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Exhibit
10.12
LOGITECH
INC.
CHANGE OF CONTROL
SEVERANCE AGREEMENT
This Change of Control
Severance Agreement (the “Agreement”) is made and
entered into effective as of
, 200
, by and between
(the “Employee”) and Logitech Inc., a California
corporation (the “Company”), and Logitech International
S.A., a Swiss corporation (the “Parent”). Certain
capitalized terms used in this Agreement are defined in
Section 1 below.
R E C I T A L
S
A. The Parent may from time
to time consider the possibility of a Change of Control. The Board
of Directors of the Company (the “Board”) recognizes
that such consideration can be a distraction to the Employee and
can cause the Employee to consider alternative employment
opportunities.
B. The Board believes that it
is in the best interests of the Company, the Parent and the
Parent’s shareholders to provide the Employee with an
incentive to continue his or her employment with the Company and to
maximize the value of the Company and the Parent, upon the
occurrence of a Change of Control, for the benefit of the
Parent’s shareholders.
C. In order to provide the
Employee with enhanced financial security and sufficient
encouragement to remain with the Company notwithstanding the
possibility of a Change of Control, the Board believes that it is
imperative to provide the Employee with severance benefits upon
certain terminations of the Employee’s employment following a
Change of Control.
AGREEMENT
In consideration of the
mutual covenants herein contained and the continued employment of
the Employee by the Company, the parties agree as
follows:
1. Definition of Terms
. The following terms referred to in this Agreement shall have the
following meanings:
(a) Base Salary .
“Base Salary” shall mean the greater of (i) the
Employee’s annual base salary, as in effect immediately prior
to the Employee’s termination of employment with the Company,
or (ii) the Employee’s annual base salary as in effect
on the effective date of this Agreement.
(b) Cause .
“Cause” shall mean (i) any act of personal
dishonesty taken by the Employee in connection with his or her
responsibilities as an employee which is intended to result in
substantial personal enrichment of the Employee, (ii) the
Employee’s conviction of a felony which the Board reasonably
believes has had or will have a material detrimental effect on the
Company’s reputation or business, (iii) a willful act by
the Employee which constitutes misconduct and is injurious to the
Company, or (iv) continued willful violations by the Employee
of the Employee’s obligations to the Company after there has
been delivered to the Employee a written demand for performance
from the Company which describes the basis for the Company’s
belief that the Employee has not substantially performed his or her
duties.
(c) Change of Control
. “Change of Control” shall mean the occurrence of any
of the following events:
(i) a merger or consolidation
of the Parent with any other entity, other than a merger or
consolidation which would result in the voting securities of the
Parent outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the
voting securities of the Parent or such surviving entity
outstanding immediately after such merger or
consolidation;
(ii) the complete liquidation
of the Parent or the sale or other disposition by the Parent of all
or substantially all of the Parent’s assets; or
(iii) any
“person” (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended)
becoming the “beneficial owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of
securities of the Parent representing fifty percent (50%) or
more of the total voting power represented by the Parent’s
then outstanding voting securities.
(d) Compensation
Continuation Period . “Compensation Continuation
Period” shall mean a period of twelve (12) consecutive
months commencing on the date when the Employee’s employment
with the Company terminates under circumstances that entitle the
Employee to benefits under Section 4.
(e) Current
Compensation . “Current Compensation” shall mean an
amount equal to the sum of (i) the Base Salary and
(ii) the Employee’s annual and quarterly bonuses for the
fiscal year preceding the fiscal year in which severance benefits
become payable to the Employee pursuant to Section 4(a) or
(b) below.
(f) Demotion .
“Demotion” shall mean a material reduction of the
Employee’s duties, position or responsibilities relative to
the Employee’s duties, position or responsibilities in effect
immediately prior to such reduction, without the Employee’s
express written consent.
(g) Involuntary
Termination . “Involuntary Termination” shall mean
(i) a termination by the Company of the Employee’s
employment with the Company that is not effected for Cause or
(ii) a resignation by the Employee of his or her employment
with the Company after (A) a substantial reduction of the
facilities and perquisites (including office space and location)
available to the Employee immediately prior to such reduction,
without the Employee’s express written consent and without
good business reasons, (B) a reduction of the Employee’s
Base Salary, (C) a material reduction in the kind or level of
employee benefits to which the Employee is entitled immediately
prior to such reduction, with the result that the Employee’s
overall benefits package is significantly reduced, (D) the
relocation of the Employee to a facility or location more than
thirty (30) miles from his or her current location, without
the Employee’s express written consent, or (E) the
failure of the Company to obtain the assumption of this Agreement
by any successor, as contemplated in Section 6(a) below.
Clause (C) above shall not apply in the event of any
reduction of the amount of the bonus actually paid but shall apply
in the event of a material reduction of the target bonus or bonus
opportunity.
2. Term of Agreement .
This Agreement shall terminate upon the date that all obligations
of the parties hereto under this Agreement have been
satisfied.
3. At-Will Employment
. The Company and the Employee acknowledge that the
Employee’s employment with the Company is and shall continue
to be at-will, as defined under applicable law. If the
Employee’s employment terminates for any or no reason, the
Employee shall not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement, or
as may otherwise be established under the Company’s or the
Company’s then existing employee benefit plans or policies at
the time of termination.
4. Severance Benefits
.
(a) Involuntary
Termination . If the Employee is subject to an Involuntary
Termination at any time within twelve (12) months after a
Change of Control, then:
(i) Severance Payments
. The Employee shall be entitled to receive continuing payments of
severance pay during the Compensation Continuation Period at a rate
equal to the Employee’s Current Compensation. Such severance
payments shall be paid bi-weekly in accordance with the
Company’s normal payroll practices.
(ii) Continued
Benefits . If the Employee elects to continue health insurance
coverage for the Employee and his or her dependents (if applicable)
under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) following his or her Involuntary Termination,
then the Company shall pay the monthly premiums for such coverage
under COBRA until the earliest of (A) the close of the
Compensation Continuation Period, (B) the expiration of the
continuation coverage under COBRA or (C) the date when the
Employee and his or her dependents (if applicable) receive
substantially equivalent health insurance coverage in connection
with new employment.
(iii) Option
Acceleration . The vesting and exercisability of each option
granted to the Employee by the Parent (or of any property received
by the Employee in exchange for such options in a Change of
Control) shall be automatically accelerated in full.
(iv) Outplacement
Services . The Employee shall be entitled to executive-level
outplacement services at the Company’s expense, not to exceed
$5,000. Such services shall be provided by a firm selected by the
Employee from a list compiled by the Company.
(b) Demotion . If the
Employee suffers a Demotion at any time within twelve
(12) months after a Change of Control, gives notice of such
Demotion to the Company within sixty (60) days of such
Demotion and resigns his or her employment with the Company after
satisfying the service requirement prescribed by Paragraph (v)
below, then:
(i) Severance Payments
. The Employee shall be entitled to receive continuing payments of
severance pay during the Compensation Continuation Period at a rate
equal to the Employee’s Current Compensation. Such severance
payments shall be paid bi-weekly in accordance with the
Company’s normal payroll practices.
(ii) Continued
Benefits . If the Employee elects to continue health insurance
coverage for the Employee and his or her dependents (if applicable)
under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) following his or her resignation, then the
Company shall pay the monthly premiums for such coverage under
COBRA until the earliest of (A) the close of the Compensation
Continuation Period, (B) the expiration of the continuation
coverage under COBRA or (C) the date when the Employee and his
or her dependents (if applicable) receive substantially equivalent
health insurance coverage in connection with new
employment.
(iii) Option
Acceleration . The v
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