LeapFrog 2011 Annual Report Download - page 183

(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. MISCELLANEOUS.
(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
Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ
a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is acquiring Class A Common Stock subject to the
Stock Award for the Participant’s own account and not with any present intention of selling or otherwise
distributing the Class A Common Stock. The foregoing requirements, and any assurances given pursuant to
such requirements, shall be inoperative if (A) the issuance of the shares upon the exercise or acquisition of
Class A Common Stock under the Stock Award has been registered under a then currently effective
registration statement under the Securities Act, or (B) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting the transfer of the Class A
Common Stock.
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