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Exhibit 10.41
TIER-2
CHANGE-IN-CONTROL AGREEMENT
FOR CERTAIN EXECUTIVES
OF IMS HEALTH INCORPORATED
[Date]
PERSONAL AND CONFIDENTIAL
[Name and Title]
IMS Health Incorporated
Dear
[ ]:
IMS Health Incorporated (the "Company") considers it essential
to the best interests of its stockholders to foster the continued
employment of key management personnel. In this connection,
the Board of Directors of the Company (the "Board") recognizes that
the possibility of a change in ownership or control of the Company
may result in the departure or distraction of such personnel to the
detriment of the Company and its stockholders. As you are a
skilled and dedicated executive with important management
responsibilities and talents, the Company believes that its best
interests will be served if you are encouraged to remain with the
Company.
The Company has determined that your ability to perform your
responsibilities and utilize your talents for the benefit of the
Company, and the Company’s ability to retain you as an
employee, will be significantly enhanced if you are provided with
fair and reasonable protection from the risks of a change in
ownership or control of the Company. Accordingly, in order to
induce you to remain in the employ of the Company, you and the
Company agree as follows:
1. Term of Agreement .
(a) Generally . Except as provided in Section 1(b)
hereof, (i) this Agreement shall be effective as of January 1, 2007
and shall continue in effect through December 31, 2008, and (ii)
commencing on January 1, 2009, and each January 1 thereafter, this
Agreement shall be automatically extended for one additional year
unless, not later than November 30th of the preceding year, either
party to this Agreement gives notice to the other that the
Agreement shall not be extended under this Section 1(a);
provided, however , that no such notice by the Company shall
be effective if a Change in Control or Potential Change in Control
(both as defined herein) shall have occurred prior to the date of
such notice.
(b) Upon a Change in Control . If a Change in
Control shall have occurred at any time during the period in which
this Agreement is effective, this Agreement shall continue in
effect for (i) the remainder of the month in which the Change in
Control occurred and (ii) a term of 24 months beyond the month in
which such Change in Control occurred (such entire period
hereinafter referred to as the "Protected Period").
2. Change in Control; Potential Change in
Control .
(a) A "Change in Control" shall be deemed to have occurred if,
during the term of this Agreement:
(i) any "Person," as such term is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange 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" (as defined in Rule 13d-3 under the Exchange
Act), 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 effectiveness of this Agreement), 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)(a)(i), (iii) or (iv) hereof,
(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 nominated 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) any transaction (or series of transactions) is consummated
under which the Company is merged or consolidated with any other
company, 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 66 2/3% 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 holds 20% or more of the combined
voting power of the then-outstanding securities of the Company or
such surviving entity;
(iv) a sale or disposition by the Company of all or
substantially all of the Company’s assets is consummated or
the stockholders of the Company approve a plan of complete
liquidation of the Company; or
(v) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Change in Control has occurred.
(b) A "Potential Change in Control" shall be deemed to have
occurred if:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
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(ii) any Person (including the Company) publicly
announces an intention to take or to consider taking actions which
if consummated would constitute a Change in Control; or
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(c) Employee Covenants . You agree that, subject to
the terms and conditions of this Agreement, in the event of a
Potential Change in Control, you will remain in the employ of the
Company until the earliest of (i) a date which is 180 days from the
occurrence of such Potential Change in Control, (ii) the
termination of your employment by reason of Disability (as defined
herein) or (iii) the date on which you first become entitled under
this Agreement to receive the benefits provided in Section 3(b)
hereof.
(d) Company Covenant Regarding Potential Change in Control or
Change in Control . In the event of a Potential Change in
Control or a Change in Control, the Company shall, not later than
15 days thereafter, have established one or more rabbi trusts and
shall deposit therein cash in an amount sufficient to provide for
full payment of all potential obligations of the Company that would
arise assuming consummation of a Change in Control and a subsequent
termination of your employment under Section 3(b). Such rabbi
trust(s) shall be irrevocable and shall provide that the Company
may not, directly or indirectly, use or recover any assets of the
trust(s) until such time as all obligations which potentially could
arise hereunder have been settled and paid in full or otherwise
extinguished, subject only to the claims of creditors of the
Company in the event of insolvency or bankruptcy of the Company;
provided, however, that if no Change in Control has occurred within
two years after such Potential Change in Control, such rabbi
trust(s) shall at the end of such two-year period become revocable
and may thereafter be revoked by the Company.
3. Termination .
(a) Termination by the Company for Cause, by You Without Good
Reason, or by Reason of Death or Disability . If during
the Protected Period your employment by the Company is terminated
by the Company for Cause, by you without Good Reason, or because of
your death or Disability, the Company shall be relieved of its
obligation to make any payments to you other than (i) its payment
of amounts otherwise accrued and owing but not yet paid and (ii)
any amounts payable under then-existing employee benefit programs
at the time such amounts are due.
