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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

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Filed by a Party other than the Registrant o

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §240.14a-12

Scholastic Corp.
(Name of Registrant as Specified In Its Charter)

 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
         
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 
 
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Amount Previously Paid:
        
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GRAPHIC

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 23, 2003, at 9:00 a.m., local time, for the following purposes:

Matters to be voted upon by holders of the Class A Stock

In addition to the foregoing purposes, such other business may be transacted as may properly come before the meeting and any adjournments 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 1, 2003 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

 
GRAPHIC

 
Charles B. Deull
Senior Vice President, General
Counsel and Secretary
August 15, 2003
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 2003   9
    Aggregated Option Exercises in Fiscal 2003 and 2003 Fiscal Year-End Option Values   10
    Pension Plan   10
    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 Class A Stock   18
    Nominees for Election by Holders of Common Stock   18
    Meetings of the Board of Directors and its Committees   21
    Director Compensation   24
    Certain Relationships   24
    Equity Compensation Plan Information   25
  •  Approval of an Amendment to the Scholastic Corporation Employee Stock Purchase Plan   25
  •  Approval of an Amendment to the Scholastic Corporation 1997 Outside Directors' Stock Option Plan   29
Independent Public Accountants   32
    Audit Committee's Report   32
Stockholder Proposals for 2004 Annual Meeting   34
Other Matters   34
Appendix A:   Amendment to the Scholastic Corporation Employee Stock Purchase Plan   A-1
Appendix B:   Amendment to the Scholastic Corporation 1997 Outside Directors' Stock Option Plan   B-1
Appendix C:   Audit Committee Charter   C-1

SCHOLASTIC CORPORATION
557 Broadway
New York, New York 10012

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
September 23, 2003

SOLICITATION OF PROXIES

General Information This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") 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 23, 2003, 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. If no instructions are specified, your shares will be voted: (i) FOR the election of the directors indicated; (ii) in the case of the Class A Stockholders, FOR the approval of proposals 2 and 3; and (iii) in the discretion of the proxy holders, if any other matter properly comes before the Annual Meeting. 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, 2003, are being mailed to stockholders on or about August 15, 2003. The cost of soliciting proxies will be borne by the Company. Solicitation other than by mail may be made personally or 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 1, 2003 (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 37,609,332 shares of Common Stock. 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 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 as shall equal at least one-fifth of the members of the Board, 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 as shall equal at least one-fifth of the members of the Board. 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 and the holders of the Common Stock will vote on the election of three members of the Board. All other proposals set forth in the notice attached to this proxy statement for consideration at the Annual Meeting will be voted on by the holders of the Class A Stock. 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 each proposal 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 1, 2003. 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
  
Name and Address
of Beneficial Owner
   Amount and Nature of
Beneficial Ownership
(1)
   Percent of
Class
   Amount and Nature of
Beneficial Ownership
(2)
   Percent of
Class
  
Richard Robinson
c/o Scholastic Corporation
557 Broadway
New York, NY 10012		   1,656,200   100 % 6,315,477 (3) 15.7 %
Barbara Robinson Buckland
c/o Scholastic Corporation
557 Broadway
New York, NY 10012		   648,620   39.2 % 2,610,588   6.8 %
Mary Sue Robinson Morrill
c/o Scholastic Corporation
557 Broadway
New York, NY 10012		   765,296   46.2 % 3,279,068 (4) 8.5 %
William W. Robinson
c/o Scholastic Corporation
557 Broadway
New York, NY 10012		   648,620   39.2 % 2,568,318 (5) 6.7 %
Trust under the Will of
Maurice R. Robinson
c/o Scholastic Corporation
557 Broadway
New York, NY 10012		   648,620   39.2 % 2,331,712   6.1 %
Trust under the Will of
Florence L. Robinson
c/o Scholastic Corporation
557 Broadway
New York, NY 10012		   116,676   7.0 % 466,676   1.2 %
Massachusetts Financial
Services Company
500 Boylston Street
Boston, MA 02116		   —   —   2,115,025 (6) 5.6 %
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202		   —   —   4,827,315 (7) 12.8 %

3

(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 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—3,392,683 shares (sole voting and investment power) and 2,922,794 shares (shared voting and investment power); Barbara Robinson Buckland—278,876 shares (sole voting and investment power) and 2,331,712 shares (shared voting and investment power); Mary Sue Robinson Morrill—0 shares (sole voting and investment power) and 3,279,068 shares (shared voting and investment power); William W. Robinson—225,146 shares (sole voting and investment power) and 2,343,172 shares (shared voting and investment power); Maurice R. Robinson Trust—2,331,712 shares (sole voting and investment power); and Florence L. Robinson Trust—466,676 shares (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; 1,020,002 shares of Common Stock under options exercisable by Mr. Robinson within 60 days; 20,959 shares of Common Stock with respect to which Mr. Robinson had voting rights at May 31, 2003 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 120,194 shares of Common Stock owned by the Richard Robinson and Helen Benham Charitable Fund. Does not include 261,132 shares of Common Stock owned by Helen V. Benham, the wife of Richard Robinson, as to which Mr. Robinson disclaims beneficial ownership, and 37,278 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 213,396 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 25,000 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. 5 to Schedule 13G dated January 21, 2003, as filed with the SEC, which states that, as of December 31, 2002, MFS had the sole dispositive and voting power with regard to 2,115,025 shares of Common Stock. (7) The information for T. Rowe Price Associates, Inc. is derived from a Schedule 13G dated August 8, 2003, as filed with the SEC, which states that, as of July 31, 2003, T. Rowe Price had the sole voting power with regard to 908,700 shares of Common Stock and the sole dispositive power with regard to 4,827,315 shares of Common Stock.

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, 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 his 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) reports 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, 2003, the Company believes its directors, executive officers and greater than ten percent beneficial owners timely filed all Section 16(a) reports required during such fiscal year.

5

Share Ownership of Management On August 1, 2003, 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
  
Name
   Amount and
Nature of
Beneficial
Ownership (1)
   Percent of
Class
   Amount and Nature
of Beneficial
Ownership (1)
   Percent of
Class
  
Directors                  
Richard Robinson   1,656,200 (2) 100 % 6,315,477 (3) 15.7 %
Rebeca M. Barrera   —   —   19,574 (4) *  
Ramon C. Cortines   —   —   36,574 (5) *  
John L. Davies   —   —   18,000 (4) *  
Charles T. Harris III   —   —   55,506 (6) *  
Andrew S. Hedden   —   —   2,000   *  
Mae C. Jemison   —   —   37,004 (5) *  
Linda B. Keene   —   —   24,000 (7) *  
Peter M. Mayer   —   —   40,000 (8) *  
John G. McDonald   —   —   37,004 (5) *  
Augustus K. Oliver   —   —   38,574 (5) *  
Richard M. Spaulding   —   —   266,491 (9) *  
Named Executive Officers                  
Richard Robinson   1,656,200 (2) 100 % 6,315,477 (3) 15.7 %
Barbara A. Marcus   —   —   461,982 (10) 1.2 %
Deborah A. Forte   —   —   370,342 (11) 1.0 %
Kevin J. McEnery   —   —   428,201 (12) 1.1 %
Charles B. Deull   —   —   394,660 (13) 1.0 %
All directors and executive officers as a group (24 persons including those named above)   1,656,200 (2) 100 % 9,254,471 (14) 21.6 %

                 

* 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; 1,020,002 shares of Common Stock under options exercisable by Mr. Robinson within 60 days; 20,959 shares of Common Stock with respect to which Mr. Robinson had voting rights at May 31, 2003 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 120,194 shares of Common Stock owned

6

by the Richard Robinson and Helen Benham Charitable Fund. Does not include 261,132 shares of Common Stock owned by Helen V. Benham, the wife of Richard Robinson, as to which Mr. Robinson disclaims beneficial ownership and 37,278 RSUs held under the MSPP. (4) Includes options under which such director may purchase 18,000 shares of Common Stock within 60 days. (5) Includes options under which such director may purchase 36,000 shares of Common Stock within 60 days. (6) Includes 8,106 shares of Common Stock held directly by Mr. Harris, 4,000 shares held through a limited partnership where Mr. Harris retains voting and dispositive power, 1,000 shares in a trust where Mr. Harris is the trustee, 400 shares in custodial accounts for his children and 42,000 shares under options exercisable by Mr. Harris within 60 days. (7) Includes options under which such director may purchase 23,500 shares of Common Stock within 60 days. (8) 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 24,000 shares under options exercisable by Mr. Mayer within 60 days. (9) Includes 198,700 shares of Common Stock held directly by Mr. Spaulding, 26,211 shares under options exercisable by him within 60 days and 41,580 shares for which Mr. Spaulding is custodian under separate custodial accounts for his children. Does not include 11,985 RSUs held under the MSPP. (10) Includes 26,317 shares of Common Stock held directly by Ms. Marcus, 433,874 shares under options exercisable by Ms. Marcus within 60 days and 1,791 shares with respect to which Ms. Marcus had voting rights at May 31, 2003 under the 401(k) Plan. Does not include 4,714 RSUs held under the MSPP. (11) Includes 9,152 shares of Common Stock held directly by Ms. Forte and 361,190 shares under options exercisable by Ms. Forte within 60 days. Does not include 9,494 RSUs held under the MSPP. (12) Includes 10,260 shares of Common Stock held directly by Mr. McEnery, 415,196 shares under options exercisable by Mr. McEnery within 60 days and 2,745 shares with respect to which Mr. McEnery had voting rights at May 31, 2003 under the 401(k) Plan. Does not include 7,889 RSUs held under the MSPP. (13) Includes 6,432 shares of Common Stock held directly by Mr. Deull and 388,228 shares under options exercisable by Mr. Deull within 60 days. Does not include 4,135 RSUs held under the MSPP. (14) Includes an aggregate of 3,589,584 shares of Common Stock under options exercisable by members of the group within 60 days, an aggregate of 30,548 shares of Common Stock with respect to which the group had voting rights at May 31, 2003 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 103,660 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 (collectively, the "Named Executives"), in respect of the fiscal years ended May 31, 2003, 2002 and 2001: Summary Compensation Table

 
   Annual Compensation
   Long-Term
Compensation
Awards

    
Name and Principal
Positions
   Fiscal
Year
   Salary
   Bonus (1)
   Other Annual
Compensation (2)
   Securities
Underlying
Options
   All Other
Compensation (3)
Richard Robinson   2003   $ 818,307   $ 0   $ 316,980   5,850   $ 6,050
Chairman of the Board,   2002   $ 781,731   $ 476,550   $ 150,457   0   $ 238,840
President and CEO   2001   $ 731,731   $ 562,500   $ 0   250,000   $ 238,727
Barbara A. Marcus   2003   $ 690,431   $ 0   $ 13,756   30,080   $ 6,050
EVP; President, Children's   2002   $ 663,407   $ 413,708   $ 12,318   25,000   $ 5,550
Book Publishing   2001   $ 629,224   $ 460,525   $ 23,630   50,000   $ 5,150
Deborah A. Forte   2003   $ 562,750   $ 0   $ 49,335   28,040   $ 6,050
EVP; President, Scholastic   2002   $ 541,816   $ 247,270   $ 16,149   30,000   $ 5,550
Entertainment   2001   $ 517,617   $ 301,875   $ 45,301   0   $ 5,150
Kevin J. McEnery   2003   $ 452,135   $ 0   $ 47,255   27,180   $ 5,857
EVP and Chief Financial   2002   $ 435,788   $ 177,618   $ 19,783   0   $ 5,746
Officer   2001   $ 406,731   $ 246,500   $ 26,262   100,000   $ 5,294
Charles B. Deull   2003   $ 416,346   $ 0   $ 33,164   22,040   $ 5,857
SVP, General Counsel and   2002   $ 406,250   $ 166,158   $ 10,165   25,000   $ 5,952
Secretary   2001   $ 336,346   $ 189,998   $ 9,064   70,000   $ 5,617
                               

(1) The amounts shown represent the full amount of the bonus actually awarded to the Named Executive, including amounts deferred at the executive's election and invested in RSUs under the MSPP. Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull elected to invest 100%, 5%, 30%, 40% and 30%, respectively, of his/her fiscal 2002 bonus and 100%, 10%, 20%, 30% and 20%, respectively, of his/her fiscal 2001 bonus in RSUs under the MSPP. In addition, on July 18, 2002, each of Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull 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 2,040 shares of Common Stock, which are reflected in this table for fiscal 2003, were issued to Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull, respectively. (2) Amounts shown represent the value of the discount received on the purchase of RSUs allocated to the Named Executives' accounts under the MSPP, based on the fair market value of the Common Stock underlying such RSUs on the date of allocation. Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull elected to invest 100%, 5%, 30%, 40% and 30%, respectively, of her/his fiscal 2002 bonus, in respect of which 18,896, 820, 2,941, 2,817 and 1,977 RSUs, respectively, were allocated to them in fiscal 2003. Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull elected to invest 100%, 10%, 20%, 30% and 20%, respectively, of her/his fiscal 2001 bonus, in respect of which 18,382, 1,505, 1,973, 2,417 and 1,242 RSUs, respectively, were allocated to them in fiscal 2002. Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull elected to invest 10%, 30%, 20% and

8

10%, respectively, of her/his fiscal 2000 bonus, in respect of which 2,388, 4,578, 2,654 and 916 RSUs, respectively, were allocated to them in fiscal 2001. (3) For Mr. Robinson, All Other Compensation for fiscal 2003, 2002 and 2001 includes $6,050, $5,550, and $5,150, respectively, in matching contributions made by the Company for Mr. Robinson's benefit under the 401(k) Plan and for fiscal 2002 and 2001 includes $233,290, and $233,577, respectively, representing the annual premium paid 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 did not pay any of the premium in respect of such policy in fiscal 2003. 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. Option Grants in Fiscal 2003 The following table sets forth information concerning individual stock option grants made to the Named Executives during the fiscal year ended May 31, 2003.

