrino De Luca...

  • Page 52
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  • Page 53
    LOGITECH INTERNATIONAL S.A. Invitation to the Annual General Meeting Wednesday, September 8, 2010 2:30 p.m. (registration starts at 1:30 p.m.) Palais de Beaulieu - Lausanne, Switzerland ***** AGENDA A. Reports Report on Operations for the fiscal year ended March 31, 2010 B. Proposals 1. 2. 3. 4. 5. ...

  • Page 54
    QUESTIONS AND ANSWERS ABOUT THE LOGITECH 2010 ANNUAL GENERAL MEETING GENERAL INFORMATION FOR ALL SHAREHOLDERS Why am I receiving this "Invitation and Proxy Statement"? This document is designed to comply with both Swiss corporate law and U.S. proxy statement rules. Outside of the U.S. and Canada ...

  • Page 55
    ... year 2010 filed with the U.S. Securities and Exchange Commission are available on our website at http://ir.logitech.com. Shareholders also may request free copies of these materials at our principal executive offices in Switzerland or the United States, at the addresses and phone numbers above...

  • Page 56
    ... sell your Logitech shares before the meeting and Logitech's Share Registrar is notified of the sale, your votes with those shares will not be counted. Any person who purchases shares after the Share Register closes on Thursday, September 2, 2010 will not be able to register them until the day after...

  • Page 57
    ...shareholders' meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect...

  • Page 58
    ... as professional asset managers, are obliged to inform Logitech of the number and par value of the registered shares they represent. Meeting Proposals There are no other matters that the Board intends to present, or has reason to believe others will present, at the Annual General Meeting. If other...

  • Page 59
    ... an aggregate par value of one million Swiss francs to demand that an item be placed on the agenda of a meeting of shareholders are available on our website at http://ir.logitech.com. You may also contact the Secretary of Logitech at our principal executive office in either Switzerland or the United...

  • Page 60
    ... Ended March 31, 2010 Senior management of Logitech International S.A. will provide the Annual General Meeting with a presentation and report on operations of the Company for fiscal year 2010. B. PROPOSALS Proposal 1 Approval of the Annual Report, the Compensation Report, the Consolidated Financial...

  • Page 61
    ... Compensation Report for fiscal year 2010. Explanation At Logitech's 2009 Annual General Meeting the Logitech Board of Directors asked shareholders to approve Logitech's compensation philosophy, policies and practices, as a reflection of evolving best practices in corporate governance in Switzerland...

  • Page 62
    ... year 2010 over those of fiscal year 2009, and the design of Logitech's bonus program placed a greater importance on the generation and retention of cash, market share, and profitability. While compensation is a central part of attracting, retaining and motivating the best executives and employees...

  • Page 63
    ... the growth of Logitech's business, for share repurchases, and for the possible acquisition of other companies or lines of business. Accordingly, the Board is proposing that no dividend be paid to shareholders and all retained earnings at the disposal of the Annual General Meeting be carried forward...

  • Page 64
    ...require that the Company print and issue stock certificates at any time and free of charge. The Board of Directors shall set forth in regulations the details and the requirements for the execution thereof. Article 4 The shares shall be registered. The general meeting of shareholders shall have the...

  • Page 65
    ... 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, any Logitech executive officers or any votes represented by Logitech. Recommendation The Board of Directors recommends a vote "FOR" the...

  • Page 66
    ... 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...

  • Page 67
    ..., and was employed by the BASF Group, a German chemical products company. Ms. Ribar holds a Masters degree in Economics and Business Administration from the University of St. Gallen, Switzerland. Ms. Ribar also served as a Director of Julius Baer Group Ltd., a Swiss private bank, until May 2010. She...

  • Page 68
    ... under the heading "Independent Public Accountants" and "Report of the Audit Committee." A member of PricewaterhouseCoopers S.A. 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...

  • Page 69
    ... the following information in regard to the following directors: Erh-Hsun Chang. Until April 2006 Mr. Chang served as Logitech's Senior Vice President, Worldwide Operations and General Manager, Far East. Richard Laube. Mr. Laube is an executive officer of Nestlé S.A. Logitech Board member, co...

  • Page 70
    ... Physics from the Ecole Polytechnique Fédérale, Lausanne, Switzerland. He serves on the Board of Nestlé S.A. In addition, he serves on the Board of Fondation Defitech, a Swiss foundation which contributes to research and development projects aimed at assisting the disabled, is the Chairman of the...

  • Page 71
    ..., and sales and marketing, particularly in Taiwan and China, Mr. Chang brings senior leadership, manufacturing and operations experience, and substantial expertise in doing business in Taiwan and China. Kee-Lock Chua ...49 Years Old Director since 2000 President and Chief Executive Officer, Vertex...

  • Page 72
    ... 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...

  • Page 73
    ... Global Marketing, Sales and Innovation. Reporting to the chief executive officer and a member of the Diageo Executive Committee, Mr. Malcolm had worldwide responsibility for the marketing, sales and innovation function for Diageo and direct responsibility for strategy, equity management, innovation...

  • Page 74
    ... marketing, consumer products and global experience. As CEO, Mr. Quindlen has direct responsibility for Logitech's strategy and operations. Monika Ribar ...50 Years Old Director since 2004 President and CEO, Panalpina Group Swiss national Monika Ribar is the President and Chief Executive Officer...

  • Page 75
    ... on the agenda of a meeting of shareholders should be sent to: Secretary to the Board of Directors, Logitech International S.A., Rue du Sablon 2-4, 1110 Morges, Switzerland, or c/o Logitech Inc., 6505 Kaiser Drive, Fremont, CA 94555, USA. Under the Company's Articles of Incorporation only registered...

  • Page 76
    ...overseeing Logitech's 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 both major computer manufacturers and consumer electronics distributors...

  • Page 77
    ... identified in the approved budgets; and the approval of the sale or acquisition, including related borrowings, of the Company's 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...

