UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_]Preliminary Proxy Statement
[_]CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (as permitted by Rule 14a-6(e)(2))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to Section 240.14a -12
SCHOLASTIC CORPORATION | ||
(Name of Registrant as Specified In Its Charter) | ||
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
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2) | Aggregate number of securities to which transaction applies: | |
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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): | |
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[_] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. | |
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Scholastic 557 Broadway, New York, NY 10012-3999 (212) 343-6100
www.scholastic.com |
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SCHOLASTIC CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Holders of Class A Stock and Common Stock:
The Annual Meeting of Stockholders of Scholastic Corporation (the “Company”) will be held at the Company’s corporate headquarters located at 557 Broadway, New York, New York on Wednesday, September 19, 2012,18, 2013, at 9:00 a.m., local time, for the following purposes:
Matters to be voted upon by holders of the Class A Stock
1. | ||
| Electing eight directors to the Board of Directors | |
2. | ||
| Approval of the |
Matters to be voted upon by holders of the Common Stock
1. | ||
| Electing three directors to the Board of Directors |
and such other business as may properly come before the meeting and any adjournments thereof.
A proxy statement describing the matters to be considered at the Annual Meeting of Stockholders is attached to this notice. Only stockholders of record of the Class A Stock and the Common Stock at the close of business on July 27, 201226, 2013 are entitled to notice of, and to vote at, the meeting and any adjournments thereof.
We hope that you will be able to attend the meeting. Whether or not you plan to be present at the meeting, we urge you to vote your shares promptly. You can vote your shares in three ways:
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By order of the Board of Directors | |
Andrew S. Hedden | |
Secretary | |
August 7, |
TABLE OF CONTENTS
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Change of Control Arrangement for Certain Class A Stockholders | 7 | |
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A-1 |
Important Notice Regarding Availability of Proxy Materials
for the 20122013 Annual Meeting of Stockholders to Be Held on September 19, 201218, 2013
This Proxy Statement and the Annual Report to Stockholders are available at
www.proxyvote.com
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SCHOLASTIC CORPORATION
557 Broadway
New York, New York 10012-3999
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
September 18, 2013
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Scholastic Corporation, a Delaware corporation (the “Company”), to be voted at its Annual Meeting of Stockholders (the “Annual Meeting”), which will be held at 557 Broadway, New York, New York at 9:00 a.m., local time, on Wednesday, September 19, 2012,18, 2013, and at any adjournments thereof.
The Company has made available to you over the Internet or delivered paper copies of this proxy statement, a proxy card and the Annual Report to Stockholders (of which the Company’s 20122013 Annual Report on Form 10-K is a part) in connection with the Annual Meeting. The Company is using the rules of the Securities and Exchange Commission (“SEC”) that allow companies to furnish their proxy materials over the Internet. As a result, the Company is mailing to many of its stockholders a notice about the Internet availability of the proxy materials instead of a paper copy of the proxy materials. All stockholders receiving the notice will have the ability to access the proxy materials over the Internet, as well as to request a paper copy by mail, by following the instructions in the notice. In addition, the notice contains instructions for electing to receive proxy materials over the Internet or by mail in future years.
This proxy statement and the accompanying form of proxy, together with the Company’s Annual Report to Stockholders, which includes the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 20122013 (the “Annual Report”), are being mailed to those stockholders who are not receiving the notice concerning Internet availability on or about August 7, 2012.2013.
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Shares represented by each proxy properly submitted, either by mail, the Internet or telephone as indicated on the enclosed form of proxy, will be voted in accordance with the instructions indicated on such proxy unless revoked. A stockholder may revoke a proxy at any time before it is exercised by:
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Any written notice revoking a proxy should be sent to the attention of Andrew S. Hedden, Corporate Secretary, Scholastic Corporation, 557 Broadway, New York, New York 10012-3999.
If you are a Common Stockholder of record submitting a proxy, and no instructions are specified, your shares will be voted FOR the election of the directors.
If you are a Common Stockholder and you hold your shares beneficially through a broker, bank or other holder of record submitting a proxy, and no instructions are specified, your shares will NOT be voted FOR the election of the directors.
If you are a Class A Stockholder submitting a proxy, and no instructions are specified, your shares will be voted FOR the election of the directors and FOR the approval of the Amended and Restated Scholastic Corporation 2007 Outside Directors Stock2013 Executive Performance Incentive Plan.
By submitting a proxy, you authorize the persons named as proxies to use their discretion in voting upon any other matter brought before the Annual Meeting. The Company does not know of any other business to be considered at the Annual Meeting.
SEC rules permit the Company to deliver only one copy of the proxy statement or the notice of Internet availability of the proxy statement to multiple stockholders of record who share the same address and have the same last name, unless the Company has received contrary instructions from one or more of such stockholders. This delivery method, called “householding,” reduces the Company’s printing and mailing costs. Stockholders who participate in householding will continue to receive or have Internet access to separate proxy cards.
If you are a stockholder of record and wish to receive a separate copy of the proxy statement, now or in the future, at the same address, or you are currently receiving multiple copies of the proxy statement at the same address and wish to receive a single copy, please write to or call the Corporate Secretary, Scholastic Corporation, 557 Broadway, New York, NY 10012, telephone: (212) 343-6100.
2 |
Beneficial owners sharing an address who are currently receiving multiple copies of the proxy materials or notice of Internet availability of the proxy materials and wish to
receive a single copy in the future, or who currently receive a single copy and wish to receive separate copies in the future, should contact their bank, broker or other holder of record to request that only a single copy or separate copies, as the case may be, be delivered to all stockholders at the shared address in the future.
The cost of soliciting proxies will be borne by the Company. Solicitation other than by mail may be made personally or by telephone, facsimile or e-mail by regularly employed officers and employees who will not be additionally compensated for such solicitation. The Company may also reimburse brokers, custodians, nominees and other fiduciaries for their reasonable expenses in forwarding proxy materials to principals.
Voting Securities of the Company
Only holders of record of the Company’s Class A Stock, $0.01 par value (“Class A Stock”), and Common Stock, $0.01 par value (“Common Stock”), at the close of business on July 27, 201226, 2013 (the “Record Date”) are entitled to vote at the Annual Meeting. As of the Record Date, there were 1,656,200 shares of Class A Stock and 29,886,62730,199,971 shares of Common Stock outstanding.
The Amended and Restated Certificate of Incorporation of the Company (the “Certificate”) provides that, except as otherwise provided by law, the holders of shares of the Class A Stock (the “Class A Stockholders”), voting as a class, have the right to: (i) fix the size of the Board so long as it does not consist of less than three nor more than 15 directors; (ii) elect all the directors, subject to the right of the holders of shares of Common Stock, voting as a class, to elect such minimum number of the members of the Board as shall equal at least one-fifth of the members of the Board; and (iii) exercise, exclusive of the holders of shares of Common Stock, all other voting rights of stockholders of the Company. The Certificate also provides that, except as otherwise provided by law, the voting rights of the holders of shares of Common Stock are limited to the right, voting as a class, to elect such minimum number of the members of the Board as shall equal at least one-fifth of the members of the Board.
Each share of Class A Stock and Common Stock is entitled to one vote. No holders of either class of stock have cumulative voting rights. At the Annual Meeting, the Class A Stockholders will vote on the election of eight members of the Board and the holders of Common Stock will vote on the election of three members of the Board. The other proposal set forth in the notice attached to this proxy statement for consideration at the Annual Meeting will be voted on by the Class A Stockholders only. If any other matters were to properly come before the Annual Meeting, they would be voted on by the Class A Stockholders.
3 |
The vote required for the election of directors and in respect of the action to be taken under the other proposal is specified in the description of each such proposal. In the election of
directors, withheld votes and abstentions have no effect on the vote. Under the Company’s Bylaws, for the purpose of determining whether a proposal has received the required vote, abstentions will not be considered as votes cast and will have no effect. Because none of the shares of Class A Stock are held by brokers, the effect of broker non-votes is not applicable in the case of the Class A Stock. Because the only proposal before Common Stockholders is the election of three directors, the effect of broker non-votes is not applicable in the case of the Common Stock.
Principal Holders of Class A Stock and Common Stock
The following table sets forth information regarding persons who, to the best of the Company’s knowledge, beneficially owned five percent or more of the Class A Stock or the Common Stock outstanding on the Record Date. Under the applicable rules and regulations of the SEC, a person who directly or indirectly has, or shares, voting power or investment power with respect to a security is considered a beneficial owner of such security. Voting power is the power to vote or direct the voting of shares, and investment power is the power to dispose of or direct the disposition of shares. In computing the number of shares and percentage beneficially owned by any stockholder, shares of Class A Stock or Common Stock subject to options or restricted stock units (“RSUs”) held by that person that are currently exercisable or vested or become exercisable or vested within 60 days of the Record Date are included. Such shares, however, are not deemed outstanding for purposes of computing the percentage owned by any other person.
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Name and Address |
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| Percent of |
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Richard Robinson |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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| 3,155,200 |
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| 6,197,721 | (3) |
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| 18.6 | % |
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Barbara Robinson Buckland |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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| 648,620 |
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| 2,498,712 |
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Mary Sue Robinson Morrill |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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| 765,296 |
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| 10.6 | % |
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William W. Robinson |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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| 648,620 |
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Florence Robinson Ford |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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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 | 3,155,200 | 100 | % | 6,391,676 | (3) | 18.9 | % | |||||||||
Barbara Robinson Buckland c/o Scholastic Corporation 557 Broadway New York, NY 10012 | 648,620 | 39.2 | % | 2,495,712 | 8.1 | % | ||||||||||
Mary Sue Robinson Morrill c/o Scholastic Corporation 557 Broadway New York, NY 10012 | 765,296 | 46.2 | % | 3,132,063 | (4) | 10.1 | % | |||||||||
William W. Robinson c/o Scholastic Corporation 557 Broadway New York, NY 10012 | 648,620 | 39.2 | % | 2,585,265 | (5) | 8.4 | % |
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Name and Address |
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Andrew S. Hedden |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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Trust under the Will of |
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Maurice R. Robinson |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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Trust under the Will of |
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Florence L. Robinson |
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c/o Scholastic Corporation |
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557 Broadway |
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New York, NY 10012 |
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| 116,676 |
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T. Rowe Price Associates, Inc. |
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100 E. Pratt Street |
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Baltimore, MD 21202 |
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| 8.7 | % |
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Blackrock, Inc. |
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40 East 52nd Street |
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New York, NY 10022 |
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| 6.8 | % |
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LSV Asset Management |
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155 N. Wacker Drive, Suite 4600 |
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Chicago, IL 60606 |
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Dimensional Fund Advisors LP |
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Palisades West, Building One |
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6300 Bee Cave Road |
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Austin, TX 78746 |
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| 2,769,212 | (10) |
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| 9.3 | % |
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4 |
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 | ||||||||||||
Florence Robinson Ford c/o Scholastic Corporation 557 Broadway New York, NY 10012 | 648,620 | 39.2 | % | 2,473,457 | 8.0 | % | ||||||||||
Andrew S. Hedden c/o Scholastic Corporation 557 Broadway New York, NY 10012 | 648,620 | 39.2 | % | 2,451,258 | (6) | 7.9 | % | |||||||||
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 | 7.6 | % | ||||||||||
Trust under the Will of Florence L. Robinson c/o Scholastic Corporation 557 Broadway New York, NY 10012 | 116,676 | 7.0 | % | 466,676 | 1.5 | % | ||||||||||
T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, MD 21202 | — | — | 1,578,785 | (7) | 5.2 | % | ||||||||||
Blackrock, Inc. 40 East 52nd Street New York, NY 10022 | — | — | 1,891,521 | (8) | 6.3 | % | ||||||||||
Royce & Associates 745 Fifth Avenue New York, NY 10151 | — | — | 3,234,699 | (9) | 10.7 | % | ||||||||||
Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, TX 78746 | — | — | 2,607,344 | (10) | 8.6 | % | ||||||||||
Fairpointe Capital 1 N. Franklin Ste. 3300 Chicago, IL 60606 | — | — | 1,666,448 | (11) | 5.5 | % |
(1) | Each of Richard Robinson, Barbara Robinson Buckland, Mary Sue Robinson Morrill, William W. Robinson, Florence Robinson Ford, Andrew S. Hedden and the Trust under the Will of Maurice R. Robinson (the “Maurice R. Robinson Trust”) have filed Statements on Schedule 13G with the SEC (the “13G Filings”) regarding beneficial ownership of Common Stock. Richard Robinson, Chairman of the Board, President and Chief Executive Officer of the Company, Barbara Robinson Buckland, |
5 |
available to the Company, the aggregate beneficial ownership of the Class A Stock on the Record Date by the following persons was: Richard Robinson—2,389,904 shares (sole voting and investment power), which includes 1,499,000 shares issuable under options to purchase Class A Stock (“Class A Options”) exercisable by Mr. Robinson within 60 days of the Record Date, and 765,296 shares (shared voting and investment power); Barbara Robinson Buckland—648,620 shares (shared voting and investment power); Mary Sue Robinson |
voting and investment power); Andrew S. Hedden—648,620 shares (shared voting and investment power); Maurice R. Robinson Trust—648,620 shares (sole voting and investment power); and Florence L. Robinson Trust—116,676 shares (sole voting and investment power). | |
(2) | The shares of Class A Stock are convertible at the option of the holder into shares of Common Stock at any time on a share-for-share basis. The number of shares of Common Stock and percentage of the outstanding shares of Common Stock for each beneficial owner of Class A Stock assumes the conversion of such holder’s shares of Class A Stock (including the 1,499,000 shares issuable under the Class A Options exercisable within 60 days of the Record Date, in the case of Mr. Robinson) into shares of Common Stock. Based on their 13G Filings and subsequent information made available to the Company, the aggregate beneficial ownership of Common Stock on the Record Date by the following holders was: Richard Robinson— |
(3) | Includes 3,155,200 shares of Common Stock issuable on conversion of the Class A Stock (including the 1,499,000 shares issuable under the Class A Options) described in Notes 1 and 2 above; |
(4) | Does not include an aggregate of |
(5) | Does not include 16,550 shares of Common Stock held under trusts for which Mr. William Robinson’s spouse is a trustee and 64,728 shares held directly by his spouse, as to which Mr. Robinson disclaims beneficial ownership. |
(6) | Includes |
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unvested RSUs | |
(7) | The information for T. Rowe Price Associates, Inc. (“Price Associates”) is derived from a Schedule 13G, dated February 14, |
(8) | The information for Blackrock, Inc. (“Blackrock”) is derived from a Schedule 13G, dated |
(9) | The information for |
(10) | The information for Dimensional Fund Advisors LP (“Dimensional Fund”) is derived from a Schedule 13G, dated February |
(11) | The information for Fairpointe Capital LLC (“Fairpointe”) is derived from a Schedule 13G, dated February 13, 2013, filed with the SEC reporting beneficial ownership as of December 31, 2012. Fairpointe has the sole power to vote or direct investments with regard to 34,778 of such shares and the shared power to vote or direct investments with regard to 1,631,670 of such shares. Accordingly, for purposes of the reporting requirements of the Exchange Act, Fairpointe is deemed to be a beneficial owner of these 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 will 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
7 |
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 will 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 will 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 Exchange Act requires directors, executive officers and persons who are the beneficial owners of more than 10% of the Common Stock to file reports of their ownership and changes in ownership of the Company’s equity securities with the SEC. The reporting persons are required by SEC regulation to furnish the Company with copies of all Section 16 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, 2012,2013, the Company believes all of its directors, executive officers and greater than ten percent beneficial owners timely filed all Section 16(a) reports required during such fiscal year.year, with the exception of Mr. Hedden and Ms. Mayer, who filed Form 4s in connection with the netting of shares to cover taxes on the vesting of restricted stock units one day after the due date as a result of an internal error.
8 |
On the Record Date, each director, 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 set forth in the table below. In computing the number of shares and percentage beneficially owned by any stockholder, shares of Class A or Common Stock subject to options or restricted stock units (“RSUs”) held by that person that are currently exercisable or vested or will become exercisable or vested within 60 days of the Record Date are included. Such shares, however, are not deemed outstanding for purposes of computing the percentage owned by any other person.
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| Class A Stock |
| Common Stock |
| ||||||||
Name |
| Amount and | Percent | Amount and | Percent | ||||||||
Directors |
|
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Richard Robinson |
|
| 3,155,200 | (2) |
| 100 | % |
| 6,197,721 | (3) |
| 18.6 | % |
James W. Barge |
|
| — |
|
| — |
|
| 21,000 | (4) |
| * |
|
Marianne Caponnetto |
|
| — |
|
| — |
|
| 8,400 | (5) |
| * |
|
John L. Davies |
|
| — |
|
| — |
|
| 51,000 | (6) |
| * |
|
Andrew S. Hedden |
|
| 648,620 | (2) |
| 39.2 | % |
| 2,396,601 | (7) |
| 7.8 | % |
Mae C. Jemison |
|
| — |
|
| — |
|
| 43,604 | (8) |
| * |
|
Peter M. Mayer |
|
| — |
|
| — |
|
| 65,250 | (9) |
| * |
|
John G. McDonald |
|
| — |
|
| — |
|
| 52,004 | (10) |
| * |
|
Augustus K. Oliver |
|
| — |
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| — |
|
| 56,274 | (11) |
| * |
|
Richard M. Spaulding |
|
| — |
|
| — |
|
| 158,358 | (12) |
| * |
|
Margaret A. Williams |
|
| — |
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| — |
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| 8,400 | (5) |
| * |
|
Named Executive Officers |
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Richard Robinson |
|
| 3,155,200 | (2) |
| 100 | % |
| 6,197,721 | (3) |
| 18.6 | % |
Maureen O’Connell |
|
| — |
|
| — |
|
| 275,683 | (13) |
| 1.0 | % |
Margery Mayer |
|
| — |
|
| — |
|
| 202,050 | (14) |
| * |
|
Judith Newman |
|
| — |
|
| — |
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| 139,420 | (15) |
| * |
|
Andrew S. Hedden |
|
| 648,620 | (2) |
| 39.2 | % |
| 2,396,601 | (7) |
| 7.8 | % |
All directors and executive officers as a group (16 persons) |
|
| 3,155,200 | (2) |
| 100 | % |
| 7,435,008 | (16) |
| 21.7 | % |
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 | 3,155,200 | (2) | 100% | 6,391,676 | (3) | 18.9% | ||
James W. Barge | — | — | 25,274 | (4) | * | |||
Marianne Caponnetto | — | — | 12,674 | (5) | * | |||
John L. Davies | — | — | 49,274 | (6) | * | |||
Andrew S. Hedden | 648,620 | (2) | 39.2% | 2,451,258 | (7) | 7.9% | ||
Mae C. Jemison | — | — | 41,878 | (8) | * | |||
Peter M. Mayer | — | — | 63,524 | (9) | * | |||
John G. McDonald | — | — | 50,278 | (10) | * | |||
Augustus K. Oliver | — | — | 54,548 | (11) | * | |||
Richard M. Spaulding | — | — | 162,632 | (12) | * | |||
Margaret A. Williams | — | — | 12,674 | (5) | * | |||
Named Executive Officers | ||||||||
Richard Robinson | 3,155,200 | (2) | 100% | 6,391,676 | (3) | 18.9% | ||
Maureen O’Connell | — | — | 267,748 | (13) | 1.0% | |||
Margery Mayer | — | — | 149,733 | (14) | * | |||
Judith Newman | — | — | 150,236 | (15) | * | |||
Andrew S. Hedden | 648,620 | (2) | 39.2% | 2,451,258 | (7) | 7.9% | ||
All directors and executive officers as a group (15 persons) | 3,155,200 | (2) | 100% | 7,636,173 | (16) | 21.9% |
* | |
| Less than 1.0% |
(1) | Except as indicated in the notes below, each person named has sole voting and investment power with respect to the shares shown opposite his or her name. |
(2) | See the information with respect to Richard Robinson and Andrew S. Hedden 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. |
(4) | Includes |
9 |
(5) | Includes |
(6) | Includes |
(7) | See the information with respect to Andrew S. Hedden under “Principal Holders of Class A Stock and Common Stock” above. |
(8) | Includes |
(9) | Includes |
(10) | Includes |
(11) | Includes |
(12) | Includes |
(13) | Includes |
(14) | Includes |
(15) | Includes 22,093 shares of Common Stock held directly by Ms. Newman, 116,547 shares under options exercisable by Ms. Newman within 60 days of the Record Date and 7,700 shares underlying RSUs scheduled to vest within 60 days of the Record Date under the 2001 Plan, 2,000 shares underlying RSUs scheduled to vest within 60 days of the Record Date under the 2011 Plan and 1,896 RSUs vested or scheduled to vest within 60 days of the Record Date held under the MSPP. Does not include |
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10 |
(16) | Includes 3,155,200 shares of Common Stock issuable on conversion of the Class A Stock (including the 1,499,000 shares issuable under the Class A Options) described in Notes 1 and 2 |
Compensation Committee Interlocks and Insider Participation
No member of the Human Resources and Compensation Committee (the “HRCC”) was at any time during fiscal 20122013 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 an executive officer of the Company 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, 2012.2013.
