Document:

Exhibit 10.28

 

ROSETTA STONE INC.
 2009 OMNIBUS INCENTIVE PLAN, AS AMENDED

 

COVER SHEET TO
 RESTRICTED STOCK AWARD AGREEMENT

 

Rosetta Stone Inc., a Delaware corporation (the “Company”), has granted to the individual whose name is set forth below on the “Name of Employee” line (“Employee”) the shares of the Company’s common stock, $.00005 par value, specified herein, subject to the terms and conditions set forth in this Cover Sheet, in the Restricted Stock Award Agreement and in the Rosetta Stone Inc. 2009 Omnibus Incentive Plan, as amended, (the “Plan”).

 

Grant Date:

 

Name of Employee:

 

Employee’s Employee Identification Number:

 

Number of Shares of Restricted Stock Granted:

 

Vesting Start Date:

 

Recipient understands and agrees that this Restricted Stock Award is granted subject to and in accordance with the terms of the Rosetta Stone, Inc. %%EQUITY_PLAN%-% (the “Plan”).  Recipient further agrees to be bound by the terms of the Plan and the terms of the Restricted Stock Award as set forth in the Restricted Stock Award Agreement and any Addenda to such Restricted Stock Award Agreement.  A copy of the Plan is available on www.etrade.com.

 

Nothing in this Notice or in the Restricted Stock Award Agreement or in the Plan shall confer upon Recipient any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Recipient) or of Recipient, which rights are hereby expressly reserved by each, to terminate Recipient’s Service at any time for any reason, with or without cause.

 

Definitions. All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the Restricted Stock Award Agreement.

 

ROSETTA STONE INC.

 

 

ROSETTA STONE INC.
 2009 OMNIBUS INCENTIVE PLAN, AS AMENDED

 

 RESTRICTED STOCK AWARD AGREEMENT

 

This RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) and the Cover Sheet to which this Agreement is attached (the “Cover Sheet”) is made by and between Rosetta Stone Inc., a Delaware corporation (the “Company”), and Employee (as that term is defined in the Covered Sheet), effective as of the Grant Date set forth on the Cover Sheet (the “Grant Date”), pursuant to the Rosetta Stone Inc. 2009 Omnibus Incentive Plan, as amended, (the “Plan”), a copy of which previously has been made available to Employee and the terms and provisions of which are incorporated by reference herein.

 

WHEREAS, the Company desires to grant to Employee the shares of the Company’s common stock, $.00005 par value, set forth on the “Number of Shares of Restricted Stock Granted” line on the Cover Sheet (the “Shares”), subject to the terms and conditions of this Agreement; and

 

WHEREAS, Employee desires to have the opportunity to hold the Shares subject to the terms and conditions of this Agreement;

 

NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

1.                                      Definitions.  For purposes of this Agreement, the following terms shall have the meanings indicated:

 

(a)                                 “Forfeiture Restrictions” shall mean the prohibitions and restrictions set forth herein with respect to the sale or other disposition of the Shares issued to Employee hereunder and the obligation to forfeit and surrender such Shares to the Company.

 

(b)                                 “Period of Restriction” shall mean the period during which Restricted Shares are subject to Forfeiture Restrictions and during which Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered.

 

(c)                                  “Restricted Shares” shall mean the Shares that are subject to the Forfeiture Restrictions under this Agreement.

 

(d)                                 “Disability” shall have the meaning ascribed to such term in the Plan, as it may be amended from time to time.

 

Capitalized terms not otherwise defined in this Agreement shall have the meanings given to such terms in the Plan.

 

2.                                      Grant of Restricted Shares.  Effective as of the Grant Date, the Company shall cause to be issued in Employee’s name the Shares as Restricted Shares.  The Company shall cause electronic book entries evidencing the Restricted Shares, and any shares of the Stock or

 

