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Exhibit 10.16
1998 MOODY'S CORPORATION
KEY EMPLOYEES' STOCK INCENTIVE PLAN
(as amended and restated as of the Distribution Date)
1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its Subsidiaries in
securing and retaining key employees of outstanding ability and to motivate such
employees to exert their best efforts on behalf of the Company and its
Subsidiaries by providing incentives through the granting of Awards. The Company
expects that it will benefit from the added interest which such key employees
will have in the welfare of the Company as a result of their proprietary
interest in the Company's success. As a result of the distribution of the shares
of New D&B owned by the Company to the holder of record of Shares, the Company
has amended and restated the Plan as of the Distribution Date.
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) Award: An Option, Stock Appreciation Right or Other
Stock-Based Award granted pursuant to the Plan.
(c) Beneficial Owner: As such term is 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% 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 Distribution Date),
individuals who at the beginning of such period 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
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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% 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 Dun & Bradstreet Corporation, a Delaware
corporation to be renamed "The Dun & Bradstreet Corporation" on the Effective
Date, to be renamed the "Moody's Corporation" after the Distribution Date.
(i) 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 a Participant has suffered a Disability shall be made by the Committee
based upon such evidence as it deems necessary and appropriate; provided,
however, that following the Distribution Date, such determination shall be made
by the New D&B Committee with respect to a New D&B Employee. A Participant 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 New D&B
Committee, as the case may be, in its sole discretion, may require.
(j) Distribution Date: The date on which the shares of New D&B
that are owned by the Company are distributed to the holders of record of shares
of the Company.
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(k) Effective Date: The date on which the Plan takes effect,
as defined pursuant to Section 17 of the Plan.
(l) Fair Market Value: On a given date, the arithmetic mean 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
arithmetic mean 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 Committee 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.
(m) ISO: An Option that is also an incentive stock option
granted pursuant to Section 7(d) of the Plan.
(n) LSAR: A limited stock appreciation right granted pursuant
to Section 8(d) of the Plan.
(o) New D&B: The New D&B Corporation, a Delaware corporation,
to be renamed The Dun & Bradstreet Corporation following the Distribution Date.
(p) New D&B Board: The Board of Directors of New D&B.
(q) New D&B 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 New D&B, any trustee or
other fiduciary holding securities under an employee benefit
plan of New D&B, or any company owned, directly or indirectly,
by the stockholders of New D&B in substantially the same
proportions as their ownership of stock of New D&B), becomes
the Beneficial Owner, directly or indirectly, of securities of
New D&B representing 20% or more of the combined voting power
of New D&B's then outstanding securities;
(ii) during any period of twenty-four months (not
including any period prior to the Distribution Date),
individuals who at the beginning of such period constitute the
New D&B Board, and any new director (other than (A) a director
nominated by a Person who has entered into an agreement with
New D&B to effect a transaction described in Sections 2(q)(i),
(iii) or (iv) of the Plan, (B) a director nominated by any
Person (including New 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
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consummated would constitute a New D&B Change in Control or
(C) a director designated by any Person who is the Beneficial
Owner, directly or indirectly, of securities of New D&B
representing 10% or more of the combined voting power of New
D&B's securities) whose election by the New D&B Board or
nomination for election by New 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;
(iii) the stockholders of New D&B approve a merger or
consolidation of New D&B with any other corporation, other
than a merger or consolidation (A) which would result in the
voting securities of New 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 New D&B or such surviving
entity outstanding immediately after such merger or
consolidation and (B) after which no Person would hold 20% or
more of the combined voting power of the then outstanding
securities of New D&B or such surviving entity; or
(iv) the stockholders of New D&B approve a plan of
complete liquidation of New D&B or an agreement for the sale
or disposition by New D&B of all or substantially all of New
D&B's assets.
(r) New D&B Committee: The Compensation and Benefits Committee
of the New D&B Board, or any successor thereto or other committee designated by
the New D&B Board to assume the obligations of the New D&B Committee hereunder.
(s) New D&B Employee: A Participant who is an employee of New
D&B immediately following the Distribution Date.
(t) Other Stock-Based Awards: Awards granted pursuant to
Section 9 of the Plan.
(u) Option: A stock option granted pursuant to Section 7 of
the Plan.
(v) Option Price: The purchase price per Share of an Option,
as determined pursuant to Section 7(a) of the Plan.
