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MCGRAW HILL FINANCIAL INC 10-K 2008
EX-10.16
 

Exhibit 10.16
THE McGRAW-HILL COMPANIES, INC.
401(k) SAVINGS AND PROFIT SHARING PLAN SUPPLEMENT
(Effective as of January 1, 2008, unless otherwise provided)
ARTICLE I
PURPOSE
          The principal purpose of the Plan is to provide selected employees of the Employer with retirement benefits which would have been provided as profit sharing and matching contributions under the SPSP (a) were it not for the limitations imposed by Sections 401(a)(17), 401(k) and 415 of the Code, and (b) if the Participant’s Earnings on which matching contributions are based had included amounts deferred under deferred compensation plans of an Employer and amounts paid under certain severance plans of the Company.
          Effective January 1, 2004, the Broadcasting EIP Supplement was merged into the McGraw-Hill SIP Supplement and the Broadcasting ERIP Supplement was merged into the McGraw-Hill ERAP Supplement, and, effective as of the Effective Date, the McGraw-Hill SIP Supplement, the McGraw-Hill ERAP Supplement, the S&P SIP Supplement and the S&P ERAP Supplement shall be merged into the Plan, and any benefits due to participants in the Broadcasting EIP Supplement, Broadcasting ERIP Supplement, McGraw-Hill SIP Supplement, McGraw-Hill ERAP Supplement, S&P SIP Supplement and S&P ERAP Supplement shall be paid from the Plan.
ARTICLE II
DEFINITIONS
          The following words and phrases as used herein shall have the following meanings:
          SECTION 2.01Account” means the Matching Contribution Account or Profit Sharing Account established for each Participant under the Plan.
          SECTION 2.02Appeal Reviewer” has the meaning set forth in the SPSP.
          SECTION 2.03Benefit” means the benefit payable to a Participant or his Designated Beneficiary under Article V of the Plan.
          SECTION 2.04Board” means the Board of Directors of the Company.
          SECTION 2.05Broadcasting EIP Supplement” means The McGraw-Hill Broadcasting Company, Inc. Employees’ Investment Plan Supplement.
          SECTION 2.06Broadcasting ERIP Supplement” means The McGraw-Hill Broadcasting Company, Inc. Employee Retirement Income Plan Supplement.

 


 

          SECTION 2.07Change in Control” means the first to occur of any of the following events:
     (i) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (1) the then outstanding shares of Common Stock (the “Outstanding Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company; (2) any acquisition by the Company; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company; or (4) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this Section 2.07; or
     (ii) A change in the composition of the Board such that the Directors who, as of the Effective Date, constitute the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this Section 2.07, that any individual who becomes a Director subsequent to the Effective Date, whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of those Directors who were members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such Director were a member of the Incumbent Board; but, provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or
     (iii) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (“Corporate Transaction”); excluding, however, such a Corporate Transaction pursuant to which (A) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either

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directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be, (B) no Person (other than the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership existed prior to the Corporate Transaction, and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or
     (iv) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
           SECTION 2.08Claimant” has the meaning set forth in Section 6.01 of the Plan.
          SECTION 2.09Code” means the Internal Revenue Code of 1986, as amended from time to time, and the applicable rules and regulations promulgated thereunder.
          SECTION 2.10Committee” means the Compensation Committee of the Board.
          SECTION 2.11Common Stock” means the common stock, $1.00 par value per share, of the Company.
          SECTION 2.12Company” means The McGraw-Hill Companies, Inc., a corporation organized under the laws of the State of New York, or any successor corporation.
          SECTION 2.13Designated Beneficiary” has the meaning set forth in the SPSP.
          SECTION 2.14Director” means an individual who is a member of the Board.
          SECTION 2.15Earnings” means all compensation paid by the Employer to a Participant for services rendered, including short-term incentive compensation. Earnings shall also include any reductions in compensation made pursuant to The McGraw-Hill Companies, Inc. Flexible Spending Account Plan, SPSP, the Transportation Benefit Program and similar plans of the Company’s subsidiaries. For purposes of the Plan, “Earnings” excludes all other executive contingent compensation.
          SECTION 2.16Effective Date” has the meaning set forth in Section 8.08 of the Plan.
          SECTION 2.17Election Effective Date” means (i) for each taxable year, January 1 of such year, and (ii) for the taxable year in which the Participant commences employment with the Employer, the date that is 30 days following the commencement thereof.

