LeapFrog 2005 Annual Report Download - page 170

(m) “Director” means a member of the Board of Directors of the Company.
(n) “Disability” means the inability of a person, in the opinion of a qualified physician acceptable to the
Company, to perform the major duties of that person’s position with the Company or a Controlled Corporation of
the Company because of the sickness or injury of the person.
(o) “Effective Date” means the date the Plan is adopted by the Board.
(p) “Employee” means any person employed by the Company or a Controlled Corporation. Mere service as
a Director or payment of a director’s fee by the Company or a Controlled Corporation shall not be sufficient to
constitute “employment” by the Company or a Controlled Corporation.
(q) “Entity” means a corporation, partnership or other entity.
(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(s) “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.
(t) “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 by the Board based upon an independent appraisal in compliance with Section 409A of the Code
or, in the case of an Incentive Stock Option, in compliance with Section 422 of the Code.
(u) “Initial Grant” means a Stock Award granted to a Non-Employee Director who meets the specified
criteria pursuant to Section 6(a) of the Plan.
(v) “IPO Date” means the date the Company’s Class A Common Stock is first offered to the public under a
registration statement declared effective under the Securities Act.
(w) “Non-Employee Director” means a Director who is not an Employee of the Company or a Controlled
Corporation.
(x) “Nonstatutory Stock Option” means an Option not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(y) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.
B-3