Document:

Exhibit 10.1 

SCHOLASTIC CORPORATION 2001 STOCK INCENTIVE
PLAN

(Amended and Restated as of July 21, 2009)

ARTICLE I

PURPOSE

          The
purpose of this Scholastic Corporation 2001 Stock Incentive Plan is to enhance
the profitability and value of the Company for the benefit of its stockholders
by enabling the Company to offer employees of, and Consultants to, the Company
and its Affiliates stock-based incentives in the Company, thereby creating a
means to raise the level of stock ownership by employees and Consultants in
order to attract, retain and reward such individuals and strengthen the
mutuality of interests between such individuals and the Company’s stockholders.

ARTICLE II

DEFINITIONS

          For
purposes of this Plan, the following terms shall have the following meanings: 

2.1     “ACQUISITION EVENT” has the meaning set forth
in Section 4.2(d). 

2.2     “AFFILIATE” means each of the following: (i)
any Subsidiary; (ii) any Parent; (iii) any corporation, trade or business
(including, without limitation, a partnership or limited liability company)
which is directly or indirectly controlled 50% or more (whether by ownership of
stock, assets or an equivalent ownership interest or voting interest) by the
Company or one of its Affiliates; (iv) any corporation, trade or business
(including, without limitation, a partnership or limited liability company)
which directly or indirectly controls 50% or more (whether by ownership of
stock, assets or an equivalent ownership interest or voting interest) of the
Company or a Parent; and (v) any other entity in which the Company or any of
its Affiliates has a material equity interest and which is designated as an
“Affiliate” by resolution of the Committee. 

2.3     “AWARD” means any award under this Plan of
any (a) Stock Option; (b) Restricted Stock; (c) Other Stock-Based Award; or (d)
other award providing benefits similar to (a) through (c) designed to meet the
requirements of a Foreign Jurisdiction. 

2.4     “AWARD AGREEMENT” means, with respect to each
Award, a written agreement between the Company and the Participant setting
forth the terms and conditions of the Award, including, without limitation, a
Stock Option Agreement and Restricted Stock Agreement. 

2.5     “BOARD” means the Board of Directors of the
Company. 

2.6     “CAUSE” shall mean, with respect to the
Termination of Employment of an employee or Termination of Consultancy of a
Consultant, (1) in the case where there is no employment agreement or
consultancy agreement between the Company or an Affiliate and the Participant
in effect at the time of the relevant grant or where there is an employment
agreement or consultancy agreement in effect at such time, but such agreement
does not define “cause” (or words of like import), termination due to a
Participant’s dishonesty, fraud, insubordination, willful misconduct, refusal to perform services
(for any reason other than illness or incapacity) or materially unsatisfactory
performance of his or her duties for the Company or an Affiliate, as determined
by

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the Committee in its sole
discretion; or (2) in the case where there is an employment agreement or
consultancy agreement between the Company or an Affiliate and the Participant
in effect at the time of grant that defines cause (or words of like import),
termination that is or would be deemed to be “for cause” (or words of like
import) as defined under such employment agreement or consultancy agreement at
the time of grant, as determined by the Committee in its sole discretion. 

2.7     “CODE” means the Internal Revenue Code of
1986, as amended. Any reference to any section of the Code shall also be a
reference to any successor provision. 

2.8     “COMMITTEE” means a committee or subcommittee
of the Board appointed from time to time by the Board, which committee or subcommittee
shall consist of two or more non-employee directors, each of whom is intended
to be, to the extent required by Rule 16b-3, a “non-employee director” as
defined in Rule 16b-3 and, to the extent required by Section 162(m) of the Code
and any regulations thereunder, an “outside director” as defined under Section
162(m) of the Code; provided, however, that if and to the extent that no
Committee exists which has the authority to administer this Plan, the functions
of the Committee shall be exercised by the Board and all references herein to
the Committee shall be deemed to be references to the Board. 

2.9     “COMMON STOCK” means the Common Stock, $.01
par value per share, of the Company. 

2.10   “COMPANY” means Scholastic Corporation, a
Delaware corporation, and its successors by operation of law. 

2.11   “CONSULTANT” means any advisor or consultant
to the Company or its Affiliates. 

2.12   “DISABILITY” means (1) in the case where
there is no employment agreement or consultancy agreement between the Company
or an Affiliate and the Participant in effect at the time of the relevant
grant, or where there is an employment agreement or consultancy agreement in
effect at such time, but such agreement does not define disability, total and
permanent disability, as defined in Section 22(e)(3) of the Code, as determined
by the Committee in its sole discretion; or (2) in the case where there is an
employment agreement or consultancy agreement between the Company or an
Affiliate and the Participant at the time of the relevant grant that defines
disability, disability as defined under such employment agreement or
consultancy agreement, as determined by the Committee in its sole discretion. 

2.13   “EFFECTIVE DATE” means the effective date of
this Plan as defined in Article XIV. 

2.14   “ELIGIBLE EMPLOYEE” means each employee of
the Company or an Affiliate. 

2.15   “EXCHANGE ACT” means the Securities Exchange
Act of 1934, as amended. Any references to any section of the Exchange Act
shall also be a reference to any successor provision. 

2.16   “FAIR MARKET VALUE” means, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, as of any date, the mean between the high and low sales prices of a
share of Common Stock on the applicable date: (i) as reported on the principal
national securities exchange on which it is then traded or The Nasdaq Stock
Market, Inc. (“NASDAQ”) or (ii) if not traded on any such national securities
exchange or NASDAQ the mean of the closing bid and asked prices of a share of
Common Stock as reported by an automated quotation system sponsored by the
National Association of Securities Dealers, Inc. If 

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the Common Stock is not
readily tradable on a national securities exchange, NASDAQ or any automated
quotation system sponsored by the National Association of Securities Dealers,
Inc., its Fair Market Value shall be set in good faith by the Committee.
Notwithstanding anything herein to the contrary, with respect to Incentive
Stock Options, “Fair Market Value” means the price for Common Stock set by the
Committee in good faith based on reasonable methods set forth under Section 422
of the Code and the regulations thereunder including, without limitation, a
method utilizing the average of prices of the Common Stock reported on the
principal national securities exchange on which it is then traded during a
reasonable period designated by the Committee. For purposes of the grant of any
Stock Option, the applicable date shall be the date for which a mean sales price
is available at the time of grant. 

2.17   “FAMILY MEMBER” means, solely to the extent
provided for in Securities Act Form S-8, any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
employee’s household (other than a tenant or employee), a trust in which these
persons have more than 50% of the beneficial interest, a foundation in which
these persons (or the employee) control the management of assets, and any other
entity in which these persons (or the employee) own more than 50% of the voting
interests or as otherwise defined in Securities Act Form S-8. 

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

2.19   “INCENTIVE STOCK OPTION” means any Stock
Option awarded to an Eligible Employee under this Plan intended to be, and
designated as, an “Incentive Stock Option” within the meaning of Section 422 of
the Code. 

2.20   “NON-QUALIFIED STOCK OPTION” means any Stock
Option awarded under this Plan that is not an Incentive Stock Option. 

2.21   “OTHER STOCK-BASED AWARD” means an Award of
Common Stock and other Awards made pursuant to Article VIII that are valued in
whole or in part by reference to, or are payable in or otherwise based on,
Common Stock, including, without limitation, an Award valued by reference to
performance of an Affiliate. 

2.22   “PARENT” means any parent corporation of the
Company within the meaning of Section 424(e) of the Code. 

2.23   “PARTICIPANT” means any Eligible Employee or
Consultant to whom an Award has been made under this Plan. 

2.24   “PERFORMANCE GOALS” has the meaning set forth
in Section 9.1. 

2.25   “PLAN” means this Scholastic Corporation 2001
Stock Incentive Plan, as amended from time to time. 

2.26   “RESTRICTED STOCK” means an Award of shares
of Common Stock under this Plan that is subject to restrictions under Article
VII. 

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2.27    “RESTRICTION PERIOD” has the meaning set
forth in Section 7.3(a) with respect to Restricted Stock or Other Stock-Based
Awards. 

2.27A “RETIREMENT”
means, with respect to any Award of Stock Options, Restricted Stock, Other
Stock-Based Award or any other award providing benefits similar thereto made on
or after July 21, 2009, a Termination of Employment on or after age 55 and at
least 10 years of continuous service with the Company or its Affiliates in
accordance with the Company’s standard retirement policies. With respect to any
Award of Stock Options, Restricted Stock, Other Stock-Based Award or any other
award providing benefits similar thereto made prior to July 21, 2009, “Retirement”
shall mean a Termination of Employment on or after age 55 in accordance with
the Company’s standard retirement policies. 

