8-KLeadership ChangesExhibits & Filings

MOODYS CORP /DE/ 8-K Report, Executive Changes (Dec 20, 2010)

Filed December 20, 2010For Securities:MCO

Summary

Moody's Corporation (MCO) filed an 8-K on December 20, 2010, to announce the adoption of the Moody’s Corporation Change in Control Severance Plan (the "Plan"). This plan, effective December 14, 2010, is designed to protect key employees, including executive officers, in the event of a change in control of the company. The objective is to align management and shareholder interests by ensuring executives can act objectively during potential sale scenarios without fearing job loss. The plan has an initial two-year term with annual renewals and mandates severance benefits if employment is terminated without Cause or by the employee for Good Reason within a specified window around a change in control. The severance benefits are structured based on the executive's role, with the CEO receiving three times their base salary and target bonus, plus three years of continued medical and dental coverage. Other executives receive two times their base salary and target bonus, along with two years of continued coverage. Crucially, these benefits are contingent upon the employee signing a release of claims and agreeing to a two-year non-compete and non-solicitation clause. This filing provides investors with insight into the company's measures to retain and incentivize key personnel during periods of potential corporate transition.

Key Highlights

  • 1Moody's Corporation adopted a Change in Control Severance Plan effective December 14, 2010.
  • 2The Plan aims to protect executive officers and key employees in the event of a company sale or merger.
  • 3Severance benefits are triggered by termination without 'Cause' or resignation for 'Good Reason' within a defined period around a change in control.
  • 4The CEO's severance package includes three times base salary and target bonus, plus three years of medical/dental benefits.
  • 5Other executives receive two times base salary and target bonus, plus two years of medical/dental benefits.
  • 6Receipt of severance is conditional upon signing a release of claims and a two-year non-compete/non-solicitation agreement.
  • 7The Plan has an initial two-year term, with automatic one-year renewals thereafter unless the company opts out.

Frequently Asked Questions

The primary purpose of the plan is to protect executive officers and key employees in the event of a change in control of Moody's Corporation. It aims to align management's interests with those of shareholders by ensuring executives can remain objective during potential sale scenarios, mitigating concerns about job security.

Severance benefits are payable only if a participant's employment is terminated by the company without 'Cause' or by the participant for 'Good Reason' within 90 days prior to or two years following a change in control of the company. Benefits are not paid if termination is for 'Cause' or voluntary resignation without 'Good Reason'.

For the CEO, the severance package includes a lump sum cash payment equal to three times the sum of their base salary and target bonus for the year of termination, plus three years of continued medical and dental coverage. For other executives, it includes a lump sum cash payment equal to two times the sum of their base salaries and target bonuses, plus two years of continued medical and dental coverage.

Yes, recipients must execute and not revoke a general release of claims against the company and agree not to compete with the company or solicit its customers or employees for a period of two years following their termination of employment.