Rosetta Stone 2010 Annual Report Download - page 114

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Company's customary payroll practices (minus all applicable withholdings). Executive's Annual Base Salary for any partial year will
be prorated based upon the number of days elapsed in such year. The Annual Base Salary may be increased (but not decreased) from
time to time during the Service Term by the Board based upon the Company's and Executive's performance.
(b) Bonus and Relocation Assistance.
(i.) Executive shall be eligible to receive an annual bonus in accordance with Company bonus policy to be
established by the Board of Directors from time to time (the "Annual Bonus"). The Annual Bonus, if any, will
be determined by the Board based upon the Company's annual achievement of financial performance goals
and other annual objectives as determined by the Board in good faith for each fiscal year of the Company.
The Annual Bonus target as a percentage of then-current Annual Base Salary, may be adjusted, but may not
be less than 75% of the Executive's then-current Annual Base Salary upon 100% achievement of the annual
objectives as set out in the Company's Executive Bonus Plan.
(ii.) Executive shall receive a one-time signing bonus upon the date of hire in the amount of $35,000, subject to
taxes and applicable withholdings. If Executive voluntarily terminates employment with Rosetta Stone
(without Good Reason) within twelve (12) months of receiving the signing bonus Executive agrees to
reimburse the Company pursuant to the following repayment schedule: (i) termination within 180 days or
less of the date of hire, 100% of the signing bonus shall be paid back to the Company; (ii) termination within
181 days - 270 days of the date of hire, 50% of the signing bonus shall be paid back to the Company; and
(iii) termination within 271 days — 365 days of the date of hire, 25% of the signing bonus shall be paid back
to the Company.
(iii.) Executive will receive up to three (3) months of temporary furnished housing expense reimbursement from
Rosetta Stone, as reasonably approved by the CEO in advance of expenses being paid.
(c) Benefits.
(i.) Executive and, to the extent eligible, her dependents, shall be entitled to participate in and receive all benefits
under any welfare or pension benefit plans and programs made available to the Company's senior level
executives or to its employees generally (including, without limitation, medical, disability and life insurance
programs, accidental death and dismemberment protection, leave and participation in retirement plans and
deferred compensation plans), subject, however, to the generally applicable eligibility and other provisions of
the various plans and programs and laws and regulations in effect from time to time.
(ii.) The Company shall reimburse Executive for all reasonable, ordinary and necessary business, travel and
entertainment expenses incurred during the Service Term in the performance of her services hereunder in
accordance with the policies of the Company as they are from time to time in effect. Executive,
2