EXHIBIT 10.16

[COMPANY NAME]

[FORM OF PERFORMANCE SHARE AWARD LETTER FOR THE AMENDED AND RESTATED 2001
MOODY’S CORPORATION KEY EMPLOYEES‘ STOCK INCENTIVE PLAN]

Dear [Name]:

Congratulations! I am pleased to inform you that the Board of Directors of
Moody’s Corporation (“Moody’s”) awarded you [            ] performance shares
(“Performance Shares”) on [DATE]. This letter outlines the key terms and
conditions of your Performance Shares grant.

Your Performance Shares grant is subject to the terms and conditions of the
Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive
Plan, as amended (the “Plan”). By accepting the grant, you agree to the terms
and conditions as set forth in the Plan and in this grant letter, including the
terms and conditions applicable to you based on your country of residence as set
forth in the attached Appendix. A copy of the Plan, as well as the prospectus
relating to the offering of shares of Moody’s stock pursuant to the Plan, is
enclosed with this letter. You should read each of the Plan and the prospectus
in their entirety for a better understanding of your grant. Capitalized terms
not defined herein shall have the same meaning ascribed to them in the Plan.

Moody’s has engaged Fidelity Investments as the Plan administrator. You will be
provided with a Fidelity Investments on-line brokerage account, at no cost to
you, in which shares will be delivered when and to the extent that your
Performance Shares vest. Once your Performance Shares are issued, you may
transfer your shares to another brokerage account or leave them in your Fidelity
account, subject to applicable exchange controls and/or repatriation
requirements which may apply based on the country in which you work and/or
reside.

Your Performance Shares grant provides you with a right to receive an equity
stake in Moody’s and an opportunity for long-term capital appreciation if
performance measures are achieved.

Details of Your Performance Shares Grant

As a holder of Performance Shares, you have an unfunded, unsecured promise of
Moody’s to issue shares of Moody’s common stock, par value $0.01 per share, in
the future if and to the extent that certain performance goals are achieved. The
maximum number of shares that can be issued to you shall equal two hundred and
twenty five percent (225%) of the number of target Performance Shares granted to
you. You shall not have the rights of a shareholder, including any right to vote
shares or receive dividends with respect to shares of Moody’s common stock,
unless and until such shares are issued pursuant to the terms of this letter at
the conclusion of the performance period, as hereinafter defined. In the event
of a stock split, a stock dividend or similar change in Moody’s common stock,
the number of your Performance Shares will be adjusted as determined by the
Governance and Compensation Committee (the “Committee”) under the Plan.

Your Performance Shares will vest, subject to your continued employment through
the Vesting Date as hereinafter defined, to the extent that Moody’s or one or
more of its Subsidiaries or Affiliates, as applicable, achieves certain
performance objectives which will be measured cumulatively over the three
calendar years 20[    ]-20[    ] (the “Performance Period”); provided, however,
that the number of Performance Shares treated as vested and the corresponding
number of shares actually issued to you as a payout may be less than the number
determined by the performance payment percentages (including zero), at the
discretion of the Committee. Consistent with prior years, in the event there is
negative total shareholder return over the Performance Period for example, the
Committee would consider whether it was appropriate to exercise negative
discretion and reduce the performance payment percentages. If, during the
Performance Period, you transfer your employment to or from Moody’s or any
Subsidiary or Affiliate, then your Performance Shares shall be divided pro rata
on the basis of the portion of the Performance Period during which you are
employed by each employer entity, and the performance goals applicable to
employees of your employer entity as of the date of grant of the Performance
Shares and any subsequent employer entities during the Performance Period shall
apply to the applicable portion of the Performance Period. The vesting of
Performance Shares on the Vesting Date will be determined by the Committee and
shall be expressed as a percentage of the total number of target Performance
Shares granted to you as determined pursuant to the following tables, subject to
the Committee’s discretion to reduce such percentage.

