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Exhibit 10.28
2000 DUN & BRADSTREET CORPORATION REPLACEMENT PLAN
FOR CERTAIN EMPLOYEES HOLDING DUN & BRADSTREET CORPORATION
EQUITY-BASED AWARDS
1. PURPOSE OF THE PLAN
The purpose of the 2000 Dun & Bradstreet Corporation Replacement Plan
for Certain Employees Holding Dun & Bradstreet Corporation Equity-Based Awards
(the "Plan") is to provide for the granting of replacement awards to New D&B
Employees (as defined below), Moody's Employees (as defined below) and Former
Employees (as defined below) whose outstanding awards under the D&B Plans will
be adjusted pursuant to the Spinoff (as defined below). It is the intention of
the Company that the terms of the replacement awards will (i) together with
awards adjusted by D&B, substantially preserve the value of the adjusted D&B
awards and (ii) except as specifically provided herein, remain substantially
identical to the terms of the adjusted D&B awards.
2. DEFINITIONS
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
A. Act: The Securities Exchange Act of 1934, as amended, or any
successor thereto.
B. Awards: Replacement options, replacement stock appreciation rights,
replacement shares of restricted stock, replacement performance share
awards and replacement special performance share grant awards granted
pursuant to the Plan.
C. Beneficial Owner: As defined in rule 13d-3 under the Act (or any
successor rule thereto).
D. Board: The Board of Directors of the Company.
E. Change in Control: The occurrence of any of the following events:
(i) any "Person" as such term is used in Section 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 company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as their ownership of stock of the Company), becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company representing 20% (30% with respect to Section 12(a)) 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 Effective Date), individuals who at the
beginning of such period
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constitute the Board, and any new director (other than (A) a
director nominated by a Person who has entered into an agreement
with the Company to effect a transaction described in Sections
2(E)(i), (iii) or (iv) of the Plan, (B) a director nominated 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 (C) 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 stockholders was approved in advance 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 stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation (A) 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 (B) after
which no Person would hold 20% (50% with respect to Section
12(a)) or more of the combined voting power of the then
outstanding securities of the Company or such surviving entity;
or
(iv) the stockholders 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.
F. Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
G. 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.
H. Company: The New D&B Corporation, a Delaware corporation to be
renamed "The Dun & Bradstreet Corporation" after the Spinoff.
I. Company Price: As such term is defined in Section 7(a) of the Plan.
J. D&B: The Dun & Bradstreet Corporation, a Delaware corporation to
be renamed the "Moody's Corporation" after the Spinoff.
K. D&B Performance Share Award: As such term is defined in Section
9(a) of the Plan.
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L. D&B Plans: The Employee Plan, the Replacement Plan, the Option Award
and the Restricted Stock Award.
M. D&B Restricted Stock: As such term is defined in Section 10 of the Plan.
N. D&B Special Performance Share Grant Award: As such term is defined in
Section 9(b) of the Plan.
O. D&B Stock Option: As such term is defined in Section 7(a) of the Plan.
P. D&B SAR: As such term is defined in Section 8(a) of the Plan.
Q. Disability: Inability to engage in any substantial gainful activity by
reason of a medically determinable physical or mental impairment which
constitutes a permanent and total disability, as defined in Section 22(e)(3) of
the Code (or any successor section thereto). The determination whether an
Eligible Holder has suffered a Disability shall be made by the Committee, with
respect to a New D&B Employee, and by the Moody's Board with respect to a
Moody's Employee based upon such evidence as it deems necessary and
appropriate. An Employee 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 Moody's Board, as the case may be, in its sole discretion,
may require.
R. Effective Date: The date as of which the Spinoff is effective.
S. Eligible Holders: A New D&B Employee, Former Employee and a Moody's
Employee.
T. Employee Plan. The 1998 Dun & Bradstreet Corporation Key Employees'
Stock Incentive Plan.
U. Fair Market Value: On a given date, the average 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
average 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 Board 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.
V. Former Employees: Certain former employees of D&B and its Subsidiaries
whose awards under the D&B Plans were adjusted pursuant to the Spinoff.
