DEFINED CONTRIBUTION EXECUTIVE RETIREMENT PLAN

 

TABLE OF CONTENTS

 

			Page
INTRODUCTION			1
SECTION 1 - DEFINITIONS			1
1.1	“Affiliated Employer”		1
1.2	“Basic Disability Plan”		1
1.3	“Basic Plan”		1
1.4	“Basic Rate”		2
1.5	“Benefit Payment Date”		2
1.6	“Board”		2
1.7	“Cause”		2
1.8	“CEO”		3
1.9	“Change in Control”		3
1.10	“Change in Control Agreement”		5
1.11	“Code”		6
1.12	“Committee”		6
1.13	“Company”		6
1.14	“Compensation”		6
1.15	“Designated Beneficiary”		6
1.16	“Disability” or “Disabled”		7
1.17	“Effective Date”		7
1.18	“Entry Age”		7
1.19	“ERISA”		7
1.20	“Former Member”		7
1.21	“Good Reason”		7
1.22	“Investment Credits”		9
1.23	“Member”		10
1.24	“Past Service”		10
1.25	“Past Service Contributions Rate”		10
1.26	“Plan”		11
1.27	“Plan Administrator”		11
1.28	“Potential Change in Control”		11
1.29	“Regulations”		12
1.30	“Retirement”		12
1.31	“Retirement Account”		12
1.32	“Retirement Benefit”		12
1.33	“Retirement Credits”		12
1.34	“Separation from Service”		12
1.35	“Service”		12
1.36	“Specified Employee”		13
1.37	“Vested Former Member”		13

 

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SECTION 2 - PARTICIPATION				14
2.1	Commencement of Participation			14
2.2	Termination of Participation			14
SECTION 3 - AMOUNT AND FORM OF BENEFITS				15
3.1	Retirement Benefit			15
3.2	Time and Form of Payment			17
3.3	Nonpayment of Benefits			21
3.4	Notification of Nonpayment of Benefits			22
3.5	Repayment of Benefits			23
3.6	Change in Control			23
SECTION 4 - DEATH BENEFITS				26
4.1	Death Prior to Benefit Payment Date			26
4.2	Death On or After Benefit Payment Date			27
SECTION 5 - PLAN ADMINISTRATOR				27
5.1	Duties and Authority			27
5.2	Presentation of Claims			27
5.3	Claims Denial Notification			28
5.4	Claims Review Procedure			28
5.5	Timing			29
5.6	Final Decision			29
5.7	Delayed Payments			30
SECTION 6 - MISCELLANEOUS				31
6.1	Amendment; Suspension			31
6.2	Termination			33
6.3	No Employment Rights			37
6.4	Unfunded Status			37
6.5	Arbitration			38
6.6	No Alienation			39
6.7	Withholding			39
6.8	Governing Law			39
6.9	Successors			40
6.10	Integration			40
Appendix A				42
Appendix B				43

 

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IMS HEALTH INCORPORATED

 

DEFINED CONTRIBUTION EXECUTIVE RETIREMENT PLAN

 

As Amended and Restated Effective as of January 1, 2009

 

INTRODUCTION

 

Effective as of January 1, 2007, the IMS Health Incorporated Defined Contribution Executive Retirement Plan (the “Plan”) was established to provide a means of ensuring the payment of a competitive level of retirement and survivor benefits, and thereby attract, retain and motivate a select group of executives of IMS Health Incorporated and its affiliated employers. This document represents a complete restatement of the Plan effective as of January 1, 2009.

 

SECTION 1 - DEFINITIONS

 

1.1          “Affiliated Employer” shall mean an entity affiliated with the Company.

 

1.2          “Basic Disability Plan” shall mean as to any Member the long-term disability plan of the Company or an Affiliated Employer pursuant to which long-term disability benefits are payable to such Member.

 

1.3          “Basic Plan” shall mean as to any Member or Vested Former Member the defined benefit pension plan of the Company or an Affiliated Employer intended to meet the requirements of Code Section 401(a) pursuant to which retirement benefits are payable to such Member or Vested Former Member or to the Designated Beneficiary of a deceased Member or Vested Former Member.

