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LEAPFROG ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share and percent data)
The following table summarizes information concerning outstanding and exercisable options as of
December 31, 2003:
Class A Options Outstanding Class A Options Exercisable
Range of Exercise Price
Number
Outstanding
Weighted-
Average
Remaining
Contractual
Life (Years)
Weighted-
Average
Exercise
Price
Number
Exercisable
Weighted-
Average
Exercise
Price
$2.37 97 3.00 $ 2.37 97 $ 2.37
5.00 2,446 7.07 5.00 1,697 5.00
6.25 – 7.50 453 6.25 6.95 295 6.93
10.00 1,066 8.08 10.00 359 10.00
12.50 1,141 8.22 12.50 355 12.50
19.71 – 30.30 932 9.21 24.88 71 20.51
31.40 – 44.60 334 9.76 38.64 12 35.27
$2.37 – 44.60 6,469 7.77 $11.84 2,886 $ 7.16
The number of Class A options exercisable at December 31, 2002 and 2001, were 5,158 shares and 3,142,
respectively.
During the years ended December 31, 2003, 2002 and 2001, the Company granted options to consultants to
purchase 14, 125 and 165 shares of Class A common stock at average exercise prices of $21.77, $9.89 and $5.00
per share, respectively. These options were granted in exchange for consulting services performed. The Company
determined the fair value of these options using the Black-Scholes valuation model. Compensation expense
related to options to consultants was $1,093, $349 and $420 for the years ended December 31, 2003, 2002 and
2001, respectively. Included in the 125 options granted to consultants in 2002 are 40 options issued in connection
with the conversion of stock appreciation rights that were originally issued in prior years. Excluding these
converted rights, 85 options at an average price of $12.20 were issued to consultants in 2002.
During the years ended December 31, 2003, 2002 and 2001, in connection with the grant of certain stock
options to employees, the Company recorded deferred stock compensation for financial statement reporting
purposes of $127, $5,034 and $3,250, respectively. Deferred stock compensation is included as a component of
stockholders’ equity and is being amortized to expense on a straight-line basis over the vesting periods of the
options. The Company recorded $2,203, $1,752 and $681 of stock-based compensation for the years ended
December 31, 2003, 2002 and 2001, respectively.
Employee Stock Purchase Plan
In July 2002, the Company’s stockholders adopted the 2002 Employee Stock Purchase Plan, under which
2,000 shares of Class A common stock have been reserved. In the year ended December 31, 2003, 156 shares
were issued under this plan. No shares were issued prior to 2003.
F-22