Document:

Separation Agreement between Leapfrog and Kathryn Olson

 Exhibit 10.1 
 September 7, 2006 
 Kathryn Olson 
 LeapFrog
Enterprises, Inc. 
 6401 Hollis Street, Suite 100 
 Emeryville,
CA 94608 
 Dear Kathryn: 
 This letter sets forth the terms and
conditions of the separation agreement (the “Agreement”) LeapFrog Enterprises, Inc. (“LeapFrog” or the “Company”) is offering to you. 
 1. Separation From Employment Service. 
 (a) Separation Date. You will resign as the
Company’s Chief Marketing Officer and as an employee of the Company effective as of September 7, 2006 (the “Separation Date”). Except as expressly provided herein, you will not hold any employment or other positions with
the Company after the Separation Date. 
 (b) Final Pay. On the Separation Date, the Company will pay you all remaining earned but
unpaid salary, and all accrued but unused vacation earned through the Separation Date, less applicable deductions and withholdings. You are entitled to this payment regardless of whether or not you sign this Agreement. 
 (c) Expense Reimbursements. Within thirty (30) days after the Separation Date, you will submit your final documented expense reimbursement
statement reflecting all business expenses you incurred through the Separation Date, if any, for which you seek reimbursement. The Company will reimburse you for these expenses pursuant to its regular business practices and procedures. 

(d) Health Insurance. To the extent provided by the federal COBRA law or, if applicable, state insurance laws, and by the Company’s
current group health insurance policies, you will be eligible to continue your group health insurance benefits after the Separation Date at your own expense. Later, you may be able to convert to an individual policy through the provider of the
Company’s health insurance, if you wish. You will be provided with a separate notice describing your rights and obligations under COBRA on or after the Separation Date. 
 2. Severance Benefits. In exchange for entering into and abiding by the terms of this Agreement, the Company will provide you with the severance benefits (the “Severance Benefits”) described
below. 
 (a) Salary Continuation Benefits. The Company shall make continuing base salary payments to you (at the base salary
rate in effect as of the Separation Date, i.e., $24,666.67 per month) for twelve (12) months (the “Salary Continuation Payments”). The Salary 

 
Continuation Payments shall be paid, subject to applicable withholdings and deductions, on the Company’s customary payroll pay dates starting on the
first payroll date after the Effective Date (as defined herein) of this Agreement. 
 (b) COBRA Reimbursement. Provided you timely
elect to continue your health insurance coverage after the Separation Date pursuant to the federal COBRA law or applicable state law, and the terms and conditions of the applicable group health insurance plans, the Company will reimburse you for all
premiums necessary to maintain your health insurance coverage as of the Separation Date (for yourself, spouse and any covered dependents) in effect through the twelve (12) month anniversary of the Separation Date or until such earlier date as
you become eligible for group health insurance through a subsequent employer (the “COBRA Reimbursement”). You agree to immediately notify the Company in writing as soon as you become eligible for health insurance coverage through a
subsequent employer. The monthly COBRA Reimbursement amount will be paid simultaneously with the Salary Continuation Payments. 
 (c)
Reimbursement for Outplacement Services. For the six (6) month period after the Separation Date, the Company will pay for outplacement services provided to you by a firm reasonably approved by the Company, up to a maximum amount of $10,000,
with such amount to be paid to you in the form of reimbursement after presentation by you to the Company of an invoice for bona fide outplacement services rendered to you. If you choose not to use such outplacement services, no compensation will be
paid to you in lieu thereof. 
 (d) Accelerated Vesting of Restricted Stock. The installment of 7,500 shares of the Company’s
Restricted Stock (representing 30% of the 25,000-share award granted to you on November 10, 2004), that would otherwise vest on November 10, 2006, will vest on an accelerated basis on the Effective Date, notwithstanding anything to the
contrary in your restricted stock award. The remaining shares of the November 10, 2004 restricted stock award, as well as any other equity awards you may hold, will be governed by their terms and the terms of any applicable plan and are not
modified in any way by this Agreement. 
 (e) No Other Severance Benefits. The benefits provided to you under this Agreement shall
entirely supersede and replace any and all severance benefits available to you under any applicable employment agreement, any other agreement between you and the Company, or pursuant to any other Company plan, policy or practice. 
 3. Other Compensation Or Benefits. You acknowledge that, except as expressly provided in this Agreement, you will not receive any additional compensation,
bonuses, severance or other benefits from the Company after the Separation Date. 
 4. Return Of Company Property. 
 (a) General Obligations. On the Separation Date and excluding only the materials described in subsection 4(b) below, you agree to immediately
return to the Company all Company documents (and all copies thereof) and other Company property in your possession or control, including, but not limited to, Company files, notes, correspondence, memoranda, notebooks, drawings, records, reports,
lists, compilations of data, proposals, agreements, drafts, 

  