(b) Termination by the Company Without Cause or by You for
Good Reason . If during the Protected Period your
employment by the Company is terminated by the Company without
Cause or by you for Good Reason, you shall be entitled to the
compensation and benefits described in this Section 3(b). If
your employment by the Company is terminated prior to a Change in
Control at the request of a Person engaging in a transaction or
series of transactions that would result in a Change in Control,
the Protected Period shall commence upon the subsequent occurrence
of a Change in Control, your actual termination shall be deemed a
termination occurring during the Protected Period and covered by
this Section 3(b), your Date of Termination shall be deemed to have
occurred immediately following the Change in Control, and Notice of
Termination shall be deemed to have been given by the Company
immediately prior to your actual termination. Your continued
employment shall not constitute consent to, or a waiver
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of rights with respect to, any circumstances
constituting Good Reason hereunder. The compensation and
benefits provided under this Section 3(b) are as
follows:
(i) The Company shall pay you your full base salary through the
Date of Termination at the rate in effect at the time Notice of
Termination is given, on the fifth day following the Date of
Termination, and you shall receive all other amounts to which you
are entitled under any compensation or benefit plan of the Company,
at the time such payments are due in accordance with the terms of
such compensation or benefit plan.
(ii) In the payroll period next following the payroll period in
which your Date of Termination occurs, the Company shall pay you,
in lieu of any further salary, bonus or severance payments for
periods subsequent to the Date of Termination, a lump sum amount in
cash equal to three times the sum of:
(A) the greater of (I) your annual base salary in effect
immediately prior to the Change in Control of the Company or (II)
your annual base salary in effect at the time Notice of Termination
is given; and
(B) the greater of (I) your annual target bonus for the year in
which the Change in Control occurs or, (II) if no such target bonus
has yet been determined for such year, the annual bonus actually
earned by you in the year immediately preceding the year in which
the Change in Control occurs.
(iii) In the payroll period next following the payroll period in
which your Date of Termination occurs, the Company shall pay to
you, in lieu of amounts which may otherwise be payable to you under
the Executive Annual Incentive Plan or any other bonus plan (the
"Bonus Plan"), an amount in cash equal to (A) that portion of your
annual target bonus payable in cash for the year in which the
Change in Control occurs, multiplied by a fraction, (I) the
numerator of which equals the number of full or partial days in
such annual performance period during which you were employed by
the Company and (II) the denominator of which is 365, and (B) the
entire target bonus opportunity with respect to each performance
period in progress for any bonus payable to you in stock under all
Bonus Plans in effect at the time of termination.
(iv) The Company shall provide you with a cash allowance for
outplacement and job search activities (including, but not limited
to, office and secretarial expenses) in the amount of 20% of your
annual base salary and annual target bonus taken into account under
Section 3(b)(ii) hereof, provided that (A) such cash
allowance shall not exceed $100,000 and (B) such cash allowance
shall apply only to those costs or obligations that are incurred by
you during the 36-month period following your termination of
employment. Payments of such cash allowance shall be made on
the fifteenth day following the submission of each receipt to the
Company evidencing costs or obligations incurred by you in
connection with outplacement and job search activities.
(v) Notwithstanding the provisions of your Restrictive
Covenant Agreement with the Company, your agreement set forth in
such Restrictive Covenant Agreement not to compete with the Company
for one year after your termination of employment shall not apply;
however, the other provisions of your Restrictive Covenant
Agreement shall remain in full force and effect, including without
limitation, the non-solicitation, non-disclosure, confidentiality
and non-disparagement covenants set forth therein.
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(vi) If you are an expatriate, you will be
repatriated, at the Company’s expense, to your home country
or to any other country you choose provided that the
Company’s cost for your repatriation will not exceed the cost
the Company would have incurred had it repatriated you to your home
country. Your repatriation allowances and benefits will be as
described in the Company’s Long-Term Assignment Policy but
there will be no claw-back of any relocation costs by reason of the
early termination of your assignment.
(vii) During the 36-month period following your termination of
employment, you will receive fully subsidized COBRA coverage
(grossed up for your taxes) under the Company’s health plan
for so long as it is available and thereafter you will be paid cash
payments equivalent on an after-tax basis to the value of the
health plan benefits you would have received under the
Company’s health plan had you continued to be employed during
such 36-month period, with such payments to be made by the Company
to you on a monthly basis (it being understood that the Company
payments to you attributable to the health plan benefits will be
equal on an after-tax basis to the monthly premium cost to you to
purchase such health plan benefits separately, which shall not
exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating). You will also
receive during such 36-month period cash payments equivalent on an
after-tax basis to the value of the life insurance benefits you
would have received under the Company’s life insurance plan
had you continued to be employed during such 36-month period, with
such payments to be made by the Company to you on a monthly basis
(it being understood that the Company payments to you attributable
to the life insurance plan benefits will be equal on an after-tax
basis to the monthly premium cost to you to purchase such life
insurance plan benefits separately, which shall not exceed the
highest risk premium charged by a carrier having an investment
grade or better credit rating). Notwithstanding the
foregoing, the benefits described in this Section 3(b)(vii) shall
constitute secondary coverage with respect to any health or life
insurance benefits actually received by you in connection with any
subsequent employment (or self-employment) during the 36-month
period following your termination.
