LeapFrog 2015 Annual Report Download - page 162

provides that the exercise price of each stock option is to be equal to the closing market price of our Class A
common stock on the date of grant. Our policy is that we will not time or select the grant dates for any stock
options or other stock awards in coordination with our release of material non-public information. In addition,
we have specific written policies regarding the establishment of grant dates for stock options and other stock
awards made to our executive officers and employees designed to minimize the risk associated with the timing
of granting stock options or other stock awards.
Fiscal 2015 and Transition Period Equity Awards
The following table sets forth the equity awards granted to our named executive officers in Fiscal 2015
and the Transition Period. Except in the case of Mr. Hicks, all awards were made during the Transition Period.
Annual Awards to Existing
Named Executive Officers
(number of shares)
Initial Awards to Newly-Hired
Named Executive Officers
(number of shares)
Name
Stock
Option RSUs
Stock
Option RSUs
Mr. Barbour
(1)
......................... 220,000 220,000 — —
Mr. Arthur
(1)
.......................... 52,000 52,000 — —
Mr. Adams
(1)
.......................... 45,500 45,250 — —
Mr. Ahearn
(1)
......................... 52,000 52,000 — —
Mr. Hicks
(2)
.......................... — — 175,000 100,000
(1) Stock options vest in 48 equal consecutive installments on the monthly anniversary of the grant date.
RSUs vest on the 1
st
,2
nd
,3
rd
and 4
th
yearly anniversaries of the grant date.
(2) With respect to the stock option, 25% of the shares subject to the stock option vest 12 months after the
employment start date, and
1
⁄ 36 of the remaining shares subject to the option vest each month thereafter,
for 36 consecutive months. RSUs vest on the 1
st
,2
nd
,3
rd
and 4
th
yearly anniversaries of the date of
grant. Mr. Hicks did not receive an annual grant during the 2014 calendar year, because he was hired in
September 2014 and received an initial grant at that time.
In September and October 2014, in connection with his initial employment as our Chief International
Officer, Mr. Hicks was granted the stock option and RSU awards described above. In determining the size of
these awards, the compensation committee drew upon the competitive market analysis prepared by Compensia
in March 2014 and other sources of equity compensation data relevant to his position. The compensation
committee also took into account recommendations and comparative data compiled by the Company’s human
resources department.
The compensation committee approved the equity awards granted to the remaining named executive
officers in March 2014 as part of its overall compensation review and assessment for the year. We believe in
maintaining a strong pay-for-performance relationship for our named executive officers and providing equity
awards that constitute a significant portion of the target total direct compensation opportunities of our named
executive officers strengthens the pay-for-performance relationship. In addition, the equity awards assure that a
significant portion of the total target direct compensation opportunities for our named executive officers is
equity-based and ‘‘at risk’’ based on corporate performance. The compensation committee believes that this
practice aligns the interests of our executive officers and stockholders. Finally, the awards maintain unvested
equity value as a percentage of base salary for our named executive officers at a sufficient level to provide a
significant retention motivation.
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