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rights to acquire shares of the Stock distributed by the Company in respect of Restricted Shares during any Period of Restriction (the “Retained Stock Distributions”), to be issued in Employee’s name.  During the Period of Restriction such electronic book entries shall contain a restrictive legend notation to the effect that ownership of such Restricted Shares (and any Retained Stock Distributions), and the enjoyment of all rights appurtenant thereto, are subject to the restrictions, terms, and conditions provided in the Plan and this Agreement.  During the Period of Restriction any regular dividends paid in cash or property (other than Retained Stock Distributions) with respect to the Restricted Shares and Retained Stock Distributions (the “Retained Cash Distributions”) shall not be paid to Employee but instead shall be accumulated by the Company until the date the Forfeiture Restrictions applicable to the Restricted Shares and Retained Stock Distributions with respect to which such Retained Cash Distributions shall have been made, paid, or declared shall have become vested and then on that date such Retained Cash Distributions shall be paid to Employee.  Employee shall have the right to vote the Restricted Shares awarded to Employee and to exercise all other rights, powers and privileges of a holder of the Shares, with respect to such Restricted Shares, with the exception that (a) Employee shall not be entitled to delivery of such Restricted Shares until the Forfeiture Restrictions applicable thereto shall have expired, (b) the Company shall retain custody of all Retained Stock Distributions made or declared with respect to the Restricted Shares and Retained Cash Distributions made or declared with respect to the Restricted Shares and the Retained Stock Distributions (and such Retained Stock Distributions and Retained Cash Distributions shall be subject to the same restrictions, terms and conditions as are applicable to the Restricted Shares) until such time, if ever, as the Restricted Shares with respect to which such Retained Stock Distributions and Restricted Cash Distributions shall have been made, paid, or declared shall have become vested, and such Retained Stock Distributions and Retained Cash Distributions shall not bear interest or be segregated in separate accounts and (c) Employee may not sell, assign, transfer, pledge, exchange, encumber, or dispose of the Restricted Shares or any Retained Stock Distributions or any Restricted Cash Distributions during the Period of Restriction.  Upon issuance the book entry representing the Restricted Shares shall be delivered to such depository as may be designated by the Committee as a depository for safekeeping until the forfeiture of such Restricted Shares occurs or the Forfeiture Restrictions lapse, together with stock powers or other instruments of assignment, each endorsed in blank, which will permit transfer to the Company of all or any portion of the Restricted Shares and any securities constituting Retained Stock Distributions which shall be forfeited in accordance with the Plan and this Agreement.  In accepting the award of the Shares set forth in this Agreement Employee accepts and agrees to be bound by all the terms and conditions of the Plan and this Agreement.

 

3.                                      Transfer Restrictions.  The Shares granted hereby may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, to the extent then subject to the Forfeiture Restrictions.  Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall be void and the Company shall not be bound thereby.  Further, the Shares granted hereby that are no longer subject to Forfeiture Restrictions may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable securities laws.  Employee also agrees that the Company may (a) refuse to cause the transfer of the Shares to be registered on the applicable stock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of any applicable securities law and (b) give related instructions to the transfer agent, if any, to stop registration of the transfer of the Shares.  The Shares are registered with the Securities and Exchange Commission under a

 

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Registration Statement on Form S-8.  A Prospectus describing the Plan and the Shares is available from the Company.

 

4.                                      Vesting.

 

(a)                                 The Shares that are granted hereby shall be subject to the Forfeiture Restrictions.  The Forfeiture Restrictions shall lapse as to the Shares that are granted hereby in accordance with the following schedule, provided that Employee’s employment with the Company or its direct or indirect subsidiaries has not terminated prior to the applicable lapse date.  On the first anniversary of the Vesting Start Date (as set forth in the Cover Sheet), and on each succeeding anniversary of the Vesting Start Date (each such anniversary date being referred to as a “lapse date”), the Forfeiture Restrictions shall lapse with respect to one-fourth (1/4th) of the total number of Restricted Shares granted hereby, rounded to the nearest whole number, except that on the fourth anniversary of the Vesting Start Date the Forfeiture Restrictions shall lapse with respect to the then remaining number of Restricted Shares granted hereby for which the Forfeiture Restrictions have not previously lapsed.

 

(b)                                 Upon the lapse of the Forfeiture Restrictions with respect to the Shares granted hereby the Company shall cause to be delivered to Employee such Shares in electronic book entry form, and such Shares shall be transferable by Employee (except to the extent that any proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of applicable securities law).

 

(c)                                  If Employee ceases to be employed by the Company or a subsidiary for any reason before the applicable lapse date including death or disability of Employee, the Forfeiture Restrictions then applicable to the Restricted Shares shall not lapse and all the Restricted Shares shall be forfeited to the Company.

 

5.                                      Capital Adjustments and Reorganizations.  The existence of the Restricted Shares shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to this Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding.

 

6.                                      Tax Withholding.  To the extent that the receipt of the Restricted Shares or the lapse of any Forfeiture Restrictions results in income to Employee for federal, state, local or foreign income, employment or other tax purposes with respect to which the Company or its Affiliates or subsidiaries have a withholding obligation, Employee shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money as the Company or any Affiliate may require to meet such obligation under applicable tax laws or regulations, and, if Employee fails to do so, the Company and its Affiliates and subsidiaries are authorized to withhold from the Shares granted hereby or from any cash or stock remuneration then or thereafter payable to Employee in any capacity any tax required to be withheld by reason of such taxable income, sufficient to satisfy the withholding obligation.

 

7.                                      Section 83(b) Election.  Employee shall not exercise the election permitted under section 83(b) of the Internal Revenue Code of 1986, as amended, with respect to the Restricted

 

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Shares without the prior written approval of the General Counsel of the Company.  If the election is permitted as provided in the prior sentence, Employee shall timely pay the Company the amount necessary to satisfy the Company’s attendant tax withholding obligations, if any.

