⁽⁷⁾

The information for Dimensional Fund Advisors LP (“Dimensional Fund”) is derived from a Schedule 13G, dated February ~~1, 2007,~~6, 2008, filed with the SEC. Dimensional Fund serves as investment adviser to four investment companies and as investment manager to certain other commingled group trusts and separate accounts (collectively, the “Funds”). The Funds own these shares, and in its role as investment advisor or manager, Dimensional Fund has the sole power to vote and direct investments with regard to all such shares. For purposes of the reporting requirements of the Securities Exchange Act of 1934, Dimensional Fund is deemed to be a beneficial owner of such shares; however, Dimensional Fund expressly disclaims that it is, in fact, the beneficial owner of such shares.

Change of Control Arrangement for Certain Class A Stockholders

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 or Class A~~ 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 reports they file. Based 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, ~~2007,~~2008, 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, except that Mr. Richard Spaulding, a director and an employee of the Company during fiscal 2007, did not file a timely report regarding the exercise of stock options and sale of the underlying Common Stock in January 2007. This report was filed on April 24, 2007, promptly after the omission was discovered.year.

Share Ownership of Management

On the Record Date, each director, ~~director nominee and~~each Named Executive Officer 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 and Nominees

Richard Robinson

2,405,450
⁽²⁾

100
%

6,872,296
⁽³⁾

17.3
%
James W. Barge **

—

—

0

*

Rebeca M. Barrera

—

—

43,504
⁽⁴⁾

*

Ramon C. Cortines

—

—

54,574
⁽⁵⁾

*

John L. Davies

—

—

42,000
⁽⁴⁾

*

Andrew S. Hedden

—

—

2,000
⁽⁶⁾

*

Mae C. Jemison

—

—

59,004
⁽⁷⁾

*

Peter M. Mayer

—

—

77,500
⁽⁸⁾

*

John G. McDonald

—

—

61,004
⁽⁹⁾

*

Augustus K. Oliver

—

—

62,574
⁽⁹⁾

*

Richard M. Spaulding

—

—

197,060
⁽¹⁰⁾

*

Named Executive Officers

Richard Robinson

2,405,450
⁽²⁾

100
%

6,872,296
⁽²⁾

17.3
%
Maureen O’Connell

—

—

25
⁽¹¹⁾

*

Mary A. Winston

—

—

104,310
⁽¹²⁾

*

Deborah A. Forte

—

—

287,396
⁽¹³⁾

*

Margery A. Mayer

—

—

256,234
⁽¹⁴⁾

*

Lisa Holton

—

—

102,488
⁽¹⁵⁾

*

All directors and executive officers as a group (23 persons including those named above)

2,405,450
⁽²⁾

100
%

9,020,365
⁽¹⁶⁾

22.8
%

	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	2,551,200	⁽²⁾	100	%	6,863,384	⁽³⁾	17.5	%
James W. Barge	—		—		4,200	⁽⁴⁾		*
Rebeca M. Barrera	—		—		47,704	⁽⁵⁾		*
Ramon C. Cortines	—		—		22,774	⁽⁶⁾		*
John L. Davies	—		—		46,200	⁽⁷⁾		*
Andrew S. Hedden	—		—		2,000	⁽⁸⁾		*
Mae C. Jemison	—		—		59,204	⁽⁹⁾		*
Peter M. Mayer	—		—		81,700	⁽¹⁰⁾		*
John G. McDonald	—		—		59,204	⁽¹⁹⁾		*
Augustus K. Oliver	—		—		63,474	⁽¹¹⁾		*
Richard M. Spaulding	—		—		207,296	⁽¹²⁾		*
Named Executive Officers
Richard Robinson	2,551,200	⁽²⁾	100	%	6,863,384	⁽³⁾	17.5	%
Maureen O’Connell	—		—		28,775	⁽¹³⁾		*
Margery A. Mayer	—		—		277,460	⁽¹⁴⁾		*
Judith Newman					212,708	⁽¹⁵⁾		*
Hugh R. Roome	—		—		266,489	⁽¹⁶⁾		*
Deborah Forte	—		—		221,097	⁽¹⁷⁾		*
Lisa Holton	—		—		0	⁽¹⁸⁾		*
All directors and executive officers as a group (16 persons)	2,551,200	⁽²⁾	100	%	8,483,669	⁽¹⁹⁾	22.2	%



*	Less than 1.0%


**	~~Nominee~~

⁽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)

⁽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, 116,676 shares of Class A Stock owned by the Florence L. Robinson Trust and 749,250 shares of Class A Stock subject to Class A Options exercisable within 60 days. 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)	See the information with respect to Richard Robinson under “Principal Holders of Class A Stock and Common Stock” above.

⁽³⁾(4)

Includes 2,405,450 shares of Common Stock issuable on conversion of the Class A Stock (including 749,250 shares issuable under Class A Options exercisable within 60 days) described in Note 2 above; 1,260,513 shares of Common Stock held directly by Richard Robinson; 350,000 shares of Common Stock held pursuant to the VPF (a variable prepaid forward stock sale); 695,8503,000 shares of Common Stock under options exercisable by Mr. ~~Robinson within 60 days; 37,278 shares of Common Stock underlying RSUs~~

~~vested or vesting~~Barge within 60 days ~~held~~and 1,200 shares underlying restricted stock units scheduled to vest within 60 days under the ~~MSPP; 4,413 shares of Common~~Scholastic Corporation 2007 Outside Director Stock with respect to which Mr. Robinson had voting rights at May 31, 2007 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 custodial account for one of his sons; 4,212 shares of Common Stock owned directly by his sons; and 73,894 shares of Common Stock owned by the Richard Robinson and Helen Benham Charitable Fund. Does not include 15,762 unvested RSUs held under the MSPP.Incentive Plan, (the “2007 Plan”), as more fully described herein.


⁽⁴⁾(5)	Includes ~~42,000~~1,504 shares held directly by Ms. Barrera, 45,000 shares of Common Stock under options exercisable by ~~such director~~her within 60 ~~days.~~days and 1,200 restricted stock units scheduled to vest within 60 days under the 2007 Plan. Ms. Barrera will cease to be a director as of the Annual Meeting.


⁽⁵⁾(6)	Includes ~~54,000~~574 shares of Common Stock held directly by Mr. Cortines, 21,000 shares of Common Stock under options exercisable by ~~such director~~him within 60 ~~days.~~days and 1,200 restricted stock units scheduled to vest within 60 days under the 2007 Plan.
(7)	Includes 45,000 shares of Common Stock under options exercisable by Mr. Davies within 60 days and 1.200 shares underlying restricted stock units scheduled to vest within 60 days under the 2007 Plan.

⁽⁶⁾(8)

As a partner of a law firm that provides legal services to the Company, Mr. Hedden has declined all stock option awards otherwise available to him as a non-employee director.


⁽⁷⁾(9)	Includes ~~58,000~~1,004 shares of Common Stock held directly by such director, 57,000 shares of Common Stock under options exercisable by such director within 60 ~~days.~~days and 1,200 restricted stock units scheduled to vest within 60 days under the 2007 Plan.


⁽⁸⁾(10)	Includes 28,500 shares of Common Stock held directly by Mr. Mayer, 1,000 shares held through a pension plan in which he has an ~~interest and 48,000 shares under options exercisable by him within 60 days.~~

⁽⁹⁾	~~Includes 60,000 shares of Common Stock under options exercisable by such director within 60 days.~~

⁽¹⁰⁾	~~Includes 159,558 shares of Common Stock held directly by Mr. Spaulding, 36,490~~interest; 51,000 shares under options exercisable by him within 60 days and ~~1,012~~1,200 restricted stock units scheduled to vest within 60 days under the 2007 Plan.
(11)	Includes 5,274 shares of Common Stock held directly by Mr. Oliver, 57,000 shares of Common Stock under options exercisable by Mr. Oliver within 60 days and 1,200 restricted stock units scheduled to vest within 60 days under the 2002 Plan.

(12)	Includes 170,806 shares of Common Stock held directly by Mr. Spaulding and 36,490 shares under options exercisable by him within 60 days. Does not include 1,200 unvested restricted stock units held under the Scholastic Corporation 2001 Stock Incentive Plan (the “2001 Plan”).

(13)

Includes 25 shares owned by Ms. O’Connell’s minor son and 27,250 shares under options exercisable by her within 60 days and 1,500 shares underlying restricted stock units scheduled to vest within 60 days under the 2001 Plan. Does not include 2,874 unvested RSUs held under the MSPP or 4,500 unvested restricted stock units held under the 2001 Plan.

(14)

Includes 20,444 shares of Common Stock held directly by Ms. Mayer, 248,540 shares under options exercisable by her within 60 days, 1,500 shares underlying restricted stock units scheduled to vest within 60 days under the 2001 Plan and 6,976 shares underlying RSUs vested or vesting within 60 days held under the MSPP. Does not include ~~3,560~~714 unvested RSUs held under the ~~MSPP.~~MSPP or 4,500 unvested restricted stock units held under the 2001 Plan.


⁽¹¹⁾	~~Ms. O’Connell joined the Company on January 22, 2007 as Executive Vice President, Chief Administrative Officer and Chief Financial Officer and has a minor son who owns 25 shares.~~

⁽¹²⁾(15)	Includes ~~100,000 shares of Common Stock under options exercisable by Ms. Winston within 60 days and 4,310 vested RSUs held under the MSPP.~~

⁽¹³⁾	~~Includes 13,754~~562 shares of Common Stock held directly by Ms. ~~Forte, 259,740~~Newman, 200,650 shares under options exercisable by her within 60 days, ~~10,152 shares underlying RSUs vested or vesting within 60 days held under the MSPP and 3,750~~2,350 shares underlying restricted stock units ~~(“Stock Units”)~~ scheduled to vest within 60 days under the ~~Scholastic Corporation~~ 2001 ~~Stock Incentive~~ Plan ~~(the “2001 Plan), as more fully described herein. Does not include 3,464 unvested RSUs held under the MSPP or 7,150 unvested Stock Units held under the 2001 Plan.~~

⁽¹⁴⁾	~~Includes 20,444 shares of Common Stock held directly by Ms. Mayer, 229,790 shares under options exercisable by her within 60 days~~ and ~~6,000~~9,146 shares underlying RSUs vested or vesting within 60 days held under the MSPP. Does not include ~~1,690~~301 unvested RSUs held under the ~~MSPP.~~MSPP or 6,200 unvested restricted stock units held under the 2001 Plan.

⁽¹⁵⁾(16)

Includes ~~2,488~~13,681 shares of Common Stock held directly by Mr. Roome, 239,310 shares under options exercisable by him within 60 days, 3,017 shares underlying restricted stock units scheduled to vest within 60 days under the 2001 Plan, 3,567 shares underlying RSUs vested or vesting within 60 days held under the MSSP and 6,914 shares of Common Stock with respect to which Mr. Roome had voting rights at May 31, 2008 under the 401(k) Plan. Does not include 1,907 unvested RSUs held under the MSPP or 6,200 unvested restricted stock units held under the 2001 Plan.

(17)

Includes 17,130 shares of Common Stock held directly by Ms. ~~Holton and 100,000~~Forte, 187,440 shares under options exercisable by her within 60 days, 8,350 shares underlying restricted stock units scheduled to vest within 60 days under the 2001 Plan and 8,177 shares underlying RSUs vested or vesting within 60 days held under the MSPP. Does not include 2,030 unvested RSUs held under the MSPP or 1,700 unvested restricted stock units held under the 2001 Plan. Ms. Forte ceased being an executive officer of the Company in September 2007, but remains an officer of the Company.

(18)	Ms. Holton is no longer an employee of the Company. See “Compensation Discussion and Analysis—Lisa Holton Severance Agreement.”

⁽¹⁶⁾(19)

Includes 1,546,021 shares of Common Stock held directly, an aggregate of ~~2,546,560~~1,801,030 shares of Common Stock under options exercisable by members of the group within 60 days, an aggregate of ~~71,669~~80,906 shares underlying RSUs vested or vesting within 60 days held under the MSPP, an aggregate of ~~10,746~~11,797 shares with respect to which members of the group had voting rights at May 31, ~~2007~~2008 under the 401(k) Plan, an aggregate of ~~5,583~~26,817 shares underlying ~~Stock Units~~restricted stock units vesting within 60 days held under the 2001 Plan and ~~2,405,450~~an aggregate of 2,551,200 shares of Common Stock issuable on ~~the~~ conversion of Class A Stock (including 895,000 the ~~749,250~~ shares issuable under Class A Options exercisable within 60 days). Does not include an aggregate of ~~34,332~~11,386 unvested RSUs held under the MSPP or an aggregate of ~~36,435~~24,600 unvested ~~Stock Units~~restricted stock units held under the 2001 Plan.

Compensation Committee Interlocks and Insider Participation

No member of the Human Resources and Compensation Committee (the “HRCC”) was at any time during fiscal ~~2007~~2008 an officer or employee of the Company or any of the Company’s subsidiaries nor was any such person a former officer of the Company or any of the Company’s subsidiaries. In addition, no HRCC member is an executive officer of another entity at which one of the Company’s executive officers serves on the board of directors.

Human Resources and Compensation Committee Report

The HRCC has reviewed and discussed with management the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement. Based on this review and discussion, the HRCC recommended to the Board (and the Board has approved) that the CD&A be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, ~~2007.~~2008.

The members of the Human Resources and Compensation Committee of the Board of Directors of Scholastic Corporation have provided this report:


	John L. Davies, Chairperson
			Ramon C. Cortines
			Peter M. Mayer
			John G. McDonald

COMPENSATION DISCUSSION AND ANALYSIS

The Company’s compensation programs for its executive officers and other senior management are administered by the HRCC, which is composed solely of independent directors as defined by NASDAQ rules.

The HRCC generally consults with management regarding employee compensation matters. The Company’s Chief Executive Officer, working with the Company’s Human Resources Department, makes annual compensation recommendations to the HRCC for executive officers (other than himself) and senior management, including the Named Executive Officers. The HRCC has reviewed and approved the following discussion and analysis, which analyzes the objectives and results for fiscal 2007 of the Company’s compensation policies and procedures for the Chief Executive Officer; the Chief Financial Officer and the remaining Named Executive Officers, as well as other members of senior management. The Company’s compensation programs have been adopted in order to implement the HRCC’s compensation philosophy discussed below, while taking into account the Company’s financial performance. They have been

developed with the assistance of the Human Resources Department, as well as independent consultants. The HRCC periodically reviews the Company’s compensation programs and practices in light of the HRCC’s compensation philosophy, changes in laws and regulations, and the Company’s financial

goals. A description of the composition and procedures of the HRCC is set forth under “Meetings of the Board and its ~~Committes—~~Committees—Human Resources and Compensation Committee” and “Corporate Governance—HRCC and SGC Procedures” in Proposal 1, “Election of Directors,” below.

Compensation ~~Policies~~Philosophy and Objectives

The Company 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, divisional results and the external market in which the Company competes for executive talent. Such factors are critical to the continued development of the Company’s operating segments, which in turn builds stockholder value. In determining the compensation of its executive officers, the Company seeks to achieve the following objectives through a combination of fixed and variable compensation.

Pay Competitively

A total compensation package should be competitive. Accordingly, the HRCC considers the executive compensation of a broad group of companies in the publishing, media and education industries. The companies used in the compensation peer group were selected based upon several criteria, including size of company by revenues, relevant industry and other factors. Information from this peer group is used to create a framework for executive compensation practices, in combination with Company-based factors, such as the Company’s financial position and relevant corporate initiatives. For senior management, including the Company’s Chief Executive Officer, the HRCC considers the level of compensation paid to individuals in comparable executive positions in the Company’s peer group ~~and at other publishing/media companies,~~ with which the Company competes in order to recruit and retain executive talent for corporate and operating unit ~~positions.~~positions and general compensation survey data for the relevant positions, as appropriate. The peer companies to which the Company has looked to gauge its competitiveness for these purposes have included but were not limited to the following: ~~ADVO Inc.,~~ Amazon.com Inc., ~~PRIMEDIA Inc.,~~Career Education Corporation, Meredith Corporation, The McGraw-Hill Companies, Inc., Pearson plc., ~~Readers Digest Association, Inc.,~~ School Specialty Inc., ~~Thomson Corporation,~~E. W. Scripps Company, The Washington Post Company and John Wiley & Sons, Inc. ~~and~~ The ~~Washington Post Company.~~Company looks to the compensation practices of peer companies for a general frame of reference but does not formally benchmark its compensation against that of its peer companies.

Pay for Performance

The Company’s compensation practices are designed to create a direct link between the aggregate compensation paid to each executive officer and the financial performance of

the Company and, as applicable, the results of the specific business division for which an executive is responsible. In order to accomplish this, the HRCC considers the individual performance of each executive officer by reviewing, among other factors, the achievement of pre-established corporate, business unit and ~~individual~~other performance objectives as well as the recommendations of the Chief Executive Officer. The amount of each component of an executive officer’s compensation is based in part on the HRCC’s assessment of that individual’s performance as well as the other factors discussed in this section.

Executives as Stockholders
The Company’s compensation practices are also designed to link a portion of each executive officer’s compensation opportunity directly to the value of the Common Stock through the use of stock-based awards. The compensation for Mr. Robinson, who is the Chairman, Chief Executive Officer and President, and the controlling stockholder, of the Company, is based upon the same objectives and policies applicable to all senior management and is recommended by the HRCC and approved by the independent members of the Board.
Elements of Compensation
To accomplish its compensation objectives and philosophy, the HRCC relies on the following elements of compensation, each of which is discussed in more detail below:
Salary
Annual cash bonus awards
Equity-based incentive compensation, in the form of stock options and restricted stock units
•
~~Salary~~
•
~~Annual cash bonus awards~~
•
~~Equity-based incentive compensation, in the form of stock options and restricted stock units~~
Each component of executive compensation is designed for a specific purpose. For example, salaries are the main component of cash-based annual compensation. Salaries are set to compensate each executive based on that executive’s employment and salary history, position within the Company and comparable competitive salaries at other companies. With regard to the more variable components of the compensation package, annual bonuses are tied to the Company’s short-term objectives, while equity-based compensation is directed towards successful results over a longer period. The purpose of the combination of salary, annual bonus and equity awards is to provide the appropriate level of total annual cash compensation and long term incentives, combined with an appropriate performance-based component. The HRCC believes that the Company’s executive compensation package, consisting of these components, is comparable to the compensation provided in the market in which the Company competes for executive talent and is critical to accomplishing the Company’s recruitment and retention aims.

Components of Executive Compensation
The following provides an analysis of each element of compensation, what each is designed to reward and why the HRCC chose to include it as an element of the Company’s executive compensation.
Base Salary
Base salaries are reviewed annually in the context of the HRCC’s consideration of the effect of base compensation on recruiting and retaining executive talent. ~~Accordingly, the~~

HRCC considers the executive compensation of a broad group of companies in the publishing and media industries, including the companies referred to above. The companies used in the compensation peer group were selected based upon several criteria, including size of company by revenues, relevant industry and other factors. Information from this peer group is used to create a framework for executive compensation practices, in combination with Company-based factors, such as the Company’s financial position and relevant corporate initiatives. In establishing each executive officer’s base salary, the HRCC considers several factors, including individual job performance, salary history, competitive external market conditions for recruiting and retaining executive talent, the scope of the executive’s position and level of experience, changes in responsibilities, responsibility for larger, more difficult to manage or more risky business ventures, such as new product development, or positions that require considerable creative talent or creative marketing capability, and the management of those providing such creative content or marketing.
          During fiscal 2007, the base salaries of executive officers were generally increased in accordance with the foregoing practices, with the HRCC particularly focusing on individual performance and changes in responsibilities. Consistent with the Company’s policy for all employees, salaries for executive officers and senior management, including the Named Executive Officers, are reviewed annually in September and increases, based on the compensation objectives discussed above, are generally effective on October 1 of each year. Of the Named ~~Executives~~Executive Officers, ~~in line with the Company’s general target of three percent, Ms. Mayer, Ms. Holton and Ms. Winston each~~only Mr. Roome received a salary ~~increases of 3%~~increase during fiscal ~~2007, in each case~~2008, which was an increase of 2.8% effective as of October 1, ~~2006. This reflected~~2007. The HRCC determined that many members of senior management, including the ~~Company’s view that their performance levels reached their individual target levels~~Chief Executive Officer, Chief Financial Officer and they substantially achieved their objectives as set out by the HRCC for the fiscal year. This also reflected the Company’s view that they were otherwise being compensated appropriately in terms of their respective total compensation packages. Ms. Forte and Mr. Robinson did not receive salary increases during fiscal 2007. This reflected the naturecertain of the ~~projects on which Ms. Forte has been working, which are not expected to come to fruition until fiscal 2008, including the production of a major motion picture. Mr. Robinson requested that he~~Named Executive Officers, would not receive a ~~raise in view~~base salary increase, but rather an increase to his or her bonus potential to bring the various components of the ~~fact that~~compensation closer in line with the ~~Company’s results for fiscal 2007 were below target level. Because Ms. O’Connell only joined the Company in January 2007, she was not eligible for a salary increase during fiscal 2007.~~industry and their peers.
Annual Performance-Based Cash Bonus Awards
The HRCC ties a significant portion of each Named Executive Officer’s total potential compensation to Company ~~performance, individual~~ performance and, in the case where the Named Executive Officer is responsible for an operating unit of the Company, business unit performance through the use of annual bonus awards. Individual performance goals were also used in respect of the fiscal year ended May 31, 2008. In setting financial and operating performance targets, which are established early in the fiscal year, the HRCC considers Company-wide strategic and operating plans and, where applicable, those of the executive’s business unit. In each case, whether considering the Company as a whole or an executive’s

business unit, the HRCC considers the budget for the next fiscal year and sets specific incentive targets that are directly linked to the Company’s or business unit’s financial performance. ~~For~~As shown below, the ~~Company performance portion, these targets have~~objective of the annual bonus element of compensation has been ~~based upon earnings per share (EPS)~~ to align the interest of senior management

and ~~Free Cash Flow,~~the Named Executive Officers with the Company’s financial, operating and strategic goals for the ~~portion based on business unit performance,~~year and, other than in the ~~targets are, in addition, based upon the profitability~~case of the ~~relevant business unit (“Division Operating Profit”). Free Cash Flow is defined by~~Chief Executive Officer, also to encourage and reward the ~~Company as net cash provided by all~~achievement of ~~the Company’s operating activities less spending for capital expenditures, pre-publication and pre-production costs and author royalty advances.~~individual goals in respect of fiscal 2008.
Potential bonus awards for executive officers, including the Named Executive Officers, are set and determined under the Company’s Management Incentive Program (“MIP”) or under the Executive Performance Incentive Plan (“EPIP”), which is designed to be exempt from the application of Section 162(m) of the Internal Revenue Code of 1986 (the “Code”), as discussed below under ~~Regulatory Considerations.~~
          In August 2006, the HRCC set the fiscal 2007 annual bonus targets for executive officers and senior management, including the Named Executive Officers. Bonus potentials for executive officers were set at percentages of their base salaries deemed appropriate for their current positions. For each of the Named Executive Officers, target amounts were set at 50% of base salary, except in the case of Mr. Robinson, whose target amount was set at 100% of base salary. Depending on the achievement of the Company, business unit and individual goals discussed below, the potential payout for each executive ranged from 0% to 150% of the target amount.
          As shown in the tables below, the objective of the annual bonus element of compensation is to align the interest of senior management and the Named Executive Officers with the Company’s financial, operating and strategic goals for the year and also to encourage and reward the achievement of individual goals. To achieve this, the HRCC established the following measures to determine bonus payouts for fiscal 2007: for “Corporate Staff Groups,” such as the Legal, Finance, and Human Resources departments, bonus is weighted 100% on the achievement of the Company’s EPS (75%) and Free Cash Flow (25%) goals, and for Business Groups, which include the Company’s operating business units, bonus is weighted 65% on the achievement of the Company’s EPS and Free Cash Flow goals and 35% on Division Operating Profit (except, in the case of certain newly hired officers in each group, when a portion of bonus was guaranteed in the officers’ initial employment arrangements)“Regulatory Considerations”. In the case of Mr. Robinson, 100% of his bonus is dependent upon the achievement of the Company’s EPS and Free Cash Flow goals. In the case of Ms. O’Connell, the Company’s current Chief Financial Officer, 100% of her bonus is also dependent upon the achievement of the Company’s EPS and Free Cash Flow goals, except in respect of the portion of her bonus guaranteed under her initial employment arrangements, as discussed below. EPS and Free Cash Flow are two measures used by investors and analysts who follow the Company to evaluate the Company’s annual performance, and the Company believes that both EPS and Free Cash Flow are a significant part of how the market evaluates the Company’s management. Thus, for executives with

responsibility for the Company’s overall operations and strategy (“Staff Executive Officers”), the HRCC concluded that basing a significant component of their fiscal 2007 compensation on EPS and Free Cash Flow was appropriate. For business unit executives, such as Ms. Forte, Ms. Mayer and Ms. Holton (“Business Unit Executive Officers”), the HRCC concluded it was appropriate to link the annual bonus to the financial results of the executive’s particular business unit as well as EPS and Free Cash Flow. Thus, for these Named Executives Officers, the financial targets were based 50% on the achievement of the Company’s EPS targets, 15% on the achievement of the Company’s Free Cash Flow targets, and 35% on the achievement of their respective Division Operating Profit targets.
~~Fiscal 2007 Target Payout Levels and Weighting~~

Measures

Target Payout Levels

35%

100%

150%

Corporate EPS

$
1.55

$
1.70

$
1.85

Corporate Free Cash Flow

$
79M

$
89.5M

$
100M

Division Operating Profit

85
%

100
%

120
%

Measures

Corporate
Staff
Groups

Business
Groups

Corporate EPS

75.0
%

50.0
%

Corporate Free Cash Flow

25.0
%

15.0
%

Division Operating Profit

N/A

35.0
%

Total

100.0
%

100.0
%

          For fiscal 2007, the Company reported EPS of $1.42 per share and Free Cash Flow of $74.7 million. As a result, Mr. Robinson was not paid a bonus. Ms. O’Connell was paid $67,500, which as described below was guaranteed under the terms of her initial employment arrangements with the Company regardless of the Company’s financial results. The bonuses for Ms. Forte, Ms. Mayer and Ms. Holton, as well as the Company’s other members of senior management who are in charge of operating divisions, were based in part upon the achievement of the goals for their respective divisions, as well as overall results for the Company. The divisional goals were based upon Division Operating Profit of each business.
The Company retains the discretion to increase or decrease the total bonus paid to an executive (other than participants in the EPIP, including Mr. Robinson and Ms. O’Connell, as to whom only discretion to decrease the total bonus is retained) by up to 100% of the achieved target and, upon the recommendation of the Chief Executive Officer, to reflect certain other Company objectives, such as revenue growth, expense management, strategic development, organizational effectiveness, demonstration of the achievement of certain cross-departmental company goals, and individual performance both recently and over the term of employment by the Company.
          ~~After reviewing~~Bonus potentials for executive officers are set at percentages of their base salaries deemed appropriate for their current positions. For each of the ~~results~~Named Executive Officers, bonus potentials were set at 55% of base salary, except in the case of Mr. Robinson, whose bonus potential is 110% of base salary, and Ms. O’Connell, whose bonus potential is set at 80% of base salary. Ms. O’Connell’s initial employment arrangement entered into in fiscal 2007 when she joined the Company provided for a bonus potential of 75% of base salary for fiscal ~~2007~~2008. Based on the scope of Ms. O’Connell’s duties and ~~in order~~her performance, the HRCC increased this amount by 5% to ~~provide the most appropriate incentive for management and for executives,~~80%. Depending upon the ~~recommendation of management, the HRCC has reapportioned the weight~~achievement of the ~~targets for the current fiscal year slightly away from the aggregate results for the~~ Company, ~~as a whole and toward divisional~~business unit and individual ~~targets. For fiscal~~goals discussed below, the potential bonus payout for each executive ranged from 0% to 150% of the target amount.
Fiscal 2008 ~~the HRCC has added a divisional component and an individual management by objective (“MBO”) component to targets for the Corporate Staff Groups and has increased the~~Targets