(viii) When you attain age 55, if you are eligible to
participate in the Company’s retiree health and life
insurance plans, you will receive monthly payments from the Company
to reimburse you for your cost to participate in those plans,
grossed up for your taxes. If you are not eligible to
participate in the Company’s retiree health and life
insurance plans, you will instead receive cash payments equivalent
on an after-tax basis to the value of the retiree health and life
insurance benefits you would have received under the
Company’s retiree health and life insurance plans (providing
benefits no less than those provided in the year in which you first
entered into a Change in Control Agreement with the Company) had
you qualified for full retiree health and life insurance benefits
under the Company’s retiree health and life insurance plans,
with such payments to be made by the Company to you on a monthly
basis (it being understood that the Company payments to you
attributable to the health and life insurance benefits will be
equal on an after-tax basis to the monthly premium cost to you to
purchase such benefits separately, which shall not exceed the
highest risk premium charged by a carrier having an investment
grade or better credit rating). Notwithstanding the
foregoing, the benefits described in this Section 3(b)(viii) shall
constitute secondary coverage with respect to any health or life
insurance benefits actually received by you in connection with any
subsequent employment (or self-employment) or otherwise following
your attainment of age 55.
(c) Excise Tax . In the event you become entitled
to any amounts payable in connection with a Change in Control
(whether or not such amounts are payable pursuant to this
Agreement) (the "Severance Payments"), if any of such
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Severance Payments are subject to the tax (the
"Excise Tax") imposed by Section 4999 of the Code (or any similar
federal, state or local tax that may hereafter be imposed), the
Company shall pay to you at the time specified herein an additional
amount (the "Gross-Up Payment") such that the net amount retained
by you, after deduction of any Excise Tax on the Total Payments (as
hereinafter defined) and any federal, state and local income tax
and Excise Tax upon the payment provided for by this Section 3(c),
shall be equal to the Total Payments. For purposes of determining
whether any of the Severance Payments will be subject to the Excise
Tax and the amount of such Excise Tax: (i) any other payments or
benefits received or to be received by you in connection with a
Change in Control or your termination of employment (whether
pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions
result in a Change in Control or any Person affiliated with the
Company or such Person) (which, together with the Severance
Payments, constitute the "Total Payments") shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of
the Code, and all "excess parachute payments" within the meaning of
Section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax, unless in the opinion of nationally-recognized tax
counsel selected by you such other payments or benefits (in whole
or in part) do not constitute parachute payments, or such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within
the meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax; (ii) the amount of the Total Payments
which shall be treated as subject to the Excise Tax shall be equal
to the lesser of (A) the total amount of the Total Payments and (B)
the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying Section 3(c)(i)
hereof); and (iii) the value of any non-cash benefits or any
deferred payments or benefit shall be determined by a
nationally-recognized accounting firm selected by you in accordance
with the principles of Sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up
Payment, you shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar
year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the
state and locality of your residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time of
termination of your employment, you shall repay to the Company
within ten days after the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of the
Gross-Up Payment attributable to the Excise Tax and federal and
state and local income tax imposed on the Gross-Up Payment being
repaid by you if such repayment results in a reduction in Excise
Tax and/or federal and state and local income tax deduction) plus
interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of your employment
(including by reason of any payment the existence or amount of
which cannot be determined at the time of the Gross-Up Payment),
the Company shall make an additional gross-up payment in respect of
such excess ten days after the time that the amount of such excess
is finally determined. The payments provided for in this
Section 3(c) shall be made on the fifteenth day following your Date
of Termination; provided, however , that if the amount of
such payments cannot be finally determined on or before such day,
the Company shall pay you on such day an estimate, as determined in
good faith by the Company, of the minimum amount of such payments
and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code)
as soon as
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administratively practicable in compliance with
Section 409A of the Code and the proposed and final Treasury
Regulations thereunder, as the same may be amended from time to
time (the "Regulations") but in no event later than the thirtieth
day after your Date of Termination subject, however, to any delay
in the payment date as a result of Section 3(d) of this Agreement
(relating to the six-month delay in payment of certain benefits to
Specified Employees as required by Section 409A of the Code).
In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to you, payable on the fifteenth
day after the demand by the Company (together with interest at the
rate provided in Section 1274(b)(2)(B) of the Code).
(d) Delay in Payment to Specified Employees .
Anything in this Agreement to the contrary notwithstanding,
payments to be made under this Agreement upon your termination of
employment which are subject to Section 409A of the Code shall be
delayed for six months following such termination of employment if
you are a "Specified Employee" as defined in Section 3(f) on your
Date of Termination. Any payment due within such six-month
period shall be delayed to the end of such six-month period. The
Company will adjust the payment to reflect the deferred payment
date by multiplying the payment by the product of the six-month CMT
Treasury Bill annualized yield rate as published by the U.S.