  • Page 78
    ... and medium term strategies; preparing the budget, which must be approved by the Board of Directors; reviewing and certifying the Company's annual report; appointing, dismissing and promoting any employees of Logitech other than executive officers and the head of the internal audit function; taking...

  • Page 79
    ... of Directors. The Board reviews and approves significant changes in Logitech's 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...

  • Page 80
    ... 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...

  • Page 81
    ... data; and reviews, before release, the audited financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's annual reporting, and recommends that the Board of Directors submit these items to the shareholders' meeting for...

  • Page 82
    ... approval, the compensation of executive officers and Logitech's 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 Company's employee equity incentive...

  • Page 83
    ... on the board of directors or compensation committee of a company that has an executive officer that serves on our Board of Directors. COMMUNICATIONS WITH THE BOARD OF DIRECTORS Shareholders may contact the Board of Directors about bona fide issues or questions about Logitech by sending an email to...

  • Page 84
    ... Compensation Report (the "named executive officers"); and all directors and current executive officers as a group. Number of Shares Owned(1) Shares that May Total be Acquired Beneficial Within 60 Days(2) Ownership Total as a Percentage of Shares Outstanding(3) Beneficial Owner 5% Shareholders...

  • Page 85
    ... for executive officers and other officers who report directly to the CEO effective September 2008. These guidelines require the CEO to hold a number of Logitech shares with a market value equal to 3 times his annual base salary. Officers who report to the CEO must hold a number of Logitech shares...

  • Page 86
    ..., or Logitech's information or assets, for their personal gain or for the improper benefit of others. These policies are included in our Conflict of Interest and Business Ethics Policy, which covers our directors, executive officers and other employees. If in a particular circumstance the Board...

  • Page 87
    ... S.A., Lausanne, Switzerland. PricewaterhouseCoopers S.A. assumed its first audit mandate for Logitech in 1988. They were re-elected by the shareholders as Logitech's auditors at the Annual General Meeting in September 2009. For purposes of U.S. securities law reporting, PricewaterhouseCoopers...

  • Page 88
    ... by PwC with a set dollar limit per type of service. The Vice President, Corporate Controller is responsible for ensuring that the work performed is within the scope and dollar limit as approved by the Audit Committee. Management must report to the Audit Committee the status of each project or...

  • Page 89
    ... securities law reporting, which is responsible for expressing an opinion on the conformity of Logitech's audited financial statements to generally accepted accounting principles and attesting to the effectiveness of Logitech's internal control over financial reporting. The Board of Directors has...

  • Page 90
    ... 16 of the Exchange Act requires Logitech's directors, executive officers and any persons who own more than 10% of Logitech's 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...

  • Page 91
    COMPENSATION REPORT 2010 INTRODUCTION This Compensation Report contains information on Logitech compensation philosophy and practices, the background for decisions, and the results of decisions with respect to Logitech's named executive officers and its Board members. This Compensation Report has ...

  • Page 92
    ... President and Chief Executive Officer (other than with respect to their own proposed compensation). The proposed base salary, bonus targets and equity incentive award recommendation for Mr. De Luca for fiscal year 2010 were developed by Logitech's Vice President of Worldwide Human Resources and its...

  • Page 93
    ... develop Logitech's executive compensation, as well as to assist the Compensation Committee in the evaluation of the design of bonus plan and equity compensation programs. The companies in Logitech's peer group were selected in March 2008 based on (i) involvement in the PCbased consumer electronics...

  • Page 94
    ... compensation programs are Base salary. Short-term cash incentive awards. Long-term equity incentive awards. Our executive officers are also eligible to participate in our health and benefits plans, retirement savings plans, and our employee share purchase plans, which are generally available...

  • Page 95
    ... compensation variable and subject to the achievement of company business goals. • Motivate and reward the executive for above-target performance • Support retention of the executive • Directly align executive and shareholder interests • Provide a direct incentive for future performance Pay...

  • Page 96
    ... to the achievement of Logitech business goals, and motivate and reward executives for above-target performance. In fiscal year 2010 Logitech named executive officers were eligible for short-term cash incentive awards under a program established under the Logitech Management Performance Bonus Plan...

  • Page 97
    ... named executive officers the operating income and cash flow from operations goals in the 2010 bonus program were set equal to Logitech's semi-annual business plans for fiscal year 2010 as approved by the Board in May and October, 2009, except that part of the goals for Junien Labrousse were based...

  • Page 98
    ...(25%) (2) Market Share (37.5%) Cash Flow (25%) Sales Contribution Margin (37.5%)(2) (29.6) 43.7% 20.0 105.8 (25.2) 45.1% 25.0 132.3 (11.4) 46.9% 50.0 264.6 (7.8) 44.3% 129.1 153.3 2nd half FY 2010 43.7% 51.7 189.5 45.1% 64.6 236.9 46.9% 129.2 308.0 43.8% 232.4 284.3 Junien Labrousse ...1st...

  • Page 99
    ... the options vesting in four equal annual increments, to encourage a long-term perspective and to encourage key employees to remain at Logitech. All options granted to named executive officers to date have an exercise price equal to the fair market value of Logitech's shares on the effective grant...

  • Page 100
    ..., not Logitech's share price. In fiscal year 2010 grants were made to new hires and promoted employees below the executive officer level at regularly scheduled meetings of the Compensation Committee, by consent in October 2009, and by consent in December 2009, in connection with our acquisition of...

  • Page 101
    ... in U.S. dollars, or the closing share price on the SIX Swiss Exchange on the date of grant, for options denominated in Swiss francs. Options granted to executive officers are typically denominated in U.S. dollars. The grant date may be the day of the Compensation Committee meeting or consent, or...

  • Page 102
    ..., Sales and Marketing, was awarded a discretionary award of $40,467 in fiscal year 2010 to enable him to purchase a value of Logitech shares equal to what he would have purchased under the Logitech Employee Share Purchase Plan for the February 1 - July 31, 2009 offering period but for his employment...

