Rosetta Stone 2011 Annual Report Download - page 203

5. Capital Adjustments and Reorganizations. The existence of the Restricted Shares shall not affect in any way the right or
power of the Company or any company the stock of which is awarded pursuant to this Agreement to make or authorize any
adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or
consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part
of its assets or business, or engage in any other corporate act or proceeding.
6. Tax Withholding. To the extent that the receipt of the Restricted Shares or the lapse of any Forfeiture Restrictions
results in income to Executive for federal, state, local or foreign income, employment or other tax purposes with respect to which the
Company or its Affiliates or subsidiaries have a withholding obligation, Executive shall deliver to the Company at the time of such
receipt or lapse, as the case may be, such amount of money as the Company or any Affiliate may require to meet such obligation under
applicable tax laws or regulations, and, if Executive fails to do so, the Company and its Affiliates and subsidiaries are authorized to
withhold from the Shares granted hereby or from any cash or stock remuneration then or thereafter payable to Executive in any
capacity any tax required to be withheld by reason of such taxable income, sufficient to satisfy the withholding obligation.
7. Section 83(b) Election. Executive shall not exercise the election permitted under section 83(b) of the Internal Revenue
Code of 1986, as amended, with respect to the Restricted Shares without the prior written approval of the General Counsel of the
Company (if Executive is the General Counsel of the Company, Executive must seek the prior written approval of the Chief Financial
Officer or the Chief Executive Officer). If the election is permitted as provided in the prior sentence, Executive shall timely pay the
Company the amount necessary to satisfy the Company's attendant tax withholding obligations, if any.
8. No Fractional Shares. All provisions of this Agreement concern whole Shares. If the application of any provision
hereunder would yield a fractional share, such fractional share shall be rounded down to the next whole share if it is less than 0.5 and
rounded up to the next whole share if it is 0.5 or more.
9. Employment Relationship. For purposes of this Agreement, Executive shall be considered to be in the employment of
the Company and its Affiliates as long as Executive has an employment relationship with the Company and its 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 agreement, and no provision of this Agreement
shall be construed or interpreted to create an employment relationship between Executive and the Company or any Affiliate, to
guarantee the right to remain employed by the Company or any Affiliate for any specified term or require the Company or any
Affiliate to employ Executive for any period of time.
11. Legend. Executive consents to the placing of an appropriate legend notation on the electronic book entry
representing the Shares restricting resale or other transfer of the Shares except in accordance with all applicable securities laws and
rules thereunder.
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