Exhibit (10)(iii)(A)

                                                                   May 16, 1996


                            HOUGHTON MIFFLIN COMPANY
                1996 SENIOR EXECUTIVE INCENTIVE COMPENSATION PLAN


A.     Purpose.  The purpose of the Plan is to motivate and reward
       performance that contributes to the achievement of divisional
       and corporate strategy.

B.     Payment Thresholds.

       1.     Financial Objectives.  Payment of incentive compensation
              for achievement of individual financial factors may occur
              if

                    a.    80% or more of the budget for that financial fac-
                          tor is achieved; and

                    b.    Corporate net income exceeds $20.8 million;

       2.     Operating Objectives.  Payment of incentive compensation
              for achievement of operating objectives only may occur if
              the weighted average achievement of all financial factors
              exceeds 50% and corporate net income exceeds 50% of
              budget, or $14.85 million.

C.     Payments.

       1.     Financial Objectives.  Payment of incentive compensation
              for achievement of financial objectives is based on the
              degree to which those financial objectives are achieved.

                    a.     Payment of incentive compensation is determined by
                           the extent to which budgeted corporate and operat-
                           ing unit financial performance is achieved.

                    b.     Achievement in excess of budgeted corporate and
                           operating unit financial performance for all
                           financial objectives permits payment in cash of up to
                           30% of the participant's December 31, 1995 salary as
                           incentive compensation.

                    c.     If the weighted average achievement of all finan-
                           cial factors exceeds 120%, additional incentive
                           compensation may be earned.

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       2.     Operating Objectives.  Payment of incentive compensation
              for achievement of operating objectives is based on the
              Chief Executive Officer's assessment of each
              participant's degree of success in achieving operating
              objectives.  Maximum payment for achievement of operating
              objectives is 10% of the participant's December 31, 1995
              salary.

       3.     Incentive for Cash Flow and Net Income Budget Achievement

                    a.     Cash Flow:  If the Company achieves its cash flow
                           budget of $18 million (before debt repayment), the
                           incentive compensation of participants will in-
                           crease by 5%.  If the Company does not achieve its
                           cash flow budget, the incentive compensation of
                           participants will decrease by 5%.

                    b.     Net Income.  If the Company achieves its net in-
                           come budget of $29.7 million, the incentive com-
                           pensation of participants will increase by 5%.  If
                           the Company does not achieve its net income bud-
                           get, the incentive compensation of participants
                           will decrease by 5%.

       4.     Payments in excess of 40% of  December  31,  1995  salary.  If the
              total incentive compensation earned exceeds 40% of a participant's
              December 31, 1995 salary,  the excess amount is paid in restricted
              shares of Houghton Mifflin Company common stock.

                    a.     The number of shares awarded will be determined on
                           the basis of the average closing price of Houghton
                           Mifflin Company common stock on the New York Stock
                           Exchange during the last calendar quarter.

                    b.     Full ownership of the restricted stock will occur
                           after three years, provided that the recipient is
                           still employed by Houghton Mifflin Company on that
                           date. If the recipient ceases to be employed by the
                           Company prior to the expiration of the restrictions,
                           all shares are forfeited to the Company without
                           payment to the recipient.

                    c.     During the period of restriction, the recipient is
                           entitled to vote any restricted shares awarded and to
                           receive any dividends paid on the shares. Any
                           additional shares issued with respect to the
                           restricted shares (e.g., as a result of a stock
                           split, dividend, or other distribution or corpo-


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                           rate transaction or event) shall be subject to the
                           same restrictions as the underlying shares.

                    d.     The recipient may not sell, assign, transfer,
                           exchange, pledge, hypothecate, or otherwise encum-
                           ber any of the shares until the restrictions
                           lapse.

                    e.     The shares shall be held by the Registrar and
                           Transfer Agent designated by the Company until the
                           restrictions lapse.

