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SCHOLASTIC CORPORATION
557 Broadway
New York, NY
10012-3999
(212) 343-6100
SCHOLASTIC CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO HOLDERS OF CLASS A STOCK AND COMMON STOCK:
The Annual Meeting of Stockholders of Scholastic Corporation (the "Company")
will be held at the Company's corporate headquarters located at 557 Broadway,
New York, New York on Tuesday, September 24, 2002, at 9:00 a.m., local time, for
the following purposes:
MATTERS TO BE VOTED UPON BY HOLDERS OF THE CLASS A STOCK
- Electing nine directors to the Board of Directors.
MATTERS TO BE VOTED UPON BY HOLDERS OF THE COMMON STOCK
- Electing three directors to the Board of Directors.
In addition to the foregoing purposes, such other business may be transacted as
may properly come before the meeting and any adjournment thereof.
A proxy statement describing the matters to be considered at the Annual Meeting
of Stockholders is attached to this notice. Only stockholders of record of the
Class A Stock and the Common Stock at the close of business on August 10, 2002
are entitled to notice of, and to vote at, the meeting and any adjournments
thereof.
WE HOPE THAT YOU WILL BE ABLE TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO
BE PRESENT AT THE MEETING, WE URGE YOU TO VOTE YOUR SHARES PROMPTLY. YOU CAN NOW
VOTE YOUR SHARES IN THREE WAYS: (I) VIA THE INTERNET AT THE WEBSITE INDICATED ON
YOUR PROXY CARD; (II) VIA TELEPHONE BY CALLING THE TOLL FREE NUMBER ON YOUR
PROXY CARD; OR (III) BY RETURNING THE ENCLOSED PROXY CARD.
By Order of the Board of Directors
[SIG]
Charles B. Deull
Senior Vice President, General
Counsel and Secretary
August 26, 2002
SCHOLASTIC LOGO
SCHOLASTIC CORPORATION
PROXY STATEMENT
TABLE OF CONTENTS
Solicitation of Proxies..................................... 1
General Information................................... 1
Voting Securities of the Company...................... 2
Principal Holders of Class A Stock and Common Stock... 3
Change of Control Arrangements........................ 5
Section 16(a) Beneficial Ownership Reporting
Compliance.......................................... 5
Share Ownership of Management......................... 6
Executive Compensation...................................... 8
Summary Compensation Table............................ 8
Option Grants in Fiscal 2002.......................... 9
Aggregated Option Exercises in Fiscal 2002 and 2002
Fiscal Year-End Option Values....................... 10
Pension Plan.......................................... 10
Employment Agreement.................................. 11
The Human Resources and Compensation Committee's
Report on Executive Compensation.................... 11
Stock Price Performance Graph......................... 16
Matters Submitted to Stockholders........................... 17
- Election of Directors................................... 17
Nominees for Election by Holders of the Class A
Stock............................................... 18
Nominees for Election by Holders of the Common
Stock............................................... 18
Meetings of the Board of Directors and its
Committees.......................................... 21
Director Compensation................................. 24
Certain Transactions and Certain Relationships........ 24
Independent Public Accountants.............................. 25
Audit Committee's Report.............................. 25
Stockholder Proposals for 2003 Annual Meeting............... 27
Other Matters............................................... 27
SCHOLASTIC CORPORATION
557 BROADWAY
NEW YORK, NEW YORK 10012
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 24, 2002
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SOLICITATION OF PROXIES
GENERAL INFORMATION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Scholastic Corporation, a Delaware
corporation (the "Company"), to be voted at its Annual Meeting of Stockholders
(the "Annual Meeting"), which will be held at 557 Broadway, New York, New York
at 9:00 a.m., local time, on Tuesday, September 24, 2002, and at any
adjournments thereof.
Shares represented by each proxy properly submitted, either by mail, the
internet or telephone as indicated on the enclosed form of proxy, will be voted
in accordance with the instructions indicated in such proxies unless revoked. A
stockholder may revoke a proxy at any time before it is exercised by:
(i) filing with the Secretary of the Company a written revocation thereof or a
duly executed proxy bearing a later date, (ii) providing subsequent telephone or
internet voting instructions or (iii) voting in person at the Annual Meeting.
Any written notice revoking a proxy should be sent to the attention of Charles
B. Deull, Senior Vice President, General Counsel and Secretary, Scholastic
Corporation, 557 Broadway, New York, New York 10012.
This proxy statement and the accompanying form of proxy, together with
the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2002,
are being mailed to stockholders on or about August 26, 2002.
The cost of soliciting proxies will be borne by the Company. Solicitation
other than by mail may be made personally, by telephone, facsimile or e-mail by
regularly employed officers and employees who will not be additionally
compensated therefor. The Company may also reimburse brokers, custodians,
nominees and other fiduciaries for their reasonable expenses in forwarding proxy
materials to principals.
VOTING SECURITIES OF THE COMPANY
Only holders of record of the Company's Class A Stock, $0.01 par value
("Class A Stock"), and Common Stock, $0.01 par value ("Common Stock"), at the
close of business on August 10, 2002 (the "Record Date") are entitled to vote at
the Annual Meeting. As of the Record Date, there were outstanding 1,656,200
shares of Class A Stock and 37,424,421 shares of Common Stock. Unless otherwise
indicated, all references to share and option amounts in this proxy statement
reflect the 2-for-1 stock split effected through the payment of a 100% stock
dividend on January 16, 2001 on each outstanding share of Class A Stock and
Common Stock (the "2-for-1 Stock Split").
The Amended and Restated Certificate of Incorporation of the Company (the
"Certificate") provides that, except as otherwise provided by law, the holders
of shares of Class A Stock, voting as a class, have the right: (i) to fix the
size of the Board of Directors so long as it does not consist of less than three
nor more than 15 directors, (ii) to elect all the directors, subject to the
right of the holders of shares of Common Stock, voting as a class, to elect such
minimum number of the members of the Board of Directors as shall equal at least
one-fifth of the members of the Board of Directors, and (iii) to exercise,
exclusive of the holders of the shares of Common Stock, all other voting rights
of stockholders of the Company. The Certificate also provides that, except as
otherwise provided by law, the voting rights of the holders of shares of Common
Stock are limited to the right, voting as a class, to elect such minimum number
of the members of the Board of Directors as shall equal at least one-fifth of
the members of the Board of Directors.
Each share of Class A Stock and Common Stock is entitled to one vote. No
holders of either class of stock have cumulative voting rights. At the Annual
Meeting, holders of the Class A Stock will vote on the election of nine members
of the Board of Directors and the holders of the Common Stock will vote on the
election of three members of the Board of Directors. If any other matters were
to properly come before the Annual Meeting, they would be voted on by the
holders of the Class A Stock.
The vote required for the election of directors is specified in the
description of such proposal. In the election of directors, withheld votes and
abstentions have no effect on the vote. Under the Company's Bylaws, for the
purpose of determining whether a proposal has received the required vote,
abstentions will not be considered as votes cast and will have no effect.
Because none of the shares of Class A Stock are held by brokers, the effect of
broker non-votes is not applicable in the case of the Class A Stock. Because the
only proposal before the holders of Common Stock is the election of three
directors, the effect of broker non-votes is not applicable in the case of the
Common Stock.
2
PRINCIPAL HOLDERS OF CLASS A STOCK AND COMMON STOCK
The following sets forth information regarding persons who, to the best
of the Company's knowledge, beneficially owned five percent or more of the
Class A Stock or the Common Stock outstanding on August 10, 2002. Under the
applicable rules and regulations of the Securities and Exchange Commission (the
"SEC"), a person who directly or indirectly has, or shares, voting power or
investment power with respect to a security is considered a beneficial owner of
such security. Voting power is the power to vote or direct the voting of shares,
and investment power is the power to dispose of or direct the disposition of
shares.
CLASS A STOCK COMMON STOCK
AMOUNT AND
AMOUNT AND NATURE OF
NATURE OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP PERCENT OF OWNERSHIP PERCENT OF
BENEFICIAL OWNER (1) CLASS (2) CLASS
Richard Robinson
c/o Scholastic Corporation
557 Broadway 1,656,200 100% 6,337,910(3) 15.8%
New York, NY 10012
Barbara Robinson Buckland
c/o Scholastic Corporation
557 Broadway 648,620 39.2% 2,821,147 7.4%
New York, NY 10012
Mary Sue Robinson Morrill
c/o Scholastic Corporation
557 Broadway 765,296 46.2% 3,549,468(4) 9.3%
New York, NY 10012
William W. Robinson
c/o Scholastic Corporation
557 Broadway 648,620 39.2% 2,732,960(5) 6.1%
New York, NY 10012
Trust under the Will of
Maurice R. Robinson
c/o Scholastic Corporation 648,620 39.2% 2,331,712 6.1%
557 Broadway
New York, NY 10012
Trust under the Will of
Florence L. Robinson
c/o Scholastic Corporation 116,676 7.0% 466,676 1.2%
557 Broadway
New York, NY 10012
Massachusetts Financial Services
Company
500 Boylston Street -- -- 3,910,481(6) 10.4%
Boston, MA 02116
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(1) Each of Richard Robinson, Barbara Robinson Buckland, Mary Sue Robinson
Morrill, William W. Robinson and the Maurice R. Robinson Trust have filed
Statements on Schedule 13G with the SEC (the "13G Filings") regarding their
beneficial ownership of Common Stock. Richard Robinson, Chairman of the
Board, President and Chief Executive Officer of the Company, and Barbara
Robinson Buckland, Mary Sue Robinson Morrill and William W. Robinson, all of
whom are siblings of Richard Robinson, are trustees of the Trust under the
Will of Maurice R. Robinson (the "Maurice R. Robinson Trust"), with shared
voting and investment power with respect to the shares owned by the Maurice
R. Robinson Trust. Under the terms
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of the Maurice R. Robinson Trust, the vote of a majority of the trustees is
required to vote or direct the disposition of the shares held by the Maurice
R. Robinson Trust. In addition, Richard Robinson and Mary Sue Robinson
Morrill are the co-trustees of the Trust under the Will of Florence L.