2.28    “RULE 16B-3” means Rule 16b-3 under Section
16(b) of the Exchange Act as then in effect or any successor provisions. 

2.29    “SECTION 162(M) OF THE CODE” means Section
162(m) of the Code and any Treasury regulations thereunder. 

2.30    “SECURITIES ACT” means the Securities Act of
1933, as amended. Any reference to any section of the Securities Act shall also
be a reference to any successor provision. 

2.31    “STOCK OPTION” or “OPTION” means any option
to purchase shares of Common Stock granted to Eligible Employees or Consultants
under Article VI. 

2.32    “SUBSIDIARY” means any subsidiary corporation
of the Company within the meaning of Section 424(f) of the Code. 

2.33    “TEN PERCENT STOCKHOLDER” means a person
owning stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, its Subsidiaries or its Parent. 

2.34    “TERMINATION OF CONSULTANCY” means (i) the
expiration of the contract (or in the case of more than one contract, all
contracts) under which services are performed by the Consultant for the Company
or an Affiliate; or (ii) when an entity which is retaining a Participant as a
Consultant ceases to be an Affiliate unless the Participant otherwise is, or
thereupon becomes, a Consultant to the Company or another Affiliate at the time
the entity ceases to be an Affiliate. In the event that a Consultant becomes an
Eligible Employee or a non-employee director upon the termination of his or her
consultancy, the Committee, in its sole and absolute discretion, may determine
that no Termination of Consultancy shall be deemed to occur until such time as
such individual is no longer a Consultant, an Eligible Employee or a
non-employee director. Notwithstanding the foregoing, the Committee may
otherwise define Termination of Consultancy in the Award Agreement or, if no
rights of a Participant are reduced, may otherwise define Termination of
Consultancy thereafter. 

2.35    “TERMINATION OF EMPLOYMENT” means: (i) a
termination of employment (for reasons other than a military or personal leave
of absence granted by the Company) of a Participant from the Company and its
Affiliates; or (ii) when an entity which is employing a Participant ceases to
be an Affiliate, unless the Participant otherwise is, or thereupon becomes,
employed by the Company or another Affiliate at the time the entity ceases to
be an Affiliate. In 

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the event that an Eligible
Employee becomes a Consultant or non-employee director upon the termination of
his or her employment, the Committee, in its sole and absolute discretion, may
determine that no Termination of Employment shall be deemed to occur until such
time as such individual is no longer an Eligible Employee, a Consultant or a
non-employee director. Notwithstanding the foregoing, the Committee may
otherwise define Termination of Employment in the Award Agreement or, if no
rights of a Participant are reduced, may otherwise define Termination of
Employment thereafter. 

2.36   “TRANSFER” means (a) when used as a noun, any
direct or indirect transfer, sale, assignment, pledge, hypothecation,
encumbrance or other disposition (including the issuance of equity in a
Person), whether for value or no value and whether voluntary or involuntary
(including by operation of law), and (b) when used as a verb, to directly or
indirectly transfer, sell, assign, pledge, hypothecate, encumber, or otherwise
dispose of (including the issuance of equity in a Person), whether for value or
no value and whether voluntarily or involuntarily (including by operation of
law). 

ARTICLE III

ADMINISTRATION

3.1     THE COMMITTEE. The Plan shall be administered
and interpreted by the Committee. If for any reason the appointed Committee
does not meet the requirements of Rule 16b-3 or Section 162(m) of the Code,
such noncompliance with the requirements of Rule 16b-3 or Section 162(m) of the
Code shall not affect the validity of Awards, grants, interpretations or other
actions of the Committee. 

3.2     GRANTS OF AWARDS. The Committee shall have
full authority to grant to Eligible Employees and Consultants, pursuant to the
terms of this Plan, (i) Stock Options, (ii) Restricted Stock, (iii) Other
Stock-Based Awards or (iv) other awards providing benefits similar to (i)
through (iii) designed to meet the requirements of Foreign Jurisdictions. All
Awards shall be granted by, confirmed by, and subject to the terms of, a
written Award Agreement executed by the Company and the Participant. In
particular, the Committee shall have the authority: 

          (a)     to select the Eligible Employees and
Consultants to whom Awards may from time to time be granted hereunder; 

          (b)     to determine whether and to what extent
Awards, including any combination of two or more Awards, are to be granted
hereunder to one or more Eligible Employees or Consultants; 

          (c)     to determine, in accordance with the terms of
this Plan, the number of shares of Common Stock to be covered by each Award
granted hereunder; 

          (d)     to determine the terms and conditions, not
inconsistent with the terms of this Plan, of any Award granted hereunder
(including, but not limited to, the exercise or purchase price (if any), any
restriction or limitation, any vesting schedule or acceleration thereof and any
forfeiture restrictions or waiver thereof, regarding any Award and the shares
of Common Stock relating thereto, based on such factors, if any, as the Committee
shall determine, in its sole discretion); 

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          (e)     to determine whether and under what
circumstances or method a Stock Option may be settled; 

          (f)     to determine whether a Stock Option is an
Incentive Stock Option or Non-Qualified Stock Option or whether an Award is
intended to satisfy Section 162(m) of the Code; 

          (g)     to determine whether to require an Eligible
Employee or Consultant, as a condition of the granting of any Award, not to
sell or otherwise dispose of shares of Common Stock acquired pursuant to the
exercise of an Option or an Award for a period of time as determined by the
Committee, in its sole discretion, following the date of the acquisition of
such Option or Award; 

          (h)     to modify, extend or renew an Award, subject
to Articles XI and XV herein, provided, however, that if an Award is modified,
extended or renewed and thereby deemed to be the issuance of a new Award under
the Code or the applicable accounting rules, the exercise price of an Award may
continue to be the original exercise price even if less than the Fair Market
Value of the Common Stock at the time of such modification, extension or
renewal; and 

          (i)     to offer to buy out an Option previously
granted, based on such terms and conditions as the Committee shall establish
and communicate to the Participant at the time such offer is made. 

3.3     GUIDELINES. Subject to Articles XI and XV
hereof, the Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan and perform
all acts, including the delegation of its administrative responsibilities, as
it shall, from time to time, deem advisable; to construe and interpret the
terms and provisions of this Plan and any Award issued under this Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
this Plan. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in this Plan or in any Award Agreement relating
thereto in the manner and to the extent it shall deem necessary to effectuate
the purpose and intent of this Plan. The Committee may adopt special guidelines
and provisions for persons who are residing in, or subject to the taxes of,
Foreign Jurisdictions to comply with applicable tax, securities and other laws
and may impose any limitations and restrictions that it deems necessary to
comply with the applicable tax, securities and other laws of such Foreign
Jurisdictions. To the extent applicable, this Plan is intended to comply with
Section 162(m) of the Code and the applicable requirements of Rule 16b-3 and
shall be limited, construed and interpreted in a manner so as to comply
therewith. 

3.4     DECISIONS FINAL. Any decision, interpretation
or other action made or taken in good faith by or at the direction of the
Company, the Board or the Committee (or any of its members) arising out of or
in connection with this Plan shall be within the absolute discretion of all and
each of them, as the case may be, and shall be final, binding and conclusive on
the Company and all employees and Participants and their respective heirs,
executors, administrators, successors and assigns. 

3.5     RELIANCE ON COUNSEL. The Company, the Board
or the Committee may consult with legal counsel, who may be counsel for the
Company or other counsel, with respect to its obligations or duties hereunder,
or with respect to any action or proceeding or any question of law, and shall not
be liable with respect to any action taken or omitted by it in good faith
pursuant to the advice of such counsel. 

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3.6     PROCEDURES. If the Committee is appointed,
the Board shall designate one of the members of the Committee as chairman and
the Committee shall hold meetings, subject to the By-Laws of the Company, at
such times and places as it shall deem advisable. A majority of the Committee
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to
writing and signed by all the Committee members, in accordance with the By-Laws
of the Company, shall be fully as effective as if it had been made by a vote at
a meeting duly called and held. The Committee shall keep minutes of its
meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable. 