(w) Participant: An individual who is selected by the
Committee to participate in the Plan pursuant to Section 5 of the Plan.
(x) Performance-Based Awards: Other Stock-Based Awards granted
pursuant to Section 9(b) of the Plan.
(y) Person: As such term is used for purposes of Section 13(d)
or 14(d) of the Act (or any successor section thereto).
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(z) Plan: The 1998 Moody's Corporation Key Employees' Stock
Incentive Plan, as amended and restated.
(aa) Post-Retirement Exercise Period: As such term is defined
in Section 7(f) of the Plan.
(bb) Retirement: Termination of employment with the Company or
a Subsidiary after such Participant has attained age 55 and five years of
service with the Company; or, with the prior written consent of the Committee
that such termination be treated as a Retirement hereunder, termination of
employment under other circumstances; provided, however, that following the
Distribution Date, the Retirement of a New D&B Employee shall be based on his or
her employment with the Company and New D&B and/or the prior written consent of
the New D&B Committee.
(cc) Shares: Shares of common stock, par value $0.01 per
Share, of the Company.
(dd) Special Exercise Period: As such term is defined in
Section 7(f) of the Plan.
(ee) Stock Appreciation Right: A stock appreciation right
granted pursuant to Section 8 of the Plan.
(ff) Subsidiary: A subsidiary corporation, as defined in
Section 424(f) of the Code (or any successor section thereto).
(gg) Termination of Employment: A Participant's termination of
employment with the Company; provided, however, that following the Distribution
Date, a New D&B Employee's termination of employment shall be based on his or
her termination of employment with New D&B and its Subsidiaries.
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan is
16,500,000. The maximum number of Shares for which Awards may be granted during
a calendar year to any Participant shall be 400,000. The Shares may consist, in
whole or in part, of unissued Shares or treasury Shares. The issuance of Shares
or the payment of cash upon the exercise of an Award shall reduce the total
number of Shares available under the Plan, as applicable. Shares which are
subject to Awards which terminate or lapse may be granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two individuals who are each "non-employee directors" within
the meaning of Rule 16b-3 under the Act (or any successor rule thereto) and
"outside directors" within the meaning of Section 162(m) of the Code (or any
successor section thereto); provided, however, that any action permitted to
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be taken by the Committee may be taken by the Board, in its discretion. The
Committee is authorized to interpret the Plan, to establish, amend and rescind
any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
the Plan. The Committee may correct any defect or omission or reconcile any
inconsistency in the Plan in the manner and to the extent the Committee deems
necessary or desirable. Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned (including, but not limited to, Participants and their beneficiaries
or successors). Determinations made by the Committee under the Plan need not be
uniform and may be made selectively among Participants, whether or not such
Participants are similarly situated. The Committee shall require payment of any
amount it may determine to be necessary to withhold for federal, state, local or
other taxes as a result of the exercise of an Award. Unless the Committee
specifies otherwise, the Participant may elect to pay a portion or all of such
withholding taxes by (a) delivery in Shares or (b) having Shares withheld by the
Company from any Shares that would have otherwise been received by the
Participant. The number of Shares so delivered or withheld shall have an
aggregate Fair Market Value sufficient to satisfy the applicable withholding
taxes. If the chief executive officer of the Company is a member of the Board,
the Board by specific resolution may constitute such chief executive officer as
a committee of one which shall have the authority to grant Awards of up to an
aggregate of 100,000 Shares in each calendar year to Participants who are not
subject to the rules promulgated under Section 16 of the Act (or any successor
section thereto); provided, however, that such chief executive officer shall
notify the Committee of any such grants made pursuant to this Section 4.
5. Eligibility
Key employees (but not members of the Committee or any person who
serves only as a director) of the Company and its Subsidiaries, who are from
time to time responsible for the management, growth and protection of the
business of the Company and its Subsidiaries, are eligible to be granted Awards
under the Plan. Participants shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of Shares to be covered by
the Awards granted to each Participant.
6. Limitations
No Award may be granted under the Plan after the tenth anniversary of
the Effective Date, but Awards theretofore granted may extend beyond that date.
7. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, non-qualified, incentive or other stock options for federal income
tax purposes, as evidenced by the related Award agreements, 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:
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(a) Option Price. The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of the Shares on the date an Option is granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be determined
by the Committee, but in no event shall an Option be exercisable more than ten
years after the date it is granted.