  • Page 103
    ... premiums for two months. Perquisites Logitech's executive officer benefit programs are substantially the same as for all other eligible employees. Mr. Quindlen was provided with personal tax preparation services in fiscal year 2010. Expenses related to these services are imputed as income to Mr...

  • Page 104
    ... Section 162(m) of the U.S. Tax Code in setting and determining executive officer long-term equity incentive award grants and in setting short-term cash incentive award compensation. The Logitech International S.A. 2006 Stock Incentive Plan approved by our shareholders in 2006 permits certain grants...

  • Page 105
    ... and profit sharing programs is established as a percentage of the employee's annual base salary. The potential target compensation for sales personnel under sales commission plans is set on the basis of their sales quotas. Long-term equity incentive awards. Approximately one-third of the Company...

  • Page 106
    ... Bonus Plan. Profit Sharing Plan. Sales commissions plans. Change of Control Severance Agreements in place with executive officers. The review included a consideration of Logitech's enterprise risk areas developed as part of its enterprise risk management process, compensation risk areas associated...

  • Page 107
    ... on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in Logitech's 2010 Invitation and Proxy Statement and Annual Report. Compensation Committee Matthew Bousquette, Chairman K ee-LocK chua r icharD...

  • Page 108
    ... Finance FY08 and Information Technology, and Chief Financial Officer Werner Heid...FY10 Sr. Vice President, Sales and Marketing David Henry ...FY10 Sr. Vice President, FY09 Customer Experience FY08 and Chief Marketing Officer Junien Labrousse ...FY10 Executive ViceFY09 President, Products FY08 787...

  • Page 109
    ...the listed officers in the fiscal years shown. The key assumptions and methodology of valuation of stock options and stock awards are presented in Note 13 to the Consolidated Financial Statements included in Logitech's Annual Report to Shareholders and Annual Report on Form 10-K for fiscal year 2010...

  • Page 110
    ... relating to the income imputed to Mr. Quindlen as a result. Represents 401(k) savings plan matching contributions, which are available to all of our regular employees who are on our U.S. payroll. Represents imputed income to Mr. Labrousse from an insurance policy held to fund, in part, the Logitech...

  • Page 111
    ... named executive officers during fiscal year 2010. For more information, please refer to "Compensation Disclosure and Analysis." All Other Stock Awards: Estimated Future Payouts Number Number of Under Equity Incentive of Shares Securities Plan Awards(3) of Stock Underlying Threshold Target Maximum...

  • Page 112
    ...the Board of Directors. The compensation earned by the named executive officers in fiscal year 2010 was not the result of any terms of their employment agreements or offer letters, except that Werner Heid received an additional option grant for 17,500 options for Logitech shares on September 1, 2009...

  • Page 113
    ... 31, 2010, the last day of Logitech's fiscal year 2010, are presented in the footnotes to the table based on a Swiss Franc to U.S. Dollar exchange rate on March 31, 2010 of 1.0642 to 1. Option Awards Stock Awards Number of Number of Number of Shares or Securities Securities Units of Market Value of...

  • Page 114
    ... of the grant date. The market value of unvested RSUs and PRSUs is calculated by multiplying the number of unvested RSUs and PRSUs held by the applicable named executive officer by the closing price of our shares on March 31, 2010, which was $16.34. PRSUs are shown at their target amount. The actual...

  • Page 115
    ...Name (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. Pension Benefits for Fiscal Year 2010 None of our executive officers are...

  • Page 116
    ...not preferential or above market. (2) NARRATIVE DISCLOSURE TO NON-QUALIFIED DEFERRED COMPENSATION TABLE The Logitech Inc. Deferred Compensation Plan effective January 1, 2009 allows the participating executive officers and other eligible employees to defer up to 80% of their annual base salary and...

  • Page 117
    ... 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 named executive officers has executed a change of control severance agreement with Logitech, with the exception of Tom...

  • Page 118
    ... a change of control he is entitled to: • • an amount equal to his current annual base salary; plus his current annual targeted bonus amount. "Cause" in Mr. Quindlen's employment agreement is defined as (i) theft, dishonesty, misconduct or falsification of any employment or Company records...

  • Page 119
    ... for determining the value of accelerated equity in the tables below was the closing price of Logitech's shares on Nasdaq on March 31, 2010, the last business day of the fiscal year, of $16.34. For those unvested options held by Mr. De Luca that have exercise prices denominated in Swiss Francs, the...

  • Page 120
    ... all executive officers other than Gerald Quindlen there is a "280G cut-back" so that, in effect, the maximum value of the cash payments plus accelerated equity awards to which an executive is entitled under the agreement is just under 3 times the average annual taxable compensation paid by Logitech...

  • Page 121
    ... 2006 Stock Incentive Plan. Annual service is measured between the dates of the Company's Annual General Meetings. The following table summarizes the total compensation earned or paid by Logitech during fiscal year 2010 to continuing members of the Board of Directors who were not executive officers...

  • Page 122
    ..., 2010 by Guerrino De Luca and Gerald Quindlen, the only members of the Board of Directors that are Logitech executive officers as of such date, is presented in the Outstanding Equity Awards at Fiscal Year-End table. Certain of the options as granted have exercise prices denominated in Swiss Francs...

  • Page 123
    .... The market value of unvested RSUs is calculated by multiplying the number of unvested RSUs held by the applicable director by the closing price of our shares on March 31, 2010, which was $16.34. Options granted to Mr. Chang before 2006 were in respect of his role as a Logitech executive officer at...

  • Page 124
    ... 1996 Plan. No further awards will be granted under the 1996 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...

  • Page 125
    MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ANNUAl REPORT

  • Page 126
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  • Page 127
    ..., headsets, video communications services, and digital video security systems for a home or small business. Our LifeSize division offers scalable high-definition ("HD") video communication products, support and services. Our digital music products include speakers, earphones, and custom in-ear...

