EXHIBIT 10.3

FORM OF SPECIAL PERFORMANCE AWARD AGREEMENT

FOR PERFORMANCE STOCK UNITS

UNDER THE MSCI INC. 2007 AMENDED AND RESTATED EQUITY INCENTIVE

COMPENSATION PLAN

MSCI Inc. (“MSCI,” and together with its Subsidiaries, the “Company”) hereby
grants to you Performance Stock Units (“PSUs”) as described below. The awards
are being granted under the MSCI Inc. 2007 Amended and Restated Equity Incentive
Compensation Plan (as may be amended from time to time, the “Plan”).

 

Participant:    [Name] Number of PSUs Granted:    [#] PSUs Grant Date:    [Date]
(the “Grant Date”) Vesting Schedule:    [•] Performance Periods:    [•]

Your PSUs may be subject to forfeiture or recoupment if you terminate employment
with the Company or do not comply with the notice requirements, as set forth in
the Plan and this Performance Stock Unit Award Agreement (including Exhibit A
and Exhibit B attached hereto, this “Award Agreement”).

You agree that this Award Agreement is granted under the Plan and governed by
the terms and conditions of the Plan and Exhibit A and Exhibit B attached
hereto. You also agree that PSUs granted to you pursuant to this Award Agreement
and any Shares issued in settlement or satisfaction thereof are subject to the
MSCI Clawback Policy. You will be able to access a prospectus and tax supplement
that contains important information about this award via the MSCI website or
your brokerage account. Unless defined in this Award Agreement, capitalized
terms shall have the meanings ascribed to them in the Plan.

IN WITNESS WHEREOF, MSCI has duly executed and delivered this Award Agreement as
of the Grant Date.

 

MSCI Inc.  

Name:

 

Title:

 

 

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EXHIBIT A

TERMS AND CONDITIONS

OF THE SPECIAL PERFORMANCE AWARD AGREEMENT

Section 1.        PSUs Generally.    MSCI has awarded you PSUs as an incentive
for you to continue to provide services to the Company and to align your
interests with those of the Company. As such, you will earn your PSUs only if
you remain in continuous employment with the Company through each Vesting Date,
or as otherwise set forth below. Each PSU corresponds to one share of MSCI
common stock, par value $0.01 per share (each, a “Share”). Each PSU constitutes
a contingent and unsecured promise by MSCI to deliver one Share on the
conversion date for such PSU.

Section 2.        Performance Adjustment, Vesting and Conversion Schedule and
HSR Act.

(a)        Performance Adjustment.    The number of PSUs initially awarded to
you under this Award Agreement shall be adjusted as follows: (i) the first
tranche of PSUs shall be adjusted after the end of the First Performance Period,
(ii) the second tranche of PSUs shall be adjusted after the end the Second
Performance Period and (iii) the third tranche of PSUs shall be adjusted after
the end of the Third Performance Period, in each case, within a range of [•]% to
[•]% of the number of PSUs per tranche and based on the achievement of the
applicable Performance Period [•] set forth below. Following the end of each
Performance Period, management of MSCI shall provide its calculation of the
Performance Period [•] to the Committee. The Committee will review the extent of
the achievement of the Performance Period [•] and shall certify in writing such
achievement.

The number of PSUs per tranche that will be converted into Shares pursuant to
Section 2(b), Section 4 or Section 5 (each such tranche, the “Tranche of
Adjusted PSUs”) will be determined based on the following formula no later than
[•] of the year following the last day of the applicable Performance Period
(each, an “Adjustment Date”):

 

Number of PSUs

Per Tranche

  x  

[•] Adjustment

Percentage

  =  

Number of

Adjusted PSUs Per Tranche

The “[•] Adjustment Percentage” will be derived as set forth in the table below;
provided that there will be extrapolation and interpolation (rounded to two
decimal places) to derive the Performance Period [•] not expressly set forth
below, and any fractional shares resulting from the application of the
Performance Period [•] will be rounded down.

[Table]

(b)        Vesting and Conversion.    The PSUs shall vest [•] (each, a “Vesting
Date”); provided that, subject to Section 4 and Section 5, you continue to be
employed by the Company on each such Vesting Date; provided, further, that you
have complied with all applicable provisions of the HSR Act. Each tranche of
vested PSUs shall convert into Shares no earlier than [•] of the year following
the year in which the applicable Vesting Date occurs and no later than the
applicable Adjustment Date.

 

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(c)        HSR Act.    If a tranche of PSUs would have vested pursuant to this
Section 2 or Section 4, but did not vest solely because you were not in
compliance with all applicable provisions of the HSR Act, the vesting date for
such tranche of PSUs shall occur on the first date following the date on which
you have complied with all applicable provisions of the HSR Act.

Section 3.        Dividend Equivalent Payments.    Section 3(a) applies to your
PSUs with a right to receive dividend equivalent payments whose record date
occurs prior to [•], and Section 3(b) applies to your PSUs with a right to
receive dividend equivalent payments whose record date occurs on or after [•].

(a)        Until your PSUs convert to Shares, if MSCI pays a dividend on Shares,
you will be entitled to a dividend equivalent payment in the same amount as the
dividend you would have received if you held Shares for your vested and
unconverted PSUs immediately prior to the record date (taking into account any
adjustments pursuant to Section 2(a) and adjustments provided under the Plan).
No dividend equivalents will be paid to you with respect to any unvested,
canceled or forfeited PSUs. MSCI will decide on the form of payment and may pay
dividend equivalents in Shares, in cash or in a combination thereof, unless
otherwise provided in Exhibit B. MSCI will pay the dividend equivalent when it
pays the corresponding dividend on its common stock or on the next regularly
scheduled payroll date.

