Executive Officer Compensation Summary
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, and
stock option grants. The Company’s Incentive Bonus Plan permits participants in the plan to receive up to 100%
of their base salary in a cash bonus 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 four year
vesting schedule (vesting 25% per year beginning one year from the date of grant), 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. Only Mr. Hickey and Mr. Schmidt 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 made in July of each year by the
Compensation Committee of the Board of Directors. On July 21, 2004 (or November 22, 2004, in the case of
Ms. Minch), the Compensation Committee approved the