Exhibit 10.46

MOODY’S CORPORATION

CAFETERIA PLAN

Effective January 1, 2008

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TABLE OF CONTENTS

 

ARTICLE I INTRODUCTION    1   1.1    Adoption and Purpose of the Plan    1   1.2
   Cafeteria Plan Status    1

ARTICLE II DEFINITIONS

   1   2.1    “Administrator”    1   2.2    “COBRA”    1   2.3    “Code”    1  
2.4    “Company”    1   2.5    “Compensation”    1   2.6    “Continuation
Participant”    1   2.7    “Contributions”    1   2.8    “Default Benefits”    2
  2.9    “Dependent”    2   2.10    “Dependent Care Reimbursement Account”    2
  2.11    “Dependent Care Benefits”    2   2.12    “Dependent Care Expenses”   
2   2.13    “Eligible Employee”    2   2.14    “Employee”    2   2.15   
“Employer”    2   2.16    “Enrollment Period”    3   2.17    “ERISA”    3   2.18
   “Explanation of Benefits”    3   2.19    “Health Care Reimbursement Account”
   3   2.20    “Health Care Benefits”    3   2.21    “Health Care Expenses”    3
  2.22    “Medical Plan”    3   2.23    “Participant”    3   2.24    “Plan”    3
  2.25    “Plan Year”    4   2.26    “Qualifying Event”    4   2.27    “Salary
Reduction Agreement”    4

ARTICLE III PARTICIPATION

   4   3.1    Commencement of Participation    4   3.2    Cessation of
Participation    4   3.3    Continuation of Participation    4   3.4   
Reinstatement of Former Participant    4

ARTICLE IV BENEFIT OPTIONS AND SALARY REDUCTION

   4

 

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  4.1    Benefit Options    4   4.2    Election Procedure and Salary Reduction
Agreements    5   4.3    Failure To Elect    6   4.4    Changes by Administrator
   6   4.5    Irrevocability of Election by Participant during Plan Year    6  
4.6    Automatic Termination of Election    8   4.7    Unused Contributions or
Benefits    8 ARTICLE V HEALTH CARE REIMBURSEMENT ACCOUNTS    8   5.1   
Establishment of Accounts    8   5.2    Crediting Accounts    8   5.3    Account
Limits    8   5.4    Health Care Benefits    8   5.5    Maximum Benefits    9  
5.6    Account Adjustments    9   5.7    Terminations    9   5.8    Forfeitures
   9

ARTICLE VI DEPENDENT CARE REIMBURSEMENT ACCOUNTS

   9   6.1    Establishment of Accounts    9   6.2    Crediting Accounts    10  
6.3    Account Limits    10   6.4    Dependent Care Benefits    10   6.5   
Maximum Benefits    10   6.6    Account Adjustments    10   6.7    Terminations
   11   6.8    Forfeitures    11   6.9    Principal Shareholder or Owners
Exception    11   6.10    Notice to Members    11

ARTICLE VII CONTINUATION PARTICIPATION

   11   7.1    Election of Continuation Participation    11   7.2    Benefits   
12   7.3    Payment of Contributions    12   7.4    Cessation of Continuation
Participation    12

ARTICLE VIII ADMINISTRATION

   12   8.1    Administrator    12   8.2    Powers and Authority; Action
Conclusive    13   8.3    Indemnification    13   8.4    Counsel and Assents   
13   8.5    Genuineness of Documents    13   8.6    Proper Proof    13   8.7   
Claims Procedure    14

 

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  8.8    Expenses of Administration    15   8.9    Nondiscriminatory Acts    15

ARTICLE IX AMENDMENT OR TERMINATION

   15   9.1    Right Reserved    15

ARTICLE X MISCELLANEOUS

   15   10.1    Payment to an Incompetent    15   10.2    Designation of
Beneficiary    16   10.3    Missing Payee    16   10.4    Rights of Participants
   16   10.5    Estoppel of Participants    16   10.6    Right of Discharge
Reserved    16   10.7    Separability    17   10.8    Governing Law    17   10.9
   Fiduciaries    17   10.10    Captions    17   10.11    Nonassignability    17
  10.12    No Representations    17

 

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ARTICLE I

INTRODUCTION

1.1 Adoption and Purpose of the Plan. The Plan is hereby amended and restated
effective as of January 1, 2008 (the “Effective Date”). The purpose of the Plan
is to provide Employees with the opportunity to pay health insurance premiums,
certain accident or health expenses and certain dependent care expenses on a
before-tax basis by means of salary reduction.

1.2 Cafeteria Plan Status. The Plan is intended to qualify as a “Cafeteria Plan”
under Code Section 125, including a dependent care assistance program under Code
Section 129 and a medical reimbursement plan under Code Section 105(b). The Plan
is to be interpreted in a manner consistent with the requirements of Code
Sections 105, 106, 125, and 129.

ARTICLE II

DEFINITIONS

The following terms when used in the Plan shall have the following meanings
unless a different meaning is clearly required by the context.

2.1 “Administrator” means the person appointed from time to time by the Company
to administer the Plan, as provided in Article VIII.

2.2 “COBRA” means the health care continuation coverage provisions of Code
Section 4980B.

2.3 “Code” means the Internal Revenue Code of 1986, as amended from time to
time. Reference to any specific provision of the Code shall include such
provision and any valid regulations promulgated thereunder, and any comparable
provision of future legislation that amends, supplements, or supersedes such
provision.

2.4 “Company” means Moody’s Corporation.

2.5 “Compensation” means an Employee’s total cash earnings received from the
Employer during a Plan Year, prior to any salary reductions under this Plan, any
other Code Section 125 plan, or any Code Section 401(k) plan.