Treasury for the date on which such payment would have been made
but for the delay multiplied by a fraction, the numerator of which
is the number of days by which such payment was delayed and the
denominator of which is 365. The Company will pay the adjusted
payment at the beginning of the seventh month following your Date
of Termination. Notwithstanding the foregoing, if calculation of
the amounts payable by any payment date specified in this Section
3(d) is not administratively practicable due to events beyond your
control (or the control of your beneficiary or estate) and for
reasons that are commercially reasonable, payment will be made as
soon as administratively practicable in compliance with Section
409A of the Code and the Regulations. In the event of your
death during such six-month period, payment will be made in the
payroll period next following the payroll period in which your
death occurs.
(e) Notice . During the Protected Period, any
purported termination of your employment by the Company or by you
shall be communicated by written Notice of Termination to the other
party hereto.
(f) Certain Definitions . Except as otherwise
indicated in this Agreement, all definitions in this Section 3(f)
shall be applicable during the Protected Period only.
(i) Cause . "Cause" shall mean termination on
account of (A) the willful and continued failure by you to
substantially perform your duties with the Company (other than any
such failure resulting from your incapacity due to physical or
mental illness or Disability or any failure after the issuance of a
Notice of Termination by you for Good Reason) which failure is
demonstrably and materially damaging to the financial condition or
reputation of the Company and/or its subsidiaries, and which
failure continues more than 48 hours after a written demand for
substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties and
the demonstrable and material damage caused thereby or (B) the
willful engaging by you in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise.
No act, or failure to act, on your part shall be deemed "willful"
unless done, or omitted to be done, by you not in good faith and
without reasonable belief that your action or omission was
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in the best interest of the Company.
Notwithstanding the foregoing, you shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to you a copy of the resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the
entire membership of the Board at a meeting of the Board (after
reasonable notice to you and an opportunity for you, together with
your counsel, to be heard before the Board) finding that, in the
good faith opinion of the Board, you were guilty of conduct set
forth above in this Section 3(f)(i) and specifying the particulars
thereof in detail.
(ii) Date of Termination . "Date of Termination"
shall mean (A) if your employment is terminated for Disability, 30
days after Notice of Termination is given (provided that you shall
not have returned to the full-time performance of your duties
during such 30-day period) or (B) if your employment is terminated
for any other reason, the date specified in the Notice of
Termination (which, in the case of a termination for Cause, shall
not be less than 30 days from the date such Notice of Termination
is given and, in the case of a termination for Good Reason, shall
not be less than 15 nor more than 60 days from the date such Notice
of Termination is given).
(iii) Disability . "Disability" shall mean your
absence from the full-time performance of your duties with the
Company for six consecutive months as a result of your incapacity
due to physical or mental illness or disability, and within 30 days
after written Notice of Termination is thereafter given you shall
not have returned to the full-time performance of your duties.
(iv) Good Reason . "Good Reason" shall mean,
without your express written consent, the occurrence upon or after
a Change in Control of any of the following circumstances unless,
in the case of Sections 3(f)(iv)(A), (D), (F) or (G) hereof, such
circumstances are fully corrected prior to the Date of Termination
specified in the Notice of Termination given in respect
thereof:
(A) the assignment to you of any duties inconsistent with the
position in the Company that you held immediately prior to the
Change in Control, or an adverse alteration in the nature or status
of your responsibilities or the conditions of your employment from
those in effect immediately prior to such Change in Control;
(B) a reduction by the Company in your annual base salary, any
target bonus or perquisites as in effect immediately prior to the
Change in Control or as the same may be increased from time to time
except for across-the-board perquisite reductions similarly
affecting all senior executives of the Company and all senior
executives of any Person in control of the Company;
(C) the relocation of the principle place of your employment to
a location more than 50 miles from the location of such place of
employment on the date of this Agreement except for required travel
on the Company’s business to an extent substantially
consistent with your business travel obligations prior to the
Change in Control;
(D) the failure by the Company to pay to you any portion of your
compensation or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of
the Company within seven days of the date such compensation is
due;
(E) the failure by the Company to continue in effect any
material compensation or benefit plan in which you participated
immediately prior to
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the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the
Company to continue your participation therein (or in such
substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amounts of benefits provided and
the level of your participation relative to other participants, as
existed at the time of the Change in Control;
(F) the failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 7 hereof; or
(G) any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(f)(v) (and, if applicable, the
requirements of Section 3(f)(i) hereof), which purported
termination shall not be effective for purposes of this
Agreement.
(v) Notice of Termination . "Notice of Termination"
shall mean notice indicating the specific termination provision in
this Agreement relied upon and setting forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so
indicated.
