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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share and percent data)
after tax), respectively, was attributable to restricted stock units and restricted stock awards. As of December 31,
2006, the Company had $12,535 of unrecognized compensation cost related to nonvested restricted stock units and
restricted stock awards that is expected to be recognized over a weighted-average period of approximately 2.5 years.
A summary of the activities of the Company’s restricted stock and restricted stock units is presented in the
following table:
Year Ended December 31, 2006
Number
of Shares
Weighted-Average
grant-date value per share
Not vested at December 31, 2005 ......................... 970 $11.24
Granted .............................................. 656 $10.12
Vested ............................................... (177) $10.05
Forfeited ............................................. (357) $11.75
Not vested at December 31, 2006 ......................... 1,092 $10.59
Performance Shares
Certain executives have restricted stock awards that are performance-based. Performance shares are
received by participants at the end of each three-year cycle and are generally tied to the Company’s performance
against pre-established annual financial measures. A portion of these performance shares is dependent on
whether the Company’s stock price meets certain milestones over the three-year cycle. During the year ended
December 31, 2006, the Company recorded pre-tax compensation expense of $747 for the portion of outstanding
performance stock awards that is based on the stock price milestone. The Company had no pre-tax compensation
expense for the year ended of 2005 and 2004, respectively. No compensation expense was accrued for the portion
of outstanding performance awards that is based on achieving the Company’s annual financial targets, as those
targets were not met, resulting in cancellation of 167 associated shares. A summary of activity for the Company’s
performance shares is presented in the following table:
Years Ended December 31, 2006
Number
of Shares
Weighted-Average
grant-date value per share
Not vested at December 31, 2005 ........................ 315 $16.21
Granted .............................................. 194 $10.42
Vested ............................................... — —
Forfeited / cancelled .................................... (342) $15.17
Not vested at December 31, 2006 ........................ 167 $11.23
Shares Reserved For Future Issuance
The following table summarizes the number of shares of Class A common stock that are reserved for future
issuance under the Company’s equity plans at December 31, 2006.
Number of
Shares
Options and stock awards available and outstanding under the Equity Incentive Plan . ............. 11,788
Shares issuable under the Employee Stock Purchase Plan .................................... 1,508
13,296
F-27