2.6 “Continuation Participant” means any former Participant and any current or
former spouse or Dependent of a Participant who participates in the Plan in
accordance with Article VII.

2.7 “Contributions” means amounts paid under the Plan and allocated (i) to pay
insurance or other premiums on behalf of a Participant, (ii) to the Health Care
Reimbursement Account of a Participant or Continuation Participant, or (iii) to
the Dependent Care Reimbursement Account of a Participant, for the purpose of
providing benefits under the Plan.

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2.8 “Default Benefits” means benefits which will be assigned to an Eligible
Employee who fails to affirmatively elect benefits for a Plan Year during the
applicable Enrollment Period, pursuant to Article IV hereunder.

2.9 “Dependent” means, with respect to any Participant, an individual defined in
Code Section 152.

2.10 “Dependent Care Reimbursement Account” means an account established
pursuant to Article VI and setting forth a Participant’s interest in the Plan
used to reimburse Dependent Care Expenses.

2.11 “Dependent Care Benefits” means the reimbursement of Dependent Care
Expenses as provided under the Plan.

2.12 “Dependent Care Expenses” means expenses that are incurred by a Participant
(i) for the care of a qualified individual, or for related household services,
and (ii) to enable the Participant to be gainfully employed for any period for
which there are one or more such qualified individuals with respect to such
Participant.

If such expenses are incurred for services provided outside the Participant’s
household by a dependent care center (as defined in Code Section 21(b)(2)(D)),
they shall be Dependent Care Expenses only if such center meets all applicable
laws and regulations of the applicable state or unit of local government.
Dependent Care Expenses shall not include any amount paid for services outside
the Participant’s household at a camp where the qualified individual stays
overnight, or any amount paid to an individual with respect to whom, for the
Plan year, a deduction is allowable under Code Section 151(c) to such
Participant or the spouse of such Participant, or who is a child of such
Participant (within the meaning of Code Section 151(c)(3)) under the age of 19
at the close of the Plan Year.

For purposes of this definition, a qualified individual is (i) a Participant’s
Dependent who is under age 13 and with respect to whom the Participant is the
custodial parent (in the event that the Participant is divorced or separated),
and is entitled to a deduction under Code Section 151(c), or (ii) a
Participant’s spouse or Dependent who is physically or mentally incapable of
caring for himself and who regularly spends at least 8 hours each day in the
Participant’s household.

2.13 “Eligible Employee” means any full-time or part-time Employee who is
regularly scheduled to work at least 20 hours a week for the Employer, and is
eligible to participate in the Plan in accordance with Section 3.1.

2.14 “Employee” means any individual employed by the Employer and classified as
a common-law employee of the Employer in the Employer’s payroll records. An
individual who is classified as a “leased employee” (as described in Code
section 414(n)) shall not be an Employee for purposes of the Plan.

2.15 “Employer” means Moody’s Corporation or any successor company, and such of
its partially or wholly-owned subsidiary companies as may from time to time, be
authorized by the Board or the Administrator to participate in the Plan with
respect to all or some of its Eligible Employees and which have adopted the
Plan.

 

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2.16 “Enrollment Period” means the period prior to the beginning of each Plan
Year during which Eligible Employees may elect benefit hereunder. The Enrollment
Period shall be established annually by the Administrator, and shall be a period
no less than 30 days prior to the beginning of the Plan Year. In addition, the
Administrator may establish special Enrollment Periods for newly eligible
Employees.

2.17 “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Reference to any specific provision of ERISA shall
include such provision and any valid regulations promulgated thereunder, and any
comparable provision of future legislation that amends, supplements, or
supersedes such provision.

2.18 “Explanation of Benefits” means a statement from a medical or dental plan
or health maintenance organization concerning benefits provided to an
individual.

2.19 “Health Care Reimbursement Account” means an account established pursuant
to Article V and setting forth the interest of a Participant or Continuation
Participant in the Plan used to reimburse Health Care Expenses.

2.20 “Health Care Benefits” means the reimbursement of Health Care Expenses as
provided under the Plan.

2.21 “Health Care Expenses” means, with respect to a Participant, expenses
incurred by the Participant, his spouse, Dependent for “medical care” as defined
in Code Section 213(d), but only to the extent that the Participant or other
person incurring such expenses is not reimbursed for, and is not eligible for
reimbursement of, such expenses through insurance or otherwise under any
accident or health plan other than this Plan and cannot deduct such expenses
under Code Section 213. The term “Health Care Expenses” does not include any
premium paid for medical and/or dental coverage.

2.22 “Medical Plan” means the programs for medical, prescription drug, vision
and/or dental coverage provided to Employees of the Employer, as evidenced by
the documents, contracts and descriptive materials governing such coverage
(hereinafter referred to as the “Policy.” The term “Medical Plan” includes the
benefit descriptions, types, amounts, options and coverage levels under the
Policy, the participation requirements under the Policy, and such other terms
and conditions as are set forth in and are applicable to such Policy, as the
same may be amended from time to time.

2.23 “Participant” means any Employee who participates in the Plan in accordance
with Article III.

2.24 “Plan” means the Moody’s Corporation Cafeteria Plan as set forth herein
together with any and all amendments and supplements thereto. The Plan is hereby
amended and restated effective as of January 1, 2008.

 

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2.25 “Plan Year” means the period beginning on the Effective Date and ending on
the following December 31, and the twelve-month period ending on each
December 31 thereafter.

