<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MCGRAW-HILL, INC.
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(Name of Registrant as Specified in Its Charter)
MCGRAW-HILL, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
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(4) Proposed maximum aggregate value of transaction:
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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- ---------------
1Set forth the amount on which the filing fee is calculated and state how it
was determined.
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McGraw-Hill, Inc.
1221 Avenue of the Americas [Logo]
New York, New York 10020
March 21, 1994
DEAR SHAREHOLDER:
On behalf of the Board of Directors and management, we cordially invite you to
the Annual Meeting of Shareholders to be held Wednesday, April 27, 1994, at 11
A.M., at the principal executive offices of the Corporation, 1221 Avenue of the
Americas, New York City. In the pages that follow you will find the Notice of
Meeting and the Proxy Statement describing the formal business to be transacted
at this meeting. Please read them carefully.
At the Annual Meeting, there will be a report to shareholders regarding the
operations of McGraw-Hill, Inc. In addition, time will be made available for
shareholders to discuss the formal business items as well as to ask other
questions about McGraw-Hill's operations.
It is important that your shares be voted at the meeting in accordance with your
preference whether or not you plan to attend in person. We urge you to specify
your choices on the matters presented by filling in the appropriate boxes on the
enclosed Proxy Card. Please sign, date and return the Proxy Card in the prepaid
envelope provided. Your cooperation in promptly returning the Proxy Card will
save your Corporation additional solicitation costs and is appreciated. If you
do attend the meeting and wish to vote in person, you may withdraw your Proxy at
that time.
Sincerely,
/s/ Joseph L. Dionne
JOSEPH L. DIONNE
Chairman of the Board and Chief
Executive Officer
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McGraw-Hill, Inc.
1221 Avenue of the Americas [Logo]
New York, New York 10020
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
To the Shareholders of McGraw-Hill, Inc.:
The Annual Meeting of Shareholders of McGraw-Hill, Inc. will be held at the
principal executive offices of the Corporation, 1221 Avenue of the Americas, New
York, New York 10020, Wednesday, April 27, 1994, at 11 A.M., for the purpose of
considering and voting upon the following:
1. Election of six directors;
2. Ratification of the appointment of independent auditors for 1994; and
3. Such other business as may properly come before the Meeting or any
adjournment thereof.
Information relating to the above matters is set forth in the accompanying Proxy
Statement.
In accordance with the By-Laws and resolutions of the Board of Directors, only
shareholders of record at the close of business on March 10, 1994 shall be
entitled to notice of and to vote at the Meeting.
By Order of the Board of Directors
ROBERT N. LANDES
Executive Vice President, General Counsel
and Secretary
New York, New York
March 21, 1994
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Please sign and return the enclosed proxy in the envelope provided.
No postage is necessary, if mailed in the United States.
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McGraw-Hill, Inc.
1221 Avenue of the Americas
New York, New York 10020
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 27, 1994
PROXY STATEMENT
To the Shareholders of McGraw-Hill, Inc.:
This statement is furnished in connection with the solicitation of proxies by
the Board of Directors of McGraw-Hill, Inc. (the "Corporation") for use at the
Annual Meeting of Shareholders to be held at 11 A.M. on April 27, 1994, at the
principal executive offices of the Corporation, 1221 Avenue of the Americas, New
York, New York, and at any adjournment thereof. A Notice of Meeting is attached
hereto and a form of proxy is enclosed.
THE PROXY
The persons named as proxies were selected by the Board of Directors of the
Corporation and are officers of the Corporation.
When the proxies in the enclosed form are properly executed and returned, the
shares they represent will be voted at the Meeting. If a shareholder
participates in the Corporation's Dividend Reinvestment Plan, any proxy given by
such shareholder will also govern the voting of all shares held for the
shareholder's account under the Dividend Reinvestment Plan, unless contrary
instructions are received. Any shareholder giving a proxy has the power to
revoke it at any time before it is voted at the Meeting by filing with the
Secretary of the Corporation an instrument revoking it or by filing a duly
executed proxy bearing a later date.
The cost of soliciting proxies will be borne by the Corporation. The Corporation
will request banks and brokers to solicit their customers who have a beneficial
interest in the Corporation's shares registered in the names of nominees and
will reimburse such banks and brokers for their reasonable out-of-pocket
expenses of such solicitations. In addition, officers and full-time employees of
the Corporation may solicit proxies by telephone, telegraph or personal
interview. The Corporation has retained Kissel-Blake Inc. to assist in the
solicitation of proxies. It is estimated the Corporation will pay Kissel-Blake a
fee of $15,500 for these services.
These proxy materials are being mailed to shareholders of the Corporation
commencing on March 21, 1994. A copy of the 1993 Annual Report to Shareholders
was mailed to shareholders on March 14, 1994.
VOTING SECURITIES
The outstanding securities of the Corporation on March 10, 1994 were 49,499,123
shares of Common Stock, par value $1 per share, and 1,599 shares of $1.20
Convertible Preference Stock, par value $10 per share. Each share of Common
Stock and $1.20 Convertible Preference Stock is entitled to one vote at the
Meeting.
VOTING PROCEDURES
Under the New York Business Corporation Law (the "BCL") and the Corporation's
Certificate of Incorporation, the presence, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock and $1.20
Convertible Preference Stock is necessary to constitute a quorum of shareholders
to take action at this Annual Meeting. For these purposes, shares which are
present, or represented by a proxy, at the Meeting will be counted for quorum
purposes regardless of whether the holder of the shares or proxy fails to vote
on any particular matter or whether a broker with discretionary authority fails
to exercise its discretionary voting authority with respect to any particular
matter. Once a quorum of the shareholders is established, under the BCL and the
Corporation's Certificate of Incorporation, the directors standing for election
must be elected by a plurality of the votes cast. For voting purposes (as
opposed to for purposes of establishing a quorum) abstentions and broker
non-votes will not be counted in determining whether the directors standing for
election have been elected.
Votes at the Meeting will be tabulated by two inspectors of election appointed
by the Board of Directors.
1
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1. ELECTION OF SIX DIRECTORS
Under the Corporation's Certificate of Incorporation, there are three classes of
directors which are to be as equal in number as possible. Three directors,
George B. Harvey, John L. McGraw and Lois Dickson Rice, were elected in 1992 to
terms expiring at the 1995 Annual Meeting. In addition, Richard H. Jenrette was
elected a director in 1993 for a two-year term expiring at the 1995 Annual
Meeting. Four directors, Joseph L. Dionne, Don Johnston, Harold W. McGraw III
and Alva O. Way, were elected in 1993 to terms expiring at the 1996 Annual
Meeting. None of these eight incumbent directors is standing for re-election at
this Meeting.
Six directors, Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston,
David L. Luke III, Paul J. Rizzo and James H. Ross, were elected in 1991 to
terms expiring at the 1994 Annual Meeting. Five of these six directors, Vartan
Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo and James H.
Ross, are to be elected for three-year terms expiring at the 1997 Annual
Meeting. David L. Luke III, a director of the Corporation since 1985, will be
retiring from the Board after the 1994 Annual Meeting, pursuant to the Board's
long standing retirement age policy, and is not standing for re-election. Linda
Koch Lorimer was elected a director on February 23, 1994, by action of the Board
of Directors taken pursuant to the Corporation's By-Laws, to a term expiring at
the 1994 Annual Meeting. Ms. Lorimer is to be elected at this Meeting for a
two-year term expiring at the 1996 Annual Meeting.
In summary, at this Meeting, Messrs. Gregorian, Hartley, Lawson-Johnston, Rizzo
and Ross are to be elected for three-year terms expiring at the 1997 Annual
Meeting and Ms. Lorimer is to be elected for a two-year term expiring at the
1996 Annual Meeting.
Harold W. McGraw, Jr., a director of the Corporation from 1954 to 1988, Chairman
of the Board from 1976 to 1988, and Chief Executive Officer of the Corporation
from 1975 until 1983, retired from the Board after the 1988 Annual Meeting
pursuant to the Board's retirement age policy. However, in recognition of Mr.
McGraw's past service and contributions to the Corporation and to assure his
continued close association with the Board and the Corporation, the Board of
Directors several years ago elected Mr. McGraw permanently to the position of
Chairman Emeritus.
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THE BOARD OF DIRECTORS' RECOMMENDATION
Unless otherwise specified by the shareholder, the Board of Directors intends
the accompanying proxy to be voted FOR the election of the named six nominees as
directors.
The Board of Directors does not contemplate that any nominee will be unable or
unwilling to serve as a director. However, if that should occur, the individuals
named as the proxies reserve the right to substitute another person as may be
selected by the Board of Directors when voting at the Annual Meeting.
Following is information about each of the six nominees for director who are
being proposed for election at this Annual Meeting and about each of the eight
incumbent directors.
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NOMINEE FOR ELECTION AS DIRECTOR FOR TERM EXPIRING AT THE 1996 ANNUAL MEETING
- -------------------- LINDA KOCH LORIMER, age 42, has been Secretary of Yale
University since 1993. She was President of Randolph-Macon
Woman's College from 1987 to 1993 and was Associate Provost
of Yale University from 1983 to 1987. She is a director of
Sprint Corporation, Yale University Press, and Yale-New
Haven Hospital. Ms. Lorimer is also a member of the Board
of Directors of the Association of American Colleges and
[Picture] the Center for Creative Leadership. Ms. Lorimer has served
as a director of the Corporation since February 1994 and is
a member of the Financial Policy Committee.
