Document:

Exhibit 10.4

 

Exhibit C

Executive Form of Option Agreement

 

 

Executive—Accelerated Vesting on a Change in Control

 

Option No.:              

 

ROSETTA STONE INC.

2006 STOCK INCENTIVE PLAN

 

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

 

Rosetta Stone Inc., a Delaware corporation (the “Company”), hereby
grants an option to purchase shares of its Class B common stock, $.001 par
value, (the “Stock”) to the optionee
named below. The terms and conditions of the option are set forth in this cover sheet, in the attachment and in the Company’s 2006 Stock
Incentive Plan (the “Plan”).

 

	
  Grant
  Date:

  	
   

  	
  ,
  200

  	
   

  

 

	
  Name
  of Optionee:

  	
   

  

 

	
  Optionee’s
  Employee Identification Number:

  	
   

  	
   -

  	
   

  	
   -

  	
   

  

 

	
  Number
  of Shares Covered by Option:

  	
   

  

 

	
  Option Price per Share: $

  	
   

  	
   .

  	
   

  

 

	
  Vesting Start Date:

  	
   

  	
   , 20

  	
   

  

 

By signing this cover sheet, you
agree to all of the terms and conditions described in the attached Agreement
and in the Plan, a copy of which is also attached. You acknowledge that you
have carefully reviewed the Plan, and agree that the Plan will control in the
event any provision of this Agreement should appear to be inconsistent.

 

	
  Optionee:  

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  
	
  Company:

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
				

 

Attachment

 

This
is not a stock certificate or a negotiable instrument

 

 

ROSETTA STONE INC.

2006 STOCK INCENTIVE PLAN

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

Nonqualified Stock Option

 

This option is not intended to be an incentive stock
option under Section 422 of the Internal Revenue Code and will be
interpreted accordingly.

 

Vesting

 

This option is only exercisable before it expires
and then only with respect to the vested portion of the option. Subject to the
preceding sentence, you may exercise this option, in whole or in part, to
purchase a whole number of vested shares not less than 100 shares, unless the
number of shares purchased is the total number available for purchase under the
option, by following the procedures set forth in the Plan and below in this
Agreement.

 

Your right to purchase shares of Stock under this
option vests as to one-fourth (1/4) of the total number of shares covered by
this option, as shown on the cover sheet (the “Option Shares”), on the one-year
anniversary of the Vesting Start Date (“Anniversary Date”), provided you then
continue in Service. Thereafter, for each such vesting date that you remain in
Service, the number of shares of Stock which you may purchase under this option
shall vest at the rate of one-sixteenth (1/16th) of the Option Shares per three
month period following the Anniversary Date. The resulting aggregate number of
vested shares will be rounded to the nearest whole number, and you cannot vest
in more than the number of shares covered by this option.

 

Notwithstanding the vesting schedule set forth
above, your Option Shares will become 100% vested upon the occurrence of a
Change of Control as defined in the Plan provided, however, that a Change of
Control shall not include a bona fide, firm commitment underwritten public
offering of the common stock of the Corporation pursuant to a registration statement
declared effective under the Securities Act of 1933, as amended.

 

No additional shares of Stock will vest after your
Service has terminated for any reason.

 

Term

 

Your option will expire in any event at the close of

 

2

 

business at Company headquarters on the day before
the 10th anniversary of the Grant Date, as shown on the cover sheet. Your
option will expire earlier (but never later) if your Service terminates, as
described below.

 

Regular Termination

 

If your Service terminates for any reason, other
than death, Disability or Cause, then your option will expire at the close of business at Company headquarters
on the 30th day after your termination date.

 

Termination for Cause

 

If your Service is
terminated for Cause, then you shall immediately forfeit all rights to your option
and the option shall immediately
expire.

 

Death

 

If your Service terminates because of your death,
then your option will expire at the
close of business at Company headquarters on the date six (6) months after
the date of death. During that six (6) month period, your estate or heirs
may exercise the vested portion of your option.

