Document:

EX-10.22

 

Exhibit 10.22

THE McGRAW-HILL COMPANIES, INC.

DIRECTOR DEFERRED COMPENSATION PLAN

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

 

 

THE McGRAW-HILL COMPANIES, INC.

DIRECTOR DEFERRED COMPENSATION PLAN

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

ARTICLE I

PURPOSE

          The purpose of the Plan is to provide funds for retirement or death for Directors (and their
beneficiaries) of the Company. It is intended that the Plan will aid in retaining and attracting
Directors by providing a means to supplement their standard of living at retirement. The Plan is
intended to satisfy the requirements of Section 409A of the Code.

ARTICLE II

DEFINITIONS

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

          SECTION 2.01 “AFR” has the meaning set forth in Section 6.02(c) of the Plan.

          SECTION 2.02 “Alternate Annual Rate” has the meaning set forth in Section 6.03(b) of the Plan.

          SECTION 2.03 “Alternate Rate” has the meaning set forth in Section 6.03(a) of the Plan.

          SECTION 2.04 “Beneficiary” means the person, persons or entity designated by the Participant
to receive any benefits payable under the Plan. Any Participant’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 “Board Meeting Fees” means the cash compensation paid
to a Director for attendance at meetings of the Board and Committees thereof, including
without limitation, Board meeting fees, committee meeting fees and fees for serving as chairman of
a committee.

          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

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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 of the Plan, constitute the Board (such Board shall be hereinafter referred to as the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, for purposes of this Section 2.07, that any individual who becomes a Director subsequent
to the effective date of the Plan, 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
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

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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 Nominating and Corporate Governance 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 “Deferral Benefit” means the benefit as calculated in Article VI payable to a
Participant commencing at his death, Disability or Projected Retirement Date.

          SECTION 2.14 “Deferral Election Agreement” means a deferral agreement, on such form as may be
prescribed by the Committee, executed and filed by a Participant prior to the beginning of the
first period for which the Participant’s Director Compensation is to be deferred pursuant to the
Plan. A new Deferral Election Agreement shall be executed and filed by a Participant for each
Director Compensation deferral election.

          SECTION 2.15 “Deferral Benefit Account” means a bookkeeping account maintained by the Company
for a Participant representing the Participant’s interest in the
Director Compensation credited to such account pursuant to Sections 6.01 and 6.02 of the Plan.

          SECTION 2.16 “Determination Date” means the date on which the amount of a Participant’s
Deferral Benefit Account is determined as provided in Sections 6.01 and 6.02 of the Plan. The last
day of each calendar month shall be a Determination Date.

          SECTION 2.17 “Director” means an individual who is a member of the Board.

          SECTION 2.18 “Director Compensation” means Retainer and Board Meeting Fees paid by the Company
to a Director.

          SECTION 2.19 “Disability” means a Participant”s becoming disabled within the meaning of Section
409A(a)(2)(C) of the Code.

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          SECTION 2.20 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, and the applicable rules and regulations promulgated thereunder.

          SECTION 2.21 “Extension Notice” has the meaning set forth in Section 9.01 of the Plan.

          SECTION 2.22 (a) “Moody’s Bond Index” means the average annual composite yield on Moody’s
Seasoned Corporate Bond Yield Index for the preceding five years as determined from Moody’s Bond
Record published by Moody’s Investors Services, Inc. (or any successor thereto), or, if such yield
is no longer published, a substantially similar average selected by the Committee. For example:

	 	 	 	 	 	 	 	 	 
	 	 	ANNUAL	 	1985 MOODY’S
	YEAR	 	AVERAGE	 	BOND INDEX
	1984
	 	 	13.49	%	 	 	 	 
	1983
	 	 	12.78	%	 	 	 	 
	1982
	 	 	14.94	%	 	 	 	 
	1981
	 	 	15.06	%	 	 	 	 
	1980
	 	 	12.75	%	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	69.02% ÷ 5 =	 	 	 	13.80	%

          (b) “Average Annual Moody’s Rate” means the average annual composite yield on Moody’s Seasoned
Corporate Bond Yield Index for the preceding year as determined from Moody’s Bond Record published
by Moody’s Investors Services, Inc. (or any successor thereto), or, if such yield is no longer
published, a substantially similar average selected by the Committee.

          SECTION 2.23 “Participant” means each individual who participates in the Plan, as provided in
Section 4.01 of the Plan.

           SECTION 2.24 “Plan” means The McGraw-Hill Companies, Inc. Director
Deferred Compensation Plan, as amended from time to time.

          SECTION 2.25 “Plan Administrator” has the meaning set forth in Section 3.01 of the Plan.

          SECTION 2.26 “Plan Year” means the calendar year; provided that the last Plan Year with
respect to a Director who ceases to be a Participant during a calendar year, shall begin on the
first day of such calendar year and end on the day such Director ceases to be a Participant.

