LeapFrog 2010 Annual Report Download - page 195

expected to result in death or which has lasted or can be expected to last for a continuous period of not less than
twelve (12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and shall be determined
by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(r) “Effective Date” means the effective date of this Plan document, which is the date of the annual meeting
of stockholders of the Company held in 2011, provided this Plan is approved by the Company’s stockholders at
such meeting.
(s) “Employee” means any person employed by the Company or an Affiliate. However, service solely as a
Director, or payment of a fee for such services, shall not cause a Director to be considered an “Employee” for
purposes of the Plan.
(t) “Entity” means a corporation, partnership, limited liability company, or other entity.
(u) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
(v) “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 (i) the
Company or any Subsidiary of the Company, (ii) 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, (iii) an underwriter temporarily holding securities pursuant to a registered
public offering of such securities, (iv) 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; or (v) any natural
person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the
Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company’s then outstanding securities.
(w) “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 any
established market, the Fair Market Value of a share of Class A Common Stock shall be the closing selling price
for such stock 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 date of determination or, if the day of determination is not a market
trading day, the last market trading day prior to the day of determination, as reported in a source the Board deems
reliable.
(ii) Unless otherwise provided by the Board, if there is no closing sales price for the Class A Common
Stock on the date of determination, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(iii) In the absence of such markets for the Class A Common Stock, the Fair Market Value shall be
determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(x) “Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended to
be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
(y) “Non-Employee Director” means a Director who either (i) is not a current employee or officer of the
Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an
Affiliate 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 promulgated pursuant to the
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