(vi) Specified Employee . "Specified Employee" shall mean
an employee of the Company who satisfies the requirements for being
designated a "key employee" under Section 416(i)(1)(A)(i), (ii) or
(iii) of the Code without regard to Section 416(i)(5) of the Code
at any time during a calendar year, in which case such employee
shall be considered a Specified Employee for the twelve-month
period beginning on the first day of the fourth month immediately
following the end of such calendar year. Notwithstanding the
foregoing, all employees who are nonresident aliens during an
entire calendar year are excluded for purposes of determining which
employees meet the requirements of Section 416(i)(1)(A)(i), (ii) or
(iii) of the Code without regard to Section 416(i)(5) of the Code
for such calendar year. The term "nonresident alien" as used herein
shall have the meaning set forth in Regulations Section
1.409A-1(j). In the event of any corporate spinoff or merger,
the determination of which employees meet the requirements of
Section 416(i)(1)(A)(i), (ii) or (iii) of the Code without regard
to Section 416(i)(5) of the Code for any calendar year shall be
determined in accordance with Regulations Section
1.409A-1(i)(2).
4. Mitigation . Except as provided in Sections
3(b)(vii) and (viii) and Section 6 hereof, you shall not be
required to mitigate the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor shall
the amount of any payment or benefit provided for under this
Agreement be reduced by any compensation earned by you as the
result of employment by another employer, by retirement benefits,
by offset against any amount claimed to be owed by you to the
Company, or otherwise.
5. Release of Employment Claims . You agree,
as a condition to your receipt of the compensation and benefits
provided for under this Agreement, that you will execute a general
release agreement, in substantially the form set forth as
Attachment A to this Agreement, releasing any and all claims
arising out of your employment other than: (a) the enforcement of
this Agreement; (b) with respect to vested rights or rights
provided for under any benefit plan or arrangement of the Company;
or (c) rights to indemnification under any agreement, law, Company
organizational document or policy, or otherwise.
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6. Forfeiture . Except as
otherwise provided in Section 3(b)(v) of this Agreement, if you
willfully and materially fail to comply with the terms of your
Restrictive Covenant Agreement with the Company or if you willfully
and materially fail to comply with Section 2(c) or Section 5 of
this Agreement, all compensation and benefits provided for under
this Agreement shall be immediately forfeited. Notwithstanding the
foregoing, you shall not forfeit any compensation or benefits
provided for under this Agreement unless and until there shall have
been delivered to you, within six months after the Board (a) had
knowledge of conduct or an event allegedly constituting grounds for
such forfeiture and (b) had reason to believe that such conduct or
event could be grounds for such forfeiture, a copy of a resolution
duly adopted by a majority affirmative vote of the membership of
the Board at a meeting of the Board called and held for such
purpose (after giving you reasonable notice specifying the nature
of the grounds for such forfeiture and not less than 30 days to
correct the acts or omissions complained of, if correctable, and
affording you the opportunity, together with your counsel, to be
heard before the Board) finding that, in the good faith opinion of
the Board, you have engaged and continue to engage in conduct which
constitutes grounds for forfeiture of your compensation and
benefits under this Agreement; provided, however, that in the event
that you shall have already received any compensation or benefits
under this Agreement before the Board makes the determination
described in this sentence, you shall immediately reimburse the
Company for such compensation and/or benefits following such
determination by the Board. The forfeiture of any compensation or
benefits provided for under this Agreement by reason of this
Section 6 shall apply to such compensation and benefits
notwithstanding any other term or provision of this Agreement or
any other agreement or plan.
7. Successors; Binding Agreement .
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company
to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in
this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be
enforceable by you and your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. In the event of your death, all
amounts otherwise payable to you hereunder shall, unless otherwise
provided herein, be paid in accordance with the terms of this
Agreement to your devisee, legatee or other designee or, if there
is no such designee, to your estate.
8. Notice . Notices and all other communications
provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when (a) personally delivered or (b)
mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective
addresses set forth on the first page of this Agreement;
provided that all notice to the Company shall be directed to
the attention of the Board with a copy to the General Counsel of
the Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon
receipt.
9. Miscellaneous . No provision of this Agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and
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signed by you and such officer as may be
designated by the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the time or at any prior or
subsequent time. Any payments provided for hereunder shall be
paid net of any applicable withholding required under federal,
state or local law. The obligations of the Company under this
Agreement shall survive the expiration of this Agreement to the
extent necessary to give effect to this Agreement.
10. Validity . The invalidity or unenforceability
of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
11. Counterparts . This Agreement may be executed
in counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same
instrument.
12. Entire Agreement . This Agreement sets forth
the entire agreement of the parties hereto in respect of the
subject matter contained herein and during the term of this
Agreement supersedes the provisions of all prior agreements,
promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereof with respect to the subject
matter contained herein. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not
expressly set forth in this Agreement. Notwithstanding
anything to the contrary in this Agreement, the procedural
provisions of this Agreement shall apply to all benefits payable as
a result of a Change in Control (or other change in control) under
any employee benefit plan, agreement, program, policy or
arrangement of the Company. The foregoing notwithstanding, in
the event of any conflict or ambiguity between this Agreement and
any employment agreement executed by you and the Company, the
provisions of such employment agreement shall govern; but no
payment or benefit under this Agreement shall be made or extended
which duplicates any payment or benefit under any such employment
agreement.
