Document:

SUPPLEMENTAL EXECUTIVE BENEFIT PLAN

 

EX 10.4

     2

SUPPLEMENTAL EXECUTIVE BENEFIT PLAN

OF MOODY’S CORPORATION

Exhibit 10.4

SUPPLEMENTAL EXECUTIVE BENEFIT PLAN

OF

MOODY’S CORPORATION

PREAMBLE

         The principal purpose of this Supplemental Executive Benefit Plan is to
provide as deferred compensation, on an unfunded basis, a competitive level of
retirement income and disability benefits to a select group of management or
highly compensated employees of the Corporation and its affiliated companies in
order to attract, retain, and motivate such employees.

Definitions

“Affiliate” means any corporation, partnership, division or other
organization controlling, controlled by or under common control with the
Corporation or any joint venture entered into by the Corporation.

“Average Final Compensation” means the greater of (a) a Participant’s or Vested
Former Participant’s average final compensation as defined in the Moody’s
Corporation Retirement Account as if no provision were set forth therein
incorporating limitations imposed by Sections 401 or 415 or any other
applicable Section of the Code, or (b) if the Participant is disabled at the
time of his Retirement, the Participant’s Basic Earnings. For purposes of (a),
Average Final Compensation will not include an employee’s compensation while
the employee is a Vested Former Participant or a Former Participant and will
include compensation from the date of the Participant’s employment with the
Corporation or an Affiliate.

“Basic Disability Plan” means as to any Participant either (a) the long-term
disability plan of the Corporation or an Affiliate pursuant to which long-term
disability benefits are payable to such Participant or (b) if the Affiliate
which employs such Participant has not adopted a long-term disability plan, the
long-term disability plan of the Corporation.

“Basic Disability Plan Benefit” means the amount of benefits actually payable
to a Participant from the Basic Disability Plan or which would be payable if
the Participant were a member of such Plan. For purposes of determining a
Participant’s Basic Disability Plan Benefit, a disability benefit shall not be
treated as actually payable to a Participant unless the Participant is actually
covered by a long-term disability plan of the Corporation or an Affiliate.

 

 

“Basic Earnings” means the total amount paid by the Corporation or any
Affiliate to a Participant in the twelve (12) months immediately preceding the
onset of the Participant’s disability, (a) including salary, wages, regular
cash bonuses and commissions, lump sum payments in lieu of foregone merit
increases, “bonus buyouts” as the result of job changes, and any portion of
such amounts (i) voluntarily deferred or reduced by the Participant under any
employee benefit plan of the Corporation or any Affiliate available to all
levels of Employees of the Corporation and/or any Affiliate(s) on a
non-discriminatory basis upon satisfaction of eligibility requirements or (ii)
voluntarily deferred or reduced under any executive deferral plan of the
Corporation or any Affiliate (so long as such amounts would otherwise not have
been excluded had they not been deferred), but (b) excluding any pension,
retainers, severance pay, special stay-on bonus payments, income derived from
stock options, stock appreciation rights and restricted stock awards and
dispositions of stock acquired thereunder, payments dependent upon any
contingency after the period of Credited Service and other special remuneration
(including performance units).

“Basic Plan” means, as to any Participant or Vested Former Participant, the
defined benefit pension plan of the Corporation or an Affiliate, which is
intended to meet the requirements of Section 401(a) of the Code and pursuant to
which retirement benefits are payable to such Participant or Vested Former
Participant or to the Surviving Spouse or designated beneficiary of a deceased
Participant or Vested Former Participant.

“Basic Plan Benefit” means the amount of benefits payable from the Basic Plan
to a Participant or Vested Former Participant.

“Board” means the Board of Directors of Moody’s Corporation.

“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, 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 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 a merger or
consolidation (i) 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.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” means the Compensation and Nominating Committee of the Board.

“Corporation” means Moody’s Corporation, a Delaware corporation, and any
successor or assigns thereto.

“Credited Service” means a Participant’s, Former Participant’s or Vested Former
Participant’s Credited Service as defined in the Moody’s Corporation Retirement
Account, except that Credited Service will include service while the
Participant is receiving Disability Benefits and service from the date the
Participant, Former Participant or Vested Former Participant was employed by
the Corporation or an Affiliate, but will not include service while an employee
is a Former Participant or Vested Former Participant. In the case of an
acquired company, however, the Participant’s, Former Participant’s or Vested
Former Participant’s service with that company prior to the date of acquisition
will not be counted unless such service is recognized for benefit accrual
purposes under the relevant Basic Plan.

“Disability Benefit” means the benefits provided to Participants and Vested
Former Participants pursuant to Section 5 of the Plan.

“Effective Date” means September 30, 2000.

“Election” means an election as to the form of benefit payment made pursuant to
Section 4.05 of the Plan.

“Election Date” means the date that a properly completed election form with
respect to an Election or a Special Election is received by the Corporation’s
Treasurer.

“Former Participant” means an employee who has not completed five (5) or more
years of Credited Service at the time his employment with the Corporation or an
Affiliate terminates or at the time he was removed, upon written notice by the
Chief Executive Officer of the Corporation and with the approval of the
Committee, from further participation in the Plan.

“Other Disability Income” means (a) the disability insurance benefit that the
Participant is entitled to receive under the Federal Social Security Act while
he is receiving the Basic Disability Plan Benefit and (b) the disability income
payable to a Participant from the following sources:

	i.	 	any supplemental executive disability plan of any Affiliate; and
	 
	ii.	 	any other contract, agreement or other arrangement with the
Corporation or an Affiliate (excluding any Basic Disability Plan) to the
extent it provides disability benefits.

“Other Retirement Income” means (a) (i) the Social Security retirement benefit
that the Participant or Vested Former Participant is entitled to receive under
the Federal Social Security Act as of the date of his Retirement or (ii) if the
Participant or Vested Former Participant is not eligible to receive a Social
Security retirement benefit commencing on such date, the Social Security
retirement benefit he is entitled to receive at the earliest age he is eligible
to receive such a benefit, discounted to the date his Benefit under the Plan
actually commences,

 

 

using the actuarial assumptions then in use under the relevant Basic Plan,
assuming for purposes of (i) and (ii) above that for years prior to the
Participant’s employment with the Corporation and for years following the
Participant’s termination of employment with the Corporation up until the
Participant attains age sixty-two (62), the Participant earned compensation so
as to accrue the maximum Social Security benefits, and (b) the retirement
income payable to a Participant or Vested Former Participant from the following
sources:

	i.	 	any retirement benefits equalization plan of the Corporation or an
Affiliate or any former Affiliate, the purpose of which is to provide
the Participant or Vested Former Participant with the benefits he is
precluded from receiving under any relevant Basic Plan as a result of
limitations under the Code; and
	 
	ii.	 	any supplemental executive retirement plan of any Affiliate; and
	 
	iii.	 	any other contract, agreement or other arrangement with the
Corporation or an Affiliate or any former Affiliate (excluding any Basic
Plan and any defined contribution plan intended to meet the requirements
of Section 401(a) of the Code) to the extent it provides retirement or
pension benefits.

“Participant” means an employee of the Corporation or an Affiliate who becomes
a participant in the Plan pursuant to Section 2.01 and has not been removed
pursuant to Section 2.02.

“Plan” means this Supplemental Executive Benefit Plan of Moody’s Corporation,
as amended from time to time.

“Potential Change in Control” means:

	 	(a)	 	the Corporation enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control of the
Corporation;
	 
	 	(b)	 	any person (including the Corporation) publicly announces an
intention to take or to consider taking actions which if consummated
would constitute a Change in Control of the Corporation;
	 
	 	(c)	 	any person, other than a trustee or their fiduciary holding
securities under an employee benefit plan of the Corporation (or a
Corporation owned, directly or indirectly, by the stockholders of
the Corporation in substantially the same proportions as their
ownership of stock of the Corporation), who is or becomes the
beneficial owner, directly or indirectly, of securities of the
Corporation representing nine and one half percent (9.5%) or more of
the combined voting power of the Corporation’s then outstanding
securities, increases his beneficial ownership of such securities by
five percent (5%) or more over the percentage so owned by such
person; or
	 
	 	(d)	 	the Board adopts a resolution to the effect that, for
purposes of this Plan, a Potential Change in Control of the
Corporation has occurred.

“Retirement” means the termination, other than at death, of a Participant’s or
Vested Former Participant’s employment with the Corporation or an Affiliate (a)
after reaching age fifty-five (55) and completing ten (10) years of Vesting
Service, or (b) immediately following the cessation of the payment of
Disability Benefits under the Plan to such Participant or Vested Former
Participant while he is still disabled, as such term is defined under the Basic
Disability Plan.