          SECTION 2.27 “Projected Retirement Date” means April 1 immediately following the Participant
attaining age 70, or, if permitted by the Committee at the time a Deferral Election Agreement is
filed by a Participant, some other date as specified in the Participant’s Deferral Election
Agreement.

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          SECTION 2.28 “Retainer” means the cash portion of the amount paid to a Director as
compensation for his services in that capacity, including, without limitation, fees for serving as
a committee members and fees for serving as chairman of a committee.

ARTICLE III

ADMINISTRATION

          SECTION 3.01 Administration. The Plan shall be administered by the Executive Vice President,
Human Resources of the Company (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 IX of the Plan, decisions of the Plan
Administrator shall be reviewable by the Committee. Subject to Article IX of the Plan, 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 IX of the Plan, the decision or
action of the 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 Plan Administrator,
the Committee and the Board (and each member thereof), and any employee of the Company 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.

ARTICLE IV

PARTICIPATION

          SECTION 4.01 Eligible Participants. Any individual who was a Participant in the Plan
immediately prior to the effective date of this amendment and restatement shall continue to be a
Participant on such date, subject to the terms and provisions of the Plan. Thereafter,
participation in the Plan shall be limited to such Participants and to other Directors who are not
employees of the Company or any of its subsidiaries and who elect to participate in the Plan by
filing a Deferral Election Agreement with the Company.

ARTICLE V

DEFERRALS AND ELECTIONS

          SECTION 5.01 Initial Deferral Election Agreement. Each new Participant in the Plan may file an
irrevocable Deferral Election Agreement to defer payment of all or part of his Director
Compensation to be earned during the Plan Year in which the Director becomes a

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Participant in the Plan and to have the Participant’s Deferral Benefit Account credited with such
deferred amounts. In order to make a deferral pursuant to this Section 5.01, the Participant must
file an executed Deferral Election Agreement with the Company. This Deferral Election Agreement
must be filed within 30 days of the date on which the Director becomes eligible to participate in
the Plan (or in any other account balance plan described in Treasury Regulation Section
1.409A-1(c)(2)(i)(A), or any successor provision thereto) and shall be effective with respect to
compensation earned after the date of filing thereof.

          SECTION 5.02 Annual Deferral Election Agreement. A Participant may file a Deferral Election
Agreement on an annual basis to defer payment of all or part of his Director Compensation to be
earned during the next succeeding Plan Year and to have the Participant’s Deferral Benefit Account
credited with such deferred amounts. In order to make a deferral pursuant to this Section 5.02, the
Participant must file an executed Deferral Election Agreement with the Company. The Deferral
Election Agreement must be filed not later than, and such Deferral Election Agreement shall become
irrevocable on, the last business day prior to the commencement of the Plan Year to which the
Deferral Election Agreement relates. Until a Deferral Election Agreement becomes irrevocable, it
may be superseded by another Deferral Election Agreement or revoked in writing by the Participant.

          SECTION 5.03 Applicability of Deferral Election Agreement. A Deferral Election Agreement that
is not superseded or revoked shall remain effective until the end of the Plan Year.

          SECTION 5.04 Elective Deferred Director Compensation. The amount of Director Compensation
that a Director elects to defer in his Deferral Election Agreement shall be credited by the Company
to the Participant’s Deferral Benefit Account at such times as the compensation would have been
paid had it not been deferred.

ARTICLE VI

DEFERRAL BENEFIT ACCOUNTS

          SECTION 6.01 Accounts. Each Participant’s Deferral Benefit Account, as of each Determination
Date, shall consist of the balance of the Participant’s Deferral Benefit Account as of the
immediately preceding Determination Date. The Deferral Benefit Account of each Participant shall
then be increased by any deferred Director Compensation credited to or reduced by the amount of all
distributions, if any, made from such Deferral Benefit Account since the preceding Determination
Date.

          SECTION 6.02 Interest Credit. (a) For Director Compensation deferred in 1986, as of each
Determination Date, the Participant’s Deferral Benefit Account shall be increased by the amount of
interest earned since the preceding Determination Date. The Deferral Benefit Account shall be
maintained and increased by the monthly equivalent of Moody’s Bond Index plus 6% (up to a maximum
of 150% of Moody’s Bond Index) until the Participant’s Projected Retirement Date. Subsequent to the
Participant’s Projected Retirement Date, however, Moody’s Bond Index shall no longer be determined
annually and shall be deemed to be the Moody’s Bond Index rate in effect during the year of the
Participant’s Projected Retirement Date.

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In the event that a Participant’s service with the Board ceases prior to his Projected Retirement
Date, other than for death or Disability, the Moody’s Bond Index rate shall no longer be determined
annually and shall be determined to be the Moody’s Bond Index rate in effect during the Plan Year
in which such cessation of services occurs.

          (b) For Director Compensation deferred in excess of the amount deferred by a Participant in
1986 or Director Compensation deferred by a Participant who began deferring subsequent to 1986 that
has begun to pay out to such Participant whose service with the Board has ceased prior to January
1, 2004, the interest credit rate shall be deemed to be the Average Annual Moody’s Rate plus 2% (up
to a maximum of 150% of the Average Annual Moody’s Rate) in effect during the year of the
Participant’s Projected Retirement Date.