 

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The following table indicates the weight ascribed to the three performance
measures based on the business entity segment for which each participant
performs services:

 

     Performance Measures  

Entity

   MCO Earnings Before
Interest, Taxes,
Depreciation &
Amortization
(“EBITDA”)     MA Sales      MIS
Ratings
Quality   Moody’s Corporation and Shared Services      [__] %      [__] %      
[__] %  Moody’s Investors Service      [__] %      [__] %       [__] %  Moody’s
Analytics      [__] %      [__] %       [__] % 

The following table indicates the [YEAR] cumulative three-year targets:

 

                     

[YEAR] Performance Share Targets

Performance Measure

   Cumulative
3-Year Target
(millions) MCO Profitability (EBITDA)    [____] MIS Ratings Quality (Average
Position)    [____] MA Sales    [__]__

Payout attributable to the achievement of each performance measure will be
determined as follows:

 

   Payout Percentage **** MCO EBITDA Achievement *   

Less than [__]% of Target

[__]% of Target

[__]% of Target

[__]% of Target

[__]% or more of Target

  

[__]%

[__]%

[__]%

[__]%

[__]%

MA Sales Achievement **   

Less than [__]% of Target

[__]% of Target

[__]% of Target

[__]% or more of Target

  

[__]%

[__]% - [__]%

[__]% - [__]%

[__]% - [__]%

MIS Ratings Quality Achievement ***   

Less than [__]% of Target

[__]% of Target

[__]% of Target

[__]% of Target

[__]% of Target

[__]% or more of Target

  

[__]%

[__]%

[__]%

[__]%

[__]%

[__]%

 

* Moody’s Corporation EBITDA means cumulative EBITDA for the three-year
Performance Period.

** Moody’s Analytics Sales means cumulative net sales of Moody’s Analytics for
the three-year Performance Period. Funding includes a modifier to increase the
funding slope as sales from acquired businesses are achieved. Funding can be
further adjusted up or down depending upon whether the results of the
acquisition are above or below the acquisition plan.

*** Moody’s Investors Service Ratings Accuracy is the three year Accuracy Ratio
(AR) of MIS Ratings.

**** Subject to reduction in the Committee’s discretion.

Immediately following the conclusion of the Performance Period, the Committee
shall certify whether the performance measures were attained, the percentage of
payout, if any, and the date on which your Performance Shares will vest and be
issued (the “Vesting Date”). For purposes of this letter, the Vesting Date shall
be the date that the Committee determines the shares will be paid, which is
expected to be the first trading day in March (but in no event after March 15th)
following the conclusion of the Performance Period.

 

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In the event of your Termination of Employment prior to the Vesting Date (for
reasons other than your death, Disability or Retirement after the first
anniversary of the grant of the Performance Shares and provided your employment
is not terminated involuntarily by Moody’s or its Subsidiary or Affiliate prior
to or simultaneous with your Retirement), you will forfeit all unvested
Performance Shares. Moody’s shall have the exclusive discretion to determine
when your Termination of Employment occurs for purposes of your Performance
Shares grant (including whether you may still be considered to be employed while
on a leave of absence), subject to U.S. Internal Revenue Code Section 409A
(“Code Section 409A”) in the event you are a U.S. taxpayer.

In the event of your Termination of Employment by death, Disability or
Retirement (provided your employment is not terminated involuntarily by Moody’s
or its Subsidiary or Affiliate, with or without cause, prior to or simultaneous
with any such Retirement), in each case after the first anniversary of the date
of your Performance Shares grant hereunder, you shall be entitled to receive as
a payout a pro rata portion of the number of shares issuable pursuant to your
Performance Shares based on the number of days of your actual service during the
Performance Period, such shares to be issued after the end of the Performance
Period on the originally scheduled Vesting Date set forth above but only if and
to the extent that such shares would have been earned by achievement of
performance measures and become issuable to you had your Termination of
Employment not occurred prior to the end of the Performance Period; provided,
however, that the number of shares actually issued to you may be less than the
number determined by the performance payout percentage (including zero), at the
discretion of the Committee.