“Retirement Benefit” means the benefits provided to Participants and Vested
Former Participants pursuant to Section 4 of the Plan.

“Special Election” means an election as to the form of benefit payment made
pursuant to Section 4.06 of the Plan.

 

 

“Surviving Spouse” means the spouse of a deceased Participant or Vested Former
Participant to whom such Participant or Vested Former Participant is legally
married immediately preceding such Participant or Vested Former Participant’s
death.

“Surviving Spouse’s Benefits” mean the benefits provided to a Participant’s or
Vested Former Participant’s Surviving Spouse pursuant to Section 6 of the Plan.

“Vested Former Participant” means an employee who completed five (5) or more
years of Credited Service at the time his employment with the Corporation or an
Affiliate terminated or at the time he was removed, upon written notice by the
Chief Executive Officer of the Corporation and with the approval of the
Committee, from further participation in the Plan.

The masculine gender, where appearing in the Plan, will be deemed to include
the feminine gender, and the singular may include the plural, unless the
context clearly indicates to the contrary.

Section 2

Eligibility and Participation

2.01 All key management employees of the Corporation and its Affiliates who are
responsible for the management, growth or protection of the business of the
Corporation and its Affiliates, who are designated by the Chief Executive
Officer of the Corporation in writing, are eligible, upon approval by the
Committee, for participation in the Plan as of the effective date of such
designation.

2.02 A Participant’s participation in the Plan shall terminate upon termination
of his or her employment. Prior to termination of employment, a Participant
may be removed, upon written notice by the Chief Executive Officer of the
Corporation and with the approval of the Committee, from further participation
in the Plan. As of the date of termination or removal, no further benefits
shall accrue to such individual.

Section 3

Eligibility For Benefits

3.01 Each Participant or Vested Former Participant is eligible for an annual
Retirement Benefit under this Plan upon Retirement, or upon termination of
employment with the Corporation before Retirement after completing five (5) or
more years of Credited Service.

3.02 Each Participant is eligible to commence receiving a Disability Benefit
under this Plan upon the actual or deemed commencement of benefits under the
relevant Basic Disability Plan. Notwithstanding the above, a Participant may
not receive a Disability Benefit if he has not previously enrolled for the
maximum disability insurance coverage available under the relevant Basic
Disability Plan.

3.03 Notwithstanding any other provision of the Plan to the contrary, no
benefits or no further benefits, as the case may be, shall be paid to a
Participant, Vested Former Participant or Surviving Spouse if the Committee
reasonably determines that such Participant or Vested Former Participant has:

	 	(a)	 	to the detriment of the Corporation or any Affiliate,
directly or indirectly acquired, without the prior written consent
of the Committee, an interest in any other company, firm,
association, or organization (other than an investment interest of
less than one percent (1%) in a publicly-owned company or
organization), the business of which is in direct competition with
any business of the Corporation or an Affiliate;

 

 

	 	(b)	 	to the detriment of the Corporation or any Affiliate,
directly or indirectly competed with the Corporation or any
Affiliate as an owner, employee, partner, director or contractor of
a business, in a field of business activity in which the Participant
or Vested Former Participant has been primarily engaged on behalf of
the Corporation or any Affiliate or in which he has considerable
knowledge as a result of his employment by the Corporation or any
Affiliate, either for his own benefit or with any person other than
the Corporation or any Affiliate, without the prior written consent
of the Committee; or
	 
	 	(c)	 	been discharged from employment with the Corporation or any
Affiliate for “Cause.” “Cause” shall include the occurrence of any
of the following events or such other dishonest or disloyal act or
omission as the Committee reasonably determines to be “Cause”:

	i.	 	the Participant or Vested Former Participant has misappropriated any
funds or property of the Corporation or any Affiliate or committed any
other act of willful malfeasance or willful misconduct in connection
with his or her employment;
	 
	ii.	 	the Participant or Vested Former Participant has, without the prior
knowledge or written consent of the Committee, obtained personal profit
as a result of any transaction by a third party with the Corporation or
any Affiliate;
	 
	iii.	 	the Participant or Vested Former Participant has sold or otherwise
imparted to any person, firm, or corporation the names of the customers
of the Corporation or any Affiliate or any confidential records, data,
formulae, specifications and other trade secrets or other information of
value to the Corporation or any Affiliate derived by his or her
association with the Corporation or any Affiliate;
	 
	iv.	 	the Participant or Vested Former Participant fails, on a continuing
basis, to perform such duties as are requested by any employee to whom
the Participant or Vested Former Participant reports or the Board; or
	 
	v.	 	the Participant or Vested Former Participant commits any felony or
any misdemeanor involving moral turpitude.

In any case described in this Section 3.03, the Participant, Vested Former
Participant or Surviving Spouse shall be given prior written notice that no
benefits or no further benefits, as the case may be, will be paid to such
Participant, Vested Former Participant or Surviving Spouse. Such written
notice shall specify the particular act(s), or failures to act, on the basis of
which the decision to terminate benefits has been made.

3.04 (a) Notwithstanding any other provision of the Plan to the contrary, a
Participant or Vested Former Participant who receives in a lump sum any portion
of his Retirement Benefit pursuant to an Election or Special Election shall
receive such lump sum portion of his Retirement Benefit subject to the
condition that if such Participant or Vested Former Participant engages in any
of the acts described in clause (i) or (ii) of Section 3.03(c), then such
Participant or Vested Former Participant shall, within sixty (60) days after
written notice by the Corporation, repay to the Corporation the amount
described in Section 3.04(b).

         (b)  The amount described under this Section 3.04(b) shall equal the
amount, as determined by the Committee, of the Participant’s or Vested Former
Participant’s lump sum benefit paid under this Plan to which such Participant
or Vested Former Participant would not have been entitled, if such lump sum
benefit had instead been payable in the form of an annuity under this Plan and
such annuity payments were subject to the provisions of Section 3.03.

 

 

Section 4

Amount and Form of Retirement Benefits

4.01 The Retirement Benefit provided by the Plan is designed to provide each
Participant and Vested Former Participant with an annual pension from the Plan
and certain other sources equal to his Retirement Benefit as hereinafter
specified. Thus, the Retirement Benefits described hereunder as payable to
Participants and Vested Former Participants will be offset by retirement
benefits payable from sources outside the Plan as specified herein. All
Retirement Benefits payable under the Plan shall be payable in accordance with
the Employee Benefits Agreement between the Corporation (formerly, The Dun &
Bradstreet Corporation) and The Dun & Bradstreet Corporation (formerly, The New
D&B Corporation), dated as of September 30, 2000.

4.02 (a) In respect of a Participant or Vested Former Participant whose
participation in the Plan commenced before October 22, 2001, the Retirement
Benefit either upon Retirement or upon termination of employment with the
Corporation before Retirement but with five (5) or more years of Credited
Service, shall be an annual benefit equal to four percent (4%) of his Average
Final Compensation for each of his first ten (10) years of Credited Service,
plus two percent (2%) of his Average Final Compensation for each year of
Credited Service in excess of ten (10) years of Credited Service, but not to
exceed in the aggregate twenty (20) years of Credited Service, offset by his
Other Retirement Income and his Basic Plan Benefit. A full month is credited
for each completed and partial month of Credited Service.

	i.	 	Notwithstanding the foregoing provisions of this paragraph (a), if a
Participant or Vested Former Participant subject to this Section 4.02(a)
commences Retirement before he reaches age sixty (60) without the
Corporation’s consent, his Retirement Benefit shall be reduced by three
percent (3%) for each year or fraction thereof that Retirement commenced
prior to his reaching age sixty (60).
	 
	ii.	 	Notwithstanding the foregoing provisions of this paragraph (a), if a
Participant or Vested Former Participant subject to this Section 4.02(a)
terminates employment with the Corporation before Retirement without the
Corporation’s consent, and the payment of his Retirement Benefit
commences (or would commence if it were payable in the form of an
annuity) before he reaches age sixty (60), his Retirement Benefit shall
be reduced by ten percent (10%) for each year or fraction thereof that
the payment of his Retirement Benefit commences (or would commence if it
were payable in the form of any annuity) prior to his reaching age sixty
(60).

         (b) In respect of a Participant or Vested Former Participant whose
participation in the Plan commenced on or after October 22, 2001, the
Retirement Benefit either upon Retirement or upon termination of employment
with the Corporation before Retirement but with five (5) or more years of
Credited Service, shall be an annual benefit equal to two percent (2%) of his
Average Final Compensation for each year of Credited Service, but not to exceed
in the aggregate thirty (30) years of Credited Service, offset by his Other
Retirement Income and his Basic Plan Benefit. A full month is credited for
each completed and partial month of Credited Service.

