Rosetta Stone 2011 Annual Report Download - page 200

(e) "Cause" shall mean Executive (i) committed a felony or a crime involving moral turpitude or committed any other
act or omission involving fraud, embezzlement or any other act of dishonesty in the course of his employment by the Company or an
Affiliate which conduct damaged the Company or an Affiliate; (ii) substantially and repeatedly failed to perform duties of the office
held by him or her as reasonably directed by the Company or an Affiliate; (iii) committed gross negligence or willful misconduct with
respect to the Company or an Affiliate; (iv) committed a material breach of any employment agreement between the Executive and the
Company or an Affiliate that is not cured within ten (10) days after receipt of written notice thereof from the Company or the Affiliate,
as applicable; (v) failed, within ten (10) days after receipt by the Executive of written notice thereof from the Company or an Affiliate,
to correct, cease or otherwise alter any failure to comply with instructions or other action or omission which the Board reasonably
believes does or may materially or adversely affect the Company's or an Affiliate's business or operations; (vi) committed 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; (vii) harassed or discriminated against the Company's or an Affiliate's employees,
customers or vendors in violation of the Company's policies with respect to such matters; viii) misappropriated funds or assets of the
Company or an Affiliate for personal use or willfully violated the Company policies or standards of business conduct as determined in
good faith by the Board (ix) failed, due to some action or inaction on the part of the Executive, to have immigration status that permits
the Executive to maintain full-time employment with the Company or an Affiliate in the United States in compliance with all
applicable immigration law; or (x) disclosed trade secrets of the Company or an Affiliate.
(f) "Disability" shall have the meaning ascribed to such term in the Plan, as it may be amended from time to time.
(g) "Good Reason" shall have the meaning ascribed to such term in the Executive's employment agreement with the
Company, or, if none, the Executive's resignation from employment with the Company due to (i) a material diminution in Executive's
annual base salary, duties, authority or responsibilities or (ii) relocation of the Executive's primary place of employment to a
geographic area more than fifty (50) miles from Executive's then-current primary place of employment, without the Executive's
consent; provided that the Executive has given thirty (30) days advance written notice to the Company of the initial existence of the
condition described in (i) and/or (ii) and the Company has not within such thirty (30) day period remedied the condition.
Capitalized terms not otherwise defined in this Agreement shall have the meanings given to such terms in the Plan.
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