2.26 “Qualifying Event” means the termination of a Participant’s employment for
any reason other than his gross misconduct, a loss of eligibility due to a
reduction in the hours of a Participant’s customary employment, the death of a
Participant, the divorce or legal separation of a Participant and his spouse, or
a Participant’s dependent child ceasing to be covered as a Dependent, if such
event occurs during a Plan Year for which the Participant has chosen to receive
Health Care Benefits.

2.27 “Salary Reduction Agreement” means an agreement between a Participant and
the Employer that the Participant shall receive an allocation of Contributions
for a Plan Year instead of his full Compensation in cash.

A pronoun or adjective in the masculine gender includes the feminine gender, and
the singular includes the plural, unless the context clearly indicates
otherwise.

ARTICLE III

PARTICIPATION

3.1 Commencement of Participation. Each Eligible Employee shall be eligible to
participate in the Plan as of his or her date of hire or rehire. Such Eligible
Employee may become a Participant by executing a Salary Reduction Agreement, as
provided in Section 4.1.

3.2 Cessation of Participation. A Participant will cease to be a Participant as
of the date on which he ceases to be an Eligible Employee.

3.3 Continuation of Participation. A Participant who would otherwise cease to be
a Participant under Section 3.2 because of a Qualifying Event, or a
Participant’s spouse or dependent child who would otherwise cease to receive
benefits under the Plan because of a Qualifying Event, may elect to become a
Continuation Participant in accordance with Article VII for the purpose of
continuing to receive health care coverage as required by COBRA. If the
Qualifying Event is the divorce or legal separation of the Participant and his
spouse, or the dependent child’s ceasing to be a covered Dependent, the
preceding sentence shall not apply to any individual unless the Participant, or
the Participant’s spouse or dependent child, provides notice to the
Administrator of the Qualifying Event within 60 days after the date the
individual would otherwise cease to be eligible to receive benefits under the
Plan.

3.4 Reinstatement of Former Participant. A former Participant will become a
Participant again as of the date on which he again becomes an Eligible Employee
and may participate in accordance with Section 3.1.

ARTICLE IV

BENEFIT OPTIONS AND SALARY REDUCTION

4.1 Benefit Options. A Participant may choose under the Plan to receive his full
Compensation for any Plan Year in cash, or to receive benefits under the Plan
for any Plan Year pursuant to a Salary Reduction Agreement. As of the Effective
Date, the benefits available for each Plan Year are:

(a) Payment of premiums under the Medical Plan;

 

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(b) The reimbursement of Health Care Expenses up to the maximum amount
determined by the Administrator, provided in accordance with Article V; and

(c) The reimbursement of Dependent Care Expenses up to $5,000 ($2,500 in the
case of a married Participant filing his federal tax return separately from his
spouse), provided in accordance with Article VI.

4.2 Election Procedure and Salary Reduction Agreements.

(a) Each Eligible Employee immediately prior to the Effective Date who desires
to become a Participant for the Plan Year commencing with the Effective Date
shall file an election with the Administrator at such time as designated by the
Administrator. By filing such an election, the Eligible Employee shall become a
Participant and his election shall become effective as of the Effective Date. An
Eligible Employee who first becomes an Eligible Employee on or after the
Effective Date (or an Eligible Employee who returns to employment status as an
Eligible Employee on or after the Effective Date) shall become a Participant by
filing an election with the Administrator prior to the thirty-first (31st) day
beginning with the date when he became an Eligible Employee (or) returned to
Eligible Employee status); provided, however, that an election filed hereunder
at a time other than during an annual Enrollment Period may not include an
election of Health Care Benefits or Dependent Care Benefits. Subject to
Section 4.5, such elections may be made only during an Enrollment Period.

Except as provided in Section 4.5 of the Plan, an Eligible Employee who fails to
file his election within the time periods provided for in the preceding
provisions of this Section 4.2 shall not be eligible to file an election for the
applicable Plan Year. Such Eligible Employee may, however, file an election with
respect to any subsequent Plan Year, as provided in Section 4.2(b), provided
such Eligible Employee is then eligible to be a Participant.

(b) The Administrator shall provide a written election form (which shall include
a Salary Reduction Agreement form to the extent required by the Administrator
and may be in electronic format) to each Eligible Employee during the Enrollment
Period prior to the beginning of each Plan Year. Each election form must be
completed and returned to the Administrator on or before such date as the
Administrator shall specify, which date shall be no later than the last day of
the Plan Year in which the relevant Enrollment Period occurs. The election form
shall be effective as of the first day of the next Plan Year.

(c) Each Participant who desires to receive benefits under the Plan during the
Plan Year shall specify the type and amount of such benefits on his election
form and shall execute a Salary Reduction Agreement. The Participant shall not
elect Health Care Benefits in excess of the limits on Contributions to Health
Care Reimbursement Accounts under Section 5.3(ii), or Dependent Care Benefits in
excess of the limits on Contributions to Dependent Care Reimbursement Accounts
under Section 6.3. The amount of the reduction in the Participant’s Compensation
for the Plan Year shall be equal to the amount of benefits that he has elected.

 

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4.3 Failure To Elect. A Participant failing to return a completed election form
to the Administrator on or before the required due date pursuant to Section 4.2
above shall be deemed to have elected to continue in effect for the applicable
Plan Year the benefits in effect for the immediately preceding Plan Year, except
that no Health Care Benefits or Dependent Care Benefits shall be deemed to be
elected. If the Eligible Employee had no coverage for the preceding Plan Year,
he shall be deemed to have elected no benefits hereunder for the current Plan
Year.