Notwithstanding the foregoing provisions of this
paragraph (b), if a
Participant or Vested Former Participant subject to this Section 4.02(b)
terminates employment with the Corporation before Retirement, his Retirement
Benefit shall be reduced by sixty percent (60%).

4.03 Any portion of the Retirement Benefit provided under Section 4.02 payable
in the form of an annuity pursuant to Section 4.04 shall be payable in monthly
installments and will commence on the first day of the calendar month
coinciding with or next following the day the Participant or Vested Former
Participant either commences Retirement, or, in the case of termination of

 

 

employment with the Corporation before Retirement, reaches age fifty-five (55)
or the date of his termination, if later. Any portion of such Retirement
Benefit payable in a lump sum pursuant to Section 4.04 shall be paid on the
date that is sixty (60) days after the date when annuity payments under this
Section 4.03 commence, or would commence if any portion of the Retirement
Benefit were payable in the form of an annuity, or as soon as practicable
thereafter, provided the Committee has approved any such lump sum payments.

4.04 (a) Except as provided under Section 4.04(b) or Section 4.04(c), a
Retirement Benefit under this Plan shall be payable to a Participant or Vested
Former Participant in the form of a straight life annuity and without regard to
any optional form of benefits elected under the Basic Plan.

         (b)  If a Participant or a Vested Former Participant makes an Election
while he is a Participant pursuant to Section 4.05 or a Special Election
pursuant to Section 4.06 and such Election or Special Election becomes
effective (i) prior to the date such Participant or such Vested Former
Participant retires or terminates employment with the Corporation or an
Affiliate and (ii) while he was still a Participant, a Retirement Benefit under
this Plan shall be payable to such Participant or such Vested Former
Participant in the form or combination of forms of payment elected pursuant to
such Election or Special Election under Section 4.05 or Section 4.06, as the
case may be, and without regard to any optional form of benefit elected under
the Basic Plan. Any lump sum distribution of a Participant’s or Vested Former
Participant’s Retirement Benefit under the Plan shall fully satisfy all present
and future Plan liability with respect to such Participant or Vested Former
Participant for such portion or all of such Retirement Benefit so distributed.

         (c)  Notwithstanding any Election or Special Election made under Section
4.05 or 4.06, if the lump sum value, determined in the same manner as provided
under Section 4.05(a), of a Participant’s or Vested Former Participant’s
Retirement Benefit is Ten Thousand Dollars ($10,000) or less at the time such
Retirement Benefit is payable under this Plan, such benefit shall be payable as
a lump sum.

         (d)  If the Retirement Benefit under this Plan is payable to a Participant
or Vested Former Participant in a different form and/or at a different time
than his Other Retirement Income or his Basic Plan Benefits, the offset
provided in this Plan for such Participant’s or Vested Former Participant’s
Other Retirement Income and Basic Plan Benefit shall be converted, using
actuarial assumptions that are reasonable and appropriate and in accordance
with applicable law at the time the benefit under this Plan is determined, to
the extent required as follows, but solely for purposes of calculating the
amount of such offset:

	i.	 	a percentage of the benefits to be offset equal to the percentage of
such Participant’s or Vested Former Participant’s benefits payable in
the form of an annuity under this Plan shall be actuarially converted to
the extent required into the form of a straight life annuity, commencing
at the time such benefits payable under this Plan commence or on the
date such Participant or Vested Former Participant would first become
eligible for the payment of such benefits under this Plan, if earlier;
and
	 
	ii.	 	the balance, if any, of the benefits to be offset shall be
actuarially converted to a lump sum payment payable on the date which is
sixty (60) days after the date described in Section 4.04(d)(i).

4.05(a) A Participant may elect, on a form supplied by the Committee, to receive
all, none, or a specified portion, as provided in Section 4.05(c), of his
Retirement Benefit under the Plan in a lump sum and to receive any balance of
such Retirement Benefit in the form of an annuity; provided, that any such
Election shall be effective for purposes of this Plan only if the conditions of
Section 4.05(b) are satisfied. A Participant may elect a payment form
different than the payment form previously elected by him or her under this
Section 4.05(a) by filing a revised election form; provided, that any such new
Election shall be effective only if the conditions of Section 4.05(b) are
satisfied with respect to such new Election. Any prior Election made by a
Participant that has satisfied the conditions of Section

 

 

4.05(b) remains effective for purposes of the Plan until such Participant has
made a new Election satisfying the conditions of Section 4.05(b). The amount
of any portion of a Participant’s or a Vested Former Participant’s Retirement
Benefit payable as a lump sum under this Section 4.05 will equal the present
value of such portion of the Retirement Benefit, and such present value shall
be determined (i) based on a discount rate equal to eighty-five percent (85%)
of the average of the fifteen (15) year non-callable U.S. Treasury bond yields
as of the close of business on the last business day of each of the three
months immediately preceding the date the annuity value is determined and (ii)
using the 1983 Group Annuity Mortality Table.

A Participant’s Election under Section 4.05(a) becomes effective only if the
following conditions are satisfied: (i) such Participant remains in the
employment of the Corporation or an Affiliate, as the case may be, for the full
twelve (12) calendar months immediately following the Election Date of such
Election, except in case of death or disability of such Participant as provided
in Section 4.05(d), and (ii) such Participant complies with the administrative
procedures set forth by the Committee with respect to the making of the
Election.

A Participant making an election under Section 4.05(a) may specify the portion
of his Retirement Benefit under the Plan to be received in a lump sum as
follows: zero percent (0%), twenty-five percent (25%), fifty percent (50%),
seventy-five percent (75%) or one hundred percent (100%).

In the event a Participant who has made an Election pursuant to Section 4.05(a)
dies or becomes totally and permanently disabled for purposes of the relevant
Basic Disability Plan while employed by the Corporation or an Affiliate and
such death or total and permanent disability occurs during the twelve (12)
calendar month period, as described under Section 4.05(b)(i), immediately
following the Election Date of such Election, the condition under Section
4.05(b)(i) shall be deemed satisfied with respect to such Participant.

4.06 Any Participant who, as of the Effective Time, had made a valid Special
Election in accordance with the procedures set forth in Section 4.6(a) of the
Supplemental Executive Benefit Plan of The Dun and Bradstreet Corporation, will
be entitled to receive all, none, or his or her specified percentages or his or
her Retirement Benefit under the Plan in a lump sum and to receive the balance
of such Retirement Benefit in the form of an annuity. (A list of such
Participants is annexed hereto as Schedule A.) The amount of any portion of a
Participant’s or a Vested Former Participant’s Retirement Benefit payable as a
lump sum under this Section 4.06 will equal the present value of such portion
of the Retirement Benefit, and such present value shall be determined (a) based
on a discount rate equal to the average of eighty-five percent (85%) of the
fifteen (15) year non-callable U.S. Treasury bond yields as of the close of
business on the last business day of each of the three (3) months immediately
preceding the date the annuity value is determined, and (b) using the 1983
Group Annuity Mortality Table.

4.07 Subject to Section 3.01, Section 3.03, Section 3.04 and the foregoing
limitations of this Section 4, the Retirement Benefit of each Participant and
Vested Former Participant under the Plan shall at all times be one hundred
percent (100%) vested and nonforfeitable.

4.08 Subject to Section 4.08(c), the Corporation shall indemnify each
Participant, Vested Former Participant and Surviving Spouse who receives any
portion of a Retirement Benefit or Surviving Spouse’s Benefit under this Plan
in the form of an annuity for any interest and penalties that may be assessed
by the U.S. Internal Revenue Service (the “IRS”) with respect to U.S. federal
income tax on such benefits (payable under the Plan in the form of an annuity)
upon final settlement or judgment with respect to any such assessment in favor
of the IRS, provided the basis for the assessment is that the amendment of the
Plan to provide for the Election or the Special Election causes the
Participant, Vested Former Participant or Surviving Spouse, as the case may be,
to be treated as being in constructive receipt of such benefits prior to the
time when such benefits are actually payable under the Plan.

 

 

In case any assessment shall be made against a Participant, Vested Former
Participant or Surviving Spouse as described in Section 4.08(a), such
Participant, Vested Former Participant or Surviving Spouse, as the case may be
(the “indemnified party”), shall promptly notify the Corporation’s Treasurer in
writing and the Corporation, upon request of such indemnified party, shall
select and retain an accountant or legal counsel reasonably satisfactory to the
indemnified party to represent the indemnified party in connection with such
assessment and shall pay the fees and expenses of such an accountant or legal
counsel related to such representation, and the Corporation shall have the
right to determine how and when such assessment by the IRS should be settled,
litigated or appealed. In connection with any such assessment, any indemnified
party shall have the right to retain his own accountant or legal counsel, but
the fees and expenses of such accountant or legal counsel shall be at the
expense of such indemnified party unless the Corporation and the indemnified
party shall have mutually agreed to the retention of such accountant or legal
counsel.

