Rosetta Stone 2014 Annual Report Download - page 184

or may materially or adversely affect the Company’s or an Affiliate’s business or operations, (f) commits 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, (g) harasses or discriminates against the Company’s or an
Affiliate’s employees, customers or vendors in violation of the Company’s policies with respect to such matters, (h)
misappropriates funds or assets of the Company or an Affiliate for personal use or willfully violates the Company
policies or standards of business conduct as determined in good faith by the Board and/or Chief Executive Officer, (i)
fails, due to some action or inaction on the part of Executive, to have immigration status that permits Executive to
maintain full-time employment with the Company in the United States in compliance with all applicable immigration
law, or (j) discloses trade secrets of the Company or an Affiliate.
(e) Upon Executive’s voluntary resignation by the delivery to the Chief Executive Officer of a written notice from
Executive that Executive has resigned with or without Good Reason. “Good Reason” shall mean Executive’s resignation from
employment with the Company after the occurrence of any of the following events without Executive’s consent: (i) a material
diminution in Executive’s Annual Base Salary, duties, authority or responsibilities from the Annual Base Salary, duties, authority or
responsibilities as in effect at the commencement of the Service Term, (ii) a material breach of the Agreement by the Company, or (iii)
a relocation of Executive’s primary place of employment to a geographic area more than fifty (50) miles from the Company’s office in
Arlington, Virginia; provided, that the foregoing events shall not be deemed to constitute Good Reason unless Executive has notified
the Company in writing of the occurrence of such event(s) within sixty (60) days of such occurrence and the Company has failed to
have cure such event(s) within thirty (30) business days of its receipt of such written notice and termination occurs within one hundred
(100) days of the event.
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)(vi) below, the following amounts:
(1) the Accrued Obligation;
(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.”