Document:

MHFI-EX10.1-2014.3.31-Q1

Exhibit (10.1)

KEY EXECUTIVE SHORT-TERM INCENTIVE COMPENSATION PLAN
(As amended effective January 1, 2014)

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McGRAW HILL FINANCIAL, INC.
KEY EXECUTIVE SHORT-TERM INCENTIVE COMPENSATION PLAN

McGraw Hill Financial, Inc. (“MHFI”), a corporation existing under the laws of the State of New York, has established and adopted the Key Executive Short-Term Incentive Compensation Plan (the “Plan”) to provide annual incentive awards to key employees of the Company, including, in the case of executive officers and certain other key executives of the Company, awards which are intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code.  The Plan is amended and restated effective as of January 1, 2014.
1.    PURPOSES OF THE PLAN
The purposes of the Plan are to provide the opportunity for incentives and financial rewards to key employees of the Company designated by the Committee, who, because of the extent of their responsibilities, can make significant contributions to the Company’s performance by their ability, industry, loyalty, leadership and individual achievement.  Providing recognition and financial rewards to such individuals based on the performance of the Company and their contributions will advance the interests of MHFI and its shareholders and will assist the Company in attracting and retaining management of the highest caliber and ability.
2.    DEFINITIONS
2.1“Award” means, subject to Section 5, the right granted to a Participant for a Year to be eligible to receive an Award Payment from the Pool in which the Participant is participating for such Year based on the attainment of the Performance Objectives for the Pool, the attainment of the Participant’s Individual Performance Criteria and such other subjective or objective factors as the Committee may determine.
2.1    “Award Payment” means the amount paid to a Participant for a given year in respect of an Award.  A Participant’s Award Payment shall equal the sum of the Participant’s Individual Formula Amount and Individual Performance Amount.
2.2    “Beneficiary” shall mean a Participant’s beneficiary designated on a beneficiary designation form approved by and provided to the Company or, if no such designation is made, the Participant’s estate.
2.3    “Board” means the Board of Directors of MHFI.
2.4    “Cause” means the Participant’s misconduct in respect of his or her obligations to the Company or other acts of misconduct by the Participant occurring during the course of his or her employment, which in either case results in or could reasonably be expected to result in material damage to the property, business or reputation of the Company; provided that in no event shall unsatisfactory job performance alone be deemed to be Cause; and provided further 

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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.
2.5    “Change in Control” has the meaning set forth in Section 4.7(c) below.
2.6    “Change-in-Control Award Payment” means the pro rata portion, based on the portion of the Year elapsed at the Change-in-Control Effective Date, of the average of, for each of the preceding three Years, the Participant’s Award Payment or, for any such Year in which the Participant did not participate in the Plan, the actual amount paid to the Participant under any other short-term incentive plan of the Company.  For purposes of determining a Participant’s Change-in-Control Award Payment, if the Participant did not participate in a short-term incentive plan of the Company during one or more of the preceding three Years, such average shall be deemed to be equal to the Participant’s Award Payment (or other short-term incentive award payment) or the average of the Participant’s Award Payments (or other payments), as applicable, for such Year or Years in which the Participant participated in the Plan (or other short-term incentive award plan).  If any such Award Payment (or other short-term incentive award payment) was reduced because the Participant commenced employment with the Company after the start of the applicable Year, then the amount of such Award Payment (or other payment) shall be annualized for purposes of determining such average.  If the Participant did not participate in a short-term incentive plan of the Company during the preceding three Years, then the Participant’s Change-in-Control Award Payment shall be equal to (x) the Participant’s annual base salary, multiplied by (y) the average of the Change-in-Control Award Payments to be paid to the other Participants at the same grade level and in a similar business unit as the Participant (or, in the case of a Covered Participant, the other Covered Participants) as a result of the Change in Control, divided by (z) the average of such other Participants’ (or Covered Participants’) annual base salaries.
2.7    “Change-in-Control Effective Date” has the meaning set forth in Section 4.7(a) below.
2.8    “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, and the applicable rules and regulations thereunder.
2.9    “Covered Award” means an Award to a Covered Participant which is intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code.
2.10    “Covered Participant” has the meaning set forth in Section 5.1 below.
2.11    “Committee” means the Compensation and Leadership Development Committee of the Board.  If at any time no Committee shall be in office, then, subject to satisfying the requirements of Section 162(m)(4)(C) of the Code and the listing requirements of the New York Stock Exchange, the functions of the Committee specified in the Plan shall be exercised by the Board or by a committee of Board members.  As used in the Plan, where applicable, the term “Committee” also shall mean one or more officers or employees, or committees thereof, to which 

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the Committee has delegated the authority to take actions on its behalf pursuant to Section 3.2(c) below.
2.12    “Company” means MHFI and all domestic and foreign corporations, partnerships and other legal entities of which at least 20% of the voting securities or ownership interests of such entities are owned directly or indirectly by MHFI.
2.13    “Corporate Transaction” has the meaning set forth in Section 4.7(c)(iii) below.
2.14    “Disability” means eligibility for disability benefits under the terms of the Company’s Long-Term Disability Plan in effect for the Participant at the time the Participant becomes disabled.
2.15    “Early Retirement” means, with the approval of the Committee, termination of a Participant’s employment with the Company on or after attaining age 55, but before attaining age 65, after having completed at least 10 years of service with the Company determined using principles applied by the Company on a consistent basis.
2.16    “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto, and the applicable rules and regulations thereunder.
2.17    “Individual Bonus Target” means the target bonus established for each Participant at or near the start of the applicable Year.
2.18     “Individual Formula Amount” means the portion of a Participant’s Award Payment for a Year that is determined in accordance with Section 4.3 based on the attainment of the Performance Objectives for the Pool applicable to the Participant’s Award.
2.19    “Individual Performance Amount” means the portion, if any, of a Participant’s Award Payment for a Year that is determined in accordance with Section 4.3 based on the attainment of the applicable Individual Performance Criteria.
2.20     “Individual Performance Criteria” means financial or non-financial performance criteria (which may include the Performance Objectives for the Pool applicable to the Participant’s Award) to be achieved during a Year and upon which the amount of the Participant’s Individual Performance Amount shall be based.  Individual Performance Criteria may include objective and subjective determinations of individual performance for a Year (which may include the results of a Participant’s individual performance evaluation by the Company for the Year).
2.21    “Net Income” means the Company’s after-tax income as reported on a consolidated basis in the Company’s audited financial statements for the applicable Year.  Net Income shall be adjusted to eliminate the effects of charges for restructurings, charges for discontinued operations, charges for extraordinary items and other unusual or non-recurring items of loss or expense, the unbudgeted current Year impact and cumulative effect of accounting changes, the unbudgeted loss or expense impact of any acquisition or divestiture made during the Year, and any direct or indirect change in the Federal corporate tax law or rate affecting the Year, each as defined by generally accepted accounting principles and identified in the audited 

