LeapFrog 2003 Annual Report Download - page 147

(ii) asale or other disposition of at least ninety percent (90%) of the outstanding securities of the
Company;
(iii) amerger, consolidation or similar transaction following which the Company is not the surviving
corporation; or
(iv) amerger, consolidation or similar transaction following which the Company is the surviving
corporation but the shares of Class A Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash or otherwise.
(l) “Covered Employee” means the chief executive officer and the four (4) other highest compensated
officers of the Company for whom total compensation is required to be reported to stockholders under the
Exchange Act, as determined for purposes of Section 162(m) of the Code.
(m) “Director” means a member of the Board of Directors of the Company.
(n) “Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3)
of the Code.
(o) “Employee” means any person employed by the Company or an Affiliate. Service as a Director or
payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by
the Company or an Affiliate.
(p) “Entity” means a corporation, partnership or other entity.
(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(r) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section
13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (A) the Company or
any Subsidiary of the Company, (B) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or
any Subsidiary of the Company, (C) an underwriter temporarily holding securities pursuant to an offering of such
securities, or (D) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their Ownership of stock of the Company.
(s) “Fair Market Value” means, as of any date, the value of the Class A Common Stock determined as
follows:
(i) If the Class A Common Stock is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Class A Common
Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or market (or the exchange or market with the greatest volume of trading in the Class A
Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable.
(ii) In the absence of such markets for the Class A Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(t) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code and the regulations promulgated thereunder.
(u) “Non-Employee Director” means a Director who either (i) is not a current Employee or Officer of the
Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company
or its parent or a subsidiary for services rendered as a consultant or in any capacity other than as a Director
(except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K
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