Document:

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               Certain Confidential Information has been omitted
                    and filed separately with the Commission

                                                                    Exhibit 10.1

genzyme CONFIDENTIAL

SEVELAMER SUPPLY AGREEMENT
GENZYME CORPORATION & RENAGEL LLC
TERM SHEET:  MARCH 13, 2000

BACKGROUND

The terms attached were developed by Genzyme in response to the RenaGel LLC's
Request for Proposals (RFP) of October 1999 for a [  *  ] manufacturing capacity
facility (Appendix A). They reflect Genzyme's response to the RFP in our
proposal of November 9th and the revised terms of the December 16, 1999 update.

On December 16, 1999 Genzyme was informed by the LLC of our selection as the
`winner' of the RFP process for the Large Scale Plant (LSP).

Consequently, the terms below serve as the basis for a definitive supply
agreement between Genzyme and the LLC. Genzyme and the LLC each hereby
acknowledge that this Term Sheet is a legally binding and enforceable obligation
of each of the parties.

It is understood that there will be two agreements relating to the LSP. The
first agreement will be between Genzyme and the LLC for the supply of sevelamer
for the LLC's Territory. The second agreement will be between Genzyme and Chugai
Pharmaceutical Co. Ltd. for the supply of sevelamer for the Chugai Territory.
The two agreements will be prepared to work together with respect to maximum
capacity, minimum purchase commitments and volume driven pricing.

The terms below reflect discussions between Mark Bamforth and Joe Tyler on Jan.
17th, 25th, 26th, Feb 7th, 15th, 22nd, March 3rd and 9th.

TERMS:

1.   The Development and Capital costs for the LSP will be paid by Genzyme.

2.   The project will start in January 2000 and Genzyme will use its
     commercially reasonable and diligent efforts to complete the design,
     construction, commission, validation and regulatory approval of the LSP by
     mid-2002.

3.   The LLC requests a 50kg sample of Sevelamer manufactured by the proposed
     process of the LSP for delivery by March 2000, principally for tableting
     studies to be conducted. As per the November 9th proposal, Genzyme requests
     reimbursement from the LLC for the incremental costs associated with
     providing this sample, currently estimated at [  *  ], and will not exceed
     [  *  ]. Genzyme does not

                                                                               1
<PAGE>   2

     propose [  *  ] the provision of this sample.

     The 50kg sample will be used for tableting studies at [  *  ]. The sample
     will not be produced to GMP and can only be used for non-human use. The
     sample must meet the following criteria:

     I.   Meet the current release specifications for Sevelamer API

     II.  Be made as far as possible by the proposed process

     GelTex will be responsible for the formulation and tableting studies to be
     conducted by [  *  ]. In the event that the material does not meet the
     tableting requirements, then GelTex will identify the areas of concern and
     work with Genzyme to produce a sample to meet the requirements. Genzyme
     will bear the cost associated with its efforts to develop a process to
     produce a sample that meets the tableting requirements. The incremental
     costs of actually producing additional material once the development work
     is complete will be paid for by the LLC. Genzyme will not [  *  ] to make
     this material.

4.   The supply agreement will be a "Take or Pay" contract for [  *  ] from
     facility approval, as per the RFP. At [  *  ] nominal capacity, the LLC
     commits to the following minimum off take:

                                    [  *  ]

     Not withstanding the above, the minimum quantities to which Chugai commits
     in its contract with Genzyme will serve to reduce the minimum commitment of
     the LLC on a ton for ton basis (i.e., if Chugai commits to a minimum take
     in 2003 of [  *  ], the LLC minimum for 2003 shall be [  *  ].).

5.   The product price to the LLC and Chugai will be:

                                    [  *  ]

     For volumes between [  *  ] the price will be adjusted as per the
     price schedule included in the December 16th update. All quantities
     purchased by Chugai will be aggregated with those purchased by the LLC in
     order to determine the appropriate product price for the LLC and Chugai.

