Exhibit 10.9
SCHOLASTIC CORPORATION 2001 STOCK INCENTIVE
PLAN
(Amended and Restated as of September 23,
2008)
ARTICLE I
PURPOSE
The
purpose of this Scholastic Corporation 2001 Stock Incentive Plan is
to enhance the profitability and value of the Company for the
benefit of its stockholders by enabling the Company to offer
employees of, and Consultants to, the Company and its Affiliates
stock-based incentives in the Company, thereby creating a means to
raise the level of stock ownership by employees and Consultants in
order to attract, retain and reward such individuals and strengthen
the mutuality of interests between such individuals and the
Company’s stockholders.
ARTICLE II
DEFINITIONS
For
purposes of this Plan, the following terms shall have the following
meanings:
2.1 “ACQUISITION
EVENT” has the meaning set forth in Section
4.2(d).
2.2 “AFFILIATE” means
each of the following: (i) any Subsidiary; (ii) any Parent; (iii)
any corporation, trade or business (including, without limitation,
a partnership or limited liability company) which is directly or
indirectly controlled 50% or more (whether by ownership of stock,
assets or an equivalent ownership interest or voting interest) by
the Company or one of its Affiliates; (iv) any corporation, trade
or business (including, without limitation, a partnership or
limited liability company) which directly or indirectly controls
50% or more (whether by ownership of stock, assets or an equivalent
ownership interest or voting interest) of the Company or a Parent;
and (v) any other entity in which the Company or any of its
Affiliates has a material equity interest and which is designated
as an “Affiliate” by resolution of the
Committee.
2.3 “AWARD” means any
award under this Plan of any (a) Stock Option; (b) Restricted
Stock; (c) Other Stock-Based Award; or (d) other award providing
benefits similar to (a) through (c) designed to meet the
requirements of a Foreign Jurisdiction.
2.4 “AWARD AGREEMENT”
means, with respect to each Award, a written agreement between the
Company and the Participant setting forth the terms and conditions
of the Award, including, without limitation, a Stock Option
Agreement and Restricted Stock Agreement.
2.5 “BOARD” means the
Board of Directors of the Company.
2.6 “CAUSE” shall
mean, with respect to the Termination of Employment of an employee
or Termination of Consultancy of a Consultant, (1) in the case
where there is no employment agreement or consultancy agreement
between the Company or an Affiliate and the Participant in effect
at the time of the relevant grant or where there is an employment
agreement or consultancy agreement in effect at such time, but such
agreement does not define “cause” (or words of like
import), termination due to a Participant’s dishonesty,
fraud, insubordination, willful misconduct, refusal to perform
services (for any reason other than illness or incapacity) or
materially unsatisfactory performance of his or her duties for the
Company or an Affiliate, as determined by
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the Committee in its sole
discretion; or (2) in the case where there is an employment
agreement or consultancy agreement between the Company or an
Affiliate and the Participant in effect at the time of grant that
defines cause (or words of like import), termination that is or
would be deemed to be “for cause” (or words of like
import) as defined under such employment agreement or consultancy
agreement at the time of grant, as determined by the Committee in
its sole discretion.
2.7 “CODE” means the
Internal Revenue Code of 1986, as amended. Any reference to any
section of the Code shall also be a reference to any successor
provision.
2.8 “COMMITTEE” means
a committee or subcommittee of the Board appointed from time to
time by the Board, which committee or subcommittee shall consist of
two or more non-employee directors, each of whom is intended to be,
to the extent required by Rule 16b-3, a “non-employee
director” as defined in Rule 16b-3 and, to the extent
required by Section 162(m) of the Code and any regulations
thereunder, an “outside director” as defined under
Section 162(m) of the Code; provided, however, that if and to the
extent that no Committee exists which has the authority to
administer this Plan, the functions of the Committee shall be
exercised by the Board and all references herein to the Committee
shall be deemed to be references to the Board.
