Document:

EX-10.16

 

Exhibit 10.16

THE McGRAW-HILL COMPANIES, INC.

401(k) SAVINGS AND PROFIT SHARING PLAN SUPPLEMENT

(Effective as of January 1, 2008, unless otherwise provided)

ARTICLE I

PURPOSE 

          The principal purpose of the Plan is to provide selected employees of the Employer with
retirement benefits which would have been provided as profit sharing and matching contributions
under the SPSP (a) were it not for the limitations imposed by Sections 401(a)(17), 401(k) and 415
of the Code, and (b) if the Participant’s Earnings on which matching contributions are based had
included amounts deferred under deferred compensation plans of an Employer and amounts paid under
certain severance plans of the Company.

          Effective January 1, 2004, the Broadcasting EIP Supplement was merged into the McGraw-Hill SIP
Supplement and the Broadcasting ERIP Supplement was merged into the McGraw-Hill ERAP Supplement,
and, effective as of the Effective Date, the McGraw-Hill SIP Supplement, the McGraw-Hill ERAP
Supplement, the S&P SIP Supplement and the S&P ERAP Supplement shall be merged into the Plan, and
any benefits due to participants in the Broadcasting EIP Supplement, Broadcasting ERIP Supplement,
McGraw-Hill SIP Supplement, McGraw-Hill ERAP Supplement, S&P SIP Supplement and S&P ERAP Supplement
shall be paid from the Plan.

ARTICLE II

DEFINITIONS

          The following words and phrases as used herein shall have the following meanings:

          SECTION 2.01 “Account” means the Matching Contribution Account or Profit Sharing Account
established for each Participant under the Plan.

          SECTION 2.02 “Appeal Reviewer” has the meaning set forth in the SPSP.

          SECTION 2.03 “Benefit” means the benefit payable to a Participant or his Designated
Beneficiary under Article V of the Plan.

          SECTION 2.04 “Board” means the Board of Directors of the Company.

          SECTION 2.05 “Broadcasting EIP Supplement” means The McGraw-Hill Broadcasting Company, Inc.
Employees’ Investment Plan Supplement.

          SECTION 2.06 “Broadcasting ERIP Supplement” means The McGraw-Hill Broadcasting Company, Inc.
Employee Retirement Income Plan Supplement.

 

 

          SECTION 2.07 “Change in Control” means the first to occur of 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 (the
“Outstanding Common Stock”) or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Voting Securities”); excluding, however,
the following: (1) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the Company; (2) any
acquisition by the Company; (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any entity controlled by
the Company; or (4) any acquisition pursuant to a transaction which complies with
clauses (A), (B) and (C) of subsection (iii) of this Section 2.07; or

     (ii) A change in the composition of the Board such that the Directors who, as
of the Effective Date, 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 Section 2.07, that
any individual who becomes a Director subsequent to the Effective Date, whose
election, or nomination for election by the Company’s shareholders, was approved by
a vote of at least a majority of those Directors who were members of the Incumbent
Board (or deemed to be such pursuant to this proviso) shall be considered as though
such Director 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 the Company
(“Corporate Transaction”); excluding, however, such a Corporate Transaction
pursuant to which (A) 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 the Company or all or substantially all of the Company’s assets
either

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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,
(B) no Person (other than the Company, any employee benefit plan (or related trust)
of the Company 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 (C)
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 the Company of a complete liquidation
or dissolution of the Company.

           SECTION 2.08 “Claimant” has the meaning set forth in Section 6.01 of the Plan.

          SECTION 2.09 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and
the applicable rules and regulations promulgated thereunder.

          SECTION 2.10 “Committee” means the Compensation Committee of the Board.

          SECTION 2.11 “Common Stock” means the common stock, $1.00 par value per share, of the Company.

          SECTION 2.12 “Company” means The McGraw-Hill Companies, Inc., a corporation organized under
the laws of the State of New York, or any successor corporation.

          SECTION 2.13 “Designated Beneficiary” has the meaning set forth in the SPSP.

          SECTION 2.14 “Director” means an individual who is a member of the Board.

          SECTION 2.15 “Earnings” means all compensation paid by the Employer to a Participant for
services rendered, including short-term incentive compensation. Earnings shall also include any
reductions in compensation made pursuant to The McGraw-Hill Companies, Inc. Flexible Spending
Account Plan, SPSP, the Transportation Benefit Program and similar plans of the Company’s subsidiaries. For purposes
of the Plan, “Earnings” excludes all other executive contingent compensation.

          SECTION 2.16 “Effective Date” has the meaning set forth in Section 8.08 of the Plan.

          SECTION 2.17 “Election Effective Date” means (i) for each taxable year, January 1 of such
year, and (ii) for the taxable year in which the Participant commences employment with the
Employer, the date that is 30 days following the commencement thereof.

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          SECTION 2.18 “Employer” means the Company and its subsidiaries.

          SECTION 2.19 “Employment Termination Date” means the date of a
Participant’s “separation from service” from the Company, as defined in Section409A(a)(2)(A)(i) of
the Code.

          SECTION 2.20 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the applicable rules and regulations promulgated thereunder.

          SECTION 2.21 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, and the applicable rules and regulations promulgated thereunder.

          SECTION 2.22 “Extension Notice” has the meaning set forth in Section 6.01 of the Plan.

          SECTION 2.23 “Key Executive Plan” means The McGraw-Hill Companies, Inc. Key Executive
Short-Term Incentive Deferred Compensation Plan, as amended from time to time, or successor
programs thereto.

          SECTION 2.24 “Matching Contribution Account” means the matching contribution account
established for each Participant under the Plan.

          SECTION 2.25 “McGraw-Hill ERAP Supplement” means The McGraw-Hill Companies, Inc. Employee
Retirement Account Plan Supplement.

          SECTION 2.26 “McGraw-Hill SIP Supplement” means The McGraw-Hill Companies, Inc. Savings
Incentive Plan Supplement.

          SECTION 2.27 “Participant” means each employee who participates in the Plan, as provided in
Article IV of the Plan, and includes a Severance Plan Participant.

          SECTION 2.28 “Plan” means The McGraw-Hill Companies, Inc. 401(k) Savings and Profit Sharing
Plan Supplement, as amended from time to time.

          SECTION 2.29 “Plan Administrator” has the meaning set forth in the SPSP.

          SECTION 2.30 “Profit Sharing Account” means the profit sharing
account established for each Participant under the Plan.

          SECTION 2.31 “Severance Plan” means The McGraw-Hill Companies, Inc. Management Severance Plan,
The McGraw-Hill Companies, Inc. Executive Severance Plan or The McGraw-Hill Companies, Inc. Senior
Executive Severance Plan, as amended from time to time, or successor programs thereto.

          SECTION 2.32 “Severance Plan Earnings” means the total amount of salary continuation payments
paid to a Severance Plan Participant under a Severance Plan (excluding any amount paid in a lump
sum in lieu of salary continuation).

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          SECTION 2.33 “Severance Plan Participant” means a former employee of an Employer who is
entitled to remain an active participant in certain Company-sponsored plans and programs under a
Severance Plan (and who is not paid a single lump sum payment in lieu thereof).

          SECTION 2.34 “SPSP” means The 401(k) Savings and Profit Sharing Plan of The McGraw-Hill
Companies, Inc. and Its Subsidiaries.

          SECTION 2.35 “SPSP Stable Assets Fund” has the meaning set forth in the SPSP.

          SECTION 2.36 “S&P ERAP Supplement” means the Standard & Poor’s Employee Retirement Account
Plan Supplement.

          SECTION 2.37 “S&P SIP Supplement” means the Standard & Poor’s’ Savings Incentive Plan
Supplement.

          SECTION 2.38 “Tax-Deferred Contributions” has the meaning set forth in the SPSP.

          SECTION 2.39 “Vested Percentage” has the meaning set forth in Section 5.04(b) of the Plan.

ARTICLE III

ADMINISTRATION

          SECTION 3.01 Administration. The Plan shall be administered by the Plan Administrator, who
shall have full authority to construe and interpret the Plan, to establish, amend and rescind rules
and regulations relating to the Plan, and to take all such actions and make all such determinations
in connection with the Plan as he may deem necessary or desirable. Subject to Article VI of the
Plan, decisions of the Plan Administrator shall be reviewable by the Appeal Reviewer and the
Committee. Subject to Article VI of the Plan, the Appeal Reviewer and the Committee shall also have
the full authority to make, amend, interpret, and enforce all appropriate rules and regulations for
the administration of the Plan and decide or resolve any and all questions, including
interpretations of the Plan, as may arise in connection with the Plan.

