Document:

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                                                                   Exhibit 10.16

                                   PEARSON PLC

                        ANNUAL BONUS SHARE MATCHING PLAN

                                      RULES

This Annual Bonus Share Matching Plan is intended to encourage Participants to
stay with the Group and to identify with the interests of shareholders by
investing some of their own funds in the Company. An individual who is invited
to participate in this Annual Bonus Share Matching Plan may elect for up to 50%
of the after-tax amount of his annual bonus to be used to acquire Shares which
will be held for a period of three or five years under the terms of this Plan as
set out below. At the end of the three or five year period, provided the
Participant has remained an employee of the Group and a performance target has
been satisfied, the Shares will be released to the Participant together with a
number of additional Shares.

The definitions of terms used in these rules are set out in rule 6 below.

GRANT OF AWARDS

BASIC AWARDS

1.1. Following the notification of the amount of any Bonus payable under a Plan,
each Participant may be invited by the Committee to elect to receive up to 50%
of the cash amount of Bonus (after deduction of income tax at the Participant's
marginal rate and employees' national insurance contributions, if payable or, in
relation to non-UK resident Participants, any applicable personal taxation) as a
Basic Award.

1.2. For the purposes of the acquisition of Shares which shall comprise a Basic
Award:

             (i)  the Committee shall, subject to rule 1.11, have absolute
                  discretion as to when the Shares are purchased PROVIDED THAT
                  all the Shares required to satisfy Basic Awards for all
                  Participants shall be purchased on the same dealing day;

            (ii)  the price at which the Shares are purchased shall be the best
                  price reasonably obtainable on the London Stock Exchange; and

           (iii)  the nearest whole number of Shares shall be acquired with the
                  amount in 1.1 above. Any sum remaining following the
                  acquisition of the Shares shall be retained by the Committee
                  for the purpose of making future Awards under this Annual
                  Bonus Share Matching Plan.

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MATCHING AWARDS

1.3 Whenever the Committee grants a Basic Award, it shall also grant a Matching
Award comprising the nearest whole number of Shares which may be acquired (at
the price referred to in rule 1.2(ii) above) with the Gross Amount of Bonus used
to calculate that Basic Award.

RELEASE PERIODS

1.4 On the third anniversary of the Grant Date, or as soon as reasonably
practicable thereafter, a Participant will be notified whether or not the
performance target set out in rule 1.9 below has been satisfied over this three
year period. A Participant may elect, within 30 days of such notification for
the Basic Award to be released to him.

1.5 If the Participant so elects under rule 1.4 for the release of the Basic
Award and:

             (i)  the performance target set out in rule 1.9 below has been
                  satisfied, the Restricted Period in relation to the Basic
                  Award shall cease and the Basic Award together with one half
                  of the Matching Award shall be released as soon as reasonably
                  practicable thereafter. The balance of the Matching Award
                  shall lapse;

            (ii)  the performance target set out in rule 1.9 below has not been
                  satisfied, the Restricted Period in relation to the Basic
                  Award shall cease and the Basic Award shall be released as
                  soon as reasonably practicable thereafter. The Matching Award
                  shall lapse in its entirety.

1.6 If the Participant does not elect for the release of the Basic Award under
rule 1.5 and:

            (i)   the performance target set out in rule 1.9 below is satisfied
                  on the third anniversary of the Grant Date; or

           (ii)   the performance target set out in rule 1.9 below is not
                  satisfied on the third anniversary of the Grant Date

the Restricted Period in relation to the Basic Award shall continue and the
Matching Award shall remain subject to the performance target set out in rule
1.9 below over a five year period from the Grant Date. On the fifth anniversary
of the Grant Date, or as soon as reasonably practicable thereafter, a
Participant will be notified whether the performance target set out in rule 1.9
below has been satisfied over this five year period. If the performance target
has been

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satisfied, the Basic Award together with the Matching Award shall be released
automatically.

1.7 Where a Participant elects, under rule 1.6(i) for an Award to continue to
the fifth anniversary of the Grant Date and the performance target in rule 1.9
below is not satisfied over the five year period, the Basic Award together with
one half of the Matching Award shall be released to the Participant as soon as
reasonably practicable after the fifth anniversary of the Grant Date. The
balance of the Matching Award shall lapse

1.8 In the event that the performance target set out in rule 1.9 below is not
satisfied on either the third or the fifth anniversary of the Grant Date, the
Restricted Period in relation to the Basic Award shall cease and the Basic Award
shall be released to the Participant as soon as reasonably practicable
thereafter but the Matching Award shall lapse.