 

8.                                      No Fractional Shares.  All provisions of this Agreement concern whole Shares.  If the application of any provision hereunder would yield a fractional share, such fractional share shall be rounded down to the next whole share if it is less than 0.5 and rounded up to the next whole share if it is 0.5 or more.

 

9.                                      Employment Relationship.  For purposes of this Agreement, Employee shall be considered to be in the employment of the Company and its Affiliates as long as Employee has an employment relationship with the Company and its Affiliates.  The Committee shall determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan and the Committee’s determination shall be final and binding on all persons.

 

10.                               Not an Employment Agreement.  This Agreement is not an employment agreement, and no provision of this Agreement shall be construed or interpreted to create an employment relationship between Employee and the Company or any Affiliate, to guarantee the right to remain employed by the Company or any Affiliate for any specified term or require the Company or any Affiliate to employ Employee for any period of time.

 

11.                               Legend.  Employee consents to the placing of an appropriate legend notation on the electronic book entry representing the Shares restricting resale or other transfer of the Shares except in accordance with all applicable securities laws and rules thereunder.

 

12.                               Notices.  Any notice, instruction, authorization, request, demand or other communications required hereunder shall be in writing, and shall be delivered either by personal delivery, by telegram, telex, telecopy or similar facsimile means, by certified or registered mail, return receipt requested, or by courier or delivery service, addressed to the Company at the Company’s principal business office address to the attention of the Company’s General Counsel and to Employee at Employee’s residential address as it appears on the books and records of the Company, or at such other address and number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth.  Notices shall be deemed given when received, if sent by facsimile means (confirmation of such receipt by confirmed facsimile transmission being deemed receipt of communications sent by facsimile means); and when delivered (or upon the date of attempted delivery where delivery is refused), if hand-delivered, sent by express courier or delivery service, or sent by certified or registered mail, return receipt requested.

 

13.                               Amendment and Waiver.  Except as otherwise provided herein or in the Plan or as necessary to implement the provisions of the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and Employee.  Only a written instrument executed and delivered by the party waiving compliance hereof shall waive any of the terms or conditions of this Agreement.  Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized officer of the Company other than Employee.  The failure of any party at any time or times to require performance of any provisions hereof shall in no manner effect the right to enforce the same.  No waiver by any party of any term or condition, or the breach of any term or condition contained in this

 

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Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other condition, or the breach of any other term or condition.

 

14.                               Dispute Resolution.  In the event of any difference of opinion concerning the meaning or effect of the Plan or this Agreement, such difference shall be resolved by the Compensation Committee of the Board of Directors.

 

15.                               Governing Law and Severability.  The validity, construction and performance of this Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.  The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

 

16.                               Successors and Assigns.  Subject to the limitations which this Agreement imposes upon the transferability of the Shares granted hereby, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and to Employee, Employee’s permitted assigns, executors, administrators, agents, legal and personal representatives.

 

17.                               Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument.

 

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Irrevocable Stock Power

 

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, For Value Received, has bargained, sold, assigned and transferred and by these presents does bargain, sell, assign and transfer unto Rosetta Stone Inc., a Delaware corporation (the “Company”), the Shares transferred pursuant to the Restricted Stock Award Agreement dated effective                                           , 20      , between the Company and the undersigned; and subject to and in accordance with such Restricted Stock Award Agreement the undersigned does hereby constitute and appoint the Secretary of the Company the undersigned’s true and lawful attorney, IRREVOCABLY, to sell, assign, transfer, hypothecate, pledge and make over all or any part of such Shares and for that purpose to make and execute all necessary acts of assignment and transfer thereof, and to substitute one or more persons with like full power, hereby ratifying and confirming all that said attorney or his substitutes shall lawfully do by virtue hereof.

 

In Witness Whereof, the undersigned has executed this Irrevocable Stock Power effective the              day of                         , 20      .

 

 

	
 
    	
 
    
	
 
    	
Name:Exhibit 10.29

 

September 16, 2011

 

REVISED October 3, 2011

 

Helena Wong

1800 N Oak Street

Apt. 907

Arlington, VA 22209

 

Dear Helena,

 

This letter will serve as confirmation that your employment with Rosetta Stone Ltd. (the “Company”) is being terminated.  Set forth in this letter and the attached Legal Release (Exhibit A) (collectively, the “Agreement”) is the complete agreement between you and the Company regarding the terms of your separation from employment.

 

Separation Date

 

Your employment with the Company will terminate at the close of business on October 17, 2011 (your “Separation Date”).  The Company, in its sole discretion, reserves the right to change your Separation Date, but you will be notified in writing of any such change.

 

Vacation

 

On the next regularly scheduled pay date following your Separation Date, or sooner if required by law, you will receive a check for all unpaid wages and, if applicable, any unused vacation or paid time off which has accrued to your account pursuant to Company policies through your Separation Date (i.e. 131.94 hours), less applicable deductions and withholdings.