13. Governing Law .
This Agreement is governed by and is to be
construed, administered, and enforced in accordance with the laws
of the State of Connecticut, without regard to conflicts of law
principles. If under the governing law, any portion of this
Agreement is at any time deemed to be in conflict with any
applicable statute, rule, regulation, ordinance, or other principle
of law, such portion shall be deemed to be modified or altered to
the extent necessary to conform thereto or, if that is not
possible, to be omitted from this Agreement. The invalidity of any
such portion shall not affect the force, effect, and validity of
the remaining portion hereof. Anything in this Agreement to the
contrary notwithstanding, the terms of this Agreement shall be
interpreted and applied in a manner consistent with the
requirements of Section 409A of the Code and the Regulations
thereunder and the Company shall have no right to accelerate or
make any payment under this Agreement except to the extent
permitted under Section 409A of the Code. The Company shall
have no obligation, however, to reimburse you for any tax penalty
or interest payable or provide a gross-up payment in connection
with any tax liability you may incur under Section 409A of the Code
except that this provision shall not apply in the event of the
Company’s negligence or willful disregard in interpreting the
application of Section 409A of the Code to this Agreement which
negligence or willful disregard causes you to become subject to a
tax penalty or interest payable under Section 409A of the Code nor
shall
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this provision be interpreted to limit any
gross-up payable to you under Section 3(c) of this
Agreement.
14. Reimbursement of Expenses
in Enforcing Rights . All
reasonable costs and expenses (including fees and disbursements of
counsel) incurred by you in seeking to interpret this Agreement or
enforce rights pursuant to this Agreement shall be paid on behalf
of or reimbursed to you promptly by the Company, whether or not you
are successful in asserting such rights; provided, however, that no
reimbursement shall be made of such expenses relating to any
unsuccessful assertion of rights if and to the extent that your
assertion of such rights was in bad faith or frivolous, as
determined by arbitrators in accordance with Section 15 or a
court having jurisdiction over the matter. Any such payment
or reimbursement shall be made in a lump sum in the month next
following the month in which such costs and expenses are incurred
subject to your submission of receipts for such expenses.
15. Arbitration .
Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by
arbitration in Fairfield, Connecticut by three arbitrators in
accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association in
effect at the time of submission to arbitration. Judgment may be
entered on the arbitrators’ award in any court having
jurisdiction. For purposes of entering any judgment upon an award
rendered by the arbitrators, the Company and you hereby consent to
the jurisdiction of any or all of the following courts:
(a) the United States District Court for the District of
Connecticut, (b) any of the courts of the State of
Connecticut, or (c) any other court having jurisdiction. The
Company and you further agree that any service of process or notice
requirements in any such proceeding shall be satisfied if the
rules of such court relating thereto have been substantially
satisfied. The Company and you hereby waive, to the fullest extent
permitted by applicable law, any objection which it may now or
hereafter have to such jurisdiction and any defense of inconvenient
forum. The Company and you hereby agree that a judgment upon an
award rendered by the arbitrators may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Subject to Section 14, the Company shall bear all
costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section 15 and shall pay such
costs and expenses in the tax year in which incurred.
Notwithstanding any provision in this Section 15, you shall be
paid during the pendency of any dispute or controversy arising
under or in connection with this Agreement.
16. Interest on Unpaid
Amounts . Any amount which has
become payable pursuant to the terms of this Agreement or any
decision by arbitrators or judgment by a court of law pursuant to
Section 15 but which has not been timely paid shall bear
interest at the prime rate in effect at the time such amount first
becomes payable, as quoted by the Company’s principal bank,
except as otherwise provided in Section 3(d) of this Agreement
(concerning interest payable with respect to delayed payments under
Section 409A of the Code).
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If this letter sets forth our agreement on the
subject matter hereof, kindly sign and return to the Company the
enclosed copy of this letter, which will then constitute our
agreement on this subject.
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IMS HEALTH INCORPORATED
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By:
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Chairman and Chief Executive Officer
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Agreed to this
day
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of
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2007.
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13
ATTACHMENT A
RELEASE
We advise you to consult an attorney before you sign this
Release. You have until the date which is seven (7) days
after the Release is signed and returned to IMS Health Incorporated
to change your mind and revoke your Release. Your Release
shall not become effective or enforceable until after that
date.