PERFORMANCE TARGET

1.9 The performance target referred to in rules 1.4, 1.5, 1.6, 1.7 and 1.8 is
that the percentage growth in the adjusted earnings per share of the Company
over the relevant period (comparing the adjusted earnings per share) stated in
the Company's accounts for the financial year ended prior to the Grant Date with
that for the financial year ending three or five years, as the case may be,
later) shall exceed the percentage growth in the UK Retail Prices Index (All
Items) by an average of at least 3 per cent. per annum.

GRANT PROCEDURE

1.10 As a condition of receiving an Award, each Participant shall be required to
agree to be bound by these rules.

1.11 Subject to the Participant's agreement referred to in rule 1.10 above, the
Award shall be granted by the Committee within 28 days of the Participant's
election to receive the Award unless the making of the Award would be prohibited
by law or the Model Code for Securities Transactions by Directors of Listed
Companies (or the Company's dealing rules). If at the end of the 28 day period
such prohibition remains in force, the Committee shall invite the Participant to
reconsider whether he wishes to elect to receive an Award or whether he wishes
to receive all of his Bonus in cash.

1.12 Each Award shall be evidenced by a Grant Letter which shall be signed on
behalf of the Company.

1.13 The Company shall be under no obligation to purchase the Shares comprised
in a Matching Award at or around the Grant Date but shall procure that there are
sufficient Shares available for transfer to satisfy a Matching Award by the
relevant release date set out in rules 1.4, 1.5, 1.6 and 1.7 above.

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1.14 Nothing in these rules or in a Participant's contract of employment shall
be construed as giving to any Participant a right to receive, or be considered
for, an Award. Neither an Award nor the Shares to which it relates shall be
pensionable for any purpose.

TERMS OF AWARDS

2.1 The main terms of each Award (which shall be set out or referred to in the
Grant Letter) shall be as follows:

(a)      NUMBER OF SHARES AND THE PERFORMANCE TARGET - The Grant Letter shall
         state the number of Shares comprised in the Basic Award and the
         Matching Award, and the performance target to which the Matching Award
         is subject.

(b)      RESTRICTED PERIOD FOR BASIC AWARD - The Restricted Period in relation
         to a Basic Award shall commence on the Grant Date and shall (unless
         foreshortened pursuant to these rules) expire on the third or fifth
         anniversary thereof as set out in rules 1.4, 1.5, 1.6, 1.7 and 1.8
         above. During the Restricted Period, the Participant shall not sell,
         transfer, pledge, assign or otherwise dispose of all or any Shares
         comprised in the Basic Award. Any attempt by the Participant to sell,
         transfer, pledge, assign or otherwise dispose of such Shares or any
         interest therein shall result in the immediate forfeiture of the Shares
         comprised in the Basic Award.

(c)      RIGHTS OF PARTICIPANT DURING RESTRICTED PERIOD - The beneficial
         interest in the Shares comprised in a Basic Award shall pass to the
         Participant on the Grant Date, even though the Shares comprised therein
         are capable of forfeiture in accordance with these rules. During the
         Restricted Period, the Participant shall be entitled to receive all
         dividends payable in respect of the Shares and shall have the rights
         commonly enjoyed by a beneficial owner of Shares. The Participant shall
         have no such rights in respect of Shares comprised in a Matching Award.

(d)      REGISTRATION AND CUSTODY OF SHARES - The Shares comprised in a Basic
         Award shall be registered in the name of the Participant, but the
         Participant shall be required to deposit the certificates relating to
         those Shares with the Secretary throughout the Restricted Period.

(e)      LAPSE OF RESTRICTIONS - Within 14 days following the expiry of the
         Restricted Period, the Secretary shall deliver to the Participant the
         certificate(s) in relation to the Shares comprised in the Basic Award.