  • Page 128
    ... drive future sales growth. We are committed to identifying and meeting current and future customer trends with new and improved product technologies, as well as leveraging the value of the Logitech brand from a competitive, channel partner and consumer experience perspective. We believe innovation...

  • Page 129
    ...substantial decline in OEM sales was related to console microphones, which sold well in the prior fiscal year, but have reached the latter stages of the typical gaming sales cycle in fiscal year 2010. The sales of LifeSize Communications, Inc., which we acquired on December 11, 2009, are included in...

  • Page 130
    ... but typically represent a majority of our retail sales. The acquisition of LifeSize in December 2009 expands our video communication product portfolio beyond webcams and video calling into the enterprise meeting room. We believe our video conferencing segment offers significant growth opportunities...

  • Page 131
    ... return a limited percentage of the previous quarter's purchases. Estimates of expected future product returns are recognized at the time of sale based on analyses of historical return trends by customer and by product, inventories owned by and located at distributors and retailers, current customer...

  • Page 132
    ... programs include volume and consumer rebates. We offer volume rebates to our distribution and retail customers related to purchase volumes or sales of specific products by distributors to specified retailers. Reserves for volume rebates are recognized as a reduction of the sale price at the time...

  • Page 133
    ...fair value of time-based RSUs is calculated based on the share market price on the date of grant. For stock options and restricted stock assumed by Logitech when LifeSize was acquired, the grant date used to estimate fair value is deemed to be December 11, 2009, the date of acquisition. Compensation...

  • Page 134
    ... strategy for the Company's overall business; • significant negative industry or economic trends; • significant decline in the Company's stock price for a sustained period; and • market capitalization relative to net book value. Recoverability of investments, property, plant and equipment...

  • Page 135
    ...fiscal year 2011, when such activity occurs. In April 2010, the FASB published ASU 2010-13, Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. The ASU provides that a share-based payment award with an...

  • Page 136
    ... with the prior fiscal years. Foreign currency exchange rates did not significantly affect the OEM sales decline. LifeSize net sales represent sales of video conferencing units and related software and services for the period from December 11, 2009, the date of acquisition, to the end of the fiscal...

  • Page 137
    ...supply levels. Foreign currency exchange rates had no significant effect on retail sales in the Americas region in either fiscal year 2010 or fiscal year 2009. Retail sales in the Asia Pacific region declined in all product families during fiscal year 2010 compared with 2009, as our channel partners...

  • Page 138
    ... and other pointing devices. Keyboards and desktops (mouse and keyboard combined) include cordless and corded keyboards and desktops. Audio includes speakers and headset products for the PC, the home, and mobile entertainment platforms, and wireless music systems. Our video product family is...

  • Page 139
    ... year 2010 by a planned future product transition. Strong sellers in our webcam family included the valuepriced C250 and C200 webcams in fiscal year 2010, and our Communicate MP and QuickCam Connect webcams in fiscal year 2009. Retail Gaming Retail unit sales of our gaming peripherals decreased...

  • Page 140
    ...consists of personnel and related overhead costs, corporate and product marketing, promotions, advertising, trade shows, customer and technical support and facilities costs. The decline in marketing and selling expenses in fiscal year 2010 compared with fiscal year 2009 resulted primarily from lower...

  • Page 141
    ...-year exchange rate changes on translation of foreign currency marketing and selling expenses to our U.S. dollar financial statements was not material in fiscal year 2009 compared with fiscal year 2008. Research and Development Research and development expense consists of personnel and related...

  • Page 142
    ... spending to support the return to revenue growth. The following table summarizes restructuring-related activities during fiscal years 2010 and 2009 (in thousands). No restructuring costs were incurred in fiscal year 2008. Termination Benefits Asset Impairments Contract Termination Costs Total...

  • Page 143
    ... or loss represents changes in the cash surrender value of Company-owned life insurance contracts related to a management deferred compensation plan offered by one of our subsidiaries. Other income in fiscal year 2008 also includes a gain of $1.0 million on the sale of our ioPen retail product line...

  • Page 144
    ....2 million, primarily for the repurchase of shares under our share buyback programs and the repayment of short and long-term debt assumed in the LifeSize acquisition, partially offset by proceeds from employee stock purchases and the exercise of stock options. At March 31, 2010, we had cash and cash...

  • Page 145
    ...terms require customers to pay for product sales generally within 30 to 60 days; however, terms may vary by customer type, by country and by selling season. Extended payment terms are sometimes offered to a limited number of customers during the second and third fiscal quarters. The Company does not...

  • Page 146
    ... 2009 2008 Acquisitions and investments, net of cash acquired...Purchases of property, plant and equipment ...Purchases of investment securities ...Sales of investment securities...Sale of investment ...Proceeds from cash surrender of life insurance policies ...Premiums paid on cash surrender value...

  • Page 147
    ...buyback program, which was completed in February 2008, each authorized the purchase of up to $250.0 million in Logitech shares. In fiscal years 2010, 2009 and 2008, we received proceeds from the sale of 3.1 million, 3.1 million and 4.7 million shares upon exercise of employee stock options and share...

  • Page 148
    ...2009, we acquired LifeSize Communications, Inc., a privately held company specializing in high definition video communication products and services. In connection with the merger, Logitech agreed to establish a cash and stock option retention and incentive plan for certain LifeSize employees, linked...

  • Page 149
    ... in the future to support product development activities and ongoing and expanded operations. At March 31, 2010, fixed purchase commitments for capital expenditures amounted to $12.9 million, and primarily relate to commitments for manufacturing equipment, tooling, computer software and computer...

  • Page 150
    ... million was outstanding. These letters of credit relate primarily to equipment purchases by a subsidiary in China, and expire between April and June 2010. ADDITIONAL FINANCIAL DISCLOSURES MARKETING, SALES AND DISTRIBUTION Principal Markets Net sales to unaffiliated customers by geographic region...

