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1.	Elect three Class II directors nominated by our Board of Directors to hold office until our Annual Meeting of Stockholders in 2017, or until their respective successors have been elected;

2.	Ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2014;

3.	Approve an amendment to the 2009 Omnibus Incentive Plan, to increase the number of shares available for issuance under the 2009 Omnibus Incentive Plan, as amended;

4.	Conduct an advisory vote on the compensation of the named executive officers; and

5.	Consider any other matters that may properly be brought before the meeting.

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•	James P. Bankoff, Laurence Franklin and Laura L. Witt are designated Class II Directors whose terms are scheduled to expire at our upcoming Annual Meeting. If re-elected at our upcoming Annual Meeting, Messrs. Bankoff and Franklin and Ms. Witt will have terms that expire at our 2017 Annual Meeting of Stockholders;

•	Patrick W. Gross and Marguerite W. Kondracke are designated Class III Directors whose terms will expire at our 2015 Annual Meeting of Stockholders; and

•	Stephen M. Swad is designated a Class I Director whose term will expire at our 2016 Annual Meeting of Stockholders.

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(1)	In May 2013, Mr. Bankoff was appointed to the Compensation Committee. In August 2013, Mr. Bankoff was appointed to the Corporate Governance and Nominating Committee.

(2)	In May 2013, Mr. Gross was appointed Chairman of the Board and to the Compensation Committee.

(3)	In August 2013, Ms. Kondracke was appointed to the Corporate Governance and Nominating Committee.

•	approving the appointment, retention and termination of our independent auditors, and approving the audit and non-audit services to be performed by our independent auditors;

•	evaluating the qualifications, performance and independence of our independent auditors;

•	monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;

•	reviewing the adequacy and effectiveness of our internal control policies and procedures;

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•	discussing the scope and results of the audit with the independent auditors and reviewing with management and the independent auditors our interim and year-end operating results; and

•	preparing the Audit Committee report required by the SEC to be included in our annual proxy statement.

•	reviewing and approving compensation of our executive officers including annual base salary, annual incentive bonuses, specific goals, equity-based awards, executive employment agreements, severance and change in control arrangements, and any other special benefits, compensation or arrangements;

•	reviewing and approving annual goals and objectives, bonus criteria and equity guidelines for our employees;

•	reviewing and discussing annually with management our "Compensation Discussion and Analysis" disclosure required by SEC rules and regulations;

•	preparing the Compensation Committee report required by the SEC to be included in our annual proxy statement;

•	administering, reviewing and making recommendations with respect to our equity-based compensation plans; and

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•	appointing, compensating and overseeing compensation consultants and other advisors.

•	assisting our Board of Directors in identifying prospective director nominees and recommending director nominees for each annual meeting of stockholders to our Board of Directors;

•	reviewing developments in corporate governance practices and developing and recommending governance principles applicable to our Board of Directors;

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•	reviewing succession planning for our Chief Executive Officer;

•	overseeing the evaluation of our Board of Directors;

•	determining the compensation of our directors; and

•	recommending members for each committee of our Board of Directors.

•	the candidate shall exhibit high standards of integrity, commitment, and independence of thought and judgment;

•	the candidate shall be committed to representing the long-term interests of our stockholders;

•	the candidate shall have sufficient time and availability to devote to the affairs of the Company, particularly in light of the number of boards on which the nominee may serve;

•	to the extent the candidate serves or has previously served on other boards, the candidate shall have a demonstrated history of contributing at board meetings; and

•	the candidate meets any other minimum qualifications and other criteria for board membership approved by our Board of Directors from time to time.

•	a majority of the Board of Directors is "independent" in accordance with the standards, if any, promulgated by the SEC, or any exchange upon which securities of the Company are traded, and any governmental or regulatory body exercising authority over the Company;

•	each of our Audit, Compensation, and Corporate Governance and Nominating Committees are comprised entirely of independent directors; and

•	at least one member of our Audit Committee shall have such experience, education and other qualifications necessary to qualify as an "audit committee financial expert" as defined by the rules of the SEC and financial sophistication requirements under NYSE rules.

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•	direct experience in our industry or in the markets in which we operate;

•	assists in achieving a mix of Board members that represents a diversity of background and experience;

•	experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing;

•	accomplished in his or her respective field, with strong credentials and recognition; and/or

•	well-regarded in the community.

•	an annual retainer paid in cash or RSUs, at the choice of the director, in an amount equal to $35,000;

•	an annual cash retainer of $20,000 for chairing the Audit Committee and $15,000 for chairing either the Compensation Committee or the Corporate Governance and Nominating Committee;

•	an annual retainer of $10,000 for each Audit Committee member and of $7,500 for each Compensation Committee member and each Corporate Governance and Nominating Committee member;

•	the members and chairpersons of any new committees that may be formed will be paid the same amounts as the members and chairpersons of the Compensation Committee and Corporate Governance and Nominating Committee;

•	$1,250 for each Board of Directors meeting, in excess of eight per year, attended in person or by telephone lasting more than one hour;

•	$1,250 for each meeting of a committee, in excess of ten per year, attended in person or by telephone lasting more than one hour; and

•	an annual grant of equity with a fair market value as of the date of grant of $100,000 comprised of:

•	50% stock options vesting quarterly over one year conditioned upon the director's continued service on our Board of Directors during that year; and

•	50% RSUs, which are fully vested upon issuance and will be paid out in shares of our common stock when the recipient director terminates his or her service on our Board of Directors.

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(1)

Represents the aggregate grant date fair value for restricted stock unit ("RSU") awards and option awards granted in the applicable year, computed in accordance with Accounting Standards Codification Topic 718, Compensation—Stock Compensation ("ASC 718"). Information about the assumptions used to value these awards can be found in Note 11 to the consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 3, 2014.

(2)	Messrs. Adams, Leonsis and Lindahl resigned from our Board effective as of May 2013 and, therefore, only received compensation for a partial year of service.

(3)	Represents options to acquire 4,496 shares of common stock granted on May 23, 2013 at an exercise price of $16.85 per share, which was the closing price per share of our common stock on the NYSE on the grant date. These options vest in four equal quarterly installments from the date of grant.

(4)	Represents 2,967 RSUs granted on May 23, 2013. The RSUs were fully vested upon grant and will be paid out in shares of our common stock when the recipient director terminates his or her service on our Board of Directors.

(5)	Cash payments were made directly to ABS Capital Partners, LLC. As of December 4, 2013, cash payments were made directly to Mr. Clough and Ms. Witt, respectively.

