EXHIBIT 10.26

PROFIT PARTICIPATION PLAN

OF

MOODY’S CORPORATION

(amended and restated as of January 1, 2014)

 

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Table of Contents

 

 

Page   SECTION I Definitions   126    1.1. Account   126    1.2. Actual Deferral
Percentage   126    1.3. Affiliated Employer   126    1.4. Beneficiary   126   
1.5. Board of Directors   126    1.6. Change in Control   126    1.7. Code   126
   1.8. Company   126    1.9. Company Stock   126    1.10. Compensation   126   
1.11. Contribution Percentage   127    1.12. Corporation   127    1.13. Earnings
Per Share   127    1.14. Eligible Employee   127    1.15. Employee   127   
1.16. Employer   127    1.17. ERISA   127    1.18. ESOP Fund   127    1.19.
Excess Aggregate Contributions   127    1.20. Fund   127    1.21. Increase in
Earnings Per Share   127    1.22. Investment Manager   128    1.23. Investment
Plan After-Tax Contributions   128    1.24. Investment Plan Before-Tax
Contributions   128    1.25. Investment Plan Contributions   128    1.26.
Management Benefits and Compensation Committee   128    1.27. Matching
Contributions of the Company   128    1.28. Member   128    1.29. Normal
Retirement Age   128    1.30. Participating After-Tax Contributions   128   
1.31. Participating Before-Tax Contributions   128    1.32. Participating
Contributions   128    1.33. Plan   128    1.34. Plan Year   128    1.35.
Post-2007 Member   128    1.36. Profit Sharing Contribution   128    1.37.
Reemployment Commencement Date   128    1.38. Retirement   128    1.39.
Retirement Contributions   128    1.40. Rollover Contributions   128   

 

MOODY’S  2014 10K   123   

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Page   1.41. Roth Contributions   128    1.42. Service   129    1.43. Spouse  
130    1.44. Threshold   130    1.45. Trustee   130    1.46. Trust Fund   130   
1.47. Valuation Date   130    1.48. Vesting Service   130    1.49. Year of
Eligibility Service   130    SECTION II Eligibility   130    SECTION III
Contributions of Members   130    SECTION IV Company Contributions and
Allocation Among Members   132    SECTION V The Trust Fund   134    SECTION VI
Investment Elections   135    SECTION VII Voting and Tendering of Moody’s
Corporation Common Stock; Dividends   136    SECTION VIII Vesting   137   
SECTION IX Distribution of Benefits   137    SECTION X Administration of Plan
and Management of Plan Assets   145    SECTION XI Amendment or Termination   146
   SECTION XII Miscellaneous   146    SECTION XIII Determination of Benefits and
Benefit Claims Procedures   147    SECTION XIV Limitations on Benefits   148   
SECTION XV Mergers, Consolidations and Assets or Liability Transfers   149   
SECTION XVI Top-Heavy Contingency   150   

 

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PROFIT PARTICIPATION PLAN OF MOODY’S CORPORATION

The Profit Participation Plan of Moody’s Corporation (the “Plan”) became
effective as of the Effective Time, as such term is defined in the Employee
Benefits Agreement entered into September 30, 2000, between The Dun & Bradstreet
Corporation and The New D&B Corporation, following its adoption by the Board of
Directors of Moody’s Corporation (the “Corporation”). The Plan was established
as of the Effective Time by way of a spin-off of Members’ accounts that were
accrued under the Profit Participation Plan of Dun & Bradstreet Corporation and
the Corporation’s assumption of sponsorship of the spun-off plan. The Plan
applies to all Employees who are in active service at the Effective Time. In
general, the Plan as in effect prior to the effective date of any amendment will
continue to apply to those who terminated employment prior to such date. The
Plan is intended to be a profit-sharing plan which is qualified for favorable
tax treatment pursuant to Section 401(a) and Section 401(k) of the Code.

The Plan is hereby amended and restated effective as of January 1, 2014. This
amendment and restatement includes good faith amendments of the Plan that are
adopted by the Board of Directors with respect to statutes with respect to which
good faith amendments are required through the date of this amendment and
restatement. Except as otherwise specifically provided herein, a Member who is
not an Employee at any time after December 31, 2013 shall be entitled to
benefits, if any, under the Plan based upon the provisions of the Plan in effect
on or prior to that date.

Effective as of January 1, 2008, the Plan has provided for additional
contributions to employees who commence or recommence employment on or after
date.

Effective as of January 1, 2008, the portion of the Plan invested in Company
Stock shall constitute a stock bonus plan and an employee stock ownership plan
(within the meaning of Code Section 4975(e)(7)) (“ESOP”). The ESOP portion of
the Plan is intended to promote employee ownership. Accordingly, amounts held in
the ESOP shall be invested exclusively in Company Stock except for cash or
cash-equivalent investments held for the limited purpose of facilitating
distributions from and investments in the ESOP Fund and paying Plan
administrative expenses. The ESOP Fund is intended to be maintained as a feature
of the Plan to the maximum extent permitted under the Employee Retirement Income
Security Act of 1974, as amended from time to time.

 

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SECTION I

DEFINITIONS

The following words and phrases as used herein have the following meaning unless
a different meaning is plainly required by the context:

1.1. Account means an account maintained for each Member as described in
Section 5.3 of the Plan and any subaccount as may be established thereunder.

1.2. Actual Deferral Percentage has the meaning ascribed to such term in
Section 3.2 of the Plan.

1.3. Affiliated Employer means the Employer and any other entity, which is a
member of a “controlled group of corporations,” a group under “common control,”
or an “affiliated service group,” as determined in accordance with Section 414
of the Code.

1.4. Beneficiary means the person or persons, entity or entities (including a
trust or trusts) or estate that shall be entitled to receive benefits payable
pursuant to the provisions of this Plan due to the death of a Member.

1.5. Board of Directors means the Board of Directors of Moody’s Corporation. Any
action authorized hereunder to be taken by the Board of Directors may be also
taken by a duly authorized committee of the Board of Directors or a duly
authorized delegate of the Board of Directors or such a committee.

 

1.6. Change in Control means:

(a) Any “Person,” as such term is used in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the
Corporation, any trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation, or any corporation owned, directly or
indirectly, by the shareholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation), is or becomes the
“Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing twenty percent
(20%) or more of the combined voting power of the Corporation’s then outstanding
securities;

(b) during any period of twenty four (24) months (not including any period prior
to the effective date of this provision), individuals who at the beginning of
such period constitute the Board of Directors, and any new director (other than
(i) a director designated by a person who has entered into an agreement with the
Corporation to effect a transaction described in clause (a), (c) or (d) of this
Section), (ii) a director designated by any Person (including the Corporation)
who publicly announces an intention to take or to consider taking actions
(including, but not limited to, an actual or threatened proxy contest) which, if
consummated, would constitute a Change in Control, or (iii) a director
designated by any Person who is the Beneficial Owner, directly or indirectly, of
securities of the Corporation representing ten percent (10%) or more of the
combined voting power of the Corporation’s securities), whose election by the
Board of Directors or nomination for election by the Corporation’s shareholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;

(c) the shareholders of the Corporation approve a merger or consolidation of the
Corporation with any other company, other than (i) a merger or consolidation
which would result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation, and (ii) after which no Person holds twenty
percent (20%) or more of the combined voting power of the then outstanding
securities of the Corporation or such surviving entity; or

(d) the shareholders of the Corporation approve a plan of complete liquidation
of the Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation’s assets.

1.7. Code means the United States Internal Revenue Code of 1986, as amended from
time to time.

1.8. Company 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 of Directors or the Committee to participate in the Plan
and which have adopted the Plan.

1.9. Company Stock means the common stock of Moody’s Corporation, which is
readily tradable on an established securities market.

1.10. Compensation means the total amount received from an Employer by an
Eligible Employee while he is a Member as salary, cash bonuses, commissions,
overtime pay, fees, participation, lump sum payments in lieu of foregone merit
increases, “bonus buyouts” as the result of job changes, and any portion of such
amounts voluntarily deferred or reduced by the Eligible Employee (a) under any
employee benefit plan of the Company available to all levels of employees of the
Company on a non-discriminatory basis upon sat-

 

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isfaction of eligibility requirements, including Participating Before-Tax
Contributions and Investment Plan Before-Tax Contributions under this Plan, and
(b) under any executive deferral plan of the Company (provided such amounts
would not otherwise have been excluded had they not been deferred), but
excluding any pension, retainers, severance pay, special stay-on bonus, income
derived from stock options, stock appreciation rights and dispositions of stock
acquired thereunder, payments dependent upon any contingency after the period of
Service and other special remunerations (including performance units). In the
case of an Eligible Employee hired on an extended workweek basis, the amount of
Compensation shall be the total remuneration received for such extended
workweek. In the case of an Eligible Employee who is transferred to a
nonparticipating subsidiary company during the Plan Year, the amount of
Compensation shall be based upon the amount received by the Eligible Employee
prior to such transfer. In addition to other applicable limitations set forth in
the Plan, and notwithstanding any other provision of the Plan to the contrary,
the Compensation of each Eligible Employee taken into account under the Plan
shall not exceed $200,000, as indexed under Section 401(a)(17) of the Code. If a
determination period consists of fewer than twelve (12) months, the annual
compensation limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period and the denominator of which is
twelve (12). If Compensation for any prior determination period is taken into
account in determining an Eligible Employee’s contributions in the current Plan
Year, the Compensation for that prior determination period is subject to the
annual compensation limit in effect for that prior determination period.

1.11. Contribution Percentage has the meaning ascribed to such term in
Section 4.8 of the Plan.

1.12. Corporation means Moody’s Corporation.

1.13. Earnings Per Share for any calendar year means the earnings per share of
Common Stock outstanding of the Corporation for such year based on the
consolidated statement of income of the Corporation and subsidiaries as
certified by the Corporation’s independent accountants and as shown in the
Corporation’s annual report to shareholders.

1.14. Eligible Employee means an Employee who is (a) any person who is in the
employment of the Company, including officers, but excluding any person who
serves only as a director, (b) any United States citizen who is in the
employment of a “Foreign Affiliate” (as defined in Section 3121(1)(8) of the
Code), provided that such person is covered by an agreement entered into by the
Company under Section 3121(l) of the Code, and (c) any United States citizen who
is in the employment of a “Domestic Subsidiary” (as defined in Section 407(a)(2)
of the Code). Eligible Employee shall not include (i) any person in an employee
group covered by a collective bargaining agreement between the Company and a
collective bargaining agent unless such collective bargaining agreement makes
provision for participation in the Plan for such employee group, (ii) any person
engaged or employed as an independent contractor or a temporary employee,
(iii) any person performing services for the Company as a leased employee,
(iv) any Employee on temporary assignment to the United States who continues to
participate in one or more retirement plans maintained by an Affiliated
Employer, or (v) any limited duration Employee who commenced or recommenced
employment with the Company or an Affiliated Employer on or after May 1, 2014.
The term “temporary employee” shall include, but not be limited to, in-house
temporary employees, co-ops and interns.

1.15. Employee means any person who is a common-law employee or a leased
employee of the Company or an Affiliated Employer, any United States citizen who
is employed by a “foreign affiliate” (as defined in Section 3121(l)(8) of the
Code), provided that such person is covered by an agreement entered into by the
Company under Section 3121(l) of the Code, and any United States citizen who is
employed by a “domestic subsidiary” as defined in Section 407(a)(2) of the Code.

1.16. Employer means, with respect to an Employee, the Company that employs such
Employee.

1.17. ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

1.18. ESOP Fund means that portion of the Trust Fund to which are allocated
assets held in Company Stock. The ESOP Fund was effective as of January 1, 2008.

1.19. Excess Aggregate Contributions has the meaning ascribed to such term in
Section 4.8 of the Plan.

1.20. Fund means the Moody’s Company Common Stock Fund and each of the other
investment funds designated, from time to time, by the Management Benefits and
Compensation Committee, into which investment of the assets in Members’ Accounts
may be directed.

1.21. Increase in Earnings Per Share means, for any Plan Year, the percentage
increase in Earnings Per Share (including any earnings decrease as a minus
amount) for said Plan Year over the immediately preceding Plan Year based upon
Earnings Per Share for such year as restated in the annual report of the Company
to shareholders for the Plan Year; provided, however, that, either the Board or
the Committee may, in the discretion of either of them (it being understood
that, in the event of inconsistent actions, the Board shall prevail), increase
or decrease such Earnings Per Share for purposes of the Plan, to eliminate part
or all of the effect of any charges or credits associated with items which are
unusual in nature, infrequent in occurrence, related to corporate restructuring
or reengineering efforts, or otherwise are deemed appropriate adjustments.

 

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1.22. Investment Manager means an investment manager within the meaning of
Section 3(38) of ERISA.

1.23. Investment Plan After-Tax Contributions mean contributions made by Members
that were subject to income tax at the time they were made.

1.24. Investment Plan Before-Tax Contributions mean contributions made by
Members that were not subject to income tax at the time they were made.

1.25. Investment Plan Contributions mean the sum of a Member’s Investment Plan
After-Tax Contributions and Investment Plan Before-Tax Contributions for each
Plan Year or other applicable period.

1.26. Management Benefits and Compensation Committee means the Management
Benefits and Compensation Committee appointed pursuant to Section 10.1 of the
Plan.

1.27. Matching Contributions of the Company mean the matching contributions made
by the Company to the Fund pursuant to Section 4.1 of this Plan in respect of
Participating After-Tax Contributions and Participating Before-Tax Contributions
made by Members.

1.28. Member means any individual who has become a Member in accordance with
Section 2 of the Plan and whose interest in the Trust Fund has not been
completely distributed pursuant to Section 9 of the Plan.

1.29. Normal Retirement Age means the time a Member attains age sixty-five (65).

1.30. Participating After-Tax Contributions means contributions made by Members
which are eligible for Matching Contributions and which were subject to income
tax at the time they were made.

1.31. Participating Before-Tax Contributions means contributions made by Members
which are eligible for Matching Contributions and which were not subject to
income tax at the time they were made.

1.32. Participating Contributions means the sum of a Member’s Participating
After-Tax Contributions and Participating Before-Tax Contributions for each Plan
Year or other period.

1.33. Plan means this Profit Participation Plan as from time to time in effect.

1.34. Plan Year means the calendar year.

1.35. Post-2007 Member means an individual who becomes a Member in accordance
with Section 2 and who commences or recommences employment with the Employer on
or after January 1, 2008. In addition, Post-2007 Member includes any Employee of
Moody’s Evaluations, Inc. regardless of the date of such Employee’s date of
commencement or recommencement of employment (other than an Employee who
continues to accrue benefits under the Moody’s Corporation Retirement Account on
or after January 1, 2008).

