LeapFrog 2010 Annual Report Download

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2010 Annual Report

Table of contents

  • Page 1
    2010 Annual Report

  • Page 2

  • Page 3
    ... rich educational content, engaging entertainment, and exceptional quality, making LeapFrog the leading brand in children's educational toys. Additionally, our products connect to our proprietary online Learning Path system which provides parents with personalized learning feedback and children with...

  • Page 4
    ... play. LeapPad Explorer will have a brilliant five-inch color touch screen, offer more than 100 learning games, videos, e-Books, and ï¬,ash card sets, and have a built-in camera, video recorder, microphone, story studio, art studio, and creativity center. • Propriety LeapFrog Character Content...

  • Page 5
    ...by LeapFrog's strong and proven team, which is now led by John Barbour, who joined us in March 2011 as our new chief executive o cer. John has a proven track record of success in building global consumer and Internet businesses for traditional retail, online retailing, mobile gaming, and branded toy...

  • Page 6
    [THIS PAGE INTENTIONALLY LEFT BLANK]

  • Page 7
    ... as of June 30, 2010 calculated using the closing market price as of that day, was approximately $103.6 million. Shares of common stock held by each current executive officer and director and by each person who is known by the registrant to own 5% or more of the outstanding voting power of the...

  • Page 8

  • Page 9
    ... or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this report. SPECIAL NOTE ON FISCAL PERIOD DATES This report on Form 10-K presents information regarding LeapFrog's performance during the fiscal years ended...

  • Page 10
    ... Statements and Supplementary Data ...Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...Item 9A. Controls and Procedures ...Item 9B. Other Information ...PART III Item 10. Item 11. Item 12. Item 13. Item 14...Directors, Executive Officers and Corporate...

  • Page 11
    ... book and game content. We have developed a number of learning platforms, including the Leapster family of mobile learning systems, and Tag and Tag Junior reading systems, which support a broad library of software titles. These and others of our products connect to our proprietary online LeapFrog...

  • Page 12
    ...for the development, design, sales and marketing of electronic educational hardware products, related software and learning toys sold in the United States. We market and sell our products directly to national and regional mass-market and specialty retailers and other retail stores, distributors, and...

  • Page 13
    ... and provides increased functionality with optional attachments such as a camera, and enables the ability to download a variety of digital content such as games, e-Books, videos and flash cards. Our library of more than 45 Leapster Explorer software titles includes licensed content such as Toy Story...

  • Page 14
    ...the Tag and Tag Junior reading systems, the Leapster2 and Leapster Explorer mobile learning systems, My Pal Scout, My Pal Violet and My Own Leaptop are designed to connect to the Learning Path. • LeapWorld: LeapWorld is an online learning environment for children that enriches the LeapFrog product...

  • Page 15
    ...electronic and online games, interactive gaming systems and e-book readers. Products in our mobile learning category, such as our Leapster platform and related software, compete against handheld and console-based gaming platforms from Sony, Nintendo, Apple's iPhone, iTouch and iPad, and other mobile...

  • Page 16
    ... safe products. We work with a relatively small group of contract manufacturers, some of which are specialized for the consumer electronics manufacturing sector. Research and Development We design our hardware platforms and related software-based content using in-house research and development...

  • Page 17
    ... designs in-house and most members of our in-house content development and production team have prior experience in the education, entertainment and educational software or video game industries. Development of online web capabilities: Our web-connected products provide accessibility to the Learning...

  • Page 18
    ... or business plans. Please see Part I, Item 1A.-Risk Factors-"Our intellectual property rights include licenses from third parties and may not prevent other companies from using our technologies or similar technologies to develop competing products, which could weaken our competitive position and...

  • Page 19
    ...19, 2011: Name Age Position Held William B. Chiasson ...Mark A. Etnyre ...William K. Campbell ...Michael J. Dodd ...Michael Y. Chai ... 58 43 49 51 48 Chief Executive Officer Chief Financial Officer President of Americas Sales President and Chief Operating Officer Executive Vice President, Product...

  • Page 20
    ... Operating Officer since March 2010. Previously, he served as Senior Vice President, Supply Chain and Operations from April 2005 to February 2010. Prior to joining LeapFrog, he co-founded Executive Technology, Inc., a value-added reseller and system integrator of information technology products, and...

  • Page 21
    ... technology with our own. We continually introduce new variations on our mobile learning and reading platforms and new learning toy products. In 2009, we introduced a number of new products and services to the market. These new products represented a substantial portion of our 2009 and 2010 sales...

  • Page 22
    .... Many of our current and planned key products, such as the Tag reading system, Leapster2, Leapster Explorer and some of our recent learning toys, are built as web-enabled products designed to be connected to a computer that has Internet access in order to access content and features. As we focus...

  • Page 23
    ... impact our sales and would adversely affect our financial results for 2011 and beyond. Our business is highly seasonal, and our annual operating results depend, in large part, on sales relating to the brief holiday season. Sales of consumer electronics and toy products in the retail channel are...

  • Page 24
    ...-time" inventory management systems increasingly used by retailers as they remain cautious about future inventory levels. See also "Our business is highly seasonal, and our annual operating results depend, in large part, on sales relating to the brief holiday season" above. If we fail to meet tight...

  • Page 25
    ... using our technologies or similar technologies to develop competing products, which could weaken our competitive position and harm our operating results. Our success depends in large part on our proprietary technologies that are used in our learning platforms and related software. We rely, and plan...

  • Page 26
    ... and related software and applications could harm our reputation and hinder adoption of these products. By using the Internet-based Learning Path application, information captured by our web-connected products about a child's performance and activities will be transferred and stored on our website...

  • Page 27
    ..., sales and consumer relationships. If demand for accessing our websites exceeds the capacity we have planned to handle peak periods or if other technical issues arise when customers attempt to use these systems to purchase products or to access features or content for our web-connected products...