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financial statements, notes to the audited financial statements, management’s discussion and analysis or other Company filings with the Securities and Exchange Commission.
2.22    “Normal Retirement” means termination of a Participant’s employment with the Company on or after age 65.
2.23    “Outstanding Common Stock” has the meaning set forth in Section 4.7(c)(i) below.
2.24    “Outstanding Voting Securities” has the meaning set forth in Section 4.7(c)(i) below.
2.25    “Participant” has the meaning set forth in Section 3.1 below.
2.26    “Performance Objectives” means financial or non-financial performance objectives to be achieved during a Year and which are used to determine the funding level for a Pool.
2.27    “Person” has the meaning set forth in Section 4.7(c)(i) below.
2.28    “Pool” means the amount allocated for payment of Awards in any Year, based on achievement of the applicable Performance Objectives during such Year.  The Committee may establish, for any year:  (i) one Pool for the Company; (ii) separate Pools for each segment or for some or all of the business units within a segment of the Company; or (iii) one or more Pools based on such organizational and other factors as the Committee shall deem relevant.
2.29    “Recovery Policy” means the Senior Executive Pay Recovery Policy of McGraw Hill Financial, Inc. (and any successor policy), as amended from time to time.
2.30    “Retirement” means Early Retirement or Normal Retirement.
2.31    “Termination Award Payment” means a pro rata Award Payment for the portion of the Year during which the Participant was employed by the Company and participating in the Plan, of which (i) the Individual Formula Amount will be based on actual achievement for the Year of the Performance Objectives for the Pool applicable to the Participant’s Award and (ii) the Individual Performance Amount will be based on assumed target performance under the Individual Performance Criteria applicable to the Award.
The foregoing notwithstanding, in the event the achievement for the Year of the Performance Objectives for the Pool applicable to the Participant’s Award exceeds 100%, such achievement shall for purposes of said payment to such Participant be deemed to be 100%.

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

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2.32    “Year” means the calendar year, or the fiscal year of MHFI, if other than a calendar year.
		
	3.
	ELIGIBILITY AND ADMINISTRATION

13.Eligibility.  The individuals entitled to participate in the Plan shall be those key employees of the Company (excluding employees participating for the Year in any other short-term incentive plan of the Company) who are selected by the Committee to receive an Award for the Year (each, a “Participant”).
23.Administration.  (a)  The Plan shall be administered by the Committee.  Subject to the provisions of the Plan and to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board:  (i) the Committee may from time to time establish rules for the administration of the Plan; (ii) the Committee shall have discretionary authority to determine the degree of attainment of Performance Objectives and satisfaction of Individual Performance Criteria, the actual amount of each Pool and the amount of the Award Payment for each Participant in respect of a Year, including, without limitation, the authority to make factual determinations, to construe and interpret the Plan and any instrument or agreement entered into in connection with the Plan, to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that the Committee shall deem desirable to carry it into effect, and to decide all matters arising thereunder or in connection with the administration of the Plan; and (iii) the decisions of the Committee, to the extent permitted by law, shall be final, conclusive and binding on all persons, including the Company and any Participant, having or claiming to have any right or interest in or under the Plan or any Award.
(b)    In addition, subject to the provisions of the Plan and to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, the Committee shall have full power and authority to do the following:  (i) select the Participants for each Year; (ii) determine the terms and conditions, not inconsistent with the provisions of the Plan, of each Award; (iii) determine the time when Awards will be made; (iv) determine the Individual Bonus Targets to be granted to Participants in respect of a Year; (v) establish and determine the target amount of each Pool and the applicable Performance Objectives for such Pool; (vi) establish Individual Performance Criteria, as applicable, for each Award; (vii) certify the Award Payment in respect of Covered Awards; (viii) determine the form of Award Payments and whether any portion of an Award Payment shall be mandatorily or may be voluntarily deferred by Participants; (ix) appoint such agents as the Committee shall deem appropriate for the proper administration of the Plan; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.  The Committee in its sole discretion has the authority to effect adjustments from time to time in connection with determining the degree of achievement of financial objectives (except in the case of the determination of Net Income under Covered Awards), and to make any other determinations, as it deems equitable, fair or advisable for the purpose of ascertaining the amount of Award Payments.