(6)	Cash payments were made directly to LF Enterprises LLC.

(7)	Represents 4,010 RSUs granted on February 21, 2013 and 2,967 RSUs granted on May 23, 2013. The RSUs were fully vested upon grant and will be paid out in shares of our common stock when Mr. Gross terminates his service on our Board of Directors.

(8)	Cash payments were made directly to Norwest Equity Partners, VIII.

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•	all information relating to the nominee that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Section 14 of the Exchange Act and the rules and regulations promulgated thereunder;

•	the nominee's written consent to being named in the proxy statement as a nominee and to serving as a director if elected;

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a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the nominating stockholder and beneficial owner, if any, and their respective affiliates and associates, or others acting in concert with them, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert with him, on the other hand, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K of the Exchange Act if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any of their respective affiliates or associates or persons acting in concert with any such person, were the "registrant" for purposes of such rule and the nominee were a director or executive officer of such registrant;

•	a completed questionnaire with respect to the background and qualification of the nominee and the background of any other person or entity on whose behalf the nomination is being made, the form of which questionnaire will be provided by our General Counsel and Secretary upon written request; and

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a written representation and agreement, in the form provided by our General Counsel and Secretary upon written request, that the nominee is not and will not become a party to any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how the nominee, if elected as a director, will act or vote on any issue or question that has not been disclosed to us or that could limit or interfere with the nominee's ability to comply, if elected as a director, with the nominee's fiduciary duties under applicable law, is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than us with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as our director that has not been disclosed to us, and in the nominee's individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as our director, and will comply with all of our applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock trading policies and guidelines.

•	a brief description of the business desired to be brought before the annual meeting;

•	the reasons for conducting such business at the annual meeting;

•	the text of the proposal or business, including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend our bylaws, the language of the proposed amendment;

•	any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made;

•	a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons, including their names, in connection with the proposal of such business by such stockholder; and

•	as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made:

•	the name and address of such stockholder, as they appear on our books, and of such beneficial owner, if any;

•	the class or series and number of shares of our capital stock that are, directly or indirectly, owned beneficially and of record by such stockholder and by such beneficial owner;

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any option, warrant, convertible security, stock appreciation right ("SAR"), or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of our capital stock, whether or not such instrument or right shall be subject to settlement in the underlying class or series of our capital stock or otherwise directly or indirectly owned beneficially by such stockholder and by such beneficial owner, if any;

•	any other direct or indirect opportunity held or owned beneficially by such stockholder and by such beneficial owner, if any, to profit or share in any profit derived from any increase or decrease in the value of our shares;

•	any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or beneficial owner, if any, has a right to vote any shares of any of our securities;

•	any short interest in any of our securities of the stockholder or beneficial owner;

•	any right to dividends on our shares of capital stock owned beneficially by such stockholder or such beneficial owner, if any, which right is separated or separable from the underlying shares;

•	any proportionate interest in shares of our capital stock or derivative instrument held, directly or indirectly, by a general or limited partnership in which such stockholder or such beneficial owner, if any, is a general partner or with respect to which such stockholder or such beneficial owner, if any, directly or indirectly, beneficially owns an interest in a general partner; and

•	any performance-related fees, other than an asset-based fee, to which such stockholder or such beneficial owner, if any, is entitled to base on any increase or decrease in the value of our shares or derivative instruments, if any, in each case with respect to the information required to be included in the notice.

•	each of our named executive officers (as defined in "Compensation Discussion and Analysis");

•	each director and nominee;

•	all current directors, nominees and executive officers as a group; and

•	each stockholder owning more than 5% of our common stock.

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(1)	Includes 183,665 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014. Also includes 77,116 shares of restricted stock that will not be vested within 60 days of March 31, 2014.

(2)	Includes 27,039 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014. Also includes 24,956 shares of restricted stock that will not be vested within 60 days of March 31, 2014.

(3)	Includes 2,309 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014. Also includes 5,807 shares of restricted stock that will not be vested within 60 days of March 31, 2014, which were forfeited on Mr. Shah's last day of employment by the Company, which was March 31, 2014.

(4)	Includes 36,115 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014. Also includes 22,643 shares of restricted stock that will not be vested within 60 days of March 31, 2014.

(5)	Mr. Wu's last day of employment by the Company was February 7, 2014.

(6)	Includes 7,905 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014 and 4,978 shares of common stock underlying vested RSUs that will be issued to Mr. Bankoff upon the termination of his service on the Board.

(7)	Includes 20,399 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014, and 12,162 shares of common stock underlying vested RSUs that will be issued to Mr. Clough upon the termination of his service on the Board, which will be May 19, 2014.

(8)	Includes 46,399 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014 and 12,162 shares of common stock underlying vested RSUs that will be issued to Mr. Coleman upon the termination of his service on the Board which will be May 19, 2014. Also includes 200 shares owned by Mr. Coleman's spouse as to which Mr. Coleman disclaims beneficial ownership.

(9)	Includes 50,769 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014 and 16,837 shares of common stock underlying vested RSUs that will be issued to Mr. Franklin upon the termination of his service on the Board.

(10)

Includes 52,899 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014 and 25,750 shares of common stock underlying vested RSUs that will be issued to Mr. Gross upon the termination of his service on the Board. Also includes 63,501 shares owned by Mr. Gross' spouse and 32,368 shares owned by the Stephanie Gross Trust as to which Mr. Gross disclaims beneficial ownership.

(11)	Includes 14,405 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014 and 8,775 shares of common stock underlying vested RSUs that will be issued to Ms. Kondracke upon the termination of her service on the Board.

(12)	Includes 20,399 shares of our common stock subject to options which are exercisable within 60 days of March 31, 2014 and 12,162 shares of common stock underlying vested RSUs that will be issued to Ms. Witt upon the termination of her service on the Board.

(13)	Includes all shares described in footnotes 1 through 12, except shares held by Messrs. Shah and Wu, which are described in footnotes 3 and 5.

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(14)	Ownership information is based on the Schedule 13G/A filed with the SEC on January 10, 2014 by Ariel Investments, LLC, whose address is 200 E. Randolph Drive, Suite 2900, Chicago, Illinois 60601.

(15)

Ownership information is based on the Schedule 13G/A filed with the SEC on February 12, 2014 by The D3 Family Fund, L.P., The D3 Family Bulldog Fund, L.P., The D3 Family Canadian Fund, L.P., The DIII Offshore Fund, L.P., Nierenberg Investment Management Company, Inc., Nierenberg Investment Management Offshore, Inc. and David Nierenberg, whose address is 19605 N.E. 8th Street, Camas, Washington 98607.

