Exhibit 10.7


                      Scholastic Corporation Management Stock Purchase Plan
                       (Amended and Restated Effective December 15, 1999)


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                             SCHOLASTIC CORPORATION
                         MANAGEMENT STOCK PURCHASE PLAN

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                            Effective January 1, 1999
                      Amended and Restated December 15, 1999


                             SCHOALSTIC CORPORATION
                         MANAGEMENT STOCK PURCHASE PLAN
                (Amended and Restated Effective December 15, 1999)

                                Table Of Contents

Article 1 - Introduction.....................................................1

Article 2 - Definitions......................................................1

Article 3 - Shares Reserved..................................................4

Article 4 - Administration...................................................4

Article 5 - Eligibility......................................................5

Article 6 - Purchases and Award of RSUs......................................5

Article 7 - Vesting and Payment of RSUs......................................6

Article 8 - Dividend Equivalent Amounts......................................8

Article 9 - Designation of Beneficiary.......................................8

Article 10 - Adjustments.....................................................8

Article 11 - Amendment or Termination of Plan................................9

Article 12 - Miscellaneous Provisions........................................9


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                             SCHOLASTIC CORPORATION
                         MANAGEMENT STOCK PURCHASE PLAN
                (Amended and Restated Effective December 15, 1999)


ARTICLE 1 - INTRODUCTION

      The purpose of the Scholastic Corporation Management Stock Purchase Plan
(the "Plan") is to provide equity incentive compensation to selected management
employees of Scholastic Corporation and its Affiliates. Participants in the Plan
receive restricted stock units at a discount in lieu of a portion or all of
their bonus awards under the Company's annual incentive plan. Under certain
circumstances, the restricted stock units convert into shares of Common Stock.
The Company believes that the Plan creates a means to provide deferred
compensation to such selected management employees and to raise the level of
stock ownership in the Company by such employees thereby strengthening the
mutuality of interests between such employees and the Company's stockholders.

ARTICLE 2 - DEFINITIONS

2.1   AFFILIATE - (i) any corporation, partnership, limited liability company or
      other entity as to which the Company possesses a direct or indirect
      ownership interest of at least fifty (50) percent or which possesses a
      direct or indirect ownership interest of at least 50% in the Company
      including, without limitation, any subsidiary corporation (as defined in
      Section 424(f) of the Code) and parent corporation (as defined in Section
      424(e) of the Code) and (ii) any other entity in which the Company or any
      of its Affiliates has a material equity interest, as determined by the
      Committee.

2.2   AWARD DATE - the first business day after the end of the fiscal quarter
      in which a Bonus for a year is paid or otherwise would have been paid.

2.3   AWARD VALUE - the Fair Market Value of a share of Common Stock on the
      Award Date.

2.4   BENEFICIARY - a Beneficiary or Beneficiaries designated by the Participant
      under Article 9.

2.5   BONUS - a Participant's annual award for a Fiscal Year under the Company's
      Annual Incentive Plan.

2.6   BOARD OF DIRECTORS - the Board of Directors of the Company or the
      Executive Committee of such Board of Directors.

2.7   CAUSE - any of the following: (i) any act or acts by the Participant
      constituting a felony under the laws of the United States, any state
      thereof, or any political subdivision thereof, (ii) the Participant's
      willful and continued failure to perform the duties assigned to him or her
      as an employee or consultant of the Company or Affiliate; (iii) any
      material breach by the Participant of any employment or consulting
      agreement with the Company or Affiliate; (iv) dishonesty, gross negligence
      or malfeasance by the Participant in the performance of his or her duties
      as an employee or consultant of the Company or Affiliate or any conduct by
      the Participant which involves a material conflict of interest


      with any business of the Company or Affiliate; or (v) the taking or
      knowingly omitting to take any other action or actions in the performance
      of the Participant's duties as an employee or consultant of the Company or
      Affiliate without informing appropriate members of management to whom such
      Participant reports, which action or actions, in the determination of the
      Committee, have caused or substantially contributed to the material
      deterioration in the business of the Company and its Affiliates, taken as
      a whole.

