exv10w8




Exhibit 10.8






The
McGraw-Hill Companies




KEY
EXECUTIVE SHORT-TERM


INCENTIVE COMPENSATION PLAN




(As amended effective July 28, 2009)









 



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THE McGRAW-HILL COMPANIES, INC.




KEY EXECUTIVE SHORT-TERM INCENTIVE COMPENSATION PLAN



     The McGraw-Hill Companies, Inc. (“McGraw-Hill”), a corporation existing under the laws
of the State of New York, hereby establishes and adopts the following Key Executive
Short-Term Incentive Compensation Plan (the “Plan”) to provide annual incentive awards to
key employees of the Company, including, in the case of executive officers and certain
other key executives of the Company, awards which are intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the Code. The
Plan is an amendment and restatement as of January 1, 2005, of the prior McGraw-Hill 1996
Key Executive Short-Term Incentive Plan.



1. PURPOSES OF THE PLAN




     The purposes of the Plan are to provide the opportunity for incentives and financial
rewards to key employees of the Company designated by the Committee, who, because of the
extent of their responsibilities, can make significant contributions to the Company’s
performance by their ability, industry, loyalty, leadership and individual achievement.
Providing recognition and financial rewards to such individuals based on the performance of
the Company and their contributions will advance the interests of McGraw-Hill and its
shareholders and will assist the Company in attracting and retaining management of the
highest caliber and ability.



2. DEFINITIONS




     2.1 “Award” means, subject to Section 5, the right granted to a Participant for a Year
to receive an Award Payment from the Pool in which the Participant is participating for
such Year based on the attainment of the Performance Objectives for the Pool, the
attainment of the Participant’s Individual Performance Criteria and such other subjective
or objective factors as the Committee may determine.



     2.2 “Award Payment” means the amount paid to a Participant for a given year in respect
of an Award.



     2.3 “Beneficiary” shall mean a Participant’s beneficiary designated on a beneficiary
designation form approved by and provided to the Company or, if no such designation is
made, the Participant’s estate.



     2.4 “Board” means the Board of Directors of McGraw-Hill.



     2.5 “Cause” means the Participant’s misconduct in respect of his or her obligations to
the Company or other acts of misconduct by the Participant occurring during the course of
his or her employment, which in either case results in or could reasonably be expected to
result in material damage to the property, business or reputation of the Company; provided
that in no event shall unsatisfactory job performance alone be deemed to be Cause; and
provided further that no termination of employment that is carried out at the request of a
person seeking to









 



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accomplish a Change in Control or otherwise in anticipation of a Change in Control shall be deemed
to be for Cause.




     2.6 “Change in Control” has the meaning set forth in Section 4.7(c) below.



     2.7 “Change-in-Control Award Payment” means the pro rata portion, based on the portion
of the Year elapsed at the Change-in-Control Effective Date, of the average of, for each of
the preceding three Years, the Participant’s Award Payment or, for any such Year in which
the Participant did not participate in the Plan, the actual amount paid to the Participant
under any other short-term incentive plan of the Company. For purposes of determining a
Participant’s Change-in-Control Award Payment, if the Participant did not participate in a
short-term incentive plan of the Company during one or more of the preceding three Years,
such average shall be deemed to be equal to the Participant’s Award Payment (or other
short-term incentive award payment) or the average of the Participant’s Award Payments (or
other payments), as applicable, for such Year or Years in which the Participant
participated in the Plan (or other short-term incentive award plan). If any such Award
Payment (or other short-term incentive award payment) was reduced because the Participant
commenced employment with the Company after the start of the applicable Year, then the
amount of such Award Payment (or other payment) shall be annualized for purposes of
determining such average. If the Participant did not participate in a short-term incentive
plan of the Company during the preceding three Years, then the Participant’s
Change-in-Control Award Payment shall be equal to (x) the Participant’s annual base salary,
multiplied by (y) the average of the Change-in-Control Award Payments to be paid to the
other Participants at the same grade level and in a similar business unit as the
Participant (or, in the case of a Covered
Participant, the other Covered Participants) as a result of the Change in Control,
divided by (z) the average of such other Participants’ (or Covered Participants’) annual
base salaries.