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W. Moody's Board: The Board of Directors of D&B as of the Effective Date.
X. Moody's Change in Control: The occurrence of any of the following
events:
(v) any "Person" as such term is used in Section 13(d) and 14(d) of
the Act (other than D&B, any trustee or other fiduciary holding
securities under an employee benefit plan of D&B, or any company
owned, directly or indirectly, by the stockholders of D&B in
substantially the same proportions as their ownership of stock of
D&B), becomes the Beneficial Owner, directly or indirectly, of
securities of D&B representing 20% (30% with respect to Section 12(a))
or more of the combined voting power of D&B's then outstanding
securities.
(vi) during any period of twenty-four months (not including any period
prior to the Effective Date), individuals who at the beginning of such
period constitute the Moody's Board, and any new director (other than
(A) a director nominated by a Person who has entered into an agreement
with D&B to effect a transaction described in Sections 2(X)(i), (iii)
or (iv) of the Plan, (B) a director nominated by any Person (including
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 Change in Control or
(C) a director designated by any Person who is the Beneficial Owner,
directly or indirectly, of securities of D&B representing 10% or more
of the combined voting power of D&B's securities) whose election by
the Moody's Board or nomination for election by D&B's stockholders was
approved in advance 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;
(vii) the stockholders of D&B approve a merger or consolidation of
D&B with any other corporation, other than a merger or consolidation
(A) which would result in the voting securities of 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 D&B or such surviving entity outstanding
immediately after such merger or consolidation and (B) after which no
Person would hold 20%)(50% with respect to Section 12(a)) or more of
the combined voting power of the then outstanding securities of D&B
or such surviving entity; or
(viii) the stockholders of D&B approve a plan of complete liquidation
of D&B or an agreement for the sale or disposition by D&B of all or
substantially all of D&B's assets.
Y. Moody's Committee: The Compensation and Benefits Committee of the
Moody's Board or any successor thereto or other Committee designated by the
Moody's Board to assume the obligations of the Moody's Committee hereunder.
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Z. Moody's Employees: Certain employees of D&B and its Subsidiaries whose
awards under the D&B Plans were adjusted pursuant to the Spinoff.
AA. New D&B Employees: Certain employees of the Company and its
Subsidiaries whose awards were adjusted under the D&B Plans pursuant to the
Spinoff.
BB. New D&B Restricted Stock: As such term is defined in Section 10 of the
Plan.
CC. Option: A stock option granted pursuant to Section 7 of the Plan.
DD. Option Award: The D&B Stock Option awarded to the Chairman and Chief
Executive Officer of the Company pursuant to his employment agreement dated May
15, 2000.
EE. Person: As such term is used in Section 13(d) or 14(d) of the Act (or
any successor section thereto).
FF. Plan: The 2000 Dun & Bradstreet Corporation Replacement Plan for
Certain Employees Holding Dun & Bradstreet Corporation Equity-Based Awards.
GG. Replacement Plan: The 1998 Dun & Bradstreet Corporation Replacement
Plan for Certain Employees Holding Dun & Bradstreet Corporation Equity-Based
Awards.
HH. Restricted Stock Award: The D&B restricted stock awarded to the
Chairman and Chief Executive Officer of the Company pursuant to his employment
agreement dated May 15, 2000.
II. Shares: Shares of common stock, par value $.01 per share, of the
Company.
JJ. Spinoff: The distribution of the Shares to the public shareholders of
D&B.
KK. Spinoff Date: The date on which the Shares are first distributed to
the public shareholders.
LL. Subsidiary: A subsidiary corporation, as defined in Section 424(f) of
the Code (or any successor section thereto).
MM. Termination of Employment: With respect to a New D&B Employee,
termination of employment with the Company and its Subsidiaries and with
respect to a Moody's Employee, termination of employment with D&B and its
Subsidiaries.
3. STOCK SUBJECT TO THE PLAN
The total number of shares of common stock of the Company ("Shares") which
may be issued under the Plan is equal to the aggregate number of Shares to be
issued as replacement awards, as calculated pursuant to this Plan. The Shares
may consist, in whole or in part, of unissued Shares or treasury shares. After
the initial grant of Awards, no further grant
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shall be made under the Plan.
