Rosetta Stone 2014 Annual Report Download - page 183

reduction applicable to all executives of the Company who are entitled to such benefit and is permissible under the
Code and the Employee Retirement Income Security Act of 1974, as amended.
4. Employment Term.
Unless Executive’s employment under this Agreement is sooner terminated as a result of Executive’s resignation or termination
in accordance with the provisions of Section 5 below, Executive’s term of employment (“Service Term”) under this Agreement shall
commence on the date hereof and shall continue for a period of one (1) year, and at the end of each day it shall renew and extend
automatically for an additional day so that the remaining Service Term is always one year; provided, however, that either party may
terminate this Agreement pursuant to Section 5 below for any reason.
5. Termination.
Executive’s employment with the Company shall cease upon the first of the following events to occur:
(a) Immediately upon Executive’s death.
(b) Upon thirty (30) days’ prior written notice by Executive to the Company of Executive’s voluntary retirement at age
65 or older.
(c) Upon thirty (30) days’ prior written notice by the Company to Executive of the Executive’s termination due to
Disability. “Disability” means (i) Executive is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of
not less than twelve (12) months, or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the
Company. A determination of Disability may be made by a physician selected or approved by the Chief Executive Officer and, in this
respect, Executive shall submit to an examination by such physician upon request by the Chief Executive Officer. Any such
termination for disability shall be only as expressly permitted by the Americans with Disabilities Act and any other applicable laws.
(d) Immediately (after taking into consideration any cure period, if applicable) upon delivery to Executive of a written
notice from the Chief Executive Officer that Executive has been terminated with or without Cause. “Cause” shall mean termination
for any of the following:
(i) Executive (a) commits a felony or a crime involving moral turpitude or commits any other act or omission
involving fraud, embezzlement or any other act of dishonesty in the course of his employment by the Company which
conduct damages the Company or an Affiliate; (b) substantially and repeatedly fails to perform duties of the office held
by Executive as reasonably directed by the Board and/or the Chief Executive Officer, (c) commits gross negligence or
willful misconduct with respect to the Company or an Affiliate; (d) commits a material breach of this Agreement that is
not cured within ten (10) days after receipt of written notice thereof from the Board and/or Chief Executive Officer; (e)
fails, within ten (10) days after receipt by Executive of written notice thereof from the Board and/or Chief Executive
Officer, to correct, cease or otherwise alter any failure to comply with instructions or other action or omission which the
Board and/or Chief Executive Officer reasonably believes does