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(c)    To the extent not inconsistent with applicable law, Section 162(m)(4)(c) of the Code and the listing requirements of the New York Stock Exchange, the Committee may delegate to one or more officers or employees of the Company, or one or more committees thereof, the authority to take actions on its behalf pursuant to the Plan; provided, however, that the Committee may not delegate its authority with respect to Section 4.7, Section 5, Section 6.1 or Section 6.2 below, or in respect of a Covered Award, and that a person to whom such authority is delegated may not further delegate such authority unless specifically authorized by the Committee.
(d)    To the extent permitted by law, the Committee and each member of the Committee and any officer or employee or committee thereof to whom responsibilities have been delegated under the Plan shall be indemnified by the Company against any claims, and the expenses of defending against such claims, resulting from any action or conduct relating to the administration of the Plan, except claims arising from gross negligence, willful neglect or willful misconduct.
4.    AWARDS
14.Pool.  At or near the start of the applicable Year, the Committee shall: (i) determine the number of Pools for the Year; (ii) specify the relevant Performance Objectives for each Pool; (iii) identify the Participants eligible to receive a share of each Pool, the Individual Bonus Target for each such Participant and specify the Individual Performance Criteria under their Awards; and (iv) determine the target amount of each Pool.  During the applicable Year, the Committee shall have discretion to adjust the target or actual amount of each Pool to reflect changes in the employment status of Participants during the Year and to adjust the actual amount of one or more Pools to take account of Award Payments in respect of Covered Awards allocated to such Pool.
24.Notice.  Each Participant shall be notified at or near the beginning of the applicable Year of the amount of his or her Individual Bonus Target.  The Committee shall determine for each Year the time and manner of notice to Participants of Awards.
34.Determination of Pools and Payment.  As soon as reasonably practicable following the conclusion of each Year, the Committee shall determine the actual amount of each Pool, based on the attainment of the applicable Performance Objectives for such Pool for such Year.  Seventy percent of each Pool shall be allocated to the Participants therein in proportion to each Participant’s Individual Bonus Target, and the amount so allocated to a Participant shall constitute the Participant’s Individual Formula Amount for the Year; provided, however, that no portion of such 70% of the Pool shall be allocated to any Participant whose performance rating for the year is “Underperforming, requires improvement” (or equivalent designation), with the result that any such Participant’s Individual Formula Amount shall be zero. The remaining 30% of each Pool shall be allocated to Participants therein based on the their attainment of the applicable Individual Performance Criteria for the Year; provided, however, that no portion of such 30% of the Pool shall be allocated to any Participant whose performance rating for the year is “Underperforming, requires improvement” (or equivalent designation), with the result that any such Participant’s Individual Performance Amount shall be zero.  Each Award Payment shall, 

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subject to any deferral required or permitted by the Committee, be paid to the Participant in cash, stock awards under a shareholder-approved stock plan of the Company, or any combination thereof at such time as is determined by the Committee in its sole discretion following the end of the applicable Year, but no more than 90 days following the date of the report of MHFI’s independent auditors certifying MHFI’s financial statements for the Year.
44.Performance Measures.  Performance Objectives may consist of financial objectives, non-financial objectives or a combination of financial and non-financial objectives.  If more than one Pool is established for a Year, such Pools may have the same or different Performance Objectives.  Individual Performance Criteria may consist of financial objectives, non-financial objectives or a combination of financial and non-financial objectives and may include objective and subjective measures of individual performance, including the results of a Participant’s individual performance evaluation by the Company.  Except in the case of the determination of Net Income under Covered Awards, the Committee in its sole discretion shall have the authority to alter or adjust financial objectives during the course of any Year, or to alter or adjust the financial results otherwise reported or achieved by MHFI during such Year, if it is deemed appropriate to do so.
54.Termination of Employment.  
(a)      If a Participant’s employment with the Company terminates during any Year because of a termination by the Company other than for Cause and the Participant is not Retirement Eligible (as defined in Section 4.5(b) below) on the effective date of the termination of employment, then the Participant, subject to the Participant executing a general release of claims against the Company in a form reasonably satisfactory to the Company, shall receive a Termination Award Payment for the portion of the Year during which the Participant was employed by the Company and participating in the Plan.  Unless the Committee specifies an earlier payment date, such Termination Award Payment shall be made at the time that Award Payments for the applicable Year are made to other Participants. 
(b)    If a Participant’s employment with the Company terminates during any Year because of (i) death, Disability or Retirement or (ii) a termination by the Company other than for Cause and the Participant is Retirement Eligible on the date of the termination of employment, then the Participant (or in the event of death, the Participant’s Beneficiary), subject to the Participant executing (or in the event of death, the Participant’s Beneficiary) a general release of claims against the Company in a form reasonably satisfactory to the Company, shall be eligible to receive a Pro Rata Actual Award Payment (as defined below) for the portion of the Year during which the Participant was employed by the Company and participating in the Plan.  Unless the Committee specifies an earlier payment date, such Pro Rata Actual Award Payment shall be made at the time that Award Payments for the applicable Year are made to other Participants.  For purposes of this Section 4.5(b), “Retirement Eligible” means eligible as of the date of the Participant’s termination of employment (as shown on the books and records of the Company) for Normal Retirement or, with the approval of the Committee, Early Retirement.  Solely for purposes of this Section 4.5(b), “Pro Rata Actual Award Payment” means an amount determined by multiplying X by Y:  where “X” equals the actual Award Payment for an Award that a Participant would have 

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received if the Participant had remained continuously employed by the Company through the Award payment date, determined on the basis of the achievement of performance measures for the Year and as adjusted in the Committee’s discretion for any applicable subjective or objective performance measures applicable to the Award or the Participant; and “Y” equals a fraction, the numerator is the number of whole calendar months in the portion of the Year during which the Participant was employed by the Company and participating in the Plan  and the denominator is 12.  For purposes of the numerator of clause Y of the previous sentence, a Participant shall receive full credit for a calendar month if the Participant is participating in the Plan and continuously employed by the Company through at least the 15th day of that month and shall receive no credit for a month if the Participant’s Retirement, death or Disability occurs prior to 15th day of the month. Notwithstanding the above, if the Award is a Covered Award, in no event shall the amount of the Award Payment payable under this Section 4.5(b) exceed the percentage of Net Income set forth in Section 5.2 for the Covered Award.
     (c)    A Participant whose employment with the Company terminates during a Year or prior to the payment date for Cause, or who voluntarily resigns during a Year or prior to the payment date, shall not be eligible for any payment under the Plan for such Year.  Neither the Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ of the Company.  A leave of absence, approved by the Committee, shall not be deemed to be a termination of employment for purposes of the Plan, and may warrant a full Award Payment or Termination Award Payment as determined by the Committee.
64.Transfer.  If a Participant is transferred within the Company during any Year to a position that is not considered as eligible for participation in the Plan, the Committee may, in its sole and absolute discretion, authorize a Termination Award Payment to the Participant, based on the portion of the Year during which the Participant was participating in the Plan, and the degree to which during the Year the applicable Performance Objectives and Individual Performance Criteria were achieved during the Year.
74.Change in Control.  In the event of a Change in Control, then:
(a)    Immediately after such event becomes effective (the “Change-in-Control Effective Date”), the Company shall pay to each Participant for the Year in which the Change in Control occurs a Change-in-Control Award Payment for the portion of the Year elapsed to the Change-in-Control Effective Date, and shall have no further obligation under the Participant’s Award with respect to the Year.  If the Committee so determines, the Company may also pay to each Participant an additional amount, if any, to reflect the achievement during the portion of the Year elapsed to the Change-in-Control Effective Date of the Performance Objectives for the Pool applicable to the Participant’s Award and of the Individual Performance Criteria under the Award.
(b)    The reasonable legal fees incurred by any Participant to enforce his/her valid rights under this Section 4.7 shall be reimbursed by MHFI, in addition to sums otherwise due under the Plan, whether or not the Participant is successful in enforcing his/her rights or whether 

