DOW JONES & COMPANY
2007 ANNUAL INCENTIVE PLAN HIGHLIGHTS
INCLUDING SUPPLEMENTAL PROVISIONS ADOPTED
ON JUNE 4, 2007,
AS AMENDED ON NOVEMBER 14, 2007
 

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PLAN OBJECTIVES
The 2007 Dow Jones & Company Annual Incentive Plan (AIP) is designed to link
annual incentive compensation payments to corporate and business unit financial
results, the attainment of business unit strategic goals and individual
performance.

PARTICIPATION
To be eligible to receive an AIP award, employees must be in a bonus-eligible
position prior to October 1, 2007, and, in general, must be in the employ of Dow
Jones at the time bonuses are paid.  Individuals participating in sales or other
incentive plans generally are not eligible to participate in the Annual
Incentive Plan.

INDIVIDUAL BONUS OPPORTUNITIES (TARGETS)
Each participant in the AIP receives a target bonus opportunity.  The target
opportunity is based upon competitive practice and is a function of his/her base
salary and job responsibility or grade level. The target bonus opportunity is
expressed as a specific dollar amount for the performance period.

PERFORMANCE PERIOD
The performance period for 2007 is the calendar year January through December.

GROUP POOLS
Bonus pools are established at a group level.  Each group has a unit bonus grid
consisting of group financial and strategic measures. The group target bonus
pool is the sum of the individual target bonus opportunities of all the
participants in the group.

Sixty percent (60%) of the group pools will be tied to financial performance and
forty percent (40%) to performance against strategic measures. Group pools will
be funded based on performance against the financial and strategic measures.

Financial Measures
The precise financial measures to be used and the weights assigned to each are
different for business operating units and corporate staff departments.  The
measures and weighting are detailed below.
 
               Operating Units:
Corporate Earnings per Share (20%),

 
Business Unit Direct Operating Income (40%)

               Corporate Support:
Corporate Earnings per Share (50%),

 
Corporate Return on Investment (10%)

 
For financial measures, specific goals will be established at
“threshold,”  “target,” “superior” and “exceptional” levels.  The “target” goal
for all financial measures will be the budget.

Payout on financial measures will be made in accordance with the table below:

·   
Threshold                           50% of target

·   
Target                                 100% of target

·   
Superior                             150% of target

·   
Exceptional                         200% of target

If results fall between the performance levels (e.g., between target and
superior), awards are set by interpolation.

Strategic Measures

Each pool group will have a handful of strategic measures. These measures should
reflect the key performance drivers or indicators of the business unit or
department.  These measures will not be individually weighted or rated; instead,
they will be given a collective rating.  Managers should indicate priorities by
emphasizing or minimizing the importance of particular objectives on each
participant’s Performance, Planning and Review Form (see below).

Adjustments

Adjustments (up or down) to the financial and strategic measurement scores may
be made at the discretion of management and the Compensation Committee of the
Dow Jones Board of Directors to take into account prevailing market,
competitive, economic and other outside influences on performance.  Financial
scores may be adjusted (up or down) by up to 30 percentage points.
 

INDIVIDUAL BONUS AWARDS
Individual bonus awards will be recommended from the group pools based on
individual performance.  Each group will be given a group pool calculated on the
basis of performance versus the identified measures and goals, and this
aggregate pool will be allocated among the group’s eligible employees.  The
total of the individual awards in a group may not exceed the group pool.

Managers are required to set individual objectives for each AIP participant on
his or her Performance Planning and Review Form. After group pool amounts are
computed and communicated, managers will rate each employee’s performance
against the criteria on the review form, which will be the basis for individual
bonus recommendations. The maximum bonus that may be awarded to any individual
is 200% of target opportunity.

PRO-RATED BONUS TARGETS
Bonus opportunities may be pro-rated for employees who are either hired by Dow
Jones or move between eligible and ineligible positions during the plan year.
Position changes and promotions before April 1, 2007, will be regarded as in
place for the full year.  Those that occur after September 30, 2007, will have
no impact on 2007 target opportunity, but will be reflected in the bonus
opportunity for 2008.   Bonus opportunities will be pro-rated when individuals
change positions during the second and third quarters of the year.