2.8   CODE - the Internal Revenue Code of 1986, as amended from time to time.

2.9   COMMITTEE - the committee of the Board of Directors authorized to
      administer the Plan. To the extent that no Committee exists which has the
      authority to administer the Plan, the functions of the Committee shall be
      exercised by the Board of Directors. The Committee shall consist of two or
      more non-employee directors, each of whom is intended to be, to the extent
      required by Rule 16b-3, a "non-employee director" as defined in Rule
      16b-3. If for any reason the appointed Committee does not meet the
      requirements of Rule 16b-3, such noncompliance shall not affect the
      validity of any grants of RSUs hereunder, interpretations or other actions
      of the Committee.

2.10  COMMON STOCK OR STOCK - Common Stock of the Company, par value $.01 per
      share.

2.11  COMPANY - Scholastic Corporation, a corporation organized under the laws
      of the State of Delaware (or any successor).

2.12  COST - the cost of purchasing an RSU under the Plan as of an Award Date,
      as determined by the Committee in its sole discretion, but in no event
      less than eighty-five (85%) percent of the lowest Fair Market Value of a
      share of Common Stock during the fiscal quarter immediately preceding
      the Award Date. The cost shall be established as of the applicable Award
      Date and shall remain in effect unless modified by the Committee at least
      thirty (30) days prior to the applicable Award Date. Effective as of the
      effective date of the Plan until modified by the Committee, the Cost
      shall be eighty-five (85%) percent of the lowest Fair Market Value of a
      share of Common Stock during the fiscal quarter immediately preceding
      the Award Date.

2.13  DEFERRAL PERIOD - a period of time (expressed in whole years) not less
      than three years beginning on an Award Date as specified by the
      Participant in his or her Subscription Agreement with respect to RSUs
      awarded on that Award Date; provided, however, that the Committee may
      establish, in its sole discretion, a fixed date as the end of the Deferral
      Period or fixed period specified with respect to RSUs awarded on that
      Award Date.

2.14  DISABILITY - complete and permanent inability by reason of illness or
      accident to perform the duties of the occupation at which the Participant
      was employed when such disability commenced, as determined by the
      Committee based on medical evidence available to it.

2.15  EXCHANGE ACT - the Securities Exchange Act of 1934, as amended.

2.16  FAIR MARKET VALUE - unless otherwise required by any applicable provision
      of the Code or any regulations issued thereunder, as of any date, the last
      sales price reported for the


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      Common Stock on the applicable date: (i) as reported on the principal
      national securities exchange on which it is then traded or the NASDAQ
      Stock Market, Inc. or (ii) if not traded on any such national securities
      exchange or the NASDAQ Stock Market, Inc. as quoted on an automated
      quotation system sponsored by the National Association of Securities
      Dealers, Inc. If the Common Stock is not readily tradable on a national
      securities exchange, the NASDAQ Stock Market, Inc. or any automated
      quotation system sponsored by the National Association of Securities
      Dealers, Inc., its Fair Market Value shall be set in good faith by the
      Committee.

2.17  FISCAL YEAR - the fiscal year of the Company.

2.18  FOREIGN JURISDICTION - any jurisdiction outside of the United States
      including, without limitation, countries, states, provinces and
      localities.

2.19  PARTICIPANT - a management employee of the Company or any Affiliate who
      satisfies the eligibility requirements under Article 5 of the Plan and
      elects to participate in the Plan in accordance with its terms.

2.20  PLAN - the Scholastic Corporation Management Stock Purchase Plan, as
      amended from time to time.

2.21  PLAN YEAR - the Fiscal Year, except that the first Plan Year shall be the
      short year beginning on the effective date of the Plan and ending on May
      31, 1999.

2.22  RETIREMENT - termination of employment with the Company and all Affiliates
      on or after age fifty-five (55).

2.23  RULE 16B-3 - means Rule 16b-3 promulgated under Section 16(b) of the
      Exchange Act or any successor provision.

2.24  RSU - a unit of measurement equivalent to one share of Common Stock but
      with none of the attendant rights of a stockholder of a share of Common
      Stock, including the right to vote (if any); except that an RSU shall have
      the dividend right described in Article 8. The fair market value of an RSU
      on any date shall be deemed to be the Fair Market Value of a share of
      Common Stock on that date.

