Document:

EX-10.11

 

Exhibit 10.11

To: _________________________

2002 STOCK INCENTIVE PLAN

Restricted Performance Share Award

The McGraw-Hill Companies, Inc., hereby grants to you a Restricted Performance Share Award for
__________shares of Common Stock of the Company, subject to the following terms and conditions:

The Restricted Performance Share Award is issued in accordance with and subject
to the provisions of the 2002 Stock Incentive Plan, as amended, and the Terms
and Conditions for such Award. This Restricted Performance Share Award shall
mature on _________, 200_.

The determination of the shares earned will be made following the maturity date
of the Award, subject to the achievement of the performance goal established
for this Award.

In the event of any error in recording here the amount or amounts of any award or awards made by
the Compensation Committee, the official records of the Committee’s action shall control.

The McGraw-Hill Companies, Inc.

James R. Clemens

Senior Vice President

Rewards & Recognition

37EX-10.12

 

Exhibit 10.12

To: Name

2002 STOCK INCENTIVE PLAN

Non-Qualified Stock Option

The McGraw-Hill Companies, Inc., hereby grants to you a Non-Qualified Stock Option to purchase
________shares of Common Stock of the Company at $______ per share, subject to the following terms
and conditions:

The Non-Qualified Stock Option is issued in accordance with and subject to the
provisions of the , as amended, and may be exercised only to the extent and under
the conditions set forth in the Plan.

This Non-Qualified Stock Option shall expire as provided in the Plan, but no later
than ________.

This Non-Qualified Stock Option shall be exercisable as follows:

50% on and after __________________

100% on and after _________________

This Non-Qualified Stock Option may not be transferred except by will or
intestacy, and during your lifetime shall be exercisable only by you.

The Compensation Committee of the Board has determined that this Non-Qualified Stock Option will be
exercisable for the full term of the option if employment is terminated by reason of
Disability, Normal Retirement or Early Retirement.

In the event of any error in recording here the amount or amounts of any award or awards made by
the Compensation Committee of the Board, the official records of the Committee’s action shall
control.

The McGraw-Hill Companies, Inc.

James R. Clemens

Senior Vice President

Rewards & Recognition

38EX-10.16

 

Exhibit 10.16

THE McGRAW-HILL COMPANIES, INC.

MANAGEMENT SEVERANCE PLAN

(As Amended and Restated Effective October 23, 2003)

39

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 1.	 	Purpose
	 	 	41	 
	Section 2.	 	Effective Date
	 	 	41	 
	Section 3.	 	Administration
	 	 	41	 
	Section 4.	 	Participation
	 	 	41	 
	Section 5.	 	Payments upon Termination of Employment at Company Convenience
	 	 	42	 
	Section 6.	 	Unfunded Status of Plan
	 	 	45	 
	Section 7.	 	Termination and Amendment of the Plan
	 	 	45	 
	Section 8.	 	Benefit of Plan
	 	 	45	 
	Section 9.	 	Non-Assignability
	 	 	45	 
	Section 10.	 	Effect of Other Plans
	 	 	46	 
	Section 11.	 	Mitigation and Offset
	 	 	46	 
	Section 12.	 	Termination of Employment
	 	 	46	 
	Section 13.	 	Severability
	 	 	46	 
	Section 14.	 	Disputed Claims
	 	 	46	 
	Section 15.	 	Governing Law; Section Heading
	 	 	47	 
	Section 16.	 	Claims Procedure
	 	 	47	 
	Section 17.	 	Limit on Discretionary Authority After Change of Control
	 	 	48	 

40

 

THE McGRAW-HILL COMPANIES, INC. MANAGEMENT SEVERANCE PLAN

Section 1. Purpose.

     The purpose of the Management Severance Plan (the “Plan”) is to provide managers who are in a
position to contribute to the success of The McGraw-Hill Companies, Inc., or any subsidiary at
least 20% of whose voting shares are owned directly or indirectly by The McGraw-Hill Companies,
Inc. (collectively, the “Company”), with reasonable compensation in the event of their termination
of employment with the Company.

Section 2. Effective Date.

The Plan is effective as of January 28, 1987.

Section 3. Administration.

