Document:

EX-10.21

 

Exhibit 10.21

THE McGRAW-HILL COMPANIES, INC.

EMPLOYEE RETIREMENT PLAN SUPPLEMENT

(As Amended and Restated as of January 1, 2004)

68

 

The McGraw-Hill Companies, Inc.

Employee Retirement Plan Supplement

Table Of Contents

	 	 	 	 	 
	Article I PURPOSE
	 	 	70	 
	Article II DEFINITIONS
	 	 	70	 
	Article III PARTICIPATION
	 	 	73	 
	Section 3.01. Eligibility to Participate
	 	 	73	 
	Article IV BENEFITS
	 	 	73	 
	Section 4.01. Basic Benefit
	 	 	73	 
	Section 4.02. Additional Benefits
	 	 	76	 
	Section 4.03. Payment of Benefits
	 	 	76	 
	Section 4.04. Payment of Benefits in Event of Change of Control
	 	 	77	 
	Article V MISCELLANEOUS
	 	 	77	 
	Section 5.01. Source of Payment of Benefits
	 	 	77	 
	Section 5.02. Amendment and Termination
	 	 	77	 
	Section 5.03. Administration
	 	 	78	 
	Section 5.04. Claims Procedure
	 	 	78	 
	Section 5.05. Withholding
	 	 	78	 
	Section 5.06. Conditions of Payment of Benefit
	 	 	78	 
	Section 5.07. Effective Date
	 	 	79	 

69

 

THE McGRAW-HILL COMPANIES, INC.

EMPLOYEE RETIREMENT PLAN SUPPLEMENT

(As Amended and Restated as of January 1, 2004)

ARTICLE I

PURPOSE

          The principal purpose of The McGraw-Hill Companies, Inc. Employee Retirement Plan Supplement
(the “Plan”) is to provide selected employees of The McGraw-Hill Companies, Inc. (the “Company”)
and its subsidiaries (hereinafter referred to collectively as the “Employers”), with retirement
benefits which would have been provided under the Employee Retirement Plan of The McGraw-Hill
Companies, Inc. (“ERP”) (a) were it not for the limitations imposed by Sections 401(a)(17) and 415
of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) had the Participant’s
Earnings on which Benefits are based included amounts deferred under deferred compensation plans of
an Employer and amounts paid under certain severance plans of the Company.

          Effective January 1, 2004, the McGraw-Hill Broadcasting Company, Inc. Employee Retirement
Income Plan Supplement (“Broadcasting ERIP Supplement”) was merged into this Plan and any benefits
due to participants in the Broadcasting ERIP Supplement shall be paid from this Plan.

ARTICLE II

DEFINITIONS

          Except for the words defined in Article I or this Article II, capitalized words shall have the
meanings ascribed thereto in the ERP. The following words and phrases as used herein shall have
the following meanings:

70

 

          (a) “Actuarial Equivalent” means a benefit of equivalent value when computed on the
basis of 7% (5% when computing the equivalent value of a benefit accrued under the
Broadcasting ERIP Supplement before 2004) interest compounded annually and the UP–1984
Mortality Table.

          (b) “Benefit” means the benefit payable to a Participant or his beneficiary under
Article IV of this Plan.

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

          (i) The acquisition (other than from the Company) by any person, entity or
“group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”), (excluding, for this purpose, the Company
or its subsidiaries, or any employee benefit plan of the Company or its
subsidiaries) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either the then outstanding shares of
common stock or the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors; or

          (ii) Individuals who, as of the Effective Date, constitute the Board of
Directors of the Company (as of the Effective Date, the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board of Directors of the
Company, provided that any person becoming 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 the directors then comprising the
Incumbent Board (other than an election or nomination of an

71

 

individual whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) shall be, for purposes of this Plan, considered as though such
person were a member of the Incumbent Board; or

          (iii) Approval by the shareholders of the Company of a reorganization, merger,
or consolidation, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own, directly or indirectly, more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company’s then outstanding
voting securities, or a liquidation or dissolution of the Company or of the sale of
all or substantially all of the assets of the Company.

