Logitech 2014 Annual Report Download - page 287

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12 — Commitments and Contingencies (Continued)
material adverse effect on its financial condition, cash flows or results of operations. However, litigation is subject
to inherent uncertainties, and there can be no assurances that the Company’s defenses will be successful or that any
such lawsuit or claim would not have a material adverse impact on the Company’s business, financial condition,
cash flows and results of operations in a particular period. Any claims or proceedings against the Company, whether
meritorious or not, can have an adverse impact because of defense costs, diversion of management and operational
resources, negative publicity and other factors. Any failure to obtain necessary license or other rights, or litigation
arising out of intellectual property claims, could adversely affect the Company’s business.
Note 13 — Shareholders’ Equity
Share Capital
The Company’s nominal share capital is CHF 43,276,655, consisting of 173,106,620 shares with a par value of
CHF 0.25 each, all of which were issued and 10,206,450 which were held in treasury as of March 31, 2014.
In September 2008, the Company’s shareholders approved an amendment to reserve conditional capital of
25,000,000 shares for potential issuance on the exercise of rights granted under the Company’s employee equity
incentive plans. The shareholders also approved the creation of conditional capital representing the issuance of up
to 25,000,000 shares to cover any conversion rights under a future convertible bond issuance. This conditional
capital was created in order to provide financing flexibility for future expansion, investments or acquisitions.
Shares Outstanding
In September 2012, the Company’s shareholders approved the cancellation of the 18.5 million shares
repurchased under the September 2008 amended share buyback program. These shares were legally cancelled
during fiscal year 2013, which decreased the treasury shares outstanding by this amount but also decreased its
shares issued and outstanding from 191.6 million to 173.1 million.
Dividends
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 458.5 million or
$518.1 million based on exchange rates at March 31, 2014) and is subject to shareholder approval. In September
2013, Logitech’s shareholders approved a cash dividend payment of CHF 33.7 million out of retained earnings to
Logitech shareholders. Eligible shareholders were paid CHF 0.21 per share ($0.22 per share in U.S. dollars), totaling
$36.1 million in U.S. Dollars in September 2013. In September 2012, the Company’s shareholders approved a cash
dividend of CHF 125.7 million out of retained earnings to Logitech shareholders. Eligible shareholders were paid
CHF 0.79 per share ($0.85 per share in U.S. dollars), totaling $133.5 million in U.S. dollars in September 2012. This
dividend qualified as a distribution of qualifying additional paid-in-capital and, as such, was not subject to Swiss
Federal withholding tax.
Legal Reserves
Under Swiss corporate law, a minimum of 5% of the Company’s annual net income must be retained in a legal
reserve until this legal reserve equals 20% of the Company’s issued and outstanding aggregate par value per share
capital. These legal reserves represent an appropriation of retained earnings that are not available for distribution
and totaled $10.8 million at March 31, 2014 (based on exchange rates at March 31, 2014).
ANNUAl REPORT
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