 
   Individual Grants (1)
   Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Option Term (2)
Name

   Number of
Securities
Underlying
Options Granted (#)
   % of Total Options
Granted to
Employees in
Fiscal Year
   Exercise or
Base Price
($/share)
   Expiration
Date
   5% ($)
   10% ($)
Richard Robinson   5,850   0.4 % $ 36.23   7/18/12   $ 133,291   $ 337,787
Barbara A. Marcus   30,080   2.2 % $ 36.23   7/18/12   $ 685,368   $ 1,736,858
Deborah A. Forte   28,040   2.0 % $ 36.23   7/18/12   $ 638,887   $ 1,619,066
Kevin J. McEnery   27,180   1.9 % $ 36.23   7/18/12   $ 619,262   $ 1,569,408
Charles B. Deull   22,040   1.6 % $ 36.23   7/18/12   $ 502,178   $ 1,272,618

                             

(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, except for 5,850, 5,080, 3,040, 2,180 and 2,040 options granted to each of Mr. Robinson, Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull, respectively, which vest 100% on the first anniversary from the date of grant and were received in lieu of 10% of the bonus he or she would have otherwise received under the Company's Executive Performance Incentive Plan for fiscal 2002. (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 is possible without appreciation in the price of the Common Stock during the applicable period.

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Aggregated Option Exercises in Fiscal 2003 and 2003 Fiscal Year-End Option Values The following table sets forth information concerning options exercised during the fiscal year ended May 31, 2003 by the Named Executives together with the number and value of the unexercised options held by such persons at May 31, 2003.

Name
   Shares
Acquired
On
Exercise
(#)
   Value
Realized
($)
   Number of
Securities Underlying
Unexercised Options
at FY-End (#)
Exercisable/Unexercisable
   Value of Unexercised
In-the-Money Options
at FY-End(1) ($)
Exercisable/Unexercisable
Richard Robinson   —   —   1,014,152/ 5,850   $ 7,819,047 / $0
Barbara A. Marcus   —   —   410,044 / 73,830   $ 3,639,092 / $0
Deborah A. Forte   —   —   351,900 / 50,540   $ 1,567,195 / $0
Kevin J. McEnery   —   —   406,766 / 27,180   $ 2,531,778 / $0
Charles B. Deull   —   —   388,228 / 48,750   $ 1,432,326 / $0
                 

(1) Based on the per share closing price of the Common Stock of $31.13 on May 31, 2003 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 up to the government-mandated maximum limit 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 up to the government-mandated maximum limit 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 up to the government-mandated maximum limit and for 20 years or more of service, 6.5% of the first $25,000 of annual base pay and 5% of the remainder up to the government-mandated maximum limit. 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 completion of five years of service. Vested retirement benefits are payable in the form of a lump-sum or annuity payment upon retirement, termination, death or disability. At August 1, 2003, Ms. Marcus, Ms. Forte, Mr. McEnery and Mr. Deull, had earned estimated annual benefit payments under the Retirement Plan of $56,577, $8,456, $19,752 and $8,199, respectively.

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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 such amendment and restatement. Mr. Robinson elected to continue participation under such prior benefit formula. This formula provides covered participants 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. On May 22, 2003, the Retirement Plan Committee of the Board, upon the recommendation of the Human Resources and Compensation Committee of the Board, approved an amendment to the Retirement Plan that provides for supplemental retirement benefits for Mr. Robinson, increasing his annual retirement benefit by $14,366. At August 1, 2003, Mr. Robinson had earned an estimated annual benefit payment using the prior benefit formula, including the supplemental benefit, of $88,559, payable upon retirement. 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, taking into account the 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:

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12

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Stock Price Performance Graph The graph below provides an indicator of cumulative total stockholder returns for the Common Stock for the period June 1, 1998 to May 31, 2003 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. The members of the peer group are: The McGraw Hill Companies, Reader's Digest Association, Inc., John Wiley and Sons, Inc. and Pearson plc. The graph assumes a $100 investment on June 1, 1998, 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.

GRAPHIC

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MATTERS SUBMITTED TO STOCKHOLDERS

PROPOSAL 1—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 so long as it does not consist of less than three nor more than fifteen directors. The Class A Stockholders have previously fixed the size of the Board at twelve directors. The Board 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 has no reason to believe that any nominees will be unable to serve. Recommendation The Board 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 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 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.

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Nominees for Election by Holders of Class A Stock

Name

   Principal Occupation or Employment

   Age
   Director
Since*

Richard Robinson
 
Chairman of the Board, President and Chief Executive Officer of the Company
 
66
 
1971

Rebeca M. Barrera
 
President, National Latino Children's Institute, Austin, TX
 
56
 
1995

Ramon C. Cortines
 
Education Consultant, Stanford, CA
 
71
 
1995

Charles T. Harris III
 
Managing General Partner, Harris Capital Partners, L.P., Darien, CT
 
51
 
1996

Andrew S. Hedden
 
Partner, Coudert Brothers LLP, New York, NY
 
62
 
1991

Mae C. Jemison
 
President and Founder, BioSentient Corporation, Houston, TX
 
46
 
1993

Peter Mayer
 
President, The Overlook Press/Peter Mayer Publishers, Inc., New York, NY
 
67
 
1999

Augustus K. Oliver
 
Managing Director, WaterView Advisors LLC, New York, NY
 
53
 
1995

Richard M. Spaulding
 
Executive Vice President of the Company
 
66
 
1974

Nominees for Election by Holders of Common Stock

Name

   Principal Occupation or Employment

   Age
   Director
Since*

John L. Davies
 
Private Investor, Washington D.C.
 
53
 
2000

Linda B. Keene
 
Principal, Waterford Marketing Group, Minneapolis, MN
 
51
 
1999

John G. McDonald
 
The IBJ Professor of Finance, Graduate School of Business, Stanford University, Stanford, CA
 
66
 
1985

* 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.

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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 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. In 2000, he served as the interim Superintendent of Schools for Los Angeles County. 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 is the Managing General Partner of Harris Capital Partners, L.P. He was a managing director with the investment firm of Goldman, Sachs & Co. from 1999 until his retirement in 2002 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 1996-2003. She served as a National Aeronautics and Space Administration (NASA) astronaut

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from 1987 to 1993 and was a member of the Space Shuttle Endeavour Flight in September 1992. She is also a director and member of the audit committees of Kimberly-Clark Corporation and Valspar Corporation. 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 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 private investor. In addition, he serves as a special advisor to General Atlantic Partners, a private equity investment firm. Mr. Davies retired from AOL in 2002, which he had joined in 1993 as Senior Vice President. In 1994, he founded AOL International, where he served as President until becoming Senior Advisor in 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. He is also a director and member of the compensation committee of Tickets.com. 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,

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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 and a member of the nominating and governance committee 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 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 Five meetings of the Board of Directors were held during the 2003 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. The following are the current members and functions of the standing committees of the Board of Directors. Executive Committee. Richard Robinson (Chairperson), 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. No meetings of the Executive Committee were held during the fiscal year ended May 31, 2003. 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 2003, in order to fulfill its

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responsibilities to the stockholders and the investment community, this committee reviewed the corporate accounting and financial reporting practices of the Company, including its disclosure controls, and the quality and integrity of the financial reports of the Company, including a review of the Company's Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. This committee also appointed the accounting firm to act as independent auditors for the fiscal year ended May 31, 2003. During fiscal 2003, the committee met with both the internal and the independent auditors, with and without the presence of company management, 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 with the independent auditors (including the comments or recommendations arising therefrom). In addition, this committee reviewed the Company's financial accounting policies and decisions, including reports thereon from the independent auditors, and reported thereon to the Board prior to the issuance of the annual financial statements. Furthermore, this committee reviewed any non-audit services proposed to be performed by the independent auditors and considered the possible effects of such services on the auditors' independence. The Audit Committee held nine meetings during the fiscal year ended May 31, 2003. Four of the meetings were held for the purpose of reviewing and discussing the Company's Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. 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, 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. This committee also reviews investment performance under the Plans. The Retirement Plan Committee held three meetings during the fiscal year ended May 31, 2003. 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.

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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, 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 five meetings during the fiscal year ended May 31, 2003. 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 candidates for election as directors, and recommends any changes it believes desirable in the size and composition of the Board as well as Board committee structure and membership. The Nominating Committee held two meetings during the fiscal year ended May 31, 2003. The Nominating Committee would be pleased to receive suggestions from stockholders about persons it should consider recommending as possible members of the Board. 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, 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 five meetings during the fiscal year ended May 31, 2003. Strategic Planning Committee. Mae C. Jemison (Chairperson), Rebeca M. Barrera, Ramon C. Cortines, Peter M. Mayer and Richard M. Spaulding are members of the Strategic Planning Committee. This committee advises the Company's management on achieving and implementing its strategic plan and reports its findings to the Board. This committee held one meeting during the fiscal year ended May 31, 2003.

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Director Compensation For the fiscal year ended May 31, 2003, each non-employee director of the Company (an "Outside Director") was paid a cash annual retainer of $25,000 for his or her services as a director, a fee of $5,000 if he or she was the chairperson of a standing Board Committee, except in the case of the chairperson of the Audit Committee, who received a $10,000 fee, 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. Under the terms of the Scholastic Corporation 1997 Outside Directors' Stock Option Plan, as amended (the "1997 Directors' Plan"), an option to purchase 6,000 shares of Common Stock at a purchase price per share equal to the fair market value of a share of Common Stock on the date of grant is automatically granted to each Outside Director on the date of the annual meeting of stockholders. As a result, in fiscal 2003 each Outside Director (other than Andrew S. Hedden, who declined his award) was granted options to purchase 6,000 shares of Common Stock on September 24, 2002, at an exercise price of $43.54 per share. The options vest one year from the date of grant and expire on September 24, 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, 2003, the Company recorded $21,731 in accrued interest expense under this plan. 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.

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Equity Compensation Plan Information The following table presents information regarding the Company's equity compensation plans at May 31, 2003:

Plan Category
   Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
   Weighted average
exercise price of
outstanding options,
warrants and rights
(b)
   Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
  
Equity Compensation plans approved by security holders   6,852,258   $ 28.65   2,838,350 (1)
Equity Compensation plans not approved by security holders   —   $ —   —  
   
 
 
 
Total   6,852,258   $ 28.65   2,838,350 (1)
   
 
 
 

(1) Includes 75,939 shares of Common Stock under the ESPP; 299,671 shares of Common Stock under the MSPP; and 2,411,250 shares of Common Stock under the 2001 Plan, which may be issued pursuant to the exercise of stock options or as restricted stock or other stock-based awards. PROPOSAL 2—APPROVAL OF AN AMENDMENT TO THE SCHOLASTIC
CORPORATION EMPLOYEE STOCK PURCHASE PLAN As of June 1, 1999, the Company began offering the opportunity to participate in the ESPP to its United States-based employees. The ESPP was approved by written consent of the Class A Stockholders on November 30, 1998. The Board believes that the ESPP helps the Company attract and retain employees by providing participating employees with equity opportunities intended to further align their interests with the Company and its stockholders. The purpose of the ESPP, which is designed to qualify under Section 423 of the Code, is to encourage broad-based employee stock ownership. The number of employees participating in the ESPP has increased steadily since inception and, as of the date hereof, approximately 1,300 employees currently participate and a total of 324,061 shares have been issued under the ESPP, with 75,939 shares remaining available for issuance. Pursuant to the ESPP, employees of the Company and its designated subsidiaries may periodically purchase shares of Common Stock at a discount through payroll deductions. On July 15, 2003, the Board unanimously adopted an amendment to the ESPP to provide for an increase in the number of shares of Common Stock available for issuance under the ESPP by 500,000 shares, in addition to the 75,939 shares currently remaining available. Such increase is necessary in order to provide for the issuance of shares consistent with current and anticipated participant purchase elections. A copy of the proposed amendment to the ESPP is attached hereto as Appendix A.