 

 

1.4          “Basic Rate” shall mean, with respect to any Member, the percentage specified in Appendix A to this Plan which is applicable to a Member whose Entry Age is the same as such Member’s Entry Age.

 

1.5          “Benefit Payment Date” shall mean the date on which a Member’s or Vested Former Member’s Retirement Benefit is paid to such Member or Vested Former Member in accordance with Section 3.2 or to such Member’s or Vested Former Member’s Designated Beneficiary in accordance with Section 4.1.

 

1.6          “Board” shall mean the Board of Directors of IMS Health Incorporated, except that any action authorized to be taken by the Board hereunder may also be taken by a duly authorized committee of the Board or its duly authorized delegees.

 

1.7          “Cause”   A Member shall not be deemed to have been terminated for “Cause” under this Plan unless such Member shall have been terminated for “Cause” under the terms of such Member’s employment agreement or Change in Control Agreement with the Company, if any.  If no such employment agreement or Change in Control Agreement containing a definition of “Cause” shall be in effect, for purposes of this Plan “Cause” shall mean a Member’s:

 

(a)           willful and continued failure to substantially perform his or her duties (other than any such failure resulting from incapacity due to physical or mental illness or Disability or any failure after the issuance of a notice of

 

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termination by the Member for Good Reason) which failure is demonstrably and materially damaging to the financial condition or reputation of the Company and/or its Affiliated Employers, and which failure continues more than 48 hours after a written demand for substantial performance is delivered to the Member by the Company, which demand specifically identifies the manner in which the Company believes that the Member has not substantially performed his or her duties; or

 

(b)                             the willful engaging by the Member in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise.

 

No act, or failure to act, on the part of the Member shall be deemed “willful” unless done, or omitted to be done, by the Member not in good faith and without reasonable belief that his or her action or omission was in the best interest of the Company.

 

1.8          “CEO” shall mean the Chief Executive Officer of the Company.

 

1.9          “Change in Control”   If a “Change in Control” shall have occurred or shall be deemed to have occurred under the terms of a Member’s or Vested Former Member’s Change in Control Agreement or employment agreement with the Company, if any, then a “Change in Control” shall be deemed to have occurred under this Plan.   Otherwise a “Change in Control” shall be deemed to have occurred if:

 

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(a)           any “Person” as such term is used for purposes of Sections 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 of 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;

 

(b)          during any period of 24 months (not including any period prior to the Effective Date), individuals who at the beginning of such period constitute the Board, and any new director (other than (i) a director nominated by a Person who has entered into an agreement with the Company to effect a transaction described in Sections 1.9(a), (c), or (d) hereof, (ii) 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 (iii) 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

 

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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;

 

(c)           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 (i) 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 (ii) 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;

 

(d)                             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

 

(e)                              the Board adopts a resolution to the effect that, for purposes of this Plan, a Change in Control has occurred.

 

1.10        “Change in Control Agreement” shall mean any written agreement in effect between any Member or Former Member or Vested Former Member and

 

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the Company or an Affiliated Employer pursuant to which benefits may be payable to such Member or Former Member or Vested Former Member in connection with a Change in Control.

 

1.11        “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

1.12        “Committee” shall mean the Human Resources Committee of the Board.

 

1.13        “Company” shall mean IMS Health Incorporated.

 

1.14        “Compensation” shall mean base salary, annual bonuses, commissions, overtime and shift pay, in each case prior to reductions for elective contributions under Sections 401(k), 125 and 132(f)(4) of the Code and deferred compensation under any nonqualified deferred compensation plan.  Notwithstanding the foregoing, Compensation shall exclude severance pay (including, without limitation, severance pay under the Company’s Employee Protection Plan), stay-on bonuses, long-term bonuses, retirement income, change-in-control payments, contingent payments, amounts paid under this Plan or any other retirement plan or deferred compensation plan, income derived from stock options, stock appreciation rights and other equity-based compensation and other forms of special remuneration.

