Exhibit 10.11
SCHOLASTIC CORPORATION
GUIDELINES FOR STOCK UNITS
GRANTED UNDER THE
SCHOLASTIC CORPORATION 2001 STOCK INCENTIVE PLAN
(As Amended and Restated as of July 21, 2009)
Grants
of Stock Units (as defined below) under the Scholastic Corporation
2001 Stock Incentive Plan (the “Plan”) shall be subject
to, and governed by, the provisions set forth in these guidelines,
the Plan (including, without limitation, Article VIII) and the
applicable Award Agreement. An Award of Stock Units shall
constitute an Other Stock-Based Award under the Plan. Unless
otherwise indicated, any capitalized term used but not defined in
these guidelines shall have the meaning ascribed to such term in
the Plan.
To
the extent applicable, these guidelines are intended to comply with
the applicable requirements of Section 409A of the Code (and the
regulations thereunder) and shall be limited, construed and
interpreted in a manner so as to comply therewith.
The
Company initially adopted these guidelines effective as of
September 20, 2004. The Company amended and restated these
guidelines effective as of May 25, 2006 in order to include a
deferral feature that complies with the requirements of Section
409A of the Code. The Company amended and restated these guidelines
as of September 23, 2008, effective as of January 1, 2005, in order
to provide for deferrals of performance-based awards and comply
with the requirements of Treasury Regulations issued under Section
409A. The Company hereby amends and restates these guidelines
effective with respect to awards of Stock Units made on or after
July 21, 2009 to modify the treatment of Stock Units upon
Termination of Employment or Consultancy. These guidelines are part
of the Plan and shall expire in accordance with Article XV
thereof.
|
|
|
|
1. Definitions . For
purposes of these guidelines, the following definitions shall
apply:
|
1.1.
“Cause” means, solely for purposes of the grant of
Stock Units and notwithstanding the definition of Cause in the
Plan: (a) in the case where there is no employment agreement,
consulting agreement, change in control agreement or similar
agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Stock Unit (or where
there is such an agreement but it does not define
“cause” (or words of like import)) any of the following
as determined by the Committee in its good faith discretion: (i)
willful misconduct of the Participant with regard to the Company;
(ii) willful refusal of the Participant to follow the proper
direction of the Board or any individual to whom the Participant
reports; (iii) the Participant’s fraud or dishonesty with
regard to the Company (other than good faith expense account
disputes); or (iv) the Participant’s conviction of, or plea
of guilty or nolo contendere to, a felony or other crime involving
moral turpitude; or (b) in the case where there is an employment
agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Company or an Affiliate and
the Participant at the time of the grant of a Stock Unit that
defines “cause” (or words of like import),
“cause” as defined under such agreement; provided,
however, that with regard to any agreement under which the
definition of “cause” only applies on occurrence of a
change in control, such definition of “cause” shall not
apply until a change in control actually takes place and then only
with regard to a termination thereafter.
1.2.
“Disability” means, solely for purposes of the grant of
Stock Units and notwithstanding the definition of Disability in the
Plan, the Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or
can be expected to last for a continuous period of not less than 12
months.
1.3.
“Retirement” means a Termination of Employment or
Consultancy on or after age 55 and at least 10 years of continuous
of service with the Company or its Affiliates in accordance with
the Company’s standard retirement policies.
1.4.
“Specified Employee” or “Key Employee”
shall mean such persons as shall be determined by the
Company.
1.5.
“Stock Unit” means a restricted stock unit, which is a
unit of measurement equivalent to one share of Common Stock but
with none of the attendant rights of a holder of a share of Common
Stock until a share of Common Stock is ultimately distributed in
payment of the obligation (other than the right to receive dividend
equivalent amounts in accordance with Section 4 hereof). Upon
distribution, all vested Stock Units shall be paid solely in the
form of shares of Common Stock.
1.6.
“Unforeseeable Emergency” means a severe financial
hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of a dependent (as
described in Section 152(a) of the Code, without regard to Section
152(b), (b)(2) and (d)(1)(B)) of a Participant, loss of the
Participant’s property due to casualty or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant.
2. Eligibility . Any
Eligible Employee or Consultant (or prospective employee of the
Company or any of its Affiliates or prospective Consultant) who is
designated by the Committee is eligible to receive Stock Units
pursuant to these guidelines. Notwithstanding the foregoing, no
such person shall be eligible to defer the payment of Stock Units
unless such person is an Eligible Employee who is a member of a
select group of management and highly compensated employees within
the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
To the extent a Participant is no longer considered a member of a
select group of management and highly compensated employees within
the meaning of Section 201(2), 301(a)(3) and 401(a)(1) of ERISA,
the Committee may deem such Participant ineligible to defer any
additional Stock Units and all then unvested Stock Units shall
continue to vest in accordance with the applicable vesting schedule
and all vested Stock Units shall be payable in accordance with the
Participant’s then existing elections, subject to the terms
of these guidelines.
|
|
|
|
3. Vesting of Stock Units and
Payment .
|
3.1.
Except as otherwise provided in Section 3.3 hereof, Stock Units
shall vest in accordance with the vesting schedule and conditions
set forth in the relevant Award Agreement, provided that the
Participant is continuously employed by (or continuously provides
consulting services to) the Company or any of its Affiliates
(including any period during which the Participant is on leave of
absence or any other break in employment in accordance with the
Company’s policies and procedures) on each applicable vesting
date and, provided further, that no portion of such Award shall
vest or be payable earlier than the date that is thirteen (13)
months after the date of its grant (“Initial Vesting
Date”). An Award Agreement may condition the grant or vesting
of Stock Units upon the attainment of Performance Goals, including
established Performance Goals intended to meet the requirements of
qualified-performance-based compensation under Section 162(m) of
the Code, or such other factors as the Committee may determine, in
its sole discretion.
2
3.2.
Except as otherwise provided in this Section 3 or in Section 4.2
hereof, the Company shall distribute one share of Common Stock with
respect to each vested Stock Unit on the applicable vesting
date.
3.3.
(a) For awards granted on or after July 21, 2009, subject to the
limitations set forth in Section 3.4 below, upon a Termination of
Employment or Termination of Consultancy (as applicable) by reason
of a Participant’s Retirement after the Initial Vesting Date
of an Award, for a period of three years from the date of
Termination of Employment or Termination of Consultancy, unvested
Stock Units will continue to vest and shares of Common Stock with
respect to such Stock Units shall be distributed on the applicable
vesting date in accordance with the vesting schedule that would
have been in effect pursuant to Section 3.1 but for the Termination
of Employment or Termination of Consultancy. The foregoing
provision shall not apply if the Termination of Employment or
Termination of Consultancy shall occur prior to the Initial Vesting
Date of the Award. Notwithstanding the foregoing, to the extent
required by Section 409A of the Code and Treasury regulations, upon
a Termination of Employment or Termination of Consultancy (other
than as a result of death) of a Specified Employee, distributions
under the Plan determined, in whole or in part, to constitute
“nonqualified deferred compensation” within the meaning
of Section 409A of the Code shall be delayed until six months after
such Termination of Employment or Termination of Consultancy if
such termination constitutes a “separation from
service” (within the meaning of Section 409A(a)(2)(A)(i) of
the Code and the Treasury regulations issued thereunder) and such
distributions shall be made at the beginning of the seventh month
following the date of the Specified Employee’s Termination of
Employment or Termination of Consultancy.
(b)
Subject to the limitations set forth in Section 3.4 below, in the
case of awards granted prior to July 21, 2009, upon a Termination
of Employment or Termination of