In the event of a Change in Control, shares or, in the discretion of the
Committee, cash equal to the fair market value of the shares as of immediately
prior to the Change in Control, shall be issued in satisfaction of your
Performance Shares immediately prior to the Change in Control as if the
performance measures for the Performance Period had been achieved at 100% of
Target.

Compliance with Stock Ownership Guidelines

As a holder of Performance Shares, you are subject to Moody’s stock ownership
guidelines. You should familiarize yourself with these guidelines, as you are
solely responsible for ensuring compliance thereto. To request a copy of the
guidelines, please contact your Human Resources representative.

Transferability of Performance Shares

Your Performance Shares may not be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by you otherwise than by will or by the
laws of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance will be void and unenforceable
against Moody’s.

Repayment/Forfeiture

Any payments or benefits you may receive hereunder shall be subject to repayment
or forfeiture to the extent required by Moody’s policy as in effect from time to
time and/or as may be required to comply with the requirements under the U.S.
Securities Act of 1933, as amended, the U.S. Securities Exchange Act of 1934, as
amended, rules promulgated by the U.S. Securities and Exchange Commission or any
other applicable law, including the requirements of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, or any securities exchange on which Moody’s
common stock is listed or traded, as may be in effect from time to time.

Nature of the Grant

In accepting the grant, you acknowledge, understand and agree that:

(1) the Plan is established voluntarily by Moody’s, it is discretionary in
nature and it may be modified, amended, suspended or terminated by Moody’s at
any time, to the extent permitted by the Plan;

(2) the Performance Shares grant is voluntary and occasional and does not create
any contractual or other right to receive future performance shares grants, or
benefits in lieu of performance shares, even if performance shares have been
granted in the past;

(3) all decisions with respect to future performance shares or other grants, if
any, will be at the sole discretion of Moody’s;

(4) the grant of Performance Shares and your participation in the Plan shall not
create a right to employment or be interpreted as forming an employment or
service contract with Moody’s, your employer or any Subsidiary or Affiliate of
Moody’s and shall not interfere with the ability of your employer or any
Subsidiary or Affiliate of Moody’s, as applicable, to terminate your employment
or service relationship (if any);

(5) you are voluntarily participating in the Plan;

 

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(6) the Performance Shares grant and the shares subject to the Performance
Shares do not constitute and are not intended to replace any pension rights or
compensation;

(7) the Performance Shares grant and the shares subject to the Performance
Shares, and the income and value of same, do not constitute and are not part of
normal or expected compensation, salary, remuneration or wages for purposes of
calculating any severance, resignation, termination, redundancy, end-of-service
payments, holiday pay, bonuses, long-service awards, pension or retirement
benefits or similar mandatory payments;

(8) the future value of the underlying shares is unknown, indeterminable and
cannot be predicted with certainty;

(9) unless otherwise agreed with Moody’s, the Performance Shares grant and the
shares subject to the Performance Shares, and the income and value of same, are
not granted as consideration for, or in connection with, the service you may
provide as a director of a Subsidiary or Affiliate of Moody’s; and

(10) in addition to paragraphs (1) through (9) above, the following provisions
will also apply to you if you are employed outside the United States:

(a) the Performance Shares and the shares subject to the Performance Shares are
not part of normal or expected compensation or salary for any purpose;

(b) no claim or entitlement to compensation or damages shall arise from
forfeiture of the Performance Shares resulting from your Termination of
Employment (for any reason whatsoever, whether or not later found to be invalid
or in breach of employment laws in the jurisdiction where you are employed or
the terms of your employment agreement, if any) and in consideration of the
grant of Performance Shares to which you are otherwise not entitled, you
irrevocably agree never to institute any claim against Moody’s, its Subsidiaries
or Affiliates and your employer, waive your ability, if any, to bring such a
claim, and release Moody’s, its Subsidiaries or Affiliates and your employer
from any such claim that may arise; if, notwithstanding the foregoing, any such
claim is allowed by a court of competent jurisdiction, then, by participating in
the Plan, you shall be deemed irrevocably to have agreed not to pursue such
claim and agree to execute any and all documents necessary to request dismissal
or withdrawal of such claim; and

(c) neither your employer nor Moody’s (nor any of its Subsidiaries or
Affiliates) shall be liable for any foreign exchange rate fluctuation between
your local currency and the United States Dollar that may affect the value of
your Performance Shares or any amounts due to you pursuant to the settlement of
your Performance Shares or the subsequent sale of shares acquired upon
settlement.

