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Exhibit 10.10
SUPPLEMENTAL EXECUTIVE BENEFIT PLAN
OF
MOODY'S CORPORATION
PREAMBLE
The principal purpose of this Supplemental Executive Benefit Plan is to
ensure the payment of a competitive level of retirement income and disability
benefits in order to attract, retain and motivate selected executives of the
Corporation and its affiliated companies.
SECTION 1
DEFINITIONS
1.01. "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.
1.02. "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.
1.03. "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.
1.04. "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.
1.05. "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
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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).
1.06. "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.
1.07. "Basic Plan Benefit" means the amount of benefits payable from the
Basic Plan to a Participant or Vested Former Participant.
1.08. "Board" means the Board of Directors of Moody's Corporation.
1.09. "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 (i) a
merger or consolidation which
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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.
1.10. "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.11. "Committee" means the Compensation and Benefits Committee of the
Board.
1.12. "Corporation" means Moody's Corporation, a Delaware corporation, and
any successor or assigns thereto.
1.13. "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.
1.14. "Disability Benefit" means the benefits provided to Participants and
Vested Former Participants pursuant to Section 5 of the Plan.
1.15. "Effective Date" means September 30, 2000.
1.16. "Election" means an election as to the form of benefit payment made
pursuant to Section 4.5 of the Plan.
1.17. "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.
1.18. "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.
1.19. "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
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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.
1.20. "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:
(a) 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 Internal Revenue Code; and
(b) any supplemental executive retirement plan of any Affiliate; and
(c) 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.
1.21. "Participant" means an employee of the Corporation or an Affiliate
who becomes a participant in the Plan pursuant to Section 2 and has not been
removed pursuant to Section 2.2.
1.22. "Plan" means this Supplemental Executive Benefit Plan of Moody's
Corporation, as amended from time to time.
1.23. "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;
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(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.
1.24. "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.
1.25. "Retirement Benefit" means the benefits provided to Participants and
Vested Former Participants pursuant to Section 4 of the Plan.
1.26. "Special Election" means an election as to the form of benefit
payment made pursuant to Section 4.6 of the Plan.
1.27. "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.
1.28. "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.
1.29. "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.
1.30. 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
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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
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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 3.3, 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 3.3(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 3.4(b).
(b) The amount described under this Section 3.4(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 3.3.
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
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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.
4.02. (a) The Retirement Benefit of a Participant or Vested Former
Participant upon Retirement shall be an annual benefit equal to forty percent
(40%) of his Average Final Compensation with respect to his first ten (10) years
of credited service, plus two percent (2%) of Average Final Compensation for
each year of Credited Service in excess of ten (10) years of Credited Service,
but not to exceed 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. If such a Participant or Vested
Former Participant retires before 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 reaching age sixty
(60).
(b) Any portion of the Retirement Benefit provided under this
Section 4.2 payable in the form of an annuity pursuant to Section 4.4
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 retires, and any portion of such
Retirement Benefit payable in a lump sum pursuant to Section 4.4 shall be
paid on the date that is sixty (60) days after the date when annuity
payments under this Section 4.2 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.
4.03. (a) Subject to Section 4.3(c), the Retirement Benefit of a
Participant or Vested Former Participant who terminates employment with the
Corporation with five (5) or more years of Credited Service before he is
eligible to retire under the relevant Basic Plan shall be an annual benefit
equal to twenty percent (20%) of his Average Final Compensation with respect to
his first five (5) years of Credited Service, plus four percent (4%) of Average
Final Compensation for each additional year of Credited Service between six (6)
and ten (10) years of Credited Service, plus two percent (2%) of Average Final
Compensation for each additional year of Credited Service from eleven (11) to
twenty (20) years, 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.
(b) Any portion of the Retirement Benefit provided under this
Section 4.3 payable in the form of an annuity pursuant to Section 4.4
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 reaches age fifty-five (55) or
the date of his termination, if later, and any portion of such Retirement
Benefit payable in a lump sum pursuant to Section 4.4 shall be paid on the
date that is sixty (60) days after the date when annuity payments under
this Section 4.3 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.