- --------------------
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NOMINEES FOR ELECTION AS DIRECTORS FOR TERMS EXPIRING AT THE 1997 ANNUAL MEETING
- -------------------- VARTAN GREGORIAN, age 59, has been President of Brown
University and a Professor of History at Brown University
since 1989. He was President and Chief Executive Officer of
the New York Public Library from 1981 to 1989. Prior to
1981, Dr. Gregorian taught and held administrative posts at
several different American universities. Dr. Gregorian is a
director of the Institute for Advanced Study, the J. Paul
Getty Trust, the Aaron Diamond Foundation, the Institute
for International Studies, the International League for
Human Rights, and the Fund for Free Expression. Dr.
Gregorian is currently President Emeritus of the New York
Public Library and was appointed by President Bush to be a
member of the Fulbright Commission. He is also a member of
the American Philosophical Society and a fellow of the
[Picture] American Academy of Arts and Letters. Dr. Gregorian has
served as a director of the Corporation since 1990 and is a
member of the Financial Policy Committee.
- --------------------
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- -------------------- JOHN T. HARTLEY, age 64, is Chairman of the Board and Chief
Executive Officer of the Harris Corporation, a supplier of
information, communication and semiconductor systems,
products and services to government and commercial markets
worldwide. Mr. Hartley was elected President and Chief
Operating Officer of the Harris Corporation in 1982, Chief
Executive Officer in 1986 and Chairman of the Board in
1987. Mr. Hartley is a director of The Equitable Companies
Incorporated and The Equitable Life Assurance Society of
the United States and formerly the Chairman of the National
Association of Manufacturers. He is a member of the
Business Roundtable and the Board of Trustees of the
Manufacturers' Alliance for Productivity and Innovation, as
well as a Trustee of the Committee for Economic
Development. Mr. Hartley is a Trustee of the Florida
Institute of Technology. Mr. Hartley has served as a
[Picture] director of the Corporation since 1989 and is a member of
the Audit, Financial Policy and Nominating and Director
Compensation Committees.
- --------------------
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- -------------------- PETER O. LAWSON-JOHNSTON, age 67, has been for more than
the past five years a general partner in Guggenheim
Brothers, a venture capital partnership. Mr. Lawson-
Johnston is also Chairman of Zemex Corporation, a mining
company. He is President and a Trustee of the Solomon R.
Guggenheim Foundation (which operates the Solomon R.
Guggenheim Museums in New York City and the Peggy
Guggenheim Collection in Venice, Italy), Chairman of the
Board of the Harry Frank Guggenheim Foundation, President
and a Trustee of the Lawrenceville School, and President
and a director of Elgerbar Corporation. Mr. Lawson-Johnston
[Picture] has served as a director of the Corporation since 1975 and
is a member of the Management Compensation and Nominating
and Director Compensation Committees.
- --------------------
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- -------------------- PAUL J. RIZZO, age 66, has been Vice Chairman of the Board
of International Business Machines Corporation, a
manufacturer and distributor of advanced information
technologies, since January 25, 1993. He is a partner in
Franklin Street Partners, an investment firm. He was Dean
of the Graduate School of Business Administration at the
University of North Carolina from 1987 to 1992. He was Vice
Chairman of the Board of Directors of the IBM Corporation
from 1983 to 1987. Prior to that, Mr. Rizzo was Senior Vice
President of the IBM Corporation from 1971 to 1982. He is a
[Picture] director of Johnson & Johnson. Mr. Rizzo has served as a
director of the Corporation since 1988 and is a member of
the Audit and Financial Policy Committees.
- --------------------
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- -------------------- JAMES H. ROSS, age 55, has been Chief Executive and a
director of Cable & Wireless plc., an international
provider of telecommunications services, since April 28,
1992. He was a Managing Director of British Petroleum plc.,
which engages in all phases of the petroleum business, from
1991 to 1992, and Chairman and Chief Executive Officer of
BP America Inc., a subsidiary of British Petroleum plc.,
from 1988 to 1991. He was Chief Executive Officer and
Managing Director of BP Oil International Limited from 1986
to 1988. Prior to that, he was General Manager of Corporate
Planning for British Petroleum plc. from 1982 through 1985.
Mr. Ross is a trustee of the Cleveland Orchestra, a member
of the Advisory Board of the Center for Strategic and
International Studies and Chairman of the Board of the
[Picture] Manchester Business School. Mr. Ross has served as a
director of the Corporation since 1989 and is a member of
the Financial Policy Committee.
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DIRECTORS WHOSE TERMS EXPIRE AT THE 1996 ANNUAL MEETING
- -------------------- JOSEPH L. DIONNE, age 60, has been Chairman of the Board
and Chief Executive Officer of the Corporation since April
1988. He was President and Chief Executive Officer of the
Corporation from 1983 to April 1988. Mr. Dionne was
President and Chief Operating Officer of the Corporation
from 1981 to 1983. He was Executive Vice President,
Operations, of the Corporation from 1979 to 1981 and
President of McGraw-Hill Information Systems Company from
1977 to 1979. He is a director of The Equitable Companies
Incorporated, The Equitable Life Assurance Society of the
United States, the Harris Corporation and Sprint
[Picture] Corporation and a Trustee of Hofstra University. Mr. Dionne
has served as a director of the Corporation since 1981 and
is Chairman of the Executive Committee.
- --------------------
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- -------------------- DON JOHNSTON, age 67, was from 1978 to 1988 Chairman and
Chief Executive Officer of JWT Group, Inc., the parent
company of various advertising agencies and public
relations and market research firms, including the J.
Walter Thompson Advertising Agency. Mr. Johnston is a
director of The Equitable Life Assurance Society of the
United States. He is a Trustee of Johns Hopkins University
and Chairman Emeritus of the International Executive
Service Corps. Mr. Johnston has served as a director of the
[Picture] Corporation since 1986 and is Chairman of the Nominating
and Director Compensation Committee and is a member of the
Management Compensation Committee.
- --------------------
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- -------------------- HAROLD W. MCGRAW III, age 45, has been President and Chief
Operating Officer of the Corporation since July 1993. He
was Executive Vice President, Operations, of the
Corporation from December 1989 to July 1993. He was
President of the McGraw-Hill Financial Services Company
from July 1988 to December 1989. Prior to that he was
President of the McGraw-Hill Publications Company from
October 1987 to July 1988. He was the Group Vice President
of the McGraw-Hill Transportation, Aerospace & Defense
Groups, and the publisher of McGraw-Hill's Aviation Week &
Space Technology and Commercial Space magazines from 1985
to September 1987. From 1983 to 1985, Mr. McGraw was Vice
President, Corporate Planning, of the Corporation, and was
Assistant Vice President, Pension Investment between 1980
and 1983. Prior to joining the Corporation, he held several
financial positions at the GTE Corporation, including
Assistant Vice President, Pension Investment. He is a
[Picture] Trustee of Hartley House (a New York City community
settlement house). Mr. McGraw has served as a director of
the Corporation since 1987 and is a member of the Financial
Policy Committee. (a)(b)
- --------------------
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- -------------------- ALVA O. WAY, age 64, is the Chairman of the Board of IBJ
Schroder Bank & Trust Company and a consultant and a
director of Schroder (PLC) (London). Mr. Way was the
President of the Travelers Corporation, a financial
services organization, from 1983 to 1984. He was President
of the American Express Company from 1981 to 1983 and Vice
Chairman from 1979 to 1981. Previously, Mr. Way was Senior
Vice President -- Finance for the General Electric Company
from 1977 to 1979 and its Financial Vice President from
1973 to 1977. He is a director of Ryder Systems, Inc.,
Gould, Inc. and Eli Lilly and Co. He is Chancellor of Brown
University and a Trustee of New York Presbyterian Hospital.
[Picture] Mr. Way has served as a director of the Corporation since
1983 and is Chairman of the Financial Policy Committee and
is a member of the Nominating and Director Compensation and
Executive Committees.
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DIRECTORS WHOSE TERMS EXPIRE AT THE 1995 ANNUAL MEETING
- ------------------- GEORGE B. HARVEY, age 62, has been Chairman, President and
Chief Executive Officer of Pitney Bowes Inc., a
manufacturer of office equipment and business supplies and
provider of financial services, since 1983. Mr. Harvey was
President and Chief Operating Officer of Pitney Bowes from
1981 to 1983. He is a director of Merrill Lynch and
Connecticut Mutual Life Insurance Company. Mr. Harvey has
[Picture] served as a director of the Corporation since 1985 and is
Chairman of the Audit Committee and is a member of the
Executive and Financial Policy Committees.
