PROPOSAL 1 REDUCTION OF CAPITAL
(Special Resolution)
Background
Proposal 1 seeks shareholder approval to create additional distributable reserves, which will increase the amount of reserves available to
us to repurchase or redeem our shares, pay dividends or make other distributions to our shareholders, as discussed further below.
Proposal 1 Reduction
of Capital and Creation of Distributable Reserves
As of September 28, 2018, $0.7 billion remained available for share repurchases
under our existing repurchase authorization limit. On November 2, 2018, we announced the authorization of an additional $2.3 billion in share repurchases, bringing the aggregate authorized share repurchase program to $3.0 billion. As
of December 28, 2018, $2.9 billion remained available for repurchase under the new repurchase authorization limit.
Under Irish law, we
may repurchase or redeem our shares, pay dividends or make other distributions to our shareholders only out of our distributable reserves, which generally means our accumulated realized profits less accumulated realized losses and
includes reserves created by way of capital reduction. It is common for Irish companies to seek shareholder approval to create additional distributable reserves. On July 3, 2010, following the Scheme of Arrangement pursuant to which we
reorganized as an Irish public limited company, we undertook a subsequent reduction of capital process, creating distributable reserves of approximately $6.2 billion.
Since 2010, we have generated additional distributable reserves through the natural operation of our business. However, we have made distributions to
shareholders that include approximately $14.7 billion for dividends paid and share repurchases from July 3, 2010 to December 28, 2018, which has reduced our distributable reserves to approximately $0.6 billion as of
December 28, 2018. During the second quarter of our fiscal year 2019, internal subsidiary dividends of $1.2 billion were made to Seagate Technology plc as part of normal business operations and are now available as additional distributable
reserves. This brings our total distributable reserves to approximately $1.8 billion.
As of December 28, 2018, we have also accumulated
approximately $1.9 billion in share premium. However, share premium is not considered part of distributable reserves under Irish law and hence cannot be used to repurchase shares or to pay dividends. In order to maintain our ability to continue
to make distributions to shareholders and to give full effect to the increased authorized share repurchase program, we are seeking shareholder approval to approve this proposal to reduce our company capital by the entire balance of our share premium
amount as at December 28, 2018, or such lesser amount as the Board, the Audit Committee or the Irish High Court may determine, to create additional distributable reserves. If this proposal is not approved, we may not be able to maintain our
ability to make distributions to shareholders and/or fully consummate our share repurchase program until we generate additional distributable reserves through the natural operation of our business, the extent and timing of which we cannot predict or
guarantee.
In this proposal, shareholders are being asked to approve a reduction of our company capital by the entire balance of our share
premium of approximately $1.9 billion as of December 28, 2018, or such lesser amount as the Board, the Audit Committee or the Irish High Court may determine, to create additional distributable reserves. In order to effect a reduction of
capital, we must seek the Irish High Courts confirmation of this proposed reduction. If shareholders approve this proposal, we will seek the Irish High Courts confirmation as soon as practicable. We expect to obtain the Irish High
Courts confirmation within approximately four weeks of making an application, but it may take substantially longer depending on the Courts schedule and Court vacations.
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SEAGATE TECHNOLOGY PLC
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Proxy Statement
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