  • Page 151
    ... Channel Distribution in the United Arab Emirates. ANNUAl REPORT Logitech's products can be purchased in most major retail chains, where we typically have access to significant shelf space. These chains in the U.S. include Best Buy, Office Depot, Staples, Target and Wal-Mart, and in Europe include...

  • Page 152
    ... the closing price of our shares was CHF 17.83 ($16.45 based on exchange rates on such date) per share on the SIX Swiss Exchange and $16.44 per share as reported by the Nasdaq Stock Market. SIX Swiss Exchange The following table sets forth certain historical share price information for the Company...

  • Page 153
    ... table sets forth certain historical share price information for the Company's shares traded on the Nasdaq Global Select Market. Price per share on Nasdaq High $ Low $ Quarterly Highs and Lows: Fiscal year 2009: First quarter ...Second quarter ...Third quarter ...Fourth quarter ...Fiscal year 2010...

  • Page 154
    ...sets forth certain information related to purchases made by Logitech of its equity securities (in thousands, except per share amounts): Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program Period Total Number of Shares Purchased Average Price Paid Per Share in USD in CHF...

  • Page 155
    ...and calculates the annual return through March 31, 2010. The stock price performance on the following graph is not necessarily indicative of future stock price performance. Comparison of 5 year cumulative total return $200 $150 $100 $50 $2005 Logitech 2006 2007 2008 2009 2010 Nasdaq Composite...

  • Page 156
    ... in the future. Year ended March 31, 2010 2009 2008 2007 2006(1) (In thousands, except per share amounts) Consolidated statements of operations and cash flow data: Net sales ...Gross profit ...Operating expenses: Marketing and selling ...Research and development ...General and administrative...

  • Page 157
    ... Company's research and development activities, patents and licenses, please refer to Item 1 "Business". QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market Risk Market risk represents the potential for loss due to adverse changes in the fair value of financial instruments. As a global...

  • Page 158
    ... interest rates on cash equivalents. The Company enters into foreign exchange forward contracts to hedge against exposure to changes in foreign currency exchange rates related to its subsidiaries' forecasted inventory purchases. The primary risk managed by using derivative instruments is the foreign...

  • Page 159
    ... changes in fair value. The notional amounts of foreign exchange forward contracts outstanding at March 31, 2010 relating to foreign currency receivables or payables were $15.1 million. Open forward contracts as of March 31, 2010 consisted of contracts in British pounds to purchase euros at a future...

  • Page 160
    ... data for fiscal years 2010 and 2009 (in thousands except per share amounts): Year ended March 31, 2010 Second Third Fourth Year ended March 31, 2009 Second Third Fourth First First Net sales ...Gross profit ...Operating expenses: Marketing and selling ...Research and development...General and...

  • Page 161
    REPORT ON CORPORATE GOVERNANCE 2010 149 ANNUAl REPORT

  • Page 162
    ... company with its registered office in Apples, Switzerland, which conducts its business through subsidiaries in North America, Europe and Asia Pacific. Shares of Logitech International S.A. are listed on both the Nasdaq Global Select Market (Ticker: LOGI, CUSIP H50430232), and the SIX Swiss Exchange...

  • Page 163
    ... The worldwide operations group also supports the business units and marketing and sales organizations through management of distribution centers and of the product supply chain, and the provision of technical support, customer relations and other services. Our LifeSize video communications products...

  • Page 164
    ... to inform the public in Switzerland. Logitech has not been notified of any ownership of options or other derivative securities of the Company, whether privately or publicly traded, by any significant shareholder of the Company that is not a member of the Board of Directors or an executive officer...

  • Page 165
    ... the market price of the shares preceding the determination of the final conditions for the bonds. 2.3 Changes in Shareholders' Equity As of March 31, 2010, 2009, 2008 and 2007, balances in shareholders' equity of Logitech International S.A., based on the parent company's Swiss Statutory Financial...

  • Page 166
    ... Financial Disclosures - Market for Logitech's Shares, Related Shareholder Matters, and Share Repurchases" in our Annual Report. 2.4 Share Categories Registered Shares. Logitech International S.A. has only one category of shares - registered shares with a par value of CHF 0.25 per share. Each of...

  • Page 167
    ...2010 Annual General Meeting, available at http://ir.logitech.com, under the heading "Corporate Governance and Board of Directors Matters." 4. Senior Management 4.1 Members of Senior Management The current members of our senior management, referred to by Logitech as our "executive officers," are set...

  • Page 168
    ... Financial Management Program. Werner Heid joined Logitech as Senior Vice President, Worldwide Sales & Marketing, in February 2009. Prior to joining Logitech, Mr. Heid was a consultative CEO to private equity firms from 2006 to 2009. Previously, he served as the president and chief executive officer...

  • Page 169
    ... Compensation, Shareholdings and Loans ANNUAl REPORT Please refer to Logitech's Compensation Report in our Invitation and Proxy Statement for our 2010 Annual General Meeting, available at http://ir.logitech.com, for information on Logitech's compensation of its Board members and executive officers...

  • Page 170
    ... ownership of members of the Board of Directors and of Logitech executive officers as of March 31, 2010, among other disclosures, please refer to Note 19 - Other Disclosures Required by Swiss Law - included in the Consolidated Financial Statements included in the 2010 Annual Report. 6. Shareholders...

  • Page 171
    ... the day the share register is closed have the right to vote at the meeting. 7. Mandatory Offer and Change of Control Provisions 7.1 Mandatory Offer Under Swiss law any shareholder who acquires more than 33 1/3% of the voting rights of a Swiss company whose shares are listed in whole or in part in...

  • Page 172
    ... analysts to ask questions of the Chief Executive Officer and Chief Financial Officer. Logitech also holds periodic analyst days where senior management present reviews of Logitech's business. These events are webcast and remain available on Logitech's Investor Relations website for a period of time...