4. ADMINISTRATION
The Committee shall administer the Plan; provided, however, that any
action permitted to be taken by the Committee may be taken by the Board, in its
discretion. The Committee shall have the authority, consistent with the Plan,
to determine the provisions of the Awards to be granted, to interpret the Plan
and the Awards granted under the Plan, to adopt, amend and rescind rules and
regulations for the administration of the Plan and the Awards and generally to
conduct and administer the Plan and to make all determinations in connection
therewith which may be necessary or advisable, and all such actions of the
Committee shall be binding upon all Eligible Holders. The Committee shall
require payment of any amount the Company may determine to be necessary or
appropriate to withhold for federal, state, local or other taxes as a result of
the payment or exercise of an Award.
5. ELIGIBILITY
Only Eligible Holders shall receive grants of Awards under the Plan. The
granting of an Award under the Plan shall impose no obligation on D&B, the
Company or any Subsidiary to continue the employment of an Eligible Holder and
shall not lessen or affect the right to terminate the employment of such
Eligible Holder.
6. LIMITATIONS
Options hereunder shall only be granted in replacement of D&B Stock
Options (as defined in Section 7(a) of the Plan) held by Eligible Holders
immediately prior to the Spinoff Date.
7. TERMS AND CONDITIONS OF STOCK OPTIONS
Stock options granted under the Plan shall be nonqualified, 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:
(a) Generally. Except as provided in Section 7(b), as of the Spinoff Date,
each unexercised stock option held by an Eligible Holder that was granted under
the D&B Plans (a "D&B Stock Option") shall be adjusted, and such Eligible
Holder shall receive a replacement stock option pursuant to this Plan. The
number of Shares covered by each replacement stock option shall be determined
by multiplying (i) the number of shares of D&B common stock covered by the
adjusted D&B Stock Option by (ii) fifty percent and rounding down the result to
a whole number of shares. The option price of each replacement stock option
shall be determined by multiplying (i) the trading price of the Company as of
the last trade "when issued" immediately prior to the Spinoff Date (the
"Company Price") by a fraction (the "Conversion Ratio"), the numerator of which
is the original option price of the corresponding D&B Stock Option, and the
denominator of which equals the trading price of D&B as of last trade "regular
way" immediately prior to the Spinoff Date (the "D&B Price") rounded down to
the nearest ten thousandth of a cent. Unless otherwise specified in this Plan,
all other terms of the replacement
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stock options shall remain substantially identical to those of the adjusted D&B
Stock Options as set forth in the D&B Plans and related option agreement(s).
(b) Other Stock Options. As of the Spinoff Date, the Option Award shall be
cancelled, and the holder thereof shall receive a replacement stock option
pursuant to this Plan. The number of shares subject to the replacement stock
option shall equal (i) the number of shares subject to the cancelled stock
option multiplied by (ii) a fraction, the numerator of which is the D&B Price,
and the denominator of which is the Company Price, rounded down to a whole
number of shares. The option price of the replacement stock option shall be
determined by multiplying the option price of the cancelled stock option by a
fraction, the numerator of which is the Company Price and the denominator of
which is the D&B Price, rounded down to the nearest whole cent. Unless otherwise
specified in this Plan, all other terms of the replacement stock option shall
remain substantially identical to those of the cancelled stock option.
(c) Exercisability. Except as set forth in the Plan, stock options
granted under the Plan shall have substantially identical terms as those of the
stock options originally granted under the D&B Plans; provided, however, that
in no event shall a replacement stock option be exercisable more than ten years
after the date the original option was granted under the D&B Plans.