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minutes, studies, plans, forecasts, purchase orders, financial and operational information, product and training information, research and development
information, customer information and contact lists, sales and marketing information, personnel and compensation information, vendor information, promotional literature and instructions, product specifications and manufacturing information,
computer-recorded information, electronic information (including e-mail and correspondence), other tangible property and equipment (including, but not limited to, computer equipment, facsimile machines, and cellular telephones), credit cards, entry
cards, identification badges and keys; and any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part). You agree that you will make a diligent
search to locate any such documents, property and information. In addition, if you have used any personally owned computer, server, or e-mail system to receive, store, review, prepare or transmit any Company confidential or proprietary data,
materials or information, you agree to immediately provide the Company with a computer-useable copy of all such information and then permanently delete and expunge such Company confidential or proprietary information from those systems; and you
agree to provide the Company access to your system as requested to verify that the necessary copying and/or deletion is done. The Company will make one of its IT specialists available to work with you directly to ensure your compliance with the
foregoing duplication and expungement processes. Your timely return of all such Company documents and other property is a precondition to your receipt of the Severance Benefits under this Agreement. 
 (b) Retained Materials. Notwithstanding the foregoing, after the Separation Date, you shall be entitled to retain a copy of: (i) all
documents which you executed in connection with your employment with the Company, including but not limited to the any applicable employment agreement and Employee Proprietary Information and Inventions Agreement; (ii) all wage statements and
other payroll records issued to you by the Company and well as documents issued to you with regard to your employee benefits with the Company; and (iii) all Company documents and information which the Company issued to you in your capacity as a
Company option holder and/or shareholder and which was otherwise made available or issued to other Company option holders and/or stockholders generally. 
 5. Proprietary Information Obligations. You hereby acknowledge and agree to abide by all of your continuing obligations under your Employee Proprietary Information and Inventions Agreement (the “Proprietary Information
Agreement”), a copy of which is attached as Exhibit A. 
 6. Confidentiality. The provisions of this Agreement will be held in strictest
confidence by you and the Company and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) you may disclose this Agreement in confidence to your immediate family; (b) the parties may disclose
this Agreement in confidence to their respective attorneys, accountants, auditors, tax preparers, and financial advisors; (c) the Company may disclose this Agreement as reasonably necessary or advisable to fulfill standard or legally required
reporting or disclosure requirements or to fulfill fiduciary duties; and (d) the parties may disclose this Agreement insofar as such disclosure is necessary to enforce its terms or as otherwise required by law. In particular, and without
limitation, you agree not to disclose the terms of this Agreement to any current or former Company employee, consultant or independent contractor. 
  

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 7. Nondisparagement. You and the Company (through its officers and directors) each agree not to disparage the
other in any manner likely to be harmful to the other’s business, business reputation, or personal reputation; provided, however, that both you and the Company may respond accurately and fully to any request for information to the extent
required by legal process. 
 8. No Voluntary Adverse Action. You agree that you will not voluntarily (except in response to legal compulsion) assist
any person in bringing or pursuing any proposed or pending litigation, arbitration, administrative claim or other formal proceeding against the Company, its parent or subsidiary entities, affiliates, officers, directors, employees or agents.

 9. Cooperation. You agree to cooperate fully with the Company in connection with its actual or contemplated defense, prosecution, or investigation
of any claims or demands by or against third parties, or other matters arising from events, acts, or failures to act that occurred during the period of your employment by the Company. Such cooperation includes, without limitation, making yourself
available to the Company upon reasonable notice, without subpoena, to provide truthful and accurate information in witness interviews and deposition and trial testimony. The Company will reimburse you for reasonable out-of-pocket expenses you incur
in connection with any such cooperation (excluding forgone wages, salary, or other compensation) and will make reasonable efforts to accommodate your scheduling needs. In addition, you agree to execute all documents (if any) necessary to carry out
the terms of this Agreement. 
 10. No Admissions. Nothing contained in this Agreement shall be construed as an admission by you or the Company of any
liability, obligation, wrongdoing or violation of law. 
 11. Release of Claims. In exchange for the consideration under this Agreement to
which you would not otherwise be entitled, including but not limited to the Severance Benefits, you hereby generally and completely release the Company and its parent or subsidiary entities, successors, predecessors and affiliates, and its and their
directors, officers, employees, shareholders, agents, attorneys, insurers, affiliates and assigns, from any and all claims, liabilities and obligations, both known and unknown, that arise from or are in any way related to events, acts, conduct, or
omissions occurring at any time prior to and including the date you sign this Agreement. This general release includes, but is not limited to: (a) all claims arising out of or in any way related to your employment with the Company or the
termination of that employment; (b) all claims related to your compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance payments, fringe benefits, stock, stock options,
or any other ownership or equity interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including but not limited to
claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other
claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), and the
California Fair Employment and Housing Act (as amended). You represent that you have no lawsuits, claims or actions pending in your name, or on behalf of any other person or entity, against the Company or any other person or entity subject to the
release granted in this paragraph. Notwithstanding 

  

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anything in this paragraph, you are not hereby releasing the Company from any obligation it may otherwise have to indemnify you for your acts within the
course and scope of your employment with the Company, nor from any obligations undertaken by the Company in this Agreement. 
 12. ADEA Waiver. You
acknowledge that you are knowingly and voluntarily waiving and releasing any rights you have under the ADEA, and that the consideration given for the waiver and releases you have given in this Agreement is in addition to anything of value to which
you were already entitled. You further acknowledge that you have been advised, as required by the ADEA, that: (a) your waiver and release does not apply to any rights or claims that arise after the date you sign this Agreement; (b) you
should consult with an attorney prior to signing this Agreement (although you may choose voluntarily not to do so); (c) you have twenty-one (21) days to consider this Agreement (although you may choose voluntarily to sign it sooner);
(d) you have seven (7) days following the date you sign this Agreement to revoke this Agreement (in a written revocation sent to the Company’s General Counsel); and (e) this Agreement will not be effective until the date upon
which the revocation period has expired, which will be the eighth day after you sign this Agreement (the “Effective Date”). 
 13.
Section 1542 Waiver. In giving the releases set forth in this Agreement, which include claims which may be unknown to you at present, you acknowledge that you have read and understand Section 1542 of the California Civil Code which
reads as follows: “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with
the debtor.” You hereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in any jurisdiction with respect to the releases granted herein, including but not limited to
the release of unknown and unsuspected claims granted in this Agreement. 
 14. Voluntary Agreement. By signing this Agreement, you acknowledge that
you have carefully read and understand this Agreement; you understand that this Agreement is legally binding and by signing it you give up certain rights. 
 15. Dispute Resolution. To aid in the rapid and economical resolution of any disputes which may arise under this Agreement, you and the Company agree that any and all claims, disputes or controversies of any nature whatsoever arising
from or regarding the interpretation, performance, negotiation, execution, enforcement or breach of this Agreement shall be resolved by confidential, final and binding arbitration conducted before a single arbitrator with Judicial Arbitration and
Mediation Services, Inc. (“JAMS”) in San Francisco, California, in accordance with JAMS’ then-applicable arbitration rules. The parties acknowledge that by agreeing to this arbitration procedure, they waive the right to resolve any
such dispute through a trial by jury, judge or administrative proceeding. You will have the right to be represented by legal counsel at any arbitration proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery
for the resolution of the dispute and to award such relief as would otherwise be available under applicable law in a court proceeding; and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the
relief, if any, awarded as to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based. The Company shall bear JAMS’ arbitration fees and administrative costs. Nothing in
this Agreement shall prevent either you or the Company from 