          (c) For Director Compensation deferred by a Participant whose service with the Board begins or
continues after January 1, 2004, as of each Determination Date, the Participant’s Deferred Account
shall be increased by the amount of interest earned since the preceding Determination Date.
Interest shall be credited at a rate determined to be in effect for each Plan Year based on 120% of
the Applicable Federal Long-Term Rate (“AFR”) as prescribed by the Internal Revenue Service in
December of the year prior to the year in which the Director Compensation is credited. Subsequent
to the Participant’s Projected Retirement Date, however, the AFR shall no longer be determined
annually and shall be deemed to be the AFR in effect during the year of the Participant’s Projected
Retirement Date. In the event that a Participant’s service with the Board ceases prior to his
Projected Retirement Date, other than for death or Disability, the AFR shall no longer be
determined annually and shall be determined to be the AFR in effect during the Plan Year in which
such cessation of services occurs.

          SECTION 6.03 Alternate Rate. (a) For Director Compensation deferred in 1986, the interest
credit rates in Section 6.02(a) of the Plan may be amended to the rate of Moody’s Bond Index as of
the Determination Date (the “Alternate Rate”) in the
Company’s sole discretion if marginal corporate tax rates are reduced or if any tax leveraged
investment vehicle being utilized is no longer appropriate. In the event of a Change in Control,
the interest credit rate cannot be changed to the Alternate Rate.

          (b) For Director Compensation deferred in excess of the amount deferred by a Participant in
1986, the interest credit rates in Section 6.02(b) of the Plan may be amended to the rate of the
Average Annual Moody’s Rate as of the Determination Date (the “Alternate Annual Rate”) in the
Company’s sole discretion if marginal corporate tax rates are reduced or if any tax leveraged
investment vehicle being utilized is no longer appropriate. In the event of a Change in Control,
the interest credit rate cannot be changed to the Alternate Annual Rate.

          SECTION 6.04 Statement of Accounts. The Company shall submit to each Participant, within 120
days following the close of each Plan Year, a statement in such form as the Company deems
desirable, setting forth the balance to the credit of such Participant in his Deferral Benefit
Account as of the last day of the preceding Plan Year.

          SECTION 6.05 Vesting of Accounts. A Participant shall be 100% vested in his Deferral Benefit
Account at all times.

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ARTICLE VII

DISTRIBUTIONS

          SECTION 7.01 Retirement Benefit. A Participant shall be entitled to a Deferral Benefit equal
to the balance of the amounts credited to his Deferral Benefit Account, as determined under
Sections 6.01 and 6.02 of the Plan and as payable in accordance with Section 7.04 as of the Plan,
as of Determination Date coincident with or immediately following his Projected Retirement Date.

          SECTION 7.02 Death. If a Participant dies after the commencement of payments of his Deferral
Benefit, or if a Participant dies prior to any payments of the balance of the amounts credited to
his Deferral Benefit Account, his Beneficiary shall receive a lump-sum payment equal to the balance
of the amounts credited to his Deferral Benefit Account as of the Determination Date coincident
with or immediately following the date of such Participant’s death.

          SECTION 7.03 Disability. In the event of a Participant’s Disability, such Participant shall
receive a lump-sum payment of the balance of the amounts credited to his Deferral Benefit Account
as of the Determination Date coincident with or immediately following the date of the Participant’s
Disability.

          SECTION 7.04 Payment of Benefit. Upon, or commencing upon, the first day of the first calendar
month following the happening of the specified date or the occurrence of the event described in
Sections 7.01, 7.02 or 7.03 of the Plan, the Company shall pay to the Participant the applicable
portion of the balance of the amounts credited to his Deferral Benefit Account in a lump sum or in
equal annual installments, as elected in the applicable Deferral Election Agreement executed and
filed by the Participant with the Company. If a Participant elects to receive payments in
installments, payment of such portion of the balance of the amounts credited to his Deferral Benefit Account shall be in an
amount which amortizes the Deferral Benefit Account balance thereof in equal annual payments of
principal and interest over a period not to exceed 15 years. For purposes of determining the amount
of the annual payment, the assumed rate of interest shall be the post-retirement rate under the
terms of Section 6.02 of the Plan.

          SECTION 7.05 Change in Election. No change in a Participant’s payment election shall be valid
unless it is made in a Deferral Election Agreement that is executed and filed with the Company in
accordance with this Section 7.05. Any change in a Participant’s payment election with respect to
his Deferral Benefit Account may not take effect until at least 12 months after the date on which
the election is made in a Deferral Election Agreement that is executed and filed with the Company.
The first payment with respect to which the election is made must be deferred for a period of not
less than five years from the date such payment would otherwise have been made.

