SCHOLASTIC CORPORATION
555 BROADWAY
NEW YORK, NEW YORK 10012
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 16, 1997
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The Annual Meeting of Stockholders (the "Meeting") of Scholastic
Corporation, a Delaware corporation ("Scholastic"), will be held at 555
Broadway, New York, New York, on Tuesday, September 16, 1997 at 9:00 A.M., local
time.

At the Meeting, the stockholders will consider and act upon the following
proposals:

To be voted upon by holders of Class A Stock

1. Fixing fifteen as the number of persons to constitute the
Board of Directors until the next Annual Meeting of
Stockholders.

2. The election of twelve directors to hold office until the next
Annual Meeting of Stockholders.

3. The adoption of the 1997 Outside Directors' Stock Option Plan.

4. The election of Ernst & Young LLP as independent auditors for
the fiscal year ending May 31, 1998.

5. Such other matters as may properly come before the Meeting.

To be voted upon by holders of Common Stock

1. The election of three directors to hold office until the next
Annual Meeting of Stockholders.

2. Such other matters as may properly come before the Meeting and
as may properly be voted upon by the holders of Common Stock.

The Board of Directors has fixed the close of business on August 6, 1997
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Meeting and at any adjournment thereof.

WE HOPE THAT YOU WILL BE ABLE TO ATTEND THE MEETING. WHETHER OR NOT YOU
EXPECT TO BE PRESENT AT THE MEETING, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE.

By order of the Board of Directors,

CHARLES B. DEULL
SENIOR VICE PRESIDENT AND SECRETARY

August 26, 1997

SCHOLASTIC CORPORATION
555 BROADWAY
NEW YORK, NEW YORK 10012

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PROXY STATEMENT

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ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 16, 1997

GENERAL INFORMATION
This Proxy Statement is furnished to holders of shares of Common Stock,
par value $.01 per share ("Common Stock"), and holders of shares of Class A
Stock, par value $.01 per share ("Class A Stock"), of Scholastic Corporation, a
Delaware corporation ("Scholastic" or the "Company"), in connection with the
solicitation by the Board of Directors of proxies to be voted at the Annual
Meeting of Stockholders (the "Meeting"). This Proxy Statement and the enclosed
proxy are being mailed to stockholders on or about August 26, 1997.

The Common Stock of Scholastic is registered pursuant to Section 12(g) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Scholastic
is subject to the informational requirements of the Exchange Act and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission ("SEC").

VOTING RIGHTS
Stockholders of record as of the close of business on August 6, 1997 are
entitled to notice of the Meeting and to vote at the Meeting as hereinafter set
forth. Any proxy given by a stockholder may be revoked at any time prior to its
exercise by giving written notice of the revocation to the Secretary of
Scholastic, by executing and delivering a proxy with a later date or by voting
in person at the Meeting. If a proxy in the accompanying form is duly executed
and returned, the shares represented thereby will be voted at the Meeting and,
where a choice is specified, the proxy will be voted in accordance with such
specification. Directors will be elected by a plurality of the votes cast by the
holders of the Class of Stock entitled to elect such directors. The affirmative
vote of a majority of the votes cast by the holders of the Class A Stock is
required for each of the other proposals to be considered at the Meeting, except
for the proposal to adopt the 1997 Outside Directors' Stock Option Plan, which
will require the favorable vote of a majority of the shares of Class A Stock
represented at the Meeting. With respect to the election of directors and the
other proposals, 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.

The Amended and Restated Certificate of Incorporation of Scholastic (the
"Certificate") provides that the holders of shares of Class A Stock, voting as a
class, have the right (i) to fix the size of the Board of Directors so long as
it does not consist of less than three nor more than 15 directors, (ii) to 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 of Directors as shall equal at least one-fifth of the members of the Board
of Directors, and (iii) to exercise, exclusive of the holders of shares of
Common Stock, all other voting rights of stockholders of Scholastic. The
Certificate also provides that, except as otherwise provided by statute, 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 of
Directors as shall equal at least one-fifth of the members of the Board of
Directors. Holders of outstanding Class A Stock and Common Stock are entitled to
one vote per share, exercisable in person or by proxy at all meetings of
stockholders. No holders of either class of stock have cumulative voting rights.

On August 6, 1997, the record date for the Meeting, Scholastic had
outstanding 828,100 shares of Class A Stock and 15,370,032 shares of Common
Stock.

PRINCIPAL SECURITY HOLDERS
Under the 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. The following are the only
persons known to Scholastic to have owned beneficially more than 5% of its
outstanding Class A Stock or Common Stock on August 6, 1997.

CLASS A STOCK COMMON STOCK
---------------------- ---------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL PERCENT BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS OWNERSHIP (1)(2) CLASS(2)
------------------- ------------ -------- ---------------- --------

Richard Robinson........................................ 445,452(3) 53.8% 723,803(4) 4.7%
c/o Scholastic Corporation
555 Broadway
New York, NY 10012

Trust under the Will of Maurice R. Robinson(5).......... 324,310 39.2 841,546 5.5
c/o Scholastic Corporation
555 Broadway
New York, NY 10012

Trust under the Will of Florence L. Robinson(6)......... 58,338 7.0 175,000 1.1
c/o Scholastic Corporation
555 Broadway
New York, NY 10012

- ----------------
(1) Except in the case of the Trust under the Will of Maurice R. Robinson (the
"Maurice R. Robinson Trust") (see Note (5) below) and the Trust under the
Will of Florence L. Robinson (the "Florence L. Robinson Trust") (see Note
(6) below), each person named has sole voting and investment power with
respect to the shares shown opposite his or her name.

(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
additional shares of Common Stock issuable upon conversion of Class A Stock
are not included in the table as beneficially owned. If Richard Robinson,
the trustees of the Maurice R. Robinson Trust or the trustees of the
Florence L. Robinson Trust, respectively, would elect to convert all of the
shares of Class A Stock owned beneficially by such holder into shares of
Common Stock, the percentage of the outstanding shares of Common Stock owned
beneficially by such holders then would increase to 7.4%, 7.4% and 1.5%,
respectively.

(3) Excludes 324,310 shares of Class A Stock owned by the Maurice R. Robinson
Trust, as to which Mr. Robinson disclaims beneficial ownership, and 58,338
shares of Class A Stock owned by the Florence L. Robinson Trust, as to which
Mr. Robinson disclaims beneficial ownership.

(4) Includes 3,797 shares of Common Stock for which Mr. Robinson is custodian
under a separate custodial account for one of his sons and 1,881 shares of
Common Stock with respect to which Mr. Robinson had voting rights at May 31,
1997 under the Scholastic 401(k) Savings and Retirement Plan (the "401(k)
Plan"). Does not include 134,283 shares of Common Stock beneficially owned
by Helen V. Benham, an employee and director of Scholastic and the wife of
Richard Robinson, as to which Mr. Robinson disclaims beneficial ownership,
or 841,546 shares of Common Stock owned by the Maurice R. Robinson Trust,
175,000 shares of Common Stock owned by the Florence L. Robinson Trust and
74,547 shares of Common Stock owned by the Richard Robinson and Helen Benham
Charitable Fund, as to which Mr. Robinson also disclaims beneficial
ownership.

(5) Richard Robinson, Chairman of the Board, President and Chief Executive
Officer of Scholastic, Barbara Robinson Buckland, Mary Sue Robinson Morrill
and William W. Robinson, all of whom are siblings of Richard Robinson,
are trustees of the Maurice R. Robinson Trust, with shared voting and
investment power with respect to the shares owned by the Maurice R. Robinson
Trust. Under the terms of the Maurice R. Robinson Trust, the vote of

(FOOTNOTES CONTINUED ON NEXT PAGE)

(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)

a majority of the trustees is required to vote or direct the disposition
of the shares held by the Maurice R. Robinson Trust. Barbara Robinson
Buckland, Mary Sue Robinson Morrill and William W. Robinson directly own
235,589, 234,304 and 195,599 shares of Common Stock, respectively. For
information with respect to Richard Robinson, see Note (4) above.

(6) Richard Robinson and Mary Sue Robinson Morrill are the co-trustees of the
Florence L. Robinson Trust, with shared voting and investment power with
respect to the shares owned by the Florence L. Robinson Trust. Any acts by
the Florence L. Robinson Trust require the approval of each Trustee.