2.25  SUBSCRIPTION AGREEMENT - an agreement executed by a Participant setting
      forth his or her election to defer receipt of a portion or all of his or
      her Bonus for the Deferral Period and to authorize the Company to credit
      such amount to the Plan in order to purchase an award of RSU. A
      Subscription Agreement shall contain such provisions, consistent with the
      provisions of the Plan, as may be established from time to time by the
      Company or Committee.


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ARTICLE 3 - SHARES RESERVED

      The aggregate number of shares of Common Stock reserved for issuance
pursuant to the Plan or with respect to which RSUs may be granted shall be
150,000, subject to adjustment as provided in Article 10 hereof.

     Such number of shares may be set aside out of the authorized but unissued
shares of Common Stock not reserved for any other purpose, or out of issued
shares of Common Stock acquired for and held in the treasury of the Company. If
any RSU awarded under the Plan is forfeited, terminated or canceled for any
reason, the share of Common Stock relating to such RSU shall again be available
under the Plan. If Common Stock has been exchanged by a Participant as full or
partial payment to the Company for withholding taxes or otherwise or if the
number of shares of Common Stock otherwise deliverable has been reduced for
withholding, the number of shares exchanged or reduced shall again be available
under the Plan.

ARTICLE 4 - ADMINISTRATION

4.1   The Plan shall be administered by the Committee. The Committee may select
      an administrator or any other person to whom its duties and
      responsibilities hereunder may be delegated. The Committee shall have full
      power and authority, subject to the provisions of the Plan, to promulgate
      such rules and regulations as it deems necessary for the proper
      administration of the Plan, to interpret the provisions and supervise the
      administration of the Plan, and to take all actions in connection
      therewith or in relation thereto as it deems necessary or advisable. The
      Committee may adopt special guidelines and provisions for persons who are
      residing in, or subject to the laws of, Foreign Jurisdictions to comply
      with applicable tax and securities laws. All interpretations and
      determinations of the Committee shall be made in its sole and absolute
      discretion based on the Plan document and shall be final, conclusive and
      binding on all parties with respect to all matters relating to the Plan.

4.2   The Committee may employ such legal counsel, consultants, brokers and
      agents as it may deem desirable for the administration of the Plan and may
      rely upon any opinion received from any such counsel or consultant and any
      computation received from any such consultant, broker or agent. The
      Committee may, in its sole discretion, designate an agent to administer
      the Plan, keep records, send statements of account to Participants and to
      perform other duties relating to the Plan, as the Committee may request
      from time to time. The Committee may adopt, amend or repeal any guidelines
      or requirements necessary for the delivery of the Common Stock.

4.3  The Company shall, to the fullest extent permitted by law and the
     Certificate of Incorporation and By-laws of the Company and, to the extent
     not covered by insurance, indemnify each director, officer or employee of
     the Company and its Affiliates (including the heirs, executors,
     administrators and other personal representatives of such person) and each
     member of the Committee against all expenses, costs, liabilities and losses
     (including attorneys' fees, judgments, fines, excise taxes or penalties,
     and amounts paid or to be paid in settlement) actually and reasonably
     incurred by such person in connection with any


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      threatened, pending or actual suit, action or proceeding (whether civil,
      criminal, administrative or investigative in nature or otherwise) in which
      such person may be involved by reason of the fact that he or she is or was
      serving this Plan in any capacity at the request of the Company, except in
      instances where any such person engages in willful neglect or fraud. Such
      right of indemnification shall include the right to be paid by the Company
      for expenses incurred or reasonably anticipated to be incurred in
      defending any such suit, action or proceeding in advance of its
      disposition; provided, however, that the payment of expenses in advance of
      the settlement or final disposition of a suit, action or proceeding shall
      be made only upon delivery to the Company of an undertaking by or on
      behalf of such person to repay all amounts so advanced if it is ultimately
      determined that such person is not entitled to be indemnified hereunder.
      Such indemnification shall be in addition to any rights of indemnification
      the person may have as a director, officer or employee or under the
      Certificate of Incorporation of the Company or the By-Laws of the Company.
      Expenses incurred by the Committee or the Board in the engagement of any
      such counsel, consultant or agent shall be paid by the Company.

