Logitech 2007 Annual Report Download - page 141

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LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Authorized and Conditional Share Capital
In June 2006, the Company’s shareholders renewed the approval of 40 million authorized shares for use in
acquisitions, mergers and other transactions. This authorization expires at the Company’s Annual General
Meeting in 2008.
In addition, the Company has conditionally authorized shares totaling 60,661,860 to cover option rights
granted or other equity rights that may be granted to employees, officers and directors of Logitech under its
employee equity incentive plans. The Company has also conditionally authorized shares totaling 10,900,000 to
cover conversion rights granted in connection with the issue of the Company’s convertible bonds. As of
November 11, 2005, all outstanding bonds had been presented for conversion. The conversion was satisfied
through delivery of treasury shares. The conditional share capital increase for the total authorized shares of
71,561,860 does not have an expiration date.
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 378.3 million or
$310.1 million based on exchange rates at March 31, 2007) and is subject to shareholder approval. The Company
will recommend to its shareholders that no cash dividends be paid in 2007.
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 $7.9 million at March 31, 2007.
Additionally, under Swiss corporate law, the Company is required to establish a reserve equal to the amount
of treasury shares repurchased at year-end. The reserve for treasury shares, which is not available for distribution,
totaled $217.1 million at March 31, 2007.
Share Repurchases
The Company employs share buyback programs as an efficient way to return value to shareholders.
In May 2006, the Company announced the approval by its board of directors of a new share buyback
program authorizing the repurchase of up to $250 million of its shares. The program expires at the Company’s
2009 Annual General Meeting at the latest. Under this program, the Company repurchased 2.7 million shares for
$76.6 million during the year ended March 31, 2007. The approved amount remaining under this program at
March 31, 2007 is $173.4 million.
In June 2005, the Company announced the approval by its board of directors of a buyback program of up to
CHF 300.0 million (approximately $235.0 million based on exchange rates at the date of announcement). Under
this program, which was completed in the quarter ended December 31, 2006, the Company repurchased a total of
11.3 million shares for $236.1 million.
F-23
CG