3.7     DESIGNATION OF CONSULTANTS/LIABILITY. 

          (a)     The Committee may designate employees of the
Company and Affiliates and professional advisors to assist the Committee in the
administration of this Plan and may grant authority to officers to execute
Award Agreements or other documents on behalf of the Committee. 

          (b)     The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the administration of this
Plan and may rely upon any opinion received from any such counsel or consultant
and any computation received from any such consultant or agent. Expenses
incurred by the Committee in the engagement of any such counsel, consultant or
agent shall be paid by the Company. The Committee, its members and any employee
of the Company or Affiliate designated pursuant to Paragraph (a) above shall
not be liable for any action or determination made in good faith with respect
to this Plan. To the maximum extent permitted by applicable law, no officer of
the Company or Affiliate or member or former member of the Committee shall be
liable for any action or determination made in good faith with respect to this
Plan or any Award granted under it. To the maximum extent permitted by
applicable law or the Certificate of Incorporation or By-Laws of the Company
(or if applicable, of an Affiliate) and to the extent not covered by insurance,
each officer and member or former member of the Committee shall be indemnified
and held harmless by the Company (or if applicable, an Affiliate) against any
cost or expense (including reasonable fees of counsel reasonably acceptable to
the Company) or liability (including any sum paid in settlement of a claim with
the approval of the Company), and shall be advanced amounts necessary to pay
the foregoing at the earliest time and to the fullest extent permitted, arising
out of any act or omission to act in connection with this Plan, except to the
extent arising out of such officer’s, member’s or former member’s own fraud or
bad faith. Such indemnification shall be in addition to any rights of
indemnification the officers, directors or members or former officers,
directors or members may have under applicable law or under the Certificate of
Incorporation or By-Laws of the Company or any Affiliate. Notwithstanding
anything else herein, this indemnification will not apply to the actions or
determinations made by an individual with regard to Awards granted to him or
her under this Plan. 

ARTICLE IV

SHARE AND OTHER LIMITATIONS

4.1     SHARES. 

          (a)     GENERAL LIMITATION. The aggregate number of
shares of Common Stock which may be issued or used for reference purposes under
this Plan or with respect to which Awards may be granted shall not exceed
6,000,000 shares of Common Stock (subject to any 

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increase or decrease
pursuant to Section 4.2) with respect to all types of Awards. The shares of
Common Stock available under this Plan may be either authorized and unissued
Common Stock or Common Stock held in or acquired for the treasury of the
Company. If any Stock Option granted under this Plan expires, terminates or is
canceled for any reason without having been exercised in full or, with respect
to Stock Options, the Company repurchases any Stock Option, the number of
shares of Common Stock underlying such unexercised or repurchased Stock Option
shall again be available for the purposes of Awards under this Plan. If any
shares of Restricted Stock awarded under this Plan to a Participant are
forfeited or repurchased by the Company for any reason, the number of forfeited
or repurchased shares of Restricted Stock shall again be available for the
purposes of Awards under this Plan. If Common Stock has been delivered or
exchanged by a Participant as full or partial payment to the Company of an
exercise price or the price of the purchase of an Award other than an Incentive
Stock Option, the number of shares of Common Stock exchanged as payment in
connection with the exercise or purchase shall again be available for purposes
of determining the number of shares of Common Stock available for Awards other
than Incentive Stock Options. If Common Stock has been delivered by a
Participant for payment of withholding taxes, or if the number of shares of
Common Stock otherwise deliverable has been reduced for payment of withholding
taxes, the number of shares of Common Stock delivered by such Participant or reduced
for payment of withholding taxes shall again be available for purposes of
determining the number of shares of Common Stock available for Awards other
than Incentive Stock Options. 

          (b)      INDIVIDUAL PARTICIPANT LIMITATIONS. 

                    (i)      The maximum number of shares of Common Stock
subject to any Stock Option or other Award intended to comply with Section
162(m) of the Code which may be granted under this Plan during any fiscal year
of the Company to each Eligible Employee or Consultant shall be 250,000 shares
per type of Award (subject to any increase or decrease pursuant to Section
4.2). 

                    (ii)     There are no annual individual Eligible
Employee or Consultant share limitations on Restricted Stock awards unless the
grant of such Award or the lapse of the relevant Restriction Period is subject
to attainment of Performance Goals in accordance with Article IX hereof. 

                    (iii)    The individual Participant limitations set
forth in this Section 4.1(b) shall be cumulative; that is, to the extent that
shares of Common Stock for which Awards are permitted to be granted to an
Eligible Employee or a Consultant during a fiscal year are not covered by an
Award to such Eligible Employee or Consultant in a fiscal year, the number of
shares of Common Stock available for Awards to such Eligible Employee or
Consultant shall automatically increase in the subsequent fiscal years during
the term of the Plan until used. 

4.2     CHANGES. 

          (a)     The existence of this Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Board
or the stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company or any
Affiliate, any issue of bonds, debentures, preferred or prior preference stock
ahead of or affecting Common Stock, the dissolution or liquidation of the
Company or any Affiliate, any sale or transfer of all or part of the assets or
business of the Company or any Affiliate or any other corporate act or
proceeding. 

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          (b)     Subject to the provisions of Section 4.2(d),
in the event of any change in the capital structure or business of the Company
by reason of any stock split, reverse stock split, stock dividend, combination
or reclassification of shares, recapitalization, or other change in the capital
structure of the Company, non-cash distribution with respect to its outstanding
Common Stock or capital stock other than Common Stock, merger, consolidation,
spin-off, reorganization, partial or complete liquidation, issuance of rights
or warrants to purchase any Common Stock or securities convertible into Common
Stock, or any other corporate transaction or event having an effect similar to
any of the foregoing and effected, then the aggregate number and kind of shares
which thereafter may be issued under this Plan, the number and kind of shares
or other property (including cash) to be issued upon exercise of an outstanding
Stock Option or other Award granted under this Plan and the purchase price
thereof shall be appropriately adjusted consistent with such change in such manner
as, and to the extent that, the Committee may deem equitable to prevent
substantial dilution or enlargement of the rights granted to, or available for,
Participants under this Plan, and any such adjustment determined by the
Committee in good faith shall be final, binding and conclusive on the Company
and all Participants and employees and their respective heirs, executors,
administrators, successors and assigns. 

          (c)     Fractional shares of Common Stock resulting
from any adjustment in Options or Awards pursuant to Section 4.2(b) shall be
aggregated until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half and rounding-up for fractions equal to or greater
than one-half. No cash settlements shall be made with respect to fractional
shares eliminated by rounding. Notice of any adjustment shall be given by the
Committee to each Participant whose Award has been adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of this Plan. 

          (d)     In the event of a merger or consolidation in
which the Company is not the surviving entity or in the event of any
transaction that results in the acquisition of substantially all of the
Company’s outstanding Common Stock by a single person or entity or by a group
of persons and/or entities acting in concert, or in the event of the sale or
transfer of all or substantially all of the Company’s assets (all of the
foregoing being referred to as “Acquisition Events”), then the Committee may,
in its sole discretion, terminate, effective as of the date of the Acquisition
Event, all outstanding Stock Options and Other Stock-Based Awards with respect
to which a Participant has a right to exercise, by delivering notice of
termination to each Participant at least 30 days prior to the date of
consummation of the Acquisition Event, in which case during the period from the
date on which such notice of termination is delivered to the consummation of
the Acquisition Event, each such Participant shall have the right to exercise
in full all of such Awards held by the Participant that are then outstanding
(without regard to any limitations on exercisability otherwise contained in the
Stock Option or Award Agreements), but any such exercise shall be contingent
upon and subject to the occurrence of the Acquisition Event, and, provided
that, if the Acquisition Event does not take place within a specified period
after giving such notice for any reason whatsoever, the notice and exercise
pursuant thereto shall be null and void. 

          If
an Acquisition Event occurs but the Committee does not terminate the
outstanding Stock Options pursuant to this Section 4.2(d), then the provisions
of Section 4.2(b) shall apply. 

4.3     MINIMUM PURCHASE PRICE. Notwithstanding any
provision of this Plan to the contrary, if authorized but previously unissued
shares of Common Stock are issued under this Plan, such shares shall not be
issued for a consideration which is less than as permitted under applicable
law. 