25

Summary of the ESPP Eligibility. To be eligible to participate in the ESPP, an employee must (i) be employed by the Company or certain of its subsidiaries for at least 20 hours per week, (ii) not own 5% or more of the combined voting power or value of the Company's capital stock or that of any related company, and (iii) have been employed for at least six months prior to the first day of an offering period. Outside Directors are not eligible to participate in the ESPP. As of July 31, 2003, approximately 6,900 employees were eligible to participate in the ESPP, including 13 executive officers. Offering Periods. The ESPP is divided into three-month offering periods that begin on June 1, September 1, December 1 and March 1 of each year and end, respectively, on the following August 31, November 30, February 28 and May 31. During each offering period, participating employees accumulate funds in an account used to buy Common Stock through payroll deductions. At the end of each offering period, the purchase price is determined and the participating employee's accumulated funds are used to purchase shares of Common Stock. Limitations on the Number of Shares Purchased. Payroll deductions accrue at a rate of not less than 1% and not more than 10% of the employee's base pay during each payroll period in the offering period. No employee may purchase more than $25,000 worth of Common Stock (based on the fair market value of the Common Stock on the first day of an offering period, which under the terms of the ESPP is the closing price of the Common Stock on the NASDAQ National Market System on that date) during any calendar year under the ESPP or any other employee stock purchase plan intended to meet the requirements of Section 423 of the Code. Purchase Price. The purchase price per share of Common Stock is 85% of the lesser of (i) the fair market value of the Common Stock on the first day of an offering period and (ii) the fair market value of the Common Stock on the last day of an offering period. On August 1, 2003, the closing price for the Common Stock was $28.70 per share. Shares Available for Grant. Under the ESPP, 200,000 shares of Common Stock (400,000 shares as adjusted following the 100% stock dividend in the form of a 2-for-1 stock split paid on January 16, 2001 (the "Stock Split")) were originally reserved for issuance. The maximum number of shares of Common Stock that will be available for further issuance under the ESPP, if this Proposal is approved by the Class A Stockholders, will be 575,939 shares, consisting of 500,000 additional shares to be authorized by the proposed amendment and 75,939 shares previously authorized and remaining available for issuance. Shares reserved for issuance under the ESPP are subject to adjustment for stock dividends, stock splits and certain other events as provided in the ESPP. The Common Stock issued under the ESPP will be from the Company's authorized but unissued shares of the Common Stock or from treasury stock.

26

Effect of Termination. Employees have no right to acquire Common Stock under the ESPP in the event of termination of employment for any reason prior to the last business day of an offering period. Upon termination of employment, the Company will pay the cash balance in the employee's account to the employee or to his or her estate. No interest will be paid on such amounts. Administration. The ESPP is administered by the HRCC, which is authorized to interpret the ESPP and to make such rules and regulations as it deems necessary in connection therewith, so long as any such interpretation or other action taken by the HRCC does not conflict with the requirements of Section 423 of the Code. Amendment of the ESPP. The Board or the HRCC has the power to amend, suspend or terminate the ESPP, except that neither the Board nor the HRCC may amend the ESPP without stockholder approval if such approval is required by Section 423 of the Code. Federal Income Tax Consequences. The following discussion summarizes the material federal income tax consequences to the Company and the participating employees in connection with the ESPP under existing applicable provisions of the Code and the accompanying regulations. The discussion is general in nature and does not address issues relating to income tax circumstances of any individual employee. The discussion is based on federal income tax laws in effect on the date of this Proxy Statement and is, therefore, subject to possible future changes in the law. The discussion does not address the consequences of state, estate, inheritance, local or foreign tax laws. Under the Code, the Company is deemed to grant employees participating in the ESPP an "option" on the first day of each three-month offering period to purchase as many shares of Common Stock as the employee will be able to purchase with the amounts expected to be credited to his or her account during the offering period. On the last day of the offering period, the purchase price is determined and the employee is deemed to have exercised the "option" and purchased that number of shares of Common Stock that his or her accumulated payroll deductions will purchase at the purchase price. Under Section 423 of the Code, no taxable income is recognized by participants in the ESPP at the beginning or end of the offering period. The required holding period for favorable tax treatment under Section 423 of the Code upon disposition of any Common Stock acquired under the ESPP is the later of: (i) two years after the "option" is granted (the first day of an offering period) or (ii) one year after the "option" is exercised and the Common Stock is purchased (the last day of an offering period). Thus, the Common Stock generally must be held for at least one year and nine months after it is purchased to gain favorable tax treatment. When any Common Stock purchased under the ESPP is disposed of after this period, the employee realizes ordinary income to the extent of the lesser of: (a) the amount by which the fair market value of the Common Stock at the time the "option"

27

was granted exceeded the "option price" and (b) the amount by which the fair market value of the Common Stock at the time of the disposition exceeded the "option price." The "option price" is equal to 85% of the lesser of: (1) the fair market value of the Common Stock on the first day of the offering period and (2) the fair market value of the Common Stock on the last day of the offering period. Any further gain is taxed at long-term capital gain rates. If the sale price is less than the "option price," there is no ordinary income and the employee recognizes a long-term capital loss. When an employee sells Common Stock purchased under the ESPP before the expiration of the required holding period, the employee generally recognizes ordinary income to the extent of the difference between the price actually paid for the Common Stock and the fair market value of the Common Stock at the date option was exercised (the last day of an offering period), regardless of the price at which the Common Stock is sold. If the sale price is less than the fair market value of the Common Stock at the date of exercise, then the employee will also have a capital loss equal to such difference. Even though an employee who meets the requisite holding period must treat part of his or her gain on a disposition of the Common Stock as ordinary income, the Company may not take an income tax deduction for such amount. However, if an employee disposes of Common Stock before the end of the requisite holding period, the amount of income that the employee must report as ordinary income qualifies as an income tax deduction for the Company during the year of such disposition. Recommendation The Board recommends that the holders of the Class A Stock vote FOR the approval of Proposal 2. Assuming the presence of a quorum, the affirmative vote of a majority of the votes cast by the holders of the Class A Stock present and entitled to vote thereon at the Annual Meeting is required to approve Proposal 2.

28

PROPOSAL 3—APPROVAL OF AN AMENDMENT TO THE SCHOLASTIC
CORPORATION 1997 OUTSIDE DIRECTORS' STOCK OPTION PLAN The 1997 Directors' Plan, which was initially approved by the holders of the Class A Stock on September 16, 1997, provides for the automatic grant of options to purchase shares of Common Stock to Outside Directors on an annual basis. On September 20, 2001, the Board approved an amendment to the 1997 Directors' Plan to increase the number of options granted annually to 6,000 from 3,000 following the Stock Split. Such amendment did not require the approval of the Class A Stockholders. On July 15, 2003, the Board, upon the recommendation of the HRCC, unanimously approved an additional amendment to the 1997 Directors' Plan, subject to approval by the Class A Stockholders at the Annual Meeting. The proposed amendment (i) increases the number of shares of Common Stock that may be issued upon the exercise of options granted under the 1997 Directors Plan by 270,000 shares and (ii) clarifies that the HRCC has the authority to make appropriate equitable adjustments under the Plan in the event that certain changes in the capitalization of the Company occur. A copy of the proposed amendment is attached hereto as Appendix B. The Company currently has in effect the Scholastic Corporation 1992 Outside Directors' Stock Option Plan, which provided for option grants to Outside Directors upon their joining the Board, and the 1997 Directors' Plan. The 1997 Directors' Plan replaced the 1992 Directors' Stock Option Plan, under which no further options may be granted. As of the date of this proxy statement, 24,000 shares of Common Stock remained available for issuance upon the exercise of options to be granted under the 1997 Directors' Plan. The purpose of the 1997 Directors' Plan is to use periodic stock option grants to attract and retain the services of experienced and knowledgeable Outside Directors, while further aligning their interests with the Company and its stockholders. Under the terms of the 1997 Directors' Plan, each Outside Director is automatically granted, on the date of the annual meeting of stockholders in each year, a stock option to purchase 6,000 shares of Common Stock at a purchase price per share equal to the fair market value of a share of Common Stock, determined under the terms of the plan as the average of the high and low price of the Common Stock on such date. Under the 1997 Directors' Plan, 180,000 shares of Common Stock (360,000 shares as adjusted following the Stock Split) were originally reserved for issuance upon the exercise of options to be granted to Outside Directors, of which 24,000 shares of Common Stock remain available for issuance. The proposed amendment provides for an additional 270,000 shares to be available for issuance, and therefore the maximum number of shares of Common Stock that will be available for issuance under the 1997 Directors' Plan as proposed to be amended will be 294,000 shares. Currently, there are nine directors participating in the 1997 Directors' Plan. Accordingly, the current Outside Directors as a group would receive annual automatic grants of options to purchase an aggregate of 54,000

29

shares of Common Stock under the 1997 Directors' Plan. During the last fiscal year, a total of 54,000 stock options were granted to nine Outside Directors under the 1997 Directors' Plan at an exercise price of $43.54 per share. The 1997 Directors' Plan provides for certain adjustments to be made with respect to outstanding options and shares remaining available for issuance in the event that changes in the capitalization of the Company occur as a result of certain events, such as a stock dividend, stock split, combination of shares, recapitalization, merger or similar corporate event. The proposed amendment clarifies that the HRCC will have the authority to determine the appropriate adjustments to be made upon the occurrence of such events. In addition, the proposed amendment clarifies that such adjustments include appropriate adjustments to the number and type of shares or other securities to be subject to the automatic annual option grant to participating Outside Directors as a result of the occurrence of any such event, as well as to the number or type of shares or other securities to be issued in respect of outstanding options and reserved for future option grants. Except as described below, each option granted to an Outside Director under the 1997 Directors' Plan will expire on the tenth anniversary of the date of grant and may not be exercised during the twelve-month period immediately following the date of grant. In the event an Outside Director ceases to be a director other than on account of death or disability, options may be exercised within six months thereafter, but only to the extent exercisable at the date he or she ceased to be a director. In the event an Outside Director ceases to be a director by reason of disability, options may be exercised in full within twelve months thereafter, regardless of whether or not the initial twelve-month vesting period had been met at the date he or she ceased to be a director. In the event an Outside Director dies while serving as a director or within three months after cessation of service as a director (twelve months if the cessation of service was caused by disability), options may be exercised within twelve months thereafter to the extent otherwise exercisable at the date of death, except that, in the case of the death of an Outside Director while serving as a director, options will be exercisable in full regardless of whether or not the initial twelve-month vesting period had been met at the date of death. Notwithstanding the foregoing, in no event may an option granted under the 1997 Directors' Plan be exercised within six months of its date of grant or after its original ten-year expiration date. The 1997 Directors' Plan provides that options may be exercised at any time and from time to time during the period that they are exercisable and may not be transferred by the Outside Director other than by will or the laws of descent and distribution. An option granted under the 1997 Directors' Plan may be exercised by paying the exercise price in cash or Common Stock or any combination of cash and Common Stock having a value equal to the exercise price.

30

The 1997 Directors' Plan is administered by the Board. The administration of the 1997 Directors' Plan includes the authority to adopt and revise administrative rules, guidelines and practices governing the plan, to interpret the terms thereof and of any option granted thereunder and to settle any claims or disputes arising thereunder. Since the grant of options and the terms thereof are non-discretionary under the 1997 Directors' Plan, the Board will have no discretion as to the selection of individuals to receive options, the number of shares to be covered by any option or the pricing or timing thereof. There is no immediate federal income tax effect on the grant of a stock option under the 1997 Directors' Plan; the Outside Director does not recognize taxable income, and the Company does not receive a tax deduction. When stock options are exercised, the Outside Director will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the Common Stock on the date of exercise, and the Company is entitled to a tax deduction in the same amount. When shares of Common Stock received upon exercise of a stock option are sold, any gain or loss will be treated by the Outside Director as either long- or short-term capital gain or loss, depending on how long the shares have been held. Recommendation The Board recommends that the holders of the Class A Stock vote FOR the approval of Proposal 3. Assuming the presence of a quorum, the affirmative vote of a majority of the votes cast by the holders of the Class A Stock present and entitled to vote thereon at the Annual Meeting is required to approve Proposal 3.

