LeapFrog 2010 Annual Report Download - page 182

shares become available from time to time). The number of shares available for issuance under the Plan shall be
reduced by: (i) one (1) share for each share of Class A Common Stock issued pursuant to an Option granted
under Section 5 or a Stock Appreciation Right granted under Section 5; and (ii) two (2) shares for each share of
Class A Common Stock issued pursuant to a restricted stock award under Section 6(a), a Restricted Stock Unit
Award under Section 6(b), a Performance Stock Award under Section 6(c) or Other Stock Awards granted under
Section 6(d). For clarity, the number of shares reserved for 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 by, as applicable, NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed
Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such
issuance shall not reduce the number of shares available for issuance under the Plan. Furthermore, if a Stock
Award or any portion thereof (i) expires or otherwise terminates without all of the shares covered by such Stock
Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such
expiration, termination or settlement shall not reduce (or otherwise offset) the number of shares of Class A
Common Stock that may be available for issuance under the Plan.
(b) Reversion of Shares to the Share Reserve. If any shares of Class A Common Stock issued pursuant
to a Stock Award are forfeited back to the Company because of the failure to meet a contingency or condition
required to vest such shares in the Participant, then the shares that are forfeited shall revert to and again become
available for issuance under the Plan. Any shares reacquired by the Company pursuant to Section 8(g) or as
consideration for the exercise of an Option shall again become available for 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 3(a) and such share of
Class A Common Stock again becomes available for issuance under the Plan pursuant to this Section 3(b), then
the number of shares of Class A Common Stock available for issuance under the Plan shall increase by two
(2) shares.
(c) Incentive Stock Option Limit. Notwithstanding anything to the contrary in this Section 3 and, subject
to the provisions of Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of
shares of Class A Common Stock that may be issued pursuant to the exercise of Incentive Stock Options shall be
[ ] ([ ]) shares of Class A
Common Stock.
(d) Section 162(m) Limitation on Annual Grants. Subject to the provisions of Section 9(a) relating to
Capitalization Adjustments, at such time as the Company may be subject to the applicable provisions of
Section 162(m) of the Code, a maximum of Three Million Five Hundred Thousand (3,500,000) shares of Class A
Common Stock subject to Options, Stock Appreciation Rights and Other Stock Awards whose value is
determined by reference to an increase over an exercise or strike price of at least one hundred percent (100%) of
the Fair Market Value on the date any such Stock Award is granted may be granted to any Participant during any
calendar year. Notwithstanding the foregoing, if any additional Options, Stock Appreciation Rights or Other
Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least
one hundred percent (100%) of the Fair Market Value on the date the Stock Award are granted to any Participant
during any calendar year, compensation attributable to the exercise of such additional Stock Awards shall not
satisfy the requirements to be considered “qualified performance-based compensation” under Section 162(m) of
the Code unless such additional Stock Award is approved by the Company’s stockholders.
(e) Source of Shares. The stock issuable under the Plan shall be shares of authorized but unissued or
reacquired Class A Common Stock, including shares repurchased by the Company on the open market or
otherwise.
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