The Corporation shall not be liable for any payments under this Section 4.08
with respect to any assessment described in Section 4.08(a) if a Participant,
Vested Former Participant or Surviving Spouse against whom such assessment is
made has not promptly notified or allowed the Corporation to participate with
respect to such assessment in the manner described in Section 4.08(b) or,
following demand by the Corporation, has not made the deposit to avoid
additional interest or penalties as described in Section 4.08(d) or has agreed
to, or otherwise settled with the IRS with respect to, such assessment without
the Corporation’s written consent; provided, however, if (i) such assessment
is settled with such consent or if there is a final judgment for the IRS, (ii)
the Corporation has been notified and allowed to participate in the manner as
provided in Section 4.08(b), and (iii) such Participant, Vested Former
Participant or Surviving Spouse has made any required deposit to avoid
additional interest or penalty as described in Section 4.08(d), the Corporation
agrees to indemnify the indemnified party to the extent set forth in this
Section 4.08.

In the event a final settlement or judgment with respect to an assessment as
described under Section 4.08 has been made against a Participant, Vested Former
Participant or Surviving Spouse, such Participant, Vested Former Participant or
Surviving Spouse may elect to receive a portion or all of his Retirement
Benefit or Surviving Spouse’s Benefit that is otherwise payable as an annuity
under the Plan in the form of a lump sum in accordance with procedures as the
Committee may set forth, and such lump sum distribution will be made as soon as
practicable after any such election. At the time such assessment is made
against such Participant, Vested Former Participant or Surviving Spouse (the
“assessed party”) and prior to any final settlement or judgment with respect to
such assessment, if so directed by the Corporation, such assessed party shall,
as a condition to receiving any indemnity under this Section 4.08, as soon as
practicable after notification of such assessment make a deposit with the IRS
to avoid any additional interest or penalties with respect to such assessment
and, upon the request of such assessed party, the Corporation shall lend, or
arrange for the lending to, such assessed party a portion of his remaining
Retirement Benefit or Surviving Spouse’s Benefit under the Plan, not to exceed
the lump sum value of such benefit under the Plan, determined using the
actuarial assumptions set forth in Section 4.05(a), solely for purposes of
providing the assessed party with funds to make a deposit with the IRS to avoid
any additional interest or penalties with respect to such assessment.

Section 5

Disability Benefits

5.01 The Disability Benefit provided by the Plan is designed to provide each
Participant with a disability benefit from the Plan and certain other sources
equal to his Disability Benefit as hereinafter specified. Thus, Disability
Benefits described hereunder as payable to Participants will be offset by
disability benefits payable from sources outside the Plan (other than benefits
payable under the relevant Basic Disability Plan) as specified herein.

 

 

5.02 In the event that a Participant has become totally and permanently
disabled for the purposes of the relevant Basic Disability Plan, an annual
Disability Benefit shall be payable in monthly installments under this Plan
during the same period as disability benefits are actually or deemed paid by
the relevant Basic Disability Plan, in an amount equal to sixty percent (60%)
of the Participant’s Basic Earnings. Such Disability Benefit shall be offset
by the Participant’s Other Disability Income, if any. A Participant’s
Disability Benefits shall also be offset by the Participant’s Basic Plan
Benefit, if the Participant’s Basic Disability Plan Benefit does not already
include such an offset.

Section 6

Surviving Spouse’s Benefits

6.01 Upon the death of a Participant or Vested Former Participant, while
employed by the Corporation or an Affiliate, who has completed at least ten
(10) years of Credited Service with the Corporation or an Affiliate and has
attained age fifty-five (55), his Surviving Spouse will be entitled to a
Surviving Spouse’s Benefit under this Plan equal to fifty percent (50%) of the
Retirement Benefit that would have been provided from the Plan had the
Participant or Vested Former Participant retired from the Corporation or an
Affiliate with the Corporation’s consent, on the date of his death.

6.02 Upon the death of a Participant or Vested Former Participant, while
employed by the Corporation or an Affiliate, who has completed at least five
(5) years of Credited Service with the Corporation or an Affiliate and has not
attained age fifty-five (55), his Surviving Spouse will be entitled to a
Surviving Spouse’s Benefit under this Plan equal to fifty percent (50%) of the
Retirement Benefit that would have been provided from the Plan had the
Participant or Vested Former Participant terminated employment with the
Corporation or an Affiliate on the date of his death with the Corporation’s
consent, and elected to have the payment of his Basic Plan Benefit commence at
age fifty-five (55) in the form of a straight life annuity.

6.03 Upon the death of a Vested Former Participant while no longer employed by
the Corporation or an Affiliate, who has not attained age fifty-five (55), his
Surviving Spouse will be entitled to a Surviving Spouse’s Benefit under this
Plan equal to fifty percent (50%) of the Retirement Benefit that would have
been provided from the Plan to the Vested Former Participant at age fifty-five
(55), taking into account whether the Corporation consented to the termination.

6.04 Upon the death of a Participant or Vested Former Participant, while
employed by the Corporation or an Affiliate, who has completed at least five
(5), but less than ten (10) years of Credited Service with the Corporation or
an Affiliate and has attained age fifty-five (55), his Surviving Spouse will be
entitled to a Surviving Spouse’s Benefit under this Plan equal to fifty percent
(50%) of the Retirement Benefit that would have been provided from the Plan had
the Participant or Vested Former Participant terminated employment with the
Corporation or an Affiliate on the date of his death with the Corporation’s
consent and his Basic Plan Benefit commenced immediately in the form of a
straight life annuity.

6.05 Upon the death of a Vested Former Participant while he is receiving
Retirement Benefits, his Surviving Spouse shall receive a Surviving Spouse’s
Benefit equal to fifty percent (50%) of the Retirement Benefit the Vested
Former Participant was receiving at the time of his death.

6.06 Except as provided in Section 6.08, the Surviving Spouse’s Benefit
provided under Section 6.01, 6.04 and 6.05 will be payable monthly, will
commence as of the first day of the month coincident with or next following the
month in which the Participant or Vested Former Participant dies, and will
continue until the first day of the month in which the Surviving Spouse dies.

 

 

6.07 Except as provided in Section 6.08, the Surviving Spouse’s Benefit
provided under Section 6.02 and 6.03 will be payable monthly, will commence as
of the first day of the month coincident with or next following the month in
which the Participant or Vested Former Participant would have attained age
fifty-five (55), and will continue until the first day of the month in which
the Surviving Spouse dies.

6.08 If a Participant or a Vested Former Participant while he was a
Participant has made an Election under Section 4.05 or a Special Election under
Section 4.06 and such Election or Special Election is effective on the date of
such Participant’s or Vested Former Participant’s death, the Surviving Spouse’s
Benefit payable to a Surviving Spouse of such Participant or Vested Former
Participant will be payable in the form or combination of forms of payment so
elected by such Participant or Vested Former Participant pursuant to such
Election or Special Election. The amount of any lump sum payment under this
Section 6.08 shall be the present value of the applicable portion of the
Surviving Spouse’s Benefit payable under the Plan, and such present value shall
be determined using the actuarial assumptions set forth in Section 4.05(a).
Any lump sum distribution of a Surviving Spouse’s Benefit under the Plan shall
fully satisfy all present and future Plan liability with respect to such
Surviving Spouse for such portion or all of such Surviving Spouse’s Benefit so
distributed.

Notwithstanding any Election or Special Election made under Section 4.05 or
4.06, if the lump sum value, determined in the same manner as provided under
Section 4.05(a), of a Surviving Spouse’s Benefit is Ten Thousand Dollars
($10,000) or less at the time such Surviving Spouse’s Benefit is payable under
this Plan, such benefit shall be payable as a lump sum.

Any portion of a Surviving Spouse’s Benefit provided under Section 6.01, 6.04
and 6.05 which is payable as an annuity shall be paid in the manner and at such
time as set forth in Section 6.06, and any such benefit which is payable as a
lump sum shall be paid sixty (60) days after the date when annuity payments
commence, or would commence if any portion of such Surviving Spouse’s Benefit
were payable as an annuity as set forth in Section 6.06.

Any portion of a Surviving Spouse’s Benefit provided under Section 6.02 and
6.03 which is payable as an annuity shall be paid in the manner and at such
time as set forth in Section 6.07, and any such benefit which is payable as a
lump sum shall be paid sixty (60) days after the date when annuity payments
commence, or would commence if any portion of such Surviving Spouse’s Benefit
were payable as an annuity, as set forth in Section 6.07.