(b)        Until your PSUs convert to Shares, if MSCI pays a dividend on Shares,
you will be credited with a dividend equivalent payment in the same amount as
the dividend you would have received if you held Shares for your vested and
unvested PSUs immediately prior to the record date (taking into account any
adjustments pursuant to Section 2(a) and adjustments provided under the Plan).
Assuming you hold PSUs on the record date, MSCI will credit the dividend
equivalent payments when it pays the corresponding dividend on its Shares. Your
dividend equivalents will vest and be paid at the same time as, and subject to
the same vesting and cancellation provisions set forth in this Award Agreement
with respect to, your PSUs (provided that, subject to Section 20, the dividend
equivalents may be paid following the scheduled conversion date on the next
regularly scheduled payroll date). No dividend equivalents will be paid to you
with respect to any canceled or forfeited PSUs. MSCI will decide on the form of
payment and may pay dividend equivalents in Shares, in cash or in a combination
thereof, unless otherwise provided in Exhibit B.

Section 4.        Termination of Employment.    Upon termination of employment
with the Company prior to any Vesting Date pursuant to this Section 4, the
following special vesting and payment terms will apply to your unvested PSUs:

(a)        Termination of Employment Due to Death or Disability.    If your
employment with the Company terminates due to death or Disability, in each case,
prior to any Vesting Date, your unvested PSUs will vest and convert into Shares
on the

 

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applicable Adjustment Date(s) (even though you are not employed by the Company
on the applicable Vesting Date(s)). Upon a termination of employment due to
death, each Tranche of Adjusted PSUs shall be delivered in accordance with
Section 9.

(b)        Involuntary Termination of Employment by the Company.    In the event
of an involuntary termination of your employment by the Company without Cause
prior to any Vesting Date, your unvested PSUs will vest and convert into Shares
on the applicable Adjustment Dates(s) (even though you are not employed by the
Company on the applicable Vesting Date(s)); provided that such vesting and
conversion is subject to your execution and non-revocation of an agreement and
release of claims satisfactory to the Company within 60 days following
termination of your employment.

(c)        Governmental Service Termination.    If your employment with the
Company terminates prior to any Adjustment Date in a Governmental Service
Termination, to the extent permitted under Section 409A, your PSUs will be
adjusted (within a range of [•]% to [•]%) based on the expected (or actual, as
the case may be if such termination occurs after the expiration of any
Performance Period) achievement of the Performance Period [•], which will be
determined by extrapolating from the Performance Period [•] that has been
achieved as of the end of the most recent completed fiscal quarter prior to the
date your employment with the Company terminates, and each such Tranche of
Adjusted PSUs will vest and convert into Shares within 60 days following the
date of such termination. If your employment with the Company terminates after
the applicable Adjustment Date in a Governmental Service Termination under
circumstances not involving a Cancellation Event, each remaining Tranche of
Adjusted PSUs will vest and convert into Shares within 60 days following the
date of such termination.

(d)        Other Resignations from Employment.    All other resignations from
employment must comply with the Notice Requirements.

(i)        If you resign from your employment with the Company under
circumstances which are not in accordance with the provisions above in this
Section 4, you will forfeit any PSUs that have not vested as of your last day of
employment with the Company; and

(ii)        If, prior to any applicable Vesting Date, you give MSCI notice of
your intention to resign from your employment with the Company as of a date
following such Vesting Date, your PSUs will vest and settle in accordance with
Section 2; provided, however, that if you do not subsequently comply with the
Notice Requirements, the Committee may, in its discretion, require that the
gross cash value of the PSUs delivered to you in accordance with this Section
4(d)(ii) be subject to recoupment or payback.

For the avoidance of doubt, (A) revocation of a notice of intention to resign
may, in the Company’s sole discretion or if required to comply with
Section 409A, be deemed to be noncompliant with the Notice Requirements and, in
connection with such revocation, your PSUs may be forfeited and (B) if, after
you have given notice of your intention to resign from your employment with the
Company, the Company involuntarily terminates your employment without Cause
prior to the expiration of your notice period, your outstanding PSUs will be
treated in accordance with Section 4(b).

 

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Notwithstanding anything to the contrary contained herein, each Tranche of
Adjusted PSUs shall only vest pursuant to this Section 4 provided that you have
complied with all applicable provisions of the HSR Act.

Section 5.        Change in Control.

(a)        General.    In the event of a Change in Control, the Committee, in
its sole discretion, may provide for (i) the continuation or assumption of your
outstanding PSUs under the Plan by the Company (if it is the surviving
corporation) or by the surviving corporation or its parent, in which case your
PSUs will continue to be subject to the terms of this Award Agreement, or
(ii) the lapse of restrictions relating to and the settlement of your
outstanding PSUs immediately prior to such Change in Control in the event a
buyer will not continue or assume the PSUs; provided, however, in each case, the
Performance Period [•] target relating to any outstanding PSUs (that have not
been adjusted pursuant to Section 2(a)) will be deemed to have been achieved at
[•]. Following a Change in Control in which your outstanding PSUs are continued
or assumed pursuant to clause Section 5(a)(i) above, such PSUs may be settled in
cash, stock or a combination thereof.