~~divisional component and added an individual MBO component to the targets for the Business Groups. Thus,~~On July 17, 2007, the HRCC set the ~~following weightings for~~ fiscal 2008 ~~targets:~~annual bonus targets for ~~Corporate Staff Groups, bonus is weighted 75%~~executive officers and senior management, including the Named Executive Officers. For fiscal 2008, for the Company performance portion, these targets have been based upon earnings per share (EPS) and Free Cash Flow, and for the portion based on business unit performance, the ~~achievement~~targets were, in addition, based upon the profitability of the relevant business unit (“Division Operating Profit”). Free Cash Flow, as defined by the Company, consists of net cash provided by the Company’s operating activities less spending for capital expenditures, pre-publication and pre-production costs. Consistent with prior years, the HRCC considered EPS and Free Cash Flow ~~goals (56.25%~~as two measures, among others, that are used by investors and ~~18.75%, respectively)~~analysts who follow the Company to evaluate the Company’s annual performance. Thus, for executives with responsibility for the Company’s overall operations and ~~25%~~strategy the HRCC concluded that basing a significant component of their fiscal 2008 compensation on overall corporate

parameters such as EPS and Free Cash Flow was appropriate. For business unit executives, such as Ms. Mayer, Ms. Newman, Mr. Roome and Ms. Forte, the ~~achievement~~HRCC concluded it was appropriate to link the annual bonus to the financial results of ~~divisional operating budget~~the executive’s particular business unit and individual ~~MBO goals (10%~~objectives as well as overall corporate parameters such as EPS and ~~15%, respectively); and~~Free Cash Flow. Accordingly, for ~~Business Groups, bonus is weighted~~these Named Executive Officers, the financial targets were based 50% on the achievement of the Company’s EPS and Free Cash Flow ~~goals (37.5% and 12.5%, respectively)~~targets and 50% on the achievement of their respective Division Operating Profit targets and individual objectives.
Thus, for fiscal 2008, bonuses were calculated in the following manner:
for “Corporate Staff Groups,” such as the Legal, Finance, and Human Resources departments, bonus was weighted 75% on the achievement of the Company’s EPS (56.25%) and Free Cash Flow (18.75%) goals, 10% on the achievement of Department Budget and 15% on the achievement of other pre-established individual Management by Objective goals (“MBOs”);
for Business Groups, which includes the Company’s operating business units, bonus was weighted 50% on the achievement of the Company’s EPS (37.5%) and Free Cash Flow (12.5%) goals, 40% on the achievement of Division Operating Profit and ~~individual MBO goals (40%~~10% on the achievement of MBOs;
For Ms. O’Connell, the Company’s Chief Administrative Officer and ~~10%, respectively). The targets~~Chief Financial Officer, 75% of her bonus was dependent upon the achievement of the Company’s EPS (56.25%) and Free Cash Flow (18.75%) goal and 25% on the achievement of MBOs, subject to a guaranteed minimum payment amount for fiscal 2008 of $150,000 under her initial employment arrangement; and
For Mr. Robinson, the Company’s Chief Executive Officer, 100% of his bonus was dependent upon the achievement of the Company’s EPS (75%) and Free Cash Flow (25%) goals.
For fiscal 2008, the Company reported EPS from continuing operations of $2.82 per share and Free Cash Flow of $188.4 million. During fiscal 2008, as previously announced, the Company made the decision to divest its Direct to Home continuities business. As a consequence, the financial results of that business have been reported as discontinued operations for fiscal 2008 (please refer to Note 3 of Notes to Consolidated Financial Statements included in Item 8, “Consolidated Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2008 (the “Annual Report”)). Pursuant to its authority under the MIP and EPIP, the HRCC used the EPS from continuing operations for the purposes of the bonus calculations, while exercising its discretion to lower the overall bonuses paid to all employees after considering the results of the businesses included in discontinued operations. Mr. Robinson was paid a bonus of $610,088 and Ms. O’Connell was paid a bonus of $378,625. The bonuses for Ms. Mayer, Ms. Newman, Mr. Roome and Ms. Forte each of whom is a Named Executive Officer listed in the Summary Compensation Table, as well as the Company’s other members of senior

management in charge of operating divisions, were also based in part upon the achievement of the goals for their respective divisions, as well as overall results for the Company and the achievement of their MBOs. The divisional goals were based upon Division Operating Profit of each business. Ms. Holton, also a Named Executive Officer for purposes of the Summary Compensation Table, did not receive a bonus or payout under the MIP or EPIP, as she was no longer employed by the Company as of the date required for her to be eligible for a bonus. Amounts paid to Named Executive Officers as bonuses for fiscal 2008 are shown in the Summary Compensation Table.
Fiscal 2009 Targets
The HRCC has reviewed the Company’s financial results for fiscal 2008 and, upon the recommendation of management, has made certain changes in both the funding methodology and the targets for fiscal 2009, in order to provide the most appropriate management incentives for fiscal 2009 annual bonus awards. First, the HRCC has set targets that are based on the overall results for the Company as a threshold. These threshold targets, which are Free Cash Flow and Operating Income, must be met in order to trigger the funding of the bonus pool to be allocated. Free Cash Flow has been defined above, and Operating Income is defined by the Company as the Company’s net revenues less total operating costs and expenses, as reported in the Company’s audited financial statements. If the threshold levels are met and the bonus pool is funded in whole or in part, individual bonuses will be calculated (and paid from the bonus pool) in the following manner:
For Corporate Staff Groups, bonus is weighted 100% on the achievement of the Company’s ~~EPS~~Operating Income goal;
For Business Group Executives, bonus is weighted 50% on the achievement of the Company’s Operating Income goal and 50% on Division Operating Profit;
For the Business Group Management, the bonus is weighted 35% on the achievement of the Company’s Operating Income goal and 65% on Division Operating Profit;
For the remaining Business Group participants, the bonus is weighted 20% on the achievement of the Company’s Operating Income goal and 80% on Division Operating Profit;
For Mr. Robinson, the Company’s Chief Executive Officer, and for Ms. O’Connell, the Company’s Chief Administrative and Chief Financial Officer, the bonuses are weighted 100% on the achievement of the Company’s Operating Income and Free Cash Flow goals (75% and 25%, respectively)~~, and for~~;
While individual payouts may be adjusted pursuant to the ~~Company’s Chief Financial Officer, targets were weighted 75% on~~MIP or EPIP as applicable, in no case will the ~~achievement~~sum of all individual payouts exceed the total of the ~~Company’s~~funded corporate pool.

As indicated above, in setting the targets for individual bonuses for fiscal 2009 the HRCC made several changes from the previous year. First, for Corporate Staff and Business Groups, the HRCC changed the corporate metric for individual bonus targets from EPS and Free Cash Flow ~~goals (56.25%~~in fiscal 2008 to Operating Income in fiscal 2009. The HRCC believes that using Operating Income as the measure for the success of the Company as a whole more closely aligns with the Company’s current strategic plan, including maximizing the Company’s operating margins, and ~~18.75%, respectively) and 25% on the achievement of individual MBO goals. These targets~~ will be ~~discussed in~~ more ~~detail in~~meaningful to management at the divisional level. The HRCC also made a slight adjustment to the targets for the Company’s ~~proxy statement for its annual meeting of stockholders scheduled~~Chief Executive Officer and Chief Administrative Officer and Chief Financial Officer to ~~be held in September 2008 (the “2008 Annual Meeting”).~~include both Operating Income and Free Cash Flow as the performance metrics to reflect these officers’ overall corporate responsibilities.
Long-Term Incentive Compensation
The Stock Grant Committee of the Board (the “SGC”), which is comprised solely of independent directors as defined by NASDAQ rules, each of whom is also a member of the HRCC, determines the awards of long-term compensation through equity incentives (in the form of stock options and restricted stock units) granted to executive officers and senior management as well as other eligible employees. The HRCC believes that including an equity component in executive compensation closely aligns the interests of the executives and the Company’s stockholders and rewards executives in line with stockholder gains. The practice of the SGC is to consider annual equity grants to key employees, including the Named Executive Officers and other executive officers and members of senior management, at its regularly scheduled ~~meeting~~meetings in either July or September. ~~Option~~Equity grants at other times depend upon circumstances such as promotions or new hires.
Equity awards are made under the Scholastic Corporation 2001 Stock Incentive Plan (the “2001 Plan”), which provides for the grant of non-qualified stock options, incentive stock options, restricted stock and other stock-based awards. As a result of a review of its equity-based incentive award practices in fiscal 2005, the HRCC determined that it would be advisable to consider the award of restricted stock units ~~(“Stock Units”)~~ in combination with stock options in appropriate cases. This determination reflected the desire to maintain a strong long term equity component in executive compensation, to reduce the number of equity units required to provide such component and to adjust compensation practices appropriately in light of the ~~upcoming~~ adoption by the Company of Statement of Financial Accounting Standards 123R (“FAS 123R”), which requires companies to recognize the compensation cost related to “share-based payment transactions,” like stock options, in their financial statements. Since the 2005 review, the Company has utilized, in part, grants of a combination of stock options and ~~Stock Units~~restricted stock units to qualified executives, including the Named Executive Officers. To date, only non-qualified stock options and ~~Stock Units~~restricted stock units have been granted under the 2001 Plan and the Company’s current intention is to continue with that mix.

Options to ~~purchase~~Purchase Common Stock and Restricted Stock Units
Equity grants made during fiscal ~~2007~~2008 to executive officers and senior management, including the Named Executive Officers, were determined by the SGC based upon the compensation objectives of the HRCC, as discussed above, and informed by the evolving nature of executive compensation practices. In determining the size of the equity grants for the Named Executive Officers, the SGC made an evaluation of a number of factors, including: competitive market practices; the level of responsibility of the individual; the individual’s job performance and ability to influence corporate results; the number of stock options and ~~Stock Units~~restricted stock units previously granted to that individual; and the cost to the Company under FAS 123R and the related effect of equity grants on earnings per share dilution. The SGC, in December 2007, granted Ms. O’Connell 100,000 stock options as part of her initial employment arrangement. Also, the SGC, in May 2008, granted Ms. Newman 100,000 stock options as a “catch-up” based on comparisons with other executives of the Company and on the importance of the business for which she is responsible. During fiscal ~~2007, Stock Units~~2008, other equity grants were ~~awarded in~~made using a ratio of ~~one Stock Unit~~two restricted stock units for ~~each two~~every three stock ~~options awarded.~~options. This ~~reflects~~generally reflected the relationship between the value of ~~Stock Units,~~restricted stock units, which is based on the market value of the underlying Common Stock, and the FAS 123R value of stock options (which is generally two or three to one), as well as the intent of delivering approximately the same economic value through the ~~Stock Unit~~restricted stock unit component of the award as the stock option component.
Stock options produce value for executives and employees only if the Common Stock price increases over the exercise price, which is set at the market price of the Common Stock on the date of grant, calculated as the average of the high and low prices on the date of grant. The Company historically has calculated the exercise price of stock options by this method, which it believes gives a fair market value and eliminates price fluctuations during the day that the grant is made. Also, through vesting and forfeiture provisions, stock options create incentives for executive officers and senior management to remain with the Company. Stock options granted in fiscal ~~2007~~2008 to executive officers and senior management, including the Named Executive Officers, vest in 25% annual installments beginning on the first anniversary of the grant date, subject to minimum annual vesting of 1,000 shares, and expire after ten years.
          ~~Stock Units~~Restricted stock units convert automatically into shares of Common Stock on a 1-to-1 basis upon vesting, unless otherwise deferred by the recipient. Twenty-five percent of the ~~Stock Units~~restricted stock units received by the Named ~~Executives~~Executive Officers and other members of senior management vest thirteen months after the date of grant and the remaining 75% vest in three equal installments annually thereafter on ~~the~~each anniversary of the date of grant. The additional month during the first vesting period facilitates compliance with applicable regulations of the Internal Revenue Service regarding deferred compensation in case the recipient elects to defer receipt of the underlying Common Stock.

The specific grants to the Named Executive Officers are set forth below in the “Grants of Plan-Based Awards” table, and information regarding the equity awards held by the Named Executive Officers as of the end of fiscal ~~2007~~2008 is set forth below in the “Outstanding Equity Awards at May 31, ~~2007”~~2008” table.

Options to ~~purchase~~Purchase Class A Stock
In July 2004, the HRCC concluded that Mr. Robinson’s long-term incentive compensation opportunities had been significantly below those made available to the chief executive officers of other companies in the publishing and media industries reviewed by the HRCC. As a result of its review of this issue, taking into account Mr. Robinson’s overall compensation, the HRCC adopted the Scholastic Corporation 2004 Class A Stock Incentive Plan (the “Class A Plan”), which was designed to enable the HRCC and the SGC to grant options to Mr. Robinson to acquire Class A Stock (“Class A Options”) and was approved by the Class A Stockholders at the Company’s annual meeting of stockholders held in September 2004. The HRCC concluded that the Class A Plan was in the best interests of the Company and its stockholders since options granted thereunder would, in its opinion, be a significant motivating factor for Mr. Robinson and would also reflect Mr. Robinson’s stated intention to treat any long-term incentive compensation opportunities provided to him under the Class A Plan as a long-term investment in the Company. Mr. Robinson is the only eligible participant in the Class A Plan.
The exercise price of Class A Options is determined by reference to the market price of the Common Stock on the grant date. Based on advice from independent consultants retained by the HRCC, it was determined by the HRCC that the fair market value of a share of Class A Stock was identical to that of a share of Common Stock. All Class A Options granted to date to Mr. Robinson are part of a proposed long-term incentive compensation program for him to provide for a total of 1,500,000 Class A Options, both as a “catch up” in respect of the level of long-term incentive compensation opportunities provided Mr. Robinson in the past and as an ongoing program based on Mr. Robinson’s continuing performance as the Chief Executive Officer of the Company. Mr. Robinson received a grant of 333,000 Class A Options in each of 2004, 2005 and ~~2006.~~2006 and a grant of 250,000 Class A options in 2007. Subject to annual review by the HRCC to provide a recommendation to the SGC, he is eligible to receive ~~grants~~a grant of 250,000 Class A Options in September ~~2007 and~~ 2008 to complete the program. These option grants vest in equal installments over a four year period commencing on the first anniversary of the grant and expire after ten years, which is identical to the Common Stock option grants described above for other executive officers. The grant made to Mr. Robinson in fiscal ~~2007~~2008 is set forth below in the “Grants of Plan-Based Awards Table,” and information regarding the equity awards held by Mr. Robinson as of the end of fiscal ~~2007~~2008 is set forth below in the “Outstanding Equity Awards at May 31, ~~2007”~~2008” table.

Other Equity-Based Incentives
In addition to its stock-based incentive plans, the Company also maintains the Scholastic Corporation Employee Stock Purchase Plan (as amended, the “ESPP”) and the Scholastic Corporation Management Stock Purchase Plan (as amended, the “MSPP”). The ESPP and the MSPP were designed to augment the Company’s stock-based incentive programs by providing participating employees with equity opportunities intended to further align their interests with the Company and its stockholders. The purpose of the ESPP is to encourage

broad-based employee stock ownership. The ESPP is offered to United States-based employees, including executive officers other than Mr. Robinson. The ESPP permits participating employees to purchase, through after-tax payroll deductions, Common Stock at a 15% discount from the closing price of the Common Stock on the last business day of each fiscal quarter.
Under the MSPP, which was adopted in 1999 in order to provide an additional incentive for senior executives to invest in the Common Stock through the use of their cash bonuses, eligible members of senior management may use their annual cash bonus payments on a tax-deferred basis to make equity investments in the Company at a discounted purchase price. With respect to fiscal ~~2007,~~2008, senior management participants were permitted to defer receipt of all or a portion of their annual cash bonus payments, which will be used to acquire ~~Restricted Stock Units~~restricted stock units (“RSUs”) at a 25% discount from the lowest closing price of the underlying Common Stock during the fiscal quarter ending on August 31, ~~2007.~~2008. The deferral period chosen by the participants may not be less than the three-year vesting period for the RSUs, which are converted into shares of Common Stock on a 1-to-1 basis upon expiration of the deferral period. During fiscal ~~2007, four~~2008, fifteen members of senior management had elected to participate in the MSPP. As a result of the award of ~~a bonus~~bonuses to Mr. Robinson, Ms. O’Connell, Ms. Mayer, Ms. Newman and Ms. Forte in respect of fiscal ~~2007, $67,500~~2008, $610,088 (100% of bonus), $124,947 (33% of bonus), $20,759 (10% of bonus), $42,543 (20% of bonus) and ~~$27,500 (25%~~$16,800 (8% of bonus), respectively, will be allocated by them to the purchase of RSUs under the MSPP on September 1, ~~2007.~~2008. Mr. ~~Robinson, Ms. Mayer and Ms. Holton~~Roome did not elect to participate in the MSPP for fiscal ~~2007.~~2008.
~~Mary Winston~~Lisa Holton Severance Agreement
On ~~January 17,~~October 5, 2007, the Company entered into a severance agreement with ~~Mary Winston~~Lisa Holton in connection with her resignation as ~~Chief Financial Officer which became effective as of January 22, 2007 (“Winston~~Executive Vice President and President, Trade and Book Fairs (the “Holton Agreement”). Under the ~~Winston~~Holton Agreement, Ms. ~~Winston~~Holton agreed to remain an employee through ~~July 21,~~December 28, 2007, ~~to ensure a smooth transition of the new Chief Financial Officer,~~ at her then-current monthly salary of ~~$47,895. In addition, the~~$51,500, in order to provide consulting services. The Company also agreed to pay her, on ~~August 10,~~December 28, 2007, ~~$574,740 as~~ a $309,000 lump-sum severance ~~payment and $599,740 to secure a one-year noncompete provision, a one-year restriction on hiring employees of the Company, nondisparagement and confidentiality clauses, and a release of claims.~~payment. In addition, the SGC approved the acceleration of the vesting of the ~~25,000~~6,000 restricted stock ~~options~~units awarded to Ms. ~~Winston~~Holton on September 19, ~~2006,~~2007, so that all such ~~options~~restricted stock units became immediately exercisable, as well as 3,316 RSUs and 994 RSUs held by her under the MSPP, and the extension of exercisability of all 100,000 outstanding stock options held by Ms. Winston from July 21, 2007, the last date of her employment, as provided by the terms of of the 2001 Plan at the time the SGC took such action, to December 31, 2007.
~~New Chief Financial Officer~~exercisable.
On January 22, 2007, Maureen O’Connell became the Company’s Executive Vice President, Chief Administrative Officer and Chief Financial Officer, replacing Mary Winston. Therefore, both Ms. O’Connell and Ms. Winston acted as Chief Financial Officer for a portion

of fiscal 2007, and as a result, the compensation paid to each of Ms. Winston and Ms. O’Connell for fiscal 2007 is included in the “Summary Compensation Table” and related tables that follow this discussion.
          ~~In connection with Ms. O’Connell’s employment, the HRCC approved an initial compensation arrangement comprised of the following elements:~~
•
~~Annual salary: $650,000.~~
•
~~Fiscal 2007 annual bonus target amount: 50% of annual salary (pro-rated based upon the date of hire), with a guaranteed minimum payment of $67,500.~~
•
~~Fiscal 2008 annual bonus target amount: 75% of annual salary, with a guaranteed minimum payment of $150,000.~~
•
~~Stock options: 100,000 options were recommended to, and granted by, the SGC in March 2007, and it will be recommended to the SGC that 100,000 options be granted in December 2007.~~
•
~~Participation in the MSPP.~~
•
~~Severance equal to twelve months’ of her then-current salary if she is terminated at any time during the first three years of her employment for reasons other than gross misconduct.~~
Regulatory Considerations
Section 162(m) of the Code generally denies a publicly traded company a Federal income tax deduction for compensation in excess of $1 million paid to certain of its executive officers, unless the amount of such excess is payable based solely upon the attainment of objective performance criteria. The Company has undertaken to qualify substantial components of the incentive compensation it makes available to its executive officers for the performance exception to non-deductibility. Most equity-based awards available for grant under the Company’s equity compensation plans, and all of the equity-based awards actually granted to executive officers, are intended to so qualify. Amounts payable under the EPIP are also intended to be exempt from the application of Section 162(m) as performance-based compensation. However, in appropriate circumstances, the HRCC may deem it appropriate to pay compensation or make incentive or retentive awards that do not meet the performance based criteria and therefore may not be deductible by reason of Section 162(m).
FAS 123R became applicable to the Company on June 1, 2006. In anticipation of such implementation, in May 2006, the HRCC approved the acceleration of the vesting of all unvested stock options outstanding as of May 30, 2006 granted to all employees, including executive officers, and outside directors of the Company in order to mitigate compensation expense that the Company would have been required to recognize in its financial statements with respect to such options as a result of the implementation of FAS 123R (the “Acceleration”). As a result of the

Acceleration, all such options became fully vested and immediately exercisable. Except for the Acceleration, all other terms and conditions applicable to such stock options were unchanged. In its consideration of the acceleration, the HRCC took into account the fact that a substantial number of the options affected were “underwater,” since the then-current market price for the Common Stock was less than the applicable exercise price. A majority of the options to purchase Common Stock that became fully vested due to the Acceleration were originally scheduled to vest in fiscal 2007.

SUMMARY COMPENSATION TABLE
The following table summarizes the total compensation earned by or paid to the Named Executive Officers for the fiscal ~~year~~years ended May 31, ~~2007.~~2008 and May 31, 2007, as indicated below, including two persons who would have otherwise been included in the table had they remained executive officers at May 31, 2008.

Name and
Principal
Position

Fiscal
Year

Salary
($)

Bonus
($)

Stock
Awards⁽¹⁾
($)

Option
Awards⁽²⁾
($)

Non-Equity
Incentive Plan
Compensation⁽³⁾
($)

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings⁽⁴⁾
($)

All Other
Compen-
sation⁽⁵⁾
($)

Total
($)

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

2007

$
870,000

$
0

$
0

$
698,903

$
0

$
17,556

$
144,225

$
1,730,684

Maureen O’Connell⁽⁶⁾Executive Vice President, Chief Administrative Officer and Chief Financial Officer

2007

$
225,000

$
67,500

$
0

$
65,396

$
0

$
0

$
5,050

$
362,946

Mary A. Winston⁽⁷⁾Former Executive Vice President and Chief Financial Officer

2007

$
568,945

$
0

$
0

$
360,315

$
0

$
5,223

$
1,271,216

$
2,205,699

Deborah A. Forte
Executive Vice President and President, Scholastic Media

2007

$
616,270

$
0

$
126,967

$
14,163

$
110,000

$
15,774

$
40,537

$
923,711

Margery W. Mayer
Executive Vice President and President, Scholastic Education

2007

$
611,769

$
0

$
0

$
82,628

$
100,000

$
11,903

$
10,621

$
816,921

Lisa Holton
Executive Vice President and President, Book Fairs and Trade

2007

$
611,769

$
0

$
74,949

$
0

$
94,091

$
4,952

$
4,018

$
789,779

Name and
Principal
Position

Fiscal Year

Salary ($)

Bonus
($)

Stock
Awards⁽¹⁾
($)

Option
Awards⁽²⁾($)

Non-Equity
Incentive Plan
Compensation⁽³⁾($)

Change in Pension Value and Nonqualified Deferred Compensation Earnings⁽⁴⁾($)

All Other Compen- sation⁽⁵⁾($)

Total
($)

Richard Robinson

2008

$
870,000

$
0

$
0

$
1,604,927

$
610,088

$
0

$
130,928

$
3,215,943

Chairman of the Board,

2007

$
870,000

$
0

$
0

$
698,903

$
0

$
17,556

$
144,225

$
1,730,684

Chief Executive Officer

and President

Maureen O’Connell⁽⁶⁾

2008

$
650,000

$
0

$
37,920

$
499,910

$
378,625

$
0

$
9,340

$
1,575,795

Executive Vice President,

2007

$
225,000

$
67,500

$
0

$
65,396

$
0

$
0

$
5,050

$
362,946

Chief Administrative Officer

and Chief Financial Officer

Margery W. Mayer

2008

$
618,000

$
0

$
37,920

$
217,366

$
207,594

$
14,658

$
9,945

$
1,105,483

Executive Vice President

2007

$
611,769

$
0

$
0

$
82,628

$
100,000

$
11,903

$
10,621

$
816,921

and President,

Scholastic Education

Judith Newman

2008

$
587,100

$
0

$
42,181

$
110,955

$
212,714

$
13,216

$
29,900

$
996,066

Executive Vice President

and President, Scholastic

Book Clubs

Hugh Roome

2008

$
544,808

$
0

$
82,746

$
41,787

$
179,509

$
19,991

$
18,361

$
887,202

Executive Vice President

and President, International

Deborah A. Forte⁽⁷⁾

2008

$
616,270

$
0

$
135,018

$
20,408

$
210,000

$
16,514

$
64,303

$
1,062,513

Executive Vice President

2007

$
616,270

$
0

$
126,967

$
14,163

$
110,000

$
15,774

$
40,537

$
923,711

and President,

Scholastic Media

Lisa Holton⁽⁸⁾

2008

$
261,346

$
0

$
279,841

$
0

$
0

$
0

$
440,389

$
981,576

Former Executive Vice

2007

$
611,769

$
0

$
74,949

$
0

$
94,091

$
4,952

$
4,018

$
789,779

President and President,

Book Fairs and Trade

⁽¹⁾
Represents the compensation cost under FAS 123R reflected in the Company’s financial statements for fiscal 2008 or fiscal 2007, as applicable, for all ~~Stock Units~~restricted stock units held by the Named Executive ~~Officer~~Officers at May 31, 2008 and May 31, 2007, whether or not awarded in fiscal 2008 or fiscal 2007, which are expensed ratably over the vesting period. Assumptions used in determining the FAS 123R values can be found in Note 1 of Notes to “Consolidated Financial Statements” included in Item 8, “Consolidated Financial Statements and Supplementary Data,” ofin the ~~Company’s~~ Annual Report, ~~on Form 10-K for the fiscal year ended May 31, 2007 (the “Annual Report”), Note 1, “Summary of Significant Accounting Policies, Stock-Based Compensation” (“Note 1”),~~ disregarding estimates of forfeitures related to service-based vesting conditions. There were no forfeitures during fiscal 2008 or fiscal 2007 for the Named Executive Officers. For Ms. Holton, as part of the Holton Agreement in connection with her resignation as Executive Vice President, and President, Book Fairs and Trade, the HRCC ratified the acceleration of 6,000 restricted stock units.
⁽²⁾
Represents the compensation cost of stock options under FAS 123R reflected in the Company’s financial statements. Assumptions used in determining the FAS 123R values can be found in Note 1 of Notes to Consolidated Financial Statements included in Item 8, “Consolidated Financial Statements and Supplementary Data” in the Annual Report, disregarding estimates of forfeitures related to service-based vesting conditions. There were no forfeitures during fiscal 2008 or fiscal 2007 for the Named Executive ~~Officers, except that, for Ms. Forte, 115,000 stock options expired without value on July 19, 2006 because they were not in-the-money.~~Officers. All awards shown are options to purchase Common Stock, except that Mr. Robinson’s award represents Class A Options. For Ms. Winston, in connection with her resignation as Chief Financial Officer on January 22, 2007, as part of the Winston Agreement, the SGC approved both the acceleration of the vesting of the stock options granted to her on September 19, 2006 to purchase 25,000 shares of Common Stock, so that all such options became immediately exercisable (the “option acceleration”), and the extension of the exercisability of all 100,000 outstanding stock options held by her on that date from July 21, 2007, the last date of her employment, as provided by the terms of the 2001 Plan at the time of the SGC’s action, to December 31, 2007 (the “option extension”). Such actions were considered a material modification of the stock options under FAS 123R, and the chart above reflects the cost of such modification under FAS 123R reflected in the Company’s financial statements.