Pursuant to an agreement dated July 23, 1990 between the Maurice R.
Robinson Trust and Richard Robinson, the Maurice R. Robinson Trust has agreed
that if it receives an offer from any person to purchase any or all of the
shares of Class A Stock owned by the Maurice R. Robinson Trust and it desires to
accept such offer, Richard Robinson shall have the right of first refusal to
purchase all, but not less than all, of the shares of Class A Stock that such
person has offered to purchase for the same price and on the same terms and
conditions offered by such person. In the event Richard Robinson does not elect
to exercise such option, the Maurice R. Robinson Trust shall be free to sell
such shares of Class A Stock in accordance with the offer it has received. In
addition, if Richard Robinson receives an offer from any person to purchase any
or all of his shares of Class A Stock and the result of that sale would be to
transfer to any person other than Richard Robinson or his heirs voting power
sufficient to enable such other person to elect the majority of the Board of
Directors, either alone or in concert with any person other than Richard
Robinson, his heirs or the Maurice R. Robinson Trust (a "Control Offer"), and
Mr. Robinson desires to accept the Control Offer, the Maurice R. Robinson Trust
shall have the option to sell any or all of its shares of Class A Stock to the
person making the Control Offer at the price and on the terms and conditions set
forth in the Control Offer. If the Maurice R. Robinson Trust does not exercise
its option, Mr. Robinson shall be free to accept the Control Offer and to sell
the 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.

SHARE OWNERSHIP OF DIRECTORS AND OFFICERS
On August 6, 1997, each director and nominee for director of Scholastic,
the five most highly compensated employees of Scholastic and all directors and
officers of Scholastic as a group owned beneficially shares of Class A Stock and
Common Stock as follows:

CLASS A STOCK COMMON STOCK
------------------------ ---------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP (1) OF CLASS OWNERSHIP (1) (2) CLASS (2)
------------------- ------------- -------- ---------------- ----------

DIRECTORS
- ---------
Richard Robinson........................................ 445,452(3) 53.8% 723,803(4) 4.7%
Rebeca M. Barrera....................................... -- -- 3,287(5) *
Helen V. Benham......................................... -- -- 134,283(6) *
Frederic J. Bischoff.................................... -- -- 61,890(7) *
John Brademas........................................... -- -- 3,502(5) *
John C. Burton.......................................... -- -- 3,502(5) *
Alonzo A. Crim.......................................... -- -- 3,502(5) *
Ramon C. Cortines....................................... -- -- 3,287(5) *
Charles T. Harris III................................... -- -- 3,153(5) *
Andrew S. Hedden........................................ -- -- -- --
Mae C. Jemison. . . .................................... -- -- 3,502(5) *
Richard A. Krinsley..................................... -- -- 4,143 *
John G. McDonald........................................ -- -- 3,502(5) *
Augustus K. Oliver...................................... -- -- 1,287(8) *
Richard M. Spaulding.................................... -- -- 133,217(9) *

CLASS A STOCK COMMON STOCK
---------------------- ----------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP(1) OF CLASS OWNERSHIP(1)(2) CLASS(2)
------------------- ------------ -------- --------------- ----------

NAMED EXECUTIVE OFFICERS
- ------------------------
Barbara Marcus.......................................... -- -- 91,395(10) *
Ruth Otte............................................... -- -- 12,500(11) *
Jean Feiwel............................................. -- -- 16,376(12) *
Kevin McEnery........................................... -- -- 37,985(13) *
All directors and officers as a group (32 persons
including those named above).......................... 445,452(3) 53.8 1,594,495(14) 10.1%

- -------------

* Less than 1.0%

(1) Each person named has sole voting and investment power with respect to the
shares shown opposite his or her name.

(3) Excludes 324,310 shares of Class A Stock owned by the Maurice R. Robinson
Trust, as to which Mr. Robinson disclaims beneficial ownership, and 58,338
shares of Class A Stock owned by the Florence L. Robinson Trust, as to
which Mr. Robinson disclaims beneficial ownership.

(4) Includes 3,797 shares of Common Stock for which Mr. Robinson is custodian
under a separate custodial account for one of his sons and 1,881 shares of
Common Stock with respect to which Mr. Robinson had voting rights at May
31, 1997 under the 401(k) Plan. Does not include 134,283 shares of Common
Stock beneficially owned by Helen V. Benham, an employee and director of
Scholastic and the wife of Richard Robinson, as to which Mr. Robinson
disclaims beneficial ownership, or 841,546 shares of Common Stock owned by
the Maurice R. Robinson Trust, 175,000 shares of Common Stock owned by the
Florence L. Robinson Trust and 74,547 shares of Common Stock owned by the
Richard Robinson and Helen Benham Charitable Fund, as to which Mr.
Robinson also disclaims beneficial ownership.

(5) Includes 3,000 shares of Common Stock as to which such director holds
options under Scholastic's Outside Directors' Stock Option Plan.

(6) Includes 3,797 shares of Common Stock for which Ms. Benham is custodian
under a separate custodial account for one of her sons. Excludes 723,803
shares of Common Stock owned by Richard Robinson, as to which Ms. Benham
disclaims beneficial ownership, and 74,547 shares of Common Stock owned by
the Richard Robinson and Helen Benham Charitable Fund, as to which Ms.
Benham also disclaims beneficial ownership.

(7) Does not include 4,200 shares of Common Stock owned by Mr. Bischoff's wife
and 50 shares of Common Stock owned by Mr. Bischoff's daughter, as to
which Mr. Bischoff disclaims beneficial ownership.

(8) Does not include 900 shares of Common Stock owned by Mr. Oliver's
daughter, as to which Mr. Oliver disclaims beneficial ownership.

(9) Includes 31,738 shares of Common Stock for which Mr. Spaulding is
custodian under separate custodial accounts for his children.

(10) Includes 895 shares of Common Stock with respect to which Ms. Marcus had
voting rights at May 31, 1997 under the 401(k) Plan and 90,500 shares of
Common Stock as to which Ms. Marcus holds options under the 1992 Stock
Option Plan.

(11) Includes 12,500 shares of Common Stock as to which Ms. Otte holds
options under the 1992 Stock Option Plan and the 1995 Stock Option Plan.

(FOOTNOTES CONTINUED ON NEXT PAGE)

(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(12) Includes 16,376 shares of Common Stock as to which Ms. Feiwel holds
options under the 1992 Stock Option Plan.

(13) Includes 485 shares of Common Stock with respect to which Mr. McEnery had
voting rights at May 31, 1997 under the 401(k) Plan and 37,500 shares of
Common Stock as to which Mr. McEnery holds options under the 1992 Stock
Option Plan.

(14) Includes an aggregate of 472,401 shares of Common Stock issuable on
exercise of stock options and 6,104 shares of Common Stock as to which
directors and officers as a group had voting rights at May 31, 1997 under
the 401(k) Plan. If Richard Robinson elected to convert all of his Class A
Stock into shares of Common Stock, the percentage of outstanding shares of
Common Stock beneficially owned by all directors and officers as a group
would be 12.5%.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires directors, executive officers
and persons who are the beneficial owners of more than 10% of the Company's
Common Stock to file reports of ownership and changes in ownership of such
Common Stock with the SEC and The NASDAQ Stock Marketsm and furnish the Company
with copies of all Section 16(a) forms they file. Based solely on a review of
the copies of such forms furnished to the Company, the Company believes that all
Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial owners were complied with, with the
exception of reports on Form 4 filed after the due date with respect to a single
transaction each on behalf of Ernest Fleishman, Raymond Marchuk, Kevin McEnery,
John Brademas and Richard A. Krinsley, officers or directors of the Company.
These transactions were included on Form 5 reports, which were timely filed.

ELECTION OF DIRECTORS

The proxies for the Class A Stock, unless otherwise directed, will be
voted for the number of directors constituting the Board of Directors to be
fixed at fifteen until the next Annual Meeting of Stockholders. The favorable
vote of a majority of the votes cast by the holders of Class A Stock represented
at the Meeting is necessary for this purpose. The proxies for the Class A Stock
and the proxies for the Common Stock, unless otherwise directed, will be voted,
respectively, for the twelve and three nominees listed below to serve as
directors until the 1998 Annual Meeting of Stockholders. The Board of Directors
expects that each of the nominees will be available for election; however, if
any of them should be unable to serve for any reason, such proxies will be voted
for the election of the other nominees named and may be voted for substituted
nominees in the discretion of the persons named as proxies. Information as to
the nominees being presented at the Meeting is as follows:

NOMINEES FOR ELECTION BY HOLDERS OF CLASS A STOCK

DIRECTOR
PRINCIPAL OCCUPATION OR EMPLOYMENT AGE SINCE*
---------------------------------- --- --------

Richard Robinson....................... Chairman of the Board, President and 60 1971
Chief Executive Officer of Scholastic

Rebeca M. Barrera...................... President, National Latino Children's Institute, 50 1995
Austin, TX
Helen V. Benham........................ Corporate Vice President, Early Childhood 47 1992
Advisor of Scholastic

Frederic J. Bischoff................... Retired Executive Vice President and Chief Financial 58 1995
Officer of Scholastic

John Brademas.......................... President Emeritus, New York University, 70 1982
New York, NY

John C. Burton......................... Professor of Accounting and Finance, Graduate 64 1978
School of Business, Columbia University,
New York, NY

Charles T. Harris III.................. Limited Partner, Goldman, Sachs & Co., New York, NY 45 1996

Andrew S. Hedden....................... Partner, Coudert Brothers, New York, NY 56 1991

DIRECTOR
PRINCIPAL OCCUPATION OR EMPLOYMENT AGE SINCE*
---------------------------------- --- --------

Mae C. Jemison......................... President, The Jemison Group, Inc., 40 1993
Houston, TX
Richard A. Krinsley.................... Retired Executive Vice President of Scholastic 67 1991

Augustus K. Oliver..................... Private Investor, Gollust & Oliver, 47 1995
New York, NY

Richard M. Spaulding................... Executive Vice President of Scholastic 60 1974

NOMINEES FOR ELECTION BY HOLDERS OF COMMON STOCK
DIRECTOR
PRINCIPAL OCCUPATION OR EMPLOYMENT AGE SINCE*
---------------------------------- --- --------

Ramon C. Cortines...................... Consultant Professor, Stanford University, 65 1995
Stanford, CA

Alonzo A. Crim......................... Professor, Georgia State University, Atlanta, GA 68 1987

John G. McDonald....................... Professor of Finance, Graduate School of 60 1985
Business, Stanford University, Stanford, CA

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* The dates set forth above indicate the date such director was first elected
as a director of the Company or Scholastic Inc., the Company's principal
operating subsidiary.