 

Health Benefits

 

If you or your covered dependents are covered under the Company’s group health insurance (medical, dental, and/or vision), that coverage will continue through the end of the month in which your Separation Date occurs or until such coverage terminates in accordance with the terms of the governing plan documents.  Following your Separation Date, you will receive separate information regarding your rights under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) to continue your group coverage after your Separation Date for yourself and any covered dependents, as applicable.  This information will describe the rules related to continuation of coverage under COBRA, the cost for you or your covered dependents to continue coverage, and a COBRA election form.

 

Separation Agreement and Release

 

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Life Insurance

 

Your Company-paid life insurance will continue through the end of the month in which your Separation Date occurs.  You may have the right to elect to convert your life insurance into individual policies pursuant to applicable law and the terms of the life insurance policy.

 

Retirement Plan

 

You will retain your vested benefits, if any, under any applicable qualified retirement plans of the Company, as determined under the terms of the governing plan documents.

 

Additional Benefit Information

 

Except as specifically set forth in this Agreement or required by applicable law, as of your Separation Date, you shall cease to participate in all employee benefit plans, policies, and practices provided by the Company, and you shall not be entitled to any other compensation and/or benefits other than as set forth in this Agreement.

 

Company Property and Continuing Obligations to the Company

 

Prior to your departure on your last day worked, you must return to your department manager all the Company property in your possession, including, but not limited to, your identification badge, keys, computers, corporate credit cards, telephones, parking permits and the original and all copies of any written, recorded, or computer readable information about Company practices, procedures, trade secrets, customer lists or product marketing associated with the Company’s business and any other information deemed proprietary or confidential in accordance with Company policies or your Executive Employment Agreement dated January 25, 2011 (the “Employment Agreement”).   By signing this Agreement, you represent that you have returned all Company confidential or proprietary information in your possession and that you took all reasonable steps to protect the confidentiality of such Company information during your employment. You agree that you are bound by (a) all the terms of the Company’s Code of Ethics and Business Conduct through your Separation Date and (b) your Employment Agreement, which remains in full force and effect after your Separation Date, and includes, among other obligations, the continuing duty not to disclose confidential and proprietary information after your Separation Date and the continuing duty not to compete with the Company or its affiliates or solicit its or its subsidiaries or affiliates employees or customers within the parameters detailed in your Employment Agreement.

 

Severance Benefits

 

In addition, under the terms and conditions as detailed below, the Company will provide you additional payments and benefits, which you acknowledge are payments and benefits to which you are otherwise not entitled, if you sign and submit this Agreement (within the required time period described in the “Decision Period” section below) and do not thereafter revoke it.  Please carefully read and consider the provisions of this Agreement.  If you do not sign this Agreement within the required time period, or if you later revoke this Agreement, you will not receive the additional payments and benefits described below. The release contained in Exhibit A hereto  is an integral part of this Agreement.  For purposes of clarity, you should understand that the  payments and benefits provided under this Agreement are contingent upon executing of a release in the form of Exhibit A.

 

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In exchange for your timely execution of this Agreement, and allowing such Agreement to become effective without thereafter revoking it (which includes executing and not revoking the release contained in Exhibit A), the Company will provide you the following (the “Severance Benefits”):

 

·                  The Company will provide you with a lump sum payment of $300,000.00  which is equal to approximately twelve (12) months of your current regular base pay (the “Severance Payment”).  The Severance Payment will be reduced by required withholdings and deductions.  In addition, to the extent allowed under the law, the Severance Payment will be further reduced by any amount that you are obligated to pay to (1) the Company pursuant to any relevant Company policy and/or (2) to any third party pursuant to the terms of the Company Corporate Card Program, if applicable.   Your Severance Payment will be paid to you in a lump sum no later than January 31, 2012, provided that you signed this Agreement (including Exhibit A) and did not revoke it.  As your active service as an employee will end on your Separation Date, this payment is not eligible for deferrals in the Company’s 401(k) plan.

 

·                  The company will provide you relocation assistance from Arlington, VA (“VA”), to New York, NY (“NY”), as follows:

 

·                  Reimbursement for breakage of your car lease up to a maximum $7,500.00 upon receiving applicable receipts, or proof of payment, no later than October 31, 2011.

 

·                  Reimbursement for a limited shipment of personal items, from VA to NY, upon receiving the Company’s prior approval of costs prior to any arrangement for shipment, and, upon receiving applicable receipts or proof of payment no later than October 31, 2011.

 

·                  Arranging and purchasing 14 days in advance of departure a one-way economy class plane ticket, from VA to NY, scheduled no later than October 17, 2011.

 

·                  The Company will provide you with a lump sum payment of $1,260, which is equal to 12 months of the basic life insurance and AD&D premium applicable to Executive’s basic life insurance coverage immediately prior to the Separation Date.  It will be paid within 30 days after your Separation Date.  You may at your option convert your basic life insurance coverage to an individual policy after the Separation Date by completing the forms required by the Company for this purpose.

