LeapFrog 2003 Annual Report Download - page 129

stock option agreement. Mr. Kalinske became our Chief Executive Officer in February 2004 and we are in the
process of amending and restating his employment agreement to reflect his new compensation package
associated with this job change. As Chief Executive Officer, Mr. Kalinske will receive an annual base salary of
$495,000 and an annual target bonus of 100% of his annual base salary.
Paul A. Rioux
Effective April 2002, we entered into an employment agreement with Paul Rioux, our Vice Chairman. The
agreement provides for an annual base salary of $265,000 in 2002 and 2003 based on a four-day work week, and
an annual base salary of $132,500 from January 2004 through March 2005 based on a two-day work week.
Mr. Rioux will also receive compensation at a rate of $2,000 per day worked beyond the number of days he is
required to work pursuant to his part-time schedule. In 2003 and 2002, Mr. Rioux received $105,000 and
$200,250, respectively, for extra days worked. The agreement also provides for an annual bonus of $135,000 per
year through December 2003, and $67,500 per year from January 2004 through March 2005. Seventy percent of
Mr. Rioux’s annual bonus is guaranteed, and the remaining thirty percent is based on our performance. For 2003,
Mr. Rioux did not receive a performance bonus and he waived the guaranteed portion of his bonus. In addition,
Mr. Rioux was granted an option to purchase a total of 150,000 shares of our Class A common stock at an
exercise price of $12.50 per share, which vest on a monthly basis starting January 2002, and which are subject to
other terms and conditions set forth in his accompanying stock option agreements. Mr. Rioux’s employment
under his agreement may be terminated by either of us at any time for any reason. However, if we terminate
Mr. Rioux’s employment without cause, he is entitled to receive a termination fee equal to 12 months salary and
bonus and his stock options will vest to the extent they would have vested, during the twelve-month period
following the date of termination.
Timothy M. Bender
In November 2003, we amended and restated our employment agreement with Timothy Bender, our
President of Worldwide Consumer Group. The agreement expires in March 2005, and provides for an annual
base salary of $260,000 and an annual bonus of up to an additional $90,000, subject to increases as determined
by our board of directors or its compensation committee. If we terminate Mr. Bender’s employment without
cause, or if he terminates his employment for good reason, he is entitled to receive his base salary, bonus and
benefits, and to continue vesting in his options, for 12 months following termination. If we terminate
Mr. Bender’s employment without cause during the 90 days prior to or 12 months following a change in control
of our company, or if he terminates his employment for good reason during the same period, Mr. Bender is
entitled to an amount equal to one hundred fifty percent of his base salary and bonus for the preceding year and
all of Mr. Bender’s unvested options would immediately vest. All of Mr. Bender’s options will automatically
vest upon a change in control of our company even if Mr. Bender’s employment is not terminated.
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