HELEN V. BENHAM is the wife of Richard Robinson. There are no other family
relationships among any of the directors or executive officers of the Company or
its subsidiaries. Each of the directors and executive officers of the Company is
a citizen of the United States.

RICHARD ROBINSON has held his position with the Company and Scholastic Inc.
for more than five years.

REBECA M. BARRERA has been the President of the National Latino Children's
Institute since 1997 and previously she was the Executive Director of Corporate
Fund for Children, a non-profit organization dedicated to the strengthening of
child and family programs through community resources, since 1990. Prior to
heading the Corporate Fund for Children, Ms. Barrera was president of Ninos
Group, Inc., a private corporation specializing in child care programs, from
1981 to 1992.

HELEN V. BENHAM joined Scholastic in 1974, working first in the Book Club
Art Department, then in the Text Division and later as Editorial Director in the
Classroom Magazine Division. In 1990, she was named Vice President and Publisher
of the Early Childhood Division and in 1996 was named Corporate Vice President,
Early Childhood Advisor.

FREDERIC J. BISCHOFF became Executive Vice President and Chief Financial
Officer of Scholastic Inc. in July 1983 and served in that capacity until his
retirement in July 1995, when he became a consultant to the Company.

JOHN BRADEMAS was President of New York University from July 1981 to
November 1991, when he became President Emeritus. For 22 years (1959-1981), Dr.
Brademas served as a United States Representative in Congress, the last four as
House Majority Whip. He currently serves on the boards of Loews Corporation,
NYNEX, Texaco Inc., The Aspen Institute and the Alexander S. Onassis Public
Benefit Foundation. He is chairman of the National Endowment for Democracy and
is chairman of the Executive Committee of the Center for National Policy.

JOHN C. BURTON was Chief Accountant of the Securities and Exchange
Commission from 1972 to 1976 and Deputy Mayor for Finance of the City of New
York from 1976 to 1977. From January 1978 to the present, he has been Professor
of Accounting and Finance, Graduate School of Business, Columbia University, and
from July 1, 1982 to 1988 he was Dean of the Graduate School of Business. Dr.
Burton was a director of Commerce Clearing House, Inc. from 1978 to 1996 and of
Manville Corporation from 1990 to 1996, and is currently a director of CPAC,
Inc. and Salomon Swapco, Inc. From 1991 to 1994, he was also a member of the
Board of Governors of the National Association of Security Dealers, Inc., which
operates the NASDAQ Stock Market, and he serves on the Consultants Panel to the
Comptroller General of the United States. Dr. Burton was also a director of
Scholastic Inc. from December 1968 to June 1972.

RAMON C. CORTINES is an independent consultant in public education and
Consultant Professor, Stanford University. He was Chancellor, Board of Education
of the City of New York from September 1993 until October 1995. He was Assistant
Secretary for Intergovernmental Affairs in the United States Department of
Education prior to his acceptance of the Chancellorship. Before joining the
Clinton Administration, Mr. Cortines was Associate Director of the Pew
Charitable Trusts' Forum on School Reform at Stanford University. He was
Superintendent of the San Francisco Unified School District from 1986 to 1992.

ALONZO A. CRIM was Superintendent of the Atlanta, Georgia Board of
Education from 1973 until 1988. He has been a professor at Georgia State
University since 1988 and at Spelman College since 1991.

ANDREW S. HEDDEN has been a partner of the law firm of Coudert Brothers
since 1975.

CHARLES T. HARRIS III has been a limited partner with the investment firm
of Goldman Sachs & Co. since 1996. He was a general partner of Goldman Sachs &
Co. from 1988 until 1996. He is a member of the Trustee Council of Phillips
Exeter Academy, a trustee of the New Canaan Country Day School and a director
and Chairman of the Alliance for Young Artists & Writers, Inc.

DR. MAE C. JEMISON has been President of The Jemison Group, Inc. since
March 1993. Prior to developing The Jemison Group, Inc., Dr. Jemison was an
astronaut with the National Aeronautics and Space Administration (NASA) from
1987 to 1993 and was a member of the Space Shuttle Endeavor Flight in September
1992.

RICHARD A. KRINSLEY was Executive Vice President, Children's Book
Publishing of the Company from April 1983 until his retirement in September
1991, when he became a Director. He was formerly an Executive Vice President
with Random House, Inc. Mr. Krinsley has been a director of Executive Telecard
Ltd. since 1995.

JOHN G. MCDONALD joined the faculty of Stanford University Graduate School
of Business, where he is the IBJ Professor of Finance, in 1968. Professor
McDonald serves on the board of directors of a number of investment companies:
Investment Co. of America, the New Perspective Fund, the Income Fund of America,
American Balanced Fund, the Growth Fund of America, Inc., EuroPacific Growth
Fund, and the Emerging Markets Growth Fund. He also serves on the Board of
Directors of Varian Associates, Inc. and TriNet Corporate Realty Trust, Inc.
From January 1987 until January 1990, Professor McDonald was a member (and Vice
Chairman in 1989-90) of the Board of Governors of the National Association of
Securities Dealers, Inc., which operates The NASDAQ Stock Market.

AUGUSTUS K. OLIVER has been a private investor with Gollust & Oliver since
1995. From 1984 to 1995, he was a partner at the investment banking and
management firm of Gollust, Tierney and Oliver, and from 1975 through April
1984, he practiced law with the firm of Skadden, Arps, Slate, Meagher and Flom,
becoming a partner in 1983. Mr. Oliver is the grandson of a former Chairman of
the Board of Directors of Scholastic Inc.

RICHARD SPAULDING has held his position with the Company and Scholastic
Inc. for more than five years.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
NOMINEES. ALL PROXIES WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS GIVEN.
WHEN NO SPECIFIC INSTRUCTIONS ARE GIVEN, PROXIES WILL BE VOTED FOR THE APPROVAL
OF THE NOMINEES.

BOARD AND COMMITTEE MEETINGS
Five meetings of the Board of Directors were held during the 1997 fiscal
year and all incumbent directors attended at least 75% of the aggregate of such
meetings and of the meetings held by all committees of the Board of which they
were a member, with the exception of Mr. Cortines. Mr. Cortines, with the
knowledge and consent of the Board, did not participate in meetings during a
portion of the 1997 fiscal year while he was engaged in a project undertaken for
the U.S. Department of Education.

The Company has standing Executive, Audit, Fiduciary, Human Resources and
Compensation, Nominating, Proxy and Stock Option Committees of its Board of
Directors.

EXECUTIVE COMMITTEE
Richard Robinson (Chairperson), Frederic J. Bischoff, John C. Burton,
Charles T. Harris, Andrew S. Hedden, Richard A. Krinsley, Augustus K. Oliver and
Richard M. Spaulding are the members of the Executive Committee, which held
two meetings during the fiscal year ended May 31, 1997. In the intervals
between meetings of the Board of Directors, 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 Scholastic. All action
taken by the Executive Committee is submitted for ratification by the Board of
Directors.

AUDIT COMMITTEE
John C. Burton (Chairperson), Frederic J. Bischoff, Andrew S. Hedden and
Augustus K. Oliver are the members of the Audit Committee, which held three
meetings during the fiscal year ended May 31, 1997. The functions performed by
the Audit Committee include reviewing with the independent auditors their audit
plan and the results of their audit (including their recommendations regarding
internal controls), recommending to the Board of Directors the independent
auditors who are to be submitted to the holders of Class A Stock for election,
reviewing Scholastic's financial accounting policies and decisions and reporting
thereon to the Board prior to the issuance of annual financial statements and
exercising general oversight over Scholastic's system of internal accounting
controls. In addition, members of the Audit Committee review any non-audit
services to be performed by the independent auditors and consider the possible
effects of such services on the auditors' independence.