          (d) “Committee” means the CEO Council of the Company.

          (e) “Earnings” means all compensation paid by the Employer to an employee for services
rendered, including short-term incentive compensation. Earnings shall also include any
reductions in compensation made pursuant to The McGraw-Hill Companies, Inc. Flexible
Spending Account Plan, The Savings Incentive Plan of The McGraw-Hill Companies, Inc. and Its
Subsidiaries and the Transportation Benefit Program. For purposes of this Plan, “Earnings”
excludes all other executive contingent compensation.

          (f) “ERIP” means the Employee Retirement Income Plan of McGraw-Hill Broadcasting
Company, Inc. and Its Subsidiaries as in effect on December 31, 2003.

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          (g) “Participant” means an employee of an Employer who has been selected to participate
in the Plan and includes a Severance Plan Participant.

          (h) “Severance Plan” means the Company’s Management Severance Plan, Executive Severance
Plan or Senior Executive Severance Plan.

          (i) “Severance Plan Earnings” means the total amount of salary continuation payments
paid to a Severance Plan Participant under Section 5(a) of a Severance Plan (excluding any
amount paid in a lump sum in lieu of salary continuation).

          (j) “Severance Plan Participant” means a former employee of an Employer who is entitled
to remain an active participant in certain Company-sponsored plans and programs under
Section 5(a) of a Severance Plan (and who is not paid a single lump sum payment in lieu
thereof).

ARTICLE III

PARTICIPATION

          Section 3.01. Eligibility to Participate. The Committee shall select those
employees of the Employers who shall be eligible to participate in the Plan. Any employee who is
so selected by the Committee shall become a Participant as of the first day of the month coinciding
with or next following his selection.

ARTICLE IV

BENEFITS

          Section 4.01. Basic Benefit. (a) Except as provided in Section 4.01(c),
for each year that a Participant is employed by an Employer beginning on or after the later of (i)
January 1 of the year in which the Participant’s participation in the Plan commenced or (ii)
January 1, 1989, the Participant shall be entitled to receive a Benefit, expressed as a life

73

 

annuity, in an amount equal to the applicable percentage of the sum of (A) the Participant’s
Earnings for such year in excess of the maximum amount of compensation that may be taken into
account under the ERP as a result of the limitation of Section 401(a)(17) of the Code in effect for
such year, (B) any short-term incentive compensation for such year deferred by the Participant
under the Company’s Key Executive Short-Term Incentive Deferred Compensation Plan and (C) for each
year after December 31, 1996, any salary earned for such year which is deferred by the Participant
under any plan or arrangement of the Employer. Any salary or short-term incentive compensation
which is deferred by a Participant shall be excluded from Earnings in the year paid to the
Participant.

          (b) For purposes of clause (a) above, the applicable percentage is 1%, except that in the case
of a Participant who was a participant in the ERP on June 30, 1986, and who had (A) as of that date
attained age 45 and completed five (5) years of Continuous Service (as defined in ERP), and (B)
whose attained age in whole years and whole months, plus years of Continuous Service, equals sixty
(60) or more, the applicable percentage is 1.4%.

          (c) Effective January 1, 2004, each individual who had been a participant in the Broadcasting
ERIP Supplement on December 31, 2003, shall become a Participant in the Plan. Such a Participant’s
Benefit for years prior to 2004 shall be determined in accordance with the following:

          (i) For each year that such a Participant was employed by an employer under the Broadcasting
ERIP Supplement beginning on or after the later of (A) January 1 of the year in which the
Participant’s participation in the Broadcasting ERIP Supplement commenced or (B) January 1, 1990,
the Participant shall be credited with (x) Dollar Income equal to one percent (1%) of the sum (1)
of the Participant’s Earnings for such year in excess of the

74

 

maximum amount of compensation that may be taken into account under the ERIP as a result of
the limitation of Section 401(a)(17) of the Code in effect for such year and (2) any short-term
incentive compensation deferred by the Participant under the Key Executive Short-Term Incentive
Deferred Compensation Plan of The McGraw-Hill Companies, Inc., and (y) Units of Variable Income
equal to the result of dividing the amount in (x) by the dollar value of a Unit as of the
Accounting Date for such year. The Participant’s Benefit, expressed as a life annuity, shall be
equal to the sum of (1) his Dollar Income and (2) the result of multiplying the total of the Units
of Variable Income credited to the Participant by the dollar value of a Unit as of the Accounting
Date for the year preceding the commencement of payments under the Plan. Such a Participant’s
Dollar Income and Units of Variable Income as of December 31, 2003 are set forth in Appendix A.

