Lightspan, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o No þ

As of July 31, 2002, the aggregate market value of registrant’s voting and non-voting stock held by non-affiliates, based upon the closing sales price for the registrant’s common stock, as reported on the Nasdaq National Market, was approximately $43.6 million. To determine this aggregate market value, the registrant has excluded from the total number of shares outstanding as of July 31, 2002 shares of common stock held by each officer and director and by each person who owns 5% or more of the outstanding common stock as such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purposes.

Number of shares of registrant’s common stock outstanding as of March 31, 2003: 47,677,851

EXPLANATORY NOTE: This Amendment No. 1 on Form 10-K/ A (“Amendment No. 1”) amends the Registrant’s Annual Report on Form 10-K, as filed by the Registrant on April 29, 2003 (the “Report”), and is being filed solely to replace Part III, Item 10 through Item 13. Consistent with rules amendments recently proposed by the United States Securities and Exchange Commission (the “SEC”), this Amendment No. 1 is also accompanied by a new certification by the Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act. In accordance with SEC Release No. 34-47551, this certification is submitted as Exhibit 99.1 and Exhibit 99.2 to this Amendment No. 1. Except as otherwise stated herein, all other information contained in the original Report has not been updated by this Amendment No. 1.

All other trade names, trademarks and service marks appearing in this Annual Report on Form 10-K are the property of their holders.

Information regarding our executive officers is located in Part I, Item I of this Annual Report, under the caption “Executive Officers and Key Employees of the Registrant.”

The following table sets forth information about our directors as of April 30, 2003:

John T. Kernan co-founded Lightspan and has served as our Chairman and Chief Executive Officer since inception, September 1993. Prior to co-founding Lightspan, Mr. Kernan served as Chairman and Chief Executive Officer of Jostens Learning Corporation, an educational software company. Mr. Kernan developed Jostens Learning from a start-up company in 1985 (then named Education Systems Technology Corporation) to one of the largest educational software businesses in the United States. Under Mr. Kernan’s leadership, Jostens Learning was a leading supplier of pre-kindergarten through adult educational software. Prior to founding Jostens Learning, Mr. Kernan was an executive with Gill Cable Corporation, a Northern California cable TV operator. He also was Vice President of Product Development for DELTAK, Inc. (now NETg), then the nation’s largest provider of video-based training for technical professionals. Mr. Kernan was the President of the Software Publishers Association, has been named “Educator of the Decade” by Electronic Learning Magazine and regional “Entrepreneur of the Year” by Inc. Magazine, among other distinctions. Mr. Kernan was a founder of Academic Systems, which has since been acquired by Lightspan, and Elemental Software, which has since been acquired by Macromedia. Mr. Kernan is a member of the Board of Directors of TechNet and Varsity Group, Inc. Mr. Kernan holds a Bachelor of Science from Loyola College.

Carl E. Zeiger co-founded Lightspan and has served as our President and Chief Operating Officer and as a director since September 1993. He also served as our Interim Chief Financial Officer and Secretary from June 2000 to January 2001. Prior to co-founding Lightspan, Mr. Zeiger served as the President and Chief Operating Officer of Jostens Learning Corporation. Along with Mr. Kernan, Mr. Zeiger developed Jostens Learning into a leading supplier of pre-kindergarten through adult educational software. Prior to joining Jostens Learning, Mr. Zeiger served as Senior Vice President of Finance for Integrated Software Systems Corporation, a leading provider of representation graphics software, and managed its initial and secondary public offerings and its eventual sale to Computer Associates. Mr. Zeiger is a Certified Public Accountant in the State of California and holds a Bachelor of Science from the University of Denver.

Jeffery W. Brown has served as one of the Company’s directors since February 2002. Since March 1999, Mr. Brown has served as Executive Director of Strategy, Development and Investments for Cox Communications. Mr. Brown served as Vice President and General Counsel for TCA Cable TV from January 1998 until its acquisition by Cox Communications in 1999. Mr. Brown also serves on the Board of Directors of Security Broadband Corporation and TV Gateway, LLC. Mr. Brown has also been a private practice attorney specializing in business, corporate and mergers and acquisitions law. Mr. Brown holds a Juris Doctorate from the South Texas College of Law and a Bachelor of Business Administration in Finance and Accounting from the University of Houston.