6.09 Notwithstanding the foregoing provisions of Section 6, the amount of a
Surviving Spouse’s Benefit shall be reduced by one (1) percentage point for
each year (including a half year or more as a full year) in excess of ten (10)
that the age of the Participant or Vested Former Participant exceeds the age of
the Surviving Spouse.

Section 7

Committee

7.01 The Board and the Committee severally (and not jointly) shall be
responsible for the administration of the Plan. The Committee shall consist of
not less than three (3) nor more than seven (7) members, as may be appointed by
the Board from time to time. Any member of the Committee may resign at will by
notice to the Board or may be removed at any time (with or without cause) by
the Board.

7.02 The members of the Committee may, from time to time, allocate
responsibilities among themselves, and may delegate to any management
committee, employee, director or agent its responsibility to perform any act
hereunder, including, without limitation, those matters involving the exercise
of discretion, provided that such delegation shall be subject to revocation at
any time at its discretion.

 

 

7.03 The Committee (and its delegees) shall have the exclusive authority to
interpret the provisions of the Plan and construe all of its terms (including,
without limitation, all disputed and uncertain terms), to adopt, amend, and
rescind rules and regulations for the administration of the Plan, and generally
to conduct and administer the Plan and to make all determinations in connection
with the Plan as may be necessary or advisable. All such actions of the
Committee shall be conclusive and binding upon all Participants, Former
Participants, Vested Former Participants and Surviving Spouses. All deference
permitted by law shall be given to such interpretations, determinations and
actions.

7.04 Any action to be taken by the Committee 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 (1) Committee member and the secretary of the Committee shall be
sufficient evidence to any person of any action taken pursuant to the Plan.

7.05 Any person, corporation or other entity may serve in more than one (1)
fiduciary capacity under the Plan.

Section 8

Miscellaneous

8.01 The Board may, in its sole discretion, terminate, suspend or amend this
Plan at any time or from time to time, in whole or in part. However, no
termination, suspension or amendment of the Plan may adversely affect a
Participant’s or Vested Former Participant’s vested benefit under the Plan, or
a retired Participant’s or Vested Former Participant’s right or the right of a
Surviving Spouse to receive or to continue to receive a benefit in accordance
with the Plan as in effect on the date immediately preceding the date of such
termination, suspension or amendment.

8.02 Nothing contained herein will confer upon any Participant, Former
Participant or Vested Former Participant the right to be retained in the
Service of the Corporation or any Affiliate, nor will it interfere with the
right of the Corporation or any Affiliate to discharge or otherwise deal with
Participants, Former Participants or Vested Former Participants with respect to
matters of employment without regard to the existence of the Plan.

8.03 Notwithstanding anything herein to the contrary, at any time following
the termination of Service of a Participant or Vested Former Participant, the
Committee may authorize, under uniform rules applicable to all Participants,
Vested Former Participants and Surviving Spouses under the Plan, a lump sum
distribution of a Participant’s, Vested Former Participant’s and/or Surviving
Spouse’s Retirement Benefit or Surviving Spouse’s Benefit under the Plan in an
amount equal to the present value of such Retirement Benefit or Surviving
Spouse’s Benefit, using the actuarial assumptions then in use for funding
purposes under the Moody’s Corporation Retirement Account, in full satisfaction
of all present and future Plan liability with respect to such Participant,
Vested Former Participant and/or Surviving Spouse, if the amount of such
present value is less than Two Hundred Fifty Thousand Dollars ($250,000). Such
lump sum distribution may be made without the consent of the Participant,
Vested Former Participant or Surviving Spouse.

8.04 Notwithstanding anything in this Plan to the contrary, if a Participant
has less than five (5) years of Credited Service at the time of a Change in
Control, and as a result of the Change in Control, and before he completes five
(5) years of Credited Service, (i) the Plan is terminated, (ii) the Participant
is removed from further participation in the Plan, or (iii) the Participant is
terminated as a result of action initiated directly or indirectly by the
Corporation or any Affiliate, such Participant shall be entitled to a Benefit
of twenty percent (20%) of his Average Final Compensation and the Corporation
will remain obligated to pay all benefits under the Plan.

 

 

Notwithstanding anything in this Plan to the contrary, upon the occurrence of a
Change in Control,

	 	(i)	 	no reduction shall be made in a Participant’s or
Vested Former Participant’s Retirement Benefit, notwithstanding
his termination of employment or Retirement prior to age sixty
(60) without the Corporation’s consent;
	 
	 	(ii)	 	the provisions of Section 3.03(c)(i) and (ii) shall
not apply to any Participant, Vested Former Participant or
Surviving Spouse;
	 
	 	(iii)	 	each Participant and Vested Former Participant
already receiving a Retirement Benefit under the Plan shall
receive a lump sum distribution of his unpaid Retirement Benefit
and, if he is married, his Surviving Spouse’s Benefit under the
Plan within thirty (30) days of the Change of Control in an
amount equal to the present value of such Retirement Benefit and
Surviving Spouse’s Benefit in full satisfaction of all present
and future Plan liability with respect to such Participant,
Vested Former Participant and Surviving Spouse, if any, and each
Surviving Spouse already receiving a Surviving Spouse’s Benefit
under the Plan shall receive a lump sum distribution of his
unpaid Surviving Spouse’s Benefit at the same time in an amount
equal to the present value of such Surviving Spouse’s Benefit in
full satisfaction of Plan liability to such Surviving Spouse;
	 
	 	(iv)	 	each Vested Former Participant who is not already
receiving a Retirement Benefit under the Plan shall receive a
lump sum distribution of his unpaid Retirement Benefit and, if
he is married, his Surviving Spouse’s Benefit within thirty (30)
days of the Change in Control in an amount equal to the present
value of such Retirement Benefit and Surviving Spouse’s Benefit,
and each Surviving Spouse of either a Vested Former Participant
or a Participant with five (5) or more years of Credited Service
who is not already receiving a Surviving Spouse’s Benefit under
the Plan shall receive a lump sum distribution of his unpaid
Surviving Spouse’s Benefit at the same time in amount equal to
the present value of such Surviving Spouse’s Benefit;
	 
	 	(v)	 	each Participant with less than five (5) years of
Credited Service who is entitled to a benefit under Section
8.04(a) shall receive a lump sum distribution of the present
value of such Retirement Benefit within thirty (30) days from
the earlier of the date the Plan is terminated, the date he is
removed from further participation in the Plan, or the date his
employment with the Corporation is terminated, and of his
Surviving Spouse’s Benefit based upon the amount of such
Retirement Benefit if he is married on the applicable date; and
	 
	 	(vi)	 	each Participant who is not included in (v) above and
who is not already receiving a Retirement Benefit under the Plan
shall receive

	 	(a)	 	within thirty (30) days of the later to occur
of the date of such Change in Control or the date he
completes five (5) years of Credited Service, a lump sum
distribution of the present value of his accrued Retirement
Benefit under the Plan as of the applicable date and, if he
is married on such date, the present value of his Surviving
Spouse’s Benefit, and
	 
	 	(b)	 	within thirty (30) days from the earliest of
the date of his Retirement or termination of employment with
the Corporation, the date the Plan is terminated or the date
he is removed from further participation in the Plan, a lump
sum distribution of the present value of his additional
Retirement Benefit accrued after the applicable event in (A)
computed as of the applicable date herein

 

 

	 	 	 	set forth in (B) and, if he is married on such applicable date,
the present value of his surviving Spouse’s Benefit.

In determining the amount of the lump sum distributions to be paid under this
Section 8.04, the following actuarial assumptions shall be used: (i) the
interest rate used shall be the interest rate used by the Pension Benefit
Guaranty Corporation for determining the value of immediate annuities as of
January 1st of either the year of the occurrence of the Change in Control or
the Participant’s retirement or termination of employment, whichever is
applicable, (ii) the 1983 Group Annuity Mortality Table shall be used; and
(iii) it shall be assumed that all Participants retired or terminated
employment with the Corporation on the date of the occurrence of the Change in
Control and with the Corporation’s consent for purposes of determining the
amount of the lump sum distribution to be paid upon the occurrence of the
Change in Control.