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          SECTION 2.18Employer” means the Company and its subsidiaries.
          SECTION 2.19Employment Termination Date” means the date of a Participant’s “separation from service” from the Company, as defined in Section409A(a)(2)(A)(i) of the Code.
          SECTION 2.20ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the applicable rules and regulations promulgated thereunder.
          SECTION 2.21Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the applicable rules and regulations promulgated thereunder.
          SECTION 2.22Extension Notice” has the meaning set forth in Section 6.01 of the Plan.
          SECTION 2.23Key Executive Plan” means The McGraw-Hill Companies, Inc. Key Executive Short-Term Incentive Deferred Compensation Plan, as amended from time to time, or successor programs thereto.
          SECTION 2.24Matching Contribution Account” means the matching contribution account established for each Participant under the Plan.
          SECTION 2.25McGraw-Hill ERAP Supplement” means The McGraw-Hill Companies, Inc. Employee Retirement Account Plan Supplement.
          SECTION 2.26McGraw-Hill SIP Supplement” means The McGraw-Hill Companies, Inc. Savings Incentive Plan Supplement.
          SECTION 2.27Participant” means each employee who participates in the Plan, as provided in Article IV of the Plan, and includes a Severance Plan Participant.
          SECTION 2.28Plan” means The McGraw-Hill Companies, Inc. 401(k) Savings and Profit Sharing Plan Supplement, as amended from time to time.
          SECTION 2.29Plan Administrator” has the meaning set forth in the SPSP.
          SECTION 2.30Profit Sharing Account” means the profit sharing account established for each Participant under the Plan.
          SECTION 2.31Severance Plan” means The McGraw-Hill Companies, Inc. Management Severance Plan, The McGraw-Hill Companies, Inc. Executive Severance Plan or The McGraw-Hill Companies, Inc. Senior Executive Severance Plan, as amended from time to time, or successor programs thereto.
          SECTION 2.32Severance Plan Earnings” means the total amount of salary continuation payments paid to a Severance Plan Participant under a Severance Plan (excluding any amount paid in a lump sum in lieu of salary continuation).

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          SECTION 2.33Severance Plan Participant” means a former employee of an Employer who is entitled to remain an active participant in certain Company-sponsored plans and programs under a Severance Plan (and who is not paid a single lump sum payment in lieu thereof).
          SECTION 2.34SPSP” means The 401(k) Savings and Profit Sharing Plan of The McGraw-Hill Companies, Inc. and Its Subsidiaries.
          SECTION 2.35SPSP Stable Assets Fund” has the meaning set forth in the SPSP.
          SECTION 2.36S&P ERAP Supplement” means the Standard & Poor’s Employee Retirement Account Plan Supplement.
          SECTION 2.37S&P SIP Supplement” means the Standard & Poor’s’ Savings Incentive Plan Supplement.
          SECTION 2.38Tax-Deferred Contributions” has the meaning set forth in the SPSP.
          SECTION 2.39Vested Percentage” has the meaning set forth in Section 5.04(b) of the Plan.
ARTICLE III
ADMINISTRATION
          SECTION 3.01 Administration. The Plan shall be administered by the Plan Administrator, who shall have full authority to construe and interpret the Plan, to establish, amend and rescind rules and regulations relating to the Plan, and to take all such actions and make all such determinations in connection with the Plan as he may deem necessary or desirable. Subject to Article VI of the Plan, decisions of the Plan Administrator shall be reviewable by the Appeal Reviewer and the Committee. Subject to Article VI of the Plan, the Appeal Reviewer and the Committee shall also have the full authority to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of the Plan and decide or resolve any and all questions, including interpretations of the Plan, as may arise in connection with the Plan.
          SECTION 3.02 Binding Effect of Decisions. Subject to Article VI of the Plan, the decision or action of the Appeal Reviewer, Plan Administrator or Committee in respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan.
          SECTION 3.03 Indemnification. To the fullest extent permitted by law, the Appeal Reviewer, the Plan Administrator, the Committee and the Board (and each member thereof), and any employee of the Employer to whom fiduciary responsibilities have been delegated shall be indemnified by the Company against any claims, and the expenses of defending against such claims, resulting from any action or conduct relating to the administration of the Plan, except claims arising from gross negligence, willful neglect or willful misconduct.