31

INDEPENDENT PUBLIC ACCOUNTANTS The Audit Committee has appointed Ernst & Young LLP (E&Y) to be the independent auditors of the Company for the fiscal year ending May 31, 2004. A representative of E&Y 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 aggregate fees billed by E&Y for professional services to the Company were $2,142,154 for fiscal 2003 and $2,116,000 for fiscal 2002. The total fees for services provided by E&Y to the Company during the fiscal years ended May 31, 2003 and May 31, 2002 are summarized in the table below:

 
   Fiscal 2003
   Fiscal 2002
Audit Fees   $ 1,578,300   $ 1,455,867
Audit-Related Fees   $ 187,929   $ 118,938
Tax Fees   $ 375,925   $ 430,500
All Other Fees   $ —   $ 110,695
   
 
TOTAL FEES PAID   $ 2,142,154   $ 2,116,000
   
 

Audit Fees include fees for auditing the Company's consolidated financial statements for the fiscal year and reviewing the Company's Quarterly Reports on Form 10-Q. Audit-Related Fees include fees for services such as benefit plan audits, business acquisitions, accounting consultations and SEC Registration Statements. Tax Fees are for the preparation of tax returns for certain international operations and consulting on tax planning opportunities and entity restructuring. In fiscal 2003, in accordance with Section 10A(i) of the Exchange Act, the Audit Committee pre-approved the tax services provided by E&Y, as permitted by Section 10A. All Other Fees in fiscal 2002 primarily related to the provision of cost analysis services in connection with the construction and improvement of the Company's headquarters facilities in New York City. Audit Committee's Report The Audit Committee of the Board of Directors is comprised of three directors. For fiscal 2003, the Board determined that each Committee member was "independent" as required under the Exchange Act and National Association of Securities Dealers listing standards. During fiscal 2003, 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 is included as Appendix C to this Proxy Statement. Under its charter, which was revised and adopted on September 24, 2002, Company management has the primary responsibility for the preparation, presentation and integrity of the

32

Company's financial statements and the financial reporting process and disclosure and internal controls. The independent auditors, E&Y, are responsible for auditing and expressing an opinion on the conformity of the Company's audited financial statements with generally accepted accounting principles. In fulfilling its oversight responsibilities during fiscal 2003, 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 examinations, their evaluations of the Company's disclosure and 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 consolidated financial statements of the Company for the fiscal year ended May 31, 2003, including a discussion of critical accounting policies, the quality and integrity, 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 the Committee pre-approved all non-audit services provided to the Company by E&Y, considering such non-audit services to be compatible with maintaining the auditors' independence. The Audit Committee has received from the independent auditors the written disclosures and letter required by the Independence Standards Board No. 1 (Independence Discussion with Audit Committee). Based on its review and discussions with management and the independent auditors, the Audit Committee recommended to the Board (and the Board has approved) the inclusion of the audited financial statements in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2003 for filing with the SEC.

    Audit Committee
     
    Augustus K. Oliver, Chairperson
John L. Davies
Linda B. Keene

33

STOCKHOLDER PROPOSALS FOR 2004 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 2004 (the "2004 Annual Meeting") must ensure that such proposals are received by the Secretary of the Company not later than April 28, 2004 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 2004 Annual Meeting, but not included in the Company's proxy materials, such proposal must be received no later than July 9, 2004. OTHER MATTERS The Board is not aware of any other matters to come before the Annual Meeting. If any other matter should properly come before the Annual 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
     
    GRAPHIC

Charles B. Deull
Senior Vice President, General Counsel and Secretary

34

Appendix A AMENDMENT NUMBER TWO
TO THE
AMENDED AND RESTATED
SCHOLASTIC CORPORATION EMPLOYEE STOCK PURCHASE PLAN

        1.     Paragraph (a) of Section 3 of the Scholastic Corporation Employee Stock Purchase Plan (Amended and Restated as of March 1, 2000) (as amended, the "Plan") is amended by substituting: "900,000" for "200,000" where it appears therein. Subject to the foregoing, the Plan remains in full force and effect in accordance with the terms thereof. The foregoing amendment was duly approved by resolution of the Board of Directors of Scholastic Corporation adopted at its meeting held on July 15, 2003.

A-1

Appendix B AMENDMENT NO. 2
TO THE
SCHOLASTIC CORPORATION 1997 OUTSIDE DIRECTORS'
STOCK OPTION PLAN 1. Section 7 of the Scholastic Corporation 1997 Outside Directors' Stock Option Plan (Amended and Restated as of May 25, 1999) (as amended, the "Plan") is amended by substituting: "630,000" for "180,000" where it appears therein; and 2. The following shall replace Section 8 in its entirety:

B-1

Appendix C CHARTER OF THE
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF SCHOLASTIC CORPORATION I. Statement of Policy The Audit Committee's primary objective is to provide assistance to the Board of Directors of Scholastic Corporation (the "Company") in fulfilling its oversight responsibilities with respect to (a) the quality and integrity of the financial statements and other financial information provided to the stockholders of the Company, the financial and investment communities and the public, (b) the Company's compliance with legal and regulatory requirements with regard to the Company's financial statements (c) the independent auditors' qualifications and independence, and (d) the performance of the Company's internal audit function.

II.    Organization

        The Audit Committee shall be comprised of no fewer than three (3) directors. Each member of the Audit Committee shall satisfy the independence, financial literacy and experience requirements of Section 10A of the Securities Exchange Act of 1934 ("the Act") and the listing standards of The Nasdaq Stock Market, Inc. ("Nasdaq") and any other applicable regulatory requirements. The Audit Committee shall contain at least one member who is a "financial expert" as such is defined in the Act. The members of the Audit Committee shall be appointed by the Board. The Audit Committee may form and delegate authority to subcommittees when appropriate.

III.  Meetings

        The Audit Committee shall meet at least four times per year on a quarterly basis, or more frequently as circumstances require. As part of its job to foster open communication, the Audit Committee shall meet with management, the chief internal auditor and the independent auditors in separate executive sessions to discuss any matters that the Audit Committee or each of these groups believe should be discussed privately.

IV.    Authority and Responsibilities

        A primary responsibility of the Audit Committee is to oversee the Company's corporate accounting and financial reporting practices and report its activities to the Company's Board of Directors. In carrying out its responsibilities, the Audit Committee and its policies and

C-1


procedures should remain flexible, in order to best react to changing conditions and circumstances. The Audit Committee shall perform the following functions: With respect to the Independent Auditors

C-2

C-3

C-4

C-5

C-6

SCHOLASTIC CORPORATION

Proxy for Annual Meeting of Stockholders, September 23, 2003

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 23, 2003 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 may instruct the plan Trustee how to vote all full and fractional shares attributable to your account invested in the Scholastic Corporation Stock Fund on August 1, 2003 by completing the reverse side of this card and returning it by September 10, 2003.

THIS PROXY IS CONTINUED ON THE REVERSE SIDE

PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY TODAY

(Continued and to be marked,dated and signed, on the other side)


Address Change/Comments (Mark the corresponding box on the reverse side)

FOLD AND DETACH HERE

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.   Please
Mark Here
for Address
Change or
Comments
 SEE REVERSE SIDE		 o
1. Proposal to elect 01 John L. Davies,
02 Linda B. Keene and 03 John G. McDonald
as directors:		 FOR
 o		 WITHHOLD
 o		   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.

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.

 
 
 
By checking the box to the right, I consent to future delivery of annual reports, proxy statements, prospectuses and other materials and shareholder communications electronically via the Internet at a webpage which will be disclosed to me. I understand that the Company may no longer distribute printed materials to me for any future shareholder meeting until such consent is revoked. I understand that I may revoke my consent at any time by contacting the Company's transfer agent, Mellon Investor Services LLC, Ridgefield Park, NJ and that costs normally associated with electronic delivery, such as usage and telephone charges as well as any costs I may incur in printing documents, will be my responsibility.
o

Signature
 
 
Signature
 
 
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 11PM Eastern Time
the 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
 
 
Telephone
1-800-435-6710
 
 
Mail
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		 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		 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 23, 2003

(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 23, 2003, 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 23, 2003

In the absence of specific directions noted below, it is understood that the undersigned's shares of Class A Stock will be voted FOR THE ELECTION OF DIRECTORS AND PROPOSALS 2 AND 3.

The undersigned hereby votes the above number of shares of Class A Stock of Scholastic Corporation as follows:


    FOR o   AGAINST o    

    FOR o   AGAINST o    

    FOR o   AGAINST o    

Signature(s):
 
 
Date:
 
 
   

 
Shareholder name (Please print)

2




                                                                   EXHIBIT 99.1






- ------------------------------------------------------------------------------


                             SCHOLASTIC CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN
              (AMENDED AND RESTATED EFFECTIVE AS OF MARCH 1, 2000)

- ------------------------------------------------------------------------------








                             SCHOLASTIC CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN
              (AMENDED AND RESTATED EFFECTIVE AS OF MARCH 1, 2000)



                                TABLE OF CONTENTS






                                                                          

1.       Purpose................................................................ 1

2.       Definitions............................................................ 1

3.       Shares Reserved for Plan............................................... 4

4.       Administration of the Plan............................................. 5

5.       Participation in the Plan.............................................. 6

6.       Purchase Price......................................................... 6

7.       Method of Payment...................................................... 6

8.       Employee's Election to Purchase.  Grants of Options.................... 6

9.       Exercise of Option..................................................... 7

10.      Delivery of Common Stock. ............................................. 8

11.      Limitations of Number of Shares Which May Be Purchased................. 8

12.      Stockholder Rights..................................................... 9

13.      Rights to Purchase Shares Not Transferable............................. 9

14.      Cancellation of Election to Purchase...................................10

15.      Leave of Absence or Layoff.............................................10

16.      Effect of Failure to Make Payments When Due. ..........................10

17.      Retirement.............................................................11

18.      Death..................................................................11




19.      Termination of Employment Other Than for Retirement or Death...........11

20.      Dividends and Interest.................................................11

21.      Application of Funds...................................................12

22.      Amendment and Termination..............................................12

23.      Reports................................................................12

24.      Effective Date; Governmental Approvals or Consents.....................12

25.      Notices................................................................12

26.      Regulations and Other Approvals; Governing Law.........................13

27.      Withholding of Taxes...................................................13

28.      Legend.................................................................14

29.      No Employment Rights...................................................14

30.      Severability of Provisions.............................................14

31.      Construction...........................................................14







                             SCHOLASTIC CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN
              (AMENDED AND RESTATED EFFECTIVE AS OF MARCH 1, 2000)

1.      PURPOSE.

         The purpose of the Scholastic Corporation 1998 Employee Stock Purchase
Plan (the "Plan") is to encourage and enable eligible employees of Scholastic
Corporation (the "Company") and certain affiliated companies to acquire
proprietary interests in the Company through the ownership of Common Stock of
the Company. The Company believes that employees who participate in the Plan
will have a closer identification with the Company by virtue of their ability as
stockholders to participate in the Company's growth and earnings. It is the
intention of the Company to have the Plan qualify as an "employee stock purchase
plan" under Section 423 of the Code. Accordingly, the provisions of the Plan
shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.

         The Plan was originally approved by the holders of the Company's Class
A Stock pursuant to written consent dated November 30, 1998 and adopted by the
Board of Directors the Company effective as of January 1, 1999 and was amended
and restated by action of the Board of Directors of the Company effective as of
March 1, 2000.

2.      DEFINITIONS.

         The following words or terms have the following meanings:

         (a) "AGENT" shall mean the agent, broker or other administrator,
including without limitation, employees of the Employer, appointed by the
Committee pursuant to Section 4(b) hereof.

         (b) "ANNUAL PAY" shall mean an amount equal to the sum of (i) the
annual basic rate of pay of an Eligible Employee as determined from the payroll
records of the Company, Designated Subsidiary or Designated Parent and (ii) all
other cash compensation paid to an Eligible Employee during a Purchase Period by
the Company, Designated Subsidiary or Designated Parent, including overtime,
bonuses, and 401(k) salary deferral contributions and amounts excludable under
Section 125 of the Code under certain employee benefit plans, but does not
include any contributions by the Company, Designated Parent or Designated
Subsidiary, to, or benefits paid under, the Plan or any other pension,
profit-sharing, fringe benefit, group insurance or other employee welfare plan
or any deferred compensation arrangement. Notwithstanding the foregoing, the
Committee, in its sole discretion, may adjust the types of



                                       1



compensation constituting Annual Pay; provided that any such determination shall
be applied on a uniform and consistent basis to all Eligible Employees.

         (c) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company or the Executive Committee of such Board of Directors.