1.36. Profit Sharing Contribution means for Plan Years commencing on or after
January 1, 2008, the annual contributions, if any, made by the Company pursuant
to Section 4.3 of the Plan. Profit Sharing Contributions shall be paid in
Company Stock unless the Board elects to make such Profit Sharing Contribution
in cash.

1.37. Reemployment Commencement Date means the first date, following a
termination of employment with the Company, that an Employee again performs an
hour of compensated Service for an Employer, as determined in accordance with
Section 1.42 hereof.

1.38. Retirement means the termination of employment of any Employee by
“retirement,” including “early retirement,” in accordance with and as such terms
are defined under the provisions of the Moody’s Corporation Retirement Account
or the retirement plan or pension plan of any affiliate.

1.39. Retirement Contributions means any contributions made to the Trust Fund on
behalf of a Post-2007 Member pursuant to Section 4.2 hereof.

1.40. Rollover Contributions means any contributions made to the Trust Fund on
behalf of a Member pursuant to Section 5.4 hereof.

1.41. Roth Contributions means Member contributions that are: (a) designated
irrevocably by the Member at the time of the cash or deferred election as a Roth
Contribution that is being made in lieu of all or a portion of the Participating
Before-Tax Contributions and/or Investment Plan Before-Tax Contributions or
catch-up contributions the Member is otherwise eligible to make under the Plan,
(b) treated by the Employer as includible in the Member’s income at the time the
Member would have received that amount in cash if the Member had not entered
into a salary reduction agreement; and (c) allocated to the Member’s Roth
Contributions Account. Contributions and withdrawals of Roth Contributions shall
be credited to the Member’s Roth Contributions Account, and the Plan shall
maintain a record of the Member’s investment in the contract (i.e., Roth
Contributions that have not been distributed). Gains, losses, and other credits
and charges will be separately allocated on a reasonable and consistent basis to
the Member’s Roth Contributions Account and the Member’s other Accounts under
the Plan. Unless otherwise specified in the Plan, (i) Roth Contributions will be
treated the same as Before-Tax Contributions for all purposes under the Plan,
and (ii) references in the Plan to Before-Tax Contributions shall include Roth
Contributions.

 

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1.42. Service means the following:

(a) “Year of Eligibility Service” means the twelve (12) consecutive month period
beginning on the commencement date of an Employee’s employment by the Company
and ending on the first anniversary date of his employment date, provided the
Employee has one thousand (1,000) hours of compensated Service during such
period. If an Employee has less than one thousand (1,000) hours of compensated
Service during such twelve (12) month period, Year of Eligibility Service means
the first calendar year following the commencement date of an Employee’s
employment by the Company during which the Employee has one thousand
(1,000) hours of compensated Service and any subsequent calendar year. The
commencement date of an Employee’s employment by the Company shall be the first
day on which the Employee performs an hour of compensated Service for the
Company. An hour of compensated Service shall include each hour or any part
thereof for which an Employee is paid or entitled to be paid any Compensation by
the Company, whether or not employment duties are performed and irrespective of
whether the employment relationship has terminated, including vacation days,
holidays, and non-working days due to illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. An hour of
compensated Service shall also include each hour for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to by the
employing Company. In the case of any Employee who is paid or entitled to be
paid Compensation with respect to any period during which the Employee performed
no duties, the number of hours of compensated Service to be credited to such
Employee and the computation period to which such hours of compensated Service
shall be credited shall be determined in accordance with applicable regulations
of the United States Department of Labor under 29 Code of Federal Regulations,
Part 2530, relating to minimum standards for employee benefit plans, as the same
may be amended from time to time. In the case of an Employee who is paid a fixed
salary and who is not entitled to compensation for overtime, each day of Service
shall be counted as ten (10) hours of Service.

(b) “Vesting Service” means that the period of time between the commencement
date of an Employee’s employment or reemployment by the Company and the date on
which an interruption in such employment occurs. Vesting Service shall be
counted in full years and in partial years, with each month or any part thereof
counting as one-twelfth (1/12) of a year and with one (1) year of Vesting
Service meaning twelve (12) months of Vesting Service. An interruption in an
Employee’s employment shall occur on the date on which the Employee resigns,
retires, is discharged or dies, or the first anniversary of the first date of a
period in which the Employee is absent from the employment of the Company due to
a leave of absence, layoff, holiday, vacation, disability or illness, whichever
is the earliest. A break-in-service shall occur upon the expiration of one
(1) year after the date an Employee’s Service is interrupted. The Vesting
Service of an Employee shall not be broken by an interruption in his employment
if his employment is resumed by the performance of an hour of compensated
Service within one (1) year of the date of interruption. If an Employee with one
(1) year or more of Vesting Service incurs a break-in-service equal to the
greater of five (5) consecutive breaks-in-service or the number of years of
Vesting Service as of his prior termination of employment, his Vesting Service
prior to such break shall not be restored upon his reemployment by the Company.
If an Employee’s employment with the Company is interrupted prior to the
completion of one (1) year of Vesting Service, his Vesting Service prior to the
break-in-service shall be disregarded upon any subsequent re-employment by the
Company. In the case of an Employee who is absent due to pregnancy of the
Employee, the birth of a child of an Employee, the placement of a child with the
Employee in connection with the adoption of the child by the Employee, or for
purposes of caring for such child immediately following the birth or placement
of such child, the following rules shall apply: (i) the Employee’s Vesting
Service shall not be interrupted until the earliest of the first anniversary of
the commencement date of such absence or the date of the Employee’s resignation
or death; and (ii) the period between the first anniversary and second
anniversary of the commencement date of such absence shall not count as Vesting
Service or as a period of severance.

(c) For purposes of calculating a Year of Eligibility Service and Vesting
Service, (i) a period of authorized leave of absence for a purpose approved by
the Management Benefits and Compensation Committee under uniform rules, or
(ii) absence for the purpose of military service pursuant to the requirements of
law or by enlistment for not longer than the minimum period required by law,
shall be counted as Service if the Employee resumes his Service as an Employee
at the end of such leave of absence or within the period prescribed by law for
the exercise of reemployment rights. To the extent determined from time to time
by the Board of Directors, Service shall also include service as an employee of
any other corporation, company or business which becomes related to the Company
by purchase, acquisition, merger, consolidation or otherwise. Service shall also
include service by a person in the employment of any corporation, the voting
stock of which is eighty percent (80%) or more owned, directly or indirectly, by
the Corporation commencing with the date of acquisition of such ownership,
provided such service would have counted as Eligibility Service or Vesting
Service, as applicable, had such person been an Employee of the Company during
such period. Service shall also include service by a person in the employment of
DonTech, an Illinois general partnership, and its subsidiary companies. In the
case of any Employee employed by Wall Street Analytics, Inc. (subsequently
renamed Moody’s Wall Street Analytics, Inc.) on December 18, 2006, Service shall
also include the Employee’s period of employment with Wall Street Analytics,
Inc. prior to December 18, 2006, for purposes of determining (i) eligibility to
participate in the Plan (provided, however, that in no event may any such
Employee become a Member prior to January 1, 2007), and (ii) vesting of benefits
under Section VIII.

 

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1.43. Spouse shall mean the spouse of a Member. Effective as of September 16,
2013 (or, if a different date is permitted or required by Internal Revenue
Service guidance for any particular purpose, the date specified in such guidance
for such purpose), such determination shall be made based on the laws of the
state where the marriage is initially established as provided in Revenue Ruling
2013-17.

1.44. Threshold means an Increase in Earnings Per Share equal to the greater of
(i) ten percent (10%) or (ii) two percent (2%) in excess of targeted Earnings
Per Share percentage growth for the Plan Year.

1.45. Trustee means a corporate trustee appointed by the Management Benefits and
Compensation Committee pursuant to Section 10 of the Plan and any additional or
substituted trustee or trustees of the Fund.

1.46. Trust Fund means the trust fund or trust funds established under the Plan
to hold the assets of the Plan.

1.47. Valuation Date means, the every business day within the calendar year.

1.48. Vesting Service is defined in Sections 1.41(b) and (c).

1.49. Year of Eligibility Service is defined in Sections 1.41(a) and (c).

The masculine pronoun wherever used includes the feminine pronoun, and the
singular includes the plural.

SECTION II

ELIGIBILITY

2.1. Eligibility. Every Eligible Employee who was participating or eligible to
participate in The Dun and Bradstreet Profit Participation Plan immediately
prior to the Effective Time shall become a Member as of the Effective Time.
Every other full-time Employee shall become eligible to participate in the Plan
on the commencement date of the Employee’s employment by the Company or, if
later, the date that such individual becomes an Employee. Every other part-time
Employee shall become eligible to participate in the Plan on the date that such
individual completes one (1) Year of Eligibility Service or, if later, the date
that such individual becomes an Employee.

2.2. Eligibility Upon Reemployment. A Member or former Member who terminates
employment with the Company and is subsequently reemployed by the Company shall
be eligible to participate in the Plan as of his Reemployment Commencement Date.
A part-time Eligible Employee who terminates employment with the Company prior
to completing one (1) Year of Eligibility Service and is subsequently reemployed
by the Company shall be eligible to participate in the Plan after the completion
of one (1) Year of Eligibility Service following his Reemployment Commencement
Date.

SECTION III

CONTRIBUTIONS OF MEMBERS

3.1. Each Eligible Employee may become a Member by electing to contribute to the
Trust Fund a stated whole percentage of his Compensation, from one percent
(1%) to a maximum of fifty percent (50%). Unless a Member elects otherwise in
accordance with procedures adopted by the Committee, an individual who first
becomes a Member (or who recommences employment with the Employer and again
becomes a Member) on or after January 1, 2008 shall be deemed to have elected to
contribute three percent (3%) of his Compensation to the Trust Fund, and such
election shall be subject to the rules under Section 414(w) of the Code. In
addition, all Members who are eligible to make Participating Contributions and
who have attained age 50 before the close of the Plan Year shall be eligible to
make catch-up contributions in accordance with, and subject to the limitations
of, Section 414(v) of the Code. Such catch-up contributions shall not be taken
into account for purposes of the provisions of the Plan implementing the
required limitations of Sections 402(g) and 415 of the Code. The Plan shall not
be treated as failing to satisfy the provisions of the Plan implementing the
requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b), or 416 of the
Code, as applicable, by reason of the making of such catch-up contributions.

3.2. Each Member may elect to make his Participating Contributions and
Investment Plan Contributions on a before-tax or after-tax basis, or by any
combination of same, in whole percentages of Compensation. Participating
Contributions and Investment Plan Contributions shall be made by regular payroll
deductions and/or reductions, respectively, as authorized by the Member.
Authorization for such payroll deduction and/or reduction contributions shall be
made (i) on forms approved by the Management Benefits and Compensation Committee
and filed with the Company, (ii) by telephonic, electronic or other data
transmission in a manner approved by the Management Benefits and Compensation
Committee, or (iii) in any other manner approved by the Management Benefits and
Compensation Committee. Effective May 1, 2014, at the time an election is made
by a Member pursuant to this Section 3.1, the Member may irrevocably elect to
designate all or a portion of the Before-Tax Contributions elected thereunder to
be treated as Roth Contributions.

3.3. In no event may a Member make Participating Before-Tax Contributions and
Investment Plan Before-Tax Contributions, if any, for any taxable year in excess
of $15,000 (or such other amount as may be prescribed from time to time under
Section 402(g) of the Code

 

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and the regulations thereunder, the provisions of which are hereby incorporated
by reference). In the event that the limitation set forth in the preceding
sentence is exceeded with respect to any Member in any Plan Year, the Member
shall be deemed to have notified the Management Benefits and Compensation
Committee of such excess amount, and such amount, increased by any income and
decreased by any losses attributable thereto, shall be distributed to the Member
no later than April 15 of the following calendar year. In addition, a Member may
allocate to the Plan any excess deferrals (as hereinafter defined) made during a
taxable year of the Member by notifying the Management Benefits and Compensation
Committee on or before March 1 of the following calendar year of the amount of
the excess deferrals to be assigned to the Plan. Upon such timely notification
by a Member, the Management Benefits and Compensation Committee shall cause to
be distributed such excess deferrals, increased by any income and decreased by
any losses attributable thereto, no later than the April 15 of the following
calendar year; provided, however, that in no event may a Member receive from
this Plan a distribution of such excess deferrals for a calendar year in an
amount exceeding the Member’s total elective deferrals for such year. The
determination of the income and loss allocable to the excess deferrals shall be
made in accordance with Code Section 402(g) and the regulations thereunder, as
they may be amended from time to time. Excess deferrals shall be treated as
annual additions under the Plan for purposes of Section 14.2, unless such
amounts are distributed no later than the first April 15 following the close of
the calendar year in which made.

3.4. Notwithstanding the foregoing, under no circumstances shall an election to
make Participating Before-Tax Contributions or Investment Plan Before-Tax
Contributions, if any, by a Highly Compensated Employee, as hereinafter defined,
be given effect to the extent such election might cause the Plan to fail to meet
the discrimination standards set forth in Section 401(k)(3) of the Code. In this
regard, the Actual Deferral Percentage for Eligible Employees who are Highly
Compensated Employees, whether or not participating in the Plan for any Plan
Year, must be either (a) not more than the Actual Deferral Percentage of all
other Employees eligible to participate in the Plan for such Plan Year
multiplied by 1.25, or (b) not more than two (2) percentage points greater than
the Actual Deferral Percentage of all other Employees eligible to participate in
the Plan for such Plan Year and not more than such Actual Deferral Percentage of
all other Eligible Employees for such year multiplied by two (2). The Actual
Deferral Percentage tests described in the preceding sentence shall be performed
by using the Actual Deferral Percentage of non-Highly Compensated Employees for
the Plan Year preceding the Plan Year that is being tested, unless the Employer
has elected to use the current Plan Year rather than the preceding Plan Year,
which election may be changed only as provided by the Internal Revenue Service.

The Actual Deferral Percentage for a specified group of Employees for a Plan
Year shall be the average of the ratios (calculated separately for each Employee
in such group) of (i) each Eligible Employee’s Before-Tax Contributions made
under the Plan for such Plan Year, to (ii) the Eligible Employee’s compensation
for such Plan Year. For purposes of this Section 3.4, a Member’s compensation
must be determined in accordance with a method permitted under Section 414(s) of
the Code. In the event the Company determines that the Before-Tax Contributions
elected by Highly Compensated Employees might cause the Plan to fail to meet the
foregoing limitation, the Company shall reduce the amount of Compensation that
may be elected as Contributions under the Plan by Highly Compensated Employees.
The amount of such reductions shall be determined by the Company and such
determination shall be conclusive. Such reductions shall be made first from any
Investment Plan Before-Tax Contributions and then from Participating Before-Tax
Contributions. In either case, the reductions shall start with the highest
dollar amount of Before-Tax Contributions, so that no Member shall be subject to
reduction until all dollar amounts have been reduced to the dollar amount
elected by such Member. Effective as of May 1, 2014, if a Member’s contributions
are to be reduced pursuant hereto and the Member made both Roth Contributions
and Before-Tax Contributions during the Plan Year, all Before-Tax Contributions
shall be reduced before any Roth Contributions are reduced.