(3)

⁽³⁾ Represents the full amount of cash bonus actually awarded to the Named Executive Officer with regard to the fiscal year under the MIP or the EPIP, including any amounts deferred at ~~the executive’s~~such person’s election and invested in RSUs under the MSPP. For fiscal 2008, Mr. Robinson, Ms. ~~Forte had elected to invest 25% of her fiscal 2007 bonus in RSUs, which will occur on September 4, 2007.~~O’Connell, Ms. Mayer, Ms.
Newman and Ms. Forte had elected to invest 100%, 33%, 10%, 20% and 8%, respectively, of his or her fiscal 2008 bonus in RSUs, which will occur on September 1, 2008. Mr. Roome chose not to defer any portion of his 2008 bonus. For fiscal 2007, Mr. Roome and Ms. Forte had elected to invest 30%, and 25%, respectively, of his or her fiscal 2007 bonus awarded in RSUs, which occurred on September 4, 2007.
(4)
⁽⁴⁾
Represents solely the Company contributions and the interest credits allocated to each Named Executive Officer under the Scholastic Corporation Cash Balance Plan, as discussed under “Pension Plan” below. Mr. Robinson is collecting benefits under the prior plan formula and since the interest rate used to determine present value rate of benefits is higher than the prior year’s rate, the change to Mr. Robinson’s pension value for fiscal 2008 was negative $35,223.
⁽⁵⁾
All Other Compensation is further described in the table entitled “Summary of All Other Compensation” below.
⁽⁶⁾
Ms. O’Connell ~~joined the Company~~became Executive Vice President, Chief Administrative Officer and Chief Financial Officer on January 22, ~~2007 at an annual rate of salary equal to $650,000, with a guaranteed minimum bonus for fiscal 2007 equal to $67,500.~~2007. The amount shown in the Bonus column is the amount actually awarded to Ms. O’Connell for fiscal ~~2007;~~2007 pursuant to her employment agreement, as further discussed herein; however, because she had elected to defer 100% of any bonus awarded to her for fiscal 2007 under the MSPP, this amount ~~will be~~was invested in the purchase of 2,874 RSUs on September 4, 2007.
⁽⁷⁾
Ms. ~~Winston~~Forte ceased to be an executive officer in September 2007, but continues to serve as an officer of the Company.
(8)
Ms. Holton resigned ~~from her position~~ as Executive Vice President and ~~Chief Financial Officer of~~President, Book Fairs and Trade on October 5, 2007, but remained an employee through December 28, 2007 as an Executive Consultant. In connection with her resignation, Ms. Holton and the Company ~~on January 22, 2007.~~entered into the Holton Agreement, as further described herein, pursuant to which, among other things, Ms. Holton was entitled to receive a severance payment of $309,000 in December 2007 and base salary payments of $51,500 per month during the period when she was an Executive Consultant.
~~SUMMARY OF ALL OTHER COMPENSATION~~Summary of All Other Compensation

Name

401(k) Plan
Matching
Contributions
($)

Life
Insurance
Premiums
($)

RSU
Cost⁽¹⁾
($)

Perquisites⁽²⁾
($)

Severance
Payments
($)

Non-
Compete
Payment
($)

Total
($)

Richard Robinson

$
6,800

$
465

$
46,193

$
90,767

$
0

$
0

$
144,225

Maureen O’Connell

$
4,800

$
250

$
0

$
0

$
0

$
0

$
5,050

Mary A. Winston

$
3,447

$
593

$
11,275

$
0

$
656,161
⁽³⁾

$
599,740
⁽³⁾

$
1,271,216

Deborah A. Forte

$
6,800

$
593

$
10,424

$
22,720

$
0

$
0

$
40,537

Margery W. Mayer

$
4,550

$
593

$
5,478

$
0

$
0

$
0

$
10,621

Lisa Holton

$
3,425

$
593

$
0

$
0

$
0

$
0

$
4,018

Fiscal Year 2008
Name

401(k) Plan
Matching
Contributions
($)

Life
Insurance
Premiums
($)

RSU
Cost⁽¹⁾
($)

Perquisites⁽²⁾
($)

Severance
Payments
($)

Tax
Reimbursements
($)

Total
($)

Richard Robinson

$
6,950

$
270

$
46,320

$
77,388

$
130,928

Maureen O’Connell

$
8,800

$
540

$
0

$
0

$
9,340

Margery W. Mayer

$
4,650

$
540

$
4,755

$
0

$
9,945

Judith Newman

$
6,784

$
540

$
6,307

$
16,269

$
29,900

Hugh Roome

$
6,281

$
540

$
11,540

$
0

$
18,361

Deborah A. Forte

$
6,950

$
540

$
9,833

$
21,522

$
25,458

$
64,303

Lisa Holton

$
228

$
315

$
0

$
0

$
439,846

$
440,389

⁽¹⁾
Represents the compensation cost under FAS 123R reflected in the Company’s financial statements for RSUs under the MSPP, which are expensed ratably over the vesting period. Assumptions used in determining the FAS 123R values can be found in Note 8 of Notes to Consolidated Financial Statements, included in Item 8, “Consolidated Financial Statements and Supplementary Data” in the Annual ~~Report in Note 8, “Capital Stock and Stock Options.”~~Report.
⁽²⁾
For Mr. Robinson, ~~$85,000~~$74,953 of the amount shown represents a portion of the compensation of certain employees who perform administrative services for Mr. Robinson personally from time to time, based on the proportion of the time estimated by Mr. Robinson to be dedicated to such services, and the remainder represents club membership dues used partially for personal use. For Ms. Newman and Ms. Forte, the amount represents payments made by the Company for personal use of a company-provided automobile, based on information provided by ~~her.~~
⁽³⁾
In connection with her resignation as Chief Financial Officer in January 2007, Ms. Winston and the Company entered into the Winston Agreement, as further described in this Proxy Statement, pursuant to which, among other things, she was entitled to receive, on August 10, 2007, a paymenteach of $599,740 in consideration for certain non-compete and non-solicitation covenants, confidentiality and non-disparagement provisions, and a release of claims (collectively, the “Non-Compete Payment”), as well as a lump-sum severance payment of $574,740. In addition, $81,421 was accrued by the Company in fiscal 2007 for the payment of her salary in fiscal 2008 through the end of her employment period on July 21, 2007, which is included in the amount under “Severance Payments.”them.

GRANTS OF PLAN-BASED AWARDS
The following table provides information on cash bonus, stock options and ~~Stock Units~~restricted stock units granted in fiscal ~~2007~~2008 to each of the Named Executive Officers.

Estimated Possible Payouts, Under
Non-Equity Incentive Plan Awards⁽¹⁾

Name

Grant
Date

Threshold
($)

Target
($)

Maximum
($)

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)

Exercise
or Base
Price of
Option
Awards⁽²⁾
($/Sh)

Closing
Market
Price on
Grant
Date
($/Sh)

Grant
Date Fair
Value of
Stock and
Option
Awards⁽³⁾
($)

Richard

—

$
304,500

$
870,000

$
1,305,000

Robinson

9/20/2006

—

333,000
⁽⁴⁾
$
30.08

$
30.23

$
3,742,169

Maureen

—

$
47,396

$
135,417

$
203,126

—

O’Connell

3/20/2007

100,000

$
34.85

$
35.05

$
1,230,376

Mary A.

9/19/2006

—

—

—

—

25,000

$
29.74

$
29.81

$
616,062

Winston

Deborah A.

—

$
107,847

$
308,135

$
462,203

Forte

9/19/2006

6,800

$
29.74

$
29.81

$
75,534

9/19/2006

3,400
⁽⁵⁾

$
29.81

$
118,707

Margery W.

—

$
108,150

$
309,000

$
463,500

—

Mayer

7/18/2006

33,000

$
27.52

$
27.58

$
353,099

Lisa Holton

$
108,150

$
309,000

$
463,500

—

—

—

—

Name

Grant
Date

Estimated Possible Payouts, Under
Non-Equity Incentive Plan Awards⁽¹⁾

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)

All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)

Exercise
or Base
Price of
Option
Awards⁽²⁾
($/Sh)

Closing
Market
Price on
Grant
Date
($/Sh)

Grant
Date Fair
Value of
Stock and
Option
Awards⁽³⁾($)

Threshold ($)

Target ($)

Maximum ($)
Richard Robinson

—

$
334,950

$
957,000

$
1,435,500

9/19/2007

—

250,000
⁽⁴⁾
$
36.21

$
35.54

$
3,075,454

Maureen O’Connell

—

$
182,000

$
520,000

$
780,000

9/19/2007

—

9,000

$
36.21

$
35.54

$
113,571

9/19/2007

6,000
⁽⁵⁾

$
35.54

$
217,260

12/11/2007

100,000

$
34.84

$
34.36

$
1,150,638

Margery W. Mayer

—

$
118,965

$
339,900

$
509,850

7/17/2007

—

33,000

$
35.38

$
35.52

$
427,136

9/19/2007

9,000

$
36.21

$
35.54

$
113,571

9/19/2007

6,000
⁽⁵⁾

$
35.54

$
217,260

Judith Newman

—

$
113,017

$
322,905

$
484,358

7/17/2007

20,000

$
35.38

$
35.52

$
258,870

9/19/2007

9,000

$
36.21

$
35.54

$
113,571

9/19/2007

6,000
⁽⁵⁾

$
35.54

$
217,260

5/20/2008

100,000

$
29.81

$
29.80

$
1,010,698

Hugh Roome

—

$
105,875

$
302,500

$
453,750

9/19/2007

9,000

$
36.21

$
35.54

$
113,571

9/19/2007

6,000
⁽⁵⁾

$
35.54

$
217,260

Deborah A. Forte

—

$
118,632

$
338,948

$
508,422

Lisa Holton

—

—

—

—

9/19/2007

9,000

$
36.21

$
35.54

$
113,571

9/19/2007

6,000
⁽⁵⁾

$
35.54

$
217,260

⁽¹⁾
Represents the potential amounts of cash bonus that could have been received for fiscal ~~2007~~2008 under the EPIP or the MIP. For actual amounts paid (except with respect to Ms. O’Connell), see the column entitled “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table. For Ms. O’Connell, amounts shown represent the pro-rated portion of her full year target, which was $325,000, or 50% of her annual salary. The actual amount paid to Ms. O’Connell was $67,500, which was the amount of guaranteed minimum bonus provided under her initial employment arrangement with the Company and is therefore shown in the column “Bonus” in the Summary Compensation Table.
⁽²⁾
The exercise price for all options, including Class A Options, is equal to the average of the high and low Common Stock price as reported on ~~the~~ NASDAQ ~~Stock Market, Inc.~~ on the respective grant dates.
⁽³⁾
This column shows the fair values of ~~Stock Units~~restricted stock units and stock options as of the grant date computed in accordance with FAS 123R. For Mary Winston, the option acceleration and the option extension discussed above were considered a material modification of the stock options under FAS 123R, and the chart above reflects the incremental fair value, computed as of January 17, 2007, in accordance with FAS 123R with respect to those awards.
⁽⁴⁾
Represents a grant of Class A Options. The CD&A discusses the ongoing long-term incentive compensation program for Mr. Robinson pursuant to which the Class A Options were granted.
⁽⁵⁾
Represents ~~Stock Units~~restricted stock units that vest in 25% increments on October 19, ~~2007, September 19,~~ 2008, September 19, 2009, September 19, 2010 and September 19, ~~2010.~~2011, with the exception of Ms. Holton’s grant, which was accelerated as part of the Holton Agreement.
The CD&A discusses the ongoing long-term incentive compensation program for Mr. Robinson pursuant to which the Class A Options noted in the tables above were granted; the severance agreement entered into with Ms. Winston pursuant to which the salary to be paid to her in fiscal 2007, following her resignation as Chief Financial Officer, severance, and Non-Compete Payment, as well as the modifications to her stock options, noted in the tables above were made; and the initial compensation arrangement entered into with Ms. O’Connell that covers her salary, as well as the bonus and stock options, noted in the above tables.

OUTSTANDING EQUITY AWARDS AT MAY 31, ~~2007~~2008
The following table ~~set~~sets forth certain information with regard to all unexercised options and all unvested ~~Stock Units~~restricted stock units held by the Named Executive Officers at May 31, ~~2007.~~2008.

Option Awards

Stock Awards

Number of
Securities
Underlying
Unexercised
Options

Number of
Securities
Underlying
Unexercised
Options⁽¹⁾

Option
Exercise
Price
($)

Option
Expiration
Date

Number
of Shares
or Units
of Stock
That Have
Not Vested⁽²⁾
(#)

Market Value
of Shares
or Units
of Stock
That Have
Not Vested⁽²⁾
($)

Grant
Date

Name

(#)
Exercisable

(#)
Unexercisable

Richard Robinson

5/13/1998

190,000

$
18.845

5/14/2008

7/20/1999

250,000

$
25.69

7/21/2009

7/18/2000

250,000

$
31.565

7/19/2010

7/18/2002

5,850

$
36.23

7/18/2012

9/20/2004

333,000
⁽³⁾

$
29.49

9/20/2014

9/21/2005

333,000
⁽³⁾

$
36.41

9/21/2015

9/20/2006

333,000
⁽³⁾
$
30.08

9/20/2016

Maureen O’Connell

3/20/2007

100,000

$
34.85

3/20/2017

Mary A. Winston

3/15/2004

50,000

$
31.56

12/31/2007
⁽⁴⁾

7/19/2005

25,000

$
37.38

12/31/2007
⁽⁴⁾

9/19/2006

25,000
⁽¹⁾

$
29.74

12/31/2007
⁽⁴⁾

Deborah A. Forte

5/13/1998

74,000

$
18.845

5/14/2008

7/20/1999

76,000

$
25.69

7/21/2009

12/18/2001

30,000

$
42.85

12/18/2011

7/18/2002

28,040

$
36.23

7/18/2012

7/14/2003

35,000

$
27.46

7/14/2013

9/20/2004

15,000

$
29.19

9/20/2014

9/19/2006

6,800

$
29.74

9/19/2016

9/20/2004

7,500

$
238,275

9/19/2006

3,400

$
108,018

Margery W. Mayer

9/19/2000

50,000

$
31.865

9/20/2010

12/18/2001

25,000

$
42.85

12/18/2011

7/18/2002

27,540

$
36.23

7/18/2012

7/14/2003

35,000

$
27.46

7/14/2013

5/24/2004

50,000

$
28.11

5/24/2014

7/19/2005

34,000

$
37.38

7/19/2015

7/18/2006

33,000

$
27.52

7/18/2016

Lisa Holton

5/25/2005

50,000

$
26.33

5/25/2015

5/25/2006

50,000

$
37.50

5/25/2016

5/25/2005

4,000

$
108,018

Option Awards

Stock Awards

Name

Grant
Date

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options⁽¹⁾
(#)
Unexercisable

Option
Exercise
Price
($)

Option
Expiration
Date

Number
of Shares
or Units
of Stock
That Have
Not Vested⁽²⁾
(#)

Market Value
of Shares
or Units
of Stock
That Have
Not Vested⁽²⁾
($)

Richard Robinson

7/20/1999

250,000

$
25.69

7/21/2009

7/18/2000

250,000

$
31.565

7/19/2010

7/18/2002

5,850

$
36.23

7/18/2012

9/20/2004

333,000
⁽³⁾

$
29.49

9/20/2014

9/21/2005

333,000
⁽³⁾

$
36.41

9/21/2015

9/20/2006

83,250
⁽³⁾
249,750
⁽³⁾
$
30.08

9/20/2016

9/19/2007

250,000
⁽³⁾
$
36.21

9/19/2017

Maureen O’Connell

3/20/2007

25,000

75,000

$
34.85

3/20/2017

9/19/2007

9,000

$
36.21

9/19/2017

9/19/2007

6,000

$
186,600

12/11/2007

100,000

$
34.84

12/11/2017

Margery W. Mayer

9/19/2000

50,000

$
31.865

9/20/2010

12/18/2001

25,000

$
42.85

12/18/2011

7/18/2002

27,540

$
36.23

7/18/2012

7/14/2003

35,000

$
27.46

7/14/2013

5/24/2004

50,000

$
28.11

5/24/2014

7/19/2005

34,000

$
37.38

7/19/2015

7/18/2006

8,250

24,750

$
27.52

7/18/2016

7/17/2007

33,000

$
35.38

7/17/2017

9/19/2007

9,000

$
36.21

9/19/2017

9/19/2007

6,000

$
186,600

Judith Newman

7/20/1999

10,000

$
25.69

7/20/2009

7/18/2000

50,000

$
31.565

7/18/2010

12/18/2001

10,000

$
42.85

12/18/2011

7/18/2002

20,000

$
36.23

7/18/2012

3/17/2003

20,000

$
24.80

3/17/2013

7/14/2003

5,000

$
27.46

7/14/2013

5/24/2004

50,000

$
28.11

5/24/2014

9/20/2005

25,000

$
36.92

9/20/2015

9/19/2006

1,700

5,100

$
29.74

9/19/2016

7/17/2007

20,000

$
35.38

7/17/2017

9/19/2007

9,000

$
36.21

9/19/2017

5/20/2008

100,000

$
29.81

5/20/2018

9/19/2006

2,550

$
79,305

9/19/2007

6,000

$
186,600

Option Awards

Stock Awards

Name

Grant
Date

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable

Number of
Securities
Underlying
Unexercised
Options⁽¹⁾
(#)
Unexercisable

Option
Exercise
Price
($)

Option
Expiration
Date

Number
of Shares
or Units
of Stock
That Have
Not Vested⁽²⁾
(#)

Market Value
of Shares
or Units
of Stock
That Have
Not Vested⁽²⁾
($)

Hugh Roome

7/20/1999

30,000

$
25.69

7/21/2009

7/18/2000

16,000

$
31.565

7/19/2010

12/14/2000

30,000

$
35.905

12/15/2010

12/18/2001

30,000

$
42.85

12/18/2011

7/18/2002

26,660

$
36.23

7/18/2012

7/14/2003

29,000

$
27.46

7/14/2013

5/24/2004

50,000

$
28.11

5/24/2014

9/20/2004

12,000

$
29.19

9/20/2014

9/20/2005

10,000

$
36.92

9/20/2015

9/19/2006

1,700

5,100

$
29.74

9/19/2016

9/19/2007

9,000

$
36.21

9/19/2017

9/20/2004

667

$
20,744

9/19/2006

2,550

$
79,305

9/19/2007

6,000

$
186,600

Deborah A. Forte

7/20/1999

76,000

$
25.69

7/21/2009

12/18/2001

30,000

$
42.85

12/18/2011

7/18/2002

28,040

$
36.23

7/18/2012

7/14/2003

35,000

$
27.46

7/14/2013

9/20/2004

15,000

$
29.19

9/20/2014

9/19/2006

1,700

5,100

$
29.74

9/19/2016

9/20/2004

7,500

$
233,250

9/19/2006

2,550

$
79,305

Lisa Holton

—

—

—

(1)
⁽¹⁾
~~Excepted as noted below, all~~All stock options that were granted in fiscal 2007 or 2008 vest in 25% increments beginning with the first anniversary of the date of grant. For Mary Winston, the vesting of the stock options shown were accelerated in connection with her resignation as Chief Financial Officer on January 17, 2007, and as a result, all such options became immediately exercisable on that date.
⁽²⁾
For ~~Stock Units~~restricted stock units granted in fiscal 2007 or 2008, 25% of the grant vests thirteen months after the grant date and the remaining 75% vests in equal increments on the 2nd, 3rd and 4th anniversaries of the grant date. The market value of ~~these~~restricted stock unit awards was calculated by multiplying the number of shares of Common Stock underlying the ~~Stock Units~~restricted stock units by ~~$31.77,~~$31.10, the closing price of the Common Stock on NASDAQ on May 31, ~~2007.~~2008.
⁽³⁾
Represents a grant of Class A Options.

⁽⁴⁾
The original expiration dates for Ms. Winston’s stock options were ten years from the respective grant dates; as a result of certain arrangements entered into between Ms. Winston and the Company in connection with her resignation as Chief Financial Officer, she has until December 31, 2007 to exercise these options.
OPTION EXERCISES AND STOCK VESTED
The table below shows the number of shares of Common Stock acquired during fiscal ~~2007~~2008 upon the exercise of stock options and upon vesting of ~~Stock Units.~~restricted stock units.

Option Awards

Stock Awards

          Name

Number of
Shares
Acquired on
Exercise
(#)

Value
Realized on
Exercise
($)

Number of
Shares
Acquired on
Vesting
(#)

Value
Realized on
Vesting
($)

Richard Robinson

153,937
⁽¹⁾
$
2,044,892
⁽¹⁾

0

0

Maureen O’Connell

0

0

0

0

Mary A. Winston

0

0

0

0

Deborah A. Forte

0

0

3,750
⁽²⁾
$
113,363
⁽²⁾
Margery W. Mayer

5,610
⁽³⁾
$
76,717
⁽³⁾

0

0

Lisa Holton

0

0

2,000
⁽²⁾
$
62,440
⁽²⁾

Option Awards

Stock Awards

Name

Number of
Shares
Acquired on
Exercise
(#)

Value
Realized on
Exercise
($)

Number of
Shares
Acquired on
Vesting
(#)

Value Realized on
Vesting
($)

Richard Robinson

190,000
⁽¹⁾
$
2,035,850
⁽¹⁾
0

0

Maureen O’Connell

0

0

0

0

Margery W. Mayer

0

0

0

0

Judith Newman

0

850
⁽⁵⁾
$
31,391
⁽⁵⁾
Hugh Roome

67,184
⁽²⁾
$
1,223,085
⁽²⁾
1,516
⁽⁵⁾
$
54,834
⁽⁵⁾
Deborah A. Forte

74,000
⁽³⁾
$
1,338,290
⁽³⁾
850
⁽⁵⁾
$
31,391
⁽⁵⁾
Lisa Holton

50,000
⁽⁴⁾
$
485,500
⁽⁴⁾
10,000
⁽⁵⁾
$
349,300
⁽⁵⁾

⁽¹⁾
During fiscal ~~2007,~~2008, Mr. Robinson exercised options to purchase ~~14,152~~190,000 shares of Common Stock that were due to expire on ~~July 16, 2007~~May 14, 2008, at an exercise price of $18.845 per share. The gain, after taxes, resulting from the exercise and ~~options~~sale of 65,000 shares was paid to ~~purchase 139,785~~Mr. Robinson’s former spouse pursuant to a marital separation agreement and Mr. Robinson retained 23,000 shares, ~~of Common Stock that were due~~which was approximately equal to ~~expire on September 16, 2007, and he retained~~ the ~~shares received upon each such exercise.~~net gain after taxes. In accordance with SEC rules, the Value Realized on Exercise was calculated by subtracting the grant price from the fair market value of the underlying Common Stock on the date of exercise. For purposes of this table, in accordance with SEC rules, the fair market value of the Common Stock on the date of exercise was computed as the closing price for the Common Stock as reported on NASDAQ on the date of exercise, ~~April 19, 2007,~~May 12, 2008, which was ~~$31.56.~~$29.56.
(2)
⁽²⁾
In accordance with SEC rules, the Value Realized on Vesting was computed based on the closing price of the Common Stock as reported on NASDAQ on the vesting dates, which was $30.23 on September 20, 2006 for Ms. Forte and $31.22 on May 25, 2007 for Ms. Holton. Ms. Forte and Ms. Holton actually received only 2,332 and 1,244 shares of Common Stock, respectively, when the Stock Units vested because 1,418 and 756 shares of Common Stock, respectively, were retained by the Company at their request to cover the taxes required to be withheld at the time of vesting.
⁽³⁾
~~Ms. Mayer~~During fiscal 2008, Mr. Roome exercised options to purchase ~~5,610~~67,184 shares of Common Stock that were due to expire on July 16, 2007 ~~and she retained the shares received upon such exercise.~~at an exercise price of $17.595 per share. In accordance with SEC rules, the Value Realized on Exercise was calculated by subtracting the grant price from the fair market value of the underlying Common Stock on the date of exercise. For purposes of this table, in accordance with SEC rules, the fair market value of the Common Stock on the date of exercise was computed as the closing price for the Common Stock as reported on NASDAQ on the date of exercise, ~~April 3,~~June 28, 2007, which was ~~$31.27.~~$35.80.
(3)
During fiscal 2008, Ms. Forte exercised options to purchase 74,000 shares of Common Stock that were due to expire on May 14, 2008, at an exercise price of $18.845 per share. In accordance with SEC rules, the Value Realized on Exercise was calculated by subtracting the grant price from the fair market value of the underlying Common Stock on the date of exercise. For purposes of this table, in accordance with SEC rules, the fair market value of the Common Stock on the date of exercise was computed as the closing price for the Common Stock as reported on NASDAQ on the date of exercise, October 19, 2007, which was $36.93.
(4)
During fiscal 2008, Ms. Holton exercised options to purchase 50,000 shares of Common Stock that were due to expire on March 27, 2008, which was 90 days after her termination date. In accordance with SEC rules, the Value Realized on Exercise was calculated by subtracting the grant price from the fair market value of the underlying Common Stock on the date of exercise. For purposes of this table, in accordance with SEC rules, the fair market value of the Common Stock on the date of exercise was computed as the closing price for the Common Stock as reported on NASDAQ on the date of exercise, October 9, 2007, which was $36.04.