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ARTICLE VIII

EFFECT OF CORPORATE TRANSACTIONS

          SECTION 8.01 Change in Control. (a) Notwithstanding anything contained in the Plan to the
contrary, in the event of a Change in Control that is a “change in control event” within the
meaning of Section 409A(a)(2)(A)(v) of the Code, the Company shall immediately pay to each
Participant in a lump sum the then remaining balance in his Deferral Benefit Account. The terms of
Sections 11.01 and 11.02 of the Plan shall not be applicable following a Change in Control.

          (b) The reasonable legal fees incurred by any Participant to enforce his valid rights under
this Section 8.01 shall be paid for by the Company to the Participant in addition to sums otherwise
due hereunder, whether or not the Participant 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 following the 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 expiration of the
period described in Section 9.03 of the Plan.

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 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.

          SECTION 9.02 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 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 Plan
Administrator. In connection with that review, the Claimant may 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

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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. 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 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 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.

ARTICLE X

BENEFICIARY DESIGNATION

          SECTION 10.01 Beneficiary Designation. Each Participant 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 Participant of the benefits due him under the Plan.

          SECTION 10.02 Amendments. Any Beneficiary designation may be changed by a Participant by the
written filing of such change on a form prescribed by the Company. The new Beneficiary designation
form shall cancel all Beneficiary designations previously filed.

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

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

ARTICLE XI

AMENDMENT AND TERMINATION OF PLAN

          SECTION 11.01 Amendment. The Board or the Committee may from time to time make such amendments
to the Plan as it may deem proper and in the best interest of the Company; provided, however, that,
subject to Section 11.03 of the Plan, no amendment shall be effective to decrease or restrict any
Deferral Benefit Account at the time of such amendment.

          SECTION 11.02 Company’s Right to Terminate. The Board or the Committee may terminate the Plan
at any time with respect to future deferrals of Director Compensation if,

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in its judgment, the
continuance of the Plan, the tax, accounting, or other effects thereof, or potential payments
thereunder would not be in the best interests of the Company. The Board or the Committee may also
terminate the Plan in its entirety at any time, and, upon any such termination, the Company shall
immediately pay to each Participant in a lump sum the then remaining balance in his Deferral
Benefit Account, subject to and in accordance with the requirements of Treasury Regulation Section
1.409A-3(j)(4)(ix) (or any successor provision thereto).

          SECTION 11.03 Section 409A. If, in the good faith judgment of the Committee, any provision of
the Plan or any Deferral Election Agreement 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 therein to the contrary, the Committee shall
have broad authority to amend or to modify the Plan or any Deferral Election Agreement, without
advance notice to or consent by any person, to the extent necessary or desirable to ensure that no
Deferral Benefit Accounts are subject to tax under Section 409A of the Code. Any determinations
made by the Committee under this Section 11.03 shall be final, conclusive and binding on all
persons.

ARTICLE XII

MISCELLANEOUS

          SECTION 12.01 Unsecured General Creditor. Participants 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 Participants 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
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 Participant’s rights under the Plan shall be
nontransferable except by will or by the laws of descent and distribution. 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 12.03 Rights and Obligations. Nothing in the Plan shall be deemed to create any
obligation on the part of the Board to nominate any Director for reelection by the Company’s
shareholders or to limit the rights of the shareholders to remove any Director.

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

          SECTION 12.05 Protective Provisions. A Participant will cooperate with the Company by
furnishing any and all information requested by the Company, in order to facilitate the payment of
benefits hereunder, and by taking such other action as may be requested by the Company.

          SECTION 12.06 Withholding. To the extent that the Company is required to withhold any taxes or
other amounts from the Participant’s deferred compensation pursuant to any state, federal or local
law, such amounts shall first be taken out of the portion of the Participant’s Director
Compensation that is not deferred under the Plan. 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 12.07 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 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 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 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. The Plan is intended to meet the
requirements of Section 409A of the Code and shall be interpreted and construed consistent with
such intent.

13EX-10.23

 

Exhibit 10.23

THE McGRAW-HILL COMPANIES, INC.

DIRECTOR DEFERRED STOCK OWNERSHIP PLAN

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

 

 

THE McGRAW-HILL COMPANIES, INC.

DIRECTOR DEFERRED STOCK OWNERSHIP PLAN

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

ARTICLE I

PURPOSE

          The purposes of the Plan are to enable the Company to attract and retain qualified persons to
serve as Directors, to enhance the equity interest of Directors in the Company, to solidify the
common interests of its Directors and stockholders, and to encourage the highest level of Director
performance by providing such Directors with a proprietary interest in the Company’s performance
and progress, by crediting them annually with shares of Common Stock. The Plan is intended to
satisfy the requirements of Section 409A of the Code.

ARTICLE II

DEFINITIONS

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

          SECTION 2.01 “Applicable Delivery Period” means a period of up to five years, as more
fully described in Section 5.01 of the Plan.

          SECTION 2.02 “Beneficiary” means the person, persons or entity designated by the
Participant to receive any shares of Common Stock deliverable in accordance with Section 7.01 of
the Plan. Any Participant’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 2.03 “Board” means the Board of Directors of the Company.