(c) Exercise of Options. Except as otherwise provided in the
Plan or in an Award agreement, an Option may be exercised for all, or from time
to time any part, of the Shares for which it is then exercisable. For purposes
of Section 7 of the Plan, the exercise date of an Option shall be the later of
the date a notice of exercise is received by the Company and, if applicable, the
date payment is received by the Company pursuant to clauses (i), (ii) or (iii)
in the following sentence. 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 Participant (i) in cash, (ii) in Shares having a Fair
Market Value equal to the aggregate Option Price for the Shares being purchased
and satisfying such other requirements as may be imposed by the Committee;
provided, that such shares of Common Stock have been held by the Participant for
no less than six months, (iii) partly in cash and partly in such Shares, 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. No Participant shall have any rights to dividends or other
rights of a stockholder with respect to Shares subject to an Option until the
occurrence of the exercise date (determined as set forth above) and, if
applicable, the satisfaction of any other conditions imposed by the Committee
pursuant to the Plan.
(d) ISOs. The Committee may grant Options under the Plan that
are intended to be ISOs. Such ISOs shall comply with the requirements of Section
422 of the Code (or any successor section thereto). Unless otherwise permitted
under Section 422 of the Code (or any successor section thereto), no ISO may be
granted to any Participant who at the time of such grant, owns more than ten
percent of the total combined voting power of all classes of stock of the
Company or of any Subsidiary, unless (i) the Option Price for such ISO is at
least 110% of the Fair Market Value of a Share on the date the ISO is granted
and (ii) the date on which such ISO terminates is a date not later than the day
preceding the fifth anniversary of the date on which the ISO is granted. Any
Participant who disposes of Shares acquired upon the exercise of an ISO either
(i) within two years after the date of grant of such ISO or (ii) within one year
after the transfer of such Shares to the Participant, shall notify the Company
of such disposition and of the amount realized upon such disposition.
(e) Exercisability Upon Termination of Employment by Death or
Disability. Upon a Termination of Employment by reason of death or Disability
after the first anniversary of the date of grant of an Option, (i) the
unexercised portion of such Option shall immediately vest in full and (ii) such
portion may thereafter be exercised during the shorter of (A) the remaining
stated term of the Option or (B) five years after the date of death or
Disability.
(f) Exercisability Upon Termination of Employment by
Retirement. Upon a Termination of Employment by reason of Retirement after the
first anniversary of the date of
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grant of an Option, an unexercised Option may thereafter be exercised during the
shorter of (i) the remaining stated term of the Option or (ii) five years after
the date of such Termination of Employment (the "Post-Retirement Exercise
Period"), but only to the extent to which such Option was exercisable at the
time of such Termination of Employment or becomes exercisable during the
Post-Retirement Exercise Period; provided, however, that if a Participant dies
within a period of five years after such Termination of Employment, an
unexercised Option may thereafter be exercised, during the shorter of (i) the
remaining stated term of the Option or (ii) the period that is the longer of (A)
five years after the date of such Termination of Employment or (B) one year
after the date of death (the "Special Exercise Period"), but only to the extent
to which such Option was exercisable at the time of such Termination of
Employment or becomes exercisable during the Special Exercise Period.
(g) Effect of Other Termination of Employment. Upon a
Termination of Employment for any reason (other than death, Disability or
Retirement after the first anniversary of the date of grant of an Option as
described above), an unexercised Option may thereafter be exercised during the
period ending 30 days after the date of such Termination of Employment, but only
to the extent to which such Option was exercisable at the time of such
Termination of Employment. Notwithstanding the foregoing, the Committee (or the
New D&B Committee with respect to a New D&B Employee) may, in its sole
discretion, accelerate the vesting of unvested Options held by a Participant if
such Participant's Termination of Employment is without "cause" (as such term is
defined by such committee in its sole discretion) by the Company or New D&B, as
the case may be.
(h) Nontransferability of Stock Options. Except as otherwise
provided in this Section 7(h), a stock option shall not be transferable by the
optionee otherwise than by will or by the laws of descent and distribution and
during the lifetime of an optionee an option shall be exercisable only by the
optionee. An option exercisable after the death of an optionee or a transferee
pursuant to the following sentence may be exercised by the legatees, personal
representatives or distributees of the optionee 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 optionee to be on terms which permit
irrevocable transfer for no consideration by such optionee 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 optionee, 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 Section 7(h). 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 Sections 7(e), 7(f) and 7(g) hereof shall continue to be applied
with respect to the original optionee, following which the options shall be
exercisable by the transferee only to the extent, and for the periods specified,
in Sections 7(e), 7(f) and 7(g). The Committee may delegate to a committee
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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 options eligible to transfer options, as well as to make other
determinations with respect to option transfers.