 

·                  The Company will pay, when due and payable under the Annual Bonus plan, the pro rata portion, if any, of your Annual Bonus earned up until such Separation Date within 30 days of the date the Company pays annual bonuses, if any, under the 2011 Rosetta Stone Executive Bonus Plan.

 

·                  The Company shall provide the services of a professional outplacement and counseling firm, as designated by the Company, for twelve (12) months to assist you in securing other employment following your Separation Date. If you do not wish to utilize the services of the outplacement firm as designated by the Company, you may exercise the option to receive a lump sum payment of $8,500.00 less applicable deductions and withholdings, within 30 days after your Separation Date, provided that you have informed the Company of your choice no later than on your Separation Date.

 

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·                  Upon separation you will have the opportunity to continue your current health benefits coverage under Company’s group health plans through COBRA.  If you timely elect to enroll to continue such coverage under COBRA, the Company shall pay for up to twelve (12) months, on an after tax basis, for the portion of your COBRA premiums for such coverage that exceeds the amount that you would have incurred in premiums for coverage under the Company’s health plan if then employed by the Company.  Following the twelve (12) months of coverage, you will be responsible for all future premium payments should you wish to continue your COBRA coverage.    However, if you or your spouse becomes eligible for group health coverage sponsored by another employer or for any other reason your COBRA coverage terminates, the Company shall not be obligated to pay any portion of the premiums provided hereunder for periods after you become eligible for such other coverage or your COBRA coverage terminates.

 

You will not be permitted to specify the taxable year in which payments described in this Agreement are made to you.  The payments and other benefits set forth in this Agreement are being offered solely in consideration for your timely execution of this Agreement (including a release of all claims against the Company in Exhibit A) without revoking it.  The payments made to you pursuant to this Agreement are not an admission of any wrongdoing by the Company.

 

Decision Period

 

Pursuant to the Older Workers Benefit Protection Act of 1990 (“OWBPA”), you are advised:  (1) to consult an attorney regarding this Agreement before executing the Agreement; (2) that you are waiving rights or claims which may be waived by law in exchange for consideration which is not otherwise due to you; (3) that rights or claims, including those arising under the Age Discrimination in Employment Act of 1967 (ADEA), that may arise after the date this Agreement is executed, are not waived; (4) that you have twenty one (21) days from your Separation Date in which to sign and return the Agreement, although you may, at your discretion, knowingly and voluntarily, sign and return the Agreement at any earlier time after your Separation Date; (5) that at any time within seven (7) days after executing this Agreement, you may revoke the Agreement; and (6) that this Agreement is not enforceable until the revocation period has passed without a revocation.  You acknowledge that by signing this Agreement, you are giving up claims and rights under the Age Discrimination in Employment Act of 1967 as amended, as described above.

 

To revoke, you must send a written statement of revocation delivered by certified mail to Rosetta Stone, Attn: Laurie Iannamico.  The revocation must be received no later than 5:00 p.m. Eastern on the seventh calendar day following the date you sign this Agreement.  If you do not so revoke, the eighth day following your acceptance will be the “Effective Date” of this Agreement.  If you have not returned the executed Agreement within the time permitted, then the Company’s offer will expire by its own terms at the conclusion of the time permitted.

 

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To accept the Agreement, you must sign below on or after your Separation Date (but no later than the deadlines stated above) and return one entire copy to:

 

Laurie Iannamico

135 W. Market St.

Harrisonburg, Virginia 22801  (An extra copy for your files is enclosed.)

 

This letter constitutes the entire agreement between you and Rosetta Stone with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written representations, understandings, agreements or communications between you and the Company concerning those subject matters.

 

This letter in no way changes the “at-will” nature of your employment with Rosetta Stone.  Please contact me or Human Resources with any questions you may have.

 

 

Best regards,

ROSETTA STONE LTD.

 

 

By:

Michaela Oliver, SVP Human Resources

 

By signing this Agreement, I acknowledge that:  I have had the opportunity to review this Agreement carefully with legal or other personal advisors of my own choice; I have been advised to consult with an attorney regarding the legal effect of this Agreement; I understand that by signing this Agreement I am releasing the Company of all claims against it; I have read this Agreement and understand its terms; I have been given a reasonable period of time to consider its terms and effect and to ask any questions I may have; I voluntarily agree to the terms of this Agreement.

 

Note:  Do not sign this Agreement until your Separation Date.

 

 

	
Name:
    	
/s/   Helena Wong
    	
 
    	
Date:
    	
11/3/2011
    
	
 
    	
Helena   Wong
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Receipt Acknowledged:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/ Laurie Iannamico
    	
 
    	
Date: 
    	
11/3/2011
    
	
 
    	
Laurie Iannamico
    	
 
    	
 
    	
 
    

 

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EXHIBIT A

 

Release of Claims

 

Legal Release

 

This Legal Release (this “Agreement” or “Release”) is between Rosetta Stone Ltd. (the “Company”) and Helena Wong (“Executive”) (each a “Party,” and together, the “Parties”). For purposes of this Agreement “Effective Date” shall mean the date on which Executive signs this Agreement.