 

1.15        “Designated Beneficiary” shall mean one or more persons, estates or other entities, designated in accordance with such procedures as may be specified by the Plan Administrator, that are entitled to receive benefits under the

 

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Plan upon the death of a Member or Vested Former Member and, in the absence of any such designation, the Member’s or Vested Former Member’s estate.

 

1.16        “Disability” or “Disabled” shall mean disability or disabled for purposes of the Basic Disability Plan.

 

1.17        “Effective Date” shall mean January 1, 2007.  The effective date of this amendment and restatement shall mean January 1, 2009.

 

1.18        “Entry Age” shall mean a Member’s age on the date that such Member commences participation in the Plan in accordance with Section 2.1.

 

1.19        “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

1.20        “Former Member” shall mean (a) a Member whose employment with the Company or an Affiliated Employer terminates before he or she has completed five or more years of Service, or (b) a Member who was removed from participation in the Plan, in accordance with Section 2.2 hereof, before he or she has completed five or more years of Service.

 

1.21        “Good Reason”  If a Member shall have terminated employment for “Good Reason” under the terms of such Member’s Change in Control Agreement or employment agreement with the Company, if any, then such Member shall be deemed to have terminated employment for “Good Reason” under this Plan.  Otherwise “Good Reason” shall mean, without the Member’s

 

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express written consent, the occurrence of any of the following circumstances unless, 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 the Member of any duties inconsistent with the Member’s position in the Company, or an adverse alteration in the nature or status of the Member’s responsibilities or the conditions of the Member’s employment;

 

(b)          a reduction by the Company in the Member’s annual base salary, target bonus or perquisites except for across-the-board perquisite reductions similarly affecting all senior executives of the Company and all senior executives of any Person, as such term is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, in control of the Company;

 

(c)           the relocation of the principal place of the Member’s employment to a location more than 50 miles from the location of such place of employment; for this purpose, required travel on the Company’s business will not constitute a relocation so long as the extent of such travel is substantially consistent with the Member’s customary business travel obligations;

 

(d)          the failure by the Company to pay to the Member any portion of the Member’s compensation or to pay to the Member any portion of an

 

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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 the Member participated 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 the Member’s 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 the Member’s participation relative to other participants;

 

(f)           the failure of the Company to obtain a satisfactory agreement from any successor to the Company to fully assume the Company’s obligations and to perform under this Plan, as contemplated in Section 6.9 hereof;

 

(g)          with respect to any Member who is a party to an employment agreement or a Change in Control Agreement, any purported termination of such Member’s employment that is not effected pursuant to the notice provisions, if any, in such Member’s employment agreement or Change in Control Agreement.

 

1.22        “Investment Credits” shall mean notional additions to the Retirement Account determined in accordance with Section 3.1(d)

 

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1.23        “Member” shall mean an employee of the Company or an Affiliated Employer who becomes a participant in the Plan pursuant to Section 2, but excludes any Former Member or Vested Former Member.

 

1.24        “Past Service” shall mean a Member’s Service as of the date of his or her commencement of participation in the Plan including Service prior to the Effective Date of this Plan.  If a Member was employed by a company acquired by the Company or an Affiliated Employer after the Effective Date, such Member’s service with that company prior to the date of acquisition will not constitute Past Service hereunder unless otherwise approved by the Committee. Upon commencement of participation hereunder in accordance with Section 2.1 hereof, the Committee may limit any Service otherwise to constitute Past Service hereunder with respect to periods prior to the date of participation in the Plan.  The foregoing notwithstanding, Past Service shall include the number of additional years (or other additional period) credited as “service” for purposes of Past Service under the Plan to the Member or Vested Former Member under this Plan or under an employment agreement between the Company or an Affiliated Employer and such person in effect at the time of such person’s Separation from Service, or otherwise approved by the Committee.

