Document:

EX-10.32

 Exhibit 10.32 
  

			
			Linda K. Zecher
			President, Chief Executive Officer and
	

		Director

 June 11, 2014 

Ms. Bridgett Paradise 
 9000 Old Waterloo Road 

Warrenton, VA 20186 
 Subject: Offer of Employment with
Houghton Mifflin Harcourt 
 Dear Bridgett, 
 I am
very pleased to provide you with this letter in order to confirm our offer of employment with Houghton Mifflin Harcourt Publishing Company (the “Company” or “HMH”). This offer letter summarizes the compensation and benefits that
we discussed. As with all new employees, your offer is contingent upon the completion of a background investigation. 
 Your title will be Senior Vice
President, Human Resources and Chief People Officer reporting directly to me. Your employment will begin on July 22, 2014 (the “Hire Date”). You will be compensated with an annual base salary rate of $325,000 (a bi-weekly salary of
$12,500.00), subject to applicable payroll taxes and withholdings. Paydays occur every other Friday. 
 This position is eligible to participate in the
Houghton Mifflin Harcourt 2014 Bonus Plan (the “Plan”) which is operated at the discretion of the Plan Administrators. Your position is eligible for a Target Bonus of 100% of your Bonus Earnings Basis. For 2014, your bonus will be prorated
based upon your Hire Date. Payment under the plan will be determined based upon the Achievement Metrics and Discretionary Component as set forth in the Plan Document. Specific details of the Plan will be provided under separate cover and may be
subject to change by the Plan Administrators. 
 Upon commencement of your employment, you will be granted options to purchase 60,000 shares of the Common
Stock of the Company under the terms of the Company’s 2012 Management Incentive Plan (the “Equity Plan”) at a strike price per share equal to the then fair market value of a share of Common Stock as determined under the terms of the
Equity Plan. Options vest 25% per year on each of the first four anniversaries of the commencement of your employment subject to your continuing employment by the Company during such vesting period. 

In addition, when the senior executive long term incentive plan is approved by the Board of Directors, you will be eligible to participate in such plan. 

You will be eligible to participate in the Company’s employee benefit programs. If you choose to enroll, unless otherwise described in the terms of any
employee benefit plan, benefits coverage will commence on the first day of the month, following 30 days from your start date. In order to participate in any of the Company’s employee benefit programs, you must complete the enrollment process
for such programs within your first 30 days of employment. You will also be eligible for up to 20 vacation days annually, which will be pro-rated in 2014 based upon your Hire Date. 

  
  

222 Berkley Street, Boston, MA 02116, hmhco.com 

 June 11, 2014 

Bridgett Paradise 
 PAGE TWO 

 

 This is a Boston, Massachusetts based position. Your temporary housing benefit will last up to 6 months with
a monthly maximum of $4,000.00. Enclosed is a Relocation Package describing the relocation benefits for which you are eligible. 
 Employment with HMH is
“At-Will,” meaning that either you or the Company may terminate the employment relationship for any reason or no reason, at any time, with or without notice. Nothing in this letter should be interpreted as creating an employment contract
between you and the Company. 
 By accepting this offer of employment, you represent that you are not bound by any employment contract, non-competition
agreement, restrictive covenant or other restriction preventing you from entering employment with or performing your job responsibilities for the Company, or which is any way inconsistent with the terms of this letter. 

Bridgett, I am thrilled you are joining Houghton Mifflin Harcourt. I am really looking forward to working with you. If you have any questions please call me
any time. 
 Sincerely, 
  

	
	/s/ Linda Zecher
	
	Linda Zecher
	President, Chief Executive Officer and Director
	Houghton Mifflin Harcourt

 Agreed to and accepted: 
  

					
	/s/ Bridgett P. Paradise				6.15.2015
	Signature				Date

  

			
	Cc:		Employee File
		
	Attachments:		Employee Benefits Summary
			Relocation Program Summary
			Confidentiality and Intellectual Property Agreement
			Non-Competition and Non-Solicitation Agreement
			Conflict of Interest Questionnaire
			Federal W-4 Form
			State W-4 Form
			Emergency Contact Information Form

  
  

222 Berkley Street, Boston, MA 02116, hmhco.comEX-10.33

 Exhibit 10.33 

Performance-Based Vesting 

HMH HOLDINGS (DELAWARE), INC. 

