LeapFrog 2012 Annual Report Download - page 144

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The named executive officers are eligible to receive certain payments and benefits upon a termination of
employment or a change in control of the Company pursuant to various plans and agreements. Messrs.
Barbour, Arthur, Ahearn and Spalding are eligible to receive payments and benefits under the terms of the
severance and change-in-control provisions in their applicable employment agreement or offer letter, as
described below. Mr. Dodd is, and Mr. Etnyre was, eligible to receive certain payments and benefits in the
event of their termination of employment under specified circumstances, including in connection with a
change in control of the Company, under our Executive Management Severance and Change-in-Control
Benefit Plan, or the Severance Plan.
The specific terms and conditions of these plans and agreements, and the estimated payments and benefits
for all of our named executive officers, are described below and are based on the assumption that a triggering
event occurred on December 31, 2012 and assume a price per share of our Class A common stock of $8.63,
which was the price of our Class A common stock reported by the NYSE at the close of market on that day.
With respect to the estimated or potential value of stock options that are accelerated and/or have extended
exercise periods in connection with a named executive officer’s termination of employment or a change in
control of the Company, the actual value of the amount realized, if any, from their stock options will depend
upon the extent to which the market value of our Class A common stock exceeds the exercise price on the
date the option is exercised. Due to the number of factors that affect the nature and amounts of compensation
and benefits provided upon the events discussed below, the amounts paid or distributed upon the actual
occurrence of a triggering event may be different from the amounts set forth below.
Severance and Change in Control Arrangements with Our Named Executive Officers
John Barbour
Mr. Barbour is eligible to receive certain payments and benefits if his employment is terminated under
certain circumstances pursuant to his employment agreement. Upon a termination of Mr. Barbour’s
employment by us without cause, or by Mr. Barbour for good reason, he is eligible to receive:
Base Severance
(Months of Base Salary) Bonus Severance
Additional Bonus
Severance
Health Insurance
Payments
Equity
Acceleration
Form of
Payment
18 150% of
Target Bonus
Prorated Bonus
for the year in
which termination
occurs
18 months of
COBRA coverage
18 months Monthly
payments
Under the terms of Mr. Barbour’s employment agreement, the term ‘‘cause’’ means:
• commission of a willful act of fraud, embezzlement or misappropriation against or involving
the Company;
• conviction, or entry of a guilty or no contest plea, for any felony involving moral turpitude
or dishonesty;
• commission of an act or failure to commit an act, involving the Company that would amount to
willful misconduct, wanton misconduct, gross negligence or a material breach of Mr. Barbour’s
employment agreement and which results or is reasonably likely to result in significant harm to the
Company; or
• willful failure to perform the responsibilities and duties set forth in the employment agreement for a
period of ten business days following receipt of written notice from the Company regarding
such failure.
Under the terms of Mr. Barbour’s employment agreement, ‘‘good reason’’ means:
• a material diminution in his authority, duties or responsibilities;
• the requirement that Mr. Barbour report to an officer or other employee of the Company rather than
the board of directors;
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