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ARTICLE V 

ELIGIBILITY

5.1     GENERAL ELIGIBILITY. All Eligible Employees
and Consultants and prospective employees of and Consultants to the Company and
its Affiliates are eligible to be granted Non-Qualified Stock Options,
Restricted Stock, Other Stock-Based Awards and awards providing benefits
similar to each of the foregoing designed to meet the requirements of Foreign
Jurisdictions under this Plan. Eligibility for the grant of an Award and actual
participation in this Plan shall be determined by the Committee in its sole
discretion. The vesting and exercise of Awards granted to a prospective
employee or Consultant are conditioned upon such individual actually becoming
an Eligible Employee or Consultant. 

5.2     INCENTIVE STOCK OPTIONS. All Eligible Employees
of the Company, its Subsidiaries and its Parent (if any) are eligible to be
granted Incentive Stock Options under this Plan. Eligibility for the grant of
an Award and actual participation in this Plan shall be determined by the
Committee in its sole discretion. 

ARTICLE VI 

STOCK OPTIONS

6.1     STOCK OPTIONS. Each Stock Option granted
hereunder shall be one of two types: (i) a Non-Qualified Stock Option; or (ii)
an Incentive Stock Option intended to satisfy the requirements of Section 422
of the Code. 

6.2     GRANTS. The Committee shall have the
authority to grant to any Eligible Employee one or more Non-Qualified Stock
Options, Incentive Stock Options or both types of Stock Options. To the extent
that any Stock Option does not qualify as an Incentive Stock Option (whether
because of its provisions or the time or manner of its exercise or otherwise),
such Stock Option, or the portion thereof which does not qualify, shall
constitute a separate Non-Qualified Stock Option. The Committee shall have the authority
to grant to any Consultant one or more Non-Qualified Stock Options.
Notwithstanding any other provision of this Plan to the contrary or any
provision in an Award Agreement evidencing the grant of a Stock Option to the
contrary, any Stock Option granted to an Eligible Employee of an Affiliate
(other than an Affiliate which is a Parent or a Subsidiary) shall be a
Non-Qualified Stock Option. 

6.3     TERMS OF STOCK OPTIONS. Stock Options granted
under this Plan shall be subject to the following terms and conditions, and
shall be in such form and contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem
desirable: 

          (a)     EXERCISE PRICE. The exercise price per share
of Common Stock shall be determined by the Committee, but shall not be less
than 100% of the Fair Market Value of a share of Common Stock at the time of
grant; provided, however, that if an Incentive Stock Option is granted to a Ten
Percent Stockholder, the exercise price shall be no less than 110% of the Fair
Market Value of the Common Stock at the time of grant. 

          (b)     STOCK OPTION TERM. The term of each Stock
Option shall be fixed by the Committee; provided, however, that no Stock Option
shall be exercisable more than 10 years after the date such Stock Option is
granted; and further provided that the term of an Incentive Stock Option
granted to a Ten Percent Stockholder shall not exceed 5 years. 

10

          (c)     EXERCISABILITY. Stock Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at grant. If the Committee provides, in
its discretion, that any Stock Option is exercisable subject to certain
limitations (including, without limitation, that such Stock Option is
exercisable only in installments or within certain time periods), the Committee
may waive such limitations on exercisability at any time at or after grant in
whole or in part (including, without limitation, waiver of the installment
exercise provisions or acceleration of the time at which such Stock Option may
be exercised), based on such factors, if any, as the Committee shall determine,
in its sole discretion. 

          (d)     METHOD OF EXERCISE. Subject to whatever
installment exercise and waiting period provisions apply under Paragraph (c)
above, Stock Options may be exercised in whole or in part at any time and from
time to time during the Stock Option term by giving written notice of exercise
to the Company specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price as follows: 

                    (i)     in cash or by check, bank draft or money
order payable to the order of the Company; 

                    (ii)    if the Common Stock is traded on a national
securities exchange, The Nasdaq Stock Market, Inc. or quoted on a national
quotation system sponsored by the National Association of Securities Dealers,
through a “cashless exercise” procedure whereby the Participant delivers
irrevocable instructions to a broker to deliver promptly to the Company an
amount equal to the purchase price; or 

                    (iii)   on such other terms and conditions as may be
acceptable to the Committee (including, without limitation, the relinquishment
of Stock Options or by payment in full or in part in the form of Common Stock
owned by the Participant for any minimum period necessary to avoid an
accounting charge to the Company’s earnings on its financial statements (and
for which the Participant has good title free and clear of any liens and
encumbrances) based on the Fair Market Value of the Common Stock on the payment
date as determined by the Committee). No shares of Common Stock shall be issued
until payment therefor, as provided herein, has been made or provided for. 

          (e)     INCENTIVE STOCK OPTION LIMITATIONS. To the
extent that the aggregate Fair Market Value (determined as of the time of
grant) of the Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Eligible Employee during any calendar year
under this Plan and/or any other stock option plan of the Company, any
Subsidiary or any Parent exceeds $100,000, such Options shall be treated as
Non-Qualified Stock Options. In addition, if an Eligible Employee does not
remain employed by the Company, any Subsidiary or any Parent at all times from
the time an Incentive Stock Option is granted until 3 months prior to the date
of exercise thereof (or such other period as required by applicable law), such
Stock Option shall be treated as a Non-Qualified Stock Option. Should any
provision of this Plan not be necessary in order for the Stock Options to
qualify as Incentive Stock Options, or should any additional provisions be
required for such purpose, the Committee may amend this Plan accordingly,
without the necessity of obtaining the approval of the stockholders of the
Company. 

          (f)     FORM, MODIFICATION, EXTENSION AND RENEWAL OF
STOCK OPTIONS. Subject to the terms and conditions and within the limitations
of this Plan, Stock Options shall be evidenced by such form of Award Agreement
or grant as is approved by the 

11

Committee, and the Committee
may (i) modify, extend or renew outstanding Stock Options granted under this
Plan (provided that the rights of a Participant are not reduced without his or
her consent), and (ii) accept the surrender of outstanding Stock Options (up to
the extent not theretofore exercised) and authorize the granting of new Stock
Options in substitution therefor (to the extent not theretofore exercised). 

          (g)     OTHER TERMS AND CONDITIONS. Options may
contain such other provisions, which shall not be inconsistent with any of the
foregoing terms of this Plan, as the Committee shall deem appropriate
including, without limitation, permitting “reloads” such that the same number
of Options are granted as the number of shares used to pay for the exercise
price of Options and/or shares used to pay withholding taxes (“Reloads”). With
respect to Reloads, the exercise price of the new Stock Option shall be the
Fair Market Value on the date of the “reload” and the term of the Stock Option
shall be the same as the remaining term of the Options that are exercised, if
applicable, or such other exercise price and term as determined by the
Committee. 

ARTICLE VII 

RESTRICTED STOCK

7.1     AWARDS OF RESTRICTED STOCK. Shares of
Restricted Stock may be issued to Eligible Employees or Consultants either
alone or in addition to other Awards granted under this Plan. The Committee
shall determine the Eligible Employees or Consultants to whom, and the time or
times at which, grants of Restricted Stock will be made, the number of shares
to be awarded, the price (if any) to be paid by the recipient (subject to
Section 7.2), the time or times within which such Awards may be subject to
forfeiture, the vesting schedule and rights to acceleration thereof, and all
other terms and conditions of the Awards. 

7.2     AWARDS AND CERTIFICATES. An Eligible Employee
or Consultant selected to receive Restricted Stock shall not have any rights
with respect to such Award, unless and until such Participant has delivered to
the Company a fully executed copy of the applicable Award Agreement relating
thereto and has otherwise complied with the applicable terms and conditions of
such Award. Further, such Award shall be subject to the following conditions: 

          (a)     PURCHASE PRICE. The purchase price of
Restricted Stock shall be fixed by the Committee. Subject to Section 4.3, the
purchase price for shares of Restricted Stock may be zero to the extent
permitted by applicable law, and, to the extent not so permitted, such purchase
price may not be less than par value. 

          (b)     ACCEPTANCE. Awards of Restricted Stock must
be accepted within a period of 30 days (or such shorter period as the Committee
may specify at grant) after the Award date by executing a Restricted Stock
Award Agreement and by paying whatever price (if any) the Committee has
designated thereunder. 

          (c)     CUSTODY. Shares of Restricted Stock shall be
recorded by book entry by the transfer agent, unless the Committee elects to
use another system, and no stock certificates evidencing shares of Common Stock
relating to the Restricted Stock shall be issued until the restrictions thereon
shall have lapsed. 