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ARTICLE IV
PARTICIPATION
          SECTION 4.01 Continuing Participants. Any individual who was a participant in the McGraw-Hill SIP Supplement, McGraw-Hill ERAP Supplement, S&P SIP Supplement or S&P ERAP Supplement immediately prior to the Effective Date shall be a Participant on such date, subject to the terms and provisions of the Plan. Each Participant’s Matching Contribution Account shall be credited with the amount earned under the McGraw-Hill SIP Supplement and the S&P SIP Supplement and each Participant’s Profit Sharing Account shall be credited with the amount earned under the McGraw-Hill ERAP Supplement and the S&P ERAP Supplement.
          SECTION 4.02 New Participants. Any employee of the Employer (other than a Participant described in Section 4.01 of the Plan) who is selected by the Plan Administrator to be eligible to participate in the Plan shall become a Participant as of the first day of the month coinciding with or next following his selection.
ARTICLE V
BENEFITS
          SECTION 5.01 Credits to Matching Contribution Account. (a) As of December 31 of the year beginning on or after the later of (i) January 1 of the year in which the Participant’s participation in the Plan commenced or (ii) January 1, 2008, there shall be credited to the Participant’s Matching Contribution Account an amount equal to 41/2% of the Participant’s Earnings for such year in excess of the limitation on Earnings under Section 401(a)(17) of the Code (or any successor provision). Notwithstanding the foregoing, no credit shall be made to the Matching Contribution Account of a Participant for any year with respect to whom Tax-Deferred Contributions were not made in an amount equal to the limitation on elective deferrals for such year under Section 402(g) of the Code, unless such amount of Tax-Deferred Contributions would have been made on the Participant’s behalf in the absence of the limitations of Section 415 of the Code (or any successor provision thereto) or any provision of SPSP implementing such limitation. In addition, no credit shall be made to a Participant’s Matching Contribution Account with respect to (i) the year in which the Participant’s Employment Termination Date occurs, unless the Participant is eligible for early or normal retirement under the Company’s Employee Retirement Plan, is terminated by an Employer through no fault of his own or has any salary continuation installment due under a Severance Plan or (ii) the year after the year in which the Participant’s Employment Termination Date occurs for any reason or in which the Participant ceases to have any salary continuation installment due under a Severance Plan, if later.
          (b) As of December 31 of the year beginning on or after the later of (i) January 1 of the year in which the Participant’s participation in the Plan commenced or (ii) January 1, 2008, there shall be credited to the Participant’s Matching Contribution Account an amount equal to 41/2% of (A) any short-term incentive compensation for such year deferred by the Participant under the Company’s Key Executive Plan, and (B) any salary earned for such year that is deferred by the Participant under any plan or arrangement of the Employer. Any salary or short-term incentive compensation that is deferred by a Participant shall be excluded from Earnings in the year paid to the Participant. No credit shall be made to a Participant’s Matching Contribution Account with respect to any year after the year in which the Participant’s Employment

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Termination Date occurs or in which the Participant ceases to have any salary continuation installment due under a Severance Plan, if later.
          (c) There shall also be credited to the Participant’s Matching Contribution Account as of December 31 of each such year in which Tax-Deferred Contributions on behalf of the Participant are limited by Section 415 of the Code (or any successor provision thereto) or any provision of SPSP implementing such limitation, an amount equal to the difference between (i) the sum of (A) 200% of the first 3% of the Tax-Deferred Contributions and (B) 150% of the second 3% of the Tax-Deferred Contributions which would have been made on behalf of the Participant to SPSP for such year if Section 415 of the Code (or any successor provision thereto) or any such implementing provision were disregarded, and (ii) the Tax-Deferred Contributions made on behalf of the Participant to SPSP for such year. No credit shall be made to a Participant’s Matching Contribution Account with respect to (i) the year in which the
Participant’s Employment Termination Date occurs, unless the Participant is eligible for early or normal retirement under the Company’s Employee Retirement Plan, is terminated by an Employer through no fault of his own or has any salary continuation installment under a Severance Plan or (ii) the year after the year in which the Participant’s Employment Termination Date occurs for any reason or in which the Participant ceases to have any salary continuation installment due under a Severance Plan, if later.
          (d) An amount shall be credited to a Severance Plan Participant’s Matching Contribution Account equal to the amount of Employer Matching Contributions that would have been credited to such Participant’s Employer Contribution Account under SPSP had the Participant made Tax-Deferred Contributions under SPSP with respect to the Participant’s Severance Plan Earnings at the rate in effect for the period immediately prior to the Participant’s Employment Termination Date. This amount shall be credited to the Severance Plan Participant’s Matching Contribution Account at such time as it would have been credited under SPSP.
          SECTION 5.02 Credits to Profit Sharing Account. (a) As of December 31 of the year beginning on or after the later of (i) January 1 of the year in which the Participant’s participation in the Plan commenced or (ii) January 1, 2008, there shall be credited to the Participant’s Profit Sharing Account an amount equal to 5% of the sum of (A) the Participant’s Earnings for such year in excess of the maximum amount of compensation that may be taken into account under Section 5.2 of the SPSP as a result of the limitations of Section 401(a)(17) of the Code for such year and (B) any short-term incentive compensation for such year deferred by the Participant under the Company’s Key Executive Plan, and (C) any salary earned for such year which is deferred by the Participant under any plan or arrangement of the Employer. Any salary or short-term incentive compensation that is deferred by a Participant shall be excluded from Earnings in the year paid to the Participant. No credit with respect to clause (A) of the preceding sentence shall be made to a Participant’s Profit Sharing Account with respect to (i) the year in which the Participant’s Employment Termination Date occurs, unless the Participant is eligible for early or normal retirement under the Company’s Employee Retirement Plan, is terminated by an Employer through no fault of his own or has any salary continuation installment due under a Severance Plan, or (ii) the year after the year in which the Participant’s Employment Termination Date occurs for any reason or the Participant ceases to have any salary continuation installment