  • Page 173
    ....com/alerts.cfm. As a Swiss company traded on the SIX Swiss Exchange, and as a company subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended, we file reports on transactions in Logitech securities by members of Logitech's Board of Directors and executive officers...

  • Page 174
    ...Logitech Europe S.A...SAS Logitech France ...Logitech GmbH ...Logitech Ireland Services Limited ...Logitech Italia SRL ...Logitech Nordic AB ...Logitech Benelux B.V...Logitech Poland Spolka z.o.o...Logitech S.A...Logitech Austria GmbH ...Logitech Middle East FZ-LLC ...Logitech (Streaming Media) SA...

  • Page 175
    ... C.V...Ultimate Ears LLC ...Ultimate Ears Incorporated ...UE Acquisition Inc...UE Consumer, LLC ...SightSpeed, Inc...LifeSize Communications, Inc ...ASIA PACIFIC LogiCool Co., Ltd...Logitech Electronic (India) Private Limited ...Logitech Far East, Ltd...Logitech Hong Kong, Limited ...Logitech Korea...

  • Page 176
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  • Page 177
    ... 31, 2010 and 2009 ...Consolidated Statements of Cash Flows - Years Ended March 31, 2010, 2009 and 2008 ...Consolidated Statements of Changes in Shareholders' Equity - Years Ended March 31, 2010, 2009 and 2008 ...Notes to Consolidated Financial Statements ... 168 169 170 171 172 165 ANNUAl REPORT

  • Page 178
    PricewaterhouseCoopers SA Avenue C.-F. Ramuz 45 Case postale 1172 1001 Lausanne Phone +41 58 792 81 00 Fax +41 58 792 81 10 www.pwc.ch Report of the statutory auditor to the general meeting of Logitech International S.A. Apples Report of the statutory auditor on the consolidated financial ...

  • Page 179
    ... 27, 2010 Enclosures: - Luc Schulthess Audit expert Consolidated financial statements (balance sheet, income statement, statement of cash flows, statement of changes in shareholders' equity and notes) for the year ended March 31, 2010, listed in the index appearing on page 165. 167 ANNUAl REPORT

  • Page 180
    LOGITECH INTERNATIONAL S.A. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) 2010 Year ended March 31, 2009 2008 Net sales ...Cost of goods sold ...Gross profit ...Operating expenses: Marketing and selling ...Research and development...General and administrative ......

  • Page 181
    ... (In thousands, except share and per share amounts) March 31, 2010 2009 ASSETS Current assets: Cash and cash equivalents ...Short-term investments ...Accounts receivable ...Inventories ...Other current assets ...Total current assets...Property, plant and equipment ...Goodwill ...Other intangible...

  • Page 182
    ... related to options, restricted stock units ("RSUs") and stock purchase rights ...Write-down of investments ...Gain on sale of investments ...Excess tax benefits from share-based compensation ...Loss (gain) on cash surrender value of life insurance policies ...In-process research and development...

  • Page 183
    ...benefit from exercise of stock options ...Purchase of treasury shares ...Sale of shares upon exercise of options and purchase rights ...Share-based compensation expense ...March 31, 2010... notes are an integral part of these consolidated financial statements. 171 ANNUAl REPORT - - - - 191...

  • Page 184
    ..., headsets, video communications services, and digital video security systems for a home or small business. Our LifeSize division offers scalable high-definition video communications products, support and services. Our digital music products include speakers, earphones, and custom in-ear monitors...

  • Page 185
    ...product. Return rights vary by customer, and range from just the right to return defective product to stock rotation rights to return a limited percentage of the previous quarter's purchases. Estimates of expected future product returns are recognized at the time of sale based on 173 ANNUAl REPORT

  • Page 186
    ... customer marketing and sales incentive programs. We enter into customer marketing programs with many of our distribution and retail customers allowing customers to receive a credit equal to a set percentage of their purchases of the Company's products, or a fixed dollar credit for various marketing...

  • Page 187
    ...customers represented 18% and 10% of total accounts receivable. Typical payment terms require customers to pay for product sales generally within 30 to 60 days; however terms may vary by customer type, by country and by selling season. Extended payment terms are sometimes offered to a limited number...

  • Page 188
    ... securities are classified as available-for-sale and are reported at estimated fair value, which is determined by estimating values of the underlying collateral using analogous published indices or by estimating future cash flows, either through discounted cash flow or option pricing methods...

  • Page 189
    ...fair value of time-based RSUs is calculated based on the share market price on the date of grant. For stock options and restricted stock assumed by Logitech when LifeSize was acquired, the grant date used to estimate fair value is deemed to be December 11, 2009, the date of acquisition. Compensation...

  • Page 190
    ...one to six months. The Company may also enter into foreign exchange swap contracts to extend the terms of its foreign exchange forward contracts. Gains and losses in the fair value of the effective portion of our forward contracts related to forecasted inventory purchases are deferred as a component...

  • Page 191
    .... The following table presents the effect of in-the-money share-based awards treated as potential shares in computing diluted earnings per share (in thousands except per share amounts): Year Ended March 31 2009 2008 ANNUAl REPORT 2010 In-the-money employee share-based awards treated as potential...

  • Page 192
    ... dilution effect of share-based awards granted, assumed and exercised (in thousands): Year ended March 31 2009 2008 2010 Basic weighted average shares outstanding as of March 31 ...Stock options and RSUs granted ...Stock options and restricted stock assumed in LifeSize acquisition ...Stock options...

  • Page 193
    ... no impact on previously presented financial information. LifeSize On December 11, 2009, pursuant to a merger agreement signed November 10, 2009, Logitech acquired LifeSize Communications, Inc., an Austin, Texas-based privately-held company specializing in high definition video 181 ANNUAl REPORT

  • Page 194
    ...purchase LifeSize stock. As part of the acquisition, Logitech assumed all outstanding unvested LifeSize stock options and unvested restricted stock held by continuing LifeSize employees at December 11, 2009. The assumed options are exercisable for a total of approximately 1.0 million Logitech shares...

