This excerpt taken from the LOGI 20-F filed May 19, 2006.
Note 8 Shareholders Equity:
In June 2004, the Companys shareholders renewed the approval of 20 million authorized registered shares for use in acquisitions, mergers and other transactions, valid through June 24, 2006. Shareholders of the Company will be requested at the 2006 Annual General Meeting to extend this authorization until June 2008.
In addition, the Company has conditionally authorized shares totaling 30,330,930 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 conditional share capital increase does not have an expiration date.
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 ($269.7 million at March 31, 2006) and is subject to shareholder approval. The Company will recommend to its shareholders that no cash dividends be paid in 2006.
Under Swiss corporate law, a minimum of 5% of the Companys annual net income must be retained in a legal reserve until this legal reserve equals 20% of the Companys 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 $7.3 million at March 31, 2006.
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 $182.9 million at March 31, 2006.
In June 2005, the Company announced the approval by its board of directors of a new buyback program of up to CHF 300.0 million (approximately $235.0 million based on exchange rates at the date of announcement). The program expires at the Companys 2008 Annual General Meeting at the latest. Under this program, the Company repurchased 4.2 million shares for $174.6 million during the year ended March 31, 2006. The approved amount remaining under this program at March 31, 2006 is CHF 76.1 million ($58.3 million based on exchange rate at March 31, 2006).
LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
During fiscal years 2006, 2005 and 2004, the Company repurchased shares under buyback programs authorized by the Board of Directors as follows (in thousands):