          SECTION 2.04 “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

2

 

Company; or (4) any acquisition pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 2.04; 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 2.04, 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 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 2.05 “Change in Control Consideration” means, with respect to each share of
Common Stock credited to a Deferred Stock Account, (i) the amount of any cash, plus the value of
any securities and other noncash consideration, constituting the most valuable

3

 

consideration per
share of Common Stock paid to any shareholder in the transaction or series of transactions that
results in a Change in Control or (ii) if no consideration per share of Common Stock is paid to any
shareholder in the transaction or series of transactions that results in a Change in Control, the
highest reported sales price, regular way, of a share of Common Stock in any transaction reported
on the New York Stock Exchange or other national exchange on which such shares of Common Stock are
listed or on NASDAQ during the 60-day period prior to and including the date of a Change in
Control. To the extent that such consideration consists all or in part of securities or other
noncash consideration, the value of such securities or other noncash consideration shall be
determined by the Committee in good faith.

     SECTION 2.06 “Claimant” has the meaning set forth in Section 10.01 of the Plan.

     SECTION 2.07 “Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the applicable rules and regulations promulgated thereunder.

     SECTION 2.08 “Committee” means the Nominating and Corporate Governance Committee of
the Board.

     SECTION 2.09 “Common Stock” means the common stock, $1.00 par value per share, of the
Company.

     SECTION 2.10 “Company” means The McGraw-Hill Companies, Inc., a corporation organized
under the laws of the State of New York, or any successor corporation.

     SECTION 2.11 “Deferral Election” means an election pursuant to Article V of the Plan.

     SECTION 2.12 “Deferred Stock Account” means a bookkeeping account maintained by the
Company for a Participant representing the Participant’s interest in the shares of Common Stock
credited to such account pursuant to Section 6.01 of the Plan.

     SECTION 2.13 “Delivery Date” has the meaning set forth in Section 7.01 of the Plan.

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

     SECTION 2.15 “Dividend Equivalent” for a given dividend or distribution means a number
of shares of Common Stock having a Value, as of the date such Dividend Equivalent is credited to a
Deferred Stock Account, equal to the amount of cash, plus the fair market value on the date of
distribution of any property, that is distributed with respect to one share of Common Stock
pursuant to such dividend or distribution; such fair market value to be determined by the Committee
in good faith.

     SECTION 2.16 “Effective Date” has the meaning set forth in Section 13.06 of the Plan.

4

 

     SECTION 2.17 “Election Amount” means for each Participant who has made a Deferral
Election pursuant to Article V of the Plan, with respect to each Plan Year, (i) the percentage that
is set forth in the Deferral Election, multiplied by (ii) the total cash compensation receivable
from the Company during the Plan Year by the Participant in his capacity as a Director, including
without limitation, retainers, fees for serving as committee members, fees for serving as chairman
of a committee, Board meeting fees and committee meeting fees.

     SECTION 2.18 “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, and the applicable rules and regulations promulgated thereunder.

     SECTION 2.19 “Extension Notice” has the meaning set forth in Section 10.01 of the
Plan.

     SECTION 2.20 “Fraction” with respect to a person who was a Participant during part,
but not all, of a calendar year, means the amount obtained by dividing (i) the number of calendar
months during such calendar year that such person was a Participant by (ii) 12; provided that for
purposes of the foregoing a partial calendar month shall be treated as a whole month.

     SECTION 2.21 “Installment Delivery Election” means the written election by a
Participant, on such form as may be prescribed by the Committee, to receive delivery of shares of
Common Stock in the Participant’s Deferred Stock Account in installments over the Applicable
Delivery Period.

     SECTION 2.22 “Participant” means each individual who participates in the Plan, as
provided in Section 4.01 of the Plan.

     SECTION 2.23 “Plan” means The McGraw-Hill Companies, Inc. Director Deferred Stock
Ownership Plan, as amended from time to time.

     SECTION 2.24 “Plan Administrator” has the meaning set forth in Section 3.01 of the
Plan.

     SECTION 2.25 “Plan Year” means the calendar year; provided that the last Plan
Year with respect to a Director who ceases to be a Participant during a calendar year,
shall begin on the first day of such calendar year and end on the day such Director ceases to
be a Participant.

     SECTION 2.26 “Stock Amount” means, with respect to a Plan Year, the greater of (i)
$30,000 or (ii) the average total cash compensation receivable (disregarding for this purpose
Deferral Elections made by any Participant and deferral elections made under The McGraw-Hill
Companies, Inc. Director Deferred Compensation Plan or any successor plan) during the Plan Year by
the Participants who were Participants during the entire Plan Year in any capacity as Directors,
including without, limitation retainers, fees for serving as committee members, Board meeting fees
and committee meeting fees, provided, however, that any retainers for serving as
committee chairs shall not be so included for this purpose.