 

1.25        “Past Service Contributions Rate” shall mean, with respect to any Member, the percentage specified in Appendix A to this Plan which is applicable to a Member whose Past Service is the same as such Member’s Past Service.

 

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1.26        “Plan” shall mean this IMS Health Incorporated Defined Contribution Executive Retirement Plan, as embodied herein, and any amendments thereto.

 

1.27        “Plan Administrator” shall mean the Company, except that any action authorized to be taken by the Plan Administrator hereunder may also be taken by any committee or person(s) duly authorized by the Board or the duly authorized delegees of such duly authorized committee or person(s).

 

1.28        “Potential Change in Control”   If a “Potential Change in Control” shall have occurred or shall be deemed to have occurred under the terms of a Member’s Change in Control Agreement or employment agreement with the Company, if any, then a “Potential Change in Control” shall be deemed to have occurred under this Plan.  Otherwise a “Potential Change in Control” shall be deemed to have occurred if:

 

(a)          the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control;

 

(b)          any Person (including the Company), as defined in Section 1.9(a) hereof, publicly announces an intention to take or to consider taking actions which if consummated would constitute a Change in Control; or

 

(c)          the Board adopts a resolution to the effect that, for purposes of this Plan, a Potential Change in Control has occurred.

 

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1.29        “Regulations” shall mean proposed and final Treasury Regulations, as the same may be amended from time to time.

 

1.30        “Retirement” shall mean a Member’s or Vested Former Member’s Separation from Service for any reason other than Cause after completing five years of Service or by reason of such Member’s or Vested Former Member’s Disability.

 

1.31        “Retirement Account”  shall mean the notional account created and maintained for each Member and Vested Former Member, which shall be the sum of the Retirement Credits and Investment Credits thereon, as provided in Sections 3.1(c) and (d) hereof.

 

1.32        “Retirement Benefit ” shall mean the benefit described in Section 3.1(b) hereof.

 

1.33        “Retirement Credits” shall mean notional additions to the Retirement Account determined in accordance with Section 3.1(c).

 

1.34        “Separation from Service” shall mean termination of employment with the Company and any Affiliated Employer.  Whether a Member or Vested Former Member has had a Separation from Service shall be determined by the Plan Administrator on the basis of all relevant facts and circumstances and with reference to Regulations Section 1.409A-1(h).

 

1.35        “Service” shall mean a Member’s or Vested Former Member’s period of employment with the Company or an Affiliated Employer that is counted

 

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as Service according to the Service Counting Rules set forth in Appendix B, except that (a) Service prior to the date of commencement of participation in this Plan will be disregarded; and (b) no service of a Former Member or Vested Former Member during any period after removal from participation under Section 2.2 shall constitute Service for purposes of the Plan. The foregoing notwithstanding, there shall be included as Service the number of additional years (or other additional period) credited as “service” for purposes of the Plan to the Member or Former Member or Vested Former Member under this Plan or under an employment agreement between the Company or an Affiliated Employer and such person in effect at the time of such person’s Separation from Service, or otherwise approved by the Committee.

 

1.36        “Specified Employee” shall mean an employee 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.

 

1.37        “Vested Former Member” shall mean (a) a Member whose employment with the Company or an Affiliated Employer terminates on or after the date on which he or she has completed five or more years of Service, or (b) a Member who was removed from participation in the Plan, in accordance

 

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with Section 2.2 hereof, on or after the date on which he or she has completed five or more years of Service.

 

SECTION 2 - PARTICIPATION

 

2.1          Commencement of Participation .  Such key executives of the Company and its Affiliated Employers as are designated by the CEO in writing and approved by the Committee shall participate in the Plan as of a date determined by the Committee.

 

2.2          Termination of Participation .  A Member’s participation in the Plan shall terminate upon his or her Separation from Service. Prior to Separation from Service, a Member may be removed, upon written notice by the CEO, and as approved by the Committee, from further participation in the Plan.  As of the date of Separation from Service or removal, no further benefits shall accrue to such individual hereunder except as provided in Sections 3 and 6 hereof.

