Rosetta Stone 2014 Annual Report Download - page 117

forfeited to the Company or exchanged by the Company for shares of the Common Stock by an amount equal to
(a) multiplied by (b) divided by (c)
where (a) is the Restricted Stock Units awarded hereby that have not been forfeited to the Company or exchanged by the Company for
shares of the Common Stock, (b) the amount of the dividend paid by the Company in cash with respect an outstanding share of the
Common Stock and (c) is the Fair Market Value of the Common Stock on the date such dividend is paid to holders of the Common
Stock (a “Cash Dividend Restricted Stock Unit”). Each Cash Dividend Restricted Stock Unit will be subject to the same restrictions,
limitations and conditions applicable to the Restricted Stock Units for which such Cash Dividend Restricted Stock Unit was awarded
and will be exchanged for shares of the Common Stock at the same time and on the same basis as such Restricted Stock Units.
(b) Stock Dividends. If during the period Director holds any Restricted Stock Units granted under this Agreement the
Company pays a dividend in shares of the Common Stock with respect to the outstanding shares of the Common Stock, then the
Company will increase the Restricted Stock Units awarded hereby that have not then been forfeited to or exchanged by the Company
for shares of the Common Stock by an amount equal to the product of (a) the Restricted Stock Units awarded hereby that have not
been forfeited to the Company or exchanged by the Company for shares of the Common Stock and (b) the number of shares of the
Common Stock paid by the Company per share of the Common Stock (collectively, the “Stock Dividend Restricted Stock Units”).
Each Stock Dividend Restricted Stock Unit will be subject to same Forfeiture Restrictions and other restrictions, limitations and
conditions applicable to the Restricted Stock Units for which such Stock Dividend Restricted Stock Unit was awarded and will be
exchanged for shares of the Common Stock at the same time and on the same basis as such Restricted Stock Units.
5. Transfer Restrictions. The Restricted Stock Units granted hereby may not be sold, assigned, pledged, exchanged,
hypothecated or otherwise transferred, encumbered or disposed of (other than by will or the applicable laws of descent and
distribution) except that the Director may transfer the Restricted Stock Units to _____________________. No further transfer of the
Restricted Stock Units shall be allowed without the written consent of the Company. Any such attempted sale, assignment, pledge,
exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall be void and the Company shall not
be bound thereby. Further, any shares of the Common Stock issued to Director in exchange for Restricted Stock Units awarded hereby
may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable securities laws. Director
also agrees that the Company may (a) refuse to cause the transfer of any such shares of the Common Stock to be registered on the
applicable stock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to the
Company, constitute a violation of any applicable securities law and (b) give related instructions to the transfer agent, if any, to stop
registration of the transfer of such shares of the Common Stock. The shares of Common Stock that may be issued under the Plan are
registered with the Securities and Exchange Commission under a Registration Statement on Form S-8. A Prospectus describing the
Plan and the shares of Common Stock is available from the Company.
6. Vesting. The Restricted Stock Units that are granted hereby shall be fully vested on the Grant Date and shall not be
subject to any Forfeiture Restrictions.
7. Capital Adjustments and Reorganizations. The existence of the Restricted Stock Units 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