ARTICLE 5 - ELIGIBILITY

      Management employees of the Company and its Affiliates as designated by
the Committee shall be eligible to participate in the Plan. Eligibility for
participation in the Plan shall be determined by the Committee in its sole
discretion. The Committee may, in its sole discretion, designate, on a
prospective basis, any Participant in the Plan as ineligible to receive awards
of RSUs pursuant to Article 6 of the Plan.

ARTICLE 6 - PURCHASES

6.1   GENERAL.
      Each Participant shall be entitled to elect to receive up to one hundred
      (100%) percent of his or her Bonus as an award of RSU. As of the
      applicable Award Date, RSUs shall be awarded to Participants and credited
      to accounts held under the Plan on behalf of Participants on a book entry
      basis calculated in the manner provided under Section 6.3.

6.2   VOLUNTARY PURCHASES.
      No later than the last day of the first quarter of each Fiscal Year, each
      Participant may elect to receive up to one hundred (100%) percent of his
      or her Bonus for that Fiscal Year as an award of RSUs by completing a
      Subscription Agreement. Notwithstanding the foregoing, for the first Plan
      Year, a Participant may elect to participate in the Plan for that Plan
      Year no later than the date set by the Committee in its sole discretion
      pursuant to procedures set by the Committee. If an employee of the Company
      or an Affiliate first becomes eligible to participate hereunder during a
      Plan Year, such employee may elect to participate in the Plan for that
      Plan Year pursuant to procedures established by the Committee (solely with
      respect to the PRO RATA portion of the Bonus earned after the Subscription
      Agreement is executed and delivered to the Company). The Subscription
      Agreement shall provide that the Participant elects to receive RSUs in
      lieu of a specified portion of his or her Bonus. Such portion may be
      expressed as:


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      (a)   a specified percentage of up to one hundred (100%) percent (in whole
            percentages) of the Participant's actual Bonus amount;

      (b)   a specified dollar amount, up to one hundred (100%) percent of the
            Participant's actual Bonus amount; or

      (c)   the lesser of the amount specified in Section 6.2(a) or (b).

            Amounts specified pursuant to any of the methods set forth herein
      are entirely contingent on, and are limited to, the amount of Bonus
      actually awarded. Each Subscription Agreement, in addition, shall specify
      a Deferral Period with respect to the RSUs to which it pertains. The
      Committee may, in its sole discretion, permit the Deferral Period with
      respect to the RSUs to which it pertains to be changed upon one year's
      notice to the Committee. Other than with respect to the first Plan Year or
      with respect to an employee of the Company or an Affiliate who first
      becomes eligible to participate hereunder during a Plan Year, Subscription
      Agreements must be received by the Company no later than the last day of
      the first quarter of the Fiscal Year for which such Bonus amount will be
      determined. With respect to any Plan Year, an election to receive RSUs in
      lieu of a portion or all of a Bonus hereunder pursuant to a Subscription
      Agreement is irrevocable on and after the date the Subscription Agreement
      must be submitted to the Company and is valid solely for the Plan Year to
      which the election relates. If no new Subscription Agreement is timely
      made with respect to any subsequent Plan Year, the Bonus earned in such
      Plan Year shall not be deferred under the Plan.

6.3   AWARDS OF RSUS.
      The Company shall award RSUs to each Participant's account under the Plan
      on the Award Date. Each Participant's account shall be credited with a
      number of RSUs (in whole and fractional RSUS) determined by dividing (a)
      the amount of the Participant's Bonus to be received as an award of RSUs
      in accordance with the Participant's Subscription Agreement and the
      methodology under Section 6.2 by (b) the Cost of a share of Common Stock
      on the Award Date.

ARTICLE 7 - VESTING AND PAYMENT OF RSUS

7.1   VESTING.
      A Participant shall be fully vested in each RSU three years after the
      Award Date pertaining to that RSU (provided that the Participant is
      continuously employed (including any period during which the Participant
      is on a leave of absence, either paid or unpaid, which is approved by the
      Committee, or any other break in employment which is approved by the
      Committee) by the Company or any Affiliate for such years) or, if earlier,
      upon death while employed, Disability while employed or Retirement. The
      Committee may, in its sole discretion, accelerate (in whole or part) the
      time at which any such RSUs may be vested, based on such factors, if any,
      as the Committee shall determine in its sole discretion.