 

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SECTION 3 - AMOUNT AND FORM OF BENEFITS

 

3.1            Retirement Benefit

 

(a)            Eligibility .   Upon the Retirement of a Member or Vested Former Member, he or she shall be entitled to the Retirement Benefit described in Section 3.1(b), payable in the form specified in Section 3.2.

 

(b)            Retirement Benefit . A notional Retirement Account shall be created and maintained for each Member and Vested Former Member and shall be the sum of the Retirement Credits and annual Investment Credits thereon, as provided in Sections 3.1(c) and (d), respectively.  A Member’s or Vested Former Member’s Retirement Benefit shall be equal to the value of his or her Retirement Account, which shall be created and maintained solely for the purpose of calculating the Retirement Benefit under this Plan.

 

(c)            Retirement Credits . For each calendar year, each Member shall have his or her Retirement Account credited with notional Retirement Credits in an amount equal to the Member’s Basic Rate times the Member’s Compensation for such calendar year. In addition, for each of the first ten calendar years of a Member’s participation in the Plan, such Member shall have his or her Retirement Account credited with an additional notional Retirement Credit in an amount equal to the Member’s Past Service Contributions Rate times the Member’s Compensation for such calendar year.  A Member’s Retirement Credits shall be allocated to the Member’s Retirement Account as of the end of each calendar year.  Notwithstanding

 

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the foregoing, Retirement Credits made with respect to the calendar year in which a Member’s Separation from Service occurs shall be made as soon as administratively practicable following such Separation from Service rather than at the end of such calendar year and in no event later than the Member’s Benefit Payment Date.

 

(d)            Investment Credits.   A Member’s or a Vested Former Member’s Retirement Account shall be credited as of the last day of each calendar year with a notional Investment Credit calculated by multiplying the Member’s or Vested Former Member’s Retirement Account as of such date (before the addition of any Retirement Credits for such calendar year) by the average of the annual yields at the end of each month in such calendar year on the AA-AAA Rated/10+ Years Component of the Merrill Lynch U.S. Corporate Master Index for such calendar year.  Notwithstanding the foregoing, Investment Credits made with respect to the calendar year in which a Member’s or Vested Former Member’s Benefit Payment Date occurs shall be made on the basis of the average of the annual yields of the AA-AAA Rated/10+ Years Component of the Merrill Lynch U.S. Corporate Master Index at the end of each of the months immediately preceding the month in which occurs such Member’s or Vested Former Member’s Benefit Payment Date and shall be credited as of such Member’s or Vested Former Member’s Benefit Payment Date. Investment Credits will cease to be credited after the Member’s or Vested Former Member’s Benefit Payment Date.

 

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3.2            Time and Form of Payment .

 

(a)            An employee may elect, on forms to be provided by the Plan Administrator, the Benefit Payment Date of any Retirement Benefit to which the Member may become entitled under the Plan.  The Member may elect any age or date at which the Member’s Retirement Benefit shall be paid following the Member’s Retirement. The form of payment, however, shall be a lump sum. The election must be filed with the Plan Administrator on such form or forms as the Plan Administrator may require within 30 days after the Member’s commencement of participation in order to be effective; provided, however, that if the Member is a participant in another account balance plan, within the meaning provided in Regulations Section 1.409A-1(c)(2)(B), that is required to be aggregated with this Plan, such election must be made before the Member’s commencement of participation in this Plan.  Notwithstanding the foregoing, a Member shall be permitted to make the election described in this Section 3.2(a) if the election is filed with the Plan Administrator on or before December 31, 2008 provided that any election filed in 2007 may apply only to amounts that would not otherwise be payable in 2007 and may not cause an amount to be paid in 2007 that would not otherwise be payable in 2007 and any election filed in 2008 may apply only to amounts that would not otherwise be payable in 2008 and may not cause an amount to be paid in 2008 that would not otherwise be payable in 2008.

 

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(b)            In the absence of an effective Be