Executive Officer Compensation Summary
August 08, 2005
Renaissance Learning, Inc.’s (the “Company’s”) executive officers consist of Mr. John Hickey, President and
Chief Executive Officer; Mr. Steven Schmidt, Executive Vice President; Ms. Mary Minch, Chief Financial
Officer; Mr. Terrance Paul, Co-Chairman of the Board; and Ms. Judith Paul, Co-Chairman of the Board.
The compensation structure for executive officers of the Company consists of base salary, cash bonus, stock
option grants and/or restricted stock awards. The Company’s Incentive Bonus Plan permits participants in the
plan to receive a cash bonus based on a percentage of their base salary which is tied to the performance of the
Company. Bonus awards are subject to a four year vesting period, vesting 25% per year beginning one year from
the date of the initial award. The vested portion of the award is then paid out promptly upon vesting. Options
granted under the Company’s Stock Incentive Plan are granted at the fair market value of the stock on the date
of grant, are subject to a vesting schedule determined by the Compensation Committee, and expire 10 years from
the date of grant (subject to earlier termination in the event of termination of employment; but see discussion of
Mr. Hickey’s option grants below).
Each executive receives a base salary, but only Mr. Schmidt and Ms. Minch participate in the Company’s
Incentive Bonus Plan. Mr. Hickey, Mr. Schmidt and Ms. Minch participate in the Company’s Stock Incentive
Plan. In addition, each executive is entitled to receive 401(k) plan and supplemental executive retirement plan
(“SERP”) matching amounts contributed by the Company. The Company does not have employment agreements
with any of its executive officers.
Compensation decisions affecting the Company’s executive officers are typically made in July of each year by
the Compensation Committee of the Board of Directors. In April 2005 and July 2005, the Compensation
Committee approved the term