Rosetta Stone 2010 Annual Report Download - page 116

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termination shall be effective immediately upon written notice thereof except for any required grace periods for "Cause" as otherwise
set forth below).
5. Termination.
Executive's employment with the Company shall cease upon the first of the following events to occur:
(a) Executive's death.
(b) Executive's voluntary retirement at age 65 or older.
(c) Executive's disability, which means her incapacity due to physical or mental illness such that she is unable to
perform the essential functions of her previously assigned duties where (1) such incapacity has been determined to exist by either
(x) the Company's disability insurance carrier or (y) by the concurring opinions of two licensed physicians (one selected by the
Company and one by Executive), and (2) the CEO has determined, based on competent medical advice, that such incapacity will
likely last for a continuous period of at six (6) months. Any such termination for disability shall be only as expressly permitted by the
Americans with Disabilities Act.
(d) Termination by the Company by the delivery to Executive of a written notice from the CEO that Executive has
been terminated ("Notice of Termination") with or without Cause. "Cause" shall mean termination for any of the following:
(i) Executive's (A) commission of a felony or a crime involving moral turpitude or the commission of any other
act or omission involving dishonesty in the performance of her duties to the Company or fraud; (B) substantial and
repeated failure to perform duties of the office held by Executive as reasonably directed by the Board or the CEO
and not cured within ten (10) days after receipt of written notice thereof; (C) gross negligence or willful misconduct
with respect to the Company or any of its Subsidiaries; (D) material breach of this Agreement not cured within ten
(10) days after receipt of written notice thereof from the Company; (E) failure, within ten (10) days after receipt by
Executive of written notice thereof from the Company, to correct, cease or otherwise alter any failure to comply
with instructions or other action or omission which the Board or the CEO reasonably believes does or may
materially or adversely affect its business or operations; (F) misconduct which is of such a serious or substantial
nature that a reasonable likelihood exists that such misconduct will materially injure the reputation of the Company
or its Subsidiaries if Executive were to remain employed by the Company; (G) harassing or discriminating against
the Company's employees, customers or vendors in violation of the Company's policies with respect to such matters;
(H) misappropriation of funds or assets of the Company for personal use or willful violation of Company policies or
standards of business conduct as determined in good faith by the Board or the CEO; and/or (I) failure due to some
action or inaction on the part of Executive to have immigration status that permits Executive to maintain full-time
employment
4