 

Recitals

 

A.                                   Executive and the Company are parties to a Separation Agreement to which this Release is appended as Exhibit A (the “Separation Agreement”).

 

B.                                     Executive wishes to receive the Severance Benefit described in the Separation Agreement.

 

C.                                     Executive and the Company wish to resolve, except as specifically set forth herein, all claims between them arising from or relating to any act or omission predating the Separation Date defined below.

 

Agreement

 

The Parties agree as follows:

 

1.                                       Confirmation of Severance Benefit Obligation. The Company shall pay or provide to Executive the entire Severance Benefit, as, when and on the terms and conditions specified in the Separation Agreement.

 

2.                                       Legal Releases

 

(a)                                  Executive, on behalf of Executive and Executive’s heirs, personal representatives and assigns, and any other person or entity that could or might act on behalf of Executive, including, without limitation, Executive’s counsel (all of whom are collectively referred to as “Executive Releasers”), hereby fully and forever releases and discharges the Company, its present and future affiliates and subsidiaries, and each of their past, present and future officers, directors, employees, shareholders, independent contractors, attorneys, insurers and any and all other persons or entities that are now or may become liable to any Releaser due to any Executive Releasee’s act or omission, (all of whom are collectively referred to as “Executive Releasees”) of and from any and all actions, causes of action, claims, demands, costs and expenses, including attorneys’ fees, of every kind and nature whatsoever, in law or in equity, whether now known or unknown, that Executive Releasers, or any person acting under any of them, may now have, or claim at any future time to have, based in whole or in part upon any act or omission occurring on or before the Effective Date, without regard to present actual knowledge of such acts or omissions, including specifically, but not by way of limitation, matters which may arise at common law, such as breach of contract, express or implied, promissory estoppel, wrongful discharge, tortious interference with contractual rights, infliction of emotional distress, defamation, or under federal, state or local laws, such as the Fair Labor Standards Act, the Employee Retirement Income Security Act, the National Labor Relations Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Rehabilitation Act of 1973, the Equal Pay Act, the Americans with Disabilities Act, the Family and Medical Leave Act, and any civil rights law of any state or other governmental body; PROVIDED, HOWEVER, that notwithstanding the foregoing or anything else contained in this Agreement, the release set forth in this Section shall not extend to: (i) any rights arising under this Agreement; (ii) any vested

 

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rights under any pension, retirement, profit sharing or similar plan; or (iii) Executive’s rights, if any, to indemnification, and/or defense under any Company certificate of incorporation, bylaw and/or policy or procedure, or under any insurance contract or any indemnification agreement with the Company, in connection with Executive’s acts and omissions within the course and scope of Executive’s employment with the Company.  Executive hereby warrants that Executive has not assigned or transferred to any person any portion of any claim which is released, waived and discharged above. Executive further states and agrees that Executive has not experienced any illness, injury, or disability that is compensable or recoverable under the worker’s compensation laws of any state that was not reported to the Company by Executive before the Effective Date, and Executive agrees not to not file a worker’s compensation claim asserting the existence of any such previously undisclosed illness, injury, or disability. Executive has specifically consulted with counsel with respect to the agreements, representations, and declarations set forth in the previous sentence. Executive understands and agrees that by signing this Agreement Executive is giving up any right to bring any legal claim against the Company concerning, directly or indirectly, Executive’s employment relationship with the Company, including Executive’s separation from employment.  Executive agrees that this legal release is intended to be interpreted in the broadest possible manner in favor of the Company, to include all actual or potential legal claims that Executive may have against the Company, except as specifically provided otherwise in this Agreement.

 

(b)                                 The Company, for itself, its affiliates, and any other person or entity that could or might act on behalf of it including, without limitation, its attorneys (all of whom are collectively referred to as “Company Releasers”), hereby fully and forever release and discharge Executive, Executive’s heirs, representatives, assigns, attorneys, and any and all other persons or entities that are now or may become liable to any Company Releaser on account of Executive’s employment with the Company or separation therefrom (all of whom are collectively referred to as “Company Releasees”) of and from any and all actions, causes of action, claims, demands, costs and expenses, including attorneys’ fees, of every kind and nature whatsoever, in law or in equity, whether now known or unknown, that the Company Releasers, or any person acting under any of them, may now have, or claim at any future time to have, based in whole or in part upon any act or omission relating to Employee’s employment with the Company or separation therefrom, without regard to present actual knowledge of such acts or omissions; PROVIDED, HOWEVER, that notwithstanding the foregoing or anything else contained in this Agreement, the release set forth in this Section shall not extend to: (i) any rights arising under this Agreement; (ii) a breach of fiduciary duty or other misconduct that renders Executive ineligible for indemnification by the Company under applicable law, or any right of recovery by the Company for Executive’s breach of fiduciary duty or misconduct in her capacity as a director of the Company under applicable law; or (iii) any claim or claims that the Company may have against Executive as of the Effective Date of which the Company is not aware as of the Effective Date because of willful concealment by Executive.  The Company understands and agrees that by signing this Agreement, it is giving up its right to bring any legal claim against Executive concerning, directly or indirectly, Executive’s employment relationship with the Company.  The Company agrees that this legal release is intended to be interpreted in the broadest possible manner in favor of Executive, to include all actual or potential legal claims that the Company may have against Executive relating to Employee’s employment with the Company or separation therefrom, except as specifically provided otherwise in this Agreement.