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or not the matter is settled.  Such reimbursement shall be made on a “pay-as-you-go” basis, as soon as practicable after presentation to MHFI of any periodic statements for such fees.
(c)    “Change in Control” means any of the following events:
(i)    An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding shares of common stock of MHFI (the “Outstanding Common Stock”) or (2) the combined voting power of the then outstanding voting securities of MHFI entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following:  (A) any acquisition directly from MHFI, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from MHFI; (B) any acquisition by MHFI; (C)  any acquisition by any employee benefit plan (or related trust) sponsored or maintained by MHFI or any entity controlled by MHFI; or (D) any acquisition pursuant to a transaction which complies with clauses (1), (2) and (3) of subsection (iii) of this definition; or
(ii)    A change in the composition of the Board such that the individuals who, as of the effective date of the Plan, constitute the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition, that any individual who becomes a member of the Board subsequent to the effective date of the Plan, whose election, or nomination for election by MHFI’s shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided further that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or
(iii)    Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of MHFI(a “Corporate Transaction”); excluding, however, a Corporate Transaction pursuant to which (1) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns MHFI or all or substantially all of MHFI’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, (2) no Person (other than the MHFI, any employee benefit plan (or related trust) of MHFI or such corporation resulting from such 

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Corporate Transaction) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership existed prior to the Corporate Transaction, and (3) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or
(iv)    The approval by the shareholders of MHFI of a complete liquidation or dissolution of MHFI.
5.    COVERED AWARDS
15.Covered Participants.  No later than 90 days after the commencement of each Year, the Committee shall, in writing:  (i) designate the Participants to receive a Covered Award for the Year (“Covered Participants”); and (ii) notify each Covered Participant of his or her Covered Award for the Year.  The Committee shall designate as Covered Participants the Participants who are executive officers of the Company and the other Participants who are expected to be a “covered employee” within the meaning of Section 162(m)(3) of the Code in the Year in which MHFI would become entitled to take a compensation deduction as a result of the Award Payment (determined without regard to the limitation on deductibility imposed by Section 162(m) of the Code).
25.Covered Award.  For each Year, a Covered Award shall consist of 0.7% of Net Income for the Year in the case of the Chief Executive Officer of MHFI and 0.5% of Net Income for the Year in the case of each other Covered Participant.
35.Award Payment.  The Award Payment in respect of each Covered Award shall be an amount equal to or less than such percentage of Net Income, as determined by the Committee in its sole discretion.  In the exercise of such discretion, the Committee may take into account the Award Payment that the Covered Participant would have received had the Covered Participant participated in a specified Pool for the Year, and may reduce the actual amount of such Pool by reference to the Award Payment made to the Covered Participant for the Year.  Notwithstanding anything to the contrary in the Plan, however, the Committee shall not have any discretion or authority to increase the Award Payment payable under a Covered Award.
45.Certification.  As soon as reasonably practicable following the conclusion of each Year, the Committee shall certify, in writing, the achievement of Net Income and the amount of the Award Payment in respect of each Covered Award for the Year.
6.    MISCELLANEOUS
6.1    Amendment and Termination of the Plan.  The Committee or the Board may, from time to time, alter, amend, suspend or terminate the Plan as it shall deem advisable subject to any requirement for shareholder approval imposed by applicable law, including Section 162(m) of the Code, and to the listing requirements of the New York Stock Exchange; provided, however, that Section 4.7 above, as it applies to any Change in Control, may not be amended following 

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that Change in Control, nor may it be amended in anticipation of a Change in Control, in either case, in a manner adverse to any Participant without the Participant’s express written consent.
6.2    Section 162(m) of the Code.  Unless otherwise determined by the Committee, or expressly provided herein, the provisions of this Plan shall be administered and interpreted in accordance with Section 162(m) of the Code to ensure the maximum deductibility by the Company of the payment of Covered Awards.
6.3    Tax Withholding.  The Company shall have the right to make all payments or distributions pursuant to the Plan to a Participant, net of any applicable Federal, State and local taxes required to be paid or withheld.  The Company shall have the right to withhold from wages, Award Payments or other amounts otherwise payable to such Participant such withholding taxes as may be required by law, or to otherwise require the Participant to pay such withholding taxes.  If the Participant shall fail to make such tax payments as are required or to satisfy any other payment obligation to the Company, the Company shall, to the extent permitted by law, have the right to deduct any such amounts from any payment of any kind otherwise due to such Participant or to take such other action as may be necessary to satisfy such withholding or other obligations.
6.4    Right of Discharge Reserved; Claims to Awards.  Nothing in the Plan nor the grant of an Award hereunder shall confer upon any Participant the right to continue in the employment of the Company or affect any right that the Company may have to terminate the employment of (or to demote or to exclude from future Awards under the Plan) any such Participant at any time for any reason.  No Participant shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants under the Plan.
6.5    Nature of Payments.  All Awards made pursuant to the Plan are in consideration of services performed or to be performed for the Company, division or business unit of the Company.  Any income or gain realized pursuant to Awards under the Plan constitute a special incentive payment to the Participant and shall not be taken into account, to the extent permissible under applicable law, as compensation for purposes of any of the employee benefit plans of the Company except as specifically provided under the applicable plan or as may otherwise be determined by the Committee or by the Board.
6.6    Recovery Policy.  Awards under the Plan shall be subject to the requirements of the Recovery Policy, and all amounts paid or payable to a Participant under or in respect of the Plan shall be subject to recovery or other action pursuant to the Recovery Policy, as and to the extent provided thereby.
6.7    Other Plans.  Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.
6.8    Unfunded Status of the Plan.  The Plan is intended to constitute an “unfunded” plan for incentive compensation, and deferred compensation if permitted by the Committee.  