4.4 Changes by Administrator. If the Administrator determines, before or during
any Plan Year, that the Plan may fail to satisfy for such Plan Year any
nondiscrimination requirement or any limitation on contributions or benefits
imposed by the Code, the Administrator shall take such action as the
Administrator deems appropriate, under rules uniformly applicable to similarly
situated Participants, to assure compliance with such requirement or limitation.
Such action may include, without limitation, a modification of the elections
made by any Participant who is a key employee (within the meaning of Code
Section 416(i)(1)), a principal shareholder or owner (within the meaning of Code
Section 129(d)(4)), or highly compensated (within the meaning of Code Sections
105(h)(5), 125(e), or 414(q), as applicable)), with or without the consent of
such Participant.

4.5 Irrevocability of Election by Participant during Plan Year. An election and
any Salary Reduction Agreement made under the Plan (or deemed to be made
pursuant to Section 4.3) shall be irrevocable by the Participant during the Plan
Year, unless there is a change in status. A Participant may revoke a benefit
election for the balance of a Plan Year and file a new election only if both the
revocation and the new election are on account of and are consistent with the
change in status.

A change in status for this purpose includes:

(a) Events that change the Participant’s legal marital status, including the
following: marriage, death of the Participant’s spouse, divorce, legal
separation, and annulment.

(b) Events that change the number of the Participant’s dependents including the
following: birth, death, adoption, and placement for adoption.

(c) Events that change the Participant’s employment status or the employment
status of the Participant’s spouse or dependent including: a termination or
commencement of employment, a strike or lockout, a commencement of or return
from an unpaid leave of absence and a change in work site.

(d) Events that cause the Participant’s dependent to satisfy or cease to satisfy
eligibility requirements for coverage on account of attainment of age, student
status, or any similar circumstance.

 

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(e) If the Participant, or the Participant’s spouse, and/or a dependent are
entitled to special enrollment rights under a group health plan, the Participant
may exercise the enrollment rights as provided for in Code Section 9801(f).

(f) If a judgment, decree or order from a court requires a Participant’s
dependent child to be covered under this Plan, the Participant may change his or
her election to provide coverage for the child. Conversely, if the order
requires another individual to provide coverage, the Participant may change his
or her election to revoke coverage for his or her child.

(g) If the Participant, or the Participant’s spouse, and/or a dependent who is
enrolled in the Plan becomes enrolled in Medicare or Medicaid, the Participant
may cancel or reduce coverage for the person who becomes enrolled in Medicare or
Medicaid. Conversely, if the Participant, or the Participant’s spouse and/or a
dependent who was covered under Medicare or Medicaid loses this coverage, the
Participant is allowed to make a prospective election to commence or increase
coverage for the person who loses Medicare or Medicaid coverage under the Plan.

(h) If the cost of the coverage under the Employer’s medical care program
significantly increases or decreases, the Participant is allowed to either
increase or decrease prospectively his or her contribution amounts or make
another election to elect an option providing similar coverage. In cases of
insignificant decrease or increase in cost of coverage, the Plan will
automatically adjust the Participant’s payroll deduction to reflect the
difference in cost. The basis of whether a change in cost is significant or
insignificant is determined on a group level, not on an individual level.
Regarding the Dependent Care Reimbursement Account, the Participant may chose to
increase his contributions in the event that the provider of services increases
its fees during the Plan Year, as long as the provider of services is not a
relative. Conversely, should the Participant choose to remove his dependent(s)
from child care or the need for child care decreases, the Participant is allowed
to decrease his or her Dependent Care Reimbursement Account election
accordingly.

(i) If the Participant’s coverage under the Employer’s medical care program is
significantly curtailed, the Participant may revoke his or her election and
elect another plan option with similar coverage. Also if the Plan adds a new
benefit during the Plan Year, the Participant may elect the newly added option.
Conversely, if the Plan should drop an existing benefit, the Participant is
allowed to choose another benefit which provides similar coverage. Further, the
Participant is allowed to make an election change under the Plan of the
Participant’s spouse, former spouse, or dependent’s employer, providing (i) the
employer plan of the Participant’s spouse, former spouse, or dependent’s
employer permits participants to make an election change that would be permitted
under the Status Change rules contained in this document; or (ii) the
Participant’s plan permits participants to make an election for a period of
coverage that is different from the period of coverage under the Plan of the
Participant’s spouse, former spouse, or dependent’s employer.

Any new election under this Section 4.5 shall be effective at such time as the
Administrator shall prescribe, but not earlier than the first pay period
beginning after the election form is completed and returned to the
Administrator.

 

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4.6 Automatic Termination of Election. An election and any Salary Reduction
Agreement made under the Plan (or deemed to be made under Section 4.3) shall
automatically terminate on the day on which a Participant ceases to be a
Participant in the Plan. Coverage for Health Care Benefits may continue or be
reinstated to the extent provided by Article VII.

4.7 Unused Contributions or Benefits. Subject to the last sentence of this
Section 4.7, if at the end of any Plan Year it is determined that the amount of
Contributions on behalf of a Participant exceeds the cost of providing the
benefits elected by the Participant for such Plan Year, the excess shall be
forfeited and used to pay the costs of administering the Plan and/or any losses
incurred under the Plan. Any excess forfeitures shall be used to reduce the cost
of providing benefits to Participants for the next succeeding Plan Year,
pursuant to Sections 5.8 and 6.8. A Participant’s unused Contributions or
benefits may not be carried over to provide benefits to such Participant in a
subsequent Plan Year; provided, however, that unused Contributions for a Plan
Year may be used to provide benefits with respect to expenses incurred in the
2-1/2 months following the end of such Plan Year.

ARTICLE V

HEALTH CARE REIMBURSEMENT ACCOUNTS

5.1 Establishment of Accounts. The Administrator shall maintain a Health Care
Reimbursement Account for each Participant who has elected to receive Health
Care Benefits.