Robinson (the "Florence L. Robinson Trust"), with shared voting and
investment power with respect to the shares owned by the Florence L.
Robinson Trust. Any acts by the Florence L. Robinson Trust require the
approval of each Trustee. Each such trust directly owns the shares
attributed to it in the table and each person listed herein as a trustee of
such trust is deemed to be the beneficial owner of the shares directly owned
by such trust. Based on their 13G filings and subsequent information made
available to the Company, the aggregate beneficial ownership of the Class A
Stock by the following persons is: Richard Robinson--890,904 shares (sole
voting and investment power) and 765,296 shares (shared voting and
investment power); Barbara Robinson Buckland--0 shares (sole voting and
investment power) and 648,620 shares (shared voting and investment power);
Mary Sue Robinson Morrill--0 shares (sole voting and investment power) and
765,296 shares (shared voting and investment power); William W. Robinson--0
shares (sole voting and investment power) and 648,620 shares (shared voting
and investment power); Maurice R. Robinson Trust--648,620 shares (sole
voting and investment power); and Florence L. Robinson Trust--116,676 shares
(sole voting and investment power).
(2) The shares of Class A Stock are convertible at the option of the holder into
shares of Common Stock at any time on a share-for-share basis. The number of
shares of Common Stock and percentage of the outstanding shares of Common
Stock for each beneficial owner of Class A Stock assumes the conversion of
such holder's shares of Class A Stock. Based on their 13G filings and
subsequent information made available to the Company, the aggregate
beneficial ownership of Common Stock by the following holders is: Richard
Robinson--3,378,622 shares (sole voting and investment power) and 2,959,288
shares (shared voting and investment power); Barbara Robinson
Buckland--395,435 shares (sole voting and investment power) and 2,425,712
shares (shared voting and investment power); Mary Sue Robinson Morrill--0
shares (sole voting and investment power) and 3,549,468 shares (shared
voting and investment power); William W. Robinson--391,948 shares (sole
voting and investment power) and 2,341,012 shares (shared voting and
investment power); Maurice R. Robinson Trust--2,331,712 (sole voting and
investment power); and Florence L. Robinson Trust--466,676 (sole voting and
investment power).
(3) Includes 1,656,200 shares of Common Stock issuable on conversion of the
Class A Stock described in Note 2; 1,453,224 shares of Common Stock held
directly by Richard Robinson; 1,014,152 shares of Common Stock under options
exercisable by Mr. Robinson within 60 days; 20,342 shares of Common Stock
with respect to which Mr. Robinson had voting rights at May 31, 2002 under
the Scholastic Corporation 401(k) Savings and Retirement Plan (the "401(k)
Plan"); 1,683,092 shares of Common Stock owned by the Maurice R. Robinson
Trust; 350,000 shares of Common Stock owned by the Florence L. Robinson
Trust; 7,594 shares of Common Stock for which Mr. Robinson is custodian
under a separate custodial account for one of his sons; 4,212 shares of
Common Stock owned directly by his sons; and 149,094 shares of Common Stock
owned by the Richard Robinson and Helen Benham Charitable Fund. Does not
include 310,511 of the shares of Common Stock beneficially owned by Helen V.
Benham, an officer and director of the Company and the wife of Richard
Robinson, as to which Mr. Robinson disclaims beneficial ownership and 18,382
restricted stock units ("RSUs") held under the Scholastic Corporation
Management Stock Purchase Plan (the "MSPP"), as more fully described herein.
(4) Does not include an aggregate of 337,376 shares of Common Stock held under
Trusts for which Ms. Morrill's spouse and sister are trustees, as to which
Ms. Morrill disclaims beneficial ownership.
(5) Does not include 44,000 shares of Common Stock held under Trusts for which
Mr. William Robinson's spouse is a trustee, as to which Mr. Robinson
disclaims beneficial ownership.
(6) The information for Massachusetts Financial Services Company ("MFS") is
derived from Amendment No. 4 to Schedule 13G dated February 12, 2002, as
filed with the SEC, which states that, as of December 31, 2001, MFS had the
sole voting power with regard to 3,422,668 shares and the sole dispositive
power with regard to 3,910,481 shares.
4
CHANGE OF CONTROL ARRANGEMENTS
Pursuant to an agreement dated July 23, 1990 between the Maurice R.
Robinson Trust and Richard Robinson, the Maurice R. Robinson Trust has agreed
that if it receives an offer from any person to purchase any or all of the
shares of Class A Stock owned by the Maurice R. Robinson Trust and it desires to
accept such offer, Richard Robinson shall have the right of first refusal to
purchase all, but not less than all, of the shares of Class A Stock that such
person has offered to purchase for the same price and on the same terms and
conditions offered by such person. In the event Richard Robinson does not elect
to exercise such option, the Maurice R. Robinson Trust shall be free to sell
such shares of Class A Stock in accordance with the offer it has received. In
addition, if Richard Robinson receives an offer from any person to purchase any
or all of his shares of Class A Stock and the result of that sale would be to
transfer to any person other than Richard Robinson or his heirs voting power
sufficient to enable such other person to elect the majority of the Board of
Directors, either alone or in concert with any person other than Richard
Robinson, his heirs or the Maurice R. Robinson Trust (a "Control Offer"), and
Mr. Robinson desires to accept the Control Offer, the Maurice R. Robinson Trust
shall have the option to sell any or all of its shares of Class A Stock to the
person making the Control Offer at the price and on the terms and conditions set
forth in the Control Offer. If the Maurice R. Robinson Trust does not exercise
its option, Mr. Robinson shall be free to accept the Control Offer and to sell
the shares of Class A Stock in accordance with the terms of the Control Offer.
If the Maurice R. Robinson Trust exercises its option, Mr. Robinson cannot
accept the Control Offer unless the person making the Control Offer purchases
the shares of Class A Stock that the Maurice R. Robinson Trust has elected to
sell.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires directors, executive officers and persons who are the beneficial owners
of more than 10% of the Common Stock to file reports of their ownership and
changes in ownership of the Company's equity securities with the SEC. The
reporting persons are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. Based solely on a review of the
copies of such forms furnished to the Company and other written representations
that no other reports were required during the fiscal year ended May 31, 2002,
the Company believes its directors, executive officers and greater than ten
percent beneficial owners timely filed all required Section 16(a) reports,
except in respect of an exercise of stock options to purchase 500 shares of
Common Stock by Linda B. Keene, a director of the Company, that was required to
be reported on a Form 4 in September 2001 and was later reported on a Form 4
filed in October 2001.
5
SHARE OWNERSHIP OF MANAGEMENT
On August 10, 2002, each director, director nominee and Named Executive
reported under the caption "Executive Compensation" and all directors and
executive officers as a group beneficially owned shares of the Class A Stock and
Common Stock as follows:
CLASS A STOCK COMMON STOCK
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
BENEFICIAL PERCENT OF BENEFICIAL PERCENT OF
NAME OWNERSHIP(1) CLASS OWNERSHIP(1) CLASS
DIRECTORS
Richard Robinson 1,656,200(2) 100% 6,337,910(3) 15.8%
Rebeca M. Barrera -- -- 7,574(4) *
Helen V. Benham -- -- 471,411(5) 1.3%
Ramon C. Cortines -- -- 24,574(6) *
John L. Davies -- -- 6,000(4) *
Charles T. Harris III -- -- 40,306(7) *
Andrew S. Hedden -- -- 2,000 *
Mae C. Jemison -- -- 31,004(7) *
Linda B. Keene -- -- 12,000(8) *
Peter M. Mayer -- -- 28,000(9) *
John G. McDonald -- -- 25,004(6) *
Augustus K. Oliver -- -- 26,574(10) *
Richard M. Spaulding -- -- 259,085(11) *
NAMED EXECUTIVE OFFICERS
Richard Robinson 1,656,200(2) 100% 6,337,910(3) 15.8%
Barbara A. Marcus -- -- 431,902(12) 1.1%
Deborah A. Forte -- -- 353,552(13) *
Jean L. Feiwel -- -- 137,016(14) *
Kevin J. McEnery -- -- 418,578(15) 1.1%
Margery A. Mayer -- -- 45,444(16) *
All directors and executive
officers as a group (27 persons
including those named above) 1,656,200(2) 100% 9,147,287(17) 21.6%
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* Less than 1.0%
(1) Except as indicated in the notes below, each person named has sole voting
and investment power with respect to the shares shown opposite his or her
name.
(2) Includes 890,904 shares of Class A Stock held directly by Richard Robinson,
648,620 shares of Class A Stock owned by the Maurice R. Robinson Trust and
116,676 shares of Class A Stock owned by the Florence L. Robinson Trust. See
the information with respect to Richard Robinson under "Principal Holders of
Class A Stock and Common Stock" above. The shares of Class A Stock are
convertible at the option of the holder into shares of Common Stock at any
time on a share-for-share basis.