2.9 “COMMON STOCK”
means the Common Stock, $.01 par value per share, of the
Company.
2.10 “COMPANY” means
Scholastic Corporation, a Delaware corporation, and its successors
by operation of law.
2.11 “CONSULTANT”
means any advisor or consultant to the Company or its
Affiliates.
2.12 “DISABILITY”
means (1) in the case where there is no employment agreement or
consultancy agreement between the Company or an Affiliate and the
Participant in effect at the time of the relevant grant, or where
there is an employment agreement or consultancy agreement in effect
at such time, but such agreement does not define disability, total
and permanent disability, as defined in Section 22(e)(3) of the
Code, as determined by the Committee in its sole discretion; or (2)
in the case where there is an employment agreement or consultancy
agreement between the Company or an Affiliate and the Participant
at the time of the relevant grant that defines disability,
disability as defined under such employment agreement or
consultancy agreement, as determined by the Committee in its sole
discretion.
2.13 “EFFECTIVE DATE”
means the effective date of this Plan as defined in Article
XIV.
2.14 “ELIGIBLE
EMPLOYEE” means each employee of the Company or an
Affiliate.
2.15 “EXCHANGE ACT”
means the Securities Exchange Act of 1934, as amended. Any
references to any section of the Exchange Act shall also be a
reference to any successor provision.
2.16 “FAIR MARKET
VALUE” means, unless otherwise required by any applicable
provision of the Code or any regulations issued thereunder, as of
any date, the mean between the high and low sales prices of a share
of Common Stock on the applicable date: (i) as reported on the
principal national securities exchange on which it is then traded
or The Nasdaq Stock Market, Inc. (“NASDAQ”) or (ii) if
not traded on any such national securities exchange or NASDAQ the
mean of the closing bid and asked prices of a share of Common Stock
as reported by an automated quotation system sponsored by the
National Association of Securities Dealers, Inc. If
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the Common Stock is not readily
tradable on a national securities exchange, NASDAQ or any automated
quotation system sponsored by the National Association of
Securities Dealers, Inc., its Fair Market Value shall be set in
good faith by the Committee. Notwithstanding anything herein to the
contrary, with respect to Incentive Stock Options, “Fair
Market Value” means the price for Common Stock set by the
Committee in good faith based on reasonable methods set forth under
Section 422 of the Code and the regulations thereunder including,
without limitation, a method utilizing the average of prices of the
Common Stock reported on the principal national securities exchange
on which it is then traded during a reasonable period designated by
the Committee. For purposes of the grant of any Stock Option, the
applicable date shall be the date for which a mean sales price is
available at the time of grant.
2.17 “FAMILY MEMBER”
means, solely to the extent provided for in Securities Act Form
S-8, any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the employee’s household (other than a
tenant or employee), a trust in which these persons have more than
50% of the beneficial interest, a foundation in which these persons
(or the employee) control the management of assets, and any other
entity in which these persons (or the employee) own more than 50%
of the voting interests or as otherwise defined in Securities Act
Form S-8.
2.18 “FOREIGN
JURISDICTION” means any jurisdiction outside of the United
States including, without limitation, countries, states, provinces
and localities.
2.19 “INCENTIVE STOCK
OPTION” means any Stock Option awarded to an Eligible
Employee under this Plan intended to be, and designated as, an
“Incentive Stock Option” within the meaning of Section
422 of the Code.
2.20 “NON-QUALIFIED STOCK
OPTION” means any Stock Option awarded under this Plan that
is not an Incentive Stock Option.
2.21 “OTHER STOCK-BASED
AWARD” means an Award of Common Stock and other Awards made
pursuant to Article VIII that are valued in whole or in part by
reference to, or are payable in or otherwise based on, Common
Stock, including, without limitation, an Award valued by reference
to performance of an Affiliate.
2.22 “PARENT” means
any parent corporation of the Company within the meaning of Section
424(e) of the Code.
