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   Exhibit 10.4 

Scholastic Corporation

Directors’ Deferred
Compensation Plan 

(Amended and Restated on September 23, 2008) 

Article 1. Introduction.  

     1.1 Establishment. Scholastic Corporation, a Delaware
corporation (the “Company”) established the Scholastic Corporation 1995 Directors’ Deferred Compensation Plan (the “Plan”) effective as of October 1, 1995 (the “Effective Date”). The Company has amended the Plan
from time to time since its adoption. The plan was last amended and restated effective as of January 1, 2005 pursuant to which the Plan was renamed the “Scholastic Corporation Directors’ Deferred Compensation Plan.” 

     1.2 Purpose. The primary purpose of the Plan is to provide
Directors of the Company with the opportunity to voluntarily defer all or a portion of their Compensation, subject to the terms of the Plan. By adopting the Plan, the Company desires to enhance its ability to attract and retain Directors of
outstanding competence. All capitalized terms not defined herein shall have the meanings set forth in Article 2 of the Plan.

     1.3 Restatement. The Company hereby amends and restates
the Plan to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended effective January 1, 2005.

     1.4 Effect of Restatement; Plan Bifurcation. Deferrals
made under the Plan on and after January 1, 2005 shall be made in accordance with, and shall be governed by, the terms and conditions of the plan document as set forth herein. Deferrals made under the Plan prior to January 1, 2005 and all earnings
thereon shall be governed by the terms and conditions of the Plan as in effect on December 31, 2004. The Plan, as in effect immediately prior to January 1, 2005 shall be known and referred to as the “Grandfathered Plan.”  

     1.5 Section 409A of the Code. This Plan is intended to
comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. To the extent that any payment or benefit hereunder is subject to Section 409A of the Code, it shall
be paid in a manner that will comply with Section 409A of the Code, including regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. Notwithstanding anything herein to the
contrary, any provision in this Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision
shall be null and void.  

Article 2. Definitions 

     Whenever used herein, the following terms shall have the meanings set forth below, and, when the defined meaning is intended, the term is capitalized:

	 	(a) 	“Board” or “Board
    of Directors” means the Board of Directors of the Company.
	 	 	 
	 	(b)	“Chairperson Fees” means
        fees paid by the Company to a Director, in cash, for serving as Chairperson
        of a Board Committee during the relevant Plan Year and which is exclusive
    of any Retainer or Meetings Fees earned during such Plan Year.
	 	 	 
	 	(c)	“Change in Control” of
        the Company means, and shall be deemed to have occurred upon, any of
    the following events:
	 	 	 
	 	 	(i) 	a “change in ownership
        of the Company” which means the date that any one person, or more
        than one person acting as a group (as defined below), acquires ownership
        of stock of the Company that, together with stock held by such person
        or group, constitutes more than 50% of the total fair market value or
        total voting power of the stock of the Company; provided, that, if any
        one person or more than one person acting as a group, is considered to
        own more than 50% of the total fair market value or total voting power
        of the stock of the Company, the acquisition of additional stock by the
        same person or persons is not considered to cause a change in the ownership
    of the Company (or to cause a “change in the effective control” (as 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

   Exhibit 10.4 

	 	 	 
	 	 	 	defined in subsection (ii)
        below). An increase in the percentage of stock owned by any one person,
        or persons acting as a group, as a result of a transaction in which the
        Company acquires its stock in exchange for property will be treated as
    an acquisition of stock for purposes of this section.
	 	 	 	 
	 	 	(ii)	 a “change in effective
        control of the Company,” which means the date that either: (A) any
        one person, or more than one person acting as a group (as defined below),
        acquires (or has acquired during the 12-month period ending on the date
        of the most recent acquisition by such person or persons) ownership of
        stock of the Company possessing 35% or more of the total voting power
        of the stock of the Company; or (B) a majority of members of the Board
        are replaced during any 12-month period by directors whose appointment
        or election is not endorsed by a majority of the members of the Board
    prior to the date of the appointment or election.
	 	 	 	 