     The "Take or Pay" agreement commits the LLC to take a minimum [  *  ]
     output per year (less any minimum amount to which Chugai is or becomes
     contractually

                                                                               2
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     committed) or pay the fixed price (less raw materials  cost) if less output
     is required in a given year.

6.   All prices are based on 1999 costs;  future costs will be adjusted using an
     agreed price index.

7.   The prices quoted are based on the cost of [  *  ], [  *  ]. The prices are
     also based on a ratio of [  *  ] in the process. Genzyme will be
     responsible for the freight & duty cost of [  *  ] to the Haverhill site.
     GelTex will be responsible for securing a source of supply of [  *  ]. The
     prices will be adjusted pro rata to reflect any change in the cost of
     [  * ]. The prices will not be adjusted for any change in the use ratio of
     [  * ].

     GelTex will  examine the option of a European [  *  ] supply in order to
     reduce material cost and the freight and duty cost for [  *  ].

8.   The estimated cost of manufacturing Sevelamer is made up of a variable cost
     and a fixed cost. The variable cost includes materials, utilities,
     consumables, direct production labour and depreciation. The fixed cost
     includes other labour, site overheads and UK management overheads. Genzyme
     agrees to [  *  ].

9.   The existing supply agreement between the LLC and Genzyme (dated Jan 1st
     1998) remains in effect, with termination scheduled for [  *  ].
     Genzyme plans to transition all production into the LSP upon approval, i.e.
     mid-2002. Therefore, the LLC's purchase commitment in the years 2002 and
     2003 are expected to be as follows (subject to adjustment for Chugai's
     commitment, as discussed above):

                                   [  *  ]

10.  Either party can terminate the LSP agreement by giving at least [  *  ]
     written notice, effective on [  *  ], but not before  completion of [  *  ]
     of output from the LSP after facility approval.

11.  The LLC and Chugai will each grant to Genzyme the right of first refusal to
     supply the aggregate requirements of the LLC and Chugai above [  *  ]
     ("Excess Requirements"). In connection therewith, the LLC and Chugai,
     either jointly or separately as suits the particular needs of the LLC and
     Chugai, shall be allowed to issue an RFP to obtain bids from third parties
     for any Excess Requirements and shall provide Genzyme with a description of
     the most favourable terms obtained. Genzyme shall respond to the terms
     provided in a timely manner, and shall use commercially reasonable and
     diligent efforts to respond in the time frame reasonably requested by the
     LLC and/or Chugai, as the case may be. If Genzyme notifies the LLC and/or
     Chugai, as the case may be, that it is able to match such terms for the

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     Excess Requirements specified in the RFP, then Genzyme shall have the right
     to manufacture such Excess Requirements. If Genzyme notifies the LLC and
     /or Chugai, as the case may be, that it is unable to match the most
     favourable terms obtained for such Excess Requirements, then the LLC and/or
     Chugai, as the case may be, shall have the right to enter into a supply
     agreement with the third party that submitted such terms; provided,
     however, that the LLC and/or Chugai, as the case may be, may not offer such
     third party more favorable terms than those set forth in the bid without
     first offering such terms to Genzyme and providing Genzyme an opportunity
     to accept such terms. Genzyme's right of first refusal shall remain in
     effect for any subsequent Excess Requirements of the LLC and Chugai. For
     the avoidance of doubt, it is understood that Genzyme will supply the LLC
     and Chugai's aggregate requirements up to and including [  *  ],
     regardless of the allocation of amounts between the two companies in any
     given year, and the right of first refusal described in this section
     relates to the LLC and Chugai's aggregate needs in excess of [  *  ].