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With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general unsecured creditor of the Company.
6.9    Governing Law.  The Plan and all determinations made and actions taken thereunder, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of New York.
6.10    Effective Date of Plan.  The Plan was originally effective as of January 1, 2005 subject to the approval of the Plan by MHFI’s shareholders at the 2005 annual meeting, which approval was obtained.  The amendments to the Plan incorporated in the restated Plan document set forth above are effective as of January 1, 2014.

NYDOCS01/1351092.6MHFI-EX10.2-2014.3.31-Q1

Exhibit (10.2)
TERMS AND CONDITIONS OF 2014 
PERFORMANCE SHARE UNIT AWARD
Performance Share Unit Award made as of the first day of April 2014 (the “Award Date”), by McGraw Hill Financial, Inc., a New York corporation (“McGraw Hill”).
WHEREAS, the Board of Directors of McGraw Hill (the “Board”) has designated the Compensation and Leadership Development Committee of the Board (the “Committee”) to administer the 2002 Stock Incentive Plan, as amended and restated (the “Plan”), with respect to certain executives of the Company;
WHEREAS, capitalized terms not otherwise defined herein shall have the meanings set forth for such terms in the Plan;
WHEREAS, the Committee has determined that the Employee should be granted a Performance Share Unit Award under the Plan for the number of Performance Share Units (“Units”) as specified in the Employee’s Performance Share Unit Award Document (the “Award Document”); and
WHEREAS, the Employee is accepting the Performance Share Unit Award subject to the terms and conditions set forth below:
1.    Grant of Awards.  The grant of this Performance Share Unit Award (“Award”) is subject to the terms and conditions hereinafter set forth with respect to the Units covered by this Award.  Payment, if any, under the Award will be made in the number of shares of Stock 

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corresponding to the number of Units earned hereunder, with each Unit corresponding to one share of Stock.  For purposes of this Award, “Award Period” means the three consecutive calendar years beginning with the calendar year that includes the Award Date.
Upon grant of the Award, no stock or other certificate representing the Units or the shares of Stock represented thereby will be issued to or registered in the name of the Employee.  The ultimate receipt of the shares of Stock by the Employee is contingent upon achievement of the EPS goal established by the Committee hereunder and the additional requirements set forth herein.
The Employee does not have an absolute right to receive a fixed or determinable amount either at the inception or expiration of the Award Period.
2.    Performance Goals.
(a)    EPS and EPS Goals.  The achievement of this Award shall be measured against a schedule of a three-year Earnings per Share (“EPS”) growth goal established prior to the grant of the Award by the Committee for the Award Period.  Subject to any adjustments to the schedule made by the Committee after the Award Date pursuant to Section 2(b), this schedule shall govern the determination of the Units earned and payable hereunder subject to and in accordance with the other terms of this Award.  If EPS growth equals 100% of the target EPS growth goal, the Employee shall earn 100% of the Units.  For EPS growth between the zero payout level as established by the Committee and the targeted growth goal, the Employee shall earn a pro rata portion of the Units.  For EPS growth that equals or exceeds the 200% payout level, as established by the Committee, the Employee shall earn 200% of the Units payable at the 100% payout level.  For growth between the targeted growth goal and the 200% payout level, as established by the Committee, the Employee shall earn 100% of the Units plus a pro rata portion 

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of the additional Units between the 100% and 200% payout levels. For growth at or below the zero payout level, all Units shall be forfeited by the Employee.   If the Employee is a Designated Employee, the maximum payment in respect of the Award shall not exceed the Section 162(m) Performance Limit.
(b)    Committee Discretion to Adjust.  For purposes of this Award, “EPS” means diluted earnings per share as shown on the Consolidated Statement of Income in the Company's Annual Report, adjusted in the manner that the Committee determines to be appropriate to exclude some or all of one or more items of income or expense.  The EPS goals referred to in Section 2(a) are the targets for EPS expressed as a dollar amount approved by the Committee for the Award Period.  The Committee may adjust these EPS targets after the Award Date in the manner that the Committee determines to be appropriate to take into account facts and circumstances occurring after the Award Date.  The decision by the Committee to adjust or not to adjust EPS or the EPS targets shall be final and binding on the Employee and all other interested persons and, subject to Section 3, may have the effect of increasing or decreasing the amount payable to the Employee pursuant to this Award.
3.    Section 162(m) Compliance.
(a)    Designated Employees.  It is the intention of the Company that the Award granted to a Designated Employee shall satisfy the requirements for "qualified performance based compensation" within the meaning of Treas. Reg. Section 1.162-27(e)(4), and, therefore, for Designated Employees, the achievement of this Award shall also be measured against the achievement of the Section 162(m) Performance Target.  Employees who are Designated Employees shall be designated as such in their Award Document.  If the Employee is a Designated Employee, then no amount shall be payable pursuant to this Award unless the Section 