	 	 	(iii)	 a “a change in
        the ownership of a substantial portion of the Company’s assets,” which
        means the date that any one person, or more than one person acting as
        a group (as defined below), acquires (or has acquired during the 12-month
        period ending on the date of the most recent acquisition by such person
        or persons) assets from the Company that have a total gross fair market
        value equal to or more than 40% of the total gross fair market value
        of all of the assets of the Company immediately prior to such acquisition
        or acquisitions. For this purpose, gross fair market value means the
        value of the assets of the Company, or the value of the assets being
        disposed of, determined without regard to any liabilities associated
        with such assets. Notwithstanding the foregoing, a Change of Control
        shall not occur when there is a transfer to an entity that is controlled
        by the shareholders of the Company immediately after the transfer, as
    provided
	 	 	 	 
	 	 	 	 
	 	 	 

 

 

 

2 

 

   Exhibit 10.4 

	 	 	 	in this paragraph
        (iii). A transfer of assets by the Company is not treated as a change
    in the ownership of such assets if the assets are transferred to:
	 	 	 
	 	(a)	 A shareholder
        of the Company (immediately before the asset transfer) in exchange for
    or with respect to its stock;
	 	 	 
	 	(b)	 An entity,
        50% or more of the total value or voting power of which is owned, directly
    or indirectly, by the Company; or
	 	 	 
	 	(c) 	A person,
        or more than one person acting as a group, that owns, directly or indirectly,
        50% or more of the total value or voting power of all the outstanding
    stock of the Company; or
	 	 	 
	 	(d)	 An entity,
        at least 50% of the total value or voting power of which is owned, directly
    or indirectly, by a person described in paragraph (c).

Persons will not be considered to be acting as a group solely because they purchase or own stock or purchase assets of the same corporation at the same time, or as a result of the same public offering. However, persons
will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or assets, or similar business transaction with the corporation. If a person, including an
entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock or assets, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a
corporation only to the extent of the ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

Notwithstanding the foregoing, an event shall not be considered to be a “Change of Control” for payment purposes if, for purposes of Section 409A of the Code, such event would not be considered to be a
“Change in Control Event” under Section 409A of the Code and regulations issued thereunder by the Secretary of the Treasury.

	 	(d)	“Code” means
        the Internal Revenue Code of 1986, as amended. Reference to any section
        or subsection of the Code includes reference to any comparable or succeeding
        provisions of any legislation that amends, supplements or replaces such
    section or subsection.
	 	 	 
	 	(e)	“Company” means
    Scholastic Corporation, a Delaware corporation. 
	 	 	 
	 	(f)	“Compensation” means
        the Retainer, Meeting Fees and, if applicable, Chair- person Fees payable
        to a Participant by the Company for services performed as a Director
        during a Plan Year. In no event, however, shall amounts paid in the form
        of Company stock or stock options qualify as Compensation eligible for
    deferral under the Plan. 
	 	 	 
	 	(g)	“Director” means
        each member of the Board of Directors of the Company who receives a Retainer
        and Meeting Fees for service on the Board of Directors and who is not
    an employee of the Company.

 

 

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   Exhibit 10.4 

	 	(h)	“Disability” means
        the inability of a Participant to engage in any substantial gainful activity
        by reason of any medically determinable physical or mental impairment
        that may result in death and, in any case, is expected to continue for
    a period of not less than 12 months.
	 	 	 
	 	(i)	“Effective Date” means
    the date the Plan became effective, as set forth in Section 1.1 herein.
	 	 	 
	 	(j)	“Grandfathered Plan” means
        the terms and provisions of the Plan in effect immediately prior to the
    Restatement Effective Date.
	 	 	 
	 	(k)	“Meeting
        Fees” means fees paid by the Company to a Director, in cash, for
        attendance at Board and various Board committee meetings during the relevant
        Plan Year, and which is exclusive of any Retainer or Chairperson Fees
        earned during such Plan Year. For the purposes of the Plan, “Meeting
        Fees” shall not include any fees paid or payable in Company stock
    or stock options.
	 	 	 
	 	(l)	“Participant” means
    any Director who is actively participating in the Plan.
	 	 	 
	 	(m)	“Plan” means
    the Scholastic Corporation Directors’ Deferred Compensation Plan.
	 	 	 
