Exhibit 10.1
SCHOLASTIC CORPORATION 2001 STOCK INCENTIVE
PLAN
(Amended and Restated as of July 21, 2009)
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.
2.27A “RETIREMENT” means, with
respect to any Award of Stock Options, Restricted Stock, Other
Stock-Based Award or any other award providing benefits similar
thereto made on or after July 21, 2009, a Termination of Employment
on or after age 55 and at least 10 years of continuous service with
the Company or its Affiliates in accordance with the
Company’s standard retirement policies. With respect to any
Award of Stock Options, Restricted Stock, Other Stock-Based Award
or any other award providing benefits similar thereto made prior to
July 21, 2009, “Retirement” shall mean a Termination of
Employment on or after age 55 in accordance with the
Company’s standard retirement policies.
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
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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 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);
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(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;
(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.
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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.
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
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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 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.
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(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 o