  

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obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations
may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction. The arbitrator, and not a court, shall be authorized to determine whether the provisions of this paragraph apply to a dispute, controversy or
claim sought to be resolved in accordance with these arbitration procedures. 
 16. Miscellaneous. This Agreement constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with regard to its subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it
supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you and the Chief Executive Officer of the Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, and their respective heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question shall be deemed modified so as to be rendered enforceable in a manner consistent with the intent of the
parties insofar as possible under applicable law. This Agreement shall be deemed to have been entered into, and construed and enforced in accordance with, the laws of the State of California without regard to conflicts of law principles. Any
ambiguity in this Agreement shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement, or rights hereunder, shall be in writing and shall not be deemed to be a waiver of any successive breach or rights
hereunder. This Agreement may be executed in counterparts which shall be deemed to be part of one original, and facsimile signatures will suffice as original signatures. 
  

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 If this Agreement is acceptable to you, please sign below and return the original to me. You have twenty-one
(21) calendar days to decide whether you would like to accept this Agreement, and the Company’s offer of severance contained herein will automatically expire if you do not accept it within that time frame. 
 We wish you all the best in your future endeavors. 
  

			
	 Sincerely,

	
	LEAPFROG ENTERPRISES, INC.
		
	 By:
	 	/s/ Jeffrey G. Katz
		 	

 Exhibit A –Proprietary Information Agreement 
  

	
	UNDERSTOOD AND AGREED:
	
	/s/ Kathryn C. Olson
	Kathryn Olson
	
	September 25, 2006
	Date

  

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 EXHIBIT A 
 PROPRIETARY INFORMATION AGREEMENT 
  

 1 

 LEAPFROG ENTERPRISES, INC. 
 EMPLOYEE PROPRIETARY INFORMATION 
 AND INVENTIONS AGREEMENT 
 In consideration of my employment or continued employment by LEAPFROG ENTERPRISES, INC. (the
“Company”), and the compensation now and hereafter paid to me, I hereby agree as follows: 
 1. NONDISCLOSURE.

 1.1 Recognition of Company’s Rights; Nondisclosure. At all times during my employment and thereafter, I will hold in
strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Proprietary Information (defined below), except as such disclosure, use or publication may be required in connection with my work for the Company, or
unless an officer of the Company expressly authorizes such in writing. I will obtain Company’s written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that relates to my work at Company
and/or incorporates any Proprietary Information. I hereby assign to the Company any rights I may have or acquire in such Proprietary Information and recognize that all Proprietary Information shall be the sole property of the Company and its
assigns. 
 1.2 Proprietary Information. The term “Proprietary Information” shall mean any and all confidential
and/or proprietary knowledge, data or information of the Company. By way of illustration but not limitation, “Proprietary Information” includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, source and
object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (b) information regarding plans for
research, development, new products, training, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (c) information regarding the skills and compensation
of other employees of the Company. 
 1.3 Third Party Information. I understand, in addition, that the Company has received and in the
future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for
certain limited purposes. During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection
with their work for the Company) or use, except in connection with my work for the Company, Third Party Information unless expressly authorized by an officer of the Company in writing. 
 1.4 No Improper Use of Information of Prior Employers and Others. During my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or any other third party to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other third party to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person. I will use in the performance of my duties only information which is
generally known and used by persons with training and experience comparable to my own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company. 
 2. ASSIGNMENT OF INVENTIONS. 
 2.1 Proprietary Rights. The term “Proprietary Rights” shall mean all trade secret, patent, copyright, mask work and other intellectual property rights throughout the world. 
 2.2 Prior Inventions. Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are
excluded from the scope of this Agreement. To preclude any possible uncertainty, I have set forth on Exhibit B (Previous Inventions) attached hereto a complete list of all Inventions that I have, alone or jointly with others, conceived,
developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have
excluded from the scope of this Agreement (collectively referred to as “Prior Inventions”). If disclosure of any such Prior Invention would cause me to violate any prior confidentiality agreement, I understand that I am not to list
such Prior Inventions in Exhibit B but am only to disclose a cursory name for each such invention, a listing of the party(ies) to 

  

 1. 

 
whom it belongs and the fact that full disclosure as to such inventions has not been made for that reason. A space is provided on Exhibit B for such
purpose. If no such disclosure is attached, I represent that there are no Prior Inventions. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company product, process or machine, the Company is hereby
granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use and sell such Prior Invention. Notwithstanding the
foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions without the Company’s prior written consent. 
 2.3 Assignment of Inventions. Subject to Sections 2.4, and 2.6, I hereby assign and agree to assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice or first fixed in
a tangible medium, as applicable) to the Company all my right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made
or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company. Inventions assigned to the Company, or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as “Company Inventions.” 
 2.4 Nonassignable Inventions. This Agreement
does not apply to an Invention which qualifies fully as a nonassignable Invention under Section 2870 of the California Labor Code (hereinafter “Section 2870”). I have reviewed the notification on Exhibit A (Limited
Exclusion Notification) and agree that my signature acknowledges receipt of the notification. 
 2.5 Obligation to Keep Company
Informed. During the period of my employment and for six (6) months after termination of my employment with the Company, I will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice
by me, either alone or jointly with others. In addition, I will promptly disclose to the Company all patent applications filed by me or on my behalf within a year after termination of employment. At the time of each such disclosure, I will advise
the Company in writing of any Inventions that I believe fully qualify for protection under Section 2870; and I will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in
confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under
the provisions of Section 2870. I will preserve the confidentiality of any Invention that does not fully qualify for protection under Section 2870. 
 2.6 Government or Third Party. I also agree to assign all my right, title and interest in and to any particular Company Invention to a third party, including without limitation the United States, as directed by
the Company. 
 2.7 Works for Hire. I acknowledge that all original works of authorship which are made by me (solely or jointly with
others) within the scope of my employment and which are protectable by copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101). 
 2.8 Enforcement of Proprietary Rights. I will assist the Company in every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to Company Inventions in any and all countries. To that end I will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request
for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof. In addition, I will execute, verify and deliver assignments of such Proprietary Rights to the Company or its
designee. My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable
rate after my termination for the time actually spent by me at the Company’s request on such assistance. 
 In the event the Company is
unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in the preceding paragraph, I hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and in my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of
the preceding paragraph with the same legal force and effect as if executed by me. I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have for infringement of any Proprietary Rights
assigned hereunder to the Company. 
 3. RECORDS. I agree to keep and maintain adequate and current records (in
the form of notes, sketches, 
  