- -------------------
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- ------------------- RICHARD H. JENRETTE, age 64, has been Chairman of the Board
since 1987 and Chief Executive Officer since 1990 of The
Equitable Companies Incorporated. Mr. Jenrette is also the
Chairman of The Equitable Life Assurance Society of the
United States, a mutual life insurance company, and
Chairman of the Equitable's wholly-owned investment banking
subsidiary, Donaldson, Lufkin & Jenrette, Inc. He is a
director of Groupe AXA, S.A. and Alliance Capital
Management Corp. Mr. Jenrette is a trustee of the
Rockefeller Foundation, the University of North Carolina at
Chapel Hill and Historic Hudson Valley, where he also
serves as its Chairman. He is a member of the Business
[Picture] Roundtable. Mr. Jenrette has served as a director of the
Corporation since 1993 and is a member of the Financial
Policy Committee.
- -------------------
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- ------------------- JOHN L. MCGRAW, age 63, has been engaged in private
business ventures for more than the past five years. He was
Executive Vice President, Operating Services, of the
Corporation from 1974 through 1978. Mr. McGraw has served
[Picture] as a director of the Corporation since 1964 and is a member
of the Audit, Executive and Management Compensation
Committees. (a)(b)
- -------------------
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- ------------------- LOIS DICKSON RICE (Mrs. Alfred B. Fitt), age 61, has been a
guest scholar since October 1991 in the Economics Study
Program at The Brookings Institution, a research and
education organization in the social sciences. Prior to
that she had been for more than five years Senior Vice
President, Government Affairs, and a director of Control
Data Corporation, which applies technology to specialized
computer, information and management needs. She has held
various positions with the College Board, an educational
association, and from 1971 through 1981 served as one of
its Vice Presidents. Mrs. Rice is a director of Bell
Atlantic of Washington, D.C., International Multifoods,
Hartford Steam Boiler Inspection and Insurance Company,
Shawmut National Corporation and Unum Corporation. Mrs.
Rice is a director of the Harry Frank Guggenheim Foundation
and Reading Is Fundamental. She also serves as an Overseer
of the Tuck School of Management of Dartmouth College, on
[Picture] President Clinton's Foreign Intelligence Advisory Board and
is a Trustee of the German Marshall Fund. Mrs. Rice has
served as a director of the Corporation since 1988 and is
a member of the Audit and Management Compensation
Committees.
- -------------------
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(a) Harold W. McGraw III and John L. McGraw are cousins.
(b) Harold W. McGraw III is the son of Harold W. McGraw, Jr. John L. McGraw is
the cousin of Harold W. McGraw, Jr.
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<PAGE> 10
INFORMATION AS TO COMMITTEES, ATTENDANCE
AND FEES OF THE BOARD OF DIRECTORS
The Corporation's Board of Directors has standing Audit, Management Compensation
and Nominating and Director Compensation Committees.
The Audit Committee is comprised of Mrs. Lois Dickson Rice and Messrs. John T.
Hartley, George B. Harvey, John L. McGraw and Paul J. Rizzo. During 1993 the
Audit Committee held three meetings. The functions performed by the Audit
Committee include: (a) reviewing and approving the scope and coverage of the
Corporation's annual audit and the division of duties between the Corporation's
independent auditors and internal auditors; (b) discussing any significant
difficulties encountered or significant findings made during the annual audit;
(c) reviewing and approving the annual audit, financial statements and
management letters following completion of the Corporation's annual audit; (d)
reviewing with the Corporation's independent auditors and the Corporation's
management the accounting systems, financial controls and procedures used by the
Corporation; (e) reviewing and approving the scope of the duties of the internal
audit function; (f) reviewing and approving, from time to time, with the
Corporation's senior management the Corporation's Code of Business Ethics to
determine compliance with such Code; (g) reviewing and approving the annual
audit budget and actual fees paid to the Corporation's independent auditors; and
(h) recommending to the Board of Directors each year the firm of independent
auditors to be retained for the following year.
The Management Compensation Committee is comprised of Mrs. Lois Dickson Rice and
Messrs. Don Johnston, Peter O. Lawson-Johnston, David L. Luke III and John L.
McGraw. During 1993 the Management Compensation Committee held five meetings.
The functions performed by the Management Compensation Committee include: (a)
establishing and approving the compensation to be paid to members of the
Corporation's senior management; (b) administering the Corporation's management
incentive plans; (c) administering the Corporation's stock incentive plans; and
(d) authorizing and approving any special compensation arrangements for senior
management.
The Nominating and Director Compensation Committee is comprised of Messrs. John
T. Hartley, Don Johnston, Peter O. Lawson-Johnston, David L. Luke III and Alva
O. Way. During 1993 the Nominating and Director Compensation Committee held
three meetings. The functions performed by the Committee include: (a)
recommending to the Board of Directors the slate of nominees for election as
directors at each Annual Meeting or for election by the Board of Directors on an
interim basis; (b) recommending to the Board of Directors individuals to fill
vacancies on it; (c) evaluating, on a continuing basis, possible candidates to
serve on the Board of Directors; (d) recommending to the Board of Directors
appropriate compensation to be paid to the directors; and (e) administering the
1993 Stock Payment Plan for Directors. The Nominating and Director Compensation
Committee is willing to consider recommendations of nominees by a shareholder if
the shareholder submits the nomination in compliance with the advance notice,
informational and other requirements set forth in the Corporation's By-Laws.
Shareholders should direct such recommendations of nominees to the Nominating
and Director Compensation Committee, c/o the Secretary of the Corporation at
1221 Avenue of the Americas, New York, New York 10020. The Corporation's By-Laws
also contain detailed procedures, including time limitations, which a
shareholder must comply with in order to introduce an item of business at a
meeting of shareholders.
In addition to the above mentioned three committees, the Corporation's Board of
Directors has an Executive Committee and a Financial Policy Committee.
The Board of Directors of the Corporation held a total of nine meetings during
1993. All directors attended at least 75% of (1) all meetings of the Board of
Directors and (2) all meetings of all board committees on which they served. The
overall attendance record for all directors as a group during 1993 was 91.5%.
Outside directors receive from the Corporation an annual fee of $25,000 for
serving on the Board of Directors, plus $850 for each board meeting which they
attend. In addition, outside directors receive $750 for each meeting of the
Audit, Management Compensation, Financial Policy and Nominating and Director
Compensation Committees which they attend. Outside directors who are members of
the Executive Committee receive an annual fee of $1,000. Inside directors, who
are employees of the Corporation, do not receive any fees for serving on the
board or for attending meetings of board committees. At the 1993 Annual Meeting,
shareholders approved the 1993 McGraw-Hill Stock Payment Plan For Directors.
Accordingly, effective May 1, 1993 and thereafter, twenty percent of the annual
retainer fee is paid to the outside directors in the form of Common Stock in
lieu of cash, together with a cash payment equal to the product of the number of
shares of Common Stock issued to the director for the year as provided above
multiplied by the aggregate cash dividends paid by the Corporation on a share of
Common Stock during the year.
Effective July 1, 1989, the Board of Directors adopted the Directors Retirement
Plan which provides for annual retirement and disability benefits to be paid to
each non-employee director of the Corporation upon retirement at or after age 65
or in the event of disability in an amount equal to 10% of the then annual
retainer fee for each year of service on the Board, provided that the director
shall have been a Board member for at least five years.
Pursuant to the Director Deferred Compensation Plan, the Corporation currently
has agreements with Mrs. Lois Dickson Rice and Messrs. Vartan Gregorian, George
B. Harvey, John L. McGraw, Paul J. Rizzo and Alva O. Way, respectively, to defer
payment to them of all or a portion of their annual cash retainer and board and
committee meeting fees which would otherwise be due and payable to them in
connection with their service on the Board of Directors. Interest on the
deferred amount is to be based on the average of a corporate bond index for the
previous five calendar years plus an additional amount currently estimated at
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<PAGE> 11
6%, except that with respect to new agreements to defer or agreements to defer
added amounts entered into after December 3, 1986, interest will be payable at
the monthly equivalent of a corporate bond index for the preceding year plus 2%
(up to a maximum of 150% of the bond index).
INDEMNIFICATION
Each of the directors and certain of the executive officers have entered into an
indemnification agreement with the Corporation pursuant to which each director
and executive officer shall be indemnified against judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys' fees actually
and necessarily incurred in any action or proceeding, whether civil or criminal,
or any appeal therein, to the fullest extent permitted by the applicable
provisions of the New York Business Corporation Law. Such indemnification will
be reduced to the extent that a director or executive officer is effectively
indemnified by directors' and officers' liability insurance maintained by the
Corporation. The Corporation has for many years carried directors' and officers'
liability insurance coverage. The Corporation's current insurance coverage was
purchased for the one year period commencing at 12:01 a.m. on June 26, 1993 and
extending through 12:01 a.m. of June 26, 1994, at an annual aggregate premium of
approximately $760,000. This coverage, subject to a number of standard
exceptions, indemnifies the directors and officers of the Corporation, whether
elected or appointed, for liabilities or losses incurred in the performance of
their duties up to an aggregate sum of $65,000,000. This coverage is also
subject to the following deductibles: $5,000 per director or officer per claim;
$50,000 for all directors and officers in the aggregate per claim; and $350,000
per loss for corporate reimbursement. The Corporation has purchased this
insurance coverage from National Union Fire Insurance Company of Pittsburgh,
PA.; Federal Insurance Company; Fidelity & Casualty Company of New York; and
Great American Insurance Companies. No sums have been paid under this coverage
to the Corporation or any directors or officers nor have any claims for
reimbursement been made under this policy.