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162(m) Performance Target is achieved, and the Committee certifies the achievement of such target in a manner that complies with Section 162(m) of the Code following the completion of the Award Period.  If the Section 162(m) Performance Target is achieved, the number of Shares available for payment under this Award shall not exceed the Section 162(m) Performance Limit, reduced, if applicable, in the manner contemplated by Section 2 to take into account the achievement of the EPS targets for the Award Period.
(b)    Deferral for Section 162(m) Compliance.  The Company reserves the right, in the event that a payment in respect of the Award to a Covered Employee (including a Designated Employee) is ineligible for treatment as "qualified performance based compensation" and if, but only if, such ineligibility would result in the loss of tax deductions to the Company, to defer, in whole or in part, the payment of the Award to the Covered Employee under the terms of this Section 3(b), but only with respect to Awards that become payable before a Change of Control.   Under the circumstances described in this Section 3(b), (i) the Employee will, but only to the extent necessary to avoid a deduction disallowance to the Company, forfeit all rights to this Award and (ii) the Company shall credit to an account for the Employee maintained on the books and records of the Company an amount equal to the value of such forfeited Award.  The payment in respect of the Award will be valued as of the date payments of other awards with the same Maturity Date are valued for other Employees.  Said amount credited to the Employee's Deferred Account, together with interest calculated at the same rates used to calculate interest on deferred balances in the Company’s Key Executive Short-Term Deferred Compensation Plan, shall be paid in a lump sum on the earliest date at which the Company reasonably anticipates that the deduction of the payment of the amount will not be limited or eliminated by application of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

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(c)    Definitions.  For purposes of this Award, the following definitions shall apply:
“Covered Employee” means an Employee who is a "covered employee" within the meaning of Section 162(m)(3) of the Code on the Payment Date.
“Designated Employee” means an Employee whom the Committee designates as such within the first 90 days of the Award Period.
“Section 162(m) Performance Limit” means the lesser of (i) 200% of the target payout level of the Award and (ii) the applicable share limit in Section 10(c)(ii) of the Plan in effect on the Award Date (as such limit may be subsequently adjusted in accordance Section 3(d) of the Plan after the Award Date).
“Section 162(m) Performance Target” means the target for the Company’s Net Income for the initial year of Award Period established by the Committee for the award in a manner that complies with Section 162(m) of the Code during the first 90 days of the Award Period.
“Net Income” means McGraw Hill’s after-tax income as reported on a consolidated basis in McGraw Hill’s audited financial statements for the applicable year in the Award Period.  Net Income shall be adjusted to eliminate the effects of charges for restructurings, charges for discontinued operations, charges for extraordinary items and other unusual or non-recurring items of loss or expense, the unbudgeted current year impact and cumulative effect of accounting changes, the unbudgeted loss or expense impact of any acquisition or divestiture made during the year, and any direct or indirect change in the Federal corporate tax law or rate affecting the year, each as defined by generally accepted accounting principles and identified in the audited financial statements, notes to the audited financial statements, management’s discussion and analysis or other McGraw Hill filings with the Securities and Exchange Commission.  The 

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calculation of Net Income for purposes of Section 3 shall be consistent in all respects with the calculation of “net income” for the applicable year under McGraw Hill’s Key Executive Short-Term Incentive Compensation Plan for the applicable year.
4.    Distribution Following Maturity Date.
(a)    Maturity and Payment Dates.  If the Employee remains an employee of the Company through December 31, 2016 (the “Maturity Date”), the Units earned in accordance with the payout schedule established by the Committee, shall be paid to the Employee on the date after the Maturity Date and prior to March 15th of the first calendar year following the Maturity Date that is specified by the Committee for the settlement of the Award (the “Payment Date”).
(b)    Conversion and Share Withholding.  The Units payable to the Employee shall be converted into shares of Stock on the Payment Date and such shares shall be delivered to the Employee on the Payment Date.  Before payment is made to the Employee, the Company shall withhold all applicable Federal, state and local income taxes.  To satisfy such withholding requirement, the Company shall hold back a sufficient number of the shares and cash which would otherwise be delivered to the Employee to satisfy the required withholding obligation.
(c)    Non-U.S. Persons.  If the Employee is not on a U.S. dollar-based payroll on the Award Date or at any time thereafter prior to the Maturity Date, then the Employee shall indemnify the Company for any loss sustained by the Company from the failure to satisfy the withholding obligations described in Section 4(b), and the Employee shall, upon request, provide the Company with satisfactory evidence that the Employee has satisfied such obligations.
5.    Termination of Employment Prior to Maturity Date.  

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(a)    Pro Rata Award Opportunity in Certain Circumstances.  In the event of the termination of the Employee's employment with the Company prior to the Maturity Date due to (i) Normal Retirement, Early Retirement, or Disability, (ii) death, or (iii) with the approval of the Committee, in connection with a termination by the Company other than for Cause, the Employee shall be eligible to receive payment of a pro rata portion of this Award.  Except as provided in Section 9 hereof, in the event the Employee voluntarily resigns his or her employment with the Company or is involuntarily terminated by the Company for Cause prior to the Maturity Date, the Employee shall forfeit the right to any payment under this Award.
(b)    Determination of Pro Rata Award.
(i)    Normal Retirement, Early Retirement, or Disability.  The pro rata portion of the Award to be received by the Employee if he or she terminates because of Normal Retirement, Early Retirement, or Disability shall be determined:  (X) first, by multiplying the number of Units by a fraction, the numerator of which is the number of years completed (counting the year of termination as a completed year) during the Award Period and the denominator of which is three years; (Y) second, by measuring the compound annual growth from the Award cycle base year through the Maturity Date; and (Z) by awarding the number of Units determined in (X) based on the degree to which the achievement calculated in (Y) achieves the EPS goal established for the Award, subject to the limits set forth in the goal and payout schedule established for this Award and to the provisions of Section 2 hereof.
(ii)    Termination by the Company Other than For Cause.  The pro rata portion of the Award to be received by the Employee, with the approval of the Committee, in connection with a termination by the Company other than for Cause, shall be determined:  (X) first, by multiplying the number of Units by a fraction, the numerator of which is the number of full months during 

