Logitech 2008 Annual Report Download - page 57

CG-5
at the time the derivative securities are issued. Pursuant to Article 26 of the Company’s Articles of
Incorporation, the share capital of the Company may be increased by CHF 15,165,465 through the issuance
of up to 60,661,860 shares with a par value of CHF 0.25 each. The purpose of this conditional share capital
is to cover option or other equity rights granted or that may be granted to employees, officers and directors
of Logitech under its employee equity incentive plans. The conditional share capital increase does not have
an expiration date. The shareholders do not have pre-emptive rights to subscribe to the newly issued shares
issued out of conditional share capital. For more information on Logitech’s employee equity incentive plans
please refer to Note 12 – Employee Benefit Plans - to our Consolidated Financial Statements included in
our Annual Report.
Although the Company has been authorized by its shareholders to use conditional capital to meet
its obligations to deliver shares as a result of employee purchases or exercises under its employee equity
incentive plans, the Company has for some years used shares held in treasury to fulfill its obligations under
the plans.
At the 2008 Annual General Meeting the Board is proposing that the conditional capital to cover the
possible issuance of shares under the Company’s employee equity incentive plans be reduced from the current
CHF 15,165,465 (representing 60,661,860 shares) to CHF 6,250,000 (representing 25,000,000 shares).
In addition, at the 2008 Annual General Meeting the Board is proposing that shareholders authorize
that the Company’s share capital may be increased by up to CHF 6,250,000 through the issuance of up to
25,000,000 shares with a par value of CHF 0.25 each to cover conversion rights that may be granted in
connection with a future issuance of debt obligations convertible into Logitech shares.
2.3 Changes in Shareholders’ Equity
As of March 31, 2008, 2007, 2006 and 2005, balances in shareholders’ equity of Logitech International
S.A., based on the parent company’s Swiss Statutory Financial Statements, were as follows (in thousands):
As of March 31,
2008 2007 2006 2005
Share capital ....................... CHF 47,902 CHF 47,902 CHF 47,902 CHF 47,902
Legal reserves:
General reserve ................. 9,580 9,580 9,580 9,580
Reserve for treasury shares ........ 400,710 272,844 238,707 217,873
Unappropriated retained earnings....... 316,586 378,300 352,032 327,892
Total shareholders’ equity . . . . . . . . . . . . . CHF 774,778 CHF 708,626 CHF 648,221 CHF 603,247
In June 2007, the Company’s Board of Directors approved a change in the Company’s Articles of
Incorporation which eliminated the conditional share capital for 10,900,000 shares with a par value of
CHF 0.25 each. The purpose of this conditional share capital was to cover conversion rights granted in
connection with the issuance of Logitech’s convertible bonds in 2001. This conditional share capital was
no longer required, as the Company satisfied its conversion obligations during fiscal year 2006 through the
delivery of treasury shares rather than the issuance of shares from conditional share capital.