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(f)      TERMINATION OF EMPLOYMENT - In the event that the Participant ceases to
         be an employee of a member of the Group during the Restricted Period:

             (i)  by reason of death, injury, disability or normal retirement
                  (aa) the Basic Award shall continue in force until the date on
                  which the linked Matching Award is released or lapses if the
                  performance target set out in rule 1.9 is not satisfied, and
                  (bb) the Matching Award shall continue (as though the
                  Participant had remained in employment) until the next to
                  occur of the third or fifth anniversary of the Grant Date, at
                  which time (if the performance target is met) the Shares
                  comprised therein shall be released but reduced pro-rata to
                  reflect the Participant's actual period of service until his
                  termination date PROVIDED THAT if the performance target was
                  met at the third anniversary of the Grant Date, and the
                  Participant leaves after that date, he shall be entitled to
                  one half of the Matching Award in full and the pro-rata
                  reduction shall apply to the balancing one half in respect of
                  the period from the third anniversary of the Grant Date to the
                  termination date. For the avoidance of doubt, if the
                  performance target is not met at the relevant anniversary, the
                  Matching Award shall lapse in its entirety and the Restricted
                  Period in relation to the Basic Award shall cease and the
                  Basic Award shall be released as soon as reasonably
                  practicable thereafter; or

            (ii)  for any other reason than in (i) above (aa) the Basic Award
                  shall be released as soon as practicable following cessation
                  of employment unless the Committee determines that the
                  Participant is entitled to retain the Matching Shares in which
                  case the Basic Award shall continue in force until the date on
                  which the Matching Award is released or lapses, and (bb) the
                  Matching Award shall be treated in such manner as the
                  Committee, in its absolute discretion determines. For the
                  avoidance of doubt, the Committee may determine that the
                  Matching Award shall lapse in its entirety.

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(g)      CHANGE OF CONTROL - If any person:

                 (i)   obtains Control of the Company as a result of making an
                       offer to acquire Shares which is either unconditional or
                       is made on a condition such that if it is satisfied the
                       person making the offer will have Control of the Company;

                 (ii)  becomes bound or entitled to acquire Shares under
                       sections 428 to 430F of the Companies Act 1985; or

                 (iii) obtains Control of the Company in pursuance of a
                       compromise or arrangement sanctioned by the Court under
                       section 425 of the Companies Act 1985,

         then both the Basic Award and the Matching Award shall be released
         within 30 days of the relevant event. The performance target shall not
         apply.

ADJUSTMENTS

3.1 In the event of any capitalisation issue, rights issue or sub-division or
consolidation of or other variation in the ordinary share capital of the
Company:

(a)      the Participant shall, in respect of his Basic Award, be treated in the
         same manner as any other holder of Shares, save that (unless the
         Committee determines otherwise):

             (i)  in the event of a rights issue in respect of Shares, the
                  Participant shall be required to sell sufficient rights
                  nil-paid (at such time during the rights issue as the
                  Secretary thinks fit) as will enable the Participant to
                  acquire with the proceeds of sale the remainder of his rights
                  entitlement;

            (ii)  in the event of receipt of cash (other than dividends paid in
                  the normal course) or securities (other than Shares) in
                  respect of Shares (on a demerger or other reorganisation of
                  the share capital of the Company), the Participant shall be
                  required to apply that cash (or the proceeds of sale of such
                  securities), after allowing for tax thereon, in the purchase
                  of further Shares; and

           (iii)  the Participant shall deposit with the Secretary for the
                  remainder of the Restricted Period the certificates in respect
                  of Shares or other securities received in connection with the
                  relevant event; and

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(b)      the number of Shares comprised in the Participant's Matching Award
         shall be adjusted in such manner as the Committee, in its absolute
         discretion, thinks fit.

SOURCE OF SHARES

4.1 Unless the Committee invokes this rule, Shares required to satisfy the
rights of Participants with respect to Awards shall be purchased on the London
Stock Exchange. However, notwithstanding rule 1.2, the Committee may permit
subscriptions of Shares to satisfy the rights of Participants with respect to
Awards. The aggregate number of Shares which may be issued for such purposes,
when added to the number of Shares issued or issuable pursuant to subsisting
rights to subscribe for Shares granted under any other Employees' Share Scheme
established by the Company, shall not exceed on the date of subscription:

(a)      5% of the issued ordinary share capital of the Company at that date in
         respect of rights under this Plan and any other Employees' Share
         Schemes granted in the preceding 10 years; or

(b)      3% of the issued ordinary share capital of the Company at that date in
         respect of rights under this Plan and any other Employees' Share
         Schemes granted in the preceding 3 years.

