Exhibit 10.1 





SCHOLASTIC
CORPORATION 2007 OUTSIDE DIRECTORS

STOCK INCENTIVE PLAN


Amended and Restated Effective July 18, 2012


	
  

 	
  

 
	
 1.

 	
 Name and General Purpose

 



          The
name of this plan is the Scholastic Corporation 2007 Outside Directors Stock
Incentive Plan (the “Plan”). The purpose of the Plan is to attract and retain
the services, for the benefit of Scholastic Corporation, a Delaware corporation
(the “Company”), of experienced and knowledgeable directors who are not
employees of the Company (the “Outside Directors”) and to provide an additional
incentive for such Outside Directors through ownership of the common stock, par
value $.01 per share, of the Company (the “Common Stock”).


	
  

 	
  

 
	
 2.

 	
 Grants to Outside Directors

 



          The
board of directors of the Company (the “Board”) shall determine the amount and
form of compensation to be paid to Outside Directors for serving as a member of
the Board. The compensation to be paid in stock options or “Restricted Stock
Units” (as hereinafter defined) under the Plan shall be determined by the Board
from time to time. For the fiscal year of the Company beginning June 1, 2012,
the Board has determined that it will award stock options 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 meeting of the Company’s stockholders occurring after the effective
date of the Plan, an incumbent Outside Director, shall automatically be
granted, as of each such date (or, if applicable, the next succeeding business
day), (i) an option to purchase 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.


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          “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.


	
  

 	
  

 
	
 3.

 	
 Exercise of Options

 



          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.


	
  

 	
  

 
	
 4.

 	
 Restricted Stock Units

 



          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


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Common Stock
in settlement of an RSU shall be no greater than any general unsecured creditor
of the Company. An Outside Director shall have no rights as a stockholder with
respect to shares of Common Stock which may be issued in settlement of an RSU
until the date of issuance of a certificate for such shares (as evidenced by
the appropriate entry on the books of the Company or a duly authorized transfer
agent). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such certificate is
issued.


	
  

 	
  

 
	
 5.

 	
 Termination of Services of Outside Directors

 



          (a)      In
the event that an Outside Director to whom an option has been granted under the
Plan shall cease to serve on the Board of Directors, otherwise than by reason
of death or 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;


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                    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.


	
  

 	
  

 
	
 6.

 	
 Transferability

 



          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.


	
  

 	
  

 
	
 7.

 	
 Shares Reserved

 



          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


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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.


	
  

 	
  

 
	
 8.

 	
 Adjustments Due to Stock Splits, Mergers, Consolidations, etc.

 



          If,
at any time, the Company shall take any action, whether by stock dividend,
stock split, combination of shares, or otherwise, which results in a
proportionate increase or decrease in the number of shares of Common Stock
theretofore issued and outstanding, the number of shares which are reserved
under the Plan shall be automatically adjusted, and both 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.


	
  

 	
  

 
	
 9.

 	
 Withholding or Deduction of Taxes

 



          If,
at any time, the Company is required under applicable laws or regulations to
withhold, or to make any deduction for, any taxes or take any other action in
connection with the exercise of any option hereunder or the vesting or delivery
of Common Stock in respect of a Restricted Stock Unit, 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


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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.


	
  

 	
  

 
	
 10.

 	
 Administration

 



          The
Plan shall be administered by the Board of Directors. Subject to the provisions
of the Plan, the Board of Directors shall have the 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 issued
under the Plan (and any agreements relating thereto), to resolve any doubtful
or disputed terms, and otherwise settle all claims and disputes arising under
the Plan;


          (c)          correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
in any award agreement relating thereto in the manner and to the extent it
shall deem necessary to effectuate the purposes and intent 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 to be made under
the Plan, the terms and conditions of each award, the number of shares of
Common Stock to be covered by each award, and the value or method of
determining the value of each type of award under the Plan;


          (e)          delegate
responsibility and authority for the operation and administration of the Plan,
including delegation of all or any portion of the authority invested in the
Board pursuant to this Section 10 or otherwise in the Plan to a committee of
the Board of Directors, and appoint employees and officers of the Company and
its affiliates to act on its behalf and employ persons to assist in fulfilling
its responsibilities under the Plan, including authorizing employees and
officers to execute on behalf of the Company any instrument required to effect
the grant of an award made by the Board under the Plan;


          (f)          make
all other decisions and determinations as may be required or appropriate under
the terms of the Plan or an 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 administering the Plan shall be borne by the Company.


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 11.

 	
 Compliance with Applicable Law

 



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


          All
awards and transactions under the Plan are intended to comply with any
applicable exemptive conditions under Rule 16b-3 promulgated by the US
Securities and Exchange Commission under the Securities Exchange Act of 1934,
as amended (“Rule 16b-3”) and the Board shall interpret and administer the
Plan, award agreements, and any Plan guidelines in a manner consistent
therewith. All awards under the Plan shall be deemed approved by the Board and
shall be deemed an exempt purchase under Rule 16b-3. Any provisions in the Plan
or an award agreement inconsistent with Rule 16b-3 shall be inoperative.


	
  

 	
  

 
	
 12.

 	
 Amendment and Termination

 



          It
is the intention of the Company that no payment or entitlement pursuant to the
Plan will give rise to any adverse tax consequences to an Outside Director
under 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”). 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 Section 409A, including
any actions to exempt an award from Section 409A or comply with the
requirements of 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. Neither the Company nor its
current or former employees, officers, directors, representatives or agents
shall have any liability to any current or former Outside Director with respect
to any accelerated taxation, additional taxes, penalties or interest for which
any current or former Outside Director 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 Plan at any time and from time
to time; provided, however, that (a) unless otherwise required by law, no
amendment, alteration or discontinuation shall be made which would impair the
rights of an Outside Director with respect to any outstanding option or RSU
which has been granted under the Plan without such individual’s consent and (b)
no amendment shall be effective without the approval of the stockholders of the
Company if stockholder approval of the amendment is


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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.


          Except
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.


	
  

 	
  

 
	
 13.

 	
 Effective Date

 



          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.


	
  

 	
  

 
	
 14.

 	
 Governing Law

 



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


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