Document:

EX-10.1

 Exhibit 10.1 

Performance-Based Vesting 

Form for 2016 LTIP Award 

HOUGHTON MIFFLIN HARCOURT COMPANY 

2015 OMNIBUS INCENTIVE PLAN 

PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD NOTICE 

Houghton Mifflin Harcourt Company (the “Company”) has previously established the Houghton Mifflin Harcourt Company 2015 Omnibus Incentive
Plan (the “Plan”) and, pursuant thereto, the Company desires to grant to the Person identified on Schedule I hereto (the “Grantee”) performance-based Restricted Stock Units (“RSUs”) with
respect to the Company’s common stock, $0.01 par value per share (“Common Stock”), as of [            ], 2016 (the “Grant Date”), subject to the terms
and conditions set forth in this notice (“Award Notice”). 
 1.        Award. Subject
to the terms and conditions set forth herein and in the Plan, the Company hereby grants to the Grantee that number of RSUs as set forth on Schedule I attached hereto (the “Award”). The Award shall be credited to a separate
book-entry account maintained for the Grantee on the books of the Company. The Award shall vest and be settled in accordance with Section 2 hereof. 
  

	2.	Terms and Conditions. 

 (a) The Award shall be one hundred percent (100%) unvested
as of the Grant Date. Except as otherwise provided in the Plan and this Award Notice, the Award shall vest and become non-forfeitable on the later of (i) the third (3rd) anniversary of
the Grant Date (such date, the “Scheduled Vesting Date”, and such three-year period from the Grant Date, the “Applicable Period”) and (ii) the date that the Committee certifies the performance results as
described on Schedule I attached hereto (the “Performance Vesting Date”), provided that the Grantee remains in continuous service with the Company or any of its Subsidiaries on the Scheduled Vesting Date or the Performance
Vesting Date, as applicable. The Grantee shall be entitled to receive that number of RSUs (if any) equal to (x) the Performance Leverage Factor (as defined on Schedule I multiplied by (y) the Target RSUs (as defined on
Schedule I). 
 (b) Except as otherwise provided in this Section 2, in the event that the Grantee’s continuous service is
terminated by the Company or by the Grantee for any reason (including for death or Disability), the Grantee shall forfeit the unvested Award as of the Grantee’s termination date. 

(c) In the event that the Grantee’s continuous service is terminated by the Company due to the Grantee’s death or Disability
(i) after the one-year anniversary of the Grant Date but before the date that is six (6) months prior to the expiration of the Performance Period (as defined on Schedule I), the unvested Award shall immediately vest assuming that
Target Achievement Level (as defined on Schedule I) has been achieved, prorated to reflect the number of months employed during the Applicable Period; or (ii) after the date that is six (6) months prior to the expiration of the
Performance Period, the unvested Award shall vest on the Performance Vesting Date based on the Performance Leverage Factor achieved for the full 

 
Performance Period, prorated to reflect the number of months employed during the Applicable Period. 

(d) Except as otherwise provided in Section 2(e), in the event that the Grantee’s continuous service is terminated by the Company
without Cause after the one-year anniversary of the Grant Date but prior to either the Scheduled Vesting Date or the Performance Vesting Date, the unvested Award shall vest on the Performance Vesting Date based on the Performance Leverage Factor
achieved for the full Performance Period, prorated to reflect the number of months the Grantee was employed during the Applicable Period. 

(e) Immediately prior to a Change in Control, the Target RSUs shall convert into service-based RSUs and the Award shall vest on the Scheduled
Vesting Date (without regard to achievement of any of the performance metrics set forth on Schedule I), provided that the Grantee remains in continuous service with the Company or any of its Subsidiaries on the Scheduled Vesting Date.
Notwithstanding any provision herein to the contrary, (i) if the Committee has made a provision for the substitution, assumption, exchange or other continuation of the Award in connection with a Change in Control, then in the event that the
Grantee’s continuous service is terminated (A) by the Company due to death or Disability following the occurrence of the Change in Control, then Section 2(c) shall not apply and the unvested Award shall immediately fully vest, but
prorated to reflect the number of months employed during the Applicable Period, or (B) by the Company other than for Cause, and other than due to death or Disability, within one (1) year following the occurrence of the Change in Control,
the unvested Award shall become immediately fully vested; or (ii) if the Committee has not made a provision for the substitution, assumption, exchange or other continuation of the Award in connection with a Change in Control, then the unvested
Award shall become fully vested immediately prior to the Change in Control. 
 (f) Within 30 days following the Scheduled Vesting Date or the
Performance Vesting Date, as applicable (or, if applicable, an earlier vesting date pursuant to Section 2(c)(i) or Section 2(e) above) (such relevant date, the “Vesting Date”), the Company shall settle the Award and shall
therefore, subject to any required tax withholding and the execution of any required documentation, (i) issue and deliver to the Grantee one share of Common Stock for each earned and vested RSU as determined hereunder (the “RSU
Shares”) (and, upon such settlement, the RSUs shall cease to be credited to the account) and (ii) enter the Grantee’s name as a shareholder of record with respect to the RSU Shares on the books of the Company. Alternatively, the
Committee may, in its sole discretion, elect to pay cash or part cash and part RSU Shares in lieu of settling the vested RSUs solely in RSU Shares. If a cash payment is made in lieu of delivering RSU Shares, the amount of such payment shall be equal
to the Fair Market Value of the RSU Shares (determined as of the Vesting Date) less an amount equal to any federal, state, local and non-U.S. income and employment taxes required to be withheld. 