 2. 

 
drawings and in any other form that may be required by the Company) of all Proprietary Information developed by me and all Inventions made by me during the
period of my employment at the Company, which records shall be available to and remain the sole property of the Company at all times. 
 4.
ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the Company I will not, without the Company’s express written consent, engage in any employment or business activity which is
competitive with, or would otherwise conflict with, my employment by the Company. I agree further that for the period of my employment by the Company and for one (l) year after the date of termination of my employment by the Company I will not,
either directly or through others, solicit or attempt to solicit any employee, independent contractor or consultant of the company to terminate his or her relationship with the Company in order to become an employee, consultant or independent
contractor to or for any other person or entity. I agree further that for the period of my employment with the Company and for one (1) year after the date of termination of my employment with the Company I will not in any manner discourage any
client or customer of the Company from continuing its business relationship with the Company. 
 5. NO CONFLICTING
OBLIGATION. I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence information acquired by me in confidence or in trust
prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith. 
 6. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I will deliver to the Company any and all drawings, notes, memoranda, specifications, devices,
formulas, and documents, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Proprietary Information of the Company. I further agree that any property situated on the
Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. 
 7. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique and because I may have
access to and become acquainted with the Proprietary Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and
without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement. 
 8. NOTICES. Any notices
required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Such notice shall be deemed given upon personal delivery, or express mail (e.g.,
Federal Express) delivery, to the appropriate address or if sent by certified or registered mail, three (3) days after the date of mailing. 
 9.
NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the Company, I hereby consent to the notification of my new employer of my rights and obligations under this
Agreement. 
 10. GENERAL PROVISIONS. 
 10.1 Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by and construed according to the laws of the State of California, as such laws are applied to agreements entered into and
to be performed entirely within California between California residents. I hereby expressly consent to the personal jurisdiction of the state and federal courts located in Alameda County, California for any lawsuit filed there against me by Company
arising from or related to this Agreement. 
 10.2 Severability. In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement; this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein; and such provision shall be construed and modified so as to render it valid, lawful, and enforceable in a manner consistent with the intent of the parties to the extent compatible
with the applicable law as it shall then appear. 
 10.3 Successors and Assigns. This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns. 
 10.4 Survival. The provisions of this Agreement shall survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee. 
 10.5 Employment. I agree and understand that nothing in this Agreement shall confer any right with respect to continuation of employment by the
Company, 

  

 3. 

 
nor shall it interfere in any way with my right or the Company’s right to terminate my employment at any time, with or without cause or advance notice,
which rights are hereby expressly reserved. 
 10.6 Waiver. No waiver by the Company of any breach of this Agreement shall be a waiver
of any preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall be construed as a waiver of any other right. The Company shall not be required to give notice to enforce strict adherence to all terms of this
Agreement. 
 10.7 Entire Agreement. The obligations pursuant to Sections 1 and 2 (except Section 2.7) of this Agreement shall
apply to any time during which I was previously engaged, or am in the future engaged, by the Company as a consultant if no other agreement governs nondisclosure and assignment of inventions during such period. This Agreement is the final, complete
and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will
be effective unless in writing and signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement. 
 This Agreement shall be effective as of the first day of my employment with the Company. 
 I HAVE READ THIS AGREEMENT CAREFULLY, UNDERSTAND
ITS TERMS, AND AGREE THERETO. I HAVE COMPLETELY FILLED OUT EXHIBIT B TO
THIS AGREEMENT. 
 Dated: 11-04-04 
  

	
	 /s/ Kathryn Olson

	(Signature)
	
	 Kathryn Olson

	(Printed Name)

 ACCEPTED AND AGREED TO: 
 LEAPFROG ENTERPRISES, INC. 
  

			
	By:	 	 /s/ Laura Dillard

	Title:	 	VP, Human Resources
	
	 6401 Hollis Street, Suite 100
 Emeryville, CA
94608

	(Address)

 Dated: May 26, 2004 
  

 4. 

 EXHIBIT A 
 LIMITED EXCLUSION NOTIFICATION 
 THIS IS
TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and the Company does not require you to assign or offer to assign to the Company any invention
that you developed entirely on your own time without using the Company’s equipment, supplies, facilities or trade secret information except for those inventions that either: 
 1. Relate at the time of conception or reduction to practice of the invention to the Company’s business, or actual or demonstrably anticipated
research or development of the Company; or 
 2. Result from any work performed by you for the Company. 
 To the extent a provision in the foregoing Agreement purports to require you to assign an invention otherwise excluded from the preceding paragraph, the
provision is against the public policy of this state and is unenforceable. 
 This limited exclusion does not apply to any patent or
invention covered by a contract between the Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United States. 
 I ACKNOWLEDGE RECEIPT of a copy of this notification. 
  

 A-1. 

 EXHIBIT B 
  

									
	TO:	  	LEAPFROG ENTERPRISES, INC.	  		  	
					
	FROM:	  	  
	  	(Employee Name)	  		  	
					
	DATE:	  	  
	  		  		  	
					
	SUBJECT:	  	Previous Inventions	  		  		  	

 1. Prior to my engagement by LeapFrog Enterprises, Inc. (the “Company”), I have  ̈ have not x made, conceived or reduced to practice, either alone or jointly with others, inventions or improvements
relevant to the subject matter of my employment by the Company. 
 (If you checked “have not,” you should not complete any other portion of this
memorandum. If you checked “have,” please complete the remaining sections of this memorandum.) 
 2. Except as listed in Section 3
below, the following is a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my
engagement by the Company: 
  

			
		  	  
  

		  	  
  

		  	  
  

  

	 ̈	Additional sheets attached. 