         (d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         (e) "COMMITTEE" shall mean the Human Resources and Compensation
Committee of the Board of Directors of the Company or any successor committee,
or such other committee of the Board of Directors of the Company appoints to
administer the Plan. To the extent that no Committee exists which has the
authority to administer the Plan, the functions of the Committee shall be
exercised by the Board of Directors.

         (f) "COMPANY" shall mean Scholastic Corporation, a corporation
organized under the laws of Delaware (or any successor corporation).

         (g) "DESIGNATED PARENT" shall mean any Parent of the Company which is
specifically designated as eligible to participate in the Plan by the Committee
from time to time in its sole discretion.

         (h) "DESIGNATED SUBSIDIARIES" shall mean each Subsidiary of the Company
on the effective date of the Plan and future Subsidiaries which are not
specifically excluded from participation by the Committee from time to time in
its sole discretion. Notwithstanding the foregoing, the term "Designated
Subsidiaries" shall not include Subsidiaries located in Foreign Jurisdictions,
unless the Committee specifically designates such Subsidiary as a Designated
Subsidiary.

                  (i) "ELIGIBLE EMPLOYEE" shall mean any person (i) whose
customary employment is for more than twenty (20) hours per week for an
Employer; (ii) whose customary employment is for more than five (5) months per
year; and (iii) who has completed the Eligibility Period. Notwithstanding the
foregoing, the Committee may exclude the employees of any specified Designated
Parent or Designated Subsidiary from any offering under the Plan.

         (j) "ELIGIBILITY PERIOD" shall mean, with respect to any employee, the
ninety (90) day period commencing on the first day of each fiscal quarter of the
Company after the employee has completed six (6) continuous months of service
with the Employer. Notwithstanding the foregoing, the Committee may, in its sole
discretion, increase or decrease the length of the Eligibility Period with
respect to the employees of the Company, and any and all Designated Parent and
Designated Subsidiaries; provided that such period shall in no event exceed two
(2) years.

         (k) "EMPLOYER" shall mean, with respect to any employee, the Company or
Designated Subsidiary or Designated Parent by which the employee is employed.


                                       2


         (l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

         (m) "EXERCISE DATE" shall mean the last business day of each Purchase
Period in which payroll deductions are made under the Plan.

         (n) "FOREIGN JURISDICTION" shall mean any jurisdiction outside of the
United States including, without limitation, countries, states, provinces, and
localities.

         (o) "MARKET PRICE" for purposes of this Plan, unless otherwise required
by any applicable provision of the Code or any regulations issued thereunder, as
of any date, the last sales price reported for the Common Stock on the
applicable date: (i) as reported on the principal national securities exchange
on which it is then traded or the Nasdaq Stock Market, Inc. or (ii) if not
traded on any such national securities exchange or the Nasdaq Stock Market, Inc.
as quoted on an automated quotation system sponsored by the National Association
of Securities Dealers, Inc. If the Common Stock is not readily tradable on a
national securities exchange, the Nasdaq Stock Market, Inc. or any automated
quotation system sponsored by the National Association of Securities Dealers,
Inc., its Market Value shall be set in good faith by the Committee.

         (p) "OFFERING DATE" shall mean the first day of each Purchase Period.

         (q) "OPTION" shall mean the right or rights granted to Eligible
Employees to purchase the Company's Common Stock under an offering made under
the Plan and pursuant to such Eligible Employees' elections to purchase.

         (r) "PARENT" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time of
granting an Option, each of the corporations other than the employer corporation
owns stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

         (s) "PARTICIPANT" shall mean an Eligible Employee who participates in
the Plan.

         (t) "PLAN" shall mean the Scholastic Corporation 1998 Employee Stock
Purchase Plan, as amended from time to time.

         (u) "PURCHASE PERIOD" shall mean the period beginning on the first day
of each fiscal quarter of the Company and ending on the last day of each fiscal
quarter of the Company, or such other period designated by the Committee, in its
sole discretion, during which installment payments for Common Stock purchased
under the Plan shall be made.

         (v) "RULE 16B-3" shall mean Rule 16b-3 promulgated under Section 16(b)
of the Exchange Act as then in effect or any successor provisions.


                                       3



         (w) "SHARES", "STOCK' or "COMMON STOCK' shall mean shares of the
Company's common stock, par value $.01 per share.

         (x) "SUBSIDIARY" shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company at the time of
granting an Option, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

         (y) "SUBSCRIPTION PERIOD" shall mean the first day of the preceding
Purchase Period through the 20th day of the last month of the preceding the
Purchase Period, or such other period of time designated by the Committee, in
its sole discretion, in any offer of Common Stock under the Plan beginning on
the first day Eligible Employees may elect to purchase Shares and ending on the
last day such elections to purchase are authorized to be received and accepted.

3.       SHARES RESERVED FOR PLAN.

         (a) The Shares of the Company's Common Stock to be sold to Eligible
Employees under the Plan may, at the election of the Committee, be purchased by
the Agent on the open market or may be treasury shares or newly-issued and
authorized Shares delivered to the Plan, upon such terms as the Committee may
approve. The maximum number of Shares which shall be reserved and made available
for sale under the Plan shall be 200,000, subject to adjustment as provided in
paragraph (b) of this Section. The Shares reserved may be issued and sold
pursuant to one or more offerings under the Plan. With respect to each offering,
the Committee may specify the number of Shares to be made available, the length
of the Subscription Period, the length of the Purchase Period, the Offering
Dates and such other terms and conditions not inconsistent with the Plan as may
be necessary or appropriate. In no event shall the Subscription Period and the
Purchase Period together exceed twenty-seven (27) months for any offering.

         (b) In the event of any increase, reduction, or change or exchange of
Common Stock for a different number or kind of Shares or other securities of the
Company by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, stock dividend, stock split or reverse stock
split, combination or exchange of Shares, repurchase of Shares, change in
corporate structure or otherwise, the Committee shall conclusively determine the
appropriate equitable adjustments, if any, to be made under the Plan, including
without limitation adjustments to the number of Shares which have been
authorized for issuance under the Plan but have not yet been placed under
Option, as well as the price per Share of Common Stock covered by each Option
under the Plan which has not yet been exercised.

         (c) In the event of the complete liquidation of the Company or of a
reorganization, consolidation or merger in which the Company is not the
surviving Corporation, any Option granted under the Plan shall continue in full
force and effect unless either (i) the Committee modifies such Option so that it
is fully exercisable with respect to all of the Common




                                       4



Stock subject thereto prior to the effective date of such transaction or (ii)
the surviving corporation issues or assumes a stock option as contemplated under
Section 424(a) of the Code.

4.       ADMINISTRATION OF THE PLAN.

         (a) The Plan shall be administered by the Committee and the Committee
may select an administrator or any other person to whom its duties and
responsibilities hereunder may be delegated. The Committee shall have full power
and authority, subject to the provisions of the Plan, to promulgate such rules
and regulations as it deems necessary for the proper administration of the Plan,
to interpret the provisions and supervise the administration of the Plan, and to
take all actions in connection therewith or in relation thereto as it deems
necessary or advisable. The Committee may adopt special guidelines and
provisions for persons who are residing in, or subject to the laws of, Foreign
Jurisdictions to comply with applicable tax and securities laws. All
interpretations and determinations of the Committee shall be made in its sole
and absolute discretion based on the Plan document and shall be final,
conclusive and binding on all parties.

         (b) The Committee may employ such legal counsel, consultants, brokers
and agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant, broker or agent. The Committee
may, in its sole discretion, designate an Agent to administer the Plan, purchase
and sell Shares in accordance with the Plan, keep records, send statements of
account to employees and to perform other duties relating to the Plan, as the
Committee may request from time to time. The Agent shall serve as custodian for
purposes of the Plan and, unless otherwise requested by the Participant, Common
Stock purchased under the Plan shall be held by and in the name of, or in the
name of a nominee of, the custodian for the benefit of each Participant, who
shall thereafter be a beneficial stockholder of the Company. The Committee may
adopt, amend or repeal any guidelines or requirements necessary for the custody
and delivery of the Common Stock, including, without limitation, guidelines
regarding the imposition of reasonable fees in certain circumstances.

         (c) The Company shall, to the fullest extent permitted by law and the
Certificate of Incorporation and By-laws of the Company and, to the extent not
covered by insurance, indemnify each director, officer or employee of the
Employer (including the heirs, executors, administrators and other personal
representatives of such person) and each member of the Committee against all
expenses, costs, liabilities and losses (including attorneys' fees, judgments,
fines, excise taxes or penalties, and amounts paid or to be paid in settlement)
actually and reasonably incurred by such person in connection with any
threatened, pending or actual suit, action or proceeding (whether civil,
criminal, administrative or investigative in nature or otherwise) in which such
person may be involved by reason of the fact that he or she is or was serving
this Plan in any capacity at the request of the Company, except in instances
where any such person engages in willful neglect or fraud. Such right of
indemnification shall include the right to be paid by the Company for expenses
incurred or reasonably anticipated to be incurred in defending any such suit,
action or proceeding in advance of its disposition; provided, however, that the
payment of expenses in advance of the settlement or final disposition of a suit,
action or



                                       5



proceeding, shall be made only upon delivery to the Company of an undertaking by
or on behalf of such person to repay all amounts so advanced if it is ultimately
determined that such person is not entitled to be indemnified hereunder. Such
indemnification shall be in addition to any rights of indemnification the person
may have as a director, officer or employee or under the Certificate of
Incorporation of the Company or the By-Laws of the Company. Expenses incurred by
the Committee or the Board of Directors in the engagement of any such counsel,
consultant or agent shall be paid by the Company.

5.      PARTICIPATION IN THE PLAN.

         Options to purchase the Company's Common Stock under the Plan shall be
granted to all Eligible Employees; provided, however, that solely to the extent
allowable under Section 423 of the Code, the Committee may determine that any
offering of Common Stock under the Plan will not be extended to all or some
officers, highly compensated employees of the Employer or to those employees
whose principal duties consist of supervising the work of other employees. Any
decision relating to the inclusion or exclusion of any executive officer (as
defined in Rule 3b-7 promulgated under the Exchange Act as then in effect or any
successor provisions) of the Employer pursuant to this Section shall be made
only by the members of the Committee who are not executive officers of the
Employer and who have not participated or been eligible to participate in this
Plan or any similar employee stock option plan for a period of at least one year
prior to such determination.

6.       PURCHASE PRICE.

         The purchase price for Shares purchased pursuant to the Plan shall be
determined by the Committee, in its sole discretion, and shall remain in effect
unless modified at least thirty (30) days prior to the applicable Offering Date,
but in no event shall be less than the lesser of: (i) eighty-five percent (85%)
of the Market Price of a Share of Common Stock on the first business day of the
Purchase Period or (ii) eighty-five (85%) of the Market Price of a Share of
Common Stock on the Exercise Date. Effective as of the effective date of the
Plan until modified by the Committee, the price per Share of the Common Stock
subject to an offering shall be the lesser of: (i) eighty-five percent (85%) of
the Market Price of a Share of Common Stock on the first business day of the
Purchase Period or (ii) eighty-five (85%) of the Market Price of a Share of
Common Stock on the Exercise Date.

7.       METHOD OF PAYMENT.

         Payment for Shares purchased pursuant to the Plan shall be made in
installments through payroll deductions, with no right of prepayment.

8.       EMPLOYEE'S ELECTION TO PURCHASE.  GRANTS OF OPTIONS.

         (a) In order to participate in the Plan, an Eligible Employee must sign
an election to purchase Shares on a form provided by the Company stating the
Eligible Employee's desire to purchase Shares under the Plan and showing the
amount which the Eligible Employee



                                       6



elects to have withheld from his or her pay for such payroll period during the
Purchase Period. The election to purchase Shares must be delivered on or before
the last day of the Subscription Period to the person or office designated to
receive and accept such elections. An Eligible Employee may increase or decrease
such payroll deductions prior to the beginning of any subsequent Subscription
Period by giving sufficient prior written notice to the Committee on a form
provided by, or acceptable to, the Committee for such purpose. An Eligible
Employee may terminate a payroll deduction authorization at any time pursuant to
Section 14(a) hereof on a form provided by the Company. An authorization shall
remain in effect until modified or terminated by the Eligible Employee or until
the percentage used to determine the Option price is effectively increased or
decreased. Any changes in the election to purchase Shares, other than a full
cancellation, shall become effective as of the next succeeding Purchase Period;
provided that such election is made during the succeeding Subscription Period.

         (b) All payroll deductions made by a Participant shall be credited to
such Participant's account under the Plan. A Participant may not make any
additional payments into such account except as otherwise provided herein.