(b)        Qualifying Termination.    In the event of a Qualifying Termination
(as defined below), your PSUs will vest and convert into Shares within 60 days
following such Qualifying Termination. If such 60-day period begins in one
taxable year and ends in a subsequent taxable year, such vesting and conversion
shall occur in the second taxable year. “Qualifying Termination” means a
termination of employment by the Company without Cause or by you for Good Reason
(which shall be deemed an involuntary termination of employment by the Company
without Cause), in each case within 24 months following the effective date of
the Change in Control in which the PSUs are continued or assumed.

Section 6.        Cancellation of Awards.    Notwithstanding any other terms of
this Award Agreement, your PSUs will be canceled prior to conversion in the
event of any Cancellation Event. You may be required to provide MSCI with a
written certification or other evidence that it deems appropriate, in its sole
discretion, to confirm that no Cancellation Event has occurred. If you fail to
submit a timely certification or evidence, MSCI will cancel your award. Except
as explicitly provided in Section 4, upon a termination of your employment by
you or by the Company for any reason, any of your PSUs that have not vested
pursuant to Section 2 as of the date of your termination of employment with the
Company will be canceled and forfeited in full as of such date.

Section 7.        Tax and Other Withholding Obligations.    Pursuant to rules
and procedures that MSCI establishes (including those set forth in Section 16(a)
of the Plan), tax or other withholding obligations arising upon vesting and
conversion (as applicable) of your PSUs may be satisfied, in MSCI’s sole
discretion, by having MSCI withhold Shares, tendering Shares or by having MSCI
withhold cash if MSCI provides for a cash

 

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withholding option, in each case in an amount sufficient to satisfy the tax or
other withholding obligations. Shares withheld or tendered will be valued using
the Fair Market Value of the Shares on the date your PSUs convert. In order to
comply with applicable accounting standards or the Company’s policies in effect
from time to time, MSCI may limit the amount of Shares that you may have
withheld or that you may tender. You acknowledge that, if you are subject to
Tax-Related Items (as defined below) in more than one jurisdiction, the Company
(including any former employer) may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.

Section 8.        Nontransferability.    You may not sell, pledge, hypothecate,
assign or otherwise transfer your PSUs, other than as provided in Section 9 or
by will or the laws of descent and distribution or otherwise as provided for by
the Committee.

Section 9.        Designation of a Beneficiary.    If you reside in the United
States, you may make a written designation of a beneficiary or beneficiaries to
receive all or part of the Shares to be paid under this Award Agreement in the
event of your death. To make a beneficiary designation, you must complete and
file the form attached hereto as Appendix A with your personal tax or estate
planning representative. Any Shares that become payable upon your death, and as
to which a designation of beneficiary is not in effect, will be distributed to
your estate. You may replace or revoke your beneficiary designation at any time.
If there is any question as to the legal right of any beneficiary(ies) to
receive Shares under this award, MSCI may determine in its sole discretion to
deliver the Shares in question to your estate. MSCI’s determination shall be
binding and conclusive, on all persons and it will have no further liability to
anyone with respect to such Shares.

Section 10.        Ownership and Possession.    Except as set forth herein, you
will not have any rights as a stockholder in the Shares corresponding to your
PSUs prior to conversion of your PSUs.

Section 11.        Securities Law Compliance Matters.    MSCI may, if it
determines it is appropriate, affix any legend to the stock certificates
representing Shares issued upon conversion of your PSUs and any stock
certificates that may subsequently be issued in substitution for the original
certificates. MSCI may advise the transfer agent to place a stop order against
such Shares if it determines that such an order is necessary or advisable.

Section 12.        Compliance with Laws and Regulations.    Any sale,
assignment, transfer, pledge, mortgage, encumbrance or other disposition of
Shares issued upon conversion of your PSUs (whether directly or indirectly,
whether or not for value, and whether or not voluntary) must be made in
compliance with any applicable constitution, rule, regulation, or policy of any
of the exchanges, associations or other institutions with which MSCI has
membership or other privileges, and any applicable law, or applicable rule or
regulation of any governmental agency, self-regulatory organization or state or
federal regulatory body.

Section 13.        No Entitlements.

 

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(a)        No Right to Continued Employment.    This PSU award is not an
employment agreement, and nothing in this Award Agreement or the Plan shall
alter your status as an “at-will” employee of the Company.

(b)        No Right to Future Awards.    This award, and all other awards of
PSUs and other equity-based awards, are discretionary. This award does not
confer on you any right or entitlement to receive another award of PSUs or any
other equity-based award at any time in the future or in respect of any future
period. You agree that any release required under Section 4 of this Award
Agreement is in exchange for the grant of PSUs hereunder, for which you have no
current entitlement.

(c)        No Effect on Future Employment Compensation.    MSCI has made this
award to you in its sole discretion. This award does not confer on you any right
or entitlement to receive compensation in any specific amount. In addition, this
award is not part of your base salary or wages and will not be taken into
account in determining any other employment-related rights you may have, such as
rights to pension or severance pay.