  • Page 195
    ...49 $ 0.48 183 ANNUAl REPORT On November 27, 2009, Logitech acquired certain assets from TV Compass, Inc., a Chicago, Illinois-based company providing video software and services for the Web and mobile devices. The acquisition has been treated as an acquisition of a business and has been accounted...

  • Page 196
    ...the Company acquired SightSpeed Inc., a privately held company providing high-quality Internet video communications services. The acquisition of SightSpeed provided Logitech with video calling technology and a software and services development team that is focused on future video calling initiatives...

  • Page 197
    Ultimate Ears In August 2008, the Company acquired the Ultimate Ears companies, a privately held group of companies offering a range of earphones for portable-music enthusiasts as well as a line of custom-fit in-ear monitors for music professionals. The acquisition is part of the Company's strategy ...

  • Page 198
    WiLife In November 2007, the Company acquired WiLife, Inc., a privately held company providing PC-based video cameras for self-monitoring a home or a small business. The acquisition is part of the Company's strategy to expand its presence in digital home products. Total consideration paid, net of ...

  • Page 199
    ... sheet amounts (in thousands): March 31, 2010 2009 Accounts receivable: Accounts receivable ...Allowance for doubtful accounts...Allowance for returns ...Cooperative marketing arrangements ...Customer incentive programs ...Pricing programs ...Inventories: Raw materials...Work-in-process ...Finished...

  • Page 200
    ... acquisitions of LifeSize and TV Compass. Logitech will maintain discrete financial information for LifeSize and accordingly, the acquired goodwill related to the LifeSize acquisition will be separately evaluated for impairment. TV Compass's business was fully integrated into the Company's existing...

  • Page 201
    ... flexibility for future expansion, investments or acquisitions. Dividends ANNUAl REPORT Pursuant to Swiss corporate law, Logitech International S.A. may only pay dividends in Swiss francs. The payment of dividends is limited to certain amounts of unappropriated retained earnings (CHF 349.3 million...

  • Page 202
    ...outstanding aggregate par value per share capital. These legal reserves represent an appropriation of retained earnings that are not available for distribution and totaled $9.0 million at March 31, 2010 (based on exchange rates at March 31, 2010). Additionally, under Swiss corporate law, the Company...

  • Page 203
    ... 31, 2010, the Company offers the 2006 Employee Share Purchase Plan (Non-U.S.) ("2006 ESPP"), the 1996 Employee Share Purchase Plan (U.S.) ("1996 ESPP"), the 2006 Stock Incentive Plan, and the LifeSize Communications, Inc. 2003 Stock Option Plan. Share-based awards granted to employees and directors...

  • Page 204
    ... assumed the LifeSize Communications, Inc. 2003 Stock Option Plan as part of its acquisition of LifeSize in December 2009. Under this plan, the Company may issue options to purchase Logitech shares to employees of LifeSize. As of March 31, 2010, a total of 215,813 shares were available for issuance...

  • Page 205
    ... fair value of employee stock options granted and shares purchased under the Company's employee purchase plans was estimated using the Black-Scholes-Merton option-pricing valuation model applying the following assumptions and values: 2010 2009 Purchase Plans Year ended March 31, 2008 2010 2009 Stock...

  • Page 206
    ... granted to employees vest in four equal annual installments on the grant date anniversary. The time-based RSUs granted to non-executive board members vest in one annual installment on the grant date anniversary. The Company estimates the fair value of these RSUs based on the share market price on...

  • Page 207
    ... is to fund amounts sufficient to meet the requirements set forth in the applicable employee benefit and tax regulations. The Company recognizes the underfunded or overfunded status of defined benefit pension plans and nonretirement post-employment benefit obligations as an asset or liability...

  • Page 208
    ....0 million. The following table presents the changes in the fair value of defined benefit pension plan assets for fiscal years 2010 and 2009 (in thousands): March 31, 2010 2009 Fair value of plan assets, beginning of year ...Actual return on plan assets ...Employer contributions ...Plan participant...

  • Page 209
    ... agency less benefit obligations. The funded status of the non-retirement post-employment benefits is the fair value of the benefit obligations. Projected benefit obligations exceeded plan assets for all plans by $22.1 million and $24.7 million as of March 31, 2010 and 2009. Amounts recognized...

  • Page 210
    ... 16,098 $32,264 The Company expects to contribute approximately $5.9 million to its defined benefit pension plans during fiscal year 2011. Deferred Compensation Plan One of the Company's subsidiaries offers a management deferred compensation plan which permits eligible employees to make 100%-vested...

  • Page 211
    ... 2009 2008 2010 Total provision for income taxes ... $18,666 $ 19,761 $ 31,788 199 ANNUAl REPORT Expected tax provision at statutory income tax rates ...Income taxes at different rates ...Research and development tax credits ...Unrealized investment income ...Stock compensation ...Transaction...

  • Page 212
    ... tax assets. This would result in an increase in the Company's effective tax rate. Deferred tax assets relating to tax benefits of employee stock option grants and RSUs have been reduced to reflect exercises in fiscal years 2010 and 2009. Some exercises resulted in tax deductions in excess of...

  • Page 213
    ... $113,628 ANNUAl REPORT The Company continues to recognize interest and penalties related to unrecognized tax positions in income tax expense. The Company recognized $1.9 million, $1.8 million and $1.6 million in interest and penalties in income tax expense during fiscal years 2010, 2009 and 2008...

  • Page 214
    ... of foreign exchange forward contracts outstanding at March 31, 2010 and 2009 relating to foreign currency receivables or payables were $15.1 million and $8.0 million. Open forward contracts as of March 31, 2010 and 2009 consisted of contracts in British pounds to purchase euros at a future date at...