Elizabeth R. Coppinger has served as one of the Company’s directors since March 2001. Ms. Coppinger has been with Sony since January 1991, most recently as Senior Vice President, New Business Development and Strategic Alliances. Prior to joining Sony Corporation of America, Ms. Coppinger was with the Broadcast and Professional Group at Sony Electronics, Inc. where she worked in New Business Development. Ms. Coppinger holds a Bachelor of Science in Chemistry from the University of Washington.

Douglas M. Holtby is currently serving as Director and Secretary of Multivan Broadcast Corporation, a television company, a position he has held since its incorporation in 2001, as Chief Executive Officer and President of Arbutus Road Investments Inc. and MKC Capital Inc., family investment companies, and as Chief Executive Officer and Director of Star of Fortune Gaming Management, a Vancouver casino. From 2000 to 2001, Mr. Holtby served as a Canwest Trustee/ Director of each of ROBtv Partnership, a business television channel, and CKVU Sub Inc., a Vancouver television station. From 1989 to 1996 Mr. Holtby served as President and CEO of WIC Western International Communications Ltd., an integrated Canadian communications, broadcast and entertainment company. Mr. Holtby also serves on the Board of Directors of Lions Gate Entertainment Corp. and CINAR Corporation. Mr. Holtby is a member of the Institutes of Chartered Accountants of Alberta and British Colombia.

Barry J. Schiffman has served as one of the Company’s directors since August 1997. Mr. Schiffman is currently CEO of Globespan Capital Partners, a venture capital firm in Palo Alto, California and Boston, Massachusetts. From October 1996 through December 2002, Mr. Schiffman served as President, Chief Investment Officer and a director of JAFCO America Ventures, Inc., a venture capital firm. From March 1995 to October 1996, he was a general partner at Weiss, Peck & Greer Venture Partners, a venture capital firm. Mr. Schiffman is currently a member of the board of several private companies. Mr. Schiffman holds a Bachelor of Science from Georgia Institute of Technology and a Masters in Business Administration from the Stanford Graduate School of Business.

Hugh Tietjen is currently serving as General Partner of Rutherford Group, a partnership with interests in the high technology and wine industries, a position he has held since January 1993. Prior to that, Mr. Tietjen founded Computer Intelligence (now known as Harte-Hanks Market Intelligence) in 1969 to provide market research for the computer industry. Under his direction, the company became the dominant source of primary market data for the computer and communications industries with $40 million in revenue. In addition to managing Computer Intelligence, he served as Senior Vice President for Ziff Communications after its acquisition of Computer Intelligence. Mr. Tietjen entered the computer industry with IBM and served in a variety of technical and marketing management positions. While on leave from IBM, Mr. Tietjen managed a program development group at the National Security Agency in Washington, D.C. Mr. Tietjen holds a Bachelor of Science from the University of Southern California.

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “1934 Act”) requires the Company’s directors and executive officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the fiscal year ended January 31, 2003, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with.

All of the Company’s directors may be reimbursed for certain expenses in connection with attendance at Board of Directors and committee meetings, and three directors currently receive cash compensation for services on the Board or any committee thereof. Cash compensation currently consists of an annual fee of $18,000 for Board service (pro rated for partial years) and $1,500 for each committee meeting attended. This compensation began in fiscal year 2003. In addition, all directors are eligible to participate in the Company’s 2000 Equity Incentive Plan (the “2000 Plan”). The following table shows for the fiscal year ended January 31, 2003, compensation paid to these three directors:

During the last fiscal year, the Company granted options covering 40,000 shares to each of Mssrs. Brown, Holtby and Tietjen, at exercise prices per share of $1.20, $1.56 and $1.56, respectively, which were equal to the fair market value of the Company’s Common Stock on the dates of grant (based on the closing sales price reported on the Nasdaq National Market for the date of grant). The options will vest 25% one year from the date of grant, and 1/36 of the remaining options will vest each month thereafter. The options will fully vest upon a change in control, as defined in the Company’s option plans, unless the acquiring company assumes the options or substitutes similar options.