(d)        Section 162(m).    Notwithstanding any other provisions of this Award
Agreement, if MSCI considers you to be one of its named executive officers at
the time provided for the conversion of your Adjusted PSUs and determines that
any dividend equivalent payments may not be fully deductible by virtue of
Section 162(m) of the Code, MSCI shall delay payment of such dividend
equivalents, unless the Committee, in its sole discretion, determines not to
delay such payment. This delay will continue until the date of your separation
from service with MSCI or, to the extent permitted under Section 409A, the end
of the first taxable year of MSCI as of the last day of which you are no longer
a named executive officer (subject to earlier payment in the event of your death
as described below).

Section 14.        No Advice Regarding Grant.    The Company is not providing
any tax, legal or financial advice, nor is the Company making any
recommendations regarding your participation in the Plan, or your acquisition or
sale of the underlying Shares. You are hereby advised to consult with your own
personal tax, legal and financial advisors regarding your participation in the
Plan before taking any action related to the Plan.

Section 15.        Consents under Local Law.    Your award is conditioned upon
the making of all filings and the receipt of all consents or authorizations
required to comply with, or to be obtained under, applicable local law.

Section 16.        Award Modification and Section 409A.

(a)        Modification.    MSCI reserves the right to modify or amend
unilaterally the terms and conditions of your PSUs, without first asking your
consent, or to waive any terms and conditions that operate in favor of MSCI.
MSCI may not modify your PSUs in a manner that would materially impair your
rights in your PSUs without your consent; provided, however, that MSCI may,
without your consent, amend or modify your PSUs in any manner that MSCI
considers necessary or advisable to comply with applicable

 

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law, stock market or exchange rules and regulations or accounting or tax rules
and regulations or to ensure that your PSUs are not subject to tax prior to
payment. MSCI will notify you of any amendment of your PSUs that affects your
rights. Any amendment or waiver of a provision of this Award Agreement (other
than any amendment or waiver applicable to all recipients generally), which
amendment or waiver operates in your favor or confers a benefit on you, must be
in writing and signed by the Global Head of Human Resources, the Chief
Administrative Officer, the Chief Financial Officer or the General Counsel (or
if such positions no longer exist, by the holders of equivalent positions) to be
effective.

(b)        Section 409A.

(i)        You understand and agree that all payments made pursuant to this
Award Agreement are intended to be exempt and/or comply with Section 409A, and
shall be interpreted on a basis consistent with such intent. For the avoidance
of doubt, the Company makes no representations that the payments provided under
this Award Agreement comply with Section 409A, and in no event will the Company
be liable for any taxes, penalties, interest or other expenses that may be
incurred by you on account of non-compliance with Section 409A.

(ii)    Notwithstanding the other provisions of this Award Agreement, to the
extent necessary to comply with Section 409A, no conversion specified hereunder
shall occur unless permissible under Section 409A. If MSCI considers you to be
one of its “specified employees” and you are a U.S. taxpayer, in each case, at
the time of your “separation from service” (as such terms are defined in the
Code) from the Company, no conversion specified hereunder shall occur prior to
the expiration of the six-month period measured from the date of your separation
from service from the Company (such period, the “Specified Employee Period”).
Any conversion of Adjusted PSUs into Shares that would have occurred during the
Specified Employee Period but for the fact that you are deemed to be a specified
employee shall be satisfied either by (A) conversion of such Adjusted PSUs into
Shares on the first business day following the Specified Employee Period or
(B) a cash payment on the first business day following the Specified Employee
Period equal to the value of such Adjusted PSUs on the scheduled conversion date
(based on the value of the Shares on such date) plus accrued interest as
determined by MSCI; provided, that to the extent this Section 16(b)(ii) is
applicable, in the event that after the date of your separation from service
from the Company you (X) die or (Y) accept employment at a Governmental Employer
and provide MSCI with satisfactory evidence demonstrating that as a result of
such new employment the divestiture of your continued interest in MSCI equity
awards or continued ownership of the Shares is reasonably necessary to avoid the
violation of U.S. federal, state or local, foreign ethics or conflicts of
interest law applicable to you at such Governmental Employer, any conversion or
payment delayed pursuant to this Section 16(b)(ii) shall occur or be made
immediately. For the avoidance of doubt, any determination as to form of payment
provided in this Section 16(b)(ii) will be in the sole discretion of MSCI.

 

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(iii)        For purposes of any provision of this Award Agreement providing for
the payment of any amounts of nonqualified deferred compensation upon or
following a termination of employment from the Company, references to your
“termination of employment” (and corollary terms) shall be construed to refer to
your “separation from service” from the Company.

(iv)        MSCI reserves the right to modify the terms of this Award Agreement,
including, without limitation, the payment provisions applicable to your PSUs,
to the extent necessary or advisable to comply with Section 409A and reserves
the right to make any changes to your PSU award so that it does not become
subject to Section 409A or become subject to a Specified Employee Period.

Section 17.        Severability.    In the event MSCI determines that any
provision of this Award Agreement would cause you to be in constructive receipt
for United States federal or state income tax purposes of any portion of your
award, then such provision will be considered null and void, and this Award
Agreement will be construed and enforced as if the provision had not been
included in this Award Agreement as of the date such provision was determined to
cause you to be in constructive receipt of any portion of your award.

Section 18.        Successors.    This Award Agreement shall be binding upon and
inure to the benefit of any successor or successors of the Company and any
person or persons who shall, upon your death, acquire any rights hereunder in
accordance with this Award Agreement or the Plan.