(3) Includes 1,656,200 shares of Common Stock issuable on conversion of the
Class A Stock described in Note 2; 1,453,224 shares of Common Stock held
directly by Richard Robinson; 1,014,152 shares of Common Stock under options
exercisable by Mr. Robinson within 60 days; 20,342 shares of Common Stock
with
6
respect to which Mr. Robinson had voting rights at May 31, 2002 under the
401(k) Plan; 1,683,092 shares of Common Stock owned by the Maurice R.
Robinson Trust; 350,000 shares of Common Stock owned by the Florence L.
Robinson Trust; 7,594 shares of Common Stock for which Mr. Robinson is
custodian under a separate custodial account for one of his sons; 4,212
shares of Common Stock owned directly by his sons; and 149,094 shares of
Common Stock owned by the Richard Robinson and Helen Benham Charitable Fund.
Does not include 310,511 of the shares of Common Stock beneficially owned by
Helen V. Benham, an officer and director of the Company and the wife of
Richard Robinson, as to which Mr. Robinson disclaims beneficial ownership
and 18,382 RSUs held under the MSPP.
(4) Includes options under which such director may purchase 6,000 share of
Common Stock within 60 days.
(5) Includes 259,386 shares of Common Stock held directly by Ms. Benham; 49,722
shares of Common Stock under options exercisable by her within 60 days;
1,403 shares of Common Stock with respect to which Ms. Benham had voting
rights as of May 31, 2002 under the 401(k) Plan; 7,594 shares of Common
Stock for which Ms. Benham is custodian under a separate custodial account
for one of her sons; 4,212 shares of Common Stock owned directly by her
sons; and 149,094 shares of Common Stock owned by the Richard Robinson and
Helen Benham Charitable Fund. Excludes 6,177,010 of the shares of Common
Stock beneficially owned by Richard Robinson, as to which Ms. Benham
disclaims beneficial ownership.
(6) Includes options under which such director may purchase 24,000 shares of
Common Stock within 60 days.
(7) Includes options under which such director may purchase 30,000 shares of
Common Stock within 60 days.
(8) Includes options under which such director may purchase 11,500 shares of
Common Stock within 60 days.
(9) Includes 15,000 shares of Common Stock held directly by Mr. Mayer, 1,000
shares held through a pension plan in which he has an interest and options
under which he may purchase 12,000 shares of Common Stock within 60 days.
(10) Includes 2,574 shares of Common Stock held directly by Mr. Oliver and
options under which he may purchase 24,000 shares of Common Stock within
60 days.
(11) Includes 198,158 shares of Common Stock held directly by Mr. Spaulding,
19,096 shares of Common Stock under options exercisable by him within
60 days and 41,580 shares of Common Stock for which Mr. Spaulding is
custodian under separate custodial accounts for his children. Does not
include 7,177 RSUs held under the MSPP.
(12) Includes 26,317 shares of Common Stock held directly by Ms. Marcus, 403,794
shares of Common Stock under options exercisable by Ms. Marcus within
60 days and 1,791 shares of Common Stock with respect to which Ms. Marcus
had voting rights at May 31, 2002 under the 401(k) Plan. Does not include
3,893 RSUs held under the MSPP.
(13) Includes 9,152 shares of Common Stock held directly by Ms. Forte and
344,400 shares of Common Stock under options exercisable by Ms. Forte within
60 days. Does not include 6,551 RSUs held under the MSPP.
(14) Includes 137,016 shares of Common Stock under options exercisable by
Ms. Feiwel within 60 days.
(15) Includes 9,393 shares of Common Stock held directly by Mr. McEnery, 406,766
shares of Common Stock under options exercisable by Mr. McEnery within
60 days and 2,419 shares of Common Stock with respect to which Mr. McEnery
had voting rights at May 31, 2002 under the 401(k) Plan. Does not include
5,071 RSUs held under the MSPP.
(16) Includes 14,834 shares of Common Stock held directly by Ms. Mayer and
30,610 shares of Common Stock under options exercisable by Ms. Mayer within
60 days. Does not include 2,858 RSUs held under the MSPP.
(17) Includes an aggregate of 3,236,172 shares of Common Stock under options
exercisable by members of the group within 60 days, an aggregate of 31,110
shares of Common Stock with respect to which the group had voting rights at
May 31, 2002 under the 401(k) Plan and 1,656,200 shares of Common Stock
issuable on the conversion of Class A Stock into shares of Common Stock.
Does not include an aggregate of 61,659 RSUs held under the MSPP.
7
EXECUTIVE COMPENSATION
The following table sets forth information regarding the cash
compensation paid or accrued by the Company and its subsidiaries for services of
the Chief Executive Officer and the four other most highly compensated executive
officers of the Company, as well as Jean L. Feiwel, an officer of the Company
who was an executive officer for a portion of the most recent fiscal year
(collectively, the "Named Executives"), in respect of the fiscal years ended
May 31, 2002, 2001 and 2000:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND PRINCIPAL FISCAL BONUS COMPENSATION UNDERLYING COMPENSATION
POSITIONS YEAR SALARY (1) (2) OPTIONS (3)
RICHARD ROBINSON 2002 $781,731 $476,550 $150,457 0 $238,840
Chairman of the Board, 2001 $731,731 $562,500 $0 250,000 $238,727
President and CEO 2000 $700,000 $735,000 $0 250,000 $233,874
BARBARA A. MARCUS 2002 $663,407 $413,708 $12,318 25,000 $5,550
EVP; President, 2001 $629,224 $460,525 $23,630 50,000 $5,150
Children's Book 2000 $570,711 $540,000 $0 100,000 $5,149
Publishing
DEBORAH A. FORTE 2002 $541,816 $247,270 $16,149 30,000 $5,550
EVP; President, 2001 $517,617 $301,875 $45,301 0 $5,150
Scholastic Entertainment 2000 $500,601 $345,000 $0 100,000 $5,150
KEVIN J. MCENERY 2002 $435,788 $177,618 $19,783 0 $5,746
EVP and Chief Financial 2001 $406,731 $246,500 $26,262 100,000 $5,294
Officer 2000 $365,865 $300,000 $0 100,000 $5,571
MARGERY W. MAYER 2002 $391,346 $206,723 $13,129 25,000 $3,381
EVP; President, 2001 $359,423 $413,625(4) $12,409 50,000 $3,262
Scholastic Education 2000 $309,519 $94,500 $0 0 $0
JEAN L. FEIWEL 2002 $491,852 $171,514 $0 0 $5,550
Publisher, Children's 2001 $479,029 $185,028 $0 50,000 $5,150
Book Publishing 2000 $435,101 $499,375 $0 0 $5,623
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(1) Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Ms. Mayer have elected
to invest 100%, 5%, 30%, 40% and 30%, respectively, of his/her fiscal 2002
bonus in RSUs under the MSPP. Previously, Mr. Robinson, Ms. Marcus,
Ms. Forte, Mr. McEnery and Ms. Mayer elected to invest 100%, 10%, 20%, 30%
and 30%, respectively, of his/her fiscal 2001 bonus and 0%, 10%, 30%, 20%
and 30%, respectively, of his/her fiscal 2000 bonus in RSUs under the MSPP.
In addition, on July 18, 2002, each of Mr. Robinson, Ms. Marcus, Ms. Forte,
Mr. McEnery and Ms. Mayer received stock options in lieu of 10% of the bonus
he or she would otherwise have received for fiscal 2002 under the Company's
Executive Performance Incentive Plan. Options to purchase 5,850, 5,080,
3,040, 2,180 and 2,540 shares of Common Stock, which are not reflected in
this table, were issued to Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery
and Ms. Mayer, respectively.
(2) Amounts shown represent the value of the 15% discount received on the
purchase of RSUs allocated to the Named Executives' accounts under the MSPP,
based on the market value of the Common Stock underlying such RSUs on the
date of allocation. Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and
Ms. Mayer elected to invest 100%, 10%, 20%, 30% and 30%, respectively, of
her/his fiscal 2001 bonus, in respect of which 18,382, 1,505, 1,973, 2,417
and 1,604 RSUs, respectively, were allocated to them on August 31, 2001.
Ms. Marcus, Ms. Forte, Mr. McEnery and Ms. Mayer elected to invest 10%, 30%,
20% and 30%, respectively, of her/his fiscal 2000 bonus, in respect of which
2,388, 4,578, 2,654 and 1,604 RSUs, respectively, were allocated to them on
August 31, 2000.
(3) For Mr. Robinson, All Other Compensation for fiscal 2002, 2001 and 2000
includes: (a) $5,550, $5,150 and $5,149, respectively, in matching
contributions made by the Company for Mr. Robinson's benefit under the
401(k) Plan; and (b) $233,290, $233,577 and $233,874, respectively,
representing the annual premium paid
8
by the Company in respect of a split dollar life insurance policy for the
benefit of Mr. Robinson and Helen Benham, which premiums represent the
non-term life insurance portion of such policy. The Company is not
responsible for payment of the premium attributable to the term life
insurance portion of such policy. All premiums paid by the Company in
respect of the non-term portion of the split dollar life insurance policy
will be repaid to the Company (without interest) not later than upon the
death of the last to survive of Mr. Robinson and Ms. Benham. The split
dollar life insurance arrangements for the benefit of Mr. Robinson and
Ms. Benham were approved by the Board of Directors of the Company. The
amounts shown for the other Named Executives reflect the matching
contributions made by the Company under the 401(k) Plan.