FIDUCIARY COMMITTEE
Richard M. Spaulding (Chairperson), John C. Burton, Andrew S. Hedden, John
G. McDonald, Augustus K. Oliver and Richard Robinson (ex-officio) are the
members of the Fiduciary Committee. The Fiduciary Committee, which held two
meetings during the fiscal year ended May 31, 1997, is responsible for
recommending to the Board policies relating to the Retirement Income Plan for
Employees of Scholastic Inc. and the 401(k) Plan and making recommendations
concerning the powers which the Board has reserved to itself under the Plans.

HUMAN RESOURCES AND COMPENSATION COMMITTEE
John G. McDonald (Chairperson), Ramon C. Cortines, Alonzo A. Crim, Charles
T. Harris, Andrew S. Hedden and Mae C. Jemison are the members of the Human
Resources and Compensation Committee, which held two meetings during the fiscal
year ended May 31, 1997. The Human Resources and Compensation Committee has the
responsibility for setting the compensation of the Chief Executive Officer and
reviewing the recommendations of the Chief Executive Officer for compensation of
corporate officers prior to approval by the Board. The names of all staff
members other than corporate officers whose salaries are $100,000 or more per
annum are also made available to the Human Resources and Compensation Committee,
together with such other data on employee compensation as is appropriate to
enable the Human Resources and Compensation Committee to evaluate Scholastic's
overall compensation plans and practices as a separate company and competitively
within the industry. This Committee also reviews the Company's Human Resource
and Diversity Programs.

NOMINATING COMMITTEE
Alonzo A. Crim (Chairperson), Rebeca M. Barrera, John Brademas, John C.
Burton, Ramon C. Cortines and Mae C. Jemison are the members of the Nominating
Committee, which held one meeting during the fiscal year ended May 31, 1997. The
functions of the Nominating Committee are to identify and recommend to the Board
of Directors, through the Proxy Committee, candidates for election as directors,
to recommend to the Board of Directors, through the Proxy Committee, any changes
it believes desirable in the size and composition of the Board, to recommend to
the Board of Directors the committee structure which the Board should adopt and
the members of the Board who should be appointed to each committee and to
recommend to the Board fees to be paid to directors for service on the Board and
on Board committees. The Nominating Committee would be pleased to receive
suggestions from stockholders about persons it should consider recommending as
possible members of the Board of Directors. Any such suggestion should be sent
to Nominating Committee of the Board of Directors, Scholastic Corporation, 555
Broadway, New York, New York 10012.

PROXY COMMITTEE
Richard Robinson (Chairperson), Andrew S. Hedden and Richard A. Krinsley
are the members of the Proxy Committee, which held one meeting during the fiscal
year ended May 31, 1997. The Proxy Committee considers the recommendations of
the aforementioned Nominating Committee and makes recommendations to the Board
as to the number and names of directors to submit as nominees to the
stockholders for election. The Proxy Committee also acts for management on any
matters to be proposed at the Annual Meeting of Stockholders.

STOCK OPTION COMMITTEE
John G. McDonald (Chairperson), Charles T. Harris and Andrew Hedden are
the members of the Stock Option Committee, which held two meetings during the
fiscal year ended May 31, 1997. The Stock Option Committee administers the 1992
Stock Option Plan and the 1995 Stock Option Plan.

COMPENSATION OF DIRECTORS
For the fiscal year ended May 31, 1997, each director of Scholastic who
was not an employee of Scholastic or any of its subsidiaries was paid an annual
sum of $25,000 as a retainer for his or her services as a director in addition
to an award of stock of the Company valued at the date of grant at $10,000. Each
non-employee director who is the chairperson of a committee also receives a
$1,500 annual chairman fee. Scholastic reimburses its directors for travel,
lodging and related expenses they may incur in attending Board and Committee
meetings.

On May 19, 1992, the Board of Directors adopted the Outside Directors'
Stock Option Plan (the "Outside Directors' Plan"), which was subsequently
approved by the holders of Class A Stock on June 15, 1992. The purpose of the
Outside Directors' Plan was to assist Scholastic in attracting and retaining
experienced and knowledgeable non-employee directors of Scholastic ("Outside
Directors") by enabling them to participate in the success and growth of
Scholastic through one-time grants of non-qualified stock options. Under the
Outside Directors' Plan, each Outside Director in office on May 19, 1992 who did
not as of February 24, 1992 beneficially own any shares of Common Stock was
automatically granted a non-qualified stock option to purchase 3,000 shares of
Common Stock at a price equal to the fair market value of a share of Common
Stock on May 19, 1992, and each subsequently elected Outside Director who did
not at the date of election beneficially own any shares of Common Stock was
automatically granted a non-qualified stock option to purchase 3,000 shares of
Common Stock at a price equal to the fair market value of a share of Common
Stock on the date such Outside Director was first elected to office. The Outside
Directors' Plan has a term of 10 years, and 30,000 shares of Common Stock were
reserved for issuance under this plan. Andrew Hedden declined to participate in
the Outside Directors' Plan. As of May 31, 1997, there were no stock options
available for issuance under the Outside Directors' Plan.

In December 1993, the Board of Directors approved a Non-Employee Director
Stock-For-Retainer Plan (the "Directors' Plan"). The Directors' Plan was
designed to compensate all Outside Directors with Common Stock of the Company in
addition to other Director compensation. The Directors' Plan provided for the
award of stock equal to the value of $5,000 in the first month of each year, and
20,000 shares of Common Stock were reserved for issuance under this plan. In
September 1995, the Class A Shareholders approved an amendment to the Directors'
Plan to increase the value of the annual stock grants to $10,000. As of May 31,
1997, 15,952 shares of Common Stock were available for issuance under the
Directors' Plan. Andrew Hedden declined to participate in the Directors' Plan.

The Directors' Plan will be terminated, and no further grants or awards
will be made thereunder or under the Outside Directors' Plan, if the 1997
Outside Directors' Stock Option Plan, included as Appendix A hereto, is approved
by the holders of the Class A Stock.

In September 1995, the Company adopted the Directors' Deferred
Compensation Plan (the "Deferred Compensation Plan"). The Deferred Compensation
Plan permits directors to defer 50% or 100% of their cash retainers and meeting
fees. Deferred amounts accrue interest at a rate equal to the 30-year treasury
bill rate and are paid in cash, upon the later of termination from Board service
or age 62, unless paid earlier due to death, disability, change of control of
the Company or severe financial hardship. As of May 31, 1997, four directors had
chosen to have 100% of their director's compensation deferred and one director
had chosen to have 50% of such compensation deferred, for a total amount
deferred since adoption of the Deferred Compensation Plan of $186,923.03.

Other than under the plans referred to above, Outside Directors are not
entitled to receive any other options or awards under any other stock plan of
Scholastic, including the 1992 Stock Option Plan and the 1995 Stock Option Plan.

CERTAIN TRANSACTIONS
Under a non-qualified pension agreement with Richard A. Krinsley, the
Company is obligated to provide Mr. Krinsley with pension benefits determined by
reference to the projected benefit for Mr. Krinsley under the pension plan of
his prior employer. As of his retirement on September 30, 1991, Mr. Krinsley had
earned annual benefits under such agreement in the amount of $41,974.

Andrew S. Hedden is a partner of the law firm of Coudert Brothers, which
has provided legal services to Scholastic in the past and is expected to
continue to do so in the future.

No employee director of Scholastic receives additional compensation for
his or her services as a director.

From time to time, the Company receives investment banking services from
Goldman, Sachs & Co., of which Charles T. Harris is a limited partner. During
the fiscal year ended May 31, 1997, Goldman, Sachs & Co. acted as co-manager of
the Company's offering of 7% Notes due 2003.

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth information regarding the cash compensation
paid or accrued by the Company and its subsidiaries for services of the Chief
Executive Officer and the four other most highly compensated employees of the
Company in respect of the fiscal years ended May 31, 1997, 1996 and 1995:

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
------------
NO. OF
SECURITIES
ANNUAL COMPENSATION UNDERLYING
NAME AND -------------------- OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) SARS(1) COMPENSATION(2)
------------------ ---- ------ -------- ------- ---------------

Richard Robinson................................. 1997 $600,000 0 0 $12,030
Chairman of the Board, President and Chief 1996 526,938 $250,000 0 6,326
Executive Officer 1995 420,000 211,600 0 9,701

Barbara Marcus................................... 1997 500,000 0 0 7,927
Executive Vice President, Children's Book 1996 350,000 190,477 25,000 2,126
Publishing 1995 297,442 175,000 0 5,570

Ruth Otte........................................ 1997 400,000 0 50,000 6,163
Executive Vice President, Media 1996 161,538 54,756 0 0
1995 -- -- -- --

Jean Feiwel...................................... 1997 350,000 0 0 6,146
Senior Vice President, Publisher and 1996 253,084 143,585 17,500 4,127
Editor-in-Chief, Book Group 1995 238,219 108,231 0 1,020

Kevin McEnery.................................... 1997 318,000 0 0 6,542
Executive Vice President and Chief 1996 275,000 113,695 0 4,012
Financial Officer 1995 217,692 63,000 50,000 1,740

- ------------------
(1) On July 15, 1997, each of the named executives received stock options in
lieu of bonuses for fiscal 1997. Such options are not included in this
table. Options to purchase 5,328, 4,441, 8,348, 2,238 and 5,009 shares were
issued to Richard Robinson, Barbara Marcus, Ruth Otte, Jean Feiwel and Kevin
McEnery, respectively, in lieu of fiscal 1997 bonuses.