The following table shows for the fiscal years ended January 31, 2003, 2002 and 2001, compensation awarded or paid to, or earned by, the Company’s Chief Executive Officer and its other four most highly compensated executive officers at January 31, 2003 (the “Named Executive Officers”):


(1)	Bonuses were accrued under the Company’s Management Incentive Plan for 2003, 2002 and 2001, as indicated, and paid during the following fiscal year.

(2)	Represents commissions paid.

(3)	Mr. Sicuro was hired by the Company in January 2001.

(4)	Mr. Dredge was hired by the Company in January 2001.

The Company grants options to its executive officers under its 2000 Plan. As of April 30, 2003, options to purchase a total of 5,690,656 shares were outstanding under the 2000 Plan and the 1992 Stock Option Plan, which the Company assumed from Academic Systems upon its acquisition of Academic Systems, and options to purchase 3,125,952 shares remained available for grant under the 2000 Plan. The Company no longer grants options under the 1992 Stock Option Plan.

The following tables show for the fiscal year ended January 31, 2003, certain information regarding options granted to, exercised by, and held at year-end by, the Named Executive Officers:


(1)	The options will vest 100% five years from the date of grant. The options will fully vest upon a change in control, as defined in the Company’s option plans, unless the acquiring company assumes the options or substitutes similar options. The Board of Directors has the ability to reprice the options under the terms of the Company’s option plans.

(2)	Based on options to purchase 2,346,600 shares granted in fiscal 2003.

(3)	The potential realizable value is calculated by assuming that the stock price on the date of grant appreciates at the indicated annual rate, compounded annually, for the entire term of the option and that the option is exercised and sold on the last day of its term for the appreciated stock price. These amounts represent certain assumed rates of appreciation only, in accordance with the rules of the SEC, and do not reflect the Company’s estimate or projection of future stock price performance. Actual gains, if any, are dependent on the actual future performance of the Company’s Common Stock and no gain to the optionee is possible unless the stock price increases over the option term, which will benefit all stockholders.


(1)	Value realized is based on the fair market value of the Company’s Common Stock on the date of exercise minus the exercise price (or the actual sales price if the shares were sold by the optionee simultaneously with the exercise) without taking into account any taxes that may be payable in connection with the transaction.

(2)	Reflects shares vested and unvested at January 31, 2003. Certain options granted under the 2000 Plan are immediately exercisable, but are subject to the Company’s right to repurchase unvested shares on termination of employment.

(3)	Includes both “in-the-money” and “out-of-the-money” options. “In-the-money” options are options with exercise prices below the market value of the Company’s Common Stock at January 31, 2003.

(4)	Value at fiscal year end is equal to the market value of the Company’s Common Stock at January 31, 2003 of $1.01, minus the exercise price of the options.

(5)	Shares exercised were set to expire July 9, 2002.

Several of the Company’s executive officers have entered into employment agreements with the Company. Two forms of employment agreement have been entered into, Tier I and Tier II. In the agreements, each executive (i) agreed to keep the Company’s information confidential, (ii) agreed for one year following the executive’s termination not to solicit any employee of the Company to leave the Company, and (iii) agreed not to compete with the Company while receiving any compensation from the Company. In connection with the employment agreements, each executive also signed the Company’s standard form of Proprietary Information and Inventions Agreement. The agreements also provide for severance payments as follows:


	•	If the executive is terminated by the Company without cause or the executive resigns with good reason (as the terms “cause” and “good reason” are defined in the agreements), then the executive is entitled to: (i) continuation of salary, bonus and health insurance payments for eighteen months for Tier I and nine months for Tier II following the cessation of employment; and (ii) executive outplacement assistance.