  • Page 215
    The following table presents the fair values of the Company's derivative instruments and their locations on the Balance Sheet as of March 31, 2010 and 2009 (in thousands): Asset Derivatives Fair Value Location 2010 2009 Liability Derivatives Fair Value Location 2010 2009 Derivatives designated as ...

  • Page 216
    ... related to commitments for manufacturing equipment, tooling, computer software and computer hardware. Also, the Company has commitments for inventory purchases made in the normal course of business to original design manufacturers, contract manufacturers and other suppliers. At March 31, 2010...

  • Page 217
    ... to equipment purchases by a subsidiary in China, and expire between April and June 2010. At March 31, 2009, The Company had $0.4 million of letters of credit in place, with no balance outstanding. In November 2007, the Company acquired WiLife, Inc., a privately held company offering PC-based video...

  • Page 218
    Net sales by product family, excluding intercompany transactions, were as follows (in thousands): Year ended March 31, 2009 2010 2008 Retail - Pointing Devices ...Retail - Keyboards & Desktops ...Retail - Audio ...Retail - Video ...Retail - Gaming...Retail - Remotes ...OEM...Personal peripherals...

  • Page 219
    ...and Security Ownership of Board Members and Executive Officers In accordance with the Swiss Code of Obligations, the compensation and security ownership of members of the Board of Directors of Logitech International S.A. and of Logitech executive officers is presented below. The following table sets...

  • Page 220
    ...members of the Board of Directors includes fees to attend meetings, annual retainers and travel fees. Bonus represents a hire-on bonus paid to an executive officer during fiscal year 2008 and, in 2010, a bonus granted to an executive officer to enable him to purchase a value of Logitech shares equal...

  • Page 221
    ...the grant date upon meeting certain minimum share price performance criteria measured against market conditions. RSUs granted to executive officers are time-based restricted stock units that vest in equal annual installments from the date of grant. RSUs granted to non-executive Directors vest in one...

  • Page 222
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  • Page 223
    LOGITECH INTERNATIONAL S.A., APPLES SWISS STATUTORY FINANCIAL STATEMENTS 211 ANNUAl REPORT

  • Page 224
    LOGITECH INTERNATIONAL S.A., APPLES SWISS STATUTORY FINANCIAL STATEMENTS TABLE OF CONTENTS Page Swiss Statutory Balance Sheets (unconsolidated) ...Swiss Statutory Statements of Income (unconsolidated) ...Notes to Swiss Statutory Financial Statements ...Proposal of the Board of Directors for ...

  • Page 225
    ...accompanying notes are an integral part of these financial statements. 213 ANNUAl REPORT LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Payables to group companies...CHF 33,249 Accruals and other liabilities ...2,490 2,829 Deferred unrealized exchange gains ...Total current liabilities...

  • Page 226
    LOGITECH INTERNATIONAL S.A., APPLES SWISS STATUTORY STATEMENTS OF INCOME (unconsolidated) (In thousands of Swiss francs) Year ended March 31, 2010 2009 Dividend income ...Royalty fees ...Interest income from third parties ...Interest income from subsidiaries ...Other income ... CHF 11,500 42,914 ...

  • Page 227
    ... Currency Share capital Purpose Logitech Europe S.A... Switzerland 100 CHF Logitech Inc ... U.S.A. 100 USD Logitech (Intrigue) Inc...Logitech Technology (Suzhou) Co., Ltd ... Canada People's Republic of China 100 100 CAD USD 100,000 Administration, research, development, sales and...

  • Page 228
    ... Swiss Code of Obligations, management has opted to record the treasury shares at a value below the lower of cost or market value. The disposal of treasury shares during the period was to the Holding Company's directors and employees under the Holding Company's share option and share purchase plans...

  • Page 229
    ... in Switzerland. Logitech has not been notified of any ownership of options or other derivative securities of the Company, whether privately or publicly traded, by any significant shareholder of the Company that is not a member of the Board of Directors or an executive officer. 217 ANNUAl REPORT

  • Page 230
    ... Note 8 - Compensation and Security Ownership of Board Members and Executive Officers: In accordance with the Swiss Code of Obligations, the compensation and security ownership of members of the Board of Directors of Logitech International S.A. and of Logitech executive officers is presented in the...

  • Page 231
    ... the Board of Directors for appropriation of retained earnings was as follows during fiscal years 2010 and 2009 (in thousands): Year ended March 31, 2010 2009 To be carried forward ... Proposal of the Board of Directors CHF 349,312 Resolution of the General Assembly CHF 354,924 219 ANNUAl REPORT

  • Page 232
    PricewaterhouseCoopers SA avenue C.-F.-Ramuz 45 Case postale 1001 Lausanne Switzerland Phone +41 58 792 81 00 Fax +41 58 792 81 10 www.pwc.ch Report of the Statutory Auditor to the General Meeting of Logitech International S.A., Apples Report of the statutory auditor on the financial statements As ...

  • Page 233
    ... appropriation of available earnings complies with Swiss law and the company's articles of incorporation. We recommend that the financial statements submitted to you be approved. PricewaterhouseCoopers SA Travis Randolph Audit expert Auditor in charge Lausanne, Switzerland May 27, 2010 Enclosures...

  • Page 234
    ..., including from companies with significantly greater resources, sales and marketing organizations, installed base and name recognition; as well as those additional factors set forth in Logitech's periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10...

  • Page 235
    ...ï"ï'ï- ï, ï'ï'ï"ï'ï'ï'ïï ïŸï•ï¡ï'ï,ï'ï' ï-ï›ï•ï™ïï€¢ï€»ïïšï ï› Chief Executive Officer of LifeSize Communications, Senior Vice President of Logitech...

  • Page 236
    SIX: LOGN-VX NASDAQ: LOGI For more information about Logitech and its products, please visit our web site: www.logitech.com.