No Advice Regarding Grant

Moody’s is not providing any tax, legal or financial advice, nor is Moody’s
making any recommendations regarding your participation in the Plan or your
acquisition or sale of the underlying shares. You are advised to consult with
your own personal tax, legal and financial advisors regarding your participation
in the Plan before taking any action related to the Plan.

Responsibility for Taxes

You acknowledge that regardless of any action taken by Moody’s or your employer,
the ultimate liability for all income tax, social insurance, payroll tax, fringe
benefit tax, payment on account or other tax-related items related to your
participation in the Plan and legally applicable to you (“Tax-Related Items”),
is and remains your responsibility and may exceed the amount, if any, actually
withheld by Moody’s or your employer. You further acknowledge that Moody’s
and/or your employer (1) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of your
Performance Shares grant, including the grant vesting or settlement of your
Performance Shares, the subsequent sale of shares acquired pursuant to such
settlement and the receipt of any dividends; and (2) do not commit to and are
under no obligation to structure the terms of the grant or any aspect of your
Performance Shares to reduce or eliminate your liability for Tax-Related Items
or achieve any particular tax result. Further, if you are subject to Tax-Related
Items in more than one jurisdiction, you acknowledge that Moody’s and/or your
employer (or former employer, as applicable) may be required to withhold or
account for Tax-Related Items in more than one jurisdiction.

Prior to any relevant taxable or tax withholding event, as applicable, you agree
to make adequate arrangements satisfactory to Moody’s and/or your employer to
satisfy all Tax-Related Items. In this regard, you authorize Moody’s or its
agent to satisfy the obligations with regard to all Tax-Related Items by
withholding in shares to be issued upon settlement of your Performance Shares.
In the event that such withholding in shares is problematic under applicable tax
or securities law or has materially adverse accounting

 

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consequences, by your acceptance of your Performance Shares, you authorize and
direct Moody’s and any brokerage firm determined acceptable to Moody’s to sell
on your behalf a whole number of shares from those shares issuable to you as
Moody’s determines to be appropriate to generate cash proceeds sufficient to
satisfy the obligation for Tax-Related Items.

Depending on the withholding method, Moody’s and/or your employer may withhold
or account for Tax-Related Items by considering applicable minimum statutory
withholding amounts or other applicable withholding rates, including maximum
applicable rates, in which case you may receive a cash refund of any
over-withheld amount not remitted to the tax authorities on your behalf and will
have no entitlement to the shares equivalent. If the obligation for Tax-Related
Items is satisfied by withholding in shares, for tax purposes you will be deemed
to have been issued the full number of shares subject to your Performance Shares
that have been earned by achievement of performance goals hereunder,
notwithstanding that a number of the shares are withheld solely for the purpose
of paying the Tax-Related Items.

Finally, you shall pay to Moody’s or your employer, including through
withholding from your wages or other cash compensation paid to you by Moody’s or
your employer, any amount of Tax-Related Items that Moody’s or your employer may
be required to withhold or account for as a result of your participation in the
Plan that cannot be satisfied by the means previously described. Moody’s may
refuse to deliver the shares or the proceeds from your Performance Shares award
if you fail to comply with your obligations in connection with the Tax-Related
Items.