12.  Genzyme will grant the LLC a non-exclusive, worldwide, [  *  ] license,
     with the right to grant sublicenses to its contract manufacturers (without
     the right allow such parties to grant further sublicenses), to use the
     technology developed by Genzyme for the manufacture of Sevelamer in the LSP
     to manufacture Sevelamer; provided, however, that the LLC will not have the
     right to grant sublicenses to Chugai, Kirin Brewery Co. Ltd. or any other
     party having the right to develop and/or commercialize products comprising
     Sevelamer. Genzyme will also grant GelTex a non-exclusive, worldwide,
     [  *  ] license to use such technology for all applications other than
     Sevelamer production applications for Renagel.

13.  All prices have been developed using an exchange rate of $ 1.60 per
     Sterling Pound. On the first business day of each quarter, the exchange
     rate (US $:(pound)) published in the Financial Times will be used to
     determine the price of Sevelamer for that calendar quarter.

14.  Genzyme reserves the right to develop and maintain master files with
     regulatory authorities in support of the manufacture of Sevelamer at its
     Haverhill facilities and to provide appropriate access to these files for
     drug registrations with regulatory authorities. The LLC will use
     commercially reasonable and diligent efforts to submit the appropriate
     regulatory applications for the territories in an expeditious manner.

15.  Genzyme and Chugai will also negotiate a supply agreement for the LSP. In
     connection with that agreement, Chugai has requested a 150 kg sample of
     Sevelamer manufactured by the proposed process of the LSP for delivery by
     March, '00, principally for tableting studies to be conducted. As per the
     November 9th proposal, Genzyme requests reimbursement from Chugai for the
     incremental costs associated with providing this sample, currently
     estimated as [  *  ], and will not exceed [  *  ]. Genzyme does not propose
     [  *  ] the provision of this sample.

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     The 150kg sample will be used for tableting studies at Chugai. The sample
     will not be produced to GMP and can only be used for non-human use. The
     sample must meet the following criteria:

     I.   Meet the current release specifications for Sevelamer API

     II.  Be made as far as possible by the proposed process

     Chugai will be responsible for the formulation and tableting studies. In
     the event that the material does not meet these requirements, then Chugai
     will identify the areas of concern and work with Genzyme to produce a
     sample to meet the requirements. Genzyme will bear the cost associated with
     its efforts to develop a process to produce a sample that meets the
     tableting requirements. The incremental costs of actually producing
     additional material once the development work is complete, will be paid for
     by Chugai. The incremental costs to actually produce additional material
     once the development efforts have been completed will be paid by Chugai.
     Genzyme will not [  *  ] to make this material.

16.  Genzyme reserves the right to develop and maintain master files with
     regulatory authorities in Chugai's Territory in support of the manufacture
     of Sevelamer at its Haverhill facilities and to provide appropriate access
     to these files for drug registrations with regulatory authorities. Chugai
     will use commercially reasonable and diligent efforts to submit the
     appropriate regulatory applications for the territories in an expeditious
     manner.

Dated: March 16, 2000
       --------------

RENAGEL LLC                                          GENZYME CORPORATION

By: GelTex Pharmaceuticals, Inc., its Member    By: /s/ Frank Ollington
                                                    ---------------------------
By: /s/ Mark Skaletsky                             Name:  Frank Ollington
    ---------------------------                    Title: Senior Vice President,
Name:  Mark Skaletsky                                     Operations
Title:  President and CEO

By: Genzyme Corporation, its Member

By:  /s/ G. Jan van Heek
     --------------------------
Name:  G. Jan van Heek
Title:  Executive Vice President

                                                                               5<PAGE>   1

                                                            Exhibit (10)(iii)(A)
                                                       January, 2000

                            HOUGHTON MIFFLIN COMPANY
                          2000 CHIEF EXECUTIVE OFFICER
                           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 factor is achieved;
          and
          b. Company income exceeds 70% of budget or $_________million;