 3. Due to a prior confidentiality
agreement, I cannot complete the disclosure under Section 2 above with respect to inventions or improvements generally listed below, the proprietary rights and duty of confidentiality with respect to which I owe to the following party(ies):

  

							
	 	  	 Invention or Improvement
	  	 Party(ies)
	  	 Relationship

	1.	  	  
  
	  	  
  
	  	  
  

	2.	  	  
  
	  	  
  
	  	  
  

	3.	  	  
  
	  	  
  
	  	  
  

  

	 ̈	Additional sheets attached. 

  

			
	By:	 	 /s/ Kathryn Olson

		 	(Employee Signature)
		
	Printed Name:	 	Kathryn Olson
	
	Date: 11-04-04

  

 B-1.Exhibit 10.7

 Exhibit 10.7 
 Form of Polonia Bank Supplemental Executive Retirement Plan 
 Effective January 1, 2006

 Polonia Bank 
 Supplemental Executive Retirement Plan 
 Table of Contents 
  

					
	 ARTICLE I
	  	Introduction	  	1
			
	 ARTICLE II
	  	Definitions	  	1
			
	 ARTICLE III
	  	Eligibility and Participation	  	3
			
	 ARTICLE IV
	  	Benefits	  	4
			
	 ARTICLE V
	  	Accounts	  	5
			
	 ARTICLE VI
	  	Supplemental Benefit Payments	  	6
			
	 ARTICLE VII
	  	Claims Procedures	  	6
			
	 ARTICLE VIII
	  	Amendment and Termination	  	7
			
	 ARTICLE IX
	  	General Provisions	  	8

 ARTICLE I 
 INTRODUCTION 
 Section 1.01 Purpose, Design and Intent. 
  

	(a)	The purpose of the Polonia Bank Supplemental Executive Retirement Plan (the “Plan”) is to assist Polonia Bank (the “Bank”) and its affiliates in retaining the
services of key employees until their retirement, to induce such employees to use their best efforts to enhance the business of the Bank and its affiliates, and to provide certain supplemental retirement benefits to such employees.

  

	(b)	The Plan, in relevant part, is intended to constitute an unfunded “excess benefit plan” as defined in Section 3(36) of the Employee Retirement Income Security Act of
1974, as amended. In this respect, the Plan is specifically designed to provide certain key employees with retirement benefits that would have been provided under various tax-qualified retirement plans sponsored by the Bank but for the applicable
limitations placed on benefits and contributions under such plans by various provisions of the Internal Revenue Code of 1986, as amended. 

 ARTICLE II 
 DEFINITIONS 
 Section 2.01 Definitions. In this Plan, whenever the context so indicates, the singular or the plural number and the masculine or feminine gender shall be deemed to include the other, the terms
“he,” “his,” and “him,” shall refer to a Participant or a beneficiary of a Participant, as the case may be, and, except as otherwise provided, or unless the context otherwise requires, the capitalized terms shall have
the following meanings: 
 (a) “Affiliate” means any corporation, trade or business, which, at the time of reference, is together with
the Bank, a member of a controlled group of corporations, a group of trades or businesses (whether or not incorporated) under common control, or an affiliated service group, as described in Sections 414(b), 414(c), and 414(m) of the Code,
respectively, or any other organization treated as a single employer with the Bank under Section 414(o) of the Code. 
 (b) “Applicable
Limitations” means one or more of the following, as applicable: 
  

	 	(i)	the maximum limitations on annual additions to a tax-qualified defined contribution plan under Section 415(c) of the Code; 

  

	 	(ii)	the maximum limitation on the annual amount of compensation that may, under Section 401(a)(17) of the Code, be taken into account in determining contributions to and benefits
under tax-qualified plans; and 

  

	 	(iii)	the maximum limitations, under Sections 401(k), 401(m), or 402(g) of the Code, on pre-tax contributions that may be made to a qualified defined contribution plan.

 (c) “Bank” means Polonia Bank and its successors. 
 (d) “Board of Directors” means the Board of Directors of the Bank. 
  

 1 

 (e) “Change in Control” means the earliest occurrence of one of the following events: 

(i) Merger: The Company merges into or consolidates with another corporation, or merges another corporation into the Company, and as a result
less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company immediately before the merger or consolidation. 
 (ii) Acquisition of Significant Share Ownership: There is filed or required to be filed, a report on Schedule 13D or another form or schedule
(other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class
of the Company’s voting securities, but this clause (ii) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more
of its outstanding voting securities. 
 (iii) Change in Board Composition: During any period of two consecutive years, individuals who
constitute the Company’s Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Company’s Board of Directors; provided, however, that for purposes of this clause (iii), each
director who is first elected by the board (or first nominated by the board for election by the stockholders) by a vote of at least two-thirds ( 2/3) of the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period; or 
 (iv) Sale of Assets: The Company sells to a third party all or substantially all of its assets. 
 Notwithstanding anything in this Agreement to the contrary, in no event shall the conversion of the Bank from the mutual holding company form of
organization to the full stock holding company form of organization (including the elimination of the mutual holding company) constitute a “Change in Control” for purposes of this Agreement. 
 (f) “Code” means the Internal Revenue Code of 1986, as amended. 
 (g) “Committee” means the person(s) designated by the Board of Directors, pursuant to Section 9.02 of the Plan, to administer the Plan. 
 (h) “Common Stock” means the common stock of the Company. 
 (i) “Company” means Polonia Bancorp and its successors. 
 (j) “Eligible Individual” means any
Employee who participates in the ESOP or the 401(k) Plan, as the case may be, and whom the Board of Directors determines is one of a “select group of management or highly compensated employees,” as such phrase is used for purposes of
Sections 101, 201, and 301 of ERISA. 
 (k) “Employee” means any person employed by the Bank or an Affiliate. 
 (l) “Employer” means the Bank or Affiliate thereof that employs the Employee. 
 (m) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 
 (n)
“ESOP” means the Polonia Bank Employee Stock Ownership Plan, as amended from time to time. 
  