 

(c)                                  In order to provide a full and complete release, each of the Parties understands and agrees that this Release is intended to include all claims, if any, covered under this Paragraph 2 that such Party may have and not now know or suspect to exist in her or its favor against any other Party and that this Release extinguishes such claims.  Thus, each of the Parties expressly waives all rights under any statute or

 

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common law principle in any jurisdiction that provides, in effect, that a general release does not extend to claims which the releasing party does not know or suspect to exist in her favor at the time of executing the release, which if known by her must have materially affected her settlement with the party being released.

 

(d)                                 Executive acknowledges that she consulted with an attorney of her choosing before signing this the Separation Agreement and this Release, and that the Company provided her with no fewer than twenty-one (21) days during which to consider the provisions of the Separation Agreement and this Release and, specifically the release set forth at Paragraph 2(a), above, although Executive may sign and return the Release sooner if she so chooses.  Executive further acknowledges that she has the right to revoke this Release for a period of seven (7) days after signing it and that this Release shall not become effective until such seven (7)-day period has expired. Executive acknowledges and agrees that if she wishes to revoke this Release, she must do so in writing, and that such revocation must be signed by Executive and received by the Company in care of the Chair of the Board of Directors no later than 5 p.m. (Eastern Time) on the seventh (7th) day after Executive has signed this Release. Executive acknowledges and agrees that, in the event that she revokes this Release, she shall have no right to receive the Severance Benefit. Executive represents that she has read this Release, including the release set forth in Paragraph 2(a), above, affirms that this Release and the Separation Agreement provide her with benefits to which she would not otherwise be entitled, and understands its terms and that she enters into this Release freely, voluntarily, and without coercion.

 

3.                                       Executive acknowledges that she has received all compensation to which she is entitled for her work up to her last day of employment with the Company, and that she is not entitled to any further pay or benefit of any kind, for services rendered or any other reason, other than the Severance Benefit.

 

4.                                       Executive agrees that the only thing of value that she will receive by signing this Release is the Severance Benefit.

 

5.                                       The Parties agree that their respective rights and obligations under the Separation Agreement and the Executive Employment Agreement shall survive the execution of this Release.

 

6.                                       The parties understand and agree that this Agreement shall not be construed as an admission of liability on the part of any person or entity, liability being expressly denied.

 

7.                                       Executive represents and warrants to the Company that, prior to the Effective Date, Executive did not disclose to any person, other than to Executive’s spouse, tax advisor and counsel, the terms of this Agreement or the circumstances under which the matter that is the subject of this Agreement has been resolved.  After the Effective Date, neither Executive, counsel for Executive, nor any other person under Executive’s control shall disclose any term of this Agreement or the circumstances of Executive’s separation from the Company, except that Executive may disclose such information to Executive’s spouse, or as required by subpoena or court order, or to an attorney or accountant to the extent necessary to obtain professional advice.  Executive shall not be entitled to rely upon the foregoing exception for disclosures pursuant to subpoena or court order unless Executive has given the Company written notice, within three business days following service of the subpoena or court order.

 

8.                                       Executive covenants never to disparage or speak ill of the Company or any the Company product or service, or of any past or present employee, officer or director of the Company, nor shall Executive at any time harass or behave unprofessionally toward any past, present or future the Company employee, officer or director.

 

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9.                                       Executive acknowledges that because of Executive’s position with the Company, Executive may possess information that may be relevant to or discoverable in connection with claims, litigation or judicial, arbitral or investigative proceedings initiated by a private party or by a regulator, governmental entity, or self-regulatory organization, that relates to or arises from matters with which Executive was involved during Executive’s employment with the Company, or that concern matters of which Executive has information or knowledge (collectively, a “Proceeding”). Executive agrees that Executive shall testify truthfully in connection with any such Proceeding, shall cooperate with the Company in connection with every such Proceeding, and that Executive’s duty of cooperation shall include an obligation to meet with the Company representatives and/or counsel concerning all such Proceedings for such purposes, and at such times and places, as the Company reasonably requests, and to appear for deposition and/or testimony upon the Company’s request and without a subpoena.  The Company shall reimburse Executive for reasonable out-of-pocket expenses that Executive incurs in honoring Executive’s obligation of cooperation under this Section 9.

