Exhibit 10.28

 

ROSETTA STONE INC.
2009 OMNIBUS INCENTIVE PLAN, AS AMENDED

 

COVER SHEET TO
RESTRICTED STOCK AWARD AGREEMENT

 

Rosetta Stone Inc., a Delaware corporation (the “Company”), has granted to the
individual whose name is set forth below on the “Name of Employee” line
(“Employee”) the shares of the Company’s common stock, $.00005 par value,
specified herein, subject to the terms and conditions set forth in this Cover
Sheet, in the Restricted Stock Award Agreement and in the Rosetta Stone Inc.
2009 Omnibus Incentive Plan, as amended, (the “Plan”).

 

Grant Date:

 

Name of Employee:

 

Employee’s Employee Identification Number:

 

Number of Shares of Restricted Stock Granted:

 

Vesting Start Date:

 

Recipient understands and agrees that this Restricted Stock Award is granted
subject to and in accordance with the terms of the Rosetta Stone, Inc.
%%EQUITY_PLAN%-% (the “Plan”).  Recipient further agrees to be bound by the
terms of the Plan and the terms of the Restricted Stock Award as set forth in
the Restricted Stock Award Agreement and any Addenda to such Restricted Stock
Award Agreement.  A copy of the Plan is available on www.etrade.com.

 

Nothing in this Notice or in the Restricted Stock Award Agreement or in the Plan
shall confer upon Recipient any right to continue in service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Corporation (or any Parent or Subsidiary employing or retaining
Recipient) or of Recipient, which rights are hereby expressly reserved by each,
to terminate Recipient’s Service at any time for any reason, with or without
cause.

 

Definitions. All capitalized terms in this Notice shall have the meaning
assigned to them in this Notice or in the Restricted Stock Award Agreement.

 

ROSETTA STONE INC.

 

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ROSETTA STONE INC.
2009 OMNIBUS INCENTIVE PLAN, AS AMENDED

 

 RESTRICTED STOCK AWARD AGREEMENT

 

This RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) and the Cover Sheet to
which this Agreement is attached (the “Cover Sheet”) is made by and between
Rosetta Stone Inc., a Delaware corporation (the “Company”), and Employee (as
that term is defined in the Covered Sheet), effective as of the Grant Date set
forth on the Cover Sheet (the “Grant Date”), pursuant to the Rosetta Stone Inc.
2009 Omnibus Incentive Plan, as amended, (the “Plan”), a copy of which
previously has been made available to Employee and the terms and provisions of
which are incorporated by reference herein.

 

WHEREAS, the Company desires to grant to Employee the shares of the Company’s
common stock, $.00005 par value, set forth on the “Number of Shares of
Restricted Stock Granted” line on the Cover Sheet (the “Shares”), subject to the
terms and conditions of this Agreement; and

 

WHEREAS, Employee desires to have the opportunity to hold the Shares subject to
the terms and conditions of this Agreement;

 

NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

 

1.                                      Definitions.  For purposes of this
Agreement, the following terms shall have the meanings indicated:

 

(a)                                 “Forfeiture Restrictions” shall mean the
prohibitions and restrictions set forth herein with respect to the sale or other
disposition of the Shares issued to Employee hereunder and the obligation to
forfeit and surrender such Shares to the Company.

 

(b)                                 “Period of Restriction” shall mean the
period during which Restricted Shares are subject to Forfeiture Restrictions and
during which Restricted Shares may not be sold, assigned, transferred, pledged
or otherwise encumbered.

 

(c)                                  “Restricted Shares” shall mean the Shares
that are subject to the Forfeiture Restrictions under this Agreement.

 

(d)                                 “Disability” shall have the meaning ascribed
to such term in the Plan, as it may be amended from time to time.

 

Capitalized terms not otherwise defined in this Agreement shall have the
meanings given to such terms in the Plan.

 

2.                                      Grant of Restricted Shares.  Effective
as of the Grant Date, the Company shall cause to be issued in Employee’s name
the Shares as Restricted Shares.  The Company shall cause electronic book
entries evidencing the Restricted Shares, and any shares of the Stock or

 