(5)
In accordance with SEC rules, the Value Realized on Vesting was computed based on the closing price of the Common Stock as reported on NASDAQ on the vesting dates. Ms. Newman, Mr. Roome and Ms. Forte each had 850 restricted stock units vest on October 19, 2007 and the closing price on that date was $36.93. Mr. Roome and Ms. Forte each received 528 shares and Ms. Newman received 562 shares as 322 and 288 shares, respectively, were retained by the Company at each person’s request to cover the taxes required to be withheld at the time of vesting. Mr. Roome and Ms. Forte had 666 and 3,750 restricted stock units vest on September 20, 2007, respectively, and the closing price on that date was $35.20. Ms. Forte chose to defer the receipt of such shares until September 20, 2012 and Mr. Roome received 414 shares, as 252 shares were retained by the Company at his request to cover the taxes required to be withheld at the time of vesting. Ms. Holton had 4,000 restricted stock units vest on December 11, 2007 and an additional 6,000 restricted stock units vest on December 28, 2007 pursuant to the accelerated vesting provided for in the Holton Agreement. The closing price was $34.36 on December 11, 2007 and $35.31 on December 28, 2007. Ms. Holton received 2,488 shares on December 11, 2007 and 3,732 shares on December 28, 2007, as 1,512 and 2,268 shares, respectively, were retained by the Company at her request to cover the taxes required to be withheld at the time of vesting.
~~PENSION PLAN~~Pension Plan
The Company maintains the Scholastic Corporation Cash Balance Retirement Plan for substantially all of its employees based in the United States, including the Named Executive Officers (the “Retirement 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 the account balances is accrued monthly based on the average rate for one-year United States Treasury Bills plus 1.0%. Participants in the Retirement Plan become fully vested in their accrued benefits upon completion of ~~five~~three years of service. Vested retirement benefits are payable in the form of a lump-sum or annuity payment upon retirement, termination, death or disability.
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 as of June 1, 1999 were given the option to remain under a modified version of the Retirement Plan’s benefit formula used prior to such amendment and restatement (the “Prior Benefit Formula”). Mr. Robinson elected to continue participation under the Prior Benefit Formula, which 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 Prior Benefit Formula provides for an annual benefit payable at retirement

equal to, for each year of credited service, 1.5% of that portion of the participant’s basic annual compensation up to $13,650, plus 2.0% of that portion of the participant’s basic annual compensation in excess of $13,650. At July 1, ~~2007,~~2008, Mr. Robinson had earned an estimated annual benefit payment using the Prior Benefit Formula of ~~$64,296,~~$67,632, which is net of the benefit transferred to his former spouse pursuant to a matrimonial agreement. In 2007, Mr. ~~Robinson’s~~Robinson reached age 70.5, and, as required by law, on April 1, 2008 he began receiving the benefit ~~is payable upon his retirement.~~he accrued through January 1, 2008 under the Retirement Plan.

The following table sets forth the years of credited service, ~~and~~ the present value of benefits accumulated and any payments received during the last fiscal year by each of the Named Executive Officers under the Retirement Plan, in each case computed as of May 31, ~~2007,~~2008, the same measurement date used in the Consolidated Financial Statements included in the Annual Report.
PENSION BENEFITS

          Name

               Plan Name

Number of
Years
Credited
Service
(#)

Present
Value of
Accumulated
Benefit
($)

Payments
During Last
Fiscal Year
($)

Richard Robinson

Scholastic Corporation Cash
Balance Retirement Plan

45

$
593,103
⁽¹⁾

$
0

Maureen O’Connell

Scholastic Corporation Cash
Balance Retirement Plan

0

0

0

Mary A. Winston⁽²⁾

Scholastic Corporation Cash
Balance Retirement Plan

3

$
10,001

0

Deborah A. Forte

Scholastic Corporation Cash
Balance Retirement Plan

24

$
85,808

0

Margery W. Mayer

Scholastic Corporation Cash
Balance Retirement Plan

17

$
73,038

0

Lisa Holton

Scholastic Corporation Cash
Balance Retirement Plan

2

$
4,952

0

Name

Plan Name

Number of
Years
Credited
Service
(#)

Present
Value of
Accumulated
Benefit
($)

Payments
During Last
Fiscal Year
($)

Richard Robinson

Scholastic Corporation Cash
Balance Retirement Plan

46

$
557,879
⁽¹⁾

$
8,964

Maureen O’Connell

Scholastic Corporation Cash
Balance Retirement Plan

1

$
0

$
0

Margery W. Mayer

Scholastic Corporation Cash
Balance Retirement Plan

18

$
87,696

$
0

Judith Newman

Scholastic Corporation Cash
Balance Retirement Plan

15

$
80,493

$
0

Hugh Roome

Scholastic Corporation Cash
Balance Retirement Plan

17

$
216,250

$
0

Deborah A. Forte

Scholastic Corporation Cash
Balance Retirement Plan

25

$
102,322

$
0

Lisa Holton

Scholastic Corporation Cash
Balance Retirement Plan

3

$
0
⁽²⁾

$
0

⁽¹⁾
Mr. Robinson is currently accumulating benefits under the Prior Benefit Formula. In fiscal 2008, Mr. Robinson reached age 70.5, and, as required by law, on April 1, 2008 he began receiving the benefit he accrued through January 1, 2008
(2)
⁽²⁾
~~When~~ Ms. ~~Winston~~Holton terminated employment ~~on July 21, 2007 as discussed above, she was not vested~~with the Company prior to vesting under the ~~terms of the~~ Retirement ~~Plan and, accordingly, is not currently eligible to receive benefits thereunder.~~Plan.

The following table sets forth information about the contributions, if any, by the Named Executive Officers under nonqualified deferred compensation arrangements which relate solely to the MSPP, during fiscal ~~2007~~2008 and the balances thereunder at May 31, ~~2007.~~2008.
NONQUALIFIED DEFERRED COMPENSATION TABLE

Name

Executive Contributions
in the Last Fiscal Year
($)⁽¹⁾

Aggregate Balance
at Last Fiscal Year End
($)⁽²⁾

Richard Robinson

$
0

$
1,685,081

Maureen O’Connell

$
0

$
0

Mary A. Winston

$
18,800

$
136,929

Deborah A. Forte

$
16,250

$
432,580

Margery W. Mayer

$
13,500

$
244,311

Lisa Holton

$
0

$
0

Name

Executive Contributions
in the Last Fiscal Year
($)⁽¹⁾

Aggregate Balance
at Last Fiscal Year End
($)⁽²⁾

Richard Robinson

$
0

$
1,649,544

Maureen O’Connell

$
67,500

$
89,381

Margery W. Mayer

$
0

$
239,159

Judith Newman

$
0

$
364,616

Hugh Roome

$
33,000

$
170,241

Deborah A. Forte

$
27,500

$
317,438

Lisa Holton

$
0

$
0

⁽¹⁾
The amounts shown represent fiscal ~~2006~~2007 bonus amounts that were to be paid in fiscal ~~2007~~2008 but were deferred at the Named Executive Officer’s election and invested in RSUs under the MSPP. Each of Ms. ~~Winston,~~O’Connell, Mr. Roome and Ms. Forte ~~and Ms. Mayer~~ elected to invest ~~50%~~100%, ~~25%~~30% and ~~20%~~25%, respectively, of her or his fiscal ~~2006~~2007 bonus in RSUs under the MSPP. The purchase of the RSUs was made on September ~~1, 2006.~~4, 2007.
⁽²⁾
Represents the value of all RSUs held by the Named Executive Officer under the MSPP at May 31, ~~2007~~2008 and was calculated by multiplying the number of RSUs held by ~~$31.77,~~$31.10, the closing price of the Common Stock on NASDAQ on such date.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
The following ~~summaries~~discussion and tables describe and quantify the potential payments and benefits that would be provided to each of the Named Executive Officers in connection with a termination of employment under the Company’s compensation plans and individual agreements. Except where noted, the calculations of the potential payments to the Named Executive Officers reflect the assumption that the termination event occurred on May 31, ~~2007,~~2008, with the closing sale price per share of the Common Stock on that date of ~~$31.77.~~$31.10. The calculations exclude payments and benefits to the extent that they do not discriminate in scope, terms or operation in favor of the Company’s executive officers and are available generally to all salaried employees of the Company. The calculations also do not include plan balances under the Retirement Plan applicable to the Named Executive Officers, which are provided in the Pension Benefits table above. Of the Named Executive Officers, as of May 31, 2008, Mr. Robinson, Ms. Mayer, Mr. Roome and Ms. Forte are of retirement age, which is fifty-five years old, and Ms. O’Connell and Ms. Newman are under retirement age. Ms. Holton was no longer employed by the Company as of May 31, 2008.

The Company generally does not enter into employment contracts with its executives and does not have a general severance policy applicable to all employees. Accordingly, the Named Executive Officers are entitled to benefits upon termination of their employment only as provided for in stock options and restricted stock units previously granted under the 2001 plan, (or, in the case of Mr. Robinson, under the Class A Plan) and previously purchased RSUs under the MSPP, as well as, in the case of Ms. O’Connell, her employment arrangements.
409A Limitations. In compliance with Internal Revenue Code Section 409A, an executive who is a “specified employee” (one of the 50 most highly compensated employees of the Company) at the time of termination of employment may not receive a payment of any compensation that is determined to be subject to Internal Revenue Code Section 409A until six months after his or her departure from the Company (including, but not limited to, certain benefit payments on voluntary or involuntary termination and 409A deferred compensation plan benefits).
O’Connell Employment Arrangement. ~~As described in “Compensation Discussion and Analysis—New Chief Financial Officer” above, the~~The compensation arrangements for Maureen O’Connell, who joined the Company as Executive Vice President, Chief Administrative Officer and Chief Financial Officer in January 2007, include a provision for a

lump-sum payment, in lieu of severance, equivalent to twelve months of her then-current base salary if she is terminated at any time during the first three years of her employment for reasons other than gross misconduct. Assuming that such a termination had occurred aton May 31, ~~2007,~~2008, this payment would have been equal to $650,000, which was her annual rate of salary as of that date.
          ~~Winston~~Holton Severance Agreement.As described in “Compensation Discussion and Analysis—~~Mary Winston~~Lisa Holton Severance Agreement” above, ~~on January 17, 2007,~~ the Company entered into a severance agreement with ~~Mary Winston~~Lisa Holton in connection with her resignation as ~~Chief Financial Officer effective as of January 22,~~Executive Vice President and President, Book Fairs and Trade on October 5, 2007. The ~~Winston~~Holton Agreement provided for the continuation of her then-current monthly salary of ~~$47,895~~$51,500 through ~~July 21,~~December 28, 2007, ~~which is the date her employment terminated,~~ for a total of ~~$285,231,~~$130,847, and a lump-sum severance payment of ~~$574,740~~$309,000 on ~~August 10,~~December 28, 2007, and a $599,740 payment on that date in consideration for a one-year non-compete provision, a one-year restriction on hiring the Company’s employees, a confidentiality agreement, a non-disparagement clause and a release of claims, for a total of ~~$1,459,711.~~$439,847. In addition, the Company agreed to accelerate the vesting of ~~25,000~~6,000 restricted stock ~~options~~units granted to her, ~~in September 2006,~~ so that all such ~~options~~RSUs became immediately exercisable, as well as 3,316 RSUs and 994 RSUs purchased by her under the MSPP on September 1, 2005 and September 1, 2006, respectively. The value of the acceleration of the vesting of such options to Ms. Winston is estimated to be $50,750, which is based on the difference between the $31.77 closing price of the Common Stock on NASDAQ on May 31, 2007 and the $29.74 exercise price of the stock options.exercisable. The value of the acceleration of such RSUs to Ms. ~~Winston is estimated to be $59,058, which is equal to the difference between~~Holton was $208,380, the value of the vested RSUs on the date of termination, based on the value of the underlying Common Stock on that date, compared to the value of such RSUs to her if they had remained unvested at the date of termination. Under the terms of the MSPP (as described below), the unvested RSUs would have been equal to the lower of the purchase price for the RSUs or the market value of the RSUs at the date of termination, using in each caserestricted stock units multiplied by the closing price of the Common Stock on ~~NASDAQ on July 23, 2007, the first business day after her termination.~~October 5, 2007.
MSPP Plan.
As described in “Compensation Discussion and Analysis—Other Equity Based Incentives” above, eligible members of senior management, including the Named Executive Officers, may defer receipt of all or a portion of their annual cash bonus payments, including under the MIP and EPIP (as described under “Compensation Discussion and Analysis—

Annual Performance-Based Cash Bonus Awards” above), through the purchase of RSUs under the MSPP. The amounts deferred with respect to bonuses received for fiscal ~~2006~~2007 but paid and deferred in fiscal ~~2007~~2008 are included in the ~~Non-Qualified~~“Non-Qualified Deferred Compensation ~~Table~~Table” above. The following discussion describes the payment provisions for ~~unvested~~ RSUs under the terms of the MSPP, including upon the voluntary or involuntary termination of employment of the executive participating in the plan (a “Participant”).

Vesting of ~~RSUs~~RSUs.
A ~~Participant~~participant will be fully vested in each RSU three years after the date such RSU is purchased or, if earlier, upon death while employed, Disability (as defined in the MSPP) while employed or retirement. The HRCC, which administers the MSPP, may, in its sole discretion, accelerate the time at which any RSUs may ~~be vested,~~vest, but in no event can the acceleration of vesting result in the acceleration of payment of the RSUs to the Participant. Of the Named Executive Officers, Mr. Robinson and Ms. Mayer are each of retirement age under the terms of the MSPP, and as a result, if either had retired on May 31, 2007, he or she would have been entitled to receive a payment of Common Stock with a value of $1,685,081 and $244,311, respectively, at that time, based upon the $31.77 closing price of the Common Stock on NASDAQ on that date.
Payment on or after ~~Vesting~~Vesting.
With respect to each vested RSU, the Company will issue to the Participant one share of Common Stock and cash in lieu of any fractional RSU as soon as practicable after the earlier of: (i) the end of the deferral period specified by the Participant pertaining to such RSU, or (ii) the Participant’s termination of employment with the Company. All of the Named Executive Officers have selected deferral periods greater than the three-year vesting period for the RSUs held by them under the MSPP as of May 31, 2007. Had Ms. Forte’s employment terminated for any reason on May 31, 2007, she would have received 4,914 shares of Common Stock in exchange for her vested RSUs, which would have been valued at $156,118 based on the $31.77 closing price of the Common Stock on NASDAQ on that date.
Payment Prior to Vesting
~~(a)~~Voluntary Termination; Termination for Cause.If a Participant voluntarily terminates his or her employment for reasons other than death or Disability or is involuntarily terminated by the Company for cause, the Participant’s unvested RSUs will be canceled, and he or she will receive as soon as practicable after his or her termination of employment a cash payment equal to the lesser of:
(1) an amount equal to the number of unvested RSUs multiplied by the “Cost” (which is defined by the HRCC to be the lowest per share closing price of the underlying Common Stock during the fiscal quarter immediately preceding the award date for the RSU minus a discount of 25%) of those RSUs; or
(2) an amount equal to the number of unvested RSUs awarded on each award date multiplied by the “fair market value” of a share of Common Stock on the date of the Participant’s termination of employment (which is defined under the MSPP as the last sales price of the Common Stock on NASDAQ on such date).

          ~~If Ms. Forte’s employment had terminated voluntarily or for cause on May 31, 2007, she would have received a payment of $98,651 in cash for the unvested RSUs held by her on that date, which was~~ equal to the ~~Cost~~number of unvested RSUs multiplied by the “Cost” (which is defined by the HRCC to be the lowest per share closing price of the underlying Common Stock during the fiscal quarter immediately preceding the award date for the RSU minus a discount of 25%) of those ~~RSUs.~~RSUs; or (2) an amount equal to the number of unvested RSUs awarded on each award date multiplied by the “fair market value” of a share of Common Stock on the date of the Participant’s termination of employment (which is defined under the MSPP as the last sales price of the Common Stock on NASDAQ on such date).
~~(b)~~Involuntary Termination.If a Participant’s employment is terminated by the Company for any reason other than cause, the Participant’s unvested RSUs will be canceled, and he or she will receive payment as soon as practicable following termination of employment as described below:
(1) The number of unvested RSUs will be multiplied by a fraction, the numerator of which is the number of full years that the Participant was employed by the Company after the date such RSU was purchased and the denominator of which is three, and the Participant will receive the resulting number of such whole RSUs in ~~shares of Common Stock, with any fractional RSU paid in cash.~~
(2) With respect to the Participant’s remaining unvested RSUs, the Participant will receive cash in an amount equal to the lesser of: (A) the number of such unvested RSUs awarded on each award date multiplied by the respective Cost of those RSUs; or (B) the number of those unvested RSUs awarded on each award date multiplied by the fair market value of a share of Common Stock on the date of the Participant’s termination of employment.
          ~~If Ms. Forte’s employment was terminated involuntarily, other than for cause, on May 31, 2007, she would have received a payment of 1,306~~ shares of Common Stock, with ~~a value~~any fractional RSU paid in cash. (2) With respect to the Participant’s remaining unvested RSUs, the Participant will receive cash in an amount equal

to the lesser of: (A) the number of ~~$41,492, which is based upon the pro-rata calculation set forth above based upon the time period that elapsed since the respective dates of purchase for the related~~such unvested RSUs awarded on each award date multiplied by the ~~$31.77 closing price~~respective Cost of those RSUs; or (B) the number of those unvested RSUs awarded on each award date multiplied by the fair market value of a share of Common Stock on ~~NASDAQ~~the date of the Participant’s termination of employment.
The table below shows the aggregate amount of potential payments that each Named Executive Officer (or his beneficiary or estate) would have been entitled to receive if his employment had terminated on May 31, 2008 under any severance arrangements, the MSPP, the 2001 Plan and, in the case of Mr. Robinson, the Class A Plan. The amounts shown assume that ~~date,~~termination was effective as of May 31, 2008, and ~~a payment~~include amounts earned through such time and are estimates of ~~$66,851 in cash,~~the amounts which ~~is equal~~could have been paid out to the ~~Cost~~Named Executive Officers upon their termination at that time. The actual amounts to be paid out can only be determined at the time of each Named Executive Officer’s separation from the ~~2,816 remaining RSUs.~~Company. Annual bonuses are discretionary and are therefore omitted from the tables. As previously indicated, the calculations also do not include plan balances under the Retirement Plan applicable to the Named Executive Officers, which are provided in the Pension Benefits table above. Ms. Holton was not longer employed by the Company as of May 31, 2008 and, accordingly, is not included in the table.
Name

Voluntary
Termination
($)

Termination
for Cause
($)

Involuntary
(Not for
Cause)
Termination
($)

Normal
Retirement
($)

Death/
Disability
($)

Change-in-
Control
($)⁽⁴⁾

Richard Robinson

MSPP

$
1,579,245

$
1,579,245

$
1,626,348

$
1,649,544

$
1,649,544

$
1,579,245

2001 Plan restricted stock units

n/a

n/a

n/a

n/a

n/a

n/a

Class A Plan stock options⁽¹⁾

$
0

$
0

$
0

$
0

$
254,745

$
254,745

Total

$
1,579,245

$
1,579,245

$
1,626,348

$
1,649,544

$
1,904,289

$
1,833,990

Maureen O’Connell

MSPP

$
67,510

$
67,510

$
67,510

n/a

$
89,381

$
67,510

2001 Plan restricted stock units⁽²⁾

$
0

$
186,000

$
186,000

n/a

$
186,000

$
186,000

2001 Plan stock options⁽³⁾

$
0

$
0

$
0

n/a

$
0

$
0

Severance

$
650,000

$
0

$
650,000

n/a

$
0

$
650,000

Total

$
717,510

$
253,510

$
903,510

n/a

$
275,381

$
903,510

Margery W. Mayer

MSPP

$
226,109

$
226,109

$
231,910

$
239,159

$
239,159

$
226,109

2001 Plan restricted stock units⁽²⁾

$
0

$
0

$
186,000

$
186,000

$
186,000

$
186,000

2001 Plan stock options⁽³⁾

$
0

$
0

$
0

$
0

$
88,605

$
88,605

Total

$
226,109

$
226,109

$
417,910

$
425,159

$
513,764

$
500,714

Judith Newman

MSPP

$
354,273

$
354,273

$
359,946

n/a

$
364,616

$
354,273

2001 Plan restricted stock units⁽²⁾

$
0

$
0

$
265,905

n/a

$
265,905

$
312,555

2001 Plan stock options⁽³⁾

$
0

$
0

$
0

n/a

$
135,936

$
135,936

Total

$
354,273

$
354,273

$
625,851

n/a

$
766,457

$
802,764

Name

Voluntary
Termination
($)

Termination for Cause
($)

Involuntary
(Not for
Cause)
Termination
($)

Normal
Retirement
($)

Death/
Disability
($)

Change-in-
Control
($)⁽⁴⁾

Hugh Roome

MSPP

$
137,526

$
137,526

$
150,170

$
170,241

$
170,241

$
137,526

2001 Plan restricted stock units⁽²⁾

$
0

$
286,648

$
286,648

$
286,648

$
286,648

$
312,555

2001 Plan stock options⁽³⁾

$
0

$
0

$
0

$
0

$
6,936

$
6,936

Total

$
137,526

$
424,174

$
436,818

$
456,889

$
463,825

$
457,017

Deborah A. Forte

MSPP

$
286,445

$
286,445

$
308,681

$
317,438

$
317,438

$
286,445

2001 Plan restricted stock units⁽²⁾

$
0

$
312,555

$
312,555

$
312,555

$
312,555

$
312,555

2001 Plan stock options⁽³⁾

$
0

$
0

$
0

$
0

$
6,936

$
6,936

Total

$
286,445

$
599,000

$
621,236

$
629,993

$
636,929

$
605,936

(1)
Under the terms of the Class A Plan, in the event of a merger or consolidation or other change-in-control, the Company has the ability to accelerate the vesting of unvested options. Accordingly, the table above assumes immediate vesting of all outstanding options. Also, in the event of the Named Executive’s death/ disability, the vesting of unvested options is accelerated. The values in the table represent the difference between the closing price of the Company’s Common Stock on May 31, 2008 of $31.10 per share and the per share exercise prices of the unvested options, which become vested in either case. Options that are already vested and options whose exercise prices exceed $31.10 per share are not reflected in the table.
(2)
All amounts represent the payout of the RSUs held under the MSPP based on the closing price of the Company’s Common Stock on May 31, 2008 of $31.10 per share. Under the terms of MSPP, all unvested RSUs become vested upon retirement or death/disability and the number above represents the payout of the RSUs as if such were fully vested.
(3)
Under the terms of the 2001 Plan, in the event of a merger or consolidation or other change-in-control, the Company has the ability to accelerate the vesting of unvested options. Accordingly, the table above assumes immediate vesting of all outstanding options. Also, in the event of the Named Executive’s death/disability, the vesting of unvested options is accelerated. The values in the table represent the difference between the closing price of the Company’s Common Stock on May 31, 2008 of $31.10 per share and the exercise prices per share of the unvested options, which become vested in either case.
(4)
See “Change of Control Arrangements for Certain Class A Stockholders” for a discussion of certain rights of first refusal with respect to shares of Class A Stock in the event of a change-in-control.

MATTERS SUBMITTED TO STOCKHOLDERS
PROPOSAL 1 — ELECTION OF DIRECTORS
The Amended and Restated Certificate of Incorporation of the Company provides that the Class A Stockholders, 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 current Board consists of ~~ten~~eleven directors. ~~In July 2007,~~Rebeca Barrerra, a director of the Company since 1995, is not standing for reelection at the ~~recommendation of the Nominating and Governance Committee of the Board,~~Annual Meeting. As a result, in July 2008, the Class A Stockholders executed a unanimous written consent fixing the size of the Board at ~~eleven~~ten directors, effective as of the date of the 2008 Annual Meeting. ~~The Nominating and Governance Committee proposed to the Board that James W. Barge be the nominee for election at the Annual Meeting to fill the resulting vacancy.~~
          ~~As a result,~~Therefore, the Board has nominated the ~~eleven~~ten 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,” including Mr. Barge,~~Stock” for election at the Annual Meeting to serve as directors of the Company until the next annual meeting of stockholders and until their respective successors are elected and qualified, or until their earlier retirement, resignation or removal. Each nominee is currently a director of the Company
Proxies are solicited in favor of the eight nominees to be elected by the Class A Stockholders and the ~~three~~two nominees to be elected by the holders of the 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 Class A Stockholders 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~~nominee will be unable to serve.
Recommendation
The Board recommends that Class A Stockholders vote FOR each of the eight nominees for election by such holders. Assuming the presence of a quorum, the affirmative vote of a plurality of the votes cast by the Class A Stockholders 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~~two 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.

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

70

1971

Rebeca M. Barrera

Founder, Tres Rebecas,
San Antonio, TX

60

1995

Ramon C. Cortines

Deputy Mayor for Education, Youth and Families,
City of Los Angeles, CA

75

1995

Andrew S. Hedden

Partner, Baker & McKenzie LLP, New York, NY

66

1991

Mae C. Jemison

President and Founder, BioSentient Corporation,
Houston, TX

50

1993

Peter M. Mayer

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

71

1999

Augustus K. Oliver

Managing Member, Oliver Press Partners, LLC,
New York, NY

57

1995

Richard M. Spaulding

Current employee and former Executive
Vice President of the Company

70

1974

Nominees for Election by Holders of Common Stock

Name

Principal Occupation or Employment

Age

Director
Since*

James W. Barge**

Senior Vice President, Controller and
Chief Accounting Officer,
Time Warner, Inc., New York, NY

52

____

John L. Davies

Private Investor, Washington D.C.

57

2000

John G. McDonald

The Stanford Investors Professor,
Graduate School of Business, Stanford University,
Stanford, CA

70

1985

Name

Principal Occupation or Employment

Age

Director
Since*
Richard Robinson

Chairman of the Board, President and
Chief Executive Officer of the Company

71

1971
Ramon C. Cortines

Senior Deputy Superintendent,
Los Angeles Unified School District
Los Angeles, CA

76

1995
John L. Davies

Private Investor, Washington D.C.

58

2000
Andrew S. Hedden

Partner, Baker & McKenzie LLP, New York, NY

67

1991
Mae C. Jemison

President and Founder, BioSentient Corporation,
Houston, TX

51

1993
Peter M. Mayer

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

72

1999
Augustus K. Oliver

Managing Member, Oliver Press Partners, LLC,
New York, NY

58

1995
Richard M. Spaulding

Former Executive Vice President of the Company

71

1974
Nominees for Election by Holders of Common Stock
Name

Principal Occupation or Employment

Age

Director
Since*
James W. Barge

Executive Vice President, Controller,
Tax and Treasury, Viacom Inc.,
New York, NY

53

2007
John G. McDonald

The Stanford Investors Professor,
Graduate School of Business, Stanford University,
Palo Alto, CA

71

1985

*
The dates set forth above indicate the date such director was elected as a director of the Company or its predecessor entity.
**
~~New nominee standing for election at the Annual Meeting.~~
Richard Robinson.Mr. Robinson has served as Chairman of the Board of the Company and/or Scholastic Inc. since 1982, as Chief Executive Officer since 1975 and as President since 1974. He has held various executive management and editorial positions with the Company since joining in 1962.
~~Rebeca M. Barrera.~~Ramon C. Cortines. ~~Ms. Barrera is a national leader in Latino children’s education. She is an author, curriculum designer, national speaker and founder~~Mr. Cortines was appointed as the Senior Deputy Superintendent of the ~~National Latino Children’s Institute. She also is the founder of Tres Rebecas, which provides consulting, design and development services throughout the United States.~~

~~Ramon C. Cortines.~~ ~~Mr. Cortines has been~~Los Angeles Unified School District in 2008. From 2006 to 2008, he was the Deputy Mayor for Education, Youth and Families for the City of Los Angeles, ~~CA since 2006.~~CA. He was an independent Education Consultant from 2001 to 2006. Since 1956, Mr. Cortines has served six school districts, including as Superintendent of Schools for Pasadena (11 years), San Jose (2 years), New York City (2 years), San Francisco (6 years) and Los Angeles (6 months).