  • Page 28
    ... and regulations could impose additional costs on the conduct of our business. For example, the "Safer Consumer Product Alternatives" draft regulations proposed by the California Department of Toxic Substances Control on June 23, 2010 as part of a California "Green Chemistry" initiative designed to...

  • Page 29
    ... us to deliver products to our customers, or for our manufacturers to deliver products to us, or suppliers to provide component parts. Notably, our U.S. distribution centers, including our distribution center in Fontana, California, and our corporate headquarters are located in California near major...

  • Page 30
    ...affecting our business. Our future success depends partly on the continued contribution of our key executives and technical, sales, marketing, manufacturing and administrative personnel. Part of our compensation package includes stock and/or stock options. To the extent our stock performs poorly, it...

  • Page 31
    ... 30, 2010, NovelPoint Learning LLC ("NovelPoint") (f/k/a Intuit Educational Ventures LLC) sued us and others for patent infringement in the United States District Court for the Eastern District of Texas. NovelPoint alleges that our Tag and Tag Junior products (and certain products of other companies...

  • Page 32
    ...low sales prices per share of our Class A common stock on the NYSE in each quarter during the last two years. The values stated below are actual high and low sales prices, inclusive of intra-day trading. 2010 High Low First quarter ...Second quarter ...Third quarter ...Fourth quarter ...2009 $7.14...

  • Page 33
    ... 369.8 $243.5 $148.1 290.0 450.4 $334.0 2010 2009 2008 (In millions) 2007 2006 Consolidated Statements of Cash Flows Data: Net cash provided by (used in): Operating activities ...Investing activities ...Financing activities ...Effect of exchange rate changes on cash ...Increase (decrease) in...

  • Page 34
    ... Leapster Explorer mobile learning systems, launched in 2008 and 2010, respectively, My Pal Scout and My Pal Violet, also launched in 2009, and My Own Leaptop, launched in 2010 are designed to connect to the Learning Path. Our products compete most directly in the toy industry in the preschool toy...

  • Page 35
    ... on building out our core product lines and improving the marketability and scope of our content library. We invest in research and development of existing and new lines of business that we believe will contribute to our long-term growth and profitability. For example, we continue to invest in...

  • Page 36
    ... quarters of 2009. The 2008 year-end retail inventory levels impacted all business lines, but had the most profound impact on the mobile learning business, including both platforms and software-related content. Net sales for 2009 included a negative impact from changes in currency exchanges rates of...

  • Page 37
    ... believe additional factors, such as our ability to leverage and grow our Learning Path, new product introductions across all categories, international expansion opportunities, and development and distribution of Leapfrog-branded digital content should positively impact our operating income in 2011...

  • Page 38
    ... the underlying Tag platform technology developed in prior years. Advertising Expenses Advertising expense consists of costs associated with marketing, advertising and promoting our products, including customer-related discounts and promotional allowances. % Change 2010 vs. 2009 2008 2009 (Dollars...

  • Page 39
    ... Year 2010 Compared to Fiscal Year 2009 Advertising expenses for 2010 increased 25% as compared to 2009. The increase was primarily driven by increased costs to support the launch of Leapster Explorer and to build consumer awareness of the Tag reading system. Fiscal Year 2009 Compared to Fiscal Year...

  • Page 40
    ... maker reviews performance, allocates resources and manages the business. Certain corporate-level operating expenses associated with sales and marketing, product support, human resources, legal, finance, information technology, corporate development, procurement activities, research and development...

  • Page 41
    ... Year 2009 Net sales for 2010 increased 12% as compared to 2009. The increase was primarily driven by the launch of Leapster Explorer in June 2010, full year of sales of our Scout line of learning toys, which we launched late in the second quarter of 2009, and significantly lower retail inventory...

  • Page 42
    ... associated with sales and marketing, product support, human resources, legal, finance, information technology, corporate development, procurement activities, research and development, legal settlements and other corporate costs are not allocated to our International segments. % Change 2010 vs. 2009...

  • Page 43
    ... credit facility. Future capital expenditures are primarily planned for new product development and purchases related to the upgrading of our information technology capabilities. We expect that capital expenditures in 2011, including those for capitalized content and website development costs, will...

  • Page 44
    ... as new software purchases to further automate processes and better support operations. Net cash provided by financing activities improved $1.8 million for 2010 as compared to 2009, primarily due to an increase in employee stock option exercises in response to a higher average company stock price...

  • Page 45
    ... tightened cash management practices in response to the economic crisis, leading to higher accounts payable balances. Thus, cash flow provided by operations was higher in the fourth quarter of 2008 and 2009 than in the first quarter of 2009 and 2010, respectively. Cash flow used in operations tends...

  • Page 46
    ...addition, we had commitments to purchase inventory totaling approximately $36.1 million at December 31, 2010. CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES Our financial statements and accompanying notes are prepared in accordance with GAAP. Preparing financial statements requires management...

  • Page 47
    ... for Doubtful Accounts, and Other Accounts Receivables and Revenue Reserves We derived the majority of our revenue from sales of our technology-based learning products and related proprietary content. Revenue is recognized when products are shipped and title passes to the customer, provided that...

  • Page 48
    ...in the statement of operations in the same period. Our evaluations of capitalized content development costs and website costs require us to make complex and subjective judgments, using currently available data as well as projections about the potential impact of possible future events and conditions...

  • Page 49
    ... RISK We develop products in the United States and market our products primarily in North America and, to a lesser extent, in Europe and the rest of the world. We are billed by and pay our third-party manufacturers in United States dollars ("USD"). Sales to our international customers are transacted...

  • Page 50
    ...balance sheet. We invest our excess cash in accordance with our investment policy. At December 31, 2010, we did not hold any cash equivalents. As of December 31, 2009, our excess cash was invested only in money market funds. Any adverse changes in interest rates or securities prices may decrease the...