          SECTION 3.02 Binding Effect of Decisions. Subject to Article VI of the Plan, the decision or
action of the Appeal Reviewer, Plan Administrator or Committee in
respect to any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations promulgated hereunder
shall be final, conclusive and binding upon all persons having any interest in the Plan.

          SECTION 3.03 Indemnification. To the fullest extent permitted by law, the Appeal Reviewer, the
Plan Administrator, the Committee and the Board (and each member thereof), and any employee of the
Employer to whom fiduciary responsibilities have been delegated 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.

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ARTICLE IV

PARTICIPATION

          SECTION 4.01 Continuing Participants. Any individual who was a participant in the McGraw-Hill
SIP Supplement, McGraw-Hill ERAP Supplement, S&P SIP Supplement or S&P ERAP Supplement immediately
prior to the Effective Date shall be a Participant on such date, subject to the terms and
provisions of the Plan. Each Participant’s Matching Contribution Account shall be credited with the
amount earned under the McGraw-Hill SIP Supplement and the S&P SIP Supplement and each
Participant’s Profit Sharing Account shall be credited with the amount earned under the McGraw-Hill
ERAP Supplement and the S&P ERAP Supplement.

          SECTION 4.02 New Participants. Any employee of the Employer (other than a Participant
described in Section 4.01 of the Plan) who is selected by the Plan Administrator to be eligible to
participate in the Plan shall become a Participant as of the first day of the month coinciding with
or next following his selection.

ARTICLE V

BENEFITS

          SECTION 5.01 Credits to Matching Contribution Account. (a) As of December 31 of the year
beginning on or after the later of (i) January 1 of the year in which the Participant’s
participation in the Plan commenced or (ii) January 1, 2008, there shall be credited to the
Participant’s Matching Contribution Account an amount equal to 41/2% of the Participant’s Earnings
for such year in excess of the limitation on Earnings under Section 401(a)(17) of the Code (or any
successor provision). Notwithstanding the foregoing, no credit shall be made to the Matching
Contribution Account of a Participant for any year with respect to whom Tax-Deferred Contributions
were not made in an amount equal to the limitation on elective deferrals for such year under
Section 402(g) of the Code, unless such amount of Tax-Deferred Contributions would have been made
on the Participant’s behalf in the absence of the limitations of Section 415 of the Code (or any
successor provision thereto) or any provision of SPSP implementing such limitation. In addition, no
credit shall be made to a Participant’s Matching Contribution Account with respect to (i) the year
in which the Participant’s Employment Termination Date occurs, unless the Participant is eligible
for early or normal retirement under the
Company’s Employee Retirement Plan, is terminated by an Employer through no fault of his own
or has any salary continuation installment due under a Severance Plan or (ii) the year after the
year in which the Participant’s Employment Termination Date occurs for any reason or in which the
Participant ceases to have any salary continuation installment due under a Severance Plan, if
later.

          (b) As of December 31 of the year beginning on or after the later of (i) January 1 of the year
in which the Participant’s participation in the Plan commenced or (ii) January 1, 2008, there shall
be credited to the Participant’s Matching Contribution Account an amount equal to 41/2% of (A) any
short-term incentive compensation for such year deferred by the Participant under the Company’s Key
Executive Plan, and (B) any salary earned for such year that is deferred by the Participant under
any plan or arrangement of the Employer. Any salary or short-term incentive compensation that is
deferred by a Participant shall be excluded from Earnings in the year paid to the Participant. No
credit shall be made to a Participant’s Matching Contribution Account with respect to any year
after the year in which the Participant’s Employment

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Termination Date occurs or in which the Participant ceases to have any salary continuation
installment due under a Severance Plan, if later.

          (c) There shall also be credited to the Participant’s Matching Contribution Account as of
December 31 of each such year in which Tax-Deferred Contributions on behalf of the Participant are
limited by Section 415 of the Code (or any successor provision thereto) or any provision of SPSP
implementing such limitation, an amount equal to the difference between (i) the sum of (A) 200% of
the first 3% of the Tax-Deferred Contributions and (B) 150% of the second 3% of the Tax-Deferred
Contributions which would have been made on behalf of the Participant to SPSP for such year if
Section 415 of the Code (or any successor provision thereto) or any such implementing provision
were disregarded, and (ii) the Tax-Deferred Contributions made on behalf of the Participant to SPSP
for such year. No credit shall be made to a
Participant’s Matching Contribution Account with respect to (i) the year in which the

Participant’s Employment Termination Date occurs, unless the Participant is eligible for early or
normal retirement under the Company’s Employee Retirement Plan, is terminated by an Employer
through no fault of his own or has any salary continuation installment under a Severance Plan or
(ii) the year after the year in which the Participant’s Employment Termination Date occurs for any
reason or in which the Participant ceases to have any salary continuation installment due under a
Severance Plan, if later.

          (d) An amount shall be credited to a Severance Plan Participant’s Matching Contribution
Account equal to the amount of Employer Matching Contributions that would have been credited to
such Participant’s Employer Contribution Account under SPSP had the Participant made Tax-Deferred
Contributions under SPSP with respect to the Participant’s Severance Plan Earnings at the rate in
effect for the period immediately prior to the Participant’s Employment Termination Date. This
amount shall be credited to the Severance Plan
Participant’s Matching Contribution Account at such time as it would have been credited under SPSP.

          SECTION 5.02 Credits to Profit Sharing Account. (a) As of December 31 of the year beginning on
or after the later of (i) January 1 of the year in which the Participant’s participation in the
Plan commenced or (ii) January 1, 2008, there shall be credited to the Participant’s Profit Sharing
Account an amount equal to 5% of the sum of (A) the Participant’s Earnings for such year in excess
of the maximum amount of compensation that may be taken into account under Section 5.2 of the SPSP
as a result of the limitations of Section 401(a)(17) of the Code for such year and (B) any
short-term incentive compensation for such year deferred by the Participant under the Company’s Key
Executive Plan, and (C) any salary earned for such year which is deferred by the Participant under
any plan or arrangement of the Employer. Any salary or short-term incentive compensation that is
deferred by a Participant shall be excluded from Earnings in the year paid to the Participant. No
credit with respect to clause (A) of the preceding sentence shall be made to a Participant’s Profit
Sharing Account with respect to (i) the year in which the Participant’s Employment Termination Date
occurs, unless the Participant is eligible for early or normal retirement under the Company’s
Employee Retirement Plan, is terminated by an Employer through no fault of his own or has any
salary continuation installment due under a Severance Plan, or (ii) the year after the year in
which the Participant’s Employment Termination Date occurs for any reason or the Participant ceases
to have any salary continuation installment

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due under a Severance Plan, if later. No credit with
respect to clause (B) of the first sentence of this Section shall be made to a Participant’s Profit
Sharing Account with respect to any year after the year in which the Participant’s Employment
Termination Date occurs or in which the Participant ceases to have any salary continuation
installment due under a Severance Plan, if later.

          (b) An amount shall be credited to a Severance Plan Participant’s Profit Sharing Account equal
to the amount that would have been credited to such Participant’s account under Section 5.2 of the
SPSP had the Participant been eligible to have an employer contribution be made to the
Participant’s account under Section 5.2 of the SPSP with respect to such Participant’s Severance
Plan Earnings. This amount shall be credited to the Severance Plan Participant’s Profit Sharing
Account at such time as it would have been credited under the SPSP.

          SECTION 5.03 Additional Credits to Accounts. (a) An additional amount shall be credited to the
Participant’s Accounts as of December 31 of each year beginning on or after the later of (i)
January 1 of the year following the year in which the initial credit is made to the Account or (ii)
January 1, 2009.