8.05 The Plan is unfunded, and all payments of benefits hereunder shall be
paid solely on a current disbursement basis from the general funds of the
Company, and no special or separate fund shall be established or other
segregation of assets made to assure such payments; provided, however, that
the Corporation reserves the right to purchase insurance contracts, which may
or may not be in the name of a Participant or Vested Former Participant, or to
establish one or more trusts to provide alternative sources of benefit payments
under this Plan; provided, further, however, that upon the occurrence of a
Potential Change in Control the appropriate officers of the Corporation are
authorized to make such contributions to such trust or trusts as are necessary
to fund the lump sum distributions to Participants required pursuant to Section
8.04 in the event of a Change in Control. In determining the amount of the
necessary contribution to the trust or trusts in the event of a Potential
Change in Control, the following actuarial assumptions shall be used:

	 	(i)	 	the interest rate used shall be the interest rate
used by the Pension Benefit Guaranty Corporation for determining
the value of immediate annuities as of January 1st of the year
of the occurrence of the Potential Change in Control,
	 
	 	(ii)	 	the 1983 Group Annuity Mortality Table shall be used;
and
	 
	 	(iii)	 	it shall be assumed that all Participants will
retire or terminate employment with the Corporation as soon as
practicable after the occurrence of the Potential Change in
Control and with the Corporation’s consent.

The existence of any such insurance contracts, trust or trusts as described in
Section 8.05(a), shall not relieve the Corporation of any liability to make
benefit payments under this Plan, but to the extent any benefit payments are
made from any such insurance contract in the name of the Corporation or any
Affiliate or from any such trust, such payment shall be in satisfaction of and
shall reduce the Corporation’s liabilities under this Plan. Further, in the
event of the Corporation’s bankruptcy or insolvency, all benefits accrued under
this Plan shall immediately become due and payable in a lump sum and all
Participants, Vested Former Participants and Surviving Spouses shall be
entitled to share in the Corporation’s assets in the same manner and to the
same extent as general unsecured creditors of the Corporation.

Participants and Vested Former Participants shall have the status of general
unsecured creditors of the Corporation and this Plan constitutes a mere promise
by the Corporation to make benefit payments at the time or times required
hereunder. No action taken pursuant to the provisions of the Plan shall create
or be construed to create a trust of any kind, or a fiduciary relationship
between the Corporation and any Participant or other person. It is the
intention of the Corporation that this Plan be unfunded for tax purposes and
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended and any trust created by the Corporation in meeting its obligations
under the Plan shall meet the requirements necessary to retain such unfunded
status.

 

 

8.06 All benefits payable under the Plan shall be authorized in writing by
the Committee (or by such person or committee to whom such responsibility may
have been delegated by the Committee) and shall be communicated in writing to
the Participant, Vested Former Participant, or Surviving Spouse. Any
Participant, Vested Former Participant, or Surviving Spouse may apply to the
Committee for payment of any benefit that may be due to him or her under the
Plan. Such application shall set forth the nature of the claim and any
information as the Committee may reasonably request. Upon receipt of any such
application, the Committee shall determine whether or not the Participant,
Vested Former Participant, or Surviving Spouse is entitled to the benefit
hereunder.

If an application for benefits is denied, in whole or in part, the Committee
shall give written notice to any Participant, Vested Former Participant, or
Surviving Spouse of the denial. The notice shall be given within ninety (90)
days after receipt of the Participant’s, Vested Former Participant’s, or
Surviving Spouse’s application unless special circumstances require an
extension for processing the claim. In no event shall such extension exceed a
period of ninety (90) days from the end of such initial review period. The
notice will be delivered to the claimant or sent to the claimant’s last known
address and will include the specific reason or reasons for the denial, a
specific reference or references to pertinent Plan provisions on which the
denial is based, a description of any additional material or information
necessary for the claimant to perfect the claim (which will indicate why such
material or information is needed), and an explanation of the Plan’s claims
review procedure.

If the claimant wishes to appeal the denial of the application for benefits,
the claimant or a duly authorized representative must file a written request
with the Committee for a subsequent review. This request must be made by the
claimant within sixty (60) days after receiving notice of the claim’s denial.
The claimant or representative may review pertinent documents relating to the
claim and its denial, may submit issues and comments in writing to the
Committee. Within sixty (60) days after receipt of such a request for review,
the Committee shall reconsider the claim, and make a decision on the merits of
the claim. If circumstances require an extension of time for processing the
claim, the sixty (60) day period may be extended but in no event more than one
hundred and twenty (120) days after the receipt of a request for review. The
decision on review will be in writing and include specific reasons and
references to the pertinent Plan provisions on which the decision is based.

8.07 If any dispute arises under the Plan between the Corporation and a
Participant, Former Participant, Vested Former Participant or Surviving Spouse
(collectively or individually referred to as “Participant” in this Section
8.07) as to the amount or timing of any benefit payable under the Plan or as to
the persons entitled thereto, such dispute shall be resolved by binding
arbitration proceedings initiated by either party to the dispute in accordance
with the rules of the American Arbitration Association and the results of such
proceedings shall be conclusive on both parties and shall not be subject to
judicial review. If the disputed benefits involve the benefits of a
Participant who is no longer employed by the Corporation or any Affiliate, the
Corporation shall pay or continue to pay the benefits claimed by the
Participant until the results of the arbitration proceedings are determined
unless such claim is patently without merit; provided, however, that if the
results of the arbitration proceedings are adverse to the Participant, then in
such event the recipient of the benefits shall be obligated to repay the excess
benefits to the Corporation. The Corporation expressly acknowledges that the
amounts payable under the Plan are necessary to the livelihood of Participants
and their family members and that any refusal or neglect to pay benefits under
the preceding sentence prior to the resolution of any dispute shall be prima
facie evidence of bad faith on its part and will be conclusive grounds for an
arbitration award resulting in an immediate lump sum payment to the
Participant, of the Participant’s benefits under the Plan then due and payable
to him or her, unless the arbitrator determines that the claim for the disputed
benefits was without merit. The amount of such lump sum payment shall be equal
to the then actuarial value of such benefits calculated by utilizing the
actuarial assumptions then in use for funding purposes under the Moody’s
Corporation Retirement Account. In addition, in the event of any dispute
covered by this Section 8.067 the Corporation agrees to pay
the entire costs of any arbitration proceeding or legal proceeding brought
hereunder, including the fees and expenses of counsel and pension experts
engaged by a Participant and that such expenses shall be reimbursed promptly
upon evidence that such expenses have been incurred without awaiting the
outcome of the arbitration proceedings; provided, however, that such costs and
expenses shall be repaid to the Corporation by the recipient of same if it is
finally determined by the arbitrators that the position taken by such person
was without merit.

8.08 To the maximum extent permitted by law, no benefit under the Plan shall
be assignable or subject in any manner to alienation, sale, transfer, claims of
creditors, pledge, attachment or encumbrances of any kind.

8.09 The Corporation may withhold from any benefit under the Plan an amount
sufficient to satisfy its tax withholding obligations.

8.10 The Plan is established under and will be construed according to the
laws of the State of New York.1998 NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN

 

EX 10.11

    3

NON-EMPLOYEE DIRECTORS’ STOCK INCENTIVE PLAN

Exhibit 10.11

1998 MOODY’S CORPORATION

NON-EMPLOYEE DIRECTORS’ STOCK INCENTIVE PLAN

(as amended and restated as of April 23, 2001)

1. Purpose of the Plan

         The purpose of the Plan is to aid the Company in attracting, retaining and
compensating non-employee directors and to enable them to increase their
ownership of Shares. The Plan will be beneficial to the Company and its
stockholders since it will allow non-employee directors of the Board to have a
greater personal financial stake in the Company through the ownership of
Shares, in addition to underscoring their common interest with stockholders in
increasing the value of the Shares on a long-term basis. As a result of the
distribution of the shares of New D&B owned by the Company to the holder of
record of Shares, the Company has amended and restated the Plan as of the
Distribution Date.

2. Definitions

         The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:

Act: The Securities Exchange Act of 1934, as amended, or any successor thereto.

Award: An Option, Share of Restricted Stock or Performance Share granted
pursuant to the Plan.

Beneficial Owner: As such term is defined in Rule 13d-3 under the Act (or any
successor rule thereto).

Board: The Board of Directors of the Company.

 

 

Change in Control: The occurrence of any of the following events: any
“Person,” as such term is used in Sections 13(d) and 14(d) of the Act, (other
than the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities.

ii) during any period of twenty-four months (not including any period prior to
the Distribution Date), individuals who at the beginning of such period
constitute the Board, and any new Director (other than a Director designated
by a person who has entered into an agreement with the Company to effect a
transaction described in clause (i), (iii) or (iv) of this Section, a Director
designated by any Person (including the Company) 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 a Director designated by any Person who is the Beneficial
Owner, directly or indirectly, of securities of the Company representing 10% or
more of the combined voting power of the Company’s securities) whose election
by the Board or nomination for election by the Company’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.

	 	 	 	iii) the shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation and after which no Person
holds 20% or more of the combined voting power of the then outstanding
securities of the Company or such surviving entity; or
	 
	 	 	 	iv) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company’s assets.