5.2 Crediting Accounts. Contributions credited to the Health Care Reimbursement
Account of a Participant shall be made through payroll deductions pursuant the
Participant’s Salary Reduction Agreement in effect for a Plan Year.

5.3 Account Limits. The total Contributions to the Health Care Reimbursement
Account of a Participant during any Plan Year shall not exceed the lesser of
(i) the amount elected by the Participant or (ii) the maximum amount determined
by the Administrator. The Administrator may limit such Contributions by a
Participant to a lower amount in its discretion, to the extent such limitation
is permitted by applicable law.

5.4 Health Care Benefits.

(a) A Participant may only seek reimbursement from his Health Care Reimbursement
Account for Health Care Expenses incurred during a Plan Year or within 2-1/2
months after the end of such Plan Year for which he has elected to receive
Health Care Benefits. All claims for benefits shall be submitted on such form or
forms as the Administrator shall prescribe (which may be in electronic form), by
no later than the May 31 following the end of the Plan Year to which such claims
relate.

(b) All claims for Health Care Benefits shall include any supporting
documentation required by the Administrator documenting that the Health Care
Expenses have been incurred and the amount of such expenses.

(c) All claims for Health Care Benefits shall also be accompanied by a written
statement from the Participant that the Health Care Expenses have not been
reimbursed and are not reimbursable under any other health plan.

 

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(d) The Administrator shall have the authority to require the Participant to
submit such additional information as may be necessary to verify that the
expense constitutes a reimbursable Health Care Expense.

5.5 Maximum Benefits. The maximum amount of Health Care Benefits available at
any time during a Plan Year shall be the amount determined under Section 5.3,
less any such benefits previously paid to the Participant with respect to such
Plan Year.

5.6 Account Adjustments. The Administrator shall from time to time adjust the
Health Care Reimbursement Account of a Participant as described below:

(a) Contributions for a Plan Year shall be credited as they are paid.

(b) Health Care Benefits shall be charged as they are paid in accordance with
the Participant’s claims for a Plan Year.

(c) Following the last day for submission of claims for a Plan Year, a charge
shall be made sufficient to eliminate any remaining balance in the account
applicable to such Plan Year, which amount shall be forfeited in accordance with
Section 5.8.

Such adjustments shall be accounted for separately for each Plan Year for which
a Participant has elected to receive Health Care Benefits.

5.7 Terminations. Except as otherwise provided in Article VII, Contributions to
the Health Care Reimbursement Account of a Participant and benefits thereunder
shall automatically terminate as of the date the Participant ceases to be a
Participant in the Plan pursuant to Section 3.2. However, the terminated
Participant may continue to seek reimbursement in accordance with Section 5.4
for Health Care Expenses incurred during the portion of the Plan Year in which
he was a Participant, up to the maximum amount for such Plan Year, determined
under Section 5.5.

5.8 Forfeitures. Except as provided in Section 4.7, a Participant shall not
carry over any unused Health Care Benefits from one Plan Year into a succeeding
Plan Year, and any amount remaining in the Health Care Reimbursement Account of
a Participant after the last day for the submission of claims for the Plan Year
to which such amount relates shall be forfeited. Forfeitures shall be used first
to defray administrative expenses and/or losses of the Plan. Any excess
forfeitures shall be allocated on any reasonable and uniform basis to the Health
Care Reimbursement Accounts of all Participants, to be applied to reimburse
Health Care Expenses incurred in the Plan Year following the year of the
forfeiture.

ARTICLE VI

DEPENDENT CARE REIMBURSEMENT ACCOUNTS

6.1 Establishment of Accounts. The Administrator shall Maintain a Dependent Care
Reimbursement Account for each Participant who has elected to receive Dependent
Care Benefits.

 

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6.2 Crediting Accounts. Contributions credited to the Dependent Care
Reimbursement Account of a Participant shall be made through payroll deductions
pursuant to the Participant’s Salary Reduction Agreement in effect for a Plan
Year.

6.3 Account Limits. The total Contributions to the Dependent Care Reimbursement
Account of a Participant during any Plan Year shall not exceed the lesser of
(i) the amount elected by the Participant or (ii) $5,000, or, in the case of a
married Participant filing his federal tax return separately from his spouse,
$2,500. Notwithstanding the preceding sentence, a Participant may not elect to
make Contributions to such account that exceed his earned income for the Plan
Year (within the meaning of Code Section 129(b)), or, if less, the earned income
of his spouse if he is married on the last day of the Plan Year. In the case of
a spouse who is a full-time student at an educational institution or is
physically or mentally incapable of caring for himself, such spouse shall be
deemed to have earned income of $200 per month (or such greater actual amount)
if the Participant has one qualified individual and $400 per month if the
Participant has two or more qualified individuals.

6.4 Dependent Care Benefits.

(a) A Participant may only seek reimbursement from his Dependent Care
Reimbursement Account for Dependent Care Expenses incurred during a Plan Year
for which he has elected to receive Dependent Care Benefits. All claims for
benefits shall be submitted on such form or forms as the Administrator shall
prescribe (which may be in electronic form), by no later than the May 31
following the end of the Plan Year to which such claims relate.

(b) All claims for Dependent Care Benefits shall include any supporting
documentation required by the Administrator documenting that the Dependent Care
Expenses have been incurred and the amount of such expenses. Unless otherwise
determined by the Administrator, the documentation shall include a written
statement from the Participant indicating the nature of the care or type of
services furnished, the name of the care provider, the dates the care was
rendered, the dates the care was paid, the amount charged, and any other
information that the Administrator may require to comply with applicable laws
and regulations, including the following: (i) If the Participant is divorced or
separated, a statement that the Participant is the custodial parent, and (ii) if
the care is provided by a dependent care center, certification from such center
that it meets all applicable state and local regulations.

