LEAPFROG ENTERPRISES, INC.
COMPENSATION COMMITTEE CHARTER
ADOPTED BY THE BOARD OF DIRECTORS ON MAY 24, 2002
AMENDED AND RESTATED BY THE BOARD OF DIRECTORS ON:
APRIL 20, 2004, AUGUST 1, 2005, MARCH 27, 2006, OCTOBER 30, 2007 AND OCTOBER 29, 2009

The role and responsibilities of the Compensation Committee (the "Committee") of LeapFrog Enterprises, Inc. (the "Company") are as follows, subject to amendment by the Company's Board of Directors (the "Board") from time to time:

ROLE

The Committee's role is to act on behalf of the Board in fulfilling the Board's responsibilities to oversee the Company's compensation policies, plans and programs, and to review and determine the compensation to be paid to the Company's executive officers, as well as to prepare and review the Committee report included in the Company's annual proxy statement in accordance with applicable rules and regulations of the Securities and Exchange Commission (the "SEC") in effect from time to time. The term "compensation" shall include salary, long-term incentives, bonuses, perquisites, equity incentives, severance arrangements, retirement benefits and other related benefits and benefit plans.

MEMBERSHIP

Committee membership shall consist of at least three Board members, each of whom may (i) be "non-employee directors" within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, (ii) be "outside directors" under the rules promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended, and (iii) satisfy the independence requirements of the New York Stock Exchange applicable to compensation committee members, as in effect from time to time, when and as required by NYSE, including any exceptions permitted by these requirements. In the event that fewer than three Board members have the requisite qualifications as set forth above, committee membership shall consist of such lesser number of Board members as meet such requisite qualifications. The members of the Committee and the Committee chairperson shall be appointed by and serve at the discretion of the Board. Vacancies occurring on the Committee shall be filled by the Board or any committee of the Board to which the Board has delegated the authority to fill such vacancies.

PROCEDURES

Committee procedures shall be as determined by the Committee.

OPERATING PRINCIPLES

In fulfilling its function and responsibilities, the Committee should give due consideration to the following principles:

• Communication - Regular and meaningful contact throughout the year with the Chairman of the Board, senior management, other committee chairpersons and other key Committee advisors, as applicable, is viewed as important for strengthening the Committee's knowledge of sound compensation policies.



• Committee Expectations and Information Needs - The Committee should communicate to the Chief Executive Officer and President or their designee the expectations of the Committee, and the nature, timing, and extent of any specific information or other supporting materials requested by the Committee, for its meetings and deliberations.



• Resources - The Committee shall have full access to all books, records, facilities and personnel of the Company as deemed necessary or appropriate by any member of the Committee to discharge his or her responsibilities hereunder. The Committee shall have the authority to obtain, at the expense of the Company, advice and assistance from internal or external legal, accounting or other advisors and consultants. In addition, the Committee shall have sole authority to retain and terminate any compensation consultant to assist in the evaluation of chief executive officer or senior executive compensation, including sole authority to approve such consultant's reasonable fees and other retention terms, all at the Company's expense. Other reasonable expenditures for external resources that the Committee deems necessary or appropriate in the performance of its duties are permitted. The Committee may form and delegate authority to subcommittees as appropriate, including, but not limited to, a subcommittee composed of one or more members of the Board to grant stock awards under the Company's equity incentive plans to persons who are not (a) "Covered Employees" under Section 162(m) of the Code; (b) individuals with respect to whom the Company wishes to comply with Section 162(m) of the Code or (c) then subject to Section 16 of the Exchange Act. The operation of the Committee shall be subject to the Bylaws of the Company as in effect from time to time and Section 141 of the Delaware General Corporation Law. The approval of this Compensation Committee Charter shall be construed as a delegation of authority to the Committee with respect to the responsibilities set forth herein.



• Meeting Agendas - Committee meeting agendas shall be the responsibility of the Committee chairperson with input from Committee members and other members of the Board, with additional input from members of senior management and outside advisors to the extent deemed appropriate by the chairperson.



• Committee Meeting Attendees - The Committee shall be authorized to request members of senior management, outside counsel and other advisors to participate in Committee meetings.



• Reporting to the Board of Directors - The Committee, through the Committee chairperson, shall report all material activities of the Committee to the Board from time to time.

MEETING FREQUENCY

The Committee should meet as frequently as considered necessary by the Committee or the chairperson, and shall meet at least annually.