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 | |
Marianne Caponnetto | |
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 Human Resources &and Compensation Committee (“HRCC”), which is composed solely of independent directors as defined by NASDAQ rules. The Company’s overall objective is to maintain a compensation system that fosters the short-term and long-term goals of the Company and its stockholders.
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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 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 position and financial performance. They have been developed with the assistance of the Human Resources Department, as well as independent executive compensation consultants.consultants retained by the HRCC. A description of the composition and procedures of the HRCC is set forth under “Meetings of the Board and its Committees—HumanCommittees-Human Resources and Compensation Committee” and “Corporate Governance—HRCCGovernance-HRCC Procedures” in “Matters Submitted to Stockholders—ProposalStockholders-Proposal 1: Election of Directors,” below.
The HRCC regularly reviews the Company’s compensation programs and considers appropriate methods to tie the executive compensation program to performance and to further strengthen management’s alignment with stockholders.
Compensation Philosophy and Objectives
Pay Competitively |
| • | The Company’s goal is to provide a competitive framework, taking into account the financial position and performance of the Company, individual contributions, teamwork, divisional or group contributions and the external market in which the Company competes for executive talent. | ||
• | |||||
| The Company, through competitive compensation policies, strives to foster the continued development of the Company’s operating segments, which in turn builds stockholder value. | ||||
• | |||||
| In determining the compensation of its Named Executive Officers, the Company seeks to achieve its compensation objectives through a combination of fixed and variable compensation. | ||||
• | |||||
| The Company reviews the executive compensation of a broad group of companies in the publishing, media and education industries for comparative purposes. The companies included in the compensation peer group are selected based upon several criteria, including size of company by revenues, relevant industry and other factors. | ||||
Pay for Performance |
| • | The Company’s compensation practices are designed to create a direct link between the aggregate compensation paid to each Named Executive Officer and the overall financial performance of the Company. | ||
• | |||||
| As applicable to business unit executives, the performance of a specific business unit for which an executive is responsible, or group of which such business unit is a part, may also be used to create a link between the achievement of divisional and group financial goals and the overall financial performance of the Company. | ||||
Executives as |
| • | The Company’s compensation practices are also designed to link a portion of each Named Executive Officer’s compensation opportunity directly to the value of the Common Stock through the use of stock-based awards, including stock options and restricted stock units. |
12 |
Peer Group Analysis
The Company reviews the compensation practices of selected peer companies to use as a general frame of reference, but it does not formally benchmark its compensation against that of such peer companies. 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: Barnes & Noble Inc., Career Education Corporation, Meredith Corporation, The McGraw-Hill Companies, Inc., Pearson plc, Reed Elsevier plc, School Specialty Inc., E. W. Scripps Company, The Washington Post Company and John Wiley & Sons, Inc. Additionally, in analyzing its executive compensation, from time to time the Company reviews general industry compensation surveys, provided by consulting firms, as well as more focused surveys covering a broad base of media companies.
Components of Executive Compensation
The following table provides a brief overview of each of the elements of compensation. A more detailed description of each compensation element follows this table.
Compensation Element | |||||||
| Objective | Key Features | |||||
Fixed | |||||||
Base Salary | • | To establish a fixed level of compensation principally tied to day-to-day responsibilities | • |
| Base salary is determined taking into account several factors, including individual job performance, salary history, internal equity, 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 complex initiatives, such as new product development, or positions that require considerable creative talent, creative marketing capability or digital skills, or the management of those providing such creative content, marketing and digital expertise. | ||
Variable | |||||||
Annual | • | To provide a reward based upon the achievement of the Company’s financial, operating and strategic goals established for the year | • |
| Through the use of annual bonus awards, the HRCC ties a significant portion of each Named Executive Officer’s total potential compensation to Company performance which, in the case where the executive officer is responsible for an operating unit of the Company, may also include business unit or segment performance, as well as group performance. | ||
Long-Term | • | To align the long-term interests of the executives and the Company’s stockholders | • |
| Stock options, which typically vest ratably over four years, producing value for executives and employees only if the Common Stock price increases over the exercise price. | ||
• |
|
| |||||
Other Equity-Based | • | To attract and retain highly qualified executives | • |
| The Company’s executives participate in the 401(k) Plan on the same terms as all employees. | ||
• |
| The ESPP provides a method for all employees, including executives, to purchase Common Stock at a 15% discount. | |||||
• |
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13 |
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. In establishing each executive officer’s base salary, including those of the Named Executive Officers, the HRCC considers several factors, including individual job performance, salary history, internal equity, 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 complex initiatives, such as new product development, or positions that require considerable creative talent, creative marketing capability or digital skills or the management of those providing such creative content, marketing and digital expertise. In considering annual base salary increases, Company financial performance is also taken into consideration.
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 either July or September and any increases, based on the compensation objectives discussed above, are generally effective on October 1 of each year. In 2011,May 2012, the CompanyHRCC’s independent compensation consultant conducted a review of market comparisons with a focus on digital positions in the context of the Company’s digital initiatives. This review also included a comparison of internal business unit size. This comprehensive review resulted in a recommendation to group executives into tiers based on comparable responsibilities and to bring pay into closer alignment within each tier. For fiscal 2012, increasescomparisons. No market adjustments to base salary for fiscal 2013 were recommended as a result of this review. However, a base salary adjustment of $9,500 was made for theone Named Executive Officers, based in part on the market and internal analysis referred to above. Mr. Robinson received an increase of 11%, Ms. O’Connell received an increase of 7%, Mr. Hedden received an increase of 14%, Ms. Mayer received an increase of 8% andOfficer, Ms. Newman, receivedto compensate her for the discontinuance, commencing in January 2013, of an increaseautomobile maintenance allowance which had previously been provided to her. In May 2013, a further review of 6%.
Formarket comparisons was conducted by such compensation consultant in preparation for the fiscal 2013, the2014 annual salary review, which review, including any salary recommendations for the Named Executive Officers for fiscal 2014, will be conducted and considered by the HRCC at its September 20122013 meeting.
Annual Performance-Based Cash Bonus Awards
The HRCC ties a meaningful portion of each Named Executive Officer’s total potential compensation to Company performance, which, in the case where thea Named Executive Officer is responsible for an operating unit of the Company, may also include business unit, segment or segmentgroup performance, through the use of annual cash bonus awards. 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, segment or segment.group. In each case, whether considering the Company as a whole or an executive’s business unit, segment or segment,group, the HRCC considers the budget for the next fiscal year and sets specific incentive targets that are
directly linked to the Company’s financial performance or that of the business unit’sunit, segment or segment’s financial performance.group. The continued focus of the annual bonus element of compensation has been to align the interests of senior management, including the Named Executive Officers, with the Company’s financial, operating and strategic goals for the year, and in the case of fiscal 2012,
14 |
2013, to primarily encourage and reward the achievement of Company-wide goals. In the context of the Company’s key financial and operating goals for fiscal 2013,2014, the emphasis for the annual bonus awards will continue to be focused on overall Company performance, as well as group performance if targets are exceeded, as further described below under “MIP/EPIP“EPIP Revisions and Fiscal 20132014 Targets.”
Potential bonus awards for executive officers, including the Named Executive Officers,senior management and other eligible employees are set and determined under the Company’s Management Incentive Program (“MIP”) or, in the case of selected executives, including the Named Executive Officers, 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.” Under the MIP and EPIP, the Company retains the discretion to decrease, but not increase, or decrease the total bonus paid to an executive (other than to participants in the EPIP, including thea Named Executive Officers, as to whom only discretion to decrease the total bonus is retained) by up to 100% of the achieved target.Officer. Upon the recommendation of the Chief Executive Officer, made at the time annual fiscal year targets are established, targets may also be established to reflect certain other Company objectives, such as revenue growth, expense management, strategic development, organizational effectiveness or demonstration of the achievement of certain cross-departmental company or specific individual goals.
Fiscal 20122013 Targets
On July 19, 2011,17, 2012, the HRCC set the fiscal 20122013 annual MIP and EPIP bonus targets for executive officers and senior management, including the Named Executive Officers, primarily based on Company-wide goals, focusing on the objective of meeting the Company’s fiscal 20122013 operating plan, in particular the Operating Income target. The MIP and EPIP provided for a corporate bonus pool to be funded based upon the achievement of the Corporate Operating Income target, and in the case of the EPIP, the bonuses for all of the Named Executive Officers under the EPIP were to be solely based on achievement of that corporate metric up to the maximum bonus opportunity. Corporate Operating Income was defined for this purpose as the Company’s net revenues less total operating costs and expenses from continuing operations as reported in the Company’s audited financial statements, excluding one-time charges. Discontinued operations are not included for this purpose. In the event that the Corporate Operating Income target iswas achieved, Named Executive Officers arewere able to earn between 100% and 150% of target based on corporate or business unit or segment operating profit, as relevant to the particular Named Executive Officer.
15 |
Bonus Potentials and Payouts for Fiscal 20122013
For each of the Named Executive Officers, individual MIP or EPIP bonus potentials for fiscal 20122013 were dependent upon the achievement of Company or business unit or segment targets as indicated in the table below, with the potential bonus payout for each executive ranging from 0% to 150% of the target bonus amount.
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Funding Metrics | Corporate Operating Income |
| Corporate Operating Income | |||
|
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|
| Group/Division Operating Profit | |
Participants | Corporate | Division |
| Corporate | Group | Division Operating |
Named Executive Officers |
|
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| 60% |
|
(Children’s Book Group) | 100% | 0% |
| 0% | (Overall Children’s | 40% |
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| Book Group |
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| Operating Profit) |
|
Named Executive Officers |
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|
(Business) | 100% | 0% |
| 0% | N/A | 100% |
Named Executive Officers |
|
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(Staff) | 100% | 0% |
| 100% | N/A | 0% |
Funding Metrics | Corporate Operating Income less than or equal to target | Corporate Operating Income greater than target | ||||
Group/Division Operating Profit | ||||||
Participants | Corporate Operating Income | Division Operating Profit | Corporate Operating Income | Group | Division Operating Profit Relative Contributions | |
Named Executive Officers (Children’s Book Group) |
100% |
0% |
0% | 70% (Overall Children’s Book Group Operating Profit) |
30% | |
Named Executive Officers (Business) | 100% | 0% | 0% | N/A | 100% | |
Named Executive Officers (Staff) | 100% | 0% | 100% | N/A | 0% |
Target bonus amounts are stated as a percent of base salary. As part of the processannual compensation review referred to tier executives for pay purposes as described in the base salary discussion above, for fiscal 20122013 target bonus amounts were increased for certain of the Named Executive Officers.Officers to increase the percentage of at risk target compensation. Mr. Robinson’s target bonus was increased from 120% to 125% of base salary. Ms. O’Connell’s target bonus was increased from 80%90% to 90%95% of base salary. Mr. Hedden’s target bonus was increased from 55%70% to 70%75% of base salary. Target bonuses for Ms. Mayer and Ms. Newman were increased from 55%60% to 60%65% of base salary.
For fiscal 2012,2013, the Company exceededdid not meet the Corporate Operating Income target, of $140 million by 150%, and accordingly, the threshold for bonus payout under the EPIP was not achieved and payments were made tonone of the Named Executive Officers received a bonus in respect of fiscal 2013 under the EPIP, as provided below.EPIP.
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Named Executive Officer | Fiscal 2012 | Fiscal 2012 | Fiscal 2012 | |||||||
Richard Robinson |
| $ | 1,164,000 |
| $ | 1,746,000 |
| 150 | % |
|
Maureen O’Connell |
| $ | 675,000 |
| $ | 1,012,500 |
| 150 | % |
|
Margery Mayer |
| $ | 399,000 |
| $ | 598,500 |
| 150 | % |
|
Judith Newman |
| $ | 399,000 |
| $ | 518,700 |
| 130 | % |
|
Andrew S. Hedden |
| $ | 420,000 |
| $ | 630,000 |
| 150 | % |
|
MIP/
Special Incentive Bonus for Fiscal 2013
The HRCC separately approved a special incentive bonus for Maureen O’Connell in the amount of $450,000, for her successfully achieving targeted results in directing a significant company-wide cost cutting initiative.
16 |
EPIP Revisions and Fiscal 20132014 Targets
As discussed above, the annual bonus awards are generally designed to reward for Company-wide measurable performance, as well as certain other indicators of performance.
With respect to fiscal 2013,2014, the HRCC has again set the MIP and EPIP performance targets for the Named Executive Officers primarily based on Company-wide goals, focusing on the objective of meeting the Company’s fiscal 20132014 operating plan. A corporate bonus pool will be funded based upon the achievement of the Corporate Operating Income target, and the EPIP bonuses for all of the Named Executive Officers will be solely based on achievement of that corporate metric up to the maximum bonus opportunity. Assuming the Corporate Operating Income target is met for fiscal 2013,2014, the portion of the corporate bonus pool resulting from any performance above target will then be proportionally divided based on Corporate Operating Profit and, for certain of the Named Executive Officers, the Division or Group Operating Profit relative contribution in accordance with the table below. Corporate Operating Income is defined for this purpose as the Company’s net revenues less total operating costs and expenses from continuing operations as reported in the Company’s audited financial statements, excluding non-standard items.items (e.g., one-time items as discussed in earnings calls, legal or tax settlements, changes to accounting policies or impaired assets). Achievement of DivisionGroup Operating Profit for those of the Named Executive Officers in the Children’s Book Group or Education Group, as well as other senior management in such Group,Groups, will be proportionally divided based on Group Operating Profit and Division Operating Profit.
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|
Funding Metrics | Corporate Operating Income |
| Corporate Operating Income | |||
|
|
|
|
| Group/Division Operating Profit | |
Participants | Corporate | Division |
| Corporate | Group | Division Operating |
Named Executive Officers |
|
|
|
| 70% |
|
(Children’s Book Group) | 100% | 0% |
| 0% | (Overall Children’s | 30% |
|
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|
| Book Group |
|
|
|
|
|
| Operating Profit) |
|
Named Executive Officers |
|
|
|
|
|
|
(Business) | 100% | 0% |
| 0% | N/A | 100% |
Named Executive Officers |
|
|
|
|
|
|
(Staff) | 100% | 0% |
| 100% | N/A | 0% |
Funding Metrics | Corporate Operating Income less than or equal to target | Corporate Operating Income greater than target | ||
Participants | Corporate Operating Income | Group Operating Income | Corporate Operating Income | Group Operating Income |
Named Executive Officers (Children’s Book Group and Education Group) | 100% | 0% | 0% | 100% |
Named Executive Officers (Staff) | 100% | 0% | 100% | 0% |
In the event the Corporate Operating Income target is exceeded, for fiscal 20132014 the bonus pool may be increased to fund up to a maximum of 150% of the target amount forfrom the bonus pool.pool for purposes of the EPIP. While individual payouts can be adjusted based on individual performance, in no case can the sum of all individual payouts exceed the total of the available corporate bonus pool. Also, if the corporate bonus pool is not funded by at least 25% of its target amount, a discretionary pool may, if determined by the HRCC, be funded within the range of 20-25% of the actual funding to be used for retention purposes for the top 10-20% highest performing employees based on recommendations to the HRCC resulting from individual performance analyses by the Human Resources Department. In the event such a discretionary pool was funded and used to pay bonuses to Named Executive Officers, such bonuses would not be covered under the EPIP.
17 |
Long-Term Incentive Compensation
The HRCC, which is comprised solely of independent directors as defined by NASDAQ rules, determines the awards of long-term compensation through equity incentives (in the form of stock options and restricted stock units) granted to executive officers, including the Named Executive Officers and
senior management, as well as other eligible employees. Prior to September 2011, when the Stock Grant Committee (the “SGC”) was merged into the HRCC, these determinations were made by the SGC.
The practice of the HRCC is to consider:
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| |
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From September 2001 through July 2011, most of the equity awards were made under the Scholastic Corporation 2001 Stock Incentive Plan (the “2001 Plan”), which provided for the grant of non-qualified stock options, incentive stock options, restricted stock and other stock-based awards. Only non-qualified stock options and restricted stock units were granted under the 2001 Plan, which expired in July 2011. Certain of the Named Executive Officers also have stock options remaining outstanding under the Scholastic Corporation 1995 Stock Option Plan (the “1995 Plan”), which expired in September 2005 and provided only for the grant of non-qualified stock options. The Company currently makes its grants of stock options and restricted stock units under the Scholastic Corporation 2011 Stock Incentive Plan (the “2011 Plan”), which was approved by the Board in July 2011 and by the Class A stockholders in September 2011.
The HRCC has determined that its current practice should continue to be to generally consider the award of restricted stock units and stock options, including a combination of both in appropriate cases, which determination reflects the desire to maintain a strong long-term equity component in executive compensation and to reduce, through the restricted stock unit component, the number of equity units required to provide such component. Accordingly, the Company currently utilizes grants of stock options, restricted stock units or a combination of both to qualified executives, including the Named Executive Officers. The HRCC is considering the addition of performance based restricted stock units where appropriate going forward; however, such performance based units are unlikely to be introduced during fiscal 2014.
Options to Purchase Common Stock and Restricted Stock Units
Equity grants made under the 2011 Plan during
During fiscal 2012 to executive officers and senior management, including the Named Executive Officers, were determined by2013, the HRCC (or the SGC prior to September 2011) based upon the compensation objectives of the HRCC, as discussed above, and informed by the evolving nature of executive compensation practices.
At their September 2011 meeting, the HRCC determined that, going forward, equity grants would be determined based on an intended target dollar value at the time of grant, rather than a flat number of equity units. This allows for better consistency from year to year as market fluctuations would not impact the value at grant.
In determining the target value of the equity grants for the Named Executive Officers, the SGC considered numerous factors, including:
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During fiscal 2012, other than in the case of new hires, the HRCC (or the SGC prior to September 2011)only granted equity-based awards the aggregate dollar valueto fulfill contractual obligations or agreements relating to a small number of which was primarily comprised of 60% restricted stock units and 40% stock options. In determining value, restricted stock unitsnewly-hired employees. These grants were valued based on the fair value of the underlying Common Stock on the grant date and stock options were valued based on the Black-Scholes option pricing model, with an exercise price equal to the fair value of the underlying Common Stock on the grant date. The Chief Executive Officer continued to receive long-term incentive compensation solelymade in the form of stock options. The reason for this formoptions, restricted stock units or a combination of long-term incentive compensation is discussed below under “Equity Awards for the Chief Executive Officer”.
both. Stock options produce value for executives and employees only if the Common Stock price increases over the exercise price, which is set at the fair market value of the Common Stock on the date of grant, calculated as the average of the high and low prices on the date of grant.
18 |
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, both stock options and restricted stock units create incentives for executive officers and senior management not yet eligible for retirement to remain with the Company. Stock options granted in fiscal 2012 to executive officers and senior management, includingby the Named Executive Officers,HRCC normally vest in 25% annual installments beginning on the first anniversary of the grant date and expire after ten years.
Restricted stock units granted under the 2011 Plan convert automatically into shares of Common Stock on a one-to-one basis upon vesting. The 2011 Plan does not permit the deferral of restricted stock units, and the vesting of time-based restricted stock units including those granted to the Named Executive Officers and other member of senior management, is generally in four equal annual installments beginning with the first anniversary of the date of grant.
The specific
During fiscal 20122013, the HRCC determined that, other than to fulfill agreements with respect to newly-hired employees, it would defer making customary equity grants to other key employees, including the Named Executive Officers are set forth below in the “Grantsand other executive officers and members of Plan-Based Awards” table, and information regarding the equity awards held by the Named Executive Officers as of the end of fiscal 2012 is set forth below in the “Outstanding Equity Awards at May 31, 2012” table. The HRCC made its long-term incentive compensation grants for fiscal 2012 in October 2011, following the approval of the Class A Stockholders of the 2011 Plan.senior management.
Equity Awards for the Chief Executive Officer
In 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, media and education industries reviewed by the HRCC. As a result of its review of this issue, taking into account Mr. Robinson’s overall compensation, the Company adopted the Scholastic Corporation 2004 Class A Stock Incentive Plan (the “Class A Plan”), which was designed to enable the HRCC and the SGCoptions to grant optionsbe granted to Mr. Robinson to acquire Class A Stock (“Class A Options”). 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 was the only eligible participant in the Class A Plan. Mr. Robinson received a total of 1,499,000 Class A Options under the Class A Plan during the period 2004 through 2008, at which time the program contemplated by the Class A Plan was completed.
In each of July 2009 and August 2010, Mr. Robinson was granted options under the 2001 Plan to purchase 250,000 shares of Common Stock, by the SGC, at the same time as the long-term incentive grants were also awarded to other executive officers and senior management by the SGC for fiscal 2010 and fiscal 2011, respectively.2011. For fiscal 2012, in October 2011 Mr. Robinson was granted options under the 2011 Plan to purchase 224,152 shares of Common Stock, by the HRCC, at the same time as the long-term incentive grants were also awarded to other executive officers and senior management. No grant was made to Mr. Robinson for fiscal 2013.
