Profit Participation Benefit Equalization Plan - Moody's Corp.
PROFIT PARTICIPATION BENEFIT EQUALIZATION PLAN
OF
MOODY'S CORPORATION
I. Purpose of the Plan
The purpose of the Profit Participation Benefit Equalization Plan of
Moody's Corporation (the "Plan") is to provide a means of equalizing the
benefits of those employees of Moody's Corporation ("the Corporation") and its
subsidiaries participating in the Profit Participation Plan of Moody's
Corporation (the "Profit Participation Plan"), whose funded benefits under the
Profit Participation Plan are or will be limited by the application of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the
Internal Revenue Code of 1986, as amended (the "Code"), or any applicable law or
regulation. The Plan is intended to be an "excess benefit plan" as that term is
defined in Section 3(36) of ERISA with respect to those participants whose
benefits under the Profit Participation Plan have been limited by Section 415 of
the Code, and a "top hat" plan meeting the requirements of Sections 201(2),
301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA with respect to those participants
whose benefits under the Profit Participation Plan have been limited by Section
401(a)(17) of the Code.
II. Administration of the Plan
The Board of Directors ("Board") of the Corporation and the Compensation
and Benefits Committee appointed by the Board (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 be removed at any time
(with or without cause) by the Board.
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.
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
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Participants and Surviving Spouses. All deference permitted by law shall be
given to such interpretations, determinations and actions.
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 Committee member and the secretary of the Committee shall be sufficient
evidence to any person of any action taken pursuant to the Plan.
Any person, corporation or other entity may serve in more than one (1)
fiduciary capacity under the Plan.
III. Participation in the Plan
All members of the Profit Participation Plan shall be eligible to
participate in this Plan whenever their benefits under the Profit Participation
Plan, as from time to time in effect, would exceed the limitations on benefits
and contributions imposed by Sections 401 or 415 or any other applicable Section
of the Code, calculated from and after September 2, 1974. For purposes of this
Plan, benefits of a participant in this Plan shall be determined as though no
provision were contained in the Profit Participation Plan incorporating
limitations imposed by Sections 401 or 415 or any other Section of the Code.
IV. Equalized Benefits
If member participating contributions or Company contributions to the
Profit Participation Plan are suspended during any calendar year because any
such contributions would cause the participant's account under such plan to
exceed the benefit limitations related to such plan as described in Section III
of this Plan, the Corporation shall pay the participant, on or about March 1st
of the following year, an amount equal to:
(a) the Company contributions that otherwise would have been credited to
such participant's account under the Profit Participation Plan for the balance
of the year in which such suspension occurs, as if no provision were set forth
therein incorporating limitations imposed by Section 401, 415 or any other
applicable Section of the Code, and the participant had continued his
participating contributions to the Profit Participation Plan at the rate in
effect at the time such contributions were suspended for the balance of the year
in which such suspension occurs, plus
(b) an interest factor equal to one-half (1/2) of the annual return which
would have been received by the participant had such payment been invested
eighty percent (80%) in the Blended Managed Income Portfolio of the Profit
Participation Plan and twenty percent (20%) in the US Equity Index Commingled
Pool of the Profit Participation Plan during the year in which such suspension
occurs, less
(c) any applicable withholding taxes.
Effective with respect to calendar years beginning on or after January 1,
2001, no participant shall be eligible to receive a payment under this Section
IV unless he or she is an
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employee of the Corporation or any participating affiliate or subsidiary as of
the last day of the calendar year for which the payment is made.
V. Change in Control
Upon the occurrence of a "Change in Control", each participant under the
Plan shall receive a lump sum distribution equal to:
(a) the total amount which such participant had accrued under the Plan
which has not yet been distributed to such participant pursuant to Section IV(a)
hereof as of the date of such Change in Control, plus
(b) an interest factor equal to one-half (1/2) of the return which would
have been received by the participant had such amount been invested eighty
percent (80%) in the Blended Managed Income Portfolio of the Profit
Participation Plan and twenty (20%) in the US Equity Index Commingled Pool of
the Profit Participation Plan during the portion of the calendar year subsequent
to the date contributions to such participant's account were suspended under the
Profit Participation Plan and prior to such Change in Control, less
(c) any applicable withholding taxes.
Any such lump sum distribution shall be paid to the participant within
sixty (60) days of the Change in Control, provided, however, that any such
payment will not prevent the further accrual of benefits under the Plan after
the date of such Change in Control.
(d) For purposes of this Plan, a "Change in Control" shall be deemed
to have occurred if
(i) 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;
(ii) 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 (1) 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), (2) a director designated by
any Person (including the Corporation) who publicly announces
an intention to take or
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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 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;
(iii) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other company, other
than (1) a merger or consolidation 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 (2) 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
(iv) 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.
VI. Miscellaneous
This Plan may be terminated at any time by the Board of Directors of the
Corporation, in which event the rights of participants to their accrued benefits
shall become nonforfeitable. This Plan may also be amended at any time by the
Board of Directors of the Corporation, except that no such amendment shall
deprive any participant of his benefits accrued at the time of such amendment.
Benefits payable under this Plan shall not be funded and shall be made out
of the general funds of the Corporation; provided, however, that the Corporation
reserves the right to establish a trust fund as an alternate source of benefits
payable under the Plan and to the extent payments are made from such trust, such
payments will satisfy the Corporation's obligations under this Plan.
No right to payment or any other interest under this Plan may be
alienated, sold, transferred, pledged, assigned, or made subject to attachment,
execution, or levy of any kind.
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Nothing in this Plan shall be construed as giving any employee the right
to be retained in the employ of the Corporation. The Corporation expressly
reserves the right to dismiss any employee at any time without regard to the
effect which such dismissal might have upon him under the Plan.
This Plan shall be construed, administered and enforced according to the
laws of the State of New York.
VII. Effective Date
This Plan shall be effective as of September 30, 2000, upon its adoption
by the Board of Directors of Moody's Corporation.