	•	If the executive is terminated by the Company without cause or resigns with good reason during the three months prior to or within one year following a change of control (as defined in the agreements) of the Company, the executive is entitled to: (i) salary, bonus and health insurance payments for 24 months for Tier I and 12 months for Tier II following the termination, to be paid in a lump-sum; (ii) executive outplacement assistance; and (iii) full acceleration of all options held by the executive. In the case where the executive is terminated prior to a change of control, the above benefits are effective as of the change of control.

In addition to the Tier I and Tier II employment agreements entered into in fiscal year 2003, Michael A. Sicuro entered into an employment agreement with the same terms as the agreements above except for the following:


	•	If the executive is terminated by the Company without cause or the executive resigns with good reason (as the terms “cause” and “good reason” are defined in the agreements), then the executive is entitled to: (i) continuation of salary, bonus and health insurance payments for twelve months following the cessation of employment; and (ii) executive outplacement assistance.

	•	If the executive is terminated by the Company without cause or resigns with good reason during the three months prior to or within one year following a change of control (as defined in the agreements) of the Company, the executive is entitled to: (i) salary, bonus and health insurance payments for 18 months following the termination, to be paid in a lump-sum; (ii) executive outplacement assistance; and (iii) full acceleration of all options held by the executive. In the case where the executive is terminated prior to a change of control, the above benefits are effective as of the change of control.

The following table sets forth the names of the executives that have signed employment agreements, the date entered into, the base salary provided for, and the form of the agreement:

During fiscal 2003, the Compensation Committee of the Board of Directors (“Committee”) was composed of Ms. Coppinger and Mr. Tietjen, neither of whom are currently officers or employees of the Company. The Committee is responsible for establishing the Company’s compensation programs for all employees, including executives. For executive officers, the Committee evaluates performance and determines compensation policies and levels.

The goals of the compensation program are to align compensation with business objectives and performance and to enable the Company to attract, retain and reward executive officers and other key employees who contribute to the long-term success of the Company and to motivate them to enhance long-term stockholder value. Key elements of this philosophy are:


	•	The Company pays competitively with technology companies with which the Company competes for talent. To ensure that pay is competitive, the Company regularly compares its pay practices with these companies and sets it pay parameters based on this review.

	•	The Company maintains annual incentive opportunities sufficient to provide motivation to achieve specific operating goals and to generate rewards that bring total compensation to competitive levels.

¹ The material in this report is not “soliciting material,” is not deemed “filed” with the SEC, and is not to be incorporated by reference into any filing of the Company under the 1933 Act or 1934 Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.


	•	The Company provides equity-based incentives for executives and other key employees to ensure that they are motivated over the long-term to respond to the Company’s business challenges and opportunities as owners and not just as employees.

Base Salary. The Committee annually reviews each executive officer’s base salary. When reviewing base salaries, the Committee considers individual and corporate performance, levels of responsibility, prior experience, breadth of knowledge and competitive pay practices.

Annual Incentive. The Management Incentive Plan, an annual incentive award plan, is the variable pay program for officers and other senior managers of the Company to earn additional annual compensation. The actual incentive award earned depends on the extent to which Company and individual performance objectives are achieved. At the start of each year, the Committee and the full Board of Directors review and approve the annual performance objectives for the Company and individual officers. The Company objectives consist of operating, strategic and financial goals that are considered to be critical to the Company’s fundamental long-term goal — building stockholder value. For fiscal year 2003, these goals were financial performance related to revenue, cash flow and net loss per share.

After the end of the year, the Committee evaluates the degree to which the Company has met its goals and awards incentive compensation based on each participant’s performance against objectives. Awards are paid in cash, and distributions are made in March following the performance year.

Long-Term Incentives. The Company’s long-term incentive program consists of the 2000 Equity Incentive Plan, and for Academic Systems the 1992 Stock Option Plan, which the Company assumed with the closing of the acquisition. The option program utilizes vesting periods (generally two or four years) to encourage key employees to continue in the employ of the Company. Through option grants, executives receive significant equity incentives to build long-term stockholder value. Grants are made at 100% of fair market value on the date of grant. Executives receive value from these grants only if the Company’s Common Stock appreciates over the long-term. The size of option grants is determined based on competitive practices at leading companies in the educational technology industry and the Company’s philosophy of significantly linking executive compensation with stockholder interests.