  • Page 51
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA LEAPFROG ENTERPRISES, INC. FORM 10-K Index to Consolidated Financial Statements For the Fiscal Year Ended December 31, 2010 Page Reports of Independent Registered Public Accounting Firm ...Consolidated Balance Sheets ...Consolidated Statements of ...

  • Page 52
    ... of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the...

  • Page 53
    ... Board (United States), the consolidated balance sheets, as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2010 of LeapFrog Enterprises, Inc. and our report dated...

  • Page 54
    LEAPFROG ENTERPRISES, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) December 31, 2010 2009 ASSETS Current assets: Cash and cash equivalents ...Accounts receivable, net of allowances for doubtful accounts of $776 and $1,119, respectively ...Inventories ...Prepaid expenses ...

  • Page 55
    LEAPFROG ENTERPRISES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Years Ended December 31, 2010 2009 2008 Net sales ...Cost of sales ...Gross profit ...Operating expenses: Selling, general and administrative ...Research and development ...Advertising ......

  • Page 56
    ... of year ...Class A common shares issued upon exercise of employee stockbased awards and purchases made under the employee purchase plan ...Net cash paid for payroll taxes on restricted stock unit releases ...Stock-based compensation expense ...Recognition of previously unrecognized tax benefits...

  • Page 57
    ... of product costs ...Purchases of intangible assets ...Sales of investments ...Net cash used in investing activities ...Financing activities: Proceeds from stock option exercises and employee stock purchase plans ...Net cash paid for payroll taxes on restricted stock unit releases ...Borrowing...

  • Page 58
    ... age nine, both at home and in schools around the world. LeapFrog has developed a number of learning platforms that support a broad library of software titles covering subjects such as phonics, reading, writing, and math. In addition, LeapFrog has a broad line of standalone educational products...

  • Page 59
    ...except per share data) Reclassifications Certain amounts in the prior years' financial statements have been reclassified to conform to the current year's presentation. Revenue Recognition The Company derives the majority of its revenue from sales of its technology-based learning products and related...

  • Page 60
    ... to be recoverable. Amortization of these costs begins when the products are initially released for sale and continues over a two-year life using the straight-line method, and is included in cost of sales. The Company evaluates the future recoverability of capitalized amounts periodically and...

  • Page 61
    ... FINANCIAL STATEMENTS (In thousands, except per share data) The Company also capitalizes external website development costs ("website costs"), which primarily include third-party costs related to developing applications that are an integral component of certain products the Company markets, as well...

  • Page 62
    ... External costs incurred after a project reaches technological feasibility are capitalized. Capitalized costs are amortized into cost of sales when the product is released to the market, over two years using the straight-line method. Capitalized research and development costs are reviewed for future...

  • Page 63
    ... Directors' Stock Award Plan, the Company issues stock options, restricted stock awards ("RSAs") and restricted stock units ("RSUs") to its employees, directors and occasionally to non-employee service providers, to purchase shares of the Company's Class A common stock. Share-based compensation cost...

  • Page 64
    ... average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an option, the amount of compensation cost, if any, for future service that the Company has not yet recognized, and the estimated tax benefits that would be recorded in paid...

  • Page 65
    ... FINANCIAL STATEMENTS (In thousands, except per share data) December 31, 2010, which represents an overall decline in value of $1,319 from par. The assumptions used in preparing the discounted cash flow model are based on data available as of December 31, 2010 and include estimates of interest rates...

  • Page 66
    ...CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share data) During the year ended December 31, 2009, there was a $431 decline in the Company's estimated cash flows expected to be collected on its ARS investments, of which $409 was determined to be credit-related and therefore reported as...

  • Page 67
    ... external costs related to the development of content for its learning products and external website development costs for its website. The Company's capitalized product costs as of December 31, 2010 and 2009 were as follows: December 31, 2010 2009 Content costs ...Website development costs ...Less...

  • Page 68
    ...The Company's accrued liabilities as of December 31, 2010 and 2009 were as follows: December 31, 2010 2009 Advertising and promotion ...Royalties payable ...Employee-related expenses ...Deferred revenue ...Manufacturing and warehousing ...Marketing, consulting and web-related ...Facilities-related...

  • Page 69
    LEAPFROG ENTERPRISES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share data) December 31, 2009 were as a result of consolidation of the Company's administrative operations and the termination of several senior-level employees in the United States, France and United...

  • Page 70
    ... ENTERPRISES, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share data) The differences between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 35% were as follows: Years Ended December 31, 2010 2009...

  • Page 71
    ... FINANCIAL STATEMENTS (In thousands, except per share data) recent three year period, the Company continues to have a full valuation allowance established against its domestic deferred tax assets. The valuation allowance in both 2010 and 2009 includes $8,503 related to excess tax benefits of stock...

  • Page 72
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share data) The Company is subject to exam for years 2000 and forward. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits in the future could decrease by up to $1,957 related to its...

  • Page 73
    ...full review of the total compensation components for key executives. There were no performance shares outstanding at December 31, 2010 and 2009. The Company also has an employee stock purchase plan ("ESPP"). On August 26, 2009, the stockholders of the Company approved a stock option exchange program...

  • Page 74
    ...The exchange was designed to result in no additional compensation expense. During the second quarter of 2009, the Company granted options to certain executives and board members to purchase an aggregate of 2,705 shares of its Class A common stock that vest based upon a service condition and a market...

  • Page 75
    ... STATEMENTS (In thousands, except per share data) The Company is authorized to issue up to a total of 24,000 shares of Class A common stock for any of the types of awards authorized under the Plans. At December 31, 2010, the remaining available for future grants was 3,558 for stock-based awards...

  • Page 76
    ... option exchange program. There were no stock options grants valued using a Monte-Carlo simulation during the fiscal year ended December 31, 2010 and 2008. During the second quarter of 2009, the Company granted options to certain executives and board members to purchase an aggregate of 2,705 shares...