2.23 “PARTICIPANT”
means any Eligible Employee or Consultant to whom an Award has been
made under this Plan.
2.24 “PERFORMANCE
GOALS” has the meaning set forth in Section 9.1.
2.25 “PLAN” means
this Scholastic Corporation 2001 Stock Incentive Plan, as amended
from time to time.
2.26 “RESTRICTED
STOCK” means an Award of shares of Common Stock under this
Plan that is subject to restrictions under Article VII.
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2.27 “RESTRICTION
PERIOD” has the meaning set forth in Section 7.3(a) with
respect to Restricted Stock or Other Stock-Based Awards.
2.28 “RULE 16B-3”
means Rule 16b-3 under Section 16(b) of the Exchange Act as then in
effect or any successor provisions.
2.29 “SECTION 162(M) OF THE
CODE” means Section 162(m) of the Code and any Treasury
regulations thereunder.
2.30 “SECURITIES ACT”
means the Securities Act of 1933, as amended. Any reference to any
section of the Securities Act shall also be a reference to any
successor provision.
2.31 “STOCK OPTION”
or “OPTION” means any option to purchase shares of
Common Stock granted to Eligible Employees or Consultants under
Article VI.
2.32 “SUBSIDIARY”
means any subsidiary corporation of the Company within the meaning
of Section 424(f) of the Code.
2.33 “TEN PERCENT
STOCKHOLDER” means a person owning stock possessing more than
10% of the total combined voting power of all classes of stock of
the Company, its Subsidiaries or its Parent.
2.34 “TERMINATION OF
CONSULTANCY” means (i) the expiration of the contract (or in
the case of more than one contract, all contracts) under which
services are performed by the Consultant for the Company or an
Affiliate; or (ii) when an entity which is retaining a Participant
as a Consultant ceases to be an Affiliate unless the Participant
otherwise is, or thereupon becomes, a Consultant to the Company or
another Affiliate at the time the entity ceases to be an Affiliate.
In the event that a Consultant becomes an Eligible Employee or a
non-employee director upon the termination of his or her
consultancy, the Committee, in its sole and absolute discretion,
may determine that no Termination of Consultancy shall be deemed to
occur until such time as such individual is no longer a Consultant,
an Eligible Employee or a non-employee director. Notwithstanding
the foregoing, the Committee may otherwise define Termination of
Consultancy in the Award Agreement or, if no rights of a
Participant are reduced, may otherwise define Termination of
Consultancy thereafter.
2.35 “TERMINATION OF
EMPLOYMENT” means: (i) a termination of employment (for
reasons other than a military or personal leave of absence granted
by the Company) of a Participant from the Company and its
Affiliates; or (ii) when an entity which is employing a Participant
ceases to be an Affiliate, unless the Participant otherwise is, or
thereupon becomes, employed by the Company or another Affiliate at
the time the entity ceases to be an Affiliate. In the event that an
Eligible Employee becomes a Consultant or non-employee director
upon the termination of his or her employment, the Committee, in
its sole and absolute discretion, may determine that no Termination
of Employment shall be deemed to occur until such time as such
individual is no longer an Eligible Employee, a Consultant or a
non-employee director. Notwithstanding the foregoing, the Committee
may otherwise define Termination of Employment in the Award
Agreement or, if no rights of a Participant are reduced, may
otherwise define Termination of Employment thereafter.
2.36 “TRANSFER” means
(a) when used as a noun, any direct or indirect transfer, sale,
assignment, pledge, hypothecation, encumbrance or other disposition
(including the issuance of
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equity in a Person), whether for
value or no value and whether voluntary or involuntary (including
by operation of law), and (b) when used as a verb, to directly or
indirectly transfer, sell, assign, pledge, hypothecate, encumber,
or otherwise dispose of (including the issuance of equity in a
Person), whether for value or no value and whether voluntarily or
involuntarily (including by operation of law).