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7.2   PAYMENT ON OR AFTER VESTING.
      With respect to each vested RSU, the Company shall issue to the
      Participant one share of Common Stock and/or cash in lieu of any
      fractional RSU as soon as practicable after the end of the Deferral Period
      specified in the Participant's Subscription Agreement pertaining to such
      RSU, or, if earlier, the Participant's termination of employment with the
      Company and its Affiliates or the termination of the Plan.

7.3   PAYMENT PRIOR TO VESTING.

      (a)   VOLUNTARY TERMINATION; TERMINATION FOR CAUSE. If a Participant
            voluntarily terminates his or her employment with the Company and
            its Affiliates for reasons other than death, Disability or is
            involuntarily terminated by the Company or an Affiliate for Cause,
            the Participant's nonvested RSUs shall be canceled, and he or she
            shall receive as soon as practicable after his or her termination of
            employment with the Company and its Affiliates a cash payment equal
            to the lesser of:

                  i)    an amount equal to the number of those nonvested RSUs
                        awarded on each Award Date multiplied by the respective
                        Cost of those RSUs; or

                  ii)   an amount equal to the number of those nonvested RSUs
                        awarded on each Award Date multiplied by the Fair Market
                        Value of a share of Common Stock on the date of the
                        Participant's termination of employment with the Company
                        and its Affiliates.

      (b)   INVOLUNTARY TERMINATION. If a Participant's employment is terminated
            by the Company or an Affiliate for any reason other than Cause, the
            Participant's nonvested RSUs shall be canceled and he or she shall
            receive payment as soon as practicable following his or her
            termination of employment with the Company and its Affiliates as
            described below:

                  i)    The number of nonvested RSUs awarded on each Award Date
                        shall be multiplied by a fraction, the numerator of
                        which is the number of full years that the Participant
                        was employed by the Company or any Affiliate after that
                        Award Date and the denominator of which is three; and
                        the Participant shall receive the resulting number of
                        such RSUs in shares of Common Stock, with any fractional
                        RSU paid in cash.

                  ii)   With respect to the Participant's remaining nonvested
                        RSUs, the Participant shall receive cash in an amount
                        equal to the lesser of: (A) the number of such nonvested
                        RSUs awarded on each Award Date multiplied by the
                        respective Cost of those RSUs; or (B) the number of
                        those nonvested RSUs awarded on each Award Date
                        multiplied by the Fair Market Value of a share of Common
                        Stock on the date of the Participant's termination of
                        employment with the Company and its Affiliates.


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      (c)   COMMITTEE'S DISCRETION. The Committee shall have complete discretion
            to determine the circumstances of a Participant's termination of
            employment with the Company and its Affiliates, including whether
            the same results from voluntary termination, Disability, Retirement,
            death or termination by the Company for or not for Cause, and the
            Committee's determination shall be final and binding on all parties
            and not subject to review or challenge by any Participant or other
            person.

ARTICLE 8 - DIVIDEND EQUIVALENT AMOUNTS

      Whenever dividends (other than dividends payable only in shares of Common
Stock) are paid with respect to shares of Common Stock, each Participant shall
be paid an amount in cash equal to the number of his or her vested RSUs
multiplied by the dividend value per share. Dividends (other than dividends
payable only in shares of Common Stock) shall not be credited or paid with
respect to each Participant's nonvested RSUs.

ARTICLE 9 - DESIGNATION OF BENEFICIARY

      A Participant may designate one or more Beneficiaries to receive payments
or shares of Common Stock in the event of his or her death. A designation of
Beneficiary shall apply to a specified percentage of a Participant's entire
interest in the Plan. Such designation, or any change therein, must be in
writing in a form acceptable to the Company and shall be effective upon receipt
by the Company. If there is no effective designation of Beneficiary, or if no
Beneficiary survives the Participant, the Participant's estate shall be deemed
to be the Beneficiary.