     SECTION 2.27 “Value” of a share of Common Stock as of the last day of a given Plan
Year shall mean the average (rounded up to the nearest cent) of the monthly average for

5

 

each of
the full calendar months during such Plan Year of the means between the reported high and low sale
prices of a share of Common Stock on the New York Stock Exchange (or, if the Common Stock is not
listed on such exchange, on any other national securities exchange on which the Common Stock is
listed) for each trading day during each such calendar month. If the Common Stock is not traded on
any national securities exchange, the Value of the Common Stock shall be determined by the
Committee in good faith.

ARTICLE III

ADMINISTRATION

          SECTION 3.01 Administration. The Plan shall be administered by the Executive Vice
President, Human Resources of the Company (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 X of the Plan, decisions of the Plan
Administrator shall be reviewable by the Committee. Subject to Article X of the Plan, 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 X of the Plan, the
decision or action of the 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 Plan
Administrator, the Committee and the Board (and each member thereof), and any employee of the
Company 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.

ARTICLE IV

PARTICIPATION

          SECTION 4.01 Eligible Participants. Any individual who was a Participant in the Plan
immediately prior to the effective date of this amendment and restatement shall continue to be a
Participant on such date, subject to the terms and provisions of the Plan, and each other
individual who becomes a Director thereafter during the term of the Plan, shall be a Participant in
the Plan, in each case during such period as such individual remains a Director and is not an
employee of the Company or any of its subsidiaries.

6

 

ARTICLE V

DEFERRALS AND ELECTIONS

          SECTION 5.01 Initial Election. Each new Participant in the Plan may make an
irrevocable Deferral Election to defer payment of all or part of the total cash compensation for
services as a Director to be earned during the Plan Year in which the Director becomes a
Participant in the Plan and to have the Participant’s Deferred Stock Account credited with shares
of Common Stock equal in Value to such deferred compensation. In order to make a Deferral Election
pursuant to this Section 5.01, the Participant must deliver to the Company a written notice of the
Deferral Election setting forth the percentage of the Participant’s total cash compensation to be
deferred. This notice must be delivered within 30 days of the date on which the Participant becomes
a Director and shall be effective with respect to compensation earned after the date of delivery
thereof. The Participant shall be permitted to make an irrevocable Installment Delivery Election at
the time of the Deferral Election.

          SECTION 5.02 Annual Elections. A Participant may make a Deferral Election on an annual
basis to defer payment of all or part of the total cash compensation for services as a Director to
be earned during the next succeeding Plan Year and to have the Participant’s Deferred Stock Account
credited with shares of Common Stock equal in Value to such deferred compensation. In order to make
a Deferral Election pursuant to this Section 5.02, the Participant must deliver to the Company a
written notice of the Deferral Election setting forth the percentage of the Participant’s total
cash compensation to be deferred. This notice must be delivered no later than, and such Deferral
Election shall become irrevocable on, the last business day prior to the commencement of the Plan
Year to which the Deferral Election relates. Any such written notice of the Deferral Election
pursuant to this Section 5.02 shall remain in effect for subsequent Plan Years unless such
Participant delivers a written notice setting forth a different Deferral Election which shall be
applied to future Plan Years until further written notice is received by the Company pursuant to
this Section 5.02. The Participant shall be permitted to make an
Installment Delivery Election at the time of the Deferral Election. Such Installment Delivery
Election shall become irrevocable on the last business day prior to the commencement of the Plan
Year to which the Installment Delivery Election relates.

ARTICLE VI

DEFERRED ACCOUNTS

          SECTION 6.01 Accounts. The Company shall maintain a Deferred Stock Account for each
Participant. As part of the compensation payable to each Participant for service on the Board, the
Deferred Stock Account of each Participant shall be credited with shares of Common Stock as set
forth in Section 6.02 of the Plan.

          SECTION 6.02 Credit of Shares of Common Stock. (a) On the first business day following
the last day of each Plan Year, the Deferred Stock Account of each Director who was a Participant
at any time during such Plan Year shall be credited with (i) a number of shares of Common Stock
having a Value equal to the sum of (A) the Stock Amount multiplied by the applicable Fraction and
(B) the Election Amount, if any; plus (ii) a number of shares of Common Stock equal to (A) the
number of shares of Common Stock credited as of that date pursuant to clause (i) multiplied by (B)
the Dividend Equivalent for each dividend paid or other distribution

7

 

made with respect to the
Common Stock, the record date for which occurred during such Plan Year and at a time when such
Participant was a Participant.

          (b) In addition, on the first business day following the last day of each Plan Year, each
Deferred Stock Account that has not, as of such date, been delivered in full pursuant to Section
7.01 of the Plan shall be credited with a number of shares of Common Stock equal to (i) the number
of shares of Common Stock in such Deferred Stock Account as of such date (before taking into
account any amounts that are credited as of such date pursuant to Section 6.02 of the Plan)
multiplied by (ii) the Dividend Equivalent for each dividend paid or other distribution made with
respect to the Common Stock, the record date for which occurred during such Plan Year and at a time
when such Participant was a Participant.