References to issues of Shares shall, for the avoidance of doubt, only include
arrangements under which Shares are newly allotted and issued.

ADMINISTRATION

5.1 The rights and obligations of any Participant under the terms of his office
or employment shall not be affected by his participation in the Annual Bonus
Share Matching Plan, and each Participant shall be deemed to waive all and any
rights to compensation or damages in consequence of the termination of his
office or employment for any reason whatsoever insofar as those rights arise or
may arise from his ceasing to have rights hereunder as a result of such
termination or from the loss or diminution in value of such rights or
entitlements.

5.2 All Share certificates and other communications relating to the Annual Bonus
Share Matching Plan shall be sent at the Participant's risk.

5.3 Any liability of a Participant to taxation in respect of an Award shall be
for the account of the relevant Participant, and the Participant shall comply
with any arrangements specified by the Company for the payment of taxation
(including, without limitation, the sale of sufficient Shares to enable the
Company to satisfy its obligations in respect of deduction of taxation at
source).

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GENERAL

6.1. The Company reserves the right to terminate the Annual Bonus Share Matching
Plan or amend these rules at any time PROVIDED THAT the provisions governing
eligibility to participate in this Annual Bonus Share Matching Plan, individual
participation limits, the number of shares available under Awards and the
consequences of any capitalisation issue, rights issue or sub-division or any
other variation of capital cannot be altered to the advantage of Participants
without the prior approval of shareholders in general meeting (except for minor
amendments to benefit the administration of the Annual Bonus Share Matching
Plan, to take account of a change in legislation or to obtain or maintain
favourable tax, exchange control or regulatory treatment for participants or for
any group company). In addition, no amendment shall operate to affect adversely
any right already acquired by a Participant.

6.2. This Annual Bonus Share Matching Plan shall constitute an Employees' Share
Scheme so that financial assistance provided by the Company or its subsidiaries
for those purposes shall be lawful by reason of section 153(4)(b) of the Act.

6.3 The Company shall bear all dealing costs and stamp duty relating to the
purchase of Shares under this Annual Bonus Share Matching Plan.

6.4. These rules shall be governed by and construed in accordance with English
law.

DEFINITIONS

7.1 In these rules, unless the context otherwise requires, the following
expressions shall have the following meanings respectively:

AWARD shall mean a Basic Award and the Matching Award linked to that Basic
Award;

BASIC AWARD shall mean an award of Shares made under rule 1.1 of this Bonus
Matching Plan;

CASH BONUS shall mean a cash bonus payable under an annual bonus plan;

COMMITTEE shall mean the personnel committee of the Company or another
appropriate committee of the board of the Company;

COMPANY shall mean Pearson plc;

CONTROL shall have the meaning given to it by section 840 of the Income and
Corporation Taxes Act 1988;

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EMPLOYEES' SHARE SCHEME shall have the meaning given to it by section 743 of the
Companies Act 1985 (being a scheme for encouraging or facilitating the holding
of Shares by employees of the Group);

GRANT DATE shall mean the date on which an Award is made by the Committee under
rule 1.11;

GRANT LETTER shall mean the notification to a Participant setting out the terms
of an Award;

GROSS AMOUNT OF BONUS shall mean the amount of Bonus elected by a Participant
under rule 1.1 to be received as a Basic Award (prior to the deduction of tax
thereon);

GROUP shall mean the Company and the Subsidiaries, and MEMBER OF THE GROUP shall
be construed accordingly;

MATCHING AWARD shall mean a conditional award of additional Shares linked to a
Basic Award, made under rule 1.3 and released in accordance with rules 1.4, 1.5,
1.6, 1.7 and 1.8 of this Bonus Matching Plan;

NOMINATED TRANSFEREE shall mean a person nominated by the Company to acquire
Shares from a Participant in accordance with rule 2.1(g) (including, without
limitation, an employee trust established by the Company for the purpose of
facilitating distributions of Shares to and acquiring Shares from employees
holding Shares);

PARTICIPANT shall mean an individual participating in a Plan;

RESTRICTED PERIOD in relation to a Basic Award, shall mean the period specified
in rule 2.1(b);

A PLAN shall mean an annual bonus plan operated by any member of the Group;

THE SECRETARY shall mean the Secretary of the Company, or some other person
nominated by the Committee;

SHARE shall mean an ordinary share in the capital of the Company or any other
shares representing those Shares following any reorganisation of the share
capital of the Company; and

SUBSIDIARY shall mean any company which at the time qualifies as a subsidiary of
the Company under Section 736 of Companies Act 1985.