          (ii) For purposes of this Section 4.02(c), “Dollar Income,” “Earnings,” “Units of Variable
Income,” “Unit” and “Accounting Date” shall have the same meanings as such terms had under the
ERIP.

          (iii) Notwithstanding the foregoing, such a Participant shall only be entitled to earn
benefits under the Plan with respect to years after 2003 if he is designated to receive future
benefits by the Committee.

          (iv) In the event that a participant in the Broadcasting ERIP Supplement terminated employment
with all employers under the Broadcasting ERIP Supplement prior to 2004 but is entitled to future
or current benefits under the Broadcasting ERIP Supplement, such benefits shall be paid under the
Plan in an amount determined under the Broadcasting ERIP Supplement and set forth in Appendix A.

75

 

          Section 4.02. Additional Benefits. In addition to the Benefit under Section
4.01, a Participant will be eligible to receive the following benefits:

          (a) In the event that any retirement benefit payable to a Participant under ERP is
limited by Section 415 of the Code (or any successor provision thereto) or any provision of
ERP implementing such limitation, the Participant shall be entitled to receive a Benefit in
an amount equal to the difference, expressed as a life annuity, between (i) the benefit the
Participant would have received under ERP if Section 415 of the Code or any such
implementing retirement plan provision were disregarded, and (ii) the benefit which the
Participant is entitled to receive under the provisions of ERP.

          (b) Effective April 26, 2000, a Severance Plan Participant shall be entitled to receive
a Benefit in an amount equal to the difference, expressed as a life annuity, between (i) the
benefit the Participant would have received under ERP had the Participant continued to earn
credit under ERP for purposes of benefit accrual with respect to the Participant’s Severance
Plan Earnings and (ii) the benefit which the Participant is entitled to receive under ERP.

          Section 4.03. Payment of Benefits. Benefits provided by this Article IV
shall be paid to a Participant commencing when benefits under ERP commence in the same form as, and
subject to the same adjustments to, the Participant’s benefits under ERP. The Benefits provided
under this Article shall be paid in accordance with the preceding sentence to the Participant’s
beneficiary in the event of the death of the Participant, whether prior to or after the
commencement of benefits under ERP, if such beneficiary is entitled to benefits under the
provisions of ERP.

76

 

          Section 4.04. Payment of Benefits in Event of Change of Control. In lieu of
the Benefits payable under Sections 4.01 through 4.03, in the event of a Change of Control, (i)
each Participant or beneficiary who is then receiving Benefits shall be paid immediately upon such
Change of Control a lump-sum payment equal to the Actuarial Equivalent of such Benefits measured as
of the date of the Change of Control; (ii) each other Participant who is not a member of The
McGraw-Hill Companies, Inc. Senior Executives Supplemental Death, Disability & Retirement Benefits
Plan shall be paid immediately upon such Change of Control a lump-sum payment equal to the
Actuarial Equivalent of the Benefits to which that Participant is entitled under Sections 4.01 and
4.02 as of the date of the Change of Control.

ARTICLE V

MISCELLANEOUS

          Section 5.01. Source of Payment of Benefits. The Benefits provided under
the Plan shall be paid by the Employers from their general assets at the time and in the manner
provided herein. The Benefits shall not be subject to assignment, pledge, alienation or
anticipation by a Participant or his beneficiary.

