LeapFrog 2009 Annual Report Download - page 172

Participants are required to execute a release prior to receiving any of the foregoing benefits and benefits
under the Severance Plan will terminate if, at any time, the officer violates any proprietary information or
confidentiality obligation to LeapFrog.
Under his March 2010 employment agreement, the vesting of Mr. Chiasson’s equity awards is subject to
100% acceleration upon a “change in control” as defined in his agreement. In addition, if we terminate
Mr. Chiasson’s employment without “cause” or if Mr. Chiasson terminates his employment for “good reason,” as
such terms are defined in the agreement, we will be obligated to make severance payments equal to 12 months
(24 months if in connection with a change in control of the company) base salary and target bonus. Mr. Chiasson
will also be eligible for the health insurance payments and bonus payments for which our other Named Executive
Officers are eligible under the Severance Plan. Under Mr. Chiasson’s agreement, “cause” for termination will
exist if, generally, Mr. Chiasson:
• commits an act of fraud, embezzlement or misappropriation against or involving the company,
• is convicted of any felony involving moral turpitude or dishonesty,
• commits willful misconduct, wanton misconduct, gross negligence or a material breach of the
agreement and which results or is reasonably likely to result in significant harm to the company, or
• willfully fails to perform his responsibilities and duties under his agreement for 10 business days
following receipt of written notice describing past instances of willful failure of performance.
Under his agreement, “good reason” will exist under generally the same conditions specified in the Severance
Plan. However, Mr. Chiasson’s agreement includes the same provision that applies to Mr. Dodd (as described
above) with respect to a change of control in which Mr. Chiasson does not hold the senior-most position in his
functional area in the surviving top-most parent company (excluding any company that is an investment fund or
other non-operating company). Similar to the Severance Plan, to resign for good reason under the terms of his
agreement, Mr. Chiasson must resign within 70 days after the occurrence, without his consent, of the event giving
him good reason, and after having given us 30 days’ written notice (during which time we would have the
opportunity to cure the event that he asserts is good reason). If we cure the event, he would not have good reason.
Nancy G. MacIntyre and Peter M. O. Wong
Mr. Wong departed from LeapFrog effective January 31, 2010 and Ms. MacIntyre departed from LeapFrog
effective February 5, 2010. Each was eligible for benefits under the Severance Plan. As a result, upon execution
of a release agreement, both received the standard benefits under the Severance Plan for a covered termination
without a change in control: (i) salary continuation equal to 12 months of her base salary paid in semi-monthly
installments; and (ii) 12 months of COBRA benefits. In addition, the compensation committee approved an
extension of the exercisability of Mr. Wong’s and Ms. MacIntyre’s outstanding options from the standard three
months to twelve months from the date of the cessation of their continuous service, as defined in the 2002 Equity
Incentive Plan. Finally, as described in “Executive Compensation—Compensation Discussion and Analysis—
Elements of Executive Compensation—Performance-Based Annual Bonus Awards,” both remained eligible for a
bonus payment under our 2009 bonus plan (though no year-end bonuses were ultimately paid under that plan).
The following table shows the amounts of these severance benefits for Ms. MacIntyre and Mr. Wong:
Name of Named Executive Officer
Payment of
Base Salary
($)(1)
Health Insurance
Payments
($)(2)
Bonus
Payment
($)
Nancy G. MacIntyre .......................................... 300,000 19,750 —
Peter M. O. Wong ............................................ 240,075 19,760 —
(1) Amount paid over 12 months in semi-monthly installments ending February 5, 2011 and subject to the terms
and conditions of the Severance Plan, including any applicable tax withholding obligations.
(2) Approximate value of benefit; does not reflect potential increase of insurance premiums in 2010.
66