(4) Includes a non-recurring bonus of $250,000.
OPTION GRANTS IN FISCAL 2002
The following table sets forth information concerning individual stock
option grants made to the Named Executives during the fiscal year ended May 31,
2002.
POTENTIAL REALIZABLE VALUE
AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
INDIVIDUAL GRANTS(1) OPTION TERM (2)
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR
OPTIONS IN FISCAL BASE PRICE EXPIRATION
NAME GRANTED YEAR ($/SHARE) DATE 5%
Richard Robinson -- -- -- -- --
Barbara A. Marcus 25,000 3.9% $42.85 12/18/11 $673,703
Deborah A. Forte 30,000 4.7% $42.85 12/18/11 $808,444
Kevin J. McEnery -- -- -- -- --
Margery W. Mayer 25,000 3.9% $42.85 12/18/11 $673,703
Jean L. Feiwel -- -- -- -- --
POTENTIAL REALIZABLE VALUE
AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
NAME 10%
Richard Robinson --
Barbara A. Marcus $1,707,297
Deborah A. Forte $2,048,756
Kevin J. McEnery --
Margery W. Mayer $1,707,297
Jean L. Feiwel --
- --------------------------------------------------------------------------------
(1) All options are exercisable for Common Stock at an exercise price equal to
the fair market value of the Common Stock at the date of grant. All options
are exercisable in four equal annual installments beginning one year from
the date of grant. On July 18, 2002, each of Mr. Robinson, Ms. Marcus,
Ms. Forte, Mr. McEnery and Ms. Mayer received stock options in lieu of 10%
of the bonus he or she would otherwise have received for fiscal 2002 under
the Company's Executive Performance Incentive Plan. Options to purchase
5,850, 5,080, 3,040, 2,180 and 2,540 shares of Common Stock, which are not
reflected in this table, were issued to Mr. Robinson, Ms. Marcus,
Ms. Forte, Mr. McEnery and Ms. Mayer, respectively.
(2) The dollar amounts under the 5% and 10% columns in the table above are the
result of calculations required by the SEC and therefore are not intended to
forecast the possible future appreciation of the price of the Common Stock.
Although permitted by SEC rules, the Company did not use an alternate
formula for grant date valuation because the Company is not aware of any
formula that will determine with reasonable accuracy a present value based
on future unknown or volatility factors. No gain on the stock options
awarded to the Named Executives or other employees is possible without
appreciation in the price of the Common Stock during the applicable period.
9
AGGREGATED OPTION EXERCISES IN FISCAL 2002 AND 2002 FISCAL YEAR-END OPTION
VALUES
The following table sets forth information concerning options exercised
during the fiscal year ended May 31, 2002 by the Named Executives together with
the number and value of the unexercised options held by such persons at May 31,
2002.
NUMBER OF
SHARES SECURITIES UNDERLYING VALUE OF UNEXERCISED
ACQUIRED VALUE UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ON EXERCISE REALIZED AT FY-END (#) AT FY-END(1)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
Richard Robinson -- -- 1,014,152 / 0 $24,403,239 / $0
Barbara A. Marcus 15,000 $ 506,250 391,294 / 37,500 $10,074,354 / $719,438
Deborah A. Forte 56,000 $1,723,930 344,400 / 30,000 $7,236,019 / $142,200
Kevin J. McEnery 25,000 $ 805,290 406,766 / 0 $9,171,646 / $0
Margery W. Mayer -- -- 18,110 / 62,500 $364,834 / $708,188
Jean L. Feiwel 45,000 $1,265,725 137,016 / 0 $2,951,727 / $0
- --------------------------------------------------------------------------------
(1) Based on the per share closing price of the Common Stock of $47.59 on
May 31, 2002 as reported on the NASDAQ-National Market System.
PENSION PLAN
The Company maintains a retirement plan for substantially all of its
employees based in the United States, including the Named Executives (the
"Retirement Plan"). As a cash balance plan, the Retirement Plan provides
participants with benefits based on monthly contributions and interest credits.
Individual participant contributions are not required under the Retirement Plan.
The Retirement Plan provides for an annual allocation by the Company to a
participant's account, calculated as follows: for less than five years of
service, 3.5% of the first $25,000 of annual base pay and 2.0% of the remainder;
for five years but less than ten years of service, 4.5% of the first $25,000 of
annual base pay and 3.0% of the remainder; for ten years of service but less
than 20 years of service, 5.5% of the first $25,000 of annual base pay and 4.0%
of the remainder; and for 20 years or more of service, 6.5% of the first $25,000
of annual base pay and 5% of the remainder. Interest on account balances is
accrued monthly based on the average rate for one-year U.S. Treasury Bills plus
1.0%. Participants in the Retirement Plan become fully vested in their accrued
benefits upon the earlier of the completion of five years of service or
attainment of age 65. Vested retirement benefits are payable in the form of a
lump-sum or annuity payment upon retirement, termination, death or disability.
At August 1, 2002, Ms. Marcus, Ms. Forte, Mr. McEnery, Ms. Mayer and
Ms. Feiwel, had earned estimated annual benefit payments under the Retirement
Plan of $56,642, $6,586, $19,250, $5,292 and $6,387, respectively.
The Retirement Plan was amended and restated to a cash balance plan
effective June 1, 1999. All plan participants as of July 1, 1998 who were at
least age 50 at such time were given the option to remain under a modified
version of the Retirement Plan's benefit formula used prior to the such
amendment and restatement. Mr. Robinson elected to continue participation under
such prior benefit formula. This formula provides participants
10
covered thereby with retirement benefits based upon career average compensation.
Individual participant contributions are not required and the Company makes all
required contributions. The formula provides for an annual benefit payable at
retirement equal to, for each year of credited service, 1.5% of that portion of
the participant's basic annual compensation up to $13,650, plus 2.0% of that
portion of the participant's basic annual compensation in excess of $13,650. At
August 1, 2002, Richard Robinson had earned an estimated annual benefit payment
using the prior benefit formula of $70,871, payable upon retirement.
EMPLOYMENT AGREEMENT
Effective October 1, 1999, Scholastic Inc., a wholly-owned subsidiary of
the Company, entered into a three year Employment Agreement (the "Agreement")
with Jean L. Feiwel. In addition to a signing bonus of $250,000 paid upon
execution of the Agreement in May 2000, the Agreement provides for an annual
salary of $475,000 through September 30, 2000, $485,000 as of October 1, 2000
and $500,000 as of October 1, 2001. The Agreement also provides for a maximum
annual performance bonus equal to 35% of Ms. Feiwel's annual salary, of which
one half of such target bonus is guaranteed. The Agreement provided for an award
of 25,000 nonqualified stock options with a one year vesting period, which were
granted in July 2000 and were subsequently adjusted to 50,000 options to give
effect to the 2-for-1 Stock Split. Ms. Feiwel is also entitled to receive the
employee group health, life and disability benefits that the Company provides to
similarly situated employees, and she is furnished with a leased car. The
Agreement also provides for varying lump sum payments in the event Ms. Feiwel
ceases to be employed for specified reasons.
THE HUMAN RESOURCES AND COMPENSATION
COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
The Company's compensation program for its executive officers and other
senior management is administered by the Human Resources and Compensation
Committee (the "HRCC") of the Board of Directors.
The HRCC believes that compensation for executive officers and other
senior management should be determined according to a competitive framework,
including financial performance of the Company, individual contributions,
teamwork and division results. Such factors are critical to enhancing the value
and continued development of the Company's operating segments, which in turn
builds stockholder value. In determining the compensation of the Company's
executive officers, the HRCC seeks to achieve the following objectives through a
combination of fixed and variable compensation:
- PAY COMPETITIVELY--Provide a total compensation package that is consistent
with competitive practices, enabling the Company to attract, motivate and
retain qualified executives; and
- PAY FOR PERFORMANCE--Create a direct link between the aggregate
compensation paid to each executive officer and the financial performance
of the Company and the
11
results of the specific business division for which the executive is
responsible, as well as specific corporate goals identified from time to
time; and
- EXECUTIVES AS STOCKHOLDERS--Link a portion of each executive officer's
compensation opportunity directly to the value of the Common Stock through
the use of stock-based awards.
The programs adopted in order to implement the HRCC's compensation
philosophy and to reflect the Company's financial performance have been
developed with the assistance of independent consultants and counsel. The HRCC
periodically reviews the Company's compensation practices in light of the HRCC's
compensation philosophy, and views variable compensation as an integral part of
the total compensation package.
BASE SALARY
In establishing each executive officer's base salary, the HRCC considers
several factors, including individual performance, competitive market conditions
for recruiting and retaining executive talent and changes in responsibilities.
Base salaries are reviewed annually and generally approximate the median
level of competitive rates, as adjusted for individual performance. In
determining base salaries, the HRCC's focus is on recruiting and retaining
executive talent. Accordingly, the HRCC considers the executive compensation of
a broad group of companies in the publishing and entertainment fields, including
the companies comprising the "Peer Group" used in the Stock Performance Graph in
this proxy statement. As a general practice, the Company does not enter into
employment agreements with executive officers, although as previously reported,
the Company has a three-year employment agreement with Ms. Feiwel, which expires
in 2002. During fiscal 2002, the base salaries of executive officers were
generally increased in accordance with the foregoing practices.