Code Section 409A

For purposes of U.S. taxpayers, the provisions of this grant of Performance
Shares are intended to either be exempt from Section 409A of the Code under the
“short-term deferral” exception or comply with Section 409A of the Code, and the
provisions of this grant will be interpreted, operated and administered in a
manner that is consistent with this intent. In furtherance of this intent, the
Committee may, at any time and without your consent, modify the terms of this
grant as it determines appropriate to comply with the requirements of
Section 409A of the Code and the related U.S. Department of Treasury guidance.
Moody’s makes no representation or covenant to ensure that your Performance
Shares or other payment hereunder are exempt from or compliant with Section 409A
of the Code, and will have no liability to you or any other party if your
Performance Shares or other payment hereunder that is intended to be exempt
from, or compliant with, Section 409A of the Code, is not so exempt or compliant
or for any action taken by the Committee with respect thereto.

Data Privacy

You hereby explicitly and unambiguously consent to the collection, use and
transfer, in electronic or other form, of your personal data as described in
this document and any other Plan materials (“Data”) by and among, as applicable,
your employer and Moody’s and its Subsidiaries or Affiliates for the exclusive
purpose of implementing, administering and managing your participation in the
Plan.

You understand that Data may include certain personal information about you,
including, but not limited to, your name, home address and telephone number,
email address, date of birth, social insurance, passport or other identification
number (e.g., resident registration number), salary, nationality, job title, any
shares of stock or directorships held in Moody’s, details of all Performance
Share grants or any other entitlement to shares of stock awarded, canceled,
exercised, vested, unvested or outstanding in your favor, for the exclusive
purpose of implementing, administering and managing the Plan.

You understand that Data will be transferred to Fidelity Investments, or such
other stock plan service provider as may be selected by Moody’s in the future,
which is assisting Moody’s with the implementation, administration and
management of the Plan. You understand that the recipients of Data may be
located in the United States or elsewhere, and that a recipient’s country of
operation (e.g., the United States) may have different data privacy laws and
protections than your country. You understand if you reside outside the United
States that you may request a list with the names and addresses of any potential
recipients of the Data by contacting your local human resources representative.

You authorize Moody’s, Fidelity Investments and any other possible recipients
which may assist Moody’s (presently or in the future) with implementing,
administering and managing the Plan to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the sole purposes of
implementing, administering and managing your participation in the Plan. You
understand that Data will be held only as long as is necessary to implement,
administer and manage your participation in the Plan. You understand that if you
reside outside the United States you may, at any time, view Data, request
additional information about the storage and processing of Data, require any
necessary amendments to Data or refuse or withdraw the consents herein, in any
case without cost to you, by contacting in writing your local human resources
representative. Further, you understand that you are providing the

 

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consents herein on a purely voluntary basis. If you do not consent, or if you
later seek to revoke your consent, your employment status with your employer
will not be adversely affected; the only consequence of refusing or withdrawing
your consent is that Moody’s would not be able to grant you Performance Shares
or other equity awards or administer or maintain such awards. Therefore, you
understand that refusing or withdrawing your consent may affect your ability to
participate in the Plan. For more information on the consequences of your
refusal to consent or withdrawal of consent, you understand that you may contact
your local human resources representative.

Electronic Delivery and Acceptance

Moody’s may, in its sole discretion, decide to deliver by electronic means any
documents related to current or future participation in the Plan. You hereby
consent to receive such documents by electronic delivery and agree to
participate in the Plan through an on-line or electronic system established and
maintained by Moody’s or any third party designated by Moody’s.

Governing Law, Venue, Documents and Severability

Your Performance Shares grant is made in the state of Delaware and is governed
by, and subject to, the laws of the state of Delaware, applicable to contracts
made and to be performed in the state of Delaware without reference to its
conflicts of laws principles, and the requirements of the New York Stock
Exchange as well as the terms and conditions set forth herein.

