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Exhibit (10)
[LETTERHEAD OF THE MCGRAW HILL COMPANIES]
March 23, 1998
Mr. Joseph L. Dionne
Chairman and Chief Executive Officer
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
Dear Joe:
This letter confirms the compensation and other arrangements to be provided in
connection with your services as non-executive Chairman of The McGraw-Hill
Companies Board of Directors. These arrangements will be in effect from July 1,
1998 to December 31, 1999.
The McGraw-Hill Companies shall pay you an annual fee of $350,000 to be paid in
equal monthly installments. Annual retainers and meeting fees normally received
by outside Directors will not be paid to you in addition to the annual fee.
Appropriate office accommodations and other support staff and facilities will be
provided to you consistent with your responsibilities as Chairman of the Board.
The compensation to be paid to you under the terms of this agreement shall be in
consideration for your assuming on behalf of the Board such specific
responsibilities as we may request, from time to time, and also for performing
such other special assignments as the Board deems necessary or desirable. All
assignments to be performed by you for the Board should be coordinated with, and
performed in conjunction with, McGraw-Hill's Chief Executive Officer.
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Exhibit (10)
Mr. Joseph L. Dionne
March 23, 1998
Page Two
If the provisions of this letter are satisfactory to you, please acknowledge
your agreement by signing below and then returning this letter to Barbara
Maddock.
Sincerely,
Paul J. Rizzo
Paul J. Rizzo
Chairman, Compensation Committee
The McGraw-Hill Companies Board of Directors
Agreed to this 31 day of March, 1998.
/s/ Joseph L. Dionne
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Joseph L. Dionne
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Exhibit (10)
[LETTERHEAD OF MCGRAW HILL COMPANIES]
June 23, 1998
Mr. Robert P. McGraw
Executive Vice President
The McGraw-Hill Companies
1221 Avenue of the Americas
New York, NY 10020
Dear Bob:
This letter confirms the arrangements which will be provided to you to recognize
your assistance in the transfer of responsibilities within the Educational &
Professional Publishing segment. Your separation date as an employee will be
September 30, 1998.
You will receive a Short-Term Incentive payment of $244,874. This amount is
based on a target prorated through September 30, 1998 of $122,437, measured on
individual objectives. It is expected that this payment will be made by the end
of February 1999.
Your Long-Term Restricted Performance Share Award target prorated through
September 30, 1998 is 5,792 shares. This represents a proration of your combined
target under the 1996, 1997, and 1998 Restricted Performance Share Awards. The
prorated target of 5,792 shares will pay out at no less than 6,444 shares, based
on shares being measured 50% on EPS and 50% on the business unit's NOI, and the
payout may be greater depending on final business results. It is expected that
this award will be made by the end of February 1999.
Vesting will be accelerated to September 30, 1998 for 6,500 of your 10,000
unvested stock options. These vested shares may be exercised up to six (6)
months after your separation date, or March 31, 1999.
You will receive a severance payment of $125,000 and a payment of $50,000 in
lieu of continued benefits coverage. These payments will be made no later than
October 31, 1998.
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Exhibit (10)
Mr. Robert P. McGraw
June 23, 1998
Page Two
Your deferred compensation balance will be payable in eight (8) annual
installments following your separation date.
Your balances under the Savings Incentive Plan (SIP), the Employee Retirement
Account Plan (ERAP), and the supplemental SIP and ERAP plans will be paid to you
after your separation date in accordance with your elections under the terms of
those plans. Information on your vested benefit under the Employee Retirement
Plan and the supplemental ERP plan will be provided to you.
You will be eligible for reimbursement of tax preparation and related
professional fees up to $2,200 for the 1998 tax year, for which returns will be
filed in 1999.
Information on continuation of medical coverage under COBRA and details
concerning other benefit plans will be provided to you shortly.
Please note that all of the payments set forth in this letter may be required to
be disclosed in the Company's proxy statement and other SEC documents.
Please acknowledge your agreement with the arrangements described above by
signing below and returning an executed copy to me at your earliest convenience.
A second copy of this letter is attached for your files.
Sincerely,
Barbara B. Maddock
BBM/bj
/s/ Robert P. McGraw June 26, 1998
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Robert P. McGraw Date
cc: Joseph L. Dionne
Harold McGraw III
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