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Exhibit
10.39
PENSION BENEFIT
EQUALIZATION PLAN
OF
MOODY’S
CORPORATION
Amended and Restated
Effective as of January 1, 2008
The purpose of the Pension Benefit
Equalization Plan of Moody’s Corporation (the
“Plan”) is to provide a means of equalizing the
benefits of those employees of Moody’s Corporation (the
“Corporation”) and its subsidiaries participating in
the Retirement Account of Moody’s Corporation (the
“Retirement Account”) whose funded benefits under the
Retirement Account are or will be limited by the application of the
Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), the Internal Revenue Code of 1986, as
amended (the “Code”) or any applicable law or
regulation. The Plan is intended to be an “excess benefit
plan”, as that term is defined in Section 3(36) of
ERISA, with respect to those participants whose benefits under the
Retirement Account have been limited by Section 415 of the
Code, and a “top hat” plan meeting the requirements of
Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA with
respect to those participants whose benefits under the Retirement
Account have been limited by Section 401(a)(17) of the Code.
The Plan is hereby amended and restated effective as of
January 1, 2008 to comply with the requirements of
Section 409A of the Code (“Section 409A”), and
shall be interpreted accordingly. The provisions of the Plan as in
effect on December 31, 2007 apply to any participant whose
benefits commenced on or before that date.
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ADMINISTRATION OF THE PLAN |
The Board of Directors
(“Board”) of the Corporation and the Compensation and
Benefits Committee appointed by the Board (the
“Committee”) severally (and not jointly) shall be
responsible for the administration of the Plan. The Committee shall
consist of not less than three (3) nor more than seven
(7) members, as may be appointed by the Board from time to
time. Any member of the Committee may resign at will by notice to
the Board or be removed at any time (with or without cause) by the
Board.
The members of the Committee may from
time to time allocate responsibilities among themselves and may
delegate to any management committee, employee, director or agent
its responsibility to perform any act hereunder, including without
limitation those matters involving the exercise of discretion,
provided that such delegation shall be subject to revocation at any
time at its discretion.
The Committee (and its delegees) shall
have the exclusive authority to interpret the provisions of the
Plan and construe all of its terms (including, without limitation,
all disputed and uncertain terms), to adopt, amend, and rescind
rules and regulations for the administration of the Plan, and
generally to conduct and administer the Plan and to make all
determinations in connection with the Plan as may be necessary or
advisable. All such actions of the Committee shall be conclusive
and binding upon all Participants, Former Participants, Vested
Former Participants and Surviving Spouses. All deference permitted
by law shall be given to such interpretations, determinations and
actions.
Any action to be taken by the Committee
shall be taken by a majority of its members, either at a meeting or
by written instrument approved by such majority in the absence of a
meeting. A written resolution or memorandum signed by one Committee
member and the secretary of the Committee shall be sufficient
evidence to any person of any action taken pursuant to the
Plan.
Any person, corporation or other entity
may serve in more than one fiduciary capacity under the
Plan.
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PARTICIPATION IN THE PLAN |
All members of the Retirement Account
shall be eligible to participate in this Plan whenever their
benefits under the Retirement Account, as from time to time in
effect, would exceed the limitations on benefits and contributions
imposed by Sections 401(a)(17), 415(b) or any other applicable
Section of the Code, calculated from and after September 2,
1974. For purposes of this Plan, benefits of a participant in this
Plan shall be determined as though no provision were contained in
the Retirement Account incorporating limitations imposed by
Sections 401(a)(17), 415(b) or any other Section of the
Code.
The Corporation shall pay to each
eligible member of the Retirement Account and his beneficiaries a
supplemental pension benefit equal to the benefit which would have
been payable to them under the Retirement Account, as if no
provision were set forth therein incorporating limitations imposed
by Sections 401(a)(17), 415(b) or any other applicable Section of
the Code, to the extent that such benefit otherwise payable under
the Retirement Account exceeds the benefit limitations related to
the Retirement Account as described in Section III of this
Plan.
A participant’s Grandfathered
Benefit shall be paid as follows:
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(a) |
Subject to Section XI of this Plan, such supplemental pension
benefits shall be payable in accordance with all of the terms and
conditions applicable to the participant’s benefits under the
Retirement Account, including whatever optional benefits he may
have elected; provided, however, if an Election (as defined in
Section VIII of this Plan) or a Special Election (as defined in
Section IX of this Plan) has been made and becomes effective prior
to the date when benefits under this Plan would otherwise be
payable, the form of payment of benefits under this Plan shall be
in the form so elected pursuant to such Election or Special
Election; provided further, that notwithstanding any Election or
Special Election, if the lump sum value, determined in the same
manner as provided under Section VIII below, of the benefits
payable under this Plan is Ten Thousand Dollars ($10,000) or less
at the time such benefits are payable under this Plan, such
benefits shall be payable as a lump sum. |
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(b) |
Any portion of the benefits payable under this Plan as a lump
sum, including any amounts payable as a lump sum under Section IV,
shall be paid sixty (60) days after the date when payments of
the same benefits under this Plan, if payable in the form of an
annuity, would otherwise commence, or as soon as practicable
thereafter, provided the Committee has approved such payment. Any
such lump sum distribution of a participant’s or
beneficiary’s benefits under this Plan shall fully satisfy
all present and future Plan liability with respect to such
participant or beneficiary for such portion or all of such benefits
so distributed. Any portion of the benefits payable under this Plan
as an annuity shall commence on the date when annuity benefits
under this Plan would otherwise commence, without regard to any
Election or Special Election. |
Subject to Section XI of this Plan, a
Participant’s Non-Grandfathered Benefit under the Plan shall
be paid in a lump sum on the six-month anniversary of the
participant’s “separation from service” (as
defined in guidance issued pursuant to
Section 409A).
