LeapFrog 2015 Annual Report Download - page 210

(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.
(g) Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the
Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to an
Award by any of the following means or by a combination of such means: (i) causing the Participant to tender
a cash payment; (ii) withholding shares of Class A Common Stock from the shares of Class A Common Stock
issued or otherwise issuable to the Participant in connection with the Award; provided, however, that no shares
of Class A Common Stock are withheld with a value exceeding the minimum amount of tax required to be
withheld by law (or such lesser amount as may be necessary to avoid classification of the Stock Award as
a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash;
(iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method
as may be set forth in the Award Agreement.
(h) Electronic Delivery. Any reference herein to a ‘‘written’’ agreement or document shall include any
agreement or document delivered electronically or posted on the Company’s intranet (or other shared
electronic medium controlled by the Company to which the Participant has access).
(i) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may
determine that the delivery of Class A Common Stock or the payment of cash, upon the exercise, vesting or
settlement of all or a portion of any Award may be deferred and may establish programs and procedures for
deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with
Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions
while a Participant is still an employee or otherwise providing services to the Company. The Board is
authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may
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