LeapFrog 2007 Annual Report Download - page 178

consulting arrangement with LeapFrog will immediately terminate. In addition, Mr. Katz is subject to a
non-solicitation provision for two years after termination of his employment, as well as a non-interference
provision and a confidentiality provision. Mr. Katz is required to execute a release prior to receiving any of the
foregoing benefits.
William B. Chiasson, Martin A. Pidel, Nancy G. MacIntyre and Michael J. Dodd
Messrs. Chiasson, Pidel and Dodd and Ms. MacIntyre are each eligible to receive severance and termination
payments under the Executive Management Severance and Change-in-Control Plan, which will be referred to
hereafter as the “Severance Plan.”
Under the terms of the Severance Plan, Messrs. Chiasson, Pidel and Dodd and Ms. MacIntyre are eligible to
receive the benefits described in the Severance Plan if the executive officer is terminated without “cause” or the
executive officer resigns for “good reason.”
Under the Severance Plan, “cause” means:
• convicted of a felony or a crime involving moral turpitude or dishonesty;
• commit fraud against LeapFrog;
• commit a material breach of any material provision of a written agreement with LeapFrog (including,
without limitation, the Proprietary Information and Inventions Agreement) or of a written company
policy, provided that the employee was given reasonable notice and opportunity to cure;
• show conduct demonstrating unfitness to serve, provided that the employee was given reasonable
notice and opportunity to cure; or
• breach duties to LeapFrog including persistent unsatisfactory performance of job duties.
Under the Severance Plan, “good reason” means:
• any material diminution in the employee’s authority, duties or responsibilities;
• a reduction in base salary of greater than 10% of base salary prior to the reduction, unless others in
equivalent roles are accordingly reduced;
• the employee’s business location moves more than 50 miles beyond the current location; or
• a material breach by LeapFrog of the agreement under which the employee is employed.
To resign for good reason, an employee must resign within 60 days after the occurrence, without the
employee’s consent, of one of the events listed in the foregoing definition, after having given LeapFrog 30 days’
written notice, during which time LeapFrog had the opportunity to cure the event that the employee asserts is
good reason. If LeapFrog cures the event, then the employee would not have good reason.
If a covered termination (which includes a resignation for good reason) is triggered and does not occur in
relation to a change in control of LeapFrog, the Severance Plan provides for the following severance benefits:
Base Severance
(Months of Base Salary) Health Insurance Payments Form of Payment
12 12 months of COBRA coverage Installments
60