Rosetta Stone 2011 Annual Report Download - page 193

9. Employment Relationship. For purposes of this Agreement, Optionee shall be considered to be in the employment of
the Company, any Subsidiary Corporation or any Affiliates as long as Optionee has an employment relationship with the Company,
any Subsidiary Corporation or any Affiliates. The Committee shall determine any questions as to whether and when there has been a
termination of such employment relationship, and the cause of such termination, under the Plan and the Committee's determination
shall be final and binding on all persons.
10. Not an Employment Agreement. This Agreement is not an employment or service agreement, and no provision of this
Agreement shall be construed or interpreted to create an employment or other service relationship between Optionee and the
Company, its subsidiaries or any of its Affiliates or guarantee the right to remain employed by the Company, its subsidiaries or any of
its Affiliates, for any specified term or require the Company, its subsidiaries or any Affiliate to employ Employee for any period of
time.
11. No Rights As Stockholder. Optionee shall not have any rights as a stockholder with respect to any Option Shares until
the date of the issuance of such shares following Optionee's exercise of the Option pursuant to its terms and conditions and payment of
all amounts for and with respect to the shares. No adjustment shall be made for dividends or other rights for which the record date is
prior to the date a certificate or certificates are issued for such shares or an uncertificated book-entry representing such shares is made.
12. Legend. Optionee consents to the placing on the certificate for any Option Shares of an appropriate legend
restricting resale or other transfer of such shares except in accordance with the Securities Act of 1933 and all applicable rules
thereunder.
13. Notices. Any notice, instruction, authorization, request, demand or other communications required hereunder shall
be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or
registered mail, return receipt requested, or by courier or delivery service, addressed to the Company at the Company's principal
business office address to the attention of the Company's General Counsel and to Optionee at Optionee's residential address as it
appears on the books and records of the Company, or at such other address and number as a party shall have previously designated by
written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given when received, if sent by
facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by
facsimile means); and when delivered (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by
express courier or delivery service, or sent by certified or registered mail, return receipt requested.
14. Amendment and Waiver. Except as otherwise provided herein or in the Plan or as necessary to implement the
provisions of the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company
and Optionee. Only a written instrument executed and delivered by the party waiving compliance hereof shall waive any of the terms
or conditions of this Agreement. Any waiver granted by the Company shall be effective only if executed and delivered by a duly
authorized director or officer of the Company other than Optionee. The failure of any party at any time or times to require
performance of any provisions
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hereof shall in no manner effect the right to enforce the same. No waiver by any party of any term or condition, or the breach of any
term or condition contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such
condition or breach, a waiver of any other condition, or the breach of any other term or condition.
15. Dispute Resolution. In the event of any difference of opinion concerning the meaning or effect of the Plan or this
Agreement, such difference shall be resolved by the Committee.
16. Governing Law and Severability. The validity, construction and performance of this Agreement shall be governed by
the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of another jurisdiction. The invalidity of any provision of this Agreement shall
not affect any other provision of this Agreement, which shall remain in full force and effect.
17. Transfer Restrictions. The Option Shares may not be sold or otherwise disposed of in any manner that would
constitute a violation of any applicable federal or state securities laws. Optionee also agrees (a) that the Company may refuse to cause
the transfer of Option Shares to be registered on the applicable stock transfer records if such proposed transfer would in the opinion of
counsel satisfactory to the Company constitute a violation of any applicable securities law and (b) that the Company may give related
instructions to the transfer agent, if any, to stop registration of the transfer of the Option Shares.
18. Successors and Assigns. This Agreement shall, except as herein stated to the contrary, inure to the benefit of and
bind the legal representatives, successors and assigns of the parties hereto.
19. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original for
all purposes but all of which taken together shall constitute but one and the same instrument.
20. Option Transfer Prohibitions. The Option granted to Optionee under this Agreement shall not be transferable or
assignable by Optionee other than by will or the laws of descent and distribution, and shall be exercisable during Optionee's lifetime
only by him.