Exhibit 10.02


 





 


August 5, 2015


 


Raymond Arthur


425 1st Street


San Francisco, CA 94105


 


Dear Mr. Arthur,


 


This letter confirms LeapFrog’s agreement to provide you
with the severance benefits recently discussed with you. I am pleased to offer you the severance benefits set forth in Exhibit
A of this letter. These severance benefits will replace in their entirety the severance benefits set forth in Exhibit A of your
offer letter dated June 5, 2012.


 


Please confirm your agreement by signing and returning a copy
of this letter.


 


Sincerely,


 


/s/ John Barbour


John Barbour


Chief Executive Officer


 


 


Agreed:


 


 


/s/ Raymond Arthur


Raymond Arthur


Chief Financial Officer


 


 


 




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Appendix A


 


Severance 


 


Severance Provisions.


 


In the event of your
Covered Termination, you shall be entitled to receive cash severance benefits equal to the following: (i) twelve (12) months of
Base Salary or, if the Covered Termination occurs during a Change in Control Period, eighteen (18)
months of Base Salary (the “Base Severance”), (ii) a payment equal to the prorated amount of your annual
bonus at target (as the target bonus is set forth in this offer letter or under the terms of the applicable bonus program for
the calendar year in which your Covered Termination occurs, as such agreement or program may be in effect at the time of such
Covered Termination) for the calendar year in which the Covered Termination occurs (Subsection (ii) is referred to as the “Pro-Rated
Bonus Severance”), and (iii) a payment equal to your annual bonus at target (as the target bonus is set forth in this
offer letter or under the terms of the applicable bonus program for the calendar year in which your Covered Termination occurs,
as such agreement or program may be in effect at the time of such Covered Termination) or, if the Covered Termination occurs
during a Change in Control Period, 1.5 times the Bonus Amount. In the event of your Covered Termination, you shall also be
credited with one (1) year of additional employment service toward vesting of your options and restricted stock units, and restricted
stock units will treated for purposes of this provision as if vesting occurred on a monthly basis. If a Covered Termination occurs
at a time when the bonus for the prior calendar year has not been paid, your Pro-Rated Bonus Severance shall be equal to (1) the
bonus that would otherwise be payable for such prior calendar year, as determined under the terms applicable to such bonus (including
the timing of its determination) plus (2) the amounts described above in Subsection (ii) for the calendar year in which the Covered
Termination occurs. The foregoing severance is intended to provide you with compensation for the period following a Covered Termination.


 


Provided
that you elect continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”),
the Company shall pay the full amount of premiums for your group medical, dental and vision coverage, including coverage for your
eligible dependents, through the earlier of (i) twelve (12) months following the Covered Termination or, if the Covered Termination
occurs during a Change in Control Period, the earlier of eighteen (18) months (the “Severance Period”) or (ii)
the date that you become eligible for group health coverage through a subsequent employer. You must notify the Company immediately
if you become eligible to be covered by a group medical, dental or vision insurance plan of a subsequent employer. No provision
of this letter will affect the continuation coverage rules under COBRA except that the Company’s payment of any applicable
insurance premiums will be credited as payment by you for purposes of your payment required under COBRA. Therefore, the period
during which you may elect whether or not to continue the Company’s group medical, dental or vision coverage under COBRA,
the length of time during which COBRA continuation coverage will be made available to you, and all your other rights and obligations
under COBRA will be applied in the same manner that such rules would apply in the absence of this provision.


 






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Upon the occurrence of
a Change in Control (i) the vesting and exercisability of all outstanding options to purchase the Company’s stock you then
hold shall be accelerated in full as of the date the Change in Control occurs, and (ii) all other stock awards that you then hold
shall vest in full, and any reacquisition or repurchase rights held by the Company with respect to such stock awards shall lapse.
Any such options shall remain exercisable by you until the period provided by the agreements evidencing such options, but in no
event beyond the expiration date of such options.


 


Payment Timing.


 


Any cash severance benefits
provided under this letter shall be paid in equal bi-monthly installments paid over the number of months in the Severance Period
on the Company’s regularly scheduled payroll periods, with such payment(s) occurring or commencing on the Release Date, subject
to the following paragraph and your delivery of the release described below. In no event shall payment of any severance benefit
be made prior to the effective date of your Covered Termination or prior to the effective date of the release described below.


 


409A Matters.


 


Cash severance payments
and vesting acceleration benefits, to the extent paid or provided from the date of the Covered Termination through March 15 of
the calendar year following the Covered Termination, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2)
of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4)
of the Treasury Regulations. To the extent such payments or benefits are made or provided following said March 15, they are intended
to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary termination
from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by
such provision, with any excess amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of the
Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payment be delayed until six
(6) months after separation from service if you are a “specified employee” within the meaning of Section 409A(a)(2)(B)(i)
of the Code at the time of such separation from service. To the extent you are entitled to an excess amount described in the preceding
sentence, such amount will not be paid or payments will not commence until the sixtieth (60th) day following the Covered Termination,
or, if later, such time as required by Section 409A(a)(2)(B)(i) of the Code.