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due under a Severance Plan, if later. No credit with respect to clause (B) of the first sentence of this Section shall be made to a Participant’s Profit Sharing Account with respect to any year after the year in which the Participant’s Employment Termination Date occurs or in which the Participant ceases to have any salary continuation installment due under a Severance Plan, if later.
          (b) An amount shall be credited to a Severance Plan Participant’s Profit Sharing Account equal to the amount that would have been credited to such Participant’s account under Section 5.2 of the SPSP had the Participant been eligible to have an employer contribution be made to the Participant’s account under Section 5.2 of the SPSP with respect to such Participant’s Severance Plan Earnings. This amount shall be credited to the Severance Plan Participant’s Profit Sharing Account at such time as it would have been credited under the SPSP.
          SECTION 5.03 Additional Credits to Accounts. (a) An additional amount shall be credited to the Participant’s Accounts as of December 31 of each year beginning on or after the later of (i) January 1 of the year following the year in which the initial credit is made to the Account or (ii) January 1, 2009.
          (b) With respect to Matching Contribution Accounts only, the additional credit shall equal the sum of (i) and (ii), where (i) is the product of (A) the balance of the Matching Contribution Account as of January l of such year, and (B) the annual rate of return of the SPSP Stable Assets Fund for the year; and (ii) is the amount of interest that would have been credited if 1/12 of the annual credit for the year under Section 5.01 of the Plan had instead been credited at the end of each calendar month in the year and each monthly credit earned interest for the remainder of the year at an annual effective rate of return equal to the SPSP Stable Assets Fund rate for the year.
          (c) With respect to Profit Sharing Accounts only, the additional amount shall be equal to the product of (i) the balance of the Profit Sharing Account as of January l of such year and (ii) the annual rate of return of the SPSP Stable Assets Funds for such year. No additional amount shall be credited to the Participant’s Profit Sharing Account for any period after December 31 of the year in which the Participant’s Employment Termination Date occurs or in which the Participant ceases to have any salary continuation installment due under a Severance Plan, if later.
          SECTION 5.04 Payment of Benefit. (a) The Benefit provided under the Plan shall consist of the balance of the Participant’s Accounts as of each applicable payment date under this Section 5.04. Subject to Section 5.05 of the Plan, and except as would violate the requirements of Sections 409A(a)(2), (a)(3) and (a)(4) of the Code, payment of the Benefit to a Participant shall be made in a lump sum, on July 1 of the calendar year following the Participant’s Employment Termination Date, and, in addition, in the case of a Severance Plan Participant, on July 1 of the subsequent calendar year. The Benefit provided under this Article shall be paid in accordance with the preceding sentence to the Participant’s Designated Beneficiary in the event of the death of the Participant, whether prior to or after commencement of benefits under SPSP, if such Designated Beneficiary is entitled to benefits under the provisions of SPSP.