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rights to acquire shares of the Stock distributed by the Company in respect of
Restricted Shares during any Period of Restriction (the “Retained Stock
Distributions”), to be issued in Employee’s name.  During the Period of
Restriction such electronic book entries shall contain a restrictive legend
notation to the effect that ownership of such Restricted Shares (and any
Retained Stock Distributions), and the enjoyment of all rights appurtenant
thereto, are subject to the restrictions, terms, and conditions provided in the
Plan and this Agreement.  During the Period of Restriction any regular dividends
paid in cash or property (other than Retained Stock Distributions) with respect
to the Restricted Shares and Retained Stock Distributions (the “Retained Cash
Distributions”) shall not be paid to Employee but instead shall be accumulated
by the Company until the date the Forfeiture Restrictions applicable to the
Restricted Shares and Retained Stock Distributions with respect to which such
Retained Cash Distributions shall have been made, paid, or declared shall have
become vested and then on that date such Retained Cash Distributions shall be
paid to Employee.  Employee shall have the right to vote the Restricted Shares
awarded to Employee and to exercise all other rights, powers and privileges of a
holder of the Shares, with respect to such Restricted Shares, with the exception
that (a) Employee shall not be entitled to delivery of such Restricted Shares
until the Forfeiture Restrictions applicable thereto shall have expired, (b) the
Company shall retain custody of all Retained Stock Distributions made or
declared with respect to the Restricted Shares and Retained Cash Distributions
made or declared with respect to the Restricted Shares and the Retained Stock
Distributions (and such Retained Stock Distributions and Retained Cash
Distributions shall be subject to the same restrictions, terms and conditions as
are applicable to the Restricted Shares) until such time, if ever, as the
Restricted Shares with respect to which such Retained Stock Distributions and
Restricted Cash Distributions shall have been made, paid, or declared shall have
become vested, and such Retained Stock Distributions and Retained Cash
Distributions shall not bear interest or be segregated in separate accounts and
(c) Employee may not sell, assign, transfer, pledge, exchange, encumber, or
dispose of the Restricted Shares or any Retained Stock Distributions or any
Restricted Cash Distributions during the Period of Restriction.  Upon issuance
the book entry representing the Restricted Shares shall be delivered to such
depository as may be designated by the Committee as a depository for safekeeping
until the forfeiture of such Restricted Shares occurs or the Forfeiture
Restrictions lapse, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit transfer to the Company of
all or any portion of the Restricted Shares and any securities constituting
Retained Stock Distributions which shall be forfeited in accordance with the
Plan and this Agreement.  In accepting the award of the Shares set forth in this
Agreement Employee accepts and agrees to be bound by all the terms and
conditions of the Plan and this Agreement.

 

3.                                      Transfer Restrictions.  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.  Employee 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

 

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Registration Statement on Form S-8.  A Prospectus describing the Plan and the
Shares is available from the Company.

 

4.                                      Vesting.

 

(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 Employee’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 Restricted 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 Restricted
Shares granted hereby for which the Forfeiture Restrictions have not previously
lapsed.

 

(b)                                 Upon the lapse of the Forfeiture
Restrictions with respect to the Shares granted hereby the Company shall cause
to be delivered to Employee such Shares in electronic book entry form, and such
Shares shall be transferable by Employee (except to the extent that any proposed
transfer would, in the opinion of counsel satisfactory to the Company,
constitute a violation of applicable securities law).

 

(c)                                  If Employee ceases to be employed by the
Company or a subsidiary for any reason before the applicable lapse date
including death or disability of Employee, the Forfeiture Restrictions then
applicable to the Restricted Shares shall not lapse and all the Restricted
Shares shall be forfeited to the Company.

 

5.                                      Capital Adjustments and
Reorganizations.  The existence of the Restricted Shares 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.

 

6.                                      Tax Withholding.  To the extent that the
receipt of the Restricted Shares or the lapse of any Forfeiture Restrictions
results in income to Employee for federal, state, local or foreign income,
employment or other tax purposes with respect to which the Company or its
Affiliates or subsidiaries have a withholding obligation, Employee shall deliver
to the Company at the time of such receipt or lapse, as the case may be, such
amount of money as the Company or any Affiliate may require to meet such
obligation under applicable tax laws or regulations, and, if Employee fails to
do so, the Company and its Affiliates and subsidiaries are authorized to
withhold from the Shares granted hereby or from any cash or stock remuneration
then or thereafter payable to Employee in any capacity any tax required to be
withheld by reason of such taxable income, sufficient to satisfy the withholding
obligation.

 

7.                                      Section 83(b) Election.  Employee shall
not exercise the election permitted under section 83(b) of the Internal Revenue
Code of 1986, as amended, with respect to the Restricted

 

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Shares without the prior written approval of the General Counsel of the
Company.  If the election is permitted as provided in the prior sentence,
Employee shall timely pay the Company the amount necessary to satisfy the
Company’s attendant tax withholding obligations, if any.