Any and all disputes relating to, concerning or arising from this letter, or
relating to, concerning or arising from the relationship between the parties
evidenced by your Performance Shares or this letter, shall be brought and heard
exclusively in the United States District Court for the District of Delaware or
the Delaware Superior Court, New Castle County. Each of the parties hereby
represents and agrees that such party is subject to the personal jurisdiction of
said courts, hereby irrevocably consents to the jurisdiction of such courts in
any legal or equitable proceedings related to, concerning or arising from such
dispute, and waives, to the fullest extent permitted by law, any objection which
such party may now or hereafter have that the laying of the venue of any legal
or equitable proceedings related to, concerning or arising from such dispute
which is brought in such courts is improper or that such proceedings have been
brought in an inconvenient forum.

If you have received this letter or any other document related to the Plan
translated into a language other than English, and if the translated version is
different than the English version, the English version will control.

The terms and conditions provided herein are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable, in whole or
in part, the remaining provisions shall nevertheless be binding and enforceable.

Compliance with Law

Notwithstanding any other provision of the Plan or this letter, unless there is
an available exemption from any registration, qualification or other legal
requirement applicable to the shares, Moody’s shall not be required to deliver
any shares issuable upon settlement of your Performance Shares prior to the
completion of any registration or qualification of the shares under any local,
state, federal or foreign securities or exchange control law or under rulings or
regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any
other governmental regulatory body, or prior to obtaining any approval or other
clearance from any local, state, federal or foreign governmental agency, which
registration, qualification or approval Moody’s shall, in its absolute
discretion, deem necessary or advisable. You understand that Moody’s is under no
obligation to register or qualify the shares with the SEC or any state or
foreign securities commission or to seek approval or clearance from any
governmental authority for the issuance or sale of the shares. Further, you
agree that Moody’s shall have unilateral authority to amend the Plan and the
terms of your Performance Shares without your consent to the extent necessary to
comply with securities or other laws applicable to issuance of shares.

Insider Trading Restriction/Market Abuse Laws

You acknowledge that you may be subject to insider trading restrictions and/or
market abuse laws, which may affect your ability to acquire or sell shares or
rights to shares (e.g., Performance Shares) under the Plan during such times as
you are considered to have “inside information” regarding Moody’s (as defined by
or determined under the laws in your country). Any restrictions under these laws
or regulations are separate from and in addition to any restrictions that may be
imposed under any applicable Moody’s insider trading policy. You acknowledge
that it is your responsibility to comply with any applicable restrictions, and
you are advised to speak to your personal advisor on this matter.

 

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Foreign Asset/Account Reporting

Please be aware that your country of residence may have certain foreign asset
and/or account reporting requirements which may affect your ability to acquire
or hold shares under the Plan or cash received from participating in the Plan
(including from any dividends received or sale proceeds arising from the sale of
shares) in a brokerage or bank account outside your country of residence. Your
country may require that you report such accounts, assets or transactions to the
applicable authorities in that country.

You acknowledge that it is your responsibility to be informed of and compliant
with such regulations, and you are advised to speak to your personal advisor on
this matter.

Appendix

Notwithstanding any provisions in this letter, your Performance Shares grant
shall be subject to any special terms and conditions set forth for your country
in any Appendix to this letter for your country. Moreover, if you relocate to
one of the countries included in the Appendix, the special terms and conditions
for such country will apply to you, to the extent Moody’s determines that the
application of such terms and conditions is necessary or advisable for legal or
administrative reasons. The Appendix constitutes part of this letter.

Imposition of Other Requirements

Moody’s reserves the right to impose other requirements on your participation in
the Plan, on your Performance Shares and on any shares acquired pursuant to your
Performance Shares, to the extent Moody’s determines it is necessary or
advisable for legal or administrative reasons, and to require you to sign any
additional agreements or undertakings that may be necessary to accomplish the
foregoing.

Waiver

You acknowledge that waiver by Moody’s of breach of any provision of this letter
shall not operate or be construed as a waiver of any other provision of this
letter, or of any subsequent breach by you or any other participant in the Plan.

* * *

If you have any questions regarding this one-time grant, please contact your
Human Resources representative.

 

Sincerely, [MOODY’S CORPORATION]

 

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