7.3     RESTRICTIONS AND CONDITIONS ON RESTRICTED
STOCK AWARDS. Shares of Restricted Stock awarded pursuant to this Plan shall be
subject to Article XIII and the following restrictions and conditions: 

12

          (a)     RESTRICTION PERIOD; VESTING AND ACCELERATION
OF VESTING. The Participant shall not be permitted to Transfer shares of
Restricted Stock awarded under this Plan during the period or periods set by
the Committee (the “Restriction Period”) commencing on the date of such Award,
as set forth in the Restricted Stock Award Agreement, and such agreement shall
set forth a vesting schedule and any events which would accelerate vesting of
the shares of Restricted Stock. Within these limits, based on service,
attainment of Performance Goals pursuant to Article IX below and/or such other
factors or criteria as the Committee may determine in its sole discretion, the
Committee may provide for the lapse of such restrictions in installments in
whole or in part, or may accelerate the vesting of all or any part of any
Restricted Stock Award and/or waive the deferral limitations for all or any
part of any Restricted Stock Award. 

          (b)     RIGHTS AS STOCKHOLDER. Except as provided in
this Paragraph (b) and Paragraph (a) above and as otherwise determined by the
Committee, the Participant shall have, with respect to the shares of Restricted
Stock, the rights of a holder of shares of Common Stock of the Company to
receive any dividends and the right to vote such shares. The Committee may, in
its sole discretion, determine at the time of grant that the payment of
dividends shall be deferred until, and conditioned upon, the expiration of the
applicable Restriction Period. 

          (c)     LAPSE OF RESTRICTIONS. If and when the
Restriction Period expires without a prior forfeiture of the Restricted Stock
subject to such Restriction Period, the certificates for such shares shall be
delivered at the direction of the Participant. All legends shall be removed
from said certificates at the time of such delivery to the Participant except
as otherwise required by applicable law or other limitations imposed by the
Committee. 

ARTICLE VIII 

OTHER STOCK-BASED AWARDS

8.1     OTHER AWARDS. Other Stock-Based Awards may be
granted either alone or in addition to or in tandem with Stock Options or
Restricted Stock. Subject to the provisions of this Plan, the Committee shall
have authority to determine the persons to whom and the time or times at which
such Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such Awards, and all other conditions of the Awards. The Committee
may also provide for the grant of Common Stock under such Awards upon the
completion of a specified performance period. 

8.2     TERMS AND CONDITIONS. Other Stock-Based
Awards made pursuant to this Article VIII shall be subject to the following
terms and conditions: 

          (a)     NON-TRANSFERABILITY. Subject to the
applicable provisions of the Award Agreement and this Plan, shares of Common
Stock subject to Awards made under this Article VIII may not be Transferred
prior to the date on which the shares are issued, or, if later, the date on
which any applicable restriction, performance or deferral period lapses. 

          (b)     DIVIDENDS. Unless otherwise determined by the
Committee at the time of Award, subject to the provisions of the Award
Agreement and this Plan, the recipient of an Award under this Article VIII
shall be entitled to receive, currently or on a deferred basis, dividends or
dividend equivalents with respect to the number of shares of Common Stock
covered by the Award, as determined at the time of the Award by the Committee,
in its sole discretion. 

13

          (c)     VESTING. Any Award under this Article VIII
and any Common Stock covered by any such Award shall vest or be forfeited to
the extent so provided in the Award Agreement, as determined by the Committee,
in its sole discretion. 

          (d)     WAIVER OF LIMITATION. The Committee may, in
its sole discretion, waive in whole or in part any or all of the limitations
imposed hereunder (if any) with respect to any or all of an Award under this
Article VIII. 

          (e)     PRICE. Subject to the next sentence, Common
Stock or Other Stock-Based Awards issued on a bonus basis under this Article
VIII may be issued for no cash consideration; Common Stock or Other Stock-Based
Awards purchased pursuant to a purchase right awarded under this Article VIII
shall be priced as determined by the Committee. Subject to Section 4.3, the
purchase price of shares of Common Stock or Other Stock-Based Awards may be
zero to the extent permitted by applicable law, and, to the extent not so
permitted, such purchase price may not be less than par value. The purchase of
shares of Common Stock or Other Stock-Based Awards may be made on either an
after-tax or pre-tax basis, as determined by the Committee; provided, however,
that if the purchase is made on a pre-tax basis, such purchase shall be made
pursuant to a deferred compensation program established by the Committee, which
will be deemed a part of this Plan. 

ARTICLE IX

PERFORMANCE GOALS

          9.1    PERFORMANCE GOALS, FORMULAE OR STANDARDS. The
Committee may condition the grant or vesting of Stock Options, Restricted Stock
or Other Stock-Based Awards upon the attainment of specified performance goals
(“Performance Goals”), including established Performance Goals intended to meet
the requirements of qualified performance-based compensation under Section
162(m) of the Code (“Qualified Performance-Based Compensation”), or such other
factors as the Committee may determine, in its sole discretion. If the grant of
shares pursuant to an Award or the lapse of restrictions of an Award is
intended to constitute Qualified Performance-Based Compensation, the Committee
shall establish the Performance Goals and the applicable vesting percentage of
the Award applicable to each Participant or class of Participants in writing
prior to the beginning of the applicable fiscal year or at such later date as
otherwise determined by the Committee and while the outcome of the Performance
Goals are substantially uncertain. Such Performance Goals may incorporate
provisions for disregarding (or adjusting for) changes in accounting methods,
corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances. With regard to an
Award that is intended to constitute Qualified Performance-Based Compensation,
to the extent any such provision would create impermissible discretion under
Section 162(m) of the Code or otherwise violate Section 162(m) of the Code,
such provision shall be of no force or effect. The applicable Performance Goals
shall be based on one or more of the Performance Criteria set forth in Exhibit
A hereto. Qualified Performance-Based Compensation does not include any amount
or portion of any amount that will be paid either regardless of performance, or
based upon a level of performance that is substantially certain to be met at
the time the criteria is established. Compensation may be Qualified
Performance-Based Compensation where the amount will be paid regardless of
satisfaction of the performance criteria due to the Participant’s death, Disability,
or a Change in Control event (as defined in Treasury Regulations §
l.409A-3(i)(5)(i)), provided that a payment made under such circumstances
without regard to the satisfaction of the performance criteria will not
constitute Qualified Performance-Based Compensation. Restricted Stock Awards or
Other Stock-Based 

14

Awards intended to be
Qualified Performance-Based Compensation under Code Section 162(m)(4)(C) shall
not be payable prior to attainment of the relevant Performance Goals; provided,
however, that (i) the Committee may provide, either in connection with the
grant of an Award of Restricted Stock or Other Stock-Based Award or by
amendment thereafter, that achievement of such performance goals will be waived
upon the death or disability (within the meaning of Code Section 162(m)) of the
Participant, or in connection with a change in ownership or control of the
Company (within the meaning of Code Section 162(m)) and, (ii) solely with
respect to performance periods commencing on or prior to December 31, 2008, the
Committee may also provide for such waiver upon Termination of Employment or
Termination of Consultancy (as applicable) by reason of retirement on or after
age 55 in accordance with the Company’s standard retirement policies,
involuntary termination without Cause, or resignation for good reason, as may
be determined by the Committee. 

ARTICLE X 

NON-TRANSFERABILITY AND TERMINATION OF 

EMPLOYMENT/CONSULTANCY

10.1   NON-TRANSFERABILITY. Except as otherwise
provided herein, no Stock Option shall be Transferable by the Participant
otherwise than by will or by the laws of descent and distribution. Except as
otherwise provided herein, all Stock Options shall be exercisable, during the
Participant’s lifetime, only by the Participant. Shares of Restricted Stock
under Article VII may not be Transferred prior to the date on which shares are
issued, or, if later, the date on which any applicable restriction, performance
or deferral period lapses. No Award shall, except as otherwise specifically
provided by law or herein, be Transferable in any manner, and any attempt to
Transfer any such Award shall be void, and no such Award shall in any manner be
liable for or subject to the debts, contracts, liabilities, engagements or
torts of any person who shall be entitled to such Award, nor shall it be
subject to attachment or legal process for or against such person.
Notwithstanding any provision herein to the contrary, the Committee may
determine at the time of grant or thereafter that a Non-Qualified Stock Option
that is otherwise not Transferable pursuant to this Section 10.1 is
Transferable to, and exercisable by, a Family Member in whole or in part and in
such circumstances, and under such conditions, as specified by the Committee. A
Non-Qualified Stock Option that is Transferred to a Family Member during the
pursuant to the preceding sentence (i) may not be subsequently Transferred
during the employee’s lifetime other than to the employee or another Family
Member and (ii) remains subject to the terms of this Plan and the Award
Agreement. 