If the amount of Investment Plan Before-Tax Contributions and Participating
Before-Tax Contributions elected by a Member to be transferred to the Trust Fund
is reduced by application of this Section 3.4(b), the amount of such reduction,
which hereinafter shall be referred to as “excess contributions,” including any
income or excluding any losses attributable to such excess contributions, shall
be paid in cash to the Member no later than March 15 of the Plan Year following
the Plan Year for which the contribution is being made and shall not be
transferred to the Trust Fund. The amount of the income or loss allocable to the
excess contributions shall be determined by multiplying the income or loss on
the Member’s Investment Plan Before-Tax Contributions and Participating
Before-Tax Contributions Account balance for the Plan Year in which the excess
contributions were made by a fraction, the numerator of which is the amount of
excess contributions for the Plan Year and the denominator of which is the value
of the Member’s Investment Plan Before-Tax Contributions and Participating
Before-Tax Contributions Account balance as of the last business day of that
Plan Year. Income for the period between the end of the applicable Plan Year and
the date of the corrective distribution shall be disregarded. Notwithstanding
the foregoing, effective for Plan Years beginning on or after January 1, 2006,
in all events this Section 3.4 shall be applied in accordance with the
requirements of Treasury Regulation section 1.401(k)-2, as amended by subsequent
legislation.

For purposes of the foregoing, the determination of Highly Compensated Employee
shall be made as follows:

(a) The term Highly Compensated Employee shall mean any Employee who

(i) was a “5% owner” of the Employer at any time during the Plan Year or the
preceding Plan Year, or

 

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(ii) for the preceding Plan Year

(A) had Compensation in excess of $80,000 (which amount shall be adjusted by the
Commissioner of Internal Revenue at the same time and in the same manner as
under Code Section 415(d), except that the base period shall be the calendar
quarter ending September 30, 1996), and

(B) if the Employer elects the application of this clause for such preceding
Plan Year, was in the “top-paid group” of Employees for such preceding Plan
Year.

An Employee shall be treated as a “5% owner” for any Plan Year if at any time
during such Plan Year such Employee was a “5% owner” of the Employer. An
Employee is in the “top-paid group” of Employees for any Plan Year if such
Employee is in the group consisting of the top twenty percent (20%) of the
Employees when ranked on the basis of Compensation paid during such Plan Year,
excluding those Employees who (1) have not completed six (6) months of service,
(2) normally work less than seventeen and one half (17 1⁄2) hours per week,
(3) normally work during not more than six (6) months during any Plan Year,
(4) have not attained age twenty one (21), and (5) are included in a unit of
employees covered by an agreement which the Secretary of Labor finds to be a
collective bargaining agreement between employee representatives and the
Employer.

(b) A former Employee shall be treated as a Highly Compensated Employee if

(i) such Employee was a Highly Compensated Employee when such Employee separated
from service, or

(ii) such Employee was a Highly Compensated Employee at any time after attaining
age fifty five (55).

The limitations set forth in this Section 3.4 shall be interpreted and applied
in accordance with applicable Treasury Regulations and Internal Revenue Service
rulings promulgated pursuant to Section 401(k)(3) of the Code.

3.5. A Member may suspend his Participating Contributions or Investment Plan
Contributions at any time by notice to the Company, in which event Participating
Contributions or Investment Plan Contributions may be resumed effective as of
the first pay period next following the filing of a new contribution election. A
Member may increase or reduce his Participating Contributions or Investment Plan
Contributions or change his election as to After-Tax Contributions and/or
Before-Tax Contributions within the limitations set forth in Section 3.1 hereof
effective as of the first pay period next following the filing with the Company
of an election authorizing a change in his payroll deductions and/or reductions.
Amounts contributed by Members shall be paid by the Company to the Trustee at
regular intervals and credited by the Trustee to their Accounts in accordance
with the certification of the Management Benefits and Compensation Committee as
to the names of the contributing Members and the amounts contributed by each
Member as Participating After-Tax Contributions and Participating Before-Tax
Contributions; provided, however, that in no event may such contributions be
transmitted to the Trustee later than the fifteenth (15th) business day of the
month following the month in which such amounts otherwise would have been
payable to the Member in cash, or such later date as may be permitted under
applicable law.

SECTION IV

COMPANY CONTRIBUTIONS AND ALLOCATION AMONG MEMBERS

4.1. The Company shall make monthly Matching Contributions to the Trust Fund
equal to fifty percent (50%) of the aggregate Participating Contributions of
Members up to six percent (6%) of Compensation (i.e., the maximum potential
match is three percent (3%) of Compensation). Each such Company Matching
Contribution shall be allocated among Members in proportion to their
Participating Contributions made during the calendar month for which the
Matching Contribution is being made and shall be credited to Member’s Accounts
when made to the Plan. In addition, the Company shall make a “true-up” Matching
Contribution to the Trust Fund on behalf of any Member who receives lower
Matching Contributions during a Plan Year as a result of not having made
Participating Contributions ratably over the course of such Plan Year than he
would have received if such Participating Contributions had been made ratably.

4.2. As soon reasonably practicable after the end of each payroll period, the
Company shall contribute Retirement Contributions to the Trust Fund in an amount
equal to the following percentage of Compensation paid to each Post-2007 Member
in such payroll period:

 

Age Plus Vesting Service Of Post-2007 Member As Of the Last Day of the Month

Retirement Contribution
(% of Compensation)   Less than 35   3.0 %  35-44   3.5 %  45-54   4.0 %  55-64
  4.5 %  65-74   5.0 %  75-84   5.5 %  85 or more   6.0 % 

 

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For the avoidance of doubt, no Member who is an active participant in the
Moody’s Corporation Retirement Account at the time any Retirement Contributions
are made shall be eligible to be credited with such Retirement Contributions.

4.3. In the event the Increase in Earnings Per Share for any Plan Year equals or
exceeds the Threshold, the Company shall make Profit Sharing Contributions for
such Plan Year; provided that, in its sole discretion, the Committee or its
delegate may determine not to award any Profit Sharing Contributions to one or
more Eligible Employees or groups of Eligible Employees, or to provide a reduced
level of Profit Sharing Contributions to one or more Eligible Employees or
groups of Eligible Employees, subject to applicable law (including
Section 401(a) of the Code). In order to receive a Profit Sharing Contribution
for a Plan Year, a Participant must be actively employed by the Company or an
Affiliate on December 31 of the applicable Plan Year and be classified by the
Company or the Affiliate as a full-time or part-time employee as of such date.
Such Profit Sharing Contributions and the allocation thereof shall be determined
in accordance with the following table:

 

Increase in Earnings Per Share for the Plan Year

Profit Sharing Contribution
(Percentage of Eligible
Employee’s Compensation
for the Plan Year)   Threshold   0.4 %  3% above Threshold   0.9 %  5.5% above
Threshold   1.2 %  8% above Threshold   1.6 %  10% or more above Threshold   1.8
% 

If the Increase in Earnings Per Share for any Plan Year results in a percentage
between any two percentages shown on the above table, the Company shall compute
the Profit Sharing Contribution amounts by mathematical interpolation and
rounding the right-hand column to the one-tenth of one percent of Compensation,
subject to the first sentence of this Section 4.3.

Notwithstanding the foregoing, in no event shall a Profit Sharing Contribution
be credited to the Account of a Participant if applicable law (including,
without limitation, the Dodd–Frank Wall Street Reform and Consumer Protection
Act) prohibits the Participant from being credited with such Profit Sharing
Contribution.

4.4. Notwithstanding the foregoing, total Company contributions under the Plan
for any calendar year shall not exceed the amount deductible for such year under
the provisions of the Code after giving full effect to contributions under the
Moody’s Corporation Retirement Account and any other defined benefit plan to
which the Company contributes. Any reductions in Company contributions mandated
by this paragraph shall be in the order of reductions in Additional Matching
Contributions and then, if necessary, reductions in Company Matching
Contributions and then, if necessary, reductions in Profit Sharing Contributions
and then, if necessary, reductions in Retirement Contributions.

4.5. All Company contributions shall be made only out of current or accumulated
earnings of the Company.

4.6. The total amount of the Trust Fund forfeited by Members during any calendar
month or calendar year shall be applied to reduce future Company contributions
due under the Plan.

4.7. Company contributions for each calendar month or for a Plan Year (as the
case may be) and the allocation thereof shall be made without regard to
contributions made by Members whose employment terminated during such calendar
month or Plan Year (as the case may be) for any reason other than Retirement,
disability or death, and no such Member shall be entitled to an allocation of
any such contribution.

4.8. Notwithstanding the foregoing, under no circumstances shall the sum of the
Matching Contributions and Additional Matching Contributions for a Highly
Compensated Employee (as defined under Section 3.3(c)), together with the sum of
his Participating After-Tax Contributions and Investment Plan After-Tax
Contributions, exceed such amount as might cause the Plan to fail to meet the
discrimination standards set forth in Section 401(m)(2) of the Code. In this
regard, the Contribution Percentage of Members who are Highly Compensated
Employees for any Plan Year must either be (a) not more than such percentage of
all other Members for such Year multiplied by 1.25 or (b) not more than two
(2) percentage points greater than such percentage of all other Members for such
Year and not more than such percentage of all other Members for such Year
multiplied by two (2). The Contribution Percentage tests described in the
preceding sentence shall be performed by using the Contribution Percentage of
non-Highly Compensated Employees for the Plan Year preceding the Plan Year that
is being tested, unless the Employer has elected to use the current Plan Year
rather than the preceding Plan Year, which election may be changed only as
provided by the Internal Revenue Service. The Contribution Percentage for a
specified group of Members for a Plan Year shall be the average of the ratios
(calculated separately for each person) of (i) the total Matching Contributions
and Additional Matching Contributions allocated to each Member for such Plan
Year plus his Participating After-Tax Contributions and his Investment Plan
After-Tax Contributions for such Plan Year, to (ii) the Member’s compensation
for such

 

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Plan Year. For purposes of this Section 4.8 of the Plan, a Member’s compensation
must be determined in accordance with the provisions of Section 414(s) of the
Code. If the Company determines that the foregoing limitations are not
satisfied, the Investment Plan After-Tax Contributions, Participating After-Tax
Contributions, Matching Contributions and Additional Matching Contributions by
Highly Compensated Employees for a Plan Year shall be reduced as follows: the
Highly Compensated Employee with the highest dollar amount of such contributions
for such Plan Year shall be reduced by the lesser of the amount required (i) to
enable the Plan to satisfy the test described in the preceding sentence, or
(ii) to cause such Highly Compensated Employee’s Compensation aggregate
contributions to equal the dollar amount of the Highly Compensated Employee with
the next highest dollar amount of such contributions. This process shall be
repeated until the Plan satisfies the test. In implementing such test, the
Company shall first reduce the amounts of Investment Plan After-Tax
Contributions and Participating After-Tax Contributions so elected to be
contributed or which have been contributed by such Members in order to comply
with Section 401(m)(2) of the Code. If the amount elected by a Member to be
transferred to the Trust Fund is reduced by application of this Section 4.8, the
amount of such reduction, which hereinafter shall be referred to as “Excess
Aggregate Contributions,” including any income or excluding any losses, shall be
paid in cash to the Member on whose behalf such contributions were made, to the
extent practicable, within two and one-half (2 1⁄2) months following the Plan
Year for which such excess contributions were made, but in no event later than
the close of the Plan Year following the Plan Year in which such Excess
Aggregate Contributions were made. The determination of the income and loss
allocable to Excess Aggregate Contributions shall be made in the manner
prescribed by Code Section 401(m) and the Treasury Regulations thereunder.

With respect to a Plan Year being tested, the determination of whether the Plan
satisfies the requirements of this Section 4.8 shall be made in accordance with
Code Section 401(m) and the Treasury Regulations thereunder, as they may be
amended from time to time, the provisions of which are hereby incorporated by
reference and shall override the provisions of the Plan to the extent
inconsistent therewith. Effective for Plan Years beginning on or after
January 1, 2006, in all events this Section 4.8 shall be applied in accordance
with the requirements of Treasury Regulation section 1.401(m)-2, as amended by
subsequent legislation.

SECTION V

THE TRUST FUND

5.1. The assets of the Plan (the “Trust Fund”) shall be held in trust by one
(1) or more corporate trustees pursuant to the terms of a Trust Agreement
between the Corporation and each corporate trustee. No person shall have any
right to or interest in the Trust Fund except as provided in the Plan and Trust
Agreement.

5.2. The Trust Fund shall consist of the Moody’s Company Stock Fund and those
other Funds designated, from time to time, by the Management Benefits and
Compensation Committee, into which investment of the assets in Members’ Accounts
may be directed.

5.3. A separate Account shall be maintained for each Member to which there shall
be credited such Member’s Participating and Investment Plan After-Tax
Contributions, Before Tax Contributions, Roth Contributions, Matching and
Additional Matching Contributions, Profit Sharing Contributions, Retirement
Contributions, Rollovers, and the share of each Member in each Fund of the Trust
Fund. As of each Valuation Date, the Trustee shall revalue the Trust Fund at
then current market values. As of the last Valuation Date of each calendar
quarter and upon such other Valuation Dates as requested by the Management
Benefits and Compensation Committee, the Trustee shall certify the value of the
Trust Fund to the Company and to the Management Benefits and Compensation
Committee. The Company, the Management Benefits and Compensation Committee, or
the Trustee, as the case may be, shall apportion the Trust Fund as revalued as
of each Valuation Date among the Members in proportion to their respective
interests in each Fund of the Trust Fund immediately preceding such Valuation
Date. As soon as practicable after the close of each calendar quarter, there
shall be sent to each Member a written statement of the amount to the credit of
his Account as of the last Valuation Date of the applicable calendar quarter.

5.4. Any amount which, with the consent of the Management Benefits and
Compensation Committee, (a) is transferred to the Trust Fund from the trust fund
of a plan which meets the requirements for qualification under the Code for the
Account of an Employee of the Company or any corporation the voting stock of
which is eighty percent (80%) or more owned, directly or indirectly, by the
Corporation, or (b) is transferred by such an Employee to the Trust Fund as a
tax free rollover under Section 402(c) or under Section 408(d)(3)(A) of the
Code, or (c) is transferred to the Trust Fund as a “direct rollover” from the
tax-qualified retirement plan of a former employer pursuant to Sections
401(a)(31) of the Code, shall be credited to a separate Account for such
Employee and shall be held and invested in the Moody’s Company Stock Fund or any
of the other Funds designated, from time to time, by the Management Benefits and
Compensation Committee, in accordance with such Employee’s investment election,
subject to the limitations in the Plan. In the case of a direct transfer from a
plan which meets the requirements for qualification under the Code, such amount
may include promissory notes evidencing a loan given in accordance with the
provisions of such transferor plan, provided that the Management Benefits and
Compensation Committee shall have consented in advance to the assumption of such
loan in accordance with Section 9.9 hereof. No amount so transferred shall be
treated as a Participating Contribution by the Member or be eligible to share in
any Matching Contribution. Such Accounts shall be fully vested and shall be
distributable in accordance with the provisions of the Plan.