(d) Exercise of Stock Options. Except as otherwise provided in the Plan
or the option, a stock option may be exercised for all, or from time to time
any part, of the Shares for which it is then exercisable. 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 Eligible Holder (i) in
cash or its equivalent (e.g., a check), (ii) in Shares of the Company having a
fair market value equal to the 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 of the Company 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. The Committee may permit the Eligible Holder to elect, subject to
such terms and conditions as the Committee shall determine, to have the number
of Shares deliverable to the Eligible Holder as a result of the exercise
reduced by a number sufficient to pay the amount the Company determines to be
necessary to withhold for federal, state, local or other taxes as a result of
the exercise of the option. No Eligible Holder shall have any rights to
dividends or other rights of a shareholder with respect to Shares subject to an
option until the Eligible Holder has given written notice of exercise of the
option, paid in full for such Shares and, if requested, given the
representation described in Paragraph 7(f) of the Plan.
(e) Exercisability Upon Termination of Employment. Upon an Eligible
Holder's Termination of Employment by reason of death, Disability, Retirement
(as defined in the D&B Plan under which the original stock option was granted;
provided, however, that, if applicable such determination shall be made by the
Committee or the Moody's Committee, as the case may be) or by the employer or
by the Eligible Employee for any reason, the option thereafter may be exercised
pursuant to the terms of the D&B Plan under which the original stock option
was granted.
(f) Additional Agreements of Eligible Holder and Restrictions on
Transfer. With respect to stock options granted under the Replacement Plan: (i)
the Committee may require each
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person purchasing Shares pursuant to exercise of a stock option to represent to
and agree with the Company in writing that the Shares are being acquired
without a view to distribution thereof (the certificates for Shares so
purchased may include any legend which the Committee deems appropriate to
reflect any restrictions on transfers); (ii) the Committee also may impose, in
its discretion, as a condition of any option, any restrictions on the
transferability of Shares acquired through the exercise of such option as it
may deem fit; and (iii) without limiting the generality of the foregoing, the
Committee may impose conditions restricting absolutely the transferability of
Shares acquired through the exercise of options for such periods as the
Committee may determine and, further, upon a Termination of Employment during
the period in which such Shares are nontransferable, the Eligible Holder may be
required, if required by the related option agreement, to sell such Shares back
to the Company at such price and on such other terms as the Committee may have
specified in the option agreement.
(g) Nontransferability of Stock Options. Except as otherwise provided in
this Paragraph 7(g), a stock option shall not be transferable by the Eligible
Holder otherwise than by will or by the laws of descent and distribution and
during the lifetime of an Eligible Holder an option shall be exercisable only by
the Eligible Holder. An option exercisable after the death of an Eligible Holder
or a transferee pursuant to the following sentence may be exercised by the
legatees, personal representatives or distributees of the Eligible Holder 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 Eligible Holder
to be on terms which permit irrevocable transfer for no consideration by such
Eligible Holder 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 Eligible Holder, 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 Paragraph 7(g). 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 employment of
Paragraph 7(e) hereof shall continue to be applied with respect to the original
Eligible Holder, following which the options shall be exercisable by the
transferee only to the extent, and for the periods specified, in Paragraph 7(e).
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 Eligible Holders eligible to
transfer options, as well as to make other determinations with respect to option
transfers.
8. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
Stock appreciation rights (including limited stock appreciation
rights) 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:
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(a) Generally. Except as provided in Section 8(b), as of the Spinoff Date,
each unexercised stock appreciation right (including a limited stock
appreciation right) held by an Eligible Holder that was granted under the D&B
Plans (a "D&B SAR") shall be adjusted, and such Eligible Holder shall receive a
replacement stock appreciation right pursuant to this Plan. The number of
shares covered by each replacement stock appreciation right shall be determined
by multiplying (i) the number of shares of D&B common stock covered by the
adjusted D&B SAR by (ii) fifty percent and rounding down the result to a whole
number of shares. The exercise price of each replacement stock appreciation
right shall be determined by multiplying the Company Price by the Conversion
Ratio. Unless otherwise specified in this Plan, all other terms of the
replacement stock appreciation rights shall remain substantially identical to
those of the adjusted D&B SARs as set forth in the applicable D&B Plans and
related D&B SAR agreement(s).