In consideration for the benefits provided under your
Change-in-Control Agreement with IMS Health Incorporated (the
"Agreement"), by your signature below, you, for yourself and on
behalf of your heirs, executors, agents, representatives,
successors and assigns, hereby release and forever discharge IMS
Health Incorporated, its past and present parent corporations,
subsidiaries, divisions, subdivisions, affiliates and related
companies (collectively, the "Company") and the Company’s
past, present and future agents, directors, officers, employees,
representatives, assigns, stockholders, attorneys, agents,
insurers, employee benefit programs (and the trustees,
administrators, fiduciaries and insurers of such programs), and any
other persons acting by, through, under or in concert with any of
the persons or entities listed herein, and their successors
(hereinafter "those associated with the Company") and with respect
to any and all claims, demands, actions and liabilities, whether in
law or equity, which you may have against the Company or those
associated with the Company of whatever kind, including but not
limited to those arising out of your employment with the Company or
the termination of that employment. You agree that this
Release covers, but is not limited to, claims arising under the Age
Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. §
2000e et seq., the Americans with Disabilities Act of 1990, 42
U.S.C. § 12101 et seq., the Fair Labor Standards Act, 29
U.S.C. § 201 et seq., the Employee Retirement Income Security
Act of 1974, 29 U.S.C. § 1001 et seq., the Family and Medical
Leave Act of 1993 and any local, state or federal law, regulation
or order providing workers’ compensation benefits,
restricting an employer’s right to terminate employees or
otherwise regulating employment, enforcing express or implied
employment contracts or requiring an employer to deal with
employees fairly or in good faith, or dealing with discrimination
in employment on the basis of sex, race, color, national origin,
veteran status, marital status, religion, disability, handicap, or
age. You also agree that this Release includes claims based
on wrongful termination of employment, breach of contract (express
or implied), tort, or claims otherwise related to your employment
or termination of employment with the Company and any claim for
attorneys’ fees, expenses or costs of litigation.
This Release covers all claims based on any facts or events,
whether known or unknown by you, that occurred on or before the
date of this Release. You expressly waive all rights you might have
under any law that is intended to protect you from waiving unknown
claims and by your signature below indicate your understanding of
the significance of doing so. Examples of released claims include,
but are not limited to: (a) claims that in any way relate to
your employment with the Company, or the termination of that
employment, such as claims for compensation, bonuses, commissions,
lost wages, or unused accrued vacation or sick pay (other than
under your Agreement); (b) claims that in any way relate to the
design or administration of any employee benefit program; (c)
claims that you have irrevocable or vested rights to severance or
similar benefits (other than under your Agreement) or to
post-employment health or group insurance benefits (other than
under your Agreement); (d) any claim, such as a benefit claim, that
was explicitly or implicitly denied before you signed this Release;
(e) any claim you might have for extra benefits as a consequence of
payments you receive because of signing this Release; or (f) any
claim to attorneys’ fees or other indemnities. Except
to enforce your Agreement or this Release, you agree that you will
never commence, prosecute, or cause to be commenced or
14
prosecuted any lawsuit or proceeding of any kind
against the Company or those associated with the Company in any
forum and agree to withdraw with prejudice all complaints or
charges, if any, that you have filed against the Company or those
associated with the Company.
Anything in this Release to the contrary notwithstanding, this
Release does not include a release of: (i) any of your rights
under the Agreement; (ii) any rights you may have to
indemnification under any agreement, law, Company organizational
document or policy, or otherwise; (iii) any rights you may have to
benefits under the Company’s benefit plans except as
otherwise provided in your Agreement or claims specifically
identified in this Release; (iv) any rights or claims under the Age
Discrimination in Employment Act or any other law that arise after
you sign this Release; or (iii) your right to enforce this Release
or any of the foregoing items described in this paragraph.
By signing this Release, you further agree as follows:
i.
You have read this Release carefully and fully understand its
terms;
ii.
You have had at least twenty-one (21) days to consider the terms of
the Release;
iii.
You have seven (7) days from the date you sign this Release to
revoke it by written notification to the Company. After this
seven (7)-day period, this Release is final and binding and may not
be revoked;
iv.
You have been advised to seek legal counsel and have had an
opportunity to do so;
v.
You would not otherwise be entitled to the benefits provided under
your Agreement had you not agreed to execute this Release; and
vi.
Your agreement to the terms set forth above is voluntary.
( The remainder of this page was intentionally
left blank)
15
TIER-3
CHANGE-IN-CONTROL AGREEMENT
FOR CERTAIN EXECUTIVES
OF IMS HEALTH INCORPORATED
[Date]
PERSONAL AND CONFIDENTIAL
[Name and Title]
IMS Health Incorporated
Dear
[ ]:
IMS Health Incorporated (the "Company") considers it essential
to the best interests of its stockholders to foster the continued
employment of key management personnel. In this connection,
the Board of Directors of the Company (the "Board") recognizes that
the possibility of a change in ownership or control of the Company
may result in the departure or distraction of such personnel to the
detriment of the Company and its stockholders. As you are a
skilled and dedicated executive with important management
responsibilities and talents, the Company believes that its best
interests will be served if you are encouraged to remain with the
Company.