John L. Davies. Mr. Davies is a private investor. 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.
Andrew S. Hedden.Mr. Hedden is a partner of the law firm of Baker & McKenzie LLP, having previously been a partner with the law firm of Coudert Brothers LLP from 1975 to 2005.
Mae C. Jemison.Dr. Jemison is ~~the~~a physician president of BioSentient Corporation, a medical ~~technology~~device 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~~and chair and founder of the ~~integration of science and technology into everyday life and social responsibility.~~Dorothy Jemison Foundation for Excellence. Dr. Jemison was a professor of Environmental Studies at Dartmouth College from 1996-2002. She served as a National Aeronautics and Space Administration (NASA) astronaut from 1987 to 1993 and was a member of the Space Shuttle Endeavour Flight in September 1992. She is a director ~~and member of the audit committees~~ of Kimberly-Clark Corporation and ~~Valspar Corporation,~~ a director and a member of ~~Gen-Probe, Inc. and~~the Audit Committee of Valspar Corporation, a member of the National Academy of Sciences Institute of ~~Medicine.~~Medicine and the Chair of the Texas State Product Development and Small Business Incubator Board.
Peter M. Mayer.Mr. Mayer has been President of The Overlook Press/Peter Mayer Publishers, Inc. since 1997. Since 2003, Mr. Mayer has also been the President of Duckworth Publishers in the United Kingdom. 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, The Netherlands 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.
Augustus K. Oliver.Mr. Oliver has been a Managing Member of Oliver Press Partners LLC, an investment advisor, since 2005. Mr. Oliver also has been a Senior Managing Director of WaterView Advisors LLC, a private equity investment firm, since 1999. Mr. Oliver is the grandson of a former Chairman of the Board of Directors of Scholastic Inc. He is a director of Comverse Technology Inc., the Phoneix Companies, Inc. and Emageon, Inc.
Richard M. Spaulding.Mr. Spaulding ~~has~~retired from Scholastic in 2008 and held various executive management positions with the Company since joining in 1960 including as Executive Vice President from 1974 to 2004.
James W. Barge.Mr. Barge ~~has been~~joined Viacom Inc. as its Executive Vice President, Controller, Tax and Treasury in January 2008. He was the Senior Vice President, Controller and Chief Accounting Officer of Time Warner Inc. ~~since 2002.~~from 2002 to 2007. Prior to joining Time Warner in 1995, Mr.

Barge held several positions at Ernst & Young, most recently as the Area Industry Leader of the Consumer Products Group and, prior to that, as a partner in its National

Office, where he was responsible for the resolution of SEC, accounting and reporting issues. Mr. Barge is a member of the Financial Executive Institute’s Committee on Corporate Reporting and the Advisory Council for the SEC Institute, as well as a Distinguished Practitioner Lecturer for the Terry College of Business at the University of Georgia.
~~John L. Davies.~~ Mr. Davies is a private investor. 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.
John G. McDonald.Professor McDonald joined the faculty of Stanford University Graduate School of Business, where he is The Stanford Investors Professor, in 1968. Professor McDonald serves on the Boards of Directors of Varian, Inc., Plum Creek Timber Co., iStar Financial, Inc. and eight mutual funds managed by Capital Research and Management Co.
Meetings of the Board and its Committees
Five regular meetings and one special meeting of the Board were held during the ~~2007~~2008 fiscal year. All incumbent directors attended 75% or more of the aggregate of such meetings and of the meetings held during the ~~2007~~2008 fiscal year by all standing committees of the Board of which they were a member.
The Board has seven standing committees—Audit; Executive; Human Resources and Compensation; Stock Grant; Nominating and Governance; Retirement Plan; and Strategic Planning. All members of the Audit, Human Resources and Compensation, Stock Grant and Nominating and Governance Committees are independent directors, as defined under NASDAQ listing standards, and all committee members are appointed by the Board on an annual basis. Each committee operates under a written charter establishing its roles and responsibilities, which can be found in the Investor Relations section of the Company’s website, scholastic.com. The duties and responsibilities of all the Board committees are reviewed regularly and are outlined below.
Executive Committee.Richard Robinson (Chairperson), Peter M. Mayer, Augustus K. Oliver and Richard M. Spaulding are the current members of the Executive Committee. In the intervals between meetings of the Board, 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, ~~2007.~~2008.

Audit Committee.Augustus K. Oliver (Chairperson), James W. Barge, John L. Davies and Ramon C. Cortines are the current members of the Audit Committee. Each member of the Audit Committee is independent, as defined under NASDAQ listing standards and applicable SEC regulations. The Board has determined that all Audit Committee members are “financially literate,” as defined under NASDAQ listing standards, and that Mr. Oliver

qualifies as the designated financial expert based upon his business experience as described previously in this proxy statement. This committee reviews the corporate accounting and financial reporting practices of the Company, including its disclosure and internal 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 appoints the Company’s independent auditors and pre-approves any non-audit services to be provided by such auditors, as further described in this proxy statement under “Independent Registered Public Accountants.” The Audit Committee discusses with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee meets with both 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 periodically reviews and approves all “related party transactions,” as defined in SEC regulations. The Audit Committee held nine meetings during the fiscal year ended May 31, ~~2007,~~2008, four of which 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), Mae Jemison, Andrew S. Hedden and Augustus K. Oliver are the current members of the Retirement Plan Committee. This committee acts on behalf of the Board in its capacity as settlor of the trusts underlying the Retirement Plan and the 401(k) Plan (collectively “the Plans”) and with respect to the powers enumerated therein, including 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, as well as the investment performance under the Plans. The Retirement Plan Committee held ~~one meeting~~two meetings during the fiscal year ended May 31, ~~2007.~~2008.
Human Resources and Compensation Committee.John L. Davies (Chairperson), Ramon C. Cortines, Peter M. Mayer and John G. McDonald are the current members of the Human Resources and Compensation Committee. Each member of the HRCC is independent, as defined under NASDAQ listing standards. Members of this committee also meet certain additional criteria so that the Company qualifies for available exemptions pursuant to Section

162(m) of the Code and Rule 16b-3 under the Exchange Act. The HRCC held ~~five~~six meetings during the fiscal year ended May 31, ~~2007.~~2008. For a description of the duties and responsibilities of this committee, see “Corporate ~~Governance-HRCC~~Governance—HRCC and SGC Procedures” below.

Nominating and Governance Committee.Ramon C. Cortines (Chairperson), Rebeca M. Barrera and Mae C. Jemison are the current members of the Nominating and Governance Committee. Each member of the committee is independent, as defined under NASDAQ listing standards. 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. This committee also administers Scholastic’s Corporate Governance Guidelines (the “Guidelines”), reviews performance under, and compliance with, the guidelines and the content of the guidelines annually and, when appropriate, recommends updates and revisions of the guidelines to the Board. In addition, this committee oversees the Board self-assessment process. The Nominating and Governance Committee held ~~four~~three meetings during the fiscal year ended May 31, ~~2007.~~2008.
Stock Grant Committee.John G. McDonald (Chairman), Ramon C. Cortines, John L. Davies, and Peter M. Mayer are the current standing members of the Stock Grant ~~Committee and, as permitted under Delaware law, Ramon C. Cortines is an alternate member.~~Committee. Each member (and alternate member) of the SGC is independent, as defined under NASDAQ listing standards. The members of this committee also meet certain additional criteria so that the Company qualifies for available exemptions pursuant to Section 162(m) of the Code and Rule 16b-3 under the Exchange Act. The SGC authorizes and approves grants, awards or issuances of stock options, warrants, restricted stock, ~~Stock Units,~~restricted stock units, or other rights under the Company’s stock-based compensation plans. For a more detailed description of these duties, see ~~“Corporation Governance —~~ “Corporate Governance—HRCC and SGC Procedures” below. The SGC held five meetings during the fiscal year ended May 31, ~~2007.~~2008.
Strategic Planning Committee.Mae C. Jemison (Chairperson), Rebeca M. Barrera, Peter M. Mayer and Richard M. Spaulding are the current 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. The Strategic Planning Committee held two meetings during the fiscal year ended May 31, ~~2007.~~2008.
Corporate Governance
In recent years, the Board has strengthened the Company’s corporate governance practices in a number of ways, including adopting the Scholastic Corporation Corporate Governance Guidelines (the “Guidelines”), which are summarized below. The full text of the Guidelines is available in the Investor Relations section of the Company’s website, scholastic.com. Stockholders may also obtain a written copy of the Guidelines at no cost by

writing to the Company at Scholastic Corporation, 557 Broadway, New York, NY 10012, Attention: Corporate Secretary. In addition to the Guidelines, the Board believes that the Scholastic Code of Ethics and the Code of Ethics for Senior Financial Officers, described below, as well as the Committee Charters, which have all been approved by the Board, are

vital to securing the confidence of Scholastic’s stockholders, customers, employees, governmental authorities and the investment community.
Independent Directors.The ~~Amended and Restated~~ Certificate ~~of Incorporation of Scholastic Corporation~~ and the Guidelines provide for a board of ten to fifteen directors and the Guidelines require a majority of independent directors. The Nominating and Governance Committee is responsible for reviewing with the Board annually the appropriate criteria and standards for determining director independence consistent with applicable legal requirements, including NASDAQ listing standards and the federal securities laws. The Board has determined that all of its current directors are independent, as defined in the NASDAQ listing standards, other than Mr. Robinson, Mr. Spaulding and Mr. Hedden. Mr. Robinson is the Company’s Chairman, President and Chief Executive Officer, and Mr. Spaulding is ~~an employee and~~ former Executive Vice President of the ~~Company.~~Company, having retired in September 2007. Mr. Hedden is not considered independent because he is a partner in a law firm that currently provides legal services to the Company.
Communication ~~With~~with the Board.Individuals may submit communications to the Board, or to the non-management directors individually or as a group, by sending the communications in writing to the attention of the Corporate Secretary of the Company at Scholastic Corporation, 557 Broadway, New York, NY 10012. All communications that relate to matters that are within the scope of responsibilities of the Board and its Committees will be forwarded to the appropriate directors by the Corporate Secretary.
Director Nomination Process.The Nominating and Governance Committee periodically reviews with the Board the requisite skills and characteristics of proposed new directors, if any, as well as the composition of the Board as a whole. The Nominating and Governance Committee makes an assessment of the suitability of candidates for election to the Board, taking into account diversity, independence, character, judgment and business experience, as well as their appreciation of the Company’s purpose, values and credo. The Committee, at this time, does not believe it is necessary or appropriate to adopt specific, minimum objective criteria for director nominees. Stockholders may propose nominees for Board membership for consideration by the Nominating and Governance Committee by submitting the nominee’s name, biographical data and qualifications along with the consent of the proposed nominee to the Nominating and Governance Committee, Attention: Corporate Secretary at Scholastic Corporation, 557 Broadway, New York, NY 10012. Stockholders who wish to nominate candidates for election to the Board at the next annual meeting of stockholders must adhere to the dates and follow the procedures outlined in “Stockholder Proposals for ~~2008~~2009 Annual Meeting” set forth below. The Nominating and Governance

Committee will consider all director candidates properly submitted by stockholders in accordance with the Company’s Bylaws and the Guidelines using the same criteria that it uses to select directors for non-stockholder nominees. From time to time, the Company has retained an independent search firm in order to assist the committee in its

selection process with respect to candidates for Board membership by identifying potential candidates and assisting the committee in its evaluation of such candidates.
Board Meetings and Executive Sessions.Directors are expected to expend sufficient time, energy and attention to assure diligent performance of their responsibilities. Directors are expected to attend meetings of the Board and the committees on which they serve, whether in person or by telephone. Management provides all directors with an agenda and appropriate written materials in advance of each meeting. To ensure active and effective participation, directors are expected to arrive at each Board and committee meeting having reviewed the materials for the meeting. The Board regularly meets in executive session with only the independent directors present.
Director Attendance at Company Annual Meetings.Directors are encouraged to attend the Company’s annual meetings of stockholders. All of the Company’s directors attended the annual meeting of stockholders held on September ~~20, 2006.~~19, 2007.
Annual Self-Assessment.The Board and each director make an annual self-assessment of performance with a particular focus on overall effectiveness. The Nominating and Governance Committee is responsible for overseeing the self-assessment process.
Access to Management and Advisors.Directors have access to the Company’s management and, in addition, are encouraged to visit the Company’s facilities. As necessary and appropriate, the Board and its committees may retain outside legal, financial or other advisors.
Investment Expectations of Directors.Directors are encouraged to own Company stock in an amount that is appropriate for them.
Scholastic Code of Ethics and Code of Ethics for Senior Financial Officers.The Company has implemented a Code of Ethics applicable to its employees and directors generally and a Code of Ethics for Senior Financial Officers. The Scholastic Code of Ethics operates as a tool to help Scholastic’s employees and directors understand and adhere to high ethical standards required for employment by, or association with, the Company. The Scholastic Code of Ethics contains procedures for employees to report to the Audit Committee any concerns with regard to any questionable accounting, internal control or auditing matters. The Code of Ethics for Senior Financial Officers provides fundamental ethical principles to which the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and Controller are expected to adhere. Both the Scholastic Code of Ethics and the

Code of Ethics for Senior Financial Officers are available in the Investor Relations section of the Company’s website, scholastic.com. Additionally, these documents are available in print to any stockholder requesting a copy.

HRCC and SGC Procedures.Under its charter, the HRCC is required to meet at least three times per year. In practice the HRCC has been meeting on at least a quarterly basis to review regulatory developments that may impact the Company’s compensation arrangements and to consider amendments to compensation and benefit plans. At its regular meeting in July of each year, the HRCC reviews the Company’s financial and operating results of the prior year and determines whether the relevant performance criteria required for the payment to the Named Executive Officers of annual bonuses under the MIP and EPIP for the prior year have been satisfied and, if so, considers and approves the actual amounts of any such payouts. At that meeting, the HRCC determines the participants in the EPIP and the MSPP and also establishes performance criteria for annual bonuses to be awarded under the EPIP for the current year. At its regular meeting in September, the HRCC considers and approves any changes in base salary of senior ~~executive officers.~~management.
Under the Company’s current practice, equity-based compensation awards under the 2001 Plan are typically made at either the ~~scheduled~~regular July or September meeting of the SGC each year, which occurs shortly before the announcement of the Company’s earnings for its previous fiscal year or the first fiscal ~~quarter.~~quarter of the next year, as the case may be. Except in limited circumstances, the SGC does not grant equity awards to Named Executive Officers at other times during a given year. In such cases, the grants are made by the SGC at one of its regularly scheduled quarterly meetings.
All equity awards are made at fair market value on the date of grant, which is the date on which the SGC approves the grant. Under the 2001 Plan, fair market value is deemed to be the average of the high and low market prices on the date of grant.
The HRCC annually reviews the performance of the Company’s Chief Executive Officer and recommends his compensation for review and revision or approval by the Board. The compensation of the ~~executive~~ officers who report directly to the Chief Executive Officer is recommended by him to the HRCC, which reviews and revises or approves the recommendations as the HRCC deems appropriate.
The HRCC has the authority and discretion to retain external compensation consultants as it deems appropriate. The HRCC looks to its consultants to periodically review and advise the HRCC regarding the adequacy and appropriateness of the Company’s overall executive compensation plans, programs and practices and, from time to time, to answer specific questions raised by the HRCC or management. Compensation decisions are made by, and are the responsibility of, the HRCC and the Board and may reflect factors and considerations other than the information and recommendations provided by the HRCC’s consultants. The Company’s compensation consultants perform substantially no other services for the Company.

Procedures for Approval of Related Person Transactions.The Company does not generally engage in transactions in which its executive officers or directors, any of their

immediate family members or any of its 5% stockholders have a material interest, with the exception of legal fees paid to Baker ~~and~~& McKenzie LLP, a law firm of which Andrew S. Hedden, a director of the Company, is a partner, as described in “Certain Relationships” below. The use of Baker ~~and~~& McKenzie for legal services is presented periodically to the Audit Committee for its consideration and approval. The Company’s Code of Ethics, which sets forth standards applicable to all employees, officers and directors of the Company, generally prohibits transactions that could result in a conflict of interest. Any waiver of the Code of Ethics for any executive officer or director of the Company requires the approval of the disinterested members of the Board. Any such waiver will be disclosed on the Company’s website, scholastic.com, or on a Current Report on Form 8-K filed with the SEC. No such waivers were granted in fiscal ~~2007.~~2008.
Director Compensation
          ~~For~~From June 1, 2007 to September 19, 2007, the ~~fiscal year ended May 31,~~date of the 2007 Annual Meeting of Stockholders, 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 committee of the Board, 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. In fiscal 2008,~~As of September 19, 2007, the Board increased the cash annual retainer to be paid to each Outside Director to $40,000 and increased the fee for the chairperson of the HRCC to $10,000. 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~~2007 Outside Directors’ Stock Option Plan (the ~~“1997~~“2007 Outside Directors’ Plan”), as approved by the Class A Stockholders at the Company’s 2007 Annual Meeting of Stockholders, an option to purchase ~~6,000~~3,000 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 ~~has been~~and 1,200 restricted stock units will be automatically granted to each Outside Director on the date of the annual meeting of stockholders. As a result, in fiscal ~~2007~~2008, each Outside Director (other than Andrew S. Hedden, who, as he has done each year, declined his award in fiscal ~~2007)~~2008) was granted options to purchase ~~6,000~~3,000 shares of Common Stock, ~~on September 20, 2006,~~ at an exercise price of ~~$30.08~~$36.21 per ~~share. The~~share, and 1,200 restricted stock units. Both the stock options ~~are scheduled to~~and the restricted stock units fully vest ~~one year from~~on the first anniversary of the date of ~~grant and~~grant. The stock options expire on September 20, 2016. Pursuant to its terms, no further awards can be made under the 1997 Outside Directors’ Plan after August 18, 2007. As a result, the Board has approved, subject to the approval of the Class A Stockholders at the Annual Meeting, the Scholastic Corporation 2007 Outside Directors Stock Incentive Plan, which provides for annual grants of equity-based compensation to Outside Directors as more fully described under Proposal 3 below.2017.

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 equal to the 30-year United States Treasury bill rate and are paid in cash upon the later of termination from Board service or the end of the

deferral period, unless paid earlier due to death, disability, change of control of the Company or severe financial hardship. For the fiscal year ended May 31, ~~2007,~~2008, two directors chose to defer 100% of their cash compensation under this plan. Interest expense accrued during fiscal ~~2007~~2008 on amounts deferred during fiscal ~~2007~~2008 and prior years under this plan was ~~$31,921.~~$44,324.
The following table summarizes the total compensation provided by the Company to the Outside Directors for the fiscal year ended May 31, ~~2007:~~2008:
DIRECTOR COMPENSATION

Name⁽¹⁾

Fees Earned or
Paid in Cash
($)

Option Awards
($)⁽²⁾

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)⁽³⁾

Total
($)

Rebeca M. Barrera

$
41,500

$
50,406

0

$
91,906

Ramon C. Cortines

$
72,000

$
50,406

0

$
122,406

John L. Davies

$
66,000

$
50,406

0

$
116,406

Andrew S. Hedden⁽⁴⁾

$
52,000

$
0

0

$
52,000

Mae C. Jemison

$
48,000

$
50,406

0

$
98,406

Peter M. Mayer

$
47,500

$
50,406

0

$
97,906

John G. McDonald

$
54,000

$
50,406

$
7,956

$
104,406

Augustus K. Oliver

$
62,000

$
50,406

$
23,966

$
112,406

Fiscal Year 2008
Name⁽¹⁾

Fees Earned
or Paid in
Cash
($)

Stock
Awards⁽²⁾
($)

Option
Awards⁽³⁾
($)

Change in
Pension Values
and
Non-qualified
Deferred
Compensation
Earnings⁽⁴⁾
($)

All Other
Compensation
($)

Total
($)

James W. Barge

$
45,000

$
30,274

$
28,447

$
0

$
0

$
103,721
Rebeca M. Barrera

$
52,750

$
30,274

$
50,761

$
0

$
21,770
⁽⁵⁾

$
155,555
Ramon C. Cortines

$
84,750

$
30,274

$
50,761

$
0

$
0

$
165,785
John L. Davies

$
85,250

$
30,274

$
50,761

$
0

$
0

$
166,285
Andrew S. Hedden⁽⁶⁾

$
67,750

$
0

$
0

$
0

$
0

$
67,750
Mae C. Jemison

$
56,250

$
30,274

$
50,761

$
0

$
0

$
137,285
Peter M. Mayer

$
64,750

$
30,274

$
50,761

$
0

$
0

$
145,785
John G. McDonald

$
65,250

$
30,274

$
50,761

$
12,357

$
0

$
158,642
Augustus K. Oliver

$
71,750

$
30,274

$
50,761

$
31,967

$
0

$
184,752
Richard M. Spaulding

$
35,500

$
0

$
0

$
0

$
63,651
⁽⁷⁾

$
99,151

(1)
⁽¹⁾
~~Neither~~ Richard Robinson, ~~who is also~~ the Company’s Chairman, Chief Executive Officer and President, ~~or Richard M. Spaulding, who is also an employee of the Company, receives~~does not receive compensation for ~~their services~~his service as a director. Mr. Barge was elected at the 2007 Annual Meeting of Stockholders and began receiving compensation at such time. Charles TT. Harris III, who ~~was a director for a portion of fiscal 2007 but~~ did not stand for reelection at the Company’s annual meeting of stockholders held in September 2006, was paid ~~$22,750 in fees for his services as as director in that year and~~ accrued ~~$9,660 in~~ interest of $9,234 during fiscal ~~2007~~2008 on all amounts previously deferred by him under the Scholastic Corporation Directors’ Deferred Compensation Plan.
⁽²⁾
Represents the compensation cost of stock ~~options~~units under FAS 123R as reflected in the Company’s financial statements. Assumptions used in determining the FAS 123R values can be found in Note 1 of Notes to Consolidated Financial Statements included in Item 8, “Consolidated Financial Statements and Supplementary Data” in the Annual Report, disregarding estimates of forfeitures related to service-based vesting conditions. There were ~~24,000~~no stock ~~option~~units forfeited during fiscal ~~2007, which resulted when~~2008. Each director, with the exception of Mr. ~~Harris left~~Hedden as noted below, had 1,200 stock units outstanding as of May 31, 2008.
(3)
Represents the ~~Board~~compensation cost of stock options granted in fiscal 2008 under FAS 123R as reflected in the Company’s financial statements. Assumptions used in determining the FAS 123R values can be found in Note 1 of Notes to Consolidated Financial Statements included in Item 8, “Consolidated Financial Statements and ~~certain~~Supplementary Data” in the Annual Report, disregarding estimates of forfeitures related to service-based vesting conditions. There were no stock options ~~held by him expired without value because they were not in-the-money.~~forfeited during fiscal 2008. For each Outside Director who received an option award during fiscal ~~2007,~~2008, the fair value of such award on the grant date, computed in accordance with FAS 123R, was ~~$72,720.~~$13.61. At May 31, ~~2007,~~2008, each of Messrs. Oliver and McDonald ~~had 54,000 options outstanding,~~and Ms. Jemison had ~~52,000~~57,000 options outstanding, Mr. ~~Cortines had 48,000 options outstanding, Mr.~~ Mayer ~~had 42,000 options outstanding and Ms. Barrera and Mr. Davies each had 36,000 options outstanding.~~

had 51,000 options outstanding, each of Ms. Barrera and Mr. Davies had 45,000 options outstanding, Mr. Cortines had 21,000 options outstanding and Mr. Barge had 3,000 options outstanding. On May 31, 2008 Mr. Spaulding had 39,490 options outstanding, which were granted to him while he was an employee.
(4)

⁽³⁾
The amounts shown represent the interest accrued on all amounts previously deferred by the director under the Scholastic Corporation Directors’ Deferred Compensation Plan.
⁽⁴⁾(5)
The amount shown represent fees paid to her for her services as a consultant to the Company in its reading initiatives for Latino children.
(6)
As stated above, Mr. Hedden is a partner in a law firm that provides legal services to the Company. Mr. Hedden reduces the fees charged for such services by the amount of his director fees paid in cash, noted in the table above, which are paid over by him to the firm. Also, Mr. Hedden declined his option award in fiscal ~~2007,~~2008, as he has done each year.
(7)
Mr. Spaulding retired as a Vice President of the Company in September 2007 and began receiving compensation as an outside director after such date. He did not receive a grant under the 2007 Outside Directors’ Plan, but did receive a grant of 3,000 stock options and 1,200 restricted stock units as an Executive Consultant under the 2001 Plan, the fiscal 2008 compensation cost of which under FAS 123R is reflected in the “Other Compensation” column above. Assumptions used in determining the FAS 123R values can be found in Note 1 of Notes to Consolidated Financial Statements included in Item 8, “Consolidated Financial Statements and Supplementary Data” in the Annual Report, disregarding estimates of forfeitures related to service-based vesting. The balance of the amount shown in the “Other Compensation” column above, $16,000, represents compensation received by Mr. Spaulding pursuant to a consulting arrangement that he has with the Company.
Certain Relationships
Andrew S. Hedden is a partner in the law firm of Baker & McKenzie LLP, which has provided legal services to the Company in the past and is expected to continue to do so in the future. This relationship is periodically reviewed and the services approved by the Audit Committee.
Involvement in Certain Legal Proceedings
From 1975 to 2005, Andrew S. Hedden was a partner with Coudert Brothers LLP, a law firm which filed for Chapter 11 bankruptcy protection in the Southern District of New York Bankruptcy Court in September 2006.
James W. Barge iswas the Senior Vice President, Controller and Chief Accounting Officer of Time Warner Inc. from 2002 to 2007. In 2005, Time Warner entered into a settlement with the SEC relating to an SEC investigation of certain of its accounting and financial disclosure practices. In connection with this settlement, Mr. Barge, together with certain other individuals, also reached a settlement with the SEC pursuant to which he agreed, without admitting or denying the SEC’s allegations, to the entry of an administrative order in March 2005 that he cease and desist from causing violations or future violations of certain reporting provisions of the securities laws; however, he is not subject to any suspension, bar or penalty.