8. Terms and Conditions of Stock Appreciation Rights
(a) Grants. The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock Appreciation Right
in connection with an Option, or a portion thereof. A Stock Appreciation Right
granted pursuant to clause (ii) of the preceding sentence (A) may be granted at
the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same Shares covered by
an Option (or such lesser number of Shares as the Committee may determine) and
(C) shall be subject to the same terms and conditions as such Option except for
such additional limitations as are contemplated by this Section 8 (or such
additional limitations as may be included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but in no
event shall such amount be less than the greater of (i) the Fair Market Value of
a Share on the date the Stock Appreciation Right is granted or, in the case of a
Stock Appreciation Right granted in conjunction with an Option, or a portion
thereof, the Option Price of the related Option and (ii) an amount permitted by
applicable laws, rules, by-laws or policies of regulatory authorities or stock
exchanges. Each Stock Appreciation Right granted independent of an Option shall
entitle a Participant upon exercise to an amount equal to (i) the excess of (A)
the Fair Market Value on the exercise date of one Share over (B) the exercise
price per Share, times (ii) the number of Shares covered by the Stock
Appreciation Right. Each Stock Appreciation Right granted in conjunction with an
Option, or a portion thereof, shall entitle a Participant to surrender to the
Company the unexercised Option, or any portion thereof, and to receive from the
Company in exchange therefor an amount equal to (i) the excess of (A) the Fair
Market Value on the exercise date of one Share over (B) the Option Price per
Share, times (ii) the number of Shares covered by the Option, 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.
(c) Limitations. The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock Appreciation
Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may grant
LSARs that are exercisable upon the occurrence of specified contingent events.
Such LSARs may provide for a different method of determining appreciation, may
specify that payment will be
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made only in cash and may provide that any related Awards are not exercisable
while such LSARs are exercisable. Unless the context otherwise requires,
whenever the term "Stock Appreciation Right" is used in the Plan, such term
shall include LSARs.
9. Other Stock-Based Awards
(a) Generally. The Committee, in its sole discretion, may
grant Awards of Shares, Awards of restricted Shares and Awards that are valued
in whole or in part by reference to, or are otherwise based on the Fair Market
Value of, Shares ("Other Stock-Based Awards"). Such Other Stock-Based Awards
shall be in such form, and dependent on such conditions, as the Committee shall
determine, including, without limitation, the right to receive one or more
Shares (or the equivalent cash value of such Shares) upon the completion of a
specified period of service, the occurrence of an event and/or the attainment of
performance objectives. Other Stock-Based Awards may be granted alone or in
addition to any other Awards granted under the Plan. Subject to the provisions
of the Plan, the Committee shall determine to whom and when Other Stock-Based
Awards will be made; the number of Shares to be awarded under (or otherwise
related to) such Other Stock-Based Awards; whether such Other Stock-Based Awards
shall be settled in cash, Shares or a combination of cash and Shares; and all
other terms and conditions of such Awards (including, without limitation, the
vesting provisions thereof).
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under this Section 9
may be granted in a manner which is deductible by the Company under Section
162(m) of the Code (or any successor section thereto) ("Performance-Based
Awards"). A Participant's Performance-Based Award shall be determined based on
the attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more than 90 days
after the commencement of the performance period to which the performance goal
relates or, if less, the number of days which is equal to 25 percent of the
relevant performance period. The performance goals, which must be objective,
shall be based upon one or more of the following criteria: (i) earnings before
or after taxes (including earnings before interest, taxes, depreciation and
amortization); (ii) net income; (iii) operating income; (iv) earnings per Share;
(v) book value per Share; (vi) return on stockholders' equity; (vii) expense
management; (viii) return on investment before or after the cost of capital;
(ix) improvements in capital structure; (x) profitability of an identifiable
business unit or product; (xi) maintenance or improvement of profit margins;
(xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv) costs;
(xvi) cash flow; (xvii) working capital (xviii) changes in net assets (whether
or not multiplied by a constant percentage intended to represent the cost of
capital) and (xix) return on assets. The foregoing criteria may relate to the
Company, one or more of its Subsidiaries or one or more of its divisions, units,
minority investments, partnerships, joint ventures, product lines or products or
any combination of the foregoing, and may be applied on an absolute basis and/or
be relative to one or more peer group companies or indices, or any combination
thereof, all as the Committee shall determine. In addition, to the degree
consistent with Section 162(m) of the Code (or any successor section thereto),
the performance goals may be calculated without regard to extraordinary items or
accounting changes. The maximum amount of a Performance-Based Award to any
Participant with respect to a fiscal year of the Company shall be $5,000,000.