 

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5.5. Notes of Members given in accordance with the loan provisions of a plan
maintained by an affiliated company, the accounts of which are transferred to
the Plan, may be held in a separate Account established hereunder. Any payments
of principal or interest pursuant to such notes shall be allocated to the
Account of the Member making the payments and invested in the Funds designated,
from time to time, by the Management Benefits and Compensation Committee, in
accordance with the Member’s investment election in effect at the time of such
payments.

SECTION VI

INVESTMENT ELECTIONS

6.1. The balance to the credit of each Member’s Account and amounts attributable
to contributions made with respect to such Member shall be held and invested in
one (1) or more of the Funds as such Member shall have most recently elected in
accordance with Section 3 hereof, subject to the limitations in the Plan.

6.2. Each new Member shall elect, prior to the commencement date of his
participation, to have amounts attributable to contributions made thereafter
with respect to such Member held and invested in one or more of the Funds, in
multiples of one percent (1%), except that no Member may elect to have more than
ten percent (10%) of his interest in contributions invested in the Moody’s
Common Stock Fund.

6.3. Each Member may make a revised investment election at any time applicable
to amounts attributable to contributions made with respect to his Account from
and after the first pay period following such revised election, subject to the
foregoing limitation with respect to investment in the Moody’s Common Stock
Fund.

6.4. Subject to Section 6.3 hereof, Each Member, at any time, may elect to have
the amount to the credit of his Account calculated as of the Valuation Date
immediately following the receipt of a revised election by the Management
Benefits and Compensation Committee (a) reallocated among the Funds, in
multiples of one percent (1%), or (b) transferred in a specified dollar amount
from one Fund to another Fund. Notwithstanding the foregoing, in no event may a
Member elect to reallocate or transfer any amount to the Moody’s Common Stock
Fund if ten percent (10%) or more of the amount to the credit of his Account as
of the applicable Valuation Date would be invested in the Moody’s Common Stock
Fund (provided that any Member with more than ten percent (10%) of the amount to
the credit of his Account as of November 1, 2011 invested in the Moody’s Common
Stock Fund shall not be required to divest any portion of such holdings, but no
additional amounts may be allocated by such Member to the Moody’s Common Stock
Fund until the ten percent (10%) limitation would not be exceeded, and in no
event thereafter may such ten percent (10%) limitation be exceeded by such
Member).

6.5. All assets of the Plan that are invested in Company Stock shall be invested
in the ESOP Fund. The ESOP Fund shall be invested exclusively in Company Stock
except for cash or cash equivalent investments for the limited purposes of
making Plan distributions to Members and paying Plan administrative expenses, or
pending the investment of contributions or other cash receipts in Company Stock,
without regard to the diversification of assets. All Company Stock is included
in the ESOP Fund, regardless of the source, character, or history of investment
of the contributions or earnings that are invested in Company Stock. Amounts
that cease to be invested in Company Stock shall cease to be included in the
ESOP Fund, subject to inclusion again if the Member directs that amounts be
invested in Company Stock. Neither any Company, the Management Benefits and
Compensation Committee nor the Trustee shall have any responsibility or duty to
time any transaction involving Company Stock, in order to anticipate market
conditions or changes in stock value, nor shall any such person have any
responsibility or duty to sell Company Stock held in the ESOP Fund (or otherwise
to provide investment management for Company Stock held in the ESOP Fund) in
order to maximize return or minimize loss. Company contributions in cash, and
other cash received by the Trustee, may be used to acquire shares of Company
Stock from Company shareholders or directly from the Company.

6.6. In the event a Member fails to make an investment election, the Member’s
current and future contributions shall be held and invested in the appropriate
qualified default investment alternative under the Plan.

6.7. Investment elections shall be made (a) on forms approved by and filed with
the Management Benefits and Compensation Committee, (b) by telephonic,
electronic or other data transmission in a manner approved by the Management
Benefits and Compensation Committee, or (c) in any other manner approved by the
Management Benefits and Compensation Committee in its sole discretion.

6.8. In all events, the valuation methodology to be used in calculating a
Member’s interest in a Fund which is terminating shall be determined by the
Management Benefits and Compensation Committee in its discretion; provided,
however, that such methodology shall apply uniformly to all Members having an
interest in such Fund at the time of termination.

 

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SECTION VII

VOTING AND TENDERING OF

MOODY’S CORPORATION COMMON STOCK; DIVIDENDS

7.1. The following provision shall apply with respect to Company Stock:

(a) Members, Beneficiaries of deceased Members and Alternate Payees shall be
permitted to direct the manner of exercise of voting rights on shares of Company
Stock or stock of an Affiliate, including fractional shares, allocated to their
Accounts, as follows:

(i) The issuer of the Company Stock shall provide the Trustee and Members,
Beneficiaries of deceased Members and Alternate Payees with all notices and
information provided to its stockholders in connection with the exercise of
their voting rights. If the Trustee receives communications directed to
stockholders concerning voting, the Trustee shall cause the communications to be
distributed to Members, Beneficiaries of deceased Members and Alternate Payees.

(ii) The Trustee shall solicit directions from Members, Beneficiaries of
deceased Members and Alternate Payees about voting the shares allocated to
Members’ Accounts and shall exercise voting rights as provided in the applicable
Trust agreement or instrument.

(iii) Except as required for trust administration or by law, individual voting
instructions shall be held by the Trustee in confidence.

(iv) Except as expressly provided in subsection (b) or the applicable trust
agreement or instrument, the Trustee may, at the direction of the Administrator,
solicit and follow directions of Members, Beneficiaries of deceased Members and
Alternate Payees under procedures similar to voting procedures under this
subsection with respect to any matter involving the exercise of individual
shareholder rights and privileges relating to Company Stock allocated to
Members.

(b) If the Trustee receives a tender offer for shares of Company Stock or stock
of an Affiliate, the following shall apply unless otherwise required by law:

(i) Tender offer means an offer to acquire Company Stock, as provided in the
applicable trust agreement or instrument.

(ii) When a tender offer is received, the Trustee shall inform all Members,
Beneficiaries of deceased Members and Alternate Payees whose Accounts are
affected by the tender offer and shall respond to the offer as provided in the
applicable trust agreement or instrument.

(iii) If the manner of exercising voting or other shareholder rights under
subsection (a) or responding to a tender offer under subsection (b) is not
permitted by law, then the Trustee shall determine how to exercise the voting or
other rights or how to respond to the tender offer, as applicable. In making
such determinations, the Trustee may employ such experts and advisors as it
deems helpful or necessary. All reasonable expenses incurred by the Trustee in
making such determinations shall be paid from the Trust Fund unless paid by the
Company.

7.2. Special Distribution of Dividends.

(a) The Company may determine that cash dividends on common shares of Company
Stock allocated to Members under the ESOP Fund may be distributed directly to
such Members in one or more of the following manners, from time to time:

(i) Mandatory Dividend Distribution By Trustee – Cash dividends received on
common shares of Company Stock allocated to Members under the ESOP Fund will be
paid currently in cash by the Trustee to such Members (or their Beneficiaries).

(ii) Mandatory Dividend Distribution by Company – Cash dividends received on
common shares of Company Stock allocated to Members under the ESOP Fund will be
paid currently in cash by the Company directly to such Members (or their
Beneficiaries).

(iii) Member Election of Dividend Distribution or Reinvestment – Each Member
will be offered the opportunity to elect to have cash dividends on common shares
of Company Stock allocated to such Member’s interest in the ESOP Fund either
paid directly to such Member or to have such cash dividends reinvested in common
shares of Company Stock for the benefit of such Member. Any election made
pursuant to this paragraph shall be made in accordance with the following:

(A) Members shall be given a reasonable opportunity before a dividend is paid or
distributed to them in which to make the election.

(B) Members shall have a reasonable opportunity to change a dividend election at
least annually.

(c) Subject to rules established by the Administrator, any election shall
continue to apply with respect to all subsequent dividends with respect to
Company Stock allocated to the Member unless the Member changes the election.

(D) If Plan terms governing the manner for payment or distribution of dividends
to Members are modified, the Members shall be given a reasonable opportunity to
make an election under the new Plan terms before the date on which the first
dividend that is subject to the new Plan terms is paid or distributed.

 

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(E) A Member’s election with respect to any dividend shall be irrevocable on the
day before the date for payment or distribution of the dividend to Members
unless the Management Benefits and Compensation Committee establishes and
notifies Members of an earlier date.

(F) If a Member does not elect distribution of dividends, the Member will be
deemed to have elected to have dividends invested in Company Stock.

(b) Any cash dividends available for distribution directly to Members under
subsection (a) shall be subject to the following:

(i) Company instructions to the Trustee regarding the distribution of dividends
must be in writing and may be revoked at any time before the dividend is
distributed to Members.

(ii) The Company may designate one or more classes of common shares of Company
Stock to be subject to distribution of dividends, and need not designate all
classes or any particular class.

(iii) Dividend distributions shall be paid in cash no later than 90 days after
the end of the Plan Year in which the dividends are received by the Trust.

(iv) The amount distributed to a Member shall be the amount of dividends paid on
common shares of Company Stock allocated to the Member as of the record date for
the dividend payment that would otherwise be paid on the Company Stock
identified by the Company under paragraph (2).

(v) Dividends subject to distribution from the Trust shall be invested pending
distribution in the investment fund that is most liquid and least likely to
suffer loss of value. Dividends pending distribution shall not be subject to
investment direction by Members. Earnings on dividends shall be subject to
investment direction by Members as determined by the Management Benefits and
Compensation Committee. Earnings on dividends shall not be distributed to
Members in connection with distribution of the dividends, and shall be retained
in the Trust and allocated to the ESOP Fund of the Member affected.

SECTION VIII

VESTING

8.1. The amount to the credit of a Member’s Account which is attributable to his
Participating After-Tax Contributions and Participating Before-Tax Contributions
and Investment Plan After-Tax and Investment Plan Before-Tax Contributions and
Rollovers shall be fully vested at all times.

8.2. The amount to the credit of a Member’s Account that is attributable to
Company Matching, Additional Matching, Profit Sharing and Retirement
Contributions shall be fully vested after such Member has completed three
(3) years or more of Vesting Service or has attained the age of sixty-five (65).

8.3. If a Member has less than three (3) years of Vesting Service, the amount to
the credit of his Account which is attributable to Company Matching, Additional
Matching, Profit Sharing and Retirement Contributions shall vest as follows:

 

Years of Vesting Service

% Vested Attributable to
Company Contributions   fewer than 3 years   0    3 years or more   100 % 

8.4. The amount to the credit of a Member’s Account that is attributable to
Company Matching, Additional Matching, Profit Sharing and Retirement
Contributions also shall be fully vested upon the Member’s Retirement,
termination of Service by reason of death or total and permanent disability, or
upon the occurrence of a Change of Control. If the Member’s termination of
Service is for reasons other than death or total and permanent disability or
upon the occurrence of a Change in Control, and the amount of the vested portion
of a Member’s Company Matching, Additional Matching, Profit Sharing and
Retirement Contributions at the time of the Member’s termination of Service is
less than one hundred percent (100%), then the Member shall be deemed to have
received a distribution of one hundred percent (100%) of such vested interest in
such amounts.

SECTION IX

DISTRIBUTION OF BENEFITS

9.1. Attainment of Age 70 1⁄2. The following provisions shall apply pursuant to
Section 401(a)(9) of the Code and the Treasury Regulations thereunder:

(a) The Member’s entire interest will be distributed, or begin to be
distributed, to the Member no later than the Member’s required beginning date.

 

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(b) If the Member dies before distributions begin, the Member’s entire interest
will be distributed, or begin to be distributed, no later than as follows:

(i) If the Member’s surviving Spouse is the Member’s sole designated
beneficiary, distributions to the surviving Spouse will begin by December 31 of
the calendar year immediately following the calendar year in which the Member
died, or by December 31 of the calendar year in which the Member would have
attained age 70 1/2, if later.

(ii) If the Member’s surviving Spouse is not the Member’s sole designated
beneficiary, distributions to the designated beneficiary will begin by
December 31 of the calendar year immediately following the calendar year in
which the Member died.

(iii) If there is no designated beneficiary as of September 30 of the year
following the year of the Member’s death, the Member’s entire interest will be
distributed by December 31 of the calendar year containing the fifth anniversary
of the Member’s death.

(iv) If the Member’s surviving Spouse is the Member’s sole designated
beneficiary and the surviving Spouse dies after the Member but before
distributions to the surviving Spouse begin, this provision shall apply as if
the surviving Spouse were the Member.

For purposes of this Section 9.1, distributions are considered to begin on the
Member’s required beginning date (or, if Section 9.1(b)(iv) applies, the date
distributions are required to begin to the surviving Spouse. If annuity payments
irrevocably commence to the Member before the Member’s required beginning date
(or to the Member’s surviving Spouse before the date distributions are required
to begin to the surviving Spouse under Section 9.1(b)(iv)), the date
distributions are considered to begin is the date distributions actually
commence.

(c) Unless the Member’s interest is distributed in the form of an annuity
purchased from an insurance company or in a single sum on or before the required
beginning date, as of the first distribution calendar year distributions will be
made in accordance herewith. If the Member’s interest is distributed in the form
of an annuity purchased from an insurance company, distributions thereunder will
be made in accordance with the requirements of Section 401(a)(9) Code and the
Treasury regulations. Any part of the Member’s interest which is in the form of
an individual account described in Section 414(k) of the Code will be
distributed in a manner satisfying the requirements of Section 401(a)(9) of the
Code and the Treasury regulations that apply to individual accounts.

(d) If the Member’s interest is paid in the form of annuity distributions under
the Plan, payments under the annuity will satisfy the following requirements:

(i) The annuity distributions will be paid in periodic payments made at
intervals not longer than one year;

(ii) The distribution period will be over a life (or lives) or over a period
certain not longer than the period described in Section 9.1(b)(iv);

(iii) Once payments have begun over a period certain, the period certain will
not be changed even if the period certain is shorter than the maximum permitted;

(iv) Payments will either be nonincreasing or increase only as follows:

(A) By an annual percentage increase that does not exceed the annual percentage
increase in a cost-of-living index that is based on prices of all items and
issued by the Bureau of Labor Statistics;

(B) To the extent of the reduction in the amount of the Member’s payments to
provide for a survivor benefit upon death, but only if the beneficiary whose
life was being used to determine the distribution period described above dies or
is no longer the Member’s beneficiary pursuant to a qualified domestic relations
order within the meaning of Section 414(p) of the Code;

(C) To provide cash refunds of employee contributions upon the Member’s death;
or

(D) To pay increased benefits that result from a plan amendment.