     2.8 “Change-in-Control Effective Date” has the meaning set forth in Section 4.7(a)
below.



     2.9 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and
any successor thereto, and the applicable rules and regulations thereunder.



     2.10 “Covered Award” means an Award to a Covered Participant which is intended to
qualify as “performance-based compensation” within the meaning of Section 162(m) of the
Code.



     2.11 “Covered Participant” has the meaning set forth in Section 5.1 below.



     2.12 “Committee” means the Compensation Committee of the Board. If at any time no
Committee shall be in office, then, subject to satisfying the requirements of Section
162(m)(4)(C) of the Code and the listing requirements of the New York Stock Exchange, the
functions of the Committee specified in the Plan shall be exercised by the Board or by a
committee of Board members. As used in the Plan, where applicable, the term “Committee”
also shall mean one or more officers or employees, or committees thereof, to which the
Committee has delegated the authority to take actions on its behalf pursuant to Section
3.2(c) below.









 



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     2.13 “Company” means McGraw-Hill and all domestic and foreign corporations,
partnerships and other legal entities of which at least 20% of the voting securities or
ownership interests of such entities are owned directly or indirectly by McGraw-Hill.



     2.14 “Corporate Transaction” has the meaning set forth in Section 4.7(c)(iii) below.



     2.15 “Disability” means eligibility for disability benefits under the terms of the
Company’s Long-Term Disability Plan in effect for the Participant at the time the
Participant becomes disabled.



     2.16 “Early Retirement” means, with the approval of the Committee, termination of a
Participant’s employment under the applicable retirement plan of McGraw-Hill; provided that
the Participant is age 55 or older with at least 10 years of service and is eligible to
receive a Company pension benefit payable upon termination.



     2.17 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, and any successor thereto, and the applicable rules
and regulations thereunder.



     2.18 “Individual Performance Criteria” means financial or non-financial performance
criteria (which may include the Performance Objectives for the Pool applicable to the
Participant’s Award) to be achieved during a Year and upon which the amount of
Participants’ Award Payments shall be based. “Individual Performance Criteria” may include
objective and subjective determinations of individual performance for a Year (which may
include the results of a Participant’s individual performance evaluation by the Company for
the Year).



     2.19 “Net Income” means the Company’s after-tax income as reported on a consolidated
basis in the Company’s audited financial statements for the applicable Year. Net Income
shall be adjusted to eliminate the effects of charges for restructurings, charges for
discontinued operations, charges for extraordinary items and other unusual or non-recurring
items of loss or expense, the unbudgeted current Year impact and cumulative effect of
accounting changes, the unbudgeted loss or expense impact of any acquisition or divestiture
made during the Year, and any direct or indirect change in the Federal corporate tax law or
rate affecting the Year, each as defined by generally accepted accounting principles and
identified in the audited financial statements, notes to the audited financial statements,
management’s discussion and analysis or other Company filings with the Securities and
Exchange Commission.



     2.20 “Normal Retirement” means termination of employment from the Company on or after
age 65.



     2.21 “Outstanding Common Stock” has the meaning set forth in Section 4.7(c)(i) below.



     2.22 “Outstanding Voting Securities” has the meaning set forth in Section 4.7(c)(i)
below.



     2.23 “Participant” has the meaning set forth in Section 3.1 below.









 



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     2.24 “Performance Objectives” means financial or non-financial performance objectives
to be achieved during a Year and upon which the actual amount of each Pool shall be based.



     2.25 “Person” has the meaning set forth in Section 4.7(c)(i) below.



     2.26 “Pool” means the amount allocated for payment of Awards in any Year, based on
achievement of the applicable Performance Objectives during such Year. The Committee may
establish, for any year: (i) one Pool for the Company; (ii) separate Pools for each
segment or for some or all of the business units within a segment of the Company; or (iii)
one or more Pools based on such organizational and other factors as the Committee shall
deem relevant.