(16)	Ownership information is based on the Form 4 filed with the SEC on March 31, 2014 by Osmium Partners, LLC, Osmium Capital, LP, Osmium Capital II, LP and Osmium Spartan, LP, Osmium Diamond, LP, Osmium Special Opportunity Fund, LP and John H. Lewis, whose address is 300 Drakes Landing Road, Suite 172, Greenbrae, California 94904.

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•	structuring our executive bonus plan such that 70% of the award target is based on financial performance metrics, 20% of the award target is based on non-financial strategic performance metrics, and 10% of the award target is based on performance relative to individual goals;

•	maintaining distinct bonus metrics for our President, Global Enterprise & Education and President, Global Consumer that are directly aligned with their scope of responsibility and reflect a commitment to compensate them based on their contributions to the financial performance of the Company, namely sales performance in their respective businesses;

•	adopting a new 2013 Long Term Incentive Program, with the potential to earn cash and Performance Stock Awards based on achievement relative to two-year cumulative corporate metrics for Bookings, Operating EBITDA, and Percentage Global Digital Sales, as defined below; and

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committing to implement a clawback policy for incentive plans effective January 1, 2014 and beyond, specifically in the event of a restatement of the Company’s financial results (other than a restatement caused by a change in applicable accounting rules or interpretations). This policy would allow the Company to recover certain incentive compensation wrongly awarded to an executive officer, including where fraud or intentional misconduct led to a restatement of the Company's financial statements.

•	No Tax Gross-ups.  In 2012, we amended our existing agreements to eliminate previously existing excise tax gross-up provisions related to change of control payments subject to Section 280G and Section 4999 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"). We do not maintain any contract or agreement with any NEO that provides for any kind of tax gross-up payment.

•	No Excessive Severance Payments.  Our termination arrangements with our NEOs do not call for excessive severance payments in cases of their termination of employment.

•	Clawback Policy. In early 2014, the Compensation Committee committed to implement the clawback policy described above for incentive plans effective January 1, 2014.

•	No Guaranteed Bonuses.  We believe that bonuses should reflect actual Company performance. Bonus guarantees undercut that notion, therefore, we do not guarantee bonus payments to our NEOs.

•	Implemented Double Trigger Vesting for Equity Awards.  Starting with equity awards granted in 2012, we implemented a policy that our equity awards would no longer vest upon consummation of a change in control, unless there is also a termination of service other than for cause or a voluntary resignation for good reason.

•	No Repricing or Replacing Outstanding Stock Options.  Repricing is not permitted under our 2009 Omnibus Incentive Plan, as amended (the "2009 Plan") without stockholder approval. We did not reprice or replace any of our outstanding stock options during 2013, nor any year prior to 2013.

•	No Excessive Perquisites.  We do not believe in granting perquisites to our NEOs that are different from the perquisites available to all our employees generally.

•	No Hedging by Our Named Executive Officers.  None of our NEOs have hedged their Company stock interests, and we have adopted a policy prohibiting the hedging of Company securities by any of our employees.

•	No Pledging By Our Named Executive Officers.  None of our NEOs have pledged any of their Company stock, and we have adopted a policy prohibiting the pledging of Company securities by any of our employees.

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•	Stock Ownership Guidelines. We encourage our executives and our directors to hold a significant equity interest in the Company. Effective January 1, 2013, our stock ownership guidelines are as follows:

◦	Chief Executive Officer: equal in value to five times (5x) the base salary within five years of his or her appointment.

◦	Senior Vice Presidents and higher positions: equal in value to twice (2x) the base salary within five years of his or her appointment.

◦	Non-Employee Directors: equal in value to three times (3x) the annual retainer for Board membership within three years of their appointment to the Board of Directors.

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(1)	Bookings means executed sales contracts by the Company that are either recorded immediately as revenue or as deferred revenue.

(2)	Adjusted Operating EBITDA is GAAP net income/(loss) plus interest income and expense, income tax benefit and expense, depreciation, amortization and stock-based compensation expense plus the change in deferred revenue, excluding increase in deferred revenue from acquisitions,

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(3)	Percentage Global Digital Sales means the percentage of all new unit sales of Global Consumer that are downloaded (e.g., TOTALe), online (e.g., OSUB/TOSUB (subscription) or ReFLEX), renewals and paid Apps.

(4)	Operating EBITDA means GAAP net income or loss plus interest expense, income tax expense, depreciation, amortization, and stock-based compensation expenses, plus the change in deferred revenues.

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•	Messrs. Swad's, Pierno's and Wu's and Ms. Verses' individual performance and contributions in 2012, and the Committee's desire to more closely align his or her salary with peer medians.

•	Mr. Shah's individual performance and contributions in 2012, and the Committee's desire to make a moderate market adjustment to better align his salary with peer medians.

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(1)

Since Mr. Shah and Ms. Verses are considered Line of Business Executives, they do not have an individual goals portion included in their 2013 bonus mix. Instead their bonus is based on 80% financial goals, which includes both corporate financial targets (20%) as well as their individual line of business metrics (60%). Their line of business financial goals and the corporate financial goals were combined and included in the financial goals target bonus column.

(2)	Mr. Swad's 2013 annualized base salary and bonus opportunity represent his salary and bonus opportunity as of December 31, 2013. No change was made to his annual target bonus percentage from 2012 to 2013.

(3)	Mr. Pierno's 2013 annualized base salary and bonus opportunity represent his salary and bonus opportunity as of December 31, 2013. Mr. Pierno's target bonus percentage was increased from 50% to 60% by the Compensation Committee in order to move his bonus target closer to peer medians, with an effective date of January 1, 2013.

(4)	Messrs. Shah's and Wu's and Ms. Verses' 2013 annualized base salary and bonus opportunity represent their respective salary and bonus opportunities as of December 31, 2013. No changes were made to their annual target bonus percentages from 2012 to 2013.

(1)	Global Bookings represent executed sales contracts received by the Company that are either recorded immediately as revenue or as deferred revenue. For 2013 Bookings, actual results were adjusted to eliminate an increase in the expected sales returns from retail partners in Japan as we no longer maintain a physical presence in Japan as of March 31, 2014.

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•	70% on leveraging the brand, of which we achieved 120%, for a funding payout of 84%, based on over achievement of goals due to the successful launch of the Kids Product suite, as well as our advanced English product on time and meeting quantified goals for Bookings and number of downloads; and

•	30% on expanding distribution, of which we achieved 50% for a funding payout of 15%, primarily as the result of changing the strategy and the restructuring of our Asian operations.