ARTICLE III
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall
be administered and interpreted by the Committee. If for any reason
the appointed Committee does not meet the requirements of Rule
16b-3 or Section 162(m) of the Code, such noncompliance with the
requirements of Rule 16b-3 or Section 162(m) of the Code shall not
affect the validity of Awards, grants, interpretations or other
actions of the Committee.
3.2 GRANTS OF AWARDS. The
Committee shall have full authority to grant to Eligible Employees
and Consultants, pursuant to the terms of this Plan, (i) Stock
Options, (ii) Restricted Stock, (iii) Other Stock-Based Awards or
(iv) other awards providing benefits similar to (i) through (iii)
designed to meet the requirements of Foreign Jurisdictions. All
Awards shall be granted by, confirmed by, and subject to the terms
of, a written Award Agreement executed by the Company and the
Participant. In particular, the Committee shall have the
authority:
(a)
to select the Eligible Employees and Consultants to whom Awards may
from time to time be granted hereunder;
(b)
to determine whether and to what extent Awards, including any
combination of two or more Awards, are to be granted hereunder to
one or more Eligible Employees or Consultants;
(c)
to determine, in accordance with the terms of this Plan, the number
of shares of Common Stock to be covered by each Award granted
hereunder;
(d)
to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Award granted hereunder (including, but
not limited to, the exercise or purchase price (if any), any
restriction or limitation, any vesting schedule or acceleration
thereof and any forfeiture restrictions or waiver thereof,
regarding any Award and the shares of Common Stock relating
thereto, based on such factors, if any, as the Committee shall
determine, in its sole discretion);
(e)
to determine whether and under what circumstances or method a Stock
Option may be settled;
(f)
to determine whether a Stock Option is an Incentive Stock Option or
Non-Qualified Stock Option or whether an Award is intended to
satisfy Section 162(m) of the Code;
(g)
to determine whether to require an Eligible Employee or Consultant,
as a condition of the granting of any Award, not to sell or
otherwise dispose of shares of Common Stock acquired pursuant to
the exercise of an Option or an Award for a period of time as
determined by the Committee, in its sole discretion, following the
date of the acquisition of such Option or Award;
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(h)
to modify, extend or renew an Award, subject to Articles XI and XV
herein, provided, however, that if an Award is modified, extended
or renewed and thereby deemed to be the issuance of a new Award
under the Code or the applicable accounting rules, the exercise
price of an Award may continue to be the original exercise price
even if less than the Fair Market Value of the Common Stock at the
time of such modification, extension or renewal; and
(i)
to offer to buy out an Option previously granted, based on such
terms and conditions as the Committee shall establish and
communicate to the Participant at the time such offer is
made.
3.3 GUIDELINES. Subject to
Articles XI and XV hereof, the Committee shall have the authority
to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan and perform all acts, including
the delegation of its administrative responsibilities, as it shall,
from time to time, deem advisable; to construe and interpret the
terms and provisions of this Plan and any Award issued under this
Plan (and any agreements relating thereto); and to otherwise
supervise the administration of this Plan. The Committee may
correct any defect, supply any omission or reconcile any
inconsistency in this Plan or in any Award Agreement relating
thereto in the manner and to the extent it shall deem necessary to
effectuate the purpose and intent of this Plan. The Committee may
adopt special guidelines and provisions for persons who are
residing in, or subject to the taxes of, Foreign Jurisdictions to
comply with applicable tax, securities and other laws and may
impose any limitations and restrictions that it deems necessary to
comply with the applicable tax, securities and other laws of such
Foreign Jurisdictions. To the extent applicable, this Plan is
intended to comply with Section 162(m) of the Code and the
applicable requirements of Rule 16b-3 and shall be limited,
construed and interpreted in a manner so as to comply
therewith.