     2.27 “Retirement” means Early Retirement or Normal Retirement.



     2.28 “Termination Award Payment” means a pro rata Award Payment for the portion of the
Year during which the Participant was employed by the Company and participating in the
Plan, based on achievement for the Year of the Performance Objectives for the Pool
applicable to the Participant’s Award, at the midpoint of the applicable payment range for
performance of the Individual Performance Criteria under the Award that fully meets
expectations.



The foregoing notwithstanding, in the event the achievement for the Year of the Performance
Objectives for the Pool applicable to the Participant’s Award exceeds one hundred percent, such
achievement shall for purposes of said payment to such Participant be deemed to be one hundred
percent.



Furthermore, the foregoing notwithstanding in the case of any Covered Award, the pro rata Award
Payment described above shall not exceed the percentage of Net Income set forth in Section 5.2
for the Covered Award.



     2.29 “Year” means a calendar year, or a fiscal year of McGraw-Hill if other than a
calendar year.



3. ELIGIBILITY AND ADMINISTRATION




     3.1. Eligibility. The individuals entitled to participate in the Plan shall be those
key employees of the Company (excluding employees participating for the Year in any other
short-term incentive plan of the Company) who are selected by the Committee to receive an
Award for the Year (each, a “Participant”).



     3.2. Administration. (a) The Plan shall be administered by the Committee. Subject
to the provisions of the Plan and to such orders or resolutions not inconsistent with the
provisions of the Plan as may from time to time be adopted by the Board: (i) the Committee
may from time to time establish rules for the administration of the Plan; (ii) the
Committee shall have discretionary authority to determine the degree of attainment of
Performance Objectives and satisfaction of Individual Performance Criteria, the actual
amount of each Pool and the amount of the Award Payment for each Participant in respect of
a Year, including, without limitation, the authority to make factual determinations, to
construe and interpret the Plan and any instrument or agreement entered into in connection
with the Plan, to correct any defect, supply any omission or









 



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reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the
Committee shall deem desirable to carry it into effect, and to decide all matters arising
thereunder or in connection with the administration of the Plan; and (iii) the decisions of the
Committee, to the extent permitted by law, shall be final, conclusive and binding on all persons,
including the Company and any Participant, having or claiming to have any right or interest in or
under the Plan or any Award.




     (b) In addition, subject to the provisions of the Plan and to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time to time be
adopted by the Board, the Committee shall have full power and authority to do the
following: (i) select the Participants for each Year; (ii) determine the terms and
conditions, not inconsistent with the provisions of the Plan, of each Award; (iii)
determine the time when Awards will be made; (iv) determine the total amount of Awards to
be granted to Participants in respect of a Year; (v) establish and to determine the target
amount of each Pool and the applicable Performance Objectives for such Pool; (vi) establish
Individual Performance Criteria, as applicable, for each Award; (vii) certify the Award
Payment in respect of Covered Awards; (viii) determine the form of Award Payments and
whether any portion of an Award Payment shall be mandatorily or may be voluntarily deferred
by Participants; (ix) appoint such agents as the Committee shall deem appropriate for the
proper administration of the Plan; and (x) make any other determination and take any other
action that the Committee deems necessary or desirable for administration of the Plan. The
Committee in its sole discretion has the authority to effect adjustments from time to time
in connection with determining the degree of achievement of financial objectives (except in
the case of the determination of Net Income under Covered Awards), and to make any other
determinations, as it deems equitable, fair or advisable for the purpose of ascertaining
the amount of Award Payments.



     (c) To the extent not inconsistent with applicable law, Section 162(m)(4)(c) of the
Code and the listing requirements of the New York Stock Exchange, the Committee may
delegate to one or more officers or employees of the Company, or one or more committees
thereof, the authority to take actions on its behalf pursuant to the Plan; provided,
however, that the Committee may not delegate its authority with respect to Section 4.7,
Section 5, Section 6.1 or Section 6.2 below, or in respect of a Covered Award, and that a
person to whom such authority is delegated may not further delegate such authority unless
specifically authorized by the Committee.