          (b) With respect to Matching Contribution Accounts only, the additional credit shall equal the
sum of (i) and (ii), where (i) is the product of (A) the balance of the Matching Contribution
Account as of January l of such year, and (B) the annual rate of return of the SPSP Stable Assets
Fund for the year; and (ii) is the amount of interest that would have been credited if 1/12 of the
annual credit for the year under Section 5.01 of the Plan had instead been credited at the end of
each calendar month in the year and each monthly credit earned interest for the remainder of the
year at an annual effective rate of return equal to the SPSP Stable Assets Fund rate for the year.

          (c) With respect to Profit Sharing Accounts only, the additional
amount shall be equal to the product of (i) the balance of the Profit Sharing Account as of
January l of such year and (ii) the annual rate of return of the SPSP Stable Assets Funds for such
year. No additional amount shall be credited to the Participant’s Profit Sharing Account for any
period after December 31 of the year in which the Participant’s Employment Termination Date occurs
or in which the Participant ceases to have any salary continuation installment due under a
Severance Plan, if later.

          SECTION 5.04 Payment of Benefit. (a) The Benefit provided under the Plan shall consist of the
balance of the Participant’s Accounts as of each applicable payment date under this Section 5.04.
Subject to Section 5.05 of the Plan, and except as would violate the requirements of Sections
409A(a)(2), (a)(3) and (a)(4) of the Code, payment of the Benefit to a Participant shall be made in
a lump sum, on July 1 of the calendar year following the Participant’s Employment Termination Date,
and, in addition, in the case of a Severance Plan Participant, on July 1 of the subsequent calendar
year. The Benefit provided under this Article shall be paid in accordance with the preceding
sentence to the Participant’s Designated Beneficiary in the event of the death of the Participant,
whether prior to or after commencement of benefits under SPSP, if such Designated Beneficiary is
entitled to benefits under the provisions of SPSP.

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          (b) Notwithstanding anything contained herein to the contrary, with respect to Profit Sharing
Accounts only, a Participant who does not have five years of Continuous Service under SPSP when he
ceases to be an employee of the Employer or ceases to have any salary continuation installment due
under a Severance Plan, if later, shall forfeit the balance credited to his Profit Sharing Account
attributable to amounts earned under the McGraw-Hill ERAP Supplement and the S&P ERAP Supplement
and shall be entitled only to the Vested Percentage of the remainder of his Profit Sharing Account
attributable to credits credited to his Profit Sharing Account; provided that the, in each case,
unless his Employment Termination Date occurs after his 65th birthday or his death. A
Participant’s “Vested Percentage” shall be determined as follows:

	 	 	 	 	 
	Years of Continuous Service	 	Vested Percentage
	 
	 	 	 	 
	Less than 2
	 	 	0	%
	2 but less than 3
	 	 	20	%
	3 but less than 4
	 	 	40	%
	4 but less than 5
	 	 	60	%
	5 or more
	 	 	100	%

          SECTION 5.05 Payment of Benefits in Event of Change in Control. In lieu of the Benefits
payable under Section 5.04 of the Plan, in the event of a Change in Control that is also a “change
in control event” within the meaning of Section 409A(a)(2)(A)(v) of the Code, each Participant who
has not received payment of the Participant’s Benefit shall receive a lump sum payment immediately
upon such Change in Control equal to the Benefit to which that Participant is entitled under
Section 5.04 of the Plan.

ARTICLE VI

CLAIMS PROCEDURE

          SECTION 6.01 Claims. In the event any person or his authorized representative (a “Claimant”)
disputes the amount of, or his entitlement to, any benefits under the Plan or their method of
payment, such Claimant shall file a claim in writing with, and on the form prescribed by, the Plan
Administrator for the benefits to which he believes he is entitled, setting forth the reason for
his claim. The Claimant shall have the opportunity to submit written comments, documents, records
and other information relating to the claim and shall be provided, upon request and free of charge,
reasonable access to and copies of all documents, records or other information relevant to the
claim. The Plan Administrator shall consider the claim and within 90 days of receipt of such claim,
unless special circumstances exist which require an extension of the time needed to process such
claim, the Plan Administrator shall inform the Claimant of its decision with respect to the claim.
In the event of special circumstances, the response period can be extended for an additional 90
days, as long as the Claimant receives written notice advising of the special circumstances and the
date by which the Plan Administrator expects to make a determination
(the “Extension Notice”)
before the end of the initial 90-day response period indicating the reasons for the extension and
the date by which a decision is expected to be made. If the Plan Administrator denies the claim,
the Plan Administrator shall give to the Claimant (i) a

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written notice setting forth the specific
reason or reasons for the denial of the claim, including references to the applicable provisions of
the Plan, (ii) a description of any additional material or information necessary to perfect such
claim along with an explanation of why such material or information is necessary, and (iii)
appropriate information as to the Plan’s appeals procedures as set forth in Section 6.02 of the
Plan.

          SECTION 6.02 Appeal of Denial. A Claimant whose claim is denied by the Plan Administrator and
who wishes to appeal such denial must request a review of the Plan Administrator’s decision by
filing a written request with the Appeal Reviewer for such review within 60 days after such claim
is denied. Such written request for review shall contain all relevant comments, documents, records
and additional information that the Claimant wishes the Appeal Reviewer to consider, without regard
to whether such information was submitted or considered in the initial review of the claim by the
Plan Administrator. In connection with that review, the Claimant may examine, and receive free of
charge, copies of pertinent Plan documents and submit such written comments as may be appropriate.
Written notice of the decision on review shall be furnished to the Claimant within 60 days after
receipt by the Appeal Reviewer of a request for review. In the event of special circumstances which
require an extension of the time needed for processing, the response period can be extended for an
additional 60 days, as long as the Claimant receives an Extension Notice. If the Appeal Reviewer
denies the claim on review, notice of the Appeal Reviewer’s decision shall include (i) the specific
reasons for the adverse determination, (ii) references to applicable Plan provisions, (iii) a
statement that the Claimant is entitled to receive, free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claim and (iv) a statement
of the Claimant’s right to bring an action under Section 502(a) of ERISA following an adverse
benefit determination on a review and a description of the applicable limitations period under the
Plan. The Claimant shall be notified no later than five days after a
decision is made with respect to the appeal.

          SECTION 6.03 Statute of Limitations. A Claimant wishing to seek judicial review of an adverse
benefit determination under the Plan, whether in whole or in part, must file any suit or legal
action, including, without limitation, a civil action under Section 502(a) of ERISA, within three
years of the date the final decision on the adverse benefit determination on review is issued or
should have been issued under Section 6.02 of the Plan or lose any rights to bring such an action.
If any such judicial proceeding is undertaken, the evidence presented shall be strictly limited to
the evidence timely presented to the Plan Administrator. Notwithstanding anything in the Plan to
the contrary, a Claimant must exhaust all administrative remedies available to such Claimant under
the Plan before such Claimant may seek judicial review pursuant to Section 502(a) of ERISA.

ARTICLE VII

AMENDMENT AND TERMINATION OF PLAN

          SECTION 7.01 Amendment and Termination. The Board or the Committee or any delegate thereof may
cause the Plan to be amended at any time and from time to time, prospectively or retroactively;
provided, however, that no amendment to the Plan may be made by the Committee that materially
increases benefits to Participants. In addition, the Board may terminate the Plan in its entirety
at any time and, in connection with any such termination, may

10

 

pay to each Participant or
Designated Beneficiary his Benefits under the Plan, subject to and in accordance with the
requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix) (or any successor provision
thereto). Notwithstanding the foregoing provisions of this Section 7.01, subject to the provisions
of Section 7.02 of the Plan, no amendment or termination shall reduce the Benefit or rights of any
Participant except with the written consent of the Participant or other person then receiving such
Benefit.

          SECTION 7.02 Section 409A. The Plan is intended to meet the requirements of Section 409A of
the Code and shall be interpreted and construed consistent with such intent. If, in the good faith
judgment of the Committee, any provision of the Plan could otherwise cause any person to be subject
to the interest and penalties imposed under Section 409A of the Code, such provision shall be
modified by the Committee in its sole discretion to maintain, to the maximum extent practicable,
the original intent of the applicable provision without causing the interest and penalties under
Section 409A of the Code to apply, and, notwithstanding any provision in the Plan to the contrary,
the Committee shall have broad authority to amend or to modify the Plan, without advance notice to
or consent by any person, to the extent necessary or desirable to ensure that no benefit under the
Plan is subject to tax under Section 409A of the Code. Any determinations made by the Committee
under this Section 7.02 shall be final, conclusive and binding on all persons.

