Exhibit 10.5
SCHOLASTIC CORPORATION 2007 OUTSIDE DIRECTORS
STOCK INCENTIVE PLAN
1. Name and General
Purpose
The
name of this plan is the Scholastic Corporation 2007 Outside
Directors Stock Incentive Plan (the “Plan”). The
purpose of the Plan is to attract and retain the services, for the
benefit of Scholastic Corporation, a Delaware corporation (the
“Company”), of experienced and knowledgeable directors
who are not employees of the Company (the “Outside
Directors”) and to provide an additional incentive for such
Outside Directors through ownership of the common stock, par value
$.01 per share, of the Company (the “Common
Stock”).
2. Automatic Grants to Outside
Directors
Subject
to the provisions of Section 13 hereof, each individual (other than
any director electing not to participate hereunder) who is, at the
conclusion of each annual meeting of the Company’s
stockholders occurring after the effective date of the Plan, an
incumbent Outside Director, shall automatically be granted, as of
each such date (or, if applicable, the next succeeding business
day), (i) an option to purchase 3,000 shares of Common Stock at a
price per share equal to 100% of the Fair Market Value of the
Common Stock on such date, and (ii) 1,200 “Restricted Stock
Units” (as herein after defined).
For
purposes of this Section 2, “Fair Market Value” shall
mean the average of the high and low selling prices of the Common
Stock on the date on which the Common Stock is to be valued
hereunder, or, if none, on the last preceding date prior to such
date on which such prices were quoted, as reported on the NASDAQ
Stock Market, Inc. L.L.C. (“NASDAQ”). All options
granted under the Plan shall be non-qualified stock
options.
Restricted
Stock Unit” or “RSU” represents an unfunded,
unsecured right to receive in the future, if the conditions of an
RSU award are met, one share of Common Stock. No shares of Common
Stock shall be issued to an Outside Director on the date of the RSU
grant.
3. Exercise of
Options
Subject
to the provisions of Section 5 hereof, an option granted hereunder
may not be exercised within twelve (12) months after the date of
grant.
Except
as provided in Section 5 below, an option may be exercised, in
whole or in part at any time and from time to time during the
period beginning with the expiration of twelve months following the
date of grant and ending on the option expiration date, by
following the procedures established by the Company and its
designated record keeper at the time of exercise specifying the
number of shares of Common Stock to be purchased.
No
shares of Common Stock shall be issued until full payment therefor
has been made. An Outside Director shall have no rights as a
stockholder of the Company with respect to any shares of Common
Stock subject to an option until such time as the Outside Director
has properly exercised his or her option, paid in full for the
shares subject to such option, and executed any representations
required by the Company.
Each
option granted hereunder shall expire on the tenth anniversary of
the date on which it was granted, if not sooner terminated as
provided herein.
4. Restricted Stock
Units
An
RSU award shall not vest until twelve (12) months from the date of
grant. shares of Common Stock in respect of a vested RSU award
shall be issued to an Outside Director upon the vesting of an
RSU.
The
record established by the Company of the RSUs awarded to an Outside
Director does not constitute any stock or property of the Company.
No funds or shares of Common Stock shall be placed in trust or set
aside to assure payment of an award of RSUs. RSUs are an unfunded,
unsecured promise of the Company to issue Common Stock in the
future, subject to vesting and other conditions in the Plan. The
right of an Outside Director to receive shares of Common Stock in
settlement of an RSU shall be no greater than any general unsecured
creditor of the Company. An Outside Director shall have no rights
as a stockholder with respect to shares of Common Stock which may
be issued in settlement of an RSU until the date of issuance of a
certificate for such shares (as evidenced by the appropriate entry
on the books of the Company or a duly authorized transfer agent.)
No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such
certificate is issued.
5. Termination of Services of
Outside Directors
(a)
In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve on the Board of
Directors, otherwise than by reason of death or disability, such
option may be exercised (to the extent that the Outside Director is
entitled to do so at the time of such option exercise) at any time
and from time to time within six (6) months after such cessation of
service, but not thereafter, and in no event after the date on
which, except for such cessation of service, the option would
otherwise expire. In the event an Outside Director to whom an
option has been granted under the Plan shall cease to serve on the
Board of Directors but shall have been designated as a Director
Emeritus, the Director shall be treated as having ceased to serve
as a director.
(b)
In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve on the Board of
Directors by reason of disability (as determined by the Board of
Directors on the basis of all the facts and circumstances), such
option may be exercised, in full or in part, by the Outside
Director or his or her legally appointed representative
(notwithstanding that the option may not yet otherwise have become
exercisable with respect to all or part of such shares as of the
date of disability) at any time and from time to time within twelve
(12) months after such
2
cessation of service, but not
thereafter, and in no event after the date on which, except for
such disability, the option would otherwise expire.
(c)
If an Outside Director to whom an option has been granted under the
Plan dies (i) while he or she is serving on the Board of Directors,
(ii) within three (3) months after cessation of service on the
Board of Directors other than by reason of disability, or (iii)
within twelve (12) months after cessation of service on the Board
of Directors by reason of disability, such option may be
exercised:
1)
in the case of death while serving on the Board of Directors, as to
all or any part of the remaining unexercised portion of the option,
notwithstanding that the option may not yet otherwise have become
exercisable with respect to all or part of such shares as of the
date of death;
