LeapFrog 2006 Annual Report Download - page 124
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The board of directors believes that our strategic business plan has the potential to create stockholder value
which is unlikely to be appropriately valued in an “auction” in the manner contemplated by the proposed
resolution, particularly as such an auction could create a forced sale atmosphere that could have the effect of
reducing the perceived value of the company to a “fire sale” level. Moreover, even though approval of this
proposal is not binding on the board of directors, the board believes that approval would work against increasing
value for the stockholders by causing uncertainty regarding the future of the company and adversely affecting
relationships with employees, customers and vendors. The potential adverse impact could lead to a reduction in
sales and profits and, in turn, stockholder value.
Therefore, the board of directors believes that growth of the business through continued implementation of
our strategic business plan and not a forced sale to the highest bidder is in the best interests of the company and
its stockholders.
Recommendation of the Board of Directors
For all the reasons set forth above, the Board of Directors recommends a vote AGAINST Proposal Three.
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