19 |
Information regarding the equity awards held by Mr. Robinson as of the end of fiscal 20122013 is set forth in the “Outstanding Equity Awards at May 31, 2012”2013” table.
Other Equity-Based Incentives
The Scholastic Corporation Employee Stock Purchase Plan (as amended, the “ESPP”) and the Scholastic Corporation Management Stock Purchase Plan (as amended, 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 officersthe Named 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 calendar quarter. Of the Named Executive Officers, only Mr. Hedden is currently participatingparticipated in the ESPP.ESPP during fiscal 2013.
Under the MSPP, which was adopted in 1999 in order to provide an additional incentive for senior management, including the Named Executive Officers, to invest in Common Stock through the use of their cash bonuses paid under the MIP or EPIP, eligible members of senior management may use such annual cash bonus payments on a tax-deferred basis to make equity investmentspurchase restricted stock units in the Company at a discounted purchase price. With respect to fiscal 2012, 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 (“RSUs”) at a 25% discount from the lowest closing price of the underlying Common Stock duringin the fiscal quarter ending on August 31, 2012. The deferral period chosen byin which the participants may not be less than the three-year vesting period for the RSUs, with the first three years of deferral running concurrently with the vesting period. Upon expiration of the applicable deferral period, the RSUs are converted into shares of Common Stock on a one-to-one basis.bonus was paid. During fiscal 2012, seven members of senior management elected to participate in the MSPP.
The chart below reflects the allocation by each2013, four of the Named Executive Officers used a portion of his or her bonustheir fiscal 2012 bonuses to purchase restricted stock units under the MSPP on September 4, 2012. For fiscal 2014, none of the Named Executive Officers participating in the MSPP received an eligible fiscal 2013 bonus for fiscal 2012.purposes of purchasing restricted stock units under the MSPP.
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Named Executive Officer |
| Fiscal 2012 |
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| % allocation to the |
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| Dollar amount of |
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Richard Robinson |
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| $ | 1,746,000 |
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| 50 | % |
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| $ | 873,000 |
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Maureen O’Connell |
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| $ | 1,012,500 |
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| 20 | % |
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| $ | 202,500 |
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Margery Mayer |
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| $ | 598,500 |
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| 0 | % |
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| $ | 0 |
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Judith Newman |
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| $ | 518,700 |
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| 20 | % |
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| $ | 103,740 |
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Andrew S. Hedden |
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| $ | 630,000 |
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| 50 | % |
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| $ | 315,000 |
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Results of Stockholder Advisory Votes on Compensation of Named Executive Officers
At the 2011 Annual Meeting of Stockholders, the Class A Stockholders approved the fiscal 2011 compensation for the Company’s Named Executive Officers, including the policies and practices related thereto. The Company believes this vote reflected the general satisfaction of the Class A Stockholders with the Company’s compensation philosophy for the Named Executive Officers. Accordingly, the HRCC is continuing to apply the same general principles in determining the amounts and types of executive compensation for fiscal 20122013 as outlined in the Company’s compensation philosophy and framework described above. In addition, at the same meeting the Class A Stockholders approved a determination that the Company hold advisory votes on Named Executive Officer compensation once every three years. As a result, the next advisory vote on Named Executive Officer compensation will take place in 2014, following the conclusion of the 2014 fiscal year. The HRCC intends
20 |
to consider the results of future votes in crafting the Company’s compensation programs for its Named Executive Officers in future years.
Regulatory Considerations
Section 162(m) of the Code generally disallows a Federal income tax deduction for compensation paid by a publicly held corporation in excess of $1 million to certain of its executive officers, unless the amount of such excess constitutes “qualified performance-based compensation,” including income from certain stock option awards and compensation payable based solely upon the attainment of pre-established, objective performance criteria. Stock option awards under the Company’s 1995 Plan, 2001 Plan and 2011 Plan constitute qualified performance-based compensation and income realized upon the exercise of such stock options is fully deductible by the Company notwithstanding the limits of Code Section 162(m). The Company has taken steps so that certain other components of the incentive compensation it makes available to its Named Executive Officers meet the requirements of qualified performance basedperformance-based compensation and are fully deductible. For example, amounts payable under the EPIP are intended to be exempt from the deduction limits of Section 162(m) as qualified performance-based compensation. Any EPIP bonuses deferred under the Management Stock Purchase Plan by a Named Executive OfficerOfficers are fully deductible when paid; however, the 25% discount at which such deferrals are converted into restricted stock units under the MSPP does not constitute qualified performance basedperformance-based compensation and counts towards the $1 million deduction limit of Section 162(m). Time-vestedIn addition, bonuses awarded from any discretionary pool established under the MIP and time-vested restricted stock units awarded under the Company’s 2001 Plan and 2011 Plan also do not constitute qualified performance-based compensation, and income realized by a Named Executive Officer from any such awards countswould count towards the $1 million deduction limit of Section 162(m). In appropriate circumstances, the HRCC may deem it appropriate to pay compensation or make incentive or retentive awards, such as time-vested restricted stock units, that do not constitute qualified performance-based compensation and therefore may not be deductible under Section 162(m). The time-vested restricted stock units awarded toFor fiscal 2013, none of the Named Executive Officers duringreceived restricted stock units or a bonus from the MIP discretionary pool; however, the supplemental bonus approved for one of the Named Executive Officers in respect of fiscal 2012,2013, as previously described, dodid not constitute qualified performance-based compensation underfor purposes of Section 162(m).
21 |
The following table summarizes the total compensation earned by or paid to the Named Executive Officers for the fiscal years ended May 31, 2013, May 31, 2012 and May 31, 2011 and May 31, 2010 as indicated below.
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Name and |
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| Fiscal |
| Salary |
|
| Bonus |
|
| Stock |
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| Option |
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| Non-Equity |
|
| Change in |
|
| All Other |
|
| Total |
| ||||||||||||
Richard Robinson |
|
| 2012 |
| $ | 933,461 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | 2,300,005 |
|
|
| $ | 1,746,000 |
|
|
|
| $ | 88,553 |
|
|
| $ | 222,498 |
|
| $ | 5,290,517 |
|
Chairman of the Board, |
|
| 2011 |
| $ | 870,000 |
|
| $ | 350,000 |
|
| $ | 0 |
|
| $ | 2,195,000 |
|
|
| $ | 283,024 |
|
|
|
| $ | 21,231 |
|
|
| $ | 538,995 |
|
| $ | 4,258,250 |
|
Chief Executive Officer |
|
| 2010 |
| $ | 870,000 |
|
| $ | 0 |
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| $ | 0 |
|
| $ | 1,947,500 |
|
|
| $ | 1,261,500 |
|
|
|
| $ | 4,336 |
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|
| $ | 198,728 |
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| $ | 4,282,064 |
|
and President |
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Maureen O’Connell |
|
| 2012 |
| $ | 731,731 |
|
| $ | 0 |
|
| $ | 390,011 |
|
| $ | 259,998 |
|
|
| $ | 1,012,500 |
|
|
|
| $ | 109 |
|
|
| $ | 37,565 |
|
| $ | 2,431,914 |
|
Executive Vice President, |
|
| 2011 |
| $ | 700,000 |
|
| $ | 535,000 |
|
| $ | 273,720 |
|
| $ | 172,560 |
|
|
| $ | 165,615 |
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|
| $ | 99 |
|
|
| $ | 83,804 |
|
| $ | 1,930,798 |
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Chief Administrative |
|
| 2010 |
| $ | 700,000 |
|
| $ | 250,000 |
|
| $ | 402,360 |
|
| $ | 0 |
|
|
| $ | 738,182 |
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|
|
| $ | 839 |
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|
| $ | 47,105 |
|
| $ | 2,138,486 |
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Officer and Chief |
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Financial Officer |
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Margery Mayer |
|
| 2012 |
| $ | 647,827 |
|
| $ | 0 |
|
| $ | 209,997 |
|
| $ | 139,997 |
|
|
| $ | 598,500 |
|
|
|
| $ | 2,628 |
|
|
| $ | 21,066 |
|
| $ | 1,620,015 |
|
Executive Vice President |
|
| 2011 |
| $ | 618,000 |
|
| $ | 215,000 |
|
| $ | 182,480 |
|
| $ | 230,080 |
|
|
| $ | 86,657 |
|
|
|
| $ | 2,341 |
|
|
| $ | 23,932 |
|
| $ | 1,358,490 |
|
and President, Scholastic |
|
| 2010 |
| $ | 618,000 |
|
| $ | 194,370 |
|
| $ | 229,920 |
|
| $ | 207,500 |
|
|
| $ | 485,430 |
|
|
|
| $ | 10,368 |
|
|
| $ | 15,304 |
|
| $ | 1,760,892 |
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Education |
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Judith Newman |
|
| 2012 |
| $ | 651,544 |
|
| $ | 0 |
|
| $ | 209,997 |
|
| $ | 139,997 |
|
|
| $ | 518,700 |
|
|
|
| $ | 2,236 |
|
|
| $ | 35,517 |
|
| $ | 1,557,991 |
|
Executive Vice President |
|
| 2011 |
| $ | 626,437 |
|
| $ | 150,000 |
|
| $ | 182,480 |
|
| $ | 115,040 |
|
|
| $ | 0 |
|
|
|
| $ | 2,023 |
|
|
| $ | 36,438 |
|
| $ | 1,112,418 |
|
and President, Scholastic |
|
| 2010 |
| $ | 626,437 |
|
| $ | 0 |
|
| $ | 229,920 |
|
| $ | 0 |
|
|
| $ | 410,316 |
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|
|
| $ | 13,863 |
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|
| $ | 36,436 |
|
| $ | 1,316,972 |
|
Book Clubs and |
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E-Commerce |
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Andrew S. Hedden |
|
| 2012 |
| $ | 572,596 |
|
| $ | 0 |
|
| $ | 209,997 |
|
| $ | 139,997 |
|
|
| $ | 630,000 |
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| $ | 0 |
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| $ | 33,889 |
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| $ | 1,586,479 |
|
Executive Vice President, |
|
| 2011 |
| $ | 525,000 |
|
| $ | 100,000 |
|
| $ | 114,050 |
|
| $ | 71,900 |
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| $ | 83,013 |
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| $ | 0 |
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| $ | 134,919 |
|
| $ | 1,028,882 |
|
General Counsel and |
|
| 2010 |
| $ | 525,000 |
|
| $ | 0 |
|
| $ | 134,120 |
|
| $ | 0 |
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| $ | 346,023 |
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| $ | 0 |
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| $ | 9,122 |
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| $ | 1,014,265 |
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Secretary |
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Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards(3) ($) | Option Awards(4) ($) | Non-Equity Incentive Plan Compensation(5) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(6) ($) | All Other Compen- sation(7) ($) | Total ($) | |||||||||||||||||||||||||
Richard Robinson | 2013 | $ | 1,007,308 | (1) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 55,393 | $ | 517,101 | $ | 1,579,802 | ||||||||||||||||
Chairman of the Board, | 2012 | $ | 933,461 | $ | 0 | $ | 0 | $ | 2,300,005 | $ | 1,746,000 | $ | 88,553 | $ | 222,498 | $ | 5,290,517 | |||||||||||||||||
Chief Executive Officer and President | 2011 | $ | 870,000 | $ | 350,000 | $ | 0 | $ | 2,195,000 | $ | 283,024 | $ | 21,231 | $ | 538,995 | $ | 4,258,250 | |||||||||||||||||
Maureen O’Connell | 2013 | $ | 778,847 | (1) | $ | 450,000 | (2) | $ | 0 | $ | 0 | $ | 0 | $ | 313 | $ | 132,041 | $ | 1,361,201 | |||||||||||||||
Executive Vice President, | 2012 | $ | 731,731 | $ | 0 | $ | 390,011 | $ | 259,998 | $ | 1,012,500 | $ | 109 | $ | 37,565 | $ | 2,431,914 | |||||||||||||||||
Chief Administrative Officer and Chief Financial Officer | 2011 | $ | 700,000 | $ | 535,000 | $ | 273,720 | $ | 172,560 | $ | 165,615 | $ | 99 | $ | 83,804 | $ | 1,930,798 | |||||||||||||||||
Margery Mayer | 2013 | $ | 690,577 | (1) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 3,448 | $ | 21,101 | $ | 715,126 | ||||||||||||||||
Executive Vice President | 2012 | $ | 647,827 | $ | 0 | $ | 209,997 | $ | 139,997 | $ | 598,500 | $ | 2,628 | $ | 21,066 | $ | 1,620,015 | |||||||||||||||||
and President, Scholastic Education | 2011 | $ | 618,000 | $ | 215,000 | $ | 182,480 | $ | 230,080 | $ | 86,657 | $ | 2,341 | $ | 23,932 | $ | 1,358,490 | |||||||||||||||||
Judith Newman | 2013 | $ | 694,451 | (1) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 4,966 | $ | 88,843 | $ | 788,260 | ||||||||||||||||
Executive Vice President | 2012 | $ | 651,544 | $ | 0 | $ | 209,997 | $ | 139,997 | $ | 518,700 | $ | 2,236 | $ | 35,517 | $ | 1,557,991 | |||||||||||||||||
and President, Scholastic Book Clubs and E-Commerce | 2011 | $ | 626,437 | $ | 150,000 | $ | 182,480 | $ | 115,040 | $ | 0 | $ | 2,023 | $ | 36,438 | $ | 1,112,418 | |||||||||||||||||
Andrew S. Hedden | 2013 | $ | 623,077 | (1) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 172,700 | $ | 795,777 | ||||||||||||||||
Executive Vice President, | 2012 | $ | 572,596 | $ | 0 | $ | 209,997 | $ | 139,997 | $ | 630,000 | $ | 0 | $ | 33,889 | $ | 1,586,479 | |||||||||||||||||
General Counsel and Secretary | 2011 | $ | 525,000 | $ | 100,000 | $ | 114,050 | $ | 71,900 | $ | 83,013 | $ | 0 | $ | 134,919 | $ | 1,028,882 |
(1) | For the fiscal year June 1, 2012 through May 31, 2013, there were 27 instead of the usual 26 pay periods. |
(2) | As described on page 16 above, represents a special incentive bonus approved by the HRCC relating to Ms. O’Connell’s successfully acheiving targeted results in directing a significant company-wide cost cutting initiative. |
(3) | Represents the grant date fair value under FASB ASC Topic 718 of awards of restricted stock units granted to the Named Executive Officers in the fiscal year indicated. Assumptions used in determining the fair value 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 2013, 2012 |
(4) | |
| Represents the grant date fair value under FASB ASC Topic 718 of awards of stock options granted to the Named Executive Officers in the fiscal year indicated. Assumptions used in determining fair value 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 2013, 2012 |
(5) | |
| Represents the full amount of the cash bonus actually awarded to the Named Executive Officer with regard to the fiscal year under the |
22 |
and Mr. Hedden had elected to invest 100%, 20%, 5%, 0% and 50%, respectively, of his or her fiscal 2011 bonus for the purchase of RSUs, which occurred on September 1, 2011. |
| Represents the actuarial present value of the Named Executive Officer’s accumulated benefit under the Company’s Cash Balance Retirement Plan on the pension plan measurement date used for financial statement purposes for fiscal |
(7) | |
| All Other Compensation is further described in the table entitled “Summary of All Other Compensation” below. |
Summary of All Other Compensation
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Name | Fiscal | 401(k) Plan | Life |
| RSU |
|
| Perquisites(2) |
|
| Dividend |
|
| Total |
| ||||||||
Richard Robinson | 2012 | $7,350 | $240 |
| $ | 136,099 |
|
|
| $ | 78,809 |
|
|
|
| $ | 0 |
|
|
| $ | 222,498 |
|
| 2011 | $7,350 | $258 |
| $ | 453,089 |
|
|
| $ | 78,298 |
|
|
|
| $ | 0 |
|
|
| $ | 538,995 |
|
| 2010 | $7,350 | $270 |
| $ | 114,248 |
|
|
| $ | 76,860 |
|
|
|
| $ | 0 |
|
|
| $ | 198,728 |
|
Maureen O’Connell | 2012 | $7,096 | $480 |
| $ | 15,920 |
|
|
| $ | 0 |
|
|
|
| $ | 14,069 |
|
|
| $ | 37,565 |
|
| 2011 | $7,173 | $515 |
| $ | 66,278 |
|
|
| $ | 0 |
|
|
|
| $ | 9,838 |
|
|
| $ | 83,804 |
|
| 2010 | $7,173 | $540 |
| $ | 32,867 |
|
|
| $ | 0 |
|
|
|
| $ | 6,525 |
|
|
| $ | 47,105 |
|
Margery Mayer | 2012 | $7,350 | $480 |
| $ | 2,078 |
|
|
| $ | 0 |
|
|
|
| $ | 11,158 |
|
|
| $ | 21,066 |
|
| 2011 | $6,125 | $515 |
| $ | 8,717 |
|
|
| $ | 0 |
|
|
|
| $ | 8,575 |
|
|
| $ | 23,932 |
|
| 2010 | $4,900 | $540 |
| $ | 3,564 |
|
|
| $ | 0 |
|
|
|
| $ | 6,300 |
|
|
| $ | 15,304 |
|
Judith Newman | 2012 | $7,099 | $480 |
| $ | 0 |
|
|
| $ | 17,017 |
|
|
|
| $ | 10,921 |
|
|
| $ | 35,517 |
|
| 2011 | $7,166 | $515 |
| $ | 0 |
|
|
| $ | 16,381 |
|
|
|
| $ | 12,376 |
|
|
| $ | 36,438 |
|
| 2010 | $7,166 | $540 |
| $ | 4,110 |
|
|
| $ | 15,283 |
|
|
|
| $ | 9,337 |
|
|
| $ | 36,436 |
|
Andrew S. Hedden | 2012 | $7,822 | $240 |
| $ | 19,956 |
|
|
| $ | 0 |
|
|
|
| $ | 5,871 |
|
|
| $ | 33,889 |
|
| 2011 | $7,139 | $415 |
| $ | 124,277 |
|
|
| $ | 0 |
|
|
|
| $ | 3,088 |
|
|
| $ | 134,919 |
|
| 2010 | $7,007 | $540 |
| $ | 0 |
|
|
| $ | 0 |
|
|
|
| $ | 1,575 |
|
|
| $ | 9,122 |
|
Name | Fiscal Year | 401(k) Plan Matching Contributions ($) | Life Insurance Premiums ($) | RSU Cost(1) ($) | Perquisites(2) ($) | Dividend Earnings on vested MSPP RSUs and unvested 2001/2011 Plan RSUs(3) ($) | Total ($) | |||||||||||||||||||
Richard Robinson | 2013 | $ | 7,800 | $ | 213 | $ | 427,426 | $ | 81,662 | $ | 0 | $ | 517,101 | |||||||||||||
2012 | $ | 7,350 | $ | 240 | $ | 136,099 | $ | 78,809 | $ | 0 | $ | 222,498 | ||||||||||||||
2011 | $ | 7,350 | $ | 258 | $ | 453,089 | $ | 78,298 | $ | 0 | $ | 538,995 | ||||||||||||||
Maureen O’Connell | 2013 | $ | 7,846 | $ | 425 | $ | 99,141 | $ | 0 | $ | 24,629 | $ | 132,041 | |||||||||||||
2012 | $ | 7,096 | $ | 480 | $ | 15,920 | $ | 0 | $ | 14,069 | $ | 37,565 | ||||||||||||||
2011 | $ | 7,173 | $ | 515 | $ | 66,278 | $ | 0 | $ | 9,838 | $ | 83,804 | ||||||||||||||
Margery Mayer | 2013 | $ | 7,749 | $ | 425 | $ | 0 | $ | 0 | $ | 12,927 | $ | 21,101 | |||||||||||||
2012 | $ | 7,350 | $ | 480 | $ | 2,078 | $ | 0 | $ | 11,158 | $ | 21,066 | ||||||||||||||
2011 | $ | 6,125 | $ | 515 | $ | 8,717 | $ | 0 | $ | 8,575 | $ | 23,932 | ||||||||||||||
Judith Newman | 2013 | $ | 7,835 | $ | 425 | $ | 50,783 | $ | 18,752 | $ | 11,048 | $ | 88,843 | |||||||||||||
2012 | $ | 7,099 | $ | 480 | $ | 0 | $ | 17,017 | $ | 10,921 | $ | 35,517 | ||||||||||||||
2011 | $ | 7,166 | $ | 515 | $ | 0 | $ | 16,381 | $ | 12,376 | $ | 36,438 | ||||||||||||||
Andrew S. Hedden | 2013 | $ | 7,596 | $ | 213 | $ | 154,222 | $ | 0 | $ | 10,669 | $ | 172,700 | |||||||||||||
2012 | $ | 7,822 | $ | 240 | $ | 19,956 | $ | 0 | $ | 5,871 | $ | 33,889 | ||||||||||||||
2011 | $ | 7,139 | $ | 415 | $ | 124,277 | $ | 0 | $ | 3,088 | $ | 134,919 |
(1) | Represents the compensation cost to the Company |
(2) | For Mr. Robinson, $74,928, $72,495 |
(3) | In fiscal 2013, the Company made four dividend payments at $.125 per share on the Common and the Class A Stock. In fiscal 2012, the Company made four dividend payments, two of which were at a quarterly dividend rate of $.10 per share on the Common and the Class A Stock and two of which were at $.125 per share on the Common and the Class A Stock. In fiscal 2011, the Company made four dividend payments, two of which were at a quarterly dividend rate of $.10 per share on the Common and the Class A Stock and two of which were at $.075 per share on the Common and the Class A Stock. |
The following table provides information on cash bonus, stock options and restricted stock units granted in fiscal 2012 to each of the Named Executive Officers.