 

In addition, if you die during the 30-day period
described in connection with a regular termination (i.e., a termination of your
Service not on account of your death, Disability or Cause), and a vested
portion of your option has not yet been exercised, then your option will
instead expire on the date six (6) months after your termination date. In
such a case, during the period following your death up to the date six (6) months after your termination date, your estate or heirs may exercise the vested portion of your option.

 

Disability

 

If your Service terminates because of your
Disability, then your option
will expire at the close of business at Company headquarters on the date six (6) months
after your termination date.

 

Leaves of Absence

 

For purposes of this option, your Service does not
terminate when you go on a bona fide  employee leave of absence that was approved
by the Company in writing, if the terms of the leave provide for continued Service crediting, or when
continued Service crediting is required by applicable law. However, your
Service will be treated as terminating 30 days after you went on employee leave, unless your right
to return to active work is guaranteed by law or by a contract. Your Service terminates in any event

 

3

 

when the approved leave ends unless you immediately
return to active employee work.

 

The Company determines, in its sole discretion,
which leaves count for this purpose, and when your Service terminates for all
purposes under the Plan.

 

Notice of Exercise

 

When you wish to exercise this option, you must
notify the Company by filing the proper “Notice of Exercise” form at the
address given on the form. Your notice must specify how many shares you wish to
purchase (in a parcel of at least 100 shares generally). Your notice must also
specify how your shares of Stock should be registered (in your name only or in
your and your spouse’s names as joint tenants with right of survivorship). The
notice will be effective when it is received by the Company.

 

If someone
else wants to exercise this option after your
death, that person must prove to the Company’s satisfaction that he or she is
entitled to do so.

 

Form of Payment

 

When you submit your notice of exercise, you must
include payment of the option price for the shares you are purchasing. Payment
may be made in one (or a combination) of the following forms:

 

·                       Cash, your personal check, a cashier’s check, a money order or another
cash equivalent acceptable to the Company.

 

·                       By causing the Company or the Affiliate to withhold shares of Stock
otherwise issuable to you with a fair market value, determined as of the
effective date of the option exercise, equal to the option price.

 

·                       Shares of Stock which have already been owned by you. The value of the
shares, determined as of the effective date of the option exercise, will be
applied to the option price.

 

·                       To the extent a public market for the Stock exists as determined by the
Company, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities
broker acceptable to the Company to
sell Stock and to deliver all or part of the
sale proceeds to the Company in

 

4

 

payment of the aggregate option price and any
withholding taxes.

 

Withholding Taxes

 

You will not be allowed to exercise this option
unless you make acceptable arrangements
to pay any withholding or other taxes that may be due as a result of the option
exercise or sale of Stock acquired under this option. In the event that the
Company determines that any federal, state, local or foreign tax or withholding
payment is required relating to the exercise or sale of shares arising from this grant, the
Company shall have the right to require such payments from you, or withhold
such amounts from other payments due to you from the Company or any Affiliate
including withholding from the shares of Stock issuable on exercise of this
option.

 

Transfer of Option

 

During your lifetime, only you (or, in the event of
your legal incapacity or incompetency, your guardian or legal representative)
may exercise the option. You cannot transfer or assign this option. For
instance, you may not sell this option or use it as security for a loan. If you
attempt to do any of these things, this option will immediately become invalid.
You may, however, dispose of this option in your will or it may be transferred
upon your death by the laws of descent and distribution.

 

Regardless of any marital property settlement
agreement, the Company is not obligated to honor
a notice of exercise from your spouse, nor is
the Company obligated to recognize your spouse’s interest in your option in any
other way.

 

Market Stand-off Agreement

 

In connection with any underwritten public offering
by the Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, including the Company’s initial
public offering, you agree not to sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
or transfer for value or agree to engage in any of the foregoing transactions with respect to any shares of Stock
without the prior written consent of the Company or its underwriters, for such
period of time after the effective
date of such registration statement as may be requested by the Company or the underwriters (not to exceed 180 

 

5

 

days in length).