BENEFICIAL OWNERSHIP OF THE CORPORATION'S COMMON STOCK (a)
The following table indicates the beneficial ownership of the Corporation's
Common Stock as of February 3, 1994, by (1) each of the directors and nominees,
(2) the chief executive officer and the other four most highly compensated
executive officers and (3) all directors, nominees and executive officers of the
Corporation as a group, based upon information supplied by each of the
directors, nominees and officers:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Right to
Sole Shared Acquire
Voting Voting Shares within Total
Power and Power and 60 Number
Sole Shared Days by of Shares Percent of
Investment Invest- Exercise Beneficially Common
Name of Beneficial Owner Power ment Power of Options Owned Stock(a)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert J. Bahash 24,125 34,006 58,131 (b)
Joseph L. Dionne(c) 104,227 97,713 201,940 (b)
Vartan Gregorian 151 151 (b)
John T. Hartley 1,051 1,051 (b)
George B. Harvey 702 702 (b)
Richard H. Jenrette 51 51 (b)
Don Johnston 2,051 2,051 (b)
Robert N. Landes 15,232 9,474 24,706 (b)
Peter O. Lawson-Johnston 2,051 2,051 (b)
As a Trustee of a Trust 4,700(d) 4,700 (b)
Linda Koch Lorimer(e) 500 500 (b)
David L. Luke III 1,051 1,051 (b)
Harold W. McGraw III 61,740 37,682 99,422 (b)
John L. McGraw 815,375 815,375 2%
Lois Dickson Rice 251 251 (b)
Paul J. Rizzo 1,051 1,051 (b)
James H. Ross 251 251 (b)
Thomas J. Sullivan(f) 25,676 36,613 62,289 (b)
Alva O. Way 1,051 1,051 (b)
All Directors and Executive Officers of the
Corporation as a group (a total of 24
persons, including those named
above) (g)(h) 1,082,903 5,200 253,958 1,342,061 3%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 12
(a) To the Corporation's knowledge, no person is the beneficial owner of more
than 5% of the Corporation's Common Stock, other than Delaware Management
Company, Inc. ("Delaware Management"), a registered investment adviser, which in
that capacity through operating subsidiaries manages client accounts. On
February 14, 1994, Delaware Management advised the Corporation by furnishing the
Corporation with its Schedule 13G filed with the Securities and Exchange
Commission that it beneficially owned in the aggregate 4,300,960 shares or 8.71%
of the outstanding Common Stock. Delaware Management has certified in its
Schedule 13G filing that the Corporation's Common Stock was acquired in the
ordinary course of business and was not acquired for the purpose of changing or
influencing control of the Corporation. None of the directors, nominees or
officers owns securities of the Corporation other than Common Stock. The number
of shares of Common Stock outstanding on February 3, 1994 (excluding treasury
shares) was 49,463,373. The percent of Common Stock is based on such number of
shares and is rounded off to the nearest one percent.
(b) Less than 1%.
(c) Joan F. Dionne, the wife of Joseph L. Dionne, is the beneficial owner of
5,380 shares of Common Stock. These shares have not been included in the above
table.
(d) The Trustee disclaims any beneficial interest in these shares.
(e) Linda Koch Lorimer acquired beneficial ownership of these 500 shares of
Common Stock on February 8, 1994. Ms. Lorimer was elected to the Board of
Directors of the Corporation on February 23, 1994.
(f) Thomas J. Sullivan, Jr., the son of Thomas J. Sullivan, is the beneficial
owner of 1,954 shares of Common Stock. These shares have not been included in
the above table.
(g) Spouses and children of some members of this group may own other shares in
which the members of this group disclaim any beneficial interest and which are
not included in the above table.
(h) Harold W. McGraw, Jr., Chairman Emeritus of the Corporation, is the
beneficial owner of 1,264,250 shares of Common Stock, which is approximately 3%
of the Corporation's issued and outstanding Common Stock. In addition, Anne P.
McGraw, the wife of Harold W. McGraw, Jr., is the beneficial owner of 40,000
shares of Common Stock. None of these shares has been included in the above
table.
INFORMATION AS TO EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation of the
Corporation's chief executive officer and each of the other four most highly
compensated executive officers (the "Named Officers") for services rendered in
all capacities to the Corporation in 1991, 1992 and 1993:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
LONG-TERM COMPENSATION
ANNUAL COMPENSATION Awards Payouts
Name Other ---------------------- --------- ALL
and Annual Restricted Securities Long-Term OTHER
Principal Compen- Stock Underlying Incentive COMPEN-
Position Year Salary Bonus sation(a) Awards(b) Options Payouts SATION
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph L. Dionne 1993 $750,000 $669,008 $ 65,689 0 19,750 0 $151,377(c)
Chairman and 1992 710,000 559,125 80,293 0 20,250 0 91,571
Chief Executive Officer 1991 710,000 124,250 72,552 0 16,200 0 117,797
Harold W. McGraw III 1993 $479,167 $351,707 $142,612 0 10,000 0 $ 71,057(c)
President and 1992 420,667 283,950 38,275 0 10,375 0 43,920
Chief Operating Officer 1991 375,000 56,250 32,963 0 8,300 0 49,546
Robert J. Bahash 1993 $340,000 $291,284 $ 28,689 0 7,000 0 $ 52,743(c)
Executive Vice President, 1992 321,000 198,619 32,928 0 9,000 0 35,815
Chief Financial Officer 1991 300,000 41,250 26,237 0 7,200 0 40,126
Thomas J. Sullivan 1993 $325,500 $228,132 $ 28,689 0 7,000 0 $ 54,409(c)
Executive Vice President, 1992 310,000 196,875 33,996 0 9,000 0 38,296
Administration 1991 297,000 43,750 29,630 0 7,200 0 44,354
Robert N. Landes 1993 $290,500 $168,074 $ 10,855 0 2,800 0 $ 38,491(c)
Executive Vice President, 1992 278,000 125,100 13,727 0 3,375 0 28,641
General Counsel 1991 266,000 26,600 13,598 0 2,700 0 31,169
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 13
(a) Represents dividend equivalents paid on outstanding Long-Term Restricted
Performance Share Awards. With respect to Mr. McGraw, the amount disclosed also
represents the value of certain personal benefits for 1993, including personal
transportation expenses of $105,205.
(b) The number and value of Restricted Stock and Restricted Performance Share
holdings at year end were as follows:
- ------------------------------------------------------------
<TABLE>
<CAPTION>
1993
----------------------------------------------
Unearned
Restricted
Restricted Performance Value
Stock Shares Total (at $67.625)*
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
J. L. Dionne 8,960 28,811 37,771 $ 2,554,264
H. W. McGraw III 4,100 15,476 19,576 1,323,827
R. J. Bahash 3,040 12,583 15,623 1,056,505
T. J. Sullivan 3,940 12,583 16,523 1,117,368
R. N. Landes 2,160 4,761 6,921 468,033
- ----------------------------------------------------------------
</TABLE>
* Based on the closing price of McGraw-Hill Common Stock on December 31, 1993
Dividend equivalent payments equal to the dividend paid on the Corporation's
Common Stock were paid in cash on Restricted Stock and Restricted Performance
Shares in 1993.
(c) For 1993, the dollar value reported in this column includes the following
items:
- ------------------------------------------------------------
<TABLE>
<CAPTION>
1993 Company
Above Market Contribution
Interest on to Defined
Deferred Contribution
Compensation Plans Total
- ------------------------------------------------------------
<S> <C> <C> <C>
J. L. Dionne $ 28,001 $ 123,376 $151,377
H. W. McGraw III 0 71,057 71,057
R. J. Bahash 3,014 49,729 52,743
T. J. Sullivan 5,099 49,310 54,409
R. N. Landes 0 38,491 38,491
</TABLE>
- ------------------------------------------------------------
OPTION GRANTS IN 1993
The following table sets forth all grants of stock options made during 1993
pursuant to the 1987 Key Employee Stock Incentive Plan to the Named Officers in
the Summary Compensation Table:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Individual Grants Term(a)
-------------------------------------------------- --------------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees in or Base Expiration
Name Granted 1993 Price Date 5% 10%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. L. Dionne 19,750 (b) 4.69% $60.9375 1/03/2003(c) $ 756,885 $ 1,918,094
H. W. McGraw III 10,000 (b) 2.37% $60.9375 1/03/2003 $ 383,233 $ 971,187
R. J. Bahash 7,000 (b) 1.66% $60.9375 1/03/2003 $ 268,263 $ 679,831
T. J. Sullivan 7,000 (b) 1.66% $60.9375 1/03/2003 $ 268,263 $ 679,831
R. N. Landes 2,800 (b) 0.66% $60.9375 1/03/2003(c) $ 107,305 $ 271,932
All Shareholders N/A N/A N/A N/A $1,886,793,474(d) $4,781,511,218(d)
All Optionees 422,000 100% $60.9427(e) (e) $ 16,173,783 $ 40,987,594
Optionees' Gain as % of
All Shareholders' Gain N/A N/A N/A N/A 0.86% 0.86%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates required by the Securities and Exchange Commission for the
maximum option term of 10 years and therefore are not intended to and may not
accurately forecast possible future appreciation, if any, of the Corporation's
Common Stock price.
