LeapFrog 2002 Annual Report Download - page 92

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LEAPFROG ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except share, per share and percent data)
In May 2002, the Board of Directors adopted the 2002 Equity Incentive Plan which amends and restates the
Plan. An additional 1,500,000 shares of Class A common stock have been reserved bringing the total issuable
under the Equity Incentive Plan to 16,500,000. The Company’s stockholders approved the 2002 Equity Incentive
Plan in July 2002.
Each stock option is exercisable pursuant to the vesting schedule set forth in the stock option agreement
granting such stock option. Unless a different period is provided for by the Board or a stock option agreement,
each stock option is generally exercisable for a period of ten years from the date of grant. No stock option shall
be exercisable after the expiration of its option term. Any incentive stock option granted to any owners of 10% or
more of the total combined voting power of the Company may be exercised only until December 31, 2002. The
exercise price of the option shall be 100% of the fair market value of a share of Class A common stock on the
date the stock option is granted, provided that the option price of an incentive stock option granted to any owner
of 10% or more of the total combined voting power of the Company shall be 110% of such fair market value.
The aggregate fair market value of Class A common stock with respect to which incentive stock options are
exercisable by an optionee during any calendar year shall not exceed $100.
In July 2002, the Board of Directors adopted, and the Company’s stockholders approved, the 2002 Non-
Employee Directors’ Stock Option Plan (“NED Plan”), under which 750,000 shares of Class A Common Stock
have been reserved.
The NED Plan provides for the following grants to be made to Non-Employee Directors without further
action of the Company’s Board of Directors: (1) an option to purchase 25,000 shares of Class A common stock
upon their initial appointment or election to the Board (2) an option to purchase 10,000 shares of Class A
common stock shall be granted annually on July 1, commencing in 2003, to all existing Non-Employee Directors.
Shares will be prorated based on annual service time.
Each stock option is exercisable for a period of ten years from the date of grant, no stock option shall be
exercisable after the expiration of its option term, the exercise price of the option shall be 100% of the fair
market value of a share of Class A common stock on the date the stock option is granted, and options shall vest
ratably over a thirty six month period.
F-23