 

Investment Representation

 

If the sale of Stock under the Plan is not
registered under the Securities Act, but an exemption is available which requires an investment or
other representation, you shall represent
and agree at the time of exercise that the Stock
being acquired upon exercise of this option is being acquired for investment,
and not with a view to the sale or distribution thereof, and shall make such other
representations as are deemed necessary or appropriate by the Company and its
counsel.

 

No Transfer

 

You cannot sell, transfer or assign any shares of
Stock acquired on exercise of this option without the Company’s consent other
than to immediate family members or a trust established for your benefit or
your immediate family
members. You may, however, dispose of the shares acquired on exercise of this
option in your will or they may be transferred upon your death by the laws of
descent and distribution. These restrictions apply to any person to whom Stock
that was originally acquired pursuant to this option is bequeathed, gifted,
transferred or otherwise disposed of, without regard to the number of such
subsequent transferees or the manner in which they acquire the Stock.

 

This restriction on transfer shall terminate in the
event that the Stock is listed on an established national or regional stock
exchange, is admitted for quotation on The Nasdaq Stock Market, Inc., or
is publicly traded in an established securities market.

 

Right to Repurchase

 

Following termination of your Service for any
reason, the Company shall have the right to purchase all of those shares of
Stock that you have or will acquire under this option. If the Company exercises
its right to
purchase the shares, the Company will notify you of its intention to purchase
such shares, and will consummate the purchase within one year (or 90 days to
the extent required by applicable law) of your termination of Service or, in
the case of Stock acquired after your termination of Service, within one year
(or 90 days to the extent required by applicable law) of the date of exercise.
The purchase price shall be the Fair Market Value of the shares on the date of
your termination of Service if the Company exercises its

 

6

 

right to purchase such shares within 90 days of your
termination of Service or exercises its right within 90 days of the date of
your exercise of the option following termination of Service; otherwise the
purchase price shall be the Fair Market Value of the shares on the date the
Company gives you notice of its intent to exercise its right to purchase the
shares. The Company’s rights of repurchase shall terminate in the event that
the Stock is listed on an established national or regional stock exchange, is
admitted for quotation on The Nasdaq Stock Market, Inc., or is publicly
traded in an established securities market.

 

Retention Rights

 

Neither your option nor this Agreement give you the
right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent,
Subsidiaries or Affiliates) reserve the right to terminate your Service at any
time and for any reason.

 

Shareholder Rights

 

You, or your estate or heirs, have no rights as a
shareholder of the Company until a certificate for your option’s shares has
been issued (or an appropriate book entry has been made). No adjustments are
made for dividends or other rights if the applicable record date occurs before
your stock certificate is issued (or an appropriate book entry has been made),
except as described in the Plan.

 

Adjustments

 

In the event of a stock split, a stock dividend or a
similar change in the Stock, the number of shares covered by this option and
the option price per share may be adjusted (and rounded down to the nearest
whole number) pursuant to the Plan. Your option shall be subject to the terms
of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate
activity.

 

Legends

 

All certificates representing the Stock issued upon
exercise of this option shall, where applicable, have endorsed thereon the following legends:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OPTIONS TO

 

7

 

PURCHASE SUCH SHARES SET FORTH IN AN AGREEMENT
BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN
INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”

 

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR
QUALIFICATION THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER
JURISDICTION’S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED.”

 

Applicable Law

 

This Agreement will be interpreted and enforced under the laws of the State of Delaware, other than
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 Plan

 

The text of the Plan is incorporated in this
Agreement by reference.
Certain capitalized terms used in this Agreement are defined in the Plan, and
have the meaning set forth in the Plan.

 

This Agreement and the Plan constitute the entire
understanding between you and the Company regarding this option. Any prior
agreements, commitments or negotiations concerning this option are superseded.

