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Exhibit 10.8
INSO CORPORATION
AMENDED AND RESTATED 1996 NON-EMPLOYEE DIRECTOR PLAN
(As approved by the Company's Stockholders on June 1, 2000)
1. Purpose
The purpose of this 1996 Non-Employee Director Plan (the "Plan") of INSO
Corporation, a Delaware corporation (the "Company"), is to encourage ownership
in the Company by outside directors of the Company whose continued services are
considered essential to the Company's future progress and to provide them with a
further incentive to remain as directors of the Company.
2. Administration
The Board of Directors shall supervise and administer the Plan. Grants of
stock options and awards under the Plan and the amount and nature of the options
and awards to be granted shall be automatic in accordance with Section 5.
However, all questions of interpretation of the Plan or of any options issued
under it shall be determined by the Board of Directors and such determination
shall be final and binding upon all persons having an interest in the Plan.
3. Participation in the Plan
Directors of the Company who are not employees of the Company or any
subsidiary of the Company shall be eligible to participate in the Plan.
4. Stock Subject to the Plan
(a) The maximum number of shares which may be issued under the Plan shall
be 415,000 shares of the Company's Common Stock, $.01 par value per share (the
"Common Stock").
(b) If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares allocable to the
unexercised portion of such option shall again become available for grant
pursuant to the Plan.
(c) All options granted under the Plan shall be nonstatutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended to date and as it may be amended from time to time (the
"Code").
5. Terms, Conditions and Form of Options
(a) Option Grants. Options will be granted in accordance with the
following: (i) Initial Grants. An option for 7,500 shares of Common Stock shall
automatically be granted to each non-employee director of the Company elected
to the Board of Directors after the Company's Annual Meeting of Shareholders
held in June 2000, such option to be granted upon his or her initial election to
the Board of Directors. Each such option
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shall be fully vested on the date of grant. (ii) Annual Grants. An option for
7,500 shares shall automatically be granted on January 27 of each year to each
non-employee director of the Company, provided that he or she was elected to
serve as a director of the Company at least three months prior to the date of
such meeting. Each such option shall be fully vested on the date of grant.
(b) Option Exercise Price. The option exercise price per share for each
option granted under the Plan shall be equal to the Fair Market Value per share
of Common Stock on the date of grant. "Fair Market Value" shall be (i) the last
reported sales price per share of the Company's Common Stock on the Nasdaq
National Market (or, if the Common Stock is traded on a national securities
exchange, the reported closing sales price per share of the Common Stock on such
exchange) or if no such price is reported, such price as reported on the nearest
preceding day or (ii) if the Common Stock is not traded on the Nasdaq National
Market or a national securities exchange, the fair market value per share as
determined by the Board of Directors.
(c) Options Non-Transferable. Each option granted under the Plan by its
terms shall not be transferable by the optionee otherwise than by will, or by
the laws of descent and distribution, and shall be exercised during the lifetime
of the optionee only by him or her. No option or interest therein may be
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.
(d) Termination. Upon termination of an optionee's service as a director
of the Company, each option held by him or her may be exercised during the three
month period following such termination of service, as to the vested portion of
such option as of the date of termination, provided that (i) no option may be
exercised more than ten (10) years after the date of grant, and (ii) in the
event an optionee ceases to serve as a director due to his death or disability
(within the meaning of Section 22(e)(3) of the Code or any successor provision),
each option may be exercised, within the period of 180 days following the date
the optionee ceases to serve as a director, by the optionee or by the person to
whom the option is transferred by will, by the laws of descent and distribution,
or by written notice, as to the total number of shares subject to such option,
whether or not then vested.
(e) Exercise Procedure. Options may be exercised only by written notice to
the Company at its principal office accompanied by (i) payment in cash of the
full consideration for the shares as to which they are exercised or (ii) an
irrevocable undertaking, in form and substance satisfactory to the Company, by a
broker to deliver promptly to the Company sufficient funds to pay the exercise
price or delivery of irrevocable instructions, in form and substance
satisfactory to the Company, to a broker to deliver promptly to the Company cash
or a check sufficient to pay the exercise price.
