LeapFrog 2010 Annual Report Download - page 189

(b) Securities Law Compliance. The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue
and sell shares of Class A Common Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any
Class A Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the
Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the
Company deems necessary for the lawful issuance and sale of Class A Common Stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell Class A Common Stock upon exercise
of such Stock Awards unless and until such authority is obtained. A Participant shall not be eligible for the grant
of a Stock Award or the subsequent issuance of Class A Common Stock pursuant to the Stock Award if such
grant or issuance would be in violation of any applicable securities law.
(c) No Obligation to Notify or Minimize Taxes. The Company shall have no duty or obligation to any
Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the
Company shall have no duty or obligation to warn or otherwise advise such holder of a pending termination or
expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company
has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.
8. M ISCELLANEOUS .
(a) Use of Proceeds from Sales of Class A Common Stock. Proceeds from the sale of shares of Class A
Common Stock pursuant to Stock Awards shall constitute general funds of the Company.
(b) Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a grant by the
Company of a Stock Award to any Participant shall be deemed completed as of the date of such corporate action,
unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the
Stock Award is communicated to, or actually received or accepted by, the Participant.
(c) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of
a holder with respect to, any shares of Class A Common Stock subject to such Stock Award unless and until
(i) such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms, if
applicable, and (ii) the issuance 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 thereto shall confer upon
any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the
Stock Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant
to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in
which the Company or the Affiliate is incorporated, as the case may be.
(e) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value
(determined at the time of grant) of Class A Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and
any Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof that exceed
such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options,
notwithstanding any contrary provision of the applicable Option Agreement(s).
(f) Investment Assurances. The Company may require a Participant, as a condition of exercising or
acquiring Class A Common Stock under any Stock Award, (i) to give written assurances satisfactory to the
A-11