LeapFrog 2012 Annual Report Download - page 145

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• a material reduction in Mr. Barbour’s base salary;
• a change in the geographic location of his workplace by more than 50 miles or an increase in his
commute in excess of thirty miles;
• the expiration of Mr. Barbour’s term as a member of the board of directors without his re-election if
the Company has failed to nominate Mr. Barbour for re-election; or
• a material breach by the Company of his employment agreement.
Under his employment agreement, upon the occurrence of a change in control of the Company, we would
be required to accelerate the vesting of any outstanding equity awards then held by Mr. Barbour such that all
of his equity awards would vest as of the date of the change in control. In addition, if during the two-year
period following a change in control of the Company, Mr. Barbour’s employment were terminated without
cause or by Mr. Barbour for good reason, we would be required to pay to Mr. Barbour the benefits described
in the following table:
Base Severance
(Months of Base Salary) Bonus Severance
Additional Bonus
Severance
Health Insurance
Payments
Equity
Acceleration
Form of
Payment
24 200% of
Target Bonus
Prorated Bonus
for the year in
which termination
occurs
18 months of
COBRA coverage
100% Monthly
payments
For purposes of the foregoing discussion, a change-in-control transaction will be deemed to have
occurred if any person or entity (other than Larry Ellison, Michael Milken, Lowell Milken or any combination
of the foregoing) acquires at least a majority of the combined voting power of our outstanding securities, or
upon our merger or consolidation, adoption by our stockholders of a plan of dissolution or liquidation or the
sale or transfer of substantially all of our assets. To receive any payments and benefits, Mr. Barbour would be
required to execute a release of claims against the Company.
Messrs. Arthur & Ahearn
Messrs. Arthur and Ahearn are each eligible to receive certain payments and benefits if their employment
is terminated under certain circumstances under the terms of their offer letters with the Company. Upon a
termination of employment of either Messrs. Arthur or Ahearn by us without cause, or by such executive for
good reason, the terminated executive would be eligible to receive the payments and benefits described in the
following table:
Base Severance
(Months of Base Salary) Bonus Severance
Additional Bonus
Severance
Health Insurance
Payments
Equity
Acceleration
Form of
Payment
12 100% of
Target Bonus
Prorated Bonus
for the year in
which termination
occurs
12 months of
COBRA coverage
12 months Monthly
payments
Under the terms of the offer letters of Messrs. Ahearn and Arthur, the term ‘‘cause’’ means:
• indictment or conviction of any felony or crime involving moral turpitude or dishonesty;
• participation in any fraud against the Company or any of its subsidiaries;
• material breach of any material provision of a written agreement with the Company (or subsidiaries)
or of a written policy of the Company;
• engaging in conduct that demonstrates unfitness to serve; or
• breach of duties to the Company, including persistent unsatisfactory performance of job duties.
53