  • Page 77
    ... related to RSUs and RSAs is calculated based on the market price of The Company's common stock on the grant date. The total market value of restricted stock unit and stock awards granted in 2010, 2009 and 2008 as measured on the grant date was $7,989, $147, and $2,666, respectively. Stock plan...

  • Page 78
    ... per share data) Stock options outstanding that are expected to vest are shown net of estimated future option forfeitures. The price of a share of the Company's Class A common stock was $5.55 and $3.91 as of December 31, 2010 and 2009, respectively. As of December 31, 2010, options to purchase 3,870...

  • Page 79
    ...THE CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share data) RSUs and RSAs: The activity in the Company's RSUs and RSAs for the years ended December 31, 2010 and 2009 was as follows: Weighted Average Grant Date Fair Value Number of Shares Restricted stock units and awards: Nonvested...

  • Page 80
    ...their Class B common stock into the same number of shares of Class A common stock at par value. The transactions had no impact on the Company's financial statements and did not have an effect on our status as a "controlled company" within the meaning of the NYSE corporate governance standards. Class...

  • Page 81
    ...the combined voting power of the Company's Class A common stock and Class B common stock. In 2010, 2009 and 2008, the Company purchased software products and support services totaling $1,138, $856 and $1,095, respectively, from Oracle Corporation on terms the Company believes are comparable to those...

  • Page 82
    ...-market retailers in the United States. Credit is extended based on an evaluation of the customers' financial condition; generally, collateral is not required. Allowances for credit losses are provided for in the consolidated financial statements at the time of sale. Three major retailers account...

  • Page 83
    ... CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share data) Customer Concentration A limited number of customers historically have accounted for a substantial portion of the Company's gross sales. For the last three fiscal years, the Company's top three customers have been Target, Toys...

  • Page 84
    ...Consolidated Financial Statements. The primary business of the two operating segments is as follows: • The U.S. segment is responsible for the development, design, sales and marketing of electronic educational hardware products and related software, and learning toys, sold primarily through retail...

  • Page 85
    ... its customers. For example, the Company attributes sales to the United Kingdom based on the sales billed by its United Kingdom-based foreign subsidiary, LeapFrog Toys (UK) Limited, to its customers. Additionally, the Company attributes sales to non-United States countries if the product is shipped...

  • Page 86
    ...except per share data) The table below shows the sales of the Company's product portfolio by segment for the years ended December 31, 2010, 2009 and 2008. 2010 $ % of Net Sales 2009 % of $ Net Sales (Dollars in millions) $ 2008 % of Net Sales SEGMENTS United States: Mobile learning ...Learning toys...

  • Page 87
    ... per share data) March 31 For 2009 Quarters Ended June 30 September 30 December 31 Full Year 2009 Net sales ...Gross profit ...Total operating expenses ...Income (loss) from operations ...Net income (loss) ...Net income (loss) per common share: Basic and Diluted ...Market price range common stock...

  • Page 88
    ...of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that...

  • Page 89
    ... control over financial reporting, management concluded that, as of December 31, 2010, our internal control over financial reporting was effective. Ernst & Young LLP, the independent registered public accounting firm that audited our financial statements included in this Annual Report on Form...

  • Page 90
    ... 2011 annual meeting of stockholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, also referred to in this Form 10-K as our 2011 Proxy Statement, which we expect to file with the SEC no later than April 30, 2011. ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE...

  • Page 91
    ... shows certain information concerning our Class A common stock reserved for issuance in connection with our 2002 Equity Incentive Plan and our 2002 Non-Employee Directors' Stock Award Plan as of December 31, 2010: Number of securities to be issued upon exercise of outstanding options, warrants and...

  • Page 92
    ... AND FINANCIAL SCHEDULES (1) Financial Statements: The following are filed as a part of Item 8 of this Annual Report on Form 10-K: Page Reports of Independent Registered Public Accounting Firm ...Consolidated Balance Sheets ...Consolidated Statements of Operations ...Consolidated Statements of...

  • Page 93
    ... Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LEAPFROG ENTERPRISES, INC By: /s/ Mark A. Etnyre Mark A. Etnyre Chief Financial Officer and Principal Financial Officer Date: February 22, 2011 83

  • Page 94
    ... the dates indicated. Signatures Title Date /s/ WILLIAM B. CHIASSON William B. Chiasson Chief Executive Officer (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer) Corporate Controller (Principal Accounting Officer) Executive Chairman February 22, 2011 /s/ MARK...

  • Page 95
    ... dated March 29, 2010 Amended and Restated Employee Equity Participation Plan Amended and Restated 2002 Equity Incentive Plan Form of Stock Option Agreement under the 2002 Equity Incentive Plan Form of Stock Bonus Agreement under the 2002 Equity Incentive Plan Form of Restricted Stock Unit Award...

  • Page 96
    ... Exhibit Filing File No. Number Date Filed Herewith 10.13* Form of Nonstatutory Stock Option Agreement under the 2002 Non-Employee Directors' Stock Award Plan Compensation Arrangements between LeapFrog and its Board of Directors†Executive Management Severance and Change in Control Benefit Plan...

  • Page 97
    ... Agreement dated January 31, 2011 by and among LeapFrog, certain financial institutions and Bank of America, N.A. List of Subsidiaries Consent of Independent Registered Public Accounting Firm Power of Attorney (see signature page to this Form 10-K) Certification of the Chief Executive Officer...

  • Page 98
    ... has been granted with respect to certain portions of this agreement. Such portions have been omitted from this filing and have been filed separately with the Securities and Exchange Commission. †Description contained under the heading "Compensation of Directors" in LeapFrog's definitive proxy...

  • Page 99
    ... Year Allowance for doubtful accounts receivable 2010 ...2009 ...2008 ...Allowance for sales returns 2010 ...2009 ...2008 ...Allowance for defective products 2010 ...2009 ...2008 ...Allowance for promotional markdowns 2010 ...2009 ...2008 ...Allowance for chargebacks and price changes 2010 ...2009...

