Rosetta Stone 2011 Annual Report Download - page 209

General Expiration Date; and (ii) the portion of the Option that was not exercisable on the date of such cessation shall be forfeited and
become null and void immediately upon such cessation.
(b) If Optionee ceases to be an employee of the Company or a Subsidiary Corporation due to Cause, all of the
Option shall be forfeited and become null and void immediately upon such cessation, whether or not then exercisable.
(c) If Optionee ceases to be an employee of the Company or a Subsidiary Corporation for any reason other
than death, Disability, or Cause, (i) the portion of the Option that was exercisable on the date of such cessation shall remain
exercisable for, and shall otherwise terminate and become null and void at the close of business at the Company's principal business
office on the later of (x) the day that is sixty (60) days after the date of such cessation, or (y) the day that is thirty (30) days after any
blackout period(s) under the Company's Insider Trading Compliance Policy (as in effect from time to time) to the extent Optionee is
then subject to any such blackout period(s), but in no event after the Option General Expiration Date, and (ii) the portion of the Option
that was not exercisable on the date of such cessation shall be forfeited and become null and void immediately upon such cessation.
(d) Upon the death of Optionee prior to the expiration of the Option, Optionee's executors, administrators or
any person or persons to whom the Option may be transferred by will or by the laws of descent and distribution, shall have the right, at
any time prior to the termination of the Option to exercise the Option with respect to the number of shares that Optionee would have
been entitled to exercise if he were still alive.
7. Tax Withholding. To the extent that the receipt of the Option, this Agreement or the Cover Sheet, the vesting of the
Option or the exercise of the Option results in income to Optionee for federal, state, local or foreign income, employment or other tax
purposes with respect to which the Company or its subsidiaries or any Affiliate has a withholding obligation, Optionee shall deliver to
the Company at the time of such receipt, vesting or exercise, as the case may be, such amount of money as the Company or its
subsidiaries or any Affiliate may require to meet its obligation under applicable tax laws or regulations, and, if Optionee fails to do so,
the Company or its subsidiaries or any Affiliate is authorized to withhold from the shares subject to the Option (based on the Fair
Market Value of such shares as of the date the amount of tax to be withheld is determined) or from any cash or stock remuneration
then or thereafter payable to Optionee any tax required to be withheld by reason of such taxable income, sufficient to satisfy the
withholding obligation.
8. Capital Adjustments and Reorganizations. The existence of the Option 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.
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
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