(b) The awards, which were granted pursuant to the 1987 Key Employee Stock
Incentive Plan, were for nonqualified stock options and provide that one-half of
the option vests on January 4, 1994, the first anniversary of the grant, and the
remaining one-half vests on January 4, 1995, the second anniversary of the
grant. In the event of a change in control of the Corporation, the option
becomes fully vested.
(c) In accordance with the Corporation's normal retirement policy and the
post-retirement exercise period of three years under the 1987 Key Employee Stock
Incentive Plan, these individuals may have an earlier expiration date for their
respective option grant than the date shown above. Accordingly, Mr. Dionne's
option may expire on June 29, 2001, and Mr. Landes' option may expire on
December 30, 1998.
(d) The amount shown represents the hypothetical return to all shareholders of
the Corporation's Common Stock assuming that all the shareholders purchased the
Corporation's Common Stock at the close of business on January 4, 1993 at a
purchase price of $60.9427, the average price for all optionees, and that all
shareholders hold the Common Stock continuously for a ten-year period. The
number of outstanding shares of Common Stock on January 4, 1993 was 49,229,475.
The hypothetical return presented is not intended as a projection of the future
performance of McGraw-Hill Common Stock, but rather is provided for illustrative
purposes only.
(e) Expiration dates range from January 3, 2003 through March 22, 2003. $60.9427
represents the average exercise price of the grants to all optionees. All grants
were made at the fair market value of the Corporation's Common Stock at the time
of the grant.
10
<PAGE> 14
AGGREGATE OPTION EXERCISES IN 1993 AND 1993 YEAR-END OPTION VALUES
The following table sets forth information with respect to options exercised by
each of the Named Officers during 1993 and the number and value of unexercised
options as of December 31, 1993:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
December 31, 1993 at December 31, 1993(a)
Shares Acquired Value --------------------------- ---------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. L. Dionne 2,080 $29,250 77,713 29,875 $ 825,861 $ 239,656
H. W. McGraw III 0 0 27,494 15,188 266,980 121,998
R. J. Bahash 478 7,051 26,006 11,500 266,097 94,625
T. J. Sullivan 1,588 21,339 28,613 11,500 299,801 94,625
R. N. Landes 5,587 88,487 6,386 4,488 23,133 36,660
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Based on the closing price of McGraw-Hill Common Stock on December 31, 1993
of $67.625 as reported on the New York Stock Exchange Composite Transactions
Tape.
LONG TERM INCENTIVE PLAN AWARDS IN 1993
The following table sets forth information concerning long-term incentive awards
granted during 1993 to the Named Officers pursuant to the 1987 Key Employee
Stock Incentive Plan:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Estimated Future Payout
Under Non-Stock Price Based Plans
------------------------------------
Number of Performance Period Threshold Target Maximum
Restricted Until Number of Number of Number of
Name Performance Shares(a) Maturation or Payout Shares Shares Shares
- --------------------- ---------------------- --------------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
J. L. Dionne 9,231 shares 3 Years 1,846 9,231 13,847
H. W. McGraw III 5,491 shares 3 Years 1,098 5,491 8,237
R. J. Bahash 3,958 shares 3 Years 792 3,958 5,937
T. J. Sullivan 3,958 shares 3 Years 792 3,958 5,937
R. N. Landes 1,536 shares 3 Years 307 1,536 2,304
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Restricted Performance Share Awards pursuant to the 1987 Key Employee Stock
Incentive Plan with payment in the Corporation's Common Stock based upon the
degree of achievement of a three-year cumulative compound earnings per share
growth goal ("the EPS goal") maturing on December 31, 1995. The awards do not
provide for interim payments (other than the payment of dividend equivalents).
The threshold amount will be earned at the achievement of 60% of the EPS goal,
the target amount will be earned at the achievement of 100% of the EPS goal and
the maximum award amount will be earned at the achievement of 120% or more of
the EPS goal. The Restricted Performance Shares are entitled to dividend
equivalent payments and voting rights comparable to the Corporation's Common
Stock based upon the target number of shares awarded.
In the event of a change in control of the Corporation, all of the financial
goals are deemed to have been satisfied, and the recipient will receive the
target amount no later than the normal maturity date of the award.
11
<PAGE> 15
SHAREHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a graph comparing the yearly percentage change in the
cumulative total shareholder return on the Corporation's Common Stock with the
cumulative total return of the S&P Composite-500 Stock Index and the cumulative
total return for a group of peer companies for the five-year period commencing
on January 1, 1989 and ending on December 31, 1993.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG MCGRAW-HILL, S&P 500 INDEX AND PEER GROUP INDEX**
<TABLE>
<CAPTION>
CURRENT
MEASUREMENT PERIOD 1994 PEER PRIOR 1993
(FISCAL YEAR COVERED) MCGRAW-HILL S&P 500 GROUP PEER GROUP
-------------------- ----------- ------- --------- -----------
<S> <C> <C> <C> <C>
1988 100 100 100 100
1989 94 132 109 111
1990 91 128 92 93
1991 103 166 117 114
1992 114 179 128 127
1993 131 197 148 156
</TABLE>
Assumes $100 Invested on December 31, 1988 in McGraw-Hill Common Stock, S&P 500
Index and Peer Group Index
* Total return assumes reinvestment of dividends
** Companies comprising the Current 1994 Peer Group: Dow Jones & Company, Inc.,
The Dun & Bradstreet Corporation, Gannett Co., Inc., Houghton Mifflin
Company, Knight-Ridder Inc., Meredith Corporation, The New York Times
Company, The Times Mirror Company, and Tribune Company. The Prior 1993 Peer
Group contained the same companies which were included in the Current 1994
Peer Group, except that Paramount Communications Inc. was included in the
Prior 1993 Peer Group and has been eliminated from the Current 1994 Peer
Group, because as a result of the recent sale of Paramount, there has been
extreme volatility in its stock price.
MANAGEMENT COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
INTRODUCTION
The McGraw-Hill executive compensation program (the "Program") is administered
by the Management Compensation Committee of the Board of Directors (the
"Committee") which is composed of the individuals listed below who are
independent outside directors of the Corporation. The Committee has sole
responsibility for all compensation matters with respect to the Corporation's
senior management. The Committee regularly reports to the Board of Directors on
its activities and decisions and meets in executive session at year end to
review the CEO's performance.
PHILOSOPHY
The Program has been designed to enable the Corporation to attract, motivate and
retain senior management by providing a fully competitive total compensation
opportunity based on performance. The Program consists of three key elements:
(1) base salaries which reflect competitive marketplace data and evaluated
individual performance; (2) annual in-
12
<PAGE> 16
centive opportunities which are payable in cash for the achievement of annual
financial performance goals established by the Committee; and (3) long-term
stock-based incentive opportunities consisting of annual grants of restricted
performance shares, which are payable for the achievement of three-year
financial performance goals established by the Committee, and annual stock
option grants. The long-term stock-based incentive opportunities are intended to
align the interests of senior management with those of the Corporation's
shareholders.
The Corporation's executive compensation program is structured so that at higher
management levels a larger portion of annual compensation is variable, based on
company performance, and a larger portion of total compensation is composed of
long-term stock-based compensation. At the CEO level, approximately two-thirds
of Mr. Dionne's total compensation package is at risk depending upon the
Corporation's performance.
In designing and administering the individual elements of the Program, the
Committee strives to balance short and long-term incentive objectives and to
employ prudent judgement in establishing financial performance criteria,
evaluating performance and determining actual incentive payments. It is not the
Committee's practice in administering this Program to provide an employment
contract to any member of senior management. The Committee's policy with respect
to the tax deductibility of executive compensation under Section 162(m) of the
Internal Revenue Code is to qualify such compensation for deductibility where
practicable. In this regard, the Corporation has amended the 1993 and 1987 Key
Employee Stock Incentive Plans to add an individual limit to stock option grants
and plans to defer payout of other compensation until it is tax deductible by
the Corporation or to otherwise comply with Section 162(m) of the Internal
Revenue Code.
Following is a discussion of each of the elements of the Program and a
description of the specific decisions and actions taken by the Committee with
regard to 1993 compensation.
PROGRAM COMPETITIVENESS
Each element of the Program is intended to be fully competitive with comparable
elements of competitor companies in the publishing, information and media
industry. Salary ranges are established for each position annually using a
third-party consultant survey of publishing, information and media industry
compensation practices, which includes the compensation practices of the
companies included in the peer group index of the Performance Graph (the "Peer
Group"). The midpoints of the salary ranges are established to be competitive
with the median base salary levels reported in the survey.
The annual incentive award opportunities are established by the Committee based
on recommendations developed by an independent compensation consulting firm
selected by the Committee. These recommended incentive opportunities are also
intended to be competitive with median levels of competitor incentive
opportunities using available incentive opportunity data for the competitor
companies included in the Peer Group and incentive opportunity data from a
third-party media industry compensation survey of other publishing, information
and media companies.