 

Other Agreements

 

You agree, as a condition of the grant of this
option, that in
connection with the exercise of the option, you will execute such document(s) as
necessary to become a party to any shareholder agreement or voting trust as the

 

8

 

Company may require.

 

By signing the cover sheet of this
Agreement, you agree to all of the terms and conditions described above and in
the Plan.

 

9Exhibit 10.5

 

Exhibit B 

Standard Form of Option Agreement

 

 

Option No.:                  

 

ROSETTA STONE INC.

2006 STOCK INCENTIVE PLAN

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

Rosetta Stone Inc., a Delaware corporation (the “Company”), hereby
grants an option to purchase shares of its Class B Common Stock, $.001 par value, (the “Stock”) to the optionee named
below. The terms and conditions of the option are set forth in
this cover sheet, in the attachment and in the Company’s 2006 Stock Incentive
Plan (the “Plan”).

 

	
  Grant
  Date:

  	
   

  	
  ,
  200

  	
   

  

 

	
  Name
  of Optionee:

  	
   

  

 

	
  Optionee’s
  Employee Identification Number:

  	
   

  	
   -

  	
   

  	
   -

  	
   

  

 

	
  Number
  of Shares Covered by Option:

  	
   

  

 

	
  Option Price per Share: $

  	
   

  	
   .

  	
   

  

 

	
  Vesting Start Date:

  	
   

  	
   , 20

  	
   

  

 

By signing this
cover sheet, you agree to all of the terms and conditions described in the
attached Agreement and in the Plan, a copy of which is also attached. You
acknowledge that you have carefully reviewed the Plan, and agree that the Plan
will control in the event any provision of this Agreement should appear to be
inconsistent.

 

	
  Optionee:

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
  Company:

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
				

 

Attachment

 

This is not a
stock
certificate or a negotiable instrument

 

 

ROSETTA STONE INC.

2006 STOCK INCENTIVE PLAN

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

Nonqualified Stock Option

 

This
option is not intended to be an incentive stock option under Section 422
of the Internal Revenue Code and will be interpreted accordingly.

 

Vesting

 

This
option is only exercisable before it expires and then only with respect to the
vested portion of the option. Subject to the preceding sentence, you may
exercise this option, in whole or in part, to purchase a whole number of vested
shares not less than 10 shares, unless the number of shares purchased is the
total number available for purchase under the option, by following the
procedures set forth in the Plan and below in this Agreement.

 

Your
right to purchase shares of Stock under this option vests as to one-fourth
(1/4) of the total number of shares covered by this option, as shown on the
cover sheet (the “Option Shares”), on the one-year anniversary of the Vesting
Start Date (“Anniversary Date”), provided you then continue in Service.
Thereafter, for each such vesting date that you remain in Service, the number
of shares of Stock which you may purchase under this option shall vest at the
rate of one-sixteenth (1/16) of the Option Shares per three month period
following the Anniversary Date. The resulting aggregate number of vested shares
will be rounded to the nearest whole number, and you cannot vest in more than
the number of shares covered by this option.

 

No
additional shares of Stock will vest after your Service has terminated for any
reason.

 

Term

 

Your
option will expire in any event at the close of  business at Company headquarters on the day
before the 10th anniversary of the Grant Date, as shown on the cover sheet.
Your option will expire earlier (but never later) if your Service terminates,
as described below.

 

Regular Termination

 

If
your Service terminates for any reason, other than  death, Disability or Cause, then your option
will expire at the close of
business at Company headquarters on the 30th

 

2

 

day after your termination date.

 

Termination for Cause

 

If your Service is terminated for Cause, then
you shall immediately forfeit all rights to your option and the option shall
immediately expire.

 

Death

 

If your Service terminates because of your
death, then your option will expire at the close of business at Company
headquarters on the date six (6) months after the date of death. During
that six (6) month period,
your estate or heirs may exercise the vested portion of your option.