6.5 Maximum Benefits. The maximum amount of Dependent Care Benefits available at
any time during a Plan Year shall be the amount in a Participant’s Dependent
Care Reimbursement Account at such time. Such amount shall be the amount
attributable to the Participant’s Contributions for such Plan Year that have
been allocated to the Participant’s Dependent Care Reimbursement Account and not
yet paid to the Participant as of the relevant date.

6.6 Account Adjustments. The administrator shall from time to time adjust the
Dependent Care Reimbursement Account of a Participant as described below:

(a) Contributions for a Plan Year shall be credited as they are paid.

 

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(b) Dependent Care Benefits shall be charged as they are paid in accordance with
the Participant’s claims for a Plan Year.

(c) Following the last day for submission of claims for a Plan Year, a charge
shall be made sufficient to eliminate any remaining balance in the account
applicable with Section 6.8.

Such adjustments shall be accounted for separately for each Plan Year for which
a Participant has elected to receive Dependent Care Benefits.

6.7 Terminations. Contributions to the Dependent Care Reimbursement Account of a
Participant shall automatically terminate as of the date the Participant ceases
to be a Participant in the Plan pursuant to Section 3.2. However, if the
Participant has not received his maximum Dependent Care Benefits for the Plan
Year in which he ceases to be a Participant (determined under Section 6.5 as of
the date he ceases participation), he may continue to seek reimbursement in
accordance with Section 6.4 for Dependent Care Expenses incurred during the
portion of the Plan Year in which he was a Participant.

6.8 Forfeitures. Except as provided in Section 4.7, a Participant shall not
carry over any unused Dependent Care Benefits from one Plan Year into a
succeeding Plan Year, and any amount remaining in the Dependent Care
Reimbursement Account of a Participant after the last day for the submission of
claims for the Plan Year to which such amount relates shall be forfeited.
Forfeitures shall be used first to defray administrative expenses and/or losses
of the Plan. Any excess forfeitures shall be allocated on any reasonable and
uniform basis to the Dependent Care Reimbursement Accounts of all Participants,
to be applied to reimburse Dependent Care Expenses incurred in the Plan Year
following the year of the forfeiture.

6.9 Principal Shareholder or Owners Exception. To the extent applicable to the
Employer, not more than 25 percent of the amounts paid for Dependent Care
Benefits during a Plan Year may be provided for the class of Participants who
are shareholders or owners of such Employer (or their spouses or Dependents),
each of whom (on any day of the Plan Year) owns more than 5 percent of the stock
or of the capital or profits interest in such Employer. Ownership of stock in
the Employer shall be determined in accordance with the rules of Code
Section 1563(d) and (e) without regard to Code Section 1563(e)(3)(C). Ownership
of an interest in an unincorporated Employer shall be determined in accordance
with regulations prescribed by the Secretary of the Treasury.

6.10 Notice to Members. The Administrator shall furnish each Participant who has
received Dependent Care Benefits during a Plan Year, a written statement showing
the amounts paid or incurred by the Employer in providing such benefits during
the Plan Year. Such written statement shall be furnished at such time as
determined by the Administrator following the close of the applicable Plan Year.

ARTICLE VII

CONTINUATION PARTICIPATION

7.1 Election of Continuation Participation. As soon as practicable, the
Administrator shall provide a written notice and election form to each
individual who may elect under

 

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Section 3.3 to become a Continuation Participant in the Plan. The election form
shall be effective as of the date on which the individual would otherwise cease
to receive benefits under the Plan. Each individual who desires to become a
Continuation Participant in the Plan to receive Health Care Benefits shall so
specify on his election form. Each election form must be completed and returned
to the Administrator on before the date that is 60 days after the later of
(i) the date on which the Qualifying Event occurs or (ii) the date on which the
notice and election form are provided to such individual.

7.2 Benefits.

(a) A Continuation Participant shall elect and receive Health Care Benefits in
accordance with Articles IV, V, and other relevant provisions of the Plan. An
election pursuant to Section 7.1 shall continue the election of Health Care
Benefits made or deemed to have been made by the Continuation Participant (or
the Continuation Participant’s spouse or parent) pursuant to Article IV for the
Plan Year in which the Qualifying Event occurs.

(b) A Continuation Participant shall not be eligible to elect or to receive any
benefits under the Plan other than Health Care Benefits.

7.3 Payment of Contributions. A Continuation Participant shall be required to
pay monthly Contributions to his Health Care Reimbursement Account as of the
effective date of his election to continue participation. The amount of such
Contributions (on an annualized basis) shall equal the amount of Health Care
Benefits that he has elected to receive for the Plan Year, adjusted by the
Administrator on a uniform and nondiscriminatory basis to include any additional
amount that may be charged to an individual electing health care continuation
coverage under COBRA.

7.4 Cessation of Continuation Participation. A Continuation Participant will
cease to be a Continuation Participant as of the earlier of (i) the date on
which he fails to make timely payment of a Contribution due under Section 7.3,
(ii) the date on which he elects to discontinue, or fails to make a required
election to continue, his participation in the Plan, or (iii) the date on which
his right under COBRA to continue health care coverage under the Plan expires. A
Continuation Participant who returns to service as an Employee without a break
in participation shall be reinstated as a Participant without any change in his
election. All other former Participants shall be reinstated as a Participant in
accordance with Section 3.4.

