Rosetta Stone 2011 Annual Report Download - page 155

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:
(i) The Company shall pay to Executive, at the times specified in Section 6(a)(vii) below, the following
amounts: (1) the Accrued Obligation;
(2) a lump sum in cash equal to the product of (x) 1/12 of the amount of the Annual Base Salary in
effect immediately prior to the Termination Date and (y) 12; and
(3) a lump sum in cash equal to the product of (x) the monthly basic life insurance premium
applicable to Executive's basic life insurance coverage immediately prior to the Termination Date and (y) 12. To the
extent then available under the life insurance program, Executive may, at his option, convert his basic life insurance
coverage to an individual policy after the Termination Date by completing the forms required by the Company for
this purpose.
The amounts described in Section 6(a) (i) (2) and (3) above shall be referred to herein as the "Severance Payments."
(ii) The Company will pay Executive the pro rata portion, if any, of Executive's Annual Bonus earned up until
such Termination Date, subject to the other terms and conditions of the then-current Company bonus policy (i.e., payment date,
payment form, components of bonus policy, bonus target, etc.).
(iii) Upon Executive's termination, Executive and his spouse and eligible dependents, as applicable, may elect
health care coverage for up to 18 months from his last day of work at the Company pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"). Subject to Section 6(a)(vii) below, the Company will pay for up to twelve (12)
months, on an after-tax basis, the portion of Executive's COBRA premiums for such coverage that exceeds the amount that Executive
would have incurred in premiums for such coverage under the Company's health plan if then employed by the Company; provided,
however, the Company's obligation shall only apply to the extent COBRA coverage is elected and in effect during such period.
Following the twelve (12) months of coverage, Executive will be responsible for the full amount of all future premium payments
should he wish to continue COBRA coverage. However, if Executive or his spouse becomes eligible for group health coverage
sponsored by another employer (regardless of whether such coverage is actually elected) or for any other reason his COBRA coverage
terminates, the Company shall not be obligated to pay any portion of the premiums provided hereunder for periods after he becomes
eligible for such other coverage or his COBRA coverage terminates.
(iv) Subject to Executive's group health plan coverage continuation rights under COBRA the benefits listed in
clause (iii) of this Section 6(a) shall be reduced to the extent benefits of the same type are received by or made available to Executive
during such period, and
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