7.2 References to any statute or statutory instrument or to any part or parts
thereof include any modification, amendment or re-enactment thereof for the time
being in force.

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7.3 Words of the masculine gender shall include the feminine and vice versa and
words in the singular shall include the plural and vice versa unless in either
case the context otherwise requires or is otherwise stated.

Amended 12 May 2000

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                                                                   Exhibit 10.17

                                  PEARSON INC.
                       EXCESS SAVINGS AND INVESTMENT PLAN

SECTION 1.        ESTABLISHMENT AND PURPOSE OF THE PLAN.

         1.1      ESTABLISHMENT. There is hereby established for the benefit of
Participants an unfunded plan of voluntarily deferred compensation known as
"The Pearson Inc. Excess Savings and Investment Plan".

         1.2      PURPOSE. The purpose of this Plan is to provide a means by
which an Eligible Employee may, in certain circumstances, elect to defer receipt
of a portion of his Compensation. The Plan also provides that the Employer
shall, in certain instances, credit the Account of a Participant with an
Employer Match.

SECTION 2.        DEFINITIONS.

                  The following words and phrases as used in this Plan have the
following meanings:

         2.1      ACCOUNT. The term "Account" shall mean a Participant's
individual account, as described in Section 5 of the Plan including, where
necessary, sub-Accounts to separately account for the Employer Match and Prior
Plan accounts.

         2.2      BOARD OF DIRECTORS. The term "Board of  Directors"  means
the Board of Directors of the Company.

         2.3      CODE. The term "Code" means the Internal Revenue Code of
1986, as amended.

         2.4      COMMITTEE. The term "Committee" means the Plan Committee, the
members of which are appointed by the Board of Directors. The Committee may act
on its own behalf or through the actions of its duly authorized delegate.

         2.5      COMPANY. The term "Company" means Pearson Inc.

         2.6      COMPENSATION. The term "Compensation" shall have the meaning
ascribed thereto in the 401(k) Plan but without regard to the limit contained in
Section 401(a)(17) of the Code; provided, however, that Compensation in excess
of $750,000 in any Plan Year shall be disregarded under the Plan.

         2.7      ELIGIBLE EMPLOYEE. The term "Eligible Employee" means an
employee of an Employer who has been selected by the Committee for participation
in the Plan. Those employees whose rate of base salary is in excess of the
Section 401(a)(17) limitation, who are among a select group of management or
highly compensated employees, and who are participants under the 401(k) Plan may
be selected for participation. The Committee may discontinue a Participant's
future eligibility to participate in the Plan in its discretion.

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         2.8      EMPLOYER. The term "Employer" means the Company, or such other
affiliate of the Company that employs an Eligible Employee and that, with the
permission of the Company, adopts the Plan.

         2.9      EMPLOYER MATCH. The term "Employer Match" means the amounts
credited to a Participant's Account pursuant to Section 4.

         2.10     EXCESS SALARY REDUCTION CONTRIBUTIONS. The term "Excess Salary
Reduction Contributions" means the portion of each payment of Compensation paid
to a Participant during a Plan Year that he elects to defer under the terms of
this Plan.

         2.11     401(k) PLAN. The term "401(k) Plan" means the Pearson Inc.
Savings and Investment Plan as the same may be amended from time to time.

         2.12     LIMITATION. The term "Limitation" means the limitation on
contributions to a defined contribution plan under Section 415(c), on
compensation taken into account under Section 401(a)(17), or on elective
deferrals under Section 402(g) of the Code.

         2.13     PARTICIPANT. The term "Participant" means an Eligible Employee
who elects to have Excess Salary Reduction Contributions made to the Plan.

         2.14     PLAN. The term "Plan" means the Pearson Inc. Excess Savings
and Investment Plan as set forth herein and incorporating the rules and
procedures established by the Committee, as amended from time to time.

         2.15     PRIOR PLAN. The term "Prior Plan" means the Viacom Excess
Investment Plan, the Paramount Communications, Inc. Corporate Annual Performance
Plan and such other non-qualified deferred compensation plans as may be
designated by the Committee.

SECTION 3.        PARTICIPATION.