     2. OPERATING OBJECTIVES. Payment of incentive compensation for achievement
of operating objectives only may occur if the weighted average achievement of
all Company financial factors exceeds 50% and Company net income exceeds 50% of
budget, or $_______ 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 targeted Company and operating unit financial performance is achieved.
Each 1% achievement of the financial objective above 80% through 120%
performance (actual to budget) for any individual financial factor provides
incentive compensation of 5% of the incentive target for that financial factor.
Based on this payment schedule, achievement at targeted Company and operating
unit financial performance for all financial objectives provides payment in cash
of up to 56-2/3% of the participant's December 31, 2000 salary as incentive
compensation.

          b. Additional incentive compensation may be earned if one or more
financial targets exceeds 120% performance. If the weighted average financial
achievement of targeted Company and operating unit financial factors is equal to
or greater than 120% of budget, an additional 5% of the incentive target for all
financial factors is earned for each 1% weighted financial performance above
120%.

<PAGE>   2

     2. OPERATING OBJECTIVES. Payment of incentive compensation for achievement
of operating objectives is based on the Compensation & Nominating Committee's
assessment of the Chief Executive Officer's degree of success in achieving
operating objectives. Maximum payment for achievement of operating objectives is
10% of the participant's December 31, 2000 salary.

     3. PAYMENTS IN EXCESS OF 66-2/3% OF DECEMBER 31, 2000 SALARY. If the total
incentive compensation earned exceeds 66-2/3% of the Chief Executive Officer's
December 31, 2000 salary, the excess amount is paid in shares of Houghton
Mifflin Company restricted 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) shall be subject to
the same restrictions as the underlying shares.

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

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

          f. In the event of retirement after age 55 with at least five years of
service, death, or permanent disability during the period of restriction, the
recipient, or his or her heirs, shall be entitled to receive, free of
restrictions, a pro rata number of shares based on a fraction, the numerator of
which is the number of whole months from January 1 of the year the shares were
awarded, and the denominator of which is 36.

          g. All restrictions shall lapse in the event of a "Change of Control"
as defined in this Plan.

          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.

                                       2

<PAGE>   3

     4. MAXIMUM PAYMENT. The maximum amount of incentive compensation, including
any restricted stock portion, which may be awarded to the participant is 100% of
the participant's December 31, 2000 salary.

D. ELIGIBILITY.

     1. Participation in this Plan is limited to the Chief Executive Officer as
designated by the Compensation & Nominating Committee.

     2. In the event of retirement, death, or permanent disability, a pro rata
share of the award (based on the number of months of eligible employment during
that year) will be paid to the participant, or his or her heirs, based upon the
extent of partial achievement of applicable objectives. In the event of a leave
of absence during the year, a pro rata share of the award may be paid.

     3. The eligibility of a participant whose participation ceases during the
year will be determined by the Compensation & Nominating Committee of the Board
of Directors.

     4. Nothing contained in the Plan shall be construed to limit in any way the
right of the Company to terminate the participant's employment or to adjust the
participant'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.

     5. 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;

                                       3

<PAGE>   4

          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;

          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 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.

                                       4

<PAGE>   5

                                                            Exhibit (10)(iii)(A)
                                                        January, 2000

                            HOUGHTON MIFFLIN COMPANY
                2000 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 factor is achieved; and
        b. Company income exceeds 70% of budget or $____ million;

     2. OPERATING OBJECTIVES. Payment of incentive compensation for achievement
of operating objectives only may occur if the weighted average achievement of
all Company financial factors exceeds 50% and Company net income exceeds 50% of
budget, or $____ 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 targeted Company and operating unit financial performance is achieved.
Each 1% achievement of the financial objective above 80% through 120%
performance (actual to budget) for any individual financial factor provides
incentive compensation of 5% of the incentive target for that financial factor.
Based on this payment schedule, achievement at targeted Company and operating
unit financial performance for all financial objectives provides payment in cash
of up to 30% of the participant's December 31, 2000 salary as incentive
compensation.

          b. Additional incentive compensation may be earned if one or more
financial targets exceeds 120% performance. If the weighted average financial
achievement of targeted Company and operating unit financial factors is equal to
or greater than 120% of budget, an additional 5% of the incentive target for all
financial factors is earned for each 1% weighted financial performance above
120%.