For purposes of the Plan:
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(x) |
A participant’s “Grandfathered Benefit” means
a participant’s vested benefit under the Plan as of
December 31, 2004, determined in accordance with the
principles of Q&A-17(a) of IRS Notice 2005-1 or any applicable
successor guidance issued by the Internal Revenue Service of the
U.S. Treasury Department. Notwithstanding the foregoing, no
participant who is an active employee of the Corporation or any
subsidiary after December 31, 2004 shall be treated as having
any Grandfathered Benefit. |
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(y) |
A participant’s “Non-Grandfathered Benefit”
means the entire benefit of a participant who does not have a
Grandfathered Benefit. |
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PAYMENTS OF BENEFITS IN THE EVENT OF DEATH |
In case of the death of the participant,
the Grandfathered Benefit shall, where applicable and subject to
Section XI of this Plan, be distributed to the surviving
beneficiary who has been designated to receive benefits under the
Retirement Account and in the manner which has been elected under
the Retirement Account; provided, however, if an Election (as
defined in Section VIII of this Plan) or a Special Election (as
defined in Section IX of this Plan) has been made and becomes
effective prior to the date when benefits under this Plan would
otherwise be payable, the form of payment of benefits payable to
such surviving beneficiary under this Plan shall be in the form so
elected pursuant to such Election or Special Election; provided
further, that notwithstanding any Election or Special Election, if
the lump sum value, determined in the same manner as provided under
Section VIII below, of the benefits payable under this Plan is Ten
Thousand Dollars ($10,000) or less at the time such benefits are
payable to such surviving beneficiary under this Plan, such
benefits shall be payable as a lump sum.
In the case of the death of the
participant, the Non-Grandfathered Benefit shall, where applicable
and subject to Section XI of the Plan, be distributed to the
surviving beneficiary who has been designated to receive benefits
under the Retirement Account in the form of a lump sum as soon as
administratively practicable following the participant’s
death.
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If the participant has not designated a
beneficiary under the Retirement Account, or if no such beneficiary
is living at the time of the participant’s death, the amount,
if any, in the participant’s account that is distributable
upon his death shall be distributed to the person or persons who
would otherwise be entitled to receive a distribution of the
participant’s Retirement Account benefits. Payment to such
person or persons shall completely discharge the Plan with respect
to the amount so paid.
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(a) |
Upon the occurrence of a “Change in Control” of the
Corporation, as such term is defined below, |
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(i) |
each participant and beneficiary already receiving benefits
and/or survivor’s benefits under the Plan shall receive a
lump sum distribution of their unpaid benefits and/or
survivor’s benefits under the Plan in an amount equal to the
present value of such benefits and/or survivor’s benefits in
full satisfaction of all present and future Plan liability with
respect to such participant or beneficiary, and |
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(ii) |
each vested participant who is not already receiving benefits
under the Plan shall receive (a) a lump sum distribution of
the present value of his accrued benefit under the Plan as of the
date of such Change in Control, within thirty (30) days of the
date of such Change in Control and (b) a lump sum distribution
of the present value of his additional benefit, if any, accrued
under the Plan from the date of the Change in Control until the
date he retires or terminates employment with the Corporation
(x) within thirty (30) days from the date of the
participant’s retirement or termination of employment with
the Corporation with respect to Grandfathered Benefits, and
(y) the first day of the seventh month following the date of
the participant’s retirement or termination of employment
with the Corporation with respect to Non-Grandfathered
Benefits. |
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(b) |
In determining the amount of the lump sum distributions to be
paid under this Section VI, the following actuarial assumptions
shall be used: |
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(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; |
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(ii) |
the 1983 Group Annuity Mortality Table shall be used;
and |
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(iii) |
it shall be assumed that all participants retired or terminated
employment with the Corporation on the date of the occurrence of
the Change in Control for purposes of determining the amount of the
lump sum distribution to be paid upon the occurrence of the Change
in Control. |
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(c) |
For purposes of this Plan, a “Change in Control”
shall be deemed to have occurred if there is a change in ownership
of the Corporation, a change in the effective control of the
Corporation, or a change in the ownership of a substantial portion
of the assets of the Corporation. For this purpose, a change in the
ownership of the Corporation occurs on the date that any one
person, or more than one person acting as a group (as determined
pursuant to the regulations under Section 409A), acquires
ownership of stock of the Corporation that, together with stock
held by such person or group, constitutes more than 50 percent of
the total fair market value or total voting power of the stock of
the Corporation. A change in effective control of the Corporation
occurs on either of the following dates: (1) the date any one
person, or more than one person acting as a group acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) ownership of
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