Rosetta Stone 2014 Annual Report Download - page 106

notice thereof from the Company; (v) failure, within ten (10) days after receipt by Optionee of written notice thereof from the
Company, to correct, cease or otherwise alter any failure to comply with instructions or other action or omission which the Board
reasonably believes does or may materially or adversely affect its business or operations; (vi) misconduct which is of such a serious or
substantial nature that a reasonable likelihood exists that such misconduct will materially injure the reputation of the Company or its
Subsidiary Corporations if Optionee was to remain employed by the Company; (vii) harassing or discriminating against the Company’s
employees, customers or vendors in violation of the Company’s policies with respect to such matters; and/or (viii) misappropriation of
funds or assets of the Company for personal use or willful violation of Company policies or standards of business conduct as
determined in good faith by the Board.
(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 day
that is 30-days after the date of such cessation, 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.  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. . 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. . 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.