LeapFrog 2005 Annual Report Download - page 173

Company because of or in connection with the failure to meet a contingency or condition required to vest
such shares in the Participant, the shares of Class A Common Stock not acquired, forfeited or repurchased
under such Stock Award shall revert to and again become available for issuance under the Plan.
(ii) Other Shares Available for Subsequent Issuance. If any shares subject to a Stock Award are
not delivered to a Participant because the Stock Award is exercised through a reduction of shares subject to
the Stock Award (i.e., “net exercised”) or an appreciation distribution in respect of a Stock Appreciation
Right is paid in shares of Class A Common Stock, the number of shares subject to the Stock Award that are
not delivered to the Participant shall remain available for subsequent issuance under the Plan. If any shares
subject to a Stock Award are not delivered to a Participant because such shares are withheld in satisfaction
of the withholding of taxes incurred in connection with the exercise of an Option, Stock Appreciation Right,
or the issuance of shares under a Restricted Stock Award or Restricted Stock Unit Award, the number of
shares that are not delivered to the Participant shall remain available for subsequent issuance under the Plan.
If the exercise price of any Stock Award is satisfied by tendering shares of Class A Common Stock held by
the Participant (either by actual delivery or attestation), then the number of shares so tendered shall remain
available for subsequent issuance under the Plan.
To the extent there is issued a share of Class A Common Stock pursuant to a Stock Award that counted as
two (2) shares against the number of shares available for issuance under the Plan pursuant to Section 4(a) and
such share of Common Stock again becomes available for issuance under the Plan pursuant to this Section 4(b),
then the number of shares of Class A Common Stock available for issuance under the Plan shall increase by two
(2) shares.
(c) Source of Shares. The shares of Class A Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise. If the aggregate number of shares of Class A Common
Stock issuable pursuant to Section 6 would exceed the number of shares remaining in the share reserve under
Section 4(a) at such time of grant, then, in the absence of any Board action otherwise, a pro rata allocation of the
shares of Class A Common Stock available shall be made in as nearly a uniform manner as shall be practicable
and equitable.
5. E LIGIBILITY .
The Initial and Annual Grants as set forth in Sections 6(a) and 6(b) automatically shall be granted under the
Plan to all Non-Employee Directors.
6. N ON -D ISCRETIONARY G RANTS .
(a) Initial Grants. Without any further action of the Board, (i) each person who is or becomes a
Non-Employee Director as of the Effective Date, and (ii) each person who, after the Effective Date, is elected or
appointed for the first time to be a Non-Employee Director automatically shall, upon the Effective Date or the
date of his or her initial election or appointment to be a Non-Employee Director, as applicable, be granted an
Initial Grant as described in Section 6(c) below.
(b) Annual Grants. Without any further action of the Board, on each July 1 (“Annual Grant Date”),
commencing on July 1, 2004, each person who is then a Non-Employee Director, automatically shall be granted
an Annual Grant as described in Section 6(c) below; provided, however, that if a Non-Employee Director holds
the position of Chairman of the Board on such date, such Non-Employee Director shall instead be granted an
Annual Grant as described in Section 6(c) below; further provided, however, that the number of shares subject to
an Annual Grant for a particular Non-Employee Director shall be reduced, on a pro rata basis, for each month
such person did not serve as a Non-Employee Director during the twelve-month period from the prior Annual
Grant Date (or from July 1, 2002 with respect to the first Annual Grant hereunder) until the current Annual Grant
Date.
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