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Capital Stock and Stock-Based Awards | 12 Months Ended
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May 31, 2023
Share-Based Payment Arrangement [Abstract] |
Capital Stock and Stock-Based Awards | CAPITAL STOCK AND STOCK-BASED AWARDS Class A Stock and Common Stock Capital stock consisted of the following as of May 31, 2023:
| Class A Stock |  | Common Stock |  | Preferred Stock
Authorized | 4,000,000 |  |  | 70,000,000 |  |  | 2,000,000 |
Reserved for Issuance | — |  |  | 7,005,664 |  |  | — |
Outstanding | 1,656,200 |  |  | 30,004,691 |  |  | — |
The only voting rights vested in the holders of Common Stock, except as required by law, are the election of such number of directors as shall equal at least one-fifth of the members of the Board. The Class A Stockholders are entitled to elect all other directors and to vote on all other matters. The Class A Stockholders and the holders of Common Stock are entitled to one vote per share on matters on which they are entitled to vote. The Class A Stockholders have the right, at their option, to convert shares of Class A Stock into shares of Common Stock on a share-for-share basis. With the exception of voting rights and conversion rights, and as to any rights of holders of Preferred Stock if issued, the Class A Stock and the Common Stock are equal in rank and are entitled on the same basis to dividends and distributions when or if declared by the Board. The Company issues shares of Common Stock from its Treasury stock to meet its share-based payment requirements, net of shares required to be withheld to cover the recipient's tax obligations. Preferred Stock The Company's Preferred Stock may be issued in one or more series, with the rights of each series, including voting rights, to be determined by the Board before each issuance. To date, no shares of Preferred Stock have been issued. Stock-based awards At May 31, 2023, the Company maintained four stockholder-approved stock-based compensation plans with regard to the Common Stock: •Scholastic Corporation 2021 Stock Incentive Plan (the "2021 Plan"); •Scholastic Corporation 2011 Stock Incentive Plan (the “2011 Plan”), under which no further grants can be made; •Scholastic Corporation 2017 Outside Directors Stock Incentive Plan (the “2017 Directors Plan”); and •Scholastic Corporation 2007 Outside Directors Stock Incentive Plan (the “2007 Directors Plan”), under which no further grants can be made. In September 2021, the Class A Stockholders approved the 2021 Plan which provides for the issuance of certain equity awards, including non-qualified stock options, time-vested restricted stock units, performance-based restricted stock units, incentive stock options and other equity awards. There are 2,500,000 shares available for issuance pursuant to awards granted under the 2021 Plan. The 2011 Plan was approved by the Class A Stockholders in September 2011 and provides for the issuance of certain equity awards, including non-qualified stock options, time-vested restricted stock units, performance-based restricted stock units, all of which have been issued by the Company to date, and incentive stock options and other equity awards. In September 2014, the Class A Stockholders approved the second amendment to the 2011 Plan increasing the shares available for issuance pursuant to awards granted under the 2011 Plan by 2,475,000 shares. In September 2018, the Class A Stockholders approved the third amendment to the 2011 Plan increasing the shares available for issuance pursuant to awards granted under the 2011 Plan by 2,540,000 shares, for a total of 7,115,000 shares available for issuance under the 2011 Plan. No further awards can be granted under the 2011 Plan. The Company’s stock-based awards vest over periods not to exceed four years and the Company's equity plans permit the acceleration of vesting upon retirement for certain eligible employees, as well as for certain other events. At May 31, 2023, non-qualified stock options to purchase 617,607 and 2,365,853 shares of Common Stock were outstanding under the 2021 and 2011 Plan, respectively. During fiscal 2023, 294,486 options were granted under the 2021 Plan at a weighted average exercise price of $41.86. At May 31, 2023, 1,621,732 shares of Common Stock were available for issuance under the 2021 Plan. In September 2017, the Class A Stockholders approved the 2017 Directors Plan which has 400,000 shares of Common Stock reserved for issuance and provides for the automatic grant to each non-employee director, on the date of each annual meeting of stockholders, of stock options and/or restricted stock units with a value equal to a fixed dollar amount. The total dollar amount, as well as the relative percentage of stock options and restricted stock units, is determined annually by the Board (or Committee designated by the Board) in advance of the grant date. In July 2022, the Board approved the fiscal 2023 grant to each non-employee director, on the date of the 2022 annual meeting of stockholders, of stock options