 2 

 (o) “ESOP Acquisition Loan” means a loan or other extension of credit incurred by the trustee of
the ESOP in connection with the purchase of Common Stock on behalf of the ESOP. 
 (p) “ESOP Valuation Date” means any day as of
which the investment experience of the trust fund of the ESOP is determined and individuals’ accounts under the ESOP are adjusted accordingly. 
 (q)
“Effective Date” means January 1, 2006. 
 (r) “Participant” means an Eligible Employee who is entitled
to benefits under the Plan. 
 (s) “Plan” means this Polonia Bank Supplemental Executive Retirement Plan. 
  
   (u) “Supplemental ESOP Account” means an account established by an
Employer, pursuant to Section 5.01 of the Plan, with respect to a Participant’s Supplemental ESOP Benefit. 
 (v) “Supplemental ESOP
Benefit” means the benefit credited to a Participant pursuant to Section 4.01 of the Plan. 
  
   (y) “Supplemental Stock Ownership Account” means an account established by an Employer, pursuant to Section 5.02 of the Plan, with respect
to a Participant’s Supplemental Stock Ownership Benefit. 
 (z) “Supplemental Stock Ownership Benefit” means the benefit
credited to a Participant pursuant to Section 4.02 of the Plan. 
 ARTICLE III 
 ELIGIBILITY AND PARTICIPATION 
 Section 3.01
Eligibility and Participation. 
  

	(a)	Each Eligible Employee may participate in the Plan. An Eligible Employee shall become a Participant in the Plan upon designation as such by the Board of Directors. An Eligible
Employee whom the Board of Directors designates as a Participant in the Plan shall commence participation as of the date established by the Board of Directors. The Board of Directors shall establish an Eligible Employee’s date of participation
at the same time it designates the Eligible Employee as a Participant in the Plan. 

  

	(b)	The Board of Directors may, at any time, designate an Eligible Employee as a Participant for any or all supplemental 

	 	benefits provided for under Article IV of the Plan. 

  

 3 

 ARTICLE IV 
 BENEFITS 
 Section 4.01 Supplemental ESOP Benefit. 
 As of the last day of each plan year of the ESOP, the Employer shall credit the Participant’s Supplemental ESOP Account with a Supplemental ESOP Benefit equal to the
excess of (a) over (b), where: 
  

	(a)	Equals the annual contributions made by the Employer and/or the number of shares of Common Stock released for allocation in connection with the repayment of an ESOP Acquisition Loan
that would otherwise be allocated to the accounts of the Participant under the ESOP for the applicable plan year, if the provisions of the ESOP were administered without regard to any of the Applicable Limitations; and 

  

	(b)	Equals the annual contributions made by the Employer and/or the number of shares of common stock released for allocation in connection with the repayment of an ESOP Acquisition Loan
that are actually allocated to the accounts of the Participant under the provisions of the ESOP for that particular plan year, after giving effect to any reduction of such allocation required by any of the Applicable Limitations.

 Section 4.02 Supplemental Stock Ownership Benefit. 
  

	(a)	Upon a Change in Control, the Employer shall credit to the Participant’s Supplemental Stock Ownership Account a Supplemental Stock Ownership Benefit equal to (i) less
(ii), the result of which is multiplied by (iii), where: 

  

	 	(i)	Equals the total number of shares of Common Stock acquired with the proceeds of all ESOP Acquisition Loans (together with any dividends, cash proceeds, or other medium related to
such ESOP Acquisition Loans) that would have been allocated or credited for the benefit of the Participant under the ESOP and/or this Plan, as the case may be, had the Participant continued in the employ of the Employer through the first ESOP
Valuation Date following the last scheduled payment of principal and interest on all ESOP Acquisition Loans outstanding at the time of the Change in Control; and 

  

	 	(ii)	Equals the total number of shares of Common Stock acquired with the proceeds of all ESOP Acquisition Loans (together with any dividends, cash proceeds, or other medium related to
such ESOP Acquisition Loans) and allocated for the benefit of the Participant under the ESOP and/or this Plan, as the case may be, as of the first ESOP Valuation Date following the Change in Control; and 

  

	 	(iii)	Equals the fair market value of the Common Stock immediately preceding the Change in Control. 

  

	(b)	For purposes of clause (i) of subsection (a) of this Section 4.02, the total number of shares of Common Stock shall be determined by multiplying the sum of
(i) and (ii) by (iii), where: 

  

	 	(i)	Equals the average of the total shares of Common Stock acquired with the proceeds of an ESOP Acquisition Loan and allocated for the benefit of the Participant under the ESOP as of
the three most recent ESOP Valuation Dates preceding the Change in Control (or lesser number if the Participant has not participated in the ESOP for three full years); 

  

 4 

	 	(ii)	Equals the average number of shares of Common Stock credited to the Participant’s Supplemental ESOP Account for the three most recent plan years of the ESOP (such that the
three most recent plan years coincide with the three most recent ESOP Valuation Dates referred to in (i) above); and 

  

	 	(iii)	Equals the original number of scheduled annual payments on the ESOP Acquisition Loan. 

