EXHIBIT 10.2
 
Eric Shuman
 

HMH HOLDINGS (DELAWARE), INC.
2012 MANAGEMENT INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD NOTICE
 
Houghton Mifflin Harcourt Company (formerly known as HMH Holdings (Delaware),
Inc.) (the “Company”) has previously established the HMH Holdings (Delaware),
Inc. 2012 Management Incentive Plan (the “Plan”) and, pursuant thereto, the
Company desires to grant to the Person identified on Schedule I hereto (the
“Grantee”) Restricted Stock Units (“RSUs”) with respect to the Company’s common
stock, $0.01 par value per share (“Common Stock”), as of the date set forth on
Schedule I hereto (the “Grant Date”), subject to the terms and conditions set
forth in this notice (“Award Notice”).
 
1.             Award. Subject to the terms and conditions set forth herein and
in the Plan, the Company hereby grants to the Grantee that number of RSUs as set
forth on Schedule I attached hereto (the “Award”). The Award shall be credited
to a separate book-entry account maintained for the Grantee on the books of the
Company. The Award shall vest and be settled in accordance with Section 2
hereof.
 
2.             Terms and Conditions.
 
(a)           The Award shall be one hundred percent (100%) unvested as of the
Grant Date. Except as otherwise provided in the Plan and this Award Notice, the
Award shall vest and become non-forfeitable in equal increments on each of the
first, second and third anniversaries of the Grant Date (each, a “Vesting
Date”), provided that the Grantee remains in continuous service with the Company
or any of its Subsidiaries on the applicable Vesting Date. In the event that the
Grantee’s continuous service is terminated by the Company for Cause, without
Cause (except as noted in clause 2(a)(i) below), or by the Grantee’s voluntary
resignation (except as noted in clause 2(a)(ii) below), the Grantee shall
forfeit the unvested Award as of the Grantee’s termination date. In the event
that the Grantee’s continuous service is terminated by the Company due to the
Grantee’s Disability or due to the Grantee’s death, the unvested Award shall
become immediately fully vested as of the Grantee’s termination date.  In the
event that (i) the Grantee’s continuous service is terminated by a successor to
Linda Zecher as Chief Executive Officer without Cause during the period
beginning on appointment of a successor to Linda Zecher as Chief Executive
Officer and ending three months thereafter (the “CEO Transition Protection
Period”), or (ii) Grantee’s employment voluntarily terminates for Good Reason,
provided that Grantee submitted the written notice of his voluntary termination
for Good Reason as described in section 4.2(c) of the Employment Agreement dated
as of August 1, 2013, by and between the Company and the Grantee (the
“Employment Agreement”) during the CEO Transition Protection Period, the vesting
of the unvested Award shall accelerate, assuming for such purpose that Grantee
had completed an additional 12 months of employment.
 
(b)           Notwithstanding the foregoing, in the event that the Grantee’s
continuous service is terminated by the Company other than for Cause, and other
than due to death or Disability,
 
 
 
 

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within one (1) year following the occurrence of a Change in Control, the
unvested Award shall become immediately fully vested.
 
(c)           Within 5 business days following each Vesting Date (or, if
applicable, an earlier vesting date under Section 2(a) or (b)), the Company
shall settle the vested portion of the Award and shall therefore, subject to any
required tax withholding and the execution of any required documentation, (i)
issue and deliver to the Grantee one share of Common Stock for each RSU (the
“RSU Shares”) (and, upon such settlement, the RSUs shall cease to be credited to
the account) and (ii) enter the Grantee’s name as a shareholder of record with
respect to the RSU Shares on the books of the Company. Alternatively, the
Committee may, in its sole discretion, elect to pay cash or part cash and part
RSU Shares in lieu of settling the vested RSUs solely in RSU Shares. If a cash
payment is made in lieu of delivering RSU Shares, the amount of such payment
shall be equal to the Fair Market Value as of the Vesting Date of the RSU Shares
less an amount equal to any federal, state, local and non-U.S. income and
employment taxes required to be withheld.
 
(d)           If on any date that RSUs remain outstanding, dividends are paid by
the Company on outstanding shares of its Common Stock (“Shares”) (each, a
“Dividend Payment Date”), then the Grantee’s account shall, as of each such
Dividend Payment Date, be credited with an amount (each such amount, a “Dividend
Equivalent Amount”) equal to the product of (i) the number of RSUs in the
account as of the Dividend Payment Date and (ii) the per Share cash amount of
such dividend (or, in the case of a dividend payable in Shares or other
property, the per Share equivalent cash value of such dividend as determined in
good faith by the Committee). On a Vesting Date, in connection with the
settlement and delivery of RSU Shares as contemplated by Section 2(c), the
Grantee shall be entitled to receive a payment, without interest, of an amount
in cash equal to the accumulated Dividend Equivalent Amounts in respect of the
RSU Shares so delivered.
 
(e)           The Company shall have the right to require, prior to the issuance
or delivery of any Shares or the payment of any cash pursuant to an Award made
hereunder, payment by the Grantee of any federal, state, local or other taxes
that may be required to be withheld or paid in connection with such Award.  The
Grantee may satisfy such withholding obligation by (i) paying such obligation in
cash or (ii) allowing the Company to withhold whole Shares that would otherwise
be delivered to the Grantee, having an aggregate Fair Market Value, determined
as of the date the obligation to withhold or pay, equal to the minimum
withholding taxes required in connection with an Award or by allowing the
Company to withhold an amount of cash that would otherwise be payable to the
Grantee, in the amount necessary to satisfy any such obligation  At the sole
discretion of the Committee, the Grantee may also satisfy such withholding
obligation by delivering Shares.
 