(c) If a Participant or Vested Former Participant terminates
employment with the Corporation without the Corporation's consent, and the
payment of his Retirement
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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 an annuity, prior to his reaching age sixty (60).
4.04. (a) Except as provided under Section 4.4(b) or Section 4.4(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 4.5 or a Special
Election pursuant to Section 4.6 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 4.5 or
Section 4.6, 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 4.5 or 4.6, if the lump sum value, determined in the same manner
as provided under Section 4.5(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
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(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
4.4(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 4.5(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 4.5(b) are satisfied. A Participant may elect a payment form different
than the payment form previously elected by him under this Section 4.5(a) by
filing a revised election form; provided, that any such new Election shall be
effective only if the conditions of Section 4.5(b) are satisfied with respect to
such new Election. Any prior Election made by a Participant that has satisfied
the conditions of Section 4.5(b) remains effective for purposes of the Plan
until such Participant has made a new Election satisfying the conditions of
Section 4.5(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 4.5
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.
(b) A Participant's Election under Section 4.5(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 4.5(d), and (ii) such Participant
complies with the administrative procedures set forth by the Committee
with respect to the making of the Election.
(c) A Participant making an election under Section 4.5(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%).
(d) In the event a Participant who has made an Election pursuant to
Section 4.5(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 4.5(b)(i), immediately following the Election Date
of such Election, the condition under Section 4.5(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
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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 4.6 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 1993 Group Annuity
Mortality Table.
4.07. Subject to Section 3.1, Section 3.3, Section 3.4 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. (a) Subject to Section 4.8(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.
(b) In case any assessment shall be made against a Participant,
Vested Former Participant or Surviving Spouse as described in Section
4.8(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.
(c) The Corporation shall not be liable for any payments under this
Section 4.8 with respect to any assessment described in Section 4.8(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 4.8(b) or, following demand by the Corporation, has
not made the deposit to avoid additional interest or penalties as
described in Section 4.8(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
<PAGE> 12
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for the IRS, (ii) the Corporation has been notified and allowed to
participate in the manner as provided in Section 4.8(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 4.8(d), the Corporation agrees to indemnify the indemnified party
to the extent set forth in this Section 4.8.
(d) In the event a final settlement or judgment with respect to an
assessment as described under Section 4.8 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 4.8, 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 4.5(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.
<PAGE> 13
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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 6.8, the Surviving Spouse's Benefit
provided under Section 6.1, 6.4 and 6.5 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.
<PAGE> 14
14
6.07. Except as provided in Section 6.8, the Surviving Spouse's Benefit
provided under Section 6.2 and 6.3 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. (a) If a Participant or a Vested Former Participant while he was a
Participant has made an Election under Section 4.5 or a Special Election under
Section 4.6 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 6.8 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 4.5(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.
(b) Notwithstanding any Election or Special Election made under Section
4.5 or 4.6, if the lump sum value, determined in the same manner as
provided under Section 4.5(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.
(c) Any portion of a Surviving Spouse's Benefit provided under Section
6.1, 6.4 and 6.5 which is payable as an annuity shall be paid in the
manner and at such time as set forth in Section 6.6, 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 6.6.
(d) Any portion of a Surviving Spouse's Benefit provided under Section
6.2 and 6.3 which is payable as an annuity shall be paid in the
manner and at such time as set forth in Section 6.7, 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 6.7.
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.
<PAGE> 15
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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
<PAGE> 16
16
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 Dun & Bradstreet 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. (a) 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.
(b) 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 3.3(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;
<PAGE> 17
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(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 8.4(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 8.4, 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
<PAGE> 18
18
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. (a) The Plan is unfunded, and the Corporation will make Plan benefit
payments solely on a current disbursement basis, 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 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 Plan Participants required pursuant to Section 8.4 of
this Plan 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 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.
(b) Members and Vested Former Members 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. 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. 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 8.6)
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
<PAGE> 19
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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, 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 8.6 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.
8.07. 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.
8.08. The Corporation may withhold from any benefit under the Plan an
amount sufficient to satisfy its tax withholding obligations.
8.09. The Plan is established under and will be construed according to the
laws of the State of New York.
