Rosetta Stone 2011 Annual Report Download - page 199

1. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated:
(a) "Change in Control" means (i) the liquidation, dissolution or winding-up of the Company, (ii) the sale, license or
lease of all or substantially all of the assets of the Company, or (iii) a share exchange, reorganization, recapitalization, or merger or
consolidation of the Company with or into any other corporation or corporations (or other form of business entity) or of any other
corporation or corporations (or other form of business entity) with or into the Company, but excluding any merger effected exclusively
for the purpose of changing the domicile of the Company; provided, however, that a Change in Control shall not include any of the
aforementioned transactions listed in clauses (i), (ii) and (iii) involving the Company or a Subsidiary Corporation in which the holders
of shares of the Company voting stock outstanding immediately prior to such transaction or any Affiliate of such holders continue to
hold at least a majority, by voting power, of the capital stock or, by a majority, based on fair market value as determined in good faith
by the Board, of the assets, in each case in substantially the same proportion, of (x) the surviving or resulting corporation (or other
form of business entity), (y) if the surviving or resulting corporation (or other form of business entity) is a wholly owned subsidiary of
another corporation (or other form of business entity) immediately following such transaction, the parent corporation (or other form of
business entity) of such surviving or resulting corporation (or other form of business entity) or (z) a successor entity holding a
majority of the assets of the Company. In addition, a Change in Control shall not include a bona fide, firm commitment underwritten
public offering of the Stock pursuant to a registration statement declared effective under the Securities Act of 1933, as amended.
(b) "Forfeiture Restrictions" shall mean the prohibitions and restrictions set forth herein with respect to the sale or other
disposition of the Shares issued to Executive hereunder and the obligation to forfeit and surrender such Shares to the Company.
(c) "Period of Restriction" shall mean the period during which Restricted Shares are subject to Forfeiture Restrictions
and during which Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered.
(d) "Restricted Shares" shall mean the Shares that are subject to the Forfeiture Restrictions under this Agreement.
2