LeapFrog 2004 Annual Report Download - page 129

communications addressed to the Corporate Secretary of LeapFrog at 6401 Hollis Street, Suite 150, Emeryville,
California 94608. All communications will be compiled by our Corporate Secretary and submitted to the board or
the individual directors on a periodic basis. These communications will be reviewed by our Corporate Secretary,
who will determine whether they should be presented to the board. The purpose of this screening is to allow the
board to avoid having to consider irrelevant or inappropriate communications (such as advertisements and
solicitations). The screening procedures have been approved by a majority of the independent directors of the
board. All communications directed to the Audit Committee in accordance with the procedures set forth in this
paragraph that relate to questionable accounting or auditing matters involving LeapFrog will be promptly and
directly forwarded to the Audit Committee. A summary of these communication procedures is posted on our
website at www.leapfroginvestor.com.
CODE OF ETHICS AND CORPORATE GOVERNANCE GUIDELINES
We have adopted the LeapFrog Code of Business Conduct and Ethics that applies to all officers, directors
and employees. Our Code of Business Conduct and Ethics and our Corporate Governance Guidelines are
available on the investor relations section of our website at www.leapfroginvestor.com. Stockholders may also
obtain a print copy of our Code of Business Conduct and Ethics and our Corporate Governance Guidelines by
writing to our Corporate Secretary at 6401 Hollis Street, Suite 150, Emeryville, California 94608. If we make any
substantive amendments to our Code of Business Conduct and Ethics or grant any waiver from a provision of the
Code to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on
the investor relations section of our website at www.leapfroginvestor.com.
COMPENSATION OF DIRECTORS
Each non-employee director of LeapFrog receives a meeting fee of $1,500 for each board of directors and
committee meeting attended, provided that if there is a board meeting and a committee meeting on the same day,
only one meeting fee is paid for both meetings. In addition to this meeting fee, in April 2004, the Compensation
Committee of our board of directors approved the payment of the following annual retainers to our non-employee
directors beginning in July 2004:
• Each non-employee director will receive an annual retainer of $30,000, provided that a non-employee
director who holds the position of Chairman of our board, will receive an annual retainer of $60,000 in
lieu of an annual retainer of $30,000.
• Each non-employee director who serves as a member of our Audit Committee of our board of directors
will receive an annual retainer of $5,000, provided that the Chairman of our Audit Committee will
receive an annual retainer of $10,000 in lieu of an annual retainer of $5,000.
• Each non-employee director who serves as the Chairman of our Compensation Committee, Nominating
and Corporate Governance Committee, and any other committee created by our board of directors will
receive an annual retainer of $5,000.
In the fiscal year ended December 31, 2004, the total compensation paid to non-employee directors was
$255,000. The members of the board of directors are also eligible for reimbursement for their expenses incurred
in attending board meetings.
Each non-employee director of LeapFrog also receives stock option grants under the 2002 Non-Employee
Directors’ Stock Option Plan, or Director Plan. Only non-employee directors of LeapFrog are eligible to receive
options under the Director Plan. Options granted under the Director Plan are intended by LeapFrog not to qualify
as incentive stock options under the Internal Revenue Code.
Option grants under the Director Plan are non-discretionary. Upon election to LeapFrog’s board of directors,
a non-employee director is granted an initial option to purchase 30,000 shares of LeapFrog’s Class A common
stock. On July 1 of each year (or the next business day if that date is a legal holiday), each member of
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