  • Page 100
    ... report financial information; Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ William B. Chiasson William B. Chiasson Chief Executive Officer b) Date: February 22, 2011

  • Page 101
    ... and report financial information; Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/ Mark A. Etnyre Mark A. Etnyre Chief Financial Officer d) Date: February 22, 2011

  • Page 102
    ... end of the period covered by the Annual Report and results of operations of the Company for the periods covered in the financial statements in the Annual Report. 2. Dated: February 22, 2011 /s/ William B. Chiasson William B. Chiasson Chief Executive Officer /s/ Mark A. Etnyre Mark A. Etnyre Chief...

  • Page 103
    ... officer compensation votes. 5. Approval of the LeapFrog Enterprises, Inc. 2011 Equity Incentive Plan. These items of business are more fully described in the proxy statement accompanying this notice. The record date for the annual meeting is April 6, 2011. Only stockholders of record at the close...

  • Page 104

  • Page 105
    ... Registered Public Accounting Firm Fee Information ...Pre-Approval Procedures of Audit and Non-Audit Services by the Independent Registered Public Accounting Firm ...Required Vote ...Recommendation ...PROPOSAL THREE-NON-BINDING ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION ...Required...

  • Page 106
    ... Corporate Governance Committee ...Corporate Governance ...Stockholder Communications with Directors ...DIRECTOR COMPENSATION ...EXECUTIVE COMPENSATION ...Compensation Discussion and Analysis ...Report of the Compensation Committee ...Summary Compensation Information ...Grants of Plan-Based Awards...

  • Page 107
    ...Daylight Time at our headquarters located at 6401 Hollis Street, Suite 100 in Emeryville, California. Directions to the annual meeting may be found at www.leapfrog.com under About Us-Contact Us. Who can vote at the annual meeting? Only stockholders of record at the close of business on April 6, 2011...

  • Page 108
    ... registered public accounting firm for our fiscal year ending December 31, 2011; Non-binding advisory vote on named executive officer compensation; Non-binding advisory vote on the preferred frequency of named executive officer compensation votes; and Approval of the LeapFrog Enterprises, Inc. 2011...

  • Page 109
    ... officer compensation, for "Three Years" as the preferred frequency of advisory votes on named executive compensation and "For" the LeapFrog Enterprises, Inc. 2011 Equity Incentive Plan. The board of directors knows of no other matters that will be presented for consideration at the annual meeting...

  • Page 110
    ... your broker instructions, the shares will be treated as broker non-votes. Under NYSE rules, elections of directors and, under a new amendment to the NYSE rules, executive compensation, including the advisory stockholder votes on the compensation of named executive officers and on the frequency of...

  • Page 111
    ... meeting there is present in person or represented by proxy the holders of outstanding shares of Class A and Class B common stock entitled to cast a majority of the votes that could be cast by all outstanding shares of Class A and Class B common stock voting together as a class. On the record date...

  • Page 112
    ... from the views of other members. John Barbour has served as our Chief Executive Officer and as a member of our board of directors since March 2011. Prior to joining LeapFrog, he served as President of the GameHouse division of RealNetworks, Inc., a digital media company, from October 2008 to August...

  • Page 113
    ... on building leading companies in areas relating to education, technology and career management and the improvement of individual and corporate performance. From 1990 to 1996, he served as President and Chief Executive Officer of Sega of America, a leading video game and entertainment company. Prior...

  • Page 114
    ... Investments and the owner of shares representing a majority of our outstanding voting power. From September 1999 to May 2004, he held the position of Corporate Development Group Director at Cadence Design Systems, an electronic design automation software and services company, where he managed...

  • Page 115
    ... financial officer duties, been responsible for corporate development for a number of years, executing many acquisitions, investments and joint ventures, both domestically and internationally. His experience in the electronic game business, including both content development and retail distribution...

  • Page 116
    ... to LeapFrog's current business as we increasingly focus on mobile and web-enabled educational entertainment platforms, and enables him to contribute to the board of directors his insights and guidance on effective strategic options as we expand our technology-based learning toys and platforms...

  • Page 117
    ... SEC rules, based on his formal education and substantial experience in the field. Mr. Wang's experience as an executive officer of various consumer products and retail companies and as a director of public companies other than LeapFrog gives him broad-based experience in corporate governance...

  • Page 118
    ... registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of the company and our stockholders. Independent Registered Public Accounting Firm Fee Information In connection with the audit of our 2011 financial statements, we...

  • Page 119
    ... studies of our 2008 and 2007 research and development credits. All Other Fees There were no other fees paid to Ernst & Young LLP in 2010 and 2009. Pre-Approval Procedures of Audit and Non-Audit Services by the Independent Registered Public Accounting Firm The audit committee's charter requires...

  • Page 120
    ... executive officers, as disclosed in the Company's Proxy Statement for the 2011 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the other related...

  • Page 121
    ... board or the Company in any way, our board of directors may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on the compensation of our named executive officers more or less frequently than the option approved by our stockholders. Under the rules...

  • Page 122
    ... the increase in the share reserve in connection with the adoption of the 2011 EIP will provide us with a sufficient reserve of common stock to offer appropriate incentives to our employees and consultants for the next three years. Our 2002 Non-Employee Directors' Stock Award Plan ("NEDSAP") is...

  • Page 123
    ...of March 31, 2011, our Prior Plan has 3,356,242, shares remaining available for grant; therefore, we are limited in our ability to issue equity to our named executive officers, key employees, or consultants unless our stockholders increase the reserve under our Prior Plan or approve a new stock plan...

  • Page 124
    ... 2011 Plan with a strike price of at least 100% of the fair market value of the underlying common stock on the date of grant, and (ii) two (2) shares for each share of common stock issued pursuant to a restricted stock award, restricted stock unit award, performance stock award, or other non-option...