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| Estimated Possible Payouts Under |
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|
|
| ||||||||||||||
Name |
|
| Grant |
|
| Threshold |
|
| Target |
|
| Maximum |
|
| All Other |
|
| All Other |
|
| Exercise |
|
| Closing |
|
| Grant |
| ||||||||
Richard |
|
| — |
|
|
| $ | 291,000 |
|
|
| $ | 1,164,000 |
|
| $ | 1,746,000 |
|
| — |
|
|
| 224,172 |
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 2,300,005 |
|
Robinson |
|
| 10/7/2011 |
|
|
|
|
|
|
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|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
Maureen |
|
| — |
|
|
| $ | 168,750 |
|
|
| $ | 675,000 |
|
| $ | 1,012,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
O’Connell |
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 13,840 | (4) |
|
|
|
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 390,011 |
|
|
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27,837 |
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 259,998 |
|
Margery |
|
| — |
|
|
| $ | 99,750 |
|
|
| $ | 399,000 |
|
| $ | 598,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mayer |
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,452 | (4) |
|
|
|
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 209,997 |
|
|
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,989 |
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 139,997 |
|
Judith |
|
| — |
|
|
| $ | 99,750 |
|
|
| $ | 399,000 |
|
| $ | 598,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newman |
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,452 | (4) |
|
|
|
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 209,997 |
|
|
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,989 |
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 139,997 |
|
Andrew S. |
|
| — |
|
|
| $ | 105,000 |
|
|
| $ | 420,000 |
|
| $ | 630,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedden |
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,452 | (4) |
|
|
|
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 209,997 |
|
|
|
| 10/7/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 14,989 |
|
|
| $28.18 |
|
| $27.74 |
|
| $ | 139,997 |
|
|
|
|
|
|
|
|
|
OUTSTANDING EQUITY AWARDS AT MAY 31, 20122013
The following table sets forth certain information with regard to all unexercised options and all unvested restricted stock units held by the Named Executive Officers at May 31, 2012.2013.
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| Option Awards |
|
| Stock Awards |
| |||||||||||||||||||
Name |
|
| Grant |
| Number of |
|
| Number of |
|
| Option |
|
| Option |
|
| Number |
|
| Market Value |
| |||||||
Richard |
|
| 7/18/2002 |
| 5,850 |
|
|
|
|
|
|
| $36.23 |
|
| 7/18/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
Robinson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9/19/2007 |
| 250,000 | (3) |
|
|
|
|
|
| $36.21 |
|
| 9/19/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9/24/2008 |
| 187,000 | (3) |
|
| 62,500 | (3) |
|
| $27.93 |
|
| 9/24/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/22/2009 |
| 125,000 |
|
|
| 125,000 |
|
|
| $19.33 |
|
| 7/22/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8/27/2010 |
| 62,500 |
|
|
| 187,500 |
|
|
| $22.81 |
|
| 8/27/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10/7/2011 |
| 224,172 |
|
|
|
|
|
|
| $28.18 |
|
| 10/7/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Maureen |
|
| 3/20/2007 |
| 100,000 |
|
|
|
|
|
|
| $34.85 |
|
| 3/20/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
O’Connell |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9/19/2007 |
| 9,000 |
|
|
|
|
|
|
| $36.21 |
|
| 9/19/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12/11/2007 |
| 100,000 |
|
|
|
|
|
|
| $34.84 |
|
| 12/11/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/22/2008 |
|
|
|
|
| 6,250 |
|
|
| $27.25 |
|
| 7/22/2018 |
|
|
| 1,000 |
|
|
|
| $ | 26,950 |
|
|
|
|
| 9/24/2008 |
|
|
|
|
| 25,000 |
|
|
| $27.93 |
|
| 9/24/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/21/2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,500 |
|
|
|
| $ | 282,975 |
|
|
|
|
| 8/27/2010 |
|
|
|
|
| 18,000 |
|
|
| $22.81 |
|
| 8/27/2020 |
|
|
| 9,000 |
|
|
|
| $ | 242,550 |
|
|
|
|
| 10/7/2011 |
|
|
|
|
| 27,837 |
|
|
| $28.18 |
|
| 10/7/2021 |
|
|
| 13,840 |
|
|
|
| $ | 372,988 |
|
|
Margery |
|
| 7/18/2002 |
| 27,540 |
|
|
|
|
|
|
| $36.23 |
|
| 7/18/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
Mayer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/19/2005 |
| 34,000 |
|
|
|
|
|
|
| $37.38 |
|
| 7/19/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/18/2006 |
| 33,000 |
|
|
|
|
|
|
| $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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/22/2008 |
| 11,250 |
|
|
| 3,750 |
|
|
| $27.25 |
|
| 7/22/2018 |
|
|
| 1,000 |
|
|
|
| $ | 26,950 |
|
|
|
|
| 7/21/2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,000 |
|
|
|
| $ | 161,700 |
|
|
|
|
| 9/22/2009 |
| 12,500 |
|
|
| 12,500 |
|
|
| $24.52 |
|
| 9/22/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8/27/2010 |
| 8,000 |
|
|
| 24,000 |
|
|
| $22.81 |
|
| 8/27/2020 |
|
|
| 6,000 |
|
|
|
| $ | 161,700 |
|
|
|
|
| 10/7/2011 |
|
|
|
|
| 14,989 |
|
|
| $28.18 |
|
| 10/7/2021 |
|
|
| 7,452 |
|
|
|
| $ | 200,831 |
|
|
Option Awards | Stock Awards | |||||||||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options(1) (#) 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 | 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 | |||||||||||||||||||||||
9/19/2007 | 250,000 | (3) | $ | 36.21 | 9/19/2017 | |||||||||||||||||||||||
9/24/2008 | 250,000 | (3) | $ | 27.93 | 9/24/2018 | |||||||||||||||||||||||
7/22/2009 | 187,500 | 62,500 | $ | 19.33 | 7/22/2019 | |||||||||||||||||||||||
8/27/2010 | 125,000 | 125,000 | $ | 22.81 | 8/27/2020 | |||||||||||||||||||||||
10/7/2011 | 56,043 | 168,129 | $ | 28.18 | 10/7/2021 | |||||||||||||||||||||||
Maureen O’Connell | 3/20/2007 | 100,000 | $ | 34.85 | 3/20/2017 | |||||||||||||||||||||||
9/19/2007 | 9,000 | $ | 36.21 | 9/19/2017 | ||||||||||||||||||||||||
12/11/2007 | 100,000 | $ | 34.84 | 12/11/2017 | ||||||||||||||||||||||||
7/21/2009 | 5,250 | $ | 158,760 | |||||||||||||||||||||||||
8/27/2010 | 12,000 | $ | 22.81 | 8/27/2020 | 6,000 | $ | 181,440 | |||||||||||||||||||||
10/7/2011 | 6,959 | 20,878 | $ | 28.18 | 10/7/2021 | 10,380 | $ | 313,891 | ||||||||||||||||||||
Margery Mayer | 7/19/2005 | 34,000 | $ | 37.38 | 7/19/2015 | |||||||||||||||||||||||
7/17/2007 | 33,000 | $ | 35.38 | 7/17/2017 | ||||||||||||||||||||||||
9/19/2007 | 9,000 | $ | 36.21 | 9/19/2017 | ||||||||||||||||||||||||
7/21/2009 | 3,000 | $ | 90,720 | |||||||||||||||||||||||||
9/22/2009 | 6,250 | $ | 24.52 | 9/22/2019 | ||||||||||||||||||||||||
8/27/2010 | 16,000 | 16,000 | $ | 22.81 | 8/27/2020 | 4,000 | $ | 120,960 | ||||||||||||||||||||
10/7/2011 | 3,747 | 11,242 | $ | 28.18 | 10/7/2021 | 5,589 | $ | 169,011 | ||||||||||||||||||||
Judith Newman | 9/20/2005 | 25,000 | $ | 36.92 | 9/20/2015 | |||||||||||||||||||||||
9/19/2006 | 6,800 | $ | 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 | 25,000 | $ | 29.81 | 5/20/2018 | ||||||||||||||||||||||||
7/22/2008 | 15,000 | $ | 27.25 | 7/22/2018 | ||||||||||||||||||||||||
7/21/2009 | 3,000 | $ | 90,720 | |||||||||||||||||||||||||
8/27/2010 | 8,000 | 8,000 | $ | 22.81 | 8/27/2020 | 4,000 | $ | 120,960 | ||||||||||||||||||||
10/7/2011 | 3,747 | 11,242 | $ | 28.18 | 10/7/2021 | 5,589 | $ | 169,011 | ||||||||||||||||||||
Andrew S. Hedden | 12/16/2008 | 75,000 | 0 | $ | 16.48 | 12/16/2018 | ||||||||||||||||||||||
7/21/2009 | 1,750 | $ | 52,920 | |||||||||||||||||||||||||
8/27/2010 | 5,000 | 5,000 | $ | 22.81 | 8/27/2020 | 2,500 | $ | 75,600 | ||||||||||||||||||||
10/7/2011 | 3,747 | 11,242 | $ | 28.18 | 10/7/2021 | 5,589 | $ | 169,011 |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Option Awards |
|
| Stock Awards |
| |||||||||||||||||||
Name |
|
| Grant |
| Number of |
|
| Number of |
|
| Option |
|
| Option |
|
| Number |
|
| Market Value |
| |||||||
Judith |
|
| 7/18/2002 |
| 10,000 |
|
|
|
|
|
|
| $36.23 |
|
| 7/18/2012 |
|
|
|
|
|
|
|
|
|
|
|
|
Newman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9/20/2005 |
| 25,000 |
|
|
|
|
|
|
| $36.92 |
|
| 9/20/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 9/19/2006 |
| 6,800 |
|
|
|
|
|
|
| $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 |
| 25,000 |
|
|
|
|
|
|
| $29.81 |
|
| 5/20/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/22/2008 |
| 11,250 |
|
|
| 3,750 |
|
|
| $27.25 |
|
| 7/22/2018 |
|
|
| 1,000 |
|
|
|
| $ | 26,950 |
|
|
|
|
| 7/21/2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6,000 |
|
|
|
| $ | 161,700 |
|
|
|
|
| 8/27/2010 |
| 4,000 |
|
|
| 12,000 |
|
|
| $22.81 |
|
| 8/27/2020 |
|
|
| 6,000 |
|
|
|
| $ | 161,700 |
|
|
|
|
| 10/7/2011 |
|
|
|
|
| 14,989 |
|
|
| $28.18 |
|
| 10/7/2021 |
|
|
| 7,452 |
|
|
|
| $ | 200,831 |
|
|
Andrew S. |
|
| 12/16/2008 |
| 50,000 |
|
|
| 25,000 |
|
|
| $16.48 |
|
| 12/16/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Hedden |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7/21/2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,500 |
|
|
|
| $ | 94,325 |
|
|
|
|
| 8/27/2010 |
| 2,500 |
|
|
| 7,500 |
|
|
| $22.81 |
|
| 8/27/2020 |
|
|
| 3,750 |
|
|
|
| $ | 101,063 |
|
|
|
|
| 10/7/2011 |
|
|
|
|
| 14,989 |
|
|
| $28.18 |
|
| 10/7/2021 |
|
|
| 7,452 |
|
|
|
| $ | 200,831 |
|
|
(1) | As discussed above, there were no equity grants to the Named Executive Officers in fiscal 2013. All stock options that were granted in fiscal 2012 |
24 |
(2) | For restricted stock units granted in fiscal 2012, the restricted stock units vest in annual 25% increments beginning with the first anniversary of the date of grant. For restricted stock units granted in fiscal 2011, |
(3) | Represents a grant of Class A Options. |
OPTION EXERCISES AND STOCK VESTED
The following table shows the number of shares of Common Stock acquired during fiscal 20122013 upon the exercise of stock options and upon vesting of restricted stock units:units.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Option Awards |
|
| Stock Awards |
| ||||||||||||||
Name |
|
| Number of |
|
| Value |
|
| Number of |
|
| Value |
| ||||||||
Richard Robinson |
|
| 0 |
|
|
|
| $ | 0 |
|
|
| 0 |
|
|
|
| $ | 0 |
|
|
Maureen O’Connell |
|
| 99,750 | (1) |
|
|
| $ | 859,425 | (1) |
|
| 10,750 |
|
|
|
| $ | 308,240 |
|
|
Margery Mayer |
|
| 85,000 | (2) |
|
|
| $ | 313,130 | (2) |
|
| 7,500 |
|
|
|
| $ | 214,355 |
|
|
Judith Newman |
|
| 140,000 | (3) |
|
|
| $ | 772,563 | (3) |
|
| 6,000 |
|
|
|
| $ | 172,880 |
|
|
Andrew S. Hedden |
|
| 25,000 | (4) |
|
|
| $ | 299,750 | (4) |
|
| 3,000 |
|
|
|
| $ | 86,268 |
|
|
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting(3) (#) | Value Realized on Vesting(3) ($) | ||||||||||||
Richard Robinson | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
Maureen O’Connell | 37,250 | (1) | $ | 339,675 | (1) | 12,710 | $ | 386,363 | ||||||||
Margery Mayer | 66,750 | (2) | $ | 411,945 | (2) | 7,863 | $ | 237,990 | ||||||||
Judith Newman | 0 | $ | 0 | 7,863 | $ | 237,990 | ||||||||||
Andrew S. Hedden | 0 | $ | 0 | 4,863 | $ | 150,517 |
(1) | During fiscal |
(2) | During fiscal |
(3) |
|
|
|
| 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. O’Connell had |
25 |
Pension Plan
Prior to June 1, 2009, the Company maintained 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”). Effective as of June 1, 2009, the Retirement Plan closed to new participants and accrual of future benefits under the Plan stopped. Accordingly, a participant’s benefit does not consider pay earned and service credited after June 1, 2009. 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 became fully vested in their accrued benefits upon completion of 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 had been 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”). Effective June 1, 2009, accrual of future benefits under the Prior Benefit Formula also stopped. Accordingly, a participant’s benefit does not consider pay earned and service credited after June 1, 2009. Mr. Robinson elected to continue participation under the Prior Benefit Formula, which, prior to June 1, 2009, provided 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, 2012,2013, Mr. Robinson had earned an estimated annual benefit payment using the Prior Benefit Formula of $74,474, which is net of the benefit transferred to his former spouse pursuant to a matrimonial agreement. In 2007, 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 under the Retirement Plan.
The following table sets forth the years of credited service, 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, 2012,2013, the same measurement date as used in the Consolidated Financial Statements included in the Annual Report.
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name | Plan Name |
| Number of |
| Present |
|
| Payments |
| ||||||
Richard Robinson | Scholastic Corporation Cash |
|
|
|
|
|
|
|
|
|
| ||||
| Balance Retirement Plan |
| 47 |
|
| $ | 652,836 |
|
|
|
| $ | 74,474 | (3) |
|
Maureen O’Connell | Scholastic Corporation Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance Retirement Plan |
| 2 |
|
| $ | 4,201 |
|
|
|
| $ | 0 |
|
|
Margery Mayer | Scholastic Corporation Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance Retirement Plan |
| 19 |
|
| $ | 97,745 |
|
|
|
| $ | 0 |
|
|
Judith Newman | Scholastic Corporation Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance Retirement Plan |
| 16 |
|
| $ | 85,158 |
|
|
|
| $ | 0 |
|
|
Andrew S. Hedden(4) | Scholastic Corporation Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance Retirement Plan |
| 0 |
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
Name | Plan Name | Number of Years of Credited Service (#)(1) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Fiscal Year ($) | ||||||||||
Richard Robinson | Scholastic Corporation Cash Balance Retirement Plan | 47 | $ | 633,755 | $ | 74,474 | (3) | |||||||
Maureen O’Connell | Scholastic Corporation Cash Balance Retirement Plan | 2 | $ | 4,514 | $ | 0 | ||||||||
Margery Mayer | Scholastic Corporation Cash Balance Retirement Plan | 19 | $ | 101,193 | $ | 0 | ||||||||
Judith Newman | Scholastic Corporation Cash Balance Retirement Plan | 16 | $ | 90,124 | $ | 0 | ||||||||
Andrew S. Hedden(4) | Scholastic Corporation Cash Balance Retirement Plan | 0 | $ | 0 | $ | 0 |
(1) | The valuation method and material assumptions used in determining pension benefits and obligations 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. |
(2) | Pay earned and service credited after June 1, 2009 will not be considered in determining the Named Executive Officer’s benefit as the Retirement Plan was frozen as of that date. |
(3) | Mr. Robinson’s benefits include $58,650 accumulated under the Prior Benefit Formula and $15,824 paid from an annuity issued by Liberty Mutual Insurance Company for participant benefits accrued under a prior retirement plan which terminated in May 1985. |
(4) | Mr. Hedden did not meet the minimum service period prior to the plan freeze and, accordingly, is not entitled to any benefits under the Retirement 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 20122013 and the balances thereunder at May 31, 2012.2013.
NONQUALIFIED DEFERRED COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
| Executive Contributions |
|
| Aggregate Balance |
| ||||||
Richard Robinson |
|
| $ | 283,024 |
|
|
|
| $ | 2,739,575 |
|
|
Maureen O’Connell |
|
| $ | 33,123 |
|
|
|
| $ | 430,445 |
|
|
Margery Mayer |
|
| $ | 4,333 |
|
|
|
| $ | 216,274 |
|
|
Judith Newman |
|
| $ | 0 |
|
|
|
| $ | 112,462 |
|
|
Andrew S. Hedden |
|
| $ | 41,507 |
|
|
|
| $ | 614,676 |
|
|
Name | Executive Contributions in the Last Fiscal Year ($)(1) | Aggregate Balance at Last Fiscal Year End ($)(2) | |||||||
Richard Robinson | $ | 873,000 | $ | 4,076,624 | |||||
Maureen O’Connell | $ | 202,500 | $ | 696,851 | |||||
Margery Mayer | $ | 0 | $ | 50,773 | |||||
Judith Newman | $ | 103,740 | $ | 216,307 | |||||
Andrew S. Hedden | $ | 315,000 | $ | 1,172,495 |
(1) | The amounts shown represent fiscal |
(2) | Represents the value of all RSUs held by the Named Executive Officer under the MSPP at May 31, |
27 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
The following 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 or change-in-control under the Company’s compensation plans. Except where noted, the calculations of the potential payments to the Named Executive Officers reflect the assumption that the termination or change-in-control event occurred on May 31, 2012,2013, with the closing sale price per share of the Common Stock on that date of $26.95.$30.24. 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, 2012,2013, Mr. Robinson, Ms. Mayer and Ms. MayerNewman were of retirement age at May 31, 2012 for all of their option and restricted stock unit grants received under any of the Company’s equity-based plans. Mr. Hedden was of retirement age for all option and restricted stock unit grants received under to the 2001 Plan prior to July 21, 2009, when retirement age was defined as age 55 or older. For all grants received on or after July 21, 2009 under the 2001 Plan, when the definition of retirement changed to age 55 plus 10 years of continuous employment service, and for all grants received under the 2011 Plan, Mr. Hedden does not qualify for retirement. As of May 31, 2012,2013, under the MSPP, Mr. Robinson, Ms. Mayer and Ms. MayerNewman were of retirement age, which was defined for purposes of the MSPP as age 55 or older, until the amendment that became effective on September 21, 2011, which changed the definition of retirement to be age 55 or older plus ten years of continuous service. Mr. Hedden was of retirement age in respect of RSUs acquired under the MSPP prior to September 21, 2011, but does not qualify for retirement in respect of RSUs acquired under the MSPP subsequent to such date. Ms. O’Connell and Ms. Newman areis not eligible for retirement under any of the Company’s equity plans. 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 or a change-in-control only as provided for in respect of stock options and restricted stock units previously granted under the 1995 Plan, the 2001 Plan and the 2011 Plan (or, in the case of a portion of Mr. Robinson’s grants, under the Class A Plan) and previously purchased RSUs under the MSPP.
409A Limitations.In compliance with 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 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).