Mr. Kernan’s base salary at the end of fiscal year 2003 as Chief Executive Officer and Chairman was $300,000. This amount, in addition to the annual incentive provided by the Management Incentive Plan, was estimated to provide an annual cash compensation level at the average as compared to a selected group of technology companies. In setting this amount, the Committee took into account (i) its belief that Mr. Kernan is one of the CEOs of leading educational companies who has significant and broad-based experience in the education technology industry, (ii) the scope of Mr. Kernan’s responsibility, and (iii) the Board’s confidence in Mr. Kernan to lead the Company’s continued development.

Through the plans described above, a significant portion of the Company’s compensation program and Mr. Kernan’s compensation is contingent on Company performance, and realization of benefits is closely linked to increases in long-term stockholder value. The Company remains committed to this philosophy of pay for performance, recognizing that the competitive market for talented executives and the volatility of the Company’s business may result in highly variable compensation for a particular time period.

During the fiscal year ended January 31, 2003, Elizabeth R. Coppinger and Hugh M. Tietjen served as members of the Company’s Compensation Committee. During that fiscal year, none of the Company’s executive officers or employees served as a director or as a member of the compensation committee of any entity that has one or more executive officers serving as a member of the Company’s Board of Directors or Compensation Committee.

The following graph shows the total stockholder return of an investment of $100 in cash on February 10, 2000 through January 31, 2003 for (i) the Company’s Common Stock, (ii) the Nasdaq Stock Market Composite Index (the “NASDAQ”) and (iii) a peer group selected by the Company. All values assume reinvestment of the full amount of all dividends and are calculated as of the end of each period.

Comparison Of Cumulative Total Return on Investment Since February 10, 2000(2)


(1)	This section is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the 1933 Act or the 1934 Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

(2)	Peer group index includes: Renaissance Learning, Inc. (RLRN) Iformerly Advantage Learning Systems, Inc. (ALSI)J; Scientific Learning Corp. (SCIL.OB) and rStar Corp. (RSTRC) Iformerly Zapme Corp. (IZAP)J. Smart Force and Riverdeep Group are no longer included in the peer group index as the stock of these companies is no longer traded on the NASDAQ Stock Market, Inc.

The following table sets forth certain information regarding the ownership of the Company’s Common Stock as of April 30, 2003 by: (i) each director and nominee for director; (ii) each of the executive officers named in the Summary Compensation Table; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than five percent of its Common Stock.

The following table is based upon information supplied by officers, directors and principal stockholders and Schedules 13D and 13G filed with the Securities and Exchange Commission (the “SEC”). Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, the Company believes that each of the stockholders named in this table has sole voting and investment power with

respect to the shares indicated as beneficially owned. Applicable percentages are based on 47,427,851 shares outstanding on April 30, 2003, adjusted as required by rules promulgated by the SEC.


	(1)	Mr. Brown’s business address is 1400 Lake Hearn Dr. NE, Atlanta, Georgia 30319.

	(2)	Ms. Coppinger’s business address is 550 Madison Avenue, New York, New York 10022.

	(3)	Mr. Holtby’s business address is 7230 Arbutus Road, West Vancouver, British Columbia, V7W 2L5, Canada.

	(4)	Mr. Schiffman’s business address is 300 Hamilton Avenue, Palo Alto, California 94301.

	(5)	Mr. Tietjen’s business address is 5514 Calumet Avenue, La Jolla, California 92037.

	(6)	The business address for Royce & Associates is 1414 Ave. of the Americas 9th Fl. New York, New York 10019.

	(7)	The business address for Liberty Media Corp. is 12300 Liberty Blvd., Englewood, Colorado 80112

	(8)	The business address for Accel Partners is 428 University Avenue, Palo Alto, California 94301.

	(9)	The business address for Kleiner, Perkins, Caufield and Byers is 2750 Sand Hill Road, Menlo Park, California 94025.


(10)	The business address for Microsoft Corporation is One Microsoft Way, Redmond, Washington 98052.

