Leapfrog Enterprises (LF)

Conclusion

LeapFrog gives executives and other key employees the potential to earn attractive compensation rewards through the plans described above. A significant portion of executive compensation, including that of the Chief Executive Officer, is generated based upon company performance, and actual rewards are closely linked to LeapFrog’s success in achieving financial goals and increases in long-term stockholder value. LeapFrog remains committed to this philosophy of pay for performance, but we also recognize that the competitive market for talented executives and the volatility of LeapFrog’s business may result in highly variable compensation for a particular time period.

Compensation Committee:

Caden Wang (Chairman)

Steven B. Fink

Dr. David C. Nagel

Ralph R. Smith

28

Conclusion

LeapFrog gives executives the potential to earn attractive compensation rewards through the plans described above. A significant portion of executive compensation, including that of the Chief Executive Officer, is generated based upon company performance, and actual rewards are closely linked to LeapFrog’s success in achieving financial goals and increases in long-term stockholder value. LeapFrog remains committed to this philosophy of pay for performance, but we also recognize that the competitive market for talented executives and the volatility of LeapFrog’s business may result in highly variable compensation for a particular time period.

Compensation Committee:

Caden Wang (Chairman)

Steven Fink

27