         3.1      ELECTION TO PARTICIPATE. To become a Participant an Eligible
Employee must elect to participate in the Plan at such time and in such form as
determined by the Committee. Such election shall specify the rate of Excess
Salary Reduction Contributions, which rate may be no less than 1% or more than
16% of Compensation. Excess Salary Reduction Contributions shall not commence
until a Participant has reached a Limitation under the 401(k) Plan.

         3.2      AMENDMENT OR SUSPENSION OF ELECTION. Participants may change
(including, suspend) their rate of Excess Salary Reduction Contributions as of
the beginning of any calendar quarter by filing such form at such time in
advance as prescribed by the Committee. Such new election shall be effective on
a prospective basis beginning with the first payroll period of the quarter. A
Participant shall not be permitted to make up suspended Excess Salary Reduction
Contributions, and during any period in which a Participant's Excess Salary
Reduction Contributions are suspended, the Employer Match to the Plan shall also
be suspended.

SECTION 4.        EMPLOYER MATCH.

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         4.1     RATE. An Employer may elect to provide for an Employer Match.
The Employer Match shall be credited with respect to the Participant's Excess
Salary Reduction Contributions at the rate of matching contributions contributed
by the Participant's Employer under the 401(k) Plan, or such other rate as
elected by the Employer. Until the Participant has become fully vested pursuant
to Section 4.2, a separate sub-Account shall be maintained to record each
Employer Match and earnings and losses credited with respect thereto.

         4.2     VESTING. A Participant shall be vested in his Employer
Matching Sub-Account to the same extent he is vested in his employer matching
account under the 401(k) Plan.

SECTION 5.       ACCOUNTS.

         5.1     CREATION OF ACCOUNTS. The Company shall maintain an Account
(including, where necessary, appropriate sub-Accounts) in the name of each
Participant. Each Participant's Account shall be increased by (i) the amount of
the Participant's Excess Salary Reduction Contributions, (ii) the Employer
Match, if any, made with respect thereto, (iii) earnings and appreciation
determined by reference to the Participant's investment selections made pursuant
to Section 5.2, and (iv) the amount credited to the Participant under a Prior
Plan where applicable. Each Participant's Account shall be decreased by (i)
payments made pursuant to Section 6, (ii) any forfeiture described in Section
6.2, and (iii) losses and depreciation determined by reference to the
Participant's investment selections made pursuant to Section 5.2.

         5.2     INVESTMENTS. For purposes of determining the amount of earnings
and appreciation and losses and depreciation to be credited to a Participant's
Account, such Account shall be deemed invested in the investment options
(designated by the Committee as available under the Plan) as the Participant may
elect, from time to time, in accordance with such rules and procedures as the
Committee may establish. However, no provision of this Plan shall require the
Company or the Employer to actually invest any amounts in any fund or in any
other investment vehicle.

         5.3     STATUS OF ACCOUNTS. Accounts established under the Plan are
merely bookkeeping entries to record the amount payable under the terms of the
Plan and do not represent an interest in any specific asset of the Company or
any Employer or an actual investment in any particular investment vehicle.

SECTION 6.       PAYMENT.

         6.1     PAYMENT UPON TERMINATION. As soon as practicable after a
Participant's termination with his Employer (and all affiliates of the Company),
the Employer shall pay, or commence payment, to the Participant (or in the event
of his death, to his beneficiary) an amount equal to the vested balance credited
to the Participant's Account. A Participant shall elect, on such form and at
such time in advance as determined by the Committee, from among the following
payment options: (i) a lump sum, (ii) three annual installments each equal to
the vested balance credited to the Account at the time of the installment
payment multiplied by a fraction, the numerator of which is 1, and the
denominator of which is three minus the number of installments previously paid,
(iii) five annual installments each equal the to the vested balance credited to
the Account at the time of the installment payment multiplied by a fraction, the
numerator of which is 1, and the denominator of which is five minus the number
of installments previously paid, or (iv) such other payment option as may be
permitted by the Committee. The Committee may adopt special

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payment rules that apply to Participants who were former participants in a Prior
Plan and where necessary shall maintain separate sub-Accounts to track their
Prior Plan accounts.

         6.2      PAYMENT PRIOR TO TERMINATION. The Participant may at any time
request a payment of an amount equal to all or any portion of the vested balance
then credited to his Account. The Employer shall thereupon pay to the
Participant 90% of the amount so requested, and the remaining 10% shall be
forfeited by the Participant as a penalty for early payment.