         (c) In the event a Participant makes a hardship withdrawal of employee
deferral (401 (k)) contributions under a 401 (k) profit sharing plan of the
Company, a Subsidiary, or a Parent or an affiliate or any other plan qualified
under Section 401(a) of the Code that contains a Code Section 401(k) feature, to
the extent required by such plan, such Participant's payroll deductions and the
purchase of Shares under the Plan shall be suspended until the first payroll
period following the Offering Date commencing after the twelve (12) month period
after such hardship withdrawal. If a Participant who elects a hardship
withdrawal under such a 401 (k) profit sharing plan or such other plan has a
cash balance accumulated in his or her account at the time of withdrawal that
has not already been applied to purchase Shares, such cash balance shall be
returned to the Participant as soon as administratively practicable.

9.       EXERCISE OF OPTION.

         (a) A Participant's election to purchase Shares shall be exercised
automatically on the Exercise Date, and the maximum number of whole and/or
fractional Shares subject to such Option shall be purchased for such Participant
at the applicable Option price with the accumulated payroll deductions in such
Participant's account. If all or any portion of the Shares cannot reasonably be
purchased on the Exercise Date in the sole discretion of the Committee because
of unavailability or any other reason, such purchase shall be made as soon
thereafter as feasible. In no event shall certificates for any fractional Shares
be issued under the Plan. Shares shall be credited to the Participant's account
as soon as administratively feasible after the Exercise Date.

         (b) If the total number of Shares which would otherwise be subject to
Options granted on an Offering Date exceeds the number of Shares then available
under the Plan (after deduction of all Shares for which Options have been
exercised or are then outstanding), the Committee shall make a pro rata
allocation of the Shares remaining available for Option grant in as uniform a
manner as shall be practicable and as it shall determine to be equitable. In
such


                                       7



event, the Committee shall give written notice to each Participant of such
reduction of the number of Option Shares affected thereby and shall similarly
reduce the rate of payroll deductions, if necessary.

         (c) All Shares included in any offering under the Plan in excess of
the total number of Shares which all Participants elect to purchase and all
Shares with respect to which elections to purchase are canceled as provided
in Section 14 shall continue to be reserved for the Plan and shall be
available for inclusion in any subsequent offering under the Plan.

10.      DELIVERY OF COMMON STOCK.

         (a) Certificates for whole shares of Common Stock shall not be issued
to Participants unless and until requested or as otherwise provided herein. Such
certificates shall be issued as soon as administratively feasible following the
Participant's request for issuance. If a Participant requests certificates for
whole shares of Common Stock, any fractional shares of Common Stock shall remain
in the Participant's account during his or her employment, unless he or she
requests cash in lieu of the fractional shares. A fee fixed by the Plan's Agent
or transfer agent, as the case may be, may be charged to the Participant for the
issuance of certificates of shares of Common Stock and for the replacement of
lost certificates. Certificates for a fractional share of Common Stock shall not
be issued under any circumstance. The Committee or the Plan's Agent may
establish limitations on the issuance of certificates to the extent allowable by
applicable law.

         (b) A Participant may request the Agent to sell all or a portion of
Shares for which certificates have not been issued and receive cash for such
Shares, subject to any brokerage fees or commissions.

         (c) Notwithstanding any other provision of the Plan to the contrary,
following a Participant's termination of employment, death or retirement from
the Company, any Subsidiary and any Parent, the Participant (or, in the case of
death, his or her legal representative) shall elect, within such period as
prescribed by the Committee to (i) direct the Committee or Agent to sell all or
a portion of Shares for which certificates have not been issued and receive cash
for such Shares, subject to any brokerage fees or commissions; (ii) receive
certificates for all of the whole Shares and cash in lieu of any fractional
Shares credited to the Participant's account under the Plan; or (iii) receive
payment from the Plan for all Shares in such other manner permitted by the
Committee in its sole discretion, including permitting the transfer of
certificates for all Shares (including fractional Shares) credited to the
Participant's account under the Plan to an individual brokerage account
established by the Agent for the benefit of the Participant or for the benefit
of the Participant and his or her spouse as joint tenants with rights of
survivorship. The Committee may establish and adopt rules dictating the default
election of a Participant (or, in the case of death, his or her legal
representative) who does not make a timely election pursuant to this paragraph
(c). A fee fixed by the Plan's Agent may be charged to the Participant for the
issuance of certificates of Shares.

11.      LIMITATIONS OF NUMBER OF SHARES WHICH MAY BE PURCHASED.



                                       8



         (a) Notwithstanding any provisions of the Plan to the contrary, no
individual shall be granted an Option under the Plan:

                  (i) if, immediately after the grant, such individual (or any
         other person whose stock would be attributed to such individual
         pursuant to Section 424(d) of the Code) would own stock and/or hold
         outstanding Options to purchase stock possessing five percent (5%) or
         more of the total combined voting power or value of all classes of
         stock of the Company or of any Subsidiary or Parent; or

                  (ii) which permits such individual's right to purchase stock
         under all employee stock purchase plans (as described in Section 423 of
         the Code) of the Company and any Subsidiary or Parent to accrue at a
         rate which exceeds twenty five thousand dollars ($25,000) of fair
         market value of such stock (determined at the time such option is
         granted) for any calendar year in which such option is outstanding at
         any time; or

                  (iii) which permits an Eligible Employee to purchase Shares
         during any one offering pursuant to the Plan for an aggregate purchase
         price (which shall be computed on an annual basis in the event the
         Purchase Period is more or less than twelve (12) months) in excess of
         ten percent (10%) of his or her Annual Pay.

         (b) An Eligible Employee may elect to purchase less than the number of
Shares which he or she is entitled to elect to purchase.

12.      STOCKHOLDER RIGHTS.

         The Common Stock purchased upon exercise of an Option hereunder shall
be credited to the Participant's account under the Plan and shall be deemed to
be transferred to the Participant on the Exercise Date. Only upon the issuance
of Shares to a Participant or his agent (and only in respect to such Shares
purchased) shall a Participant obtain the rights of stockholders, including,
without limitation, any right to vote the Shares or receive any dividends or any
other distributions thereon. The Shares purchased will be issued as soon as
practicable after the Exercise Date.

13.      RIGHTS TO PURCHASE SHARES NOT TRANSFERABLE.

         (a) Neither payroll deductions credited to a Participant's account nor
any rights with regard to the exercise of an Option or to receive Shares under
the Plan may be sold, pledged, assigned or transferred in any manner otherwise
than by will or the laws of descent and distribution. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10 hereof.

         (b) All rights of a Participant granted under this Plan, including but
not limited to, the grant of an Option, the right to exercise an Option and the
ability to authorize



                                       9



payroll deductions shall relate solely to a Participant, except as otherwise
provided in Section 17 hereof.

14.      CANCELLATION OF ELECTION TO PURCHASE.

         (a) An Eligible Employee who has elected to purchase Shares during a
Purchase Period may cancel his or her election with respect to such Purchase
Period in the amount which he or she has authorized the Company to withhold from
his pay for each payroll period during the Purchase Period. Any such
cancellation shall be effective as soon as feasible after the delivery by the
Eligible Employee of sufficient prior written notice of cancellation on a form
provided by, or acceptable to, the Committee for such purpose to the office or
person designated by the Committee to receive such elections. Such notice of
full cancellation must be so delivered no later than the close of business on
the 20th day of the month preceding the Exercise Date.

         (b) An Eligible Employee's rights upon the full cancellation of his or
her election to purchase Shares shall be limited to receiving in cash, as soon
as practicable after delivery of the notice of cancellation, the cash balance
(without interest) then credited to his or her account.

         (c) A Participant's cancellation of his or her election to purchase
Shares in an offering shall not have any effect upon such Participant's
eligibility to participate in a subsequent offering or in any similar plan which
may hereafter be adopted by the Company.

15.      LEAVE OF ABSENCE OR LAYOFF.

         (a) If a Participant who is granted a leave of absence (including a
military leave) or who is laid off during a Purchase Period, his or her election
to purchase shall be deemed to have been canceled at the time of the leave of
absence or layoff. An Participant's Eligible Employee's rights upon leave of
absence (including a military leave) or layoff shall, subject to any rights
under law, be limited to having the cash balance credited to his or her account
at the time of such leave of absence or layoff becomes effective applied to the
purchase of the number of Shares such amount will then purchase at the end of
the Purchase Period.

         (b) In the event that such individual's leave of absence ends and such
individual again becomes an Eligible Employee within 90 days from the date of
his or her leave of absence or layoff, payroll deductions shall resume
automatically in accordance with his or her most recent payroll deduction
authorization form in effect prior to the leave of absence or layoff.

16.      EFFECT OF FAILURE TO MAKE PAYMENTS WHEN DUE.

         (a) If in any payroll period, for any reason not set forth in Section
14, a Participant who has filed an election to purchase Shares under the Plan
has no pay or his or her pay is insufficient (after other authorized deductions)
to permit deduction of his or her installment payment, the Participant may make
a payment to the Plan in cash at such time equal to the amount of the
installment payment deficiency. If such cash payment is not so made, the


                                       10



Participant, when his or her pay is again sufficient to permit the resumption of
installment payments, must pay in cash the amount of the deficiency in his or
her account or arrange for uniformly increased installment payments so that,
assuming the maximum purchase price per Share, payment for the maximum number of
Shares covered by his or her Option will be completed in the last month of the
Purchase Period. If the Participant elects to make increased installment
payments, he or she may, nevertheless, at any time make up the remaining
deficiency by making a lump sum payment.

         (b) Subject to paragraph (a) above and other provisions of the Plan
permitting postponement, the Company may treat the failure by a Participant to
make any payment as a cancellation of his or her election to purchase Shares.
Such cancellation will be affected by mailing notice to him or her at his or her
last known business or home address. Upon such mailing, his or her only right
will be to receive in cash the amount credited to his or her account.

17.      RETIREMENT.

         (a) Upon "Retirement" (as hereinafter defined), a Participant will be
deemed canceled as of the date of retirement and the only right of the
Participant will be to receive in cash, the cash amount credited to his or her
account.

         (b) For the purposes of this Plan, "Retirement shall mean a
Participant's attainment of age sixty-five (65).

18.      DEATH.

         If a Participant dies and has an election to purchase Shares in effect
at the time of his or her death, the election will be deemed canceled as of the
date of death, and the only right of such legal representative will be to
receive in cash, the cash amount credited to the deceased Participant's account.



                                       11



19.       TERMINATION OF EMPLOYMENT OTHER THAN FOR RETIREMENT OR DEATH.

         If an Eligible Employee's employment is terminated for any reason other
than Retirement or death prior to the end of the Purchase Period, his or her
election to purchase shall thereupon be deemed canceled as of the date on which
his or her employment ended. In such an event, no further payments under such
election will be permitted, and the Eligible Employee's only right will be to
receive in cash the amount credited to his or her account.

20.      DIVIDENDS AND INTEREST.

         (a) Cash dividends, if any, on Shares acquired through the Plan will be
automatically paid by check directly to the Participant by the Company, or if
applicable, the transfer agent. Dividends paid in property other than cash or
Common Stock shall be distributed to Participants as soon as practicable.

         (b) Except as required by law, including without limitation, the
Investment Company Act of 1940, as amended, no interest shall accrue on or be
payable with respect to the payroll deductions of a Participant in the Plan.

21.      APPLICATION OF FUNDS.

         All funds received by the Company in payment for Shares purchased under
the Plan and held by the Company at any time may be used for any valid corporate
purpose.

22.      AMENDMENT AND TERMINATION.

         The Company, by action of the Board of Directors (or a duly authorized
committee) or the Committee may at any time terminate, amend or freeze the Plan.
No such termination shall adversely affect Options previously granted and no
amendment may make any change in any Option theretofore granted which adversely
affects the rights of any Participant. No amendment shall be effective unless
approved by the stockholders of the Company if stockholder approval of such
amendment is required to comply with Section 423 of the Code or to comply with
any other applicable law, regulation or stock exchange rule. Upon termination of
the Plan, the Company shall return or distribute the payroll deductions credited
to a Participant's account (that have not been used to purchase Shares) and
shall distribute or credit Shares credited to a Participant's account. Upon the
freezing of the Plan, any payroll deductions credited to a Participant's account
(that have not been used to purchase Shares) shall be used to purchase Shares in
accordance with Section 9, substituting the term Exercise Date with the
effective date of the freezing of the Plan.

23.      REPORTS.

         Individual accounts shall be maintained for each Participant in the
Plan. Statements of account shall be given to Participants at such times
prescribed by the Committee; such statements shall set forth the amounts of
payroll deductions, the purchase price per Share,



                                       12



the number of Shares purchased, the aggregate Shares in the Participant's
account and the remaining cash balance, if any.