                    f.     In the event a termination of the recipient's em-
                           ployment during the restricted period results from
                           (i) the recipient's retirement at a time at which the
                           recipient is eligible to receive benefits under the
                           provisions of the Houghton Mifflin Pension Plan,
                           (ii) the recipient's death, or (iii) the recipient's
                           becoming "permanently and totally disabled" (as
                           defined in Section 22 of the Internal Revenue Code
                           of 1986, as amended from time to time), the recipient
                           (or, in the event of the recipient's death, his or
                           her estate) shall be entitled to receive, free of
                           restrictions, a pro rata number of shares of Houghton
                           Mifflin Company common stock determined by
                           multiplying the number of restricted shares awarded
                           hereunder to the recipient by a fraction, the
                           numerator of which shall be the number of whole
                           months which have elapsed from January 1 of the year
                           the shares were awarded to the date of such
                           termination, and the denominator of which shall be
                           thirty-six (36).

                    g.     All restrictions shall lapse in the event of a
                           "Change in Control" as defined in Section F hereof.

                    h.     The Compensation and Nominating Committee of the
                           Board of Directors, or the Board of Directors, acting
                           by a majority of its directors who are not employees
                           of the Company, may at any time accelerate the time
                           at which the restrictions lapse.

              5.    Maximum Payment.  The maximum amount of incentive
                    compensation, including any restricted stock portion,
                    which may be awarded to any participant is 100% of
                    the participant's December 31, 1995 salary.


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       D.     Eligibility.

              1.    Participants in this Plan include executive vice presidents,
                    division heads, and corporate staff senior executives as
                    designated by the Chief Executive Officer. Individuals who
                    become participants after the beginning of the year
                    participate on a prorated basis.

              2.    In the event a termination of a participant's employment
                    occurs during the year and results from circumstances
                    described in Section C.3.f. hereof, a pro rata share of the
                    award (based on the number of days of eligible employment
                    during the year) will be paid to the participant (or, in the
                    event of the participant's death, his or her estate), based
                    upon the extent of partial achievement of applicable ob-
                    jectives. In the event of a leave of absence during the
                    year, a pro rata share of the award may be paid. In the
                    event of a Change in Control, and as soon as practicable
                    thereafter, each participant will be paid a pro rata bonus
                    determined by multiplying forty percent (40%) of his or
                    her salary on the day immediately preceding the Change in
                    Control by a fraction, the numerator of which shall be the
                    number of days in 1995 up to and including the day the
                    Change in Control occurred and the denominator of which
                    shall be three hundred-and-sixty-five (365).

              3.    Except as provided in Section D.2. or D.4. hereof, a
                    participant whose employment terminates, voluntarily or
                    involuntarily, for reasons other than circumstances
                    described in Section C.3.f. hereof, is not eligible for an
                    incentive award.

              4.    Except as provided in Section D.2. hereof, the eligibility
                    of a participant whose participation ceases during the year
                    will be determined by the Chief Executive Officer.

              5.    If the participant during the year transfers to another
                    position and continues to participate in the Plan, the
                    employee's performance will be measured against the
                    objectives in each position and then prorated on the number
                    of months each position was held.

              6.    Nothing contained in the Plan shall be construed to limit in
                    any way the right of the Company to termi-

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                    nate a participant's employment or to adjust an employee's
                    position or salary at any time, or be evidence of any
                    agreement or understanding, expressed or implied, that any
                    person will be employed in a particular position or at a
                    particular rate of compensation. If a pro rata payment is
                    made to a participant in accordance with the provisions of
                    this Section D. the participant will have no right to any
                    additional payment under the Plan.

              7.    The Compensation and Nominating Committee of the Board of
                    Directors reserves the right to amend the terms of this Plan
                    whenever in its best judgment it is in the best interest of
                    the Company to do so.

       E.     Interpretation. The Compensation and Nominating Committee of the
              Board of Directors ("Committee") shall administer this Plan and
              approve any payments pursuant to the Plan. Any interpretations of
              the Plan, including adjustments to the financial objectives
              under the Plan, shall be made by the Committee. Determinations of
              the Committee shall be final and binding on all participants.