The Company has determined that your ability to perform your
responsibilities and utilize your talents for the benefit of the
Company, and the Company’s ability to retain you as an
employee, will be significantly enhanced if you are provided with
fair and reasonable protection from the risks of a change in
ownership or control of the Company. Accordingly, in order to
induce you to remain in the employ of the Company, you and the
Company agree as follows:
1. Term of Agreement .
(a) Generally . Except as provided in Section 1(b)
hereof, (i) this Agreement shall be effective as of January 1, 2007
and shall continue in effect through December 31, 2008, and (ii)
commencing on January 1, 2009, and each January 1 thereafter, this
Agreement shall be automatically extended for one additional year
unless, not later than November 30th of the preceding year, either
party to this Agreement gives notice to the other that the
Agreement shall not be extended under this Section 1(a);
provided, however , that no such notice by the Company shall
be effective if a Change in Control or Potential Change in Control
(both as defined herein) shall have occurred prior to the date of
such notice.
(b) Upon a Change in Control . If a Change in
Control shall have occurred at any time during the period in which
this Agreement is effective, this Agreement shall continue in
effect for (i) the remainder of the month in which the Change in
Control occurred and (ii) a term of 24 months beyond the month in
which such Change in Control occurred (such entire period
hereinafter referred to as the "Protected Period").
2. Change in Control; Potential Change in
Control .
(a) A "Change in Control" shall be deemed to have occurred if,
during the term of this Agreement:
(i) any "Person," as such term is used for purposes of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange 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" (as defined in Rule 13d-3 under the Exchange
Act), 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 effectiveness of this Agreement), 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)(a)(i), (iii) or (iv) hereof,
(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 nominated 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) any transaction (or series of transactions) is consummated
under which the Company is merged or consolidated with any other
company, 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 66 2/3% 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 holds 20% or more of the combined
voting power of the then-outstanding securities of the Company or
such surviving entity;
(iv) a sale or disposition by the Company of all or
substantially all of the Company’s assets is consummated or
the stockholders of the Company approve a plan of complete
liquidation of the Company; or
(v) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Change in Control has occurred.
(b) A "Potential Change in Control" shall be deemed to have
occurred if:
(i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control;
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(ii) any Person (including the Company) publicly
announces an intention to take or to consider taking actions which
if consummated would constitute a Change in Control; or
(iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has
occurred.
(c) Employee Covenants . You agree that, subject to
the terms and conditions of this Agreement, in the event of a
Potential Change in Control, you will remain in the employ of the
Company until the earliest of (i) a date which is 180 days from the
occurrence of such Potential Change in Control, (ii) the
termination of your employment by reason of Disability (as defined
herein) or (iii) the date on which you first become entitled under
this Agreement to receive the benefits provided in Section 3(b)
hereof.
(d) Company Covenant Regarding Potential Change in Control or
Change in Control . In the event of a Potential Change in
Control or a Change in Control, the Company shall, not later than
15 days thereafter, have established one or more rabbi trusts and
shall deposit therein cash in an amount sufficient to provide for
full payment of all potential obligations of the Company that would
arise assuming consummation of a Change in Control and a subsequent
termination of your employment under Section 3(b). Such rabbi
trust(s) shall be irrevocable and shall provide that the Company
may not, directly or indirectly, use or recover any assets of the
trust(s) until such time as all obligations which potentially could
arise hereunder have been settled and paid in full or otherwise
extinguished, subject only to the claims of creditors of the
Company in the event of insolvency or bankruptcy of the Company;
provided, however, that if no Change in Control has occurred within
two years after such Potential Change in Control, such rabbi
trust(s) shall at the end of such two-year period become revocable
and may thereafter be revoked by the Company.
3. Termination .
(a) Termination by the Company for Cause, by You Without Good
Reason, or by Reason of Death or Disability . If during
the Protected Period your employment by the Company is terminated
by the Company for Cause, by you without Good Reason, or because of
your death or Disability, the Company shall be relieved of its
obligation to make any payments to you other than (i) its payment
of amounts otherwise accrued and owing but not yet paid and (ii)
any amounts payable under then-existing employee benefit programs
at the time such amounts are due.
(b) Termination by the Company Without Cause or by You for
Good Reason . If during the Protected Period your
employment by the Company is terminated by the Company without
Cause or by you for Good Reason, you shall be entitled to the
compensation and benefits described in this Section 3(b). If
your employment by the Company is terminated prior to a Change in
Control at the request of a Person engaging in a transaction or
series of transactions that would result in a Change in Control,
the Protected Period shall commence upon the subsequent occurrence
of a Change in Control, your actual termination shall be deemed a
termination occurring during the Protected Period and covered by
this Section 3(b), your Date of Termination shall be deemed to have
occurred immediately following the Change in Control, and Notice of
Termination shall be deemed to have been given by the Company
immediately prior to your actual termination. Your continued
employment shall not constitute consent to, or a waiver
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of rights with respect to, any circumstances
constituting Good Reason hereunder. The compensation and
benefits provided under this Section 3(b) are as
follows:
(i) The Company shall pay you your full base salary through the
Date of Termination at the rate in effect at the time Notice of
Termination is given, on the fifth day following the Date of
Termination, and you shall receive all other amounts to which you
are entitled under any compensation or benefit plan of the Company,
at the time such payments are due in accordance with the terms of
such compensation or benefit plan.
(ii) In the payroll period next following the payroll period in
which your Date of Termination occurs, the Company shall pay
you,
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