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E XHIBIT
10.01
L EAP F
ROG E NTERPRISES , I
NC .
2002 E
QUITY I NCENTIVE P
LAN
S TOCK O
PTION A GREEMENT
(I NCENTIVE
S TOCK O PTION OR N
ONSTATUTORY S TOCK O
PTION )
Pursuant to your Stock Option
Grant Notice (“Grant Notice”) and this Stock Option
Agreement, LeapFrog Enterprises, Inc. (the “Company”)
has granted you an option under its 2002 Equity Incentive Plan (the
“Plan”) to purchase the number of shares of the
Company’s Class A Common Stock indicated in your Grant
Notice at the exercise price indicated in your Grant Notice.
Defined terms not explicitly defined in this Stock Option Agreement
but defined in the Plan shall have the same definitions as in the
Plan.
The details of your option
are as follows:
1. V
ESTING . Subject to the limitations contained
herein, your option will vest as provided in your Grant Notice,
provided that vesting will cease upon the termination of your
Continuous Service.
2. N
UMBER OF S HARES
AND E XERCISE P RICE
. The number of shares of Class A Common Stock subject to
your option and your exercise price per share referenced in your
Grant Notice may be adjusted from time to time for Capitalization
Adjustments.
3. M
ETHOD OF P AYMENT
. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of
the exercise price in cash or by check or in any other manner
permitted by your Grant Notice, which may include one
or more of the following:
(a) Bank draft or
money order payable to the Company.
(b) In the
Company’s sole discretion at the time your option is
exercised and provided that at the time of exercise the
Class A Common Stock is publicly traded and quoted regularly
in The Wall Street Journal , pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board
that, prior to the issuance of Class A Common Stock, results
in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise
price to the Company from the sales proceeds.
(c) Provided that at
the time of exercise the Class A Common Stock is publicly
traded and quoted regularly in The Wall Street Journal , by
delivery of already-owned shares of Class A Common Stock
either that you have held for the period required to avoid a charge
to the Company’s reported earnings (generally six
(6) months) or that you did not acquire, directly or
indirectly from the Company, that are owned free and clear of any
liens, claims, encumbrances or security interests, and that are
valued at Fair Market Value on the date of exercise.
“Delivery” for these purposes, in the sole discretion
of the Company at the time you exercise your option, shall include
delivery to the Company of your attestation of ownership of such
shares of Class A Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your
option by tender to the Company of Class A Common Stock to the
extent such tender would violate the provisions of any law,
regulation or agreement restricting the redemption of the
Company’s stock.
1
(d) Provided that at
the time of exercise the Company has adopted FAS 123, as revised,
by a “net exercise” arrangement pursuant to which the
Company will reduce the number of shares of Common Stock issued
upon exercise of your option by the largest whole number of shares
with a Fair Market Value that does not exceed the aggregate
exercise price; provided, however, that the Company shall
accept a cash or other payment from you to the extent of any
remaining balance of the aggregate exercise price not satisfied by
such reduction in the number of whole shares to be issued;
provided further, however, that shares of Common Stock will
no longer be outstanding under your option and will not be
exercisable thereafter to the extent that (1) shares are used
to pay the exercise price pursuant to the “net
exercise,” (2) shares are delivered to you as a result
of such exercise, and (3) shares are withheld to satisfy tax
withholding obligations.
4. W
HOLE S HARES . You may exercise
your option only for whole shares of Class A Common
Stock.
5. S
ECURITIES L AW C
OMPLIANCE . Notwithstanding anything to the
contrary contained herein, you may not exercise your option unless
the shares of Class A Common Stock issuable upon such exercise
are then registered under the Securities Act or, if such shares of
Class A Common Stock are not then so registered, the Company
has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise
of your option also must comply with other applicable laws and
regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in
material compliance with such laws and regulations.
6. T
ERM . You may not exercise your option before
the commencement or after the expiration of its term. The term of
your option commences on the Date of Grant and expires upon the
earliest of the following:
(a) three
(3) months after the termination of your Continuous Service
for any reason other than your Disability or death, provided that
if during any part of such three (3) month period your option
is not exercisable solely because of the condition set forth in the
above section “Securities Law Compliance,” your option
shall not expire until the earlier of the Expiration Date or until
it shall have been exercisable for an aggregate period of three
(3) months after the termination of your Continuous
Service;
(b) six
(6) months after the termination of your Continuous Service
due to your Disability;
(c) six
(6) months after your death if you
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