(b) Other Replacement Stock Appreciation Rights. As of the Spinoff Date,
the limited stock appreciation right granted in tandem with the Option Award
shall be cancelled, and the holder thereof shall receive a replacement limited
stock appreciation right pursuant to this Plan. The number of shares subject to
the replacement limited stock option shall equal (i) the number of shares
subject to the cancelled limited stock appreciation right multiplied by (ii) a
fraction, the numerator of which is the D&B Price, and the denominator of which
is the Company Price, rounded down to a whole number of shares. The exercise
price of the replacement limited stock appreciation right shall be determined
by multiplying the exercise price of the cancelled limited stock appreciation
right by a fraction, the numerator of which is the Company Price and the
denominator of which is the D&B Price, rounded down to the nearest whole cent.
Unless otherwise specified in this Plan, all other terms of the replacement
limited stock appreciation right shall remain substantially identical to those
of the cancelled limited stock appreciation right.
(c) Terms. Each stock appreciation right shall entitle an Eligible
Holder to receive from the Company in exchange therefor an amount equal to the
excess of the fair market value on the exercise date of one Share over the
exercise price per Share times the number of Shares covered by the stock
appreciation right, or portion thereof, which is surrendered. The date a notice
of exercise is received by the Company shall be the exercise date. Payment
shall be made in Shares or in cash, or partly in Shares and partly in cash,
valued at such fair market value, all as shall be determined by the Committee.
Stock appreciation rights may be exercised from time to time upon actual
receipt by the Company of written notice of exercise stating the number of
Shares with respect to which the stock appreciation right is being exercised.
No fractional Shares will be issued in payment for stock appreciation rights,
but instead cash will be paid for a fraction or, if the Committee should so
determine, the number of Shares will be rounded downward to the next whole
Share.
(d) Limitations on Exercisability. The Committee shall impose such
conditions upon the exercisability of stock appreciation rights as will result,
except upon the occurrence of an event contemplated by replacement limited stock
appreciation rights granted pursuant to Paragraphs 8(b) and 8(e) or contemplated
by the provisions of Paragraph 12, in the amount to be charged against the
Company's consolidated income by reason of stock appreciation rights not to
exceed, in any one calendar year, two percent of the Company's prior calendar
year's consolidated income before income taxes. The Committee also may impose,
in its discretion, such other conditions upon the exercisability of stock
appreciation rights as it may deem fit.
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(e) Replacement Limited Stock Appreciation Rights. The Committee shall
grant replacement limited stock appreciation rights in substantially the same
manner in which replacement stock appreciation rights are awarded pursuant to
this Section 8 of the Plan. Unless the context otherwise requires, whenever the
term "stock appreciation right" is used in the Plan, such term shall include
limited stock appreciation rights.
9. PERFORMANCE SHARE AWARDS.
(a) Generally. As of the Spinoff Date, each performance share award
granted to a New D&B Employee under the D&B Plans (a "D&B Performance Share
Award") shall be cancelled, and such New D&B Employee shall receive a
replacement performance share award opportunity pursuant to the Plan. The
replacement performance share award opportunity shall equal (i) a number of
Shares determined by multiplying the number of shares of D&B common stock
covered by the original D&B Performance Share Award by fifty percent and
rounding down the result to a whole number of shares and (ii) a cash payment
opportunity equal to the Fair Market Value (as of the date the award is
approved) of a number of shares of D&B equal to the number of shares of D&B
common stock covered by the original D&B Performance Share Award. Actual award
of the replacement performance share award opportunity will be made at the
conclusion of the original performance period based on performance results
versus originally established performance parameters. Unless otherwise
specified in this Plan, all other terms of the replacement performance share
award opportunity shall remain substantially identical to those of the adjusted
D&B Performance Share Award as set forth in the D&B Plans and related award
agreement(s).