10.2   TERMINATION OF EMPLOYMENT OR TERMINATION OF
CONSULTANCY. The following rules apply with regard to the Termination of
Employment or Termination of Consultancy of a Participant: 

          (a)     RULES APPLICABLE TO STOCK OPTIONS. Unless
otherwise determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter: 

                    (i)     TERMINATION BY REASON OF DEATH OR DISABILITY.
If a Participant’s Termination of Employment or Termination of Consultancy is
by reason of death, or Disability, all Stock Options held by such Participant
shall become fully exercisable on the date of such Termination of Employment or
Termination of Consultancy and may be exercised by the Participant (or, in the
case of death, by the legal representative of the Participant’s estate) at any
time within a period of one year from the date of such Termination of
Employment or 

15

Termination of Consultancy,
but in no event beyond the expiration of the stated terms of such Stock
Options. 

                    (ii)     TERMINATION BY REASON OF RETIREMENT. In the
event of a Participant’s Termination of Employment by reason of Retirement, for
a period of three years from the date of such Termination of Employment, all unvested
Stock Options held by such Participant shall continue to vest and all
exercisable Stock Options may be exercised by the Participant, but in no event
beyond the expiration of the stated terms of such Stock Options. 

                    (iii)     INVOLUNTARY TERMINATION WITHOUT CAUSE. If a
Participant’s Termination of Employment or Termination of Consultancy is by
involuntary termination without Cause, all Stock Options held by such
Participant may be exercised, to the extent exercisable at Termination of
Employment or Termination of Consultancy, by the Participant at any time within
a period of 90 days from the date of such Termination of Employment or
Termination of Consultancy, but in no event beyond the expiration of the stated
term of such Stock Options. 

                    (iv)     TERMINATION FOR CAUSE OR FOR ANY REASON OTHER
THAN DEATH, DISABILITY, RETIREMENT OR INVOLUNTARY TERMINATION WITHOUT CAUSE. If
a Participant’s Termination of Employment or Termination of Consultancy is for
Cause, all Stock Options held by such Participant shall thereupon terminate and
expire as of the date of such Termination of Employment or Termination of
Consultancy. If a Participant’s Termination of Employment or Termination of
Consultancy is for any reason other than Cause, death, Disability, Retirement,
or other than an involuntary Termination of Employment or Termination of
Consultancy without Cause, including, without limitation, a voluntary
Termination of Employment or Termination of Consultancy, all Stock Options held
by such Participant may be exercised, to the extent exercisable at Termination
of Employment or Termination of Consultancy, by the Participant at any time
within a period of 90 days from the date of such Termination of Employment or
Termination of Consultancy, but in no event beyond the expiration of the stated
term of such Stock Options. 

10.3    RULES APPLICABLE TO RESTRICTED STOCK AND
OTHER STOCK-BASED AWARDS. Subject to the applicable provisions of the Award
Agreement and this Plan and except as provided in Section 9.1 hereof with
respect to Qualified Performance-Based Compensation, upon a Participant’s
Termination of Employment or Termination of Consultancy for any reason during
the relevant Restriction Period or other period specified in the Award
Agreement, all unvested Restricted Stock and Other Stock-Based Awards will vest
or be forfeited in accordance with the terms and conditions established by the
Committee at grant or thereafter. 

ARTICLE XI 

TERMINATION OR AMENDMENT OF PLAN

           Notwithstanding
any other provision of this Plan, the Board or the Committee may at any time,
and from time to time, amend, in whole or in part, any or all of the provisions
of this Plan (including any amendment deemed necessary to ensure that the
Company may comply with any regulatory requirement referred to in Article
XIII), or suspend or terminate it entirely, retroactively or otherwise;
provided, however, that, unless otherwise required by law or specifically
provided herein, the rights of a Participant with respect to Awards granted
prior to such amendment, suspension or termination may not be impaired without
the consent of such Participant and, provided further, without the approval of
the stockholders of the Company in accordance with the Company’s Certificate of
Incorporation and the laws of the State of 

16

Delaware, to the extent
required by the applicable provisions of Rule 16b-3 or Section 162(m) of the
Code or, to the extent applicable to Incentive Stock Options, Section 422 of
the Code, no amendment may be made which would (i) increase the aggregate
number of shares of Common Stock that may be issued under this Plan; (ii)
increase the maximum individual Participant limitations for a fiscal year under
Section 4.1(b); (iii) change the classification of employees or Consultants
eligible to receive Awards under this Plan; (iv) decrease the minimum option
price of any Stock Option; (v) extend the maximum option period under Section
6.3; (vi) materially alter the Performance Criteria for Awards as set forth in
Exhibit A; or (vii) require stockholder approval in order for this Plan to
continue to comply with the applicable provisions of Section 162(m) of the Code
or, to the extent applicable to Incentive Stock Options, Section 422 of the
Code. 

          The
Committee may amend the terms of any Award theretofore granted, prospectively
or retroactively, but, subject to Article IV above or as otherwise specifically
provided herein, no such amendment or other action by the Committee shall
impair the rights of any holder without the holder’s consent. 

ARTICLE XII 

UNFUNDED PLAN

12.1   UNFUNDED STATUS OF PLAN. This Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested interest but which
are not yet made to a Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than those of a
general creditor of the Company. 

ARTICLE XIII 

GENERAL PROVISIONS

13.1   LEGEND. The Committee may require each person
receiving shares pursuant to an Award under this Plan to represent to and agree
with the Company in writing that the Participant is acquiring the shares
without a view to distribution thereof. In addition to any legend required by
this Plan, the certificates for any shares issued under the Plan shall include
any legend which the Committee deems appropriate to reflect any restrictions on
Transfer if the shares of Common Stock available under Plan are no longer
registered under a Securities Act Form S-8 or any successor form. All
certificates for shares of Common Stock delivered under this Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions. 

13.2   OTHER PLANS. Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases. 

13.3   NO RIGHT TO EMPLOYMENT/CONSULTANCY. Neither
this Plan nor the grant of any Award hereunder shall give any Participant or
other employee or Consultant any right with 

17

respect to continuance of
employment or Consultancy by the Company or any Affiliate, nor shall they be a
limitation in any way on the right of the Company or any Affiliate by which an
employee is employed or a Consultant is retained to terminate his or her
employment or Consultancy at any time. 

13.4   WITHHOLDING OF TAXES. The Company shall have
the right to deduct from any payment to be made to a Participant, or to
otherwise require, prior to the issuance or delivery of any shares of Common
Stock or the payment of any cash hereunder, payment by the Participant of, any
minimum Federal, state or local taxes required by law to be withheld. Upon the
vesting of Restricted Stock, or upon making an election under Code Section
83(b), a Participant shall pay all required withholding to the Company. 

          Any
such withholding obligation with regard to any Participant may be satisfied,
subject to the consent of the Committee, by reducing the number of shares of
Common Stock otherwise deliverable by the Company or by delivering shares of
Common Stock already owned by the Participant. Any fraction of a share of
Common Stock required to satisfy such tax obligations shall be disregarded and
the amount due shall be paid instead in cash by the Participant. 

13.5   LISTING AND OTHER CONDITIONS. 

          (a)     Unless otherwise determined by the Committee,
as long as the Common Stock is listed on a national securities exchange or
system sponsored by a national securities association, the issue of any shares
of Common Stock pursuant to an Award shall be conditioned upon such shares
being listed on such exchange or system. The Company shall have no obligation
to issue such shares unless and until such shares are so listed, and the right
to exercise any Stock Option with respect to such shares shall be suspended
until such listing has been effected. 

          (b)     If at any time counsel to the Company shall
be of the opinion that any sale or delivery of shares of Common Stock pursuant
to an Award is or may in the circumstances be unlawful or result in the
imposition of excise taxes on the Company under the statutes, rules or
regulations of any applicable jurisdiction, the Company shall have no
obligation to make such sale or delivery, or to make any application or to
effect or to maintain any qualification or registration under the Securities
Act or otherwise with respect to shares of Common Stock or Awards, and the
right to exercise any Stock Option shall be suspended until, in the opinion of
said counsel, such sale or delivery shall be lawful or will not result in the
imposition of excise taxes on the Company. 