  • Page 125
    ...-employee directors under the NEDSAP. Awards The 2011 EIP allows the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards and other stock awards. Subject to plan limits, the compensation committee...

  • Page 126
    ...to the various limitations set forth in the 2011 EIP, the number and kind of shares subject to outstanding awards under the 2011 EIP, and the exercise or settlement price of outstanding stock options and of other awards. In the event of a corporate transaction, the board of directors may arrange for...

  • Page 127
    ... Our ability to realize the benefit of any tax deductions described below depends on our generation of taxable income as well as the requirement of reasonableness, the provisions of Section 162(m) of the Tax Code and the satisfaction of our tax reporting obligations. Incentive Stock Options The 2011...

  • Page 128
    ... to stock options and stock appreciation rights will qualify as performance-based compensation if, among other requirements, (i) such awards are approved by a compensation committee composed solely of "outside directors," (ii) the plan contains a per-employee limitation on the number of shares for...

  • Page 129
    ... currently determine the benefits or number of shares subject to awards that may be granted in the future to executive officers, directors and employees under the 2011 EIP. Equity Compensation Plan Information Information, as of December 31, 2011, regarding equity compensation plans approved and not...

  • Page 130
    ... of LeapFrog's Class A common stock and Class B common stock (convertible into Class A common stock) as of March 31, 2011 by: (i) each director; (ii) each of the executive officers named in the Summary Compensation Table below; (iii) all executive officers and directors of LeapFrog as a group; and...

  • Page 131
    ...,748,737 shares of Class B common stock outstanding as of March 31, 2011. Unless otherwise indicated in the footnotes to this table, the applicable address for each of our directors and executive officers is c/o LeapFrog Enterprises, Inc., 6401 Hollis Street, Suite 100, Emeryville, California 94608...

  • Page 132
    ...Parkway, San Mateo, California 94403. (8) Based solely on information provided in a Schedule 13G filed on February 7, 2011 by BlackRock, Inc. The address for BlackRock, Inc. is 40 East 52nd Street, New York, New York 10022. (9) Includes 167,066 shares of Class A common stock issuable to Mr. Campbell...

  • Page 133
    ... stock unit awards that are scheduled to be vested within 60 days after March 31, 2011, provided that pursuant to the terms of the grant, the shares will not be released by LeapFrog until three months following the expiration or termination of Mr. Maron's term on LeapFrog's board of directors...

  • Page 134
    ... by Lawrence J. Ellison, Chief Executive Officer of Oracle Corporation, holds a majority of the voting power of our outstanding stock. In 2010, we purchased software products and support services from Oracle Corporation totaling approximately $1.1 million. As of March 31, 2011, Mr. Ellison may be...

  • Page 135
    ...any of his family members and us, our senior management and our independent registered public accounting firm, our board of directors affirmatively determined in February 2011 that all of our continuing directors are independent within the meaning of the applicable NYSE listing standards, except for...

  • Page 136
    ... 2010 and March 2011. As Chairman, Mr. Chiasson continues to have an active role in consulting with our senior management and board regarding LeapFrog's business strategy and technology and product direction. The regular duties of the Chairman of the Board are described in our bylaws, which provide...

  • Page 137
    ... time each director and nominee has to devote to the company. The committee also works with our management to establish orientation programs for new directors and succession plans for key executive officers. • • • COMMITTEES OF THE BOARD In 2010, our board of directors had three standing...

  • Page 138
    ... reviews and approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services; monitors the rotation of partners of the independent registered public accounting firm on LeapFrog's engagement as required by law; confers with management...

  • Page 139
    ... SEC rules. The board of directors made a qualitative assessment of Messrs. McKee's and Wang's level of knowledge and experience based on a number of factors, including their formal education and experience, in the case of Mr. McKee, as a chief financial officer for a public reporting company...

  • Page 140
    ... independence. Based on the review and discussions referred to above, the audit committee recommended to the board that the audited consolidated financial statements be included in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 for filing with the Securities and...

  • Page 141
    ... the release by the Company of material non-public information, nor will we have any program, plan or practice to do so. In addition, we have specific written policies regarding the selection of grant dates for stock options and other stock awards made to our executive officers and employees. See...

  • Page 142
    ... perform any services for the Company or any of our affiliates other than compensation consulting services related to determining or recommending the form or amount of executive and director compensation, designing and implementing incentive plans and providing information on industry and peer group...

  • Page 143
    ... of the board of directors, assessing the performance of management and the board of directors, reviewing the compensation paid to non-employee directors for their service on our board of directors and its committees, and developing a set of corporate governance principles for LeapFrog. Our...

  • Page 144
    ...Corporate Secretary of LeapFrog at 6401 Hollis Street, Emeryville, California 94608, at least 120 days prior to the anniversary date of the mailing of our proxy statement for the last annual meeting of stockholders, which for our 2012 annual meeting of stockholders is a deadline of December 22, 2011...

  • Page 145
    ...written communications addressed to the Corporate Secretary of LeapFrog at 6401 Hollis Street, Suite 100, Emeryville, California 94608. The board of directors has established procedures for how we should deal with all direct communications. The board of directors has directed that all communications...

  • Page 146
    ... 2002 Non-Employee Directors' Stock Award Plan. These stock option awards were granted at an exercise price of $3.92 per share and vest over three years. The grant date fair value of each of these stock option awards, as calculated under FASB ASC Topic 718 for financial statement reporting purposes...

  • Page 147
    ...an option to purchase 30,000 shares of our Class A common stock and the annual award will be an option to purchase 15,000 shares of our Class A common stock; provided, however, that a non-employee director who holds the position of Chair of our board of directors at the time of the annual award will...

  • Page 148
    ... resignation from our board of directors in March 2011. In March 2011, William B. Chiasson ceased serving as our CEO and became a non-employee director and Chairman of the Board. Since a portion of their compensation for the year ended December 31, 2010 was as employee directors, the description of...

