Logitech 2012 Annual Report Download - page 86

Explanation
Under Swiss law, the use of retained earnings must be submitted to shareholders for approval or disapproval
at each annual general meeting. The retained earnings at the disposal of Logitech shareholders at the 2012 Annual
General Meeting are the earnings of Logitech International S.A., the Logitech parent holding company.
The Board of Directors proposes in Proposal 3.2 below that, in lieu of a dividend out of available earnings,
the Company distributes qualifying additional paid-in capital out of its capital contribution reserves. In order to
free up the capital contribution reserves required for this distribution, the Board of Directors proposes to release the
reserves for treasury shares and the general reserve that had been constituted out of capital contributions reserves,
to recreate such reserves from retained earnings, and to carry forward the balance of the retained earnings at the
disposal of the Annual General Meeting in an amount of CHF 335,268,321.
The Board of Directors proposes the carry-forward of retained earnings based on the Board’s belief that it
is in the best interests of Logitech and its shareholders to retain Logitech’s earnings for future investment in the
growth of Logitech’s business, for share repurchases, and for the possible acquisition of other companies or lines
of business.
In the event of a negative vote on this proposal by shareholders, the Board of Directors will take the vote of
the shareholders into consideration, withdraw Proposal 3.2 below, and call an extraordinary general meeting of
shareholders for re-consideration by shareholders of this proposal or a revised proposal.
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 proposed appropriation of retained
earnings with respect to fiscal year 2012.
3.2 Distribution of Capital Contribution Reserves
Proposal
The Board of Directors proposes that the Company’s capital contribution reserves be reclassified as free
reserves in an amount of CHF 125,650,814 (US $131,506,142 based on the exchange rate on June 30, 2012), and that
such free reserves be distributed to shareholders in an amount of approximately CHF 0.81 per share (US $0.84 per
share based on the exchange rate on June 30, 2012),* up to an aggregate amount of CHF 125,650,814, as follows:
Year ended
March 31, 2012
(in thousands)
Free reserve from capital contributions before allocations............................... CHF —
Proposed allocation from reserve for treasury shares from capital contributions ........... 116,070
Proposed allocation from general reserve from capital contributions .................... 9,580
Proposed distribution from capital contributions.................................... (125,650)
Free reserve from capital contributions to be carried forward ............................ CHF —
No distribution shall be made on shares held in treasury by the Company and its subsidiaries.
The approximate payment date for the distribution is expected to be September 18, 2012.
This proposal shall be withdrawn if Proposal 3.1 above is not approved.
* Calculated based on 155,960,117 shares outstanding, net of treasury shares, as of June 30, 2012. Distribution-
bearing shares are all shares issued except for treasury shares held by Logitech International S.A. on the day
preceding the payment of the distribution.
76