(2) Includes matching contributions made by the Company in favor of each
of the named executives in connection with their participation in the
401(k) Plan ($6,879, $6,187, $5,126 and $4,802, respectively, in fiscal
1997 with respect to Mr. Robinson, Ms. Marcus, Ms. Feiwel and Mr. McEnery)
and life insurance premiums paid by the Company ($5,151, $1,740, $1,858,
$1,020 and $1,740, respectively, in fiscal 1997 with respect to Mr.Robinson,
Ms. Marcus, Ms. Otte, Ms. Feiwel and Mr. McEnery) on behalf of each named
executive.

Executives of the Company are covered by an executive life insurance
program. Each executive is insured in an amount equal to three times the
executive's annual earnings up to a maximum coverage of $500,000. Premiums for
such coverage are fully paid by the Company.

The Company has not entered into any employment agreements with the
executive officers named above.
10

STOCK OPTIONS
In 1987, the 1987 Stock Option Plan was adopted by the former Board of
Directors of Scholastic, which at that time consisted of Richard Robinson and
two other officers of Scholastic. Options to purchase shares of Common Stock
were granted to certain officers and executives of Scholastic, most of which
options were granted in exchange for options previously granted to such persons
to acquire shares of common stock of Scholastic Inc. On May 19, 1992, the 1987
Stock Option Plan was amended and restated as the 1992 Stock Option Plan. The
1992 Stock Option Plan provided for the grant to key employees and consultants
of Scholastic, including officers, of incentive stock options and non-qualified
stock options. The purpose of the 1992 Stock Option Plan was to assist
Scholastic in attracting and retaining employees of ability, training and
experience by providing an opportunity for employees to acquire and maintain
stock ownership in the Company. At August 6, 1997, 877,725 shares of Common
Stock were covered by existing grants under the 1992 Stock Option Plan. No
further grants of options may be made under the 1992 Stock Option Plan.

On September 24, 1991, the Board of Directors of Scholastic approved the
1992 Stock Option Plan. The 1992 Stock Option Plan is administered by the Stock
Option Committee, consisting of non-employee directors of Scholastic. Prior to
September 24, 1991, Richard Robinson had been the sole member of the Stock
Option Committee. Non-employee directors of the Company are not entitled to
receive any options or awards under the 1992 Stock Option Plan.

The exercise price for options granted prior to May 19, 1992, under the
1987 Stock Option Plan, was the greater of $3.18 or a formula value price based
on a computation designed to reflect the fair value of a share of Common Stock,
except that the exercise price for options issued in exchange for options
previously granted to acquire shares of common stock of Scholastic Inc. was
equal to the average exercise price of the options exchanged. The exercise price
for options granted under the 1992 Stock Option Plan is not less than the
average of the high and low selling prices of a share of Common Stock as
reported by the Automated Quotation System of the National Association of
Securities Dealers, Inc. as of the date of the grant.

Incentive stock options granted under the 1992 Stock Option Plan will
expire not more than ten years from the date of grant and non-qualified options
will expire not more than ten years and one day from the date of grant. Options
granted under the 1992 Stock Option Plan are not exercisable for a one-year
period after the date of grant, except in the case of the death of the optionee
during such one-year period. The exercise price of each share purchased pursuant
to each option must be paid in full at the time of exercise in cash, in shares
of Common Stock owned by the optionee having a fair market value on the date of
exercise of an amount at least equal to the exercise price, or a combination of
cash and such stock. With the consent of the Stock Option Committee, the
exercise price may be paid by means of a full recourse promissory note.

No option granted under the 1992 Stock Option Plan is transferable other
than by will or the laws of descent and distribution. An option is exercisable
by the optionee only if, at the time of exercise, the optionee is an employee or
consultant of Scholastic (or a subsidiary or affiliate), except that, upon
termination of the optionee's employment or consulting arrangement with
Scholastic (or a subsidiary or affiliate), the optionee may exercise an option
(i) within twelve months thereafter in the event of termination due to
disability or to retirement on or after age 55 or (ii) within three months
thereafter in the event of involuntary termination at the request of Scholastic
(other than for cause or by reason of disability or retirement on or after age
55), but, in each case, only to the extent of the accrued right to exercise at
the date of such termination and in no event later than the expiration dates of
such options. In the event of the death of an optionee while an employee or
consultant of Scholastic (or a subsidiary or affiliate) or if the optionee dies
within the applicable twelve-month or three-month period during which options
may be exercised following a termination of employment or consulting arrangement
as described above, such optionee's estate or beneficiary may exercise such
optionee's option within a period not greater than the earlier of (i) twelve
months from the date of the optionee's death and (ii) the expiration of the term
of the option, without regard to whether the one-year restriction on exercise
had expired as of the date of death. If the optionee ceased to be an employee or
consultant for any other reason, his or her options terminate immediately.

On September 21, 1995, the stockholders adopted the 1995 Stock Option Plan
(the "1995 Plan") to supplement the 1992 Stock Option Plan. The Board of
Directors recommended the adoption of the 1995 Plan because (i) it continued to
believe that stock based incentives are important factors in attracting,
retaining and rewarding officers, key employees and consultants and closely
aligning their interests with those of shareholders and (ii) the 1992 Stock

Option Plan expired on July 16, 1996 and had insufficient options available for
grant to meet Scholastic's needs. Under the 1995 Plan, 2,000,000 shares of
Common Stock were reserved for issuance on exercise of options to be granted
and, as of August 6, 1997, 1,262,044 shares of Common Stock were covered by
existing grants under the 1995 Stock Option Plan and an additional 737,956
shares of Common Stock were reserved for issuance upon the exercise of options
to be granted in the future.

Participants in the 1995 Plan will be selected by the Stock Option
Committee, in accordance with the terms of the 1995 Plan, from officers, key
employees and consultants of Scholastic, its subsidiaries and affiliates, who
are expected to make a significant contribution to Scholastic, its subsidiaries
and affiliates. The Stock Option Committee has exclusive power to select the
individuals who shall receive stock option awards under the 1995 Plan and to
determine the amount of shares of Common Stock to be covered and the terms,
including any vesting schedule, of the awards. Participants may be selected and
stock options may be granted at any time during the period that awards may be
made under the 1995 Plan. The number of shares of Common Stock available at any
time for awards under the 1995 Plan shall be determined in a manner which
reflects the number of shares of Common Stock then subject to outstanding awards
and the number of shares of Common Stock previously acquired under the 1995
Plan.

Under the 1995 Plan, the Stock Option Committee may award non-qualified
stock options or incentive stock options which qualify for specified tax
benefits under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). Non-qualified stock options shall have a term of not more than ten
years and one day from the grant date. Incentive stock options generally shall
have a term of not more than ten years from the grant date. Stock options will
be granted with an exercise price per share of Common Stock of not less than
100% of the fair market value of a share of Common Stock, determined as the
average of the high and low price per share of Common Stock as reported by the
Automated Quotation System of the National Association of Securities Dealers,
Inc. on the date of the grant. The aggregate fair market value, determined as of
the grant date, of the Common Stock for which any employee may be awarded
incentive stock options which are first exercisable by such person during any
calendar year under the 1995 Plan or any other stock option plan maintained by
Scholastic, its subsidiaries or affiliates may not exceed $100,000. The maximum
number of shares of Common Stock which may be awarded as options under the 1995
Plan during any calendar to any person is 500,000 shares. Stock options may not
be exercisable for at least one year from the date of grant, except in the event
of the death or disability of the recipient. A stock option granted under the
1995 Plan may be exercised by paying the exercise price in cash or Common Stock
of Scholastic or any combination of cash and Common Stock having a value equal
to the exercise price.

No option granted under the 1995 Plan is transferable other than by will
or the laws of descent and distribution. An option is exercisable by the
optionee only if, at the time of exercise, the optionee is an employee or
consultant of Scholastic, its subsidiary or affiliate, except that, upon
termination of the optionee's employment or consulting arrangement, the optionee
may exercise an option (i) within one year thereafter in the event of
termination due to disability or death, without regard as to whether the
one-year restriction on exercise has expired as of the date of disability or
death, (ii) within three years thereafter in the event of termination due to
retirement on or after age 55, to the extent exercisable on the date of
retirement, or (iii) within three months thereafter in the event of involuntary
termination at the request of Scholastic (other than for cause or by reason of
disability, death or retirement on or after age 55), but only to the extent
exercisable on the date of such termination. If the optionee ceases to be an
employee or consultant for any other reason, his or her options terminate
immediately to the extent not previously exercised. The Stock Option Committee
may accelerate the exercisability of an option in its discretion.