     The Plan shall be administered by the Chief Executive Officer (the “CEO”) of the Company. The
CEO shall have authority to delegate responsibility for the operation and administration of the
Plan. Subject to the express provisions of the Plan , including without limitation Section 17
below, and the rights of Participants pursuant thereto, the CEO or his or her delegate (the
“Administrator”) shall have discretionary authority to (i) adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as the Administrator shall, from
time to time, deem advisable; (ii) resolve all questions or ambiguities relating to the
interpretation and application of the Plan (and any notices or agreements relating thereto); (iii)
make eligibility and benefit determinations under the Plan, including any factual determinations
relevant thereto; and (iv) otherwise supervise the administration of the Plan in accordance with
the terms hereof. The discretionary authority under the preceding sentence may also be exercised
by any person making a determination on a claim for benefits or a review of a claim pursuant to
Section 16 below, subject to Section 17 below.

     Subject to Sections 16 and 17 hereof, all decisions made by the Administrator pursuant to the
provisions of the Plan shall be final and binding on all persons, including the Company and
Participants.

Section 4. Participation.

     The CEO shall from time to time select the employees who are to participate in the Plan (the
“Participants”) from among those employees who are determined by the CEO to be in a position to
contribute to the success of the Company.

     The Company shall notify each Participant in writing of his participation in the Plan, and
such notice shall also set forth the payments and benefits to which the Participant may become
entitled. The Company may also enter into such agreements as the Company deems necessary or
appropriate with respect to a Participant’s rights under the Plan. Any such notice or agreement may
contain such terms, provisions and conditions not inconsistent with the Plan, including but not
limited to provisions for the extension or renewal of any such agreement, as shall be determined by
the Company, in its sole discretion.

     A Participant shall cease to be a Participant in the Plan upon the earlier of (i) his receipt
of all of the payments, if any, to which he is or becomes entitled under the terms of this Plan and
the terms of any notice or agreement issued by the Company with respect to his participation
hereunder,

41

 

or (ii) the termination of his employment with the Company under circumstances not requiring
payments under the terms of this Plan.

Section 5. Payments upon Termination of Employment at Company Convenience.

          (a) In the event of a Termination of Employment at Company Convenience, the
Participant shall be entitled, as compensation for services rendered, subject to any applicable
payroll or other taxes required to be withheld, to:

               (i) continue to receive an amount equal to his Monthly Base Salary for a
period of not more than 12 months nor less than 6 months following his termination of
employment, based upon the following formula: the number of full and partial years of the
Participant’s continuous service with the Company, up to a maximum of 20 years, multiplied
by 0.6;

               (ii) remain an active participant in all Company-sponsored retirement, life,
medical, dental, accidental death and disability insurance benefit plans or programs in
which he was participating at the time of his termination for the full duration of the
salary continuation period described in Section 5(a)(i) above, but only to the extent
permitted by applicable law as determined by the Company, it being understood that continued
participation in Company-sponsored retirement plans or programs shall be limited to such
plans or programs that are not intended to be qualified under Section 401 (a) or 401(k) of
the Internal Revenue Code of 1986, as amended (the “Code”);

provided that the CEO may authorize, in his sole discretion, in lieu of the payments and benefits
provided under Section 5(a)(i) and (ii) above, payment to the Participant of a single lump sum
equal to 110% of the Participant’s Monthly Base Salary for the period specified under Section
5(a)(i) (100% of Monthly Base Salary for such period in lieu of salary continuation, and 10% of
Monthly Base Salary for such period in lieu of benefits continuation).

     Such payments shall be in lieu of any other payments under the Plan or under any other
severance pay or separation allowance plan, program or policy of the Company, including the
Company’s Separation Pay Plan; provided, however, if payments pursuant to the terms and conditions
of the Company’s Separation Pay Plan would result in greater payments to a Participant than would
be payable under this Plan, said Participant shall in such event receive payments pursuant to the
terms and conditions of the Company’s Separation Pay Plan in lieu of payments pursuant to this
Plan.

          (b) For purposes of this Section 5, the following definitions shall apply:

               (i) “Termination of Employment at Company Convenience” shall mean termination
of the employment of a Participant initiated by the Company, other than for Cause, and other
than by reason of death, Disability, voluntary resignation by a Participant, or lawful
Company mandated retirement at normal retirement age.