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          (b) Notwithstanding anything contained herein to the contrary, with respect to Profit Sharing Accounts only, a Participant who does not have five years of Continuous Service under SPSP when he ceases to be an employee of the Employer or ceases to have any salary continuation installment due under a Severance Plan, if later, shall forfeit the balance credited to his Profit Sharing Account attributable to amounts earned under the McGraw-Hill ERAP Supplement and the S&P ERAP Supplement and shall be entitled only to the Vested Percentage of the remainder of his Profit Sharing Account attributable to credits credited to his Profit Sharing Account; provided that the, in each case, unless his Employment Termination Date occurs after his 65th birthday or his death. A Participant’s “Vested Percentage” shall be determined as follows:
         
Years of Continuous Service   Vested Percentage
 
       
Less than 2
    0 %
2 but less than 3
    20 %
3 but less than 4
    40 %
4 but less than 5
    60 %
5 or more
    100 %
          SECTION 5.05 Payment of Benefits in Event of Change in Control. In lieu of the Benefits payable under Section 5.04 of the Plan, in the event of a Change in Control that is also a “change in control event” within the meaning of Section 409A(a)(2)(A)(v) of the Code, each Participant who has not received payment of the Participant’s Benefit shall receive a lump sum payment immediately upon such Change in Control equal to the Benefit to which that Participant is entitled under Section 5.04 of the Plan.
ARTICLE VI
CLAIMS PROCEDURE
          SECTION 6.01 Claims. In the event any person or his authorized representative (a “Claimant”) disputes the amount of, or his entitlement to, any benefits under the Plan or their method of payment, such Claimant shall file a claim in writing with, and on the form prescribed by, the Plan Administrator for the benefits to which he believes he is entitled, setting forth the reason for his claim. The Claimant shall have the opportunity to submit written comments, documents, records and other information relating to the claim and shall be provided, upon request and free of charge, reasonable access to and copies of all documents, records or other information relevant to the claim. The Plan Administrator shall consider the claim and within 90 days of receipt of such claim, unless special circumstances exist which require an extension of the time needed to process such claim, the Plan Administrator shall inform the Claimant of its decision with respect to the claim. In the event of special circumstances, the response period can be extended for an additional 90 days, as long as the Claimant receives written notice advising of the special circumstances and the date by which the Plan Administrator expects to make a determination (the “Extension Notice”) before the end of the initial 90-day response period indicating the reasons for the extension and the date by which a decision is expected to be made. If the Plan Administrator denies the claim, the Plan Administrator shall give to the Claimant (i) a

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written notice setting forth the specific reason or reasons for the denial of the claim, including references to the applicable provisions of the Plan, (ii) a description of any additional material or information necessary to perfect such claim along with an explanation of why such material or information is necessary, and (iii) appropriate information as to the Plan’s appeals procedures as set forth in Section 6.02 of the Plan.
          SECTION 6.02 Appeal of Denial. A Claimant whose claim is denied by the Plan Administrator and who wishes to appeal such denial must request a review of the Plan Administrator’s decision by filing a written request with the Appeal Reviewer for such review within 60 days after such claim is denied. Such written request for review shall contain all relevant comments, documents, records and additional information that the Claimant wishes the Appeal Reviewer to consider, without regard to whether such information was submitted or considered in the initial review of the claim by the Plan Administrator. In connection with that review, the Claimant may examine, and receive free of charge, copies of pertinent Plan documents and submit such written comments as may be appropriate. Written notice of the decision on review shall be furnished to the Claimant within 60 days after receipt by the Appeal Reviewer of a request for review. In the event of special circumstances which require an extension of the time needed for processing, the response period can be extended for an additional 60 days, as long as the Claimant receives an Extension Notice. If the Appeal Reviewer denies the claim on review, notice of the Appeal Reviewer’s decision shall include (i) the specific reasons for the adverse determination, (ii) references to applicable Plan provisions, (iii) a statement that the Claimant is entitled to receive, free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim and (iv) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA following an adverse benefit determination on a review and a description of the applicable limitations period under the Plan. The Claimant shall be notified no later than five days after a decision is made with respect to the appeal.
          SECTION 6.03 Statute of Limitations. A Claimant wishing to seek judicial review of an adverse benefit determination under the Plan, whether in whole or in part, must file any suit or legal action, including, without limitation, a civil action under Section 502(a) of ERISA, within three years of the date the final decision on the adverse benefit determination on review is issued or should have been issued under Section 6.02 of the Plan or lose any rights to bring such an action. If any such judicial proceeding is undertaken, the evidence presented shall be strictly limited to the evidence timely presented to the Plan Administrator. Notwithstanding anything in the Plan to the contrary, a Claimant must exhaust all administrative remedies available to such Claimant under the Plan before such Claimant may seek judicial review pursuant to Section 502(a) of ERISA.
ARTICLE VII
AMENDMENT AND TERMINATION OF PLAN
          SECTION 7.01 Amendment and Termination. The Board or the Committee or any delegate thereof may cause the Plan to be amended at any time and from time to time, prospectively or retroactively; provided, however, that no amendment to the Plan may be made by the Committee that materially increases benefits to Participants. In addition, the Board may terminate the Plan in its entirety at any time and, in connection with any such termination, may