and restricted stock units having a combined value, as determined by the Board, of one hundred thousand dollars ($100,000), (based on the fair market value on the date of grant), with 60% of such award to be awarded as restricted stock units and 40% of such award to be awarded as stock options, such grant to vest in its entirety on the earlier of the first anniversary of the date of grant or the date of the next annual meeting of stockholders following the date of grant. In September 2007, the Class A Stockholders approved the 2007 Directors Plan. From September 2007 through September 2011, the 2007 Directors Plan provided for the automatic grant to each non-employee director, on the date of each annual meeting of stockholders, of non-qualified stock options to purchase 3,000 shares of Common Stock at a purchase price per share equal to the fair market value of a share of Common Stock on the date of grant and 1,200 restricted stock units. In September 2012, the Class A Stockholders approved an amendment and restatement of the 2007 Directors Plan (the “Amended 2007 Directors Plan”), which provided for the automatic grant to each non-employee director, on the date of each annual meeting of stockholders, of stock options and restricted stock units with a value equal to a fixed dollar amount. The total amount, as well as the relative percentage of stock options and restricted stock units, were to be determined annually by the Board (or committee designated by the Board) in advance of the grant date. The value of the stock option was determined based on the Black-Scholes option pricing method, with the exercise price being the fair market value of the Common Stock on the grant date, and the value of the restricted stock unit portion is the fair market value of the Common Stock on the grant date. In December 2015, the Board approved amendment number 2 to the Amended 2007 Directors Plan to provide that a non-employee director elected between annual meetings of stockholders would receive a grant at the time of such election equal to a pro rata portion of the most recent annual grant of stock options and restricted stock units, based on the number of regular Board meetings remaining to be held for the annual period during which such election occurred. During fiscal 2023, an aggregate of 20,510 options at a weighted average exercise price of $42.40 per share and 9,905 restricted stock units were granted to the non-employee directors under the 2017 Directors Plan, such grant to vest in its entirety on the earlier of the first anniversary of the date of grant or the date of the next annual meeting of Stockholders following the date of grant. As of May 31, 2023, non-qualified stock options to purchase 160,124 and 44,817 shares were outstanding under the 2017 Directors Plan and 2007 Directors Plan, respectively. At May 31, 2023, 147,736 shares of Common Stock were available for issuance under the 2017 Directors Plan. Stock Options - Generally, stock options granted under the Company's equity plans may not be exercised for a minimum of one year after the date of grant and expire seven to ten years after the date of grant. The intrinsic value of certain stock options is tax deductible by the Company upon exercise, if compliant with current tax law. The Company amortizes the fair value of stock options as stock-based compensation expense over the requisite service period on a straight-line basis, or sooner if the employee effectively vests upon termination of employment for certain retirement-eligible employees, as well as in certain other events. The following table sets forth the intrinsic value of stock options exercised, pretax stock-based compensation cost and related tax benefits for the Company's equity plans for the fiscal years ended May 31:
| 2023 |  | 2022 |  | 2021
Total intrinsic value of stock options exercised | $ | 8.2 |  |  | $ | 5.1 |  |  | $ | 0.1 |
Total stock-based compensation cost (pretax) |  | 10.5 |  |  |  | 7.8 |  |  |  | 6.6 |
Tax benefits (shortfalls) related to stock-based compensation cost |  | (7.8) |  |  |  | 2.3 |  |  |  | (3.7) |
Weighted average grant date fair value per option | $ | 11.62 |  |  | $ | 8.04 |  |  | $ | 3.80 |
Pretax stock-based compensation cost is recognized in Selling, general and administrative expenses. As of May 31, 2023, the total pretax compensation cost not yet recognized by the Company with regard to outstanding unvested stock options was $3.4. The weighted average period over which this compensation cost is expected to be recognized is 1.7 years. The following table sets forth the stock option activity under the Company's equity plans for the fiscal year ended May 31, 2023:
| Options |  | Weighted Average Exercise Price |  | Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in millions)
Outstanding at May 31, 2022 |  | 4,257,925 |  |  | $ | 30.54 |  |  |  |  |  |  |
Granted |  | 314,996 |  |  |  | 41.90 |  |  |  |  |  |  |
Exercised |  | (689,711) |  |  |  | 31.28 |  |  |  |  |  |  |
Expired, canceled and forfeited |  | (694,809) |  |  |  | 39.06 |  |  |  |  |  |  |
