EXHIBIT 10.5
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SCHOLASTIC CORPORATION 1995 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
SCHOLASTIC CORPORATION, a Delaware corporation (the "Company"), hereby
grants to ______________________ (the "Optionee") an option (the "Option") to
purchase _______ (____) shares of common stock, par value $.01, of the Company
(the "Common Stock"), at the price and on the terms set forth herein, and in all
respects subject to the terms and provisions of the Company's 1995 Stock Option
Plan (the "Plan"), which terms and provisions are incorporated by reference
herein. Unless the context herein otherwise requires, the terms defined in the
Plan shall have the same meanings in this Agreement.
1. TERMS OF OPTION GRANT AND EXERCISE. The Option shall be a
Non-Qualified Stock Option as that term is defined in the Plan. Subject to the
provisions of the Plan and this Agreement, the Option shall not be exercised
prior to the first anniversary date of this Agreement and thereafter, the Option
shall be exercisable, cumulatively, as follows:
DATE NUMBER OF SHARES EXERCISE PRICE EXPIRATION DATE
Once exercisable, subject to the provisions of the Plan and this
Agreement, the Option may be exercised, in whole or in part, pursuant to the
notice and payment procedures then in effect as established by the Company, in
its sole discretion. Any written notice of exercise by Optionee shall be
irrevocable. The Option may not be exercised if the issuance of the Common Stock
would constitute a violation of any applicable federal, state or foreign
securities laws or regulations. The Option may not be exercised with respect to
a fractional share of Common Stock.
The Option shall cease to be exercisable upon the expiration date set
forth above (the "Expiration Date"), unless earlier terminated or extended, as
the case may be, pursuant to the provisions of the Plan and this Agreement,
including, but not limited to, the provisions of Section 2 hereof.
2. TERMINATION OF SERVICES OF AN OPTIONEE. (a) DEATH OR DISABILITY. In
the event of the Optionee's death or Disability while the Option is outstanding,
the unexercised portion of the Option may be exercised in full (even though the
one year
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holding period set forth in Section 1 hereof may not yet have expired) by the
Optionee, or his or her estate, personal representative or other legally
appointed representative, at any time until the first anniversary of such death
or Disability (and the Expiration Date of the Option shall be automatically
extended, if necessary, to permit the Option to be exercised during such
period).
(b) RETIREMENT. In the event an Optionee's employment (or
consulting arrangement) terminates due to retirement on or after age 55, the
Option to the extent vested on the date of such retirement, may be exercised by
the Optionee within three (3) years after the date of such retirement, but not
beyond the Expiration Date of the Option, if earlier.
(c) INVOLUNTARY TERMINATION OTHER THAN FOR CAUSE/RETIREMENT.
In the event an Optionee's employment (or consulting arrangement) is
involuntarily terminated by the Company (or an Affiliate) other than a
Termination for Cause, the Option, to the extent vested on the date of such
termination, may be exercised by the Optionee within three (3) months after the
date of such termination, but not beyond the Expiration Date of the Option, if
earlier
(d) OTHER TERMINATION. In the event an Optionee's employment
(or consulting arrangement) terminates other than as the result of death,
Disability, retirement on or after age 55 or involuntary termination (as set
forth in Sections 2(a), (b) and (c) hereof), the Option shall be cancelled and
shall not be exercisable to the extent not exercised prior to the date an
Optionee's employment (or consulting arrangement) terminates. The Stock Option
shall be cancelled and cease to be exercisable in the event of the Termination
for Cause of an Optionee's employment (or consulting arrangement).
3. WITHHOLDING TAX LIABILITY. In connection with the exercise of the
Option, the Company and the Optionee may incur liability for income or
withholding tax. The Company will have the right to withhold from any exercise
of the Option, transfer of Common Stock or payment made to the Optionee or to
any person hereunder, whether such payment is to be made in cash or in Common
Stock, all applicable federal, state, city or other taxes as shall be required,
in the determination of the Company, pursuant to any statute or governmental
regulation or ruling.
4. NONTRANSFERABILITY OF STOCK OPTION. The Option may not be sold,
pledged, assigned, hypothecated, gifted, transferred or disposed of in any
manner either voluntarily or involuntarily by operation of law, other than by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order, as determined by the Company, and may be exercised
during the lifetime of the Optionee only by the Optionee. Subject to the
foregoing and the terms of the Plan, the terms of this Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.
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5. NO ENLARGEMENT OF RIGHTS. Neither the Plan nor this Agreement shall
confer upon the Optionee any right to continue as an officer, employee or
consultant of the Company or any Affiliate. Nothing contained in the Plan or
this Agreement shall interfere in any way with the rights of the Company or any
Affiliate to terminate the employment (or consulting arrangement) of the
Optionee at any time. The Optionee shall have only such rights and interests
with respect to the Option as are expressly provided in this Agreement and the
Plan.
6. NO SHAREHOLDER RIGHTS BEFORE EXERCISE AND ISSUANCE. No rights as a
stockholder shall exist with respect to the Common Stock subject to the Option
as a result of the grant of the Option. Such rights shall exist only after
issuance of a stock certificate following the exercise of the Option as provided
in this Agreement and the Plan.
7. EFFECT OF THE PLAN ON OPTION. The Option is subject to, and the
Company and the Optionee agree to be bound by, all of the terms and conditions
of the Plan, as such may be amended from time to time in accordance with the
terms thereof. Without the consent of the Optionee, the Company may amend or
modify this Agreement in any manner not inconsistent with the Plan, including
without limitation, to change the date or dates as of which a Option becomes
exercisable, or to cure any ambiguity, defect or inconsistency, or to make any
change that does not adversely affect the right of the Optionee.
8. ENTIRE AGREEMENT. The terms of this Agreement and the Plan
constitute the entire agreement between the Company and the Optionee with
respect to the subject matter hereof and supersede any and all previous
agreements between the Company and the Optionee. This Agreement may be signed in
counterparts.
9. SEVERABILITY. If any provision of this Agreement, or the application
of such provision to any person or circumstances, is held valid or
unenforceable, the remainder of this Agreement, or the application of such
provision to persons or circumstances other than those as to which it is held
valid or unenforceable, shall not be affected thereby.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned as of
the date first written above.
OPTIONEE SCHOLASTIC CORPORATION
By:
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