(b) Special Performance Share Grant Awards. As of the Spinoff Date, each
special performance share grant award that is based on the appreciation of the
fair market value of a share of common stock of D&B against the appreciation in
the fair market value of the shares of stock of the companies that comprise the
S&P 500 granted to a New D&B Employee under the D&B Plans (a "D&B Special
Performance Share Grant Award") shall be cancelled, and each New D&B Employee
shall receive a replacement special performance share grant award pursuant to
this Plan. Each replacement special performance share grant award shall equal
(i) the number of shares subject to the cancelled D&B Special Performance Share
Grant Award multiplied by (ii) a fraction, the numerator of which is the D&B
Price, and the denominator of which is the Company Price, rounded down to a
whole number of shares. Unless otherwise specified in this Plan, all other terms
of each replacement special performance share grant award shall remain
substantially identical to those of the cancelled D&B Special Performance Share
Grant Award as set forth in the applicable D&B Plans and related award
agreements.
10. TERMS AND CONDITIONS OF RESTRICTED STOCK.
As of the Spinoff Date, restricted stock held by an Eligible Holder
that was granted under the D&B Plans ("D&B Restricted Stock") and restricted
stock received by an Eligible Holder as a result of the Spinoff ("New D&B
Restricted Stock") shall be forfeited, and such Eligible Holder shall receive
replacement shares of Company restricted stock pursuant to this Plan. The
number of shares of Company restricted stock shall equal (i) the number of
shares of forfeited D&B Restricted Stock multiplied by (ii) a fraction, the
numerator of which is the D&B Price, and the denominator of which is the
Company Price, rounded down to a whole number of shares. Unless otherwise
specified in this Plan, all other terms of the replacement
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restricted stock shall remain substantially identical to those of the forfeited
D&B Restricted Stock as set forth in the applicable D&B Plans.
11. TRANSFERS AND LEAVES OF ABSENCE
For purposes of the Plan: (a) a transfer of an employee of the Company
or D&B from the Company or D&B, as the case may be, to a 50% or more owned
subsidiary, partnership, venture or other affiliate (whether or not
incorporated) of the Company or D&B, as the case may be, or vice versa, or from
one such subsidiary, partnership, venture or other affiliate to another, (b) a
leave of absence, duly authorized in writing by the Company or D&B, as the case
may be, for military service or sickness or for any other purpose approved by
the Company or D&B, as the case may be, if the period of such leave does not
exceed 90 days, or (c) a leave of absence in excess of 90 days, duly authorized
in writing by the Company or D&B, as the case may be, provided the employee's
right to re-employment is guaranteed either by statute or by contract, shall not
be deemed a termination of employment under the Plan.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR OTHER EVENTS
(a) With respect to Awards originally granted under the Replacement Plan:
(i) Generally. Upon changes in the Shares by reason of a stock
dividend, stock split, reverse split, recapitalization, merger,
consolidation, combination or exchange of Shares, separation,
reorganization or liquidation, the number and class of Shares
available under the Plan as to which stock options or stock
appreciation rights may be granted (both in the aggregate and to any
one Eligible Holder), the number and class of Shares under each option
and the option price per Share and the terms of stock appreciation
rights and the number shall be correspondingly adjusted by the
Committee, such adjustments to be made in the case of outstanding
options without change in the total price applicable to such options.