         6.3      WITHHOLDING. All payments made under the Plan shall be subject
to applicable tax withholding and other statutory deductions. The Employer may
also withhold taxes from Compensation not deferred hereunder where such
withholding may be required prior to actual payment of benefits under the Plan.

SECTION 7.        NATURE OF INTEREST OF PARTICIPANT.

         Participation in this Plan shall not create, in favor of any
Participant, any right or lien in or against any of the assets of the Company or
any Employer, and all amounts of Compensation deferred hereunder shall at all
times remain an unrestricted asset of the Company or the Employer. All payments
hereunder shall be paid in cash from the general funds of the applicable
Employer and no special or separate fund shall be established and no other
segregation of assets shall be made to assure the payment of benefits hereunder.
Nothing contained in the Plan, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind, or a fiduciary
relationship, between any Employer and a Participant or any other person, and
each Employer's promise to pay benefits hereunder shall at all times remain
unfunded as to the Participant, and the Participant shall be treated as an
unsecured creditor of the Employer with respect thereto.

         Although the Plan is intended to constitute an "unfunded" plan for
deferred compensation, the Company or any Employer may set aside assets in a
trust or otherwise, to satisfy its obligations under the Plan; provided,
however, that with respect to any payments not yet made to a Participant in
respect of his or her Account, nothing contained in the Plan shall give any such
Participant any rights that are greater than those of a general unsecured
creditor of his or her Employer, and any such trust or other arrangement shall
not create, in favor of any Participant, any right or lien in or against any of
the assets of the Company or any Employer.

SECTION 8.        BENEFICIARY DESIGNATION.

         A Participant's beneficiary designation for this Plan shall
automatically be the same as such Participant's beneficiary designation under
the 401(k) Plan, unless a separate beneficiary form for this Plan has been
properly filed.

SECTION 9.        ADMINISTRATION.

         9.1      COMMITTEE. This Plan shall be administered by the Committee.

         9.2      POWERS OF THE COMMITTEE. The Committee's powers shall include,
but shall not be limited to, the power:

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               (i)      to determine who are Eligible Employees for purposes of
                        participation in the Plan.
               (ii)     to interpret the terms and provisions of the Plan and to
                        determine any and all questions arising under the Plan,
                        including without limitation, the right to remedy
                        possible ambiguities, inconsistencies, or omissions by a
                        general rule or particular decision, and
               (iii)    to adopt rules and procedures, and prescribe forms,
                        consistent with the Plan, and amend such rules,
                        procedures and forms as it deems appropriate.

         9.3   FINALITY OF COMMITTEE DETERMINATIONS. Determinations by the
Committee and any interpretation, rule, or decision adopted by the Committee
under the Plan or in carrying out or administering the Plan shall be final and
binding for all purposes and upon all interested persons, their heirs, and
personal representatives.

SECTION 10.    ASSIGNMENT.

          A Participant's right to receive payment under the Plan, and the
Employer's obligation to make payment under the Plan, may not be anticipated,
sold, encumbered, pledged, mortgaged, charged, transferred, alienated, assigned
nor become subject to execution, garnishment or attachment; provided, however,
that the Participant's Employer may assign its obligation to make payment under
the Plan to any successor to all or any portion of the Employer's business, and
provided further that the Employer may offset from any payment to which the
participant is otherwise entitled under the Plan any amount owing by the
Participant to the Employer.

SECTION 11.    NO EMPLOYMENT RIGHTS.

         No provisions of the Plan or any action taken by the Company, the Board
of Directors, any Employer or the Committee shall give any person any right to
be retained in the employ of any Employer, and the right and power of the
Company and any Employer to dismiss or discharge any Participant is specifically
reserved.

SECTION 12.    AMENDMENT, SUSPENSION AND TERMINATION.

         The Board of Directors shall have the right to amend, suspend, or
terminate the Plan at any time, and each Employer shall have the right to
terminate its participation if the Plan at any time. No amendment, suspension or
termination shall, without the consent of a Participant, adversely affect such
Participant's right to receive payment of the amount then credited to his
Account.

SECTION 13.    GOVERNING LAW.

         The Plan shall in all respects be construed according to the laws of
the State of New York, except where preempted by applicable Federal law.

                                       5

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