3.4 DECISIONS FINAL. Any
decision, interpretation or other action made or taken in good
faith by or at the direction of the Company, the Board or the
Committee (or any of its members) arising out of or in connection
with this Plan shall be within the absolute discretion of all and
each of them, as the case may be, and shall be final, binding and
conclusive on the Company and all employees and Participants and
their respective heirs, executors, administrators, successors and
assigns.
3.5 RELIANCE ON COUNSEL. The
Company, the Board or the Committee may consult with legal counsel,
who may be counsel for the Company or other counsel, with respect
to its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be
liable with respect to any action taken or omitted by it in good
faith pursuant to the advice of such counsel.
3.6 PROCEDURES. If the Committee
is appointed, the Board shall designate one of the members of the
Committee as chairman and the Committee shall hold meetings,
subject to the By-Laws of the Company, at such times and places as
it shall deem advisable. A majority of the Committee members shall
constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination
reduced to writing and signed by all the Committee members, in
accordance with the By-Laws of the Company, shall be fully as
effective as if it had been made by a vote at a meeting duly called
and held. The Committee shall keep minutes of its meetings and
shall make such rules and regulations for the conduct of its
business as it shall deem advisable.
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3.7 DESIGNATION OF
CONSULTANTS/LIABILITY.
(a)
The Committee may designate employees of the Company and Affiliates
and professional advisors to assist the Committee in the
administration of this Plan and may grant authority to officers to
execute Award Agreements or other documents on behalf of the
Committee.
(b)
The Committee may employ such legal counsel, consultants and agents
as it may deem desirable for the administration of this Plan and
may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or
agent. Expenses incurred by the Committee in the engagement of any
such counsel, consultant or agent shall be paid by the Company. The
Committee, its members and any employee of the Company or Affiliate
designated pursuant to Paragraph (a) above shall not be liable for
any action or determination made in good faith with respect to this
Plan. To the maximum extent permitted by applicable law, no officer
of the Company or Affiliate or member or former member of the
Committee shall be liable for any action or determination made in
good faith with respect to this Plan or any Award granted under it.
To the maximum extent permitted by applicable law or the
Certificate of Incorporation or By-Laws of the Company (or if
applicable, of an Affiliate) and to the extent not covered by
insurance, each officer and member or former member of the
Committee shall be indemnified and held harmless by the Company (or
if applicable, an Affiliate) against any cost or expense (including
reasonable fees of counsel reasonably acceptable to the Company) or
liability (including any sum paid in settlement of a claim with the
approval of the Company), and shall be advanced amounts necessary
to pay the foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in connection
with this Plan, except to the extent arising out of such
officer’s, member’s or former member’s own fraud
or bad faith. Such indemnification shall be in addition to any
rights of indemnification the officers, directors or members or
former officers, directors or members may have under applicable law
or under the Certificate of Incorporation or By-Laws of the Company
or any Affiliate. Notwithstanding anything else herein, this
indemnification will not apply to the actions or determinations
made by an individual with regard to Awards granted to him or her
under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 SHARES.
(a)
GENERAL LIMITATION. The aggregate number of shares of Common Stock
which may be issued or used for reference purposes under this Plan
or with respect to which Awards may be granted shall not exceed
6,000,000 shares of Common Stock (subject to any increase or
decrease pursuant to Section 4.2) with respect to all types of
Awards. The shares of Common Stock available under this Plan may be
either authorized and unissued Common Stock or Common Stock held in
or acquired for the treasury of the Company. If any Stock Option
granted under this Plan expires, terminates or is canceled for any
reason without having been exercised in full or, with respect to
Stock Options, the Company repurchases any Stock Option, the number
of shares of Common Stock underlying such unexercised or
repurchased Stock Option shall again be available for the purposes
of Awards under this Plan. If any shares of Restricted Stock
awarded under this Plan to a Participant are forfeited or
repurchased by the Company for any reason, the number of forfeited
or repurchased shares of Restricted Stock shall again be available
for the purposes of Awards under this Plan. If Common Stock has
been
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delivered or exchanged by a
Participant as full or partial payment to the Company of an
exercise price or the price of the purchase of an Award other than
an Incentive Stock Option, the number of shares of Common Stock
exchanged as payment in connection with the exercise or purchase
shall again be available for purposes of determining the number of
shares of Common Stock available for Awards other than Incentive
Stock Options. If Common Stock has been delivered by a Participant
for payment of withholding taxes, or if the number of shares of
Common Stock otherwise deliverable has been reduced for payment of
withholding taxes, the number of shares of Common Stock delivered
by such Participant or reduced for payment of withholding taxes
shall again be available for purposes of determining the number of
shares of Common Stock available for Awards other than Incentive
Stock Options.
