Rosetta Stone 2014 Annual Report Download - page 201

Exhibit 10.31
DIRECTOR AGREEMENT
In consideration of being considered for a position on the Board of Directors of Rosetta Stone Inc. (the “Corporation”) and in
accordance with Section 1.4 of the Second Amended and Restated Bylaws (as amended, the “Bylaws”) of the Corporation, the
undersigned hereby represents and agrees that the undersigned (a) is not and will not become a party to (i) any agreement, arrangement
or understanding with, and has not given any commitment or assurance to, any person or entity as to how the undersigned, if elected as
a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the
Corporation or (ii) any Voting Commitment that could limit or interfere with the undersigned’s ability to comply, if elected as a director
of the Corporation, with the undersigned’s fiduciary duties under applicable law, (b) is not and will not become a party to any
agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect
compensation, reimbursement or indemnification in connection with service or action as a director, and (c) in the undersigned’s
individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if
elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of
interest, confidentiality and stock trading policies and guidelines of the Corporation. The undersigned has listed and described in detail
any Voting Commitment in place as of the date of this Agreement on Exhibit A attached hereto and attached to Exhibit A a copy of
such Voting Commitment if it is in writing and agrees that if he enters into any such Voting Commitment at a later date, he will
describe such Voting Commitment in detail and provide a copy of such Voting Commitment to the board of directors of the
Corporation if it is in writing.
In accordance with Section 1.3(a)(ii)(A) of the Bylaws of the Corporation, attached as Exhibit B hereto is a description of all
direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years,
and any other material relationships, between or among the undersigned or any Affiliate or Associate of the undersigned and any of
John H. Lewis (“Lewis”), Osmium Partners, LLC (“Osmium Partners”), Osmium Capital, LP (“Fund I”), Osmium Capital II, LP
(“Fund II”), Osmium Spartan, LP (“Fund III”), Osmium Diamond, LP (Fund IV”), and Osmium Special Opportunity Fund, LP
(“Fund V”, and together with Lewis, Osmium Partners, Fund I, Fund II, Fund III, and Fund IV, the “Osmium Parties”), or any
Affiliates (defined below) or Associates (defined below) of the Osmium Parties or others acting in concert therewith, including,
without limitation all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the
Osmium Parties or their Affiliates or Associates were the “registrant” for purposes of such rule and the undersigned were a director or
executive officer of such registrant.
Although the undersigned has previously had a relationship with the Osmium Parties, as of the date of this Agreement the
undersigned does not, and so long as the undersigned is a director of the Corporation, the undersigned will not:
•receive any compensation from any of the Osmium Parties other than the return on his investment as a limited partner in various
of the funds described above;
•have any investment authority with any of the Osmium Parties; or
•have any ownership interest in any Osmium Party other than his interest as a limited partner certain funds.
For purposes of this Agreement: the terms “Affiliate” and “Associate” shall have the meanings set forth in Rule 12b-2
promulgated by the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and the terms “person” or “persons” shall mean any individual, corporation (including not-for-profit), general or
limited partnership, limited liability or