LeapFrog 2009 Annual Report Download - page 153

Each of our named executive officers participated in the stock option exchange program. In the aggregate,
our named executive officers tendered stock options covering 3,817,013 shares of Class A common stock in
exchange for new options covering 2,063,550 shares of Class A common stock. The stock options surrendered
and new options received by each named executive officer under the stock option exchange program were as
follows:
Name
Surrendered Options
Exercise Prices
(Range)
Surrendered
Options
Total Shares
New Option
Total Shares
New Option
Exercise Price
Jeffrey G. Katz ............................ $7.02-$14.79 2,595,812 1,388,757 $6.25
William B. Chiasson ....................... $7.02-$15.17 359,264 199,909 $3.79
Michael J. Dodd ........................... $7.02-$15.49 273,250 153,964 $3.79
William K. Campbell ....................... $7.02-$20.60 213,934 105,221 $3.79
Nancy G. MacIntyre(1) ..................... $7.02-$15.17 194,780 122,986 $3.79
Peter M. O. Wong(1) ....................... $7.02-$15.17 179,973 92,713 $3.79
(1) Ceased serving as an executive officer in mid-December 2009 and employment terminated in the first
quarter of 2010.
Severance Benefits
Our named executive officers, with the exception of Mr. Katz, were eligible to receive payments and
benefits under our Executive Management Severance and Change-in-Control Plan, or the Severance Plan.
The Severance Plan is intended to achieve three objectives:
• minimize distraction and risk of departure of our executives and other members of senior management
in the event of a potential change-in-control transaction involving our company;
• provide consistency in benefits among our executives and other members of senior management; and
• align our severance payments and benefits for our executives and other members of senior management
with competitive practice.
Under the terms of the Severance Plan, each of the named executive officers (other than Mr. Katz) was
eligible to receive payments and benefits if we terminated his or her employment “without cause” or if he
resigned for “good reason.” In these situations, the Severance Plan provides for the continued payment of base
salary for a period of 12 months (paid in semi-monthly installments) and COBRA benefits for a period of 12
months. In the event that the termination of employment occurs during the period beginning three months before
and ending 12 months after a change in control of our company, the Severance Plan provides for a lump sum
cash payment consisting of an amount equal to 24 months of base salary and an amount equal to 200% of his or
her target bonus, COBRA benefits for a period of 24 months, and acceleration of vesting of all outstanding
unvested stock awards. None of our named executive officers is eligible to receive any tax “gross-up” or other
tax payment under the Severance Plan.
In determining the amounts payable under the Severance Plan, the compensation committee took into
consideration the severance practices of the companies in our Peer Group. In addition, the compensation
committee considered the multi-year nature of our turnaround plan and the historic and anticipated continued
volatility of our stock price and operating results.
For more information about the terms and conditions of the Severance Plan, as well as the definitions of
“cause” and “good reason,” see “Potential Payments upon Termination or Change in Control” below.
Mr. Katz, who was not eligible to participate in the Severance Plan, was eligible to receive payments and
benefits under his employment agreement, which was negotiated and approved by our Board of Directors when
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