Common use of Vesting and Exercisability Expiration Clause in Contracts

Vesting and Exercisability Expiration. Except as otherwise provided herein with respect to an earlier expiration date, the Option will expire and be of no further effect on the ninetieth (90th) day (the “Expiration Date”) after the third anniversary of the Date of Grant (the “Performance End Date”). The Option shall become vested on the first anniversary of the Date of Grant so long as the Optionee remains in Continuous Service from the Date of Grant through such first anniversary (such service vesting requirement referred to herein as the “Service Vesting Requirement”), except as otherwise provided herein. The Option may only be exercised, however, after the Optionee has satisfied the Service Vesting Requirement and only if and to the extent the Option has become exercisable due to satisfaction of the stock price hurdle requirements (“Price Hurdle Requirement”) during the Optionee’s Continuous Service as follows, except as otherwise provided herein: The Option shall be exercisable with respect to 175,747 Shares if and when the Company stock price on the NYSE closes at $22 per Share (or above) for any 40 consecutive trading days before the Performance End Date. The Option shall be exercisable with respect to 181,160 Shares if and when the Company stock price on the NYSE closes at $25 per Share (or above) for any 40 consecutive trading days before the Performance End Date. The Option shall be exercisable with respect to 193,424 Shares if and when the Company stock price on the NYSE closes at $29 per Share (or above) for any 40 consecutive trading days before the Performance End Date. The Share price targets shall be subject to adjustment by the Committee due to changes in capitalization or other transactions as described in Section 10(c) of the Plan. If a Change in Control occurs, then the 40 consecutive trading days requirement of the foregoing Price Hurdle Requirements is waived but the stock price still must be achieved for the applicable portion of the Option to become exercisable as of immediately before and contingent upon the Change in Control. If the Price Hurdle Requirement for any one-third tranche is not achieved by the Performance End Date, then such applicable portion of the Option is cancelled for no consideration. Notwithstanding the foregoing, the Committee shall have discretion to determine a performance tranche achieved if the specific requirements above have not been met. If the Optionee’s Continuous Service terminates due to death, Disability, termination by the Company without Cause or by the Optionee with Good Reason (as those terms are defined in the Optionee’s employment agreement with the Company), then the vested and exercisable portion of the Option as of the Optionee’s termination date will remain exercisable until the earlier of the one year anniversary of such termination or the Expiration Date. Additional portions of the Option may become vested and exercisable as provided below. If the Optionee’s Continuous Service terminates due to voluntary termination by the Optionee without Good Reason, then the vested and exercisable portion of the Option as of the Optionee’s termination date will remain exercisable until the earlier of the thirtieth (30th) day after such termination or the Expiration Date. If the Optionee’s Continuous Service terminates due to death, Disability, termination by the Company without Cause or by the Optionee with Good Reason before a Change in Control and before either the Service Vesting Requirement or all of the Price Hurdle Requirements are achieved, then the Option will remain outstanding with respect to the portions thereof for which the Price Hurdle Requirement has not been achieved until the earlier of the one year anniversary of such termination date or the Expiration Date but will become exercisable if and to the extent any of such Price Hurdle Requirements are achieved before such expiration. Unless otherwise provided herein, upon the termination of the Optionee’s Continuous Service, any portion of the Option which is not yet vested and/or exercisable shall automatically and without notice terminate and be null and void. Upon termination of the Optionee’s Continuous Service by the Company for Cause, the Option shall immediately terminate for no consideration, whether vested or exercisable. If, upon a Change in Control, the Service Vesting Requirement has not been achieved but the Price Hurdle Requirement has been achieved with respect to all or a portion of the Option, and the Optionee continues in employment with a successor company that is publicly-listed and the Option is converted into a successor option, then the Service Vesting Requirement will be deemed achieved upon termination of the Optionee’s Continuous Service by the Company or successor without Cause or by the Optionee for Good Reason. If a successor is privately held, and the Price Hurdle Requirement has been achieved with respect to all or a portion of the Option, then the Service Vesting Requirement will be deemed achieved immediately before and contingent upon the Change in Control. The Expiration Date shall be tolled while the Optionee cannot exercise the Option because such an exercise would violate an applicable Federal, state, local, or foreign law, provided that the period during which the Option may be exercised is not extended more than 30 days after the exercise of the Option first would no longer violate an applicable Federal, state, local, or foreign law.