The long-term incentive grant guidelines were most recently reviewed and reset
by the Committee in late 1992 and were used in making the 1993 grants. These
grant guidelines are intended to provide median competitive long-term
compensation opportunities if the assumptions as to goal achievement and stock
price growth are realized. The guidelines are anticipated to remain in effect
for a multiple-year period until reviewed and reset by the Committee. The grant
guidelines are derived from general industry long-term incentive grant data
which is adjusted by an independent consultant to reflect the long-term
incentive grant practices of publishing, information and media industry
companies including those in the Peer Group.
ANNUAL SALARY AND INCENTIVE COMPENSATION
Annual total cash compensation for senior management consists of base salary and
the annual incentive awards earned under the Key Executive Short-Term Incentive
Compensation Plan. Base salaries are administered within a system designed to
reflect the competitive marketplace, evaluated position responsibilities and
individual performance. The base salaries for senior executives other than the
CEO are recommended by Mr. Dionne based on the above criteria, and are reviewed
and approved annually by the Committee.
Target awards established under the Key Executive Short-Term Incentive
Compensation Plan are expressed as a percentage of each participant's base
salary. Mr. Dionne's target annual incentive award for 1993 was 70% of salary.
The maximum payment opportunity is set at 150% of the annual target award.
Payment of the annual incentive awards for Mr. Dionne and the other executives
named in the Summary Compensation Table is based on the company's performance in
relation to pre-established minimum, target and maximum earnings per share
payment goals approved by the Committee at the beginning of the plan year. The
Committee establishes performance goals which, in its view, represent a
significant achievement in relation to the general outlook and prospects for
publishing, information and media companies during the coming year and the
Corporation's prior performance.
13
<PAGE> 17
LONG-TERM INCENTIVE COMPENSATION
The long-term incentive compensation program for senior management consists of
two types of annual stock awards -- restricted performance shares and stock
options. The 1993 long-term incentive awards were granted under the 1987 Key
Employee Stock Incentive Plan, which Plan was approved by shareholders in 1988.
Restricted performance share awards are granted annually under
Committee-approved grant guidelines which relate the size of the awards to
salary or salary range midpoints. The grant guideline for Mr. Dionne is 75% of
salary. The awards vest at the end of a three-year award cycle within a range of
0 to 150% of the shares awarded, subject to the achievement of minimum, target
and maximum cumulative compound earnings per share growth goals established at
the start of the award cycle by the Committee for Mr. Dionne and the other
executives named in the Summary Compensation Table. These awards are subject to
forfeiture if the minimum performance goal is not attained or if employment is
terminated for certain reasons before the shares become vested. During the award
cycle, participants receive dividend equivalent payments on the shares and also
have the right to vote the awarded shares.
In early 1994, the Committee reviewed the degree of achievement of the
cumulative compound earnings per share growth goals established for the 1991
Restricted Performance Share Award which matured on December 31, 1993. The
earnings per share growth for this award fell below the minimum performance goal
established by the Committee. As a result, the Committee determined that there
would be no payment to participants for the 1991 Award, who were measured on
earnings per share growth, and the shares based on this performance measure were
forfeited and returned to the Corporation.
The second component of the long-term incentive award program consists of stock
option awards which are granted annually. Stock options provide the right to
purchase shares of McGraw-Hill Common Stock at the fair market value (the
average of the high and low trading prices) on the date of grant. These grants
are awarded under Committee-approved guidelines which relate the number of
shares granted to salary grade levels with larger grants being made to
executives at higher grade levels. Each stock option becomes exercisable in two
equal annual installments commencing one year after grant, and has a ten-year
maximum term.
The size of the annual awards of restricted performance shares and stock options
provided under the Committee-approved guidelines are not reduced for any current
stock holdings or previous awards held by a participant and are not dependent
upon and are not adjusted for individual or company performance except in
unusual circumstances.
1993 CEO COMPENSATION
Mr. Dionne's base salary is reviewed and established annually by the Committee.
As part of its review, the Committee considered competitive CEO base salary
information from publishing, information and media industry companies identified
by the Committee, including the Peer Group, Mr. Dionne's individual performance
and contributions since his last review, and the merit increase guidelines in
effect for other salaried employees during this period. Effective January 1,
1993, the Committee increased Mr. Dionne's base salary by 5.6% to $750,000,
based on its review and assessment of the factors and criteria described above.
In early 1994, the Committee reviewed and approved the 1993 annual incentive
award payments for Mr. Dionne and the other named executives under the Key
Executive Short-Term Incentive Compensation Plan. These payments are shown in
the Bonus column of the Summary Compensation Table. For purposes of determining
1993 incentive compensation payments, the Committee adjusted reported 1993
earnings per share to exclude the unusual charges associated with the purchase
and operation in the fourth quarter of 1993 of the 50% interest in
Macmillan/McGraw-Hill School Publishing Company which was not previously owned
by McGraw-Hill and for the increase in the corporate federal tax rate under the
1993 Omnibus Budget Reconciliation Act which was retroactive to January 1, 1993.
Based on these adjustments, the earnings per share for 1993 exceeded the
Committee-established target payment goal and the incentive payments to the
participants were equal to 127% of target opportunity, resulting in a 1993
short-term incentive payment to Mr. Dionne of $669,008.
The 1993 long-term incentive awards which the Committee approved for Mr. Dionne
were made in accordance with the grant guidelines established at the end of
1992. Mr. Dionne's 1993 awards, consisting of 9,231 restricted performance
shares which will mature on December 31, 1995 subject to the achievement of the
earnings per share goal established for this award and 19,750 stock option
shares, are disclosed in the Long-Term Incentive Plan Awards Table and the
Option Grants Table along with the 1993 awards to the other named executives.
CLOSING STATEMENT
The Committee believes that the caliber and motivation of the Corporation's key
employees and the quality of their leadership makes a significant difference in
the
14
<PAGE> 18
long-term performance of the Corporation. The Committee further believes that
compensation should vary with the Corporation's financial performance so that
executives are well rewarded when performance meets or exceeds standards
established by the Committee, and commensurately, there should be comparable
downside risks to compensation when performance does not meet these standards.
In its view, the Committee believes that McGraw-Hill's executive compensation
program is meeting and fulfilling the goals contained in the program's
philosophy.
The foregoing report has been furnished by
Don Johnston
Peter O. Lawson-Johnston
David L. Luke III (Chairman)
John L. McGraw
Lois Dickson Rice.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Management Compensation Committee is comprised of Messrs. Don Johnston,
Peter O. Lawson-Johnston, David L. Luke III, John L. McGraw and Mrs. Lois
Dickson Rice.
Mr. John L. McGraw, a member of the Committee, was Chairman of the Board of
Directors of the Corporation from 1968 to 1974 and was Executive Vice President,
Operating Services, of the Corporation from 1974 to 1978.
Mr. Joseph L. Dionne, the Corporation's Chairman and Chief Executive Officer, is
a director of and chairman of the compensation committee of The Equitable
Companies Incorporated and The Equitable Life Assurance Society of the United
States. Mr. Richard H. Jenrette is Chairman, Chief Executive Officer and a
director of The Equitable Companies Incorporated and The Equitable Life
Assurance Society of the United States as well as being a director of
McGraw-Hill.
Mr. Dionne is a director and a member of the compensation committee of the
Harris Corporation. Mr. John T. Hartley is Chairman of the Board and Chief
Executive Officer of the Harris Corporation and a director of McGraw-Hill.
DEFINED BENEFIT RETIREMENT PLANS
The officers named in the Summary Compensation Table are entitled to retirement
benefits under three defined benefit plans maintained by the Corporation: the
Employee Retirement Plan ("ERP"), the Employee Retirement Plan Supplement ("ERP
Supplement") and the Senior Executive Supplemental Death, Disability and
Retirement Benefits Plan (the "Supplemental Benefits Plan"). Under the
Supplemental Benefits Plan, a participant is entitled to receive upon normal
retirement at age 65, an annual retirement benefit equal to 55% of the
participant's highest rate of annual base salary and highest target opportunity
under the Key Executive Short-Term Incentive Compensation Plan during the
36-month period before retirement, reduced by the participant's annual
retirement benefits under ERP and ERP Supplement, the annual annuity value, if
any, of the participant's hypothetical account balance maintained pursuant to
ERP, the participant's annual retirement benefit under pension plans of any
previous employers and the participant's annual Social Security retirement
benefit.
ERP provides participants with retirement benefits based upon career
compensation. These benefits are subject to limitation under certain provisions
of the Internal Revenue Code. Prior to July 1, 1986, ERP required participants
to make contributions to said Plan. Subsequent to July 1, 1986, ERP was amended
so that the Corporation is to make all of the required contributions to the Plan
and participants are no longer required to make contributions thereto. In
addition, effective as of January 1, 1989, the benefit formula for service after
December 31, 1988 was amended to be 1.4% of each year's earnings for
participants age 45 with five years of continuous service as of June 30, 1986
and whose age and service totalled at least sixty, and 1.0% of each year's
earnings for other participants, and the vesting schedule of ERP was amended to
provide that participants are 100% vested after completion of five years of
continuous service with the Corporation. Under ERP Supplement, participants are
provided with retirement benefits which would have
15
<PAGE> 19
been provided under ERP except for the limitations imposed by the Internal
Revenue Code.