     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

<PAGE>   6

payment for achievement of operating objectives is 10% of the participant's
December 31, 2000 salary.

     3. PAYMENTS IN EXCESS OF 40% OF DECEMBER 31, 2000 SALARY. If the total
incentive compensation earned exceeds 40% of a participant's December 31, 2000,
the excess amount is paid in shares of Houghton Mifflin Company restricted
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) shall be subject to
the same restrictions as the underlying shares.

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

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

          f. In the event of retirement after age 55 with at least five years of
service, death, or permanent disability during the period of restriction, the
recipient, or his or her heirs, shall be entitled to receive, free of
restrictions, a pro rata number of shares based on a fraction, the numerator of
which is the number of whole months from January 1 of the year the shares were
awarded, and the denominator of which is 36.

          g. All restrictions shall lapse in the event of a "Change of Control"
as defined in this Plan.

          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.

     4. 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, 2000 salary.

                                       2

<PAGE>   7

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 of retirement, death, or permanent disability, a pro rata
share of the award (based on the number of months of eligible employment during
that year) will be paid to the participant, or his or her heirs, based upon the
extent of partial achievement of applicable objectives. In the event of a leave
of absence during the year, a pro rata share of the award may be paid.

     3. A participant whose employment terminates, voluntarily or involuntarily,
for reasons other than retirement after age 55 with at least five years of
service, death, or permanent disability, is not eligible for an incentive award.

     4. 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 terminate 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.

     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:

                                       3

<PAGE>   8

          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;

          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 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.

                                       4

<PAGE>   9

                                                            Exhibit (10)(iii)(A)

                            HOUGHTON MIFFLIN COMPANY

                       2000 SENIOR MANAGEMENT AND DIRECTOR
                               STOCK PURCHASE PLAN

1.   PURPOSE. The Houghton Mifflin Company 2000 Senior Management and Director
     Stock Purchase Plan (the "Plan"), adopted pursuant to the Houghton Mifflin
     Company 1998 Stock Compensation Plan (the "1998 Plan"), is designed to
     facilitate the immediate purchase, by senior managers and key employees
     (collectively, the "Employees") and Directors of Houghton Mifflin Company
     and its subsidiaries (collectively, the "Company"), of the Company's common
     stock, par value $1.00 per share ("Common Stock"). The purchases
     facilitated by the Plan are intended to achieve the following specific
     purposes:

     a.   more closely align Employees' and Directors' financial rewards with
          the financial rewards realized by other Company stockholders;

     b.   increase Employees' and Directors' motivation to manage the Company as
          owners; and

     c.   increase the ownership of Common Stock among Employees and Directors
          of the Company.

2.   ELIGIBILITY AND PARTICIPATION. Individuals eligible to participate are
     those Employees and Directors granted options to purchase shares of Common
     Stock by vote of the Compensation and Nominating Committee of the Company's
     Board of Directors (the "Committee") on February 28, 2000. To become a Plan
     participant ("Participant"), an eligible individual must:

     a.   submit a completed and executed Option Grant and Exercise Agreement;
          and

     b.   promptly complete and execute all necessary agreements and other
          documents relating to the Plan and the loan contemplated by Section 3
          hereof.

<PAGE>   10

                                                  Senior Management and Director
                                                        2000 Stock Purchase Plan
                                                               February 29, 2000

     The agreements and other documents specified in this Section 2 must be in
     such form and must be submitted at such times and to such Company officers
     as are specified by the Company. No eligible individual is required to
     participate in the Plan.