(e) The amount that must be distributed on or before the Member’s required
beginning date (or, if the Member dies before distributions begin, the date
distributions are required to begin above) is the payment that is required for
one payment interval. The second payment need not be made until the end of the
next payment interval even if that payment interval ends in the next calendar
year. Payment intervals are the periods for which payments are received, e.g.,
bi-monthly, monthly, semi-annually, or annually. All of the Member’s benefit
accruals as of the last day of the first distribution calendar year will be
included in the calculation of the amount of the annuity payments for payment
intervals ending on or after the Member’s required beginning date.

(f) Any additional benefits accruing to the Member in a calendar year after the
first distribution calendar year will be distributed beginning with the first
payment interval ending in the calendar year immediately following the calendar
year in which such amount accrues.

 

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(g) If the Member’s interest is being distributed in the form of a joint and
survivor annuity for the joint lives of the Member and a nonspouse beneficiary,
annuity payments to be made on or after the Member’s required beginning date to
the designated beneficiary after the Member’s death must not at any time exceed
the applicable percentage of the annuity payment for such period that would have
been payable to the Member using the table set forth in Q&A-2 of section
1.401(a)(9)-6T of the Treasury regulations. If the form of distribution combines
a joint and survivor annuity for the joint lives of the Member and a nonspouse
beneficiary and a period certain annuity, the requirement in the preceding
sentence will apply to annuity payments to be made to the designated beneficiary
after the expiration of the period certain.

(h) Unless the Member’s Spouse is the sole designated beneficiary and the form
of distribution is a period certain and no life annuity, the period certain for
an annuity distribution commencing during the Member’s lifetime may not exceed
the applicable distribution period for the Member under the Uniform Lifetime
Table set forth in section 1.401(a)(9)-9 of the Treasury regulations for the
calendar year that contains the annuity starting date. If the annuity starting
date precedes the year in which the Member reaches age 70, the applicable
distribution period for the Member is the distribution period for age 70 under
the Uniform Lifetime Table set forth in section 1.401(a)(9)-9 of the Treasury
regulations plus the excess of 70 over the age of the Member as of the Member’s
birthday in the year that contains the annuity starting date. If the Member’s
Spouse is the Member’s sole designated beneficiary and the form of distribution
is a period certain and no life annuity, the period certain may not exceed the
longer of the Member’s applicable distribution period, as determined under this
Section, or the joint life and last survivor expectancy of the Member and the
Member’s Spouse as determined under the Joint and Last Survivor Table set forth
in section 1.401(a)(9)-9 of the Treasury regulations, using the Member’s and
Spouse’s attained ages as of the Member’s and Spouse’s birthdays in the calendar
year that contains the annuity starting date.

(i) If the Member dies before the date distribution of his or her interest
begins and there is a designated beneficiary, the Member’s entire interest will
be distributed, beginning no later than the time described herein, over the life
of the designated beneficiary or over a period certain not exceeding:

(i) Unless the annuity starting date is before the first distribution calendar
year, the life expectancy of the designated beneficiary determined using the
beneficiary’s age as of the beneficiary’s birthday in the calendar year
immediately following the calendar year of the Member’s death; or

(ii) If the annuity starting date is before the first distribution calendar
year, the life expectancy of the designated beneficiary determined using the
beneficiary’s age as of the beneficiary’s birthday in the calendar year that
contains the annuity starting date.

(j) If the Member dies before the date distributions begin and there is no
designated beneficiary as of September 30 of the year following the year of the
Member’s death, distribution of the Member’s entire interest will be completed
by December 31 of the calendar year containing the fifth anniversary of the
Member’s death.

(k) If the Member dies before the date distribution of his or her interest
begins, the Member’s surviving Spouse is the Member’s sole designated
beneficiary, and the surviving Spouse dies before distributions to the surviving
Spouse begin, this Section 9.1 will apply as if the surviving Spouse were the
Member, except that the time by which distributions must begin will be
determined without regard to Section 9.1(b)(iv).

(l) For purposes of this Section 9.1, the following terms have the following
meanings:

(i) “Designated beneficiary” means the individual who is designated as the
beneficiary under the Plan and is the designated beneficiary under
Section 401(a)(9) of the Code and section 1.401(a)(9)-1, Q&A-4, of the Treasury
regulations.

(ii) “Distribution calendar year” means a calendar year for which a minimum
distribution is required. For distributions beginning before the Member’s death,
the first distribution calendar year is the calendar year immediately preceding
the calendar year which contains the Member’s required beginning date. For
distributions beginning after the Member’s death, the first distribution
calendar year is the calendar year in which distributions are required to begin
pursuant to this Section 9.1(b)(iv).

(iii) “Life expectancy” means life expectancy as computed by use of the Single
Life Table in section 1.401(a)(9)-9 of the Treasury Regulations.

(iv) “Required beginning date” means April 1 of the calendar year following the
calendar year in which the Member (A) attains age 70 1⁄2 or (B) retires,
whichever is later; except that, in the case of a Member who is a five percent
owner (as defined in Section 416 of the Code) of an Employer Company with
respect to the calendar year in which he attains age 70 1⁄2, required beginning
date means April 1 following the calendar year in which the Member attains age
70 1⁄2.

9.2. Retirement or Disability. If a Member’s Service is terminated by Retirement
or by total and permanent disability, as determined by the Management Benefits
and Compensation Committee after review of whatever medical evidence is
requested by it, the entire

 

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amount to the credit of his Account shall be distributed to him, subject to the
Member’s consent if required under Section 9.11 of the Plan. Such distribution
shall be paid in a lump sum as soon as reasonably practicable after termination
of employment, unless, prior to such distribution, the Member elects, in a
manner prescribed by the Management Benefits and Compensation Committee, to
receive the amount distributable from his Account, together with any earnings
thereon, in one of the following manners:

(a) in a lump sum as soon as reasonably practicable following his termination of
Service in the amount to the credit of his Account as of the Valuation Date
immediately preceding the date distribution is actually made, except that no
such election shall be permitted which defers distribution beyond the April 1
following the calendar year in which the Member attains age seventy and one half
(70 1⁄2); except that if the Member attained age seventy and one half
(70 1⁄2) before January 1, 1988 and is not and has never been an owner of five
percent (5%) of the outstanding stock or voting power of the Corporation, he may
defer distribution until the April 1 following the calendar year of his
Retirement;

(b) in installments, over a period which shall not exceed twenty (20) years, or
the life expectancy of the Member or the life expectancy of the Member and his
designated Beneficiary if such period is less than twenty (20) years, beginning
on or about March 1 of the calendar year following such termination of Service,
or any subsequent March 1 selected by the Member which is not later than the
March 1 immediately following the calendar year in which the Member attains age
seventy and one half (70 1⁄2) and continuing on or about each subsequent
anniversary of such commencement date; provided, however, if the Member’s
designated Beneficiary is not his Spouse, the maximum installment period shall
be reduced, if necessary, so that the present value of amounts payable to the
Member for his life expectancy is more than fifty percent (50%) of the present
value of the total amounts payable under this option as of the installment
commencement date. Payment shall be made in annual installments, the amounts of
which are calculated annually by dividing the then current value of his Account
(determined as of the last Valuation Date in the year preceding the payment
date) by the remaining number of unpaid installments.

All Accounts deferred or distributable in installments shall remain in the Trust
Fund until paid, and consequently, shall be subject to periodic revaluation with
the attendant risk of market loss in the Fund or Funds selected by the Member
pursuant to his investment election. Each installment distribution shall be made
from the Funds in the same proportion that the value of the Member’s interest in
each such Fund bears to the total value of his Account as of the applicable
Valuation Date.

Any payment election made under this subsection 9.2 may be changed at any time
prior to the lump sum payment date or the first installment date elected by the
Member but may not be changed thereafter, except that a Member or, in the event
of his death, his Beneficiary may accelerate the payment of the Member’s entire
undistributed Account balance at any time.

9.3. Death. Upon the death of a Member who is an Employee at the time of his
death, the amount to the credit of his Account as of the Valuation Date
immediately preceding the date of distribution shall be paid as soon as
practicable thereafter to the Beneficiary or Beneficiaries designated by him, or
if none, to the legal representative of the Member’s estate; provided, however,
that prior to such payment, such Beneficiary or estate representative may elect,
in a manner prescribed by the Management Benefits and Compensation Committee, to
receive the entire amount to the credit of the Member’s Account (determined as
of the Valuation Date immediately preceding the date of distribution) in a lump
sum as soon as reasonably practicable following the year of the Member’s death.

Upon the death of a Member who is not an Employee at the time of his death, the
amount to the credit of his Account, to the extent vested, shall be paid within
sixty (60) days after the Committee receives notice of death, if practicable, to
the Beneficiary or Beneficiaries designated by him, or if none, to the legal
representative of the Member’s estate.

Notwithstanding the foregoing, any Member whose Service has terminated by
Retirement or death may elect, prior thereto, to have the distribution of his
Account after his death either

(a) in the case of a Member who has commenced receiving installment payments
under the Plan and who has attained age seventy and one half (70 1⁄2), continued
after his death, in accordance with his election made under Section 9.2(b) of
the Plan, to his Spouse or other Beneficiary with provision that if the Spouse
or other Beneficiary does not survive the installment payment period elected by
the Member, the balance to the credit of his Account will be paid in a lump sum
to the estate of such Spouse or other Beneficiary, or

(b) in the case of a Member who has not commenced receiving payments under the
Plan or who has not attained age seventy and one half (70 1⁄2), paid, after his
death, in annual installments to his Spouse in accordance with the Member’s
election under Section 9.2(b) of the Plan over a period not extending beyond the
life expectancy of such Spouse, with provision that if such Spouse does not
survive the installment payment period elected by the Member, the balance to the
credit of his Account will be paid in a lump sum to the estate of his Spouse, or

(c) in the case of a Member who is not married at the time of his death, or who
is married and does not select his Spouse as Beneficiary, and who has not
commenced receiving payments or who has not attained age seventy and one half
(70 1⁄2), paid in annual installments to a designated adult Beneficiary in
accordance with Section 9.2(b) of the Plan over a period not extending beyond
the

 

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life expectancy of such designated Beneficiary, with provision that if such
designated Beneficiary does not survive the installment payment period elected
by the Member, the balance to the credit of his Account will be paid in a lump
sum to the estate of such Beneficiary.

Designation of a Beneficiary or Beneficiaries shall be made in writing and filed
with the Management Benefits and Compensation Committee in such form and in such
manner as such Committee from time to time may prescribe. A designated
Beneficiary or Beneficiaries may be changed in the same manner. Any Beneficiary
designation made by a Married Member who is an Employee on or after January 1,
1985, shall be ineffective unless his Spouse is the designated Beneficiary or
consents to such designation in accordance with Section 205(c)(2)(A) of ERISA.
Any Beneficiary designation made (i) by an unmarried Member who subsequently
marries or (ii) by a married Member who subsequently remarries shall be
ineffective unless his Spouse or new Spouse, respectively, is the designated
Beneficiary or consents to such designation in accordance with
Section 205(c)(2)(A) of ERISA and Section 401(a)(11) of the Code. If a married
Member dies without having made an effective Beneficiary designation, his
surviving Spouse shall be considered for all purposes of the Plan as his
designated Beneficiary.

9.4. Termination of Service by Reason of Company Reorganization. Subject to
Section 9.11 and Section 9.14 hereof, if a Member ceases to be an Employee as
the result of a Company reorganization, including a change in ownership of the
stock or all or part of the assets of his Employer, then the entire vested
amount to the credit of his Account as of the Valuation Date immediately
preceding the date of distribution shall be distributed to him in a lump sum as
soon as reasonably practicable following such termination of employment;
provided, however, that a Member who is to receive a distribution pursuant to
this Section 9.4 may elect any other method of distribution otherwise available
under the Plan, including, without limitation, the direct transfer of the entire
amount to the credit of his Account to an employee benefit plan of his new
employer provided such plan meets the requirements for qualification under the
Code. If a Member elects to leave his Account in the Trust Fund in lieu of
receiving a distribution from the Plan pursuant to this Section 9.4, he shall
continue to be a Member in the Plan with respect to amounts credited to his
Account, except (a) he shall not be

entitled to share in Company contributions for any month subsequent to the month
in which he ceases to be an Employee or to make contributions of his own, and
(b) the amount to the credit of his Account shall be one hundred percent
(100%) vested and shall be nonforfeitable, shall not be eligible for any
withdrawal under Section 9.7 of the Plan and shall remain in the Trust Fund
subject to periodic revaluation under the terms of the Plan and the risks
thereof until the Account becomes distributable pursuant to the terms of the
election made by such Member in accordance with the terms of the Plan.
Notwithstanding the foregoing provisions of this Section 9.4, any such Account
balance shall be eligible for distribution pursuant to Section 9.8 in the case
of financial necessity.

9.5. Other Terminations. If a Member’s Service is terminated for any reason
other than Retirement, disability, death, or reorganization of such Member’s
Employer, the amount to the credit of his Account which is vested under
Section 8 of the Plan as of the Valuation Date immediately preceding the date of
distribution, together with the amount of his Participating Contributions made
after such Valuation Date, shall be distributed to him, subject to the Member’s
consent if required under Section 9.11 of the Plan, as soon as reasonably
practicable following such termination date, or as soon thereafter as
practicable, and the balance to the credit of his Account shall be forfeited.

Notwithstanding the foregoing, if a Member’s Service is terminated for any
reason other than Retirement, disability or death, and as a result of such
termination an amount to the credit of his Account is forfeited, the amount of
such forfeiture shall be restored by the Company to his Account provided he is
reemployed by the Company and within five (5) years of his reemployment date he
repays to the Trust Fund an amount of cash equal to the amount distributed to
him from the Trust Fund at termination of his Service. Any amounts repaid or
restored under this paragraph shall be repaid or restored to the Funds, in
accordance with the investment election of the Member in effect at the time of
repayment and restoration. If as the result of a termination of Service a Member
incurs a forfeiture under this Section 9.5, any amount to the credit of his
Account that was vested at such termination of employment shall no longer be
subject to forfeiture. Accordingly, if any such Member is reemployed by the
Company and resumes his Membership, a separate Account shall be maintained for
such Member showing the amount to the credit of his Account which is not subject
to forfeiture, including amounts left in the Trust Fund at the time of his
termination pursuant to the first paragraph hereof and amounts repaid to the
Trust Fund pursuant to the second paragraph hereof.