2012 MANAGEMENT INCENTIVE PLAN 

PERFORMANCE-BASED RESTRICTED STOCK AWARD NOTICE 

Houghton Mifflin Harcourt Company (formerly known as HMH Holdings (Delaware), Inc.) (the “Company”) has previously established the HMH
Holdings (Delaware), Inc. 2012 Management 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 shares of the Company’s common stock, $0.01 par value per share (“Common Stock” and each share, a “Share”), as of [            ], 2015 (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 performance-based restricted Shares (the “Performance Shares”) as set forth on Schedule I attached
hereto (the “Award”). The Award shall vest 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 (and the restrictions thereupon shall lapse) 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 Performance Shares (if any) equal to (x) the Performance Leverage Factor (as defined on Schedule I ) multiplied by (y) the Target Shares (as defined on Schedule I).
Any Performance Shares that do not vest and become non-forfeitable pursuant to this Section 2 shall be forfeited. 
 (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, a number of Performance Shares equal to the Target Shares shall convert into service-based
Restricted Stock (and the number of Performance Shares in excess of the Target Shares shall be forfeited) which 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 service-based Restricted Stock 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 service-based Restricted Stock 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 service-based Restricted Stock shall become fully vested
immediately prior to the Change in Control. 
 (f) Dividends, if any, payable with respect to Performance Shares that vest hereunder shall
be distributed to the Grantee in cash or, at the sole discretion of the Committee, in Shares having a Fair Market Value equal to the amount of such dividends, within thirty (30) days following either the Scheduled Vesting Date or 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”), and, if such Performance Shares are forfeited, the
Grantee shall have no right to such dividends. 
 (g) The Grantee shall pay to the Company promptly upon request, and in any event at the
time the Grantee recognizes taxable income in respect of 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). 

  
 2 

 3. Non-Transferability. The Award is subject to the restrictions on transferability set forth in
Section 9.3 of the Plan. In addition, the Grantee agrees to comply with any written holding requirement policy adopted by the Company for employees. 

4. Rights as Shareholder. The Grantee shall be the record owner of the Performance Shares unless and until such Performance Shares are forfeited
or sold or otherwise disposed of, and as record owner shall be entitled to all rights of a common stockholder of the Company, including, without limitation, voting rights, if any, with respect to the Performance Shares. 

5. Certificates. As a condition to the receipt of this Award, the Grantee shall deliver to the Company an escrow agreement and share powers,
duly endorsed in blank, relating to the Performance Shares. Certificates evidencing the Performance Shares shall be issued by the Company and shall be registered in the Grantee’s name on the stock transfer books of the Company promptly after
the date hereof, and shall be deposited, together with the share powers, with an escrow agent designated by the Committee (who may be the Company’s transfer agent), and shall remain in the physical custody of such escrow agent at all times
prior to, in the case of any particular Performance Shares, the applicable Vesting Date. 
 6. Restrictive Legend. All certificates
representing the Performance Shares shall have affixed thereto a legend in substantially the following form, in addition to any other legends that may be required under federal or state securities laws: 

TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS OF THE HMH HOLDINGS (DELAWARE), INC. 2012
MANAGEMENT INCENTIVE PLAN AND A RESTRICTED STOCK AWARD NOTICE, BETWEEN HOUGHTON MIFFLIN HARCOURT COMPANY AND THE GRANTEE. A COPY OF SUCH PLAN AND AWARD NOTICE IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF HOUGHTON MIFFLIN HARCOURT COMPANY. 

7. Adjustments. The Award is subject to adjustment pursuant to Section 3.2 of the Plan. 

8. 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. 
 9. 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. 

  
 3 

 10. 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. 
 11. 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. 
 12. 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. 

13. 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. 
 14. 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. 
 15. 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. 

16. 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. 
 17. 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. 

18. 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. 
 19. 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. 

20. 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. 

  
 4 

 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:		William F. Bayers
	Title:		Executive Vice President and General Counsel
	
	GRANTEE
	
	  

	Name:		
			

 SCHEDULE I 

Performance Leverage Factor 

Except as may otherwise be provided herein, the Performance Shares 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 Shares =
[                ]1 shares of Common Stock. 

Performance Shares = [                ]2 shares of Common Stock. 
  

