Rosetta Stone 2015 Annual Report Download - page 128

(v) the Participant fails, within ten (10) days after receipt by the Participant 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 or may materially or adversely affect the Employer’s or any of its Affiliate’s business or operations;
(vi) the Participant 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 Employer or any of its Affiliates;
(vii) the Participant harasses or discriminates against the Employer’s or any of its Affiliate’s employees, customers or vendors in violation
of the Company’s policies with respect to such matters;
(viii) the Participant misappropriates funds or assets of the Employer or any of its Affiliates for personal use or willfully violates the
Employer’s policies or standards of business conduct as determined in good faith by the Board and/or Chief Executive Officer;
(ix) the Participant fails, due to some action or inaction on the part of the Participant, to have immigration status that permits the
Participant to maintain full-time employment with the Employer in the United States in compliance with all applicable immigration law, or
(x) The Participant discloses trade secrets of the Employer or any of its Affiliates.
Section 2.06 “Change in Control” means the occurrence of one of the following events:
(i) the liquidation, dissolution or winding-up of the Company,
(ii) the sale, license or lease of all or substantially all of the assets of the Company, or
(iii) a share exchange, reorganization, recapitalization, or merger or consolidation of the Company with or into any other corporation or
corporations (or other form of business entity) or of any other corporation or corporations (or other form of business entity) with or into the
Company, but excluding any merger effected exclusively for the purpose of changing the domicile of the Company;
provided, however, that a Change in Control shall not include any of the aforementioned transactions listed in clauses (i), (ii) and (iii) involving the
Company or a Subsidiary Corporation (as such term is defined below) in which the holders of shares of the Company voting stock outstanding immediately
prior to such transaction or any Affiliate of such holders continue to hold at least a majority, by voting power, of the capital stock or, by a majority, based on
fair market value as determined in good faith by the Board, of the assets, in each case in substantially the same proportion, of (x) the surviving or resulting
corporation (or other form of business entity), (y) if the surviving or resulting corporation (or other form of business entity) is a wholly owned subsidiary of
another corporation (or other form of business entity) immediately following such transaction, the parent corporation (or other form of business entity) of
such surviving or resulting corporation (or other form of business entity) or (z) a successor entity holding a majority of the assets of the Company. In addition,
a Change in Control shall not include a bona fide, firm commitment underwritten public offering of the Stock pursuant to a registration statement declared
effective under the Securities Act of 1933, as amended. For purposes of the definition of “Change in Control,” the term “Subsidiary Corporation” means any
corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the action or transaction, each of
the corporations other than the last corporation in an unbroken chain owns stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.
Section 2.07 “Chief Executive Officer” means the Chief Executive Officer of the Company.
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