(g) Simultaneously with the settlement and delivery of RSU Shares as contemplated by Section 2(f), the Grantee shall be entitled to
receive an additional amount (the “Dividend Equivalent Amount”) equal to the product of (i) the cash amount of each per share dividend that was paid by the Company on shares of its Common Stock (“Shares”) on
any date that the Grantee’s RSUs remained outstanding hereunder (or, in the case of a dividend payable in Shares or other property, the per Share equivalent cash value of such dividend as determined in good

  
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faith by the Committee) and (ii) the number of RSU Shares so delivered (or, if the RSUs are not settled exclusively in Shares, the number of RSU Shares that would have been delivered had
they been settled exclusively in Shares). The Dividend Equivalent Amount shall be payable in cash or, at the discretion of the Committee, in Shares with an equivalent Fair Market Value on the date of payment. The Company shall establish a
bookkeeping methodology to account for the Dividend Equivalent Amount. The Dividend Equivalent Amount shall not bear interest. 
 (h)
The Company shall have the right to require prior to the issuance or delivery of any Shares or the payment of any cash pursuant to the Award, payment by the Grantee of any federal, state, local or other taxes that may be required to be withheld or
paid in connection with the Award. At the sole discretion of the Committee, the Grantee may satisfy such withholding obligation (1) by allowing the Company to withhold whole Shares that would otherwise be delivered to the Grantee, having an
aggregate Fair Market Value, determined as of the date the obligation to withhold or pay, equal to the minimum withholding taxes required in connection with the Award or by allowing the Company to withhold an amount of cash that would otherwise be
payable to the Grantee, in the amount necessary to satisfy any such obligation; (2) by paying such obligation in cash; (3) by delivering Shares or (4) by any combination of the foregoing (1) through (3). 

3.        Non-Transferability. The Award is subject to the restrictions on transferability set forth in
Section 15(b) of the Plan. In addition, with respect to any RSU Shares delivered upon settlement of the RSUs, the Grantee agrees to comply with any written holding requirement policy adopted by the Company for employees. 

4.        Rights as Shareholder. The Grantee shall have no rights as shareholder with respect to the
Shares subject to the Award unless, until and to the extent that (i) the Company shall have issued and delivered to the Grantee the RSU Shares (via certificates or book entry notation) and (ii) the Grantee’s name shall have been
entered as a shareholder of record with respect to such RSU Shares on the books of the Company. 

5.        Adjustments. The Award is subject to adjustment pursuant to Sections 12 and 13 of the Plan.

 6.        Applicable Securities Laws. Shares issued pursuant to the Award shall not be sold or
transferred unless either they first shall have been registered under the Securities Act or, upon request by the Company, the Company first shall have been furnished with an opinion of legal counsel, reasonably satisfactory to the Company, to the
effect that such sale or transfer is exempt from the registration requirements of the Securities Act. 

7.        Notice. Every notice or other communication relating to this Award Notice shall be in writing,
and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that, unless and
until some other address be so designated, all notices or communications by the Grantee to the Company shall be mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to the Grantee may
be given to the Grantee personally or may be mailed to the Grantee’s address as recorded in the records of the Company or any Subsidiary. 

  
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 8.        Governing Law. This Award Notice shall be
construed and interpreted in accordance with the laws of the State of Delaware without regard to its conflict of law principles. 

9.        Plan. The terms and provisions of the Plan are incorporated herein by reference, a copy of
which has been provided or made available to the Grantee. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Award Notice, the Plan shall govern and control. All capitalized terms not
defined herein shall have the meaning ascribed to them as set forth in the Plan. 

10.        Interpretation. Any dispute regarding the interpretation of this Award Notice shall be
submitted by the Grantee or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be binding on the Company and the Grantee. 

11.        No Right to Continued Service. Nothing in this Award Notice shall be deemed by implication or
otherwise to impose any limitation on any right of the Company or any Subsidiary to terminate the Grantee’s service. 

12.        Severability. Every provision of this Award Notice is intended to be severable and any
illegal or invalid term shall not affect the validity or legality of the remaining terms. 

13.        Headings. The headings of the Sections hereof are provided for convenience only and are not
to serve as a basis for interpretation of construction, and shall not constitute a part of this Award Notice. 

14.        Section 409A. It is intended that the Award be exempt from or comply with
Section 409A of the Code and this Award Notice shall be interpreted consistent therewith. 

