LeapFrog 2012 Annual Report Download - page 131

Each of our named executive officers is eligible to receive payments and benefits if we terminate his
employment ‘‘without cause.’’ In addition, each of our named executive officers except Mr. Spalding is
eligible to receive payments and benefits if he resigns for ‘‘good reason.’’ In determining amounts payable
under these severance arrangements, the compensation committee took into consideration market data,
including the severance practices of the companies in our Peer Group.
On June 28, 2012, Mr. Etnyre resigned as our chief financial officer, effective October 1, 2012. In
connection with his termination of employment, he was eligible to receive (1) $315,000 in severance pay,
which was equal to 12 months of his base salary, (2) his 2012 performance-based bonus, prorated through
August 6, 2012, plus (3) reimbursement of COBRA payments for 12 months. The severance will be paid over
the 12 months following his separation in the form of salary continuation, except for the portion
corresponding to the 2012 performance-based bonus, which was paid in April 2013. As of December 31,
2012, Mr. Etnyre had received $65,625 in severance pay plus $2,930 in COBRA reimbursements.
For more information about the terms and conditions of our severance arrangements, see ‘‘Potential
Payments Upon Termination or Change in Control’’ below.
Other Benefits
We offer our executives various benefits, including healthcare coverage and the opportunity to participate
in our Section 401(k) plan and employee stock purchase plan, on the same general conditions as are made
available to all our full-time employees. We do not offer our U.S. executives, or other U.S. employees,
guaranteed retirement or pension benefits. However, in the absence of Section 401(k) plans in the
United Kingdom, or UK, we contribute a percentage of the salary of our UK employees to individual private
pension plans after three months of service on their behalf. Pursuant to the terms of Mr. Spalding’s
employment agreement, we contribute 10% of his salary to an individual private pension on his behalf. For
more information about how this applies to our UK-based executive officer, Mr. Spalding, see ‘‘Employment
Agreements — Christopher Spalding’’ below.
In view of the high cost of housing in the San Francisco Bay Area relative to other parts of the country,
we offer newly-hired executives reimbursement of relocation expenses and mortgage interest differential
payments, where appropriate. Typically, the amount and duration of these payments is negotiated and set forth
in the new executive’s employment agreement or offer letter. In 2012, we extended these benefits to Messrs.
Ahearn and Arthur under the terms of their respective offer letters, and certain benefits continue with respect
to Mr. Barbour. The table below summarizes payments made to Messrs. Ahearn and Arthur in this regard
during 2012.
Name
Amount Paid
in 2012
Mr. Ahearn .................................................. $352,312
Mr. Arthur ................................................... $ 66,387
Although Mr. Barbour is eligible for additional relocation benefits under the terms of his employment
agreement, he did not receive compensation for any relocation benefits during 2012. For more information
about the payment of relocation benefits, see ‘‘Summary Compensation Table’’ below.
Except as discussed above, we do not view perquisites or other personal benefits as a significant
component of our executive compensation program. However, from time to time, our board of directors may
provide certain of our named executive officers with perquisites in amounts that it believes to be reasonable
when it believes they may be useful in attracting, motivating, and retaining the executive talent for which we
compete or that these benefits will assist our named executive officers in performing their duties and provide
certain time efficiencies for our named executive officers in appropriate circumstances.
Employment Arrangements
Our U.S.-based executives are generally employed at will. In recent years, only the individual serving as
our chief executive officer has had an employment agreement with the Company. In other jurisdictions,
however, it is more common for employees to enter into employment agreements with their employers. Our
only UK-based executive officer, Mr. Spalding, also has an employment agreement with the Company. A
39