PROPOSAL 2
2—APPROVAL OF AN AMENDMENT ~~NO. 3~~ TO
THE SCHOLASTIC CORPORATION
~~2001~~ EMPLOYEE STOCK ~~INCENTIVE~~PURCHASE PLAN
          ~~The~~As of June 1, 1999, the Company began offering the opportunity to participate in the Scholastic Corporation ~~2001~~Employee Stock ~~Incentive~~Purchase Plan ~~(as previously amended, the “2001 Plan”~~(the “ESPP”) to its United States-based employees. The ESPP was ~~initially~~ approved by the Class A Stockholders at the Company’s annual meeting of stockholders held on September 20, 2001. 4,000,000 shares of Common Stock were initially authorized for issuance under the 2001 Plan. The 2001 Plan provides for the grant of stock options, restricted stock and other stock-based awards.
          In connection with the Acceleration, the HRCC adopted Amendment No. 1 to the 2001 Plan on May 25, 2006, which deleted the provision stating that no stock option could have an exercise or vesting date of less than one year. On March 20, 2007, the HRCC adopted Amendment No. 2 to the 2001 Plan to allow for a 90-day exercise period after the voluntary termination of employment by an employee. Upon the HRCC’s recommendation, the Board has approved Amendment No. 3 to the 2001 Plan (the “Amendment”), which is being submitted for approvalwritten 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. As of the date hereof, approximately 648 employees currently participate and a total of 779,587 shares have been issued under the ESPP, with 116,218 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 May 21, 2008, the ~~Annual Meeting and is attached hereto asAppendix A. The proposed Amendment would~~Board unanimously adopted an amendment to the ESPP to provide for an increase in the number of shares of Common Stock ~~authorized~~available for issuance under the ~~2001 Plan~~ESPP by ~~2,000,000~~500,000 shares, in addition to the ~~360,105~~116,218 shares ~~that remained available~~currently remaining available. Such increase is necessary in order to provide for the issuance ~~as stock-based awards at May 31, 2007.~~
          ~~The following is a brief summary~~of shares consistent with current and anticipated participant purchase elections. A copy of the ~~principal provisions of the 2001 Plan as~~ proposed ~~to be amended by the Amendment. This summary does not purport to be complete and is qualified in its entirety by reference~~amendment to the ~~text of the 2001 Plan~~ESPP is attached to this Proxy Statement as ~~it would be revised by the Amendment.~~Appendix A.
Summary of the ~~2001 Plan.~~ESPP
          ~~Purpose.~~Eligibility. ~~The purpose~~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 ~~2001 Plan~~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 June 1, 2008, approximately 7,446 employees were eligible to participate in the ESPP, including all of the executive officers, with the exception of Mr. Robinson, who is not eligible due to ~~enhance~~ the ~~profitability~~fact that he owns more than 5% of the combined voting power and value of the ~~Company for~~Company’ stock.
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 ~~benefit~~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 ~~its stockholders by enabling~~each offering period, the ~~Company~~purchase price is determined and the participating employee’s accumulated funds are used to ~~offer stock-based incentives to employees~~purchase shares of and consultants to, the Company and its affiliates, thereby creating a means to raise the level of stock ownership by such individuals in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and stockholders.
          ~~Administration.~~The 2001 Plan is administered by the HRCC (or such other committee as may be designated by the Board) comprised of two or more non-employee directors, each of whom is independent as defined under NASDAQ listing standards (the “Committee”).Common Stock.
~~The Committee has the full authority to administer and interpret the 2001 Plan, including the authority to: (i) grant discretionary awards under the 2001 Plan, (ii) determine~~

Limitations on the ~~persons to whom discretionary awards will be granted, (iii) determine~~Number of Shares Purchased. Payroll deductions accrue at a rate of not less than 1% and not more than 10% of the ~~types~~employee’s base pay during each payroll period in the offering period. No employee may purchase more than $25,000 worth of ~~discretionary awards to be granted, (iv) determine~~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 Stock Market 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 fair market value of the Common Stock on the last day of an offering period. On May 31, 2008, the closing price for the Common Stock was $31.10 per share.
Shares Available for Grant. Under the ESPP, 400,000 shares of Common Stock (as adjusted to reflect the 100% stock dividend in the form of a 2-for-1 stock split paid on January 16, 2001) were originally reserved for issuance, and ~~conditions of each discretionary award, (v) determine the~~500,000 additional shares were also reserved for issuance in July 2003. 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 616,218 shares, consisting of 500,000 additional shares to be ~~covered~~authorized by ~~each discretionary award, (vi) prescribe~~ the ~~form~~proposed amendment and 116,218 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 Common Stock or ~~forms~~from treasury stock.
Effect of ~~instruments evidencing awards,~~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 ~~(vii)~~to make ~~all~~such rules and regulations as it deems necessary in connection therewith, so long as any such interpretation or other ~~determinations~~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 ~~2001 Plan and awards made thereunder as the Committee, in its sole discretion, deems necessary or desirable.~~
          ~~The Committee may also, in its discretion, extend or accelerate the exercisability of an award granted~~ESPP under ~~the 2001 Plan, accelerate the vesting of or eliminate or make less restrictive any restrictions contained in any award, waive any restriction or other provision~~existing applicable provisions of the ~~2001 Plan or~~Code and the accompanying

regulations. The discussion is general in nature and does not address issues relating to income tax circumstances of any ~~award or otherwise amend or modify any award~~individual employee. The discussion is based on federal income tax laws in ~~any manner that is either (i) not adverse to the participant to whom the award was granted or (ii) consented to by such participant.~~
          ~~The terms and conditions of individual awards are set forth in written agreements that are consistent with the terms of the 2001 Plan. Awards under the 2001 Plan may not be made~~effect on ~~or after July 18, 2011, the tenth anniversary of~~ the date of this Proxy Statement and is, therefore, subject to possible future changes in the ~~2001 Plan was adopted by~~law. The discussion does not address the ~~Board, but awards granted prior to such date may extend beyond that date.~~consequences of state, estate, inheritance, local or foreign tax laws.
          ~~Eligibility.~~Under the ~~2001 Plan, all employees of, and consultants to,~~Code, the Company ~~or any~~is deemed to grant employees participating in the ESPP an “option” on the first day of ~~its affiliates (including prospective employees and consultants) are eligible~~each three-month offering period to ~~be granted options to~~ purchase as many shares of Common Stock ~~restricted stock, and other stock-based awards, such~~ as ~~Stock Units. In addition, employees~~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 ~~Company~~offering period, the purchase price is determined and ~~employees of~~ the ~~Company’s affiliates~~employee is deemed to have exercised the “option” and purchased that ~~qualify as subsidiaries or parent corporations (within the meaning of Section 424 of the Code) are eligible to be granted incentive stock options (“ISOs”) under the 2001 Plan.~~
~~Types of Awards under the 2001 Plan.~~
          ~~Options.~~The Committee may grant ISOs, which qualify for favorable treatment under the Code, and stock options that do not qualify for such treatment, called non-qualified options, under the 2001 Plan. The Committee determines the number of shares of Common Stock ~~subject to each option,~~that his or her accumulated payroll deductions will purchase at the ~~term~~purchase price. Under Section 423 of ~~each option (which may not exceed ten years, or five years~~the Code, no taxable income is recognized by participants in the ~~case~~ESPP at the beginning or end of the offering period.
The required holding period for favorable tax treatment under Section 423 of the Code prior to the 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 ~~ISO granted to a 10% stockholder),~~offering period) or (ii) one year after the ~~exercise price, the vesting schedule (if any)~~“option” is exercised and the ~~other material terms~~Common Stock is purchased (the last day of ~~each option. No ISO or nonqualified stock~~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” 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 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 ~~may have~~was exercised (the last day of an ~~exercise~~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 ~~time~~date of ~~grant (or, in~~exercise, then the ~~case of an ISO granted to~~employee will also have a ~~10% stockholder, 110% of such fair market value).~~
          ~~Options will be exercisable at such time or times and subject~~capital loss equal to such ~~terms and conditions as determined by~~difference.
Even though an employee who meets the ~~Committee at grant, and the Committee, in its sole discretion,~~

~~may accelerate the exercisability~~requisite holding period must treat part of ~~such options. Payment~~his or her gain on a disposition of the exercise price may be made: (i) in cash or by check, bank draft or money order, (ii) through a “cashless exercise” procedure whereby the recipient delivers irrevocable instructions to a broker to deliver toCommon Stock as ordinary income, the Company ~~promptly upon the sale of the underlying shares an amount equal to the exercise price, or (iii) on such other terms and conditions as~~ may be acceptable to the Committee, which may include surrender of options or other shares of Common Stock owned by the optionee. To date, non-qualified options, but no ISOs, have been granted under the 2001 Plan. As of May 31, 2007, a total of 847,173 shares of Common Stock had been issued upon the exercise of stock options under the 2001 Plan and options to purchase 2,748,887 shares were granted and remained outstanding thereunder.
          The 2001 Plan authorizes the Committee, if it decides in its sole discretion, to permit “reloads” of stock options exercised, including, without limitation, permitting reloads such that the same number of stock options are granted as the number of shares used to pay for the exercise price of stock options or shares used to pay withholding taxes. The Committee may also at any time offer to buy out a recipient’s stock options subject to such terms and conditions as the Committee may determine. No reloads have been granted under the 2001 plan to date.
          ~~Restricted Stock.~~The Committee may award “restricted” shares of Common Stock under the 2001 Plan. Upon the award of restricted stock, the recipient has all rights of a stockholder with respect to the shares, including the right to receive dividends, the right to vote the shares and, conditioned upon full vesting of the shares, the right to tender such shares, subject to the conditions and restrictions generally applicable under the 2001 Plan to restricted stock or specifically set forth in the recipient’s restricted stock agreement. The Committee may, in its sole discretion, determine at grant that the payment of dividends, if any, shall be deferred until the expiration of the applicable restriction period. Any recipients of restricted stock would be required to enter into a restricted stock agreement with the Company, which sets forth the restrictions to which the shares are subject, including, as applicable, the date or dates on which such restrictions will lapse or as of which any performance criteria must be met for such restrictions to lapse.
          If the grant of restricted stock or the lapse of the relevant restrictions is based on the attainment of objective performance goals, the Committee is responsible for establishing for each recipient the applicable performance goals, formulas or standards and the applicable vesting percentages with reference to the attainment of such goals or satisfaction of such formulas or standards while the outcome of the performance goals are substantially uncertain. Such performance goals may incorporate provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar events or circumstances. Section 162(m) of the Code requires that performance awards be based upon objective performance measures. No restricted stock has been granted under the 2001 Plan to date.

          ~~Other Stock-Based Awards.~~The Committee may grant awards of Common Stock and other awards that are valued in whole or in part by reference to, or are payable in or otherwise based on, Common Stock, which awards may be granted either alone or in addition to or in tandem with grants of stock options or restricted stock. Subject to the provisions of the 2001 Plan, the Committee has the authority to determine the recipients to whom and the time or times at which such awards will be made, the number of shares of Common Stock to be awarded pursuant to, or to be used for reference purposes in respect of, such awards, and all other conditions of the awards. The Committee may also provide for the grant of Common Stock under such awards upon the completion of a specified performance period. To date, the Committee has granted other stock-based-awards only in the form of restricted stock units (“Stock Units”), as described below.
          Unless otherwise deferred, Stock Units automatically convert to shares of Common Stock on a one-for-one basis as the award vests, which is typically over a four-year period beginning thirteen months from the grant date and thereafter annually on the anniversary of the grant date. To date, the Company has granted 165,556 Stock Units to eligible employees under the terms of the 2001 Plan, and 30,583 shares of Common Stock have been issued upon conversion of Stock Units.
          ~~Amendment and Termination.~~The 2001 Plan provides that it may be amended, in whole or in part, suspended or terminated by the Board, except that no such amendment, suspension or termination may be made without stockholder approval to the extent such approval is required by applicable law that would increase the aggregate number of shares of Common Stock reserved for awards or the maximum individual share limits, change the classification of employees or consultants eligible to receive awards, decrease the minimum exercise price of any option, extend the maximum option period under the 2001 Plan or otherwise effect an amendment that would require stockholder approval under the Section 162(m) or Section 22 of the Code or Rule 16-b-3 under the Exchange Act.
~~Material Federal Income Tax Consequences Relating to the 2001 Plan~~
          The rules concerning the federal income tax consequences with respect to stock-based-awards granted pursuant to the 2001 Plan are quite technical. Moreover, the applicable statutory provisions are subject to change, possibly with retroactive effect, as are the interpretations and applications of such statutory provisions, which may also vary in individual circumstances. The following summary is designed to provide a general understanding of the material federal income tax consequences relating to the 2001 Plan:
          ~~ISOs.~~~~In general, an employee will~~ not ~~realize taxable income upon either the grant or the exercise of an ISO unless required by the alternative minimum tax, and the Company will not realize~~take an income tax deduction ~~at either time. If the recipient does not sell the Common~~for such amount. However, if an employee disposes of

Common Stock ~~received pursuant to~~before the ~~exercise of an ISO within either (1) two years after the date~~end of the ~~grant~~requisite holding period, the amount of income that the ISO or (2) one year after the date of exercise, a subsequent sale of the Common Stock will result in long-term capital gain or loss to the recipient and will not result in a tax deduction to the Company.
          ~~If the recipient disposes of the Common Stock acquired upon exercise of the ISO within either of the above-mentioned time periods, the recipient will generally realize~~employee must report as ordinary income an amount equal to the lesser of: (1) the fair market value of the Common Stock on the date of exercise over the exercise price or (2) the amount realized upon disposition over the exercise price. In such event, the Company generally will be entitled toqualifies as an income tax deduction equal to the amount recognized as ordinary income. Any gain in excess of the amount realized by the recipient as ordinary income will be taxed at the rates applicable to short-term or long-term capital gains, depending on the holding period.
          ~~Nonqualified Stock Options.~~~~In general, a recipient will not realize any taxable income upon the grant of a nonqualified stock option and~~for the Company ~~will not receive a deduction at~~during the time of grant. Upon the exercise of a nonqualified stock option, the recipient generally will realize ordinary income in an amount equal to the excess of the fair market value of the Common Stock on the date of exercise over the exercise price. Upon a subsequent saleyear of such Common Stock by the recipient, the recipient will recognize short-term or long-term capital gain or loss depending upon his or her holding period for the Common Stock. The Company will generally be allowed a deduction equal to the amount recognized by the recipient as ordinary income.disposition.
          ~~Stock Awards and Related Tax Payments.~~Under the Code, federal income tax consequences with respect to a stock award (including Stock Units) depend on the facts and circumstances of each stock award and, in particular, the nature of the restrictions imposed with respect to the shares which are the subject of the stock award. In general, if shares which are the subject of the stock award are actually issued to a participant, but are subject to a “substantial risk of forfeiture” (for example, if rights to ownership of the shares are conditioned upon the future performance of substantial services by the participant), a taxable event generally occurs only when the risk of forfeiture lapses. At such time as the substantial risk of forfeiture lapses, the participant will realize ordinary income to the extent of the excess of the fair market value of the shares on the date the risk of forfeiture lapses over the participant’s cost for such shares (if any), and the same amount is then deductible by the Company as compensation expense. If the restrictions with respect to the shares that are the subject of such stock award, by their nature, do not subject the employee to a “substantial risk of forfeiture” of the shares, then the participant will realize ordinary income with respect to the shares to the extent of the excess at the time of the grant of the fair market value of the shares over the participant’s cost, and the same amount is then deductible by the Company. If no shares are actually issued to the participant at the time the stock award is granted, the participant will generally realize ordinary income at the time the participant receives shares

free of any substantial risk of forfeiture, and the amount of such income will be equal to the fair market value of the shares at such time over the participant’s cost, if any, and the same amount is then deductible by the Company. The Company’s deductions for compensation paid under the 2001 Plan are in all cases subject to certain applicable tax law limitations.
          ~~Other.~~In general, a federal income tax deduction is allowed to the Company in an amount equal to the ordinary income recognized by a participant with respect to awards under the 2001 Plan, provided that such amount constitutes an ordinary and necessary business expense of the Company, that such amount is reasonable and that the Company satisfies any withholding obligation with respect to such income.
          ~~Section 162(m) of the Internal Revenue Code.~~Section 162(m) of the Code disallows deductions for compensation in excess of $1 million for certain executives of publicly held corporations, unless such compensation meets the requirements of Section 162(m) as “performance-based” compensation. Because the 2001 Plan received the requisite stockholder approval and awards under the 2001 Plan are intended to meet these other requirements, the Company expects to be entitled to deduct for federal income tax purposes certain performance-based compensation paid under the 2001 Plan to executive officers who may be subject to Section 162(m) notwithstanding the $1 million limitation under such section.
          ~~Allocation of Awards under the 2001 Plan.~~The allocation of future ~~awards~~share acquisitions under the ~~2001 Plan~~ESPP is not currently determinable because such allocation ~~is dependent~~depends on future investment decisions to be made by the ~~Committee~~participants in ~~its sole discretion.~~the ESPP. Accordingly, it is not possible to determine the amounts of benefits that will be received under the ~~2001 Plan~~ESPP by the Named Executive Officers, all executive officers as a group or all employees other than executive officers.
          ~~Current Stock Information.~~Recommendation~~On August 1, 2007,~~
The Board recommends that the ~~closing price~~holders of the ~~Common~~Class A Stock ~~as reported~~vote FOR the approval of Proposal 2. Assuming the presence of a quorum, the affirmative vote of a majority of the votes cast by ~~NASDAQ was $32.46 per share.~~the holders of the Class A Stock present and entitled to vote thereon at the Annual Meeting is required to approve Proposal 2.
~~Recommendation~~

PROPOSAL 3—APPROVAL OF THE SCHOLASTIC CORPORATION
2008 EXECUTIVE PERFORMANCE INCENTIVE PLAN
The Board has unanimously approved and is submitting to the Class A Stockholders, for their consideration, the Scholastic Corporation 2008 Executive Performance Incentive Plan.
Description of Plan
The Scholastic Corporation 2008 Executive Performance Incentive Plan (the “EPIP”), if approved by the Class A Stockholders, will provide for annual incentive payments to key employees of the Company and its Affiliates (as defined in the EPIP) based upon the performance of the Company (including performance at the business division, operational unit or administrative department level). The Company’s compensation programs are based on a pay-for-performance philosophy. A central element of this philosophy is to link aggregate compensation payable to key employees and the financial performance of the Company generally, as well as the results of the specific business division, operational unit or administrative department for which the employee is responsible. The EPIP is intended to further enhance this direct linkage between performance and compensation for key employees of the Company by focusing on overall corporate growth and performance as well as on divisional or unit growth and performance.
Section 162(m) of the Code generally disallows a federal income tax deduction to any publicly held corporation for compensation paid in excess of $1 million in any taxable year to the chief executive officer or any of the four other most highly compensated executive officers. The Company intends to structure awards under the EPIP so that compensation resulting therefrom would qualify as “performance based compensation” eligible for continued deductibility pursuant to Section 162(m). To permit the compensation reflected in an EPIP award to qualify as performance based compensation, and thereby preserve its tax deductibility under Section 162(m), the Company, in accordance with Section 162(m), is seeking approval of the Class A Stockholders of the EPIP, including the material terms of the performance goals applicable to the EPIP.
The Board of Directors recommends approval of the EPIP. The following description of the EPIP is a summary and is qualified in its entirety by reference to the EPIP, a copy of which is attached as Appendix B to this proxy statement.
Plan Administration
The EPIP will be administered by the HRCC or a subcommittee thereof, which is intended to consist entirely of non-employee directors who meet the criteria of “outside

director” under Section 162(m) of the Code. The HRCC will select the key employees of the Company eligible to receive awards and the target pay-out levels and performance targets for such employees. The HRCC will certify the level of attainment of performance targets following the end of each fiscal year.
Performance Criteria
Participants in the EPIP will be eligible to receive annual cash performance awards based on attainment by the Company (or a subsidiary, parent, division, operational unit or administrative department of the Company, subsidiary or parent) of specified performance goals to be established for the participants by the HRCC for each fiscal year. The performance awards will be payable within two and one half months following the end of the fiscal year with respect to which the payments relate, but only after the HRCC certifies that the relevant performance goals have been attained. A participant and the Company may agree to defer all or a portion of a performance award in a written agreement in accordance with the provisions of MSPP.
Section 162(m) of the Code requires that performance awards be based upon objective performance measures. Under the terms of the EPIP, performance goals will be based on one or more of the following criteria with regard to the Company (including any business division, operational unit or administrative department):
(i)
earnings per share from continuing operations;
(ii)
the performance measured by revenues, net profit, net income, operating income or any combination of any or all of the foregoing (which may be measured without regard to extraordinary items);
(iii)
reduction of or other specified objectives with regard to limiting all or a portion of controllable expenses or costs or other expenses or costs of the Company, subsidiary, parent, division, operational unit or administrative department;
(iv)
the attainment of certain target levels of revenues, income before income taxes and extraordinary items, net income, earnings before income tax, earnings before interest, taxes, depreciation and amortization, or a combination of any or all of the foregoing;
(v)
after-tax or pre-tax profits;
(vi)
the fair market value of the shares of the Company’s Common Stock;
(vii)
the growth in the value of an investment in the Company’s Common Stock;
(viii)
return on capital employed or return on invested capital;
(ix)
after-tax or pre-tax return on stockholders’ equity;
(x)
economic value added targets based on a cash flow return on investment formula;

(xi)
the attainment of certain target levels of, or a specified increase in, free or operational cash flow; and
(xii)
the reduction of or other specified objective with regard to limiting the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company.
In addition, such performance goals may be based upon the attainment of specified levels of the Company’s (or a subsidiary, parent, division, operational unit or administrative department of the Company, subsidiary or parent) performance under one or more of the measures described above relative to the performance of other corporations. To the extent permitted under the Code, the performance goals may incorporate provisions for disregarding or adjusting for changes in accounting methods, corporate transactions and other similar events or circumstances. To the extent permitted under the Code, the HRCC may also designate additional business criteria on which the performance goals may be based or adjust, modify or amend the aforementioned business criteria.
Term and Amendment of the EPIP
The EPIP, if approved by the holders of the Class A Stock, will be effective for all fiscal years beginning on and after May 31, 2008. The EPIP may be amended or discontinued by the Board of Directors at any time, except that approval by the Class A Stockholders is also required for an amendment that materially alters the business criteria on which performance goals are based, increases the maximum annual measuring factor for deferred amounts, changes the class of eligible employees or otherwise requires stockholder approval under Code Section 162(m).
The EPIP is not subject to any of the requirements of ERISA nor is it intended to be qualified under Section 401(a) of the Code.
Recommendation
The Board of Directors recommends that the Class A Stockholders vote FOR ~~the~~ approval and adoption of the ~~Amendment.~~Scholastic Corporation 2008 Executive Performance Incentive Plan. Assuming the presence of a quorum, the affirmative vote of a majority of the votes cast by the Class A Stockholders present and entitled to vote on this item at the Annual Meeting is required to approve the ~~Amendment.~~EPIP.

~~PROPOSAL 3~~
~~APPROVAL OF THE SCHOLASTIC CORPORATION 2007 OUTSIDE DIRECTORS~~
~~STOCK INCENTIVE PLAN~~
          As noted under “Director Compensation” above, the 1997 Outside Directors’ Plan, which provided for the automatic grant of options to purchase 6,000 shares of Common Stock to each Outside Director on an annual basis on the date of the Company’s annual meeting of stockholders, is scheduled to expire by its terms on August 18, 2007. Therefore, the Board, upon the recommendation of the HRCC, has unanimously approved the Scholastic Corporation 2007 Outside Directors Stock Incentive Plan (the “2007 Directors Plan”), which is attached hereto as~~Appendix B, subject to approval by the Class A Stockholders at the Annual Meeting.~~
          The purpose of the 2007 Directors Plan is to use periodic stock-based incentive awards 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 2007 Directors Plan, each Outside Director will automatically be granted, on the date of the annual meeting of stockholders in each year, a stock option to purchase 3,000 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, and 1,200 Restricted Stock Units (“Director RSUs”). Director RSUs automatically convert into shares of Common Stock on a one-for-one basis when the award vests, which will be on the date that is twelve months from the date of grant.
          Under the 2007 Directors Plan, a total of 500,000 shares of Common Stock will be initially authorized for issuance upon the exercise of stock options or vesting of Director RSUs to be granted to Outside Directors. Currently, there are eight Outside Directors eligible to participate in the 2007 Directors Plan, and the Board has nominated one additional Outside Director for election by the Class A Stockholders at the Annual Meeting. If so elected, the nine Outside Directors as a group would be eligible to receive: (1) annual automatic grants of options to purchase an aggregate of 27,000 shares of Common Stock under the 2007 Plan and (2) 10,800 Director RSUs, with the initial grant on the date of the Annual Meeting.
          The 2007 Directors Plan provides for certain adjustments to be made with respect to outstanding stock options and Directors RSUs 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 Board is authorized to determine the appropriate adjustments to be made upon the occurrence of such events, including appropriate adjustments to the number and type of shares or other securities to be subject to the automatic annual grant of stock options and

Director RSUs 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 stock options and Director RSUs and reserved for future grants.
          Except as described below, each stock option granted to an Outside Director under the 2007 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 no event may a stock option granted under the 2007 Directors Plan be exercised within six months of its date of grant or after its original ten-year expiration date.
          The 2007 Directors Plan provides that stock 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. A stock option granted under the 2007 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 or through a cashless exercise.
          The 2007 Directors Plan is administered by the Board. The administration of the 2007 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 stock option or Director RSU granted thereunder and to settle any claims or disputes arising thereunder. Since the grant of stock options, Director RSUs and the terms thereof are non-discretionary under the 2007 Directors Plan, the Board will have no discretion as to the selection of individuals to receive awards, the number of shares to be covered by any award or the pricing or timing thereof.
          There is no immediate federal income tax effect on the grant of a stock option under the 2007 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 subsequently 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.
          Outside Directors are not subject to tax on the grant of an RSU. Instead, at the time of vesting of an RSU, an Outside Director is subject to income tax, at ordinary income rates, on the fair market value of the Common Stock on such date and the Company is allowed a tax deduction in the same amount. When Outside Directors sell Common Stock received in settlement of an RSU, 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 Class A Stockholders vote FOR the approval of the 2007 Outside Directors Plan.~~ Assuming the presence of a quorum, the affirmative vote of a majority of the votes cast by the Class A Stockholders present and entitled to vote thereon at the Annual Meeting is required to approve the 2007 Outside Directors Plan.
EQUITY COMPENSATION PLAN INFORMATION
The following table presents information regarding the Company’s equity compensation plans at May 31, ~~2007:~~2008:

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 Common Stock

5,348,758

$
30.84

814,541
⁽¹⁾

Class A Stock

999,000

$
31.99

500,000

Equity Compensation plans not approved by security holders Common Stock

—

—

—

Class A Stock

—

—

—

Total

6,347,758

$
31.21

1,314,541

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
Common Stock

4,273,288

$
32.50

2,675,415
⁽¹⁾

Class A Stock

1,249,000

$
32.84

250,000

Equity Compensation plans not approved by security holders
Common Stock

—

—

—

Class A Stock

—

—

—

Total

5,522,288

$
32.58

2,925,415

⁽¹⁾
Includes ~~187,898~~116,218 shares of Common Stock under the ESPP; ~~266,538~~250,258 shares of Common Stock under the MSPP; ~~and 360,105~~1,842,539 shares of Common Stock under the 2001 Plan, which may be issued ~~pursuant to~~upon the exercise of stock options or as restricted stock, ~~Stock Units,~~restricted stock units, or other stock-based ~~awards.~~awards and 466,400 shares of Common Stock under the 2007 Outside Directors’ Plan, which may be issued upon the exercise of stock options or as restricted stock units.