ARTICLE VIII

ADMINISTRATION

8.1 Administrator. The Company shall select an Administrator, and such
Administrator will have full power to administer the Plan in all of its details,
subject to applicable requirements of law, provided that the Plan is carried out
in a nondiscriminatory fashion, in accordance with its terms, and for the
exclusive benefit of Participants and their Dependents. The Company shall
designate one or more of its employees as liaison to the Administrator, with
authority, power and responsibility to perform all duties and supply and
transmit all information and reports with respect to Employees of each Employer
to enable the Administrator to discharge properly its duties under the Plan, and
to achieve compliance by the Company with reporting, disclosure and other
requirements of ERISA.

 

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8.2 Powers and Authority; Action Conclusive. Except as otherwise expressly
provided in the Plan:

(a) The Administrator will have all powers necessary or helpful for the carrying
out of its responsibilities.

(b) The Administrator may delegate to one or more persons the right to act on
its behalf in any one or more matters connected with the administration of the
Plan.

(c) Without limiting the generality of the foregoing, the Administrator will
have the power to make rules and regulations for the administration of the Plan
that are consistent with the terms and provisions of the Plan, to interpret and
construe all terms, provisions, conditions and limitations of the Plan, and to
determine all questions arising out of, or in connection with, the provisions of
the Plan or its administration in any and all cases in which the Administrator
deems a determination advisable. The decisions or actions taken by the Company,
the Administrator or its delegates in good faith in respect of any matter
hereunder, including decisions regarding claims for benefits, will be conclusive
and binding upon all parties concerned.

The foregoing list of powers is not intended to be either complete or exclusive
and the Administrator will, in addition, have such powers as it may determine to
be necessary for the performance of its duties under the Plan.

8.3 Indemnification. To the extent permitted by law, any person who is an
employee, officer and/or director of the Company shall be indemnified by the
Company and held harmless against any claims, and the expenses of defending
against such claims, resulting from any action or conduct connected with or
related to the Plan or the administration of the Plan, unless such person has
acted in bad faith or in a grossly negligent fashion, or has willfully neglected
his duties, in respect of the Plan.

8.4 Counsel and Assents. The Administrator may employ such counsel (including
legal counsel, who may be counsel for the Company) and agents, and may arrange
for such clerical and other services, as the Administrator may require in
carrying out the provisions of the Plan. Neither the Company nor the
Administrator shall be liable for the acts or omissions of any person to whom
responsibilities are delegated pursuant to this Section 8.4, except as otherwise
provided by law.

8.5 Genuineness of Documents. The Administrator, the Company, and their
respective officers, directors, and employees will be entitled to rely upon any
notice, request, consent, letter, telegram or other paper or document believed
by them or any of them to be genuine and to have been signed or sent by the
proper person, and will be fully protected in respect of any action taken or
suffered by them in good faith reliance thereon.

8.6 Proper Proof. In any case in which the Company or the Administrator is
required under the Plan to take action upon the occurrence of any event, they
will be under no obligation to take such action unless and until proper and
satisfactory evidence of such occurrence has been received by them.

 

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8.7 Claims Procedure. The Administrator shall establish such claims procedures
as it deems necessary and appropriate, in accordance with the terms and
conditions of the Plan. A claim for reimbursement under a Dependent Care
Reimbursement Account shall not be deemed denied solely because payment is
deferred until such time as there are sufficient funds credited to the
Participant’s Account to pay such claim. If a claim for reimbursement is denied
(or denied in part) by the Administrator, the claimant shall be given notice in
writing of such denial within 90 days after receipt of the claim (or if special
circumstances require an extension of time, written notice of the extension
shall be furnished to the claimant, indicating the special circumstances
requiring the extension of time and the date by which the Plan expect to render
a decision. In no event shall such extension exceed an additional 90 days). The
notice of a denial of a claim shall be written in a manner calculated to be
understood by the claimant and shall set forth the following information:

(a) the specific reason or reasons for such denial;

(b) a specific reference to pertinent Plan provisions on which the denial is
based;

(c) description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;

(d) An explanation of the Plan’s claims procedure and the time limits applicable
to such procedures, including a statement of the claimant’s right to bring a
civil action under section 502(a) of ERISA.

Within 60 days after receipt of the above material, the claimant shall have a
reasonable opportunity to appeal the claim denial to the Administrator for a
full and fair review. The claimant or his authorized representative must request
such a review in writing within 60 days after such notice of denial has been
received.

The claimant or his duly authorized representative shall have (i) the
opportunity to submit written comments, documents, records, and other
information relating to the claim for benefits, (ii) upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits, and (iii) the
opportunity to submit written comments, documents, records, and other
information relating to the claim for benefits. The Administrator’s review of
the adverse benefit decisions shall take into account all comments, documents,
records, and other information submitted by the claimant relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination.

The decision of the Administrator shall be made promptly, and not later than 60
days after the Administrator’s receipt of the request for review, unless special
circumstances require an extension of time for processing, in which case the
claimant shall be so notified before the termination of the initial 60 day
period and a decision shall be rendered as soon as possible, but

 

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not later than 120 days after receipt of the request for review. The extension
notice shall indicate the special circumstances requiring an extension of time
and the date by which the Plan expects to render the determination on review.

The claimant shall be given a copy of the decision promptly. The decision shall
be in writing and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision is based. The decision shall
include a statement that the claimant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records, and
other information relevant to the claimant’s claim for benefits. Additionally,
the decision shall include a statement of the claimant’s right to bring an
action under section 502(a) ERISA.

