LeapFrog 2005 Annual Report Download - page 160

value on the date of exercise of a number of Class A common stock equivalents with respect to which the
recipient is exercising the stock appreciation right, over (ii) the strike price determined by the board of directors
on the date of grant. The appreciation distribution upon exercise of a stock appreciation right may be paid in
cash, shares of LeapFrog’s Class A common stock, any combination of the two or in any other form of
consideration determined by the board of directors.
Stock appreciation rights vest and become exercisable at the rate specified in the stock appreciation right
agreement as determined by the board of directors. If a stock appreciation rights recipient’s relationship with us,
or any affiliate of ours, terminates, the recipient generally may exercise any vested stock appreciation right for 3
months (or such longer or shorter period specified in the stock appreciation rights agreement) after the date such
service relationship ends. In no event may a stock appreciation right be exercised beyond the expiration of its
term.
Acceleration of Awards. The board of directors has the power to accelerate the vesting of a stock award
notwithstanding the vesting schedule or terms relating to the exercisability contained in a stock option agreement.
Adjustments upon Changes in Stock. If any change is made in the Class A common stock subject to the
Equity Plan or subject to any stock award without receipt of consideration by LeapFrog (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in property other than cash, stock split,
liquidating dividend, combination of shares, exchange of shares, change in corporate structure or otherwise), the
class(es) and maximum number of shares subject to the Equity Plan, the maximum annual award limit applicable
under the Equity Plan and the class(es) and number of shares and price per share of stock subject to outstanding
stock awards will be appropriately adjusted.
Corporate Transactions. In the event of a Corporate Transaction (as defined in the Equity Plan), any
surviving or acquiring corporation may assume or continue any stock awards outstanding under the Equity Plan
or may substitute similar awards for those outstanding under the Equity Plan. A surviving corporation or
acquiring corporation (or its parent) may choose to assume or continue only a portion of a stock award or
substitute a similar stock award for only a portion of a stock award. If a surviving or acquiring corporation does
not assume or continue such stock awards or substitute similar awards, then, unless otherwise provided by the
board of directors, any outstanding stock awards that have not been assumed or substituted may be exercised (to
the extent vested) prior to the effective time of such corporate transaction, and any such stock awards will
terminate if not exercised prior to the effective time of such corporate transaction.
Changes in Control. In the event of a Change in Control (as defined in the Equity Plan), an outstanding
stock award held by a recipient whose relationship with us, or any affiliate of ours, has not terminated may be
subject to additional acceleration of vesting and exercisability upon of after such Change in Control to the extent
provided in a stock award agreement or any other written agreement between the recipient and us or an affiliate.
In the absence of such provision, however, no such acceleration will occur.
Amendments to the Equity Plan. The board of directors has the authority to amend the Equity Plan, so
long as such action does not impair any stock award previously granted under the Equity Plan, unless consented
to in writing by the holder of such award. In addition, no amendment will be effective unless approved by our
stockholders where such amendment requires stockholder approval under applicable law or stock exchange
requirements. The board of directors may, in its sole discretion, submit any other amendment to the Equity Plan
for stockholder approval.
Termination or Suspension of the Equity Plan. The board of directors may suspend or terminate the
Equity Plan at any time. No stock awards may be granted under the Equity Plan while the Equity Plan is
suspended or after it is terminated.
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