LeapFrog 2006 Annual Report Download - page 171

(b) Reversion of Shares to the Share Reserve.
(i) Shares Available For Subsequent Issuance. If any Stock Award shall for any reason expire or
otherwise terminate, in whole or in part, without having been exercised in full, or if any shares of Class A
Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or repurchased by the
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; provided,
however, that subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the aggregate
maximum number of shares of Class A Common Stock that may be issued as Incentive Stock Options shall
be Twenty-Four Million (24,000,000) shares of Class A Common Stock.
(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.
5. E LIGIBILITY .
(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to Employees.
Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.
Notwithstanding the foregoing or any provision in the Plan to the contrary, Employees, Directors and Consultants
of a Parent shall not be eligible to receive any Stock Awards under the Plan.
(b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive Stock Option
unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of
the Class A Common Stock on the date of grant and the Option is not exercisable after the expiration of five
(5) years from the date of grant.
(c) Section 162(m) Limitation on Annual Grants. Subject to the provisions of Section 11(a) relating to
Capitalization Adjustments, no Employee shall be eligible to be granted Stock Awards covering more than Two
Million (2,000,000) shares of Class A Common Stock during any calendar year.
(d) Consultants. A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant,
a Form S-8 Registration Statement under the Securities Act (“Form S-8”) is not available to register either the
offer or the sale of the Company’s securities to such Consultant because of the nature of the services that the
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