       F.     Change in Control.

              1.  For purposes of the Plan, a "Change in Control" of the
Company shall be deemed to have occurred if any of the following occurs:

                                            i) any "Person" (as defined in this
Section F) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities;

                                            ii) during any period of no more
than two consecutive years beginning after the date of this Amendment and
Restatement individuals who at the beginning of such period constitute the
Board, and any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the directors of the Company) whose election by the Board or
nomination for election by the Company's stockholders was approved or
recommended by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or whose nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof;

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                                            iii) there occurs a merger or con-
solidation of the Company or a subsidiary thereof with or into any other entity,
other than (x) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), more than 75% of the
combined voting power of the voting securities of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger or
consolidation or (y) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person
acquires 25% or more of the combined voting power of the Company's then
outstanding securities; or

                                            iv) the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets.

        2. For purposes of the Plan, "Person" has the meaning given such term in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) of the Exchange Act, but excludes (a) the Company or any of its
subsidiaries, (b) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company (or of any subsidiary of the Company), (c)
any corporation owned, directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of stock of
the Company and (d) an underwriter temporarily holding securities pursuant to
an offering of such securities.

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                                                            Exhibit (10)(iii)(A)


                              (NADER F. DAREHSHORI)

                          GRANT OF RESTRICTED SHARES OF
                 COMMON STOCK UNDER THE HOUGHTON MIFFLIN COMPANY
                          1995 STOCK COMPENSATION PLAN


No. of Shares: (14,414)                                   As of January 31, 1996

Pursuant to its 1995 Stock Compensation Plan (the "Plan"), approved on April 26,
1995, by its shareholders, Houghton Mifflin Company (the "Company"), which term
shall include its successors as provided in the Plan, hereby grants to (NADER F.
DAREHSHORI) (the "Grantee") Fourteen Thousand Four Hundred Fourteen (14,414)
restricted shares of Common Stock of the Company (the "Restricted Shares") and
the "Make-Whole Payment" described in Section 3 hereof, subject to the terms and
conditions set forth hereinafter and in the Plan (together, the "Grant").

1. Lapse of Restrictions. Subject to the provisions of this Section and Section
2 hereof, the restrictions on the Restricted Shares shall lapse upon the third
anniversary hereof, if the Grantee is still employed by the Company on such
anniversary (which shall mark the completion of the "Vesting Period").

If, during the Vesting Period, the Committee determines that the Company may
lose its federal income tax deduction in connection with the future lapsing of
the restrictions on such Restricted Shares because of the deductibility cap of
Section 162(m) of the Internal Revenue Code of 1986, as amended from time to
time (the "Code"), the Committee, in its discretion, may convert some or all of
such Restricted Shares into an equal number of Restricted Share Units, as to
which payment will be postponed until the first day that the payment will not
cause the Company to lose its federal income tax deduction for such payment
under Section 162(m). Until payment of the Restricted Share Units is made, if
any dividends are paid on the Company's outstanding shares of Common Stock
("Shares"), the Grantee will be credited with dividend equivalents on the
Restricted Share Units outstanding hereunder (and if any Shares or other
securities are issued with respect to the Company's outstanding Shares (e.g., as
a result of a stock split, dividend, or other distribution or corporate
transaction or event),

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the Grantee will be credited with equitable equivalents on the Restricted Share
Units), all dividend and other equivalents will be converted into additional
Restricted Share Units, which shall be subject to the same restrictions (and
other provisions hereof) as the underlying Restricted Share Units. When payment
of any Restricted Share Units is made, it will be made in the same number of
unrestricted Shares.

Notwithstanding the foregoing, the Compensation and Nominating Committee (the
"Committee") of the Board of Directors, or the Board of Directors, acting by a
majority of its directors who are not employees of the Company, may at any time
accelerate the time at which the restrictions lapse on Restricted Shares or
Restricted Share Units and payment of Restricted Share Units is made.