The following table sets forth the annual benefits under ERP, ERP Supplement,
and the Supplemental Benefits Plan (computed based on a straight life annuity)
payable upon retirement at age 65 to each of the Named Officers based upon the
Corporation's contributions and the executive's 1993 compensation (salary and
1993 target opportunity under the Key-Executive Short-Term Incentive
Compensation Plan for purposes of the Supplemental Benefits Plan), which are
not subject to any deduction for Social Security benefits:
ANNUAL RETIREMENT BENEFIT FROM
CORPORATE CONTRIBUTIONS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Supplemental
ERP and Benefits
Name ERP Supplement Plan Total
- ------------------------------------------------------------ -------------- ------------ ---------
<S> <C> <C> <C>
Joseph L. Dionne $227,000 $292,000 $ 519,000
Harold W. McGraw III $158,000 $237,000 $ 395,000
Robert J. Bahash $105,000 $157,000 $ 262,000
Thomas J. Sullivan $100,000 $ 71,000 $ 171,000
Robert N. Landes $ 77,000 $ 80,000 $ 157,000
- -----------------------------------------------------------------------------------------------------------
</TABLE>
Pursuant to the Supplemental Benefits Plan, in the event of involuntary
termination of employment without cause or resignation of employment by the
employee for good reason within two years after a change of control of the
Corporation, or resignation by the employee for any reason during the thirty day
period following the first anniversary of such change of control, participants
shall receive a lump sum payment actuarially equivalent to the monthly
retirement benefit they would have received based upon from 44% to 55% of their
final monthly earnings and target opportunity under the Key Executive Short-Term
Incentive Compensation Plan, depending upon their age at the date of
termination. The Supplemental Benefits Plan is administered by the Management
Compensation Committee of the Board of Directors, which Committee approves
participants who are recommended by the Corporation's Chief Executive Officer.
SENIOR EXECUTIVE SEVERANCE PLAN
Effective January 28, 1987, the Board of Directors adopted the Senior Executive
Severance Plan, which Plan provides that if the employment of a participating
senior executive of the Corporation is involuntarily terminated without cause or
the executive resigns for good reason, the executive shall receive a minimum
severance payment of 12 months base salary and a maximum severance payment of 24
months base salary, the actual amount of severance to be based upon 1.6
multiplied by the number of years of continuous service with the Corporation. In
addition, each participant shall continue to participate in the Corporation's
retirement, life, medical and other insurance benefit plans and programs during
the period the participant receives severance payments, or in lieu thereof, each
participant shall receive an additional cash payment equal to 10% of the
severance amount. The receipt of payments by participants pursuant to the Senior
Executive Severance Plan is in lieu of receiving benefits pursuant to the
Corporation's regular separation allowance plan, which plan is applicable to all
full-time employees of the Corporation. On September 28, 1988 the Plan was
amended to provide that benefits will be payable to participants who voluntarily
terminate their employment within a thirty day period one year after a change in
control of the Corporation has occurred. The Senior Executive Severance Plan is
administered by the Management Compensation Committee of the Board of Directors,
which Committee approves participants who are recommended by the Corporation's
Chief Executive Officer.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
During the year ended December 31, 1993, Ernst & Young audited the consolidated
financial statements of the Corporation and its subsidiaries.
The Board of Directors, after receiving a favorable recommendation from the
Audit Committee, has again selected Ernst & Young to serve as the Corporation's
16
<PAGE> 20
independent auditors for 1994. Although not required to do so, the Board is
submitting the selection of this firm for ratification by the Corporation's
shareholders to ascertain their views. Ernst & Young has advised the Corporation
that it has no direct, nor any material indirect, financial interest in the
Corporation or any of its subsidiaries. A representative of Ernst & Young is
expected to be present at the Annual Meeting with the opportunity to make a
statement if the representative desires to do so, and such representative will
be available to respond to appropriate questions.
The following resolution will be offered by the Board of Directors at the Annual
Meeting:
RESOLVED: That the selection by the Board of Directors of Ernst & Young as
independent auditors for this Corporation and its subsidiaries for 1994 be,
and hereby is, ratified and approved.
THE BOARD OF DIRECTORS' RECOMMENDATION
Your Board recommends that you vote FOR this resolution. Unless otherwise
specified by the shareholder, the Board intends the accompanying proxy to be
voted for this resolution.
3. OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the Annual
Meeting. However, if other matters should properly come before the Meeting, it
is the intention of those named in the solicited proxy to vote such proxy in
accordance with their best judgment.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)") requires
the Corporation's directors, executive officers, and persons who own more than
10% of a registered class of the Corporation's equity securities, to file with
the Securities and Exchange Commission and the New York Stock Exchange reports
on Forms 3, 4 and 5 concerning their ownership of the Common Stock and other
equity securities of the Corporation.
Based solely on the Corporation's review of copies of such reports and written
representations that no other reports were required, the Corporation believes
that Mr. John L. McGraw filed one late report on August 16, 1993 which disclosed
five transactions, which report should have been filed by August 10, 1993.
SHAREHOLDER PROPOSALS FOR 1995
Shareholder proposals which may be submitted for inclusion in the Corporation's
proxy statement and form of proxy for the 1995 Annual Meeting of Shareholders
must be received by the Corporation at its principal executive offices, 1221
Avenue of the Americas, New York, New York 10020, on or before November 22,
1994. Such proposals when submitted must be in full compliance with applicable
laws.
By Order of the Board of Directors
Robert N. Landes
Executive Vice President,
General Counsel and Secretary
New York, New York
March 21, 1994
17
<PAGE> 21
[logo]
MCGRAW-HILL, INC.
VOTING INSTRUCTIONS FOR ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 27, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: THE NORTHERN TRUST COMPANY, AS TRUSTEE UNDER THE EMPLOYEES' INVESTMENT PLAN
OF MCGRAW-HILL BROADCASTING COMPANY, INC. AND ITS SUBSIDIARIES ("EIP")
The Trustee named is hereby instructed to vote all the shares of
Common Stock of McGraw-Hill, Inc. which are credited to the undersigned's
account as of March 10, 1994, at the Annual Meeting of Shareholders to be held
on April 27, 1994, and any adjournment thereof, on the items set forth on the
reverse hereof, as described in the accompanying Proxy Statement and upon such
other business as may properly come before the Meeting.
Voting rights will be exercised by the Trustee as directed, provided
instructions are received by April 20, 1994. Your instructions will be kept
confidential by the Trustee.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN THIS VOTING
INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
- -------------
EIP
THIS PROXY WILL BE VOTED AS DIRECTED BY THE PLAN PARTICIPANT. IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSAL 2.
The Board of Directors recommends a vote FOR all nominees in Items 1a and 1b,
and a vote FOR Proposal 2:
1a-Election of Linda Koch Lorimer as a director for a two-year term expiring at
the 1996 Annual Meeting:
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
1b-Election of the following nominees as directors for three-year terms
expiring at the 1997 Annual Meeting:
Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo
and James H. Ross
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
2. Ratification of the appointment of Ernst & Young as independent public
accountants for 1994:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
And, in their discretion, in the transaction of such other business as may
properly come before the Meeting.
INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee's name below.
- --------------------------------------------------------------------------------
Signature(s)
------------------------------------------------------------
Date
---------------------------
NOTE: Please sign exactly as your name appears on this card in the enclosed
envelope.
<PAGE> 22
[logo]
MCGRAW-HILL, INC.
VOTING INSTRUCTIONS FOR ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 27, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: THE NORTHERN TRUST COMPANY, AS TRUSTEE UNDER THE SAVINGS INCENTIVE PLAN OF
MCGRAW-HILL, INC. AND ITS SUBSIDIARIES ("SIP")
The Trustee named is hereby instructed to vote all the shares of
Common Stock of McGraw-Hill, Inc. which are credited to the undersigned's
account as of March 10, 1994, at the Annual Meeting of Shareholders to be held
on April 27, 1994, and any adjournment thereof, on the items set forth on the
reverse hereof, as described in the accompanying Proxy Statement and upon such
other business as may properly come before the Meeting.
Voting rights will be exercised by the Trustee as directed, provided
instructions are received by April 20, 1994. Your instructions will be kept
confidential by the Trustee.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN THIS VOTING
INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
- ---------------
McGraw-Hill SIP
THIS PROXY WILL BE VOTED AS DIRECTED BY THE PLAN PARTICIPANT. IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSAL 2.
The Board of Directors recommends a vote FOR all nominees in Items 1a and 1b,
and a vote FOR Proposal 2:
1a-Election of Linda Koch Lorimer as a director for a two-year term expiring at
the 1996 Annual Meeting:
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
1b-Election of the following nominees as directors for three-year terms
expiring at the 1997 Annual Meeting:
Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo
and James H. Ross
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
2. Ratification of the appointment of Ernst & Young as independent public
accountants for 1994:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
And, in their discretion, in the transaction of such other business as may
properly come before the Meeting.
INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee's name below.
- --------------------------------------------------------------------------------
Signature(s)
------------------------------------------------------------
Date
---------------------------
NOTE: Please sign exactly as your name appears on this card in the enclosed
envelope.
<PAGE> 23
[logo]
MCGRAW-HILL, INC.
The undersigned appoints Robert N. Landes and Thomas J. Sullivan, and
each of them, proxies with full power of substitution, to vote the shares of
stock of McGraw-Hill, Inc., which the undersigned is entitled to vote, at the
Annual Meeting of Shareholders of said Corporation to be held at the principal
executive offices of the Corporation, 1221 Avenue of the Americas, New York,
N.Y. 10020 on Wednesday, April 27, 1994, at 11 A.M., and any adjournment
thereof.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE MATTERS TO BE VOTED UPON AND THE INSTRUCTIONS ARE SET FORTH ON THE REVERSE
SIDE. PLEASE VOTE, SIGN AND RETURN PROMPTLY.
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
- ------------- ------------- -------------
Common Div. Reinvest. Preference
THIS PROXY WILL BE VOTED AS DIRECTED BY THE PLAN PARTICIPANT. IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSAL 2.
The Board of Directors recommends a vote FOR all nominees in Items 1a and 1b,
and a vote FOR Proposal 2:
1a-Election of Linda Koch Lorimer as a director for a two-year term expiring at
the 1996 Annual Meeting:
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
1b-Election of the following nominees as directors for three-year terms
expiring at the 1997 Annual Meeting:
Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo
and James H. Ross
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
2. Ratification of the appointment of Ernst & Young as independent public
accountants for 1994:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
And, in their discretion, in the transaction of such other business as may
properly come before the Meeting.
INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee's name below.
- --------------------------------------------------------------------------------
Signature(s)
----------------------------------------------------------
Date
-----------------------------
NOTE: Please sign exactly as your name appears on this card in the enclosed
envelope.
<PAGE> 24
[logo]
MCGRAW-HILL, INC.
VOTING INSTRUCTIONS FOR ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 27, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: THE NORTHERN TRUST COMPANY, AS TRUSTEE UNDER THE EMPLOYEE RETIREMENT
ACCOUNT PLAN OF STANDARD & POOR'S ("ERAP")
The Trustee named is hereby instructed to vote all the shares of
Common Stock of McGraw-Hill, Inc. which are credited to the undersigned's
account as of March 10, 1994, at the Annual Meeting of Shareholders to be held
on April 27, 1994, and any adjournment thereof, on the items set forth on the
reverse hereof, as described in the accompanying Proxy Statement and upon such
other business as may properly come before the Meeting.
Voting rights will be exercised by the Trustee as directed, provided
instructions are received by April 20, 1994. Your instructions will be kept
confidential by the Trustee.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN THIS VOTING
INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
- -------------
S&P ERAP
THIS PROXY WILL BE VOTED AS DIRECTED BY THE PLAN PARTICIPANT. IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSAL 2.
The Board of Directors recommends a vote FOR all nominees in Items 1a and 1b,
and a vote FOR Proposal 2:
1a-Election of Linda Koch Lorimer as a director for a two-year term expiring at
the 1996 Annual Meeting:
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
1b-Election of the following nominees as directors for three-year terms
expiring at the 1997 Annual Meeting:
Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo
and James H. Ross
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
2. Ratification of the appointment of Ernst & Young as independent public
accountants for 1994:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
And, in their discretion, in the transaction of such other business as may
properly come before the Meeting.
INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee's name below.
- --------------------------------------------------------------------------------
Signature(s)
----------------------------------------------------------------
Date
-----------------------------------
NOTE: Please sign exactly as your name appears on this card in the enclosed
envelope.
<PAGE> 25
[logo]
MCGRAW-HILL, INC.
VOTING INSTRUCTIONS FOR ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 27, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: THE NORTHERN TRUST COMPANY, AS TRUSTEE UNDER THE SAVINGS INCENTIVE PLAN OF
STANDARD & POOR'S ("SIP")
The Trustee named is hereby instructed to vote all the shares of
Common Stock of McGraw-Hill, Inc. which are credited to the undersigned's
account as of March 10, 1994, at the Annual Meeting of Shareholders to be held
on April 27, 1994, and any adjournment thereof, on the items set forth on the
reverse hereof, as described in the accompanying Proxy Statement and upon such
other business as may properly come before the Meeting.
Voting rights will be exercised by the Trustee as directed, provided
instructions are received by April 20, 1994. Your instructions will be kept
confidential by the Trustee.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN THIS VOTING
INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
- -------------
S&P SIP
THIS PROXY WILL BE VOTED AS DIRECTED BY THE PLAN PARTICIPANT. IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSAL 2.
The Board of Directors recommends a vote FOR all nominees in Items 1a and 1b,
and a vote FOR Proposal 2:
1a-Election of Linda Koch Lorimer as a director for a two-year term expiring at
the 1996 Annual Meeting:
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
1b-Election of the following nominees as directors for three-year terms
expiring at the 1997 Annual Meeting:
Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo
and James H. Ross
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
2. Ratification of the appointment of Ernst & Young as independent public
accountants for 1994:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
And, in their discretion, in the transaction of such other business as may
properly come before the Meeting.
INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee's name below.
- --------------------------------------------------------------------------------
Signature(s)
----------------------------------------------------------------
Date
-----------------------------------
NOTE: Please sign exactly as your name appears on this card in the enclosed
envelope.
<PAGE> 26
[logo]
MCGRAW-HILL, INC.
VOTING INSTRUCTIONS FOR ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, APRIL 27, 1994
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TO: THE NORTHERN TRUST COMPANY, AS TRUSTEE UNDER THE EMPLOYEE RETIREMENT
ACCOUNT PLAN OF MCGRAW-HILL, INC. AND ITS SUBSIDIARIES ("ERAP")
The Trustee named is hereby instructed to vote all the shares of
Common Stock of McGraw-Hill, Inc. which are credited to the undersigned's
account as of March 10, 1994, at the Annual Meeting of Shareholders to be held
on April 27, 1994, and any adjournment thereof, on the items set forth on the
reverse hereof, as described in the accompanying Proxy Statement and upon such
other business as may properly come before the Meeting.
Voting rights will be exercised by the Trustee as directed, provided
instructions are received by April 20, 1994. Your instructions will be kept
confidential by the Trustee.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN THIS VOTING
INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
- -------------
McGraw-Hill ERAP
THIS PROXY WILL BE VOTED AS DIRECTED BY THE PLAN PARTICIPANT. IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR
PROPOSAL 2.
The Board of Directors recommends a vote FOR all nominees in Items 1a and 1b,
and a vote FOR Proposal 2:
1a-Election of Linda Koch Lorimer as a director for a two-year term expiring at
the 1996 Annual Meeting:
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
1b-Election of the following nominees as directors for three-year terms
expiring at the 1997 Annual Meeting:
Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo
and James H. Ross
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
2. Ratification of the appointment of Ernst & Young as independent public
accountants for 1994:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
And, in their discretion, in the transaction of such other business as may
properly come before the Meeting.
INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee's name below.
- --------------------------------------------------------------------------------
Signature(s)
---------------------------------------------------------
Date
---------------------------
NOTE: Please sign exactly as your name appears on this card in the enclosed
envelope.
<PAGE> 27
[logo]
McGraw-Hill, Inc.
The undersigned appoints Robert N. Landes and Thomas J. Sullivan, and
each of them, proxies with full power of substitution, to vote the shares of
stock of McGraw-Hill, Inc., which the undersigned is entitled to vote, at the
Annual Meeting of Shareholders of said Corporation to be held at principal
executive offices of the Corporation, 1221 Avenue of the Americas, New York,
N.Y. 10020 on Wednesday, April 27, 1994, at 11 A.M., and any adjournment
thereof.
PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
(CONTINUED, AND TO BE SIGNED ON THE REVERSE SIDE)
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
[ X ] PLEASE MARK YOUR VOTES LIKE THIS
- ------------- ------------- -------------
Common Div. Reinvest. Preference
THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NOT OTHERWISE
SPECIFIED, THE PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AS SET FORTH
IN ITEMS 1a AND 1b AND FOR PROPOSAL 2.
1a-The Board of Directors recommends a vote FOR the election of Linda Koch
Lorimer as a director for a two-year term expiring at the 1996 Annual
Meeting:
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
1b-The Board of Directors recommends a vote FOR the election of the following
five nominees as directors for three-year terms expiring at the 1997 Annual
Meeting:
Vartan Gregorian, John T. Hartley, Peter O. Lawson-Johnston, Paul J. Rizzo
and James H. Ross
FOR THE WITHHOLD AUTHORITY
NOMINEE(S) to vote for the nominee(s)
[ ] [ ]
2. Ratification of the appointment of Ernst & Young as independent public
accountants for 1994:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
And, in their discretion, in the transaction of such other business as may
properly come before the Meeting, hereby revoking all prior proxies to vote the
same share.
INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
that nominee's name below.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as your name appears on this card in the enclosed
envelope.
Signature(s)
---------------------------------------------------------------
Date
----------------------