	 	(n)	“Plan Administrator” means
        the executive(s) appointed by the Board pursuant to Section 3.1 hereof
        to administer certain provisions of the Plan as set forth herein and
        shall initially be the Vice President of Human Resources of Scholastic
    Inc.
	 	 	 
	 	(o)	“Plan Year” means
        the fiscal year of the Company beginning on June 1st and
    ending on May 31st . 
	 	 	 
	 	(p)	“Restatement Effective
    Date” means January 1, 2005.
	 	 	 
	 	(q)	“Retainer” means
        the annual cash retainer paid by the Company and earned by a Director
        during the relevant Plan Year with respect to the Director’s service
        on the Board, and which is exclusive of Meeting Fees or Chairperson Fees
        earned during such Plan Year. For purposes of the Plan, “Retainer” shall
    not include any retainer paid or payable in Company stock or stock options.
	 	 	 
	 	(r)	“Transition Relief” means
        the extended time period permitted by Q&A-21 of Notice 2005-1 issued
        by the Internal Revenue Service in which a valid deferral election could
        be made with respect to compensation to be earned in, or during a portion
    of, calendar year 2005. 

Article 3. Administration

     3.1 Administration of the Plan. The Plan shall be
administered by, and in the sole and absolute discretion of, the Board. Subject to the provisions set forth herein, the Board shall take such actions as are required or permitted to be taken by it hereunder and shall have full and complete
discretionary authority to interpret the Plan, to determine the rights of each Director and the eligibility of a Director to participate in the Plan, the amount of benefits payable to a Director 

4 

   Exhibit 10.4 

and the terms and conditions of each Director’s participation in the Plan; to construe and interpret the Plan and any agreement or instrument entered into under the Plan, including any unclear, uncertain or
disputed terms thereof; to establish, amend, waive or rescind rules and regulations for the Plan’s administration; to amend (subject to the provisions of Article 9 herein) the terms and conditions of the Plan and any agreement or instrument
entered into under the Plan and to make all other determinations which may be necessary or advisable for the administration of the Plan. The Board may employ accountants and counsel and other persons to assist or render advice to it, all at the
expense of the Company.

     Subject to the terms of the Plan, the Board may delegate any or all of its authority granted under the Plan to an executive or executives of the Company. The executive or executives to
whom the Board has delegated authority to administer the Plan shall be the Plan Administrator.

     3.2 Decisions Binding. All determinations and decisions of
the Board or the Plan Administrator, as applicable, as to any disputed question or any other issue arising under the Plan, including questions of construction and interpretation, shall be final, conclusive, and binding on all parties.

     3.3 Indemnification. Each person who is or shall have been
a member of the Board, each person who is or shall have been the Plan Administrator and each executive to whom authority is or has been delegated by the Board pursuant to the Section 3.1, shall be indemnified and held harmless by the Company against
and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party, or in which he or she may be
involved by reason of any action taken or failure to act under the Plan. The Company shall, subject to the requirements and limitations of Delaware law, pay such loss, cost, liability or expense imposed on or incurred by such person promptly upon
demand by him or her, whether or not he or she has actually advanced such amount prior thereto.

     The Company shall also indemnify each such person who is or shall have been a member of the Board, each such person who is or shall have been the Plan Administrator and each executive to
whom authority is or has been delegated by the Board pursuant to Section 3.1, against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her against him or her, provided he or
she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.

     The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

Article 4. Eligibility and Participation  

     4.1 Eligibility. Each person who was a Director of the
Company immediately prior to the Restatement Effective Date shall be eligible to participate in the Plan on and after the 

5 

   Exhibit 10.4 

Restatement Effective Date. Each other person who becomes a member of the Board of Directors on or after the Restatement Effective Date shall be eligible to participate in the Plan.

     4.2 Inactive Participant. In the event a Participant no
longer meets the requirements for eligibility to participate in the Plan, such Participant shall become an inactive Participant retaining all of the rights described under the Plan, except the right to make any further deferrals hereunder. In the
event a Director shall cease to serve as a member of the Board of Directors but shall be designated as a Director Emeritus, such Director shall be deemed to have ceased to serve as a Director for purposes of this Plan.