(b)
INDIVIDUAL PARTICIPANT LIMITATIONS.
(i)
The maximum number of shares of Common Stock subject to any Stock
Option or other Award intended to comply with Section 162(m) of the
Code which may be granted under this Plan during any fiscal year of
the Company to each Eligible Employee or Consultant shall be
250,000 shares per type of Award (subject to any increase or
decrease pursuant to Section 4.2).
(ii)
There are no annual individual Eligible Employee or Consultant
share limitations on Restricted Stock awards unless the grant of
such Award or the lapse of the relevant Restriction Period is
subject to attainment of Performance Goals in accordance with
Article IX hereof.
(iii)
The individual Participant limitations set forth in this Section
4.1(b) shall be cumulative; that is, to the extent that shares of
Common Stock for which Awards are permitted to be granted to an
Eligible Employee or a Consultant during a fiscal year are not
covered by an Award to such Eligible Employee or Consultant in a
fiscal year, the number of shares of Common Stock available for
Awards to such Eligible Employee or Consultant shall automatically
increase in the subsequent fiscal years during the term of the Plan
until used.
4.2 CHANGES.
(a)
The existence of this Plan and the Awards granted hereunder shall
not affect in any way the right or power of the Board or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the
Company’s capital structure or its business, any merger or
consolidation of the Company or any Affiliate, any issue of bonds,
debentures, preferred or prior preference stock ahead of or
affecting Common Stock, the dissolution or liquidation of the
Company or any Affiliate, any sale or transfer of all or part of
the assets or business of the Company or any Affiliate or any other
corporate act or proceeding.
(b)
Subject to the provisions of Section 4.2(d), in the event of any
change in the capital structure or business of the Company by
reason of any stock split, reverse stock split, stock dividend,
combination or reclassification of shares, recapitalization, or
other change in the capital structure of the Company, non-cash
distribution with respect to its outstanding Common Stock or
capital stock other than Common Stock, merger, consolidation,
spin-off, reorganization, partial or complete liquidation, issuance
of rights or warrants to purchase any Common Stock or securities
convertible into Common Stock, or any other corporate transaction
or event having an effect similar to any of the foregoing and
effected, then the aggregate number and kind of shares which
thereafter may be issued under this Plan, the number and kind of
shares or other property (including cash) to be issued upon
exercise of an outstanding Stock Option or other Award
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granted under this Plan and the
purchase price thereof shall be appropriately adjusted consistent
with such change in such manner as, and to the extent that, the
Committee may deem equitable to prevent substantial dilution or
enlargement of the rights granted to, or available for,
Participants under this Plan, and any such adjustment determined by
the Committee in good faith shall be final, binding and conclusive
on the Company and all Participants and employees and their
respective heirs, executors, administrators, successors and
assigns.
(c)
Fractional shares of Common Stock resulting from any adjustment in
Options or Awards pursuant to Section 4.2(b) shall be aggregated
until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half and rounding-up for fractions equal to
or greater than one-half. No cash settlements shall be made with
respect to fractional shares eliminated by rounding. Notice of any
adjustment shall be given by the Committee to each Participant
whose Award has been adjusted and such adjustment (whether or not
such notice is given) shall be effective and binding for all
purposes of this Plan.
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