     (d) To the extent permitted by law, the Committee and each member of the
Committee and any officer or employee or committee thereof to whom responsibilities have been
delegated under the Plan shall be indemnified by the Company against any claims, and the expenses
of defending against such claims, resulting from any action or conduct relating to the
administration of the Plan, except claims arising from gross negligence, willful neglect or willful
misconduct.



4. AWARDS




     4.1. Pool. At or near the start of the applicable Year, the Committee
shall: (i) determine the number of Pools and target amount of each Pool for the Year; (ii) specify the
relevant Performance Objectives and the methodology to determine the actual amount of each Pool;
and (iii) identify the Participants eligible to receive a share of each Pool and, if applicable,














 



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specify the Individual Performance Criteria under their Awards. During the applicable Year,
the Committee shall have discretion to adjust the target or actual amount of each Pool to reflect
changes in the employment status of Participants during the Year and to adjust the actual amount of
one or more Pools to take account of Award Payments in respect of Covered Awards allocative to such
Pool.




     4.2. Notice. The Committee shall determine for each Year the time and manner of
notice to Participants of Awards.



     4.3. Payment. As soon as reasonably practicable following the conclusion of each
Year, the Committee shall determine the actual amount of each Pool, based on the attainment
of the applicable Performance Objectives for such Year, and shall determine each
Participant’s share in the applicable Pool based on the terms of the Participant’s Award
and the Participant’s attainment of the applicable Individual Performance Criteria for the
Year. Each Award Payment shall, subject to any deferral required or permitted by the
Committee, be paid to the Participant in cash, stock awards under a shareholder-approved
stock plan of the Company, or any combination thereof at such time as is determined by the
Committee in its sole discretion following the end of the applicable Year, but no more than
90 days following the date of the report of McGraw-Hill’s independent auditors certifying
McGraw-Hill’s financial statements for the Year.



     4.4. Performance Measures. Performance Objectives may consist of financial
objectives, non-financial objectives or a combination of financial and non-financial
objectives. If more than one Pool is established for a Year, such Pools may have the same
or different Performance Objectives. Individual Performance Criteria may consist of
financial objectives, non-financial objectives or a combination of financial and
non-financial objectives and may include objective and subjective measures of individual
performance, including the results of a Participant’s individual performance evaluation by
the Company. Except in the case of the determination of Net Income under Covered Awards,
the Committee in its sole discretion shall have the authority to alter or adjust financial
objectives during the course of any Year, or to alter or adjust the financial results
otherwise reported or achieved by McGraw-Hill during such Year, if it is deemed appropriate
to do so.



     4.5. Termination of Employment. (a) If a Participant’s employment with the Company
terminates during any Year because of death, Disability, Retirement or termination by the
Company other than for Cause, the Participant (or the Participant’s Beneficiary), subject
to the Participant executing a general release of claims against the Company in a form
reasonably satisfactory to the Company, shall receive a Termination Award Payment for the
portion of the Year during which the Participant was employed by the Company and
participating in the Plan. Unless the Committee specifies an earlier payment date, such
Termination Award Payment shall be made at the time that Award Payments for the applicable
Year are made to other Participants.



     (b) A Participant whose employment with the Company terminates during
a Year or prior to the payment date for Cause, or who voluntarily resigns during a
Year or prior to the payment date, shall not be eligible for any payment under the Plan for
such Year. Neither the Plan nor any action taken hereunder shall be construed as giving
any Participant any right to be retained in the employ of the Company. A leave of absence,
approved by the Committee, shall not be deemed to be a termination of employment for
purposes of the Plan, and may warrant a full Award Payment or Termination Award Payment as
determined by the Committee.









 



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     4.6. Transfer. If a Participant is transferred within the Company during any Year to
a position that is not considered as eligible for participation in the Plan, the Committee
may, in its sole and absolute discretion, authorize a Termination Award Payment to the
Participant, based on the portion of the Year during which the Participant was
participating in the Plan, and the degree to which during the Year the applicable
Performance Objectives and Individual Performance Criteria were achieved during the Year.