The Board of Directors may amend or terminate the 1995 Plan at any time,
provided that, in general, it may not, without shareholder approval, increase
the number of shares of Common Stock which may be acquired under the 1995 Plan,
extend the term during which stock options may be granted under the 1995 Plan or
reduce the exercise price of an option below the fair market value of the Common
Stock on the date on which the option is granted. The 1995 Plan shall terminate
as of, and no award may be made after, September 21, 2005, unless extended by
shareholder vote.

The following table shows the options granted under the 1992 Stock Option
Plan and 1995 Stock Option Plan during the last fiscal year to the five most
highly compensated executive officers together with the number and grant date
present value at May 31, 1997:

POTENTIAL POTENTIAL
REALIZABLE VALUE REALIZABLE VALUE
AT ASSUMED AT ASSUMED
NO. OF EXERCISE ANNUAL RATES OF ANNUAL RATES OF
SECURITIES % OF TOTAL OR STOCK PRICE STOCK PRICE
UNDERLYING OPTIONS BASE APPRECIATION FOR APPRECIATION FOR
OPTIONS GRANTED IN PRICE EXPIRATION OPTION TERM OPTION TERM
NAME GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% 10%
- ----- --------- ----------- --------- --------- -------------- --------------

Richard Robinson.............. 0 0 0 0 0 0
Barbara Marcus................ 0 0 0 0 0 0
Ruth Otte..................... 50,000 23.2% $68.81 7/16/07 $2,112,402 $8,923,771
Jean Feiwel................... 0 0 0 0 0 0
Kevin McEnery................. 0 0 0 0 0 0

The following table shows the options exercised during the fiscal year
ended May 31, 1997 by the five most highly compensated executive officers
together with the number and value of exercisable/unexercised options at May 31,
1997:

AGGREGATED OPTIONS/SARS EXERCISED IN FISCAL 1997 AND MAY 31, 1997 OPTION/SAR VALUES

VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS AT
SHARES ACQUIRED AT MAY 31, 1997 MAY 31, 1997
NAME ON EXERCISE VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----- -------------- -------------- ------------------------ -------------------------

Richard Robinson............. 0 0 0/0 0/0
Barbara Marcus............... 7,000 $424,040 84,250/23,750 $1,309,140/0
Ruth Otte.................... 0 0 0/50,000 0/0
Jean Feiwel.................. 2,500 157,425 11,938/15,812 0/0
Kevin McEnery................ 15,000 536,250 37,500/37,500 0/0

EMPLOYEE BENEFIT PLANS
RETIREMENT INCOME PLAN FOR EMPLOYEES OF SCHOLASTIC INC.
The Retirement Income Plan for Employees of Scholastic Inc. (the
"Retirement Plan") is a contributory defined benefit pension plan covering all
domestic salaried and hourly employees of Scholastic who have attained age 21
and have completed one year of service. The Retirement Plan is administered by
an employee committee (the "Administrative Committee"), consisting of six
members of management of Scholastic, which is appointed by the Board of
Directors. Each participant is required to contribute 3% of his or her basic
annual compensation (excluding overtime pay, bonuses and other special
compensation) in excess of $20,000. For periods after July 1, 1990, the benefit
formula under the Retirement Plan provides for an annual benefit payable at
retirement equal to, for each year of credited service, 11/2% of that portion of
the participant's basic annual compensation up to $13,650, plus 2% of that
portion of the participant's basic annual compensation in excess of $13,650.
Participants in the Retirement Plan become fully vested in their accrued
benefits upon the earlier of the completion of five years of service or
attainment of age 65. Death benefits are payable to the surviving spouse of a
vested participant unless waived by such spouse. Scholastic is required to make
annual contributions to the Retirement Plan in such amounts as are actuarially
required to fund the benefits of participants thereunder. At May 31, 1997,
Richard Robinson, Barbara Marcus and Kevin McEnery had earned estimated annual
benefits under the Retirement Plan, payable upon retirement at age 65, in the
approximate amounts of $55,467, $36,655 and $7,168, respectively. Ruth Otte and
Jean Feiwel have elected not to participate in the Retirement Plan. The

aggregate amounts paid by the Company to the trustee of the Retirement Plan in
respect of fiscal 1997, 1996 and 1995 were, respectively, $1,315,606, $230,360
and $2,894,884.

The Retirement Plan does not provide for Social Security or other
deductions from the monthly pension benefit payable thereunder.

401(K) PLAN
All domestic salaried and hourly employees of Scholastic aged 21 or over,
with at least 500 hours of service, are eligible to participate in the 401(k)
Plan. The 401(k) Plan is also administered by the Administrative Committee. A
participant may elect, under Section 401(k) of the Code, to reduce his or her
compensation and to have such amount contributed to the 401(k) Plan by
Scholastic on a pre-tax basis up to the amount permitted by law ("Pre-tax
Contributions") or as may be further restricted by the Administrative Committee.
The 401(k) Plan permits Pre-tax Contributions by highly-compensated employees of
10% of compensation and permits Pre-tax Contributions by other employees of 15%
of compensation. Currently, the Administrative Committee has limited Pre-tax
Contributions of highly-compensated employees to 6% of compensation. A
participant may also elect to make additional after-tax contributions which,
when aggregated with such participant's Pre-tax Contributions, may not exceed
15% of his or her aggregate compensation ("After-tax Contributions").
Scholastic, in its sole discretion, may make matching contributions for the
benefit of participants who elect to make Pre-tax Contributions, the amount of
such matching contributions to be determined in advance of each plan year by the
Board of Directors, not to exceed 6% of a participant's compensation.
Scholastic, in its sole discretion, may also make discretionary contributions
for the benefit of all participants regardless of whether they elected to make
Pre-tax Contributions to the 401(k) Plan, the amount of such discretionary
contributions to be determined by the Board of Directors. No discretionary
contributions (other than matching contributions) were made by Scholastic to the
401(k) Plan in the fiscal year ended May 31, 1997. Amounts contributed to a
participant's account are invested by the trustee in one or more investment
funds chosen by the participant from the various investment funds recommended by
the Administrative Committee and approved by the Fiduciary Committee. The 401(k)
Plan was amended as of June 1, 1992 to provide that cash amounts contributed to
the 401(k) Plan may also be invested in shares of Common Stock.

A participant is fully vested at all times in the portion of his or her
account attributable to Pre-tax and After-tax Contributions. That portion of his
or her account attributable to matching and discretionary contributions made by
Scholastic becomes vested at the rate of 20% for each year of service. A
participant's vested account may be distributed in full upon termination of
employment for any reason, including death, disability or retirement. During
employment, but only once in any plan quarter, a participant may withdraw all or
a portion of his or her account which is attributable to After-tax
Contributions. In the event of financial hardship or upon the attainment of age
591/2, a participant may also withdraw during employment his or her vested
account balance, provided that in the case of financial hardship the participant
may only withdraw such amount as the Administrative Committee may determine is
necessary to meet such financial hardship. A participant may also borrow up to
50% of his or her vested account balance for financial hardship, not to exceed
the lesser of $50,000 or the portion of the participant's account attributable
to Pre-tax Contributions, repayable with interest over a period not to exceed 5
years, except that in the event that the proceeds of such loan are used to
acquire a primary residence such amount may be repayable over a period of up to
10 years. A participant may not otherwise withdraw any portion of his or her
account during employment.

REPORT OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE
The Human Resources and Compensation Committee (hereinafter referred to as
the "Compensation Committee") consists of five outside directors who review
recommendations for compensation of corporate officers and recommend guiding
principles and compensation programs to the Board of Directors.

The Board of Directors and the Compensation Committee believe that the
Company's success requires a highly motivated and professional staff. The
compensation policies, therefore, are designed to attract and retain persons of
ability, training and experience in the employ of the Company and its
subsidiaries and affiliates. Prior to the Company's going public in February
1992, as a private company for the five years from 1987 to 1992, the Company
provided significant incentives in the form of stock options to the officers of
the private company. At August 6, 1997, officers of the Company held
approximately 9.5% of the Company's stock, which provides motivation to improve
the performance of the Company.

The Company's executive compensation program combines base salary, annual
bonus and the stock ownership program to attract, retain and motivate
executives. Base salary increases are determined after review of both the
individual performance of each executive and the consolidated financial
performance of the Company. All base salary increases reflect market and
cost-of-living increases. In addition, executive compensation is determined
based on such factors as: the need for highly qualified professionals,
specialized areas of expertise, retention of executives critical to Company
growth and success and creation of a barrier of recruitment for industry
competitors.