Vesting and Exercisability Expiration. (a) Subject to the terms and conditions set forth herein and in the Plan, the Award shall vest and become exercisable in equal installments on each of the first four (4) anniversaries of the Grant Date; provided, that, the Grantee remains in continuous service with the Company or any of its Subsidiaries on each such vesting date. Except as otherwise provided herein with respect to an earlier expiration datein this Section 2, in the event that the Grantee’s continuous service is terminated by the Company or by the Grantee for any reason, the Option will Grantee shall forfeit the unvested portion of the Award as of the Grantee’s termination date. (b) In the event that the Grantee’s continuous service is terminated by the Company without Cause (as defined in the Grantee’s offer letter with Houghton Mifflin Harcourt Publishing Company, dated as of February 10, 2017) or due to the Grantee’s Disability or death or the Grantee resigns for Good Reason (as defined in the HMH Holdings (Delaware), Inc. Change in Control Severance Plan), the unvested portion of the Award shall become immediately fully vested as of the Grantee’s termination date. (c) Notwithstanding any provision herein to the contrary, 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 portion of the Award shall become fully vested and exercisable immediately prior to the Change in Control. (d) Subject to earlier termination as provided in this clause (d), the Award shall expire and be of no further effect on the ninetieth (90th) day seventh anniversary of the Grant Date (the “Expiration Date”). The portion of the Award that is vested as of the Grantee’s termination of continuous service with the Company shall remain exercisable following such termination as follows: (i) after until the third anniversary of following the Date of Grant (the “Performance End Date”). The Option shall become vested on the first anniversary of the Date of Grant so long as the Optionee remains in Continuous Service from the Date of Grant through such first anniversary (such service vesting requirement referred to herein as the “Service Vesting Requirement”), except as otherwise provided herein. The Option may only be exercised, however, after the Optionee has satisfied the Service Vesting Requirement and only if and to the extent the Option has become exercisable due to satisfaction of the stock price hurdle requirements (“Price Hurdle Requirement”) during the OptioneeGrantee’s Continuous Service as follows, except as otherwise provided herein: The Option shall be exercisable with respect to 175,747 Shares if and when the Company stock price on the NYSE closes at $22 per Share (or above) for any 40 consecutive trading days before the Performance End Date. The Option shall be exercisable with respect to 181,160 Shares if and when the Company stock price on the NYSE closes at $25 per Share (or above) for any 40 consecutive trading days before the Performance End Date. The Option shall be exercisable with respect to 193,424 Shares if and when the Company stock price on the NYSE closes at $29 per Share (or above) for any 40 consecutive trading days before the Performance End Date. The Share price targets shall be subject to adjustment by the Committee due to changes in capitalization or other transactions as described in Section 10(c) of the Plan. If a Change in Control occurs, then the 40 consecutive trading days requirement of the foregoing Price Hurdle Requirements is waived but the stock price still must be achieved for the applicable portion of the Option to become exercisable as of immediately before and contingent upon the Change in Control. If the Price Hurdle Requirement for any one-third tranche is not achieved by the Performance End Date, then such applicable portion of the Option is cancelled for no consideration. Notwithstanding the foregoing, the Committee shall have discretion to determine a performance tranche achieved if the specific requirements above have not been met. If the Optionee’s Continuous Service terminates due to death, Disability, termination by the Company without Cause or by the Optionee with Grantee’s resignation for Good Reason but in no event later than the Expiration Date, (as those terms are defined in the Optionee’s employment agreement with the Company), then the vested and exercisable portion of the Option as of the Optionee’s termination date will remain exercisable ii) until the earlier of the one year anniversary following the Grantee’s termination by the Company due to Disability or termination due to the Grantee’s death, but in no event later than the Expiration Date, or (iii) until the 30th day following the Grantee’s voluntary termination of such termination or continuous service with the Company, but in no event later than the Expiration Date. Additional portions of the Option may become vested and exercisable as provided below. If the Optionee’s Continuous Service terminates due to voluntary termination by the Optionee without Good ReasonThereafter, then the vested and exercisable any unexercised portion of such Award shall be forfeited immediately. In the Option as of event that the OptioneeGrantee’s termination date will remain exercisable until the earlier of the thirtieth (30th) day after such termination or the Expiration Date. If the Optionee’s Continuous Service terminates due to death, Disability, termination by the Company without Cause or by the Optionee with Good Reason before a Change in Control and before either the Service Vesting Requirement or all of the Price Hurdle Requirements are achieved, then the Option will remain outstanding with respect to the portions thereof for which the Price Hurdle Requirement has not been achieved until the earlier of the one year anniversary of such termination date or the Expiration Date but will become exercisable if and to the extent any of such Price Hurdle Requirements are achieved before such expiration. Unless otherwise provided herein, upon the termination of the Optionee’s Continuous Service, any portion of the Option which continuous service is not yet vested and/or exercisable shall automatically and without notice terminate and be null and void. Upon termination of the Optionee’s Continuous Service terminated by the Company for Cause, the Option Grantee shall immediately terminate for no considerationforfeit the Award, whether vested or exercisable. Ifnot vested, upon a Change in Control, the Service Vesting Requirement has not been achieved but the Price Hurdle Requirement has been achieved with respect to all or a portion as of the Option, and the Optionee continues in employment with a successor company that is publicly-listed and the Option is converted into a successor option, then the Service Vesting Requirement will be deemed achieved upon Grantee’s termination of the Optionee’s Continuous Service by the Company or successor without Cause or by the Optionee for Good Reason. If a successor is privately held, and the Price Hurdle Requirement has been achieved with respect to all or a portion of the Option, then the Service Vesting Requirement will be deemed achieved immediately before and contingent upon the Change in Control. The Expiration Date shall be tolled while the Optionee cannot exercise the Option because such an exercise would violate an applicable Federal, state, local, or foreign law, provided that the period during which the Option may be exercised is not extended more than 30 days after the exercise of the Option first would no longer violate an applicable Federal, state, local, or foreign lawdate.