     4.7. Change in Control. In the event of a Change in Control, then:



     (a) Immediately after such event becomes effective (the “Change-in-Control Effective
Date”), the Company shall pay to each Participant for the Year in which the Change in
Control occurs a Change-in-Control Award Payment for the portion of the Year elapsed to the
Change-in-Control Effective Date, and shall have no further obligation under the
Participant’s Award with respect to the Year. If the Committee so determines, the Company
may also pay to each Participant an additional amount, if any, to reflect the achievement
during the portion of the Year elapsed to the Change-in-Control Effective Date of the
Performance Objectives for the Pool applicable to the Participant’s Award and of the
Individual Performance Criteria under the Award.



     (b) The reasonable legal fees incurred by any Participant to enforce his/her valid
rights under this Section 4.7 shall be reimbursed by McGraw-Hill, in addition to sums
otherwise due under the Plan, whether or not the Participant is successful in enforcing
his/her rights or whether or not the matter is settled. Such reimbursement shall be made
on a “pay-as-you-go” basis, as soon as practicable after presentation to McGraw-Hill of any
periodic statements for such fees.



     (c) “Change in Control” means any of the following events:



     (i) An acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the
then outstanding shares of common stock of McGraw-Hill (the “Outstanding Common Stock”) or
(2) the combined voting power of the then outstanding voting securities of McGraw-Hill
entitled to vote
generally in the election of directors (the “Outstanding Voting Securities”);
excluding, however, the following: (A) any acquisition directly from McGraw-Hill, other
than an acquisition by virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from McGraw-Hill; (B) any acquisition by
McGraw-Hill; (C) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by McGraw-Hill or any entity controlled by McGraw-Hill; or (D) any
acquisition pursuant to a transaction which complies with clauses (1), (2) and (3) of
subsection (iii) of this definition; or



     (ii) A change in the composition of the Board such that the individuals who, as of the
effective date of the Plan, constitute the Board (such Board shall be hereinafter referred
to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, for purposes of this definition, that any individual who becomes
a member of the Board subsequent to the effective date of the Plan, whose election, or
nomination for election by McGraw-Hill’s shareholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed









 



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to be such pursuant to this proviso) shall be considered as though such individual were a member of
the Incumbent Board; but, provided further that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board
shall not be so considered as a member of the Incumbent Board; or




     (iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of McGraw-Hill (a “Corporate
Transaction”); excluding, however, a Corporate Transaction pursuant to which (1) all or
substantially all of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or indirectly, more
than 50% of, respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including, without limitation, a corporation which as a result of such
transaction owns McGraw-Hill or all or substantially all of McGraw-Hill’s assets either
directly or through one or more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common
Stock and Outstanding Voting Securities, as the case may be, (2) no Person (other than the
McGraw-Hill, any employee benefit plan (or
related trust) of McGraw-Hill or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20% or more of, respectively,
the outstanding shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors except to the extent
that such ownership existed prior to the Corporate Transaction, and (3) individuals who
were members of the Incumbent Board will constitute at least a majority of the members of
the board of directors of the corporation resulting from such Corporate Transaction; or



     (iv) The approval by the shareholders of McGraw-Hill of a complete liquidation or
dissolution of McGraw-Hill.



5. COVERED AWARDS




     5.1. Covered Participants. No later than 90 days after the commencement of each Year,
the Committee shall, in writing: (i) designate the Participants to receive a Covered Award
for the Year (“Covered Participants”); and (ii) notify each Covered Participant of his or
her Covered Award for the Year. The Committee shall designate as Covered Participants the
Participants who are executive officers of the Company and the other Participants who are
expected to be a “covered employee” within the meaning of Section 162(m)(3) of the Code in
the Year in which McGraw-Hill would become entitled to take a compensation deduction as a
result of the Award Payment (determined without regard to the limitation on deductibility
imposed by Section 162(m) of the Code).