          (c)     Upon termination of any period of suspension
under this Section 13.5, any Award affected by such suspension which shall not
then have expired or terminated shall be reinstated as to all shares available
before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall
extend the term of any Stock Option. 

          (d)     A Participant shall be required to supply the
Company with any certificates, representations and information that the Company
requests and otherwise cooperate with the Company in obtaining any listing,
registration, qualification, exemption, consent or approval the Company deems
necessary or appropriate. 

13.6   GOVERNING LAW. This Plan shall be governed
and construed in accordance with the laws of the State of Delaware (regardless
of the law that might otherwise govern under applicable Delaware principles of
conflict of laws). 

18

13.7      CONSTRUCTION. Wherever any words are used in
this Plan in the masculine gender they shall be construed as though they were
also used in the feminine gender in all cases where they would so apply, and
wherever any words are used herein in the singular form they shall be construed
as though they were also used in the plural form in all cases where they would
so apply. 

13.8      OTHER BENEFITS. No Award payment under this
Plan shall be deemed compensation for purposes of computing benefits under any
retirement plan of the Company or its subsidiaries nor affect any benefits
under any other benefit plan now or subsequently in effect under which the
availability or amount of benefits is related to the level of compensation. 

13.9      COSTS. The Company shall bear all expenses
incurred in administering this Plan, including expenses of issuing Common Stock
pursuant to any Awards hereunder. 

13.10    NO RIGHT TO SAME BENEFITS. The provisions of
Awards need not be the same with respect to each Participant, and such Awards
to individual Participants need not be the same in subsequent years. 

13.11    DEATH/DISABILITY. The Committee may in its
discretion require the transferee of a Participant to supply it with written
notice of the Participant’s death or Disability and to supply it with a copy of
the will (in the case of the Participant’s death) or such other evidence as the
Committee deems necessary to establish the validity of the transfer of an
Award. The Committee may also require the agreement of the transferee to be
bound by all of the terms and conditions of this Plan. 

13.12    SECTION 16(B) OF THE EXCHANGE ACT. All
elections and transactions under this Plan by persons subject to Section 16 of
the Exchange Act involving shares of Common Stock are intended to comply with
any applicable exemptive condition under Rule 16b-3. The Committee may
establish and adopt written administrative guidelines, designed to facilitate
compliance with Section 16(b) of the Exchange Act, as it may deem necessary or
proper for the administration and operation of this Plan and the transaction of
business hereunder. 

13.13    SUCCESSOR AND ASSIGNS. This Plan shall be
binding on all successors and permitted assigns of a Participant, including,
without limitation, the estate of such Participant and the executor,
administrator or trustee of such estate. 

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

13.15    HEADINGS AND CAPTIONS. The headings and
captions herein are provided for reference and convenience only, shall not be
considered part of this Plan, and shall not be employed in the construction of
this Plan. 

ARTICLE XIV

EFFECTIVE DATE OF PLAN

             This
Plan became effective upon its adoption by the Board and was approved by the
stockholders of the Company in accordance with the requirements of the
Company’s Certificate of Incorporation and the laws of the State of Delaware.
The Plan is hereby amended and restated 

19

on July 21, 2009, which
amendment and restatement is effective January 1, 2005; provided, however, that
the restatement date for such provisions as were amended prior to the date
hereof and after January 1, 2005 shall become effective as of the effective
date of the pertinent amendment. 

ARTICLE XV 

TERM OF PLAN

          No
Award shall be granted pursuant to this Plan on or after, July 18, 2011 (the
tenth anniversary) of the date this Plan was adopted by the Board, but Awards
granted prior to such tenth anniversary may extend beyond that date. 

20

EXHIBIT A TO THE 2001 STOCK INCENTIVE PLAN

PERFORMANCE CRITERIA

          Performance
Goals established for purposes of conditioning the grant of an Award based on
performance or the vesting of performance-based Awards shall be based on one or
more of the following performance criteria (“Performance Criteria”): (i) the
attainment of certain target levels of, or a specified percentage increase in,
revenues, income before income taxes and extraordinary items, net income,
earnings before income tax, earnings before interest, taxes, depreciation and
amortization or a combination of any or all of the foregoing; (ii) the
attainment of certain target levels of, or a percentage increase in, after-tax
or pre-tax profits including, without limitation, that attributable to
continuing and/or other operations; (iii) the attainment of certain target
levels of, or a specified increase in, operational cash flow; (iv) the achievement
of a certain level of, reduction of, or other specified objectives with regard
to limiting the level of increase in, all or a portion of the Company’s bank
debt or other long-term or short-term public or private debt or other similar
financial obligations of the Company, which may be calculated net of such cash
balances and/or other offsets and adjustments as may be established by the
Committee; (v) the attainment of a specified percentage increase in earnings
per share or earnings per share from continuing operations; (vi) the attainment
of certain target levels of, or a specified increase in, return on capital
employed or return on invested capital; (vii) the attainment of certain target
levels of, or a percentage increase in, after-tax or pre-tax return on
stockholders’ equity; (viii) the attainment of certain target levels of, or a
specified increase in, economic value added targets based on a cash flow return
on investment formula; (ix) the attainment of certain target levels in the fair
market value of the shares of the Company’s Common Stock; and (x) the growth in
the value of an investment in the Company’s Common Stock assuming the
reinvestment of dividends. For purposes of item (i) above, “extraordinary
items” shall mean all items of gain, loss or expense for the fiscal year
determined to be extraordinary or unusual in nature or infrequent in occurrence
or related to a corporate transaction (including, without limitation, a
disposition or acquisition) or related to a change in accounting principle, all
as determined in accordance with standards established by Opinion No. 30 of the
Accounting Principles Board. 

          In
addition, such Performance Criteria may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations. To the extent permitted
under Code Section 162(m), but only to the extent permitted under Code Section
162(m) (including, without limitation, compliance with any requirements for
stockholder approval), the Committee may: (i) designate additional business
criteria on which the Performance Criteria may be based or (ii) adjust, modify
or amend the aforementioned business criteria.Exhibit 10.2 

STOCK UNIT AGREEMENT UNDER THE SCHOLASTIC
CORPORATION 

2001 STOCK INCENTIVE PLAN

          This
Agreement (the “Agreement”) is entered into as of                    ,by
and between Scholastic Corporation (the “Company”) and
                                   (the
“Participant”).

W I T N E S S E T H:

          WHEREAS, the Company has adopted the
Scholastic Corporation 2001 Stock Incentive Plan (as amended to date, the
“Plan”), which is administered by a Committee appointed by the Company’s Board
of Directors (the “Committee”); and 

          WHEREAS, pursuant to Section 3.3 of the
Plan, the Committee has also adopted guidelines for the grant of Stock Units
under the Plan (as amended to date, the “Guidelines”), which constitute an
Other Stock-Based Award under the Plan. 

          NOW, THEREFORE, for and in consideration of
the mutual promises herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows: 

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Grant of Stock Units.

 
	
  

 	
  

 	
  

 
	
           Subject
 to the restrictions and other conditions set forth herein, the Committee has
 authorized this grant of Stock Units on _____________ (the “Grant Date”).

 
	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 Vesting and Payment.

 
	
  

 	
  

 	
  

 
	
                     (a)          Except
 as provided in Section 2(c) of this Agreement, 25% of the Award of Stock
 Units shall vest on a date that is thirteen months after the Grant Date
 (“Initial Vesting Date”) and an additional 25% of such Award of Stock Units
 shall vest on each succeeding anniversary of the Grant Date, provided that
 the Participant is continuously employed by the Company or any of its
 Affiliates (including any period during which the Participant is on leave of
 absence or any other break in employment in accordance with the Company’s
 policies and procedures) on each applicable vesting date.

 
	
  

 
	
                     (b)          Except
 as provided in Section 2(c) and Section 2A.4 of this Agreement, a share of
 Common Stock shall be distributed with respect to each vested Stock Unit on
 the applicable vesting date.