The following table sets forth certain additional information about the equity compensation plans of the Company as of January 31, 2003.

Except as described under “Employment, Severance and Change of Control Agreements” in Item 11 above, the Company has not been a party to any transaction occurring after February 1, 2002, in which the amount involved exceeded $60,000 and in which any director, executive officer or holder of more than 5% of the Company’s capital stock had or will have a direct or indirect material interest.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 29th day of May, 2003.


	By:	/s/ CARL E. ZEIGER



	Carl E. Zeiger,
	President, Chief Operating Officer and Director

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints John T. Kernan and Carl E. Zeiger and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place, and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.

I, John T. Kernan, Chairman of the Board and Chief Executive Officer of Lightspan, Inc., certify that:

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:


	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


	By:	/s/ JOHN T. KERNAN



	John T. Kernan
	Chairman of the Board and
	Chief Executive Officer

I, Michael A. Sicuro, Senior Vice President, Chief Financial Officer, Treasurer and Secretary of Lightspan, Inc., certify that:


	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

	c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


	By:	/s/ MICHAEL A. SICURO



	Michael A. Sicuro
	Senior Vice President, Chief Financial Officer, Treasurer and Secretary


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the fiscal year ended January 31, 2003

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to


Delaware		33-0585210
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

10140 Campus Point Drive San Diego, California (Address of principal executive office)		92121-1520 (Zip Code)


TABLE OF CONTENTS
PART III
	Item 10. Directors and Executive Officers of the Registrant
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	Item 13. Certain Relationships and Related Transactions
SIGNATURES
EXHIBIT 99.1
EXHIBIT 99.2


			Page

PART III
	Item 10.	Directors and Executive Officers of the Registrant		3
	Item 11.	Executive Compensation		5
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		11
	Item 13.	Certain Relationships and Related Transactions		13
SIGNATURES				14


• Academic.com	• Learning Search	• The Lightspan Network®
• AcademicOnline 2000	• Lightspan	• Lightspan Partnership
• Academic Systems	• Lightspan.com	• Lightspan Reading Center
• Desktop Professional Development	• Lightspan Achieve Now	• School Focus
• Ed-mail®	• Lightspan Achieve Now Online	• StudyWeb®
• eduTest.com	• Lightspan Adventures	• Your Class Online
• Family Focus	• Lightspan Assessment Builder	• Your School Online
• Global Schoolhouse®	• Lightspan Early Reading Program
• LearningPlanet.com	• Lightspan eduTest Assessment

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Name	Age		Position

John T. Kernan		57	Chairman of the Board and Chief Executive Officer
Carl E. Zeiger		60	President, Chief Operating Officer and Director
Jeffrey W. Brown		41	Director
Elizabeth R. Coppinger		51	Director
Douglas M. Holtby		56	Director
Barry J. Schiffman		57	Director
Hugh M. Tietjen		68	Director


			Committee
	Board Service		Attendance		Total
Name	Compensation		Compensation		Compensation

Jeffrey W. Brown	$	7,050	$	1,500	$	8,550
Douglas M. Holtby	$	10,016	$	1,500	$	11,516
Hugh M. Tietjen	$	8,000	$	1,500	$	9,500


								Long-Term
								Compensation
				Annual Compensation
								Securities		All Other
		Fiscal		Salary				Underlying		Compensation
Name and Principal Position		Year		($)(1)		Bonus		Options(#)		($)(2)

John T. Kernan			2003	$	301,000	$	116,700		100,000
	Chief Executive Officer and		2002	$	297,000				100,000
	Chairman		2001	$	272,000
Carl E. Zeiger			2003	$	291,000	$	83,000		100,000
	President, Chief Operating		2002	$	286,000				100,000
	Officer and Director		2001	$	263,000
Michael A. Sicuro(3)			2003	$	210,000	$	66,700		100,000
	Senior Vice President, Chief		2002	$	198,000				100,000
	Financial Officer, Treasurer and		2001	$	3,000				300,000
	Secretary
Sandra K. Fivecoat			2003	$	210,000	$	37,500		75,000	$	110,205
	Senior Vice President of Sales		2002	$	212,000	$	70,000		100,000	$	118,766
			2001	$	211,000	$	107,500		20,000	$	176,444
James M. Dredge(4)			2003	$	247,000	$	66,700		100,000
	Chief Executive Officer of		2002	$	244,000	$	6,250		100,000
	Academic Systems		2001	$	4,000				150,000



