Item 5.01 - Changes in Control of Registrant
To the knowledge of the Registrant, a change in control of the Registrant has occurred. As previously announced by the Registrant in a press release dated June 6, 2021, M. Richard Robinson, Jr., the Chairman, Chief Executive Officer and controlling stockholder of the Registrant, passed away on June 5, 2021.
Iole Lucchese, Executive Vice President and Chief Strategy Officer of the Registrant and President of Scholastic Entertainment Inc., is the Scholastic special executor of Mr. Robinson’s estate (the “Estate”) and became qualified under local law to perform her duties as executor under preliminary letters testamentary dated July 1, 2021 that were delivered to Ms. Lucchese on July 6, 2021. As executor, Ms. Lucchese has sole voting and dispositive power over 890,904 shares of the Registrant’s Class A Stock (“Class A Shares”) (53.8% of the outstanding Class A Shares) and sole voting and dispositive power over 2,046,871 shares of the Registrant’s Common Stock (“Common Shares”) (6.03% of the outstanding Common Shares, including, for this purpose, 1,220,690 options over Common Shares held by the Estate which are immediately exercisable). The Class A Shares are convertible into Common Shares on a one-for-one basis. For purposes of determining beneficial ownership by Ms. Lucchese of Common Shares pursuant to relevant securities law regulations, assuming the conversion of all of the Class A Shares in the Estate and the exercise of all immediately exercisable options in the Estate, Ms. Lucchese may be deemed to beneficially own, directly or indirectly, 3,075,727 shares of the Registrant’s Common Shares, or approximately 8.8%, of the total number of Common Shares outstanding. This number includes 31,233 Common Shares and 106,719 exercisable options held individually by Ms. Lucchese.
The Registrant’s charter provides that, except as otherwise provided by Delaware law, the Common Shares’ voting rights are limited to the election of 1/5 of the members of the Registrant’s board of directors. The holders of the Class A Shares have all other voting rights, including the right to elect all remaining members of the Registrant’s board of directors.
Under Mr. Robinson’s will and revocable trust, Ms. Lucchese is expected to be the sole beneficiary of the 890,904 Class A Shares after probate is completed. As such, she will continue to retain the sole voting and dispositive power with respect to these 890,904 Class A Shares. Consequently, Ms. Lucchese may be deemed to control the Registrant.
Ms. Lucchese will continue to serve the Registrant as Executive Vice President and Chief Strategy Officer and President of Scholastic Entertainment Inc., and the Registrant is progressing with its search for the person to fill the position of Chief Executive Officer.