ANNUAL BONUS INCENTIVE
For fiscal 2002, the Company's annual bonus targets were established by
the HRCC based on divisional and corporate performance. Bonus potentials for
executive officers were set at percentages of their base salaries deemed
appropriate for their current positions and are generally based on divisional
performance and earnings per share targets. In addition, for fiscal 2002, a
target based on meeting certain diversity goals was added for members of senior
management comprising the Company's management executive committee, including
the Chief Executive Officer. Bonus awards for the Named Executives were set and
determined under the Company's stockholder-approved Executive Incentive
Performance Plan, which is designed to be exempt from the application of
Section 162(m) of the Internal Revenue Code of 1986 ("the Code"). Based on its
review of the Company's overall performance during fiscal 2002, and to further
align management interests with those of other stockholders, the HRCC
recommended that, with respect to the fifteen members of senior management
serving on the Company's management executive committee, the fiscal
12
2002 bonuses otherwise payable to them should be reduced by 10%, in lieu of
which such persons were granted options to purchase Common Stock as described
herein. Bonuses for fiscal 2002 were payable in August 2002.
EQUITY-BASED INCENTIVES
Stock options historically have been the Company's form of equity-based
incentives and its primary form of long-term incentive compensation. The Company
grants stock options as part of executive compensation as a means to encourage
superior performance and to more directly link the economic interests of
executives with those of other stockholders.
As a result of a review in fiscal 2001 by the HRCC, with the assistance
of independent consultants and counsel, of the Company's general compensation
philosophy and overall compensation programs, the HRCC and the Board of
Directors in fiscal 2002 adopted the Scholastic Corporation 2001 Stock Incentive
Plan (the "2001 Plan"), which was approved by the holders of the Class A Stock
at the 2001 Annual Meeting of Stockholders. The 2001 Plan provides for the grant
of stock options, restricted stock and other stock-based awards, and the HRCC
also has the authority to grant to specified employees of the Company reload and
transfer rights in connection with stock option grants. While the HRCC
anticipates that stock options will remain the Company's primary form of
long-term compensation, the HRCC recommended that the 2001 Plan include optional
design and award features in order to make the 2001 Plan more competitive with
the Company's peer group and provide the Company with additional flexibility in
structuring an individual's total compensation package, when, and if, deemed
appropriate by the HRCC. 4,000,000 shares of Common Stock were reserved for
issuance under the 2001 Plan.
During fiscal 2002, 99 individuals, including ten executive officers,
received stock option awards to purchase an aggregate of 638,000 shares of
Common Stock. All of the option awards in fiscal 2002 were made at fair market
value (the average of the high and low price) of the Common Stock on the date of
grant. The size of each senior management option award was based on the HRCC's
subjective evaluation of a number of factors, including the level of
responsibility of the individual, competitive market practice, past grants and
other matters relating to the individual's performance and ability to influence
corporate results. The actual grant of stock options is made by the Stock Grant
Committee of the Board of Directors, which is comprised solely of non-employee
directors, each of whom is also a member of the HRCC. In fiscal 2002,
Ms. Marcus, Ms. Forte and Ms. Mayer were awarded options to purchase 25,000,
30,000 and 25,000 shares of Common Stock, respectively. Additionally, in
July 2002, options to purchase an aggregate of 33,490 shares of Common Stock
were granted to fifteen members of senior management in lieu of 10% of their
fiscal 2002 cash bonus awards referred to above. These options, with an exercise
price at fair market value on the date of grant, have a one year vesting period.
Of these options, Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and
Ms. Mayer received options to purchase 5,850, 5,080, 3,040, 2,180 and 2,540
shares of Common Stock, respectively.
13
In addition to its stock option plans, the Company also maintains two
stockholder-approved, stock-based incentive programs: the Scholastic Corporation
Employee Stock Purchase Plan (the "ESPP") and the MSPP. The ESPP and the MSPP
were designed to augment the Company's stock-based incentive programs by
providing participating employees with equity opportunities intended to further
align their interests with the Company and its stockholders. The purpose of the
ESPP is to encourage broad-based employee stock ownership. The ESPP is offered
to U.S. employees generally. The ESPP permits participating employees to
purchase, through after-tax payroll deductions, Common Stock at a 15% discount
from the lower of the fair market value of the Common Stock on the first or last
business day of each fiscal quarter.
Under the MSPP, eligible members of senior management may use all or a
portion of their annual bonus payments on a tax-deferred basis to make equity
investments in the Company at a discounted purchase price. In order to encourage
increased participation in the MSPP and based on the recommendation of the
Company's independent consultants and a review of practices adopted by other
companies, the HRCC recommended that, commencing for fiscal 2002, the previous
15% discount in respect of RSU purchases under the MSPP should be increased to
25% and that MSPP participants should also be entitled to participate in the
ESPP, for which they were previously ineligible. Accordingly, under the amended
MSPP, participants could use all or a portion of their fiscal 2002 annual bonus
payments on a tax deferred basis to acquire RSUs at a 25% discount from the
lowest fair market value of the underlying Common Stock during the fiscal
quarter ending on August 31, 2002. During the deferral period, which may not be
less than three years, bonus payments deferred under the MSPP are allocated as
RSUs, based on the applicable acquisition price, which are converted into shares
of Common Stock on a 1-to-1 basis upon expiration of the deferral period. During
fiscal 2002, 22 members of senior management participated in the MSPP, including
Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Ms. Mayer, who allocated to
the purchase of RSUs under the MSPP $476,550 (100% of bonus), $20,685 (5% of
bonus), $74,181 (30% of bonus), $71,047 (40% of bonus), and $62,017 (30% of
bonus), respectively. The RSUs in respect of such elections will be allocated on
September 3, 2002.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Robinson's compensation is based on the same objectives and policies
applicable to all members of senior management and includes base salary, bonus
opportunities and stock option grants. Effective October 1, 2002,
Mr. Robinson's base salary was increased from $750,000 to $800,000.
Mr. Robinson was awarded a bonus for fiscal 2002 of $476,550, which he has
elected to use in full to purchase RSUs under the MSPP, as noted above.
Mr. Robinson's fiscal 2002 bonus was awarded at the rate of 95% of his corporate
target and 50% of his diversity target opportunities, and it also reflects the
10% reduction recommended by the HRCC as discussed above, in respect of which he
received, in July 2002, options to purchase 5,850 shares of Common Stock. No
stock options were granted to Mr. Robinson during fiscal 2002. In determining
Mr. Robinson's compensation for fiscal
14
2002, the HRCC considered the compensation of the chief executive officers of
the peer companies, as well as the Company's financial performance for fiscal
2001 and 2002 and Mr. Robinson's individual performance and long-term
contributions to the success of the Company.
POLICY AS TO SECTION 162(M) OF THE CODE
Section 162(m) of the Code generally denies a publicly traded company a
Federal income tax deduction for compensation in excess of $1 million paid to
certain of its executive officers, unless the amount of such excess is payable
based solely upon the attainment of objective performance criteria. The Company
has undertaken to qualify substantial components of the incentive compensation
it makes available to its executive officers for the performance exception to
nondeductibility. Most equity-based awards available for grant under the
Company's equity compensation plans, and all of the equity-based awards actually
granted to executive officers, are intended to so qualify. Amounts payable under
the Company's stockholder-approved Executive Performance Incentive Plan are also
intended to be exempt from the application of Section 162(m) as performance
based compensation. However, in appropriate circumstances, the HRCC may in the
future deem it appropriate to pay compensation or make incentive or retentive
awards that do not meet the performance based criteria and therefore may not be
deductible by reason of Section 162(m).
The HRCC comprises five voting outside directors, none of whom is an
employee or former employee of the Company. In addition, none of these five
directors has a relationship with another corporation or entity that would
require specific disclosure of such relationship in the proxy statement or
preclude him or her from serving on this committee.
HUMAN RESOURCES AND COMPENSATION
COMMITTEE
John L. Davies (Chairperson)
Ramon C. Cortines
Linda B. Keene
Peter M. Mayer
John G. McDonald
15
STOCK PRICE PERFORMANCE GRAPH
The graph below provides an indicator of cumulative total stockholder
returns for the Common Stock for the period June 1, 1997 to May 31, 2002
compared with the NASDAQ Composite Index and a composite peer group of publicly
traded companies with which the Company competes in its principal operating
segments. In the Company's proxy materials regarding its Annual Meeting of
Stockholders held in 2001, the peer group chosen by the Company for this graph
included Harcourt General, Inc. and Houghton Mifflin Co., neither of which
continues as a publicly traded company. Accordingly, the Company has substituted
John Wiley and Sons, Inc. and Pearson plc as members of the peer group, which
together with The McGraw-Hill Companies and Reader's Digest Association Inc.
comprise the peer group reflected in the graph below. The graph assumes a $100
investment on June 1, 1997, together with the reinvestment of all dividends, if
any, except in the case of Pearson plc, which is included on the basis of a $100
investment as of September 1, 2000, following the initial public offering of its
American Depository Receipts in the United States.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
5/31/97 5/31/98 5/31/99 5/31/00 5/31/01 5/31/02
Scholastic Corporation 100 134.45 163.03 178.78 268.57 319.93
Peer Group 100 140.23 190.14 184.09 215.34 211.1
NASDAQ STOCK MARKET (U.S.) 100 126.81 179.03 245.44 152.33 117.1
16
MATTERS SUBMITTED TO STOCKHOLDERS
ELECTION OF DIRECTORS
The Amended and Restated Certificate of Incorporation of the Company
provides that the holders of shares of Class A Stock, voting as a class, have
the right to fix the size of the Board of Directors so long as it does not
consist of less than three nor more than fifteen directors. The holders of the
Class A Stock unanimously executed a written consent in August 2002 fixing the
number of directors constituting the full board of Directors at twelve,
effective as of the Annual Meeting.