15.        Clawback. To the extent required by applicable law (including, without limitation,
Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of NASDAQ or any other securities exchange or inter-dealer quotation service on which
the Shares are listed or quoted, or if so required pursuant to a written policy adopted by the Company, this Award shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements. 

16.        Successors. The terms of this Award Notice shall be binding upon and inure to the benefit of
the Company, its successors and assigns, and the Grantee and the beneficiaries, executors, administrators, heirs and successors of the Grantee. 

17.        Entire Agreement. This Award Notice and the Plan contain the entire agreement and
understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereof. 

18.        Counterparts. This Award Notice may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
 [signature page follows] 

  
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 IN WITNESS WHEREOF, the Company has caused this Award Notice to be executed by its duly
authorized representative and the Grantee has executed this Award Notice, effective as of the Grant Date. 
  

			
	HOUGHTON MIFFLIN HARCOURT COMPANY
		
	By:	 	 
		 	 Name: Linda K. Zecher
 Title: President and
Chief Executive Officer

  

	
	GRANTEE
	
	   

	Name:

 SCHEDULE I 

Performance Leverage Factor 
 Except as
may otherwise be provided herein, the RSUs shall vest as to the performance conditions based on the achievement of specified levels of the Performance Goals for the Performance Period, as set forth herein. 

Target RSUs = [            ] shares of Common Stock. 

 

	(i)	Billings Metric 

 Billings Target RSUs =
[            ] shares of Common Stock 
 The Billings Payout Percentage will be
based on the achievement of cumulative Billings (as defined below) for the Company’s 2016, 2017 and 2018 fiscal years (such three-fiscal-year period, the “Performance Period”), as follows: 

 

							
	 Achievement Level
	  	Billings Goal	  	Billings
Achievement
Percentage	  	Billings
Payout
Percentage
	 Maximum
	  	$[_____]	  	[        ]	  	[        ]
	 Target
	  	$[_____]	  	[        ]	  	[        ]
	 Threshold
	  	$[_____]	  	[        ]	  	[        ]

 If the Billings Achievement Percentage for the Performance Period is greater than Threshold Achievement Level
and less than Target Achievement Level, or greater than Target Achievement Level and less than Maximum Achievement Level, then the Billings Achievement Percentage (and, in turn, the Billings Payout Percentage) shall be determined based on linear
interpolation between the applicable Achievement Levels. If Billings Achievement Percentage for the Performance Period is equal to or greater than the Maximum Achievement Level, then the Billings Payout Percentage shall be capped at 150%. 

For the avoidance of doubt, if the Billings Achievement Percentage achieved for the Performance Period is less than Threshold Achievement
Level, then the Billings Achievement Percentage shall be zero. 
 “Billings” is measured by Net Sales in accordance with
accounting principles generally accepted in the United States adjusted for the change in deferred revenue on the balance sheet during the period and for the impact of material acquisitions and divestitures. 

 

	(ii)	Total Shareholder Return Metric 

 TSR Target RSUs =
[            ] shares of Common Stock 
 The TSR Payout Percentage will be based
on the Total Shareholder Return (“TSR”) (as defined below) for the Company as compared and ranked against the TSR performance of each 

 
of the companies in the Peer Group (as defined below) for the Performance Period (the “TSR Percentile Ranking”), as follows: 

 

					
	 Achievement Level
	  	TSR Percentile
Ranking	  	TSR Payout
Percentage
	 Maximum
	  	[        ]	  	[        ]
	 Stretch
	  	[        ]	  	[        ]
	 Target
	  	[        ]	  	[        ]
	 Threshold
	  	[        ]	  	[        ]

 If the TSR Percentile Ranking achieved for the Performance Period is greater than Threshold Achievement Level
and less than Target Achievement Level, or greater than Target Achievement Level and less than Stretch Achievement Level, or greater than Stretch Achievement Level and less than Maximum Achievement Level, then the TSR Payout Percentage shall be
determined based on linear interpolation between the applicable Achievement Levels. If the TSR Percentile Ranking for the Performance Period is equal to or greater than the Maximum Achievement Level, then the TSR Payout Percentage shall be capped at
200%. 
 Notwithstanding the foregoing, if the Company’s TSR for the Performance Period is negative, then the TSR Payout Percentage
shall be capped at 100%. For the avoidance of doubt, if the TSR Percentile Ranking achieved for the Performance Period is less than Threshold Achievement Level, then the TSR Payout Percentage shall be zero. 

