LeapFrog 2006 Annual Report Download - page 178

10. M ISCELLANEOUS .
(a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at
which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest
in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may
first be exercised or the time during which it will vest.
(b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of
a holder with respect to, any shares of Class A Common Stock subject to such Stock Award unless and until such
Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms.
(c) No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Stock
Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or
an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the
Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or
without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the
Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate,
and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.
(d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value
(determined at the time of grant) of Class A Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and
its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof that exceed such
limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options,
notwithstanding any contrary provision of any Stock Award Agreement.
(e) Investment Assurances. The Company may require a Participant, as a condition of exercising or
acquiring Class A Common Stock under any Stock Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring Class A Common Stock subject to the Stock Award for
the Participant’s own account and not with any present intention of selling or otherwise distributing the Class A
Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (1) the issuance of the shares of Class A Common Stock upon the exercise or acquisition of
Class A Common Stock under the Stock Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the then applicable securities
laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Class A Common Stock.
(f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the
Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition
of Class A Common Stock under a Stock Award by any of the following means (in addition to the Company’s
right to withhold from any compensation paid to the Participant by the Company) or by a combination of such
means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Class A Common Stock
from the shares of Class A Common Stock otherwise issuable to the Participant as a result of the exercise or
acquisition of Class A Common 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
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