Change-in-control.None of the MSPP, the 1995 Plan, the 2001 Plan, the 2011 Plan or the Class A Plan contains provisions that automatically change the terms of any award or accelerates the vesting of any unvested restricted stock unit or stock option.option upon a change-in-
28 |
control. However, each of
these plans has various provisions that would permit the Board committee responsible for administering such plan to amend, change or terminate the plan and/or the terms of the awards made under the plan or otherwise provide for the (i) acceleration of vesting of restricted stock units, (ii) acceleration of vesting of stock options and/or (iii) conversion of restricted stock units to stock. Because the HRCC (which administers each of these plans) has this power and may, in its discretion, choose to exercise such power in connection with a change of control or similar event (such as a merger or consolidation in which the Company is not the surviving entity or the acquisition of the Company’s Common Stock by a single person or group), the Company has presented information in the table on page 33 below regarding potential pay-outs to the Named Executive Officers upon a change-in-control based on the assumption that the HRCC would use its authority to accelerate vesting of restricted stock units and stock options and convert restricted stock units to shares under these plans effective upon a change-in-control of the Company.
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, received under the MIP andor EPIP, through the purchase of RSUs under the MSPP. The amounts deferred with respect to bonuses received for fiscal 20112012 but paid and deferred in fiscal 20122013 are included in the “Nonqualified Deferred Compensation Table” above. The following table describes the payment provisions for RSUs under the terms of the MSPP upon a termination of employment of an executive participating in the MSPP.
Status of | Voluntary | Involuntary Termination | Normal |
| Death or | |||||||
Vested | RSUs convert | RSUs convert | RSUs convert | RSUs convert | ||||||||
Unvested | RSUs are forfeited and participant receives cash equal to the lesser of the fair market value of the underlying stock or the purchase price of the unvested RSUs. | RSUs are forfeited and participant receives a partial payment in stock and cash. The amount of stock is equal to a percentage of RSUs, with the number of full years of employment since purchase as the numerator and 3 as the denominator, and the remainder is paid in cash at the lesser of the purchase price of the unvested RSUs or the fair market value of the number of shares underlying the unvested RSUs on the date of termination. | Vesting is accelerated and RSUs convert into stock. | Vesting is accelerated and RSUs convert into stock. |
(1) | Under the terms of the MSPP, for all RSUs purchased prior to September 21, 2011, the definition of normal retirement is age 55 or older and for all RSUs |
29 |
Equity Incentives
As described in “Compensation Discussion and Analysis-Options to Purchase Common Stock and Restricted Stock Units” above, the Company has granted to its Named Executive Officers, with the exception of Mr. Robinson who has received only stock options, a combination of stock options and restricted stock units as part of its long-term compensation program.
The following table illustrates the payment provisions upon a termination of employment for stock options and restricted stock units under the 1995 Plan, 2001 Plan and the 2011 Plan in effect at May 31, 2012.2013.
Type of equity | Voluntary | Termination | Involuntary | Normal | Death or | ||||||||||
Non-qualifiedstock optionsgranted underthe 1995 Planand before July21, 2009 underthe 2001 Plan. | Unvested options are forfeited. Participant has 90 days to exercise vested options. | All options expire as of the date of termination. | Unvested options are forfeited. Participant has 90 days to exercise vested options. | Unvested options are forfeited. Participant has 3 years to exercise vested options. Retirement defined as age 55 or older. | Vesting accelerates. Participant or his estate has | ||||||||||
Non-qualifiedstock optionsgranted on orafter July 21,2009 under the2001 Plan andnon-qualifiedstock optionsgranted underthe 2011 Plan. | Unvested options are forfeited. Participant has 90 days to exercise vested options. | All options expire as of the date of termination. | Unvested options are forfeited. Participant has 90 days to exercise vested options. | Unvested options | Vesting accelerates. Participant or his estate has one year to exercise vested options. | ||||||||||
RestrictedStock Units(RSUs) grantedbefore July 21,2009 under the2001 Plan. | Unvested RSUs are forfeited. | Unvested RSUs are forfeited. | Vesting is accelerated and RSUs convert into stock. | Vesting is accelerated and RSUs convert into stock. Retirement defined as age 55 or older. | Vesting is accelerated and RSUs convert into stock. | ||||||||||
| Unvested RSUs are forfeited. | Unvested RSUs are forfeited. | Unvested RSUs are forfeited. | RSUs continue to vest for a period of 3 years. Retirement defined as age 55 or older and 10 years employment. | Vesting is accelerated and RSUs convert into stock. | ||||||||||
| Unvested RSUs are forfeited. | Unvested RSUs are forfeited. | Unvested RSUs are forfeited. | Vesting is accelerated and RSUs convert into stock. Retirement defined as age 55 or older and 10 years employment. | Vesting is accelerated and RSUs convert into stock. | ||||||||||
RSUs grantedunder the 2011Plan on or afterMarch 22, 2012. | Unvested RSUs are forfeited. | Unvested RSUs are forfeited. | Unvested RSUs are forfeited. | Vesting is accelerated and RSUs convert into stock for all RSUs granted more than one year before the date of retirement. Retirement defined as age 55 or older and 10 years employment. | Vesting is accelerated and RSUs convert into stock. |
30 |
The following table illustrates the payment provisions upon a termination of employment for stock options under the Class A Plan.
Type of equity | Voluntary | Involuntary | Normal | Death or | ||||||||
Non-qualifiedstock options | Unvested options are forfeited. Participant has 90 days to exercise vested options. | Unvested options are forfeited. Participant has 90 days to exercise vested options. | Unvested options are forfeited. Participant has three years to exercise vested options. | Vesting of options accelerates. Participant or his estate has one year to exercise vested options. |
The table below shows the aggregate amount of potential payments that each Named Executive Officer (or his or her beneficiary or estate) would have been entitled to receive if his or her employment had terminated, or, as noted under “Change-in-control” on page 3028 above, is assumed to receive if a change-in-control had occurred, on May 31, 20122013 under the MSPP, the 2001 Plan, the 2011 Plan and, in the case of a portion of Mr. Robinson’s outstanding stock options, the Class A Plan. The amounts shown assume that termination or the change-in-control was effective as of May 31, 2012,2013, and include amounts earned through such time and estimates of the amounts which could otherwise have been paid out to the Named Executive Officers at that time. The actual amounts which would be paid out can only be determined at the time of each Named Executive Officer’s separation from the Company or at the time of thea change-in-control. Annual bonuses are discretionary and are therefore omitted from the table, and no amounts are reflected in respect of the 1995 Plan as the stock options remaining outstanding thereunder had no value at May 31, 20122013 based on the exercise prices thereunder. 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
| Voluntary |
|
| Termination |
|
| Involuntary |
|
| Normal |
|
| Death/ |
|
| Change-in- | |||||||||||||||||
Richard Robinson |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
MSPP(1) |
|
|
| $ | 1,698,684 |
|
|
|
| $ | 1,698,684 |
|
|
|
| $ | 2,045,242 |
|
|
|
| $ | 2,739,575 |
|
|
|
| $ | 2,739,575 |
|
|
| $ | 2,739,575 | (5) |
Class A Plan stock options(2) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
| $ | 0 |
|
2001 Plan stock options(2) |
|
|
| $ | 1,211,250 |
|
|
|
| $ | 0 |
|
|
|
| $ | 1,211,250 |
|
|
|
| $ | 2,940,000 |
|
|
|
| $ | 2,940,000 |
|
|
| $ | 2,940,000 |
|
2011 Plan stock options(2) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
| $ | 0 |
|
Total |
|
|
| $ | 2,909,934 |
|
|
|
| $ | 1,698,684 |
|
|
|
| $ | 3,256,492 |
|
|
|
| $ | 5,679,575 |
|
|
|
| $ | 5,679,575 |
|
|
| $ | 5,679,575 |
|
Maureen O’Connell |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSPP(1) |
|
|
| $ | 261,992 |
|
|
|
| $ | 261,992 |
|
|
|
| $ | 326,333 |
|
|
|
|
| N/A |
|
|
|
| $ | 430,445 |
|
|
| $ | 430,445 |
|
2001 Plan restricted stock units(3) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 26,950 |
|
|
|
|
| N/A |
|
|
|
| $ | 552,475 |
|
|
| $ | 552,475 |
|
2001 Plan stock options(2) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
|
| N/A |
|
|
|
| $ | 74,520 |
|
|
| $ | 74,520 |
|
2011 Plan restricted stock units(4) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
|
| N/A |
|
|
|
| $ | 372,988 |
|
|
| $ | 372,988 |
|
2011 Plan stock options(2) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
|
| N/A |
|
|
|
| $ | 0 |
|
|
| $ | 0 |
|
Total |
|
|
| $ | 261,992 |
|
|
|
| $ | 261,992 |
|
|
|
| $ | 353,283 |
|
|
|
|
| N/A |
|
|
|
| $ | 1,430,428 |
|
|
| $ | 1,430,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
| Voluntary |
|
| Termination |
|
| Involuntary |
|
| Normal |
|
| Death/ |
|
| Change-in- |
| ||||||||||||||||||
Margery Mayer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
MSPP(1) |
|
|
| $ | 195,098 |
|
|
|
| $ | 195,098 |
|
|
|
| $ | 202,919 |
|
|
|
| $ | 216,274 |
|
|
|
| $ | 216,274 |
|
|
|
| $ | 216,274 |
|
|
2001 Plan restricted stock units(3) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 26,950 |
|
|
|
| $ | 350,350 |
|
|
|
| $ | 350,350 |
|
|
|
| $ | 350,350 |
|
|
2001 Plan stock options(2) |
|
|
| $ | 63,495 |
|
|
|
| $ | 0 |
|
|
|
| $ | 63,495 |
|
|
|
| $ | 193,230 |
|
|
|
| $ | 193,230 |
|
|
|
| $ | 193,230 |
|
|
2011 Plan restricted stock units(4) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 150,623 |
|
|
|
| $ | 200,831 |
|
|
|
| $ | 200,831 |
|
|
2011 Plan stock options(2) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
Total |
|
|
| $ | 258,593 |
|
|
|
| $ | 195,098 |
|
|
|
| $ | 293,364 |
|
|
|
| $ | 910,477 |
|
|
|
| $ | 960,685 |
|
|
|
| $ | 960,685 |
|
|
Judith Newman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSPP(1) |
|
|
| $ | 107,255 |
|
|
|
| $ | 107,255 |
|
|
|
| $ | 110,726 |
|
|
|
|
| N/A |
|
|
|
| $ | 112,462 |
|
|
|
| $ | 112,462 |
|
|
2001 Plan restricted stock units(3) |
|
|
| $ | 207,515 |
|
|
|
| $ | 207,515 |
|
|
|
| $ | 234,465 |
|
|
|
|
| N/A |
|
|
|
| $ | 557,865 |
|
|
|
| $ | 557,865 |
|
|
2001 Plan stock options(2) |
|
|
| $ | 16,560 |
|
|
|
| $ | 0 |
|
|
|
| $ | 16,560 |
|
|
|
|
| N/A |
|
|
|
| $ | 66,240 |
|
|
|
| $ | 66,240 |
|
|
2011 Plan restricted stock units(4) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
|
| N/A |
|
|
|
| $ | 200,831 |
|
|
|
| $ | 200,831 |
|
|
2011 Plan stock options(2) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
|
| N/A |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
Total |
|
|
| $ | 331,330 |
|
|
|
| $ | 314,770 |
|
|
|
| $ | 361,751 |
|
|
|
|
| N/A |
|
|
|
| $ | 937,398 |
|
|
|
| $ | 937,398 |
|
|
Andrew S. Hedden |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MSPP(1) |
|
|
| $ | 387,509 |
|
|
|
| $ | 387,509 |
|
|
|
| $ | 456,097 |
|
|
|
| $ | 614,676 |
|
|
|
| $ | 614,676 |
|
|
|
| $ | 614,676 |
|
|
2001 Plan restricted stock units(3) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 195,387 |
|
|
|
| $ | 195,387 |
|
|
2001 Plan stock options(2) |
|
|
| $ | 533,850 |
|
|
|
| $ | 0 |
|
|
|
| $ | 533,850 |
|
|
|
| $ | 523,500 |
|
|
|
| $ | 826,650 |
|
|
|
| $ | 826,650 |
|
|
2011 Plan restricted stock units(4) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 200,831 |
|
|
|
| $ | 200,831 |
|
|
2011 Plan stock options(2) |
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
|
| $ | 0 |
|
|
Total |
|
|
| $ | 921,359 |
|
|
|
| $ | 387,509 |
|
|
|
| $ | 989,947 |
|
|
|
| $ | 1,138,176 |
|
|
|
| $ | 1,837,544 |
|
|
|
| $ | 1,837,544 |
|
|
31 |
Name | Voluntary Termination ($) | Termination for Cause ($) | Involuntary (Not for Cause) Termination ($) | Normal Retirement ($) | Death/ Disability ($) | Change-in- Control(5) ($) | ||||||||||||||||||
Richard Robinson | ||||||||||||||||||||||||
MSPP(1) | $ | 2,417,499 | $ | 2,417,499 | $ | 3,147,446 | $ | 4,076,624 | $ | 4,076,624 | $ | 4,076,624 | ||||||||||||
Class A Plan stock options(2) | $ | 880,530 | $ | 0 | $ | 880,530 | $ | 880,530 | $ | 880,530 | $ | 880,530 | ||||||||||||
2001 Plan stock options(2) | $ | 2,974,375 | $ | 0 | $ | 2,974,375 | $ | 4,585,000 | $ | 4,585,000 | $ | 4,585,000 | ||||||||||||
2011 Plan stock options(2) | $ | 115,449 | $ | 0 | $ | 115,449 | $ | 461,794 | $ | 461,794 | $ | 461,794 | ||||||||||||
Total | $ | 6,387,853 | $ | 2,417,499 | $ | 7,117,800 | $ | 10,003,948 | $ | 10,003,948 | $ | 10,003,948 | ||||||||||||
Maureen O’Connell | ||||||||||||||||||||||||
MSPP(1) | $ | 420,126 | $ | 420,126 | $ | 524,966 | N/A | $ | 696,851 | $ | 696,851 | |||||||||||||
2001 Plan restricted stock units(3) | $ | 0 | $ | 0 | $ | 0 | N/A | $ | 340,200 | $ | 340,200 | |||||||||||||
2001 Plan stock options(2) | $ | 0 | $ | 0 | $ | 0 | N/A | $ | 89,160 | $ | 89,160 | |||||||||||||
2011 Plan restricted stock units(4) | $ | 0 | $ | 0 | $ | 0 | N/A | $ | 313,891 | $ | 313,891 | |||||||||||||
2011 Plan stock options(2) | $ | 14,336 | $ | 0 | $ | 14,336 | N/A | $ | 57,344 | $ | 57,344 | |||||||||||||
Total | $ | 434,462 | $ | 420,126 | $ | 539,302 | N/A | $ | 1,497,446 | $ | 1,497,446 | |||||||||||||
Margery Mayer | ||||||||||||||||||||||||
MSPP(1) | $ | 28,589 | $ | 28,589 | $ | 42,369 | $ | 50,773 | $ | 50,773 | $ | 50,773 | ||||||||||||
2001 Plan restricted stock units(3) | $ | 0 | $ | 0 | $ | 0 | $ | 211,680 | $ | 211,680 | $ | 211,680 | ||||||||||||
2001 Plan stock options(2) | $ | 118,880 | $ | 0 | $ | 118,880 | $ | 273,510 | $ | 273,510 | $ | 273,510 | ||||||||||||
2011 Plan restricted stock units(4) | $ | 0 | $ | 0 | $ | 0 | $ | 169,011 | $ | 169,011 | $ | 169,011 | ||||||||||||
2011 Plan stock options(2) | $ | 7,719 | $ | 0 | $ | 7,719 | $ | 30,877 | $ | 30,877 | $ | 30,877 | ||||||||||||
Total | $ | 155,188 | $ | 28,589 | $ | 168,968 | $ | 735,851 | $ | 735,851 | $ | 735,851 | ||||||||||||
Judith Newman | ||||||||||||||||||||||||
MSPP(1) | $ | 161,056 | $ | 161,056 | $ | 161,056 | $ | 216,307 | $ | 216,307 | $ | 216,307 | ||||||||||||
2001 Plan restricted stock units(3) | $ | 232,848 | $ | 232,848 | $ | 232,848 | $ | 444,528 | $ | 444,528 | $ | 444,528 | ||||||||||||
2001 Plan stock options(2) | $ | 118,440 | $ | 0 | $ | 118,440 | $ | 177,880 | $ | 177,880 | $ | 177,880 | ||||||||||||
2011 Plan restricted stock units(4) | $ | 0 | $ | 0 | $ | 0 | $ | 169,011 | $ | 169,011 | $ | 169,011 | ||||||||||||
2011 Plan stock options(2) | $ | 7,719 | $ | 0 | $ | 7,719 | $ | 30,877 | $ | 30,877 | $ | 30,877 | ||||||||||||
Total | $ | 520,063 | $ | 393,904 | $ | 520,063 | $ | 1,038,603 | $ | 1,038,603 | $ | 1,038,603 | ||||||||||||
Andrew S. Hedden | ||||||||||||||||||||||||
MSPP(1) | $ | 702,498 | $ | 702,498 | $ | 894,275 | $ | 1,004,703 | $ | 1,172,495 | $ | 1,172,495 | ||||||||||||
2001 Plan restricted stock units(3) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 128,520 | $ | 128,520 | ||||||||||||
2001 Plan stock options(2) | $ | 1,069,150 | $ | 0 | $ | 1,069,150 | $ | 1,032,000 | $ | 1,106,300 | $ | 1,106,300 | ||||||||||||
2011 Plan restricted stock units(4) | $ | 0 | $ | 0 | $ | 0 | $ | N/A | $ | 169,011 | $ | 169,011 | ||||||||||||
2011 Plan stock options(2) | $ | 7,719 | $ | 0 | $ | 7,719 | $ | N/A | $ | 30,877 | $ | 30,877 | ||||||||||||
Total | $ | 1,779,367 | $ | 702,498 | $ | 1,971,144 | $ | 2,036,703 | $ | 2,607,203 | $ | 2,607,203 |
(1) | All amounts represent the payout of the restricted stock units held under the MSPP based on the closing price of the Company’s Common Stock on May 31, |
32 |
$30.24 and the lesser of purchase price of the remaining unvested restricted stock | ||
(2) | Under the terms of the 2001 Plan, the 2011 Plan and the Class A Plan, in the event of a merger or consolidation or other change-in-control, the HRCC has the ability to accelerate the vesting of unvested stock options. Accordingly, as noted under |
(3) | All amounts represent the payout of the restricted stock units held under the 2001 Plan based on the closing price of the Company’s Common Stock on May 31, | |
(4) | All amounts represent the payout of the restricted stock units held under the 2011 Plan based on the closing price of the Company’s Common Stock on May 31, | |
(5) | 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. |
33 |
EQUITY COMPENSATION PLAN INFORMATION
The following table presents information regarding the Company’s equity compensation plans at May 31, 2012.2013.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Category |
| Number of securities to |
| Weighted average |
| Number of securities |
| |||||||||
Equity Compensation plans approved by security holders Common Stock |
|
|
| 3,449,075 |
|
|
| $ | 28.68 |
|
|
|
| 2,375,423 | (1) |
|
Class A Stock |
|
|
| 1,499,000 |
|
|
| $ | 32.02 |
|
|
|
| 0 |
|
|
Equity Compensation plans not approved by security holders Common Stock |
|
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
Class A Stock |
|
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
Total |
|
|
| 4,948,075 |
|
|
| $ | 29.69 |
|
|
|
| 2,375,423 |
|
|
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 | 2,686,480 | $28.07 | 2,211,126 | (1) | ||||||||
Class A Stock | 1,499,000 | $32.02 | — | |||||||||
Equity Compensation plans not approved by security holders | ||||||||||||
Common Stock | — | — | — | |||||||||
Class A Stock | — | — | — | |||||||||
Total | 4,185,480 | $29.49 | 2,211,126 | |||||||||
(1) | |
| Includes |
The HRCC adopted the Scholastic Corporation Senior Management Stock Ownership Guidelines (the “Stock Ownership Guidelines”) in 2002. The Stock Ownership Guidelines require certain members of senior management, including the Named Executive Officers, to maintain certain specified ownership levels of the Common Stock of the Company, based on a multiple of annual base salary, exclusive of bonuses or other forms of special compensation. The multiple applicable to the Chief Executive Officer is three times annual base salary and the multiple applicable to the other Named Executive Officers is two times annual base salary. The Stock Ownership Guidelines originally provided that, with respect to each person subject to them, they would be phased in over a five year period, which was subsequently extended to six years by the HRCC. For purposes of determining compliance with the Stock Ownership Guidelines, Common Stock includes all Common Stock and securities based on the value of Common Stock acquired through participation in any of the Company’s incentive, retirement or stock purchase plans, but excluding options to purchase Common Stock. At May 31, 2012,2013, all of the Named Executive Officers who were not within the current six year phase-in period were in compliance with the stock ownership level specified under the Stock Ownership Guidelines with the exception of Ms. Newman, who was at approximately 92% of her required level of ownership.Guidelines.