 


Release Requirement.


 


In order to be eligible
to receive Severance benefits you must execute a general waiver and release in form acceptable to the Company, and the release
must become effective in accordance with its terms not later than sixty (60) days following the date of the Covered Termination
(the sixtieth day, the “Release Date”).


 






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Termination of
Benefits.


 


The benefits set forth
under this Appendix A shall terminate immediately if you, at any time, (i) violate any proprietary information or confidentiality
obligation to the Company or (ii) disparage the Company, its affiliated, related, parent or subsidiary corporations, or
its or their present or former directors, officers, employees, attorneys or agents in any manner likely to be harmful to them or
their business, business reputation or personal reputation, provided that you may respond accurately and fully to any question,
inquiry or request for information when required by legal process.


 


Payment Limits.


 


If any payment or benefit
you would receive in connection with a Change in Control or otherwise (“Payment”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed
by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount.


 


The “Reduced Amount”
shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise
Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all
applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in your receipt, on an after-tax basis, of the greater amount of the Payment, notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute
payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order; reduction
of cash payments; cancellation of accelerated vesting of stock options; reduction of employee benefits. In the event that acceleration
of vesting of stock options is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date
of grant of such options (i.e., earliest granted option cancelled last) unless you elect in writing a different order for
cancellation.


 


The accounting firm engaged
by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting firm to make the
determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm
required to be made hereunder.


 


The accounting firm engaged
to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company
and to you within fifteen (15) calendar days after the date on which your right to a Payment is triggered (if requested at that
time by the Company or you) or such other time as requested by the Company or you. If the accounting firm determines that no Excise
Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company
and you with an opinion reasonably acceptable to you that no Excise Tax will be imposed with respect to such Payment. Any good
faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and you.


 






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Definitions.


 


“Cause” means any of the following
has occurred, as reasonably determined by the Company in good faith:


 


(i)you are
indicted for or convicted of any felony or crime involving moral turpitude or dishonesty;


 


(ii)you
participate in any fraud against the Company or any of its subsidiaries;


 


(iii)you
materially breach any material provision of a written agreement with the Company or any of its subsidiaries (including, without
limitation, the Proprietary Information and Inventions Agreement) or of a written policy of the Company or any of its subsidiaries,
provided that, if such breach is reasonably susceptible of cure, you fail to cure such breach within a reasonable period of time
(to be determined by the Company in its sole discretion) after receiving notice of such breach from the Company;


 


(iv)you
engage in conduct that demonstrates unfitness to serve; or


 


(v)you breach
your duties to the Company or any of its subsidiaries, including, without limitation, persistent unsatisfactory performance of
job duties.


 


“Change in Control” means
the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:


 


(i)any Exchange
Act Person (as defined in the Company’s 2011 Equity Incentive Plan) (other than Larry Ellison, Michael Milken, Lowell Milken,
or any combination of the foregoing), becomes the owner, directly or indirectly, of securities of the Company representing more
than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of
a merger, consolidation or similar transaction;


 


(ii)there
is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after
the consummation of such merger, consolidation, or similar transaction, the stockholders of the Company immediately prior thereto
do not own, directly or indirectly, outstanding voting securities representing more than fifty percent (50%) of the combined voting
power of the surviving entity in such merger, consolidation or similar transaction or more than fifty percent (50%) of the combined
outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction;


 






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(iii)the
stockholders of the Company approve or the Company’s Board of Directors approves a plan of complete dissolution or liquidation
of the Company; or


 


(iv)there
is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company
and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets
of the Company and its Subsidiaries to an entity, more than fifty percent (50%) of the combined voting power of the voting securities
of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately
prior to such sale, lease, license, or other disposition.


 


“Change in Control
Period” means the period beginning three (3) months before and ending twelve (12) months after a Change in Control.


 


“Covered Termination”
means (i) a termination by the Company and its subsidiaries without Cause or (ii) your Good Reason Resignation.


 


“Good Reason Resignation” means
your voluntary termination of employment within sixty (60) days after the occurrence of one of the following events without your
consent:


 


(i)a material
diminution in your authority, duties, or responsibilities;


 


(ii)a reduction
in your Base Salary in an amount greater than ten percent (10%) of your Base Salary prior to such reduction;


 


(iii)a change
in the geographic location of your workplace by more than fifty (50) miles from its previous location; or


 


(iv)a reduction
in your target bonus in an amount greater than ten percent (10%) of the target bonus set forth your offer letter; or


 


(v)a material
breach by the Company and its subsidiaries of the agreement under which you are employed.


 


Prior to any Good Reason
Resignation, you must provide written notice to the Company of the existence of the Good Reason event within thirty (30) days following
the initial existence of the event, and the Company shall have a period of thirty (30) days following such notice to cure the event.
If the event is cured within such time period, you shall not be entitled to terminate his or her employment pursuant to a Good
Reason Resignation.


 






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