The Board of Directors has designated the twelve persons listed below
under the sections captioned "Nominees for Election by Holders of Class A Stock"
and "Nominees for Election by Holders of Common Stock" for nomination to serve
as directors of the Company until the next annual meeting and until their
respective successors are elected and qualified, or until their earlier
retirement, resignation or removal.
Proxies are solicited in favor of the nine nominees to be elected by the
holders of Class A Stock and the three nominees to be elected by the holders of
Common Stock, and it is intended that the proxies will be voted for such
nominees unless otherwise specified. Should any one or more of the nominees
become unable to serve for any reason, unless the holders of the Class A Stock
provide for a lesser number of directors, the persons named in the enclosed
proxy may act with discretionary authority in respect of the election of a
substitute nominee or nominees. The Board of Directors has no reason to believe
that any nominees will be unable to serve.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF CLASS A STOCK VOTE FOR
EACH OF THE NINE NOMINEES FOR ELECTION BY SUCH HOLDERS. Assuming the presence of
a quorum, the affirmative vote of a plurality of the votes cast by the holders
of shares of the Class A Stock present and entitled to vote on this item at the
Annual Meeting is required to elect each of the nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF COMMON STOCK VOTE FOR
EACH OF THE THREE NOMINEES FOR ELECTION BY SUCH HOLDERS. Assuming the presence
of a quorum, the affirmative vote of a plurality of the votes cast by the
holders of shares of Common Stock present and entitled to vote on this item at
the Annual Meeting is required to elect each of the nominees.
17
NOMINEES FOR ELECTION BY HOLDERS OF CLASS A STOCK
DIRECTOR
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT AGE SINCE*
Richard Robinson Chairman of the Board, President and Chief Executive 65 1971
Officer of the Company
Rebeca M. Barrera President, National Latino Children's Institute, 55 1995
Austin, TX
Ramon C. Cortines Education Consultant, Stanford, CA 70 1995
Charles T. Harris III Managing Director, Goldman, Sachs & Co., New York, 50 1996
NY
Andrew S. Hedden Partner, Coudert Brothers LLP, New York, NY 61 1991
Mae C. Jemison President and Founder, BioSentient Corporation, 45 1993
Houston, TX
Peter Mayer President, The Overlook Press/Peter Mayer 66 1999
Publishers, Inc., New York, NY
Augustus K. Oliver Managing Director, WaterView Advisors LLC, New York, 52 1995
NY
Richard M. Spaulding Executive Vice President of the Company 65 1974
NOMINEES FOR ELECTION BY HOLDERS OF COMMON STOCK
DIRECTOR
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT AGE SINCE*
John L. Davies Senior Advisor and Founder, AOL International 52 2000
Linda B. Keene Principal, Waterford Marketing Group, Minneapolis, 50 1999
MN
John G. McDonald The IBJ Professor of Finance, Graduate School of 65 1985
Business, Stanford University, Stanford, CA
- --------------------------------------------------------------------------------
* The dates set forth above indicate the date such director was elected as a
director of the Company or its predecessor entity.
RICHARD ROBINSON. Mr. Robinson has served as Chairman of the Board of
the Company and/or Scholastic Inc. since 1982, as Chief Executive Officer since
1975 and as President since 1974. He has held various executive management and
editorial positions with the Company since joining in 1962.
REBECA M. BARRERA. Ms. Barrera is the President of the National Latino
Children's Institute, a non-profit organization founded in 1997 and located in
San Antonio, Texas. NLCI creates a voice for young Latinos and implements
programs and services that help
18
build healthy communities throughout the country. From 1990 to 1997,
Ms. Barrera was Executive Director of the Corporate Child Development Fund, and
she also owned and managed childcare centers, developed curriculum and was a
faculty member at both the public school and university level.
RAMON C. CORTINES. Mr. Cortines was Executive Director of the Pew
Network for Standards-Based Reform at Stanford University from 1996 until
December 31, 2001. In the spring of 1999, he was a Lecturer of Education at
Harvard University. During 1998, he served as interim director of the Annenberg
Institute for School Reform at Brown University. From March to August 1997, he
was the acting Assistant Secretary for the office for Educational Research and
Improvement. From February through August of 1993, he served as Assistant
Secretary (designate) for Intergovernmental and Interagency Affairs and for
Human Resources, United States Department of Education. From 1993 to 1995, he
was Chancellor of the New York City Public School System. In December 1992,
Mr. Cortines chaired a Department of Education transition team for then
President-elect Bill Clinton. Since 1956, Mr. Cortines has served six school
districts, including as Superintendent of Schools for Pasadena (11 years), San
Jose (2 years) and San Francisco (6 years). Mr. Cortines is also a Trustee of
The J. Paul Getty Trust and Brown University and a member of the Board of
Directors of Special Olympics International.
CHARLES T. HARRIS III. Mr. Harris has been a managing director with the
investment firm of Goldman, Sachs & Co. since 1999 and a general partner from
1988 to 1996. He is a trustee of Phillips Exeter Academy, and a director and
Chairman of the Alliance for Young Artists & Writers, Inc. Mr. Harris is also a
director of the Georgia Gulf Corporation.
ANDREW S. HEDDEN. Mr. Hedden has been a partner of the law firm of
Coudert Brothers LLP since 1975 and has been associated with the firm since
1968.
MAE C. JEMISON. Dr. Jemison is the president of BioSentient Corporation,
a medical technology company she founded in 2001 that develops and markets
ambulatory equipment to monitor the autonomic nervous system and to train people
to respond favorably in stressful situations. She is also the President of The
Jemison Group, a technology consulting company that focuses on the integration
of science and technology into everyday life and social responsibility.
Dr. Jemison founded and chairs The Earth We Share (TEWS), an international
science camp for students age 12-16 from around the world. Dr. Jemison is an
A.D. White Professor-at-Large at Cornell University and was a professor of
Environmental Studies at Dartmouth College from 1996-2002. She served as a
National Aeronautics and Space Administration (NASA) astronaut from 1987 to 1993
and was a member of the Space Shuttle Endeavour Flight in September 1992.
PETER MAYER. Mr. Mayer has been President of The Overlook Press/Peter
Mayer Publishers, Inc. since 1997. From 1978 to 1996, he was Chairman of the
Board and Chief Executive Officer of the Penguin Group Companies, overseeing its
operations in the United
19
States, the United Kingdom, Canada, Australia, New Zealand, Holland and India.
From 1976 to 1978, he was President and Publisher of Pocket Books. He has also
served as Editor-in-Chief, Publisher and President of Avon Books. In 1996,
Mr. Mayer was awarded the Chevalier and Officier of the Order des Arts et des
Lettres by the French Ministry of Culture and the Foundation of Publishers' and
Booksellers' Association's India Award for Outstanding Contribution to
International Publishing. In 1995, he was the recipient of the Literary
Marketplace Person of the Year Award (New York City) as the Most Distinguished
Publisher of 1995.
AUGUSTUS K. OLIVER. Mr. Oliver has been a Senior Managing Director of
WaterView Advisors LLC, a private equity investment firm, since October 1999.
Prior to joining WaterView, Mr. Oliver was a private investor with Oliver
Management. From 1984 to 1995, he was a partner at the investment banking and
management firm of Gollust, Tierney and Oliver, and from 1975 to 1984, he
practiced law with the firm of Skadden, Arps, Slate, Meagher and Flom, becoming
a partner in 1983. Mr. Oliver is the grandson of a former Chairman of the Board
of Directors of Scholastic Inc.
RICHARD M. SPAULDING. Mr. Spaulding has served as Executive Vice
President of the Company and/or Scholastic Inc. since 1974. He has held various
executive management positions with the Company since joining in 1960.
JOHN L. DAVIES. Mr. Davies is a senior advisor for AOL International.
Mr. Davies joined AOL in July 1993 as a Senior Vice President and founded AOL
International in 1994, serving as its President from 1994 to 2000. Before
joining AOL, Mr. Davies was Managing Director of Citicorp's London-based
consumer mortgage business. Prior to that, he was Vice President, Europe for RCA
records, having previously been employed at General Electric for ten years in
consumer marketing management positions.
LINDA B. KEENE. Ms. Keene is a principal of Waterford Marketing Group,
an independent consultant agency for marketing and organizational issues.
Previously, she was Vice President of Market Development for American Express
Financial Advisors from 1994 to 2001, where she was responsible for marketing
and business research, competitive analysis, advertising, brand development,
consumer communications and seminar event marketing. From 1987 to 1994, she was
with The Pillsbury Company, serving as Vice President of Marketing Services from
1992 to 1994. Her professional associations include memberships in the Executive
Leadership Council, the National Black MBA Association and the National
Association of Female Executives. Ms. Keene serves as Board Secretary of the
YMCA of Metropolitan Minneapolis. She is also a director of The Huffy
Corporation.