34 |
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 eleven directors.
The Board has nominated the eleven persons listed below under the sections captioned “Nominees for Election by Holders of Class A Stock” and “Nominees for Election by Holders of Common Stock” for 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.
Proxies are solicited in favor of the eight nominees to be elected by the Class A Stockholders and the three 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 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 the Common Stock vote FOR each of the three nominees for election by such holders.Assuming the presence of a quorum, the affirmative vote of a plurality of the votes cast by the holders of the Common Stock present and entitled to vote on this item at the Annual Meeting is required to elect each of the nominees.
35 |
Nominees for Election by Holders of Class A Stock
|
|
|
|
Name | Principal Occupation or Employment | Age | Director |
Richard Robinson | Chairman of the Board, President and Chief Executive Officer of the Company | 75 | 1971 |
| |||
John L. Davies | Private Investor, Washington D.C. | 62 | 2000 |
| |||
Andrew S. Hedden | Executive Vice President, General Counsel and Secretary of the Company | 71 | 1991 |
| |||
Mae C. Jemison | President and Founder, The Jemison Group, Inc., Houston, TX | 55 | 1993 |
| |||
Peter M. Mayer | President, The Overlook Press/Peter Mayer Publishers, Inc., New York, NY | 76 | 1999 |
| |||
Augustus K. Oliver | Managing Member, Oliver Press Partners, LLC, New York, NY | 62 | 1995 |
| |||
Richard M. Spaulding | Former Executive Vice President of the Company | 75 | 1974 |
| |||
Margaret A. Williams | Partner, Griffin Williams LLC, Washington, D.C. | 57 | 2010 |
|
|
|
|
|
| ||
|
|
|
|
Name | Principal Occupation or Employment | Age | Director |
James W. Barge | Executive Vice President, Chief Financial Officer, | 57 | 2007 |
| Viacom Inc., New York, NY |
|
|
| |||
Marianne Caponnetto | Founder, MCW Group, Inc., Bedford, NY | 61 | 2010 |
| |||
John G. McDonald | The Stanford Investors Professor, |
|
|
| Graduate School of Business, Stanford University, Palo Alto, CA | 75 | 1985 |
Name | Principal Occupation or Employment | Age | Director Since* | |
Richard Robinson | Chairman of the Board, President and Chief Executive Officer of the Company | 76 | 1971 | |
Andrew S. Hedden | Executive Vice President, General Counsel and Secretary of the Company | 72 | 1991 | |
Mae C. Jemison | President and Founder, The Jemison Group, Inc., Houston, TX | 56 | 1993 | |
Peter M. Mayer | President, The Overlook Press/Peter Mayer Publishers, Inc., New York, NY | 77 | 1999 | |
John G. McDonald | The Stanford Investors Professor, Graduate School of Business, Stanford University, Palo Alto, CA | 76 | 1985 | |
Augustus K. Oliver | Managing Member, Oliver Press Partners, LLC, New York, NY | 63 | 1995 | |
Richard M. Spaulding | Former Executive Vice President of the Company | 76 | 1974 | |
Margaret A. Williams | Partner, Griffin Williams LLC, Washington, D.C. | 58 | 2010 |
Nominees for Election by Holders of Common Stock
Name | Principal Occupation or Employment | Age | Director Since* | |
James W. Barge | Independent Financial Consultant, Greenwich, CT | 58 | 2007 | |
Marianne Caponnetto | Founder, MCW Group, Inc., Bedford, NY | 62 | 2010 | |
John L. Davies | Private Investor, Washington D.C. | 63 | 2000 |
* | |
| The dates set forth above indicate the date such director was elected as a director of the Company or its predecessor entity. |
Richard RobinsonRobinson.. 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.
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. He was also a director of Tickets.com Inc. until March 2005 when it became a private company.
Andrew S. HeddenHedden.. In December 2008, Mr. Hedden joined the Company as its Executive Vice President, General Counsel and Secretary. Mr. Hedden was a partner of the law firm of Baker & McKenzie LLP from 2005 to November 2008, having previously been a partner with the law firm of Coudert Brothers LLP from 1975 to 2005.
Mae C. JemisonJemison.. Dr. Jemison is a physician and the President of The Jemison Group, a technology consulting company, and chair and founder of the Dorothy Jemison Foundation for Excellence, as well as the founder of Biosentient Corporation.Excellence. Dr. Jemison is currently leading the initiative 100 Year Starship seed-funded by DARP4 to paveensure the wayscientific, technological and societal capabilities for human interstellar flight. Also,travel to another star system exists within the next 100 years. 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 memberthe first
36 |
woman of color in the world in space aboard Space Shuttle Endeavour Flight in September 1992. She is a director and a member of the Nominating and Corporate Governance Committee and the Management Development and Compensation Committee of Kimberly-Clark Corporation, a director and a member of the AuditCompensation Committee of Valspar Corporation and, from 2004 to 2007, was also a board member of Gen-Probe Incorporated. Dr. Jemison is a member of the National Academy of SciencesSciences’ Institute of Medicine, a member of the Morehouse College Board of Trustees, a member of the Texas Medical Center Board of Directors and a member of the Greater Houston Partnership Board, an organization formed for the purpose of stimulating the local Houston economy. Also, Dr. Jemison was an official US Public Delegate to the 55th United Nations Commission on the Status of Women.
Peter M. MayerMayer.. 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.
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 Plum Creek Timber Co., iStar Financial, Inc., QuinStreet, Inc. and, until December 2012, thirteen mutual funds managed by Capital Research and Management Co. (CRMC, the America Funds). Professor McDonald chaired the Proxy Committee at CRMC from 1993 to 2010, voting proxies of mutual fund portfolio companies. From 1999 to May 2010, he was a director of Varian, Inc., which was acquired by Agilent Technologies Inc. in May 2010. Professor McDonald has informed the Company that he does not intend to stand for reelection at the 2014 annual meeting of stockholders.
Augustus K. OliverOliver.. 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. and the Phoenix Companies,
Inc. He was a director of Emageon, Inc. until April 4, 2009, when it became a private company.company, a director of Comverse Technology Inc. until January 4, 2013, when it merged with Verint Systems Inc., and a director of Verint Systems Inc. until February 4, 2013.
Richard M. SpauldingSpaulding.. Mr. Spaulding retired from Scholastic in fiscal 2008 and held various executive management positions with the Company since joining in 1960, including as Executive Vice President from 1974 to 2004.
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Margaret A. WilliamsWilliams.. Ms. Williams is a founding partner and founder ofin Griffin Williams, LLC, a management consulting firm established in 2005. The firmthat helps public and private clients navigate challenges dealing withchange, transition change and communication. From 2001-2004, she managedchallenging communications environments. Ms. Williams currently serves on the board of the Clinton Foundation, includingGlobal Initiative (CGI). She is an advisory board member of the launchInstitute of its signature HIV/AIDS initiative.Politics at Harvard University and the Eli J. Segal Citizen Leadership Program at Brandeis University. She is a Trustee at the Rhode Island School of Design and a U.S. Commissioner to UNESCO. Previously, Ms. Williams has held severalserved as the director of communications management positions including Director of Communicationsfor the Children’s Defense Fund; media relations manager for the Center on Budget and Policy PrioritiesPriorities; president of Fenton Communications; and chief of staff to former President Bill Clinton at the Children’s Defense Fund.Clinton Foundation. From 1993-97,1993-1997, Ms. Williams served concurrently as an Assistantassistant to the President Clinton and Chief of Staff to First Lady Hillary Clinton. She is a trusteeClinton, becoming the first person to hold both positions concurrently. Ms. Williams received her MA from the Annenberg School for Communication at the University of the Rhode Island School of DesignPennsylvania and a Director of the Clinton Foundation HIV/AIDS Initiative (CHAI), and,BA from 2000 to 2007, she was a director of Delta Financial Corp.Trinity College in Washington DC.
James W. BargeBarge..From October 2010 until November 2012, Mr. Barge servesserved as the Executive Vice President, Chief Financial Officer of Viacom Inc., a position he was appointed to in October 2010, having served as its Executive Vice President, Controller, Tax and Treasury since January 2008. He was the Senior Vice President, Controller and Chief Accounting Officer of Time Warner Inc. 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 Advisory Council for the SEC Institute, as well as a Distinguished Practitioner Lecturer for the Terry College of Business at the University of Georgia.
Marianne CaponnettoCaponnetto.. As Founder and President of MCW Group, Inc., Ms. Caponnetto acts as a Strategic Advisor, Consultant and Board member for a diverse group of companies with a focus on start-ups and organizations with significant transformational and growth objectives. She works with a range of technology start-ups, Fortune 500 and Venture Capital Firmsventure capital firms in B2B and B2C businesses. From 2006-2006 to 2008, Ms. Caponnetto was the Chief Sales and Marketing Officer at DoubleClick, Inc., an online advertising technology company acquired by Google Inc. in 2008. From 1994 to 2005, she held several marketing, digital and sales management roles at IBM, ultimately as Vice President, Global Media and Entertainment Industry. Prior to IBM, she led Strategic and Corporate Marketing for Dow Jones & Co., after a successful career in the advertising agency business. Ms. Caponnetto has served on digital technology, media and advertising industry boards, and is active on several private and non-profit company boards. Ms. Caponnetto is a graduate of the University of California, Berkeley.
John G. McDonaldL. Davies.. Professor McDonaldMr. Davies is a private investor. Mr. Davies retired from AOL in 2002, which he had joined the faculty of Stanford University Graduate School of Business,in 1993 as Senior Vice President. In 1994, he founded AOL International, where he is The Stanford Investors Professor,served as President until becoming Senior Advisor in 1968. Professor McDonald serves on the Boards of Directors of Plum Creek Timber Co., iStar Financial, Inc., QuinStreet, Inc. and thirteen mutual funds managed by Capital Research and Management Co. From 1999 to May 2010, he2000. He was also a director of Varian,Tickets.com Inc., which was acquired by Agilent Technologies Inc. in May 2010. until March 2005 when it became a private company.
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The Board and the Nominating and Governance Committee believe that the diverse backgrounds and experience of the current members of the Board, as described below, combine to provide the Company with the perspectives and judgment needed to provide the necessary guidance and oversight of the Company’s business and strategies. The qualifications of the members of the Board include:
Richard Robinson
Andrew S. Hedden
Mae C. Jemison, M.D.
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Peter M. Mayer
John G. McDonald
Augustus K. Oliver
Richard M. Spaulding
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Margaret A. Williams
James W. Barge
Marianne Caponnetto
John L. Davies
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Board Leadership Structure and Risk Oversight
The Board of Directors has adopted a structure whereby the Chief Executive Officer and principal stockholder of the Company, Mr. Richard Robinson, is the Chairman of the Board. The Board believes that having Mr. Robinson as Chairman provides strong leadership for the Board and critical thinking with respect to the Company’s strategy and performance and helps ensure that shareholder interests are well represented during Board deliberations. The Board considers the Chief Executive Officer’s participation to be important to make information and insight about the Company’s business and its operations directly available to the directors in their deliberations. In the context of this structure, the Board has also approved the formal designation of a Lead Independent Director, as discussed under “Lead Independent Director” below.
The Board believes that risk oversight is the responsibility of the Board as a whole and not of any one of its committees. The Board periodically reviews the processes established by management to identify and manage risks, communicates with management about these processes and receives regular reports from each of its committees concerning, among other things, risks arising within their areas of responsibility. To facilitate the Board’s risk oversight, the Board has delegated certain functions (including the oversight of risks related to these functions) to various Board committees. The Audit Committee generally evaluates the risks related to the Company’s financial reporting process and oversees the Company’s general risk management processes. The Human Resources and Compensation Committee evaluates the risks presented by the Company’s compensation programs and takes into account these risks when making compensation decisions. The Nominating and Governance Committee evaluates whether the Board has the requisite core competencies to respond to the risks that the Company faces. The roles and responsibilities of these committees are discussed in more detail below. Although the Board has delegated certain functions to various committees, each of these committees regularly reports to and solicits input from the full Board regarding its activities.
Meetings of the Board and its Committees
Five regular meetings of the Board were held during the 20122013 fiscal year. All incumbent directors attended 75% or more of the aggregate of such meetings and of the meetings held during the 20122013 fiscal year by all standing committees of the Board of which they were a member.
The Board currently has six standing committees: Audit; Executive; Human Resources and Compensation; Nominating and Governance; Retirement Plan; and Strategic Planning, as the duties of the Stock Grant Committee were merged into the Human Resources and Compensation Committee during the 2012 fiscal year.Planning. All members of the Audit, Human Resources and Compensation and Nominating and Governance Committees are independent directors, as defined under NASDAQ listing standards. All committee
members are appointed by the Board on an annual basis each September. Each committee operates under a written charter establishing its roles and
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responsibilities, which can be found in the Investor Relations section of the Company’s website, investor.scholastic.com.investor.scholastic.com, and regularly reports to the Board on its deliberations and actions, which are also submitted to the Board for ratification as appropriate. The duties and responsibilities of all the Board committees are reviewed regularly and are outlined below.
Executive CommitteeCommittee.. 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. One meetingNo meetings of the Executive Committee waswere held during the fiscal year ended May 31, 2012.2013.
Audit CommitteeCommittee.. Augustus K. Oliver (Chairperson), James W. Barge and John L. Davies 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 and Mr. Barge qualify as designated financial experts based upon their business and professional experience as described previously in this proxy statement. The Audit 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. The Audit Committee also 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 and 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. Commencing June 1, 2013, the Company fully outsourced the internal audit function to Pricewaterhouse Coopers LLP, which now provides the Company’s internal audit team and reports directly to the Audit Committee. The Audit Committee periodically reviews and approves all “related party transactions,” as defined in SEC regulations. The Audit Committee held four meetings during the fiscal year ended May 31, 2012.2013.
Human Resources and Compensation CommitteeCommittee.. John L. Davies (Chairperson), Marianne Caponnetto, Peter M. Mayer and John G. McDonald are the current members of the Human Resources and Compensation Committee. Each member of the Human Resources and Compensation Committee (“HRCC”) is independent, as defined under the current applicable NASDAQ listing standards, and also meets 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. For a description of the duties and responsibilities of this committee, see “Corporate Governance-HRCC Procedures” below.below, which includes a
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discussion of the actions taken by the HRCC in fiscal 2013 with respect to certain new NASDAQ rules relating to compensation committees. The HRCC held sixfive meetings during the
fiscal year ended May 31, 2012. As indicated above, at the September 2011 meeting of the Board of Directors, the duties of the Stock Grant Committee were merged into the duties of the HRCC, effective as of September 21, 2011.2013.
Nominating and Governance CommitteeCommittee.. James W. Barge (Chairperson), Mae C. Jemison and Richard M. Spaulding are the current members of the Nominating and Governance Committee. Each member of the Nominating and Governance Committee is independent, as defined under NASDAQ listing standards. The Nominating and Governance Committee identifies and recommends to the Board candidates for election as directors and recommends any changes it believes desirable in the size and composition of the Board as well as Board committee structure and membership. The Nominating and Governance 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, the Nominating and Governance Committee oversees the Board self-assessment process. The Nominating and Governance Committee held threetwo meetings during the fiscal year ended May 31, 2012.2013.
Retirement Plan CommitteeCommittee.. Richard M. Spaulding (Chairperson), Andrew S. Hedden, Mae Jemison and John G. McDonald are the current members of the Retirement Plan Committee. The Retirement Plan 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. The Retirement Plan Committee also oversees the Administrative Committee, comprised of Company employees who are responsible for the day-to-day administration of the Plans, and approves the appointment of one or more trustees, or other professionals, necessary for the proper administration and operation of the Plans. Furthermore, the Retirement Plan 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, in terms of the Company and competitively within the publishing industry, as well as the investment performance under the Plans. The Retirement Plan Committee held two meetings during the fiscal year ended May 31, 2012.2013.
Strategic Planning CommitteeCommittee.. Mae C. Jemison (Chairperson), Marianne Caponnetto, Peter M. Mayer, Augustus K. Oliver, Richard M. Spaulding and Margaret A. Williams are the current members of the Strategic Planning Committee. The Strategic Planning Committee advises the Company’s management on achievingimplementing and implementingachieving its strategic plan, and reportsfocusing at its findingsmeetings on selected topics or areas of strategic concern to the Board.Company. The Strategic Planning Committee held three meetingsone meeting during the fiscal year ended May 31, 2012.2013.
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As part of the Company’s corporate governance practices, the Board has adopted the Scholastic Corporation Corporate Governance Guidelines, which are summarized below. The full text of the Company’s Corporate Governance Guidelines is available in the Investor Relations section of the Company’s website, investor.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 DirectorsDirectors.. Scholastic’s Corporate Governance Guidelines provide for a board of ten to fifteen directors and 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 and Mr. Hedden, who are executive officers of the Company.
Lead Independent DirectorDirector.. In May 2010, the Board of Directors amended the Company’s Corporate Governance Guidelines to formally provide for a Lead Independent Director. At its May 2010 meeting, it was determined by the Board, upon recommendation of the Nominating and Governance Committee, that this process be formalized and provide for a Lead Independent Director in the Corporate Governance Guidelines, in view of the Company’s practice of combining the Chairman and Chief Executive Officer positions. Since the practice of holding executive sessions of the independent directors began, Mr. Oliver, at the request of the independent directors, had chaired the meetings and acted as the liaison between the independent directors and the Chairman and Chief Executive Officer, effectively fulfilling the role of a lead independent director. At the May 2010 Board meeting, the independent directors formally appointed Mr. Oliver as the Lead Independent Director pursuant to the new policy. The Board believes that, as the Chair of the Company’s Audit Committee and with his thorough understanding of the Company, Mr. Oliver is well-suited to lead the independent sessions of the Board in his capacity as Lead Independent Director. As described in the Company’s Corporate Governance Guidelines, the Lead Independent Director presides at executive sessions of the Board involving only the independent directors and serves as the liaison between the Chairman and Chief Executive Officer and the independent directors (unless the matter under consideration is within the jurisdiction of one of the Board’s committees). Among other matters, the independent directors, meeting in executive session, consider items they would like included in future Board agendas, the flow
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of information to directors, relevant Board corporate governance matters and any other topics
or issues which any of the independent directors desires to raise in executive session. The Lead Independent Director is responsible for advising the Chairman and Chief Executive Officer of decisions reached or suggestions made at executive sessions.
Communication with the BoardBoard.. 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 ProcessProcess.. The Nominating and Governance Committee periodically reviews with the Board the requisite skills, competencies and characteristics of new directors, 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 relevant business experience, as well as their appreciation of the Company’s mission, values and credo. In particular, the Board focuses on identifying the potential contribution any candidate can make to the diversity of backgrounds, experience and competencies which it desires to have represented on the Board. The Nominating and Governance Committee does not believe it is currently necessary or appropriate to adopt specific, minimum objective criteria for new 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 20132014 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 Corporate Governance Guidelines using the same criteria that it uses to select directors for non-stockholder nominees. The Nominating and Governance Committee also considers such other relevant factors as it deems appropriate, including the balance of independent and non-independent directors, the need for Audit Committee or other relevant expertise, and the qualifications of other potential nominees. Although there is no specific policy regarding diversity, the Nominating and Governance Committee seeks to achieve diversification in the qualifications of nominees, such as different types of business or academic experience or expertise in different industries, professions and geographic areas.
At its July 2013 meeting, the Nominating and Governance Committee, in the course of determining its recommendations for the nominees to be presented for election at the Annual Meeting, also generally discussed the overall composition of the Board, including the
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current composition of the Board members in terms of age and length of tenure, and determined that, during fiscal 2014, it would work with the Chairman and Chief Executive Officer to assess the current Board composition, particularly with respect to the relative ages and length of tenure of the current Board members.
Board Meetings and Executive SessionsSessions.. 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. As previously discussed, the Board regularly meets in executive session with only the independent directors present, and Mr. Oliver presides over those sessions as Lead Independent Director.
Director Attendance at Company Annual MeetingsMeetings.. All directors are encouraged to attend the Company’s annual meetings of stockholders. All of the Company’s directors, with the exception of Dr. Jemison, attended the annual meeting of stockholders held on September 21, 2011.19, 2012.
Annual Self-AssessmentSelf-Assessment.. The Board makes an annual self-assessment of performance with a particular focus on key metrics related to Board performance and overall effectiveness. The Nominating and Governance Committee is responsible for overseeing the self-assessment process.
Access to Management and AdvisorsAdvisors.. 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 DirectorsDirectors.. Directors are encouraged to own Company stock in an amount that is appropriate for them, although the Company does not currently have any formal equity ownership requirements for members of the Board of Directors.
Scholastic Code of Ethics and Code of Ethics for Senior Financial OfficersOfficers.. 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
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Ethics and the Code of Ethics for Senior Financial Officers are available in the Investor Relations section of the Company’s website, investor.scholastic.com. Additionally, these documents are available in print to any stockholder requesting a copy.