“Company Average Share Price” shall mean the average closing price of the Common Stock (as reported on the principal stock
exchange or automated quotation system on which the Common Stock is traded or listed) for the twenty (20) consecutive market trading days ending on and including the date of determination (adjusted, as applicable, for stock splits,
reorganizations, recapitalizations, or similar corporate transactions during such period). 
 “Company Share Price
Appreciation” shall mean the result (which may be negative) obtained by subtracting the Company Average Share Price as of the last day of the Performance Period from the Company Average Share Price on the day prior to the first day of the
Performance Period. 
 “Peer Group” shall mean the companies included in the Russell 2000 Small Cap Market Index on the
first day of the Performance Period; provided however, that, any company included in the Russell 2000 Small Cap Market Index for less than the entire Performance Period either due to an acquisition, a going private transaction, or a merger where the
surviving entity does not remain in the Peer Group, shall be excluded from and not considered part of the Peer Group. 
 “Peer Group
Company Average Share Price” shall mean, with respect to each company in the Peer Group, the average closing price of the common stock of the applicable Peer Group company (as reported on the principal stock exchange or automated quotation
system on which such common stock is traded or listed) for the twenty (20) consecutive market trading days 

 
ending on and including the date of determination (adjusted, as applicable, for stock splits, reorganizations, recapitalizations, or similar corporate transactions during such period). 

“Peer Group Company Share Price Appreciation” shall mean the result (which may be negative) obtained by subtracting the Peer
Group Company Average Share Price as of the last day of the Performance Period from the Peer Group Company Average Share Price on the day prior to the first day of the Performance Period. 

“Total Shareholder Return” shall mean: 

(1) as applied to the Company, the quotient (expressed as a percentage return, which may be negative) obtained by dividing (A) by (B),
where: 
 (A) is the sum of: 

(i) the Company Share Price Appreciation, plus 

(ii) dividends and distributions made or declared during the Performance Period (it shall be assumed that such dividends or distributions are
immediately reinvested in Common Stock as of the dividend payment date by dividing such dividends or distributions (or the fair market value of any non-cash dividends or distributions as determined by the Committee) by the closing share price for
the Common Stock (as reported on the principal stock exchange or automated quotation system on which the Common Stock is traded or listed) as of the dividend payment date, and then converted back to a cash amount by dividing by the closing share
price of the Common Stock (as reported on the principal stock exchange or automated quotation system on which the Common Stock is traded or listed) as of the last day of the Performance Period); and 

(B) is the Company Average Share Price as of day immediately prior to the first day of the Performance Period; and 

(2) as applied to each company in the Peer Group, the quotient (expressed as a percentage return, which may be negative) obtained by dividing
(A) by (B), where: 
 (A) is the sum of: 

(i) the applicable Peer Group Company Share Price Appreciation, plus 

(ii) dividends and distributions made or declared during the Performance Period (it shall be assumed that such dividends or distributions are
immediately reinvested in the common stock of the relevant Peer Group company as of the dividend payment date by dividing such dividends or distributions (or the fair market value of any non-cash dividends or distributions as determined by the
Committee) by the closing share price for such stock (as reported on the principal stock exchange or automated quotation system on which such stock is traded or listed) as of the dividend payment date, and then converted back to a cash amount by
dividing by the closing share price of the relevant stock (as reported on the principal stock exchange or automated quotation system on which such stock is traded or listed) as of the last day of the Performance Period); and 

 (B) is the applicable Peer Group Company Average Share Price as of day immediately prior to the
first day of the Performance Period; and 
 Performance Leverage Factor Calculation 

The Performance Leverage Factor (expressed as a percentage) shall be the quotient obtained by dividing (A) by (B), where: 

(A) is the sum of: 
 (i)
Billings Payout Percentage * Billings Target RSUs, plus 
 (ii) TSR Payout Percentage * TSR Target RSUs, and 

(B) is the number of Target RSUs.EX-10.4

 Exhibit 10.4 

Policy Category: Benefits 
 Policy Title: Plan
Document and Summary Plan Description for the Houghton Mifflin Harcourt Severance Plan
 Policy Effective Date: March 31, 2016 

This HOUGHTON MIFFLIN HARCOURT SEVERANCE PLAN (the “Plan”) has been established by HOUGHTON MIFFLIN HARCOURT PUBLISHING COMPANY (the
“Company”) to provide severance benefits for its “Eligible Employees,” as that term is defined below, and for the Eligible Employees of certain of its Affiliates that have adopted the Plan with the consent of the Administrator.
This Plan document also constitutes the summary plan description required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Plan is amended and restated as of March 31, 2016 and is effective with respect to
terminations occurring after that date. A prior version of this Plan, which was originally effective with respect to terminations occurring on or after September 5, 2014, is hereby terminated, and it and all previously adopted and communicated
severance plans except the Houghton Mifflin Harcourt Publishing Company ELT Severance Plan1 but including, without limitation, the March 16, 2009 Severance Plan, the Houghton Mifflin Severance
Policy and the Harcourt Education Severance Plan, each of which was previously terminated, is hereby superseded. 
 PLAN ADMINISTRATION 

The Plan is administered by the Chief Human Resources Officer (the “Administrator”), who shall act as the “named fiduciary” and “plan
administrator” under ERISA. The Administrator has the discretionary and final authority to make factual determinations, to construe and administer the Plan, to interpret any ambiguities, and to resolve any and all issues including, without
limitation, eligibility to participate and the right to any Severance Benefits.
 ELIGIBILITY

An Eligible Employee, as defined below, will be entitled to the Severance Benefits described in this Plan provided he/she (i) executes and returns a valid
Severance Agreement, as discussed below, that is not revoked, (ii) returns all Company Property, (iii) reimburses his or her Employer for any personal charges or cash advances, (iv) pays any and all personal expenses charged to his or her
Company-issued credit card and (v) pays any amounts otherwise owed to the Company, including, without limitation, any tuition assistance and relocation repayments. 