 
	
  

 
	
                     (c)          Upon
 a Termination of Employment or Termination of Consultancy (as applicable) as
 a result of the Participant’s death or Disability, all outstanding unvested
 Stock Units shall immediately vest and a share of Common Stock with respect
 to each Stock Unit shall be distributed within ninety (90) days following
 such termination; provided, however, that,
 if a Participant has made a deferral election 

 

1

	
  

 	
  

 	
  

 
	
 with respect
 to such Award, the foregoing accelerated vesting and payment provisions shall
 not apply to the Award if the Participant’s Termination of Employment or
 Termination of Consultancy (as applicable) under the circumstances described
 herein occurs on or before the Initial Vesting Date; provided, further, however, that the
 foregoing accelerated vesting and payment provisions shall apply to any
 unvested Stock Units covered by such Award if the Participant’s Termination
 of Employment or Termination of Consultancy (as applicable) under the
 circumstances described herein occurs after the Initial Vesting Date. Upon a
 Termination of Employment by reason of a Participant’s Retirement, for a
 period of three years from the date of such Termination of Employment,
 unvested Stock Units will continue to vest and shares of Common Stock with
 respect to such Stock Units shall be distributed on the applicable vesting
 dates in accordance with the vesting schedule that would have been in effect
 but for the Termination of Employment; provided, however, that if a Participant
 has made a deferral election with respect to such Award, the foregoing
 provisions shall not apply to the Award if the Participant’s Termination of
 Employment under the circumstances described herein occurs on or before the
 Initial Vesting Date; provided, further, however, that the
 foregoing provisions shall apply to any unvested Stock Units covered by such
 Award if the Participant’s Termination of Employment under the circumstances
 described herein occurs after the Initial Vesting Date. Notwithstanding the
 foregoing, to the extent required by Section 409A of the Code and the
 Treasury Regulations upon a Termination of Employment or Termination of
 Consultancy (other than as a result of death) of a Specified Employee,
 distributions determined, in whole or in part, to constitute “nonqualified
 deferred compensation” within the meaning of Section 409A of the Code shall
 be delayed until six months after such Termination of Employment or
 Termination of Consultancy if such termination constitutes a “separation from
 service” (within the meaning of Section 409A(a)(2)(A)(i) of the Code and the
 Treasury regulations issued thereunder) and such distribution shall be made
 at the beginning of the seventh month following the date of the Specified
 Employee’s Termination of Employment or Termination of Consultancy.

 
	
  

 	
  

 	
  

 
	
                     (d)          Except
 as otherwise provided in Section 2(c) of this Agreement, Stock Units that are
 not vested as of the date of the Participant’s Termination of Employment or
 Termination of Consultancy for any reason shall terminate and be forfeited in
 their entirety as of the date of such termination. Stock Units that are
 vested as of the date of the Participant’s Termination of Employment or
 Termination of Consultancy, as applicable, shall be distributed to the
 Participant as of the date of such termination.

 
	
  

 
	
                     (e)          Notwithstanding
 anything in these guidelines to the contrary, no distribution shall be made
 upon a Participant’s Termination of Employment or a Termination of
 Consultancy unless such termination constitutes a “separation from service”
 within the meaning of Section 409A(a)(2)(A)(i) of the Code and the Treasury
 regulations issued thereunder.

 
	
  

 	
  

 	
  

 
	
  

 	
 2A.

 	
 Deferral of Payment Date.

 
	
  

 	
  

 	
  

 
	
  

 	
 2A.1 Deferral Election. In accordance with
 the Guidelines, the Participant 

 

2

	
  

 	
  

 	
  

 
	
  

 	
 may, no
 later than 30 days after the Grant Date, elect to defer, for a period of time
 (expressed in whole years) of not less than five years, the scheduled payment
 dates of the Stock Units covered by the Award, provided that:

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (a)          in
 order for a deferral election under this Section 2A.1 to be effective, the
 Participant must make the election at least twelve (12) months prior to the
 first date on which the first payment is scheduled to vest;

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (b)          a
 deferral election made by the Participant pursuant to this Section 2A.1 shall
 defer each scheduled payment date by the same period of time elected (e.g.,
 if a Participant elects a deferral period of five years, the Stock Units
 scheduled to be paid on October 19, 2010 will be paid on October 19, 2015,
 the Stock Unites scheduled to be paid on September 19, 2011 will be paid on
 September 19, 2016, etc.); and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (c)          the
 Participant may not elect a deferral period (expressed in whole years) that
 is less than five years, measured from each of the payment dates.

 

	
  

 	
  

 	
  

 
	
  

 	
 2A.2 Subsequent Deferral Elections. The
 Participant shall also be permitted to extend the deferred payment dates he
 or she elected pursuant to Section 2A.1, provided that: (a) in order to be
 effective, the Participant must make the subsequent deferral election at
 least twelve (12) months prior to the first scheduled deferred payment date;
 (b) a subsequent deferral election made by the Participant pursuant to this
 Section 2A shall defer each previously deferred payment date by the same
 period of time (expressed in whole years) of not less than five years; and
 (c) the Participant’s subsequent deferral election will not become effective
 until twelve (12) months after the date on which it is made.

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 2A.3 Procedures. The Participant must make
 any deferral election permitted under this section in writing on the election
 form and in accordance with the procedures established by the Company. A
 deferral election is valid solely with respect to the Stock Units identified
 on the election form and must comply with the requirements of Section 2A to
 be given effect.

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 2A.4 Deferred Distributions. If the
 Participant defers the payment of Stock Units under this section, the
 distribution of such units, to the extent vested, shall be made to the
 Participant on the earlier of: (a) the deferred payment date or (b) within 90
 days following the Participant’s Termination of Employment or Termination of
 Consultancy, as applicable, subject to the special rules in such section
 applicable to distributions to Specified Employees.

 	
  

 

3

	
  

 	
  

 	
  

 
	
  

 	
 2A.5 Section 409A. This Agreement is intended
 to comply with Section 409A of the Code and the Company shall construe,
 interpret and amend the provisions of this Agreement in such manner as the
 Company deems necessary, in its sole discretion, to comply with Section 409A
 of the Code but in no event shall the foregoing provisions or any other
 provision of this Agreement, the Plan or the Guidelines be construed as a
 guarantee by the Company of any particular tax treatment.

 	
  

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 Withholding.

 
	
  

 	
  

 	
  

 
	
          Participant
 shall pay, or make arrangements to pay, in a manner satisfactory to the
 Company, an amount equal to the minimum amount of all applicable federal,
 state and local or foreign taxes that the Company is required to withhold at
 any time. In the absence of such arrangements, the Company or one of its
 Affiliates shall have the right to withhold such taxes from the Participant’s
 normal pay or other amounts payable to the Participant. In addition, any
 statutorily required withholding obligation may be satisfied, in whole or in
 part, at the Participant’s election, in the form and manner prescribed by the
 Committee, by delivery of shares of Common Stock (including shares issuable
 under this Agreement).

 
	
  

 
	
  

 	
 4.

 	
 Plan and Guidelines.

 
	
  

 	
  

 	
  

 	
  

 
	
            In
 addition to the terms and conditions set forth herein, the Stock Units are
 subject to and governed by the terms and conditions set forth in the Plan and
 the Guidelines, which are hereby incorporated by reference. Unless otherwise
 indicated, any capitalized term used but not defined herein shall have the
 meaning ascribed to such term in the Plan and the Guidelines.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 Restrictions on Sale.

 
	
  

 	
  

 	
  

 
	
           Affiliates
 may resell Common Stock only pursuant to an effective registration statement
 under the Securities Act, pursuant to Rule 144 under the Securities Act, or
 pursuant to another exemption from registration under the Securities Act.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 Amendment.

 
	
  

 	
  

 	
  

 	
  

 
	
           To
 the extent applicable, the Board or the Committee may at any time and from
 time to time amend, in whole or in part, any or all of the provisions of this
 Agreement to comply with Section 409A of the Code and the regulations
 thereunder or any other applicable law and may also amend, suspend or
 terminate this Agreement subject to the terms of the Plan.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Notices.

 
	
  

 	
  

 	
  

 	
  

 
	
           Any
 notice given hereunder shall be in writing and shall be deemed to have been
 duly given: (i) when delivered in person; (ii) two (2) days after being sent
 by United States mail; or (iii) on the first business day following the date
 of deposit if delivered by a nationally recognized overnight delivery service,
 to the appropriate party at the address 

 

4

	
  

 
	
 set forth
 below (or such other address as the party shall from time to time specify): If
 to the Company, to:

 

Scholastic
Corporation

557 Broadway

New York, New York 10012

Attention: Corporate Secretary Department

          If to the
Participant, to the most recent address on file with the Company. 

5

          IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above. 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 SCHOLASTIC CORPORATION 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	

 

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	

 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 PARTICIPANT

 

6

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