Code: The Internal Revenue Code of 1986, as amended, or any successor thereto.

Committee: The Compensation and Benefits Committee of the Board, or any
successor thereto or other committee designated by the Board to assume the
obligations of the Committee hereunder.

Company: The New Dun & Bradstreet Corporation, a Delaware corporation, to be
renamed “The Dun & Bradstreet Corporation” after June 30, 1998, to be renamed
the Moody Corporation after the Distribution Date.

D&B: The Dun & Bradstreet Corporation, a Delaware corporation.

Disability: Inability to continue to serve as a non-employee director due to a
medically determinable physical or mental impairment which constitutes a
permanent and total disability, as determined by the Committee (excluding any
member thereof whose own Disability is at issue in a given case) based upon
such evidence as it deems necessary and appropriate; provided,
however, that
following the Distribution Date, the Disability of a New D&B Director shall be
determined by the New D&B Committee. A Participant shall not be considered
disabled unless he or she furnishes such medical or other evidence of the
existence of the Disability as the Committee or the New D&B Committee, as the
case may be, in its sole discretion, may require.

 

 

Distribution Date: The date on which the shares of New D&B that are owned by
the Company are distributed to the holders of record of shares of the Company.

Effective Date: The date on which the Plan takes effect, as defined pursuant to
Section 14 of the Plan.

Fair Market Value: On a given date, the arithmetic mean of the high and low
prices of the Shares as reported on such date on the Composite Tape of the
principal national securities exchange on which such Shares are listed or
admitted to trading, or, if no Composite Tape exists for such national
securities exchange on such date, then on the principal national securities
exchange on which such Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on a national securities exchange, the
arithmetic mean of the per Share closing bid price and per Share closing asked
price on such date as quoted on the National Association of Securities Dealers
Automated Quotation System (or such market in which such prices are regularly
quoted), or, if there is no market on which the Shares are regularly quoted,
the Fair Market Value shall be the value established by the Committee in good
faith. If no sale of Shares shall have been reported on such Composite Tape or
such national securities exchange on such date or quoted on the National
Association of Securities Dealers Automated Quotation System on such date, then
the immediately preceding date on which sales of the Shares have been so
reported or quoted shall be used.

New D&B: The New D&B Corporation, a Delaware corporation, to be renamed “The
Dun & Bradstreet Corporation” following the Distribution Date.

New D&B Board: The Board of Directors of New D&B.

New D&B Change in Control: The occurrence of any of the following events:

(i)  any “Person,” as such term is used in Sections 13(d) and 14(d), (other than
New D&B, any trustee or other fiduciary holding securities under an employee
benefit plan of New D&B, or any corporation owned, directly or indirectly, by
the shareholders of New D&B in substantially the same proportions as their
ownership of stock of New D&B), is or becomes the Beneficial Owner, directly or
indirectly, of securities of New D&B representing 20% or more of the combined
voting power of New D&B’s then outstanding securities.

(ii)  during any period of twenty-four months (not including any period prior to
the Distribution Date), individuals who at the beginning of such period
constitute the New D&B Board, and any new Director (other than a Director
designated by a person who has entered into an agreement with New D&B to effect
a transaction described in clause (i), (iii) or (iv) of this Section, a
Director designated by any Person (including New D&B) 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
New D&B Change in Control or a Director designated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of New D&B representing
10% or more of the combined voting power of New D&B’s securities) whose
election by the New D&B Board or nomination for election by New D&B’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.

(iii)  the shareholders of New D&B approve a merger or consolidation of New D&B
with any other corporation, other than a merger or consolidation which would
result in the voting securities of New D&B outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of New D&B or such surviving
entity outstanding immediately after such merger or consolidation and after
which no Person holds 20% or more of the combined voting power of the then
outstanding securities of New D&B or such surviving entity; or

 

 

(iv)  the shareholders of New D&B approve a plan of complete liquidation of New
D&B or an agreement for the sale or disposition by New D&B of all or
substantially all of New D&B’s assets.

New D&B Committee: The Compensation and Benefits Committee of the New D&B
Board, or any successor thereto or other committee designated by the New D&B
Board to assume the obligations of the New D&B Committee hereunder.

New D&B Director: A Participant who is a director of New D&B immediately
following the Distribution Date.

Option: A stock option granted pursuant to Section 6 of the Plan.

Option Price: The purchase price per Share of an Option, as determined pursuant
to Section 6(b) of the Plan.

Participant: Any director of the Company who is not an employee of the Company
or any Subsidiary of the Company as of the date that an Award is granted.

Performance Period: The calendar year or such other period of time as shall be
designated by the Committee from time to time.

Performance Share: A periodic bonus award, payable in unrestricted Shares,
granted pursuant to Section 8(a) of the Plan.

Person: As such term is used for purposes of Section 13(d) or 14(d) of the Act
(or any successor section thereto).

Plan: The 1998 Moody’s Corporation Non-Employee Directors’ Stock Incentive
Plan, as amended and restated.

Restricted Stock: A Share of restricted stock granted pursuant to Section 7 of
the Plan.

Retirement: Termination of service with the Company after such Participant has
attained age 70, regardless of the length of such Participant’s service; or,
with the prior written consent of the Committee (excluding any member thereof
whose own Retirement is at issue in a given case), termination of service at an
earlier age after the Participant has completed six or more years of service
with the Company; provided, however, that following the Distribution Date, the
Retirement of a New D&B Director shall be based on his or her service as a
non-employee director of the Board and the New D&B Board and/or the prior
written consent of the New D&B Committee.

Shares: Shares of common stock, par value $0.01 per share, of the Company.

Subsidiary: A subsidiary corporation, as defined in Section 424(f) of the Code
(or any successor section thereto).

Termination of Service: A Participant’s termination of service with the
Company; provided, however, that following the Distribution Date, a New D&B
Director’s termination of service shall be based on his or her termination of
service with New D&B.

3. Shares Subject to the Plan

         The total number of Shares which may be issued under the Plan is 400,000.
The Shares may consist, in whole or in part, of unissued Shares or treasury
Shares. The issuance of Awards shall reduce the total number of Shares
available under the Plan. Shares which are subject to Awards which terminate
or lapse may be granted again under the Plan.

 

 

4. Administration

         The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two “non-employee directors” within the meaning of Rule
16b-3 under the Act (or any successor rule thereto); provided, however, that
any action permitted to be taken by the Committee may be taken by the Board, in
its discretion. The Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan,
and to make any other determinations that it deems necessary or desirable for
the administration of the Plan. The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan in the manner and to the
extent the Committee deems necessary or desirable. Any decision of the
Committee in the interpretation and administration of the Plan, as described
herein, shall lie within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned (including, but not limited to,
Participants and their beneficiaries or successors).

5. Eligibility

         All Participants shall be eligible to participate under this Plan.

6. Terms and Conditions of Options

         Options granted under the Plan shall be non-qualified stock options for
federal income tax purposes, as evidenced by the related Option agreements, and
shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the Committee
shall determine:

Grants. A Participant may receive, on such dates as determined by the
Committee in its sole discretion, grants consisting of such number of Options
as determined by the Committee in its sole discretion.

Option Price. The Option Price per Share shall be determined by the Committee,
but shall not be less than 100% of the Fair Market Value of the Shares on the
date an Option is granted.

Exercisability. Options granted under the Plan shall be exercisable at such
time and upon such terms and conditions as may be determined by the Committee,
but in no event shall an Option be exercisable more than ten years after the
date it is granted.

Exercise of Options. Except as otherwise provided in the Plan or in a related
Option agreement, an Option may be exercised for all, or from time to time any
part, of the Shares for which it is then exercisable. For purposes of Section
6 of the Plan, the exercise date of an Option shall be the later of the date a
notice of exercise is received by the Company and, if applicable, the date
payment is received by the Company pursuant to clauses (i), (ii) or (iii) in
the following sentence. The purchase price for the Shares as to which an
Option is exercised shall be paid to the Company in full at the time of
exercise at the election of the Participant (i) in cash, (ii) in Shares having
a Fair Market Value equal to the aggregate Option Price for the Shares being
purchased and satisfying such other requirements as may be imposed by the
Committee, (iii) partly in cash and partly in such Shares or (iv) through the
delivery of irrevocable instructions to a broker to deliver promptly to the
Company an amount equal to the aggregate Option Price for the Shares being
purchased. No Participant shall have any rights to dividends or other rights
of a stockholder with respect to Shares subject to an Option until the
occurrence of the exercise date (determined as set forth above) and, if
applicable, the satisfaction of any other conditions imposed by the Committee
pursuant to the Plan.

