LeapFrog 2010 Annual Report Download - page 129

restricted stock, restricted stock units, performance awards and other stock-based awards will qualify as
performance-based compensation, if, among other requirements, (i) the award is approved by a compensation
committee composed solely of “outside directors,” (ii) the award is granted, becomes vested or is settled, as
applicable, only upon the achievement of an objective performance goal established in writing by the
compensation committee while the outcome is substantially uncertain, (iii) a committee of outside directors
certifies in writing prior to the granting (or vesting or settlement) of the award that the performance goal has been
satisfied, and (iv) prior to the granting (or vesting or settlement) of the award, the stockholders have approved the
material terms of the award (including the class of employees eligible for such award, the business criteria on
which the performance goal is based, and the maximum amount, or formula used to calculate the amount,
payable upon attainment of the performance goal).
New Plan Benefits
Awards under the 2011 EIP are discretionary, and we have not approved any awards that are conditioned on
stockholder approval of the 2011 EIP. Accordingly, we cannot 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 approved by
stockholders is summarized in the following table:
Plan Category
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
Equity compensation plans approved by
security holders ..................... 7,784,600 $4.22 4,949,572(1)
Equity compensation plans not approved by
security holders ..................... — — —
TOTAL ............................. 7,784,600 $4.22 4,949,572
(1) Includes 1,391,409 shares reserved for issuance under our 2002 Employee Stock Purchase Plan, 3,097,133
shares reserved for issuance under our 2002 Equity Incentive Plan, subject to this Proposal Five, and
461,030 shares reserved for issuance under our 2002 Non-Employee Directors’ Stock Award Plan.
Vote Required
Adoption of the 2011 EIP requires affirmative “For” vote from a majority of the voting power present and
entitled to vote either in person or by proxy on this Proposal Five at the Annual Meeting. Abstentions will be
counted toward the tabulation of votes cast on the proposal and will have the same effect as “Against” votes.
Under the rules of the NYSE, brokers are prohibited from giving proxies to vote on the implementation of any
equity compensation plan unless the beneficial owner of such shares has given voting instructions on the matter.
This means that if your broker is the record holder of your shares, you must give voting instructions to your
broker with respect to this Proposal Five if you want your broker to vote your shares on the matter. If you do not
give your broker voting instructions, your shares will be treated as broker non-votes. Broker non-votes will have
no effect on the outcome of the vote.
Recommendation
The Board of Directors recommends a vote FOR Proposal Five.
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