 

10.                                 Miscellaneous Terms and Conditions

 

(a)                                  Each party understands and agrees that Executive or it assumes all risk that the facts or law may be, or become, different than the facts or law as believed by the party at the time Executive or it executes this Agreement.  Executive and the Company acknowledge that their relationship precludes any affirmative obligation of disclosure, and expressly disclaim all reliance upon information supplied or concealed by the adverse party or its counsel in connection with the negotiation and/or execution of this Agreement.

 

(b)                                 The parties warrant and represent that they have been offered no promise or inducement except as expressly provided in this Agreement, and that this Agreement is not in violation of or in conflict with any other agreement of either party.

 

(c)                                  All covenants and warranties contained in this Agreement are contractual and shall survive the closing of this Agreement.

 

(d)                                 Successors and Assigns. This Agreement shall be binding in all respects upon, and shall inure to the benefit of, the parties’ heirs, successors and assigns.

 

(e)                                  Governing Law; Jurisdiction. All questions or disputes concerning this Agreement and the exhibits hereto will be governed by and construed in accordance with the internal laws of the Commonwealth of Virginia, without giving effect to any choice of law or conflict of law provision or rule (whether of the Commonwealth of Virginia or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Virginia.  The parties hereby: (i) submit to the non-exclusive jurisdiction of any state or federal court sitting in the Commonwealth of Virginia in any action or proceeding arising out of or relating to this Agreement; and (ii) agree that all claims in respect of such action or proceeding may be heard or determined in any such court. Each party hereby waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought. The parties hereby agree that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law..

 

(f)                                    Should any provision of this Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect. Notwithstanding the foregoing, if Section 2(a), above, is declared void or unenforceable, then this Agreement shall be null and void and both parties shall be restored to the positions that they occupied before the Agreement’s execution (meaning that, among other things, all sums paid by the Company pursuant to Section 1,

 

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above, shall be immediately refunded to the Company); provided that in such circumstances this Agreement and the facts and circumstances relating to its execution shall be inadmissible in any later proceeding between the parties, and the statutes of limitations applicable to claims asserted in the proceeding shall be deemed to have been tolled for the period between the Effective Date and 10 days after the date on which Section 2(a) is declared unenforceable.

 

(g)                                 This Agreement constitutes the entire agreement of the parties and a complete merger of prior negotiations and agreements.

 

(h)                                 This Agreement shall not be modified except in a writing signed by the parties.

 

(i)                                     Waiver.  No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by a writing signed by the party charged with the waiver or estoppel.  No waiver of any breach of this Agreement shall be deemed a waiver of any later breach of the same provision or any other provision of this Agreement.

 

(j)                                     Headings are intended solely as a convenience and shall not control the meaning or interpretation of any provision of this Agreement.

 

(k)                                  Pronouns contained in this Agreement shall apply equally to the feminine, neuter and masculine genders.  The singular shall include the plural, and the plural shall include the singular.

 

(l)                                     Each party shall promptly execute, acknowledge and deliver any additional document or agreement that the other party reasonably believes is necessary to carry out the purpose or effect of this Agreement.

 

(m)                               Any party contesting the validity or enforceability of any term of this Agreement shall be required to prove by clear and convincing evidence fraud, concealment, failure to disclose material information, unconscionability, misrepresentation or mistake of fact or law.

 

(n)                                 The parties acknowledge that they have reviewed this Agreement in its entirety and have had a full and fair opportunity to negotiate its terms and to consult with counsel of their own choosing concerning the meaning and effect of this Agreement.  Each party therefore waives all applicable rules of construction that any provision of this Agreement should be construed against its drafter, and agrees that all provisions of the agreement shall be construed as a whole, according to the fair meaning of the language used.

 

(o)                                 Every dispute arising from or relating to this Agreement shall be tried only in the state or federal courts situated in the Commonwealth of Virginia.  The parties consent to venue in those courts, and agree that those courts shall have personal jurisdiction over them in, and subject matter jurisdiction concerning, any such action.

 

(p)                                 In any action relating to or arising from this Agreement, or involving its application, the party substantially prevailing shall recover from the other party the expenses incurred by the prevailing party in connection with the action, including court costs and reasonable attorneys’ fees.

 

(q)                                 This Agreement may be executed in counterparts, or by copies transmitted by telecopier, all of which shall be given the same force and effect as the original.

 

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ROSETTA STONE LTD.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

	
By: 
    	
/s/ Michaela Oliver
    	
 
    
	
Michaela Oliver, SVP Human Resources
    	
 
    

 

	
 
    	
 
    

 

	
Date: 
    	
11/3/2011
    	
 
    

 

	
 
    	
 
    
	
 
    	
 
    
	
EXECUTIVE
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Helena Wong
    	
 
    
	
Helena Wong
    	
 
    
	
 
    	
 
    

                                                

	
Date:
    	
11/3/2011
    	
 
    

 

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