The base salary for Mr. Robinson, Chief Executive Officer of the Company,
for the fiscal year ended May 31, 1997 was $600,000. In addition to the factors
previously cited for executive officers above, Mr. Robinson's compensation is
determined based on the evaluation of his individual contribution to the growth
of the Company. These factors include involvement in recruitment and retention
of highly motivated executive and creative staff members; maintaining and
enhancing Scholastic's reputation and products in the educational community;
leadership and guidance in maintaining and developing educational products to
expand Scholastic's market share, profitability and the market value of
shareholders' equity; and the overall economic performance of the Company and
its subsidiaries and affiliates.

The annual bonus plan provides for the payment of bonuses in August based
on individual and corporate performance for the prior fiscal year. Target bonus
levels are established annually by the Compensation Committee with respect to
Richard Robinson. In fiscal 1997, Mr. Robinson received options to purchase
5,328 shares of Common Stock in lieu of bonus.

The Company experienced a 0.1% return on equity for fiscal 1997
following returns on equity of 12.7% and 18.7% in the fiscal years 1996 and
1995, respectively.

The 1992 Stock Option Plan and the 1995 Stock Option Plan provide for
annual grants of non-qualified stock options and incentive stock options
intended to enable executives and managers to participate in the long-term
growth of the Company and motivate executives to improve total return to
shareholders. The number of options granted to executive officers as a group
during fiscal 1997 (excluding options issued in lieu of bonuses) was 215,500.

Human Resources and Compensation Committee

John G. McDonald (Chairperson)
Ramon C. Cortines
Alonzo A. Crim
Charles T. Harris
Andrew S. Hedden
Mae C. Jemison

PERFORMANCE GRAPH

TOTAL RETURN
The following graph compares the cumulative total stockholders return of
an investment of $100 on May 31, 1992 in the Company's Common Stock, (ii) the
NASDAQ Composite Index and (iii) the Company's peer group, for the five fiscal
years ended May 31, 1993, 1994, 1995, 1996 and 1997. Scholastic's initial public
offering occurred on February 24, 1992. The year-end values of each investment
are based on the share price appreciation plus monthly reinvestment of
dividends, if any. The Company's peer group consists of Harcourt General, Inc.,
Houghton Mifflin Co., McGraw Hill Inc., Golden Books Family Entertainment Inc.
and Reader's Digest Association, Inc.

COMPARISON OF CUMULATIVE TOTAL RETURN
Scholastic Corporation, NASDAQ Composite Index, and Peer Group

[Chart below represents graph]

Scholastic Nasdaq Peer Group
5/31/92 100 100 100
5/31/93 125.64 119.69 113.92
5/31/94 122.22 125.61 120.33
5/31/95 188.89 147.71 132.34
5/31/96 212.82 212.44 151.36
5/31/97 101.71 239.24 154.41

ADOPTION OF 1997 OUTSIDE DIRECTORS' STOCK OPTION PLAN

On August 20, 1997, the Board of Directors of the Company adopted the
1997 Outside Directors' Stock Option Plan (the "1997 Directors' Plan"), subject
to the approval thereof by the holders of the Class A Stock. The 1997 Directors'
Plan provides for the automatic grant of options to purchase shares of the
Company's Common Stock to non-employee directors of the Company.

BACKGROUND
The Company currently has in effect the Outside Directors' Stock Option
Plan, providing for one-time grants of non-qualified options to purchase 3,000
shares of the Company's Common Stock when a director, who is neither an employee
nor a consultant of the Company, joins the Board, provided such director does
not own any shares of the Company's Common Stock on his or her date of election,
and the Non-Employee Director Stock-For-Retainer Plan, providing for annual
awards of Common Stock to each such director in the first month of each year
equal in value to $10,000. As of May 31, 1997, no shares and 15,952 shares,
respectively, were available for issuance under the foregoing plans. Subject to
the approval of the 1997 Directors' Plan by the holders of the Class A Stock, it
is intended that no further options or awards will be granted under the
foregoing plans.

DESCRIPTION OF 1997 DIRECTORS PLAN
The purpose of the 1997 Directors' Plan is to attract and retain the
services of experienced and knowledgeable Outside Directors by enabling them to
participate in the success and growth of the Company through periodic grants of
non-qualified stock options.

Under the terms of the 1997 Directors' Plan, each Outside Director will
automatically be granted, on January 7 of each year (or, if not a business day,
the next succeeding business day), a non-qualified stock option to purchase
3,000 shares of the Company's Common Stock at a purchase price per share equal
to the fair market value of a share of Common Stock, determined as the average
of the high and low selling prices per share of Common Stock as reported by the
Automated Quotation System of the National Association of Securities Dealers,
Inc., on such date. The average of such high and low selling prices per share of
Common Stock on August 22, 1997 was $32.88. Under the 1997 Directors' Plan,
180,000 shares of Common Stock have been reserved for issuance upon the exercise
of options to be granted to Outside Directors thereunder. Currently there are
twelve directors eligible to participate in the 1997 Directors' Plan.
Accordingly, the current Outside Directors as a group, assuming all of such
Outside Directors participate in the 1997 Directors' Plan, would receive annual
automatic grants of options to purchase an aggregate of 36,000 shares under the
1997 Directors' Plan.

Except as described below, each option granted to an Outside Director
under the 1997 Directors' Plan will expire on the tenth anniversary of the date
of grant and may not be exercised during the twelve-month period immediately
following the date of grant. In the event an Outside Director ceases to be a
director other than on account of death or disability, such option may be
exercised within six months thereafter, but only to the extent it was
exercisable at the date he or she ceased to be a director. For this purpose, an
Outside Director who ceases to be a director but is designated a Director
Emeritus will be deemed to continue his or her status as a director during the
period that such Director Emeritus status is held. In the event an Outside
Director ceases to be a director by reason of disability, such option may be
exercised within twelve months thereafter, regardless of whether or not the
initial twelve-month vesting period had been met at the date he or she ceased to
be a director. In the event an Outside Director dies while serving as a director
or within three months after cessation of such service as a director (twelve
months if such cessation of service was caused by disability), such option may
be exercised within twelve months thereafter to the extent it was otherwise
exercisable at the date of death, except that, in the case of the death of an
Outside Director while serving as a director, the option will be exercisable
regardless of whether or not the initial twelve-month vesting period had been
met at the date of death. Notwithstanding the foregoing, in no event will an
option be exercisable within six months of its date of grant or after its
original ten-year expiration date.

Options granted under the 1997 Directors' Plan 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. An option granted under the 1997 Directors' Plan may
be exercised by paying the exercise price in cash or Common Stock of the Company
or any combination of cash and Common Stock having a value equal to the exercise
price.

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, appropriate
adjustments will be made in the number and/or kind of shares received for
issuance under the 1997 Directors' Plan, as well as the number and/or kind of
shares which are subject to purchase under outstanding options and in the option
exercise prices applicable to such options.

The 1997 Directors' Plan is administered by the Board of Directors. The
administration of the 1997 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 option granted thereunder and to settle
any claims or disputes arising thereunder. Since the grant of options and the
terms thereof are non-discretionary under the 1997 Directors' Plan, the Board of
Directors will have no discretion as to the selection of individuals to receive
options, the number of shares to be covered by any option or the pricing or
timing thereof.

The Board of Directors may amend or terminate the 1997 Directors' Plan
at any time, provided that (a) unless otherwise required by law, no amendment
may be made which would impair the rights of an Outside Director under
outstanding options without such individual's consent and (b) no amendment may
become effective without stockholder approval if such approval would then be
required pursuant to Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, or the applicable rules of any national securities exchange or NASDAQ.
The 1997 Directors' Plan will terminate on August 19, 2007, after which date no
further awards may be made thereunder.

FEDERAL INCOME TAX CONSEQUENCES
Counsel has provided the Company with the following summary of the
Federal income tax consequences under the Code with respect to non-qualified
stock options to be granted under the 1997 Directors' Plan:

No taxable income is realized by an Outside Director upon the grant of
a non-qualified option and no deduction is available to the Company at such
time. On exercise, the excess of the fair market value of the shares at the time
of exercise over the option exercise price of such shares would be treated as
taxable compensation income to the Outside Director. Any amounts so treated as
compensation would be taxable to the Outside Director at ordinary income tax
rates in the year of exercise and generally would be an allowable income tax
deduction to the Company. The Outside Director's tax basis for shares acquired
upon exercise of a non-qualified option would be equal to the fair market value
of the shares on the date of exercise. Upon disposition of the shares, any gain
or loss realized will be treated as either short-term or long-term capital gain
or loss, as the case may be, depending on the length of time the shares have
been held.

NEW PLAN BENEFITS
The following table sets forth the annual benefits to be received by
the current Outside Directors as a group under the 1997 Directors' Plan.