9.6. Company Contributions for the Year of Termination of Service. If a Member
or his Beneficiary is entitled to share in the Additional Matching Contribution
or the Profit Sharing Contribution, if any, of the Company for the Plan Year in
which his Service terminates, such share shall be paid to him or to his
Beneficiary in cash within ninety (90) days after the end of such Year or as
soon as practicable thereafter; except that if he has elected or has been deemed
under Section 9.11 to have elected an optional form of

distribution, such share shall be added to the amounts payable to him under the
optional form of distribution elected or deemed to have been elected by him.

 

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9.7. Withdrawals. A Member may, by application to the Management Benefits and
Compensation Committee, request cash withdrawals from his Account to the extent
attributable to his own Participating After-Tax Contributions or Investment Plan
After-Tax Contributions and to vested Company contributions. Such withdrawals
shall be made as soon as reasonably practicable after submission of the
withdrawal application. Withdrawals shall be permitted only in accordance with
one of the following options:

(a) A Member may, at any time, withdraw an amount up to the total to the credit
of his Account attributable to his Participating After-Tax Contributions,
excluding any amount to the credit of his Account attributable to his
Participating After-Tax Contributions made for the current Plan Year and the two
(2) immediately preceding Plan Years.

(b) A Member with three (3) years or more of Vesting Service may, at any time,
withdraw an amount up to the total to the credit of his Account attributable to
his own Participating After-Tax Contributions and Company Matching
Contributions, excluding any amount to the credit of his Account attributable to
Participating and Company Matching Contributions made for the current and the
two (2) immediately preceding Plan Years.

(c) A Member who has attained age fifty nine and one half (59 1⁄2) may, by
application to the Management Benefits and Compensation Committee, request a
cash withdrawal of part or all of the entire vested amount to the credit of his
Account. Such withdrawal shall be made as soon as reasonably practicable after
submission of the withdrawal application.

(d) Applications for withdrawals under this Section 9.7 shall be made (i) on
forms approved by and filed with the Management Benefits and Compensation
Committee, (ii) by telephonic, electronic or other data transmission in a manner
approved by the Management Benefits and Compensation Committee, or (iii) in any
other manner approved by the Management Benefits and Compensation Committee in
its sole discretion.

9.8. Financial Necessity. In accordance with rules established by the Management
Benefits and Compensation Committee uniformly applicable to all Members, all or
any part of the amount to the credit of the Account of a Member (excluding any
portion of his Account invested under Section 9.9 in a loan to such Member and
any portion of his Account attributable to post-1988 earnings on either his
Participating or Investment Plan Before-Tax Contributions) may, in the

sole discretion of the Committee, to the extent that such amount is vested, be
distributed to him in cash at any time subsequent to his written application to
the Committee showing an immediate and heavy financial need for a distribution
in the amount requested. Financial necessity withdrawals shall be permitted out
of Participating Before-Tax Contributions and Investment Plan Before-Tax
Contributions Accounts only if the immediate and heavy financial need relates
to: (a) the purchase of the Member’s principal residence or Funds needed to
prevent eviction from or foreclosure on such principal residence;
(b) unreimbursed medical expenses of the Member, his Spouse, dependents or
beneficiaries greater than seven and one half percent (7.5%) of annual adjusted
gross income; (c) tuition and related educational fees for the next twelve
(12) months of post-secondary education for the Member, his Spouse, his
children, his dependents or his beneficiaries; (d) payments for burial or
funeral expenses for the Member’s deceased parent, Spouse, children or
dependents; or (e) expenses for the repair of damage to the Member’s principal
residence that would qualify for the casualty deduction under section 165 of the
Code (determined without regard to whether the loss exceeds 10% of adjusted
gross income) and, if requested by the Member, any additional amounts necessary
to pay any federal, state and/or local income taxes and/or penalties reasonably
anticipated to result from the distribution. The Member’s application shall
include a representation (i) that his financial need is not covered by
insurance, (ii) that he cannot meet the need by a reasonable liquidation of his
liquid assets, (iii) that cessation of contributions under the Plan would not
enable him to meet the need, (iv) that he has exhausted his withdrawal rights
under the Plan, (v) that repayment of any borrowing from commercial sources or
the Plan would itself be a hardship, and (vi) such other information as may be
required by the Management Benefits and Compensation Committee. Any financial
necessity withdrawal approved by the Committee shall be made (A) from the
Member’s Participating After-Tax Contributions Account to the extent available,
and if insufficient therefor, then (B) out of any Rollover Account, and if
insufficient therefor, then (C) out of the vested portion of his Matching,
Additional Matching, Profit Sharing and Retirement Contribution Accounts, and if
insufficient therefor, (D) out of his Participating Before-Tax Contributions and
Investment Plan Before-Tax Contributions Accounts. Any such distribution to a
Member shall be made from the Funds in the same proportion that the value of his
interest in each such Fund bears to the total value of his Account as of the
applicable Valuation Date.

9.9. Loans to Members. A Member in active Service or a Member not in active
Service who is a “party-in-interest” with respect to the Plan (as such term is
defined in Section 3(14) of ERISA) may borrow an amount to the credit of his
Account which, when added to all outstanding loans to such Member under this
Plan (and, for purposes of this Section 9.9, any plan from which the Member’s
Account may have been transferred), does not exceed the lesser of:

(a) $50,000 reduced by the excess, if any, of

(i) the Member’s highest outstanding loan balance under the Plan during the
twelve month period ending on the day before the date on which the last loan is
made, and

 

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(ii) the Member’s outstanding loan balance on the date on which such loan is
made; or

(b) fifty percent (50%) of the total amount to the credit of his Account, to the
extent vested.

The minimum amount of any loan shall be Five Hundred Dollars ($500) and all
loans shall be in One Hundred Dollar ($100) increments. The maximum number of
loans to any Member that may be outstanding at any one time shall be two (2);
provided, however, that a third loan may be made to a Member to purchase a
principal residence.

All loans shall bear a rate of interest two (2) percentage points higher than
the prime rate as published in The Wall Street Journal as of the last day of the
month immediately preceding the receipt of the loan application, which rate
shall remain in effect for the term of the loan. The loan shall be adequately
secured by the Member’s Account and by the Member’s executed promissory note,
and shall be repayable, no less frequently than quarterly, in full over a
nonrenewable repayment period of from twelve (12) to sixty (60) months, or, in
the case of a loan to purchase a principal residence, one hundred twenty
(120) months. Prior to the receipt of the proceeds of any loan, any full-time
salaried Employee and any part-time salaried Employee who is employed on a
regular and continuous schedule by a company participating in the Moody’s
corporate payroll system shall authorize repayment of same, together with
interest thereon, by regular payroll deductions; provided, however, that a
Member may prepay in full the then outstanding balance of any loan.

If a Member defaults for any reason on any scheduled repayment of principal
and/or interest, the Management Benefits and Compensation Committee shall have
the right (A) to accelerate repayment, (B) to demand immediate repayment of the
entire amount outstanding, (C) to renegotiate the terms of the loan, or (D) to
approve a financial necessity distribution of the Member’s note subject to the
terms of the Plan.

Each loan made hereunder shall be an investment of the Member’s Account over
which such Member has exercised investment control and the proceeds of any such
loan paid to the Member shall be made from the Funds in which the Member’s
Account is invested, in the same proportion that the value of his interest in
each such Fund bears to the total value of his Account as of the applicable
Valuation Date. All interest payments and repayments of principal shall be
credited to the Member’s Account and shall be invested in the Funds in
accordance with the investment election of the Member in effect at the time of
such payments.

Upon the termination of Service of a Member for any reason other than Retirement
or disability at a time when he has any unpaid balance of principal or interest
on an outstanding loan, such loan shall thereupon be deemed to be due and
payable in full and the value of the Member’s Account shall be reduced by the
amount of such unpaid balance of principal and interest in complete satisfaction
of the Member’s loan obligation hereunder.

Notwithstanding the foregoing, the termination of Service of a Member shall not
cause his loan to become due and payable provided the Member forgoes
distribution of his Account during the remaining term of the loan. A Loan which
is made to a Member who is a party in interest with respect to the Plan but is
not in active Service shall be subject to such additional requirements regarding
collateral or otherwise as the Management Benefits and Compensation Committee
may determine in accordance with its fiduciary responsibilities under ERISA.

In addition to the terms and conditions specifically set forth herein, all loans
under the Plan shall be subject to such other terms and conditions as the
Management Benefits and Compensation Committee may from time to time determine
under rules applicable to all Members on a reasonably equivalent basis.

9.10. Form of Distribution. All distributions shall be in cash; provided,
however, to the extent lump sum distributions on Account of Retirement, death,
disability or other termination of Service are from the Moody’s Common Stock
Fund or any other Fund which provides for in-kind distributions, a Member, prior
to the distribution, may elect to receive whole shares of Moody’s Common Stock
and cash in lieu of fractional shares. All partial distributions shall be made
from the Funds in the same proportion that the value of the Member’s interest in
each such Fund bears to the total value of the Member’s Account as of the
applicable Valuation Date. In connection with a distribution, a Participant may
elect to receive Company Stock held in the Participant’s ESOP Fund in the form
of Company Stock, except that fractional shares shall be distributed in cash.

9.11. Consent. Notwithstanding any other provision of the Plan, if the amount to
the credit of a Member’s Account exceeds One Thousand Dollars ($1,000) (the
“Involuntary Cashout Amount”), and becomes distributable to him on an immediate
lump sum basis pursuant to any provision of this Section 9 of the Plan, no such
distribution shall be made to him unless he consents in writing to same pursuant
to election forms and notices provided by the Management Benefits and
Compensation Committee no more than ninety (90) days and no less than thirty
(30) days prior to the anticipated date of the Member’s distribution, as
required by Section 1.411(a)-11(c) of the Treasury Regulations. If a
distribution is one to which Sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than thirty (30) days after the
notice required under Section 1.411(a)-11T(c) of the Treasury Regulations is
given, provided that:

(a) the Management Benefits and Compensation Committee clearly informs the
Member that the Member has a right to a period of at least thirty (30) days
after receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and

 

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(b) the Member, after receiving the notice, affirmatively elects a distribution.

Failure to give such consent shall be deemed to be an election to have the
amount to the credit of the Member’s Account (to the extent not forfeited) as of
the earliest of (i) the giving of such consent by the Member, (ii) the Member’s
attainment of age sixty five (65), or (ii) receipt by the Compensation and
Benefit Committee of notice of the Member’s death, distributed to the Member (or
to his designated Beneficiary if he is not living) in a lump sum within sixty
(60) days following such date or as soon thereafter as reasonably practicable;
provided, however, if the Member is married at the time of his death, his
surviving Spouse shall be considered to be his designated Beneficiary unless
such Spouse has consented to the Member’s Beneficiary designation in accordance
with Section 205(c)(2)(A) of ERISA. Any election by a Member to receive an
optional form of benefit available under the Plan shall be deemed to be his
consent to receive such form of benefit. Failure to give the requisite consent
hereunder shall also be deemed to be an election by the Member to have the
entire amount to the credit of his Account, to the extent not forfeited, remain
invested in the Trust Fund and consequently subject to periodic revaluations
with the attendant risk of market loss in the Fund or Funds selected by the
Member pursuant to his investment election, as may be amended from time to time
in accordance with Section 6 hereof. The Member may, at any time thereafter,
receive distribution of his entire Account by giving the requisite consent, but
he shall no longer be eligible to make any other withdrawals under the Plan nor
shall he be eligible to make contributions to the Plan, receive any additional
Company Matching Contributions or Additional Matching Contributions under the
Plan, or receive any financial hardship distributions from the Plan.

Notwithstanding any other provision of the Plan, if the vested amount credited
to a Member’s Account is less than One Thousand Dollars ($1,000) at the time it
becomes distributable, such amount shall be distributed as soon as reasonably
practicable to the Member or the Beneficiary in a single lump sum. In the event
that such distribution is eligible to be rolled over pursuant to Section 9.13,
if the Member does not elect to have such distribution paid directly to an
eligible retirement plan specified by the Member in a direct rollover or to
receive the distribution directly, then the distribution shall be paid in a
direct rollover to an individual retirement plan designated by the Management
Benefits and Compensation Committee or its successor.

9.12. No Adjustment for Earnings after Applicable Valuation Date. The amount of
each distribution from the Plan is based on the amount to the credit of the
Member’s Account as of the Valuation Date immediately preceding the date of
distribution as specified in this Section 9. In no event (a) shall any portion
of the Member’s Account distributed in cash from the Trust Fund be credited with
any earnings between such Valuation Date and the distribution date with respect
to the amount being distributed, but any such earnings (if any) shall remain in
the Trust Fund for reapportionment among active Members pursuant to Section 5.3
of the Plan, nor (b) shall the amount of any such distribution accrue any
earnings between the Valuation Date as of which it is removed from the Member’s
Plan Account and the date on which such distribution is received by the Member
or his Beneficiary; provided, however, that the Trustee for the Trust Fund is
authorized and directed to pay over to the recipient of any lump sum
distribution that includes shares of Common Stock of the Corporation any
dividends paid to it as shareholder of record as of any date which falls between
the Valuation Date applicable to such lump sum distribution and the date the
shares are transferred to the distributee by the Corporation’s stock
registration agent.

9.13. Direct Rollover Treatment for Certain Withdrawals and Distributions.
Notwithstanding any provision of the Plan to the contrary that would otherwise
limit a distributee’s election under this Section 9.13, a distributee may elect,
at the time and in the manner prescribed by the Management Benefits and
Compensation Committee, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee in a
direct rollover.

An eligible rollover distribution is a distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible rollover
distribution does not include:

(a) any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or the joint life
expectancies) of the distributee and the distributee’s designated Beneficiary,
or for a specified period of ten (10) years or more;

(b) any distribution to the extent such distribution is required under
Section 401(a)(9) of the Code; and

(c) any hardship withdrawal.

An eligible retirement plan is an individual retirement account described in
Section 408(a) of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 401(a) of the Code, and (i) a
plan described in Section 403(b) of the Code, or (ii) an eligible plan under
Section 457(b) of the Code which is maintained by a state, political subdivision
of a state, or any agency or instrumentality of a state or political subdivision
of a state and which agrees to separately account for amounts transferred into
such plan from this Plan, that accepts the distributee’s eligible rollover
distribution. However, in the case of an eligible rollover distribution to the
surviving Spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.

 

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A distributee is an Employee or former Employee. In addition, the Employee’s or
former Employee’s Spouse or former Spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section 414(p) of the Code, is
a distributee with regard to the interest of the Spouse or former Spouse.

A direct rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.

In addition, a Beneficiary who is not the Member’s Spouse but who is a
“designated beneficiary” within the meaning of Section 401(a)(9)(E) of the Code
may elect to have the portion of the distribution that otherwise is an eligible
rollover distribution transferred in a trustee-to-trustee transfer to an
individual retirement account or an individual retirement annuity that has been
established for purposes of receiving such distribution.