ARTICLE 10 - ADJUSTMENTS

      In the event of a stock dividend, stock split, reverse stock split,
combination or reclassification of shares, recapitalization, merger,
consolidation, exchange, spin-off or otherwise which affects Common Stock, the
Committee shall make appropriate equitable adjustments in:

      (a)   the number or kind of shares of Common Stock or securities with
            respect to which RSUs shall thereafter be granted;

      (b)   the number and kind of shares of Common Stock remaining subject to
            outstanding RSUs;

      (c)   the number of RSUs credited to each Participant; and

      (d)   the method of determining the value of RSUs.

ARTICLE 11 - AMENDMENT OR TERMINATION OF PLAN

      The Company reserves the right to amend, terminate or freeze the Plan at
any time, by action of its Board of Directors (or a duly authorized committee
thereof) or the Committee,


                                       8


provided that no such action shall adversely affect a Participant's rights under
the Plan with respect to RSUs awarded and vested before the date of such action.
No amendment shall be effective unless approved by the stockholders of the
Company if stockholder approval of such amendment is required to comply with any
applicable law, regulation or stock exchange rule. Upon termination of the Plan,
any vested RSU shall be paid in accordance with Section 7.2 of the Plan and any
nonvested RSU shall be canceled and paid in accordance with Section 7.3(b) of
the Plan except that such amount shall be paid as soon as administratively
practicable following the Plan termination. Upon freezing of the Plan, all
vested RSUs awarded prior to freezing shall continue to be held under the Plan
until the Deferral Period expires and all nonvested RSUs awarded prior to
freezing shall vest or become canceled in accordance with the terms of the Plan.

ARTICLE 12 - MISCELLANEOUS PROVISIONS

12.1  NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS.
      The Committee may require each person acquiring shares of Common Stock
      under the Plan to represent to and agree with the Company in writing that
      such person is acquiring the shares without a view to distribution
      thereof. No shares of Common Stock shall be issued until all applicable
      securities law and other legal and stock exchange requirements have been
      satisfied. The Committee may require the placing of such stop-orders and
      restrictive legends on certificates for Common Stock as it deems
      appropriate.

12.2  WITHHOLDING.
      Participation in the Plan is subject to any required tax withholding on
      wages or other income of the Participant in connection with the Plan. Each
      Participant agrees, by entering the Plan, that the Company or the
      Affiliate employing the Participant shall have the right to deduct any
      federal, state or local income taxes or other taxes, in its sole
      discretion, from any amount payable to the Participant under the Plan or
      from any payment of any kind otherwise due to the Participant. Upon the
      vesting of the RSU, prior to the issuance or delivery of shares of Common
      Stock or the payment of any cash hereunder, a Participant shall pay all
      required withholding to the Company and, if applicable, an Affiliate.
      Without limiting the generality of the foregoing, any withholding
      obligation with regard to any Participant may be satisfied by: (i)
      reducing the number of shares of Common Stock otherwise deliverable to the
      Participant; (ii) subject to the Committee's prior consent, any method
      approved by the Committee which may include the Participant delivering
      shares of Common Stock already owned for at least six months (or such
      other period to avoid an accounting charge against the Company's earnings)
      and held free and clear of all encumbrances to the Company; or (iii) by
      the Participant paying cash directly to the Company.

12.3  NOTICES; DELIVERY OF STOCK CERTIFICATES.
      Any notice required or permitted to be given by the Company or the
      Committee pursuant to the Plan shall be deemed given when personally
      delivered or deposited in the United States mail, registered or certified,
      postage prepaid, addressed to the Participant at the last address shown
      for the Participant on the records of the Company. Delivery of stock
      certificates to persons entitled to receive them under the Plan shall be
      deemed effected for all purposes when the Company or a share transfer
      agent of the Company shall have


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      deposited such certificates in the United States mail, addressed to such
      person at his/her last known address on file with the Company.

12.4  NONTRANSFERABILITY OF RIGHTS
      During a Participant's lifetime, any payment or issuance of shares under
      the Plan shall be made to him or her otherwise than by will or the laws of
      descent and distribution. No RSU or other interest under the Plan shall be
      subject in any manner to anticipation, alienation, sale, transfer,
      assignment, pledge, encumbrance, garnishment, execution, levy or charge,
      and any attempt by a Participant or any Beneficiary under the Plan to do
      so shall be void. No interest under the Plan shall in any manner be liable
      for or subject to the debts, contracts, liabilities, engagements or torts
      or a Participant or Beneficiary entitled thereto.