3.   PAYMENT OF EXERCISE PRICE. Each Participant must deliver consideration
     equivalent to 100% of the price for the shares of the Common Stock
     purchased pursuant to this Plan ("Purchased Shares") at the time, place,
     and manner specified by the Company. The exercise price per share shall be
     equal to the fair market value of the share, as determined by the Committee
     in good faith. The Purchased Shares will not be issued in the Participant's
     name until the Company has received such consideration. The Company will,
     on request, provide a loan (the "Loan") as consideration to fund the
     purchase of the Purchased Shares. If a Loan is provided as consideration to
     fund the Purchased Shares, the Purchased Shares shall be treasury shares.
     The Participant is fully obligated to repay all principal and interest on
     the Loan when due and payable.

4.   SECURITY FOR LOAN. The Company may take all action relating to the
     Participant and his or her assets which the Committee deems reasonable and
     necessary to provide security for the Loan provided by the Company,
     including, without limitation, a pledge of the Purchased Shares.

5.   REGISTRATION OF SHARES. The Purchased Shares will be registered in the name
     of the Participant. Purchased Shares which secure a Loan will be held in
     book form. Any certificate issued will bear a legend referring to the Plan
     and the agreements between the Participant and the Company relating to the
     Purchased Shares. The certificates for the Purchased Shares, together with
     all non-cash and other extraordinary dividends on the Purchased Shares,
     will be held by the Company until all restrictions on the Purchased Shares
     have lapsed and the Loan is no longer outstanding. Each Participant shall
     deliver to the Company a stock power endorsed in blank with respect to
     Purchased Shares which secure a Loan.

6.   TERMINATION OF EMPLOYMENT. The issuance or exercise of an option under the
     Plan will not confer upon the Participant any

                                       2

<PAGE>   11

                                                  Senior Management and Director
                                                        2000 Stock Purchase Plan
                                                               February 29, 2000

     right or obligation with respect to continuance of employment by the
     Company, nor will it interfere in any way with any right of the the Company
     to terminate the Participant's employment at any time. Termination of
     employment will not affect a Participant's obligation to repay the Loan
     according to its terms.

7.   STOCKHOLDER RIGHTS. During the period in which the Purchased Shares are
     subject to pledge or restrictions on transfer, unless and until the
     Participant has defaulted in any obligation under the Loan agreements or
     this Plan, each Participant will have all other rights of a stockholder
     with respect to the Purchased Shares, including the right to vote the
     Purchased Shares and the right to receive all regular cash dividends paid
     with respect to the Purchased Shares. To the extent required by the Plan,
     the loan agreements and other documents relating to the Plan, the Company's
     Transfer Agent will be irrevocably directed to deliver all such dividends
     directly to the Company for payment of loan interest on the Loan. Any
     regular cash dividends with respect to the Purchased Shares in excess of
     required interest payments will, at the Participant's option, either be
     paid directly to the Participant or deposited in a bank account designated
     by the Participant.

8.   RESTRICTIONS ON SALE OF PURCHASED SHARES. Each Participant is permitted to
     sell or transfer all or any portion of the Purchased Shares, subject to the
     following restrictions:

     a.   except in the event of (i) a Participant's death or disability (as
          determined by the Company, in its sole discretion); (ii) termination
          of an Employee's employment (whether voluntary or involuntary); or
          (iii) a Change in Control (as defined in Section 9 below), no
          Participant may sell or transfer any portion of the Purchased Shares
          before the first anniversary of the Participant's payment of the
          exercise price;

     b.   no Participant may sell or transfer any portion of the Purchased
          Shares unless all principal and interest due on the Loan have
          previously been paid or all proceeds of the sale are simultaneously
          applied first to the payment of all such principal and interest; and

                                       3

<PAGE>   12

                                                  Senior Management and Director
                                                        2000 Stock Purchase Plan
                                                               February 29, 2000

     c.   the Company has the right to impose additional restrictions on the
          timing, amount, and form of the sale or transfer of the Purchased
          Shares with respect to any Participant to the extent it determines
          that such restrictions are necessary or advisable in order to comply
          with any applicable securities law; and

     d.   each Participant must notify the Company of his or her intention to
          sell or transfer the Purchased Shares before such a sale or transfer
          may be implemented. The Company may elect, by notice directed to the
          Participant on the business day immediately following receipt of such
          notification, to allow the Participant to sell the Purchased Shares in
          the open market or to repurchase the Purchased Shares itself. If the
          Company repurchases the Purchased Shares, the purchase price will be
          the closing sale price of a share of Common Stock as reported in the
          New York Stock Exchange Composite Index on the day of the notification
          to the Company of the intent to sell.

