LeapFrog 2003 Annual Report Download - page 116

Download and view the complete annual report

Please find page 116 of the 2003 LeapFrog annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 170

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170

•reviews the financial statements to be included in LeapFrog’s annual report on Form 10-K and quarterly
reports on Form 10-Q; and
•discusses with management and the independent auditors the results of the annual audit and the results
of LeapFrog’s quarterly financial statements.
From January 2003 through October 2003 our Audit Committee was comprised of three directors: Dr. Munitz
and Messrs. Berg and Resnick. As of November 2003, our Audit Committee was comprised of three directors:
Messrs. McKee, Berg and Resnick. It met eight times during our 2003 fiscal year. The board has determined that
all members of LeapFrog’s Audit Committee are independent (as independence is defined in Section 303A.02 of
the NYSE listing standards). The Audit Committee has adopted a written Audit Committee Charter that will be
posted on the investor relations section of our website at www.leapfrog.com no later than the date of our 2004
annual meeting of stockholders.
Our board of directors has determined that Mr. McKee, the chairman of our Audit Committee, qualifies as
an “audit committee financial expert,” as defined in applicable SEC rules. The board made a qualitative
assessment of Mr. McKee’s level of knowledge and experience based on a number of factors, including his
formal education and experience as a chief financial officer for a public reporting company.
COMPENSATION COMMITTEE
The Compensation Committee reviews and approves the overall compensation strategy and policies for
LeapFrog. The Compensation Committee reviews and approves corporate performance goals and objectives
relevant to the compensation of LeapFrog’s executive officers and other senior management; reviews and
approves the compensation and other terms of employment of LeapFrog’s Chief Executive Officer; recommends
to the board for approval the compensation and other terms of employment of the other executive officers; and
administers LeapFrog’s stock option and purchase plans, stock bonus plans and other similar programs. The
board has determined that all members of LeapFrog’s Compensation Committee are independent (as
independence is defined in Section 303A.02 of the NYSE listing standards). In 2003, three directors comprised
the Compensation Committee: Dr. Munitz and Messrs. Berg and Resnick. The Compensation Committee met
three times during our 2003 fiscal year and acted by unanimous written consent two times. The Compensation
Committee has adopted a written Compensation Committee Charter that will be posted on the investor relations
section of our website at www.leapfrog.com no later than the date of our 2004 annual meeting of stockholders.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
In April 2004, our board of directors formed a Nominating and Corporate Governance Committee, or
Governance Committee, of the board of directors which is responsible for identifying, reviewing and evaluating
candidates to serve as directors on our board (consistent with criteria approved by the board), reviewing and
evaluating incumbent directors, recommending to the board candidates for election to the board of directors,
making recommendations to the board regarding the membership of the committees of the board, assessing the
performance of management and the board, and developing a set of corporate governance principles for
LeapFrog. Our Governance Committee charter will be posted on the investor relations section of our website at
www.leapfrog.com no later than the date of our 2004 annual meeting of stockholders. Two directors comprise the
Governance Committee: Messrs. Fink and Berg. All members of the Governance Committee are independent (as
independence is defined in Section 303A.02 of the NYSE listing standards).
The Governance Committee believes that candidates for director should have certain minimum
qualifications, including being able to read and understand basic financial statements, being over 21 years of age
and having the highest personal integrity and ethics. The Governance Committee also intends to consider such
factors as possessing relevant expertise upon which to be able to offer advice and guidance to management,
having sufficient time to devote to the affairs of LeapFrog, demonstrated excellence in his or her field, having the
ability to exercise sound business judgment and having the commitment to rigorously represent the long-term
16