A distributee who is a Member, a Spouse of a Member or an alternate payee may
elect to directly roll over all or a portion of the eligible rollover
distribution to a Roth IRA in a manner permitted by guidance issued by the
Internal Revenue Service.

In the event that the provisions of this Section 9.13 or any part thereof cease
to be required by law as a result of subsequent legislation or otherwise, this
Section 9.13 or applicable part thereof shall be ineffective without necessity
of further amendment of the Plan.

Any such election shall be made (i) on forms approved by and filed with the
Management Benefits and Compensation Committee, (ii) by telephonic, electronic
or other data transmission in a manner approved by the Management Benefits and
Compensation Committee, or (iii) in any other manner approved by the Management
Benefits and Compensation Committee in its sole discretion.

9.14. Limitation on Distribution of Before-Tax Contributions. Notwithstanding
any other provisions of the Plan, Participating Before-Tax Contributions and
Investment Plan Before-Tax Contributions and any income allocable to such
amounts, shall not be distributable earlier than the Member’s Retirement,
severance of employment, death or disability, as determined in accordance with
Section 401(k)(2) of the Code and the Treasury Regulations thereunder, or upon a
showing of financial necessity in accordance with Section 9. 8 hereof. Such
Before-Tax Contributions also may be distributed in accordance with
Section 401(k)(10) of the Code and solely in the form of a “lump sum
distribution” (as defined in Section 401(k)(10)(B)(ii) of the Code), upon
termination of the Plan without the establishment or maintenance by the Company
of another defined contribution plan (other than an “employee stock ownership
plan”, as defined in Section 4975(e)(7) of the Code).

9.15. Special ESOP Rule. Notwithstanding any other provision of the Plan to the
contrary, (i) a Member shall be entitled to elect to commence distribution of
his vested Account under the Plan no later than the time required by
Section 409(o) of the Code, and (ii) distributions shall be made over a period
no longer than the amount permitted under Section 409(o)(1)(C) of the Code.

SECTION X

ADMINISTRATION OF PLAN AND MANAGEMENT OF PLAN ASSETS

10.1. The Management Benefits and Compensation Committee shall be the named
fiduciary (the “Named Fiduciary”) which shall have authority to control and
manage the operation and administration of the Plan and to manage and control
its assets. The Management Benefits and Compensation Committee shall consist of
not less than three (3) nor more than seven (7) members, as may be appointed by
the Board of Directors from time to time. Any member of the Management Benefits
and Compensation Committee may resign at will by notice to the Board of
Directors or be removed at any time (with or without cause) by the Board of
Directors.

10.2. The Named Fiduciary may from time to time allocate fiduciary
responsibilities among its members and may designate persons other than members
of the Named Fiduciary to carry out fiduciary responsibilities under the Plan,
and such persons shall be deemed to be fiduciaries under the Plan with respect
to such delegated responsibilities. Fiduciaries may employ one or more persons
to render advice with regard to any responsibility such fiduciaries have under
the Plan.

10.3. The Named Fiduciary (and its delegates) shall have the exclusive right to
interpret any and all of the provisions of the Plan and to determine any
questions arising thereunder or in connection with the administration of the
Plan. Any decision or action by the Named Fiduciary (and its delegates) shall be
conclusive and binding upon all Employees, Members and Beneficiaries. In all
instances the Named Fiduciary (and its delegates) shall have complete
discretionary authority to determine eligibility for participation and benefits
under the Plan, and to construe and interpret all provisions of the Plan and all
documents relating thereto including, without limitation, all disputed and
uncertain terms. All deference permitted by law shall be given to such
constructions, interpretations and determinations.

10.4. Any action to be taken by the Named Fiduciary shall be taken by a majority
of its members either at a meeting or by written instrument approved by such
majority in the absence of a meeting. A written resolution or memorandum signed
by one Committee member and the secretary of the Management Benefits and
Compensation Committee shall be sufficient evidence to any person of any action
taken pursuant to the Plan.

10.5. Any person, corporation or other entity may serve in more than one
fiduciary capacity under the Plan.

 

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SECTION XI

AMENDMENT OR TERMINATION

11.1. No part of the corpus or income of the Trust Fund shall be used for or
diverted to purposes other than for the exclusive purpose of providing benefits
to Members and their Beneficiaries and defraying reasonable expenses of
administering the Plan. Subject to this provision, the Plan may be amended at
any time by action of the Management Benefits and Compensation Committee in
accordance with its established rules of procedure, and any amendment may be
given retroactive effect to the extent permitted by applicable law; provided,
however, that no amendment shall have the effect of depriving any Member or
Beneficiary of all or any part of the amount then to the credit of his Account
under the Plan; and provided, further, that no such amendment which would
materially increase the cost of the Plan to the Company shall be made without
the consent of the Board of Directors. The Management Benefits and Compensation
Committee may, from time to time, delegate its authority to amend the Plan to
any committee established by it pursuant to Section 10 of the Plan in accordance
with their established rules of procedure.

11.2. The Plan may be terminated or partially terminated, and contributions
under the Plan may be completely discontinued, at any time by the Board of
Directors in accordance with its established rules of procedure. In the event of
termination or partial termination of the Plan or complete discontinuance of
contributions under the Plan, (a) no contribution shall be made thereafter with
respect to affected Members except for a month or year the last day of which
coincides with or precedes such termination, partial termination or
discontinuance; (b) no distribution with respect to affected Members shall be
made except either as provided in the Plan or as determined by the Board of
Directors; (c) the rights of all affected Members to the amounts to the credit
of their Accounts as of the date of such termination, partial termination or
discontinuance shall vest; and (d) no person shall have any right or interest
except with respect to the Trust Fund.

SECTION XII

MISCELLANEOUS

12.1. Except as otherwise required by law, no benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge and shall not be subject to attachment,
garnishment or other legal process. Notwithstanding the foregoing and any other
provision of the Plan to the contrary, distribution of the amount to the credit
of a Member’s Account shall be made in accordance with the terms of a qualified
domestic relations order to a Member’s Spouse, former Spouse, child or other
dependent or any person specified in such order, provided such order and the
terms thereof meet the requirements of Section 206(d) of ERISA and
Section 401(a)(13) of the Code and the regulations thereunder. All domestic
relations orders received by the Plan shall be handled in accordance with
reasonable procedures established under the Plan in accordance with such
provisions of ERISA and the Code, including a procedure which will permit the
distribution to a payee specified in a qualified domestic relations order an
amount not exceeding the amount withdrawable by an active Member pursuant to
Section 9.7 of the Plan.

12.2. Neither the establishment of the Plan nor participation herein shall
confer upon any person any right to be continued as an employee of the Company,
and the Company reserves the right to discharge any employee whenever in its
sole judgment the interest of the Company so requires. The Plan shall be
construed, administered and enforced according to the laws of the State of New
York, except to the extent that State law shall have been preempted by the
provisions of ERISA or any other laws of the United States heretofore or
hereafter enacted, as the same may be amended from time to time.

12.3. Notwithstanding any provision of the Plan to the contrary, any Member with
less than three (3) years of Vesting Service who ceases to be an Employee for
reasons related to fraud, dishonesty or serious misconduct, as conclusively
determined by the Management Benefits and Compensation Committee, shall forfeit
the entire amount to the credit of his Account which is attributable to Company
Matching Contributions, Additional Matching Contributions, Profit Sharing
Contributions and Retirement Contributions.

12.4. If, in the judgment of the Management Benefits and Compensation Committee,
a Member or Beneficiary to whom benefits shall be due under the Plan shall be or
become incompetent, either physically or mentally, the Management Benefits and
Compensation Committee shall have the right to determine to whom such benefits
shall be paid for the benefit of such Member or Beneficiary.

12.5. Each Member and Beneficiary shall keep the Company advised of his current
address. If amounts become distributable under the Plan and the Company is
unable to locate the Member or Beneficiary to whom the distributions are
payable, the Account of such Member or Beneficiary shall be closed after three
(3) years from the time such distributions first become payable and the amount
then to the credit of such Account shall be applied to reduce Company Matching
Contributions. If, however, such Member or Beneficiary subsequently makes proper
claim to the Company for such amount, the amount to which the Member or
Beneficiary is entitled will be restored to the Trust Fund by the Company out of
its next contribution, if any, and will be distributable in accordance with the
terms of the Plan.

12.6. The Plan shall be administered in accordance with the requirements of
ERISA and the Code. No benefits shall become distributable under the Plan until
proper application for same has been filed with the Company together with
whatever consents by the

 

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Member and his Spouse, if any, may be required under ERISA and the Code. The
Company and the Management Benefits and Compensation Committee shall be entitled
to rely conclusively upon documentation presented to its or their satisfaction
that a Member is not married or, if such Member is married at the time of
reference, that such Member’s Spouse cannot be located or that the consent of
such Spouse is not obtainable for whatever circumstances the Secretary of the
Treasury prescribes by regulations as sufficient to justify the commencement or
waiver of benefits without spousal consent.

12.7. The Company may elect to pay any administrative fees or expenses.
Otherwise the expenses and fees shall be paid from the Trust Fund.

12.8. Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to military service will be provided in
accordance with Code Section 414(u). In addition: (a) effective January 1, 2007,
the Plan shall apply the requirements of Code Section 401(a)(37) (relating to
death benefits for Members who die while performing qualified military service)
and Code Section 414(u)(9) (relating to treatment in the event of death or
disability resulting from active military service), and (b) effective January 1,
2009, differential wage payments shall be treated as provided in Code
Section 414(u)(12).

12.9. Notwithstanding anything in this Plan to the contrary, in accordance with
the terms of the Employee Benefits Agreement entered into on or about
September 30, 2000 between the Corporation and The New D&B Corporation (“New
D&B”) (“Moody’s EBA”):

(a) To the extent the full vested account balances in the Profit Participation
Plan of The Dun & Bradstreet Corporation (“D&B PPP”) of Members are transferred
by the trustee of the D&B PPP to the Trustee of this Plan, such transfers shall
be made in kind based on those investment funds in which such account balances
are then invested (including, but not limited to, the stock funds); provided,
however, that loans made under the D&B PPP to Members shall be transferred to
this Plan in this form of notes.

(b) With respect to any Member in this Plan who was a participant in the D&B PPP
as of the Effective Time (as such term is defined in the Moody’s EBA),

(i) all shares of “New D&B Common Stock” (as such term is defined in the Moody’s
EBA) held therein in such Member’s “New D&B Stock Fund” (as such term is defined
in the Moody’s EBA) shall be transferred to a non-employer stock fund in this
Plan known as “the D&B Common Stock Fund”; and

(ii) all shares of “Moody’s Common Stock” (as such term is defined in the
Moody’s EBA) held therein in such Member’s “Moody’s Stock Fund” (as such term is
defined in the Moody’s EBA) shall be transferred to an employer stock fund in
this Plan known as the Moody’s Common Stock Fund.

From and after the Effective Time, no Member may transfer or contribute any
amounts to the New D&B Stock Funds.

(c) If, during the one-year period following the Effective Time, an employee of
one of the members of the “D&B Group” (as such term is defined in the Moody’s
EBA) (“D&B Employer”) terminates his or her employment with such D&B Employer
and then immediately commences employment with the Corporation, such employee’s
past service with the D&B Group shall be recognized for all purposes under this
Plan, to the extent recognized under the D&B PPP.

SECTION XIII

DETERMINATION OF BENEFITS AND BENEFIT CLAIMS PROCEDURES

13.1. All benefits payable under the Plan shall be authorized in writing by the
Management Benefits and Compensation Committee or by such person or committee
(such as, but not limited to, an “appeals committee”) to whom such
responsibility may have been delegated by the Management Benefits and
Compensation Committee pursuant to the power vested in it by Section 10 and
shall be communicated in writing to the Member or Beneficiary. Any Employee,
Member or Beneficiary for whom no benefits have been authorized, or who disputes
the amount of any benefit authorized hereunder, may request the Management
Benefits and Compensation Committee, through its appeals committee, either
(a) informally or (b) formally in writing, to review and reconsider its
determination. Such request may be made to any person or persons authorized by
the Management Benefits and Compensation Committee to review same. Upon review
and reconsideration of any determination by the appeals committee, the
Management Benefits and Compensation Committee shall give or cause to be given
to the applicant written notice of its decision. Such notice shall also inform
the applicant that he or she may request a further review and reconsideration of
the Management Benefits and Compensation Committee’s determination within a
specified period of time, which, in no event, shall be less than sixty (60) days
from the giving of such notice. Any such requests to the Management Benefits and
Compensation Committee must specify in writing the position being taken by the
Employee, Member or Beneficiary and the reasons therefor. Such notice shall be
filed with the person or persons designated in the notice given by the
Management Benefits and Compensation Committee. The Management Benefits and
Compensation Committee may thereupon request such further information as it may
deem appropriate, and the Management Benefits and Compensation Committee or the
applicant shall have the right to require an informal hearing. All decisions by
the Management Bene-

 

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fits and Compensation Committee shall be signed by at least one (1) member of
the Management Benefits and Compensation Committee and communicated in writing
to the applicant and to the Management Benefits and Compensation Committee and
shall be final and binding on both.

13.2. The Management Benefits and Compensation Committee shall be appointed by
the Board of Directors, and shall consist of not less than three (3) nor more
than five (5) members, at least one (1) of whom shall be a non-employee member
of the Board of Directors. Any member may resign at will by notice to the
Management Benefits and Compensation Committee or be removed (with or without
cause by the Board of Directors. The Board of Directors, upon written
application to it by any Employee, Member or Beneficiary, shall have final
authority under the Plan to review any decision of the Management Benefits and
Compensation Committee with respect to the benefits and the amount or form
thereof payable under the Plan to any such applicant. The Board of Directors
shall have the authority to engage, and rely on the advice of, independent
experts, counsel and consultants in the performance of its responsibilities, who
may but need not be the same independent experts, counsel or consultants engaged
by the Management Benefits and Compensation Committee, and upon request of the
Management Benefits and Compensation Committee, the Board of Directors may
compensate any such person or persons out of Plan assets.

SECTION XIV

LIMITATIONS ON BENEFITS

14.1. Limitations on Annual Additions. In no event may a Member’s Annual
Addition in any Limitation Year exceed the maximum permitted under Section 415
of the Code. For this purpose:

(a) “Annual Addition” means, with respect to any Defined Contribution Plan, the
aggregate of -

(i) the amount of the Member’s Participating After-Tax and Before-Tax
Contributions and his Investment Plan After-Tax and Before-Tax Contributions;

(ii) the aggregate Company Matching, Additional Matching, Profit Sharing and
Retirement Contributions and forfeitures allocated to the Member’s Account for
the Limitation Year; and

(iii) contributions allocated to any individual medical benefit Account of a 5%
owner under a Defined Benefit Plan.

(b) “Limitation Year” means the calendar year.