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(1)	Mr. Swad earned 100% of his individual performance goals based on approval by the Compensation Committee.

(2)	Mr. Pierno earned 110% of his individual performance goals based on recommendation by the Chief Executive Officer, Mr. Swad, and approval by the Compensation Committee.

(3)

Since Mr. Shah and Ms. Verses are considered Line of Business Executives, they do not have an individual goals portion included in their 2013 bonus mix. Instead their bonus is based on 80% financial goals, which includes both corporate financial targets (20%) as well as their individual line of business metrics (60%). Their line of business financial goals and the corporate financial goals were combined and included in the financial goals bonus column.

(4)	Mr. Wu resigned from the Company and his last day of employment was on February 7, 2014, therefore, he was no longer eligible to receive a bonus payout for the 2013 bonus plan year, since our annual bonus plan states that a participant must be employed when the annual bonus is paid out.

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•	Minimum: If the minimum threshold of each performance goal for the program period is achieved, then 50% of the targeted amount under the executive’s award for both Performance Stock Awards and cash shall vest and become payable.

•	Target: If the target threshold of each Performance Goal for the program period is achieved, then 100% of the targeted amount under the executive’s award for both Performance Stock Awards and cash shall vest and become payable.

•	Maximum: If the maximum threshold for each Performance Goal for the program period is achieved, then 200% of the targeted amount under the executive’s award for both Performance Stock Awards and cash shall vest and become payable.

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•	CEO: Five times (5x) base salary

•	SVPs and above levels: Two times (2x) base salary

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•	long term incentive compensation value that is driven entirely by increases in stock price; and

•	low compensation levels exacerbated by performance-driven awards not paying out; including both annual bonus and long term incentive compensation.

•	the Compensation Committee's ability to exercise discretion to decrease incentive award payouts;

•	the use of an array of performance metrics across compensation programs (that is, bonuses are based on financial goals, non-financial strategic metrics and individual performance goals; LTIP awards are based on both Company operating performance and stock price; and new hire and annual equity incentives are driven by stock price gains);

•	the fact that many of our executives hold significant vested equity stakes in the Company; and

•	the fact that the mix of compensation balances a short-term and long-term focus.

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(1)

Represents the aggregate grant date fair value for restricted stock awards and stock option awards granted in the applicable year, computed in accordance with ASC 718. Information about the assumptions used to value these awards can be found in Note 11 to the consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 3, 2014. An overview of the features of these awards can be found in "Compensation Discussion and Analysis" above. The amounts under stock awards includes potential performance based equity awards under the 2013 LTIP. Executives are eligible to receive Performance Stock Awards in the form of restricted shares, and cash, upon the Company's achievement of specified performance goals between January 1, 2013 and December 31, 2014. The incentive target value in each Executive’s Award shall consist of 70% in Performance Stock Awards and 30% in cash. Each Executive’s target award is a multiple of their base salary as of December 31, 2012 and is represented in the chart entitled, "Grants of Plan-Based Awards in Fiscal Year 2013." The target Performance Stock Award is based on valuation as of January 1, 2013. For this chart, the value of the potential 2013 LTIP stock award is based on the target number of shares and the stock price as of December 31, 2013 of $12.22. The target 2013 LTIP stock awards are as follows: for Mr. Swad, $1,042,329; for Mr. Pierno, $222,367; for Mr. Shah, $191,096; for Ms. Verses, $208,461; and for Mr. Wu, $208,461. No awards, or cash, have been earned, approved or initiated under this plan as of December 31, 2013. Details of the LTIP are included in the section entitled "Determining the Amount of Each Element of Compensation." In order for the granting of any Performance Stock Award or any cash payment to be made under the LTIP, the Company must meet the minimum threshold requirements for each performance goal for the 2014 fiscal year, in addition to the cumulative performance goals over the two year period ending December 31, 2014. Each performance goal is mutually exclusive. Each performance goal has a range of payout levels depending on the achievement of the goal ranging from zero to 200% of the incentive target. The awards upon the Company’s achievement of the following specified performance goals during the Program Period: (i) 33.33% Bookings; (ii) 33.33% Operating EBITDA; and (iii) 33.33% Percentage Global Digital Sales.

(2)

Prior to 2012, all executive annual grants were in the form of stock options. For all NEOs other than Ms. Verses, the amounts included for 2011 represent the grant date fair value of stock awards under the 2011 Long Term Incentive Program ("2011 LTIP"), the only stock awards that they received in that year since annual stock grants for 2011 consisted solely of stock options. For Ms. Verses, $361,520 of the amount for 2011 represents the fair value of her award under the 2011 LTIP and $200,001 represents the grant date fair value of a restricted stock grant. If all milestones under the 2011 LTIP had been met, the values of the 2011 LTIP awards as of their respective grant dates would have been: $2,573,750 for Mr. Swad; $364,700 for Ms. Verses; and $514,750 for Mr. Wu. The 2011 LTIP was canceled on November 30, 2011. Accordingly, no shares were ever granted under this program and no value was realized by any of the NEOs in connection with these awards.

(3)	For Mr. Swad, represents insurance premiums the Company paid on behalf of the executive under our group term life insurance policy and our health and welfare policies in the amount of $11,447 during the specified year, 401(k) matching contributions in the amount of $10,200 and other perquisites in the amount of $7,869.

(4)

In February 2012, Mr. Adams transitioned from his role as President and Chief Executive Officer to the Chairman of the Board and Mr. Swad was appointed from the position of Chief Financial Officer to the positions of President and Chief Executive Officer. The amount listed in the 2012 Salary column above for Mr. Swad includes the base salary earned by Mr. Swad as Chief Financial Officer (at his annualized base salary of $400,000) prior to his appointment as President and Chief Executive Officer. As President and Chief Executive Officer, Mr. Swad earned base salary at an annual rate of $500,000.

(5)

In January 2012, the Compensation Committee granted special retention bonuses consisting of cash and equity awards to selected key members of our management team, including our NEOs, other than Mr. Pierno who was hired in May 2012, in order to retain key executives during the transformation of our business model, keeping them focused on our business objectives during the search for a successor to serve as our President and Chief Executive Officer. The retention cash awards were paid in single payments on December 31, 2012 contingent upon the applicable NEO remaining employed until December 31, 2012, or the earlier termination of his or her employment by us without cause.