JOHN G. MCDONALD. Professor McDonald joined the faculty of Stanford
University Graduate School of Business, where he is The IBJ Professor of
Finance, in 1968. Professor McDonald serves on the Boards of Directors of
Varian, Inc., Plum Creek Timber Co., Capstone Turbine, Corp., iStar
Financial, Inc. and eight investment companies managed by
20
Capital Research and Management Co. From January 1987 until January 1990,
Professor McDonald was a member (and Vice Chairman in 1989-90) of the Board of
Governors of the National Association of Securities Dealers, Inc.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
Seven meetings of the Board of Directors were held during the 2002 fiscal
year. All incumbent directors attended 75% or more of the aggregate of such
meetings and of the meetings held by all standing committees of the Board of
which they were a member, except for Helen V. Benham, who attended 71% of the
relevant meetings.
The following are the current members and functions of the standing
committees of the Board of Directors.
EXECUTIVE COMMITTEE. Richard Robinson (Chairperson), Helen V. Benham,
Charles T. Harris III, Andrew S. Hedden, Peter M. Mayer, Augustus K. Oliver and
Richard M. Spaulding are the members of the Executive Committee. In the
intervals between meetings of the Board of Directors, the Executive Committee is
authorized to exercise, with certain exceptions, all of the powers of the Board
in the management of the business and affairs of the Company. All actions taken
by the Executive Committee are submitted for ratification by the Board of
Directors. No meetings of the Executive Committee were held during the fiscal
year ended May 31, 2002.
AUDIT COMMITTEE. Augustus K. Oliver (Chairperson), John L. Davies and
Linda B. Keene are the members of the Audit Committee. Each member of the Audit
Committee is independent of the management of the Company, neither a current nor
former employee of the Company or its subsidiaries, and free of any relationship
that, in the judgment of the Board of Directors, would interfere with his or her
exercise of independent judgment as a committee member. All Audit Committee
members are also financially literate, and at least one member has accounting or
related financial management expertise. During fiscal 2002, in order to fulfill
its responsibilities to the stockholders and the investment community, this
committee reviewed the corporate accounting and financial reporting practices of
the Company and the quality and integrity of the financial reports of the
Company. This committee also recommended to the Board of Directors the
accounting firm to act as independent auditors for the fiscal year ended
May 31, 2002. During fiscal 2002, the committee met with both the internal and
the independent auditors to discuss the scope, staffing and procedures of their
respective audit plans for the year. The committee also discussed the proposed
fee for the audit and the results of the audit (including their comments or
recommendations arising therefrom) with the independent auditors. In addition,
this committee reviewed the Company's financial accounting policies and
decisions and reported thereon to the Board prior to the issuance of the annual
financial statements. Furthermore, this committee reviewed any non-audit
services to be performed by the
21
independent auditors and considered the possible effects of such services on the
auditors' independence. The Audit Committee held three meetings during the
fiscal year ended May 31, 2002.
RETIREMENT PLAN COMMITTEE. Richard M. Spaulding (Chairperson), Charles
T. Harris III, Andrew S. Hedden and Augustus K. Oliver are the members of the
Retirement Plan Committee. This committee acts on behalf of the Board in its
capacity as settlor of the trust underlying the Retirement Plan and the 401(k)
Plan (collectively "the Plans"), and with respect to the powers enumerated
therein, including, without limitation, the power to amend or terminate the
Plans. This committee also oversees the Administrative Committee, comprised of
Company employees who are responsible for the day-to-day administration of the
Plans. In addition, this committee approves the appointment of one or more
trustees, or other professionals, necessary for the proper administration and
operation of the Plans. Furthermore, this committee, which reports its actions
to the Board of Directors, oversees the policies and practices related to the
Plans and evaluates the Company's overall retirement benefit plan philosophy and
the Plans in the context of the Company as a separate company and competitively
within the publishing industry. The Retirement Plan Committee held two meetings
during the fiscal year ended May 31, 2002.
HUMAN RESOURCES AND COMPENSATION COMMITTEE. John L. Davies
(Chairperson), Ramon C. Cortines, Linda B. Keene, Peter Mayer and John G.
McDonald are the members of the Human Resources and Compensation Committee. This
committee has the responsibility for setting the compensation of the Chief
Executive Officer and reviewing the recommendations of the Chief Executive
Officer for compensation of the other executive officers and other members of
senior management prior to approval by the Board. This committee evaluates the
Company's overall compensation plans and practices as a separate company and
competitively within the industry. This committee, in overseeing the
administration of all of the Company's compensation plans and arrangements,
reviews and approves the annual bonus award target payouts (including awards
under the Company's Executive Performance Incentive Plan) and any proposed
contractual relationships with executive officers and also reviews the Company's
recruitment practices, including the Company's Human Resource and Diversity
Programs. Each member of the committee is independent of the management of the
Company and free of any relationship that, in the judgment of the Board of
Directors, would interfere with his or her exercise of independent judgment as a
committee member. Members of this committee may not be employees or former
employees of the Company or its subsidiaries, nor may their membership on this
committee disqualify the Company for available exemptions pursuant to
Section 162(m) of the Code or Rule 16b-3 under the Exchange Act. The Human
Resources and Compensation Committee held two meetings during the fiscal year
ended May 31, 2002.
NOMINATING COMMITTEE. Ramon C. Cortines (Chairperson), Rebeca M.
Barrera, Charles T. Harris III and Mae C. Jemison are the members of the
Nominating Committee. This committee identifies and recommends to the Board of
Directors candidates for
22
election as directors and any changes it believes desirable in the size and
composition of the Board and also recommends to the Board of Directors committee
structure and membership and fees to be paid to directors for service on the
Board and on Board committees. The Nominating Committee held one meeting during
the fiscal year ended May 31, 2002. The Nominating Committee would be pleased to
receive suggestions from stockholders about persons it should consider
recommending as possible members of the Board of Directors. Any such suggestions
should be sent to the Nominating Committee of the Board of Directors, c/o
Corporate Secretary, Scholastic Corporation, 557 Broadway, New York, New York
10012.
STOCK GRANT COMMITTEE. John G. McDonald (Chairman), John L. Davies,
Linda B. Keene and Peter M. Mayer are the standing members of the Stock Grant
Committee and, as permitted under Delaware law, Ramon C. Cortines is an
alternate member of the Stock Grant Committee. The committee authorizes and
approves grants, awards or issuances of options, warrants, restricted stock or
other rights under the Company's stock-based compensation plans. Each member (or
alternate) of the committee is independent of the management of the Company and
free of any relationship that, in the judgment of the Board of Directors, would
interfere with his or her exercise of independent judgment as a committee
member. Members of this committee may not be employees or former employees of
the Company or its subsidiaries, nor may their membership on this committee
disqualify the Company for available exemptions pursuant to Section 162(m) of
the Code or Rule 16b-3 under the Exchange Act. This committee held three
meetings during the fiscal year ended May 31, 2002.
STRATEGIC PLANNING COMMITTEE. Mae C. Jemison (Chairperson), Rebeca M.
Barrera, Helen V. Benham, Ramon Cortines, Peter Mayer and Richard M. Spaulding
are members of the Strategic Planning Committee. This committee reviews and
advises management of the Company on the strategic development of properties and
programs and reports its findings to the Board of Directors. This committee held
no meetings during the fiscal year ended May 31, 2002.
23
DIRECTOR COMPENSATION
For the fiscal year ended May 31, 2002, each non-employee director of the
Company was paid a cash annual retainer of $25,000 for his or her services as a
director, a chairperson fee of $5,000 if he or she was the chair of a standing
Board Committee and an attendance fee of $1,500 for attendance at each Board or
Committee meeting, whether in person or telephonically. The Company reimburses
directors for travel, lodging and related expenses they may incur in connection
with their services as directors.
The Company maintains the Outside Directors' Stock Option Plan (the "1997
Directors' Plan"), pursuant to which annual grants of stock options are made to
non-employee directors. During fiscal 2002, following the 2-for-1 Stock Split,
the 1997 Directors' Plan was amended to increase the annual grant of stock
options from 3,000 to 6,000 and, commencing in fiscal 2003, to provide that the
grant be made on the date of the annual meeting of stockholders, rather than in
January. As a result, each non-employee director (other than Andrew S. Hedden,
who declined his award) was granted options to purchase 6,000 shares of Common
Stock on January 7, 2002, at an exercise price of $43.875, the fair market value
of the Common Stock on the date of grant. The options vest one year from the
date of grant and expire on January 7, 2012.
Under the terms of the Scholastic Corporation Directors' Deferred
Compensation Plan, directors are permitted to defer 50% or 100% of their cash
retainers and meeting fees. Deferred amounts accrue interest at a rate that
extrapolates a 30-year Treasury bill rate and are paid in cash upon the later of
termination from Board service or age 62, unless paid earlier due to death,
disability, change of control of the Company or severe financial hardship. Two
directors have chosen to have 100% of their director's compensation deferred.
For the fiscal year ended May 31, 2002, the Company recorded $16,911 in accrued
interest expense under this plan.
CERTAIN TRANSACTIONS AND CERTAIN RELATIONSHIPS
Andrew S. Hedden is a partner of the law firm of Coudert Brothers LLP,
which has provided legal services to the Company in the past and is expected to
continue to do so in the future.