Exercisability Upon Termination of Service by Death. Upon a Termination of
Service by reason of death after the first anniversary of the date on which an
Option is granted, the unexercised portion of such Option shall immediately
vest in full and

 

 

may thereafter be exercised during the shorter of the
remaining term of the Option or five years after the date of death.

Exercisability Upon Termination of Service by Disability or Retirement. Upon a
Termination of Service by reason of Disability or Retirement after the first
anniversary of the date on which an Option is granted, the unexercised portion
of such Option may thereafter be exercised during the shorter of the remaining
term of the Option or five years after the date of such Termination of Service;
provided, however, that if a Participant dies within a period of five years
after such Termination of Service, the unexercised portion of the Option shall
immediately vest in full and may thereafter be exercised, during the shorter of
the remaining term of the Option or the period that is the longer of five years
after the date of such Termination of Service or one year after the date of
death.

Effect of Other Termination of Service. Upon a Termination of Service by
reason of Disability or Retirement prior to the first anniversary of the date
on which an Option is granted (as described above), then, a pro rata portion of
such Option shall immediately vest in full and may be exercised thereafter,
during the shorter of (A) the remaining term of such Option or (B) five years
after the date of such Termination of Service, for a prorated number of Shares
(rounded down to the nearest whole number of Shares), equal to (i) the number
of Shares subject to such Option multiplied by (ii) a fraction the numerator of
which is the number of days the Participant served on the Board and the New D&B
Board subsequent to the date on which such Option was granted and the
denominator of which is 365. The portion of such Option which is not so
exercisable shall terminate as of the date of Disability or Retirement. Upon a
Termination of Service for any other reason prior to the first anniversary of
the date on which an Option is granted, such Option shall thereupon terminate.
Upon a Termination of Service for any reason other than death,
Disability or Retirement after the first anniversary of the date on which an
Option is granted, the unexercised portion of such Option shall thereupon
terminate.

Nontransferability of Stock Options. Except as otherwise provided in this
Section 6(h), a stock option shall not be transferable by the optionee
otherwise than by will or by the laws of descent and distribution and during
the lifetime of an optionee an option shall be exercisable only by the
optionee. An option exercisable after the death of an optionee or a transferee
pursuant to the following sentence may be exercised by the legatees, personal
representatives or distributees of the optionee or such transferee. The
Committee may, in its discretion, authorize all or a portion of the options
previously granted or to be granted to an optionee to be on terms which permit
irrevocable transfer for no consideration by such optionee to any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, of the optionee, trusts for
the exclusive benefit of these persons, and any other entity owned solely by
these persons (“Eligible Transferees”), provided that (x) the stock option
agreement pursuant to which such options are granted must be approved by the
Committee, and must expressly provide for transferability in a manner
consistent with this Section and (y) subsequent transfers of transferred
options shall be prohibited except those in accordance with the first sentence
of this Section 6(h). The Committee may, in its discretion, amend the
definition of Eligible Transferees to conform to the coverage rules of Form S-8
under the Securities Act of 1933 or any comparable Form from time to time in
effect. Following transfer, any such options shall continue to be subject to
the same terms and conditions as were applicable immediately prior to transfer.
The events of Termination of Service of Sections 6(e), 6(f) and 6(g) hereof
shall continue to be applied with respect to the original optionee, following
which the options shall be exercisable by the transferee only to the extent,
and for the periods specified, in Sections 6(e), 6(f) and 6(g). The Committee
may delegate to a committee consisting of employees of the Company the
authority to authorize transfers, establish terms and conditions upon which
transfers may be made and establish classes of options eligible to transfer
options, as well as to make other determinations with respect to option
transfers.

 

 

7. Terms and Conditions of Restricted Stock

         Restricted Stock granted under the Plan shall be subject to the foregoing
and the following terms and conditions and to such other terms and conditions,
not inconsistent therewith, as the Committee shall determine:

Grants. A Participant may receive, on such dates as determined by the
Committee in its sole discretion, grants consisting of such amounts of
Restricted Stock as determined by the Committee in its sole discretion.

Restrictions. Restricted Stock granted under the Plan may not be sold,
transferred, pledged, assigned or otherwise disposed of under any
circumstances; provided, however, that the foregoing restrictions shall lapse
at such time and upon such terms and conditions as may be specified by the
Committee in the related Award agreement(s).

Vesting. Any grant of Restricted Stock under the Plan shall be subject to a
minimum one-year vesting requirement.

Forfeiture of Grants. Except to the extent otherwise specified by the
Committee in a related Award agreement(s), all Shares of Restricted Stock as to
which restrictions have not previously lapsed pursuant to Section 7(b) of the
Plan shall be forfeited upon a Participant’s Termination of Service for any
reason (including, without limitation, by reason of death, Disability or
Retirement).

Other Provisions. During the period prior to the date on which the foregoing
restrictions lapse, Shares of Restricted Stock shall be registered in the
Participant’s name and such Participant shall have voting rights and receive
dividends with respect to such Restricted Stock.

8. Terms and Conditions of Performance Shares

Establishment of Annual Performance Target Levels and Number of Performance
Shares. Prior to the commencement of a given Performance Period, the Committee
shall establish performance goals for the Company for such performance period.
The Committee shall also establish the number of Performance Shares that would
be payable to Participants upon the attainment of various performance goals
during such Performance Period.

Payment in Unrestricted Shares. As soon as practicable following a given
Performance Period, Participants shall receive unrestricted Shares equal to the
number of Performance Shares earned by such Participant during such Performance
Period. A Participant who did not serve on the Board during an entire
Performance Period shall receive a prorated number of Shares (rounded down to
the nearest whole number of Shares) based upon (i) the number of days during
the Performance Period during which such Participant served on the Board and
(ii) the actual performance results.

Authorization for Committee to Permit Deferral. Notwithstanding Section 8(b)
of the Plan, a Participant may, if and to the extent permitted by the
Committee, elect to defer payment of any unrestricted Shares payable as a
result of any Performance Shares earned by such Participant; provided, however,
that any such election must be made (i) no later than June 30 of the year
immediately preceding the year in which any such unrestricted Shares are to be
paid and (ii) in accordance with such terms and conditions as are established
by the Committee in its sole discretion.

Vesting. Any grant of Performance Shares under the Plan shall be subject to a
minimum one-year vesting requirement.

9. Adjustments Upon Certain Events

         Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:

 

 

Generally. In the event of any change in the outstanding Shares after the
Effective Date by reason of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or exchange of
Shares or other corporate exchange, or any distribution to stockholders of
Shares other than regular cash dividends, the Committee in its sole discretion
and without liability to any person may make such substitution or adjustment,
if any, as it deems to be equitable, as to (i) the number or kind of Shares or
other securities issued or reserved for issuance pursuant to the Plan or
pursuant to outstanding Awards, (ii) the Option Price and/or (iii) any other
affected terms of such Awards.

Change in Control. Upon the occurrence of a Change in Control, (i) all
restrictions on Shares of Restricted Stock shall lapse, (ii) each Participant
shall receive the target number of Performance Shares for the Performance
Period in which the Change in Control occurs (or, if no target number has been
established for such Performance Period, the target number for the immediately
preceding Performance Period shall be used) and (iii) all Stock Options shall
vest and become exercisable.

New D&B Change in Control. Upon the occurrence of a New D&B Change in Control,
with respect to Awards granted prior to the Distribution Date, (i) all
restrictions on Shares of Restricted Stock held by New D&B Directors shall
lapse, (ii) each New D&B Director shall receive the target number of
Performance Shares for the Performance Period in which the New D&B Change in
Control occurs (or, if no target number has been established for such
Performance Period, the target number for the immediately preceding Performance
Period shall be used) and (iii) all Stock Options held by New D&B Directors
shall vest and become exercisable.

10. Successors and Assigns

         The Plan shall be binding on all successors and assigns of the Company and
a Participant, including without limitation, the estate of such Participant and
the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant’s creditors.

11. Amendments or Termination

         The Committee may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of
any Participant under any Award theretofore granted without such Participant’s
consent.

12. Nontransferability of Awards

         Except as provided in Section 6(h) of the Plan, an Award shall not be
transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. During the lifetime of a Participant, an
Award shall be exercisable only by such Participant. An Award exercisable
after the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant. Notwithstanding anything
to the contrary herein, the Committee, in its sole discretion, shall have the
authority to waive this Section 12 (or any part thereof) to the extent that
this Section 12 (or any part thereof) is not required under the rules
promulgated under any law, rule or regulation applicable to the Company.

13. Choice of Law

         The Plan shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to contracts made and to be performed in the
State of Delaware.

14. Effectiveness of the Plan

         The Plan shall be effective as of June 30, 1998.

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