     4.3 Participation. The Plan Administrator shall notify a
Director as soon as practicable after he or she first becomes eligible to participate in the Plan. At such time, the Plan Administrator shall provide such Director with an Election to Defer Form which shall be submitted by the Director as provided
in Sections 5.2 hereof. Except as otherwise provided in Section 4.4 below, a Director, once notified of eligibility to participate in the Plan, shall be entitled to make deferrals with respect to each subsequent Plan Year by submitting an Election
to Defer Form to the Plan Administrator in the time and manner provided in Section 5.2. 

     4.4 Partial Plan Year Participation. In the event a
Director first becomes eligible to participate in the Plan after the beginning of a Plan Year, the Committee may, in its discretion, allow such Director to complete an Election to Defer Form within thirty (30) days after the date the Director first
becomes eligible to participate, in which case the deferral election shall be valid and applicable for the Plan Year then in progress; provided that such deferral election will only be effective if the Director does not participate at the time of
the election in any other “nonqualified deferred compensation plans” (as defined in Section 409A of the Code) maintained by the Company and its subsidiaries that together with the Plan are treated as a single plan under the regulations
issued under Section 409A of the Code. An Election to Defer Form submitted pursuant to this Section 4.3 shall apply only to Compensation earned subsequent to the date on which a valid Election to Defer Form is received by the Board from the
Participant.

     4.5 Special Deferral Election for 2005 Plan Year. Each
Director who was a participant in the Grandfathered Plan immediately prior to the Restatement Effective Date shall be eligible to participate in the Plan on and after the Restatement Effective Date provided the Director makes an election, on or
before March 15, 2005 pursuant to the Transition Relief, to defer Compensation under the Plan with respect to the Plan Year beginning on June 1, 2005.

Article 5. Deferral Opportunity  

     5.1 Amount Which May Be Deferred. A Participant may elect
to defer fifty percent (50%) or one hundred percent (100%) of his or her aggregate Compensation in any Plan Year.

     5.2 Deferral Election. A Participant may make an election
to defer Compensation under the Plan with respect to a Plan Year provided he or she makes such election prior to December 31 of the calendar year preceding such Plan Year or not later than thirty (30) calendar days after the date the Director
initially became eligible to participate in the Plan(subject to satisfaction of the terms of Section 4.4), as applicable. All deferral elections shall be irrevocable and shall be made on an Election to Defer Form, as described herein, which shall
specify, with regard to the applicable Plan Year, the following: (i) the percentage of Compensation which the Participant elects to defer and (ii) the deferral period, as described in Section 5.4 below. A deferral election must be submitted to the
Plan 

6 

   Exhibit 10.4 

Administrator on a timely basis in order to be given effect. Once a Participant has submitted an Election to Defer Form, the Participant may only revoke or change the deferral election if he or she notifies the Plan
Administrator in writing of the revocation or change prior to December 31 of the calendar year preceding the Plan Year for which the revocation or change is to be effective. All amounts deferred under the Plan for a particular Plan Year shall be
paid to the Participant (or Beneficiary) in a single sum cash payment.

     5.3 Length of Deferral. Except as otherwise provided
herein or in the Election to Defer Form, each deferral hereunder and earnings thereon shall be maintained in deferred status until the later of: (a) the expiration of the deferral period (which may not exceed 15 years) specified by the Director in
the Election to Defer Form or (b) termination of the Director’s service for any reason other than death or Disability. Notwithstanding the foregoing provisions, in the event of the termination of the Director’s service due to Disability or
death, payments of all deferred amounts plus earnings thereon shall be made to the Director (or his or her Beneficiary) within 90 days following such Director’s termination of service.

     5.4 Change in Deferral Period. A Participant may elect to
extend the deferral period and thereby defer payment of the deferred amount plus earnings thereon provided that the Participant’s subsequent deferral election: (i) may not be effective until 12 months after the date the subsequent election is
made; (ii) the subsequent election must be made at least 12 months prior to the date the payment would otherwise be made; (iii) the payment is delayed by at least five years from the original payment date under Section 5.3 (or any subsequent
election); and (iv) the original deferral period together with any subsequent deferral period does not provide for the deferral of any Compensation for more 15 years after the date the Compensation would have been paid to the Director in the absence
of an deferral election under the Plan.  