From time to time, the Company may receive investment banking services
from Goldman, Sachs & Co., of which Charles T. Harris III is a managing
director. Goldman Sachs & Co. did not provide any investment banking services to
the Company during fiscal 2002.
There are no family relationships among the directors and executive
officers of the Company, except for Richard Robinson and Helen V. Benham, who
are husband and wife. See also the description of the Split Dollar Life
Insurance arrangement in Footnote 3 to the Summary Compensation Table herein.
24
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee has appointed Ernst & Young LLP to be the independent
auditors of the Company for the fiscal year ending May 31, 2003. A
representative of Ernst & Young LLP will be present at the Annual Meeting and
will be afforded the opportunity to make a statement. Such representative will
also be available to respond to appropriate questions.
The fees for services provided by Ernst & Young to the Company during the
fiscal year ended May 31, 2002 were as follows:
Audit Fees.................................................. $1,240,000
Financial Information Systems Design and Implementation
Fees...................................................... 0
All Other Fees.............................................. 876,000
----------
TOTAL FEES PAID............................................. $2,116,000
==========
During the fiscal year ended May 31, 2002, Audit Fees included fees for
auditing the Company's consolidated financial statements and reviewing the
Company's Quarterly Reports on Form 10-Q. In fiscal 2002, All Other Fees
generally included (i) fees for audit-related services, such as benefit plan
audits, business acquisitions, accounting consultations and SEC Registration
Statements, and (ii) fees for tax consulting and tax return preparation.
AUDIT COMMITTEE'S REPORT
The Audit Committee of the Board of Directors is comprised of three
directors. For fiscal 2002, the Board determined that each Committee member was
independent as defined under the National Association of Securities Dealers
listing standards.
During fiscal 2002, it was the responsibility of the Audit Committee to
oversee the Company's financial reporting process on behalf of the Board of
Directors. The Audit Committee operates under a written charter, which was
included as Appendix B to the Proxy Statement for the 2001 Annual Meeting. Under
the charter in existence during 2002, Company management had the primary
responsibility for the financial statements and the reporting process, including
the Company's systems of internal controls. The independent auditors were
responsible for expressing an opinion on the conformity of the audited financial
statements with generally accepted accounting principles.
In fulfilling its oversight responsibilities during the 2002 fiscal year,
the Audit Committee discussed with the Company's internal and independent
auditors the overall scope and plans for their respective audits. The Audit
Committee met with the internal and independent auditors, with and without
management present, to discuss the results of their
25
examinations, their evaluations of the Company's internal controls and the
overall quality of the Company's financial reporting.
The Audit Committee reviewed and discussed, with both management and the
independent auditors, the audited financial statements of the Company for the
fiscal year ended May 31, 2002, including a discussion of critical accounting
policies, the quality, not just the acceptability, of the accounting principles
followed, the reasonableness of significant judgments reflected in such
financial statements and the clarity of disclosures in the financial statements.
The Audit Committee also reviewed with the independent auditors the other
matters required to be discussed by Statement on Auditing Standards No. 61
(Communications with Audit Committees). In addition, the Audit Committee
discussed with the independent auditors their independence from management and
considered the compatibility of nonaudit services provided to the Company with
the auditors' independence. The Audit Committee has received from the
independent auditors the written disclosures and letter required by the
Independence Standards Board (including Independence Standards Board Standard
No. 1).
Based on its review and discussions with management and the independent
auditors, the Audit Committee recommended to the Board of Directors (and the
Board of Directors has approved) the inclusion of the audited financial
statements for the fiscal year ended May 31, 2002 in the Company's Annual Report
on Form 10-K for filing with the SEC.
The Audit Committee is reviewing its charter and responsibilities in
light of the Sarbanes-Oxley Act of 2002, which was enacted on July 30, 2002.
AUDIT COMMITTEE
Augustus K. Oliver, Chairperson
John L. Davies
Linda B. Keene
26
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Stockholders who intend to present proposals for inclusion in the proxy
materials regarding the Company's annual meeting of stockholders to be held in
2003 (the "2003 Annual Meeting") must ensure that such proposals are received by
the Secretary of the Company not later than April 24, 2003 and that such
proposals meet the other requirements contained in SEC Rule 14a-8. In order for
a proposal submitted outside of Rule 14a-8 to be considered "timely" within the
meaning of SEC Rule 14a-4(c) for consideration at the 2003 Annual Meeting, but
not included in the Company's proxy materials, such proposal must be received no
later than July 10, 2003.
OTHER MATTERS
The Board of Directors of the Company is not aware of any other matters
to come before the Annual Meeting. If any other matter should come before the
meeting, the persons named in the enclosed proxy intend to vote the proxy
according to their best judgment.
By Order of the Board of Directors
Charles B. Deull
Senior Vice President, General
Counsel
and Secretary
27
SCHOLASTIC CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 24, 2002
(THE SOLICITATION OF THIS PROXY IS MADE OF BEHALF OF THE BOARD OF DIRECTORS)
The undersigned hereby appoints RICHARD ROBINSON and ANDREW S. HEDDEN, or either
of them, each with full power of substitution and revocation, as proxies to
represent the undersigned at the Annual Meeting of Stockholders of Scholastic
Corporation to be held at 557 Broadway, New York, New York, on Tuesday,
September 24, 2002, at 9:00 A.M. local time, and at any adjournment thereof, and
to vote the shares of Class A Stock the undersigned would be entitled to vote if
personally present.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY TODAY
SCHOLASTIC CORPORATION
CLASS A STOCK PROXY
ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 24, 2002
IN THE ABSENCE OF SPECIFIC DIRECTIONS NOTED BELOW, IT IS UNDERSTOOD THAT THE
UNDERSIGNED'S SHARES OF CLASS A STOCK WILL BE VOTED FOR PROPOSAL 1.
The undersigned hereby votes the above number of shares of Class A Stock of
Scholastic Corporation as follows:
1. Upon the election of: Richard Robinson, Rebeca M. Barrera, Charles T.
Harris III, Andrew S. Hedden, Mae C. Jemison, Peter M. Mayer, Augustus K.
Oliver, Richard M. Spaulding
FOR __________ AGAINST __________
2. In their discretion the proxies will vote upon such other matters as may
properly come before the meeting and as may properly be voted upon by the
holders of Class A Stock.
Signature(s): ______________________________________ Date:________________
Please sign as name appears hereon. Joint owners should each sign. When signing
as attorney, executor, administrator, trustee or guardian, please give full
title as such.
Please mark your vote as indicated in this example X
-
--------------------------
Shareholder Name (Please Print)
No. of Shares ______
1
SCHOLASTIC CORPORATION
ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 24, 2002
Please mark
your votes as
indicated in
this example /X/
IN THE ABSENCE OF SPECIFIC DIRECTIONS NOTED BELOW, IT IS UNDERSTOOD THAT THE
UNDERSIGNED'S SHARES OF COMMON STOCK WILL BE VOTED FOR PROPOSAL 1.
1. Proposal to elect 01 John L. Davies,
02 Linda B. Keene and 03 John G. McDonald
as directors:
If you wish to vote FOR the election of directors
and withhold authority to vote for any of the
individual nominees, enter the name(s) of such
nominee(s) below.
- -------------------------------------------------------------
FOR all nominees WITHHOLD
listed to the left AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the left
/ / / /
2. In their discretion, the proxies will vote upon such other matters as
may properly come before the meeting and as may properly be
voted upon by the holders of Common Stock.
Signature(s): _________________________________ Date: _________________
Please sign as name appears hereon. Joint owners should each sign. When signing
as attorney, executor, administrator, trustee or guardian, please give full
title as such.
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 4PM EASTERN TIME
THE BUSINESS DAY PRIOR TO ANNUAL MEETING DAY.
YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE NAMED PROXIES TO
VOTE YOUR SHARES IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED
YOUR PROXY CARD.
INTERNET
http://www.eproxy.com/schl
Use the Internet to vote your proxy.
Have your proxy card in hand when
you access the web site. You will be
prompted to enter your control
number, located in the box below, to
create and submit an electronic
ballot.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone telephone to
vote your proxy. Have your proxy
card in hand when you call. You will
be prompted to enter your control
number, located in the box below,
and then follow the directions
given.
OR
MAIL
Mark, sign and date
your proxy card
and
return it in the
enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
SCHOLASTIC CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, SEPTEMBER 24, 2002
PLEASE COMPLETE AND RETURN
(THE SOLICITATION OF THIS PROXY IS MADE OF BEHALF OF THE BOARD OF DIRECTORS)
The undersigned hereby appoints RICHARD ROBINSON and ANDREW S. HEDDEN, or either
of them, each with full power of substitution and revocation, as proxies to
represent the undersigned at the Annual Meeting of Stockholders of Scholastic
Corporation to be held at 557 Broadway, New York, New York, on Tuesday,
September 24, 2002 at 9:00 A.M. local time, and at any adjournment thereof, and
to vote the shares of Common Stock the undersigned would be entitled to vote if
personally present.
If all or a portion of the shares you are voting are a result of your being a
participant in the Scholastic Corporation 401(k) Savings and Retirement Plan,
then you are instructing the plan Trustee how to vote all full and fractional
shares attributable to your account invested in the Scholastic Corporation Stock
Fund on August 10, 2002 by completing the reverse side of this card and
returning it by September 10, 2002.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY TODAY
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