HRCC ProceduresProcedures.. 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 reviewdeal generally with compensation matters, including reviewing regulatory developments that may impact the Company’s compensation arrangements and to considerconsidering amendments or modifications to compensation and benefit plans. At its regular meeting in July of each year, the HRCC reviews the Company’s financial and operating results
for the most recent fiscal 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 such year have been satisfied and, if so, considers and approves the actual amounts of any such payouts. Also, at that meeting the HRCC customarily determines the participants in the EPIP and establishes performance criteria for annual bonuses to be awarded under the MIP and EPIP for the current fiscal year. At its regular meeting in September, the HRCC customarily considers and approves any changes in base salary of senior executive officers.
Under the Company’s currentrecent practice, equity-based compensation awards under the Company’s stock incentive plans then in effect are typically made each year at the scheduled July or September meeting of the HRCC, (or, in the past, the SGC), which occurs shortly before the announcement of the Company’s earnings for its fiscal year or first fiscal quarter. For fiscal 2012, the grant of equity-based compensation awards was made at a special meeting of the HRCC held in October 2011. Except in limited circumstances, the HRCC does not generally grant equity awards to Named Executive Officers at other times during a given year and, in such cases, the grants would normally be made by the HRCC at one of its other regularly scheduled meetings. However, during fiscal 2013, no equity-based compensation awards were made to the Named Executive Officers, and the only equity-based compensation awards made were pursuant to contractual obligations or agreements with newly-hired personnel.
All equity awards are made at fair market value on the date of grant, which is no earlier than the date on which the HRCC approves the grant. Under the 2001 Plan and the 2011 Plan, fair market value is deemed to be the average of the high and low market prices of the Common Stock 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 forgoing practices are conducted with the assistance of the Company’s Human Resources Department.Department and, as requested, input from the compensation consultants retained by the HRCC from time to time.
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The HRCC has the authority and discretion to retain such 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 current executive
At its March 2013 meeting, the HRCC adopted a revised charter pursuant to new NASDAQ rules issued pursuant to the Dodd-Frank Act which, among other matters, set forth enhanced independence standards for compensation consultants,committee members and certain committee responsibilities and authority, including the requirement that the committee consider the independence of persons retained by the committee to provide advice to the committee. At the meeting, the HRCC reviewed certain factors included in the revised charter relevant to considering the independence of the compensation consultant currently retained by the HRCC, Pay Governance LLC. After consideration of these independence factors and review of their application to Pay Governance LLC, performthe HRCC unanimously determined that Pay Governance LLC qualified as an “independent” compensation consultant and approved the continued retention of Pay Governance LLC as the HRCC’s independent compensation consultant. Pay Governance LLC performs no services for the Company other than to the HRCC in relation to compensation matters.
Procedures for Approval of Related Person TransactionsTransactions.. 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 & McKenzie LLP, a law firm of which Andrew S. Hedden, a director and executive officer of the Company, was a partner prior to joining the Company. The use of Baker & McKenzie for legal services is periodically presented to the Audit Committee for its consideration and approval. The Company’s Code of Ethics, which was revised in fiscal 2013 and is posted on investor.scholastic.com, sets forth standards applicable to all employees, officers and directors of the Company, and 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 would be disclosed on the Company’s website, investor.scholastic.com, or on a Current Report on Form 8-K filed with the SEC.
Director Compensation
During the 20122013 fiscal year, for the period from June 1, 2011 until September 30, 2011 each non-employee director of the Company (an “Outside Director”) was paid a cash annual retainer at the rate of $40,000$75,000 for his or her services as a director, an annual fee at the rate of $5,000 if he or she was the chairperson of a standing committee of theincluding service on Board or $10,000 in the case of the chairpersons of the Audit Committeecommittees, and the HRCC, and an attendance fee of $1,500 for attendance at each Board or committee meeting, whether in person or telephonically. For the period from October 1, 2011 through May 31, 2012, each Outside Director was paid a cash annual retainer at the rate of $75,000 for his or her services as a director, an annual fee at the rate of $5,000 if he or she was the chairperson of a standing committee of the Board, or $15,000 in the case of each of the chairpersons of the Audit Committee and the HRCC and the Company ceased to pay meeting fees at that time.Committees.
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In addition, underpursuant to the terms of the Amended and Restated Scholastic Corporation 2007 Outside Directors Stock Incentive Plan (the “Amended Directors’ Plan”), as approved by the Class A Stockholders at the Company’s 2007 Annual Meeting2012 annual meeting of Stockholders,stockholders, which provides for annual equity awards to Outside Directors on the date of each annual meeting of stockholders, the Board determined that, for the fiscal year of the Company beginning June 1, 2012, stock options and restricted stock units would be awarded to purchase 3,000 shareseach Outside Director having a combined value of Common Stock at$70,000, with sixty percent (60%) of such value to be awarded as restricted stock units and forty percent (40%) of such value to be awarded as stock options. Under the Amended Directors’ Plan, the fair value of the stock options was determined based upon the Black-Scholes model of calculating the fair value of a purchasestock option, including the use of the exercise price per share equal to the fair market value of a share of Common Stock on the date of grant and 1,200 restricted stock units are automatically granted each year to each Outside Director onSeptember 19, 2012, the date of the 2012 annual meeting of stockholders. In fiscal 2012, each Outside Director was granted options to purchase 3,000 sharesstockholders, and the fair value of Common Stock, at an exercise price of $26.73 per share, and 1,200 restricted stock units. The stock options become fully exercisable and the restricted stock units fullywas based upon the fair market value of a share of Common Stock on the same date. Pursuant to the terms of the Amended Directors’ Plan, the stock options and restricted stock units vest on the earlier of the first anniversary of the date of grant or the next annual meeting of stockholders following the date of grant. Accordingly, with regard to the grant of stock options and restricted stock units on September 19, 2012, the entire grant vests on September 18, 2013. The stock options expire on September 21, 2021. In July 2012, the Board approved the Amended and Restated Scholastic Corporation 2007 Outside Directors Stock Incentive Plan as described below under “Proposal 2: Approval of the Amended and Restated Scholastic Corporation 2007 Outside Directors Stock Incentive Plan”.19, 2022.
Under the terms of the Scholastic Corporation Directors’ Deferred Compensation Plan, directors are permitted to defer 50% or 100% of their cash retainers and meetingother 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. During the fiscal year ended May 31, 2012,2013, one director chose to defer 100% of his cash compensation under this plan. Interest expense accrued during fiscal 20122013 on amounts deferred under thisthe plan was $4,528.$6,276.
The following table summarizes the total compensation provided by the Company to the Outside Directors for the fiscal year ended May 31, 2012.2013.
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Fiscal Year 2012 |
|
| Fees Earned |
|
| Stock |
|
| Option |
|
| Change in |
|
| All Other |
|
| Total |
|
James W. Barge |
|
| $71,500 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
|
|
|
| $129,316 |
|
Marianne Caponnetto |
|
| $66,500 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
|
|
|
| $124,316 |
|
John L. Davies |
|
| $84,500 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
|
|
|
| $142,316 |
|
Mae C. Jemison |
|
| $70,000 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
|
|
|
| $127,816 |
|
Peter M. Mayer |
|
| $68,000 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
|
|
|
| $125,816 |
|
John G. McDonald |
|
| $66,500 |
|
| $32,076 |
|
| $25,740 |
|
| $4,528 |
|
|
|
|
| $128,844 |
|
Augustus K. Oliver |
|
| $78,500 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
|
|
|
| $136,316 |
|
Richard M. Spaulding(5) |
|
| $70,000 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
| $21,000 |
|
| $148,816 |
|
Margaret Williams |
|
| $62,000 |
|
| $32,076 |
|
| $25,740 |
|
|
|
|
|
|
|
| $119,816 |
|
Fiscal Year 2013 Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | Option Awards(3) ($) | Change in Pension Values and Non-qualified Deferred Compensation Earnings(4) ($) | All Other Compensation ($) | Total ($) |
James W. Barge | $80,000 | $41,971 | $28,029 | $0 | $0 | $150,000 |
Marianne Caponnetto | $75,000 | $41,971 | $28,029 | $0 | $0 | $145,000 |
John L. Davies | $90,000 | $41,971 | $28,029 | $0 | $0 | $160,000 |
Mae C. Jemison | $80,000 | $41,971 | $28,029 | $0 | $0 | $150,000 |
Peter M. Mayer | $75,000 | $41,971 | $28,029 | $0 | $0 | $145,000 |
John G. McDonald | $75,000 | $41,971 | $28,029 | $6,276 | $0 | $151,276 |
Augustus K. Oliver | $90,000 | $41,971 | $28,029 | $0 | $0 | $160,000 |
Richard M. Spaulding(5) | $80,000 | $41,971 | $28,029 | $0 | $13,000 | $163,000 |
Margaret Williams | $75,000 | $41,971 | $28,029 | $0 | $0 | $145,000 |
(1) | Richard Robinson, the Company’s Chairman, President and Chief Executive Officer, and Andrew S. Hedden, Executive Vice President and General Counsel, do not receive compensation for their service as a director. |
(2) | Represents the aggregate grant date fair value of restricted stock units granted in fiscal 2013 under FASB ASC Topic 718. Assumptions used in determining the FASB ASC Topic 718 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. Each Outside Director had |
(3) | Represents the aggregate grant date fair value of stock options granted in fiscal |
(4) | The amount shown represents the interest accrued on all amounts previously deferred by the director under the Scholastic Corporation Directors’ Deferred Compensation Plan. |
(5) | The amount shown in the “Other Compensation” column represents compensation received by Mr. Spaulding pursuant to a consulting arrangement that he has with the Company, which was approved by the Audit Committee. |
51 |
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 was 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.
From 2000 to 2007, Margaret A. Williams was a director of Delta Financial Corp., a consumer finance company which filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the District of Delaware in December 2007.
PROPOSAL 2:
2—APPROVAL OF THE AMENDED AND RESTATED SCHOLASTIC CORPORATION 20132007 OUTSIDE DIRECTORS STOCKEXECUTIVE PERFORMANCE INCENTIVE PLAN
The Board upon the recommendation of the HRCC, has unanimously approved and is submitting to the Amended and RestatedClass A Stockholders, for their consideration, the Scholastic Corporation 2007 Outside Directors Stock2013 Executive Performance Incentive Plan. The performance targets contained in the Scholastic Corporation 2008 Executive Performance Incentive Plan (the “Amended Outside Directors Plan”), subjectwere required to be resubmitted for stockholder approval in 2013, and the Company has chosen to incorporate such performance targets in a new plan to be presented in its entirety for approval by the Class A Stockholders at the Annual Meeting.
At its meeting in September 2011, the HRCC conducted a reviewStockholders. The provisions of the Company’s current director compensation practices and the director compensation practices at a group of selected peer companies, including a review of total director compensation and the breakdown of such compensation among cash and equity incentives and the form of such cash and equity compensation. Among other things, the HRCC examined various cash compensation alternatives, including retainer fees for serving on the Board and for serving on Board committees, the use of meeting fees and fees paid2013 EPIP are similar to committee chairpersons in recognitionthose of the additional work involved related to serving2008 EPIP in that capacity. In the contextall material respects.
Description of the equity incentive portion of the compensation of directors, the HRCC reexamined the Company’s practice under the 2007 Outside Directors StockPlan
The Scholastic Corporation 2013 Executive Performance Incentive Plan (the “2007 Plan”“2013 EPIP”)
of awarding an annual grant of a fixed number of stock options and restricted stock units as opposed to an annual grant based on a fixed dollar value of the stock options and restricted stock units the subject of the grant.
As a result of this review, the HRCC recommended, and the Board, if approved at its September 2011 meeting, a change in the cash compensation portion of the annual directors’ compensation to increase the annual Board retainer and the fees paid to the chairpersons of the Audit Committee and the HRCC and to do away with the payment of meeting fees, which changes became effective October 1, 2011 and are referred to above under “Proposal 1: Election of Directors - Director Compensation.” At the same meeting, the HRCC also recommended that the equity incentive portion of director compensation should be changed from a fixed number of shares underlying the annual grant of stock options and restricted stock units to a fixed dollar value, recommending that this dollar value be initially set at $70,000, based on the review discussed above of director compensation practices. The HRCC also recommended that this change in the equity incentive portion of director compensation not be implemented until the date of the 2012 annual meeting of stockholders. At its meeting held on July 17, 2012, the HRCC again reviewed its prior recommendation and recommended to the Board that such recommendation be implemented through the adoption of the Amended Outside Directors Plan, as more fully described below, which recommendation was approved and adopted by the Board at its July 18, 2012 meeting, subject to the approval of the Amended Outside Directors Plan by the Class A Stockholders, will provide for annual incentive payments to selected key employees of the Company and its Affiliates (as defined in the 2013 EPIP) based upon the performance of the Company (including performance at the Annual Meeting.
A copybusiness group, division, operational unit or administrative department level). The 2013 EPIP is intended to include those key employees who would qualify as executive officers subject to Section 162(m) of the Amended Outside Directors PlanInternal Revenue Code (the “Code”) and, accordingly, is included as Appendixlimited to a group of approximately four key employees who meet the relevant criteria at the present time plus
52 |
other executives who may become subject to Section 162(m) of the Code during fiscal 2014 and thereafter.
If approved by the Class A hereto,Stockholders, the 2013 EPIP will replace the 2008 EPIP. No further awards will be made under the 2008 EPIP upon approval of the 2013 EPIP by the Class A Shareholders.
The Company’s compensation programs are based on a pay-for-performance philosophy. A central element of this philosophy is to link the aggregate compensation payable to key employees and the summary below does not purportfinancial performance of the Company generally, as well as the results of the specific business group, division, operational unit or administrative department for which the employee is responsible. The 2013 EPIP is intended to further enhance this direct linkage between performance and compensation for selected key employees of the Company by focusing on overall corporate growth and performance as well as on group, 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 three other most highly compensated executive officers (other than the chief executive officer and principal financial officer). The Company intends to structure awards under the 2013 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 2013 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 the approval of the Class A Stockholders of the 2013 EPIP, including the material terms of the performance goals which may be completeapplicable under the 2013 EPIP.
The Board of Directors recommends approval of the 2013 EPIP. The following description of the 2013 EPIP is a summary and is qualified in its entirety by reference to the text2013 EPIP, a copy of which is attached as Appendix A to this proxy statement.
Plan Administration
The 2013 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 Amended Outside Directors Plan as set forth in Appendix A.
Code. The purposeHRCC, all of the Amended Outside Directors Plan continuesmembers of which currently meet the criteria of “outside director,” will select the key employees of the Company eligible to receive awards under the 2013 EPIP 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.
53 |
Performance Criteria
Participants in the 2013 EPIP will be eligible to receive annual cash performance awards based on attainment by the Company (or a subsidiary, parent or group, 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 (2½) months following the end of the fiscal year with respect to use periodic stock-based incentive awardswhich 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 attract and retain the servicesdefer all or a portion of experienced and knowledgeable Outside Directors, while further aligning their interestsa performance award in a written agreement in accordance with the Company and its stockholders.provisions of the MSPP.
Section 162(m) of the Code requires that performance awards be based upon objective performance measures. Under the Amended Outside Directors Plan, each Outside Director will receive an automatic grant, onterms of the date of each annual meeting of stockholders, of stock options and restricted stock units with a value equal to a fixed dollar amount. Such dollar amount, as well as the allocation of such amount between stock options and restricted stock units,2013 EPIP, performance goals will be determined annually by the Board (or committee designated by the Board) in advancebased on one or more of the grant date. The Boardfollowing criteria with regard to the Company (including any group, business division, operational unit or committee is expectedadministrative department):
(i) 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 (which may be measured without regard to value the stock optionextraordinary 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 annual grant by reference toCompany, subsidiary, parent, group, division, operational unit or administrative department;
(iv) the Black-Scholes option pricing method, utilizingattainment 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 standard Company metrics,foregoing ;
(v) after-tax or similar methods, with the exercise price beingpre-tax profits;
(vi) the fair market value of the Common Stock on the grant date, and to value the restricted stock unit portionshares of the annual grantCompany’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;
54 |
(xi) the fair market valueattainment 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 Common Stock onCompany.
In addition, such performance goals may be based upon the grant date. Each grantattainment of options becomes fully exercisable and each grant of restricted stock units becomes fully vested on the earlierspecified levels of the first anniversaryCompany’s (or a subsidiary, parent or group, division, operational unit or administrative department of the date of grantCompany, subsidiary or the dateparent) performance under one or more of the next annual meetingmeasures described above relative to the performance of stockholders followingother corporations. To the date of grant. Each grant of options has a term
of ten years fromextent permitted under the date of grant, subject to earlier termination as providedCode, 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 Amended Outside Directors Plan. In no eventextent permitted under the Code, the HRCC may such optionsalso designate additional business criteria on which the performance goals may be exercised within six monthsbased or adjust, modify or amend the aforementioned business criteria.
Term and Amendment of the date2013 EPIP
The 2013 EPIP, if approved by the holders of grantthe Class A Stock, will be effective for all fiscal years beginning on and after June 1, 2013. The 2013 EPIP may be amended or after their original ten-year expiration date.
At its meeting on July 18, 2012,discontinued by the Board further approved, subject to theof Directors at any time, except that approval of the Amended Outside Directors Plan by the Class A Stockholders atis also required for an amendment that materially alters the Annual Meeting,business criteria on which performance goals are based, increases the automatic grant, on September 19, 2012,maximum annual measuring factor for deferred amounts, changes the dateclass of the Annual Meeting, of stock options and restricted stock units with a value of $70,000, with 40% of such value to be in the form of options and 60% to be in the form of restricted stock units. At the same meeting, the Board also delegated to the HRCC all of its authority and responsibility as provided in the Amended Outside Directors Plan, including the authority to determine the subsequent automatic annual grants in advance of each annual meeting of stockholders and to administer, amend (subject toeligible employees or otherwise requires stockholder approval when required) and interpret the plan.under Code Section 162(m).
In 2007, under the original 2007 Plan,
Upon approval by the Class A Stockholders, authorized a total of 500,000 shares of Common Stock for issuancethe 2013 EPIP will replace the 2008 EPIP and no further awards will be made under the 2007 Plan upon the exercise of stock options or vesting of restricted stock units to be granted to Outside Directors. Currently, there are nine Outside Directors eligible to participate in the 2007 Plan and 333,800 shares remain available for grants thereunder and, accordingly, will be available for grants under the Amended Outside Directors Plan. The Amended Outside Directors Plan does not increase the number of shares remaining for issuance under the plan.2008 EPIP.
The Amended Outside Directors Plan provides for certain adjustments to be made with respect to outstanding stock options and restricted stock units 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 annual grant of stock options and restricted stock units to 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 restricted stock units and reserved for future grants.
The Amended Outside 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 Amended Outside Directors Plan may be exercised by paying the exercise price in cash or Common Stock, any combination of cash and Common Stock having a value equal to the exercise price through a cashless exercise or pursuant to such other procedures established by the Company and its designated record keeper at the time of exercise.
The Amended Outside Directors Plan will be administered by the HRCC. The administration of the Amended Outside 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 options or restricted stock units granted thereunder and to settle any claims or disputes arising thereunder.
There is no immediate federal income tax effect on the grant of a stock option under the Amended Outside Directors Plan; the Outside Director does not recognize taxable income, and the Company does not receive a tax deduction on the date of the grant. 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 options 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 a restricted stock unit under the Amended Outside Directors Plan. Instead, at the time of vesting of the restricted stock unit, 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 a restricted stock unit, 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.
Income realized by an Outside Director with respect to awards under the Amended Outside Directors Plan2013 EPIP is not subject to any of the deduction limitsrequirements of ERISA nor is it intended to be qualified under Section 162(m) and is fully tax deductible by401(a) of the Company. The Company has no liability for social security or Medicare taxes with respect to income realized by Outside Directors from awards under the Amended Outside Directors Plan and the Company is not required to withhold income tax from such income.Code.
Recommendation
Recommendation
The Board of Directors recommends that the Class A Stockholders vote FOR the approval and adoption of the Amended Outside DirectorsScholastic Corporation 2013 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 Amended Outside Directors Plan.2013 EPIP.
