LeapFrog 2013 Annual Report Download - page 137
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Please find page 137 of the 2013 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.The allocation of the Company and individual performance objectives for each named executive officer is
set forth below.
Individual
Component + Company Component =
Total
Performance
Objectives
Name Net Sales +
Operating
Income
Mr. Barbour .................. 20% + 32% + 48% = 100%
Mr. Arthur ................... 25% + 30% + 45% = 100%
Mr. Adams ................... 25% + 30% + 45% = 100%
Mr. Ahearn ................... 25% + 30% + 45% = 100%
Mr. Dodd .................... 25% + 30% + 45% = 100%
Mr. Spalding .................. 25% + 30% + 45% = 100%
To calculate the Bonus Factor, the percentage weight of each component was multiplied by the level of
achievement of that component, as determined by the compensation committee based on its evaluation of
Company and individual performance. The maximum (cap) for the Bonus Factor for our chief executive
officer was 180% and for our other named executive officers was 175% (in other words, any result in the
formula above 180% or 175%, respectively, would still yield the maximum Bonus Factor).
Bonus Factor =
Individual
Component
Weight %
×
Level of
Achievement
%
+
Net Sales
Component
Weight %
×
Level of
Achievement
%
+
Operating
Income
Component
Weight %
×
Level of
Achievement
%
Individual Performance Component. Our named executive officers were eligible for this portion of their
target bonus opportunity based on their actual performance against their individual goals. Each executive
officer’s individual goals, except those of our chief executive officer, were developed with and recommended
by our chief executive officer and approved by the compensation committee. Our chief executive officer’s
goals were developed by our compensation committee.
The individual performance goals for our named executive officers were divided into two categories:
(i) achievement of financial goals relevant to each executive officer’s department; and (ii) achievement of
goals related to the Company’s long-term strategic objectives.
The compensation committee conducted an evaluation of the individual performance of each named
executive officer and assigned a goal completion score for each executive officer from 0 − 100%. Our chief
executive officer provided input on the performance evaluations for all named executive officers except
himself. The analysis was primarily focused on overall achievement of each named executive officer’s
respective performance goals for the year, while also taking into consideration any exceptional contributions
and impact that his area of responsibility had on the performance of the Company. Based on this analysis (and
input from our chief executive officer, where appropriate) the compensation committee established the level of
achievement of each named executive officer’s individual goals used in the calculation of the Bonus Factor.
The maximum Individual Performance Component score was 100%; this portion of the bonus was not eligible
to scale above 100%, as with the Company Component, as described below.
Company Component — Net Sales. A portion of each named executive officer’s bonus depended upon
achievement of a specified Net Sales result. Threshold, target, stretch and maximum levels for Net Sales were
established by the compensation committee in February 2013, based on our 2013 operating plan and data
regarding our financial results and business expectations as of that time, including toy industry sales growth
projections and Company resources and capabilities. In addition, these levels were consistent with the relative
risk acceptable to our board of directors in approving the Company’s operating plan.
The compensation committee then established achievement levels of the Net Sales objective for each
potential result. In each instance, net sales achievement between the threshold, target, stretch and maximum
levels would result in a ratable achievement level score for the Net Sales measure.
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