PRIMARY COMMITTEE RESPONSIBILITIES

To implement the Committee's purpose and policies, the Committee shall be charged with the following duties and responsibilities. The Committee may supplement and, except as otherwise required by applicable law or the requirements of NYSE, deviate from these activities as appropriate under the circumstances:

• Overall Compensation Strategy - The Committee shall review, modify (as needed) and approve the overall compensation strategy and policies for the Company, including:
• reviewing and approving corporate performance goals and objectives, which shall support and reinforce the Company's long-term strategic goals, relevant to the compensation of the Company's executive officers (as that term is defined in Section 16 of the Exchange Act and Rule 16a-1 thereunder) and other senior management, as appropriate;
• evaluating and recommending to the Board the compensation plans and programs advisable for the Company, as well as modification or termination of existing plans and programs;
• establishing policies with respect to equity compensation arrangements, with the objective of appropriately balancing the perceived value of equity compensation and the dilutive effect and other costs of that compensation to the Company;
• reviewing regional and industry-wide compensation practices and trends to assess the propriety, adequacy and competitiveness of the Company's executive compensation programs among comparable companies in the Company's industry; however, the Committee shall exercise independent judgment in determining the appropriate levels and types of compensation to be paid;
• reviewing and approving the terms of any employment agreements, severance arrangements, change-of-control protections and any other compensatory arrangements for the Company's executive officers (as that term is defined in Section 16 of the Exchange Act and Rule 16a-1 thereunder) and other senior management, as appropriate; and
• evaluating the efficacy of the Company's compensation policy and strategy in achieving expected benefits to the Company and otherwise furthering the Committee's policies.

• Compensation of Chief Executive Officer - The Committee, either as a committee, or together with the other independent directors of the Company (as determined by the Board), shall determine the compensation and other terms of employment of the Company's Chief Executive Officer and shall evaluate the Chief Executive Officer's performance in light of relevant corporate performance goals and objectives, taking into account, among other things, the policies of the Committee and the Chief Executive Officer's performance in:
  • fostering a corporate culture that promotes the highest levels of integrity and the highest ethical standards;
  • developing and executing the Company's long-term strategic plan and conducting the business of the Company in a manner appropriate to enhance long-term stockholder value;
  • achieving any other corporate performance goals and objectives deemed relevant to the Chief Executive Officer as established by the Committee; and
  • achieving the Chief Executive Officer's individual performance goals and objectives.

In determining the long-term incentive component of the Chief Executive Officer's compensation, the Committee should seek to achieve an appropriate level of risk and reward, taking into consideration the Company's performance and relative stockholder return, the potential benefits and costs to the Company of the award, the value of similar incentive awards given to chief executive officers of comparable companies, the awards given to the Company's Chief Executive Officer in past years, and such other criteria as the Committee deems advisable.


• Compensation of Other Executive Officers and Senior Management - The Committee shall review and approve the individual and corporate performance goals and objectives of the Company's other executive officers (as that term is defined in Section 16 of the Exchange Act and Rule 16a-1 thereunder) that are periodically established, and other senior management, as appropriate. The Committee shall determine and approve the compensation and other terms of employment of these executive officers and senior management, as appropriate, taking into consideration the officer's success in achieving his or her individual performance goals and objectives and the corporate performance goals and objectives deemed relevant to the officer as established by the Committee, as well as in fostering a corporate culture that promotes the highest levels of integrity and the highest ethical standards.



• Administration of Incentive Plans - The Committee shall recommend to the Board the adoption, amendment, and termination of stock option plans, stock appreciation rights plans, pension and profit sharing plans, stock bonus plans, stock purchase plans, bonus plans, deferred compensation plans, and similar programs (the "Compensation Plans") and, except as may be explicitly delegated by the Board to another committee, administer the Compensation Plans in accordance with their terms, including without limitation establishing guidelines, interpreting plan documents, selecting participants, approving grants and awards, and making all other decisions regarding the operation of such plans.



• Other Matters - The Committee shall review and approve such other compensation matters as the Board, Chief Executive Officer or President wishes to have the Committee approve.



• Proxy Statement Reports - The Committee shall prepare any report required by the rules of the SEC to be included in the Company's annual proxy statement.



• Committee Charter - The Committee shall review, as it deems necessary, the Committee Charter and shall recommend any proposed changes for approval by the full Board.



• Committee Self-Assessment. The Committee shall review, discuss and assess its own performance at least annually. The Committee shall also periodically review and assess the adequacy of this charter, including the Committee's role and responsibilities as outlined in this Charter, and shall recommend any proposed changes to the Board for its consideration.