In the case of death, disability or retirement, employees meeting the minimum
participation time requirement (more than three months) would retain a bonus
target opportunity, which may be pro-rated.  In such cases, the requirement that
the employee be in the employ of the Company when bonuses are paid will be
waived.
 
 

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PAYMENT OF AWARD
We expect the 2007 AIP awards to be paid in March 2008.  To receive a bonus
payment, a participant must be employed by Dow Jones at the time the award is
paid, except in cases of death, disability or retirement.

In cases of job elimination or other involuntary termination for a reason other
than “for cause,” or if there is an extraordinary transaction involving a
business unit (e.g., acquisition, divestiture, reorganization), management
reserves the right to determine whether a bonus will be awarded.

CONSEQUENCES UPON A CHANGE IN CONTROL
The summary above was modified, on June 4, 2007, to add provisions that will
apply, and will supersede the provisions above, in the event that there is a
Change in Control of Dow Jones during 2007.

For purposes of the AIP, a “Change in Control” shall mean:

(a)          Any acquisition or series of acquisitions during any twelve (12)
month period after which any “Person” (as the term person is used for purposes
of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (other than any Bancroft Person (as defined below)) is the
“Beneficial Owner” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of thirty percent (30%) or more of the combined voting power of
the outstanding voting securities of the Company; provided, however, that:
 
(i)       the acquisition of Beneficial Ownership by a Person by reason of such
Person’s having entered into a voting, tender or option agreement with Bancroft
Persons approved by the Board of Directors of the Company for purposes of
Section 203 of the Delaware General Corporation Law in connection with the
Company’s entering into a definitive agreement for a Merger (as defined below)
shall not by reason of this clause (a) constitute a Change in Control, provided,
further that whether the consummation of any such Merger, the applicable tender
offer or the exercise of such option would constitute a Change in Control shall
be determined without regard for the exception in this sub-clause (i), and
 
(ii)       a Change in Control that would otherwise occur pursuant to this
clause (a) shall be deemed to not have occurred pursuant to this clause (a) so
long as Bancroft Persons have Beneficial Ownership, directly or indirectly, of
fifty percent (50%) or more of the combined voting power of the outstanding
voting securities of the Company; or
 
(b)           The consummation of a merger, consolidation or reorganization
with, into or of the Company (each, a “Merger”), unless immediately following
the Merger, Bancroft Persons have Beneficial Ownership, directly or indirectly,
of fifty percent (50%) or more of the combined voting power of the outstanding
voting securities of (x) the corporation or other entity resulting from such
Merger (the “Surviving Entity”), if fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of the Surviving
Corporation is not Beneficially Owned, directly or indirectly by another
corporation (a “Parent Entity”), or (y) if there is one or more Parent Entities,
the ultimate Parent Entity.
 
A “Bancroft Person” means any Person who is, or is controlled by, Bancroft
Family Members, trustees of Bancroft Trusts (solely in their capacity as
trustees), Bancroft Charitable Organizations or Bancroft Entities, each as
defined in the By-laws of the Company as in effect as of the date hereof.
 
If there is a Change in Control during 2007, the performance measurements used
in determining the funding of 2007 bonus pools will be treated as follows:
financial performance measurements shall (A) be adjusted to eliminate the effect
of costs, expenses and other charges directly or indirectly arising from or
relating to such Change in Control and (B) be deemed to have been achieved at a
level (I) if financial performance for the business of Dow Jones is separately
measured following the Change in Control through December 31, 2007, based on
such performance adjusted in good faith to reflect the impact of changes in the
business directly or indirectly arising from or relating to such Change in
Control and (II) otherwise, based on performance of the business of Dow Jones
through the last day of the month preceding the date on which the Change in
Control occurs as compared to budgeted performance for such period.

In addition, if there is a Change in Control during 2007, in cases of job
elimination or other involuntary termination for a reason other than “for cause”
after the Change in Control, a pro rata portion of the 2007 AIP award will be
paid to each affected participant, the amount of which shall be determined as
provided in the immediately preceding paragraph, but which shall be prorated
based on the ratio of the number of full and partial months (counting any
portion of a month as a full month) prior to such termination to 12.