          Section 5.02. Amendment and Termination. The Board of Directors of the
Company or the Committee may cause the Plan to be amended at any time and from time to time,
prospectively or retroactively, and the Board of Directors of the Company may terminate the Plan in
its entirety at any time; provided, however, that no amendment to the Plan may be made by the
Committee which materially increases benefits to Participants. Notwithstanding the foregoing
provisions of this paragraph, no amendment or termination shall reduce the Benefit or rights of any
Participant except with the written consent of the Participant or other person then

77

 

receiving such Benefit. In addition, after a Change in Control, the definition of “Actuarial
Equivalent” in Article II and the provisions of Section 4.04 may not be amended.

          Section 5.03. Administration. The Committee shall administer the Plan and
shall have discretionary authority to determine eligibility, to grant or deny benefits, including
the right to make factual determinations in connection therewith, the exclusive right to construe
and interpret the Plan and to decide any and all matters arising thereunder or in connection with
the administration of the Plan. The decisions of the Committee will, to the extent permitted by
law, be conclusive and binding upon all persons having or claiming to have any right or interest in
or under the Plan. In addition, after a Change in Control, the definition of “Actuarial
Equivalent” in Article II and the provisions of Section 4.04 may not be amended.

          Section 5.04. Claims Procedure. The Committee or its delegate, shall
provide adequate written notice to any Participant whose claim for Benefits hereunder has been
denied, setting forth specific reasons for such denial, written in a manner calculated to be
understood by such Participant, and shall afford such Participant a full and fair review of the
decision denying the claim, in accordance with the requirements of the Employee Retirement Income
Security Act of 1974.

          Section 5.05. Withholding. The Employer shall have the right to deduct from
any payment of a Benefit any amount required to satisfy its obligation to withhold federal, state
and local taxes.

          Section 5.06. Conditions of Payment of Benefit. Notwithstanding any
provision of the Plan to the contrary, the right of a Participant or his beneficiary to receive the
Benefit otherwise payable hereunder shall cease upon the discharge of the Participant from
employment with the Employer for acts which constitute fraud, embezzlement, or dishonesty.

78

 

          Section 5.07. Effective Date. The Plan was effective as of December 1,
1989.

79EX-10.22

 

Exhibit 10.22

THE McGRAW-HILL COMPANIES, INC.

SAVINGS INCENTIVE PLAN SUPPLEMENT

(As Amended and Restated as of January 1, 2004)

80

 

The McGraw-Hill Companies, Inc.

Savings Incentive Plan Supplement

Table of Contents

	 	 	 	 	 
	Article I PURPOSE
	 	 	82	 
	Article II DEFINITIONS
	 	 	82	 
	Article III PARTICIPATION
	 	 	85	 
	Section 3.01. Eligibility to Participate
	 	 	85	 
	Article IV BENEFITS
	 	 	 	 
	Section 4.01. Credits to Account
	 	 	85	 
	Section 4.02. Additional Credits to Account
	 	 	88	 
	Section 4.03. Payment of Benefit.
	 	 	88	 
	Section 4.04. Payment of Benefits in Event of Change of Control
	 	 	89	 
	Article V MISCELLANEOUS
	 	 	 	 
	Section 5.01. Source of Payment of Benefits
	 	 	90	 
	Section 5.02. Amendment and Termination
	 	 	90	 
	Section 5.03. Administration
	 	 	90	 
	Section 5.04. Claims Procedure
	 	 	90	 
	Section 5.05. Withholding
	 	 	91	 
	Section 5.06. Conditions of Payment of Benefit
	 	 	91	 
	Section 5.07. Effective Date
	 	 	91	 

81

 

THE McGRAW-HILL COMPANIES, INC.

SAVINGS INCENTIVE PLAN SUPPLEMENT

(As Amended and Restated as of January 1, 2004)

ARTICLE I

PURPOSE

               The principal purpose of The McGraw-Hill Companies, Inc. Savings Incentive Plan Supplement
(the “Plan”) is to provide selected employees of The McGraw-Hill Companies, Inc. (the “Company”)
and its subsidiaries (hereinafter referred to collectively as the “Employers”), with retirement
benefits which would have been provided under The Savings Incentive Plan of The McGraw-Hill
Companies, Inc. (“SIP”) (a) were it not for the limitations imposed by Sections 401(a)(17), 401(k)
and 415 of the Internal Revenue Code of 1986, as amended (the “Code”), and (b) if the Participant’s
Earnings on which matching contributions are based had included amounts deferred under deferred
compensation plans of an Employer and amounts paid under certain severance plans of the Company.

