Logitech 2011 Annual Report Download - page 74

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Background on Share Purchase Plans at Logitech
The 1996 Plan was adopted by the Board of Directors on April 24, 1996 as a worldwide Employee Share
Purchase Plan. The 1996 Plan was split into one plan for employees based in the United States and another plan for
employees based outside of the United States by action of the Board of Directors on June 15, 2006.
Under the ESPPs employees may purchase shares twice a year at the end of each six-month offering period.
The purchase price is 85% of the market value of Logitech shares on the first day of the six-month offering period
or 85% of the market value of the shares on the last day of the offering period if that value is lower. Employees are
able to contribute up to 10% of their annual salary, up to a $25,000 limit calculated in accordance with U.S. tax
rules (taking into account the application of the $25,000 limit for each calendar year a purchase right is at any time
outstanding). The majority of companies with which we compete for talent in the United States offer share purchase
programs to their employees. Outside of the United States we believe our share purchase plan helps set us apart
from other companies with which we compete for talent, because we believe that share purchase plans similar to
ours are not as common as they are in the United States.
In fiscal year 2011, 1,128,706 shares (1,073,833 in fiscal year 2010 and 1,094,898 in fiscal year 2009) were
issued from the ESPPs, resulting in an annual dilution cost of 0.6% (0.6% in fiscal year 2010 and 0.6% in fiscal year
2009). Annual dilution equals shares issued divided by the average shares outstanding in the applicable fiscal year.
We expect the approval of an additional 5,000,000 shares under the ESPPs, when combined with the remaining
shares under the ESPPs as of September 2011, to result in an approximate 3.3% dilution over the life of the plans.
Key Terms
Only the number of shares available for issuance under the ESPPs will change if this proposal is approved by
shareholders. All other terms of the ESPPs will remain unchanged. For convenience, the key terms of the ESPPs
are summarized below.
Eligibility
Employees of certain of Logitech’s subsidiaries are eligible to participate in the ESPPs. The subsidiaries
whose employees are entitled to participate may be changed from time to time by Logitech. Employees of Logitech
who regularly work 20 hours or more per week and five months or more per year, subject to applicable law, are
eligible to participate in the ESPPs. Logitech may establish administrative rules requiring that employees deliver
subscriptions for shares some minimum period (currently, 7 days) before an enrollment period begins. As of
June 24, 2011, approximately 2,870 employees were eligible to participate in the ESPPs.
Employees are not eligible to participate in the ESPPs if they would immediately after such purchase own
(directly or indirectly) shares, which when added to shares that the employees may purchase under outstanding
options, amounts to 5% or more of the total combined voting power of shares of Logitech.
Enrollment and Participation
An eligible employee who wants to enroll and participate in the ESPPs must file a completed subscription
agreement (which includes a payroll deduction agreement) with Logitech during an enrollment period. The
subscription agreement authorizes Logitech to withhold automatically a percentage of the participant’s regular
earnings through regular payroll deductions, and the amount of the deduction is credited to an ESPP account in
the participant’s name on Logitech’s books during the offering period. The minimum deduction allowed is 1% of
compensation, and the maximum deduction is 10% of regular earnings. No interest is paid or credited with respect
to such payroll deductions.
Participants may decrease, but may not increase, their rate of contribution during an offering period by filing
a new subscription agreement. If a participant has not followed these procedures to change the rate of contribution,
the rate of contribution continues at the originally elected rate throughout the offering period and future offering
periods. Participants may change their rate of contribution for the next offering period by filing an amended
subscription agreement during the enrollment periods.