               (ii) “Cause” shall mean the Participant’s misconduct in respect of the
Participant’s obligations to the Company or other acts of misconduct by the Participant
occurring during the course of the Participant’s employment, which 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

42

 

unsatisfactory job performance alone be deemed to be “Cause”; and, provided, further,
that no termination of employment that is carried out at the request of a person seeking to
accomplish a Change in Control or otherwise in anticipation of a Change in Control shall be
deemed to be for “Cause”.

               (iii) “Disability” shall mean a Participant’s long-term disability pursuant
to a determination of disability under the Company’s Long-Term Disability Plan.

               (iv) “Monthly Base Salary” shall mean a Participant’s highest regular monthly
salary during the preceding 24-month period, excluding any of the following: year-end or
other bonuses, incentive compensation, whether short term or long term, commissions,
reimbursed expenses, and any payments on account of premiums on insurance or other
contributions made to other welfare or benefit plans.

               (v) “Change of Control” shall mean:

               (i) An acquisition by an 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 the Corporation (the “Outstanding
Corporation Common Stock”) or (2) the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of directors (the
“Outstanding Corporation Voting Securities”); excluding, however, the following: (1) any
acquisition directly from the Corporation, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so converted was itself
acquired directly from the Corporation; (2) any acquisition by the Corporation; (3) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any entity controlled by the Corporation; or (4) 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 of Directors such that the
individuals who, as of the effective date of the Plan, constitute the Board of Directors
(such Board of Directors shall be hereinafter referred to as the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board of Directors; provided,
however, for purposes of this definition, that any individual who becomes a member of the
Board of Directors subsequent to the effective date of the Plan, whose election, or
nomination for election by the Corporation’s shareholders, was approved by a vote of at
least a majority of those individuals who are members of the Board of Directors 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 of
Directors shall not be so considered as a member of the Incumbent Board; or

43

 

               (iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Corporation (“Corporate
Transaction”); excluding, however, such 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 Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such Corporate Transaction will beneficially own, directly
or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and
the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation resulting
from such Corporate Transaction (including, without limitation, a corporation which as a
result of such transaction owns the Corporation or all or substantially all of the
Corporation’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 Corporation Common Stock and Outstanding Corporation Voting Securities, as
the case may be, (2) no Person (other than the Corporation, any employee benefit plan (or
related trust) of the Corporation or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20% or more of, respectively,
the outstanding shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors except to the extent
that such ownership existed prior to the Corporate Transaction, and (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 stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.

          (c)          (i) In the event a Participant dies after the commencement of payments pursuant
to Section 5(a) above, the balance of said payments shall be payable to said Participant’s estate.

                         (ii) It is the intent of this Plan that a Participant’s transfer to another location shall not
by itself entitle a Participant to payments hereunder.

                         (iii) It is the intent of this Plan that a Participant shall not receive payments hereunder in
the event of a sale of the business unit of the Company with which the Participant is associated,
if the Participant (A) is offered a Local Position which is either a Comparable Position or a
Substitute Position with the buyer or the Company (or any successor thereto), whether or not such
offer is accepted by the Participant, or (B) is employed following such transaction by the buyer or
the Company (or any successor thereto).

     For purposes of the Plan, the following definitions shall apply: the determination of whether
a position is considered a “Local Position” will be made by the CEO using standards similar to the
standards utilized under the Code (including, without limitation, the distance standard in Section
217(c)(1)(A) of the Code), for purposes of moving expense deductions, and such other factors as the
CEO deems relevant; whether a position offered to a Participant is a “Comparable Position” to the
then current position held by the Participant shall be determined by the CEO after taking into
account the job requirements of the two positions, the duties of the two positions, the base pay of
the two positions and such other factors as the CEO deems

44

 

relevant; a “Substitute Position” is a position which may not be comparable in title, duties
and responsibilities to a prior position, but which affords the Participant a comparable level of
base pay and which, in the judgment of the CEO, is consistent with the experience, education or
skills of the Participant. A Comparable Position or a Substitute Position may require a
Participant to utilize different skills from those used in the Participant’s then current position.
Aggregate levels of benefits, cash bonus opportunities and titles do not need to be taken into
account by the CEO in assessing whether a position qualifies as a Comparable Position or a
Substitute Position.