Section 19.        Governing Law; Venue.    This Award Agreement and the related
legal relations between you and the Company will be governed by and construed in
accordance with the laws of the State of New York, without regard to any
conflicts or choice of law, rule or principle that might otherwise refer the
interpretation of the award to the substantive law of another jurisdiction. For
purposes of litigating any dispute that arises under this grant or the Award
Agreement, the parties hereby submit to and consent to the jurisdiction of the
State of New York, agree that such litigation shall be conducted in the courts
of New York County, New York, or the federal courts for the United States for
the Southern District of New York, where this grant is made and/or to be
performed.

Section 20.        Rule of Construction for Timing of Conversion.    With
respect to each provision of this Award Agreement that provides for your PSUs to
convert to Shares, or your dividend equivalents to be paid, on a specified event
or date, such conversion or payment will be considered to have been timely made,
and neither you nor any of your beneficiaries or your estate shall have any
claim against the Company for damages based on a delay in conversion or payment,
and the Company shall have no liability to you (or to any of your beneficiaries
or your estate) in respect of any such delay, as long as payment is made by
December 31 of the year in which the applicable vesting date or such other
specified event or date occurs, or if later, by March 15th of the year following
such specified event or date.

 

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Section 21.        Non-U.S. Participants.    The following provisions will apply
to you if you reside or work outside of the United States. For the avoidance of
doubt, if you reside or work in the United States and subsequently relocate to
another country after the Grant Date, or if you reside in another country and
subsequently relocate to the United States after the Grant Date, the following
provisions may apply to you to the extent MSCI determines that the application
of such terms and conditions is necessary or advisable for tax, legal or
administrative reasons.

(a)        Termination of Employment.    Unless otherwise provided in Section 4,
your employment relationship will be considered terminated as of the date you
are no longer actively providing services to the Company (whether or not later
found to be invalid or in breach of employment laws in the jurisdiction where
you are employed or the terms of your employment agreement, if any), and such
date will not be extended by any notice period (e.g., your period of service
would not include any contractual notice period of “garden leave” or similar
period mandated under employment laws in the jurisdiction where you are employed
or the terms of your employment agreement, if any).

(b)        Tax and Other Withholding Obligations.    You acknowledge that,
regardless of any action taken by the Company, the ultimate liability for all
income tax, social insurance, payroll tax, fringe benefits tax, payment on
account or other tax-related items related to your participation in the Plan and
legally applicable to you (“Tax-Related Items”) is and remains your
responsibility and may exceed the amount actually withheld by the Company. You
further acknowledge that the Company (i) makes no representations or undertaking
regarding the treatment of any Tax-Related Items in connection with any aspect
of the PSUs, including, but not limited to, the grant, vesting or settlement of
the PSUs, the subsequent sale of Shares acquired pursuant to such settlement and
the receipt of any dividend equivalents and/or dividends; and (ii) does not
commit to and is under no obligation to structure the terms of the grant or any
aspect of the PSUs to reduce or eliminate your liability for Tax-Related Items
or achieve any particular tax result.

If the obligation for Tax-Related Items is satisfied by withholding in Shares,
for tax purposes, you are deemed to have been issued the full number of Shares
subject to the vested PSUs, notwithstanding that a number of the Shares are held
back solely for the purpose of paying the Tax-Related Items.

In the event that withholding in and/or tendering Shares is problematic under
applicable tax or securities law or has materially adverse accounting
consequences, by your acceptance of the PSUs, you authorize and direct MSCI and
any brokerage firm determined acceptable to MSCI to sell on your behalf a whole
number of Shares from those Shares issued to you as MSCI determines to be
appropriate to generate cash proceeds sufficient to satisfy the obligation for
Tax-Related Items. Depending on the withholding method, the Company may withhold
or account for Tax-Related Items by considering maximum applicable rates, in
which case you will receive a refund of any over-withheld amount in cash and
will have no entitlement to the stock equivalent.

 

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Finally, you agree to pay to the Company, including through withholding from
your wages or other cash compensation paid to you by MSCI and/or your employer,
any amount of Tax-Related Items that the Company may be required to withhold or
account for as a result of your participation in the Plan that cannot be
satisfied by the means previously described. MSCI may refuse to issue or deliver
the Shares or the proceeds of the sale of Shares if you fail to comply with your
obligations in connection with the Tax-Related Items.

(c)        Nature of Grant.    In accepting the PSUs, you acknowledge,
understand and agree that:

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

(ii)        this PSU award is not an employment or service agreement, and
nothing in this Award Agreement or your participation in the Plan shall create a
right to continued employment with the Company or interfere with the ability of
the Company to terminate your employment or service relationship (if any);

(iii)        this award, and all other awards of PSUs and other equity-based
awards, are discretionary, voluntary and occasional. This award does not confer
on you any contractual or other right or entitlement to receive another award of
PSUs, any other equity-based award or benefits in lieu of PSUs at any time in
the future or in respect of any future period. You agree that any release
required under Section 4 of this Award Agreement is in exchange for the grant of
PSUs hereunder, for which you have no current entitlement.