(ii) Change in Control. In the event of a merger, consolidation,
combination, reorganization or other transaction in which the Company
will not be the surviving corporation, an Eligible Holder shall be
entitled to options on that number of shares of stock in the new
corporation which the Eligible Holder would have received had the
Eligible Holder exercised all of the unexercised options available to
the Eligible Holder under the Plan, whether or not then exercisable,
at the instant immediately prior to the effective date of such
transaction, and if such unexercised options had related stock
appreciation rights the Eligible Holder also will receive new stock
appreciation rights related to the new options. Thereafter,
adjustments as provided above shall relate to the options or stock
appreciation rights of the new corporation. Except as otherwise
specifically provided in the stock option or stock appreciation right,
in the event of a Change in Control, merger, consolidation,
combination, reorganization or other transaction in which the
shareholders of the Company will receive cash or securities (other
than common stock) or in the event that an offer is made to the
holders of common stock of the Company to sell or exchange such common
stock for cash,
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12
securities or stock of another corporation and such offer, if
accepted, would result in the offeror becoming the owner of (a) at
least 50% of the outstanding common stock of the Company or (b) such
lesser percentage of the outstanding common stock which the Committee
in its sole discretion determines will materially adversely affect the
market value of the common stock after the tender or exchange offer,
the Committee shall, prior to the shareholders' vote on such
transaction or prior to the expiration date (without extensions) of
the tender or exchange offer, with respect to stock options and stock
appreciation rights, (i) accelerate the time of exercise so that all
stock options and stock appreciation rights which are outstanding
shall become immediately exercisable in full without regard to any
limitations of time or amount otherwise contained in the Plan or the
options or stock appreciation rights and/or (ii) determine that the
options and stock appreciation rights shall be adjusted and make such
adjustments by substituting for common stock of the Company subject to
options and stock appreciation rights, common stock of the surviving
corporation or offeror if such stock of such corporation is publicly
traded or, if such stock is not publicly traded, by substituting
common stock of a parent of the surviving corporation or offeror if
the stock of such parent is publicly traded, in which event the
aggregate option price shall remain the same and the number of Shares
subject to option shall be the number of Shares which could have been
purchased on the closing day of such transaction or the expiration
date of the offer with the proceeds which would have been received by
the Eligible Holder if the option had been exercised in full prior to
such transaction or expiration date and the Eligible Holder had
exchanged all of such Shares in the transaction or sold or exchanged
all of such Shares pursuant to the tender or exchange offer, and if
any such option has related stock appreciation rights, the stock
appreciation rights shall likewise be adjusted.
(iii) Moody's Change in Control. Except as otherwise specifically
provided in the stock option or stock appreciation right, in the event
of a Moody's Change in Control, the Moody's Committee may accelerate
the time of exercise so that all stock options and stock appreciation
rights held by a Moody's Employee which are outstanding shall become
immediately exercisable in full without regard to any limitations of
time or amount otherwise contained in the Plan or the options or stock
appreciation rights.
(b) With respect to Awards originally granted under the Employee Plan:
(i) Generally. In the event of any change in the outstanding Shares 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 shall make such substitution or adjustment, if any, as it,
in its sole discretion and without liability to any person, deems to
be equitable, as to (A) the number or kind of Shares or other
securities issued or reserved for issuance pursuant to the Plan or
pursuant to outstanding Awards, (B) the Option Price and/or (C) any
other affected terms of such Awards.
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13
(ii) Change in Control. In the event of a Change in Control, (A)
each Option and stock appreciation right shall become immediately
vested and exercisable; provided, however, that if such Awards
are not exercised prior to the date of the consummation of the
Change in Control, the Committee, in its sole discretion and
without liability to any person may provide for (1) the payment
of a cash amount in exchange for the cancellation of such Award
and/or (2) the issuance of substitute Awards that will
substantially preserve the value, rights and benefits of any
affected Awards (previously granted hereunder) as of the date of
the consummation of the Change in Control, (B) restrictions on
Awards of restricted stock shall lapse and (C) performance share
awards and special performance share awards shall become payable
as if targets for the current period were satisfied at 100%.
(iii) Moody's Change in Control. In the event of a Moody's
Change in Control, (A) each Option and stock appreciation right
held by a Moody's Employee shall become immediately vested and
exercisable; (B) restrictions on Awards of restricted stock held
by Moody's Employees shall lapse and (C) performance share
awards and special performance share awards shall become payable
as if targets for the current period were satisfied at 100%.
13. AMENDMENTS
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of
any Eligible Holder under any award theretofore granted, without the Eligible
Holder's consent, or which, without the approval of the shareholders of the
Company, would:
(a) Except as is provided in Paragraph 12 of the Plan, increase the total
number of Shares reserved for the purposes of the Plan.
(b) Decrease the option price to less than 100% of fair market value on
the date of grant of the original option under the D&B Plans.
(c) Change the employees (or class of employees) eligible to receive
awards under the Plan.
(d) Materially increase the benefits accruing to employees participating
under the Plan.
14. EFFECTIVENESS OF THE PLAN AND AMENDMENTS
The Plan shall be effective as of the Spinoff Date.
