LeapFrog 2005 Annual Report Download - page 180

by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares
from the shares of the Class A Common Stock otherwise issuable to the Participant as a result of the exercise or
acquisition of stock under the Stock Award, provided, however, that no shares of Class A Common Stock are
withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to
the Company owned and unencumbered shares of the Class A Common Stock.
(e) Lock-Up Period. Upon exercise of any Stock Award, a Participant may not sell, dispose of, transfer,
make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with
the same economic effect as a sale, any shares of Class A Common Stock or other securities of the Company held
by the Participant, for a period of time specified by the managing underwriter(s) (not to exceed one hundred
eighty (180) days) following the effective date of a registration statement of the Company filed under the
Securities Act, other than a Form S-8 registration statement, (the “Lock Up Period”); provided, however, that
nothing contained in this section shall prevent the exercise of a repurchase option, if any, in favor of the
Company during the Lock Up Period. A Participant may be required to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with
the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing, the Company
may impose stop-transfer instructions with respect to such shares of Class A Common Stock until the end of such
period. The underwriters of the Company’s stock are intended third party beneficiaries of this Section 11(e) and
shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
12. A DJUSTMENTS UPON C HANGES IN C LASS AC OMMON S TOCK .
(a) Capitalization Adjustments. If any change is made in the stock subject to the Plan, or subject to any
Stock Award, without the receipt of consideration by the Company (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split,
liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other
transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in
the nature, class(es) and maximum number of securities subject both to the Plan pursuant to Section 4 and to the
nondiscretionary Stock Awards specified in Section 6, and the outstanding Stock Awards will be appropriately
adjusted in the nature, class(es) and number of securities and price per share of stock subject to such outstanding
Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and
conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction
“without receipt of consideration” by the Company.)
(b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, then all
outstanding Stock Awards shall terminate immediately prior to such event.
(c) Change in Control. If a Change in Control occurs and as of, or within twelve (12) months after, the
effective time of such Change in Control, a Participant’s Continuous Service terminates, then his or her Stock
Awards will accelerate and become fully vested and immediately exercisable (to the extent applicable), unless
the termination was a result of the Participant’s resignation (other than any resignation contemplated by the terms
of the Change in Control or required by the Company or the acquiring entity pursuant to the Change in Control).
(d) Parachute Payments. In the event that the acceleration of the vesting and exercisability of the Stock
Awards provided for in Section 12(c) and benefits otherwise payable to a Participant (“Payment”) would
(i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this
sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such
Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of
the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable
federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest
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