24.      EFFECTIVE DATE; GOVERNMENTAL APPROVALS OR CONSENTS.

         The Plan was originally approved by the holders of the Company's Class
A Stock pursuant to written consent dated November 30, 1998 and adopted by the
Board of Directors the Company effective as of January 1, 1999 and was amended
and restated by action of the Board of Directors of the Company effective as of
March 1, 2000. The Plan and any offerings and sales to Eligible Employees under
it are subject to any governmental approvals or consents that may be or become
applicable in connection therewith. The Board of Directors or the Committee may
make such changes in the Plan and include such terms in any offering under the
Plan as may be necessary or desirable, in the opinion of counsel, so that the
Plan will comply with the rules and regulations of any governmental authority
and so that Eligible Employees participating in the Plan will be eligible for
tax benefits under the Code or the laws of any state.

25.      NOTICES.

         All notices or other communications by a Participant to the Company or
the Committee under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company or Committee at
the location, or by the person, designated for the receipt thereof and within
the time period prescribed by the Company or Committee. Each Participant shall
be responsible for furnishing the Committee with the current and proper address
for the mailing of notices and the delivery of other information. Any notices or
communications by the Company to a Participant shall be deemed given if directed
to such address and mailed by regular United States mail, first-class and
prepaid. If any item mailed to such address is returned as undeliverable to the
addressee, mailing shall be suspended until the Participant furnishes the proper
address.

26.      REGULATIONS AND OTHER APPROVALS; GOVERNING LAW.

         (a) This Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Delaware
without giving effect to the choice of law principles thereof, except to the
extent that such law is preempted by federal law.

         (b) The obligation of the Company to sell or deliver Shares with
respect to Options granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.

         (c) To the extent required, the Plan is intended to comply with Rule
16b-3 and the Committee shall interpret and administer the provisions of the
Plan in a manner consistent therewith. Any provisions inconsistent with Rule
16b-3 shall be inoperative and shall not affect the validity of the Plan. The
Committee may establish and adopt administrative guidelines,



                                       13



designed to facilitate compliance with Section 16(b) of the Exchange Act and
Rule 16b-3, as it may deem necessary or proper for the administration and
operation of the Plan and the transaction of business thereunder.

27.      WITHHOLDING OF TAXES.

         (a) If the Participant makes a disposition, within the meaning of
Section 424(c) of the Code and regulations promulgated thereunder, of any Share
or Shares issued to such Participant pursuant to such Participant's exercise of
an Option, and such disposition occurs within the two-year period commencing on
the day after the Offering Date or within the one-year period commencing on the
day after the Exercise Date, such Participant shall immediately, or as soon as
practicable thereafter, notify the Company thereof and thereafter immediately
deliver to the Company any amount of federal, state or local income taxes and
other amounts which the Company informs the Participant the Company is required
to withhold.

         (b) Notwithstanding anything herein to the contrary, the Employer shall
have the right to make such provisions as it deems necessary to satisfy any
obligations to withhold federal, state, or local income taxes or other taxes
incurred by reason of the issuance of Common Stock pursuant to the Plan.
Notwithstanding anything herein to the contrary, the Employer may require a
Participant to remit an amount equal to the required withholding amount and may
invalidate any election if the Participant does not remit applicable withholding
taxes. Without limiting the generality of the foregoing, any withholding
obligation with regard to any Participant may be satisfied by: (i) reducing the
number of shares of Common Stock otherwise deliverable to the Participant; (ii)
subject to the Committee's prior consent, any method approved by the Committee;
or (iii) by the Participant paying cash directly to the Company.

28.      LEGEND.

         (a) The Committee may require each person receiving shares pursuant to
the exercise of an Option under the Plan to represent to and agree with the
Company in writing that the Participant is acquiring the shares without a view
to distribution thereof. In addition to any legend required by this Plan, the
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.

         (b) All certificates for Shares delivered under the Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable to assist in the compliance with any applicable tax
withholding laws or under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

29.      NO EMPLOYMENT RIGHTS.


                                       14



         The establishment and operation of this Plan shall not confer any legal
rights upon any Participant or other person for a continuation of employment,
nor shall it interfere with the rights of an Employer to discharge any employee
and to treat him or her without regard to the effect which that treatment might
have upon him or her as a Participant or potential Participant under the Plan.

30.      SEVERABILITY OF PROVISIONS.

         If any provision of the Plan shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such provisions had
not been included.

31.      CONSTRUCTION.

         The use of a masculine pronoun shall include the feminine, and the
singular form shall include the plural form, unless the context clearly
indicates otherwise. The headings and captions herein are provided for reference
and convenience only, shall not be considered part of the Plan, and shall not be
employed in the construction of the Plan.




                                      15




                                                                Exhibit 99.2



                              AMENDMENT NUMBER ONE
                           TO THE AMENDED AND RESTATED
               SCHOLASTIC CORPORATION EMPLOYEE STOCK PURCHASE PLAN

         WHEREAS, Scholastic Corporation (the "Corporation") maintains the
Scholastic Corporation Employee Stock Purchase Plan, (Amended and Restated as of
March 1, 2000) (the "Plan"); and

         1.       Paragraph (c) of Section 8 of the Plan is amended by
                  substituting "six (6) month period" for "twelve (12) month
                  period" where it appears therein.

Subject to the foregoing, the Restated Plan remains in full force and effect in
accordance with the terms thereof.




                                                                  Exhibit 99.3

        SCHOLASTIC CORPORATION 1997 OUTSIDE DIRECTORS' STOCK OPTION PLAN

1.       NAME AND GENERAL PURPOSE

         The name of this plan is the Scholastic Corporation 1997 Outside
Directors' Stock Option Plan (the "Plan"). The purpose of the Plan is to attract
and retain the services, for the benefit of Scholastic Corporation, a Delaware
corporation (the "Company"), of experienced and knowledgeable directors who are
not employees of the Company ("Outside Directors") and to provide an additional
incentive for such Outside Directors through continuing ownership of the common
stock, par value $.01 per share, of the Company (the "Common Stock").

2.       AUTOMATIC OPTION GRANTS TO OUTSIDE DIRECTORS

         Subject to the provisions of Section 13 hereof, each individual (other
than any director electing not to participate hereunder) who is, as of each
January 7 (or, if such date is not a business day, as of the next succeeding
business day) occurring after the effective date of the Plan, an incumbent
Outside Director, excluding Directors Emereti, shall automatically be granted,
as of each such January 7 (or, if applicable, the next succeeding business day),
an option to purchase 3,000 shares of Common Stock at a price per share equal to
100% of the Fair Market Value of the Common Stock on such date.

         For purposes of this Section 2, "Fair Market Value" shall mean the
average of the high and low selling prices of the Common Stock on the date on
which the Common Stock is to be valued hereunder, or, if none, on the last
preceding date prior to such date on which such prices were quoted, as reported
by the Automated Quotation System of the National Association of Securities
Dealers, Inc. ("NASDAQ"). All options granted under the Plan shall be
non-qualified stock options.

3.       EXERCISE OF OPTIONS

         Subject to the provisions of Section 5 hereof, an option granted
hereunder may not be exercised within twelve (12) months after the date of
grant.

         Except as provided in Section 5 below, an option may be exercised, in
whole or in part at any time and from time to time during the period beginning
with the expiration of twelve months following the date of grant and ending on
the option expiration date, by giving written notice of exercise to the Company
specifying the number of shares of Common Stock to be purchased. Such notice
shall be accompanied by payment in full of the option price, either in cash or
by certified check or bank check or in shares of Common Stock of the Company
(valued at Fair Market Value on the date of exercise), actually or by
attestation, or in any combination thereof. The option price may also be paid by
delivery of an irrevocable notice of exercise to the Company and a broker-dealer
acceptable to the Company under such circumstances as the Board of Directors
shall authorize.

         No shares of Common Stock shall be issued until full payment therefor
has been made. An Outside Director will have no rights as a shareholder of the
Company with respect to any shares of Common Stock subject to an option until
such time as the Outside Director has properly exercised his or her option, paid
in full for the shares subject to such option and executed any representations
required by the Company.

4.       EXPIRATION OF OPTIONS

         Each option granted hereunder shall expire on the tenth anniversary of
the date on which it was granted, if not sooner terminated as provided herein.

5.       TERMINATION OF SERVICES OF OUTSIDE DIRECTORS

     (a) In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve as a Director on the Board of
Directors of the Company, otherwise than by reason of death or disability, such
option may be exercised (to the extent that the Outside Director was entitled to
do so at the time of such cessation of service) at any time and from time to
time within six (6) months after such cessation of service, but not thereafter,
and in no event after the date on which, except for such cessation of service,
the option would otherwise expire; provided, however, that, in the event an
Outside Director to whom an option has been granted under the Plan shall


cease to serve on the Board of Directors but shall have been designated as a
Director Emeritus, his or her option shall continue to be exercisable as though
such Director Emeritus continued to serve as an Outside Director until six (6)
months after termination of his or her Director Emeritus status or expiration of
the option, whichever occurs first.

     (b) In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve on the Board of Directors by reason
of disability (as determined by the Board of Directors on the basis of all the
facts and circumstances), such option may be exercised, in full or in part, by
the Outside Director or his or her legally appointed representative
(notwithstanding that the option may not yet otherwise have become exercisable
with respect to all or part of such shares as of the date of disability) at any
time and from time to time within twelve (12) months after such cessation of
service, but not thereafter, and in no event after the date on which, except for
such disability, the option would otherwise expire.

     (c) If an Outside Director to whom an option has been granted under the
Plan dies (i) while he or she is serving on the Board of Directors, (ii) within
three (3) months after cessation of service on the Board of Directors other then
by reason of disability, or (iii) within twelve (12) months after cessation of
service on the Board of Directors by reason of disability, such option may be
exercised:

         1) in the case of death while serving on the Board of Directors, as to
     all or any part of the remaining unexercised portion of the option,
     notwithstanding that the option may not yet otherwise have become
     exercisable with respect to all or part of such shares as of the date of
     death; and

         2) in the case of death after cessation of service on the Board of
     Directors or death after termination of such service by reason of
     disability, to the extent that the Outside Director was entitled to do so
     at the date of his or her death, giving effect to the provisions of
     subsections (a) and (b) above of this Section 5;

in each case by the person who acquired the right to exercise such option by
bequest or inheritance or by reason of the death of the Outside Director, at any
time and from time to time within twelve (12) months after the date of death of
the Outside Director, but in no event after the date on which the option would
otherwise expire under Section 4 of the Plan.

     (d) Notwithstanding the provisions of subsections (b) and (c) above of this
Section 5, in no event shall any option granted under the Plan be exercisable
within six (6) months of the date of grant.

6.       TRANSFERABILITY

         No option granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated, other than by will or by the laws of descent
and distribution.

7.       SHARES RESERVED

         The aggregate number of shares reserved for issuance pursuant to the
Plan shall be 180,000 shares of Common Stock, or the number and kind of shares
of stock or other securities which shall be substituted for such shares or to
which such shares shall be adjusted as provided in Section 8.

         Such number of shares may be set aside out of the authorized but
unissued shares of Common Stock not reserved for any other purpose, or out of
issued shares of Common Stock acquired for and held in the treasury of the
Company.

         Shares subject to, but not sold or issued under, any option
terminating, expiring or cancelled for any reason prior to its exercise in full
will again be available for options thereafter granted during the balance of the
term of the Plan.

8.       ADJUSTMENTS DUE TO STOCK SPLITS, MERGERS, CONSOLIDATIONS, ETC.

         If, at any time, the Company shall take any action, whether by stock
dividend, stock split, combination of shares, or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, (i) the number of shares which are reserved
under the Plan shall be automatically adjusted, and (ii) the number of shares
which, at such time, are subject to outstanding options shall be adjusted in the
same
                                       2


proportion (with appropriate adjustments in the option price); provided,
however, that the Company shall not be obligated to issue fractional shares.

         In the event of any change in the outstanding shares of Common Stock by
reason of any recapitalization, merger, consolidation, combination, exchange of
shares, or other similar corporate change, equitable substitution or adjustment
shall be made in the number or kind of shares of Common Stock or other
securities issued or reserved for issuance pursuant to the Plan, including
pursuant to outstanding options granted under the Plan.

9.       WITHHOLDING OR DEDUCTION OF TAXES

         If, at any time, the Company is required under applicable laws or
regulations to withhold, or to make any deduction for, any taxes or take any
other action in connection with the exercise of any option hereunder, the
Company shall have the right to deduct from all amounts payable in cash any
taxes required by law to be withheld therefrom, and, in the case of payments in
the form of Common Stock, the Outside Director to whom such payments are to be
made shall be required to pay to the Company the amount of any taxes required to
be withheld, or, in lieu thereof, the Company shall have the right to retain, or
sell without notice, a sufficient number of shares of Common Stock to cover the
amount required to be withheld.

