Logitech 2014 Annual Report Download - page 77

Proposal 5
Authorization to Exceed 10% Holding of Own Share Capital
Proposal
The Board of Directors proposes that shareholders authorize the Company to hold more than 10 percent of its
own shares.
Explanation
Under Swiss corporate law, shares that are repurchased are not automatically cancelled, but instead are held
in the Company’s treasury pending either shareholder approval of their cancellation or re-use by the Company to
cover delivery obligations, subject to certain time limits and procedures. Members of the Board of Directors may be
exposed to personal liability under Swiss law for harm to the company as a result of it holding more than 10 percent
of its own shares. Approval of this proposal may lessen the potential personal liability of the members of the Board
of Directors in such a circumstance.
At the Company’s 2012 and 2013 Annual General Meetings, shareholders authorized the Company to hold
more than 10 percent of its own shares, to the extent that the own shares exceeding the 10 percent ownership threshold
are being repurchased with a view to being cancelled at the 2013 and/or 2014 and 2014 and/or 2015, respectively,
Annual General Meetings of the Company. On August 9, 2013, the Company’s original share repurchase program,
including its “second trading line” that permitted the Company to comply with its obligations under the Swiss tax
laws in connection with repurchasing shares above the 10 percent threshold, expired. In March 2014, the Company
announced approval of a new $250 million share repurchase program that is expected to remain in effect for
three years.
As of September 26, 2014, Logitech held approximately 5.7 percent of its own shares in its treasury and,
under share repurchase plans authorized by the Board of Directors, the Company may acquire up to approximately
17,310,662 additional shares until April 24, 2017. If the Company continues repurchases under its current stock
repurchase program or begins a new stock repurchase program, it may again accumulate shares in treasury
approaching or exceeding 10 percent of its issued capital.
In order to provide the Company with continued flexibility in the management of its capital, the Board of
Directors seeks authorization to cause the Company to hold more than 10 percent of its own shares, to the extent
that the shares exceeding the 10 percent ownership threshold are being repurchased, over a second trading line
or otherwise, with a view to being cancelled. In the event of a negative vote on this proposal by shareholders, the
Board of Directors will cause the Company not to exceed a 10 percent holding of its own shares.
There are potential adverse tax consequences to the Company that may be avoided through repurchasing
shares above the 10 percent threshold through a “second trading line” with withholding tax arrangements. Should
the Board of Directors resolve to make use of the authorization in this proposal, it would apply for applicable approval
by the Swiss Takeover Board, and apply for the opening of a second trading line on the SIX Swiss Exchange in
order to purchase shares for cancellation. It will also take other appropriate action to levy the withholding tax that
would be due in such a case.
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 and not counting the votes of any member of the Board of Directors or any
Logitech executive officers.
Recommendation
The Board of Directors recommends a vote “FOR” approval of the following resolution:
“The Company shall be authorized to hold more than 10 percent of its own shares, to the extent that the own
shares exceeding the 10 percent ownership threshold are being repurchased, over a second trading line or
otherwise, with a view to being cancelled on the occasion of a reduction of share capital, to be proposed to the
Annual General Meeting of the Company in 2015 and/or 2016.”
ENglISH
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