Rosetta Stone 2011 Annual Report Download - page 207

ROSETTA STONE INC.
2009 OMNIBUS INCENTIVE PLAN, AS AMENDED
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
This NONQUALIFIED STOCK OPTION AWARD AGREEMENT (this "Agreement") and the Cover Sheet to which this
Agreement is attached (the "Cover Sheet") are entered into between Rosetta Stone Inc., a Delaware corporation (the "Company"), and
Optionee (as that term is defined in the Covered Sheet). The Board of Directors of the Company has adopted, and the stockholders of
the Company have approved, the Rosetta Stone Inc. 2009 Omnibus Incentive Plan, as amended, (the "Plan"), the terms of which are
incorporated by reference herein in their entirety. Any term used in this Agreement that is not specifically defined herein shall have
the meaning specified in the Plan.
IT IS AGREED:
1. Grant of Option. Subject to the terms of the Plan, this Agreement and the Cover Sheet, on the Grant Date set forth
on the Cover Sheet (the "Grant Date"), the Company granted to Optionee an option (the "Option") to purchase that number of shares
of the Company's common stock, $.00005 par value (the "Stock"), at the Option Price per Share of Stock set forth on the Cover Sheet
(the "Option Price"), subject to adjustment as provided in the Plan.
2. Type of Option. The Option is a nonqualified stock option which is not intended to be governed by section 422 of
the Code and will be interpreted accordingly.
3. Optionee's Agreement. In accepting the Option, Optionee accepts and agrees to be bound by all the terms and
conditions of the Plan which pertain to nonqualified stock options granted under the Plan.
4. Vesting of Option. Subject to the provisions of the Plan and the provision of this Agreement (including the
requirement in Section 6 that Optionee continue to be employed by the Company or a Subsidiary Corporation on the dates set forth
below), the Option will vest and become exercisable in accordance with the following terms:
(a) on the first anniversary of the Vesting Start Date (as set forth on the Cover Sheet), and on each succeeding
anniversary date of the Vesting Start Date, the Option will vest with respect to, and may be exercised for up to, one-fourth (1/4th) of
the total number of shares of the Stock subject to the Option as set forth on the Cover Sheet (the "Option Shares"), rounded to the
nearest whole number of shares, except that on the fourth anniversary of the Vesting Start Date the Option shall vest with respect to
the remaining number of Option Shares for which the Option has not previously vested;
(b) to the extent not exercised, installments of vested Option Shares shall be cumulative and may be exercised
in whole or in part.
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