1997 Directors' Plan
--------------------
Number of Shares
Underlying Annual
Group Option Grants
----- -------------
Non-Executive Director Group 36,000
(12 persons)

The 1997 Directors' Plan is printed in its entirety as Appendix A
beginning on page A-1.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE THE
1997 DIRECTORS' PLAN. ALL PROXIES WILL BE VOTED IN ACCORDANCE WITH INSTRUCTIONS
GIVEN. WHEN NO SPECIFIC INSTRUCTIONS ARE GIVEN, PROXIES WILL BE VOTED FOR THE
APPROVAL OF THE 1997 DIRECTORS' PLAN.

ELECTION OF AUDITORS

Action is to be taken at the Meeting with respect to the election of
auditors to audit the financial statements of Scholastic for the fiscal year
ending May 31, 1998. The Audit Committee has recommended the election of Ernst &
Young as independent auditors and, unless otherwise directed, proxies for the
Class A Stock will be voted in favor of the election of Ernst & Young.
Representatives of Ernst & Young will be available at the Meeting to respond to
questions and to make a statement if they so desire. If the holders of Class A
Stock do not elect Ernst & Young, the selection of independent auditors will be
reconsidered by the Audit Committee.

During the fiscal year ended May 31, 1997, Ernst & Young served as
Scholastic's independent auditors. It is the belief of Scholastic's Audit
Committee that the financial relationship between Scholastic and its independent
auditors should be fully disclosed to the stockholders. The fees and expenses
for audit services provided by Ernst & Young to Scholastic and its foreign
subsidiaries with respect to the fiscal year ended May 31, 1997 were $620,635.
This fee includes certain non-audit services provided by Ernst & Young to
Scholastic for which they were paid $191,651 (30.9% of total fees and expenses),
which were related primarily to tax and financial accounting advice on various
proposed transactions and to general accounting assistance.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE
ERNST & YOUNG AS INDEPENDENT AUDITORS OF THE COMPANY. ALL PROXIES WILL BE VOTED
IN ACCORDANCE WITH INSTRUCTIONS GIVEN. WHEN NO SPECIFIC INSTRUCTIONS ARE
GIVEN, PROXIES WILL BE VOTED FOR THE APPROVAL OF ERNST & YOUNG AS INDEPENDENT
AUDITORS FOR THE COMPANY.

OTHER MATTERS

The Board of Directors is not aware of any matters to be presented for
action at the Meeting other than the matters mentioned above, and the Board does
not intend to bring any other matters before the Meeting. However, if any other
matters should properly come before the Meeting for stockholder action, it is
intended that the holders of the proxies will vote thereon at their discretion.

STOCKHOLDERS PROPOSALS

Proposals of stockholders for inclusion in the Proxy Statement to be
issued in connection with the Annual Meeting of Stockholders of Scholastic to be
held in September 1998 must be received by the President of Scholastic by April
28, 1998.

EXPENSES OF SOLICITATION

The cost of soliciting proxies for the Meeting will be borne by
Scholastic. Solicitation of proxies may be made through personal calls upon, or
telephone or facsimile communications with, stockholders or their
representatives by officers and other employees of Scholastic who will receive
no additional compensation therefor.

By Order of the Board of Directors

CHARLES B. DEULL
SENIOR VICE PRESIDENT AND SECRETARY

August 26, 1997

APPENDIX A

SCHOLASTIC CORPORATION 1997 OUTSIDE DIRECTORS' STOCK OPTION PLAN

1. NAME AND GENERAL PURPOSE

The name of this plan is the Scholastic Corporation 1997 Outside
Directors' Stock Option 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 ("Outside Directors") and to provide an additional
incentive for such Outside Directors through continuing ownership of the common
stock, par value $.01 per share, of the Company (the "Common Stock").

2. AUTOMATIC OPTION 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, as of each
January 7 (or, if such date is not a business day, as of the next succeeding
business day) occurring after the effective date of the Plan, an incumbent
Outside Director, excluding Directors Emereti, shall automatically be granted,
as of each such January 7 (or, if applicable, the next succeeding business day),
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.

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 by the
Automated Quotation System of the National Association of Securities Dealers,
Inc. ("NASDAQ"). All options granted under the Plan shall be non-qualified
stock options.

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 giving written notice of exercise to the Company
specifying the number of shares of Common Stock to be purchased. Such notice
shall be accompanied by payment in full of the option price, either in cash or
by certified check or bank check or in shares of Common Stock of the Company
(valued at Fair Market Value on the date of exercise), actually or by
attestation, or in any combination thereof. The option price may also be paid by
delivery of an irrevocable notice of exercise to the Company and a broker-dealer
acceptable to the Company under such circumstances as the Board of Directors
shall authorize.

No shares of Common Stock shall be issued until full payment therefor has
been made. An Outside Director will have no rights as a shareholder 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.

4. EXPIRATION OF OPTIONS

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.

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 as a Director on the Board of
Directors of the Company, otherwise than by reason of death or disability, such
option may be exercised (to the extent that the Outside Director was entitled to
do so at the time of such cessation of service) 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

A-1

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 as though such
Director Emeritus continued to serve as an Outside Director 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; and

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;

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, at any
time and from time to time within twelve (12) months after the date of death of
the Outside Director, but in no event after the date on which the option would
otherwise expire under Section 4 of the Plan.

(d) Notwithstanding the provisions of subsections (b) and (c) above of
this Section 5, in no event shall any option granted under the Plan be
exercisable within six (6) months of the date of grant.

6. TRANSFERABILITY

No option 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 180,000 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 terminating,
expiring or cancelled for any reason prior to its exercise in full will again be
available for options 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, (i) the number of shares which are reserved
under the Plan shall be automatically adjusted, and (ii) the number of shares
which, at such time, are subject to outstanding options 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.

A-2

In the event of any change in the outstanding shares of Common Stock by
reason of any recapitalization, merger, consolidation, combination, exchange of
shares, or other similar corporate change, equitable substitution or adjustment
shall be made in the number or kind of shares of Common Stock or other
securities issued or reserved for issuance pursuant to the Plan, including
pursuant to outstanding options granted under the Plan.

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, 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
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 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 hereunder,
the number of shares of Common Stock covered by any such option or the price or
timing of any option 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 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.

12. AMENDMENT AND TERMINATION

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 which has been granted
under the Plan without such individual's consent and (b) no amendment shall be
effective without approval of 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, or the applicable rules of any
national securities exchange or NASDAQ.

A-3

13. EFFECTIVE DATE

The effective date of this Plan is August 20, 1997, 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 Class A Stock. The Plan shall terminate on
August 19, 2007.

14. GOVERNING LAW

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

A-4

SCHOLASTIC CORPORATION

Proxy for Annual Meeting of Stockholders, September 16, 1997

(The Solicitation of This Proxy is Made on Behalf of the Board of Directors)

The undersigned hereby appoints RICHARD ROBINSON, RICHARD A. KRINSLEY and
ANDREW S. HEDDEN, or a majority of them, 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 555 Broadway, New York, New
York, on Tuesday, September 16, 1997, 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 IS CONTINUED ON THE REVERSE SIDE

PLEASE DATE, SIGN AND MAIL THIS PROXY TODAY

Please mark
your votes as
indicated in /x/
this example

In the absence of specific directions noted below, it is understood that the
undersigned's shares of Common Stock will be voted in favor of proposal No. 1.
Receipt of a copy of the 1997 Annual Report, Notice of Annual Meeting of
Stockholders, and Proxy Statement dated August 26, 1997 is hereby acknowledged.

Item 1--Proposal to elect Ramon C. Cortines, Alonzo A. Crim and John G. McDonald
as directors.

// FOR // WITHHOLD

Item 2--Proposal for the appointees of the undersigned to act, in their
discretion, upon such matters as may properly come before the meeting and as may
properly be voted upon by the holders of Common Stock.

If you wish to vote for the election of directors and withhold authority to vote
for any of the individual nominees, enter the name(s) of such nominee(s) below.

Signature(s)------------------------------------------------ Date---------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.

SCHOLASTIC CORPORATION
Scholastic Inc. 401(k) Savings and Retirement Plan

IMPORTANT

Please Complete and Return
(This Solicitation is Made on Behalf of the Board of Directors)

The enclosed Notice of the 1997 Annual Meeting and Proxy Statement and the
1997 Annual Report are being provided to you as a participant in the Scholastic
Inc. 401(k) Savings and Retirement Plan. Participants who had funds invested in
the Scholastic Corporation Common Stock fund on August 6, 1997, the record date
for the 1997 Annual Meeting, may instruct the plan Trustee how to vote all full
and fractional shares attributable to their account by completing the reverse
side of this card and returning it by September 9, 1997.

Scholastic Corporation urges you to complete, date, sign, and return this
confidential voting instruction card TODAY.

Please mark
your votes as
indicated in /x/
this example

Item 1--Proposal to elect Ramon C. Cortines, Alonzo A. Crim and John G. McDonald
as directors.

// FOR // WITHHOLD

If you wish to vote for the election of directors and withhold authority to vote
for any of the individual nominees, enter the name(s) of such nominee(s) below.

Signature(s)------------------------------------------------- Date -------------
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.