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(6)	For Mr. Swad, represents insurance premiums paid by the Company on behalf of the employee under our group term life insurance policy and our health & welfare policies in the amount of $11,968, and 401(k) matching contributions in the amount of $6,909 provided on behalf of Mr. Swad during the specified year, and other perquisites in the amount of $532.

(7)	Consists of 401(k) matching contributions provided on behalf of the executive during the specified year.

(8)	For Mr. Pierno, represents insurance premiums the Company paid on behalf of the executive under our group term life insurance policy and our health and welfare policies in the amount of $11,447 during the specified year and other perquisites in the amount of $635.

(9)	Mr. Pierno joined the Company effective May 2012. His annualized base salary for 2012 was $320,000.

(10)	For Mr. Pierno, represents insurance premiums paid by the Company on behalf of the executive under our group term life insurance policy and our health & welfare policies in the amount of $7,979 during the specified year.

(11)	Mr. Shah's first year as a NEO was 2012. Accordingly, prior year compensation information is not included in the Summary Compensation Table.

(12)

For Mr. Shah, represents insurance premiums the Company paid on behalf of the executive under our group term life insurance policy and our health and welfare policies in the amount of $9,850 during the specified year; 401(k) matching contributions in the amount of $10,200; other perquisites in the amount of $302; and the following amounts paid by the Company attributed to an international assignment to Japan in 2013: $30,745 in tuition costs; $335,195 in housing and living allowances; $55,477 in tax equalization to offset the difference in tax liability attributable to working in Japan while remaining a U.S. citizen for an aggregate of $421,417.

(13)

For Mr. Shah, represents insurance premiums the Company paid on behalf of the executive under our group term life insurance policy and our health & welfare policies in the amount of $14,066 during the specified year; represents the following amounts paid by the Company attributed to an international assignment to Japan in 2012: $45,252 in relocation; $40,249 in tuition costs; $201,081 in housing allowances, $132,485 in tax equalization to offset the difference in tax liability attributable to working in Japan while remaining a U.S. citizen for an aggregate of $419,067; 401(k) matching contributions in the amount of $9,097 and other perquisites in the amount of $521.

(14)	For Ms.Verses, represents insurance premiums paid by the Company on behalf of the executive under our group term life insurance policy in the amount of $339 during the specified year, 401(k) matching contributions in the amount of $10,200, and other perquisites in the amount of $7,632.

(15)	For Ms. Verses, represents insurance premiums the Company paid on behalf of the executive under our group term life insurance policy and our health and welfare policies in the amount of $860 during the specified year; 401(k) matching contributions in the amount of $9,744 and other perquisites in the amount of $521.

(16)	Ms. Verses joined the Company effective October 2011. Her annualized base salary for 2011 was $300,000.

(17)	Mr. Wu received a one-time $20,000 performance award approved by the Compensation Committee.

(18)	This amount represents Mr. Wu's potential 2013 bonus payout. Mr. Wu voluntarily terminated his employment with the Company in February 2014 and therefore was not eligible to receive a bonus payout for the 2013 bonus plan year.

(19)	For Mr. Wu, represents insurance premiums the Company paid on behalf of the executive under our group term life insurance policy in the amount of $339 during the specified year, 401(k) matching contributions in the amount of $10,400, and other perquisites in the amount of $889.

(20)	For Mr. Wu, represents insurance premiums the Company paid on behalf of the executive under our group term life insurance policy and our health and welfare policies in the amount of $816 during the specified year; 401(k) matching contributions in the amount of $9,800 and other perquisites in the amount of $521.

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(1)

Represents potential payouts under the Executive Bonus Plan for 2013, except for our Line of Business Executives, 70% of which consisted of a financial component, 20% of which consisted of a non-financial strategic goals component, and 10% of which consisted of an individual performance goals component, as further described above under "Annual Cash Incentive Compensation." For all NEOs except Line of Business Executives, the financial portion of the bonus was based on achievement of the corporate financial goals. There were three components of the financial portion of the bonus: (i) achievement of the 2013 target Bookings (weighted at 40%); (ii) achievement of the 2013 target Adjusted Operating EBITDA goal (weighted at 40%); and (iii) achievement of the 2013 target Percentage Global Digital Sales

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(2)

Represents potential awards under the 2013 LTIP. Executives are eligible to receive Performance Stock Awards and cash upon the Company's achievement of specified performance goals between January 1, 2013 and December 31, 2014. The target value in each executive’s award is denominated 70% in Performance Stock Awards and 30% in cash. Each executive’s target award was established as a multiple of their base salary as of December 31, 2012. The target number of shares represented by the Performance Stock Award is based on valuation as of January 1, 2013. Details of the 2013 LTIP are included in the section entitled "Determining the Amount of Each Element of Compensation." In order for the granting of any Performance Stock Award or any cash payment to be made under the 2013 LTIP, the Company must meet the minimum threshold requirements for each performance goal for the 2014 fiscal year, in addition to the cumulative performance goals over the two year period ending December 31, 2014. Each performance goal is mutually exclusive. Each performance goal has a range of payout levels depending on the achievement of the goal ranging from zero to 200% of the incentive target. The awards upon the Company’s achievement of the following specified performance goals during the Program Period: (i) 33.33% Bookings; (ii) 33.33% Operating EBITDA; and (iii) 33.33% Percentage Global Digital Sales.

(3)

With respect to the bonus plan in footnote (1), all NEOs' amounts in this column, under "Annual Cash," represent the lowest possible bonus payout if the Company were to achieve the threshold of financial targets, except for Mr. Shah and Ms. Verses, where this column represents the lowest payout if the Company and their respective line of business met the financial thresholds. As such, each NEO therefore earned 80% of the portion of his or her target bonus that was based on the financial targets (Company and, if applicable, line of business) assuming no payout in respect of the non-financial targets were earned and approved. There is no guarantee of payment under this plan, therefore zero is the absolute minimum payout under the plan parameters.

(4)

With respect to all NEOs, amounts in this column represent the lowest possible cash payout if the Company were to achieve the threshold of the 2013 LTIP performance goals, as detailed in the section entitled "Determining the Amount of Each Element of Compensation." As such, each NEO therefore may earn 50% of the portion of his or her target cash award. There is no guarantee of award or payment under this plan, therefore zero is the absolute minimum payout under the plan parameters.