3.             Non-Transferability. The Award is subject to the restrictions on
transferability set forth in Section 9.3 of the Plan. In addition, with respect
to any RSU Shares delivered upon settlement of the RSUs, the Grantee agrees to
comply with any written holding requirement policy adopted by the Company for
employees.
 
4.             Rights as Shareholder. The Grantee shall have no rights as
shareholder with respect to the Shares subject to the Award unless, until and to
the extent that (a) the Company shall have
 
 
 
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issued and delivered to the Grantee the RSU Shares (via certificates or book
entry notation) and (b) the Grantee’s name shall have been entered as a
shareholder of record with respect to such RSU Shares on the books of the
Company.
 
5.             Adjustments. The Award granted hereunder is subject to adjustment
pursuant to Section 3.2 of the Plan.
 
6.             Applicable Securities Laws. Shares issued pursuant to the Award
granted under this Award Notice shall not be sold or transferred unless either
they first shall have been registered under the Securities Act or, upon request
by the Company, the Company first shall have been furnished with an opinion of
legal counsel, reasonably satisfactory to the Company, to the effect that such
sale or transfer is exempt from the registration requirements of the Securities
Act.
 
7.             Notice. Every notice or other communication relating to this
Award Notice shall be in writing, and shall be mailed to or delivered to the
party for whom it is intended at such address as may from time to time be
designated by it in a notice mailed or delivered to the other party as herein
provided; provided, that, unless and until some other address be so designated,
all notices or communications by the Grantee to the Company shall be mailed or
delivered to the Company at its principal executive office, and all notices or
communications by the Company to the Grantee may be given to the Grantee
personally or may be mailed to the Grantee’s address as recorded in the records
of the Company or any Subsidiary.
 
8.             Governing Law. This Award Notice shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to its conflict of law principles.
 
9.             Plan. The terms and provisions of the Plan are incorporated
herein by reference, a copy of which has been provided or made available to the
Grantee. In the event of a conflict or inconsistency between the terms and
provisions of the Plan and the provisions of this Award Notice, the Plan shall
govern and control.  All capitalized terms not defined herein shall have the
meaning ascribed to them as set forth in the Plan, except that the terms
“Cause”, “Disability” and “Good Reason” shall have definitions given to them in
the Employment Agreement.
 
10.           Interpretation. Any dispute regarding the interpretation of this
Award Notice shall be submitted by the Grantee or the Company to the Committee
for review. The resolution of such a dispute by the Committee shall be binding
on the Company and the Grantee.
 
11.           No Right to Continued Service. Nothing in this Award Notice shall
be deemed by implication or otherwise to impose any limitation on any right of
the Company or any Subsidiary to terminate the Grantee’s service.
 
12.           Severability. Every provision of this Award Notice is intended to
be severable and any illegal or invalid term shall not affect the validity or
legality of the remaining terms.
 
13.           Headings. The headings of the Sections hereof are provided for
convenience only and are not to serve as a basis for interpretation of
construction, and shall not constitute a part of this Award Notice.
 
 
 
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14.           Market Standoff Agreement. If, in connection with an underwritten
public offering, the underwriters require that any officers and directors of the
Company or its Subsidiaries agree not to effect any disposition of any equity
security of the Company or its Subsidiaries or of any security convertible into
or exchangeable or exercisable for any equity security of the Company or its
Subsidiaries (in each case, other than as part of such underwritten public
offering and other than the exercise of the Award granted hereunder), Grantee,
if Grantee is then an officer or director of the Company or its Subsidiaries,
agrees to execute the “market stand-off agreement” so required by the
underwriters.
 
15.           Section 409A. It is intended that the Award be exempt from or
comply with Section 409A of the Code and this Award Notice shall be interpreted
consistent therewith.
 
16.           Successors. The terms of this Award Notice shall be binding upon
and inure to the benefit of the Company, its successors and assigns, and the
Grantee and the beneficiaries, executors, administrators, heirs and successors
of the Grantee.
 
17.           Entire Agreement. This Award Notice and the Plan contain the
entire agreement and understanding of the parties hereto with respect to the
subject matter contained herein and supersede all prior communications,
representations and negotiations in respect thereof.
 
18.           Counterparts. This Award Notice may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
 
[signature page follows]
 
 
 
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IN WITNESS WHEREOF, the Company has caused this Award Notice to be executed by
its duly authorized representative and the Grantee has executed this Award
Notice, effective as of the Grant Date.
 

HOUGHTON MIFFLIN HARCOURT COMPANY
             
By:
/s/ Michael Dolan    
Name:  Michael Dolan
   
Title:  Senior Vice President and Corporate Controller
           

 
GRANTEE
             
/s/ Eric Shuman
 
Name:
Eric Shuman
 

 
 
 

 
 
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SCHEDULE I
 
AWARD
 
Grant Date: January 31, 2014

GRANTEE
NUMBER OF RSUs
Eric Shuman
2,599

 
 
 
 
 
 

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