ARTICLE VIII

MISCELLANEOUS

          SECTION 8.01 Unsecured General Creditor. The Plan is an unfunded
deferred compensation plan for a select group of management or highly compensated employees
within the meaning of ERISA, and shall be construed and administered accordingly. Participants and
their Beneficiaries shall have no legal or equitable rights, interest or claims in any property or
assets of the Employer. The assets of the Employer shall not be held under any trust for the
benefit of Participants or their Beneficiaries or held in any way as collateral security for the
fulfilling of the obligations of the Employer under the Plan. Any and all of the Employer’s assets
shall be, and remain, the general, unpledged, unrestricted assets of the Employer. The
Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of
the Employer to pay money in the future.

          SECTION 8.02 Nonassignability. Each Participant’s rights under the Plan shall be
nontransferable except by will or by the laws of descent and distribution and except insofar as
applicable law may otherwise required. Subject to the foregoing, neither a Participant nor any
other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if
any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly
declared to be nonassignable and non-transferable. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, nor be transferable by
operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

          SECTION 8.03 Conditions of Payment of Benefit. Notwithstanding any provision of the Plan to
the contrary, the right of a Participant or his Designated Beneficiary to

11

 

receive the Benefit
otherwise payable hereunder shall cease upon the discharge of the Participant from employment with
the Employer for acts which constitute fraud, embezzlement, or dishonesty, and shall be determined
by the Appeal Reviewer in his sole discretion.

          SECTION 8.04 Not a Contract of Employment. The terms and conditions of the Plan shall not be
deemed to constitute a contract of employment with the Participant, and the Participant (or his
Designated Beneficiary) shall have no rights against the Employer except as specifically provided
herein. Moreover, nothing in the Plan shall be deemed to give a Participant the right to be
retained in the service of the Employer or to interfere with the rights of the Employer to
discipline or discharge him at any time.

          SECTION 8.05 Binding Effect. The Plan shall be binding upon and shall inure to the benefit of
the Participant or his Designated Beneficiary, his heirs and legal representatives, and the
Employer.

          SECTION 8.06 Withholding. To the extent required by the law in effect at the time payments are
made, the Employer shall withhold from payments made hereunder any taxes or other amounts required
to be withheld for any federal, state or local government and other authorized deductions.

          SECTION 8.07 Severability. In the event that any provision or portion of the Plan shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions and portions of the Plan shall be unaffected thereby and shall remain in full force
and effect to the fullest extent permitted by law.

          SECTION 8.08 Effective Date. The Plan is effective as of January 1, 2008 (the “Effective
Date”).

          SECTION 8.09 Governing Law. The Plan shall be construed under the laws of the State of New
York, to the extent not preempted by federal law.

          SECTION 8.10 Headings. The section headings used in this document are for ease of reference
only and shall not be controlling with respect to the application and interpretation of the Plan.

          SECTION 8.11 Rules of Construction. Any words herein used in the masculine shall be read and
construed in the feminine where they would so apply. Words in the singular shall be read and
construed as though used in the plural in all cases where they would so apply. All references to
sections are, unless otherwise indicated, to sections of the Plan.

12EX-10.18

 

Exhibit 10.18

THE McGRAW-HILL COMPANIES, INC.

SENIOR EXECUTIVE SUPPLEMENTAL

DEATH, DISABILITY & RETIREMENT BENEFITS PLAN

(Amended and restated effective as of January 1, 2008)

 

 

THE McGRAW-HILL COMPANIES, INC.

SENIOR EXECUTIVE SUPPLEMENTAL

DEATH, DISABILITY & RETIREMENT BENEFITS PLAN

(Amended and restated effective as of January 1, 2008)

ARTICLE I

PURPOSE

          The Company desires to retain the services of and provide rewards and incentives to members of
a select group of management employees who contribute to the success of the Company.

          In order to achieve this objective, the Company has adopted the Plan to provide disability or
supplemental retirement benefits for certain management employees who become Members of such Plan
and supplemental death benefits for the Beneficiaries of deceased Members.

ARTICLE II

DEFINITIONS

          The following words and phrases as used herein shall have the following meanings:

          SECTION 2.01 “Actuarial Equivalent” or “Actuarially Determined” means a benefit of equivalent
value when computed on the basis of 7% interest compounded annually and the 1971 group mortality
tables (determined separately by sex).

          SECTION 2.02 “Attained Age” or “Attaining Age” means the age of a Member as of his last
birthday.

          SECTION 2.03 “Basic Long-Term Disability Plan” means The McGraw-Hill Companies, Inc. Long Term
Disability Plan, as amended from time to time (or any successor plan).

          SECTION 2.04 “Beneficiary” means the person, persons or entity designated by the Member to
receive any benefits payable under the Plan. Any Member’s Beneficiary designation shall be made in
a written instrument filed with the Company and shall become effective only when received, accepted
and acknowledged in writing by the Company.

          SECTION 2.05 “Board” means the Board of Directors of the Company.

          SECTION 2.06 “Cause” means the Member’s misconduct in respect of the Member’s obligations to
the Company or other acts of misconduct by the Member occurring during the course of the Member’s
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

2

 

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

          SECTION 2.07 “Change in Control” means the first to occur of 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 (the “Outstanding Common Stock”) or (2) the
combined voting power of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding Voting Securities”);
excluding, however, the following: (1) any acquisition directly from the Company, other
than an acquisition by virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the Company; (2) any acquisition by
the Company; (3) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any entity controlled by the Company; or (4) any
acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 2.07; or

     (ii) A change in the composition of the Board such that the Directors who, as of the
Effective Date, 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 Section 2.07, that any individual who becomes a
Director subsequent to the Effective Date, whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least a majority of those
Directors who were members of the Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such Director 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 the Company (“Corporate
Transaction”); excluding, however, such a Corporate Transaction pursuant to which (A) 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

3

 

of such transaction owns the Company or all or substantially all of the Company’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, (B) no Person (other than the
Company, any employee benefit plan (or related trust) of the Company 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 (C) 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 the Company of a complete liquidation or
dissolution of the Company.

          SECTION 2.08 “Claimant” has the meaning set forth in Section 9.01 of the Plan.

          SECTION 2.09 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and
the applicable rules and regulations promulgated thereunder.

          SECTION 2.10 “Committee” means the Compensation Committee of the Board.

          SECTION 2.11 “Common Stock” means the common stock, $1.00 par value per share, of the Company.

          SECTION 2.12 “Company” means The McGraw-Hill Companies, Inc., a corporation organized under
the laws of the State of New York, or any successor corporation.

          SECTION 2.13 “Death Benefit” means any benefit paid to a Beneficiary upon the death of a
Member as provided under the terms of the Plan.

          SECTION 2.14 “Director” means an individual who is a member of the Board.

          SECTION 2.15 “Disability” or “Disabled” means the Member (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months; or (ii) is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the Company.

4

 

          SECTION 2.16 “Distribution Date” means a Member’s Retirement Date or, if the Member is a
Specified Employee as of his Employment Termination Date, the six-month anniversary of such date.

          SECTION 2.17 “Early Retirement” means a Member’s retirement during the period commencing on
the first day of the month coincident with or immediately following the Member’s 50th
birthday and ending on the Member’s Normal Retirement Date.

          SECTION 2.18 “Effective Date” has the meaning set forth in Section 12.07 of the Plan.

          SECTION 2.19 “Employment Termination Date” means the date of a Member’s “separation from
service” from the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code.

          SECTION 2.20 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the applicable rules and regulations promulgated thereunder.

          SECTION 2.21 “Excess Benefit Plan” means The McGraw-Hill Companies, Inc. Employee Retirement
Plan Supplement, Standard & Poor’s Employee Retirement Plan Supplement and any amendments or
successor plans thereto.

          SECTION 2.22 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, and the applicable rules and regulations promulgated thereunder.

          SECTION 2.23 “Extension Notice” has the meaning set forth in Section 9.01 of the Plan.