Notwithstanding the foregoing, any claim which arises under an insurance
contract shall not be subject to review under this Plan, and the Administrator’s
authority under this section shall not extend to any matter as to which an
administrator under any such other plan is empowered to make determinations
under such plan.

8.8 Expenses of Administration. The expenses, other than settlor expenses,
incurred by or on behalf of the Employer relative to the administration of the
Plan shall be paid from forfeitures arising under Sections 4.7, 5.8 and 6.8,
and, to the extent such expenses exceed such forfeitures, shall be paid by the
Employer; provided, however, each Participant electing any reimbursement account
available under the Plan may be charged certain expenses incident to the
maintenance of such account as determined by the Administrator.

8.9 Nondiscriminatory Acts. Any discretionary acts to be taken under the terms
and provisions of the Plan by the Employer or the Administrator shall be uniform
in their nature and application to all those similarly-situated, and no
discretionary acts shall be taken that would be discriminatory under the
provisions of the Code relating to cafeteria plans, medical plans, or dependent
care assistance plans, or any other employee welfare benefit plan, where
applicable.

ARTICLE IX

AMENDMENT OR TERMINATION

9.1 Right Reserved. The Plan may be amended or terminated at any time by the
Board, the Governance and Compensation Committee of the Board, the Management
Benefits and Compensation Committee, or a delegate of any of them. Such
amendment or termination shall not adversely affect or alter any right or
obligation with respect to any benefit previously accrued hereunder.

ARTICLE X

MISCELLANEOUS

10.1 Payment to an Incompetent. If any amount is payable hereunder to an
adjudged legally incompetent person, such amount may be paid to the legal
representative(s) of such incompetent person, and if none, to the first
surviving class of the following successive preference payees:

(a) To such person’s spouse;

 

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(b) To such person’s parent;

(c) To a guardian of such incompetent person or to the person with whom such
incompetent person resides; or

(d) Directly to such incompetent person.

Payment to any person in accordance with the foregoing provisions will, to the
extent of the payment, discharge the Plan, the Company, the Administrator and
any person making such payment pursuant to the direction of the Company or the
Administrator, and none of the foregoing will be required to see to the proper
application of such payment.

10.2 Designation of Beneficiary. If a Participant dies during a Plan Year, the
Plan shall reimburse such Participant’s spouse, or if none, such Participant’s
beneficiary, for covered expenses incurred prior to the Participant’s death or
as otherwise required by Code Section 4980B, upon receipt by the Administrator
of a completed claim. In the event that a participant dies without a spouse, the
designated beneficiary or beneficiaries of a Participant entitled to succeed to
the Participant’s right to receive any benefit or payment under the Plan shall
be the Participant’s designated beneficiary or beneficiaries under the group
term life insurance plan maintained by the Employee’s Employer (if applicable),
and in the absence of any such designated beneficiary, the Participant’s estate.

10.3 Missing Payee. Any amount due and payable under the Plan to a Participant
or beneficiary shall be forfeited if the Administrator after reasonable effort
is unable to locate such individual.

10.4 Rights of Participants. Nothing hereunder shall require the Employer to
vest a Participant or Continuation Participant in any right against the
Employer, except as an unsecured creditor seeking enforcement of this Plan.
Neither the establishment of this Plan, nor any modification thereof, nor any
payments hereunder, shall be considered as giving to any Participant or
Continuation Participant, or any person, any legal or equitable rights against
the Employer or the Employer’s shareholders, directors, or officers.

10.5 Estoppel of Participants. The Administrator and the Employer may rely upon
any certificate, statement or other representation made to them by any Employee,
Participant, Continuation Participant, or Dependent with respect to any fact
required to be determined under any of the provisions of the Plan, and will not
be liable on account of the payment of any moneys or the doing of any act in
reliance upon any such certificate, statement or other representation.

In the discretion of the Administrator, any such certificate, statement or other
representation will be conclusively binding upon an Employee, Participant, or
Continuation Participant, and his Dependents, and such Employee, Participant,
Continuation Participant, or Dependents will thereafter and forever be estopped
from disputing the truth and correctness of such certificate, statement or other
representation.

10.6 Right of Discharge Reserved. The establishment of the Plan shall not be
construed to confer upon an Employee or Participant any legal right to be
retained in the employ of the Employer. All Employees will remain subject to
discharge to the same extent as if the

 

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Plan had never been adopted, and may be treated without regard to the effect
such treatment might have upon them under the Plan. Nothing in the Plan shall be
deemed to be an agreement, consideration, inducement, or condition of
employment.

10.7 Separability. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability will not affect any other
provision of the Plan, and the Plan will be construed and enforced as if such
provision had not been included therein.

10.8 Governing Law. The Plan shall be construed in accordance with the laws of
the State of New York to the extent not preempted by federal law.

10.9 Fiduciaries. Every fiduciary under the Plan shall act solely in the
interest of Participants and beneficiaries, and for the exclusive purpose of
providing benefits to Participants and beneficiaries. Any fiduciary under the
Plan may serve in more than one fiduciary capacity with respect to the Plan.

10.10 Captions. The captions contained herein are inserted only as a matter of
convenience and for reference and in no way define, limit, enlarge or describe
the scope or intent of the Plan, nor in any way shall affect the Plan or the
construction of any provision thereof.

10.11 Nonassignability. A Participant shall not be permitted to assign,
anticipate, transfer or alienate his rights under the Plan. Eligibility for
benefits is conditioned on compliance with this Section.

10.12 No Representations. The tax advantages to be provided by this Plan are
subject to government rulings, regulations, and application of the tax laws by
the Internal Revenue Service. The Employer makes no representation that any
particular tax consequences will result through participation in this Plan.

 

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