Rosetta Stone 2011 Annual Report Download - page 129

(d) Termination by the Company by the delivery to Executive of a written notice from the Chief Executive Officer that
Executive has been terminated ("Notice of Termination") with or without Cause. "Cause" shall mean termination for any of the
following:
(i) Executive (A) commits a felony or a crime involving moral turpitude or commits any other act or omission
involving fraud, embezzlement or any other act of dishonesty in the course of her employment by the Company
which conduct damages the Company or an Affiliate; (b) substantially and repeatedly fails to perform duties of the
office held by Executive as reasonably directed by the Board and/or Chief Executive Officer, (c) commits gross
negligence or willful misconduct with respect to the Company or an Affiliate; (d) commits a material breach of this
Agreement that is not cured within ten (10) days after receipt of written notice thereof from the Board and/or Chief
Executive Officer; (e) fails, within ten (10) days after receipt by Executive of written notice thereof from the Board
and/or Chief Executive Officer, to correct, cease or otherwise alter any failure to comply with instructions or other
action or omission which the Board and/or Chief Executive Officer reasonably believes does or may materially or
adversely affect the Company's or an Affiliate's business or operations, (f) commits 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 an Affiliate, (g) harasses or discriminates against the Company's or an Affiliate's
employees, customers or vendors in violation of the Company's policies with respect to such matters,
(h) misappropriates funds or assets of the Company or an Affiliate for personal use or willfully violates the
Company policies or standards of business conduct as determined in good faith by the Board and/or Chief Executive
Officer, (i) fails, due to some action or inaction on the part of Executive, to have immigration status that permits
Executive to maintain full-time employment with the Company in the United States in compliance with all
applicable immigration law, or (j) discloses trade secrets of the Company or an Affiliate.
(e) Executive's voluntary resignation by the delivery to the Chief Executive Officer of a written notice from Executive
that Executive has resigned with or without Good Reason. "Good Reason" shall mean Executive's resignation from employment with
the Company within thirty (30) days after (i) a material diminution in Executive's annual salary, duties, authority or responsibilities
from the annual salary, duties, authority or responsibilities as in effect at the commencement of the Service Term, (ii) the Company's
failure to perform any material obligation undertaken by the Company to Executive hereunder after Executive has provided the
Company with written notice of such failure and such failure has not thereafter been cured within ten (10) days of the delivery of such
written notice or (iii) notice by the Company to Executive that her primary place of employment is to be relocated to a geographic area
more than 50 miles from the Company's office in Arlington, Virginia, without Executive's consent.
6. Rights on Termination.
(a) If during the Service Term Executive's employment is terminated under Section 5 above (x) by the Company
without Cause or (y) by Executive with Good Reason, then:
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