LeapFrog 2004 Annual Report Download - page 147

$43,750 per month for the first two years after Mr. Perez’s separation from LeapFrog and would be
reduced in the third year by the gross amount of any monetary compensation earned by Mr. Perez from
any other work activity during the consulting period.
• If Mr. Perez elects to continue his LeapFrog-provided health insurance coverage pursuant to COBRA
law, Mr. Perez will be entitled during the consulting period to reimbursement for premiums to continue
his health insurance at the same level of coverage for him and his dependents in effect as of the
separation date until the earlier of: (i) the date Mr. Perez becomes eligible for group insurance coverage
with a subsequent employer or (ii) the date his consulting relationship with LeapFrog pursuant to his
employment agreement ends.
Paul A. Rioux
Effective April 2002, we entered into an employment agreement with Paul Rioux, our Vice Chairman. The
agreement provided 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 also received compensation at a rate of $2,000 per day worked beyond the number of days he was required
to work pursuant to his part-time schedule. In 2004, 2003 and 2002, Mr. Rioux received $174,800, $105,000 and
$200,250, respectively, for extra days worked. The agreement also provided 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 was guaranteed, and the remaining thirty percent was based on our performance. For
2004, Mr. Rioux did not receive a performance bonus, but did receive the guaranteed portion of his bonus. For
2003, Mr. Rioux did not receive a performance bonus and he waived the guaranteed portion of his bonus. For
2002, Mr. Rioux received both the guaranteed and performance portions of his bonus. In addition, Mr. Rioux was
granted options 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 agreement. Mr. Rioux’s employment under his agreement
was terminable by either of us at any time for any reason. However, if we had terminated Mr. Rioux’s
employment without cause, he would have been entitled to receive a termination fee equal to 12 months salary
and bonus and his stock options would have continued to vest during the twelve-month period following the date
of termination. This agreement expired on March 31, 2005.
On April 1, 2005, Paul A. Rioux entered into an employment agreement with LeapFrog for the position of
Advisor to LeapFrog’s Chief Executive Officer. Under the new employment agreement, Mr. Rioux will provide
his services to LeapFrog on a part-time basis and will be compensated at a monthly rate of $3,333.33 less payroll
deductions and withholdings. This employment agreement with Mr. Rioux will expire on June 30, 2005, at which
time Mr. Rioux will become a non-employee director and will be entitled to the compensation described under
“Compensation of Directors” above.
Timothy M. Bender
In November 2003, we amended and restated our employment agreement with Timothy Bender, our
President of Worldwide Consumer Group. The agreement expired on March 31, 2005, and provided 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. In 2004, Mr. Bender received an annual
base salary of $283,900 and was eligible to receive a bonus of up to 50% of his 2004 earned annual base salary
for his service to LeapFrog in 2004. As of January 1, 2005, Mr. Bender’s annual salary is $300,000, and he is
eligible to receive a target bonus of up to 50% of his 2005 earned annual base salary.
Michael C. Wood
On September 1, 2004, Michael C. Wood resigned as Chief Vision and Creative Officer of LeapFrog. Due
to this resignation, the amended and restated employment agreement, dated effective as of January 1, 2002,
between Michael C. Wood and LeapFrog, was terminated on September 1, 2004. Mr. Wood’s terminated
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