 

In addition, if you die during the 30-day
period described in connection with a regular termination (i.e., a termination
of your Service not on account of your death, Disability or Cause), and a
vested portion of your option has not yet been exercised, then your option will
instead expire on the date six (6) months after your termination date. In
such a case, during the period following your death up to the date six (6) months
after your termination date, your estate or heirs may exercise the vested
portion of your option.

 

Disability

 

If your Service terminates because of your
Disability, then your option will expire at the close of business at Company
headquarters on the date six (6) months after your termination date.

 

Leaves of Absence

 

For purposes of this option, your Service
does not terminate when you go on a bona
fide employee leave of absence that was approved
by the Company in writing, if the terms of the leave provide for continued Service
crediting, or when continued Service crediting is required by applicable law.
However, your Service will be treated as terminating 30 days after you went on
employee leave, unless your right to return to active work is guaranteed by law
or by a contract. Your Service terminates in any event when the approved leave ends unless
you immediately return to active employee work.

 

The Company
determines, in its sole discretion, which
leaves count for this purpose, and when your Service terminates for all purposes under the Plan.

 

Notice of Exercise

 

When you wish to exercise this option, you must
notify the Company by filing the proper “Notice of Exercise” form at

 

3

 

the address given on the form. Your notice
must specify how many shares you wish to purchase (in a parcel of at least 10
shares generally). Your notice must also specify how your shares of Stock
should be registered (in your name only or in your and your spouse’s names as
joint tenants with right of survivorship). The notice will be effective when it
is received by the Company.

 

If someone else wants to exercise this option
after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

 

Form of Payment

 

When you submit your notice of exercise, you
must include payment of the option price for the shares you are purchasing.
Payment may be made in one (or a combination) of the following forms:

 

·        Cash,
your personal check, a cashier’s check, a money order or another cash
equivalent acceptable to the Company.

 

·        By
causing the Company or the Affiliate to withhold shares of Stock otherwise issuable
to you with a Fair Market Value, determined as of the effective date of the
option exercise, equal to the option price.

 

·        Shares
of Stock which have already been owned by you. The Fair Market Value of the
shares, determined as of the effective date of the option exercise, will be
applied to the option price.

 

·        To
the extent a public market for the Stock exists as determined by the Company,
by delivery (on a form prescribed by the Company) of an irrevocable direction
to a licensed securities broker acceptable to the Company to sell Stock and to
deliver all or part of the sale proceeds to the Company in payment of the
aggregate option price and any withholding taxes.

 

Withholding Taxes

 

You will not be allowed to exercise this
option unless you make
acceptable arrangements to pay any withholding or other taxes that may be due
as a result of the option exercise or sale of Stock acquired under this option.
In the event that the Company determines that any federal,

 

4

 

state, local or foreign tax or withholding payment
is required relating to the exercise or sale of shares arising from this grant,
the Company shall have the right to require such payments from you, or withhold
such amounts from other payments due to you from the Company or any Affiliate
including withholding from the shares of Stock issuable on exercise of this
option.

 

Transfer of Option

 

During your lifetime, only you (or, in the event of
your legal incapacity or incompetency, your guardian or legal representative)
may exercise the option. You cannot transfer or assign this option. For
instance, you may not sell this option or use it as security for a loan. If you
attempt to do any of these things, this option will immediately become invalid.
You may, however, dispose of this option in your will or it may be transferred
upon your death by the laws of descent and distribution.

 

Regardless of any marital property settlement
agreement, the Company is not obligated to honor a notice of exercise from your
spouse, nor is the Company obligated to recognize your spouse’s interest in
your option in any other way.

 

Market Stand-off Agreement

 

In connection with any underwritten public offering
by the Company of its equity securities pursuant to an effective registration
statement filed under the Securities Act, including the Company’s initial
public offering, you agree not to sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
or transfer for value or agree to engage in any of the foregoing transactions
with respect to any shares of Stock without the prior written consent of the
Company or its underwriters, for such period of time after the effective date
of such registration statement as may be requested by the Company or the
underwriters (not to exceed 180 days in length).

