Nonfunded Deferred Compensation Plan for Nonemployee Directors - Moody's Corp.
THE MOODY'S CORPORATION
NONFUNDED DEFERRED COMPENSATION PLAN
FOR NONEMPLOYEE DIRECTORS
1. Members of the Board of Directors ("Directors") of the Company who are
not employees of the Company or any of its subsidiaries ("Nonemployee
Directors") may elect on or before December 31 of any year to have payment of
all or a specified part of all fees payable to them for their services as
Directors (including fees payable to them for services as members of a committee
of the Board of Directors of the Company (the "Board")) during the calendar year
following such election and succeeding calendar years deferred until they cease
to be Directors of the Company. Any person, not an employee, who shall become a
Director during any calendar year, and who was not a Director of the Company on
the preceding December 31, may elect, within 30 days of the date on which his or
her term as a Director begins, to have payment of all or a specified part of
such fees for the remainder of such calendar year and for succeeding calendar
years so deferred. Any such election shall be made by written notice delivered
to the Secretary of the Company. The "Company" means The Dun & Bradstreet
Corporation, to be renamed the "Moody's Corporation" after the shares of The New
D&B Corporation ("New D&B") are distributed as a dividend to the shareholders of
The Dun & Bradstreet Corporation ("D&B") (the "Spinoff").
2. All deferred fees shall be held in the general funds of the Company,
shall be credited to the Director's account and shall be deemed to have been
invested in one or more of the funds (as set forth on the Deferred Compensation
Election Form attached hereto as Exhibit A) in the Addendum to the Company's
Profit Participation Plan (or successor plan) (the "Employee Plan") as such
Director shall have most recently elected. Such election shall be made on a
Deferred
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Compensation Election Form filed with the Secretary of the Company. The
Director's account shall be credited with deferred fees and with the investment
performance of the respective funds in which the account is invested on the same
basis and in the same manner as is applicable to employees participating in the
Employee Plan. Directors may elect to have deferred amounts held and invested in
one or more of the funds in multiples of 10%, except that no Director may elect
to have more than 50% of his or her account invested in the Moody's Common Stock
Fund. Subject to the foregoing investment limitation in the Moody's Common Stock
Fund and to the limitation on multiples of 10%, each Director may, at any time,
make a revised investment election applicable to amounts deferred, or elect to
have the amount credited to his or her account reallocated among the investment
funds, such revised election or reallocation to be effective from and after the
first day of the month following receipt of a Deferred Compensation Election
Form by the Secretary of the Company. In the event a Director fails to make an
investment election, his or her entire account shall be credited to the Special
Fixed Income Fund.
3. With respect to each Nonemployee Director who was a nonemployee
director of D&B prior to the Spinoff and continues to be a Nonemployee Director
of the Company following the Spinoff, each such Director's account shall be
credited with the balance in the Director's account as of the effective date of
the Spinoff under The Dun & Bradstreet Corporation Nonfunded Deferred
Compensation Plan for Non-Employee Directors ("Prior Plan"), giving effect to
the election by each such Director to transfer such funds into the funds
available under the Employee Plan; provided, however, that with respect to
amounts deemed to be invested in the Dun & Bradstreet Common Stock Fund under
the Prior Plan (the "D&B Fund"), each Director shall have (i) an amount of New
D&B stock credited to the Dun & Bradstreet Common Stock Fund under the Plan
equal to the number of shares of New D&B stock such Director would have
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received pursuant to the Spinoff if such Director owned the D&B stock credited
to the D&B Fund as at the record date of the Spinoff and (ii) an amount of
Company stock credited to the Moody's Common Stock Fund under the Plan equal to
the number of deemed shares of D&B stock such Director held under the D&B Fund;
provided, further, that a Director may not reallocate his or her account, or
elect to defer any additional amounts, into the New D&B Common Stock Fund.
4. The aggregate balance in the Director's account, giving effect to the
investment performance of the fund(s) to which deferred fees were credited,
shall be paid to the Director in five or ten annual installments or in a lump
sum, as the Director shall elect in the notice referred to in Paragraph 1 above.
The first installment (or lump sum payment if the Director so elects) shall be
paid on the tenth day of the calendar year immediately following the calendar
year in which the Director ceases to be a Director of the Company, and
subsequent installments shall be made on the tenth day of each succeeding
calendar year until the entire amount credited to the Director's account shall
have been paid. The amount of each installment shall be determined by
multiplying the balance credited to the Director's account as of the December 31
immediately preceding the installment payment date by a fraction, the numerator
of which shall be one and the denominator of which shall be the number of
installment payments over which payment of such amount is to be made, less the
number of installments theretofore made. Thus, if payment is to be made in ten
installments, the fraction for the first installment shall be 1/10th, for the
second installment 1/9th, and so on.