SEVERANCE BENEFITS
 The following Severance Benefits are
available under this Plan.
 (a) Severance Pay. An Eligible Employee will be entitled to Severance Pay equal to his
or her Weekly Base Compensation times the greater of (i) the “Minimum Number of Weeks,” as set forth below, for his or her Talent Management Level at the time of termination or (ii) the number of his or her Years of Service multiplied by
two weeks per Year of Service: 
  

			
	 Talent Management Level
	  	 Minimum Number of Weeks

	SU1 – SU 4	  	4
	IC3 - IC7 and FM5 - FM7	  	8
	FM8, EL8, EL9	  	12

  

	1 	Clarification added April 27, 2016 

  
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 In no event will the amount of Severance Pay exceed the amount of an Eligible Employee’s Weekly Base
Compensation multiplied by fifty-two. 
 To the extent an Eligible Employee receives a payment pursuant to the Puerto Rico Discharge Indemnity Law, such
payment will be paid in a lump sum upon termination of employment and the Severance Pay to which such employee shall be eligible under this Plan will be reduced by the amount of such indemnity payment and any amount paid under this Plan shall apply
toward satisfaction of any payment required under the Discharge Indemnity Law.
 Severance Pay will be paid in installments, less withholdings as required
by law, based on the current pay schedule (or period) of the Eligible Employee at the time of termination, beginning generally within twenty-one days following the latest of (A) the date of termination, (B) the last day of the first pay period
immediately following the pay period in which the Eligible Employee returns a fully and properly executed Severance Agreement or (C) if the Eligible Employee has a right to revoke his or her execution of the Severance Agreement, the latest date as
of which he or she may no longer do so. In no event will Severance Pay be paid later than the last day of the second taxable year following the date the Employee terminates. 

The Employer may deduct (after all applicable withholdings have been deducted) from Severance Pay any indebtedness, obligation or liability owed by an
Eligible Employee to an Employer as of his or her termination date, as permitted under applicable law.
 The following examples illustrate the Severance Pay
available under the Plan:
 Example 1: Assume an employee with a Talent Management Level of SU3 has five and one-half Years of
Service. His/her position is eliminated due to a reduction in the workforce. Under the Plan and assuming all other requirements for payment are satisfied, he/she would be eligible for a total of twelve weeks of Severance Pay (five Years of
Service plus an additional (partial) Year of Service for a total of six Years of Service, times two weeks per Year of Service). 

Example 2: Assume an employee with a Talent Management Level of IC7 and eight Years of Service is
terminated for Performance Reasons. This employee would not be entitled to any benefits under the Plan. 
 Example 3: Assume an
employee with a Talent Management Level of FM8 has two Years of Service at the time his/her position is eliminated due to an organizational restructuring. Under the Plan and assuming all other requirements for payment are satisfied, he/she would be
eligible for a total of twelve weeks of Severance Pay, the minimum for that Talent Management Level. 
 Rehire Situations: An individual who is
rehired will be eligible for Severance Benefits under the Plan if he or she meets the definition of Eligible Employee and the other requirements of the Plan at the time of a later termination. If the individual is still receiving

  
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Severance Pay under the Plan at the time of rehire, the individual will have no further right to any unpaid Severance Pay or Outplacement Benefits, which will immediately end upon
rehire. Under certain circumstances as described below in the definition of Years of Service, service with any Employer or Affiliate prior to rehire may be taken into account in calculating Severance Pay. Effective March 31, 2016, however, any
prior Years of Service will be disregarded under this Plan if an Eligible Employee is rehired and subsequently becomes eligible for benefits under this Plan. However, if any prior service is taken into account and the individual received any
prior Severance Pay (or any severance benefits under any prior severance plan, policy or arrangement of any Employer or Affiliate), the amount of Severance Pay for which the individual will be eligible at termination will be the greater of (1) the
dollar amount of Severance Pay for which the individual would be eligible based on his/her date of rehire (i.e., not counting the prior Years of Service) or (2) the dollar amount of Severance Pay for which the individual would be eligible based on
his/her original date of hire (i.e., counting prior Years of Service), less the dollar amount of Severance Pay the individual had previously received under this Plan or any prior severance plan, policy or arrangement. 

Example 4: Assume an employee with a Talent Management Level of SU3 worked for the Company for three years, left in 2010, and
returned in 2015. Assume further that he/she worked another two years and was then terminated (and at termination was eligible for Severance Benefits). He/she would receive a total of four weeks of Severance Pay (two Years of Service times two weeks
per Year). Because he/she was gone for at least three years, the prior service is not taken into account in calculating Severance Benefits upon subsequent termination. 

