LeapFrog 2015 Annual Report Download - page 173

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Our named executive officers are eligible to receive certain payments and benefits upon a termination of
employment or a change in control of LeapFrog pursuant to various plans and agreements. Messrs. Barbour,
Arthur, Ahearn and Hicks are eligible to receive certain 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. Adams is eligible to receive certain payments and benefits in the event of his termination
of employment under specified circumstances, including in connection with a change in control of LeapFrog,
under our Employee 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 each of our named executive officers, are described below and are based on the assumption that a
triggering event occurred on March 31, 2015 and assume a price per share of our Class A common stock of
$2.18, 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, the vesting requirements of which 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 LeapFrog, 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 payments 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, the term ‘‘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;
• a material reduction in Mr. Barbour’s base salary;
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