LeapFrog 2009 Annual Report Download - page 149

based on application of a percentage of the bonus determined through performance reviews. Actual bonus awards
for named executive officers under the year-end element of our 2009 bonus plan could have ranged between 0%
and 120% of an individual’s respective target bonus, depending on performance. For the quarterly cash-balance
bonus portion of the plan, the range was 0% to 100% of the individual’s respective target bonus. Our CEO
recommended bonus awards for each of the named executive officers (except for himself) for the relevant period,
which recommendations were then reviewed and approved by the compensation committee. In the case of our
CEO, either the board or the compensation committee evaluated his performance for the relevant period and
approved his bonus awards.
Generally, the funding of the bonus pool was as follows:
• The quarterly cash balance elements of the company performance component were funded at 100% for
each relevant quarter, as our cash balances exceeded the targets for quarter end for each of the first,
second and, third quarters of 2009.
• The “annual” bonus (operating income plus the individual performance component of the bonus plan)
was not funded, as our operating loss for 2009 ($8.4 million) exceeded the threshold operating loss
requirement for 2009 of $5.0 million.
Quarterly Cash Balance Goals. The board or compensation committee approved the funding of the
quarterly cash balance portion of the company performance component in April, July, and October 2009 based
on our cash balance as of the end of the relevant preceding quarter. In each case, we exceeded the 100% target
levels for our cash balances as of such dates, with cash balances of $85.3 million as of March 31, 2009, $52.8
million as of June 30, 2009 and $29.5 million as of September 30, 2009.
The board or compensation committee determined that each quarterly bonus award would be made at 100%
of the target bonus allocated to such quarterly cash-balance goal for each named executive officer, so long as the
named executive officer met or exceeded a “strong performer” performance evaluation rating for the quarter. The
compensation committee or the board determined in its discretion whether or not a named executive officer met
this requirement based on general job performance in helping the company achieve its strategic goals and in
managing the business. The interim performance evaluations for each of the named executive officers met or
exceeded this threshold for full payment of their allocation of the cash balance bonus pool for each quarter.
Accordingly, each named executive officer received the full amount of his or her allocation of the quarterly cash
balance bonus element for each covered quarter.
Full Year Operating Income or Loss Goal and Annual Individual Bonus. We recognized an operating loss
of $8.4 million for 2009, which exceeded the maximum operating loss threshold for funding of the operating
income or loss element of the company performance component of the bonus pool. Therefore, neither the
individual component nor the operating income element of the company performance component of the 2009
bonus plan was funded. Accordingly, none of the named executive officers received an annual bonus for 2009.
Total Bonus Awards. Based on the foregoing, our named executive officers received the following cash
bonus awards for 2009:
Name
2009 Bonus Plan Elements and Payouts
Q1 Cash
Balance ($)
Q2 Cash
Balance ($)
Q3 Cash
Balance ($)
Annual
(Operating
Income Plus
Individual) ($) Totals ($)
Mr. Katz ................................. 24,312 48,624 72,936 — 145,872
Mr. Chiasson .............................. 6,256 12,512 18,768 — 37,536
Mr. Dodd ................................. 5,844 11,688 17,532 — 35,064
Mr. Campbell ............................. 4,881 9,762 14,643 — 29,286
Ms. MacIntyre(1) .......................... 6,000 12,000 18,000 — 36,000
Mr. Wong(1) .............................. 4,801 9,603 14,405 — 28,809
(1) Ceased serving as an executive officer in mid-December 2009 and employment terminated in the first
quarter of 2010.
43