(iv)        MSCI has made this award to you in its sole discretion. All
decisions with respect to future PSU or other grants, if any, will be at the
sole discretion of MSCI;

(v)        you are voluntarily participating in the Plan;

(vi)        the grant of PSUs and the Shares subject to the PSUs are not
intended to replace any pension rights or compensation;

(vii)        this award does not confer on you any right or entitlement to
receive compensation in any specific amount. In addition, the PSUs and the
Shares subject to the PSUs, and the income and value of same, are not part of
normal or expected compensation for purposes of calculating any severance,
resignation, termination, redundancy, dismissal, end-of-service payments,
bonuses, long-service awards, holiday pay, pension or retirement or welfare
benefits or similar payments;

(viii)        unless otherwise agreed with MSCI, the PSUs and the Shares subject
to the PSUs, and the income and value of same, are not granted as consideration
for, or in connection with, the service you may provide as a director of a
Subsidiary;

 

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

(x)        no claim or entitlement to compensation or damages shall arise from
forfeiture of the PSUs resulting from the termination of your employment
relationship (for any reason whatsoever, whether or not later found to be
invalid or in breach of employment laws in the jurisdiction where you are
employed or the terms of your employment agreement, if any); and

(xi)        you acknowledge and agree that the Company shall not be liable for
any foreign exchange rate fluctuation between your local currency and the
U.S. Dollar that may affect the value of the PSU or of any amounts due to you
pursuant to the settlement of the PSU or the subsequent sale of any shares of
Common Stock acquired upon settlement.

(d)        Data Privacy.    You hereby explicitly and unambiguously consent to
the collection, use and transfer, in electronic or other form, of your personal
data as described in this Award Agreement and any other PSU grant materials by
and among, as applicable, MSCI and any Subsidiary for the exclusive purpose of
implementing, administering and managing your participation in the Plan.

You understand that the Company may hold certain personal information about you,
including, but not limited to, your name, home address and telephone number,
date of birth, social insurance number or other identification number, salary,
nationality, job title, any Shares or directorships held in MSCI, details of all
PSUs or any other entitlement to Shares awarded, canceled, exercised, vested,
unvested or outstanding in your favor (“Data”), for the exclusive purpose of
implementing, administering and managing the Plan.

You understand that Data will be transferred to E*Trade Financial Corporate
Services, Inc., or such other stock plan service provider as may be selected by
MSCI in the future, which is assisting MSCI with the implementation,
administration and management of the Plan. You understand that the recipients of
the Data may be located in the United States. or elsewhere, and that the
recipients’ country of operation (e.g., the United States) may have different
data privacy laws and protections than your country. You understand that if you
reside outside the United States, you may request a list with the names and
addresses of any potential recipients of the Data by contacting your local human
resources representative. You authorize MSCI, E*Trade Financial Corporate
Services, Inc., and any other possible recipients which may assist MSCI
(presently or in the future) with implementing, administering and managing the
Plan to receive, possess, use, retain and transfer the Data, in electronic or
other form, for the sole purpose of implementing, administering and managing
your participation in the Plan. You understand that Data will be held only as
long as is necessary to implement, administer and manage your participation in
the Plan. You understand if

 

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you reside outside the United States, you may, at any time, view Data, request
additional information about the storage and processing of Data, require any
necessary amendments to Data or refuse or withdraw the consents herein, in any
case without cost, by contacting in writing your local human resources
representative. Further, you understand that you are providing the consents
herein on a purely voluntary basis. If you do not consent, or if you later seeks
to revoke your consent, your service and career with the Company will not be
adversely affected; the only consequence of refusing or withdrawing your consent
is that MSCI would not be able to grant you PSUs or other equity awards or
administer or maintain such awards. Therefore, you understand that refusing or
withdrawing your consent may affect your ability to participate in the Plan. For
more information on the consequences of your refusal to consent or withdrawal of
consent, you understand that you may contact your local human resources
representative.

(e)        Language.    If you have received this Award Agreement or any other
document related to the Plan translated into a language other than English and
if the meaning of the translated version is different than the English version,
the English version will control.

(f)        Electronic Delivery and Acceptance.    MSCI may, in its sole
discretion, decide to deliver any documents related to current or future
participation in the Plan by electronic means. You hereby consent to receive
such documents by electronic delivery and agree to participate in the Plan
through an online or electronic system established and maintained by MSCI or a
third party designated by MSCI.

(g)        Exhibit B.    Notwithstanding any provisions in this Award Agreement,
the PSUs shall be subject to any special terms and conditions set forth in
Exhibit B to this Award Agreement for your country. Moreover, if you relocate to
one of the countries included in Exhibit B, the special terms and conditions for
such country will apply to you, to the extent MSCI determines that the
application of such terms and conditions is necessary or advisable for legal or
administrative reasons. Exhibit B constitutes part of this Award Agreement.

(h)        Insider Trading Restrictions/Market Abuse Laws.    Depending on your
country of residence, you may be subject to insider trading restrictions and/or
market abuse laws, which may affect your ability to acquire or sell Shares or
rights to Shares (e.g., PSUs) under the Plan during such times as you are
considered to have “inside information” regarding the Company (as defined by the
laws in your country). Any restrictions under these laws or regulations are
separate from and in addition to any restrictions that may be imposed under any
applicable Company insider trading policy. You are responsible for ensuring
compliance with any applicable restrictions, and you should consult your
personal legal advisor on this matter.