     5.5 Payments of Deferred Amounts. Each Participant shall
receive payment of the deferred amounts, together with earnings accrued thereon, pursuant to Section 6.2, at the end of the applicable deferral period or termination of service, as determined under Section 5.3. Each payment for a particular Plan
Year shall be made in cash, in a single sum payment, on the date specified for payment as determined under Section 5.3 (or within 90 days thereafter in the case of payment on account of termination of service).

     Notwithstanding the foregoing, any unpaid deferred amounts and accumulated earnings thereon shall be paid to the Participant in the event that, at any time prior to full payment of such
deferred amounts and earnings thereon, a Change in Control of the Company occurs. In such event, payments of all deferred amounts plus earnings thereon shall be made to all Participants in single sum cash payments within 90 days after the effective
date of the Change in Control, as applicable.

     5.6 Unforeseeable Emergency. If a Participant suffers an
unforeseen emergency, as defined herein, the Board, in its sole discretion, may pay to the Participant, within 90 days of a determination by the Board of an unforeseen emergency, only that portion, if any, of his or her account that the Board
determines is necessary to satisfy the emergency need, including any amounts necessary to pay any federal, state or local income taxes reasonably anticipated to result from the distribution. A Participant requesting an emergency payment shall apply
for the payment in writing in a form approved by the Plan Administrator and shall provide such additional information as the Plan Administrator may require. For purposes of this paragraph, “unforeseen emergency” means a severe financial

7 

   Exhibit 10.4 

hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant, [the Participant’s spouse or beneficiary] or of a dependent (as described in Section 152 of the Code,
without regard to section 152(b)(1), (b)(2), and (d)(1)(B)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control
of the Participant. The circumstances constituting an unforeseeable emergency shall depend on the facts of each case, but, in any event, shall not be made to the extent that such emergency is or may be relieved: (a) through liquidation or
compensation by insurance or otherwise, (b) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or (c) by cessation of deferrals under an account balance
plan (as such term is defined in Treasury Regulation Section 1.409A -1(c)) maintained by the Participant’s current employer.

     In addition to the requirements set forth in clauses (a), (b), and (c) above, as a precondition to an unforeseen emergency, a Participant must have obtained all distributions, other than
hardship distributions of salary reduction contributions under a cash-or-deferred arrangement maintained by any employer pursuant to a plan qualified under Section 401(a) of the Code which contains a cash-or-deferred arrangement and other than
in-service withdrawals resulting in a forfeiture, currently available under all plans maintained by any employer.

Article 6. Deferred Compensation Accounts  

     6.1 Participants’ Accounts. The Company shall
establish and maintain an individual bookkeeping account for deferrals made by each Participant, and earnings thereon, under Article 5 herein. Each account shall be credited as of the date the amount deferred otherwise would have become due and
payable to the Participant. The term “account” and other measures representing the value of a Director’s deferrals under the Plan are bookkeeping entries only and shall not constitute property of any kind or any interest in the
Company or specific assets thereof.

     6.2 Earnings on Deferred Amounts. Compensation deferred
under the Plan shall accrue interest on a quarterly basis at a rate equal to the 30-year Treasury Bill rate of interest in effect as of the first business day of each calendar quarter (or, if such rate is not available, interest shall accrue at a
rate determined by Scholastic to be equivalent to the investment yield of a 30-year Treasury Bill for such period). Each Participant’s deferred compensation account shall be credited on the last day of each calendar quarter until all deferrals
have been paid, with interest computed on the average balance in the account during such quarter. Interest earned on deferred amounts shall be paid out to Participants at the same time and in the same manner as the underlying deferred
amounts.

     6.3 Charges Against Accounts. There shall be charged
against each Participant’s deferred compensation account any payments made to the Participant or to his or her beneficiary.