 

8.                                      No Fractional Shares.  All provisions of
this Agreement concern whole Shares.  If the application of any provision
hereunder would yield a fractional share, such fractional share shall be rounded
down to the next whole share if it is less than 0.5 and rounded up to the next
whole share if it is 0.5 or more.

 

9.                                      Employment Relationship.  For purposes
of this Agreement, Employee shall be considered to be in the employment of the
Company and its Affiliates as long as Employee has an employment relationship
with the Company and its 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.

 

10.                               Not an Employment Agreement.  This Agreement
is not an employment agreement, and no provision of this Agreement shall be
construed or interpreted to create an employment relationship between Employee
and the Company or any Affiliate, to guarantee the right to remain employed by
the Company or any Affiliate for any specified term or require the Company or
any Affiliate to employ Employee for any period of time.

 

11.                               Legend.  Employee consents to the placing of
an appropriate legend notation on the electronic book entry representing the
Shares restricting resale or other transfer of the Shares except in accordance
with all applicable securities laws and rules thereunder.

 

12.                               Notices.  Any notice, instruction,
authorization, request, demand or other communications required hereunder shall
be in writing, and shall be delivered either by personal delivery, by telegram,
telex, telecopy or similar facsimile means, by certified or registered mail,
return receipt requested, or by courier or delivery service, addressed to the
Company at the Company’s principal business office address to the attention of
the Company’s General Counsel and to Employee at Employee’s residential address
as it appears on the books and records of the Company, or at such other address
and number as a party shall have previously designated by written notice given
to the other party in the manner hereinabove set forth.  Notices shall be deemed
given when received, if sent by facsimile means (confirmation of such receipt by
confirmed facsimile transmission being deemed receipt of communications sent by
facsimile means); and when delivered (or upon the date of attempted delivery
where delivery is refused), if hand-delivered, sent by express courier or
delivery service, or sent by certified or registered mail, return receipt
requested.

 

13.                               Amendment and Waiver.  Except as otherwise
provided herein or in the Plan or as necessary to implement the provisions of
the Plan, this Agreement may be amended, modified or superseded only by written
instrument executed by the Company and Employee.  Only a written instrument
executed and delivered by the party waiving compliance hereof shall waive any of
the terms or conditions of this Agreement.  Any waiver granted by the Company
shall be effective only if executed and delivered by a duly authorized officer
of the Company other than Employee.  The failure of any party at any time or
times to require performance of any provisions hereof shall in no manner effect
the right to enforce the same.  No waiver by any party of any term or condition,
or the breach of any term or condition contained in this

 

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Agreement, in one or more instances, shall be construed as a continuing waiver
of any such condition or breach, a waiver of any other condition, or the breach
of any other term or condition.

 

14.                               Dispute Resolution.  In the event of any
difference of opinion concerning the meaning or effect of the Plan or this
Agreement, such difference shall be resolved by the Compensation Committee of
the Board of Directors.

 

15.                               Governing Law and Severability.  The validity,
construction and performance of this Agreement shall be governed by the laws of
the State of Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction.  The invalidity of any
provision of this Agreement shall not affect any other provision of this
Agreement, which shall remain in full force and effect.

 

16.                               Successors and Assigns.  Subject to the
limitations which this Agreement imposes upon the transferability of the Shares
granted hereby, this Agreement shall bind, be enforceable by and inure to the
benefit of the Company and its successors and assigns, and to Employee,
Employee’s permitted assigns, executors, administrators, agents, legal and
personal representatives.

 

17.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall be an original for all purposes
but all of which taken together shall constitute but one and the same
instrument.

 

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Irrevocable Stock Power

 

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, For Value Received, has
bargained, sold, assigned and transferred and by these presents does bargain,
sell, assign and transfer unto Rosetta Stone Inc., a Delaware corporation (the
“Company”), the Shares transferred pursuant to the Restricted Stock Award
Agreement dated effective                                           , 20      ,
between the Company and the undersigned; and subject to and in accordance with
such Restricted Stock Award Agreement the undersigned does hereby constitute and
appoint the Secretary of the Company the undersigned’s true and lawful attorney,
IRREVOCABLY, to sell, assign, transfer, hypothecate, pledge and make over all or
any part of such Shares and for that purpose to make and execute all necessary
acts of assignment and transfer thereof, and to substitute one or more persons
with like full power, hereby ratifying and confirming all that said attorney or
his substitutes shall lawfully do by virtue hereof.

 

In Witness Whereof, the undersigned has executed this Irrevocable Stock Power
effective the              day of                         , 20      .

 

 

 

 

 

Name:

 

 

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