Exhibit 10.23

 

SECOND AMENDMENT

TO

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDMENT (the “Amendment”) made effective on February 22, 2012 to
the Executive Employment Agreement, dated as of November 9, 2010 (“Employment
Agreement”), as amended by the Amendment to the Executive Employment Agreement,
dated December 22, 2011, among Rosetta Stone Ltd., a Virginia corporation
(together with its successors and assigns, the “Company”), and Stephen M. Swad
(the “Executive”).

 

WHEREAS, the Company and the Executive have previously entered into the
Employment Agreement; and

 

WHEREAS, the Company and the Executive desire to amend the Employment Agreement
in connection with Executive’s promotion to President and Chief Executive
Officer.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
promises contained herein, the parties agree as follows:

 

1.               Recital A. of the Employment Agreement is amended by deleting
it in its entirety and substituting the following therefor:

 

A.                               The Company and Executive desire to enter into
an agreement pursuant to which the Company will employ Executive as its
President and Chief Executive Officer subject to the terms and conditions of
this Agreement.

 

2.               Section 1. of the Employment Agreement is amended by deleting
the reference to “Chief Financial Officer” and substituting the position with
“President and Chief Executive Officer.”

 

3.               Section 2. of the Employment Agreement is amended by deleting
it in its entirety and substituting the following therefor:

 

2.                                       Duties.

 

During the Service Term, Executive, as President and Chief Executive Officer of
the Company, shall have all the duties and responsibilities customarily rendered
by chief executive officers of companies of similar size and nature and such
other duties and responsibilities as may be delegated from time to time by the
Board in its sole discretion.  Executive will report to the Board.

 

Executive will devote his best efforts and substantially all of his business
time and attention (except for vacation periods and periods of illness or other
incapacity) to the business of the Company and its Affiliates. With the prior
consent of the Board, Executive will be permitted to serve on the boards of
other companies so long as such service does not unreasonably interfere with his
duties to the Company.

 

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4.               Section 3. of the Employment Agreement is amended by deleting
the first paragraph in its entirety and substituting the following thereof.

 

3.                                      Salary, Bonus and Benefits.

 

The Board shall make all decisions related to Executive’s base salary and the
payment of bonuses, if any.  Executive’s Annual Base Salary and other
compensation will be reviewed by the Board at least annually.

 

5.               Section 3. (a) of the Employment Agreement is amended by
deleting the words “the CEO and” from the second line and replacing “$400,000”
with “$500,000” in the third line of the section.

 

6.               Section 3. (b) of the Employment Agreement is amended by
replacing “60%” with “100%” in the eighth line of the section.

 

7.               Section 3. (d) of the Employment Agreement is amended by
deleting the following sentences: “The grants shall have such terms as are
determined by the Board in accordance with the current stock plan in place at
time of grant. Executive will be eligible to participate in a pending executive
long-term performance plan that will be approved by the Board.  Executive will
receive a minimum of 12.5% of the executive grant pool pursuant to the terms of
the long term incentive program.”

 

8.               Section 5. (c) of the Employment Agreement is amended by
replacing “CEO” with “Board” in the fifth line of the section.

 

9.               Section 5. (d) of the Employment Agreement is amended by
replacing “CEO” with “Board” in the second line of the section.

 

10.         Section 5. (d) (i) is amended by deleting “or the CEO” from the
fifth, eleventh, and twentieth lines of the subsection.

 

11.         Section 5. (e) is amended by deleting “the CEO or” from the sixth
line of the section.

 

12.         Section 6. (a) (i) (3) and (4) are amended by replacing “(y) 12”
with “(y) 18” in the third line of each subsection.

 

13.         Section 6. (a) (iii) is amended by replacing “twelve” with
“eighteen” in the fourth and seventh lines on the subsection.

 

14.         Section 8. (a) is amended by replacing “CEO’s” with “Board’s” in the
twelfth line of the section.

 

15.         Section 8. (b) is amended by replacing “CEO” with “Board” in the
sixteenth and seventeenth lines of the section.

 

16.         Section 8. (c) is amended by replacing “CEO” with “Board” in the
eleventh line of the section.

 

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17.         Section 9. (a) is amended by replacing “twelve (12)” with “eighteen
(18)” in the second line of the section and replacing “12-month” with “18-month”
in the tenth line of the section.

 

18.         Section 9. (c) is amended by replacing “Chief Financial Officer”
with “President and Chief Executive Officer” in the fourth line of the section.

 

19.         Section 11. is amended so that notices to the Company shall be
addressed to the Chairman of the Board of Directors.

 

20.         Section 12. (b) is amended by deleting it in its entirety and
substituting the following therefor:

 

(b)                                 Complete Agreement.  This Agreement, those
documents expressly referred to herein and other documents of even date herewith
embody the complete agreement and understanding among the parties and supersede
and preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.

 

21.         Except as amended or modified hereby, all terms and conditions in
the Employment Agreement, as amended, shall remain in full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date
set forth below.

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

By:

 /s/ Stephen Swad

 

 

  Stephen Swad

 

 

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

Date:

  2/22/2012

 

 

 

 

 

 

 

ROSETTA STONE LTD.

 

 

 

 

 

 

 

By:

   /s/ Tom P.H. Adams

 

 

    Tom P.H. Adams

 

 

 

 

Title:

Chairman of the Board of Directors

 

 

 

 

 

 

 

Date:

  2/22/2012

 

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