Section 22.        Defined Terms.    For purposes of this Award Agreement, the
following terms shall have the meanings set forth below:

 

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A “Cancellation Event” will be deemed to have occurred under any one of the
following circumstances:

(a)        misuse of Proprietary Information or failure to comply with your
obligations under MSCI’s Code of Conduct or otherwise with respect to
Proprietary Information;

(b)        termination from the Company for Cause (or a later determination that
you could have been terminated for Cause; provided that such determination is
made within six months of termination);

(c)        your commission of a fraudulent act or participation in misconduct
which leads to a material restatement of the Company’s financial statements;

or if, without the consent of MSCI:

(d)        while employed by the Company, including during any notice period
applicable to you in connection with your termination of employment with the
Company, you directly or indirectly in any capacity (including through any
person, corporation, partnership or other business entity of any kind) hire or
solicit, recruit, induce, entice, influence or encourage any Company employee to
leave the Company or become hired or engaged by another company; or

(e)        while employed by the Company, including during any notice period
applicable to you in connection with your termination of employment with the
Company, you directly or indirectly in any capacity (including through any
person, corporation, partnership or other business entity of any kind) solicit
or entice away or in any manner attempt to persuade any client or customer, or
prospective client or customer, of the Company (i) to discontinue or diminish
his, her or its relationship or prospective relationship with the Company or
(ii) to otherwise provide his, her or its business to any person, corporation,
partnership or other business entity which engages in any line of business in
which the Company is engaged (other than the Company).

“Cause” means:

(a)        any act or omission which constitutes a material willful breach of
your obligations to the Company or your continued and willful refusal to
substantially perform satisfactorily any duties reasonably required of you,
which results in material injury to the interest or business reputation of the
Company and which breach, failure or refusal (if susceptible to cure) is not
corrected (other than failure to correct by reason of your incapacity due to
physical or mental illness) within 30 days after written notification thereof to
you by the Company; provided that no act or failure to act on your part shall be
deemed willful unless done or omitted to be done by you not in good faith and
without reasonable belief that your action or omission was in the best interest
of the Company;

(b)        your commission of any dishonest or fraudulent act, or any other act
or omission with respect to the Company, which has caused or may reasonably be
expected to cause a material injury to the interest or business reputation of
the Company and which act or omission is not successfully refuted by you within
30 days after written notification thereof to you by the Company;

 

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(c)        your plea of guilty or nolo contendere to or conviction of a felony
under the laws of the United States or any state thereof or any other plea or
confession of a similar crime in a jurisdiction in which the Company conducts
business; or

(d)        your commission of a fraudulent act or participation in misconduct
which leads to a material restatement of the Company’s financial statements.

A “Change in Control” shall be deemed to have occurred if any of the following
conditions shall have been satisfied:

(a)        any one person or more than one person acting as a group (as
determined under Section 409A), other than (A) any employee plan established by
the Company, (B) the Company or any of its affiliates (as defined in Rule 12b-2
promulgated under the Exchange Act), (C) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (D) a corporation
owned, directly or indirectly, by stockholders of MSCI in substantially the same
proportions as their ownership of MSCI, is or becomes, during any 12-month
period, the beneficial owner, directly or indirectly, of securities of MSCI (not
including in the securities beneficially owned by such person(s) any securities
acquired directly from the Company or its affiliates other than in connection
with the acquisition by the Company or its affiliates of a business)
representing 30% or more of the total voting power of the stock of MSCI;
provided that the provisions of this subsection (a) are not intended to apply to
or include as a Change in Control any transaction that is specifically excepted
from the definition of Change in Control under subsection (c) below;

(b)        a change in the composition of the Board such that, during any
12-month period, the individuals who, as of the beginning of such period,
constitute the Board (the “Existing Board”) cease for any reason to constitute
at least 50% of the Board; provided, however, that any individual becoming a
member of the Board subsequent to the beginning of such period whose election,
or nomination for election by MSCI’s stockholders, was approved by a vote of at
least a majority of the directors immediately prior to the date of such
appointment or election shall be considered as though such individual were a
member of the Existing Board; and provided, further, however, that,
notwithstanding the foregoing, no individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 or Regulation 14A promulgated under the Exchange
Act or successor statutes or rules containing analogous concepts) or other
actual or threatened solicitation of proxies or consents by or on behalf of an
individual, corporation, partnership, group, associate or other entity or
“person” other than the Board, shall in any event be considered to be a member
of the Existing Board;

(c)        the consummation of a merger or consolidation of the Company with any
other corporation or other entity, or the issuance of voting securities in
connection with a merger or consolidation of the Company pursuant to applicable
stock exchange

 

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requirements; provided that immediately following such merger or consolidation
the voting securities of MSCI outstanding immediately prior thereto do not
continue to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity of such merger or consolidation
or parent entity thereof) 50% or more of the total voting power of MSCI’s stock
(or if the Company is not the surviving entity of such merger or consolidation,
50% or more of the total voting power of the stock of such surviving entity or
parent entity thereof); and provided, further, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person (as determined under Section 409A) is or becomes the
beneficial owner, directly or indirectly, of securities of MSCI (not including
in the securities beneficially owned by such person any securities acquired
directly from the Company or its affiliates other than in connection with the
acquisition by the Company or its affiliates of a business) representing 50% or
more of either the then outstanding Shares or the combined voting power of
MSCI’s then-outstanding voting securities shall not be considered a Change in
Control; or

(d)        the sale or disposition by the Company of all or substantially all of
the Company’s assets in which any one person or more than one person acting as a
group (as determined under Section 409A) acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value
equal to more than 50% of the total gross fair market value of all of the assets
of the Company immediately prior to such acquisition or acquisitions.