ARTICLE VII

DISTRIBUTIONS

          SECTION 7.01 Delivery of Shares of Common Stock. The shares of Common Stock in a
Participant’s Deferred Stock Account as of the date the Participant ceases to be a Director for any
reason (the “Delivery Date”) shall be delivered or begin to be delivered in accordance with this
Section 7.01 on or as soon as practicable, but in no event more than 60 days after the Delivery
Date. Such shares of Common Stock shall be delivered at one time; provided that if the
number of shares of Common Stock so credited includes a fractional share, such number shall be
rounded up to the nearest whole number of shares; and provided, further, that if
the Director has in effect a valid Installment Delivery Election pursuant to Article V of the Plan,
then the applicable portion of such shares of Common Stock shall be delivered in equal yearly
installments over the Applicable Delivery Period, with the first such installment being delivered
on the first anniversary of the Delivery Date; provided that if in order to equalize such
installments, fractional shares of Common Stock would have to be delivered, such installments shall
be adjusted by rounding up to the nearest whole share. If any such shares of Common Stock are to be
delivered after the Director has become legally incompetent, they shall be delivered to the
Director’s legal guardian. If any such shares of Common Stock are to be
delivered after the Director has died, they shall be delivered to the Director’s Beneficiary;
provided that if the Director dies with a valid Installment Delivery Election in effect, the
Committee shall deliver all remaining undelivered shares of Common Stock to the Director’s
Beneficiary as soon as practicable. Reference to a Director in the Plan shall be deemed to refer to
the Director’s legal guardian or the Beneficiary, where appropriate.

          SECTION 7.02 Voting and Other Rights. Shares of Common Stock delivered to a
Participant pursuant to Section 7.01 of the Plan shall be issued in the name of the Participant,
and the Participant shall be entitled to all rights of a shareholder with respect to Common Stock
for all such shares of Common Stock issued in his name, including the right to vote the shares of
Common Stock, and the Participant shall receive all dividends and other distributions paid or made
with respect thereto.

          SECTION 7.03 General Restrictions. Notwithstanding any other provision of the Plan or
agreements made pursuant thereto, the Company shall not be required to issue or deliver any shares
of Common Stock under the Plan prior to fulfillment of all of the following conditions:

8

 

     (i) Listing or approval for listing upon official notice of issuance of such
shares on the New York Stock Exchange, or such other securities exchange as may at
the time be a market for the Common Stock;

     (ii) Any registration or other qualification of such shares of Common Stock
under any state or federal law or regulation, or the maintaining in effect of any
such registration or other qualification which the Committee shall, in its absolute
discretion upon the advice of counsel, deem necessary or advisable; and

     (iii) Obtaining any other consent, approval, or permit from any state or
federal governmental agency which the Committee shall, in its absolute discretion
after receiving the advice of counsel, determine to be necessary or advisable.

ARTICLE VIII

SHARES AVAILABLE

          SECTION 8.01 Shares Available. Subject to Article IX of the Plan, the maximum number
of shares of Common Stock which may be credited to Deferred Stock Accounts pursuant to the Plan is
640,000 in the aggregate. Shares of Common Stock issuable under the Plan may be taken from
authorized but unissued or treasury shares of the Company or purchased on the open market.

ARTICLE IX

EFFECT OF CORPORATE TRANSACTIONS

          SECTION 9.01 Change in Capital Structure. In the event that there is, at any time
after the Board adopts the Plan, any change in the Common Stock by reason of any stock dividend,
stock split, combination of shares, exchange of shares, warrants or rights offering to purchase
Common Stock at a price below its fair market value,
reclassification, recapitalization, merger, consolidation, spin-off or other change in
capitalization of the Company, appropriate adjustment shall be made in the number and kind of
shares or other property subject to the Plan and the number and kind of shares or other property
held in the Deferred Stock Accounts, and any other relevant provisions of the Plan by the
Committee, whose determination shall be binding and conclusive on all persons.

          SECTION 9.02 Change in Control. Without limiting the generality of the foregoing, and
notwithstanding any other provision of the Plan, in the event of a Change in Control that is a
“change in control event” within the meaning of Section 409A(a)(2)(A)(v) of the Code, the following
shall occur on the date of the Change in Control (the “Change in Control Date”): (i) the last day
of the then-current Plan Year shall be deemed to occur on the Change in Control Date and such Plan
Year shall be the last Plan Year under the Plan; (ii) the Deferred Stock Accounts shall be credited
with shares of Common Stock pursuant to Section 6.02 of the Plan, as if, for this purpose, the
Participants ceased to be Participants on the Change in Control Date; (iii) the Company shall
immediately pay to each Participant in a lump sum the Change in Control Consideration multiplied by
the number of shares of Common Stock held in the Participant’s Deferred Stock Account immediately
before such Change in Control; and (iv) the Plan shall be terminated with respect to each
Participant’s Deferred Stock Account.