          SECTION 2.24 “Final Monthly Earnings” means:

     (i) For purposes of Article V and Article VIII, (1) the sum of (x) a Member’s highest
rate of annual base salary in effect during the 36-month period immediately preceding
retirement (other than pursuant to Section 5.02 of the Plan), termination without Cause
pursuant to Section 5.03 of the Plan, or termination following a Change in Control as
provided in Article VIII, and (y) the Member’s highest 100% target annual short-term
incentive opportunity during that same 36-month period (2) divided by 12; or

     (ii) For purposes of Article VII, (1) the greater of (A) 1.5 times a Member’s annual
base salary in effect immediately preceding the date of the Member’s Disability or (B) the
sum of (x) the Member’s highest rate of annual base salary in effect during any portion of
such 36-month period occurring prior to January 1, 2005, and during which the Member
participated in the Plan, and (y) the Member’s highest 100% target annual short-term
incentive opportunity during that same portion of such 36-month period (2) divided by 12.

5

 

          SECTION 2.25 “Good Reason” means voluntary termination based on any of the following: (1)
reduction in the Member’s base salary, (2) reduction of the Member’s incentive compensation award
opportunities, (3) transfer of the Member to a principal business location so as to increase the
distance between the principal business location and such Member’s place of residence at the time
of the Change in Control by more than 35 miles, (4) significant reduction in the Member’s
responsibilities and status within the Company or a change in the Member’s title or office without
prior written consent, (5) involuntary discontinuation of the Member’s participation in any life
insurance, health and accident or disability plan maintained by the Company, (6) involuntary
elimination of the Member’s paid vacation or (7) for any reason during the 30-day period following
the first anniversary of a Change in Control.

          SECTION 2.26 “Member” means an employee who is part of a select group of management and has
become a Member as provided in Article IV hereof.

          SECTION 2.27 “Monthly Disability Income” means a monthly income due a Disabled Member as
provided in Article VII hereof.

          SECTION 2.28 “Monthly Retirement Income” means a monthly income due a Retired Member which
shall commence as of his Distribution Date and continue for the period provided herein.

          SECTION 2.29 “Named Fiduciary” means the Executive Vice President, Human Resources of the
Company.

          SECTION 2.30 “Normal Retirement Date” means the first day of the month coincident with or
immediately following the Member’s 65th birthday.

          SECTION 2.31. “Plan” means The McGraw-Hill Companies, Inc. Senior Executive Supplemental
Death, Disability & Retirement Benefits Plan, as amended from time to time.

          SECTION 2.32 “Primary Social Security” means the estimated Primary Insurance Amount (payable
monthly) available to a Member at age 62, or his Distribution Date, whichever is later, under the
Social Security Act in effect at that time.

          SECTION 2.33 “Qualified Plan” means the Employee Retirement Plan of The McGraw-Hill Companies,
Inc. and its Subsidiaries, the Retirement Plan for Employees of Standard & Poor’s Corporation and
Participating Subsidiaries and any amendments or successor plans thereto.

          SECTION 2.34 “Retired Member” means any Member of the Plan who has qualified for retirement
and has retired, and who is eligible to receive a Monthly Retirement Income by direction of the
Committee. The term “Retired Member” shall also include any Member terminated without Cause and who
is eligible to receive a Monthly Retirement Income pursuant to Section 5.03 of the Plan, and any
Member for whom the Committee has approved a Monthly Retirement Income under Section 5.02 of the
Plan.

6

 

          SECTION 2.35 “Retirement Date” means the first day of the month coincident with or immediately
following the Member’s Employment Termination Date due to any of the following: (1) retirement
pursuant to Sections 5.01 or 5.03 of the Plan, (2) termination without Cause or retirement if so
approved by the Committee pursuant to Section 5.02 of the Plan, (3) termination without Cause
pursuant to Section 5.03 of the Plan, or (4) termination for any reason described in Sections 8.02
or 8.03 of the Plan.

          SECTION 2.36 “Specified Employee” means a specified employee within the meaning of Section
409A(a)(2)(b)(i) of the Code.

ARTICLE III

ADMINISTRATION

          SECTION 3.01 Administration. The Plan shall be administered by the
Committee, which shall have full authority to construe and interpret the Plan, to establish, amend
and rescind rules and regulations relating to the Plan, and to take all such actions and make all
such determinations in connection with the Plan as it may deem necessary or desirable.

          SECTION 3.02 Binding Effect of Decisions. Subject to Article IX, the decision or action of the
Committee in respect to any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations promulgated hereunder
shall be final, conclusive and binding upon all persons having any interest in the Plan.

          SECTION 3.03 Indemnification. To the fullest extent permitted by law, the Committee and the
Board (and each member thereof), and any employee of the Company and its affiliates to whom
fiduciary 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.

ARTICLE IV

MEMBERSHIP

          SECTION 4.01 Eligible Members. Eligibility for membership in the Plan shall be determined by
the Committee in its sole discretion, on an individual basis; provided that each individual who was
a Member immediately prior to the effective date of this amendment and restatement shall continue
to be a Member on such date, subject to the terms and provisions of the Plan.

          SECTION 4.02 Removal of Members. (a) The Committee shall also have the right to remove a
Member from the Plan at any time in its sole discretion if the Member is no longer eligible to
participate in the Plan under the terms of Section 4.04 of the Plan.

7

 

          (b) A Member whose benefits under the Plan have commenced to be paid shall not be removed from
membership in the Plan and such benefits shall not be terminated thereafter for any reason.

          (c) If a Member whose benefits under the Plan have not commenced to be paid is removed from
the Plan, all future benefits payable under the Plan to the Member or his Beneficiary shall cease.

          (d) Notwithstanding anything contained herein to the contrary, Article VIII shall be
applicable to a Member who is removed from the Plan following the Change in Control.

          SECTION 4.03 Continuous Employment Requirement. Subject to Section 8.02 of the Plan, the
payment of benefits to the Member or his Beneficiary under the Plan is conditioned upon the
continuous employment of the Member by the Company (including periods of disability and authorized
leaves of absence) from the date of the Member’s participation in the Plan until the Member’s
Retirement Date, Disability or death, whichever first occurs.

          SECTION 4.04 Compensation Requirement. Employees who are selected to participate in the Plan
shall be chosen from employees who are in Executive Compensation Band 1 and Executive Compensation
Band 2.

ARTICLE V

MONTHLY RETIREMENT INCOME

          SECTION 5.01 Normal Retirement. (a) A Member who retires on his Normal Retirement Date shall
be entitled to receive, commencing on the Member’s Distribution Date, a Monthly Retirement Income
under the Plan as calculated by the Committee. The amount of a Member’s Monthly Retirement Income
shall be 55% of Final Monthly Earnings reduced by the amounts set forth in Sections 5.01(b),
5.01(c), 5.01(d) and 5.01(e) of the Plan.

          (b) One hundred percent (100%) of his monthly Primary Social Security benefit as of the
Member’s Retirement Date.

          (c) One hundred percent (100%) of the monthly income, received from the Qualified Plan and the
Excess Benefit Plan as of the Member’s Retirement Date. Such amount shall be Actuarially Determined
as of the Member’s Retirement Date as a life annuity payable in equal monthly installments,
regardless of the actual form of payment.

          (d) One hundred percent (100%) of benefits received from the qualified pension plans of any
previous employers. Such amounts shall be Actuarially Determined as of the Member’s Retirement Date
as a life annuity payable in equal monthly installments, regardless of the actual form of payment.

          (e) The annuity value of the hypothetical account balance maintained in accordance with the
Qualified Plan as of as of the Member’s Retirement Date. This amount shall be determined, in
accordance with the rules of the Qualified Plan for this determination, as a life

8

 

annuity payable in equal monthly installments. This value will be determined so as to reflect the same reduction
for early commencement as the Qualified Plan benefit in Section 5.01(c) of the Plan.

          SECTION 5.02 Early Retirement With Committee Approval. (a) A Member (i) between the ages of
50-54 who elects Early Retirement or whose employment is terminated by the Company other than for
Cause and who has ten years or more of continuous service with the Company, or (ii) who elects
Early Retirement or whose employment is terminated without Cause subsequent to Attaining Age 55 and
less than ten years of continuous service with the Company, may, with the written approval of the
Committee, receive a Monthly Retirement Income, if any, in such amount and containing such terms
and conditions as may be determined by the Committee. Further, a Member for whom the Committee has
approved a Monthly Retirement Income under this Section 5.02 and who is between the ages of 50-54,
shall begin to receive, upon the later of the Member’s Distribution Date and the first day of the
month coincident with or immediately following Attaining Age 55, such Monthly Retirement Income as
described in this Section 5.02.