  

  ARTICLE V 
 ACCOUNTS

 Section 5.01 Supplemental ESOP Benefit Account. 
 For each Participant who is credited with a benefit pursuant to Section 4.01 of the Plan, the Employer shall establish, as a memorandum account on its books, a Supplemental ESOP Account. Each year, the Committee
shall credit to the Participant’s Supplemental ESOP Account the amount of benefits determined under Section 4.01 of the Plan for that year. The Committee shall credit the account with an amount equal to the appropriate number of shares of
Common Stock or other medium of contribution that would have otherwise been made to the Participant’s accounts under the ESOP but for the limitations imposed by the Code. Shares of Common Stock shall be valued under this Plan in the same manner
as under the ESOP. Cash contributions credited to a Participant’s Supplemental ESOP Account shall be credited annually with interest at a rate equal to the combined weighted return provided to the Participant’s non-stock accounts under the
ESOP. 
 Section 5.02 Supplemental Stock Ownership Account. 
 The Employer shall establish, as a memorandum account on its books, a Supplemental Stock Ownership Account. Upon a Change in Control, the Committee shall credit to the Participant’s Supplemental Stock Ownership
Account the amount of benefits determined under Section 4.02 of the Plan. The Committee shall credit the account with an amount equal to the appropriate number of shares of Common Stock or other medium of contribution that would have otherwise
been made to the Participant’s accounts under the ESOP. Shares of Common Stock shall be valued under this Plan in the same manner as under the ESOP. Cash contributions credited to a Participant’s Supplemental Stock Ownership Account shall
be credited annually with interest at a rate equal to the combined weighted return provided to the Participant’s non-stock accounts under the ESOP. 
  

 5 

   ARTICLE VI 
 SUPPLEMENTAL BENEFIT PAYMENTS 
 Section 6.01 Payment of Supplemental ESOP Benefit. 
  

	(a)	A Participant’s Supplemental ESOP Benefit shall be paid to the Participant or, in the event of the Participant’s death, to his beneficiary, in cash, at the same time as
his benefits are paid under the ESOP. 

  

	(b)	A Participant shall have a non-forfeitable right to the Supplemental ESOP Benefit credited to him under this Plan in the same percentage as he has benefits allocated to him under
the ESOP at the time the benefits become distributable to him under the ESOP. 

 Section 6.02 Payment of Supplemental Stock
Ownership Benefit. 
  

	(a)	A Participant’s Supplemental Stock Ownership Benefit shall be paid to the Participant or, in the event of the Participant’s death, to his beneficiary, in cash at the same
time as his benefits are paid under the ESOP. 

  

	(b)	A Participant shall always have a fully non-forfeitable right to the Supplemental Stock Ownership Benefit credited to him under this Plan. 

  
   ARTICLE VII 
 CLAIMS PROCEDURES 
 Section 7.01 Claims Reviewer. 
 For purposes of handling claims with respect to this Plan, the “Claims Reviewer” shall be the Committee, unless the Committee designates another person or group
of persons as Claims Reviewer. 
  

 6 

 Section 7.02 Claims Procedure. 
  

	(a)	An initial claim for benefits under the Plan must be made by the Participant or his beneficiary or beneficiaries in accordance with the terms of this Section 7.02.

  

	(b)	Not later than ninety (90) days after receipt of such a claim, the Claims Reviewer will render a written decision on the claim to the claimant, unless special circumstances
require the extension of such 90-day period. If such extension is necessary, the Claims Reviewer shall provide the Participant or the Participant’s beneficiary or beneficiaries with written notification of such extension before the expiration
of the initial 90-day period. Such notice shall specify the reason or reasons for the extension and the date by which a final decision can be expected. In no event shall such extension exceed a period of ninety (90) days from the end of the
initial 90-day period. 

  

	(c)	In the event the Claims Reviewer denies the claim of a Participant or any beneficiary in whole or in part, the Claims Reviewer’s written notification shall specify, in a manner
calculated to be understood by the claimant, the reason for the denial; a reference to the Plan or other document or form that is the basis for the denial; a description of any additional material or information necessary for the claimant to perfect
the claim; an explanation as to why such information or material is necessary; and an explanation of the applicable claims procedure. 

  

	(d)	Should the claim be denied in whole or in part and should the claimant be dissatisfied with the Claims Reviewer’s disposition of the claimant’s claim, the claimant may
have a full and fair review of the claim by the Committee upon written request submitted by the claimant or the claimant’s duly authorized representative and received by the Committee within sixty (60) days after the claimant receives
written notification that the claimant’s claim has been denied. In connection with such review, the claimant or the claimant’s duly authorized representative shall be entitled to review pertinent documents and submit the claimant’s
views as to the issues, in writing. The Committee shall act to deny or accept the claim within sixty (60) days after receipt of the claimant’s written request for review unless special circumstances require the extension of such 60-day
period. If such extension is necessary, the Committee shall provide the claimant with written notification of such extension before the expiration of such initial 60-day period. In all events, the Committee shall act to deny or accept the claim
within 120 days of the receipt of the claimant’s written request for review. The action of the Committee shall be in the form of a written notice to the claimant and its contents shall include all of the requirements for action on the original
claim. 

  

	(e)	In no event may a claimant commence legal action for benefits the claimant believes are due the claimant until the claimant has exhausted all of the remedies and procedures afforded
the claimant by this Article VII. 

 ARTICLE VIII 
 AMENDMENT AND TERMINATION 
 Section 8.01 Amendment of the Plan. 

The Bank may from time to time and at any time amend the Plan; provided, however, that such amendment may not adversely affect the rights of any Participant or
beneficiary with respect to any benefit under the Plan to which the Participant or beneficiary may have previously become entitled prior to the effective date of such amendment without the consent of the Participant or beneficiary. The Committee
shall be authorized to make minor or administrative changes to the Plan, as well as amendments required by applicable federal or state law (or authorized or made desirable by such statutes); provided, however, that such amendments must subsequently
be ratified by the Board of Directors. 
  

