Rosetta Stone 2015 Annual Report Download - page 118

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accepting the award of the Shares set forth in this Agreement Executive accepts and agrees to be bound by all the terms and
conditions of the Plan and this Agreement.
3. . The Shares granted hereby may not be sold, assigned, pledged, exchanged, hypothecated or otherwise
transferred, encumbered or disposed of, to the extent then subject to the Forfeiture Restrictions. 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, the Shares granted hereby that are no longer subject to Forfeiture
Restrictions may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable
securities laws. Executive also agrees that the Company may (a) refuse to cause the transfer of the Shares 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 the Shares. The Shares are registered with the Securities and Exchange Commission under
a Registration Statement on Form S-8. A Prospectus describing the Plan and the Shares is available from the Company.
4. .
(a) The Shares that are granted hereby shall be subject to the Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to
the Shares that are granted hereby in accordance with the following schedule, provided that Executive’s employment with the
Company or its direct or indirect subsidiaries has not terminated prior to the applicable lapse date. On the first anniversary of
the Vesting Start Date (as set forth in the Cover Sheet), and on each succeeding anniversary of the Vesting Start Date (each
such anniversary date being referred to as a “lapse date”), the Forfeiture Restrictions shall lapse with respect to one-fourth
(1/4th) of the total number of Shares granted hereby, rounded to the nearest whole number, except that on the fourth
anniversary of the Vesting Start Date the Forfeiture Restrictions shall lapse with respect to the then remaining number of Shares
granted hereby for which the Forfeiture Restrictions have not previously lapsed.
(b) If the Executive’s employment terminates as a result of the Executive’s involuntary termination not-for-Cause, a number of
Shares that are unvested as of the date of such termination will immediately vest in an amount equal to (i) the product obtained
by multiplying (A) the total number of Shares granted under this Agreement by (B) a fraction, the numerator of which is the
number of days in the period beginning on the Grant Date and ending on the date of such termination of Employment, and the
denominator of which is the number of days in the period beginning on the Grant Date and ending on the fourth anniversary of
the Grant Date, minus (ii) the number of Shares that had vested pursuant to the vesting schedule set forth in Section 4 (a) above
as of the date of termination. Any unvested Shares that do not vest after application of the preceding sentence shall be forfeited
to the Company upon the effective date of such termination without any payment or consideration due by the Company.
(c) Notwithstanding any other provision of this Agreement to the contrary, if a Change in Control occurs and Executive’s
employment is terminated by the Company without Cause or by
4