Article 7. Beneficiary Designation  

     Each Participant shall designate a beneficiary or beneficiaries who, upon the Participant’s death, will receive the amounts that otherwise would have been paid to the Participant
under the Plan. All designations shall be signed by the Participant, and shall be in such form as prescribed 

8 

   Exhibit 10.4 

by the Board. Each designation shall be effective as of the date delivered to a Company employee so designated by the Board.

     Participants may change their designations of beneficiary on such form as prescribed by the Board. The payment of amounts deferred under the Plan shall be in accordance with the last
unrevoked written designation of beneficiary that has been signed by the Participant and delivered by the Participant to the designated employee prior to the Participant’s death.

     In the event that all the beneficiaries named by a Participant pursuant to this Article 7 predecease the Participant, the deferred amounts that would have been paid to the Participant or
the Participant’s beneficiaries under the Plan shall be paid to the Participant’s estate.

     In the event a Participant does not designate a beneficiary, or for any reason such designation is ineffective, in whole or in part, the amounts that otherwise would have been paid to the
Participant or the Participant’s beneficiaries under the Plan shall be paid to the Participant’s estate.

Article 8. Rights of Participants  

     8.1 Contractual Obligation. The Plan shall create a
contractual obligation on the part of the Company to make payments from the Participants’ accounts when due. Payment of account balances shall be made out of the general funds of the Company.

     8.2 Unfunded Plan. The Plan constitutes an unfunded,
unsecured promise of the Company to make payments in the future of the amounts deferred under the Plan and is intended to constitute a nonqualified deferred compensation plan which is unfunded for tax purposes and for the purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Nothing contained in the Plan and no action taken pursuant to the provisions of the Plan shall create, or be construed to create, a trust of any kind, a fiduciary
relationship between the Company and any Director or any other person. No special or separate fund shall be established or other segregation of assets made to assure payment of deferred amounts hereunder. No Director or any other person shall have
any preferred claim on, or beneficial ownership interest in, any assets of the Company prior to the time that deferred amounts are paid to the Director as provided herein. The rights of a Director to receive benefits from the Company shall be no
greater than any general unsecured creditor of the Company.

     8.3 Service as a Director. Neither the establishment of
the Plan, nor any action taken hereunder, shall in any way obligate (i) the Company to nominate a Director for reelection or to continue to retain a Director; or (ii) a Director to agree to be nominated for reelection or to continue to serve on the
Board.

Article 9. Amendment and Termination 

     The Company hereby reserves the right to amend, modify, or terminate the Plan at any time by action of the Board. No such amendment or termination shall in any material manner adversely
affect any Participant’s rights to deferred amounts or interest earned thereon, without the consent of the Participant.

9

   Exhibit 10.4 

Article 10. Miscellaneous 

     10.1 Notice. Any notice or filing required or permitted to
be given to the Company under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail to the Plan Administrator with a copy to sent to the Corporate Secretary of the Company. Such notice, if mailed,
shall be addressed to the principal executive offices of the Company. Notice mailed to a Participant shall be at such address as is given in the records of the Company. Notices shall be deemed given as of the date of delivery or, if delivery is made
by mail, as of the date shown on the postmark on the receipt for registration or certification.

     10.2 Successors. All obligations of the Company under the
Plan shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the
Company.

     10.3 Nontransferability. Participants’ rights to
deferred amounts, contributions, and investment return earned thereon under the Plan may not be sold, transferred, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. In no event shall the
Company make any payment under the Plan to any assignee or creditor of a Participant.

     10.4 Severability. In the event any provision of the Plan
shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

     10.5 Costs of the Plan. All costs of implementing and administering the Plan shall be
borne by the Company.

     10.6 Gender and Number. Except where otherwise indicated
by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular, and the singular shall include the plural.

     10.7 Governing Law. The Plan shall be governed by and
construed in accordance with the laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule, subject to preemption by ERISA.

