Rosetta Stone 2014 Annual Report Download - page 159

(2) a lump sum payment in cash equal to the product of (x) one-twelfth (1/12th) of the amount of the
Annual Base Salary in effect immediately prior to the Termination Date and (y) twelve (12); and
(3) a lump sum payment 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) twelve (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 in accordance with the terms of the then-current Company bonus policy.
(iii) The Company shall provide professional outplacement and counseling services through an outplacement
firm chosen by the Company for six (6) months from the Termination Date to assist Executive in his search for other employment.
(iv) Upon Executive’s termination, Executive and his spouse and eligible dependents, as applicable, may elect
health care coverage for up to eighteen (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)(v) 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. Executive shall have the obligation to notify the
Company if he or his spouse becomes eligible for group health coverage sponsored by another employer.
(v) Payments and benefits provided to Executive under this Section 6 (other than Accrued Obligation) are
contingent upon Executive’s execution of a release substantially in the form of Exhibit A hereto and such release becoming
irrevocable within sixty (60) days following his termination of employment.
(vi) The Company shall pay Executive the amounts specified in Sections 6(a)(i)(1), (2) and (3) within sixty (60)
days after the Termination Date, except that the Accrued Obligation will be paid earlier if required by law; provided, however, that in
no event shall the timing of Executive’s execution of the release, directly or indirectly, result in him designating the calendar year of
payment, and if a payment that is subject to execution of the release could be made in more than one taxable year, such payment shall
be made in the later taxable year. Notwithstanding the forgoing, if the Executive is deemed on the Termination