8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):

October 12, 2011

Rosetta Stone Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-34283	043837082
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

1919 North Lynn St., 7th Fl., Arlington, Virginia 22209

(Address of principal executive offices, including zip code)

800-788-0822

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)(e)           On October 12, 2011, Tom P.H. Adams, the President and Chief Executive Officer of Rosetta Stone Inc. (the “Company”) proposed, and the Company’s Board of Directors (the “Board”) has accepted, a plan to transition from his position as President and Chief Executive Officer to Chairman of the Board, upon the identification of a successor to serve as the Company’s president and chief executive officer.

The Board has agreed, subject to Mr. Adams’ continued performance in good faith of his duties and obligations as an officer and director, as applicable, of the Company, that:

·until a successor chief executive officer is appointed, Mr. Adams will continue to serve as the Company’s chief executive officer and remain a Board member, subject to the terms of his existing agreements with the Company;

·at the effective time of his resignation, Mr. Adams will receive a transition bonus of $575,000 and those benefits under his employment agreement with the Company to which he would be entitled if his employment had been terminated without “cause” (as such term is defined in Mr. Adams’ employment agreement); and

·as long as Mr. Adams continues to serve on the Board, any unvested equity held by Mr. Adams will continue to vest in accordance with its existing vesting schedule, and Mr. Adams will not be required to exercise any vested options within any specific time frame.

The Board intends to elect Mr. Adams to serve as non-executive Chairman upon the effectiveness of his resignation.

Forward-looking Statements

Certain statements in this Current Report on Form 8-K are forward-looking statements and are qualified by reference to the discussion contained in “Cautionary Statement Regarding Forward-Looking Statements” in the press release furnished herewith as Exhibit 99.1 hereto.

Item 7.01.     Regulation FD Disclosure.

On October 12, 2011, the Company issued a press release announcing Mr. Adams’ planned transition. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information in Exhibit 99.1 and in this Item shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.	Financial Statements and Exhibits.
(d)	Exhibits.
99.1	Press Release dated October 12, 2011.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: October 13, 2011

By:	/s/ Michael C. Wu
	Name:	Michael C. Wu
	Title:	General Counsel and Secretary

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EX-99.1

Exhibit 99.1

Rosetta Stone Inc. CEO Announces Transition Plan

·Tom Adams announces plan to transition from President and Chief Executive Officer to Chairman of Rosettta Stone’s Board of Directors

·Search has commenced for Adams’ successor as President and Chief Executive Officer

ARLINGTON, VA — October 13, 2011 — Rosetta Stone Inc. (NYSE:RST), a leading provider of technology-based language-learning solutions, today announced that Tom Adams has proposed, and the Board of Directors has accepted, a plan to transition from his position as President and Chief Executive Officer of Rosetta Stone to Chairman of the Board of Directors, upon identifying a suitable successor. Tom Adams plans to remain in his position until a new CEO is named, at which time the Board of Directors plans to elect Adams as non-executive Chairman.

“While I am very proud of Rosetta Stone’s tremendous accomplishments over the last nine years I believe that even greater opportunities lie ahead as we endeavor to extend our leadership in international markets, and as the company evolves from the CD-ROM based desktop software model to digital services, combining effective self-study with live online conversational coaching in a multi-device platform,” said Tom Adams, president and chief executive officer of Rosetta Stone.  “I look forward to assisting with the search for my successor and to the further development and execution of the Company’s strategy as Chairman of the Board. While we conduct the search to find my successor, my management team and I will continue to work hard to make progress against our strategic objectives.”

“We’re pleased that Tom will succeed me as Chairman, building on his extraordinary contributions to Rosetta Stone,” said Laurence Franklin, outgoing Chairman of the Board of Directors of Rosetta Stone.  “During Tom’s tenure as CEO, Rosetta Stone’s revenue grew more than twenty-five-fold from $10 million in 2002 to $259 million in 2010.  During this period, Rosetta Stone firmly established itself as the global innovation leader in language learning by leveraging technology to deliver better learner results. We look forward to Tom’s continued guidance and direction as Chairman of our Board of Directors after his successor is named, and I look forward to continuing to work with Tom as a fellow board member.”

Rosetta Stone has engaged Champion Scott Partners, an executive search firm, to actively conduct a search for a new CEO.

About Rosetta Stone

Rosetta Stone Inc. is changing the way the world learns languages. Rosetta Stone provides interactive solutions that are acclaimed for the speed and power to unlock the natural language-learning ability in everyone. Available in more than 30 languages, Rosetta Stone language-learning solutions are used by schools, organizations and millions of individuals in over 150 countries throughout the world. The company was founded in 1992 on the core beliefs that learning a language should be natural and instinctive and that interactive technology can replicate and activate the immersion method powerfully for learners of any age. The company is based in Arlington, Va., with international offices in the Brazil, Germany, Korea, Japan and the United Kingdom. For more information, visit www.RosettaStone.com.

“Rosetta Stone,” “TOTALe,” “ReFLEX” and other names used herein are registered trademarks or trademarks of Rosetta Stone Ltd. in the United States and other countries.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release are forward-looking statements, including statements concerning our identification of a successor CEO, Mr. Adams’ election to serve as non-executive Chairman following the naming of a new CEO, our future opportunities in international markets, the evolution of our products and services, and our expected future business and  performance.  These forward-looking statements may be identified by words such as “believe,” “endeavor,” “continue,” “evolve,” “plan,” and “will.”  These forward-looking statements reflect the company’s current views with respect to future events and are subject to certain risks, uncertainties, and assumptions.  A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, including difficulties in identifying and designating a suitable successor to Mr. Adams to serve as president and CEO; demand for language learning software; the advantages of our products, technology, brand and business model as compared to others; our ability to maintain effective internal controls or to remediate material weaknesses; our cash needs and expectations regarding cash flow from operations; our product development plans; the impact of our Version 4 TOTALe and ReFLEX products on our industry; the appeal and efficacy of Version 4 TOTALe and ReFLEX; our expectations regarding capturing lifetime value and a broader range of market segments through such offerings; our plans regarding expansion of our marketing initiatives and sales force; our international expansion plans; our plans regarding our kiosks and retail relationships; the impact of any revisions to our pricing strategy; our ability to manage and grow our business and execute our business strategy; our financial performance; our actions to stabilize our business in the U.S. consumer market including realigning our cost structure and revitalizing our go-to-market strategy; adverse trends in general economic conditions and the other factors described more fully in the company’s filings with the U.S. Securities and Exchange Commission (SEC), including the company’s annual report on Form 10-K for the year period ended December 31, 2010, which is on file with the SEC.  The company assumes no obligation to update the information in this communication, except as otherwise required by law.

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Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

Rosetta Stone Inc.
Investor Contact:	Media Contact:
Elizabeth Corse, 703-522-9965	Megan Richter, 703-522-9953
ecorse@rosettastone.com	mrichter@rosettastone.com
Source: Rosetta Stone Inc.

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