10Exhibit 10.5 

SCHOLASTIC CORPORATION 2007 OUTSIDE DIRECTORS
STOCK INCENTIVE PLAN

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. Automatic Grants to Outside Directors 

          Subject
to the provisions of Section 13 hereof, each individual (other than any
director electing not to participate hereunder) who is, at the conclusion of
each annual meeting of the Company’s stockholders occurring after the effective
date of the Plan, an incumbent Outside Director, shall automatically be
granted, as of each such date (or, if applicable, the next succeeding business
day), (i) an option to purchase 3,000 shares of Common Stock at a price per
share equal to 100% of the Fair Market Value of the Common Stock on such date,
and (ii) 1,200 “Restricted Stock Units” (as herein after defined).

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

          Restricted
Stock Unit” or “RSU” represents an unfunded, unsecured right to receive in the
future, if the conditions of an RSU award are met, one share of Common Stock.
No shares of Common Stock shall be issued to an Outside Director on the date of
the RSU grant. 

3. Exercise of Options 

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

          Except
as provided in Section 5 below, an option may be exercised, in whole or in part
at any time and from time to time during the period beginning with the
expiration of twelve months following the date of grant and ending on the
option expiration date, by 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. 

          No
shares of Common Stock shall be issued until full payment therefor has been
made. An Outside Director shall have no rights as a stockholder 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 until twelve (12) months from the date of grant.
shares of Common Stock in respect of a vested RSU award shall be issued to an
Outside Director upon the vesting of an RSU.

          The
record established by the Company of the RSUs awarded to an Outside Director
does not constitute any stock or property of the Company. No funds or shares of
Common Stock shall be placed in trust or set aside to assure payment of an
award of RSUs. RSUs are an unfunded, unsecured promise of the Company to issue
Common Stock in the future, subject to vesting and other conditions in the
Plan. The right of an Outside Director to receive shares of Common Stock in
settlement of an RSU shall be no greater than any general unsecured creditor of
the Company. An Outside Director shall have no rights as a stockholder with
respect to shares of Common Stock which may be issued in settlement of an RSU
until the date of issuance of a certificate for such shares (as evidenced by
the appropriate entry on the books of the Company or a duly authorized transfer
agent.) No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such certificate is
issued. 

5. Termination of Services of Outside
Directors 

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

          (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 

2

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 completion
of twelve (12) months from the date of grant for such year otherwise than by
reason of death or disability, the RSU award for such year shall be forfeited
upon such cessation of services. In the event that an Outside Director to whom
an RSU has been granted shall cease to serve on the Board of Directors but
shall have been designated as a Director Emeritus, such director shall be
treated as having terminated service as an Outside Director for purposes of
determining the vesting and payment of an RSU award and cessation of services
as a director. In the event that an Outside Director to whom an RSU has been
granted under the Plan shall cease to serve as an Outside Director prior to
completion of twelve (12) months from the date of grant on account of death or
(as determined by the Board of Directors on the basis of all the facts and
circumstances) disability, the RSU award shall become immediately vested and
non-forfeitable and shares of Common Stock in respect of such RSU award shall
be distributed upon 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 upon such
cessation of services. 

3

6. Transferability 

          No
option or Restricted Stock Units 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 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 options or RSUs thereafter granted during the
balance of the term of the Plan. 

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

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

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

9. Withholding or Deduction of Taxes 

          If,
at any time, the Company is required under applicable laws or regulations to
withhold, or to make any deduction for, any taxes or take any other action in
connection

4

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. 

10. Administration 

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

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

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

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

          (d)
otherwise supervise the administration of the Plan;

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

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

11. Compliance with Applicable Law 

          Notwithstanding
any other provision of the Plan, the Company shall not be obligated to issue
any shares of Common Stock, or grant any option or RSU with respect thereto,
unless 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. 

5

12. Amendment and Termination; 

          It
is the intention of the Company that no payment or entitlement pursuant to this
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.
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 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 then required pursuant to Rule 16b-3
under the Securities Exchange Act of 1934, as amended, the applicable rules of
any national securities exchange or NASDAQ, or the Delaware corporation law or
other applicable laws. 

13. Effective Date 

          The
effective date of this Plan is July 18, 2007, the date on which it was adopted
by the Board of Directors; provided, however, that this Plan is subject to
approval by the holders of the Company’s Class A Stock, per value $.01 per
share. The Plan shall terminate on July 18, 2017. 

14. Governing Law 

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

6

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