  • Page 149
    ... Company was terminated in March 2011); and William K. Campbell, currently our President, Americas Sales (formerly our Senior Vice President, Consumer Sales through February 2010). • Executive Compensation Philosophy Our philosophy is to provide total compensation to our named executive officers...

  • Page 150
    ... awards for our named executive officers has been delegated to the performance compensation award subcommittee of the compensation committee. For more information about the performance compensation award subcommittee, including its membership and functions, see "Board of Directors and Corporate...

  • Page 151
    ... reference point for our executive and director compensation programs to identify compensation design trends and "best practices" in our industry. Industry reference peers include companies that provide toys, educational products, consumer packaged goods for children or games (handheld or electronic...

  • Page 152
    ... more than 700 high technology companies. This analysis, which was performed in February 2010, indicated that the target total direct compensation for our executives (the sum of target total cash compensation and the value of annual equity awards) base salaries and equity award grant values all fell...

  • Page 153
    ... compensation committee sought to provide sufficient compensation to ensure retention of these executives in view of the recent turnover in the CEO position and their important role in the Company's critical holiday season and 2011 fiscal year planning. Performance-Based Bonuses We use performance...

  • Page 154
    ...our 2010 operating plan and data regarding our financial results and business expectations as of that time, including toy industry sales growth projections and Company resources and capabilities. In addition, these levels were consistent with the relative risk acceptable to the board of directors in...

  • Page 155
    ...on our 2010 operating plan and data regarding our financial results and business expectations as of that time, including toy industry projections and Company resources and capabilities. In addition, these levels were consistent with the relative risk acceptable to the board of directors in approving...

  • Page 156
    ...the year, and in part with respect to the contributions and impact that his area of responsibility had on the performance of the Company. Under the bonus plan, the board of directors and compensation committee had discretion to vary the amount of the bonus awards paid to our named executive officers...

  • Page 157
    ... 12 pre-established grant dates during any calendar year. This policy also provides that the exercise price of each stock option is to be equal to the closing market price of our Class A common stock on the trading day immediately preceding the date of grant. 2010 Equity Awards In March 2010, Messrs...

  • Page 158
    ... important role in the Company's critical holiday season and 2011 fiscal year planning. The October and November equity awards were made for retention purposes and, with respect to Mr. Dodd, in tandem with his promotion to President and Chief Operating Officer. Severance Benefits Our named executive...

  • Page 159
    ... various provisions designed to allow us to qualify stock options and other equity awards as "performance-based" compensation under Section 162(m), including a limitation on the maximum number of shares subject to awards that may be granted to an individual under the plan in any one year. Our 2002...

  • Page 160
    .... Based on this review and discussion, the compensation committee has recommended to the board of directors that the CD&A be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2010. Compensation Committee David...

  • Page 161
    ...Stock-Based Compensation," of Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2010. To the extent that option awards were granted as part of our value-for-value stock option exchange program in 2008 or 2009, the values reported for such option...

  • Page 162
    ... Also includes $38,885 in meeting fees and board retainer fees for his service as a non-employee director from March through December 2010. (9) Mr. Katz received $2,000 in matching contributions to his Section 401(k) savings plan account. The Company paid $150 for life insurance premiums and $60 for...

  • Page 163
    .... (5) As provided in the 2002 Equity Incentive Plan, prior to April 28, 2010, we granted options to purchase shares of our Class A common stock at an exercise price equal to the closing market price of our Class A common stock on the trading day immediately preceding the date of grant. On and...

  • Page 164
    ...also provided for an option to purchase shares of the Company's common stock and a grant of restricted stock units. On March 15, 2010, pursuant to the terms of his employment agreement, Mr. Chiasson was granted (i) an option to purchase 150,000 shares of our Class A common stock at an exercise price...

  • Page 165
    ... executive officers. Outstanding Equity Awards at December 31, 2010 Option Awards(1) Stock Awards Equity Equity Incentive Plan Incentive Awards: Number of Market Plan Awards: Market or Shares or Value of Number of Payout Value Units of Shares Unearned of Unearned Number of Number of Stock or Units...

  • Page 166
    ... Plan. (2) Calculated by multiplying the closing market price of our Class A common stock as reported by the NYSE for December 31, 2010, $5.55 per share, by the number of shares of restricted stock that had not vested as of December 31, 2010. (3) Represents 2,500 restricted stock units or awards...

  • Page 167
    ... the vesting commencement date, which was March 1, 2010. (14) Represents grant of option pursuant to our option exchange program in exchange for cancellation of an option to purchase 22,976 shares originally issued June 9, 2008 under the 2002 Non-Employee Director Stock Award Plan. Option is fully...

  • Page 168
    ... Compensation Table and Grants of Plan-Based Awards Table" above for information regarding adjustments in February 2010 to the vesting of Mr. Katz's unvested option awards based upon his resignation as our CEO. (22) Represents 25,000 restricted stock units that vest at the rate of 25% of the shares...

  • Page 169
    ... was March 15, 2010, and in 12 equal monthly installments thereafter; and 150,000 restricted stock units that vest at the rate of 50% of the shares subject to the award on January 1, 2012 and in 12 equal monthly installments thereafter. (36) Represents grant of option pursuant to our option exchange...

  • Page 170
    ... was March 15, 2010, and in 12 equal monthly installments thereafter; and 100,000 restricted stock units that vest at the rate of 50% of the shares subject to the award on January 1, 2012 and in 12 equal monthly installments thereafter. (48) Represents grant of option pursuant to our option exchange...

  • Page 171
    ...closing market price as reported on the NYSE of our Class A common stock on the last trading day prior to the weekend vesting date of the stock award, or $6.51 per share on March 26, 2010, by the number of shares acquired on vesting. (2) Calculated by multiplying the closing market price as reported...