(f) Exercise by Representative Following Death of Director. An optionee,
by written notice to the Company, may designate one or more persons (and from
time to time change such designation), including his or her legal
representative, who, by reason of the director's death, shall acquire the right
to exercise all or a portion of the option. If the person or persons so
designated wish to exercise any portion of the option, they must
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do so within the term of the option as provided herein. Any exercise by a
representative shall be subject to the provisions of the Plan.
(g) Form of Agreement. Each option granted under the Plan shall be
evidenced by a written agreement in such form as the Board of Directors shall
from time to time approve, which agreements shall comply with and be subject to
the terms and conditions of this Plan.
6. Assignments
The rights and benefits of participants under the Plan may not be assigned,
whether voluntarily or by operation of law, except as provided in Section 5(f).
7. Effective Date
The Plan shall become effective immediately upon its adoption by the Board
of Directors, but all grants of options shall be conditional upon the approval
of the Plan by the stockholders of the Company within 12 months after adoption
of the Plan by the Board of Directors.
8. Limitation of Rights
(a) No Right to Continue as a Director. Neither the Plan, nor the granting
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain the optionee as a director for any period of time.
(b) No Stockholders' Rights for Options. An optionee shall have no rights
as a stockholder with respect to the shares covered by his or her options until
the date of the issuance to him or her of a stock certificate therefore, and no
adjustment will be made for dividends or other rights (except as provided in
Section 9) for which the record date is prior to the date such certificate is
issued.
9. Changes in Common Stock.
If the outstanding shares of Common Stock are increased, decreased or
exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
with respect to such shares of Common Stock or other securities, through merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other distribution with respect to such shares of Common
Stock, or other securities, an appropriate and proportionate adjustment will be
made in (i) the maximum number and kind of shares reserved for issuance under
the Plan, (ii) the number and kind of shares or other securities subject to then
outstanding options under the Plan and (iii) the price for each share subject to
any then outstanding options under the Plan, without changing the aggregate
purchase price as to which such options remain exercisable. No fractional shares
will be issued under the Plan on account of any such adjustments.
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10. Change in Control.
(a) Upon the occurrence of a Change in Control, all options outstanding
under the Plan immediately prior to the effective date of such Change in Control
shall become automatically exercisable in full.
(b) A "Change in Control" shall be deemed to have occurred only upon the
occurrence of any of the following events: (i) any "person," as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, any
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock of the Company or
an Exempt Person) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 33 1/3% or more of the combined voting power of the Company's then
outstanding securities (other than as a result of the acquisition of such
securities directly from the Company); (ii) during any period of two consecutive
years (not including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board of
Directors of the Company (the "Board"), and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in paragraph (i), (iii) or (iv) of
this Subsection) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved cease for any reason to constitute at least a majority thereof; or
(iii) the stockholders of the Company approve a merger or consolidation of the
Company with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person (as
hereinabove defined), other than a person holding more than 50% of the combined
voting power of the Company's then outstanding securities immediately prior to
such recapitalization, acquires more than 50% of the combined voting power of
the Company's then outstanding securities; or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets.
(c) "Exempt Person" means Houghton Mifflin Company ("HMC"), provided that
HMC shall cease to be an Exempt Person if and when, following a Change in
Control (as defined above but substituting "Houghton Mifflin Company" for the
"Company" as used therein) of HMC, HMC, directly or indirectly, acquires
beneficial ownership of any additional shares of the Company's capital stock.
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11. Amendment of the Plan
The Board of Directors may suspend or discontinue the Plan or revise or
amend it in any respect whatsoever; provided, however, that without approval of
the stockholders of the Company no revision or amendment shall change the number
of shares subject to the Plan (except as provided in Section 10), or materially
increase the benefits accruing to participants under the Plan. The provisions of
Sections 5(a)(i) and 5(a)(ii) of the Plan may not be amended more than once in
any six-month period.
12. Notice
Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the Treasurer of the Company and shall become
effective when it is received.
13. Governing Law
The Plan and all determinations made and actions taken pursuant hereto
shall be governed by the laws of the State of Delaware.
Adopted by the Board of Directors
on April 7, 2000.
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