pr8kex10_1.htm


     

     

    
      DOW
        JONES
& COMPANY

      2007
        ANNUAL INCENTIVE PLAN HIGHLIGHTS

      INCLUDING
        SUPPLEMENTAL PROVISIONS ADOPTED

      ON
        JUNE
        4, 2007,

      AS
        AMENDED ON NOVEMBER 14, 2007

       

      
        
          
            

          

        

      

      


      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.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      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.