LeapFrog 2005 Annual Report Download - page 155
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Please find page 155 of the 2005 LeapFrog annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
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Upon disposition of the stock acquired upon the receipt of a restricted stock award, the participant will
recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid
for such stock plus any amount recognized as ordinary income upon issuance (or vesting) of the stock. Such gain
or loss will be long-term or short-term depending on whether the stock was held for more than one year.
Restricted Stock Unit Awards.No taxable income is recognized upon receipt of a restricted stock unit
award. The participant will recognize ordinary income in the year in which the shares subject to that unit are
actually vested and issued to the participant in an amount equal to the fair market value of the shares on the date
of issuance. Subject to the requirement of reasonableness and the satisfaction of a tax reporting obligation,
LeapFrog will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the
participant at the time the shares are issued. In general, the deduction will be allowed for the taxable year in
which such ordinary income is recognized by the participant.
Stock Appreciation Rights. No taxable income is realized upon the receipt of a stock appreciation right.
Upon exercise of the stock appreciation right, the fair market value of the shares (or cash in lieu of shares)
received is recognized as ordinary income to the participant in the year of such exercise. Subject to the
requirement of reasonableness and the satisfaction of a reporting obligation, Generally, with respect to
employees, LeapFrog is will be entitled to an income tax deduction equal to the amount of ordinary income
recognized by the participant.
The Board of Directors Recommends
A Vote in Favor of Proposal Two.
44