(5)

With respect to all NEOs, except Mr. Shah and Ms. Verses, amounts in this column, under "Annual Cash," represent the highest possible bonus payout if the Company were to achieve or exceed the maximum target or more of each of the financial targets described in footnote (1), with a maximum payout of 150% for each metric. For Mr. Shah and Ms. Verses, this number represents the maximum payout if the Company and their respective line of business achieved or exceeded the maximum financial targets, with a payout of 150% for Company metrics, consistent with other NEOs, and 250% for the maximum payout of line of business metrics. This calculation assumes maximum payout of 150% for all non-financial metrics for all NEOs. For all NEOs if achievement of one financial metric exceeded the threshold, and the other did not, the bonus would be funded for the metric that was achieved. Plan funding for the non-financial strategic targets was based on the attainment percentage of the specified non-financial strategic goals as determined by the Compensation Committee.

(6)	With respect to all NEOs, amounts in this column represent the highest possible cash payout if the Company were to achieve or exceed the maximum target or more of each of the 2013 LTIP performance goals, as detailed in the section entitled "Determining the Amount of Each Element of Compensation." As such, each NEO may earn 200% of the portion of his or her target performance cash award.

(7)

With respect to all NEOs, amounts in this column represent the lowest possible equity payout if the Company were to achieve the threshold of the 2013 LTIP performance goals, as detailed in the section entitled "Determining the Amount of Each Element of Compensation." As such, each NEO therefore may earn 50% of the portion of his or her target Performance Stock Award. There is no guarantee of award or payment under this plan, therefore zero is the absolute minimum payout under the plan parameters.

(8)

With respect to all NEOs, amounts in this column represent the highest possible equity payout if the Company were to achieve or exceed the maximum target or more of each of the 2013 LTIP performance goals, as detailed in the section entitled "Determining the Amount of Each Element of Compensation." As such, each NEO therefore may earn 200% of the portion of his or her target Performance Stock Award.

(9)

For all NEOs, represents stock options and restricted stock awards granted to each NEO that vest over a period of time based on the individual's services to the Company. Awards granted on February 21, 2013 represent annual awards. The amount of each annual award was discretionary and intended to put each NEO's equity awards and total equity ownership at the median of their respective peers based on the third party compensation study conducted by Exequity and to give each of our NEOs significant equity ownership that was subject to vesting to provide forward retention value. Due to operational constraints (primarily share dilution concerns), we have been unable to provide equity grants equal to the median compared to our peer base. Our Compensation Committee intends to make grants of stock options and restricted stock subject to vesting or other forms of equity based awards to our executives as part of its annual review of our executives' compensation as described under the caption "Compensation Discussion and Analysis—Elements of our Executive Compensation Program—Equity Based Compensation" in order to continue to align their interests with those of our stockholders. Our Compensation Committee has adopted a formal stock ownership guideline policy for our executives. Our Compensation Committee considers the liquidity of the executives' equity ownership as an important part of the executives' perception of the value of the equity award as compensation.

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(1)	Options vested as to one-fourth of the total number of shares on October 12, 2011 and thereafter vest at the rate of one-quarter per annum.

(2)	Restricted stock vested in equal annual installments over two years from grant date of January 9, 2012.

(3)	Options vested as to one-fourth of the total number of shares on February 22, 2013 and thereafter vest at the rate of one-quarter per annum.

(4)	Mr. Swad received 48,500 shares of restricted stock under the 2009 Plan on February 22, 2012 that vest in equal annual installments over four years.

(5)	Options vested as to one-fourth of the total number of shares on February 21, 2014 and thereafter vest at the rate of one-quarter per annum.

(6)	Mr. Swad received 13,633 shares of restricted stock under the 2009 Plan on February 21, 2013 that vest equal annual installments over four years.

(7)	Options will vest as to one-fourth of the total number of shares on May 4, 2013 and thereafter vest at the rate of one-quarter per annum.

(8)	Mr. Pierno received 15,000 shares of restricted stock under the 2009 Plan on May 4, 2012 that vest in equal annual installments over four years.

(9)	Restricted stock will vest in equal annual installments over four years from grant date of February 21, 2013.

(10)	Options vested as to one-fourth of the total number of shares on November 14, 2012 and thereafter vest at the rate of one-quarter per annum.

(11)	Mr. Shah received 6,803 shares of restricted stock under the 2009 Plan on December 9, 2011 that vest in four equal annual installments beginning November 14, 2012.

(12)	Options vested as to one-fourth of the total number of shares on October 5, 2012 and thereafter vest at the rate of one-quarter per annum.

(13)	Ms. Verses received 19,194 shares of restricted stock under the 2009 Plan on October 5, 2011 that vest in four equal annual installments beginning October 5, 2012.

(14)	Options vested as to one-fourth of the total number of shares on February 23, 2013 and thereafter vest at the rate of one-quarter per annum.

(15)	Restricted stock will vest in equal annual installments over four years from grant date of February 23, 2012.

(16)	Options vested as to one-fourth of the total number of shares on April 15, 2010 and thereafter vest at the rate of one-quarter per annum.

(17)	Options vested as to one-fourth of the total number of shares on March 15, 2011 and thereafter vest at the rate of one-quarter per annum.

(18)	Options vested as to one-fourth of the total number of shares on May 26, 2012 and thereafter will vest at the rate of one-quarter per annum.

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(1)	Mr. Swad sold 11,729 shares to cover taxes associated with the restricted stock vesting and received 20,141 shares on January 1, 2013.

(2)	Mr. Swad sold 12,723 shares to cover taxes associated with the restricted stock vesting and received 22,688 shares on January 1, 2013.

(3)	Mr. Swad sold 6,369 shares to cover taxes associated with the restricted stock vesting and received 5,756 shares on February 22, 2013.

(4)	Mr. Swad paid cash in the amount of $191,804 to cover taxes associated with the restricted stock vesting and received 33,333 shares on November 9, 2013.

(5)	Mr. Pierno sold 1,216 shares to cover taxes associated with the restricted stock vesting and received 2,534 shares on May 2, 2013.

(6)	Mr. Shah sold 700 shares to cover taxes associated with the restricted stock vesting and received 1,071 shares on January 1, 2013.

(7)	Mr. Shah sold 555 shares to cover taxes associated with the restricted stock vesting and received 1,146 shares November 14, 2013.

(8)	Ms. Verses sold 700 shares to cover taxes associated with the restricted stock vesting and received 1,071 shares on January 1, 2013.

(9)	Ms. Verses sold 119 shares to cover taxes associated with the restricted stock vesting and received 186 shares on February 25, 2013.

(10)	Ms. Verses sold 1,572 shares to cover taxes associated with the restricted stock vesting and received 3,227 shares on October 5, 2013.