5. If a Director should die before full payment of all amounts credited to
the Director's account, the full amount credited to the account as of December
31 of the year of the Director's death shall be paid on the tenth day of the
calendar year following the year of death to the
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Director's estate or to such beneficiary or beneficiaries as previously
designated by the Director in a written notice delivered to the Secretary of the
Company.
6. A Director's election to defer compensation shall continue until a
Director ceases to be a Director or until the Director changes or terminates
such election by written notice delivered to the Secretary of the Company. Any
such notice of change or termination shall become effective as of the end of the
calendar year in which such notice is given. Amounts credited to the account of
a Director prior to the effective date of such change or termination shall not
be affected thereby and shall be paid to the Director only in accordance with
paragraph 4 (or Paragraph 5 in the event of death) above.
7. The right of a Director to any deferred fees and/or the interest
thereon shall not be subject to assignment by the Director. If a Director does
make an assignment of any deferred fees and/or the interest thereon, the Company
may disregard such assignment and discharge its obligation hereunder by making
payment as though no such assignment has been made.
8. If there is a "Change in Control" of the Company, as defined in
Paragraph 9:
a) The total amount to the credit of each Director's
account as of the date of such Change in Control under the Plan shall
be paid to the Director in a lump sum within 30 days from the date of
such Change in Control; provided, however, if such payment is not made
within such 30-day period, the amount to the credit of the Director's
account shall be credited with interest from the date of such Change in
Control until the actual payment date at an annual rate equal to the
yield on 90-day U.S. Treasury Bills plus one percentage point. For this
purpose the yield on U.S. Treasury Bills shall be the rate published in
The Wall Street Journal on the first business day of the calendar month
in which the Change in Control occurred.
b) The total amount credited to each Director's account
under the Plan from the date of the Change in Control until the date
the Director ceases to be a Director shall be paid to the Director in a
lump sum within 30 days from the date the Director ceases to be a
Director.
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c) If a Director elects to change or terminate an
election with respect to the deferral of fees by written notice
delivered to the Secretary of the Company, and such notice is given
during the calendar year in which a Change in Control occurs and on or
before the date of the Change in Control, the change or termination of
election shall become effective as of the date of the Change in
Control. If such notice is given subsequent to the date of the Change
in Control, it shall become effective as of the end of the calendar
year in which the notice is given.
9. A "Change in Control" of the Company shall mean the occurrence of any
of the following events:
a) any "Person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange 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" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Company's then outstanding securities;
b) during any period of twenty-four months (not
including any period prior to the execution of this Agreement),
individuals who at the beginning of such period constitute the Board,
and any new Director (other than (1) a Director designated by a person
who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) of this Section, (2) 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 (3) 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;
c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation (1) 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 (2) after which no Person would hold 20% or more of
the combined voting power of the then outstanding securities of the
Company or such surviving entity; or
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d) 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.
10. Notwithstanding any provision herein to the contrary, amounts payable
under this Plan shall not be funded and shall be made out of the general funds
of the Company; provided, however, that the Company reserves the right to
establish one or more trusts to provide alternate sources of benefit payments
under this Plan; provided, further, however, that upon the occurrence of a
"Potential Change in Control" of the Company, as defined below, the appropriate
officers of the Company are authorized to make transfers to such a trust fund,
established as an alternate source of benefits payable under the Plan, as are
necessary to fund the lump sum payments to Directors required pursuant to
Paragraph 8 of this Plan in the event of a Change in Control of the Company;
provided, further, however, that if payments are made from such trust fund, such
payments will satisfy the Company's obligations under this Plan to the extent
made from such trust fund.
For the purposes of this Plan, "Potential Change in Control" means:
a) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control of the Company;
b) any person (including the Company) publicly announces
an intention to take or to consider taking actions which if consummated
would constitute a Change in Control of the Company;
c) any person, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company (or a
company owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of
stock of the Company), who is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing 9.5% or more
of the combined voting power of the Company's then outstanding
securities, increases such person's beneficial ownership of such
securities by 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 Company has
occurred.
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11. The Compensation and Benefits Committee of the Board (the "Committee")
shall be responsible for the administration of the Plan 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. The Committee shall have full
authority to interpret the provisions of the Plan and construe all of its 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,
other than those determinations delegated to management employees or independent
third parties by the Board. All of its rules, interpretations and decisions
shall be applied in a uniform manner to all Directors similarly situated and
decisions of the Committee shall be conclusive and binding on all persons. Any
action permitted to be taken by the Committee may be taken by the Board, in its
discretion.
12. Neither participation in the Plan nor any action under the Plan shall
be construed to give any Director a right to be retained in the service of the
Company.
13. The Plan may be modified, amended or revoked at any time by the Board.
14. 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 New York.