Rosetta Stone 2011 Annual Report Download - page 152

(a) Base Salary. During the Service Term, the Company will pay Executive a base salary (the "Annual Base Salary") as
the Board may designate from time to time. The initial Annual Base Salary shall be at the rate of $275,000 per annum paid in
accordance with the Company's customary payroll practices (minus all applicable withholdings and deductions). 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 Plan. Executive shall be eligible to receive an annual bonus in accordance with Company bonus policy to
be established by the Board 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 Company will pay Executive the Annual Bonus for a given year, if any, in
accordance with the terms of the then-current Company bonus policy. For 2011, Executive will be eligible to receive an Annual
Bonus of up to seventy five percent (75%) of his Annual Base Salary upon 100% achievement of annual objectives. For subsequent
years, 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.
(c) Equity. Executive shall be eligible to receive annual grants of stock options and other equity awards in accordance
with equity compensation arrangements established by the Board. The grants shall have such terms as are determined by the Board in
accordance with the current stock plan in place at time of grant.
(d) Benefits.
(i) Executive and, to the extent eligible, his 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 or
entertainment expenses incurred during the Service Term in the performance of his services hereunder in accordance
with the policies of the Company as they are from time to time in effect. Executive, as a condition precedent to
obtaining such payment or reimbursement, shall provide to the Company any and all statements, bills or receipts
evidencing the travel or out-of-pocket expenses for which Executive seeks payment or reimbursement, and any other
information or materials, which the Company may from time to time reasonably require. The Company shall
reimburse Executive the amount of such an expense in accordance with the Company's expense reimbursement
policy as
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