Example 5: Assume an employee with a Talent Management Level of FM6 worked for the Company for five years, left and began
receiving Severance Pay on January 4, 2016 and was rehired on March 1, 2016 after receiving eight (out of a possible ten) weeks of severance pay (at the rate of $1,250/week = $10,000). Assume further he/she worked another two years with a Talent
Management Level of FM6 and was then terminated when his/her Weekly Base Compensation was $1,400/week (and at termination was eligible for Severance Benefits). He/she would receive eight weeks of Severance Pay (in the amount of $11,200), calculated
based on his/her rehire date, which results in a larger amount of Severance Pay than when calculated based on Years of Service, as set forth below: 

Calculation based on rehire date 

Years of Service since rehire: 2 

Maximum weeks of Severance Pay: greater of 8 or (2 weeks x 2 Years of Service) = 8

Amount of Severance Pay eligible for payout: 8 x $1,400/week = $11,200 

OR 
 Calculation based on
total Years of Service 
 Total Years of Service: 5 + 2 = 7 

Maximum weeks of Severance Pay: greater of 8 or (2 weeks x 7 Years of Service) = 14

Amount of Severance Pay previously received: 8 weeks x $1,250/week = $10,000 

Amount of Severance Pay eligible for payout: 

14 weeks x $1,400/week = $19,600 - $10,000 = $9,600 

  
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 Example 6: Assume an employee with a Talent Management Level of FM6 worked for the
Company for five years, left and began receiving Severance Pay on March 4, 2016 and was rehired on May 2, 2016 after receiving eight (out of a possible ten) weeks of severance pay (at the rate of $1,250/week = $10,000). Assume further he/she works
another two years with a Talent Management Level of FM6 and is then terminated when his/her Weekly Base Compensation was $1,400/week (and at termination was eligible for Severance Benefits). He/she would receive the eight minimum weeks of Severance
Pay (in the amount of $11,200), calculated based solely on his/her service since his/her rehire date. Because he/she was rehired after March 31, 2016, the prior service is not taken into account in calculating Severance Benefits upon
subsequent termination. 
 (b) Outplacement Benefits. An Eligible Employee will be entitled to
receive outplacement assistance services from a vendor selected by the Company. Use of Outplacement Benefits must begin within two months of termination, will be paid directly by the Employer, and will continue in accordance with the following
schedule: 
  

			
	 Talent Management Level
	  	 Duration of Outplacement
Services

	SU1 - SU4	  	1 month
	IC3 - IC7 and FM5 - FM7	  	3 months
	FM8, EL8, EL9	  	6 months

 COORDINATION WITH SHORT-TERM DISABILITY OR OTHER APPROVED LEAVES OF ABSENCES 

If an Eligible Employee is on an approved leave of absence at the time of termination, the timing and amount of Severance Pay will depend on whether the
Eligible Employee is receiving other forms of income protection. If the Eligible Employee is receiving short-term disability payments (or “STD”), then Severance Pay will be reduced by the amount of STD paid from the date of termination.
Severance Pay will not be reduced, however, if the employee is on an unpaid leave (such as an FMLA leave) at the time of termination.
 SEVERANCE
AGREEMENT
 As a condition of receiving benefits under the Plan, an Eligible Employee will be required to execute a Severance Agreement in a form
acceptable to the Employer. A Severance Agreement will contain a release of claims and certain other provisions as the Company may deem appropriate, including, but not limited to, post-employment obligations or restrictions on the Eligible
Employee. The release will, to the extent permitted by law, waive and release any and all claims and actions an Eligible Employee might otherwise have against his or her Employer and its Affiliates, as well as any other related parties and
entities the Company decides to include in the release. No Severance Benefits will be paid under the Plan if an Eligible Employee fails to timely execute (or revokes) a Severance Agreement.

DEFINITIONS OF KEY TERMS
 Under the Plan, certain terms
have special meanings and have already been defined. Other key terms are defined as follows:
 “Affiliate” means a corporation or other entity
controlled by, or under common control with, the Company, as determined by the Administrator. 

  
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“Cause” means any of the following, as determined by the Employer in its sole discretion: (i) engaging in or threatening to engage in conduct detrimental to the best interests of the
Company or an Affiliate; (ii) theft, embezzlement, fraud, dishonesty or misappropriation of Company Property, or misappropriation of a corporate opportunity of the Company or an Affiliate; (iii) use or being under the influence of illegal drugs or
alcohol at work, while working or in any manner that interferes with the performance of the Employee’s job duties; (iv) conviction of, a guilty plea to or nolo contendere or equivalent plea to a felony, or if it results in incarceration,
a misdemeanor, and/or an Employee’s conviction of, guilty plea to or nolo contendere or equivalent plea to violation of any federal or state securities laws; or (v) material breach of the Houghton Mifflin Harcourt Code of Conduct or
Employee Guide, as amended and in effect from time to time, or any successor or similar code(s), standard(s) or policies of ethics or conduct in effect during employment. 