          (b) If such Member dies, however, before Attaining Age 55 and the Member had elected a joint
and survivor annuity option at the time of such Member’s retirement or termination of employment,
then the deceased Member’s spouse, if such spouse is still surviving, shall receive reduced Monthly
Retirement Income payments hereunder at the time when the deceased Member would have Attained Age
55.

          (c) If a Member is approved for a Monthly Retirement Income payment under this Section 5.02,
the Member also may be entitled to receive a post-retirement Death Benefit in accordance with the
provisions of Section 6.03 of the Plan, provided that at the time the Monthly Retirement Income
payment is approved hereunder for the Member the Committee also approves the payment of the
post-retirement Death Benefit for the Member.

          SECTION 5.03 Early Retirement After Age 55. (a) A Member who has Attained Age 55, has ten
years or more of continuous service with the Company and either elects Early Retirement or is
terminated by the Company other than for Cause, shall receive, commencing on the Member’s
Distribution Date, a Monthly Retirement Income equal to 55% of Final Monthly Earnings reduced by 4%
for every year that the Member’s Attained Age on his Retirement Date is less than 65, as set forth
in the following table:

9

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	MONTHLY
	 	 	 	 	 	 	RETIREMENT
	 	 	 	 	 	 	INCOME AS A
	ATTAINED AGE	 	BENEFIT FORMULA	 	 	 	PERCENT OF
	AT RETIREMENT	 	AS A % OF FINAL	 	REDUCTION	 	FINAL MONTHLY
	DATE	 	MONTHLY EARNINGS	 	FACTOR	 	EARNINGS
	55
	 	    55%
	 	40%
	 	    33.0%
	56
	 	55
	 	36
	 	35.2
	57
	 	55
	 	32
	 	37.4
	58
	 	55
	 	28
	 	39.6
	59
	 	55
	 	24
	 	41.8
	60
	 	55
	 	20
	 	44.0
	61
	 	55
	 	16
	 	46.2
	62
	 	55
	 	12
	 	48.4
	63
	 	55
	 	8
	 	50.6
	64
	 	55
	 	4
	 	52.8

          A Member’s Monthly Retirement Income shall be further reduced by the amounts set forth in
Sections 5.03(b), 5.03(c), 5.03(d) and 5.03(e) of the Plan.

          (b) One hundred percent (100%) of his Primary Social Security benefit as of the Member’s
Retirement Date. A Member who retires prior to Attaining Age 62 shall have his benefits reduced by
his Primary Social Security payable at age 62 regardless of whether it is received.

          (c) One hundred percent (100%) of the monthly income, calculated in the form of a straight
life annuity, that he receives from the Qualified Plan and the Excess Benefit Plan as of the
Member’s Retirement Date. Such amount shall be Actuarially Determined as of the Member’s Retirement
Date as a life annuity payable in equal monthly installments, regardless of the actual form of
payment.

          (d) One hundred percent (100%) of benefits received from the
qualified pension plans of any previous employers. Such amounts shall be Actuarially
Determined as of the Member’s Retirement Date as a life annuity payable in equal monthly
installments, regardless of the actual form of payment.

          (e) The annuity value of the hypothetical account balance maintained in accordance with the
Qualified Plan as of the Member’s Retirement Date. This amount shall be determined, in accordance
with the rules of the Qualified Plan for this determination, as a life annuity payable in equal
monthly installments. This value will be determined so as to reflect the same reduction for early
commencement as the Qualified Plan benefit in Section 5.03(c) of the Plan.

          SECTION 5.04 Minimum Service Requirement. A Member who has less than ten years of continuous
service with the Company and who elects Early Retirement without the

10

 

written consent of the
Committee shall not be entitled to receive a Monthly Retirement Income under the terms of the Plan.

          SECTION 5.05 Retirement After Age 65. If a Member remains in the employ of the Company
subsequent to his Normal Retirement Date, no Monthly Retirement Income shall be paid until the
Member’s Distribution Date. At that time he shall be entitled to receive a Monthly Retirement
Income calculated as though he had retired on his Normal Retirement Date.

          SECTION 5.06 Form of Payment. The basic form of Monthly Retirement Income (to which the
formula indicated in Section 5.01 of the Plan applies) shall be a monthly income commencing on the
Member’s Distribution Date and continuing for his life.
Alternatively, the Member shall be entitled to receive any Actuarially Equivalent life annuity that
is permitted under the Qualified Plan, subject to the requirements of Section 409A(a)(4)(C) of the
Code. The Member’s Monthly Retirement Income shall in all circumstances be calculated as of the
Member’s Retirement Date, as if such benefits commenced on such date. If the Member is a Specified
Employee as of his Employment Termination Date, then the payments that otherwise would have been
paid to the Member prior to his Distribution Date shall be paid to the Member in a lump sum on such
date. Interest at the rate used to determine Actuarially Equivalent benefits under the Plan shall
be credited on such payments for the period, if any, commencing on the Member’s Normal Retirement
Date (or, if later the Member’s Retirement Date), and ending on the Member’s Distribution Date.

ARTICLE VI

 DEATH BENEFITS

          SECTION 6.01. In the event of the death of a Member or a Disabled Member prior to his
Retirement Date, in lieu of a Monthly Retirement Income or Monthly Disability Benefit, the Member’s
Beneficiary shall be entitled to receive a lump-sum Death Benefit within 60 days following the
Member’s date of death. Such pre-retirement Death Benefit shall be equal to 400% of the Member’s
annual base salary in effect at the time of his death.

          SECTION 6.02. In the event of the death of a Retired Member subsequent to Attaining Age 55,
the Member’s Beneficiary shall be entitled to receive a lump-sum Death Benefit in an amount equal
to 100% of the Member’s annual base salary in effect at the Member’s Retirement Date. This Death
Benefit is in addition to any Monthly Retirement Income benefits that may be payable to a Member’s
Beneficiary.

          SECTION 6.03. In the event of the death of a Member who has been approved for a Monthly
Retirement Income payment and for a Death Benefit under Section 5.02 of the Plan, the Member’s
Beneficiary shall be entitled to receive a lump-sum Death Benefit in an amount equal to 100% of the
Member’s annual base salary in effect at the time of the Member’s retirement or termination of
employment.

11

 

ARTICLE VII

DISABILITY BENEFITS

          SECTION 7.01. (a) If a Member is determined to be Disabled prior to his Normal Retirement
Date, the Disabled Member shall be entitled to receive a Monthly Disability Income equal to 50% of
the Member’s Final Monthly Earnings reduced by Sections 7.01(b), 7.01(c) and 7.01(d) of the Plan.
Such income benefit shall be payable to the Member until Attaining Age 65 or death, whichever first
occurs.

          (b) One hundred percent (100%) of his monthly benefit received from the Basic Long-Term
Disability Plan, payments from Social Security, Workers’ Compensation and/or other federal, state
or employer group insurance plans.

          (c) One hundred percent (100%) of his monthly income paid from the Qualified Plan. Such amount
shall be Actuarially Determined as a life annuity payable in equal monthly installments, regardless
of the actual form of payment.

          (d) One hundred percent (100%) of benefits received from the qualified pension plans of any
previous employers. Such amounts shall be Actuarially Determined as a life annuity payable in equal
monthly installments, regardless of the actual form of payment.

          SECTION 7.02. Upon Attaining Age 65, the Disabled Member shall be entitled to receive a
Monthly Retirement Income under Section 5.01 of the Plan.

ARTICLE VIII

SPECIAL RULES IN THE EVENT OF A CHANGE IN CONTROL

          SECTION 8.01. Notwithstanding anything to the contrary in any other section of the Plan, in
the event of a Change in Control, neither the Company nor the Board or the Committee shall
thereafter terminate, modify or amend, in whole or in part, any or all of the provisions of the
Plan.

