LeapFrog 2012 Annual Report Download - page 120
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granted in the form of an RSU award. The accounting value of these stock awards is calculated using the
same methodology as is applied by LeapFrog for purposes of determining the accounting charge associated
with all equity awards to employees and directors. In October 2011, our board of directors adopted a
resolution that this same methodology would be used to grant equity awards to directors under the 2011 Plan
upon suspension of the NEDSAP.
The exercise price of stock options granted to directors is 100% of the fair market value of the Class A
common stock subject to the option on the date of the option grant. Stock options granted pursuant to initial
awards to directors vest in equal monthly installments over a three-year period in accordance with their terms.
RSU awards granted pursuant to initial awards to directors vest as to one-third of the shares subject to such
awards on each annual anniversary of the grant over a three-year period in accordance with their terms. Stock
awards granted pursuant to annual awards to directors vest on the last day of the month prior to the month in
which the annual meeting of stockholders occurs on the year following the year of such annual grant. For
example, stock awards granted pursuant to the annual grant in 2012 will vest on May 31, 2013.
The term of stock options granted to directors is 10 years unless earlier terminated based on termination
of continuous service or other conditions. In the event of a merger of LeapFrog with or into another
corporation or a consolidation, acquisition of assets or other change-in-control transaction, the vesting of stock
options and stock awards granted to directors will accelerate and become fully vested and immediately
exercisable, if, as of the completion of the change-in-control transaction or within 12 months of such
transaction, the non-employee director’s service terminates, provided that such acceleration will not occur if
the termination was a result of the non-employee director’s resignation (other than any resignation
contemplated by the terms of the change-in-control transaction or required by LeapFrog or the acquiring entity
pursuant to the change in control).
As a result of the annual grants to the members of our board of directors in July 2012, the share reserve
of the NEDSAP was depleted and the NEDSAP was automatically suspended. All existing awards granted
under the NEDSAP will continue to be governed by the terms of the NEDSAP. Upon suspension of the
NEDSAP, all equity awards to members of our board of directors are made under the 2011 Plan. All existing
director awards granted under the 2011 Plan will be governed by the terms of the 2011 Plan.
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