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the performance period in which the Employee participated and the denominator of which is 36 months; (Y) second, by measuring the compound annual growth from the Award cycle base year through the Maturity Date; and (Z) by awarding the number of Units determined in (X) based on the degree to which the achievement calculated in (Y) achieves the EPS goal established for the Award, subject to the limits set forth in the goal and payout schedule established for this Award and to the provisions of Section 2 hereof.
(iii)    Death.  The pro rata portion of the Award to be received by the Employee if he or she terminates because of death, shall be determined:  (X) first, by multiplying the number of Units by a fraction, the numerator of which is the number of years completed during the Award Period (counting the year of termination as a completed year) and the denominator of which is three years; (Y) second, by measuring the compound annual growth from the Award cycle base year through the end of the year in which termination occurs; and (Z) by awarding the number of Units determined in (X) based on the degree to which the achievement calculated in (Y) achieves the EPS goal established for the Award, subject to the limits set forth in the goal and payout schedule established for this Award and to the provisions of Section 2 hereof.
(c)    Timing of Distribution of Pro Rata Award.
(i)    All Circumstances Other Than Death.  In the event of the termination of the Employee’s employment with the Company prior to the Maturity Date other than for death (including, without limitation, Normal Retirement, Early Retirement, Disability, or other than for Cause), the Employee’s pro rata portion of the Award (if any) determined to have been earned out pursuant to Section 5(a) herein shall be delivered to the Employee on the Payment Date.
(ii)    Death.  In the event of the termination of the Employee’s employment with the Company prior to the Maturity Date due to death, the Employee’s pro rata portion of the Award 

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(if any) determined to have been earned out pursuant to Section 5(a) herein shall be delivered to the beneficiary designated by the Employee (or if the Employee has not designated a beneficiary, to the representative of the Employee’s estate), not later than March 15, in the year immediately following the year in which death occurred.
6.    Voting and Dividend Rights.  Prior to the delivery of any shares of Stock covered by this Award, the Employee shall not have the right to vote or to receive any dividends with respect to such shares.
7.    Transfer Restrictions.  This Award and the Units are nontransferable (other than by will or by the laws of descent and distribution), and may not be transferred, sold, assigned, pledged or hypothecated and shall not be subject to execution, attachment or similar process.  Any attempt to effect any of the foregoing shall be null and void.
8.    Miscellaneous.  These Terms and Conditions (a) shall be binding upon and inure to the benefit of any successor of the Company, (b) shall be governed by the laws of the State of New York and any applicable laws of the United States, and (c) may not be amended or modified in any way without the express written consent of both the Company and the Employee.  Consent on behalf of the Company may only be given through a writing signed, dated and authorized by the Executive Vice President of Human Resources for McGraw Hill, which directly refers to these Terms and Conditions and this Award.  No other modifications to these Terms and Conditions are valid under any circumstances.  No contract or right of employment shall be implied by this Award.  If this Award is assumed or a new award is substituted therefor in any corporate reorganization, employment by such assuming or substituting corporation or by a parent corporation or subsidiary thereof shall be considered for all purposes of this Award to be employment by the Company.

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In the event of any merger, reorganization, consolidation, recapitalization, dividend, stock split or other change in corporate structure affecting the Stock, such substitution or adjustment shall be made in the number of Units granted pursuant to this Award as may be determined to be appropriate by the Committee in its sole discretion.
This Award shall be subject to the requirements of the Senior Executive Pay Recovery Policy of McGraw Hill (the “Policy”), and all shares of Stock or other amounts paid or payable to a Participant under or in respect of the Award shall, if applicable, be subject to recovery or other action pursuant to and as, and to the extent, provided by the Policy (or any successor policy or requirement), as in effect from time to time.
Any payment pursuant to this Award shall not be deemed compensation for purposes of computing benefits under any retirement plan of the Company, and, except as the Committee may otherwise determine, shall not affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.
9.    Change in Control.
In the event of a Change in Control, the following shall apply:
(a)    Effect of Change in Control.  The EPS goal hereunder shall be deemed to have been achieved, and such achievement shall be at the higher of (i) the target EPS goal and (ii) the EPS goal the Employee would have earned for the Award Period if the achievement of the relevant goal were measured as of the date such Change in Control is determined to have occurred solely with respect to the time frame in which the Award was outstanding.  In addition, if the Change in Control occurs during the first year of the Performance Cycle, the Section 162(m) Performance Target shall be deemed to have been achieved.

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(b)    Section 409A Compliance.
(i)    Pro Rata Portion and Stock Payment.  If the Change in Control constitutes a “change in control event” within the meaning of Section 409A(a)(2)(A)(v) of the Code (a “Section 409A Change in Control”), then a pro rata portion of the Units earned under this Award as determined in Section 9(b)(ii) below shall be distributed immediately to the Employee in the form of shares of Stock, if any, for the period from the start of the Award Period through the date of the Change in Control.  If such Change in Control is not a Section 409A Change in Control, then all of the Units earned under this Award shall be converted into cash in accordance with Section 9(c) below and payment shall be made on the Payment Date or, if earlier, the Separation Payment Date, in accordance with the provisions of Section 9(c).
(ii)    Calculation of Pro Rata Portion.  Calculation of the pro rata portion of the Units to be distributed to the Employee hereunder in the event of a Section 409A Change in Control shall be determined solely by multiplying the number of Units earned under this Award by a fraction, (x) the numerator of which is the number of calendar quarters of the 12 quarter cycle for the award which have occurred from the date hereof up to and including the calendar quarter in which the Section 409A Change in Control occurred and (y) the denominator of which is 12 quarters.
(c)    Conversion and Payment.
(i)    Cash Payment.  The Units earned under this Award other than the Units distributed to the Employee as shares of Stock pursuant to Section 9(b)(i) above in the event of a Section 409A Change in Control shall be converted into cash by the Company as of the date such Change in Control is determined to have occurred.  The converted cash amount for each share of Stock shall be the Change in Control Price.  For purposes of this Section 9(c), the “Change in 