									Potential Realizable
									Value at Assumed
									Annual Rates of
	Number of								Stock Price
	Securities		% of Total						Appreciation for
	Underlying		Options Granted		Exercise				Option Terms(3)
	Options		to Employees in		Or Base		Expiration
Name	Granted(#)(1)		Fiscal Year(2)		Price($/Sh)		Date		5%($)		10%($)

John T. Kernan		100,000		4.3		1.01		5/11/2012		63,518		160,968
Carl E. Zeiger		100,000		4.3		1.01		5/11/2012		63,518		160,968
Michael A. Sicuro		100,000		4.3		1.01		5/11/2012		63,518		160,968
Sandra K. Fivecoat		75,000		3.2		1.01		5/11/2012		47,639		120,726
James M. Dredge		100,000		4.3		1.01		5/11/2012		63,518		160,968


Executive	Date of Agreement		Base Salary		Form of Agreement

John T. Kernan		03/01/01	$	300,000	Tier I
Carl E. Zeiger		03/01/01	$	290,000	Tier I
James M. Dredge		03/01/01	$	247,000	Tier II
Sandra K. Fivecoat		03/16/01	$	210,000	Tier II
Michael A. Sicuro		01/29/01	$	210,000	Other


	Compensation Committee
	Elizabeth R. Coppinger
	Hugh M. Tietjen


Item 12.	*Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters*



		Beneficial Ownership

				Shares
				Acquirable
		Total		Within 60 Days		Percent
		Number of		of		of
Beneficial Owner		Shares		April 30, 2003		Total

Officers of the Company:
John T. Kernan			1,685,654		104,165		3.5	%
Carl E. Zeiger			1,392,665		104,165		2.9	%
Michael A. Sicuro			186,733		181,250		*
Sandra K. Fivecoat			177,528		146,977		*
James M. Dredge			96,009		90,624		*
Directors of the Company:
Jeffrey W. Brown(1)			—		—		*
	Cox Communications, Inc.
Elizabeth R. Coppinger(2)			—		—		*
	Sony Corporation of America
Douglas M. Holtby(3)			—		—		*
Barry J. Schiffman(4)			—		—		*
	Globespan Capital Partners
Hugh M. Tietjen(5)			—		—		*
Beneficial owners of more than 5% of the Company’s common stock:
Royce & Associates(6)			6,076,300		—		12.6	%
Liberty Media Corp.(7)			4,060,836		1,534		8.5	%
Accel Partners(8)			3,115,578		3,652		6.5	%
Kleiner, Perkins, Caufield & Byers(9)			3,062,143		3,653		6.4	%
Microsoft Corporation(10)			2,915,080		1,298		6.1	%
All directors and officers as a group (10 persons)			22,768,526		637,318		47.4	%


Item 13.	*Certain Relationships and Related Transactions*



Signature	Title	Date


/s/ JOHN T. KERNAN John T. Kernan	Chief Executive Officer and Chairman (Principal Executive Officer)	May 29, 2003

/s/ CARL E. ZEIGER Carl E. Zeiger	President, Chief Operating Officer, and Director	May 29, 2003

/s/ MICHAEL A. SICURO Michael A. Sicuro	Chief Financial Officer (Principal Financial and Accounting Officer)	May 29, 2003

/s/ JEFFREY W. BROWN Jeffrey W. Brown	Director	May 29, 2003

/s/ ELIZABETH R. COPPINGER Elizabeth R. Coppinger	Director	May 29, 2003

/s/ DOUGLAS M. HOLTBY Douglas M. Holtby	Director	May 29, 2003


	*	Less than one percent.


	LIGHTSPAN, INC.