Logitech 2012 Annual Report Download - page 88

The Board of Directors now proposes that the shareholders approve the cancellation of 18.5 million shares
repurchased under the amended September 2008 program and that the share capital set forth in Article 3 of the
Company’s Articles of Incorporation be reduced accordingly.
In their special audit report prepared for the Annual General Meeting the auditors PricewaterhouseCoopers
SA confirmed that the claims of the Company’s creditors would be covered despite the proposed share
capital reduction.
The capital reduction by cancellation of shares can only be accomplished after publication of three notices to
creditors in accordance with Article 733 of the Swiss Code of Obligations. If this proposal is approved, such notices
to creditors will be published after the Annual General Meeting in the Swiss Official Gazette of Commerce. After
the two-month waiting period required by law has lapsed, the capital reduction will be effected and entered in the
Commercial Register.
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” approval of the cancellation of 18.5 million shares, the
reduction of share capital of the Company by CHF 4,625,000, and the amendment of the Articles of Incorporation
of the Company accordingly.
Proposal 5
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 nine million (9,000,000) additional shares
for issuance under the Plan, to improve the Company’s corporate governance practices, and to implement other
best practices.
Explanation
The Board of Directors believes a key component of the Company’s 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 Company’s success.
The 2006 Stock Incentive Plan is the Company’s 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 30, 2012 we have approximately 4.8 million shares remaining for issuance
under the Plan. We estimate that this remaining pool will be exhausted before the 2014 Annual General Meeting
despite the fact that, to protect shareholder interests, 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 2016, 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:
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