               Effective January 1, 2004, the McGraw-Hill Broadcasting Company, Inc. Employees’ Investment
Plan Supplement (“Broadcasting EIP Supplement”) was merged into this Plan and any benefits due to
participants in the Broadcasting EIP Supplement shall be paid from this Plan.

ARTICLE II

DEFINITIONS

               Except for the words defined in Article I or this Article II, capitalized words shall have the
meanings ascribed thereto in the SIP. The following words and phrases as used herein shall have
the following meanings:

82

 

       (a) “Account” means the account established for each Participant under the Plan.

       (b) “Benefit” means the benefit payable to a Participant or his beneficiary under
Article IV of this Plan.

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

               (i) The acquisition (other than from the Company) by any person, entity or
“group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”), (excluding, for this purpose, the Company
or its subsidiaries, or any employee benefit plan of the Company or its
subsidiaries) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either the then outstanding shares of
common stock or the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors; or

               (ii) Individuals who, as of the Effective Date, constitute the Board of
Directors of the Company (as of the date hereof the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board of Directors of the Company,
provided that any person becoming 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 the directors then comprising the Incumbent Board
(other than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating to
the election of the Directors of the

83

 

Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Plan, considered as though
such person were a member of the Incumbent Board; or

               (iii) Approval by the shareholders of the Company of a reorganization, merger,
or consolidation, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own, directly or indirectly, more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company’s then outstanding
voting securities, or a liquidation or dissolution of the Company or of the sale of
all or substantially all of the assets of the Company.

       (d) “Committee” means the CEO Council of the Company.

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

       (f) “Participant” means an employee of an Employer who has been selected to participate
in the Plan and includes a Severance Plan Participant.

       (g) “Severance Plan” means the Company’s Management Severance Plan, Executive Severance
Plan or Senior Executive Severance Plan.

84

 

       (h) “Severance Plan Earnings” means the total amount of salary continuation payments
paid to a Severance Plan Participant under Section 5(a) of a Severance Plan (excluding any
amount paid in a lump sum in lieu of salary continuation).

       (i) “Severance Plan Participant” means a former employee of an Employer who is entitled
to remain an active participant in certain Company-sponsored plans and programs under
Section 5(a) of a Severance Plan (and who is not paid a single lump sum payment in lieu
thereof).

ARTICLE III

PARTICIPATION

               Section 3.01. Eligibility to Participate. The Committee shall select those
employees of the Employers who shall be eligible to participate in the Plan. Any employee who is
so selected by the Committee shall become a Participant as of the first day of the month coinciding
with or next following his selection.

ARTICLE IV

BENEFITS

               Section 4.01. Credits to Account. (a) As of December 31 of the year
beginning on or after the later of (i) January 1 of the year in which the Participant’s
participation in the Plan commenced or (ii) January 1, 2002, there shall be credited to the
Participant’s Account an amount equal to 41/2% of the Participant’s Earnings for such year in excess
of the limitation on Earnings under Section 401(a)(17) of the Code (or any successor provision).
Notwithstanding the foregoing, no credit shall be made to the Account of a Participant for any year
with respect to whom Tax-Deferred Contributions (as defined in SIP) were not made in an amount
equal to the

85

 

limitation on elective deferrals for such year under Section 402(g)(1) of the Code, unless
such amount of Tax-Deferred Contributions would have been made on the Participant’s behalf in the
absence of the limitations of Section 415 of the Code (or any successor provision thereto) or any
provision of SIP implementing such limitation. In addition, no credit shall be made to a
Participant’s Account with respect to (i) the year in which the Participant ceases to be an
employee of the Employers, unless the Participant is eligible for early or normal retirement under
the Company’s Employee Retirement Plan, is terminated by an Employer through no fault of his own or
has any salary continuation installment due the Participant under a Severance Plan or (ii) the year
after the year in which the Participant ceases to be an employee of the Employers for any reason or
ceases to have any salary continuation installment due the Participant under a Severance Plan, if
later.