 7 

 Section 8.02 Termination of the Plan. 
 The Bank may terminate the Plan at any time; provided, however, that such termination may not adversely affect the rights of any Participant or beneficiary with respect to any benefit under the Plan to which the
Participant or beneficiary may have previously become entitled prior to the effective date of such termination without the consent of the Participant or beneficiary. Any amounts credited to the supplemental accounts of any Participant shall remain
subject to the provisions of the Plan and no distribution of benefits shall be accelerated because of termination of the Plan. 
 Section 8.03
Special Transition Rule Relating to Section 409A. 
 The Bank intends this Plan to conform in all respects with Section 409A of the
Internal Revenue Code of 1986, as amended, in both form and operation. Notwithstanding any other provision in this Plan, the Bank reserves the right to amend any provision of the Plan or take any other action the Board of Trustees deems appropriate
to ensure compliance with Section 409A, including altering the time and form of any distribution under the Plan. 
 ARTICLE IX

 GENERAL PROVISIONS 
 Section 9.01 Unfunded, Unsecured Promise to Make Payments in the Future. 
 The right of a Participant or any beneficiary to
receive a distribution under this Plan shall be an unsecured claim against the general assets of the Bank or its Affiliates, and neither a Participant, nor his designated beneficiary or beneficiaries, shall have any rights in or against any amount
credited to any account under this Plan or any other assets of the Bank or an Affiliate. The Plan at all times shall be considered entirely unfunded both for tax purposes and for purposes of Title I of ERISA. Any funds invested hereunder shall
continue for all purposes to be part of the general assets of the Bank or an Affiliate and available to its general creditors in the event of bankruptcy or insolvency. Accounts under this Plan and any benefits which may be payable pursuant to this
Plan are not subject in any manner to anticipation, sale, alienation, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of a Participant or a Participant’s beneficiary. The Plan constitutes a mere promise by the
Bank or Affiliate to make benefit payments in the future. No interest or right to receive a benefit may be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against, such Participant or
beneficiary, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings. 
 Section 9.02 Committee as Plan
Administrator. 
  

	(a)	The Plan shall be administered by the Committee designated by the Board of Directors of the Bank. 

  

	(b)	 The Committee shall have the authority, duty and power to interpret and construe the provisions of the Plan as it deems appropriate. The Committee shall have the
duty and responsibility of maintaining records, making the requisite calculations and disbursing the payments hereunder. In addition, the Committee shall have the authority and power to delegate any of its administrative duties to employees of the
Bank or an Affiliate, as they may deem appropriate. The Committee shall be entitled to rely on all tables, valuations, certificates, opinions, data and reports furnished 

  

 8 

	 	 
by any actuary, accountant, controller, counsel or other person employed or retained by the Bank with respect to the Plan. The interpretations,
determinations, regulations and calculations of the Committee shall be final and binding on all persons and parties concerned. 

 Section 9.03 Expenses. 
 Expenses of administration of the Plan shall be paid by the Bank or an
Affiliate. 
 Section 9.04 Statements. 
 The
Committee shall furnish individual annual statements of accrued benefits to each Participant, or current beneficiary, in such form as determined by the Committee or as required by law. 
 Section 9.05 Rights of Participants and Beneficiaries. 
  

	(a)	The sole rights of a Participant or beneficiary under this Plan shall be to have this Plan administered according to its provisions and to receive whatever benefits he or she may be
entitled to hereunder. 

  

	(b)	Nothing in the Plan shall be interpreted as a guaranty that any funds in any trust which may be established in connection with the Plan or assets of the Bank or an Affiliate will be
sufficient to pay any benefit hereunder. 

  

	(c)	The adoption and maintenance of this Plan shall not be construed as creating any contract of employment or service between the Bank or an Affiliate and any Participant or other
individual. The Plan shall not affect the right of the Bank or an Affiliate to deal with any Participants in employment or service respects, including their hiring, discharge, compensation, and other conditions of employment or service.

 Section 9.06 Incompetent Individuals. 
 The Committee may, from time to time, establish rules and procedures which it determines to be necessary for the proper administration of the Plan and the benefits payable to a Participant or beneficiary in the event
that such Participant or beneficiary is declared incompetent and a conservator or other person is appointed and legally charged with that Participant’s or beneficiary’s care. Except as otherwise provided for herein, when the Committee
determines that such Participant or beneficiary is unable to manage his financial affairs, the Committee may pay such Participant’s or beneficiary’s benefits to such conservator, person legally charged with such Participant’s or
beneficiary’s care, or institution then contributing toward or providing for the care and maintenance of such Participant or beneficiary. Any such payment shall constitute a complete discharge of any liability of the Bank or an Affiliate and
the Plan for such Participant or beneficiary. 
 Section 9.07 Sale, Merger or Consolidation of the Bank. 
 The Plan may be continued after a sale of assets of the Bank, or a merger or consolidation of the Bank into or with another corporation or entity only if, and to the
extent that, the transferee, purchaser or successor entity agrees to continue the Plan. Additionally, upon a merger, consolidation or other change in control any amounts credited to Participant’s deferral accounts shall be placed in a grantor
trust to the extent not already in such a trust. In the event that the Plan is not continued by the transferee, purchaser or successor entity, then the Plan shall be terminated subject to the provisions of Section 8.02 of the Plan. Any legal
fees incurred by a Participant in determining benefits to which such Participant is entitled under 

  

 9 

 
the Plan following a sale, merger, or consolidation of the Bank or an Affiliate of which the Participant is an Employee or, if applicable, a member of the
Board of Directors, shall be paid by the resulting or succeeding entity. 
 Section 9.08 Location of Participants. 
 Each Participant shall keep the Bank informed of his current address and the current address of his designated beneficiary or beneficiaries. The Bank shall not be
obligated to search for any person. If such person is not located within three (3) years after the date on which payment of the Participant’s benefits payable under this Plan may first be made, payment may be made as though the Participant
or his beneficiary had died at the end of such three-year period. 
 Section 9.09 Liability of the Bank and its Affiliates. 
 Notwithstanding any provision herein to the contrary, neither the Bank nor any individual acting as an employee or agent of the Bank shall be liable to any Participant,
former Participant, beneficiary, or any other person for any claim, loss, liability or expense incurred in connection with the Plan, unless attributable to fraud or willful misconduct on the part of the Bank or any such employee or agent of the
Bank. 
 Section 9.10 Governing Law. 
 All
questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the United States and, to the extent not preempted by such laws, by the laws of the State of New York. 
  

 10 

 Having been adopted by its Board of Directors, this Plan is executed by its duly authorized officer this
     day of                     , 2006. 
  

							
	Attest:	 		 	POLONIA BANK
				
	  
	 		 	By:	 	  

		 		 		 	Anthony J. Szuszczewicz
		 		 		 	President and Chief Executive Officer

  

 11

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