Further, notwithstanding the foregoing, all restrictions with respect to the
Restricted Shares or Restricted Share Units shall lapse, and payment of
Restricted Share Units shall be made, upon the occurrence of a "Change in
Control" (as defined in Section 6 hereof) of the Company.

2. Termination of Employment. Except as provided in this Section or Section 1
hereof, if the Grantee ceases to be employed by the Company during the Vesting
Period, all Restricted Shares (and any Restricted Share Units outstanding
hereunder) are forfeited to the Company without payment to the Grantee. In the
event a termination of the Grantee's employment during the Vesting Period
results from (i) the Grantee's death, or (ii) the Grantee's becoming
"permanently and totally disabled" (as defined in Section 22 of the Code), the
Grantee (or, in the event of the Grantee's death, his estate) shall be entitled
to receive, free of restrictions, a pro rata number of Shares determined by
multiplying the number of Restricted Shares originally granted hereunder
(subject to any equitable adjustments made thereto pursuant to Section 6 hereof)
by a fraction, the numerator of which shall be the number of whole months which
have elapsed from the date hereof to the date of such termination, and the
denominator of which shall be thirty-six (36). In the event the Grantee's
employment is terminated by the Company during the Vesting Period without his
prior written consent and without "Cause" (as defined below in this Section 2),
the Grantee shall be entitled to receive, free of restrictions, a number of
Shares equal to the number of Restricted Shares originally granted here-


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under (subject to any equitable adjustments made thereto pursuant to Section 7
hereof).

For purposes of this Section 2, "Cause" shall mean (i) the willful and continued
failure by the Grantee to substantially perform the Grantee's duties with the
Company (other than any such failure resulting from the Grantee's incapacity due
to physical or mental illness) after a written demand for substantial
performance is delivered to the Grantee by the Company's Board of Directors,
which demand specifically identifies the manner in which the Board believes that
the Grantee has not substantially performed the Grantee's duties, or (ii) the
willful engaging by the Grantee in conduct which is demonstrably and materially
injurious to the Company or its subsidiaries, monetarily or otherwise. For
purposes of clauses (i) and (ii) of this definition, no act, or failure to act,
on the Grantee's part shall be deemed "willful" unless done, or omitted to be
done, by the Grantee not in good faith and without reasonable belief that the
Grantee's act, or failure to act, was in the best interest of the Company.

3. Additional Payment upon Lapse of Restrictions. Upon any lapse of restrictions
with respect to any or all of the Restricted Shares granted hereunder (or the
lapse of restrictions on Restricted Share Units outstanding hereunder and the
payment of such Restricted Share Units), the Company shall pay the Grantee a
lump sum cash payment (the "Make-Whole Payment") equal to the amount which will
make the Grantee whole for the imposition of any federal, state or local income
taxes with respect to any such event and with respect to the payment provided by
this Section 3.

4. No Transferability during Vesting Period. The Grantee shall not sell, assign,
transfer, exchange, pledge, hypothecate, or otherwise encumber any of the
Restricted Shares until the restrictions lapse (or any Restricted Share Units
outstanding hereunder until restrictions lapse and payment is made). The
Restricted Shares shall be held by the Registrar and Transfer Agent designated
by the Company until the restrictions lapse. No certificates for the Restricted
Shares on which the restrictions lapse (or for Shares representing payment of
Restricted Share Units) will be issued to the Grantee until the Company has
completed all steps required by law to be taken in connection with the issue and
sale of the Shares, including without limitation, receipt of any

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agreements or representations from the Grantee necessary to prevent a resale or
distribution of the Shares in violation of federal or state securities laws.

5. Other Effects of Vesting Period. During the Vesting Period and while
Restricted Shares are outstanding hereunder, the Grantee shall be entitled to
vote the Restricted Shares and to receive any dividends paid on the Restricted
Shares. Any additional Shares (or other securities) issued hereunder with
respect to the Restricted Shares (e.g., as a result of a stock split, dividend,
or other distribution or corporate transaction or event) shall be subject to the
same restrictions (and other provisions hereof) as the underlying Restricted
Shares.