               (b) As of December 31 of the year beginning on or after the later of (i) January 1 of the year
in which the Participant’s participation in the Plan commenced or (ii) January 1, 1992, there shall
be credited to the Participant’s Account an amount equal to 41/2% of (A) any short-term incentive
compensation for such year deferred by the Participant under the Company’s Key Executive Short-Term
Incentive Deferred Compensation Plan and (B) for each year after December 31, 1996, any salary
earned for such year which is deferred by the Participant under any plan or arrangement of the
Employer. Any salary or short-term incentive compensation which is deferred by a Participant shall
be excluded from Earnings in the year paid to the Participant. No credit shall be made to a
Participant’s Account with respect to any year after the year in which the Participant ceases to be
an employee of the Employers or ceases to have any salary continuation installment due the
Participant under a Severance Plan, if later.

86

 

               (c) There shall also be credited to the Participant’s Account as of December 31 of each such
year in which Tax-Deferred Contributions on behalf of the Participant are limited by Section 415 of
the Code (or any successor provision thereto) or any provision of SIP implementing such limitation,
an amount equal to the difference between (i) the sum of (A) 200% of the first 3% of the
Tax-Deferred Contributions and (B) 150% of the second 3% of the Tax-Deferred Contributions which
would have been made on behalf of the Participant to SIP for such year if Section 415 of the Code
or any such implementing provision were disregarded, and (ii) the Tax-Deferred Contributions made
on behalf of the Participant to SIP for such year. No credit shall be made to a Participant’s
Account with respect to (i) the year in which the Participant ceases to be an employee of the
Employers, unless the Participant is eligible for early or normal retirement under the Company’s
Employee Retirement Plan, is terminated by an Employer through no fault of his own or has any
salary continuation installment due the Participant under a Severance Plan or (ii) the year after
the year in which the Participant ceases to be an employee of the Employers for any reason or
ceases to have any salary continuation installment due the Participant under a Severance Plan, if
later.

               (d) Effective April 26, 2000, an amount shall be credited to a Severance Plan Participant’s
Account equal to the amount of Employer Matching Contributions that would have been credited to
such Participant’s Employer Contribution Account under SIP had the Participant made Tax-Deferred
Contributions under SIP with respect to the Participant’s Severance Plan Earnings at the rate in
effect for the period immediately prior to the Participant’s ceasing to be an employee of the
Employers. This amount shall be credited to the Severance Plan Participant’s Account at such time
as it would have been credited under SIP.

87

 

               (e) Effective January 1, 2004, each employee of an Employer who had been a participant in the
Broadcasting EIP Supplement on December 31, 2003, shall become a Participant in this Plan and an
amount shall be credited to the Account of such a Participant equal to the amount earned under the
Broadcasting EIP Supplement as of December 31, 2003 as set forth in Appendix A. Notwithstanding
the foregoing, such a Participant shall only be entitled to future credits under this Plan if the
Participant is designated to receive future credits by the Committee.

               Section 4.02. Additional Credits to Account. An additional amount shall be
credited to the Participant’s Account as of December 31 of each year commencing with the year
following the year in which the initial credit is made to the Account. The additional credit shall
equal the sum of (i) and (ii), where (i) is the product of (A) the balance of the Account as of
January l of such year, and (B) the annual rate of return of the SIP Stable Assets Fund for the
year; and (ii) is the amount of interest that would have been credited if 1/12 of the annual credit
for the year under Section 4.01 had instead been credited at the end of each calendar month in the
year and each monthly credit earned interest for the remainder of the year at an annual effective
rate of return equal to the SIP Stable Assets Fund rate for the year.

