Logitech 2012 Annual Report Download - page 136

Determination of long-term equity incentive awards
The Compensation Committee is responsible for approving who should receive equity incentive awards, when
the awards should be made, the vesting schedule, and the number of shares or other rights to be granted. Long-term
equity incentive awards may be granted only by the Compensation Committee or the full Board of Directors. The
Compensation Committee regularly reports its activity, including approvals of grants, to the Board. We do not have
any program, plan, or practice to select equity compensation grant dates in coordination with the release of material
non-public information, nor do we time the release of information for the purpose of affecting value. We do not
backdate options or grant options retroactively.
Timing of grants
Long-term equity incentive award grants to executive officers are typically and predominantly made at
regularly scheduled, predetermined meetings of the Compensation Committee. These meeting are scheduled up
to 18 months in advance and take place before the regularly scheduled, predetermined meetings of the full Board.
On limited occasions, grants may be made at an interim meeting of the Compensation Committee or by consent,
for the purpose of approving the hiring and compensation package for newly hired or promoted executives. The
timing of interim meetings or consents, if they occur, is based on the activity which generated the need for the
meeting or the consent, not Logitech’s share price. In fiscal year 2012 grants were made to new hires and promoted
employees, including those at the executive officer level, through regularly scheduled monthly written consents of
the Compensation Committee.
BRACKEN DARRELL’S NEW HIRE PACKAGE
In April 2012, Logitech appointed Mr. Darrell to the role of President, and he is expected to succeed
Mr. De Luca as Chief Executive Officer in January 2013. When establishing Mr. Darrell’s compensation package,
the Compensation Committee based its decisions on our compensation peer group and high-technology market
data for chief executive officer positions provided by the Compensation Committee’s independent compensation
consultant, as well as the compensation and benefits package Mr. Darrell had with his previous employer.
The Compensation Committee positioned Mr. Darrell’s cash compensation package between the 25th and
50th percentile of the market data for chief executive officers, given that it is expected that he will be assuming the
chief executive officer position in January 2013. Mr. Darrell’s base salary is $750,000 and his annual bonus target
percentage is 100%.
When developing Mr. Darrell’s equity package, the Compensation Committee targeted his new hire equity
package at the 50th percentile of the market for chief executive officers to ensure that, over time, he will have an
ownership position and equity value consistent with those held by our compensation peer group chief executive
officers. Mr. Darrell’s equity package consists of (1) 500,000 stock options to provide a meaningful upside for
success in driving the profitable growth of the business; (2) 100,000 RSUs to offset a portion of the earned, but
not vested long-term incentives Mr. Darrell lost when leaving his former employer; (3) 1.2 million premium-priced
stock options, or PPOs, that have value only if there is a significant increase in Logitech’s stock value. We believe
this equity package will provide exceptionally rewarding incentives to Mr. Darrell if he is able to lead the Company
in driving a substantial increase in Logitech’s market value.
Mr. Darrell received a relocation assistance package to move him and his family from Switzerland to the
United States that includes payments for certain relocation costs and expenses such as airfare, house purchase
and sale assistance (including reimbursement for a qualified home purchase of up to 2% of the purchase price and
reimbursement for qualified home sales expenses of up to 1% of the home sale price), a relocation bonus equivalent
to two months’ salary, tax advice assistance, moving costs and temporary living benefits including lodging, meals
and auto rental.
As part of his terms of employment, Mr. Darrell will receive severance benefits in the case of a termination
without cause or under certain conditions associated with a Change of Control, as described in the section “Potential
Payments Upon Termination or Change in Control.”
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