(c) “Defined Benefit Plan” means any retirement plan maintained by the Company
or any affiliated employer within the meaning of Section 415(h) of the Code that
is not a Defined Contribution Plan.

(d) “Defined Contribution Plan” means any retirement plan maintained by the
Company or any affiliated employer within the meaning of Section 415(h) of the
Code which provides for an individual Account for each participant and for
benefits based solely on the amount contributed to such Account (and any income,
expense, gains and losses, and forfeitures of Accounts of other participants
which may be allocated to such Account.

14.2. Maximum Annual Addition. In no event may a Member’s Annual Addition under
all Defined Contribution Plans exceed the lesser of: Forty Thousand Dollars
($40,000) (as adjusted pursuant to Section 415(c)of the Code), or one hundred
percent (100%) of 415 Compensation.

For purposes of this Plan, “415 Compensation” means the Member’s compensation,
within the meaning of Treas. Reg. § 1.415-2(d)(1) and (2), for a Limitation Year
from the Company and all Affiliated Employers, including, to the extent
includible in gross income, the Member’s wages, salary, and other amounts
(including fringe benefits, reimbursements, expense allowances, vacation pay,
and long-term disability benefits) received or made available or, as applicable,
accrued for personal services actually rendered, earned income from sources
outside the United States whether or not excluded from taxable gross income,
non-deductible moving expenses paid on behalf of or reimbursed to the Member,
non-qualified stock options taxable in the year granted, and, as applicable,
amounts previously not included which are earned but not paid in such period
because of the timing of pay periods and pay days but are paid during the first
few weeks following the end of such period, but excluding deferred compensation,
stock options and other distributions that receive special tax benefits. 415
Compensation also includes any amounts deferred pursuant to Section 402(g)(3) of
the Code, excludable from the gross income of the Member pursuant to Section 125
of the Code, and qualified transportation fringe benefits described in
Section 132(f)(4) of the Code. 415 Compensation includes payments made by the
later of 2-1/2 months after severance from employment, or the end of the
Limitation Year that includes the date of severance from employment, if, absent
a severance from employment, such payments would have been paid to the Member
while the Participant continued in employment with the Company, and are regular
compensation for services during the Member’s regular working hours,
compensation for services outside the employee’s regular working hours (such as
overtime or shift differential), commissions, bonuses or other similar
compensation.

 

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14.3. Adjustment for Excess Annual Additions.

(a) If as a result of the allocation of forfeitures, a reasonable error in
estimating a Member’s compensation or other facts and circumstances to which
Treasury Regulations promulgated under Code Section 415 shall be applicable, the
Annual Additions under this Plan would cause the maximum Annual Additions to be
exceeded for any Member, the Management Benefits and Compensation Committee
shall

(i) return any Participating After-Tax and Before-Tax Contributions and
Investment Plan After-Tax and Before-Tax Contributions credited for the
Limitation Year to the extent that the return would reduce the “excess amount”
in the Member’s Account,

(ii) hold any “excess amount” remaining after the return of any such
contributions in a “Section 415 suspense Account”,

(iii) allocate and reallocate the “Section 415 suspense Account” in the next
Limitation Year (and succeeding Limitation Years if necessary) to all Members in
the Plan before any contributions which would constitute Annual Additions are
made to the Plan for such Limitation Year, and

(iv) reduce contributions to the Plan for such Limitation Year by the amount of
the “Section 415 suspense Account” allocated and reallocated during such
Limitation Year.

(b) For purposes of this Section, “excess amount” for any Member for a
Limitation Year shall mean the excess, if any, of

(i) the Annual Additions which would be credited to his Account under the terms
of the Plan without regard to the limitations of Code Section 415, over

(ii) the maximum Annual Additions determined pursuant to this Section 14.

(c) For purposes of the Section, “Section 415 suspense Account” shall mean an
unallocated Account equal to the sum of “excess amounts” for all Members in the
Plan during the Limitation Year. The “Section 415 suspense Account” shall not
share in any earnings or losses of the Trust Fund.

This Section 14.3 is effective only for Limitation Years beginning before
July 1, 2007. EPCRS is the only correction method for correcting excess Annual
Additions for Limitation Years beginning on or after July 1, 2007.

14.4. Interpretation. This Section shall be interpreted in accordance with
regulations under Section 415 of the Code, as amended by the Tax Equity and
Fiscal Responsibility Act of 1982, the Deficit Reduction Act of 1984, and any
successor legislation, including, but not limited to the Tax Reform Act of 1986,
and any applicable dollar limitations (whether higher or lower than the amounts
specifically stated herein) imposed by such legislation if different from the
dollar amounts specified herein shall be incorporated herein and shall supersede
such stated dollar amounts as though the Plan had been amended accordingly.

14.5. Lump Sum Contribution. For purposes of this Section 14 only, any lump sum
Employee contribution made with respect to the Member’s prior Compensation which
is made not later than thirty (30) days after the end of a Limitation Year shall
be deemed credited to the Member’s Account as of the last day of such Limitation
Year; provided, that if all or any portion of such contribution would be in
excess of the limitations for such Member for such Limitation Year, such excess
amount shall be credited to the Member’s Account as of the date actually
contributed.

SECTION XV

MERGERS, CONSOLIDATIONS AND ASSETS OR LIABILITY TRANSFERS

15.1. In the case of any merger or consolidation with, or transfer of assets or
liabilities to, any other plan, each Member and Beneficiary under the Plan shall
be entitled to receive a benefit immediately after the merger, consolidation or
transfer (if the merged, consolidated or transferee plan then terminated) which
is equal to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had then
terminated).

 

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SECTION XVI

TOP-HEAVY CONTINGENCY

16.1. The provisions of this Section 16 shall apply only in a Plan Year in
respect of which the Plan becomes top-heavy as herein defined and thereafter to
the extent provided herein.

16.2. The Plan shall be considered to be top-heavy in any Plan Year if the
aggregation group of which the Plan is required to be a part becomes top-heavy
for such year; provided, however, the Plan shall not be considered to be
top-heavy in such Plan Year if, by the inclusion of additional plans permitted
to be included in such required aggregation group, the resulting permissive
aggregation group is not top-heavy for such year.

(a) The required aggregation group as to the Plan shall include the Plan and any
pension, profit sharing or stock bonus plan of the Company, its subsidiaries and
any other corporation or entity under common control by or with the Company, if
such plan is intended to be a qualified plan under Section 401(a) of the Code,
and either

(i) includes or has included any key employee as a participant in this Plan Year
or in the five (5) preceding Plan Years, or

(ii) enables the Plan or any such plan to meet the anti-discrimination
requirements and minimum participation standards applicable to qualified plans
under the Code.

(b) The permissive aggregation group shall include plans in the required
aggregation group and any other comparable plan of an employer in the controlled
group specified in subparagraph (a) or to which such employer contributes, if
such plan is intended to be qualified under Section 401(a) of the Code and
continues to meet the anti-discrimination requirements and minimum participation
standards of the Code when considered together with the plans in the required
aggregation group.

16.3. A required aggregation group or a permissive aggregation group shall be
considered to be top-heavy if, as of the applicable determination dates, the sum
of the present value of the cumulative accrued benefits for key employees under
all defined benefit plans in such group and the aggregate value of the Accounts
of key employees under all defined contribution plans in such group exceeds
sixty percent (60%) of the sum of such values for all employees participating in
or eligible for participation in such plans.

(a) The applicable determination date for each such plan shall be the last day
of its plan year which immediately precedes the plan year for which such plan is
being tested or, in the case of a new plan, the last day of its first plan year.

(b) The present value of accrued benefits of employees under each defined
benefit plan shall be determined as of the plan’s most recent Valuation Date
within the twelve (12) month period ending on the determination date (or, in the
case of a new plan, as of the determination date) and shall be based upon the
assumption that each employee terminated his vesting service on the
determination date with a fully vested accrued benefit on such date and elected
a lump sum distribution in an amount equal to the present value of such benefit
based upon the actuarial assumptions, mortality rates and assumed earnings used
to maintain the plan’s minimum funding account as defined in Section 412 of the
Code.

(c) The present value of accrued benefits and the values of Accounts used in the
sixty percent (60%) calculation described herein shall be increased by all
distributions made within the five (5) year period ending on the determination
date to employees covered by plans in the aggregation group.

(d) Rollover Accounts, benefits of former key employees, and benefits of persons
not employed for the five (5) year period ending on the determination date shall
not be taken into account to the extent provided by Section 416(g)(4) of the
Code.

(e) Employer matching contributions shall be taken into account for purposes of
satisfying the minimum contribution requirements of Section 416(c)(2) of the
Code and the Plan. The preceding sentence shall apply with respect to matching
contributions under the Plan or, if the Plan provides that the minimum
contribution requirement shall be met in another plan, such other plan. Employer
matching contributions that are used to satisfy the minimum contribution
requirements shall be treated as matching contributions for purposes of the
actual contribution percentage test and other requirements of Section 401(m) of
the Code.

(f) Notwithstanding the foregoing, the present values of accrued benefits and
the amounts of account balances of an employee as of the determination date
shall be increased by the distributions made with respect to the employee under
the plan and any plan aggregated with the plan under Section 416(g)(2) of the
Code during the 1-year period ending on the determination date. The preceding
sentence shall also apply to distributions under a terminated plan which, had it
not been terminated, would have been aggregated with the plan under
Section 416(g)(2)(A)(i) of the Code. In the case of a distribution made for a
reason other than severance from employment, death, or disability, this
provision shall be applied by substituting “5-year period” for “1-year period.”
The accrued benefits and accounts of any individual who has not performed
services for the employer during the 1-year period ending on the determination
date shall not be taken into account.

 

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16.4. A key employee shall include any employee or former employee (including
any deceased employee) who at any time during the plan year that includes the
determination date was an officer of the employer having annual compensation
greater than $ 130,000 (as adjusted under Section 416(i)(1) of the Code for plan
years beginning after December 31, 2002), a 5-percent owner of the employer, or
a 1-percent owner of the employer having annual compensation of more than $
150,000. For this purpose, annual compensation means compensation within the
meaning of Section 415(c)(3) of the Code. The determination of who is a key
employee will be made in accordance with Section 416(i)(1) of the Code and the
applicable regulations and other guidance of general applicability issued
thereunder.

16.5. A non-key employee shall include any Employee who is not a key employee.

16.6. In the event the Plan becomes top-heavy for any Plan Year, all plans in
the required aggregation group will also be top-heavy for such year and all
non-key employees will be participating in more than one top-heavy plan. In such
event, there shall be provided to each non-key employee a minimum benefit under
the Company’s Retirement Account Plan equal to:

(a) an annual retirement benefit (with no ancillary benefits) commencing at
normal retirement at or after age 65 equal to three percent (3%) of his average
annual compensation for each year of service from and after December 31, 1983
during which this Plan was top-heavy, excluding any such service in excess of
ten (10) years; minus

(b) the amount of such retirement benefit which could be purchased for such
Employee by application of all amounts allocated to his Accounts under this Plan
and any other defined contribution plan of the Company as the result of employer
contributions and forfeitures for all Plan Years during which such Employee was
a Member, but excluding any such allocations which were forfeited by such
Employee. The determination of the amount of such retirement benefit which could
be purchased for each non-key employee shall be made by the Company’s
independent actuaries as of the date of such Employee’s termination of service
and shall utilize the earnings and actuarial assumptions most recently published
by the Pension Benefit Guaranty Corporation.

Average annual compensation of a non-key employee for purposes of the foregoing
shall mean his average annual aggregate compensation, as determined under
Section 415(c)(3) of the Code, for the five (5) consecutive years of his service
resulting in the highest such average (or for the actual years of his service if
fewer than five (5)).

16.7. Notwithstanding any provision in the Plan to the contrary, if the Plan
becomes top-heavy in any Plan Year, the accrued benefits of all Employees in
active service from and after such year shall vest and become nonforfeitable
after three (3) years of vesting service.

16.8. In the event the Plan becomes top-heavy, an Employee’s compensation taken
into account for purposes of the Plan shall not exceed $200,000 for each Plan
Year in which the Plan is or continues to be top-heavy, except that such maximum
shall be automatically adjusted without Plan amendment to reflect cost-of-living
adjustments made to such amount by the Secretary of the Treasury pursuant to
Section 416(d)(2) of the Code.

 

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APPENDIX A

TREATMENT OF KMV EMPLOYEES

The following provisions shall apply to employees of KMV commencing on July 1,
2002:

1. KMV’s Status as a Company under the Plan. KMV is a Company under the Plan
effective as of July 1, 2002.

2. Application of Plan Provisions to KMV Participants. Except as specifically
noted herein, all provisions of the Plan shall apply to Eligible Employees who
are Employees of KMV and who are hired on or before December 31, 2002 (“KMV
Eligible Employees”).

3. Participating Contributions and Investment Plan Contributions. KMV Eligible
Employees shall be eligible to make Participating Contributions and Investment
Plan Contributions under the Plan commencing with the first payroll after
July 1, 2002 (or, if later, the date such a KMV Eligible Employee would have
been eligible to contribute under the terms of the Plan).

4. Matching Contributions and Additional Matching Contributions. Notwithstanding
any other provision of the Plan to the contrary, for the Plan Year ending
December 31, 2002, KMV Eligible Employees shall not be eligible to be credited
with Matching Contributions or Additional Matching Contributions.

5. Special Profit Sharing Contributions for 2002. KMV Eligible Employees who are
Employees on December 31, 2002 shall be eligible to be credited with a Special
Profit Sharing Contribution, determined as follows:

a. Eligibility. Only those KMV Eligible Employees who are actually performing
services for KMV or are on an approved leave of absence as of December 31, 2002
shall be eligible to be credited with a Special Profit Sharing Contribution.

b. Discretionary Nature of Contribution. The making of the Special Profit
Sharing Contribution shall be at the Company’s discretion.

c. Amount of Contribution. The amount of the Special Profit Sharing
Contribution, if made, that is credited to a KMV Eligible Employee shall equal a
percentage (not to exceed fifteen percent (15%)) determined by the Company of
the KMV Eligible Employee’s Compensation earned from the date of the closing of
the transaction by which Moody’s Corporation acquired the stock of KMV through
December 31, 2002; provided, however, that in no event shall the amount of such
Special Profit Sharing Contribution on behalf of any KMV Eligible Employee
exceed Thirty Thousand Dollars ($30,000) reduced by the amount (if any)
contributed by KMV on behalf of the KMV Eligible Employee for 2002 to the SEP
IRA maintained by KMV.

d. Vesting of Contribution. The Special Profit Sharing Contribution shall be
100% vested at all times.

e. Distribution of Contribution. For purposes of Section IX of the Plan, the
Special Profit Sharing Contribution shall be treated in the same manner as
Matching Contributions made under the Plan.

 

152 MOODY’S  2014 10K