 

Investment Representation

 

If the sale of Stock under the Plan is not
registered under the Securities Act, but an exemption is available which
requires an investment or other representation, you shall represent and agree
at the time of exercise that the Stock being acquired upon
exercise of this option is being acquired for investment, and not with a view
to the sale or distribution thereof, and shall make such other

 

5

 

representations
as are deemed necessary or appropriate by the Company and its counsel.

 

No Transfer

 

You cannot sell, transfer or assign any
shares of Stock acquired on exercise of this option without the Company’s
consent. You may, however, dispose of the shares acquired on exercise of this
option in your will or they may be transferred upon your death by the laws of
descent and distribution.

 

This restriction on transfer shall terminate in the event that the Stock
is listed on an established national or regional stock exchange, is admitted
for quotation on The Nasdaq Stock Market, Inc., or is publicly traded in
an established securities market.

 

Right to Repurchase

 

Following termination of your Service for any reason, the Company shall
have the right to purchase all of those shares of Stock that you have or will
acquire under this option. If the Company exercises its right to purchase the
shares, the Company will notify you of its intention to purchase such shares,
and will consummate the purchase within one year (or 90 days to the extent
required by applicable law) of your termination of Service or, in the case of
Stock acquired after your termination of Service, within one year (or 90 days
to the extent required by applicable law) of the date of exercise.

 

The purchase price shall be the Fair Market
Value of the shares on the date of your termination of Service if the Company
exercises its right to purchase such shares within 90 days of your termination
of Service or exercises its right within 90 days of the date of your exercise
of the option following termination of Service; otherwise the purchase price
shall be the Fair Market Value of the shares on the date the Company gives you
notice of its intent to exercise its right to purchase the shares.

 

The Company’s rights of repurchase shall
terminate in the event that the Stock is listed on an established national or regional
stock exchange, is admitted for quotation on The Nasdaq Stock Market, Inc. or
is publicly traded in an established securities market.

 

Retention Rights

 

Neither your option nor this Agreement give
you the right

 

6

 

to be retained by the Company (or any Parent,
Subsidiaries or Affiliates) in any capacity. The Company (and any Parent,
Subsidiaries or Affiliates) reserve the right to terminate your Service at any
time and for any reason.

 

Shareholder Rights

 

You, or your estate or heirs, have no rights
as a shareholder of the Company until a certificate for your option’s shares
has been issued (or an appropriate book entry has been made). No adjustments
are made for dividends or other rights if the applicable record date occurs
before your stock certificate is issued (or an appropriate book entry has been
made), except as described in the Plan.

 

Adjustments

 

In the event of a stock split, a stock
dividend or a similar change in the Stock, the number of shares covered by this
option and the option price per share may be adjusted (and rounded down to the
nearest whole number) pursuant to the Plan.

 

Legends

 

All certificates representing the Stock
issued upon exercise of this option shall, where applicable, have endorsed
thereon the following legends:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER
PREDECESSOR IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE
SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY
THIS CERTIFICATE.”

 

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR QUALIFICATION

 

7

 

THEREOF UNDER SUCH ACT AND SUCH APPLICABLE STATE OR OTHER
JURISDICTION’S SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION AND QUALIFICATION IS NOT
REQUIRED.”

 

Applicable Law

 

This Agreement will be interpreted and
enforced under the laws of the State of Delaware, other than 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 Plan

 

The text of the Plan is incorporated in this
Agreement by reference. Certain capitalized terms used in this Agreement are
defined in the Plan, and have the meaning set forth in the Plan.

 

This Agreement and the Plan constitute the
entire understanding between you and the Company regarding this option. Any
prior agreements, commitments or negotiations concerning this option are
superseded.

 

Other Agreements

 

You agree, as a condition of the grant of
this option, that in connection with the exercise of the option, you will
execute such document(s) as necessary to become a party to any shareholder
agreement or voting trust as the Company may require.

 

By signing the cover sheet of this
Agreement, you agree to all of the terms and conditions described above and in
the Plan.

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]