6. Change in Control.

   a. For purposes of this Grant, a "Change in Control" of the Company shall be
   deemed to have occurred if any of the following occurs:

       i) any "Person" (as defined in Section 6.b. hereof) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of the
Company's then outstanding securities;

       ii) during any period of no more than two consecutive years beginning
after the date of this Grant individuals who at the beginning of such period
constitute the Board, and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company) whose election
by the Board or nomination for election by the Company's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of the period or
whose election or whose nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a majority thereof;

       iii) there occurs a merger or consolidation of the Company or a
subsidiary thereof with or into any other entity, other than (x) a merger or
consolidation

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which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity
or any parent thereof), more than 75% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation or (y) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person acquires 25% or more of the combined
voting power of the Company's then outstanding securities; or

       iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

   b. For purposes of this Grant, "Person" has the meaning given such term in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and
14(d) of the Exchange Act, but excludes (a) the Company or any of its
subsidiaries, (b) any trustee or other fiduciary holding securities under an
employee benefit plan of the Company (or of any subsidiary of the Company), (c)
any corporation owned, directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the Company
and (d) an underwriter temporarily holding securities pursuant to an offering of
such securities.

7. Equitable Adjustments and Miscellaneous. The Restricted Shares which are the
subject of this Grant are shares of the Common Stock of the Company as
constituted on the date hereof, subject to adjustment as provided in Section 9
of the Plan. Any Restricted Share Units outstanding hereunder shall be subject
to adjustment in a similar manner. Notices hereunder shall be mailed or
delivered to the Company at its principal place of business, 222 Berkeley
Street, Boston, Massachusetts 02116, Attention: Treasurer, and shall be mailed
or delivered to the Grantee at his or her address set forth below, or in either
case at such other address as one party may subsequently furnish to the other
party in writing. This Grant is made and accepted pursuant to the terms and
provisions of the Plan and expressly incorporates herein all of the terms and
provisions of the Plan. Notwithstanding anything in this Grant to the contrary,
in the event that any inconsistency arises between any term or provision of the
Plan and any term or provision of this


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Grant, then the applicable term or provision of the Plan shall control. This
Grant shall not confer upon the Grantee any right with respect to continuance of
employment by the Company or a subsidiary, nor shall it interfere in any way
with any right of the Grantee's employer to terminate the Grantee's employment
at any time.

8. Income Tax Withholding. In connection with the lapse of restrictions on any
or all of the Restricted Shares granted hereunder (or the lapse of restrictions
on, and the payment of any Restricted Share Units outstanding hereunder), the
Company is expressly authorized to take any and all steps it deems necessary to
comply with its tax withholding obligations under state and federal laws
including without limitation (i) withholding cash in an amount sufficient to
satisfy the Company's tax withholding obligations with respect to the Grantee
from the compensation then payable to the Grantee (including, without
limitation, the Make-Whole Payment), (ii) conditioning the delivery of Shares
(and any other securities hereunder) to the Grantee upon the payment to the
Company of an amount sufficient to satisfy the Company's tax withholding
obligations with respect to the Grantee and this Grant, or (iii) reducing the
number of Shares (and any other securities hereunder) deliverable to the Grantee
by such number as is sufficient in value to satisfy the Company's tax
withholding obligations with respect to the Grantee and this Grant, provided
that such reduction does not cause the Grantee to incur liability under Section
16(b) of the Exchange Act.

                                            HOUGHTON MIFFLIN COMPANY


                                            By: /s/ Gary L. Smith
                                               ---------------------------
                                                    Gary L. Smith
                                                    Senior Vice President,
                                                    Administration

Receipt of the foregoing Grant is hereby acknowledged and accepted and the
Grant's terms and conditions are hereby agreed to.


                                                /s/ Nader F. Darehshori
                                               --------------------------
                                                    Nader F. Darehshori
                                                    44 Carisbrooke Road
                                                    Wellesley, MA  02181

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