From the Glossary:
Defeat
Defeat is caused when a character’s toughness is less than or equal to an opposing character’s strength. A defeat also occurs when a character is stopped from achieving his goal in battle. A Hero(es) is defeated when the Hero(es) in battle are discarded, repelled or otherwise fails to make a successful rescue such as in a stalemate. The Evil Character(s) is defeated when the Evil Character(s) in battle are discarded, ignored or otherwise fails to stop the Hero from making a successful rescue such as in a mutual destruction by numbers.