Section 6. Unfunded Status of Plan.

     The Plan is intended to constitute an “unfunded” compensation arrangement. With respect to any
payments required to be made, but 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 creditor
of the Company. In its sole discretion, the Company may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver payments in lieu of or with
respect to amounts payable hereunder; provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.

Section 7. Termination and Amendment of the Plan.

     The Company shall have the right at any time, in its discretion, to amend the Plan, in whole
or in part, or to terminate the Plan, except that no amendment or termination shall impair or
abridge the obligations of the Company to any Participant or the rights of any Participant under
the Plan (1) under any notices or agreements previously issued pursuant to the Plan, (2) with
respect to any termination of employment that occurred before such amendment or termination, or (3)
with respect to any termination of employment that occurs during the period of 24 months following
a Change of Control or 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, in each case without the
express written consent of the affected Participant.

     Except for the amendments or modifications made by the Board or Committee as provided for in
this section, no modifications, alterations and/or changes made to the terms and/or provisions of
the Plan, either globally or for an individual participant, will be effective unless evidenced by a
writing that directly refers to the Plan and which is signed and dated by the Executive Vice
President of Human Resources, as such title may be modified from time to time.

Section 8. Benefit of Plan.

     The Plan shall be binding upon and shall inure to the benefit of the Participant, his heirs
and legal representatives, and the Company and its successors. The term “successor” shall mean any
person, firm, corporation or other business entity that, at any time, whether by merger,
acquisition or otherwise, acquires all or substantially all of the stock, assets or business of the
Company.

Section 9. Non-Assignability.

     Each Participant’s rights under this Plan shall be nontransferable except by will or by the
laws of descent and distribution and except insofar as applicable law may otherwise require.
Subject to the foregoing, no right, benefit or interest hereunder, shall be subject to
anticipation,

45

 

alienation, sale, assignment, encumbrance, charge, pledge, hypothecation, or set-off in
respect of any claim, debt or obligation, or to execution, attachment, levy or similar process, or
assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such
action shall, to the full extent permitted by law, be null, void and of no effect.

Section 10. Effect of Other Plans.

     Except as expressly provided in Section 5 with respect to the Company’s Separation Pay Plan,
(i) nothing in the Plan shall affect the level of benefits provided to or received by any
Participant (or the Participant’s estate or beneficiaries) as part of any employee benefit plan of
the Company, and (ii) the Plan shall not be construed to affect in any way a Participant’s rights
and obligations under any other plan maintained by the Company on behalf of employees.

Section 11. Mitigation and Offset.

     No Participant shall be required to mitigate the amount of any payment under the Plan by
seeking employment or otherwise, and there shall be no right of set-off or counterclaim, in respect
of any claim, debt or obligation, against any payments to the Participant, his dependents,
beneficiaries or estate provided for in the Plan.

     If, after a Participant’s termination of employment with the Company, the Participant is
employed by another entity or becomes self-employed, the amounts (if any) payable under this Plan
to the Participant shall not be offset by the amounts (if any) payable to the Participant from such
new employment with respect to services rendered during the severance period applicable to such
Participant under this Plan.

Section 12. Termination of Employment.

     Nothing in the Plan shall be deemed to entitle a Participant to continued employment with the
Company, and the rights of the Company to terminate the employment of a Participant shall continue
as fully as though this Plan were not in effect.

Section 13. Severability.

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

Section 14. Disputed Claims.

          (a) If a Participant makes a claim for payments under the Plan and such claim is
disputed by the Company (a “Disputed Claim”), the Company shall reimburse the Participant for any
reasonable attorney’s fees and disbursements incurred in pursuing such claim (“Attorney’s Fees”)
provided that the Participant obtains a nonappealable, final judgment from a court of competent
jurisdiction or a binding arbitration award granting the Participant all or substantially all of
the amount sought (a “Judgment or Award”). Unless the Judgment or Award specifies whether it
constitutes “all or substantially all of the amount sought,” such determination shall be made by
the Administrator in its sole and absolute discretion. Said reimbursement of Attorney’s Fees, if
applicable, shall be made as soon as practicable after said determination.