10.      ADMINISTRATION

         The Plan shall be administered by the Board of Directors. Subject to
the provisions of the Plan, the Board of Directors shall have the discretionary
authority to:

     (a) adopt, revise and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable,

     (b) interpret the terms of the Plan and any option issued under the Plan
(and any agreements relating thereto), and otherwise settle all claims and
disputes arising under the Plan;

     (c) delegate responsibility and authority for the operation and
administration of the Plan, including to a committee of the Board of Directors,
and appoint employees and officers of the Company and its affiliates to act on
its behalf and employ persons to assist in fulfilling its responsibilities under
the Plan; and

     (d) otherwise supervise the administration of the Plan;

provided, however, that the Board of Directors shall have no discretion with
respect to the selection of individuals eligible to receive options hereunder,
the number of shares of Common Stock covered by any such option or the price or
timing of any option granted hereunder (all of which determinations are
automatic under the terms of the Plan).

         The entire expense of administering the Plan shall be borne by the
Company.

11.      COMPLIANCE WITH APPLICABLE LAW

         Notwithstanding any other provision of the Plan, the Company shall not
be obligated to issue any shares of Common Stock, or grant any option with
respect thereto, unless it is advised by counsel of its selection that it may do
so without violation of the applicable. federal and state laws pertaining to the
issuance of securities or the provisions of any national securities exchange or
NASDAQ, and the Company may require any securities so issued to bear a legend,
may give its transfer agent instructions, and may take such other steps as in
its judgment are reasonably required to prevent any such violation.

12.      AMENDMENT AND TERMINATION

         The Board of Directors may amend or discontinue the Plan at any time
and from time to time; provided, however, that (a) unless otherwise required by
law, no amendment, alteration or discontinuation shall be made which would
impair the rights of an Outside Director with respect to any option which has
been granted under the Plan without such individual's consent and (b) no
amendment shall be effective without approval of stockholders of


                                       3



the Company if stockholder approval of the amendment is then required pursuant
to Rule 16b-3 under the Securities Exchange Act of 1934, as amended, or the
applicable rules of any national securities exchange or NASDAQ.

13.      EFFECTIVE DATE

         The effective date of this Plan is August 20, 1997, the date on which
it was adopted by the Board of Directors; provided, however, that this Plan is
subject to approval by the holders of Class A Stock. The Plan shall terminate on
August 19, 2007.

14.      GOVERNING LAW

         The Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware.






                                                                 Exhibit 99.4

                 SCHOLASTIC CORPORATION 1997 OUTSIDE DIRECTORS'
                                STOCK OPTION PLAN
                    (Amended and Restated as of May 25, 1999)

1.       NAME AND GENERAL PURPOSE

                  The name of this plan is the Scholastic Corporation 1997
Outside Directors' Stock Option Plan (the "Plan"). The Plan was originally
adopted effective September 16, 1997 and was subsequently amended and restated
as of May 25, 1999. The purpose of the Plan is to attract and retain the
services, for the benefit of Scholastic Corporation, a Delaware corporation (the
"Company"), of experienced and knowledgeable directors who are not employees of
the Company ("Outside Directors") and to provide an additional incentive for
such Outside Directors through continuing ownership of the common stock, par
value $.0l per share, of the Company (the "Common Stock").

2.       AUTOMATIC OPTION GRANTS TO OUTSIDE DIRECTORS

                  Subject to the provisions of Section 13 hereof, each
individual (other than any director electing not to participate hereunder) who
is, as of each January 7 (or, if such date is not a business day, as of the next
succeeding business day) occurring after the effective date of the Plan, an
incumbent Outside Director, excluding Directors Emereti, shall automatically be
granted, as of each such January 7 (or, if applicable, the next succeeding
business day), an option to purchase 3,000 shares of Common Stock at a price per
share equal to 100% of the Fair Market Value of the Common Stock on such date.

                  For purposes of this Section 2, "Fair Market Value" shall mean
the average of the high and low selling prices of the Common Stock on the date
on which the Common Stock is to be valued hereunder, or, if none, on the last
preceding date prior to such date on which such prices were quoted, as reported
by the Automated Quotation System of the National Association of Securities
Dealers, Inc. ("NASDAQ"). All options granted under the Plan shall be
non-qualified stock options.

3.       EXERCISE OF OPTIONS

                  Subject to the provisions of Section 5 hereof, an option
granted hereunder may not be exercised within twelve (12) months after the date
of grant.

                  Except as provided in Section 5 below, an option may be
exercised, in whole or in part at any time and from time to time during the
period beginning with the expiration of twelve months following the date of
grant and ending on the option expiration date, by giving written notice of
exercise to the Company specifying the number of shares of Common Stock to be
purchased. Such notice shall be accompanied by payment in full of the option
price, either in cash or by certified check or bank check or in shares of Common
Stock of the




Company (valued at Fair Market Value on the date of exercise), actually or by
attestation, or in any combination thereof. The option price may also be paid by
delivery of an irrevocable notice of exercise to the Company and a broker-dealer
acceptable to the Company under such circumstances as the Board of Directors
shall authorize.

                  No shares of Common Stock shall be issued until full payment
therefor has been made. An Outside Director shall have no rights as a
shareholder of the Company with respect to any shares of Common Stock subject to
an option until such time as the Outside Director has properly exercised his or
her option, paid in full for the shares subject to such option and executed any
representations required by the Company.

4.       EXPIRATION OF OPTIONS

                  Each option granted hereunder shall expire on the tenth
anniversary of the date on which it was granted, if not sooner terminated as
provided herein.

5.       TERMINATION OF SERVICES OF OUTSIDE DIRECTORS

     (a) In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve as a Director on the Board of
Directors of the Company, otherwise than by reason of death or disability, such
option may be exercised (to the extent that the Outside Director is entitled to
do so at the time of such option exercise) at any time and from time to time
within six (6) months after such cessation of service, but not thereafter, and
in no event after the date on which, except for such cessation of service, the
option would otherwise expire; provided, however, that, in the event an Outside
Director to whom an option has been granted under the Plan shall cease to serve
on the Board of Directors but shall have been designated as a Director Emeritus,
his or her option shall continue to be exercisable (to the extent his or her
options have become exercisable at the time of such exercise) until six (6)
months after termination of his or her Director Emeritus status or expiration of
the option, whichever occurs first.

     (b) In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve on the Board of Directors by reason
of disability (as determined by the Board of Directors on the basis of all the
facts and circumstances), such option may be exercised, in full or in part, by
the Outside Director or his or her legally appointed representative
(notwithstanding that the option may not yet otherwise have become exercisable
with respect to all or part of such shares as of the date of disability) at any
time and from time to time within twelve (12) months after such cessation of
service, but not thereafter, and in no event after the date on which, except for
such disability, the option would otherwise expire.

     (c) If an Outside Director to whom an option has been granted under the
Plan dies (i) while he or she is serving on the Board of Directors, (ii) within
three (3) months after cessation of service on the Board of Directors other than
by reason of disability, or (iii) within


                                       2



twelve (12) months after cessation of service on the Board of Directors by
reason of disability, such option may be exercised:

     1) in the case of death while serving on the Board of Directors, as to all
or any part of the remaining unexercised portion of the option, notwithstanding
that the option may not yet otherwise have become exercisable with respect to
all or part of such shares as of the date of death;

     2) in the case of death after cessation of service on the Board of
Directors or death after termination of such service by reason of disability, to
the extent that the Outside Director was entitled to do so at the date of his or
her death, giving effect to the provisions of subsections (a) and (b) above of
this Section 5; and

     3) in each case by the person who acquired the right to exercise such
option by bequest or inheritance or by reason of the death of the Outside
Director, at any time and from time to time within twelve (12) months after the
date of death of the Outside Director, but in no event after the date on which
the option would otherwise expire under Section 4 of the Plan.

     4) Notwithstanding the provisions of subsections (b) and (c) above of this
Section 5, in no event shall any option granted under the Plan be exercisable
within six (6) months of the date of grant.

6.       TRANSFERABILITY

                  No option granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated, other than by will or by the laws of
descent and distribution.

7.       SHARES RESERVED

                  The aggregate number of shares reserved for issuance pursuant
to the Plan shall be 180,000 shares of Common Stock, or the number and kind of
shares of stock or other securities which shall be substituted for such shares
or to which such shares shall be adjusted as provided in Section 8.

                  Such number of shares may be set aside out of the authorized
but unissued shares of Common Stock not reserved for any other purpose, or out
of issued shares of Common Stock acquired for and held in the treasury of the
Company.

                  Shares subject to, but not sold or issued under, any option
terminating, expiring or cancelled for any reason prior to its exercise in full
will again be available for options thereafter granted during the balance of the
term of the Plan.


                                       3



8.       ADJUSTMENTS DUE TO STOCK SPLITS, MERGERS, CONSOLIDATIONS, ETC.

                  If, at any time, the Company shall take any action, whether by
stock dividend, stock split, combination of shares, or otherwise, which results
in a proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, (i) the number of shares which are reserved
under the Plan shall be automatically adjusted, and (ii) the number of shares
which, at such time, are subject to outstanding options shall be adjusted in the
same proportion (with appropriate adjustments in the option price); provided,
however, that the Company shall not be obligated to issue fractional shares.

                  In the event of any change in the outstanding shares of Common
Stock by reason of any recapitalization, merger, consolidation, combination,
exchange of shares, or other similar corporate change, equitable substitution or
adjustment shall be made in the number or kind of shares of Common Stock or
other securities issued or reserved for issuance pursuant to the Plan, including
pursuant to outstanding options granted under the Plan.

9.       WITHHOLDING OR DEDUCTION OF TAXES

                  If, at any time, the Company is required under applicable laws
or regulations to withhold, or to make any deduction for, any taxes or take any
other action in connection with the exercise of any option hereunder, the
Company shall have the right to deduct from all amounts payable in cash any
taxes required by law to be withheld therefrom, and, in the case of payments in
the form of Common Stock, the Outside Director to whom such payments are to be
made shall be required to pay to the Company the amount of any taxes required to
be withheld, or, in lieu thereof, the Company shall have the right to retain, or
sell without notice, a sufficient number of shares of Common Stock to cover the
amount required to be withheld.

10.      ADMINISTRATION

                  The Plan shall be administered by the Board of Directors.
Subject to the provisions of the Plan, the Board of Directors shall have the
discretionary authority to:

     (a) adopt, revise and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable;

     (b) interpret the terms of the Plan and any option issued under the Plan
(and any agreements relating thereto), and otherwise settle all claims and
disputes arising under the Plan;

     (c) delegate responsibility and authority for the operation and
administration of the Plan, including to a committee of the Board of Directors,
and appoint employees and officers of the Company and its affiliates to act on
its behalf and employ persons to assist in fulfilling its responsibilities under
the Plan; and


                                       4


     (d) otherwise supervise the administration of the Plan;

  provided, however, that the Board of Directors shall have no discretion with
  respect to the selection of individuals eligible to receive options hereunder,
  the number of shares of Common Stock covered by any such option or the price
  or timing of any option granted hereunder (all of which determinations are
  automatic under the terms of the Plan).

                  The entire expense of administering the Plan shall be borne by
the Company.

11.      COMPLIANCE WITH APPLICABLE LAW

                  Notwithstanding any other provision of the Plan, the Company
shall not be obligated to issue any shares of Common Stock, or grant any option
with respect thereto, unless it is advised by counsel of its selection that it
may do so without violation of the applicable federal and state laws pertaining
to the issuance of securities or the provisions of any national securities
exchange or NASDAQ, and the Company may require any securities so issued to bear
a legend, may give its transfer agent instructions, and may take such other
steps as in its judgment are reasonably required to prevent any such violation.

12.      AMENDMENT AND TERMINATION

                  The Board of Directors may amend or discontinue the Plan at
any time and from time to time; provided, however, that (a) unless otherwise
required by law, no amendment, alteration or discontinuation shall be made which
would impair the rights of an Outside Director with respect to any option which
has been granted under the Plan without such individual's consent and (b) no
amendment shall be effective without approval of stockholders of the Company if
stockholder approval of the amendment is then required pursuant to Rule 16b-3
under the Securities Exchange Act of 1934, as amended, the applicable rules of
any national securities exchange or NASDAQ, or the Delaware corporation law or
other applicable laws.

13.      EFFECTIVE DATE

                  The effective date of this Plan is August 20, 1997, the date
on which it was adopted by the Board of Directors; provided, however, that this
Plan is subject to approval by the holders of Class A Stock. The Plan shall
terminate on August 19, 2007.

14.      GOVERNING LAW

                  The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware.

                                       5