EXHIBIT 10.01

LEAPFROG ENTERPRISES, INC.

2002 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

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. VESTING. 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. NUMBER OF SHARES AND EXERCISE PRICE. 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. METHOD OF PAYMENT. 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.

 

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(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. WHOLE SHARES. You may exercise your option only for whole shares of Class A
Common Stock.

5. SECURITIES LAW COMPLIANCE. 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. TERM. 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 die either during your Continuous
Service or within three (3) months after your Continuous Service terminates;

(d) the Expiration Date indicated in your Grant Notice; or

(e) the day before the tenth (10th) anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal
income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the date of grant of your option and
ending on the day three (3) months before the date of your option’s exercise,
you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability
of your option under certain circumstances for your benefit but cannot guarantee
that your option will necessarily be treated as an Incentive Stock Option if you
continue to provide services to the Company or an Affiliate as a Consultant or
Director after your

 

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employment terminates or if you otherwise exercise your option more than three
(3) months after the date your employment with the Company or an Affiliate
terminates.

7. EXERCISE.

(a) You may exercise the vested portion of your option (and the unvested portion
of your option if your Grant Notice so permits) during its term by delivering a
Notice of Exercise (in a form designated by the Company) together with the
exercise price to the Secretary of the Company, or to such other person as the
Company may designate, during regular business hours, together with such
additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of
your option, the Company may require you to enter into an arrangement providing
for the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (1) the exercise of your option, (2) the lapse of
any substantial risk of forfeiture to which the shares of Class A Common Stock
are subject at the time of exercise, or (3) the disposition of shares of Class A
Common Stock acquired upon such exercise.

(c) If your option is an Incentive Stock Option, by exercising your option you
agree that you will notify the Company in writing within fifteen (15) days after
the date of any disposition of any of the shares of the Class A Common Stock
issued upon exercise of your option that occurs within two (2) years after the
date of your option grant or within one (1) year after such shares of Class A
Common Stock are transferred upon exercise of your option.

(d) By exercising your option you agree that you shall not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale,
any shares of Common Stock or other securities of the Company held by you, for a
period of time specified by the managing underwriter(s) (not to exceed one
hundred eighty (180) days) following the effective date of a registration
statement of the Company filed under the Securities Act, other than a Form S-8
registration statement, (the “Lock Up Period”); provided, however, that nothing
contained in this section shall prevent the exercise of a repurchase option, if
any, in favor of the Company during the Lock Up Period. You further agree to
execute and deliver such other agreements as may be reasonably requested by the
Company and/or the underwriter(s) that are consistent with the foregoing or that
are necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to your
shares of Common Stock until the end of such period. The underwriters of the
Company’s stock are intended third party beneficiaries of this paragraph (d) and
shall have the right, power and authority to enforce the provisions hereof as
though they were a party hereto.

8. TRANSFERABILITY. Your option is not transferable, except by will or by the
laws of descent and distribution, and is exercisable during your life only by
you. Notwithstanding the foregoing, by delivering written notice to the Company,
in a form satisfactory to the Company, you may designate a third party who, in
the event of your death, shall thereafter be entitled to exercise your option.

9. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or of the Company or an Affiliate to continue your employment.
In addition, nothing in your option shall obligate the Company or an Affiliate,
their respective stockholders, Boards of Directors, Officers or Employees to
continue any relationship that you might have as a Director or Consultant for
the Company or an Affiliate.

 

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10. WITHHOLDING OBLIGATIONS.

(a) At the time you exercise your option, in whole or in part, or at any time
thereafter as requested by the Company, you hereby authorize withholding from
payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “cashless exercise” pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.

(b) Upon your request and subject to approval by the Company, in its sole
discretion, and compliance with any applicable legal conditions or restrictions,
the Company may withhold from fully vested shares of Class A Common Stock
otherwise issuable to you upon the exercise of your option a number of whole
shares of Class A Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax
required to be withheld by law (or such lower amount as may be necessary to
avoid variable award accounting). If the date of determination of any tax
withholding obligation is deferred to a date later than the date of exercise of
your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of
the Code, covering the aggregate number of shares of Class A Common Stock
acquired upon such exercise with respect to which such determination is
otherwise deferred, to accelerate the determination of such tax withholding
obligation to the date of exercise of your option. Notwithstanding the filing of
such election, shares of Class A Common Stock shall be withheld solely from
fully vested shares of Class A Common Stock determined as of the date of
exercise of your option that are otherwise issuable to you upon such exercise.
Any adverse consequences to you arising in connection with such share
withholding procedure shall be your sole responsibility.

(c) You may not exercise your option unless the tax withholding obligations of
the Company and/or any Affiliate are satisfied. Accordingly, you may not be able
to exercise your option when desired even though your option is vested, and the
Company shall have no obligation to issue a certificate for such shares of
Class A Common Stock or release such shares of Class A Common Stock from any
escrow provided for herein unless such obligations are satisfied.

11. NOTICES. Any notices provided for in your option or the Plan shall be given
in writing or shall be delivered electronically, and shall be deemed effectively
given or delivered upon receipt or, in the case of notices delivered by mail by
the Company to you, five (5) days after deposit in the United States mail,
postage prepaid, addressed to you at the last address you provided to the
Company.

12. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is
further subject to all interpretations, amendments, rules and regulations, which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of your option and those of the
Plan, the provisions of the Plan shall control.

* * * * *

This Stock Option Agreement shall be deemed to be signed by the Company and the
Participant upon the electronic acceptance by the Participant of the applicable
Stock Option Grant Notice.

 

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