	(i)	Billings Metric  

 The Performance Leverage Factor will be weighted one-half
(1/2) based on the achievement of cumulative Billings (as defined below) for the Company’s 2015, 2016 and 2017 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
[        ]%. 
 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. 

 

	1 	Insert target number of shares of common stock. 

	2 	Insert maximum number of shares of common stock. 

	(ii)	Adjusted Post Plate Cash EBITDA Metric  

 The Performance Leverage Factor
will be weighted one-half (1/2) based on the achievement of cumulative Adjusted Post Plate Cash EBITDA (as defined below) for the Performance Period, as follows: 
  

													
	 Achievement Level
	  	Adjusted Post
Plate Cash
EBITDA Goal	 	  	Adjusted Post
Plate Cash
EBITDA
Achievement
Percentage	 	 	Adjusted
Post Plate
Cash
EBITDA
Payout
Percentage	 
	 Maximum
	  	$	[            	] 	  	 	[        	]% 	 	 	[        	]% 
	 Target
	  	$	[            	] 	  	 	[        	]% 	 	 	[        	]% 
	 Threshold
	  	$	[            	] 	  	 	[        	]% 	 	 	[        	]% 

 If Adjusted Post Plate Cash EBITDA 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 Maximum Achievement Level, then the Adjusted Post Plate Cash EBITDA Achievement Percentage (and, in turn, the Adjusted Post Plate Cash EBITDA Payout
Percentage) shall be determined based on linear interpolation between the applicable Achievement Levels. If Adjusted Post Plate Cash EBITDA for the Performance Period is equal to or greater than the Maximum Achievement Level, then the Adjusted Post
Plate Cash EBITDA Payout Percentage shall be capped at [        ]%. 
 For the avoidance of doubt,
if Adjusted Post Plate Cash EBITDA achieved for the Performance Period is less than Threshold Achievement Level, then the Adjusted Post Plate Cash EBITDA Achievement Percentage shall be zero. 

Billings Achievement Percentage and Adjusted Post Plate Cash EBITDA Achievement Percentage are sometimes referred to in this Award Notice
(individually or collectively, as the context requires) as the “Achievement Percentage”. 
 For purposes of determining Adjusted
Post Plate Cash EBITDA, the accounting measure used for determining performance, for any period, will be consolidated net income, in accordance with accounting principles generally accepted in the United States, for such period, subject to such
adjustments as determined appropriate by the Committee in its sole discretion which may include, without limitation, the following additions and subtractions: plus, without duplication and to the extent deducted in determining such
consolidated net income, the sum of: (i) consolidated interest expense for such period; (ii) provisions for taxes based on income, profits or losses (determined on a consolidated basis) during such period; (iii) all amounts
attributable to depreciation and amortization for such period; (iv) any extraordinary losses for such period; (v) any fees, expenses or charges for such period related to any equity offering, Investment, acquisition permitted hereunder,
permitted disposition, recapitalization or the incurrence of Indebtedness including a refinancing thereof (in each case, whether or not successful); (vi) any non-cash charges for such period (for the
avoidance of doubt, including, but not limited to, purchase accounting adjustments, assets impairments and equity compensation charges, unrealized derivatives charges); (vii) restructuring charges for such period relating to

 
current or anticipated future cash expenditures, including restructuring costs related to closure or consolidation of facilities, and severance and other separation costs and post-retirement
medical expenses; (viii) other non-recurring charges, (ix) deferred financing fees (and any write-offs thereof), and (x) the change in deferred revenue on the balance sheet less
“additions to pre-publication costs” per the statement of cash flows. Adjusted Post Plate Cash EBITDA for any period will be calculated so as to exclude (without duplication of any adjustment referred to above) the effect
of: (A) the cumulative effect of any changes in GAAP or accounting principles applied by management; (B) any gain or loss for such period that represents after-tax gains or losses attributable to any sale, transfer or other
disposition or abandonment of assets other than dispositions or sales of inventory and other dispositions in the ordinary course of business; (C) any extraordinary gains for such period; and (D) the impact of material acquisitions and
divestitures. 
  

	 	(iii)	Performance Leverage Factor Calculation 

 The Performance Leverage Factor
(expressed as a percentage) shall be determined as the result of the sum of: 
 (Billings Payout Percentage * 50%) + (Adjusted Post Plate
Cash EBITDA Payout percentage * 50%)

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