INDEPENDENT REGISTERED 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, ~~2008.~~2009. 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 $4,576,340 for fiscal 2008 and $4,053,592 for fiscal ~~2007 and $4,660,227 for fiscal 2006.~~2007. The total fees for services provided by E&Y to the Company during the fiscal years ended May 31, ~~2007~~2008 and May 31, ~~2006~~2007 are summarized in the table below:

Fiscal 2007
$

Fiscal 2006
$

Audit Fees

$
3,726,910

$
4,256,495

Audit-Related Fees

$
120,220

$
116,793

Tax Fees

$
206,462

$
286,939

All Other Fees

$
—

$
—

TOTAL FEES PAID

$
4,053,592

$
4,660,227

Fiscal 2008
$

Fiscal 2007
$

Audit Fees

$
3,892,340

$
3,726,910
Audit-Related Fees

$
87,000

$
120,220
Tax Fees

$
492,000

$
206,462
All Other Fees

$
105,000

$
—

TOTAL FEES PAID

$
4,576,340

$
4,053,592

Audit Fees include the financial statement audit, as well as the audit of the assertion by management of the effectiveness of the Company’s internal controls required by the Sarbanes-Oxley Act of ~~2002.~~2002, and the related quarterly financial statement reviews. Also included in Audit Fees are fees related to work by E&Y with respect to consents related to SEC registration statement filings, goodwill impairment testing and a review of the accounting treatment for the Company’s discontinued operations. Audit-Related Fees include fees for services such as benefit plan audits and accounting ~~consultations and work related to business acquisitions and SEC Registration Statements.~~consultations. Tax Fees are for the preparation of tax returns for certain international operations and consulting on tax planning opportunities and entity ~~restructuring.~~restructuring and FIN 48 implementation assistance. All Other Fees consist of a comprehensive review of the Company’s real estate rent agreements. In fiscal ~~2007~~2008 and fiscal ~~2006,~~2007, in accordance with Section 10A(i) of the Exchange Act, the Audit Committee pre-approved all of the Audit-Related services and Tax services provided by E~~&Y.~~&Y as well as E&Y’s review of the Company’s real estate rent agreements. The Audit Committee’s non-audit services pre-approval policies require the receipt and analysis of a summary containing a description of the non-audit service to be provided prior to commencement of the engagement. The Audit Committee then makes an evaluation as to whether the provision of the proposed non-audit service by E&Y will affect its independence and also considers the percentage of non-audit fees related to the total audit fees. If a non-audit service is required before the Audit Committee’s next scheduled meeting, the committee has delegated to its chair, Mr. Oliver, the authority to approve such service on its behalf, provided that such action is reported to the committee at its next meeting.

AUDIT COMMITTEE’S REPORT
The Audit Committee has reviewed and discussed the audited consolidated financial statements of the Company for the fiscal year ended May 31, ~~2007~~2008 with the Company’s management. The Audit Committee has discussed with E&Y, the Company’s independent

accountants, the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as modified or supplemented.
The Audit Committee has also received the written disclosures and the letter from E&Y required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Committees) and the Audit Committee has discussed the independence of E&Y with that firm.
Based on the Audit Committee’s review and discussions noted above, the Audit Committee unanimously recommended to the Board (and the Board has approved) that the Company’s audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, ~~2007~~2008 for filing with the SEC.
~~Audit Committee~~
~~Augustus K. Oliver, Chairperson~~
~~John L. Davies~~
~~Ramon C. Cortines~~
Audit Committee
Augustus K. Oliver, Chairperson
James W. Barge
Ramon C. Cortines
John L. Davies
STOCKHOLDER PROPOSALS FOR ~~2008~~2009 ANNUAL MEETING
Stockholders who intend to present proposals for inclusion in the proxy materials regarding the ~~2008~~2009 Annual Meeting must ensure that such proposals are received by the Secretary of the Company not later than April 16, ~~2008~~2009 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 ~~2008~~2009 Annual Meeting, but not included in the Company’s proxy materials, such proposal must be received no later than June 30, ~~2008.~~2009.

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
Devereux Chatillon
Secretary

~~By Order of the Board of Directors~~
~~Devereux Chatillon~~
~~Secretary~~

Appendix A
AMENDMENT ~~NO. 3~~
~~(dated July 17, 2007)~~
~~to the~~
NUMBER THREE
TO THE
AMENDED AND RESTATED
SCHOLASTIC CORPORATION ~~2001~~EMPLOYEE STOCK ~~INCENTIVE~~PURCHASE PLAN
          ~~Section 4.1 of~~WHEREAS, Scholastic Corporation (the “Company”) maintains the Scholastic Corporation ~~2001~~Employee Stock ~~Incentive~~Purchase Plan (Amended and Restated as of March 1, 2000) (as subsequently amended, the “Plan”); and
WHEREAS, pursuant to Section 22 of the Plan, the Company reserved the right, by action of its Board of Directors or its Human Resources and Compensation Committee (the ~~“Plan”~~“Committee”), to amend the Plan from time to time; and
WHEREAS, the Committee desires to amend the Plan.
NOW, THEREFORE, subject to the approval of this Amendment Number Three by the holders of the Company’s Class A Stock, the Plan is amended as follows:
Paragraph (a) of Section 3 of the Plan is amended by substituting: ~~“6,000,000”~~“1,400,000” for ~~“4,000,000”~~“900,000” where it appears ~~therein; and~~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 ~~resolutions~~resolution of the Human Resources and Compensation Committee of the Board of Directors of Scholastic Corporation adopted at its meeting held on ~~July 17, 2007 and the Board of Directors at its meeting held on July 18, 2007.~~

~~Appendix B~~
~~SCHOLASTIC CORPORATION 2007 OUTSIDE DIRECTORS~~
~~STOCK INCENTIVE PLAN~~
~~1. Name and General Purpose~~May 20, 2008.
The name of this plan is the Scholastic Corporation 2007 Outside Directors Stock Incentive 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 (the “Outside Directors”) and to provide an additional incentive for such Outside Directors through ownership of the common stock, par value $.01 per share, of the Company (the “Common Stock”).
~~2. Automatic 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, at the conclusion of each annual meeting of the Company’s stockholders occurring after the effective date of the Plan, an incumbent Outside Director, shall automatically be granted, as of each such date (or, if applicable, the next succeeding business day), (i) 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, and (ii) 1,200 “Restricted Stock Units” (as herein after defined).
          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 on the NASDAQ Stock Market, Inc. L.L.C. (“NASDAQ”). All options granted under the Plan shall be non-qualified stock options.
          “Restricted Stock Unit” or “RSU” represents an unfunded, unsecured right to receive in the future, if the conditions of an RSU award are met, one share of Common Stock. No shares of Common Stock shall be issued to an Outside Director on the date of the RSU grant.
~~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.~~

Appendix B
          ~~Except~~SCHOLASTIC CORPORATION
2008 EXECUTIVE PERFORMANCE INCENTIVE PLAN
1. PURPOSE
The purpose of this Plan is to attract, retain, and motivate key employees by providing annual cash performance awards to designated key employees of the Company and its Affiliates. This Plan is intended to establish a clear link between performance and the level of awards paid to such designated key employees with a focus on overall corporate growth and performance as well as on divisional or unit growth and performance. This Plan is effective as of May 21, 2008, subject to approval by the stockholders of the Company entitled to vote thereon in accordance with the laws of the State of Delaware.
2. DEFINITIONS
Unless the context otherwise requires, the words which follow shall have the following meaning:
(a) “Affiliate”—shall mean each corporation that is a member of the Company’s affiliated group, within the meaning of Code Section 1504 (without regard to Code Section 1504(b)) other than any subsidiary of the Company that is itself a publicly held corporation, and subsidiaries of such public corporation, as such term is defined in Code Section 162(m) and the Treasury regulations issued thereunder.
(b) “Award”—shall mean the total annual Performance Award as determined under the Plan.
(c) “Board”—shall mean the Board of Directors of the Company.
(d) “Change in Control of the Company”—shall have the meaning set forth in the Participant’s employment agreement (if any) or other written agreement with the Company or an Affiliate with respect to the Plan. If a Participant does not have an employment agreement or other written agreement which defines Change in Control, the provisions of the Plan with respect to a Change in Control shall not apply to such Participant.
(e) “Code”—shall mean the Internal Revenue Code of 1986, as amended and any successor thereto.
(f) “Code Section 162(m)”—shall mean the exception for performance-based compensation under Section 162(m) of the Code or any successor section and the Treasury regulations promulgated thereunder.

Appendix B
(g) “Company”—shall mean Scholastic Corporation and any successor by merger, consolidation or otherwise.
(h) “Committee”—shall mean the Human Resources and Compensation Committee of the Board (or subcommittee thereof) or such other Committee of the Board that is appointed by the Board all of whose members shall be “outside directors,” as defined under Code Section 162(m).
(i) “Individual Target Award”—shall mean the targeted performance award for a Plan Year specified by the Committee as provided in Section 5 ~~below,~~hereof.
(j) “Participant”—shall mean an ~~option~~employee of the Company or any of its Affiliates selected, in accordance with Section 4 hereof, to be eligible to receive an Award in accordance with this Plan.
(k) “Performance Award”—shall mean the amount paid or payable under Section 6 hereof.
(l) “Plan”—shall mean this Scholastic Corporation 2008 Executive Performance Incentive Plan.
(m) “Plan Year”—shall mean the fiscal year of the Company.
3. ADMINISTRATION AND INTERPRETATION OF THE PLAN
The Plan shall be administered by the Committee. The Committee shall have the exclusive authority and responsibility to: (i) interpret the Plan; (ii) approve the designation of eligible Participants; (iii) set the performance criteria for Awards within the Plan guidelines; (iv) certify attainment of performance goals and other material terms; (v) reduce Awards as provided herein; (vi) authorize the payment of all benefits and expenses of the Plan as they become payable under the Plan; (vii) adopt, amend and rescind rules and regulations relating to the Plan; and (viii) make all other determinations and take all other actions necessary or desirable for the Plan’s administration, including, without limitation, correcting any defect, supplying any omission or reconciling any inconsistency in this Plan in the manner and to the extent it shall deem necessary to carry this Plan into effect, but only to the extent any such action would be permitted under Code Section 162(m).
Decisions of the Committee shall be made by a majority of its members. All decisions of the Committee on any question concerning the selection of Participants and the interpretation and administration of the Plan shall be final, conclusive, and binding upon all parties. The Committee may rely on information, and consider recommendations, provided

Appendix B
by the Board or the senior management of the Company. The Plan is intended to comply with Code Section 162(m), and all provisions contained herein shall be ~~exercised,~~limited, construed, and interpreted in ~~whole~~a manner to so comply.
4.ELIGIBILITY AND PARTICIPATION
(a) For each Plan Year, the Committee shall select, in its discretion, key employees of the Company or any of its Affiliates who are to participate in ~~part~~the Plan.
(b) No person shall be entitled to any Award under this Plan for any Plan Year unless he or she is so designated as a Participant for that Plan Year. The Committee may add to or delete individuals from the list of designated Participants at any time and from time to time, ~~during~~in its sole discretion, subject to any limitations required to comply with Code Section 162(m).
5. INDIVIDUAL TARGET AWARD
For each Participant for each Plan Year, the ~~period beginning with~~Committee may specify a targeted performance award. The Individual Target Award may be expressed, at the ~~expiration~~Committee’s discretion, as a fixed dollar amount, a percentage of ~~twelve months following~~base pay or total pay (excluding payments made under this Plan), or an amount determined pursuant to an objective formula or standard. Establishment of an Individual Target Award for an employee for a Plan Year shall not imply or require that the ~~date~~same level of ~~grant and ending on the option expiration date, by following the procedures~~Individual Target Award (if any such award is established by the Committee for the relevant employee) be set for any subsequent Plan Year. At the time the Performance Goals are established (as provided in subsection 6.2 below), the Committee shall prescribe a formula to determine the percentages (which may be greater than one-hundred percent (100%)) of the Individual Target Award which may be payable based upon the degree of attainment of the Performance Goals during the Plan Year. Notwithstanding anything else herein, the Committee may, in its sole discretion, elect to pay a Participant an amount that is less than the Participant’s Individual Target Award (or attained percentage thereof) regardless of the degree of attainment of the Performance Goals; provided that no such discretion to reduce an Award earned based on achievement of the applicable Performance Goals shall be permitted for the Plan Year in which a Change in Control of the Company ~~and its designated record keeper~~occurs, or during such Plan Year with regard to the prior Plan Year if the Awards for the prior Plan Year have been earned but have not been paid by the time of the Change in Control of the Company, with regard to individuals who were Participants at the time of ~~exercise specifying~~ the ~~number of shares of Common Stock to be purchased.~~
          ~~No shares of Common Stock shall be issued until full payment therefor has been made. An Outside Director shall have no rights as a stockholder~~Change in Control of the ~~Company with respect~~Company; and further provided that no such discretion to ~~any shares of Common Stock subject~~reduce an Award otherwise payable to a Participant shall result in an ~~option until such time as the Outside Director has properly exercised his or her option, paid~~increase in ~~full for the shares subject~~an Award payable to ~~such option, and executed any representations required by the Company.~~another Participant.
~~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.~~
~~4. Restricted Stock Units~~
An RSU award shall not vest until twelve (12) months from the date of grant. shares of Common Stock in respect of a vested RSU award shall be issued to an Outside Director as soon as practicable from the vesting of an RSU.
          The record established by the Company of the RSUs awarded to an Outside Director does not constitute any stock or property of the Company. No funds or shares of Common Stock shall be placed in trust or set aside to assure payment of an award of RSUs. RSUs are an unfunded, unsecured promise of the Company to issue Common Stock in the future, subject to vesting and other conditions in the Plan. The right of an Outside Director to receive shares of Common Stock in settlement of an RSU shall be no greater than any general unsecured creditor of the Company. An Outside Director shall have no rights as a stockholder with respect to shares of Common Stock which may be issued in settlement of an RSU until the date of issuance of a certificate for such shares (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent.) No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued.
~~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 on the Board of Directors, otherwise than by reason of death or~~

Appendix B
~~disability, such option may be exercised (to~~6. PERFORMANCE AWARD PROGRAM
6.1 PERFORMANCE AWARDS. Subject to Section 7 herein, each Participant is eligible to receive up to the ~~extent that the Outside Director is entitled to do so at the time~~achieved percentage 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~~their Individual Target Award for such ~~cessation of service, the option would otherwise expire; provided, however, that, in the event an Outside Director~~Plan Year (or, subject to ~~whom an option has been granted under the Plan shall cease to serve on the Board of Directors but shall have been designated~~Section 5, such lesser amount 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~~Committee in its sole discretion) based upon the attainment of ~~Directors on~~ the ~~basis~~objective Performance Goals established pursuant to subsection 6.2 and the formula or standard established pursuant to Section 5. Except as specifically provided in Section 7, no Performance Award shall be paid to a Participant for a Plan Year unless the minimum Performance Goals for such Plan Year are attained.
6.2 OBJECTIVE PERFORMANCE GOALS, FORMULAE OR STANDARDS (THE “PERFORMANCE GOALS”). The Committee shall establish the objective performance goals, formulae or standards and the Individual Target Award applicable to each Participant or class of ~~all~~Participants for a Plan Year in writing prior to the ~~facts~~beginning of such Plan Year or at such later date as permitted under Code Section 162(m) and ~~circumstances)~~while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate, if and only to the extent permitted under Code Section 162(m), provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances. To the extent any such provision would create impermissible discretion under Code Section 162(m) or otherwise violate Code Section 162(m), such ~~option~~provision shall be of no force or effect. These Performance Goals shall be based on one or more of the following criteria with regard to the Company or any of its Affiliates (or a division, operational unit or administrative department of the Company or any of its Affiliates): (i) earnings per share or the attainment of a specified percentage increase in earnings per share or earnings per share from continuing operations; (ii) performance measured by revenues, net profit, net income, operating income or any combination of any or all of the foregoing (any or all of which may be ~~exercised,~~measured without regard to extraordinary items); (iii) the attainment of a certain level of, reduction of, or other specified objectives with regard to limiting the level of or increase in, ~~full~~all or a portion of controllable expenses or costs or other expenses or costs; (iv) the attainment of certain target levels of, or a specified percentage increase in, ~~part,~~revenues, income before income taxes and extraordinary items, net income, earnings before income tax, earnings before interest, taxes, depreciation and amortization, or a combination of any or all of the foregoing; (v) the attainment of certain target levels of, or a percentage increase in, after-tax or pre-tax profits including, without limitation, that attributable to continuing and/or other operations; (vi) the attainment of certain target levels in the fair market value of the shares of the Company’s common stock; (vii) the growth in the value of an investment in the Company’s common stock assuming the reinvestment of dividends; (viii) the attainment of certain target levels of, or a specified increase in, return on capital employed or return on invested capital; (ix) the

Appendix B
attainment of certain target levels of, or a percentage increase in, after-tax or pre-tax return on stockholders’ equity; (x) the attainment of certain target levels of, or a specified increase in, economic value added targets based on a cash flow return on investment formula; (xi) the attainment of certain target levels of, or a specified increase in, free or operational cash flow; and (xii) the achievement of a certain level of, reduction of, or other specified objectives with regard to limiting the level of increase in, all or a portion of the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of such cash balances and/or other offsets and adjustments as may be established by the ~~Outside Director~~Committee. For purposes of items (ii) and (iv) above, “extraordinary items” shall mean all items of gain, loss or ~~his~~expense for the Plan Year determined to be extraordinary or ~~her legally appointed representative (notwithstanding~~unusual in nature or infrequent in occurrence or related to a corporate transaction (including, without limitation, a disposition or acquisition) or related to a change in accounting principle, all as determined in accordance with standards established by Opinion No. 30 of the Accounting Principles Board.
In addition, such Performance Goals may be based upon the attainment of specified levels of Company or any of its Affiliates (or a division, operational unit or administrative department of the Company or any of its Affiliates) performance under one or more of the measures described above relative to the performance of other corporations. To the extent permitted under Code Section 162(m), but only to the extent permitted under Code Section 162(m) (including, without limitation, compliance with any requirements for stockholder approval), the Committee may: (i) designate additional business criteria on which the Performance Goals may be based or (ii) adjust, modify or amend the aforementioned business criteria.
6.3 COMMITTEE CERTIFICATION. Performance Awards shall not be paid before the Committee certifies in writing that the ~~option~~Performance Goals specified pursuant to subsection 6.2 have been satisfied. Notwithstanding the forgoing, the Committee may, ~~not yet otherwise have become exercisable~~in its sole and absolute discretion, permit the payment of Performance Awards 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~~a 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 twelve (12) months after cessation of service on the Board of Directors by reason of disability, such option may be exercised:
                    1)Year in the case of death ~~while serving on the Board of Directors, as to all~~ or ~~any part~~“disability” of the ~~remaining unexercised portion~~Participant (within the meaning of ~~the option, notwithstanding that the option may not yet otherwise have become exercisable with respect to all~~Code Section 409A) 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 provided in Section 7.3 of the Plan, Change in Control of the Company during such Plan Year without regard to actual achievement of the Performance Goals and whether or not payment of such Awards would be deductible; provided, however, that ~~the Outside Director was entitled to do so at the date~~this provision shall be of ~~his~~no force or ~~her death, giving~~ effect to the ~~provisions~~extent Awards made under the Plan would fail to be qualified performance-based compensation under Code Section 162(m)(4)(C) and Treasury regulations issued thereunder regardless of ~~subsections (a) and (b) above of this Section 5; and~~
                    ~~3) in each case by the person who acquired the right~~payment. The Committee may not use its discretion to ~~exercise such option by bequest or inheritance or by reason~~increase a Performance Award that would otherwise be payable upon attainment of the ~~death of the Outside~~Performance Goals. The Committee shall use its best efforts to make a

Appendix B
~~Director, but in no event after the date on which the option would otherwise expire under Section 3~~determination with regard to satisfaction 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 exercised within six (6) months of the date of grant.~~
          (d) In the event that an Outside Director to whom an RSU has been granted under the Plan for a year shall cease to serve as an Outside Director prior to completion of twelve (12) months from the date of grant for such year otherwise than by reason of death or disability, the RSU award for such year shall be forfeited upon such cessation of services. In the event that an Outside Director to whom an RSU has been granted shall cease to serve on the Board of Directors but shall have been designated as a Director Emeritus, such director shall be deemed to continue in service as an Outside Director until termination of his or her Director Emeritus status for purposes of determining the vesting of an RSU award and cessation of services as a director. In the event that an Outside Director to whom an RSU has been granted under the Plan shall cease to serve as an Outside Director prior to completion of twelve (12) months from the date of grant on account of death or (as determined by the Board of Directors on the basis of all the facts and circumstances) disability, the RSU award shall become immediately vested and non-forfeitable and shares of Common Stock in respect of such RSU award shall be distributedPerformance Goals as soon as practicable after ~~such cessation~~the end of ~~services.~~each Plan Year.
7. TIME OF PAYMENT
7.1 GENERAL. Except as otherwise provided in this Section 7, Awards shall be paid no later than two and one-half months (2¹/₂) following the Plan Year in which they are earned subject to the Participant’s continued active employment with the Company or any of its Affiliates on the payment date.
7.2 DISABILITY AND DEATH. The Committee, in its sole discretion, may waive the requirement of continued active employment on the payment date in the event that during the Plan Year to which the Performance Award relates the Participant experiences a termination of employment due to death or disability.
7.3 CHANGE IN CONTROL. In the event ~~that an Outside Director ceases to serve as an Outside Director, any shares of Common Stock in respect~~ of a ~~vested undistributed RSU award~~Change in Control of the Company during the Plan Year to which an Award relates, the Committee may, in its discretion, pay upon the consummation of such transaction a pro-rata portion (through the date of the Change in Control of the Company) of the Performance Award for such Plan Year at 100% of the Individual Target Award. Any such immediate pro-rata payment shall reduce any other Award made for such Plan Year under this Plan to the Participant by the amount of the pro-rata payment.
7.4 DEFERRAL ELECTION. A Participant may elect to defer payment of an Award pursuant to a written agreement executed on or before the date that is six months before the end of the Plan Year to which the Performance Award relates in accordance with any deferred compensation program in effect applicable to such Participant and in compliance with the requirements of Code Section 409A. Any Performance Award deferred by a Participant shall be ~~distributed as soon as practicable after~~subject to the provisions of the Company’s Management Stock Purchase Plan or any successor plan. The Participant shall have no right to receive payment of any deferred Award prior to the attainment of the Performance Goals for the Plan Year to which the Award relates and certification of such ~~cessation of services.~~
~~6. Transferability~~
          ~~No option or Restricted Stock Units granted~~attainment by the Committee and until the Participant has a right to receive such amount under the terms of the applicable deferred compensation program.
8. NON-ASSIGNABILITY
No Award under this Plan ~~may~~nor any right or benefit under this Plan shall be ~~sold, transferred, pledged, assigned,~~subject to anticipation, alienation, sale, assignment, pledge, encumbrance, garnishment, execution or ~~otherwise alienated, other than~~

Appendix B
levy of any kind or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber and, to the extent permitted by ~~will~~applicable law, charge, garnish, execute upon or levy upon the same shall be void and shall not be recognized or given effect by the ~~laws~~Company.
9. NO RIGHT TO EMPLOYMENT
Nothing in the Plan or in any notice of ~~descent and distribution.~~
~~7. Shares Reserved~~
          ~~The aggregate number of shares reserved for issuance~~award pursuant to the Plan shall confer upon any person the right to continue in the employment of the Company or any of its Affiliates or affect the right of the Company or any of its Affiliates to terminate the employment of any Participant.
10. AMENDMENT OR TERMINATION
The Board (or a duly authorized committee thereof) may, in its sole and absolute discretion, amend, suspend or terminate the Plan or adopt a new plan in place of this Plan at any time; provided, that no such amendment shall, without the prior approval of the stockholders of the Company entitled to vote thereon in accordance with the laws of the State of Delaware to the extent required under Code Section 162(m): (i) materially alter the Performance Goals as set forth in subsection 6.2; (ii) change the class of eligible employees set forth in Section 4(a); or (iii) implement any change to a provision of the Plan requiring stockholder approval in order for the Plan to continue to comply with the requirements of Code Section 162(m). Furthermore, no amendment, suspension, or termination shall, without the consent of the Participant, alter or impair a Participant’s right to receive payment of an Award for a Plan Year otherwise payable hereunder.
11. SEVERABILITY
In the event that any one or more of the provisions contained in the Plan shall, for any reason, be ~~500,000 shares~~held to be invalid, illegal or unenforceable, in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of ~~Common Stock, or~~ the ~~number~~Plan and ~~kind of shares of stock or other securities which~~the Plan shall be ~~substituted for~~construed as if such ~~shares~~invalid, illegal or ~~to which such shares shall be adjusted as provided in Section 8.~~unenforceable provisions had never been contained therein.

Appendix B
          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.12. WITHHOLDING
          Shares subject to, but not sold or issued under, any option or Restricted Stock Unit terminating, expiring or cancelled for any reason prior to its exercise in full will again be available for options or RSUs 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, the number of shares which are reserved under the Plan shall be automatically adjusted, and both(i) the number of shares which, at such time, are subject to outstanding options or Restricted Stock Units, and (ii) the number of options and RSUs that are automatically granted to Outside Directors each year, 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 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 Board of Directors 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 or RSU, the number of shares which shall be the number of the automatic grants to Directors, as well as the price per share of Common Stock covered by each option outstanding under the Plan which has not yet been exercised.
~~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 or the vesting or delivery of Common Stock in respect of a Restricted Stock Unit, theThe Company shall have the right to ~~deduct from all amounts payable in cash~~make such provisions as it deems necessary or appropriate to satisfy any obligations it may have to withhold federal, state, or local income or other taxes ~~required~~incurred by ~~law to be withheld therefrom, and, in the case~~reason of payments ~~in the form of Common Stock, the Outside Director to whom such payments are to be made shall be required to pay~~pursuant to the ~~Company~~Plan.
13. SECTIONS 162(m) AND 409A
It is intended that the ~~amount~~Plan be administered in compliance with Code Section 162(m) so that the Awards paid under the Plan to Participants who are or may become subject to Code Section 162(m) will be treated as qualified performance-based compensation under Code Section 162(m)(4)(C). If any provision of ~~any taxes required~~the Plan does not comply with the requirements of Code Section 162(m), then the Committee may construe or amend such provision to ~~be withheld, or, in lieu~~

~~Appendix B~~the extent necessary to conform to such requirements.
~~thereof,~~It is intended that the ~~Company shall have~~Awards granted under the ~~right to retain, or sell without notice, a sufficient number of shares of Common Stock to cover the minimum amount required to be withheld.~~
~~10. Administration~~
          ~~The~~ Plan shall be ~~administered by~~exempt from, or in compliance with, Code Section 409A. In the ~~Board of Directors. Subject to the provisions~~event any 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 or RSU award~~Awards 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~~are subject 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 or Restricted Stock Units hereunder, the number of shares of Common Stock covered by any such option or Restricted Stock Unit award or the price or timing of any option or RSU 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 or RSU with respect thereto, unless~~Code Section 409A, 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.