  • Page 172
    ...to which the market value of our Class A common stock exceeds the exercise price on the date the option is exercised. Due to the number of factors that affect the nature and amounts of compensation and benefits provided upon the events discussed below, the amounts paid or distributed upon the actual...

  • Page 173
    ... have been $337,500 and, based on exercise price of the Chiasson Options of $5.55 per share, the closing market price of our Class A common stock as reported by the NYSE for December 31, 2010, the potential realizable value of all vested options as of that date would have been $600,886, for a total...

  • Page 174
    ... all of Mr. Chiasson's outstanding stock options were exercised on the same date, based on exercise price of $5.55 per share, the closing market price of our Class A common stock as reported by the NYSE for December 31, 2010, the potential realizable value of the additional options which would have...

  • Page 175
    ... than full time basis), for a period of six months (or a shorter period as the Company or its successor determines) in order to provide transition support to LeapFrog or its successor. Under the Severance Plan, to resign for "good reason," an executive must resign within 60 days after the occurrence...

  • Page 176
    ... value of the additional vested options assuming a change in control of the Company occurred on December 31, 2010 and that such executive's options were exercised on the same date, based on an exercise price of $5.55 per share, the closing market price of our Class A common stock as reported by the...

  • Page 177
    ... with the SEC on February 22, 2011, including the financial statements and the financial statement schedules contained in the Form 10-K. We make our Annual Report on Form 10-K, as well as our other SEC filings, available free of charge through the investor relations section of our website located at...

  • Page 178
    ... for consideration at the annual meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment. By Order of the Board of Directors Robert L. Lattuga Vice...

  • Page 179
    ... Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards. (d) Purpose. The Company, by means of the Plan, seeks to secure and retain the services of the group of persons eligible to receive Awards as set forth in Section 1(b), to provide...

  • Page 180
    ... the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees, (B) Section 422 of the Code regarding incentive stock options or (C) Rule 16b-3. (viii) To approve forms of Award Agreements for use under the Plan and to amend...

  • Page 181
    ... the Plan, or (ii) cancel any outstanding Options or Stock Appreciation Rights that have an exercise price or strike price greater than the current Fair Market Value of the Class A Common Stock in exchange for cash or other Stock Awards under the Plan, unless the stockholders of the Company have...

  • Page 182
    ... issuance in this Section 3(a) is a limitation on the number of shares of the Class A Common Stock that may be issued pursuant to the Plan and does not limit the granting of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted...

  • Page 183
    ... designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of Class A Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated...

  • Page 184
    ...Nonstatutory Stock Option, by a "net exercise" arrangement pursuant to which the Company will reduce the number of shares of Class A Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however...

  • Page 185
    ... provided in a Participant's Award Agreement, if the immediate sale of any Class A Common Stock received upon exercise of an Option or SAR following the termination of the Participant's Continuous Service (other than for Cause) would violate the Company's insider trading policy, then the Option...

  • Page 186
    ... appropriate. To the extent consistent with the Company's Bylaws, at the Board's election, shares of Class A Common Stock may be (i) held in book entry form subject to the Company's instructions until any restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by a certificate...

  • Page 187
    ...contained in the Restricted Stock Unit Award Agreement. (iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Class A Common Stock (or their cash...

  • Page 188
    ... at the time of grant of an Award to "covered employees" within the meaning of Section 162(m) of the Code, the number of shares of Class A Common Stock, Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account of satisfaction of such Performance Goals may...

  • Page 189
    ... of the Class A Common Stock subject to such Stock Award has been entered into the books and records of the Company. (d) No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant...

  • Page 190
    ... the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Class A Common Stock are publicly traded and a Participant holding an Award that constitutes "deferred compensation" under Section 409A of the Code is a "specified employee" for purposes of...

  • Page 191
    ...Incentive Stock Options pursuant to Section 3(c), (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Sections 3(d) and 6(c)(i) , and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board...

  • Page 192
    ... of an Award. (d) "Board" means the Board of Directors of the Company. (e) "Capitalization Adjustment" means any change that is made in, or other events that occur with respect to, the Class A Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the...

  • Page 193
    ...Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply. (h) "Class A Common Stock" means the Class A common stock of the Company. (i) "Code" means...

  • Page 194
    ..." means LeapFrog Enterprises, Inc., a Delaware corporation. (l) "Consultant" means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors...

  • Page 195
    ... determination is not a market trading day, the last market trading day prior to the day of determination, as reported in a source the Board deems reliable. (ii) Unless otherwise provided by the Board, if there is no closing sales price for the Class A Common Stock on the date of determination, then...

  • Page 196
    ... (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated corporation" who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not...

  • Page 197
    ...discretion of the Board. (nn) "Performance Stock Award" means a Stock Award granted under the terms and conditions of Section 6(c)(i). (oo) "Plan" means this LeapFrog Enterprises, Inc. 2011 Equity Incentive Plan. (pp) "Restricted Stock Award" means an award of shares of Class A Common Stock which is...

  • Page 198
    ...the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement shall be subject to the terms and conditions of the Plan. (tt) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange...

  • Page 199
    ... beginning on December 30, 2005 through December 31, 2010 (based on the closing prices of LeapFrog's Class A common stock as reported on the New York Stock Exchange). The stockholder return shown on the graph below is not necessarily indicative of future performance and we do not make or endorse any...

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    ... STOCK Continental Stock Transfer & Trust New York, New York (212) 509-4000 ANNUAL MEETING The 2011 Annual Meeting of Stockholders will take place at 9:00 a.m. Pacific Daylight Time on Thursday, June 2, 2011, at the company's headquarters in Emeryville, California. INVESTOR RELATIONS LeapFrog...

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    LeapFrog Enterprises, Inc. 6401 Hollis Street • Emeryville, CA 94608 510.420.5000 • leapfrog.com TM & © LeapFrog Enterprises, Inc. All rights reserved.