LeapFrog 2002 Annual Report Download - page 90

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LEAPFROG ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except share, per share and percent data)
14. Redeemable Convertible Series A Preferred Stock
In March 2001, the Company authorized the issuance of 20,000,000 shares of preferred stock at $0.0001 par
value per share, of which 6,000,000 shares are designated as Series A preferred stock. The rights and preferences
to preferred stock are established by the Company’s Board of Directors (the “Board”). On March 23, 2001, the
Company issued 2,000,000 shares of Series A preferred stock at $12.50 per share for total proceeds of $24,139,
net of issuance costs of $861. In March 2002, the Board decreased the number of authorized shares from
6,000,000 to 2,000,000.
Under the terms of our amended and restated certificate of incorporation, our Series A preferred stock
automatically converts into Class A common stock if the closing price of our Class A common stock equals or
exceeds $18.75 per share for 30 consecutive trading days and the aggregate value of all of the outstanding, freely
tradable Class A common stock held by persons other than our affiliates equals or exceeds $100,000. During the
30 trading days between October 11, 2002 and November 21, 2002, the closing price of our Class A common
stock on the New York Stock Exchange was equal to or greater than $18.75 per share. Also, based on the
November 21, 2002 closing price of $31.10 per share, the requirement that the aggregate value of all of the
outstanding, freely tradable Class A common stock held by persons other than our affiliates being equal to or
greater than $100,000 was also met. All our Series A preferred stock therefore automatically converted on a one-
for-one basis to Series A common stock on November 21, 2002.
On November 21, 2002, all outstanding shares of our Series A preferred stock automatically converted into
our Class A common stock on a one-for-one basis. Accordingly, 2,000,000 shares of our Series A preferred stock
were converted into 2,000,000 million shares of our Class A common stock.
15. Stockholders’ Equity
Common Stock
The Company is authorized to issue 180,000,000 shares of common stock at a $0.0001 par value per share,
of which 139,500,000 shares shall be designated as Class A common stock and 40,500,000 shares shall be
designated as Class B common stock.
Conversion
Each holder of Class B common stock shall have the right to convert each share of Class B common stock
into one share of Class A common stock.
Dividends
Class A and B stockholders shall be entitled to dividends when and as declared by the Board out of funds
legally available. When dividends are declared, such dividends shall be paid in equal amounts per share on all
shares of Class A and Class B common stock.
F-21