Exhibit 10.4
LOGITECH
CHANGE OF CONTROL SEVERANCE
AGREEMENT
This Change of Control Severance
Agreement (the “Agreement”) is made and entered into
effective as of December 3, 2008, by and between Gerald P.
Quindlen (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. Such reduction shall not be considered a
“Demotion” unless (i) the Employee gives the
Company written notice of such reduction within 90 days after such
reduction occurs and (ii) the Company fails to remedy such
reduction within 30 days after receiving the Employee’s
written notice.
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(g) Good Reason . “Good
Reason” shall mean (i) 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, (ii) a material reduction of the
Employee’s Base Salary, (iii) 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, (iv) 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
(v) the failure of the Company to obtain the assumption of
this Agreement by any successor, as contemplated in
Section 6(a) below. Clause (iii) 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. A condition shall not be considered
“Good Reason” unless the Employee gives the Company
written notice of such condition within ninety (90) days after
such condition comes into existence and the Company fails to remedy
such condition within thirty (30) days after receiving the
Employee’s written notice.
(h) Involuntary Termination .
“Involuntary Termination” shall mean a Separation
caused by (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 for Good Reason.
(i) Separation .
“Separation” shall mean a “separation from
service,” as defined in the regulations under
Section 409A of the Internal Revenue Code of 1986, as amended
(the “ Code ”).
2. Term of Agreement; Termination
of Prior Agreement . This Agreement shall terminate upon the
date that all obligations of the parties hereto under this
Agreement have been satisfied. Any prior agreement among the
Company, the Employee and the Parent concerning the subject matter
of this Agreement, including the Change of Control Severance
Agreement dated as of January 28, 2008 among the Company, the
Employee and the Parent, is hereby terminated.
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.
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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 and shall commence within
thirty (30) days after the Involuntary Termination.
(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. The vesting, exercisability or
settlement of any other equity awards granted to the Employee by
the Parent shall be accelerated to the extent set forth in the
applicable equity award agreement between the Employee and the
Parent or the Company.
(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 and a Separation occurs
because the Employee 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 and shall commence within
thirty (30) days after the resignation.
(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.
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(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. The vesting, exercisability or
settlement of any other equity awards granted to the Employee by
the Parent shall be accelerated to the extent set forth in the
applicable equity award agreement between the Employee and the
Parent or the Company.
(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.
(v) Service Period .
Notwithstanding any other provision of this Subsection (b),
the Employee shal