“Company Property” means all business or financial information in any form or media, and any copies thereof (including, but not limited to, reports,
customer lists, customer contracts, proprietary information, business plans, notes, maps, files, memoranda, manuals or records) and all equipment (including, but not limited to, automobiles, credit cards, cardkey passes, door and file keys,
software, computers, electronic files, printers, tablets, smartphones or other hand-held devices) of, or leased to, the Company or any Affiliate. 

“Eligible Employee” means an Employee whose employment is involuntarily terminated by an Employer for any reason other than for Performance Reasons
or for Cause. The term Eligible Employee shall not, however, include: (i) any Employee who is eligible to receive severance or similar type benefits under the provisions of any other severance plan, program, arrangement, policy or practice of, or
any agreement with, an Employer; or (ii) any Employee whose current position is moved to a new work location within fifty miles of his or her current work location. An Employee shall not be considered to have been “involuntarily
terminated” where: (A) employment is terminated at the end of a leave of absence because of a failure to return to work; (B) employment is terminated at the end of a leave of absence because the Employee’s position was filled during the
leave and the Employer does not offer the Employee another position; (C) the individual resigns, including as a result of an election to take early, normal or deferred retirement; (D) employment is terminated after the individual gives oral or
written notice of an intention to resign; or (E) employment is terminated in connection with the sale of equity interests in, or the sale or lease of all or part of the assets of a business of, the Employer where (I) the Employee is offered
employment in a comparable position at a comparable salary with the purchaser or lessee, as the case may be, or (II) the Employee voluntarily elected not to participate in the selection process for the employment described in (I) above. 

“Employee” means a common law employee of the Company or any Affiliate; provided, however, Employee shall not include: (i) a temporary
employee, including a project employee, or any other employee who is not a regular employee (as determined by the Employee’s Employer in accordance with employment policies and practices established by the Employer); (ii) any individual who is
not paid through an Employer’s U.S. or Puerto Rico payroll; (iii) any individual employed by a leasing company or staffing agency or whose work for an Employer is intended to be as an independent contractor, whether the individual’s
relationship to his or her Employer is subsequently determined by an agency, a court or the Employer to have been that of a common law employee; and (iv) any union employee. 

  
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 “Employer” means the Company or any Affiliate of the Company that adopts the Plan with the consent of
the Company. As of the Effective Date of the Plan, no Affiliates had adopted the Plan. 
 “Performance Reasons” means any of the following, as
determined by the Employer in its sole discretion: (i) misconduct or negligence in connection with the performance of an Employee’s job duties; (ii) failure to perform job responsibilities at a satisfactory level; (iii) chronic absence or
tardiness from work that is not permitted or excused; or (iv) failure to follow the lawful direction of the person or persons to whom the employee reports.

“Weekly Base Compensation” means an Employee’s gross weekly base wages, before any withholding or deductions, at the time of termination. If
the Employee normally works less than his or her Employer’s standard full-time workweek, then Weekly Base Compensation means the Employee’s gross base wages, before any withholding or deductions, for his or her normally scheduled weekly
number of hours, as determined by the Employer. Weekly Base Compensation does not include bonuses, overtime pay, incentives, allowances, commissions, equity compensation, and any other extraordinary remuneration.

“Years of Service” means an individual’s whole months of service divided by twelve.

 

	 	•	 	An individual rehired on or before March 31, 2016 will be credited with each whole month of service (without regard to partial months) he or she has worked for any Employer or Affiliate but disregarding any months of
service before any continuous break in service lasting for three years or more. An Eligible Employee’s period of service consisting of a partial year shall be rounded up or down to the nearest whole year. A transfer of employment between and
among the Company and any Affiliate is not considered an interruption or termination of continuous service for purposes of determining an Eligible Employee’s Years of Service. 

 

	 	•	 	An individual hired or rehired after March 31, 2016 will be credited with each whole month of service (without regard to partial months) he or she has worked for any Employer or Affiliate but disregarding any months of
service before the employee’s most recent hire date. An Eligible Employee’s period of service consisting of a partial year shall be rounded up or down to the nearest whole year. A transfer of employment between and among the Company and
any Affiliate is not considered an interruption or termination of continuous service for purposes of determining an Eligible Employee’s Years of Service. 

CLAIMS PROCEDURES
 An Employee (a “Claimant”)
who believes he or she has not received the Severance Benefits due under the Plan may file a claim in writing with the Administrator. If the claim is wholly or partially denied, the Administrator shall notify the claimant of the denial within
ninety days after receipt of the claim by the Administrator (unless additional time is needed). The written or electronic notice will: (i) specify the reason(s) for the denial; (ii) refer to the specific provisions of the Plan upon which the denial
is based; (iii) describe any additional material or information necessary to perfect the claim and an explanation of why the material or information is necessary; and (iv) describe the Plan’s review procedures, including a statement of the
Claimant’s right to bring a civil action under Section 502(a) of ERISA filling an adverse benefit determination on review.

