LeapFrog 2012 Annual Report Download - page 137

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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.
Following is a description of the only two employment agreements entered into by the Company with any of
our named executive officers.
John Barbour
Mr. Barbour joined the Company as our Chief Executive Officer in March 2011. He has an employment
agreement with the Company which was negotiated and approved by our board of directors at that time.
Mr. Barbour’s employment agreement provides for an annual base salary for Mr. Barbour in the amount of
$575,000 and an annual performance-based target bonus of $575,000 per year. Mr. Barbour is eligible to
receive an additional bonus for exemplary performance pursuant to stretch-level objectives to be determined
by our board of directors in its discretion. In addition, Mr. Barbour was eligible to receive travel and
temporary housing assistance in the amount of $150,000, payable in quarterly installments, and certain
relocation benefits. Mr. Barbour’s employment agreement also provided for him to receive a grant of an
option to purchase 850,000 shares of our Class A common stock and an RSU award covering 150,000 shares
of our Class A common stock. These equity awards provide that one-fourth (1/4) of the shares subject to each
award vest (and, in the case of the RSU, be delivered) upon completion of one year of continuous
employment service, and one forty-eighth of the shares subject to each award vest (and, in the case of the
RSUs, be delivered) upon completion of each month of continuous employment service thereafter.
Mr. Barbour is eligible for vesting acceleration rights and other severance payments and benefits upon certain
terminations of employment or in connection with a change in control of the Company. A summary of these
arrangements is set forth below in the section entitled ‘‘Potential Payments Upon Termination or Change
in Control.’’
Christopher Spalding
Mr. Spalding joined the Company in 2008 and is currently our Senior Vice President and Managing
Director, EMEA. He has an employment agreement with our UK subsidiary, LeapFrog Toys (UK) Limited, or
LeapFrog UK, and is based in London. Mr. Spalding’s employment agreement provides for an annual base
salary in the amount of £160,000 and an annual performance-based target bonus of 30% per year. These
amounts were subsequently increased to £200,000 and 50% without amendment of the employment
agreement. Mr. Spalding is eligible to receive a car allowance of £8,900 per year, plus mileage
reimbursement. LeapFrog UK contributes 10% of Mr. Spalding’s base salary to a stakeholder non-contributory
pension scheme in the UK on his behalf. Mr. Spalding is eligible for six months’ notice in the event of a
termination of employment, or, at LeapFrog UK’s option, six months’ severance. A summary of these
arrangements is set forth below in the section entitled ‘‘Potential Payments Upon Termination or Change in
Control.’’ The employment agreement automatically terminates when Mr. Spalding attains the age of 65.
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