EXHIBIT 10.17

                         DEFERRED C0MPENSATION AGREEMENT

       THIS AGREEMENT is made and entered into in the City of New York, State of
New York,  this 31st day of July,  1989, by and between  Scholastic  Inc., a New
York corporation ("Scholastic"), and Ernest Fleishman, an individual residing in
the State of Connecticut ("Employee").

       This  Agreement is being  entered into between the parties in  connection
with the  commencement  of the  employment  of the Employee by  Scholastic.  The
parties  desire to  provide  for  certain  elective  deferrals  of salary by the
Employee on the terms and conditions herein set forth.

       IN CONSIDERATION of the foregoing and the mutual agreements  herein,  the
parties agree as follows:

       1.     An amount of salary which but for this Agreement  would be payable
to the Employee for his services  performed for Scholastic on and after the date
of this  Agreement and prior to the Initial  Disbursement  Date (as such term is
defined by Paragraph 5 hereof)  shall instead be credited to an Account (as such
term is defined by Paragraph 7 hereof).

              The Account  shall be credited  with the salary so deferred at the
annual rate of $25,000 per annum in level amounts at the end of each regular pay
period of Scholastic during which the Agreement remains in effect.

              On the first day of each  year  after the date of this  Agreement,
Scholastic  shall credit to the Account as interest an additional  amount at the
rate  equal to the  average  30 year  treasury  bonds as of the last day of each
month of the preceding year as reported in THE NEW YORK TIMES  multiplied by the
average  monthly balance of the account during the preceding year. (See attached
example.)

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       2.     Payment under the terms of this Agreement of salary and additional
amounts credited to the Account as interest shall not commence until the Initial
Disbursement  Date and shall be made in  quarterly  installments  over a fifteen
(15)  year  period  following  the  Initial   Disbursement   Date.  The  Initial
Disbursement  Date shall be the Employee's  retirement date, date of termination
from Scholastic, or at any other subsequent time chosen by Employee.

              The amount of each  quarterly  installment  shall be  computed  by
dividing  the  balance  of the  Account  (including  interest)  by the number of
installments remaining under the Agreement.

       3.     In the  event of the death of the  Employee  while  there  remains
unpaid any portion of the Account,  the unpaid  balance of the Account  shall be
paid  in a lump  sum to  Employee's  executors  or  administrators  as  soon  as
practicable.

       4.     No amounts  credited  to the  Account  and no  payments to be made
hereunder  may be  assigned,  sold,  transferred,  pledged,  charged,  commuted,
encumbered or otherwise  alienated by Employee,  to the extent permitted by law,
and no such amount or payment  shall in any way be subject to any legal  process
to subject the same to the payments of any claims  against the  Employee.  In no
event will Employee have the right to recover any amounts of salary  credited to
the Account otherwise than in accordance with this Agreement.

       5.     In the event that the Employee incurs a hardship,  Scholastic,  in
its sole discretion,  may revise the payment  schedule.  Such hardship must have
been caused by accident,  illness,  or event beyond the control of the Employee,
and Scholastic shall revise the payment  schedule only to the extent  reasonably
necessary to eliminate the hardship.

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              Scholastic  also reserves the right,  in its sole  discretion,  to
accelerate  payment for any other  reason,  and in such event  Scholastic  shall
revise the payment schedule as previously established.

       6.     This  Agreement  will be effective for salary payable for the 1989
calendar year and for subsequent  calendar years unless the Employee  revokes or
modifies such Agreement by written notice to Scholastic  prior to December 31 of
a calendar year, effective as of January 1 of the following year.

       7.     "Account"  means a bookkeeping  entry  maintained by Scholastic of
the  amounts of salary  deferred  hereunder,  additions  credited  thereon,  and
installments  paid under this Agreement.  The use of the word "Account" does not
contemplate  or imply  any  segregation  by  Scholastic  of any  monies or their
assets,  nor shall it be deemed to mean that any amount  credited to the Account
is the  property  of  Employee.  The right of the  Employee  to receive  amounts
deferred  under  this  Agreement  shall  be no  greater  than the  rights  of an
unsecured  general creditor against the assets of Scholastic.  Nothing contained
in this Agreement and no action taken  pursuant to its  provisions  shall in any
way be deemed to create a trust of any kind or a fiduciary  relationship between
Scholastic and the Employee and no assets of Scholastic  shall be subject to any
prior claim by the  Employee  or his  beneficiary  to assure  payment of amounts
deferred under this  Agreement.  All payments under this Agreement shall be paid
in cash from the general funds of Scholastic.

       8.     This  Agreement  shall be binding upon and inure to the benefit of
the Employee and Scholastic and their  respective  successors and assigns.  This
Agreement contains the full understanding of the parties

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with respect to its subject matter and may not be modified or amended, except by
a written agreement executed by both parties. This Agreement has been executed
and delivered in the State of New York and its validity, interpretation,
performance and enforcement shall be governed by the laws of the State of New
York.


       IN WITNESS  WHEREOF,  the parties to this Agreement have subscribed their
names.

       Executed in duplicate, this 31st day of July, 1989.

                                        SCHOLASTIC INC.

                                        By /s/ Richard Robinson
                                        -----------------------
                                        Name:  Richard Robinson
                                        Title: President

                                        /s/ Ernest B. Fleishman
                                        -----------------------
                                        Employee

FLEISHMN/F


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