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pay to each Participant or Designated Beneficiary his Benefits under the Plan, subject to and in accordance with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix) (or any successor provision thereto). Notwithstanding the foregoing provisions of this Section 7.01, subject to the provisions of Section 7.02 of the Plan, no amendment or termination shall reduce the Benefit or rights of any Participant except with the written consent of the Participant or other person then receiving such Benefit.
          SECTION 7.02 Section 409A. The Plan is intended to meet the requirements of Section 409A of the Code and shall be interpreted and construed consistent with such intent. If, in the good faith judgment of the Committee, any provision of the Plan could otherwise cause any person to be subject to the interest and penalties imposed under Section 409A of the Code, such provision shall be modified by the Committee in its sole discretion to maintain, to the maximum extent practicable, the original intent of the applicable provision without causing the interest and penalties under Section 409A of the Code to apply, and, notwithstanding any provision in the Plan to the contrary, the Committee shall have broad authority to amend or to modify the Plan, without advance notice to or consent by any person, to the extent necessary or desirable to ensure that no benefit under the Plan is subject to tax under Section 409A of the Code. Any determinations made by the Committee under this Section 7.02 shall be final, conclusive and binding on all persons.
ARTICLE VIII
MISCELLANEOUS
          SECTION 8.01 Unsecured General Creditor. The Plan is an unfunded deferred compensation plan for a select group of management or highly compensated employees within the meaning of ERISA, and shall be construed and administered accordingly. Participants and their Beneficiaries shall have no legal or equitable rights, interest or claims in any property or assets of the Employer. The assets of the Employer shall not be held under any trust for the benefit of Participants or their Beneficiaries or held in any way as collateral security for the fulfilling of the obligations of the Employer under the Plan. Any and all of the Employer’s assets shall be, and remain, the general, unpledged, unrestricted assets of the Employer. The Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Employer to pay money in the future.
          SECTION 8.02 Nonassignability. Each Participant’s rights under the Plan shall be nontransferable except by will or by the laws of descent and distribution and except insofar as applicable law may otherwise required. Subject to the foregoing, neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be nonassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.
          SECTION 8.03 Conditions of Payment of Benefit. Notwithstanding any provision of the Plan to the contrary, the right of a Participant or his Designated Beneficiary to

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receive the Benefit otherwise payable hereunder shall cease upon the discharge of the Participant from employment with the Employer for acts which constitute fraud, embezzlement, or dishonesty, and shall be determined by the Appeal Reviewer in his sole discretion.
          SECTION 8.04 Not a Contract of Employment. The terms and conditions of the Plan shall not be deemed to constitute a contract of employment with the Participant, and the Participant (or his Designated Beneficiary) shall have no rights against the Employer except as specifically provided herein. Moreover, nothing in the Plan shall be deemed to give a Participant the right to be retained in the service of the Employer or to interfere with the rights of the Employer to discipline or discharge him at any time.
          SECTION 8.05 Binding Effect. The Plan shall be binding upon and shall inure to the benefit of the Participant or his Designated Beneficiary, his heirs and legal representatives, and the Employer.
          SECTION 8.06 Withholding. To the extent required by the law in effect at the time payments are made, the Employer shall withhold from payments made hereunder any taxes or other amounts required to be withheld for any federal, state or local government and other authorized deductions.
          SECTION 8.07 Severability. In the event that any provision or portion of the Plan shall be determined to be invalid or unenforceable for any reason, the remaining provisions and portions of the Plan shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.
          SECTION 8.08 Effective Date. The Plan is effective as of January 1, 2008 (the “Effective Date”).
          SECTION 8.09 Governing Law. The Plan shall be construed under the laws of the State of New York, to the extent not preempted by federal law.
          SECTION 8.10 Headings. The section headings used in this document are for ease of reference only and shall not be controlling with respect to the application and interpretation of the Plan.
          SECTION 8.11 Rules of Construction. Any words herein used in the masculine shall be read and construed in the feminine where they would so apply. Words in the singular shall be read and construed as though used in the plural in all cases where they would so apply. All references to sections are, unless otherwise indicated, to sections of the Plan.

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