55 |
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee has appointed Ernst & Young LLP (“E&Y”) to be the independent registered public accountants of the Company for the fiscal year ending May 31, 2013.2014. 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 $4,238,000 for fiscal 2013 and $3,981,600 for fiscal 2012 and $4,219,500 for fiscal 2011.2012. The total fees for services provided by E&Y to the Company during the fiscal years ended May 31, 20122013 and May 31, 20112012 are summarized in the table below.
|
|
|
|
|
|
|
| ||||||||
|
| Fiscal 2012 |
| Fiscal 2011 |
| ||||||||||
|
| $ |
| $ |
| Fiscal 2013 $ | Fiscal 2012 $ | ||||||||
Audit Fees |
| $ | 3,195,600 |
| $ | 3,460,000 |
| $ | 2,931,000 | $ | 3,070,600 | ||||
Audit-Related Fees |
| $ | 105,000 |
| $ | 95,000 |
| $ | 805,000 | $ | 230,000 | ||||
Tax Fees |
| $ | 681,000 |
| $ | 664,500 |
| $ | 502,000 | $ | 681,000 | ||||
All Other Fees |
| $ | — |
| $ | — |
| $ | — | $ | — | ||||
TOTAL FEES PAID |
| $ | 3,981,600 |
| $ | 4,219,500 |
| $ | 4,238,000 | $ | 3,981,600 |
Type of Fee paid | Work performed | |||
Audit Fees | Fees related to: | |||
• |
| the annual audit of the consolidated financial statements and internal control over financial reporting | ||
• |
| quarterly financial statement reviews | ||
• |
| work performed with respect to consents related to SEC registration statement filings | ||
• |
| |||
Audit-Related Fees |
| |||
• | benefit plan audits | |||
• | assistance for the response to an SEC comment letter | |||
• | other agreed upon procedures. | |||
• | stand alone audit of a subsidiary | |||
|
| |||
Tax Fees | Fees related to: | |||
• |
| federal, state and international tax compliance | ||
• |
|
|
In fiscal 20122013 and fiscal 2011,2012, in accordance with Section 10A(i) of the Exchange Act, the Audit Committee approved the Audit Fees and also pre-approved all of the Audit-Related services and Tax services provided by E&Y. 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 proposed 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 Audit 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 Audit Committee at its next meeting.
56 |
The Audit Committee has reviewed and discussed the audited consolidated financial statements of the Company for the fiscal year ended May 31, 20122013 with the Company’s
management. The Audit Committee has discussed with E&Y, the Company’s independent public registered accountants, the matters required to be discussed by Statement on Auditing Standards No.no. 61, as adopted by the Public Company Accounting Oversight Board, as modified or supplemented.
The Audit Committee has also received the written disclosures and the letter from E&Y required by Rule 3526 of the Public Company Accounting Oversight Board, 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, 20122013 for filing with the SEC.
Audit Committee | |
| |
Augustus K. Oliver, Chairperson | |
James W. Barge | |
John L. Davies |
STOCKHOLDER PROPOSALS FOR 20132014 ANNUAL MEETING
Stockholders who intend to present proposals for inclusion in the proxy materials regarding the 20132014 Annual Meeting must ensure that such proposals are received by the Secretary of the Company not later than April 9, 20132014 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 20132014 Annual Meeting, but not included in the Company’s proxy materials, such proposal must be received no later than June 24, 2013.23, 2014.
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 | |
Andrew S. Hedden | |
Secretary |
57 |
[This Page Intentionally Left Blank]
SCHOLASTIC CORPORATION 2007 OUTSIDE DIRECTORSSTOCK2013 EXECUTIVE PERFORMANCE INCENTIVE PLAN
Amended and Restated Effective July 18, 2012
1. Purpose | |
|
|
The name of this plan is the Scholastic Corporation 2007 Outside Directors Stock Incentive Plan (the “Plan”).
The purpose of thethis Plan is to attract, retain, and retain the services, for the benefit of Scholastic Corporation, a Delaware corporation (the “Company”), of experienced and knowledgeable directors who are notmotivate key employees by providing annual cash performance awards to designated key employees of the Company (the “Outside Directors”) and its Affiliates. This Plan is intended to provide an additional incentive forestablish a clear link between performance and the level of awards paid to such Outside Directors through ownershipdesignated key employees with a focus on overall corporate growth and performance as well as on group, divisional or unit growth and performance. This Plan is effective as of July 17, 2013, subject to approval by the common stock, par value $.01 per share,stockholders of the Company (the “Common Stock”).
|
|
The board of directorsentitled to vote thereon in accordance with the laws of the Company (the “Board”)State of Delaware.
2. Definitions
Unless the context otherwise requires, the words which follow shall determinehave the amount and form of compensation to be paid to Outside Directors for serving asfollowing meaning:
(a) “Affiliate”—shall mean each corporation that is a member of the Board. The compensationCompany’s affiliated group, within the meaning of Code Section 1504 (without regard to be paidCode 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 stock options or “Restricted Stock Units” (as hereinafter defined)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 be determinednot 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.
A-1 |
(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 from timeall 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 hereof.
(j) “Participant”—shall mean an employee of the Company or any of its Affiliates selected, in accordance with Section 4 hereof, to time. Forbe 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 2013 Executive Performance Incentive Plan.
(m) “Plan Year”—shall mean the fiscal year of the Company beginning June 1, 2012, the Board has determined that it will award stock optionsCompany.
3.Administration and Restricted Stock Units to each Outside Director having a combined value, as determined by the Board, of $70,000, with sixty percent (60%) of such award to be awarded as Restricted Stock Units and forty percent (40%) of such award to be awarded as stock options.
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 meetingInterpretation 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 such number of shares of Common Stock as shall be determined by the Board at an exercise price per share equal to 100% of the Fair Market Value of the Common Stock on such date, and (ii) such number of Restricted Stock Units as shall be determined by the Board.
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 for each RSU awarded. No shares of Common Stock shall be issued to an Outside Director on the date of the RSU grant.
|
|
Subject to the provisions of Section 5 hereof, an option granted hereunder may not be exercised until the earlier of (i) twelve (12) months from the date of grant, and (ii) the date of the Annual Meeting of Stockholders next following the date of grant.
Except as provided in Section 5 below or an applicable award agreement, an option may be exercised, in whole or in part, at any time and from time to time during the period beginning with the earlier of (i) twelve (12) months from the date of grant, and (ii) the date of the Annual Meeting of Stockholders next following the date of grant and ending on the option expiration date, by following the procedures established by the Company and its designated record keeper at the time of exercise specifying the number of shares of Common Stock to be purchased upon any such exercise.
No shares of Common Stock shall be issued until full payment therefor has been made as provided in the applicable award agreement. An Outside Director shall have no rights as a stockholder of the Company with respect to any shares of Common Stock subject to an option until such time as the Outside Director has properly exercised his or her option, paid in full for the shares subject to such option, and executed any representations required by the Company.
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.
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An RSU award shall not vest prior to the earlier of (i) twelve (12) months from the date of grant, and (ii) the date of the Annual Meeting of Stockholders next following the date of grant. Shares of Common Stock in respect of a vested RSU award shall be issued to an Outside Director within thirty (30) days from the vesting of an RSU as provided in an award agreement.
The record established by the Company of the Restricted Stock Units 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 Restricted Stock Units. Restricted Stock Units are an unfunded, unsecured promise of the Company to issue Common Stock in the future, subject to vesting and other conditions in the Plan or an applicable award agreement. 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.
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(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 disability, such option may be exercised (to the extent that the Outside Director is entitled to do so at the time of such option exercise) at any time and from time to time within six (6) months after such cessation of service, but not thereafter, and in no event after the date on which, except for such cessation of service, the option would otherwise expire; provided, however, that, in the event an Outside Director to whom an option has been granted under the Plan shall cease to serve on the Board of Directors but shall have been designated as a Director Emeritus, his or her option shall continue to be exercisable (to the extent his or her option has become exercisable at the time of such exercise) until six (6) months after termination of his or her Director Emeritus status or expiration of the option, whichever occurs first.
(b) In the event that an Outside Director to whom an option has been granted under the Plan shall cease to serve on the Board of Directors by reason of disability (as determined by the Board of Directors on the basis of all the facts and circumstances), such option may be exercised, in full or in part, by the Outside Director or his or her legally appointed representative (notwithstanding that the option may not yet otherwise have become exercisable with respect to all or part of such shares as of the date of disability) at any time and from time to time within twelve (12) months after such cessation of service, but not thereafter, and in no event after the date on which, except for such disability, the option would otherwise expire.
(c) If an Outside Director to whom an option has been granted under the Plan dies (i) while he or she is serving on the Board of Directors, (ii) within three (3) months after cessation of service on the Board of Directors other than by reason of disability, or (iii) within twelve (12) months after cessation of service on the Board of Directors by reason of disability, such option may be exercised:
1) in the case of death while serving on the Board of Directors, as to all or any part of the remaining unexercised portion of the option, notwithstanding that the option may not yet otherwise have become exercisable with respect to all or part of such shares as of the date of death;
2) in the case of death after cessation of service on the Board of Directors or death after termination of such service by reason of disability, to the extent that the Outside Director was entitled to do so at the date of his or her death, giving effect to the provisions of subsections (a) and (b) above of this Section 5; and
3) in each case by the person who acquired the right to exercise such option by bequest or inheritance or by reason of the death of the Outside Director, but in no event after the date on which the option would otherwise expire under Section 3 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 the earlier of (i) twelve (12) months from the date of grant, and (ii) the date of the Annual Meeting of Stockholders next following the date of grant 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 the earlier of (i) twelve (12) months from the date of grant, and (ii) the date of the Annual Meeting of Stockholders next following 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 distributed within thirty (30) days after such cessation of services. 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 shall be distributed within thirty (30) days after such cessation of services.
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No option or Restricted Stock Unit granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated, other than by will or by the laws of descent and distribution.
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The aggregate number of shares reserved for issuance pursuant to the Plan shall be 500,000 shares of Common Stock, or the number and kind of shares of stock or other
securities which shall be substituted for such shares or to which such shares shall be adjusted as provided in Section 8.
Such number of shares may be set aside out of the authorized but unissued shares of Common Stock not reserved for any other purpose, or out of issued shares of Common Stock acquired for and held in the treasury of the Company.
Shares subject to, but not sold or issued under, any option or Restricted Stock Unit terminating, expiring or cancelled for any reason prior to its exercise in full will again be available for awards thereafter granted during the balance of the term of the Plan.
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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 the number of shares which, at such time, are subject to outstanding option or Restricted Stock Unit awards and the number of shares to be awarded in the future to Outside Directors shall be adjusted in the same proportion (with appropriate adjustment to 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 or type of shares which have been authorized for issuance under the Plan but have not yet been placed under option or RSU, the number or type of shares which are subject to outstanding awards or may be awarded in the future as grants to Outside Directors, as well as the price per share covered by each option outstanding under the Plan which has not yet been exercised.
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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, the Company shall have the right to deduct from all amounts payable in cash any taxes required by law to be withheld therefrom, and, in the case of payments in the form of Common Stock, the Outside Director to whom such payments are to be made shall be required to pay to the Company the amount of any taxes required to be
withheld, or, in lieu thereof, the Company shall have the right to retain, or sell without notice, a sufficient number of shares of Common Stock to cover the minimum amount required to be withheld.
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The Plan shall be administered by the BoardCommittee. The Committee shall have the exclusive authority and responsibility to: (i) interpret the Plan; (ii) approve the designation of Directors. Subject toeligible Participants; (iii) set the provisionsperformance 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 the Board of Directors shall have the sole and complete 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) construe and interpret the terms of the Plan and any option, RSU or other award issuedthey become payable under the Plan (and any agreementsPlan; (vii) adopt, amend and rescind rules and regulations relating thereto), to resolve any doubtful or disputed terms, and otherwise settle all claims and disputes arising under the Plan;
(c) correct 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, supplysupplying any omission or reconcilereconciling any inconsistency in thethis Plan or in any award agreement relating thereto in the manner and to the extent it shall deem necessary to effectuatecarry this Plan into effect, but only to the purposes and intentextent any such action would be permitted under Code Section 162(m).
Decisions of the Plan;
(d) determine the amount and form of compensation to be paid to Outside Directors from time to time, the allocation of such compensation among the awards toCommittee shall be made underby a majority of its members. All decisions of the Plan,Committee on any question concerning the terms and conditionsselection of each award, the number of shares of Common Stock to be covered by each award,Participants and the value or method of determining the value of each type of award under the Plan;
(e) delegate responsibility and authority for the operationinterpretation and administration of the Plan including delegationshall be final, conclusive, and binding upon all parties. The Committee may rely on information, and consider recommendations, provided by the Board or the senior management of the Company. The Plan is intended to comply with
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Code Section 162(m), and all provisions contained herein shall be limited, construed, and interpreted in 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 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, 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 Committee may specify a targeted performance award. The Individual Target Award may be expressed, at the Committee’s discretion, as a fixed dollar amount, a percentage of 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 same level of 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 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 the Change in Control of the Company; and further provided that no such discretion to reduce an Award otherwise payable to a Participant shall result in an increase in an Award payable to another Participant.
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6.Performance Award Program
6.1 PERFORMANCE AWARDS. Subject to Section 7 herein, each Participant is eligible to receive up to the achieved percentage of their Individual Target Award for such Plan Year (or, subject to Section 5, such lesser amount as determined by the Committee in its sole discretion) based upon the attainment of the 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 Participants for a Plan Year in writing prior to the beginning of such Plan Year or at such later date as permitted under Code Section 162(m) and 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 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 group, 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 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, 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, 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 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
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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 authority invested in the Board pursuant to this Section 10Company’s bank debt or otherwise in the Plan to a committee of the Board of Directors, and appoint employees and officersother 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 Committee. For purposes of items (ii) and (iv) above, “extraordinary items” shall mean all items of gain, loss or expense for the Plan Year determined to be extraordinary or 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 as defined by the Financial Accounting Standards Board’sAccounting Standards Codification Topic 225-20.
In addition, such Performance Goals may be based upon the attainment of specified levels of Company or any of its affiliatesAffiliates (or a group, 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 actthe 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 Performance Goals specified pursuant to subsection 6.2 have been satisfied. Notwithstanding the forgoing, the Committee may, in its behalfsole and employ personsabsolute discretion, permit the payment of Performance Awards with respect to assista Plan Year in fulfilling its responsibilitiesthe case of death or “disability” of the Participant (within the meaning of Code Section 409A) or, 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 this provision shall be of no force or effect to the extent Awards made under the Plan including authorizing employeeswould fail to be qualified performance-based compensation under Code Section 162(m)(4)(C) and officersTreasury regulations issued thereunder regardless of payment. The Committee may not use its discretion to executeincrease a Performance Award that would otherwise be payable upon attainment of the Performance Goals. The Committee shall use its best efforts to make a determination with regard to satisfaction of the Performance Goals as soon as practicable after the end of each Plan Year.
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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 2½ months 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 behalfthe 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 of a 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 instrument requiredother Award made for such Plan Year under this Plan to effect the grantParticipant by the amount of the pro-rata payment.
7.4 DEFERRAL ELECTION. A Participant may elect to defer payment of an award madeAward 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 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 attainment by the Board underCommittee and until the Plan;
(f) make all other decisions and determinations as may be required or appropriateParticipant has a right to receive such amount under the terms of the applicable deferred compensation program.
8.Non-Assignability
No Award under this Plan nor any right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance, garnishment, execution or levy of any kind or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber and, to the extent permitted by applicable law, charge, garnish, execute upon or levy upon the same shall be void and shall not be recognized or given effect by the Company.
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9.No Right to Employment
Nothing in the Plan or anin any notice of award agreement as the Board may deem necessary or advisable for the administration of the Plan; and otherwise supervise the administration of the Plan.
All decisions by the Board or a committee thereof shall be final and binding on all Outside Directors and shall be given the maximum deference permitted by law.
The entire expense of administeringpursuant 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 borne by the Company.
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Notwithstandingheld to be invalid, illegal or unenforceable, in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of the Plan and the Plan shall be construed as if such invalid, illegal or unenforceable provisions had never been contained therein.
12.Withholding
The Company shall not be obligatedhave the right to issuemake such provisions as it deems necessary or appropriate to satisfy any shares of Common Stock, or grant any option or RSU with respect thereto, unless it is advised by counsel of its selection thatobligations it may do so without violationhave to withhold federal, state, or local income or other taxes incurred by reason of the applicable federal and state laws pertainingpayments pursuant to the issuance of securities orPlan.
13.Sections 162(m) and 409A
It is intended that the provisions of any national securities exchange or NASDAQ, andPlan be administered in compliance with Code Section 162(m) so that 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.
All awards and transactionsAwards paid under the Plan to Participants who are intendedor 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 the Plan does not comply with any applicable exemptive conditions under Rule 16b-3 promulgated bythe
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requirements of Code Section 162(m), then the US Securities and Exchange Commission underCommittee may construe or amend such provision to the Securities Exchange Act of 1934, as amended (“Rule 16b-3”) andextent necessary to conform to such requirements.
It is intended that the Board shall interpret and administer the Plan, award agreements, and any Plan guidelines in a manner consistent therewith. All awardsAwards granted under the Plan shall be deemed approved byexempt from, or in compliance with, Code Section 409A. In the Board and shall be deemed an exempt purchaseevent any of the Awards issued under Rule 16b-3. Any provisions in the Plan or an award agreement inconsistent with Rule 16b-3 shall be inoperative.
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Itare subject to Code Section 409A, it is the intention of the Companyintended that no payment or entitlement pursuant to thethis Plan will give rise to any adverse tax consequences to an Outside Directora 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 including any actions to exempt an award from Section 409A or complyprovided that such action is consistent with the requirements of Code Section 409A. Further, no effect shall be given to any provision herein in a manner that reasonably could be expected to give rise to adverse tax consequences under 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 DirectorParticipant with respect to any accelerated taxation, additional taxes, penalties or interest for which any current or former Outside DirectorParticipant 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 discontinuationamendments thereto shall be made which would impair the rights of an Outside Director with respect to any outstanding option or RSU which has been granted under the Plan without such individual’s consentconstrued, 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, the applicable rules of any national securities exchange or NASDAQ, or the Delaware corporation law or other applicable laws.
Exceptgoverned in connection with a corporate transaction involving the Company (including without limitation a transaction described in Section 8 or a change in control of the Company), without the approval of the Company’s stockholders, the Board cannot approve either (i) the cancellation of outstanding options in exchange for the grant in substitution therefor of new options having a lower exercise price, (ii) the amendment of outstanding options to reduce the exercise price thereof, or (iii) the cancellation of outstanding options with an exercise price above the current stock price in exchange for cash or other securities. This limitation shall not be construed to apply to “issuing or assuming an option in a transaction to which Section 424(a) applies,” within the meaning of Section 424 of the Code.
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The effective date of the Plan as originally adopted is July 18, 2007, the date on which it was originally adopted by the Board of Directors, having subsequently received the requisite stockholder approval from the holders of the Company’s Class A Stock, per value $.01 per share (the “Class A Holders”). The Plan shall terminate on July 18, 2017. The effective date of this Amended and Restated Plan is July 18, 2012, the date it was adopted by the Board of Directors; provided, however, that this Amended and Restated Plan is also subject to the approval of the Class A Holders at the Annual Meeting of Stockholders to be held in September 2012.
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The Plan shall be governed by, and construedall 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).
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement, 10K Wrap is/are available at www.proxyvote.com.
SCHOLASTIC CORPORATION
Annual Meeting of Stockholders
September 18, 2013 9:00 AM
This proxy is solicited by the Board of Directors
The undersigned hereby appoints RICHARD ROBINSON AND ANDREW S. HEDDEN, or either of them, each with the 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 18, 2013 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.
This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned. If you are a stockholder of record and no direction is given, this Proxy will be voted FOR the election of directors. In their discretion, the proxies are authorized to vote on such other business as may properly come before the Annual Meeting or any adjournment thereof.
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 July 26, 2013 by completing the reverse side of this card and returning it by September 13, 2013.
Continued and to be signed on reverse side
SCHOLASTIC CORPORATION 557 BROADWAY NEW YORK, NY 10012 | VOTE BY INTERNET - www.proxyvote.com |
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | |
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS | |
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | |
VOTE BY PHONE - 1-800-690-6903 | |
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. | |
VOTE BY MAIL | |
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
KEEP THIS PORTION FOR YOUR RECORDS |
DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||||||
The Board of Directors recommends you vote FOR the following: | |||||||||||||||
o | o | o | |||||||||||||
1. | Election of Directors | ||||||||||||||
Nominees | |||||||||||||||
01 | James W. Barge 02 Marianne Caponnetto 03 John L. Davies | ||||||||||||||
NOTE:Such other business as may properly come before the meeting or any adjournment thereof. | |||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | |||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | ||||||||||||
SCHOLASTIC CORPORATION
Proxy for Annual Meeting of Stockholders, September 19, 201218, 2013
(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. 2012,18. 2013, 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
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SCHOLASTIC CORPORATION
CLASS A STOCK PROXY
Annual Meeting of Stockholders, September 19, 201218, 2013
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 Proposal 2.
The undersigned hereby votes the above number of shares of Class A Stock of Scholastic Corporation as follows:
1. | For the election of: Richard Robinson, |
FOR: | WITHHOLD: |
FOR:__________
WITHHOLD: __________
2. | For the approval of the |
FOR: | AGAINST: | ABSTAIN: |
FOR:__________
AGAINST: __________
ABSTAIN: _________
3. | 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. |
Class A Stockholder | |||
No. of |
Please mark your vote as indicated in this exampleX
Please mark your vote as indicated in this example | X |