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Control Price” means the highest cash price per share of Stock paid in any transaction reported on the Consolidated Transaction Reporting System, or paid or offered in the transaction or transactions that result in the Change in Control or any other bona fide transaction related to a Change in Control or possible Change in Control at any time during the sixty-day period ending on the date of the Change in Control, as determined by the Committee.  Such cash amounts shall be retained by the Company for the benefit of the Employee and thereafter shall be distributed by the Company to the Employee on the Payment Date or, if earlier, the Separation Payment Date, in accordance with the other provisions of this Section 9(c).
(ii)    Special Rule for Securities Payments to Shareholders.  If the payment to the shareholders of the Company in connection with the transaction giving rise to a Change in Control is in the form of securities, either in whole or in part, then for the purpose of determining the Change in Control Price such securities shall be deemed converted immediately by the Company into a cash equivalent amount as of the date of the Change in Control.  The determination of such cash equivalent amount for such securities shall be made by an independent investment banking firm selected by the Company.  The determination of the cash equivalent amount by this independent investment banking firm shall be final, conclusive and binding on all persons having an interest therein.  All fees incurred in retaining this investment banking firm shall be paid for by the Company.  These cash amounts so determined as a cash equivalent in the manner provided herein, together with the cash derived from converting the shares of Stock into cash under Section 9(c)(i) above, shall be retained by the Company for the benefit of the Employee and thereafter shall be distributed by the Company to the Employee on the Payment Date or, if earlier, the Separation Payment Date, in accordance with the provisions of this Section 9(c).

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(iii)    Funding.  Notwithstanding anything herein to the contrary in Sections 9(c)(i) and 9(c)(ii) above, if in connection with a Change in Control the Company elects to fund other payments due senior executives of the Company pursuant to various management and benefit plans by effecting payments to the “rabbi trust” by a third-party trustee or through some other comparable vehicle in order to protect these payments for the benefit of the senior executives, the Company in such instance shall immediately fund the cash payment referred to herein on the same basis, for example, using a rabbi trust or other comparable vehicle, that are provided for other payments due senior executives of the Company.
(iv)    Involuntary Termination Other Than for Cause.  If the Employee is terminated involuntarily (except for Cause) prior to the Maturity Date, Employee shall receive a cash payment computed as provided in Sections 9(c) (i) and (ii) with respect to the Units that were not converted into shares of Stock and distributed to the Employee pursuant to Sections 9(a) and (b)(i) calculated as of the date such Change in Control is determined to have occurred.  The Employee shall receive the payment on (A) the Separation Payment Date, if the Change in Control is a Section 409A Change in Control and the Separation Date is not more than two years after the Change in Control, or (B) the Payment Date, if the Change in Control is not a Section 409A Change in Control or the Separation Date is more than two years after the Change in Control.  For purposes of this Section 9(c), the “Separation Date” means the date of the Employee’s “separation from service” with the Company within the meaning of Section 409A(a)(2)(A)(i) of the Code, and the “Separation Payment Date” means the Separation Date or, if the Employee is a “specified employee” as of the Separation Date within the meaning of Section 409A(a)(2)(B)(i) of the Code, the date that is six months after the Separation Date (or, if earlier, the date of the Employee’s death).

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(v)    Special Rule Where Severance is Payable.  If the employment of the Employee is terminated voluntarily prior to the Maturity Date and the Employee receives severance in accordance with any of the provisions of the severance plan in which the Employee participates at the time of a Change in Control, the Employee shall receive a cash payment computed as provided in Sections 9(c) (i) and (ii) with respect to the Units that were not converted into shares of Stock and distributed to the Employee pursuant to Sections 9(a) and (b)(i) calculated as of the date such Change in Control is determined to have occurred.  The Employee shall receive the payment on (A) the Separation Payment Date, if the Change in Control is a Section 409A Change in Control and the Separation Date is not more than two years after the Change in Control, or (B) the Payment Date, if the Change in Control is not a Section 409A Change in Control or the Separation Date is more than two years after the Change in Control.
(vi)    Retirement or Disability.  If the employment of the Employee is terminated due to Retirement or Disability prior to the Maturity Date, the Employee shall receive a cash payment computed as provided in Sections 9(c)(i) and (ii) with respect to the Units that were not converted into shares of Stock and distributed to the Employee pursuant to Sections 9(a) and (b)(i) calculated as of the date the Change in Control is determined to have occurred.  The Employee shall receive such payment on (A) the Separation Payment Date, if the Change in Control is a Section 409A Change in Control and the Separation Date is not more than two years after the Change in Control, or (B) the Payment Date, if the Change in Control is not a Section 409A Change in Control or the Separation Date is more than two years after the Change in Control.
(vii)    Death.  If the employment of the Employee is terminated due to death prior to the Maturity Date, upon such termination, the beneficiary designated by the Employee (or if the 

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Employee has not designated a beneficiary, to the representative of the Employee’s estate) shall receive, within 60 days following the date of the Employee’s death, a cash payment computed as provided in Sections 9(c)(i) and (ii) with respect to the Units that were not converted into shares of Stock and distributed to the Employee pursuant to Sections 9(a) and (b)(i) calculated as of the date the Change in Control is determined to have occurred.
(viii)    Forfeiture.  If the employment of the Employee terminates prior to the Maturity Date for any reason not described in Sections 9(c)(iv) through (vii), the Employee will forfeit all Units that were not converted into shares of Stock and distributed to the Employee purchase to Sections 9(a) and (b)(i).
(d)    Securities Law Compliance.  If in the event of a Change in Control no listing or registration statement is in effect pursuant to Section 10 below, the Company shall distribute to the Employee a cash equivalent amount representing the shares of Stock to be distributed to the Employee.
10.    Securities Law Requirements.  The Company shall not be required to issue shares of Stock in settlement of or otherwise pursuant to this Award unless and until (a) the shares have been duly listed upon each stock exchange on which the Stock is then registered; (b) a registration statement under the Securities Act of 1933, as amended, with respect to such shares is then effective; and (c) the issuance of the shares would comply with such legal or regulatory provisions of such countries or jurisdictions outside the United States as may be applicable in respect of this Award.
11.    Section 409A.  This Award is intended to provide for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code and to meet the 

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requirements of Section 409A(a)(2), (3) and (4) of the Code, and it shall be interpreted and construed in accordance with this intent.
12.    Incorporation of Plan Provisions.  This Award, including the Units and the shares of Stock, if any, to be issued hereunder, is made pursuant to the Plan and, except where specifically noted, the terms and conditions thereof are incorporated as if fully set forth herein.

NYDOCS01/1352892.5

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