(11)	Mr. Wu sold 2,720 shares to cover taxes associated with the restricted stock vesting and received 4,362 shares on January 1, 2013.

(12)	Mr. Wu sold 469 shares to cover taxes associated with the restricted stock vesting and received 749 shares on February 25, 2013.

(13)	The dollar amount in this column represents the number of shares vested multiplied by the closing price of the Company's stock on the date of vesting, and does not necessarily represent the cash value the NEOs realized in connection with the stock award.

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(1)	Represents benefits payable upon the NEOs' termination by the Company without cause or resignation for good reason (see preceding section, Employment Arrangements with Named Executive Officers) within one year following a change in control event.

(2)	Represents a severance payment equal to 18 months of Mr. Swad's base salary in the amount of $772,500, $26,930 in COBRA premium costs paid on his behalf for 18 months, $470 equal to a lump sum payment of 18 months of life insurance premiums, $327,591 in bonus payment earned as of December 31, 2013, $8,600 in outplacement services.

(3)	Represents acceleration of Mr. Swad's unvested restricted stock awards granted on February 22, 2012 of 36,375 shares of our common stock, each of which will accelerate vesting upon termination by the Company without cause or by Mr. Swad for good reason.

(4)

Represents unvested restricted shares detailed in (3) above, in addition to acceleration of Mr. Swad's unvested restricted stock awards granted on January 9, 2012 of 67,280 shares of our common stock and restricted stock awards granted on February 21, 2013 of 13,633 shares of our common stock, each of which will accelerate vesting upon a termination by the Company without Cause or by Mr. Swad for Good Reason as defined above; acceleration of unvested options to purchase 93,750 shares of our common stock, granted on February 22, 2012, with an exercise price of $8.76 per share, which would all accelerate vesting upon a change in control of our Company and his termination by the Company without Cause or by Mr. Swad for Good Reason, as defined above, within one year of the change in control event.

(5)

Mr. Swad is eligible for a pro-rata portion of any 2013 LTIP award earned and approved, scheduled to be paid out in 2015, within 45 days of the end of the 2013 LTIP plan period of December 31, 2014. Since the 2013 LTIP results have not been determined, the estimated payout is based on proration of time in the plan and payout at target, assuming the Performance Stock Awards would be valued at the closing stock

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(6)	Represents a severance payment equal to 12 months of Mr. Pierno's base salary in the amount of $330,000, $17,954 in COBRA premium costs paid on his behalf for 12 months, $8,600 in outplacement services, $313 in life insurance premiums paid in a lump sum representing 12 months of premiums, and $127,928 in bonus payment earned as of December 31, 2013.

(7)	Represents acceleration of Mr. Pierno's unvested restricted stock award of 11,250 shares of our common stock, granted on May 4, 2012,which will accelerate vesting upon a termination by the Company without Cause or by Mr. Pierno for Good Reason as defined above.

(8)

Represents vesting acceleration set forth in (7) above plus unvested options to purchase 37,500 shares of our common stock with an exercise price of $10.55 per share, granted on May 4, 2012, and acceleration of Mr. Pierno's unvested restricted stock award of 3,208 shares of our common stock, granted on February 21, 2013, that would accelerate vesting upon change in control of our company and Mr. Pierno's termination by the Company without Cause or by Mr. Pierno for Good Reason, as defined above, within one year of the change in control event.

(9)

Mr. Pierno is eligible for a pro-rata portion of any 2013 LTIP award earned and approved, scheduled to be paid out in 2015, within 45 days of the end of the 2013 LTIP plan period of December 31, 2014. Since the 2013 LTIP results have not been determined, the estimated payout is based on proration of time in the plan and payout at target, assuming the Performance Stock Awards would be valued at the closing stock price on December 31, 2013 of $12.22. Mr. Pierno's pro-rata 2013 LTIP payout (a mix of cash and performance shares) would be valued at $159,178.

(10)	In connection with his termination without cause effective March 31, 2014, Mr. Shah will receive severance payments consistent with this table with one exception. Instead of he and his family being immediately repatriated back to the United States, he will receive a modified repatriation package that is approximately the same cost to the Company.

(11)

Represents a severance payment equal to 12 months of Mr. Shah's base salary in the amount of $300,000, $16,330 in COBRA premium costs paid on his behalf for 12 months, $145,044 in bonus payment earned as of December 31, 2013, $8,600 in outplacement services, and $313 in life insurance premiums paid in a lump sum representing 12 months of premiums. Mr. Shah is also eligible, upon termination, for repatriation from his assignment in Japan. The estimated cost of repatriation is $31,000, which includes shipment of goods back to the United States, one-way transportation cost to the Unites States for him and his dependents, etc.

(12)	Represents acceleration of Mr. Shah's unvested restricted stock award of 3,401 shares of our common stock, granted on December 9, 2011, which will accelerate vesting upon a termination by the Company without cause or by Mr. Shah for good reason as defined above.

(13)

Represents vesting acceleration set forth in (12) above plus unvested options to purchase 32,500 shares of our common stock, granted on December 9, 2011, with an exercise price of $7.35 per share; acceleration of Mr. Shah's unvested restricted stock award of 1,770 shares of our common stock, granted on January 9, 2012, and acceleration of Mr. Shah's unvested restricted stock award of 3,208 shares of our common stock, granted on February 21, 2013, that would accelerate vesting upon change in control of our company and Mr. Shah's termination by the Company without Cause or by Mr. Shah for Good Reason, as defined above, within one year of the change in control event.

(14)

Mr. Shah is eligible for a pro-rata portion of any 2013 LTIP award earned and approved, scheduled to be paid out in 2015, within 45 days of the end of the LTIP plan period of December 31, 2014. Since the LTIP results have not been determined, the estimated payout is based on proration of time in the plan and payout at target, assuming the Performance Stock Awards would be valued at the closing stock price on December 31, 2013 of $12.22. Mr. Shah's pro-rata LTIP payout (a mix of cash and performance shares) would be valued at $136,798.

(15)

Represents a severance payment equal to 12 months of Ms. Verses' base salary in the amount of $309,000, $139,885 in bonus payment earned as of December 31, 2013, $8,600 in outplacement services, and $313 in life insurance premiums paid in a lump sum representing 12 months of premiums. Ms. Verses is not enrolled in our health and welfare benefits programs and therefore would not receive any COBRA continuation.

(16)	Represents acceleration of Ms. Verses' unvested restricted stock award of 9,596 shares of our common stock, granted on October 5, 2011, plus unvested restricted stock of 913 shares of our common stock, granted on February 23, 2012, which will accelerate vesting upon a termination by the Company without Cause or by Ms. Verses for Good Reason as defined above.