46

 

          (b) If a Disputed Claim is made with respect to a termination of employment
occurring during a period beginning on the date of a Change of Control and ending 24 months
thereafter, the Participant shall be entitled to reimbursement of Attorney’s Fees, whether or not
the Participant obtains a Judgment or Award. Such reimbursement shall be made on a “pay-as-you-go”
basis, as soon as practicable after presentation to the Company of any periodic statements for
Attorney’s Fees.

          (c) Without affecting the rights of a Participant under subsection (a) of this
Section 14, a Participant shall be entitled to reimbursement of Attorney’s Fees for a Disputed
Claim in accordance with the terms of subsection (b) with respect to termination of employment
occurring six months prior to a Change of Control, whether or not the Participant obtains a
Judgment or Award, provided, however, that no reimbursement will be made under this subsection (c)
in such case (i) unless and until the Change of Control actually occurs or (ii) if reimbursement
has been made under subsection (a) of this Section 14.

Section 15. Governing Law; Section Heading.

     All questions pertaining to the construction, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with the laws of the State of New York.

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

Section 16. Claims Procedure.

          (a) Benefits shall be paid in accordance with the provisions of the Plan. Any claim
for benefits under the Plan shall be promptly filed in writing by the Participant, the
Participant’s beneficiary or contingent beneficiary, or the Participant’s authorized representative
(hereinafter collectively referred to as the “Claimant”) with the Company. This written claim
shall be mailed or delivered to the Company by registered mail and shall be decided by the person
or persons to whom this responsibility is delegated from time to time by the Administrator.

          (b) The Claimant shall be sent a written notice of the Company’s determination with
respect to the claim of the Claimant within 90 days of receipt of the claim, unless special
circumstances require an extension of time for processing the claim. Such extension shall not
exceed 90 days and notice thereof will be given within the first 90-day period. If the claim is
denied in whole or in part, the notice shall indicate the reason for the denial (including
references to the Plan provisions on which the denial is based), describe any additional
information or material needed and the reasons why such additional information or material is
necessary, and explain the claim review procedure.

          (c) If a claim is denied in whole or in part (or if no decision on a claim is
rendered within the limitations of the time described in Section 16(b)), the Claimant may request a
review of the decision (or of the claim, if no timely decision has been rendered). This request
shall be submitted in writing to the Chief Human Resources Officer of the Company (the “Claims
Reviewer”) within 60 days of receipt of the notice of denial. The business address and telephone
number of the Claims Reviewer is:

The McGraw-Hill Companies, Inc.

1221 Avenue of the Americas

47

 

New York, New York 10020

(212) 512-2000

This written request for review shall be mailed or delivered to the Claims Reviewer by registered
mail. The Claimant may review pertinent documents and may submit in writing additional comments
and material.

          (d) The Company shall have the right to change the Claims Reviewer under the Plan.
The Company shall also have the right to change the address and telephone number of the Claims
Reviewer. The Company shall give the Participants written notice of any change of the Claims
Reviewer, or any change in the address and telephone number of the Claims Reviewer.

          (e) A review decision shall be made by the Claims Reviewer within 60 days of receipt
of the request for review, unless there are special circumstances (such as the need for a hearing)
which require an extension of the time for processing. Such extension shall not exceed 60 days and
notice thereof shall be given within the first 60-day period. The review decision shall be in
writing and include specific references to the Plan provisions on which the decision is based.

Section 17. Limit on Discretionary Authority After Change of Control

          Notwithstanding any other provision of this plan, the authority granted pursuant to Sections
3, 14 and 16 above to the Administrator and to persons making determinations on claims for benefits
and reviews of claims shall, when exercised (1) during the period of 24 months following a Change
of Control or (2) with respect to any termination of employment that occurs during the period of 24
months following a Change of Control or 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 not be
“discretionary,” but shall be subject to de novo review by a court of competent jurisdiction or an
arbitrator, as applicable.

January 28, 1987

As amended: March 25, 1987

September 30, 1987

September 28, 1988

April 26, 2000

April 24, 2002

October 23, 2003

48

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