  
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 A Claimant will be given a full and fair review by the Administrator of the denial of the claim if he or she
requests a review in writing within sixty days after receipt of the notice of denial. As part of the review process, the Claimant, or his or her duly authorized representative, may review pertinent documents, submit issues and comments in
writing, and receive upon request and free of charge reasonable access to, and copies of, all non-privileged documents, records, and other information relevant to the Claimant’s claim for benefits. The Administrator shall make a decision
with respect to an appeal within sixty days of its receipt (unless additional time is needed) and if wholly or partially denied, shall furnish the Claimant with written or electronic notice of the decision. The notice will: (A) specify the reason(s)
for the denial; (B) refer to the specific provisions of the Plan upon which the denial is based; (C) describe any additional material or information necessary to perfect the claim and an explanation of why the material or information is necessary;
and (D) describe the Plan’s review procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA filling an adverse benefit determination on review. 

The decision of the Administrator shall be final and binding in all respects.

ADDITIONAL PLAN DOCUMENT PROVISIONS
 Effect on other
benefits. Severance Benefits provided under the Plan shall be in addition to any compensation or benefits that may be due an Employee from the Company or an Affiliate. 

No right to employment. The Plan (i) does not establish any right to continued employment of any Employee, nor any right to benefits under the Plan
except according to its terms and (ii) is not to be construed as interfering with either an Employer’s right to terminate the employment of any Employee at any time or the fact that, unless so stated clearly in a writing signed by a senior
executive authorized by the Chief Executive Officer of the Company, each Employee is employed “at-will,” meaning employment is not for a specific period of time, and both the Employer and the Employee may terminate the employment
relationship at any time, with or without notice, for any or no reason. 
 Plan amendment or termination. The Plan may be amended or terminated by
the Company at any time. 
 Tax matters. It is the intention of the parties that no payment or entitlement pursuant to this Plan will give rise to
any adverse tax consequences pursuant to Internal Revenue Code Section 409A. The Administrator shall interpret and apply the Plan to that end, and shall not give effect to any provision in a manner that reasonably could be expected to give rise to
adverse tax consequences under Section 409A. For purposes of this Plan, an Employee shall be considered involuntarily terminated only if the termination constitutes an “involuntary separation from service” as defined in Treas. Reg.
§ 1.409A-1(n). 
 ADDITIONAL SUMMARY PLAN DESCRIPTION PROVISIONS

ERISA rights statement. As a participant in the Plan you are guaranteed certain rights and protections under ERISA including the right to:

(i) Examine, without charge, at the Company’s office this Plan document and copies of all documents (if any) filed by the Plan with the
U.S. Department of Labor (such as detailed annual reports and Plan descriptions). However, you may not inspect materials containing confidential information about other Plan participants;

  
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 (ii) Obtain copies of all non-confidential Plan information upon written request to the
Administrator, for which a reasonable charge may be made; 
 (iii) Receive a summary of the Plan’s annual financial report. The
Administrator is required by law to furnish each participant with a copy of this summary annual report; and
 (iv) Continue health care
coverage for yourself, spouse or dependents if there is a loss of coverage as a result of a qualifying event. You or your dependents will have to pay for such coverage.

In addition to creating rights for Plan participants, ERISA also imposes obligations upon the persons responsible for the operation of the employee benefit
plan. These persons are referred to as “fiduciaries” in the law. Fiduciaries must act solely in the interest of Plan participants and they must exercise prudence in the performance of their Plan duties. Fiduciaries who violate ERISA
may be removed and required to make good any losses they have caused the Plan. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit under the Plan
or exercising your rights under ERISA.
 If you have a claim for benefits that is denied or ignored, in whole or in part, you may file suit in a state or
federal court. If it should happen that Plan fiduciaries misuse the Plan’s money or you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court. The
court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, in certain circumstances the court may order you to pay these costs and fees,
for example, if it finds your claim was frivolous.
 If you have any questions about the Plan, you should contact your local Human 

Resources Representative. If you have any questions about this statement or about your rights under ERISA, you should contact the nearest area office of the
Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution
Avenue, N.W., Washington, D.C. 20210.
 Plan number. 519 

Type of plan. The Houghton Mifflin Harcourt Severance Plan is a welfare benefit plan providing severance benefits. 

Source of contributions. Benefits are provided by the Employers. All amounts are paid out of the general assets of the Employers and no special trust
or fund has been set up to provide benefits under the Plan. 
 Type of plan administration; plan year. The Plan is administered by the Administrator.
The Administrator can be contacted by mail c/o Chief Human Resources Officer, Houghton Mifflin Harcourt Publishing Company, 222 Berkeley Street, Boston, Massachusetts 02116. The Plan operates and keeps its records on a calendar year basis. 

  
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 Identification of plan sponsor. The Company is the Plan sponsor. The Company’s Taxpayer
Identification Number is 04-1456030. The Company is also the agent for service of legal process. 
 Policy Owner - Human Resources 

  
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