9.   CHANGE IN CONTROL. For purposes of this Agreement, a "Change in Control"
     shall be deemed to have occurred if:

     a.   any person as defined in subsection (d) of this Section 9 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;

     b.   the stockholders of the Company approve a merger or consolidation of
          the Company with any other entity, other than (i) 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) more than 75% of the combined
          voting power of the voting securities of the Company or such surviving
          entity outstanding immediately after such merger

                                       4

<PAGE>   13

                                                  Senior Management and Director
                                                        2000 Stock Purchase Plan
                                                               February 29, 2000

          or consolidation, or (ii) 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

     c.   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.

     As used in subsection (a) of this Section 9, the term "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 (i)
     the Company, (ii) any trustee or other fiduciary holding securities under
     an employee benefit plan of the Company (or of any subsidiary of the
     Company), and (iii) 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.

10.  1998 PLAN AND AMENDMENT OF THIS PLAN. The Plan is governed by the
     provisions of the 1998 Plan, except as otherwise expressly stated herein.
     Subject to the provisions of the 1998 Plan, the Committee may amend the
     Plan at any time it determines an amendment to be in the best interests of
     the Company. In accordance with the 1998 Plan, no such amendment may
     adversely affect the rights of a Participant without the consent of the
     Participant.

                                       5

<PAGE>   14

                                                            Exhibit (10)(iii)(A)

                       OPTION GRANT AND EXERCISE AGREEMENT

No. of Shares: << NO_SHARES >>                           As of February 29, 2000

Pursuant to its 1998 Stock Compensation Plan (the "Plan"), approved on April 29,
1998 by its stockholders, and pursuant to its 2000 Senior Management and
Director Stock Purchase Plan established thereunder (the "Purchase Plan"),
Houghton Mifflin Company (the "Company") hereby grants to << PARTICIPANT >>
(the "Optionee") an option (the "Option") to purchase on the date hereof all or
any part of <<NO_SHARES>> shares (the "Option Shares") of common stock of the
Company, par value $1.00 per share (the "Common Stock"), at a price of $39.8125
per share, subject to the terms and conditions set forth herein and in the Plan
and the Purchase Plan.

1.   MANNER OF EXERCISE. The Optionee may exercise this Option and elect to
purchase the Option Shares by delivering to the Company on the date hereof an
executed copy of this Agreement, (the "Purchased Shares"). Said executed
agreement shall be accompanied by payment for the Option Shares either in cash
or through a loan to the Optionee as described in Paragraph 2 hereof. No
certificates for the Purchased Shares will be issued to the Optionee until the
Company has completed all steps required by law to be taken in connection with
the issue and sale of the Purchased Shares, including, without limitation,
receipt of any agreements or representations from the Optionee necessary to
prevent a resale or distribution of the Purchased Shares in violation of federal
or state securities laws. In accordance with the Purchase Plan, Purchased Shares
for which the purchase price was paid through the loan referenced in Paragraph 2
will be held in book form, and certificates representing the Purchased Shares
issued to the Optionee will be held by the Company, until all restrictions on
such shares have lapsed and the loan referred to in Paragraph 2 hereof is no
longer outstanding, as the case may be. In the event that the Optionee fails to
exercise this Option by timely delivery of an executed copy of this Agreement as
provided in this paragraph, the Option granted hereby shall terminate and be of
no further force and effect.