Notwithstanding the foregoing, (1) no Change in Control shall be deemed to have
occurred if there is consummated any transaction or series of integrated
transactions immediately following which the record holders of MSCI common stock
immediately prior to such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which owns
substantially all of the assets of the Company immediately prior to such
transaction or series of transactions and (2) no event or circumstances
described in any of clauses (a) through (d) above shall constitute a Change in
Control unless such event or circumstances also constitute a change in the
ownership or effective control of the Company, or in the ownership of a
substantial portion of the Company’s assets, as defined in Section 409A. In
addition, no Change in Control shall be deemed to have occurred upon the
acquisition of additional control of the Company by any one person or more than
one person acting as a group that is considered to effectively control the
Company. In no event will a Change in Control be deemed to have occurred if you
are part of a “group” within the meaning of Section 13(d)(3) of the Exchange Act
that effects a Change in Control.

Terms used in the definition of a Change in Control shall be as defined or
interpreted pursuant to Section 409A.

“Code” means the United States Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board, any successor
committee thereto or any other committee of the Board appointed by the Board
with the powers of the Committee under the Plan, or any subcommittee appointed
by such Committee.

 

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“Disability” means (a) you are unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months or (b) you, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, are receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of
the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Good Reason” means:

(a)        any material diminution in your title, status, position, the scope of
your assigned duties, responsibilities or authority, including the assignment to
you of any duties, responsibilities or authority inconsistent with the duties,
responsibilities and authority assigned to you prior to a Change in Control
(including any such diminution resulting from a transaction in which the Company
is no longer a public company);

(b)        any reduction in your Total Reward that was in existence prior to a
Change in Control (for purposes of this clause (b), Total Reward is comprised of
your annual base salary, your annual bonus and the grant date fair value of your
equity-based incentive compensation awards for the year prior to the year in
which your termination of employment occurs);

(c)        a relocation of more than 25 miles from the location of your
principal job location or office prior to a Change in Control; or

(d)        any other action or inaction that constitutes a material breach by
the Company of any agreement pursuant to which you provide services to the
Company;

provided, that you provide the Company with written notice of your intent to
terminate your employment for Good Reason within 90 days of your becoming aware
of any circumstances set forth above (with such notice indicating the specific
termination provision above on which you are relying and describing in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the indicated provision) and that you
provide the Company with at least 30 days following receipt of such notice to
remedy such circumstances.

“Governmental Employer” means a federal governmental or executive branch
department or agency.

“Governmental Service Termination” means the termination of your employment with
the Company as a result of your accepting employment at a Governmental Employer
and you provide MSCI with satisfactory evidence

 

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demonstrating that, as a result of such new employment, the divestiture of your
continued interest in MSCI equity awards or continued ownership in MSCI common
stock is reasonably necessary to avoid the violation of U.S. federal, state or
local, foreign ethics or conflicts of interest law applicable to you at such
Governmental Employer.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

“Notice Requirements” means prior written notice to MSCI of at least:

(a)        180 days if you are a member of the MSCI Executive Committee (or a
successor or equivalent committee) at the time of notice of resignation; or

(b)        90 days if you are a Managing Director of the Company (or equivalent
title) at the time of notice of resignation.

For the avoidance of doubt, employees working or residing outside of the United
States may be subject to notice periods mandated under local labor or regulatory
requirements which may differ from the Notice Requirements set forth above.

“Performance Period” means [•].

“Proprietary Information” means any information that may have intrinsic value to
the Company, the Company’s clients or other parties with which the Company has a
relationship, or that may provide the Company with a competitive advantage,
including, without limitation, any trade secrets or inventions (whether or not
patentable); formulas; flow charts; computer programs, access codes or other
systems of information; algorithms, technology and business processes; business,
product or marketing plans; sales and other forecasts; financial information;
client lists or other intellectual property; information relating to
compensation and benefits; and public information that becomes proprietary as a
result of the Company’s compilation of that information for use in its business;
provided that such Proprietary Information does not include any information
which is available for use by the general public or is generally available for
use within the relevant business or industry other than as a result of your
action. Proprietary Information may be in any medium or form including, without
limitation, physical documents, computer files or discs, videotapes, audiotapes
and oral communications.

“Section 409A” means Section 409A of the Code.

 

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APPENDIX A

Designation of Beneficiary(ies) Under

MSCI Inc. 2007 Amended and Restated

Equity Incentive Compensation Plan

This Designation of Beneficiary(ies) shall remain in effect with respect to all
awards issued to me under any MSCI equity compensation plan, including any
awards that may be issued to me after the date hereof, unless and until I modify
or revoke it by submitting a later dated beneficiary designation. This
Designation of Beneficiary(ies) supersedes all my prior beneficiary designations
with respect to all my equity awards.

I hereby designate the following beneficiary(ies) to receive any survivor
benefits with respect to all my equity awards:

 

   Beneficiary(ies) Name(s)    Relationship    Percentage

(1)

        

(2)

        

Address(es) of Beneficiary(ies):

 

(1)

        

(2)

        

Contingent Beneficiary(ies)

Please also indicate any contingent beneficiary(ies) and to which
beneficiary(ies) above such interest relates.

 

   Beneficiary(ies) Name(s)    Relationship    Nature of Contingency

(1)

        

(2)

        

Address(es) of Contingent Beneficiary(ies):

 

(1)

        

(2)

        

 

Name: (please print)    Date:

Signature

Please sign and return this form to MSCI’s Human Resources Department.

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EXHIBIT B

[COUNTRY-SPECIFIC TERMS AND CONDITIONS]

 

B-1