Logitech 2012 Annual Report Download - page 264

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Legal Proceedings
On May 23, 2011, a class action complaint was filed against Logitech International S.A. and certain of
its officers in the United States District Court for the Southern District of New York on behalf of individuals
who purchased Logitech shares between October 28, 2010 and April 1, 2011. The complaint relates to Logitech’s
disclosure on March 31, 2011 that its results for fiscal year 2011 would fall below expectations and seeks unspecified
monetary damages and other relief against the defendants. The action was transferred to the United States District
Court for the Northern District of California on July 28, 2011. The California Court appointed a lead plaintiff on
October 27, 2011. The plaintiff filed an amended complaint on January 9, 2012 which expanded the alleged class
period to between October 28, 2010 and September 22, 2011.
On July 15, 2011, a complaint was filed against Logitech International S.A. and two of its subsidiaries in the
United States District Court for the Central District of California by Universal Electronics, Inc. (UEI). The complaint
alleges that Logitech’s Harmony remotes, Logitech Revue for Google TV and other products for the digital home
infringe one or more of the seventeen UEI patents asserted in the action, and seeks unspecified monetary damages
and other relief against the defendants. On November 3, 2011, the Company filed a counter suit against UEI for
infringement of five patents by various UEI products, for UEI’s abuse of the legal process in suing the Company
on three expired patents, and for unfair competition. On April 17, 2012, UEI filed a related suit against Logitech
Europe S.A. seeking a declaratory judgment that one of the patents in the counter suit is unenforceable.
In addition, from time to time the Company is involved in claims and legal proceedings which arise in the
ordinary course of its business. The Company is currently subject to several such claims and a small number of
legal proceedings.
The Company believes these lawsuits and claims lack merit and intends to vigorously defend against them.
However, there can be no assurances that its defenses will be successful, or that any judgment or settlement in any
of these lawsuits would not have a material adverse impact on the Company’s business, financial condition, cash
flows and results of operations. The Company is presently unable to estimate the effects of these claims and legal
proceedings on its results of operations, cash flows or financial position.
Note 12 — Shareholders’ Equity
Share Capital
The Company’s nominal share capital is CHF 47,901,655, consisting of 191,606,620 shares with a par value of
CHF 0.25 each, all of which were issued and 27,173,339 of which were held in treasury as of March 31, 2012.
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.
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 460.9 million or
$511.1 million based on exchange rates at March 31, 2012) and is subject to shareholder approval.
Note 11 — Commitments and Contingencies (Continued)
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