EXHIBIT 10.1
SEPARATION AGREEMENT AND GENERAL
RELEASE
AGREEMENT, made as of May 7,
2008, by and between Brian M. Clarkson (“Employee,”
“you” or “your”) and Moody’s
Corporation (the “Company,” “we” or
“our”), with its principal place of business in New
York, New York.
In consideration of the promises and
conditions set forth below, and intending to be legally bound, the
parties agree as follows:
1. Termination of Employment
. Your resignation as an employee will be effective, and your
employment with the Company will terminate, on July 31, 2008
(the “Termination Date”). You hereby resign effective
immediately from all other offices and positions with the Company
or any subsidiary or affiliate of the Company, including any
boards, committees, and similar positions. You agree to sign and
provide any additional documentation that may be reasonably
required by the Company in order to effectuate and confirm these
resignations. Until the Termination Date you will continue to
provide such services as may be necessary or requested by the Firm.
After the Termination Date, the Company will pay you for all
accrued and unused vacation days you had as of the Termination
Date. You agree that you will not apply for or seek re-employment
with the Company, its parent companies, subsidiaries and affiliates
after that date.
2. Special Severance Benefits
. If you sign this Agreement and also sign Exhibit A on or after
the Termination Date, and fully comply with the terms of both this
Agreement and Exhibit A, in addition to any accrued but unpaid
salary through the Termination Date, and reimbursement of any
unreimbursed business expenses incurred prior to the Termination
Date and submitted and approved in accordance with the policy of
the Company, and any rights you may have to payments or benefits
under any benefit plan of the Company in which you participate, in
accordance with the terms and conditions thereof, the Company will
provide you with the following special severance
benefits:
(a) You will be paid salary
continuation from August 1, 2008, through July 31, 2009
(“salary continuation period”), as set forth in Exhibit
B, less benefit deductions, tax withholdings and other deductions
required by law;
(b) Medical, dental and life
insurance benefits shall be provided throughout the salary
continuation period at the levels in effect for you immediately
prior to the Termination Date, but in no event greater than the
levels in effect for active employees generally during the salary
continuation period, provided that you shall pay the employee
portion of any required premium payments at the level in effect for
employees of the Company generally. Since as of the Termination
Date, you will be between the ages of 50 and 55 with 10 or more
years of credited service with the Company, you also will be
eligible for any post-employment medical and dental coverage that
may be offered by the Company following the salary continuation
period, at the Company’s full cost per participant for such
coverage but otherwise on the same terms and conditions as coverage
for employees of the Company, provided that the Company may modify
or discontinue such post-employment coverage at any time for any
reason, without any liability to you, so long as any such
modification or discontinuance is applicable generally to similarly
situated individuals in addition to you;
(c) In further consideration for
your execution of this Agreement and Exhibit A, the Company will
pay you a prorated bonus under the Executive Performance Incentive
Compensation (EPIC) Plan for 2008 in the first quarter of 2009 in
accordance with the letter to you, dated February 13, 2008,
representing 7/12 of $810,900, which is the target amount set forth
in that letter; and
(d) The Company will waive
Section 4.02(b)(i) of the Supplemental Executive Benefit Plan
(“SEBP”), which would otherwise reduce the amount of
your SEBP Retirement Benefit by 60%, and will provide you a SEBP
Retirement Benefit as calculated pursuant to Section 4.02(b),
it being mutually understood that all other provisions of the SEBP
shall continue to apply; and
(e) For purposes of the 1998
Moody’s Corporation Key Employees’ Stock Incentive Plan
and the Amended and Restated Moody’s Corporation 2001 Key
Employees’ Stock Incentive Plan (collectively, the
“Stock Incentive Plans”), your termination of
employment with the Company shall be treated as a
“Retirement” within the meaning of Section 2(bb)
and Section 2(y), respectively. As a consequence, any and all
outstanding stock options held by you for more than one year as of
the Termination Date shall be exercisable in accordance with the
rules of Section 7(f) of the Stock Incentive Plans relating to
exercisability upon termination of employment by reason of
Retirement, and any outstanding restricted stock award held by you
for more than one year as of the Termination Date shall be treated
in accordance with the rules of Section 9(c)(iv) of the
Moody’s Corporation 2001 Key Employees’ Stock Incentive
Plan relating to immediate vesting in full of restricted stock upon
a termination of employment by reason of Retirement. The
Company’s agreement to treat your termination as a Retirement
is conditioned on your agreeing to pay, and paying, in an amount
and in a manner determined by the Company, FICA taxes or any
similar taxes that become payable by reason of the Company’s
agreement, and the Company’s agreement will become void
without further notice if you fail to pay the specified amount by
the date determined by the Company, such date not to occur prior to
five business days following the Company’s delivery to you of
a written statement containing the specified amount and calculation
thereof. The terms of this Paragraph 2(e) shall apply to the
outstanding stock options and restricted stock awards set forth on
Exhibit C; and
(f) You will be provided
outplacement services through an outplacement service provider
selected by the Company, which said amount shall be determined by
your job classification. You will not be entitled to the cost of
outplacement services if you choose not to elect them.
You acknowledge that the special
severance benefits set forth above include compensation and/or
benefits in addition to what you would otherwise be entitled to
receive. The special severance benefits will not become due on or
before the Effective Date of the Agreement, as defined in Paragraph
17(f).
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3. Approvals. The Company
represents and warrants that all necessary approvals to grant the
special severance benefits set forth in Paragraph 2 have been
obtained.
4. Waiver and Release
.
(a) In exchange for the special
severance benefits promised to you in this Agreement, and as a
material inducement for that promise, you hereby WAIVE,
RELEASE and FOREVER DISCHARGE the Company and/or related
persons from any and all claims, rights and liabilities of every
kind, whether or not you now know them to exist, which you ever had
or may have arising out of your employment with the Company or
termination of that employment. This WAIVER and
RELEASE includes, but is not limited to, any claim for
severance benefits provided by the Company, as stated in an offer
letter, individual contract, or otherwise, unlawful discrimination
or sexual harassment under Title VII of the Civil Rights Act of
1964, as amended, the Ag