               Section 4.03. Payment of Benefit. The Benefit provided under the Plan shall
consist of the balance of the Participant’s Account on the date benefit payments under SIP are paid
or commence. Payment of the Benefit to a Participant shall be made in a lump sum, within 90 days
following the December 31 on which the additional amount is credited to the Participant’s Account
under Section 4.02 for the year in which the Participant ceases to be an employee of the Employers
or ceases to have any salary continuation installment due the Participant under a Severance Plan,
if later. The Benefit provided under this Article shall be paid

88

 

in accordance with the preceding sentence to the Participant’s beneficiary in the event of the
death of the Participant, whether prior to or after commencement of benefits under SIP, if such
beneficiary is entitled to benefits under the provisions of SIP.

               Notwithstanding anything contained herein to the contrary, an employee who becomes a
Participant on or after January 1, 1995 and does not have four years of Continuous Service under
SIP when he ceases to be an employee of the Employers or ceases to have any salary continuation
installment due the Participant under a Severance Plan, if later, shall be entitled only to the
vested percentage of his Account attributable to credits credited to his Account prior to 2001,
unless his employment terminates after his 65th birthday or his death. A Participant’s vested
percentage shall be determined as follows:

	 	 	 	 	 
	Years of Continuous Service	 	Vested Percentage	 
	Less than 1
	 	 	0	%
	1 but less than 2
	 	 	25	%
	2 but less than 3
	 	 	50	%
	3 but less than 4
	 	 	75	%
	4 or more
	 	 	100	%

               A Participant will always be fully vested in the portion of his Account attributable to
credits credited to his Account after 2000.

               Section 4.04. Payment of Benefits in Event of Change of Control. In lieu of
the Benefits payable under Section 4.03, in the event of a Change of Control, each Participant who
has not received payment of the Participant’s Benefit shall receive a lump sum payment immediately
upon such Change of Control equal to the Benefit to which that Participant is entitled under
Section 4.03.

89

 

ARTICLE V

MISCELLANEOUS

               Section 5.01. Source of Payment of Benefits. The Benefits provided under
the Plan shall be paid by the Employers from their general assets at the time and in the manner
provided herein. The Benefits shall not be subject to assignment, pledge, alienation or
anticipation by a Participant or his beneficiary.

               Section 5.02. Amendment and Termination. The Board of Directors of the
Company or the Committee may cause the Plan to be amended at any time and from time to time,
prospectively or retroactively, and the Board of Directors of the Company may terminate the Plan in
its entirety at any time; provided, however, that no amendment to the Plan may be made by the
Committee which materially increases benefits to Participants. Notwithstanding the foregoing
provisions of this paragraph, no amendment or termination shall reduce the Benefit or rights of any
Participant except with the written consent of the Participant or other person then receiving such
Benefit.

               Section 5.03. Administration. The Committee shall administer the Plan and
shall have discretionary authority to determine eligibility, to grant or deny benefits, including
the right to make factual determinations in connection therewith, the exclusive right to construe
and interpret the Plan and to decide any and all matters arising thereunder or in connection with
the administration of the Plan. The decisions of the Committee will, to the extent permitted by
law, be conclusive and binding upon all persons having or claiming to have any right or interest in
or under the Plan.

               Section 5.04. Claims Procedure. The Committee, or its delegate, shall
provide adequate written notice to any Employee whose claim for benefits hereunder has been denied,

90

 

setting forth specific reasons for such denial, written in a manner calculated to be
understood by such Employee, and shall afford such Employee a full and fair review of the decision
denying the claim, in accordance with the requirements of the Employee Retirement Income Security
Act of 1974.

               Section 5.05. Withholding. The Employer shall have the right to deduct from
any payment of a Benefit any amount required to satisfy its obligation to withhold federal, state
and local taxes.

               Section 5.06. Conditions of Payment of Benefit. Notwithstanding any
provision of the Plan to the contrary, the right of a Participant or his beneficiary to receive the
Benefit otherwise payable hereunder shall cease upon the discharge of the Participant from
employment with the Employer for acts which constitute fraud, embezzlement, or dishonesty.

               Section 5.07. Effective Date. The Plan was effective as of December 1,
1989.

91

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