~~Appendix B~~
~~12. Amendment and Termination;~~
          ~~It is the intention of the Company~~intended that no payment or entitlement pursuant to this Plan will give rise to any adverse tax consequences to ~~an Outside Director~~a Participant under Code Section 409A of the Internal Revenue Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including those issued after the date hereof (collectively, “Section 409A”).409A. The Plan shall be interpreted to that end and, consistent with that objective and notwithstanding any provision herein to the contrary, the Company may unilaterally take any action it deems necessary or desirable to amend any provision herein to avoid the application of or excise tax ~~or other penalties~~ under Code Section ~~409A. Further, no effect shall be given to any provision herein in a manner~~409A provided that ~~reasonably could be expected to give rise to adverse tax consequences under~~such action is consistent with the requirements of Code Section ~~409A.~~162(m). Neither the Company nor its Affiliates, nor their current ~~or former~~ employees, officers, directors, representatives or agents shall have any liability to any current or former ~~Outside Director~~Participant with respect to any accelerated taxation, additional taxes, penalties or interest for which any current or former ~~Outside Director~~Participant may become liable in the event that any amounts payable under the Plan are determined to violate Section 409A.
          ~~The Board of Directors may amend or discontinue the~~14. GOVERNING LAW
This Plan atand any ~~time and from time to time; provided, however, that (a) unless otherwise required by law, no amendment, alteration or discontinuation~~amendments thereto shall be ~~made which would impair the rights of an Outside Director with respect to any option or RSU which has been granted under the Plan without such individual’s consent~~construed, administered, and (b) no amendment shall be effective without the approval of the 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 July 18, 2007, 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 the Company’s Class A Stock, per value $.01 per share. The Plan shall terminate on July 18, 2017.
~~14. Governing Law~~
          ~~The Plan shall be~~ governed ~~by, and construed~~in all respects in accordance with the laws of the State of ~~Delaware.~~Delaware (regardless of the law that might otherwise govern under applicable principles of conflict of laws).

SCHOLASTIC CORPORATION

Proxy for Annual Meeting of Stockholders, September ~~19, 2007~~

24, 2008
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,~~evocation, 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 Wednesday, September ~~19, 2007,~~24, 2008 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, ~~2007~~2008 by completing the reverse side of this card and returning it by September ~~14, 2007.~~19, 2008.
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)

pFOLD AND DETACH HEREp

PRINT AUTHORIZATION (THIS BOXED AREA DOES NOT PRINT)

To commence printing on this proxy card please sign, date and fax this card to :212-691-9013
SIGNATURE: ________________________________________________ DATE: ____________ TIME: ______________
oMark this box if you would like the Proxy Card EDGARized:oASCIIoEDGAR IIo(HTML)
Registered Quantity (common3040Broker Quantity200)
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~~Pelease
Mark Here
for Address
Change or
Comments
o

SEE REVERSE SIDE

1.
Proposal to elect

FOR

WITHHOLD
2. In their discretion the proxies will vote upon such other matters as may be properly come before the meeting and as may properly be voted upon by the holders of Common Stock.
01 James W. Barge, and

02 John G. McDonald as directors:

~~FOR~~
~~WITHHOLD~~
1.
~~Proposal to elect~~
~~01 James W. Barge 02 John L. Davies and~~
~~03 John G. McDonald as directors:~~
o
o
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.

2.

~~In their discretion the proxies will vote upon such other matters as may be properly come before the meeting and as may properly be voted upon by the holders of Common Stock.~~

Signature
~~Signature~~
~~Date~~

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.
pFOLD AND DETACH HEREp

~~FOLD AND DETACH HERE~~
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Internet and telephone voting is available through 11:59 PM 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
~~INTERNET~~
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Use the ~~Internet~~internet to vote your proxy.      Use any touch-tone telephone to
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OR
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If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
ChooseMLink^SMfor fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ~~ServiceDirect®~~ServiceDirect^®atwww.melloninvestor.com/isdwhere step-by-step instructions will prompt you through enrollment.

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SCHOLASTIC CORPORATION

Proxy for Annual Meeting of Stockholders, September ~~19, 2007~~

24, 2008
(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 Wednesday, September ~~19, 2007,~~24, 2008, 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 19, 2007~~
Annual Meeting of Stockholders, September 24, 2008
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 FOR EACH OF PROPOSALS 2 and 3.
The undersigned hereby votes the above number of shares of Class A Stock of Scholastic Corporation as follows:

1.
Upon the election of: Richard Robinson, ~~Rebeca M. Barrera,~~ Ramon C. Cortines, John L. Davies, Andrew S. Hedden, Mae C. Jemison, Peter M. Mayer, Augustus K. Oliver and Richard M. Spaulding.
FOR:__________
                                   ~~FOR:  __________~~
WITHHOLD __________
2.
Approving an amendment to the Scholastic Corporation ~~2001~~Employee Stock ~~Incentive~~Purchase Plan.
FOR:__________
                                   ~~FOR:  __________~~
WITHHOLD __________
3.
3.
Approving the Scholastic Corporation ~~2007 Outside Directors Stock~~2008 Executive Performance Incentive Plan.
FOR:__________
                                   ~~FOR:  __________~~
WITHHOLD __________
4.
4.
In their discretion, the proxies will vote upon such other matters as may properly come before the meeting and as may properly be voted upon by the holders of Class A Stock.
~~Signature(s):  ______________________________________     Date:  ________________~~

Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
Please mark your vote as indicated in this exampleX
__________________________
Stockholder Name (please print)
~~__________________________~~
~~Stockholder Name (please print)~~
1

	~~OMB APPROVAL~~
	~~OMB APPROVAL~~

	~~OMB Number: 3235-0059~~

	~~Expires: January 31, 2008~~

	~~Estimated average burden hours per response: 14~~


	.

[X]	No fee required.

[_]	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.


1)	Title of each class of securities to which transaction applies:


2)	Aggregate number of securities to which transaction applies:

[_]	Fee paid previously with preliminary materials:


[_]	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.

	1)	Amount previously paid:


	2)	Form, Schedule or Registration Statement No.:


	3)	Filing Party:


	4)	Date Filed:

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 for Certain Class A Stockholders		5
Section 16(a) Beneficial Ownership Reporting Compliance		56
Share Ownership of Management		67
Compensation Committee Interlocks and Insider Participation		89
Human Resources and Compensation Committee Report		89
Compensation Discussion and Analysis		89
Summary Compensation Table		2021
Grants of Plan-Based Awards		2223
Outstanding Equity Awards at May 31, ~~2007~~2008		2324
Option Exercises and Stock Vested		2426
Pension Plan		2527
Nonqualified Deferred Compensation Table		2729
Potential Payments Upon Termination or Change-in-Control		27
~~Matters Submitted to Stockholders~~		3129
Matters Submitted to Stockholders		34
Proposal 1 — Election of Directors		3134
Nominees for Election by Holders of Class A Stock		3235
Nominees for Election by Holders of Common Stock		3235
Meetings of the Board and its Committees		3437
Corporate Governance		3639
Director Compensation		4043
Certain Relationships		4245
Involvement in Certain Legal Proceedings		4245
Proposal 2 — Approval of an Amendment to ~~the~~ Scholastic Corporation ~~2001~~Employee Stock ~~Incentive~~Purchase Plan		4346
Proposal 3 — Approval of the Scholastic Corporation ~~2007 Outside Directors Stock~~2008 Executive Performance Incentive Plan		4950
Equity Compensation Plan Information		5153
Independent Registered Public Accountants		5254
Audit Committee’s Report		5255
Stockholder Proposals for ~~2008~~2009 Annual Meeting		5355
Other Matters		5356
Appendix A: Amendment ~~No. 3~~Number three to the Amended and Restated Scholastic Corporation ~~2001~~Employee Stock ~~Incentive~~Purchase Plan		A-1
Appendix B: Scholastic Corporation ~~2007 Outside Directors’ Stock~~2008 Executive Performance Incentive Plan		B-1

delivering to the Secretary of the Company a written revocation thereof or a duly executed proxy bearing a later date, providing subsequent telephone or internet voting instructions, or voting in person at the Annual Meeting.
•	~~delivering to the Secretary of the Company a written revocation thereof or a duly executed proxy bearing a later date,~~

•	~~providing subsequent telephone or internet voting instructions, or~~

•	~~voting in person at the Annual Meeting.~~

SCHOLASTIC CORPORATION
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)



3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):


4)	Proposed maximum aggregate value of transaction:


5)	Total fee paid:

	2.	Approving an ~~Amendment~~amendment to the Scholastic Corporation ~~2001~~Employee Stock ~~Incentive~~Purchase Plan


	1.	Electing ~~three~~two directors to the Board of ~~Directors;~~Directors


	•	~~via the Internet at the website indicated on your proxy card;~~

	•	~~via telephone by calling the toll free number on your proxy card; or~~

	•	~~by returning the enclosed proxy card.~~


	By order of the Board of Directors



	~~Devereux Chatillon~~		~~Secretary~~ ~~August 14, 2007~~


•	~~FOR the election of the directors indicated;~~

•	~~in the case of the Class A stockholders, FOR the approval of Proposals 2 and 3; and~~

•	~~in the discretion of the proxy holders, if any other matter properly comes before the Annual Meeting.~~


	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	2,405,450	100	%	6,872,296	⁽³⁾	17.3	%
Barbara Robinson Buckland c/o Scholastic Corporation 557 Broadway New York, NY 10012	648,620	27.0	%	2,504,512		6.7	%
Mary Sue Robinson Morrill c/o Scholastic Corporation 557 Broadway New York, NY 10012	765,296	31.8	%	3,263,468	⁽⁴⁾	8.7	%
William W. Robinson c/o Scholastic Corporation 557 Broadway New York, NY 10012	648,620	27.0	%	2,589,315	⁽⁵⁾	6.9	%
Trust under the Will of Maurice R. Robinson c/o Scholastic Corporation 557 Broadway New York, NY 10012	648,620	27.0	%	2,331,712		6.3	%
Trust under the Will of Florence L. Robinson c/o Scholastic Corporation 557 Broadway New York, NY 10012	116,676	4.9	%	466,676		1.3	%
T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, MD 21202	—	—		3,501,735	⁽⁶⁾	8.6	%
Dimensional Fund Advisors LP 1299 Ocean Avenue Santa Monica, CA 90401	—	—		2,626,085	⁽⁷⁾	6.5	%

	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	2,551,200	100	%	6,863,384	17.5	%⁽³⁾
Barbara Robinson Buckland c/o Scholastic Corporation 557 Broadway New York, NY 10012	648,620	39.2	%	2,500,362	6.9	%
Mary Sue Robinson Morrill c/o Scholastic Corporation 557 Broadway New York, NY 10012	765,296	46.2	%	3,255,568	8.8	%⁽⁴⁾
William W. Robinson c/o Scholastic Corporation 557 Broadway New York, NY 10012	648,620	39.2	%	2,598,685	7.1	%⁽⁵⁾
Florence Robinson Ford c/o Scholastic Corporation 557 Broadway New York, NY 10012	648,620	39.2	%	2,882,733	7.8	%
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	6.3	%




⁽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, Florence Robinson Ford, Mary Sue Robinson Morrill and William W. Robinson, all of whom are siblings of Richard Robinson, and Andrew S. Hedden, a director of the Company, are trustees of the Trust under the Will of Maurice R. Robinson (the “Maurice R. Robinson Trust”), with shared voting and investment power


⁽⁴⁾	Does not include an aggregate of ~~212,896~~208,896 shares of Common Stock held under Trusts for which Ms. Morrill’s spouse is the trustee, as to which Ms. Morrill disclaims beneficial ownership.


⁽⁵⁾	Does not include ~~25,000~~15,430 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.


	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 and Nominees
Richard Robinson		2,405,450	⁽²⁾	100	%	6,872,296	⁽³⁾	17.3	%
James W. Barge **		—		—		0		*
Rebeca M. Barrera		—		—		43,504	⁽⁴⁾	*
Ramon C. Cortines		—		—		54,574	⁽⁵⁾	*
John L. Davies		—		—		42,000	⁽⁴⁾	*
Andrew S. Hedden		—		—		2,000	⁽⁶⁾	*
Mae C. Jemison		—		—		59,004	⁽⁷⁾	*
Peter M. Mayer		—		—		77,500	⁽⁸⁾	*
John G. McDonald		—		—		61,004	⁽⁹⁾	*
Augustus K. Oliver		—		—		62,574	⁽⁹⁾	*
Richard M. Spaulding		—		—		197,060	⁽¹⁰⁾	*
Named Executive Officers
Richard Robinson		2,405,450	⁽²⁾	100	%	6,872,296	⁽²⁾	17.3	%
Maureen O’Connell		—		—		25	⁽¹¹⁾	*
Mary A. Winston		—		—		104,310	⁽¹²⁾	*
Deborah A. Forte		—		—		287,396	⁽¹³⁾	*
Margery A. Mayer		—		—		256,234	⁽¹⁴⁾	*
Lisa Holton		—		—		102,488	⁽¹⁵⁾	*
All directors and executive officers as a group (23 persons including those named above)		2,405,450	⁽²⁾	100	%	9,020,365	⁽¹⁶⁾	22.8	%

Salary Annual cash bonus awards Equity-based incentive compensation, in the form of stock options and restricted stock units
•	~~Salary~~

•	~~Annual cash bonus awards~~

•	~~Equity-based incentive compensation, in the form of stock options and restricted stock units~~


Measures	Target Payout Levels

	35%			100%			150%

Corporate EPS	$	1.55		$	1.70		$	1.85
Corporate Free Cash Flow	$	79M		$	89.5M		$	100M
Division Operating Profit		85	%		100	%		120	%


Measures	Corporate Staff Groups		Business Groups

Corporate EPS	75.0	%	50.0	%
Corporate Free Cash Flow	25.0	%	15.0	%
Division Operating Profit	N/A		35.0	%
Total	100.0	%	100.0	%


•	~~Annual salary: $650,000.~~

•	~~Fiscal 2007 annual bonus target amount: 50% of annual salary (pro-rated based upon the date of hire), with a guaranteed minimum payment of $67,500.~~

•	~~Fiscal 2008 annual bonus target amount: 75% of annual salary, with a guaranteed minimum payment of $150,000.~~

•	~~Stock options: 100,000 options were recommended to, and granted by, the SGC in March 2007, and it will be recommended to the SGC that 100,000 options be granted in December 2007.~~

•	~~Participation in the MSPP.~~

•	~~Severance equal to twelve months’ of her then-current salary if she is terminated at any time during the first three years of her employment for reasons other than gross misconduct.~~


Name and Principal Position	Fiscal Year	Salary ($)		Bonus ($)		Stock Awards⁽¹⁾ ($)		Option Awards⁽²⁾ ($)		Non-Equity Incentive Plan Compensation⁽³⁾ ($)			Change in Pension Value and Nonqualified Deferred Compensation Earnings⁽⁴⁾ ($)			All Other Compen- sation⁽⁵⁾ ($)		Total ($)

Richard Robinson Chairman of the Board, Chief Executive Officer and President	2007	$	870,000	$	0	$	0	$	698,903		$	0		$	17,556	$	144,225	$	1,730,684

Maureen O’Connell⁽⁶⁾Executive Vice President, Chief Administrative Officer and Chief Financial Officer	2007	$	225,000	$	67,500	$	0	$	65,396		$	0		$	0	$	5,050	$	362,946

Mary A. Winston⁽⁷⁾Former Executive Vice President and Chief Financial Officer	2007	$	568,945	$	0	$	0	$	360,315		$	0		$	5,223	$	1,271,216	$	2,205,699

Deborah A. Forte Executive Vice President and President, Scholastic Media	2007	$	616,270	$	0	$	126,967	$	14,163		$	110,000		$	15,774	$	40,537	$	923,711

Margery W. Mayer Executive Vice President and President, Scholastic Education	2007	$	611,769	$	0	$	0	$	82,628		$	100,000		$	11,903	$	10,621	$	816,921

Lisa Holton Executive Vice President and President, Book Fairs and Trade	2007	$	611,769	$	0	$	74,949	$	0		$	94,091		$	4,952	$	4,018	$	789,779

Name and Principal Position	Fiscal Year		Salary ($)		Bonus ($)		Stock Awards⁽¹⁾ ($)		Option Awards⁽²⁾($)		Non-Equity Incentive Plan Compensation⁽³⁾($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings⁽⁴⁾($)		All Other Compen- sation⁽⁵⁾($)		Total ($)

Richard Robinson	2008	$	870,000	$	0	$	0	$	1,604,927	$	610,088	$	0	$	130,928	$	3,215,943
Chairman of the Board,	2007	$	870,000	$	0	$	0	$	698,903	$	0	$	17,556	$	144,225	$	1,730,684
Chief Executive Officer
and President
Maureen O’Connell⁽⁶⁾	2008	$	650,000	$	0	$	37,920	$	499,910	$	378,625	$	0	$	9,340	$	1,575,795
Executive Vice President,	2007	$	225,000	$	67,500	$	0	$	65,396	$	0	$	0	$	5,050	$	362,946
Chief Administrative Officer
and Chief Financial Officer
Margery W. Mayer	2008	$	618,000	$	0	$	37,920	$	217,366	$	207,594	$	14,658	$	9,945	$	1,105,483
Executive Vice President	2007	$	611,769	$	0	$	0	$	82,628	$	100,000	$	11,903	$	10,621	$	816,921
and President,
Scholastic Education
Judith Newman	2008	$	587,100	$	0	$	42,181	$	110,955	$	212,714	$	13,216	$	29,900	$	996,066
Executive Vice President
and President, Scholastic
Book Clubs
Hugh Roome	2008	$	544,808	$	0	$	82,746	$	41,787	$	179,509	$	19,991	$	18,361	$	887,202
Executive Vice President
and President, International
Deborah A. Forte⁽⁷⁾	2008	$	616,270	$	0	$	135,018	$	20,408	$	210,000	$	16,514	$	64,303	$	1,062,513
Executive Vice President	2007	$	616,270	$	0	$	126,967	$	14,163	$	110,000	$	15,774	$	40,537	$	923,711
and President,
Scholastic Media
Lisa Holton⁽⁸⁾	2008	$	261,346	$	0	$	279,841	$	0	$	0	$	0	$	440,389	$	981,576
Former Executive Vice	2007	$	611,769	$	0	$	74,949	$	0	$	94,091	$	4,952	$	4,018	$	789,779
President and President,
Book Fairs and Trade



⁽¹⁾	Represents the compensation cost under FAS 123R reflected in the Company’s financial statements for fiscal 2008 or fiscal 2007, as applicable, for all ~~Stock Units~~restricted stock units held by the Named Executive ~~Officer~~Officers at May 31, 2008 and May 31, 2007, whether or not awarded in fiscal 2008 or fiscal 2007, which are expensed ratably over the vesting period. Assumptions used in determining the FAS 123R values can be found in Note 1 of Notes to “Consolidated Financial Statements” included in Item 8, “Consolidated Financial Statements and Supplementary Data,” ofin the ~~Company’s~~ Annual Report, ~~on Form 10-K for the fiscal year ended May 31, 2007 (the “Annual Report”), Note 1, “Summary of Significant Accounting Policies, Stock-Based Compensation” (“Note 1”),~~ disregarding estimates of forfeitures related to service-based vesting conditions. There were no forfeitures during fiscal 2008 or fiscal 2007 for the Named Executive Officers. For Ms. Holton, as part of the Holton Agreement in connection with her resignation as Executive Vice President, and President, Book Fairs and Trade, the HRCC ratified the acceleration of 6,000 restricted stock units.

(4)
⁽⁴⁾	Represents solely the Company contributions and the interest credits allocated to each Named Executive Officer under the Scholastic Corporation Cash Balance Plan, as discussed under “Pension Plan” below. Mr. Robinson is collecting benefits under the prior plan formula and since the interest rate used to determine present value rate of benefits is higher than the prior year’s rate, the change to Mr. Robinson’s pension value for fiscal 2008 was negative $35,223.


⁽⁷⁾	Ms. ~~Winston~~Forte ceased to be an executive officer in September 2007, but continues to serve as an officer of the Company.


Name	401(k) Plan Matching Contributions ($)			Life Insurance Premiums ($)			RSU Cost⁽¹⁾ ($)			Perquisites⁽²⁾ ($)			Severance Payments ($)				Non- Compete Payment ($)				Total ($)

Richard Robinson		$	6,800		$	465		$	46,193		$	90,767		$	0			$	0			$	144,225
Maureen O’Connell		$	4,800		$	250		$	0		$	0		$	0			$	0			$	5,050
Mary A. Winston		$	3,447		$	593		$	11,275		$	0		$	656,161	⁽³⁾		$	599,740	⁽³⁾		$	1,271,216
Deborah A. Forte		$	6,800		$	593		$	10,424		$	22,720		$	0			$	0			$	40,537
Margery W. Mayer		$	4,550		$	593		$	5,478		$	0		$	0			$	0			$	10,621
Lisa Holton		$	3,425		$	593		$	0		$	0		$	0			$	0			$	4,018

Fiscal Year 2008 Name	401(k) Plan Matching Contributions ($)			Life Insurance Premiums ($)			RSU Cost⁽¹⁾ ($)		Perquisites⁽²⁾ ($)			Severance Payments ($)		Tax Reimbursements ($)			Total ($)

Richard Robinson		$	6,950		$	270	$	46,320		$	77,388						$	130,928
Maureen O’Connell		$	8,800		$	540	$	0		$	0						$	9,340
Margery W. Mayer		$	4,650		$	540	$	4,755		$	0						$	9,945
Judith Newman		$	6,784		$	540	$	6,307		$	16,269						$	29,900
Hugh Roome		$	6,281		$	540	$	11,540		$	0						$	18,361
Deborah A. Forte		$	6,950		$	540	$	9,833		$	21,522				$	25,458	$	64,303
Lisa Holton		$	228		$	315	$	0		$	0	$	439,846				$	440,389


⁽²⁾	For Mr. Robinson, ~~$85,000~~$74,953 of the amount shown represents a portion of the compensation of certain employees who perform administrative services for Mr. Robinson personally from time to time, based on the proportion of the time estimated by Mr. Robinson to be dedicated to such services, and the remainder represents club membership dues used partially for personal use. For Ms. Newman and Ms. Forte, the amount represents payments made by the Company for personal use of a company-provided automobile, based on information provided by ~~her.~~

⁽³⁾	In connection with her resignation as Chief Financial Officer in January 2007, Ms. Winston and the Company entered into the Winston Agreement, as further described in this Proxy Statement, pursuant to which, among other things, she was entitled to receive, on August 10, 2007, a paymenteach of $599,740 in consideration for certain non-compete and non-solicitation covenants, confidentiality and non-disparagement provisions, and a release of claims (collectively, the “Non-Compete Payment”), as well as a lump-sum severance payment of $574,740. In addition, $81,421 was accrued by the Company in fiscal 2007 for the payment of her salary in fiscal 2008 through the end of her employment period on July 21, 2007, which is included in the amount under “Severance Payments.”them.


			Estimated Possible Payouts, Under Non-Equity Incentive Plan Awards⁽¹⁾

Name	Grant Date		Threshold ($)		Target ($)		Maximum ($)		All Other Stock Awards: Number of Shares of Stock or Units (#)			All Other Option Awards: Number of Securities Underlying Options (#)			Exercise or Base Price of Option Awards⁽²⁾ ($/Sh)		Closing Market Price on Grant Date ($/Sh)		Grant Date Fair Value of Stock and Option Awards⁽³⁾ ($)

Richard		—	$	304,500	$	870,000	$	1,305,000
Robinson		9/20/2006								—			333,000	⁽⁴⁾	$	30.08	$	30.23	$	3,742,169
Maureen		—	$	47,396	$	135,417	$	203,126		—
O’Connell		3/20/2007											100,000		$	34.85	$	35.05	$	1,230,376
Mary A.		9/19/2006		—		—		—		—			25,000		$	29.74	$	29.81	$	616,062
Winston
Deborah A.		—	$	107,847	$	308,135	$	462,203
Forte		9/19/2006											6,800		$	29.74	$	29.81	$	75,534
		9/19/2006								3,400	⁽⁵⁾						$	29.81	$	118,707
Margery W.		—	$	108,150	$	309,000	$	463,500		—
Mayer		7/18/2006											33,000		$	27.52	$	27.58	$	353,099
Lisa Holton			$	108,150	$	309,000	$	463,500		—			—					—		—

Name	Grant Date	Estimated Possible Payouts, Under Non-Equity Incentive Plan Awards⁽¹⁾						All Other Stock Awards: Number of Shares of Stock or Units (#)		All Other Option Awards: Number of Securities Underlying Options (#)		Exercise or Base Price of Option Awards⁽²⁾ ($/Sh)		Closing Market Price on Grant Date ($/Sh)		Grant Date Fair Value of Stock and Option Awards⁽³⁾($)
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)

Richard Robinson	—	$	334,950	$	957,000	$	1,435,500
	9/19/2007							—		250,000	⁽⁴⁾	$	36.21	$	35.54	$	3,075,454
Maureen O’Connell	—	$	182,000	$	520,000	$	780,000
	9/19/2007							—		9,000		$	36.21	$	35.54	$	113,571
	9/19/2007							6,000	⁽⁵⁾					$	35.54	$	217,260
	12/11/2007									100,000		$	34.84	$	34.36	$	1,150,638
Margery W. Mayer	—	$	118,965	$	339,900	$	509,850
	7/17/2007							—		33,000		$	35.38	$	35.52	$	427,136
	9/19/2007									9,000		$	36.21	$	35.54	$	113,571
	9/19/2007							6,000	⁽⁵⁾					$	35.54	$	217,260
Judith Newman	—	$	113,017	$	322,905	$	484,358
	7/17/2007									20,000		$	35.38	$	35.52	$	258,870
	9/19/2007									9,000		$	36.21	$	35.54	$	113,571
	9/19/2007							6,000	⁽⁵⁾					$	35.54	$	217,260
	5/20/2008									100,000		$	29.81	$	29.80	$	1,010,698
Hugh Roome	—	$	105,875	$	302,500	$	453,750
	9/19/2007									9,000		$	36.21	$	35.54	$	113,571
	9/19/2007							6,000	⁽⁵⁾					$	35.54	$	217,260
Deborah A. Forte	—	$	118,632	$	338,948	$	508,422
Lisa Holton	—		—		—		—
	9/19/2007									9,000		$	36.21	$	35.54	$	113,571
	9/19/2007							6,000	⁽⁵⁾					$	35.54	$	217,260


⁽²⁾	The exercise price for all options, including Class A Options, is equal to the average of the high and low Common Stock price as reported on ~~the~~ NASDAQ ~~Stock Market, Inc.~~ on the respective grant dates.


⁽⁴⁾	Represents a grant of Class A Options. The CD&A discusses the ongoing long-term incentive compensation program for Mr. Robinson pursuant to which the Class A Options were granted.


⁽⁵⁾	Represents ~~Stock Units~~restricted stock units that vest in 25% increments on October 19, ~~2007, September 19,~~ 2008, September 19, 2009, September 19, 2010 and September 19, ~~2010.~~2011, with the exception of Ms. Holton’s grant, which was accelerated as part of the Holton Agreement.