LeapFrog 2010 Annual Report Download - page 188

Performance Goals) shall not exceed three million five hundred thousand (3,500,000) shares of Class A Common
Stock. The Board may provide for or, subject to such terms and conditions as the Board may specify, may permit
a Participant to elect for, the payment of any Performance Stock Award to be deferred to a specified date or
event. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may
determine that cash may be used in payment of Performance Stock Awards.
(ii) Performance Cash Awards. A Performance Cash Award is a cash award that may be paid
contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Cash
Award may also require the completion of a specified period of Continuous Service. At the time of grant of a
Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved during
the Performance Period, and the measure of whether and to what degree such Performance Goals have been
attained shall be conclusively determined by the Committee, in its sole discretion. In any calendar year, the
Committee may not grant a Performance Cash Award that has a maximum value that may be paid to any
Participant in excess of one million dollars ($1,000,000). The Board may provide for or, subject to such terms
and conditions as the Board may specify, may permit a Participant to elect for, the payment of any Performance
Cash Award to be deferred to a specified date or event. The Committee may specify the form of payment of
Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the
option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in
whole or in part in cash or other property.
(iii) Board Discretion. The Board retains the discretion to reduce or eliminate the compensation or
economic benefit due upon attainment of Performance Goals and to define the manner of calculating the
Performance Criteria it selects to use for a Performance Period.
(iv) Section 162(m) Compliance. Unless otherwise permitted in compliance with the requirements
of Section 162(m) of the Code with respect to an Award intended to qualify as “performance-based
compensation” thereunder, the Committee shall establish the Performance Goals applicable to, and the formula
for calculating the amount payable under, the Award no later than the earlier of (a) the date ninety (90) days after
the commencement of the applicable Performance Period, or (b) the date on which twenty-five percent (25%) of
the Performance Period has elapsed, and in either event at a time when the achievement of the applicable
Performance Goals remains substantially uncertain. Prior to the payment of any compensation under an Award
intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee
shall certify the extent to which any Performance Goals and any other material terms under such Award have
been satisfied (other than in cases where such relate solely to the increase in the value of the Class A Common
Stock). Notwithstanding satisfaction of any completion of any Performance Goals, to the extent specified 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 be reduced by the Committee
on the basis of such further considerations as the Committee, in its sole discretion, shall determine.
(d) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or
otherwise based on, Class A Common Stock, including the appreciation in value thereof (e.g., options or stock
rights with an exercise price or strike price less than 100% of the Fair Market Value of the Class A Common
Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under
Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the Board shall
have sole and complete authority to determine the persons to whom and the time or times at which such Other
Stock Awards will be granted, the number of shares of Class A Common Stock (or the cash equivalent thereof) to
be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.
7. C OVENANTS OF THE C OMPANY .
(a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all
times the number of shares of Class A Common Stock reasonably required to satisfy such Stock Awards.
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