Rosetta Stone 2011 Annual Report Download - page 183

including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in
Executive's receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the
Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting "parachute payments" is
necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order: (A) cash payments
shall be reduced first and in reverse chronological order such that the cash payment owed on the latest date following the
occurrence of the event triggering such Excise Tax will be the first cash payment to be reduced; and (B) employee benefits
shall be reduced last (but only to the extent such benefits may be reduced under applicable law, including, but not limited to
the Code and the Employee Retirement Income Security Act of 1974, as amended) and in reverse chronological order such
that the benefit owed on the latest date following the occurrence of the event triggering such Excise Tax will be the first
benefit to be reduced.
(b) The determinations and calculations required hereunder shall be made by nationally recognized accounting
firm that is (i) not be serving as accountant or auditor for the person who acquires ownership or effective control or
ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Code) or any Affiliate
of such person, and (ii) agreed upon by the Company and Executive (the "Accounting Firm"). The Company shall bear all
expenses with respect to the determinations by the Accounting Firm required to be made hereunder.
(c) The Accounting Firm engaged to make the determinations hereunder shall provide its calculations,
together with detailed supporting documentation, to the Company and Eligible Executive within fifteen (15) business days
after the date on which right to a Payment is triggered (if requested at that time by the Company or Executive) or such other
time as requested by the Company or Executive. Any good faith determinations of the accounting firm made hereunder shall
be final, binding and conclusive upon the Company and Executive."
2.
Except with respect to the subject matters covered herein, this Amendment does not otherwise amend, supplement, modify,
or terminate the Employment Agreement, which remains in full force and effect.
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