          SECTION 8.02. (a) If the employment of a Member is terminated voluntarily for Good Reason
within 24 months after a Change in Control that is a “change in control event” within the meaning
of Section 409A(a)(2)(A)(v) of the Code or
is involuntarily terminated (except for Cause) at any time after such a Change in Control,
said Member shall receive on the Member’s Distribution Date a lump-sum distribution computed as of
such date of the Actuarial Equivalent of the monthly benefit he would have received under the Plan
as if (1) he had continued as an employee of the Company until the later of Attaining Age 50 or his
Retirement Date, and he had then elected to receive payments under the Plan; (2) he had at least 10
years of continuous service with the Company as of the date of the Change in Control; and (3) he
was granted written consent for Early Retirement under the Plan by the Committee. The lump-sum
Actuarial Equivalent of the monthly benefit he would have received shall be determined by assuming
that he had continued in the employment of the Company until the later of Attaining Age 50 or his
Retirement Date, and if under age 50 by assuming that he received the Final Monthly Earnings that
he was receiving on his Employment Termination Date until Attaining

12

 

Age 50. The amount shall be determined by computing the amounts set forth in Sections 8.02(b)
through 8.02(f) of the Plan, and then subtracting the sum of the amounts in Sections 8.02(c),
8.02(d), 8.02(e), and 8.02(f) of the Plan from the amount in Section 8.02(b) of the Plan.

          (b) The lump-sum Actuarial Equivalent computed as of the Member’s Distribution Date of a
benefit payable monthly for life in the amount of a percentage, as specified in the schedule below,
of the Member’s Final Monthly Earnings that he was receiving on his Employment Termination Date,
assuming payments commence on the later of the Member’s Distribution Date or his 55th
birthday.

	 	 	 
	 	 	BENEFIT AMOUNT
	ATTAINED AGE AT	 	AS A % OF FINAL
	RETIREMENT DATE	 	MONTHLY EARNINGS
	Age 60 and below	 	    44.0%
	61
	 	46.2
	62
	 	48.4
	63
	 	50.6
	64
	 	52.8
	65
	 	55.0

          In addition, a Member shall receive on his Distribution Date a lump-sum distribution of the
Actuarial Equivalent of the post-retirement lump-sum Death Benefit described in Sections 6.02 and
6.03 of the Plan, with the Actuarial Equivalent computed as of the Member’s Distribution Date, and
for a Member under age 50, assuming that the Death Benefit would be payable only if death occurred
after Attaining Age 50.

          The payments pursuant to this Section 8.02 shall be in lieu of payments to be made pursuant to
Articles V and VI hereof.

          (c) The lump-sum Actuarial Equivalent computed as of the Member’s Distribution Date of 100% of
the monthly Primary Social Security benefit. If, as of his Employment Termination Date, the Member
has not Attained Age 50, then the monthly
Primary Social Security benefit will be calculated by assuming that he had continued in the
employment of the Company until Attaining Age 50 and by assuming that he received the same Final
Monthly Earnings until that date. For all Members, the Primary Social Security benefit will be
computed assuming he received no earnings after the later of Attaining Age 50 or his Employment
Termination Date until Attaining Age 62.

          (d) The lump-sum Actuarial Equivalent computed as of the Member’s Distribution Date of 100% of
his monthly income calculated in the form of a straight life annuity under the Qualified Plan,
commencing as of the earliest date (but not before the Member’s Distribution Date) that the Member
would be eligible to begin to receive monthly benefits from the Qualified Plan. If as of his
Employment Termination Date the Member has not Attained Age 50 then the benefit to be received from
the Qualified Plan will be calculated by assuming he had continued in the employment of the Company
until Attaining Age 50, and by assuming that he received the same Final Monthly Earnings that he
was receiving as of his Employment

13

 

Termination Date until Attaining Age 50, and assuming that he had
continued to accrue a benefit under the Qualified Plan until Attaining Age 50. The benefit from the Qualified Plan
payable as of
the earliest date that the Member could elect to receive a benefit under the Qualified Plan (or the
Member’s Distribution Date, if later) shall be reduced for early commencement (if any) according to
the provisions of the Qualified Plan in effect as of the date of the Change in Control.

          (e) The balance of the hypothetical account maintained in accordance with the Qualified Plan,
reflecting hypothetical Member and Company contributions, and the assumed investment return,
accumulated to the later of the Member’s Distribution Date or Attaining Age 50.

          (f) The lump-sum Actuarial Equivalent of the benefits, if any, the Member is eligible to
receive from qualified plans of any previous employers, determined as of the Member’s Distribution
Date assumed to be payable as of the earliest date that the Member could elect to have the benefit
payable, or his age as of the Member’s Distribution Date, if later.

          SECTION 8.03. Except as set forth in Section 8.02 of the Plan, if the employment of a Member
is terminated voluntarily for any reason at any time after a Change in Control that is a “change in
control event” within the meaning of Section 409A(a)(2)(A)(v) of the Code has occurred, said Member
shall receive on his Distribution Date a lump-sum distribution computed as of the Member’s
Retirement Date of the Actuarial Equivalent of the monthly benefit he is entitled to receive under
the Plan pursuant to Article V and adjusted for interest payable in accordance with the last
sentence of Section 5.06 of the Plan. In addition, said Member shall receive on his Distribution
Date a lump-sum distribution of the Actuarial Equivalent of the post-retirement lump-sum Death
Benefit described in Sections 6.02 and 6.03 of the Plan, computed as described in the second
paragraph of Section 8.02(b) of the Plan.

          SECTION 8.04. In the event of a Change in Control, the Committee shall
elect either to:

     (i) if such Change in Control is a “change in control event” within the meaning of
Section 409A(a)(2)(A)(v) of the Code, provide each Retired Member with a lump-sum
distribution of the Actuarial Equivalent of his Monthly Retirement Income and, in addition,
provide each Retired Member with a lump-sum distribution of the Actuarial Equivalent of the
post-retirement lump-sum Death Benefit described in Sections 6.02 and 6.03 of the Plan, in
each case computed as of the date of such distribution and subject to and in accordance with
the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix) (or any successor
provision); or

     (ii) provide sufficient funds to the existing “rabbi trust” for which The Bank of New
York has been designated as trustee (or to any successor trustee), or in lieu of The Bank of
New York, as trustee, to any similar legal entity selected by the Committee, to protect the
Monthly Retirement Income and the post-retirement lump-sum Death Benefits which shall be
payable to each Retired Member pursuant to Articles V and VI hereof.

14

 

          In the event the Committee does not elect to comply with (i) or (ii) above within 30 days
after a Change in Control has occurred, or such Change in Control is not a “change in control
event” within the meaning of Section 409A(a)(2)(A)(v) of the Code, it shall be deemed as if the
Committee had elected to comply with (ii) above, and the funds referred to in (ii) shall be
provided to such trust within 15 days thereafter. Any payments pursuant to Section 8.04(i) of the
Plan shall be in lieu of any further benefits under the Plan.

          SECTION 8.05. The provisions of this Article VIII shall supersede and take precedence over the
provisions of any of the other sections of the Plan.

          SECTION 8.06. The reasonable legal fees incurred by any Member (or former Member who was a
Member when the Change in Control occurred) or Retired Member to enforce his valid rights under
this Article VIII shall be paid for by the Company to the Member or Retired Member in addition to
sums otherwise due under the Plan, whether or not the Member or Retired Member is successful in
enforcing his rights or whether or not the matter is settled;
provided that such payment shall be
made not later than the end of the taxable year in which such legal fees are incurred; provided,
further, that no such payment shall be made after the last day of the sixth year following the
Member or Retired Member’s Employment Termination Date.

ARTICLE IX

CLAIMS PROCEDURE

          SECTION 9.01 Claims. In the event any person or his authorized representative (a “Claimant”)
disputes the amount of, or his entitlement to, any benefits under the Plan or their method of
payment, such Claimant shall file a claim in writing with, and on the form prescribed by, the Named
Fiduciary for the benefits to which he
believes he is entitled, setting forth the reason for his claim. The Claimant shall have the
opportunity to submit written comments, documents, records and other information relating to the
claim and shall be provided, upon request and free of charge, reasonable access to and copies of
all documents, records or other information relevant to the claim. The Named Fiduciary shall
consider the claim and within 90 days of receipt of such claim, unless special circumstances exist
which require an extension of the time needed to process such claim, the Named Fiduciary shall
inform the Claimant of its decision with respect to the claim. In the event of special
circumstances, the response period can be extended for an additional 90 days, as long as the
Claimant receives written notice advising of the special circumstances and the date by which the
Named Fiduciary expects to make a determination (the “Extension Notice”) before the end of the
initial 90-day response period indicating the reasons for the extension and the date by which a
decision is expected to be made. If the Named Fiduciary denies the claim, the Named Fiduciary shall
give to the Claimant (i) a written notice setting forth the specific reason or reasons for the
denial of the claim, including references to the applicable provisions of the Plan, (ii) a
description of any additional material or information necessary to perfect such claim along with an
explanation of why such material or information is necessary, and (iii) appropriate information as
to the Plan’s appeals procedures as set forth in Section 9.02 of the Plan.