2.   FINANCING OF EXERCISE PRICE. In order to permit the Optionee to exercise
the Option, the Company will extend to the Optionee a loan (the "Loan") to fund
up to 100% of the purchase price for the Purchased Shares. In connection with
the Loan, the Optionee is delivering to the Company simultaneously herewith such
documentation as the Company may require to evidence the Loan, including any
documentation the Company may require in connection with the pledge of the
Purchased Shares as security therefor. As security for the obligation of the
Optionee under the Loan, the Optionee is granting to the Company a security
interest in the Purchased Shares and will execute such documents and

<PAGE>   15

                                             Option Grant and Exercise Agreement
                                                               February 29, 2000

take such other action as the Company may require to evidence and perfect such
security interest, such grant to become effective upon delivery of an executed
copy of this Agreement as set forth in Paragraph 1 hereof. The Optionee further
agrees that the Company may take all action which the Company deems reasonable
and necessary for the Company to obtain security for the Loan.

3.   TERMS OF PURCHASE PLAN; RESTRICTIONS ON SALE. The Company and the Optionee
acknowledge and agree that the Purchased Shares will be subject to all of the
terms and conditions set forth in the Plan and the Purchase Plan, including,
without limitation, the restrictions on the sale of the Purchased Shares set
forth in Section 8 of the Purchase Plan.

4.   TRANSFERABILITY. This Option is personal to the Optionee, is not
transferable by the Optionee in any manner by operation of law or otherwise, and
is exercisable only on the date hereof and only by the Optionee.

5.   TERMINATION OF EMPLOYMENT. This Option will not confer upon the Optionee
any right or obligation with respect to continuance of employment by the Company
or its subsidiaries, nor will it interfere in any way with any right of the
Optionee's employer to terminate the Optionee's employment at any time.

6.   MISCELLANEOUS. 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 Optionee at the Optionee's 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 Agreement is entered into by the Optionee and the Company pursuant
to the terms and provisions of the Plan and the Purchase Plan and expressly
incorporates herein all of the terms and provisions of the Plan and the Purchase
Plan. Notwithstanding anything in this Agreement to the contrary, in the event
that any inconsistency arises between any term or provision of the Plan or the
Purchase Plan and any term or provision of this Agreement, then the applicable
term or provision of the Plan or the Purchase Plan, as the case may be, shall
control.

7.   GOVERNING LAW. This Agreement shall be governed and construed in accordance
with the laws of the Commonwealth of Massachusetts without regard to principles
thereof relating to conflicts of law.

8.   INCOME TAX WITHHOLDING. In connection with the exercise of all or any part
of the Option granted hereunder and all arrangements and

                                      -2-

<PAGE>   16

                                             Option Grant and Exercise Agreement
                                                               February 29, 2000

transactions relating to the Purchased Shares, 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, if any, including without
limitation (i) withholding cash in an amount sufficient to satisfy the Company's
tax withholding obligations, with respect to the Optionee from the compensation
then or thereafter payable to the Optionee, (ii) conditioning the delivery of
stock to the Optionee upon the payment to the Company of an amount sufficient to
satisfy the Company's tax withholding obligations, with respect to the Optionee,
or (iii) reducing the number of shares deliverable to the Optionee by such
number as is sufficient in value to satisfy the Company's tax withholding
obligations with respect to the Optionee, provided that such reduction does not
cause the Optionee to incur liability under Section 16(b) of the Securities
Exchange Act of 1934, as amended.

                                            HOUGHTON MIFFLIN COMPANY

                                            By: _______________________________
                                                Arthur S. Battle
                                                Vice President, Human Resources

Receipt of the Option and its terms and conditions and the terms and conditions
of the Purchase Plan are hereby acknowledged and agreed to, and notice of the
exercise of the Option as to the number of Shares set forth below is hereby
given, as of February 29, 2000.

Number of shares                            ____________________________________
as to which Option                          Name:<<PARTICIPANT>>
exercised:

<<NO_SHARES>> SHARES                        ____________________________________
                                            (Address)

                                            ____________________________________
                                            (City, State, Zip)

                                      -3-

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