     5.2. Covered Award. For each Year, a Covered Award shall consist of 0.7% of Net
Income for the Year in the case of the Chief Executive Officer of McGraw-Hill and 0.5% of
Net Income for the Year in the case of each other Covered Participant.









 



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     5.3. Award Payment. The Award Payment in respect of each Covered Award shall be an
amount equal to or less than such percentage of Net Income, as determined by the Committee
in its sole discretion. In the exercise of such discretion, the Committee may take into
account the Award Payment that the Covered Participant would have received had the Covered
Participant participated in a specified Pool for the Year, and may reduce the actual amount
of such Pool by reference to the Award Payment made to the Covered Participant for the
Year. Notwithstanding anything to the contrary in the Plan, however, the Committee shall
not have any discretion or authority to increase the Award Payment payable under a Covered
Award.



     5.4. Certification. As soon as reasonably practicable following the conclusion of
each Year, the Committee shall certify, in writing, the achievement of Net Income and the
amount of the Award Payment in respect of each Covered
Award for the Year.



6. MISCELLANEOUS




     6.1 Amendment and Termination of the Plan. The Committee or the Board may, from time
to time, alter, amend, suspend or terminate the Plan as it shall deem advisable subject to
any requirement for shareholder approval imposed by applicable law, including Section
162(m) of the Code, and to the listing requirements of the New York Stock Exchange;
provided, however, that Section 4.7 above, as it applies to any Change in Control, may not
be amended following that Change in Control, nor may it be amended in anticipation of a
Change in Control, in either case, in a manner adverse to any Participant without the
Participant’s express written consent.



     6.2 Section 162(m) of the Code. Unless otherwise determined by the Committee, or
expressly provided herein, the provisions of this Plan shall be administered and
interpreted in accordance with Section 162(m) of the Code to ensure the maximum
deductibility by the Company of the payment of Covered Awards.



     6.3 Tax Withholding. The Company shall have the right to make all payments or
distributions pursuant to the Plan to a Participant, net of any applicable Federal, State
and local taxes required to be paid or withheld. The Company shall have the right to
withhold from wages, Award Payments or other amounts otherwise payable to such Participant
such withholding taxes as may be required by law, or to otherwise require the Participant
to pay such withholding taxes. If the Participant shall fail to make such tax payments as
are required or to satisfy any other payment obligation to the Company, the Company shall,
to the extent permitted by law, have the right to deduct any such amounts from any payment
of any kind otherwise due to such Participant or to take such other action as may be
necessary to satisfy such withholding or other obligations.



     6.4 Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor the grant
of an Award hereunder shall confer upon any Participant the right to continue in the
employment of the Company or affect any right that the Company may have to terminate the
employment of (or to demote or to exclude from future Awards under the Plan) any such
Participant at any time for any reason. No Participant shall have any claim to be granted
any Award under the Plan, and there is no obligation for uniformity of treatment of
Participants under the Plan.









 



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     6.5 Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services performed or to be performed for the Company, division or business unit of the
Company. Any income or gain realized pursuant to Awards under the Plan constitute a
special incentive payment to the Participant and shall not be taken into account, to the
extent permissible under applicable
law, as compensation for purposes of any of the employee benefit plans of the Company
except as specifically provided under the applicable plan or as may otherwise be determined
by the Committee or by the Board.



     6.6 Other Plans. Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to shareholder approval if such
approval is required; and such arrangements may be either generally applicable or
applicable only in specific cases.



     6.7 Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded”
plan for incentive compensation, and deferred compensation if permitted by the Committee.
With respect to any payments not yet made to a Participant by the Company, nothing
contained herein shall give any such Participant any rights that are greater than those of
a general unsecured creditor of the Company.



     6.8 Effective Date of Plan. The Plan shall be effective as of January 1, 2005, upon
the approval of the Plan by McGraw-Hill’s shareholders at the 2005 annual meeting. The
Plan shall be null and void and of no effect if the foregoing condition is not fulfilled.



     6.9 Governing Law. The Plan and all determinations made and actions taken thereunder,
to the extent not otherwise governed by the Code or the laws of the United States, shall be
governed by the laws of the State of New York.