          SECTION 9.02 Appeal of Denial. A Claimant whose claim is denied by the Named Fiduciary and who
wishes to appeal such denial must request a review of the Named

15

 

Fiduciary’s decision by filing a written request with the Committee for such review within 60 days
after such claim is denied. Such written request for review shall contain all relevant comments,
documents, records and additional information that the Claimant wishes the Committee to consider,
without regard to whether such information was submitted or considered in the initial review of the
claim by the Named Fiduciary. In connection with that review, the Claimant may examine, and receive
free of charge, copies of pertinent Plan documents and submit such written comments as may be
appropriate. Written notice of the decision on review shall be furnished to the Claimant within 60
days after receipt by the Committee of a request for review. In the event of special circumstances
which require an extension of the time needed for processing, the response period can be extended
for an additional 60 days, as long as the Claimant receives an Extension Notice. If the Committee
denies the claim on review, notice of the Committee’s decision shall include (i) the specific
reasons for the adverse determination, (ii) references to applicable Plan provisions, (iii) a
statement that the Claimant is entitled to receive, free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claim and (iv) a statement
of the Claimant’s right to bring an action under Section 502(a) of ERISA following an adverse
benefit determination on a review and a description of the applicable limitations period under the
Plan. The Claimant shall be notified no later than five days after a decision is made with respect
to the appeal.

          SECTION 9.03 Statute of Limitations. A Claimant wishing to seek judicial review of an adverse
benefit determination under the Plan, whether in whole or in
part, must file any suit or legal action, including, without limitation, a civil action under
Section 502(a) of ERISA, within three years of the date the final decision on the adverse benefit
determination on review is issued or should have been issued under Section 9.02 of the Plan or lose
any rights to bring such an action. If any such judicial proceeding is undertaken, the evidence
presented shall be strictly limited to the evidence timely presented to the Named Fiduciary.
Notwithstanding anything in the Plan to the contrary, a Claimant must exhaust all administrative
remedies available to such Claimant under the Plan before such Claimant may seek judicial review
pursuant to Section 502(a) of ERISA.

ARTICLE X

BENEFICIARY DESIGNATION

          SECTION 10.01 Beneficiary Designation. Each Member shall have the right, at any time, to
designate any person, persons, entity or entities as his Beneficiary or Beneficiaries (both primary
as well as contingent) to whom payment under the Plan shall be paid in the event of his death prior
to complete distribution to the Member of the benefits due him under the Plan.

          SECTION 10.02 Amendments. Any Beneficiary designation may be changed by a Member by the
written filing of such change on a form prescribed by the Company and shall become effective only
when received, accepted and acknowledged in writing by the Company. The new Beneficiary designation
form shall cancel all Beneficiary designations previously filed.

16

 

          SECTION 10.03 No Beneficiary Designation. If a Member fails to designate a Beneficiary as
provided above, or if all designated Beneficiaries predecease the Member, then any amounts to be
paid to the Member’s Beneficiary shall be paid to the Member’s estate.

          SECTION 10.04 Effect of Payment. The payment under this Article X of amounts due to a Member
under the Plan shall completely discharge the Company’s obligations in respect of the Member under
the Plan.

ARTICLE XI

AMENDMENT AND TERMINATION OF PLAN

          SECTION 11.01 Amendment. Subject to Section 8.01 and 11.02 of the Plan, the Company reserves
the right at any time and from time to time, by action of the Committee or the Board to terminate,
modify or amend, in whole or in part, any or all of the provisions of the Plan, including
specifically the right to make any such amendments effective retroactively; provided that no such
action shall reduce the benefits or rights of any Disabled or Retired Member or his Beneficiary. In
addition, the Company may amend or modify any provision of the Plan as to any particular Member by
agreement with such Member, provided that such agreement is in writing, is executed by both the
Company and the Member, and is filed with the Plan records. The provisions of any amendment or
modification made by agreement between a Member and the Company
shall apply only to the Member so agreeing and no other.

          SECTION 11.02 Section 409A. The Plan is intended to satisfy the requirements of Section 409A
of the Code with respect to amounts subject thereto and shall be interpreted and construed in
accordance with such intent. If, in the good faith judgment of the Committee, any provision of the
Plan could otherwise cause any person to be subject to the interest and penalties imposed under
Section 409A of the Code, such provision shall be modified by the Committee in its sole discretion
to maintain, to the maximum extent practicable, the original intent of the applicable provision
without violating the requirements of Section 409A of the Code, and, notwithstanding any provision
in the Plan to the contrary, the Committee shall have broad authority to amend or to modify the
Plan, without advance notice to or consent by any person, to the extent necessary or desirable to
ensure that no benefits under the Plan are subject to tax under Section 409A of the Code. Any
determinations made by the Committee under this Section 11.02 shall be final, conclusive and
binding on all persons.

ARTICLE XII

MISCELLANEOUS

          SECTION 12.01 Unsecured General Creditor. The Plan is an unfunded deferred compensation plan
for a select group of management or highly compensated employees within the meaning of ERISA, and
shall be construed and administered accordingly. Members and their Beneficiaries shall have no
legal or equitable rights, interest or claims in any property or assets of the Company. The assets
of the Company shall not be held under any trust for the benefit of Members or their Beneficiaries
or held in any way as collateral security for the fulfilling of the obligations of the Company
under the Plan. Any and all of the Company’s assets shall be, and remain, the general, unpledged,
unrestricted assets of the Company. The

17

 

Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of
the Company to pay money in the future.

          SECTION 12.02 Nonassignability. Each Member’s right under the Plan shall be nontransferable
except by will or by the laws of descent and distribution and except insofar as applicable law may
otherwise require. Subject to the foregoing, neither a Member nor any other person shall have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be
nonassignable and non-transferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Member or any other person, nor be transferable by operation of law in the
event of a Member’s or any other person’s bankruptcy or insolvency.

          SECTION 12.03 Not a Contract of Employment. The terms and conditions of the Plan shall not be
deemed to constitute a contract of employment with the Member, and the Member (or his Beneficiary)
shall have no rights against the
Company except as specifically provided herein. Moreover, nothing in the Plan shall be deemed
to give a Member the right to be retained in the service of the Company or to interfere with the
rights of the Company to discipline or discharge him at any time. A Retired Member shall not be
considered an employee for any purposes under the law.

          SECTION 12.04 Binding Effect. The Plan shall be binding upon and shall inure to the benefit of
the Member or his Beneficiary, his heirs and legal representatives, and the Company.

          SECTION 12.05 Withholding. To the extent required by the law in effect at the time payments
are made, the Company shall withhold from payments made hereunder any taxes or other amounts
required to be withheld for any federal, state or local government and other authorized deductions.

          SECTION 12.06 Severability. In the event that any provision or portion of the Plan shall be
determined to be invalid or unenforceable for any reason, the remaining provisions and portions of
the Plan shall be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.

          SECTION 12.07 Effective Date. The Plan was initially effective as of January 1, 1986 (the
“Effective Date”). This amendment and restatement is effective as of January 1, 2008.

          SECTION 12.08 Governing Law. The Plan shall be construed under the laws of the State of New
York, to the extent not preempted by federal law.

          SECTION 12.09 Headings. The section headings used in this document are for ease of reference
only and shall not be controlling with respect to the application and interpretation of the Plan.

18

 

          SECTION 12.10 Rules of Construction. Any words herein used in the masculine shall be read and
construed in the feminine where they would so apply. Words in the singular shall be read and
construed as though used in the plural in all cases where they would so apply. All references to
sections are, unless otherwise indicated, to sections of the Plan.

19

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