Exhibit 10.3

Management Incentive Plan (MIP) Recommendation to Board of Directors

Purpose:

Provide a cash incentive program for the leadership of School Specialty

 

 

Goal:

Gain 100% alignment and engagement from senior leaders around the CEO
priorities:  1) stabilize our business; 2) align
our infrastructure better and lower our costs; 3) improve our bottom line
performance.

 

 

Structure:

Essentially, this is the Incentive Bonus Plan structure (as of June 1, 2007)
that has been in place previously

 

 

Cost:

At current staffing levels of eligible participants (73 total), annual cost at
Target  = $3,300,000

 

 

Payout:

Payout Percentage will be determined by the FY2015 final results with payout
occurring within 90 days from the close
of the fiscal year

 

 

Target/Metric:

The MIP for F2015 will be based on a single metric of Operating EBITDA with the
following thresholds and Scale:

 

 

Threshold

Target

Maximum

 

% achievement

96.2%

100%

119.2%

 

EBITDA

$50.0M

$52.0M

$62.0M

 

% Payout(1)

50%

100%

200%

(1) This represents the percentage of an individual target based on the salary
grade level of the participant

Other Specifics:

Additional Comments on the plan include:

 

√

Participant must be employed with company on date of payment.

 

√

Board of Directors will approve final payout percentage

 

√

Target represents Budget

 

√

Participants are director level and up (range on target as % of base =- 15% to
100%)

 

√

No payout for EBITDA achievement below $50M; program capped at 200% achievement