Outstanding at May 31, 2023 |  | 3,188,401 |  |  | $ | 29.63 |  |  |  | 4.6 |  | $ | 41.3 |
Exercisable at May 31, 2023 |  | 1,717,085 |  |  | $ | 31.16 |  |  |  | 4.2 |  | $ | 19.7 |
Restricted Stock Units – In addition to stock options, the Company has issued restricted stock units to certain officers and senior management under the 2021 Plan and the 2011 Plan. The restricted stock units convert to shares of Common Stock on a one-for-one basis upon vesting, which for time-vested restricted stock units is typically in three or four equal annual installments beginning with the first anniversary of the date of grant. During fiscal 2023, there were 41,177 and 99,237 shares of Common Stock issued upon the vesting of restricted stock units under the 2021 Plan and 2011 Plan, respectively. The Company measures the value of restricted stock units at fair value based on the number of units granted and the price of the underlying Common Stock on the grant date. The Company amortizes the fair value of outstanding restricted stock units as stock-based compensation expense over the requisite service period on a straight-line basis, or sooner if the employee effectively vests upon termination of employment under certain circumstances. The following table sets forth the restricted stock unit award activity for the fiscal years ended May 31:
|  | 2023 |  |  | 2022 |  |  | 2021
Granted |  | 139,111 |  |  |  | 178,461 |  |  |  | 137,106 |
Weighted average grant date price per unit | $ | 41.99 |  |  | $ | 34.45 |  |  | $ | 21.24 |
As of May 31, 2023, the total pretax compensation cost not yet recognized by the Company with regard to unvested restricted stock units was $4.6. The weighted average period over which this compensation cost is expected to be recognized is 1.5 years. Management Stock Purchase Plan - The Company maintains the Scholastic Corporation Management Stock Purchase Plan (the “MSPP”), which permits certain members of senior management to defer up to 100% of his or her annual cash bonus payments in the form of restricted stock units (the "MSPP RSUs”) which are purchased by the employee at a 25% discount from the lowest closing price of the Common Stock on NASDAQ on any day during the fiscal quarter in which such bonuses are awarded. The MSPP RSUs are converted into shares of Common Stock on a one-for-one basis at the end of the applicable deferral period, which must be a minimum of three years. The Company measures the value of MSPP RSUs based on the number of awards granted and the price of the underlying Common Stock on the grant date, giving effect to the 25% discount. The Company amortizes this discount as stock-based compensation expense over the vesting term on a straight-line basis, or sooner if the employee effectively vests upon termination of employment under certain circumstances. The following table sets forth the MSPP RSUs activity for the fiscal years ended May 31:
|  | 2023 |  |  | 2022 |  |  | 2021
MSPP RSUs allocated |  | 37,865 |  |  |  | 33,761 |  |  |  | 5,665 |
Purchase price per unit | $ | 25.51 |  |  | $ | 24.67 |  |  | $ | 16.88 |
At May 31, 2023, there were 242,672 shares of Common Stock remaining authorized for issuance under the MSPP. As of May 31, 2023, the total pretax compensation cost not yet recognized by the Company with regard to unvested MSPP RSUs was $0.2. The weighted average period over which this compensation cost is expected to be recognized is 2.2 years. The following table sets forth the restricted stock unit and MSPP RSUs activity for the year ended May 31, 2023:
| Restricted stock units and MSPP RSUs |  |  |  | Weighted Average grant date fair value
Nonvested as of May 31, 2022 | 317,593 |  |  |  | $ | 30.17 |
Granted | 176,976 |  |  |  |  | 37.00 |
Vested | (153,543) |  |  |  |  | 31.59 |
Forfeited | (8,440) |  |  |  |  | 33.18 |
Nonvested as of May 31, 2023 | 332,586 |  |  |  | $ | 33.08 |
The total fair value of shares vested during the fiscal years ended May 31, 2023, 2022 and 2021 was $4.9, $2.8 and $3.2, respectively. Employee Stock Purchase Plan - The Company maintains the Scholastic Corporation Employee Stock Purchase Plan (the “ESPP”), which is offered to eligible United States employees. The ESPP permits participating employees to purchase Common Stock, with after-tax payroll deductions, on a quarterly basis at a 15% discount from the closing price of the Common Stock on NASDAQ on the last business day of the calendar quarter. The Company recognizes the discount on the Common Stock issued under the ESPP as stock-based compensation expense in the quarter in which the employees began participating in the ESPP. The following table sets forth the ESPP share activity for the fiscal years ended May 31:
|  | 2023 |  |  | 2022 |  |  | 2021
Shares issued |  | 80,897 |  |  |  | 59,322 |  |  |  | 67,097 |
Weighted average purchase price per share | $ | 29.07 |  |  | $ | 32.52 |  |  | $ | 22.19 |
At May 31, 2023, there were 148,923 shares of Common Stock remaining authorized for issuance under the ESPP.

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