(17)

Represents vesting acceleration set forth in (16) above plus unvested options to purchase 32,500 shares of our common stock, granted on October 5, 2011, with an exercise price of $10.42 per share and unvested options to purchase 2,363 shares of our common stock, granted on February 23, 2012, with an exercise price of $8.95 per share; plus Ms. Verses' unvested restricted stock award of 1,770 shares of our common stock, granted on January 9, 2012, and unvested restricted stock of 3,208 shares of our common stock, granted on February 21, 2013, that would accelerate vesting upon change in control of our company and Ms. Verses' termination by the Company without Cause or by Ms. Verses for Good Reason, as defined above, within one year of the change in control event.

(18)

Ms. Verses is eligible for a pro-rata portion of any LTIP award earned and approved, scheduled to be paid out in 2015, within 45 days of the end of the LTIP plan period of December 31, 2014. Since the LTIP results have not been determined, the estimated payout is based on proration of time in the plan and payout at target, assuming the Performance Stock Awards would be valued at the closing stock price on December 31, 2013 of $12.22. Ms. Verses' pro-rata LTIP payout (a mix of cash and performance shares) would be valued at $149,237.

(19)	Mr. Wu voluntarily resigned effective February 7, 2014, and will not receive any severance payments.

(20)	Represents a severance payment equal to 12 months of Mr. Wu's base salary in the amount of $310,000, $98,596 in bonus payment earned as of December 31, 2013, $8,600 in outplacement services and $313 in life insurance premiums paid in a lump sum for 12 months of premiums. Mr. Wu is not enrolled in our health and welfare benefits programs and therefore would not receive any COBRA continuation.

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(21)	Represents acceleration of Mr. Wu's unvested restricted stock award of 3,654 shares of our common stock, granted on February 23, 2012, which will accelerate vesting upon a termination by the Company without Cause or by Mr. Wu for Good Reason as defined above.

(22)

Represents vesting acceleration set forth in (21) above plus unvested options to purchase 9,453 shares of our common stock, granted on February 23, 2012, with an exercise price of $8.95 per share plus Mr. Wu's unvested restricted stock award of 7,082 shares of our common stock, granted on January 9, 2012, and unvested restricted stock of 2,406 shares of our common stock, granted on February 21, 2013, that would accelerate vesting upon change in control of our company and Mr. Wu's termination by the Company without Cause or by Mr. Wu for Good Reason, as defined above, within one year of the change in control event.

(23)

Mr. Wu is eligible for a pro-rata portion of any LTIP award earned and approved, scheduled to be paid out in 2015, within 45 days of the end of the LTIP plan period of December 31, 2014. Since the LTIP results have not been determined, the estimated payout is based on proration of time in the plan and payout at target, assuming the Performance Stock Awards would be valued at the closing stock price on December 31, 2013 of $12.22. Mr. Wu's pro-rata LTIP payout (a mix of cash and performance shares) would be valued at $149,237.

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•	Adds 500,000 shares to the 2009 Plan by increasing the maximum aggregate number of shares of common stock in respect of which awards may be granted under the 2009 Plan from 6,877,674 shares to 7,377,674 (of which approximately 2,422,760 shares would be available for grant if our stockholders approve this Amendment); and

•	Increases the aggregate number of shares of our common stock with respect to which incentive stock options may be granted under the 2009 Plan to 7,377,674 shares.

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•	accelerate the time at which some or all of the awards then outstanding may be exercised so that such awards may be exercised in full for a limited period of time on or before a specified date, after which all such awards that remain unexercised shall terminate;

•

require the mandatory surrender to our Company of some or all of the then outstanding awards as of a specified date, in which event the Committee will then cancel such awards and our Company will pay to each such holder an amount of cash per share equal to the excess, if any, of the per share price offered to stockholders of our Company in connection with such transaction over the exercise prices under such awards for such shares;

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•	have some or all outstanding awards assumed or have a new award of a similar nature substituted for some or all of the then outstanding awards;

•

provide that the number and class or series of our shares of common stock covered by an award will be adjusted so that such award when exercised will then cover the number and class or series of our common stock or other securities or property to which the holder of such award would have been entitled pursuant to the terms of the agreement or plan relating to such transaction if the holder of such award had been the holder of record of the number of shares of our common stock then covered by such award; or

•	make such adjustments to awards then outstanding as the Committee deems appropriate to reflect such transaction.

(1)

Awards granted under the 2009 Plan to our executive officers and employees are discretionary and are not subject to set benefits or amounts, and we have not approved any awards that are conditioned on stockholder approval of this Proposal No. 3. Accordingly, we cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to our executive officers or employees under the 2009 Plan.

(2)

Pursuant to our current non-employee director compensation policy, each of our then current non-employee directors, with the exception of John T. Coleman and Phillip A. Clough, will receive an annual equity grant with a fair market value as of the date of grant of $100,000, comprised of 50% stock options and 50% RSUs granted under the 2009 Plan. The number of shares subject to such awards granted under the 2009 Plan is determined on the basis of the fair market value of our common stock on the date of grant and, therefore, is not determinable at this time.

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(1)

As of February 28, 2014, the Company had 2,191,149 shares remaining available for grant under its equity compensation plans and the following equity awards were outstanding: 2,321,158 stock options, with a weighted average exercise price of $13.32 and a weighted average remaining term of 8 years, as well as 739,094 Full Value Awards, which consisted of 646,268 restricted stock awards and 92,826 RSUs.

(2)	Represents nonqualified stock options outstanding under the Rosetta Stone Inc. 2006 Stock Incentive Plan.

(3)	Represents the weighted-average exercise price of the outstanding nonqualified stock options, excluding the RSUs which can be exercised for no consideration.

(4)	In addition to our 2009 Plan, we maintain the Rosetta Stone Inc. 2006 Stock Incentive Plan, which was previously approved by our stockholders in 2006 prior to our initial public offering. No new awards will be made under the 2006 plan and awards that are forfeited will not be made available for future awards.

(5)	Represents nonqualified stock options outstanding under the 2009 Omnibus Plan.

(6)	Represents RSU awards outstanding under the 2009 Omnibus Plan.

(7)	Represents number of securities available for award under the 2009 Omnibus Plan.

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(a)	the closing sale price of the Stock on that date, if the Stock is traded on that date, or

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(b)	the closing sale price of the Stock on the last trading date immediately preceding that date, if the Stock is not traded on that date;

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