The
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Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to a given Participant
and, if they have, to so certify and ascertain the amount of the applicable
Performance-Based Award. No Performance-Based Awards will be paid for such
performance period until such certification is made by the Committee. The amount
of the Performance-Based Award actually paid to a given Participant may be less
than the amount determined by the applicable performance goal formula, at the
discretion of the Committee. The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however, that a Participant
may, if and to the extent permitted by the Committee and consistent with the
provisions of Section 162(m) of the Code, elect to defer payment of a
Performance-Based Award.
10. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding
Shares after the Effective Date 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 (i) the number or
kind of Shares or other securities issued or reserved for issuance pursuant to
the Plan or pursuant to outstanding Awards, (ii) the Option Price and/or (iii)
any other affected terms of such Awards.
(b) Change in Control. In the event of a Change in Control,
Awards granted under the Plan shall accelerate as follows: (i) 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 (A) the payment of a cash
amount in exchange for the cancellation of such Award and/or (B) 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; (ii) restrictions on Awards of
restricted shares shall lapse; and (iii) Other Stock-Based Awards shall become
payable as if targets for the current period were satisfied at 100%.
(c) New D&B Change in Control. In the event of a New D&B
Change in Control, Awards held by New D&B Employees granted under the Plan prior
to the Distribution Date shall accelerate as follows: (i) each Option and Stock
Appreciation Right shall become immediately vested and exercisable; (ii)
restrictions on Awards of restricted shares shall lapse; and (iii) Other
Stock-Based Awards shall become payable as if targets for the current period
were satisfied at 100%.
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11. No Right to Employment
The granting of an Award under the Plan shall impose no obligation on
the Company, New D&B or any of their Subsidiaries to continue the employment of
a Participant and shall not lessen or affect the Company's, New D&B's or any of
their Subsidiaries' right to terminate the employment of such Participant.
12. Successors and Assigns
The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such Participant
and the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.
13. Nontransferability of Awards
Except as provided in Section 7(h) of the Plan, an Award shall not be
transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. During the lifetime of a Participant, an Award
shall be exercisable only by such Participant. An Award exercisable after the
death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant. Notwithstanding anything to
the contrary herein, the Committee, in its sole discretion, shall have the
authority to waive this Section 13 (or any part thereof) to the extent that this
Section 13 (or any part thereof) is not required under the rules promulgated
under any law, rule or regulation applicable to the Company.
14. Amendments or Termination
The Board or the Committee may amend, alter or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made which, (a) without
the approval of the stockholders of the Company, would (except as is provided in
Section 10 of the Plan), increase the total number of Shares reserved for the
purposes of the Plan or change the maximum number of Shares for which Awards may
be granted to any Participant or (b) without the consent of a Participant, would
impair any of the rights or obligations under any Award theretofore granted to
such Participant under the Plan; provided, however, that the Board or the
Committee may amend the Plan in such manner as it deems necessary to permit the
granting of Awards meeting the requirements of the Code or other applicable
laws. Notwithstanding anything to the contrary herein, neither the Committee nor
the Board may amend, alter or discontinue the provisions relating to Section
10(b) and 10(c) of the Plan after the occurrence of a Change in Control.
15. International Participants
With respect to Participants who reside or work outside the United
States of America and who are not (and who are not expected to be) "covered
employees" within the meaning of Section 162(m) of the Code (or any successor
section thereto), the Committee may, in its sole discretion, amend the terms of
the Plan or Awards with respect to such Participants in order to conform such
terms with the requirements of local law.
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16. Choice of Law
The Plan shall be governed by and construed in accordance with the laws
of the State of Delaware applicable to contracts made and to be performed in the
State of Delaware.
17. Effectiveness of the Plan
The Plan became effective as of June 30, 1998 upon its approval by the
stockholders at the 1999 Annual Meeting.