Logitech 2013 Annual Report Download - page 69

OTHER COMPENSATION POLICIES
Derivatives
We do not permit certain persons designated by the Company as insiders, including officers and directors, to
trade in puts, calls, warrants or other derivative Logitech securities traded on an exchange or in any other organized
securities market.
Recovery of compensation for restatements and misconduct
In June 2010, the Compensation Committee adopted a policy regarding the recovery of compensation paid
to an executive officer or the principal accounting officer of the Company (a “clawback”). Under the terms of the
policy we may recover bonus amounts, equity awards or other incentive compensation awarded or paid within the
prior three years to a covered officer if the Compensation Committee determines the compensation was based
on any performance goals that were met or exceeded as a result, in whole or in part, of the officer’s fraud or
misconduct, or the officer knew at the time of the existence of fraud or misconduct that resulted in performance
goals being met or exceeded, and a lower amount would otherwise have been awarded or paid to the officer. In
addition, under the policy Logitech may recover gains realized on the exercise of stock options or on the sale of
vested shares by an executive officer or the principal accounting officer if, within three years after the date of the
gains or sales, Logitech discloses the need for a significant financial restatement, other than a financial restatement
solely because of revisions to US GAAP, and the Compensation Committee determines that the officer’s fraud or
misconduct caused or partially caused the need for the restatement, or the covered officer knew at the time of the
existence of fraud or misconduct that resulted in the need for such restatement.
In addition, our 2006 Stock Incentive Plan and our Management Performance Bonus Plan provide that awards
under the plans are suspended or forfeited if the plan participant, whether or not an executive officer:
• hascommittedanactofembezzlement,fraudorbreachoffiduciaryduty;
• makesanunauthorizeddisclosureofanyLogitechtradesecretorconfidentialinformation;or
• induces any customer to breach a contract with Logitech.
Any decision to suspend or cause a forfeiture of any award held by an executive officer under the 2006 Stock
Incentive Plan or the Management Performance Bonus Plan is subject to the approval of the Board of Directors.
The Compensation Committee will amend the policy, as necessary, to comply with the final SEC rules regarding
the recoupment policies of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Additional tax and accounting considerations
U.S. Tax Code Section 162(m)
We are limited by Section 162(m) of the U.S. Tax Code, or Section 162(m), to a deduction for U.S. federal
income tax purposes of up to $1 million of compensation paid to our CEO and any of our three most highly
compensated executive officers, other than our Chief Financial Officer, in a taxable year. Compensation above
$1 million may be deducted if, by meeting certain technical requirements, it can be classified as “performance-
based compensation.” The Compensation Committee considers the implications of Section 162(m) 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, and amended
by our shareholders in 2012, permits certain grants of awards under that plan to qualify as “performance-based
compensation.” Bonuses paid to executives under the Bonus Plan may similarly qualify under Section 162(m).
Although the Compensation Committee uses the requirements of Section 162(m) as a guideline, deductibility is
not the sole factor it considers in assessing the appropriate levels and types of executive compensation, and it
will elect to forego deductibility when the Committee believes it to be in the best interests of the Company and
its shareholders.
PROX Y STATEMENT
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