Exhibit 10.1

 

AMENDMENT TO HANDLEMAN COMPANY 2001 STOCK

OPTION AND INCENTIVE PLAN

 

The Handleman Company 2001 Stock Option and Incentive Plan is amended, effective
as of the date hereof, by replacing the existing Paragraph 16 in its entirety
with the following:

 

If the employment of a Participant by the Corporation or a Subsidiary shall be
terminated (or an outside director’s service as a director shall terminate), the
Committee may, in its discretion, permit the exercise of stock options granted
to such Participant (a) for a period not to exceed three months following such
termination of employment (or one year following termination of employment on
account of the Participant’s death or permanent disability) with respect to
Incentive Options, and (b) for a period not to extend beyond the expiration date
with respect to Nonqualified Options. In no event, however, shall a stock option
be exercisable subsequent to its expiration date. A stock option may only be
exercised after termination of a Participant’s employment (or of an outside
director’s service as a director) to the extent exercisable on the date of
termination of employment (or termination of service as an outside director);
provided, however, that if the termination of a Participant’s employment (or of
an outside director’s service as a director) is due to the Participant’s death
or permanent disability, all stock options granted to such Participant shall
thereupon become exercisable in full; and provided further, that if the
termination of a Participant’s employment (or of an outside director’s service
as a director) is due to the Participant’s retirement at a retirement age
permitted under the Corporation’s retirement plan, the Committee may, in its
discretion, permit the Participant’s stock options to become exercisable
following the termination of employment or service as a director in accordance
with the provisions established at the time of grant in the relevant stock
option agreement or agreements.

 

As adopted by the Board of Directors on February 24, 2004.