9

 

          SECTION 9.03 Share Conversion. If the shares of Common Stock credited to the Deferred
Stock Accounts are converted pursuant to this Section 9.03 into another kind or form of property
(including cash), references in the Plan to the Common Stock shall be deemed, where appropriate, to
refer to such other kind or form of property, with such other modifications as may be required for
the Plan to operate in accordance with its purposes. Without limiting the generality of the
foregoing, references to delivery of certificates for shares of Common Stock shall be deemed to
refer to delivery of cash and the incidents of ownership of any other property held in the Deferred
Stock Accounts.

ARTICLE X

CLAIMS PROCEDURE

          SECTION 10.01 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.

          SECTION 10.02 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 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 Plan Administrator. In connection with that review, the Claimant may
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. The Claimant shall be notified no later than five days after a decision is made
with respect to the appeal.

          SECTION 10.03 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 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 10.02 of the Plan or

10

 

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.

ARTICLE XI

BENEFICIARY DESIGNATION

          SECTION 11.01 Beneficiary Designation. Each Participant 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 shares of Common Stock shall be delivered in
accordance with Section 7.01 of the Plan from the Participant’s Deferred Stock Account in the event
of such Participant’s death prior to complete distribution to the Participant of the shares of
Common Stock due him under the Plan.

          SECTION 11.02 Amendments. Any Beneficiary designation may be changed by a Participant
by the written filing of such change on a form prescribed by the Company. The new Beneficiary
designation form shall cancel all Beneficiary designations previously filed.

          SECTION 11.03 No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided above, or if all designated Beneficiaries predecease the Participant, then
any amounts to be paid to the Participant’s Beneficiary shall be paid to the Participant’s estate.

          SECTION 11.04 Effect of Payment. The delivery of shares of Common Stock under this
Article XI due to a Participant to a Beneficiary under the Plan shall completely discharge the
Company’s obligations in respect of the Participant under the Plan.

ARTICLE XII

AMENDMENT AND TERMINATION OF PLAN

          SECTION 12.01 Amendment. The Board or the Committee may from time to time make such
amendments to the Plan as it may deem proper and in the best interest of the Company without
further approval of the Company’s stockholders, except to the extent required by the Rules of the
New York Stock Exchange (or rules of any other exchange or quotation system on which the Company’s
securities are then listed).

          SECTION 12.02 Company’s Right to Terminate. The Board or the Committee may terminate
the Plan at any time and, in connection with any such termination, may deliver to each Participant
the shares of Common Stock credited to his Deferred Stock Account, subject to and in accordance
with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix) (or any successor provision
thereto). Notwithstanding any other provision of the Plan to the contrary, neither the Board nor
the Committee shall be authorized to exercise any discretion with respect to the selection of
persons to receive credits of shares of Common Stock under the Plan or concerning the amount or
timing of such credits under the Plan, and, subject to Section 12.03 of the Plan, no amendment or
termination of the Plan shall adversely affect the interest of any

11

 

Participant in shares previously
credited to such Participant’s Deferred Stock Account without that Participant’s express written
consent.

          SECTION 12.03 Section 409A. 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 benefits are subject to tax under Section
409A of the Code. Any determinations made by the Committee under this Section 12.03 shall be final,
conclusive and binding on all persons.

ARTICLE XIII

MISCELLANEOUS

          SECTION 13.01 Unsecured General Creditor. Participants 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 Participants 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
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 13.02 Nonassignability. Each Participant’s rights under the Plan shall be
nontransferable except by will or by the laws of descent and distribution. 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 13.03 Rights and Obligations. Nothing in the Plan shall be deemed to create
any obligation on the part of the Board to nominate any Director for reelection by the Company’s
shareholders or to limit the rights of the shareholders to remove any Director.

          SECTION 13.04 Binding Effect. The Plan shall be binding upon and shall inure to the
benefit of the Participant or his Beneficiary, his heirs and legal representatives, and the
Company.

          SECTION 13.05 Withholding. The Company shall have the right to require, prior to the
issuance or delivery of any shares of Common Stock pursuant to the Plan, that a

12

 

Participant make
arrangements satisfactory to the Committee for the withholding of any taxes required by law to be
withheld with respect to the issuance or delivery of such shares of Common Stock, including without
limitation, by the withholding of shares of Common Stock that would otherwise be so issued or
delivered, by withholding from any other payment due to the Participant, or by a cash payment to
the Company by the Participant.

          SECTION 13.06 Effective Date and Term. The Plan was initially effective as of July 1,
1996. This amendment and restatement is effective as of January 1, 2008. The Plan shall remain in
effect until the earlier of (i) its termination by action of the Board, (ii) its termination as set
forth in Section 12.02 of the Plan, or (iii) no shares of Common Stock remain available under the
Plan.

          SECTION 13.07  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 13.08 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 13.09 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.

          SECTION 13.10 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. The Plan is intended to meet
the requirements of Section 409A of the Code and shall be interpreted and construed consistent with
such intent.

13

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