12.5  OBLIGATIONS UNFUNDED AND UNSECURED.
      The Plan shall at all times be entirely unfunded, and no provision shall
      at any time be made with respect to segregating assets of the Company
      (including Common Stock) for payment of any amounts or issuance of any
      shares of Common Stock hereunder. No Participant or other person shall own
      any interest in any particular assets of the Company or any Affiliate
      (including Common Stock) by reason of the right to receive payment under
      the Plan, and any Participant or other person shall have only the rights
      of a general unsecured creditor of the Company with respect to any rights
      under the Plan. Nothing contained in this Plan and no action taken
      pursuant to the provisions of this Plan shall create or be construed to
      create a trust of any kind, or a fiduciary relationship amongst the
      Company, any Affiliate, the Committee, and the Participants, their
      designated Beneficiaries or any other person. Any funds which may be
      invested under the provisions of this Plan shall continue for all purposes
      to be part of the general funds of the Company and no person other than
      the Company shall by virtue of the provisions of this Plan have any
      interest in such funds. If the Company decides to establish any accrued
      reserve on its books against the future expense of benefits payable
      hereunder, or if the Company establishes a rabbi trust under this Plan,
      such reserve or trust shall not under any circumstances be deemed to be an
      asset of the Plan.

12.6  GOVERNING LAW.
      The Plan is established in order to provide deferred compensation to a
      select group of management and highly compensated employees within the
      meanings of Sections 201(2) and 301(a)(3) of the Employee Retirement
      Income Security Act of 1974, as amended ("ERISA"). To the extent legally
      required, the Code and ERISA shall govern the Plan and, if any provision
      hereof is in violation of any applicable requirement thereof, the Company
      reserves the right to retroactively amend the Plan to comply therewith. To
      the extent not governed by the Code and ERISA, the terms of the Plan shall
      be governed, construed, administered and regulated in accordance with the
      laws of Delaware. In the event any provision of this Plan shall be
      determined to be illegal or invalid for any reason, the other provisions
      shall continue in full force and effect as if such illegal or invalid
      provision had never been included herein.


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12.7  CLAIMS PROCEDURE
      A Participant or Beneficiary shall make any claim (and, in the case of the
      denial of such claim, any appeal) in writing to the Committee or such
      other person designated by the Committee in accordance with the claims
      procedure established by the Committee, which is intended to comply with
      the claims procedure provided under ERISA and U.S. Department of Labor
      Regulation ss. 2560.503- 1.

12.8  RULE 16B-3
      To the extent required, the Plan is intended to comply with Rule 16b-3 and
      the Committee shall interpret and administer the provisions of the Plan in
      a manner consistent therewith. If a management employee is designated by
      the Committee to participate hereunder, any election to receive an award
      of RSUs shall be deemed approved by such Committee and shall be deemed an
      exempt purchase under Rule 16b-3. Any provisions inconsistent with Rule
      16b-3 shall be inoperative and shall not affect the validity of the Plan.

12.9  NO EMPLOYMENT RIGHTS.
      The establishment and operation of this Plan shall not confer any legal
      rights upon any Participant or other person for a continuation of
      employment, nor shall it interfere with the rights of the Company or
      Affiliate to discharge any employee and to treat him or her without regard
      to the effect which that treatment might have upon him or her as a
      Participant or potential Participant under the Plan.

12.10 SEVERABILITY OF PROVISIONS.
      If any provision of the Plan shall be held invalid or unenforceable, such
      invalidity or unenforceability shall not affect any other provisions
      hereof, and the Plan shall be construed and enforced as if such provisions
      had not been included.

12.11 CONSTRUCTION.
      The use of a masculine pronoun shall include the feminine, and the
      singular form shall include the plural form, unless the context clearly
      indicates otherwise. The headings and captions herein are provided for
      reference and convenience only, shall not be considered part of the Plan,
      and shall not be employed in the construction of the Plan.

12.12 EFFECTIVE DATE OF PLAN.
      The Plan is adopted, effective upon January 1, 1999, subject to approval
      of the stockholders of the Company as provided under applicable law,
      regulation or stock exchange rule.


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