EXECUTIVE PENSION PLAN

 

TABLE OF CONTENTS

 

						Page
INTRODUCTION						1
SECTION 1				- DEFINITIONS		1
	1.1			“Actuarial Equivalent Value”		1
	1.2			“Affiliated Employer”		1
	1.3			“Average Final Compensation”		2
	1.4			“Basic Disability Plan”		2
	1.5			“Basic Disability Plan Benefit”		2
	1.6			“Basic Plan”		2
	1.7			“Basic Plan Benefit”		2
	1.8			“Board”		3
	1.9			“Cause”		3
	1.10			“CEO”		4
	1.11			“Change in Control”		4
	1.12			“Change in Control Agreement”		6
	1.13			“Code”		7
	1.14			“Committee”		7
	1.15			“Company”		7
	1.16			“Compensation”		7
	1.17			“Covered Earnings”		7
	1.18			“Deferred Vested Benefit”		8
	1.19			“Disability” or “Disabled”		8
	1.20			“Disability Benefits”		8
	1.21			“Effective Date”		8
	1.22			“Former Member”		8
	1.23			“Good Reason”		8
	1.24			“Member”		10
	1.25			“Other Disability Income”		11
	1.26			“Other Retirement Income”		11
	1.27			“Plan”		11
	1.28			“Plan Administrator”		11

 

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				Page
	1.29		“Potential Change in Control”	12
	1.30		“Regulations”	12
	1.31		“Retirement”	12
	1.32		“Retirement Benefits”	13
	1.33		“Separation from Service”	13
	1.34		“Service”	13
	1.35		“Specified Employee”	14
	1.36		“Surviving Spouse”	15
	1.37		“Surviving Spouse’s Benefits”	15
	1.38		“Vested Former Member”	15
SECTION 2			- PARTICIPATION	15
	2.1		Commencement of Participation	15
	2.2		Termination of Participation	16
SECTION 3			- AMOUNT AND FORM OF BENEFITS	16
	3.1		Retirement Benefits	16
	3.2		Deferred Vested Benefit	17
	3.3		Time and Form of Payment	19
	3.4		Lump Sum Calculation	25
	3.5		Nonpayment of Benefits	25
	3.6		Notification of Nonpayment of Benefits	27
	3.7		Repayment of Benefits Paid as Lump Sum	27
	3.8		Change in Control	28
SECTION 4			- DISABILITY BENEFITS	30
	4.1		Eligibility	30
	4.2		Amount	30
SECTION 5			- SURVIVING SPOUSE’S BENEFITS	30
	5.1		Death Prior to Benefit Payment	30
	5.2		Death On or After Benefit Payment	31
	5.3		Payment of Surviving Spouse’s Benefit	31

 

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				Page
	5.4		Reduction	31
SECTION 6			- PLAN ADMINISTRATOR	31
	6.1		Duties and Authority	31
	6.2		Presentation of Claims	32
	6.3		Claims Denial Notification	32
	6.4		Claims Review Procedure	33
	6.5		Timing	34
	6.6		Final Decision	34
	6.7		Delayed Payments	35
SECTION 7			- MISCELLANEOUS	35
	7.1		Amendment; Suspension	35
	7.2		Termination	36
	7.3		No Employment Rights	38
	7.4		Unfunded Status	39
	7.5		Arbitration	39
	7.6		No Alienation	40
	7.7		Withholding	40
	7.8		Governing Law	40
	7.9		Successors	41
	7.10		Integration	42

 

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IMS HEALTH INCORPORATED

 

EXECUTIVE PENSION PLAN

 

As Amended and Restated Effective as of January 1, 2005

 

INTRODUCTION

 

Effective as of April 17, 2001, the IMS Health Incorporated Executive Pension Plan (the “Plan”) was established to provide a means of ensuring the payment of a competitive level of retirement income and disability 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, 2005.  The provisions of this amendment and restatement of the Plan shall apply to Members of the Plan who have not retired or terminated employment with the Company as of January 1, 2005.  The rights to benefits, if any, of any Former Member or Vested Former Member who retired or otherwise terminated employment before January 1, 2005, together with the amount of such benefits, shall continue to be governed by the provisions of the Plan in effect as of the date of such retirement or termination of employment.

 

SECTION 1 - DEFINITIONS

 

1.1            “Actuarial Equivalent Value” shall mean a benefit of equivalent value computed on the basis of the mortality table and interest rate used to calculate accrued benefits under the Basic Plan unless otherwise specifically provided in this Plan.

 

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

 

 

1.3            “Average Final Compensation” shall mean a Member’s average annual Compensation during the five consecutive 12-month periods in the last ten consecutive 12-month periods of his or her Service (or during the total number of consecutive 12-month periods if fewer than five), immediately prior to the month following the earlier of:  (a) the Member’s termination of employment with the Company or an Affiliated Employer, (b) the Member’s removal from participation under this Plan, or (c) the commencement of benefits to the Member under the Basic Disability Plan, affording the highest such Average Final Compensation.

 

1.4            “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.

 

1.5            “Basic Disability Plan Benefit” shall mean the amount of benefits payable to a Member from the Basic Disability Plan.

 

1.6            “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 Surviving Spouse or designated beneficiary of a deceased Member or Vested Former Member.

 

1.7            “Basic Plan Benefit” shall mean the amount of benefits payable from the Basic Plan to a Member or Vested Former Member.

 

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1.8            “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.

 

1.9            “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 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 Board, which demand specifically identifies the manner in which the Board 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.

 

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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.  Notwithstanding the foregoing, the Member shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Member 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 the Member and an opportunity for the Member, together with the Member’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Member was guilty of conduct set forth above in this definition and specifying the particulars thereof in detail.

 

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

 

1.11          “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:

 

(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

 

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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 1.11(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 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

 

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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.

 

1.12          “Change in Control Agreement” shall mean any written agreement in effect between any Member or Former Member or Vested Former Member and the Company or an Affiliated Employer pursuant to which benefits may be payable to

 

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such Member or Former Member or Vested Former Member in connection with a Change in Control.

 

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

 

1.14          “Committee” shall mean the Human Resources Committee of the Board (the Compensation and Benefits Committee before January 1, 2007) or any successor thereto.

 

1.15          “Company” shall mean IMS Health Incorporated.

 

1.16          “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.

 

1.17          “Covered Earnings” shall mean a Member’s Compensation in the 12 months immediately preceding the onset of the Member’s Disability.

 

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1.18          “Deferred Vested Benefit” shall mean the benefits described in Section 3.2(b) hereof.

 

1.19          “Disability” or “Disabled” shall mean that the Member has been determined to be disabled in accordance with the Basic Disability Plan by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months and the Member has received at least three months of benefits under the Company’s short-term disability plan and/or the Basic Disability Plan.

 

1.20          “Disability Benefits” shall mean the benefits provided as described in Section 4.2 hereof.

 

1.21          “Effective Date” shall mean April 17, 2001. The effective date of this amendment and restatement of the Plan shall mean January 1, 2005.

 

1.22          “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.

 

1.23          “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 express written

 

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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 installment of deferred compensation under any deferred compensation

 

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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 7.9 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.

 

1.24          “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.

 

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1.25          “Other Disability Income” shall mean (a) the disability insurance benefit that the Member is entitled to receive under the Federal Social Security Act while he or she is receiving the Basic Disability Plan Benefit and (b) the disability income payable to a Member from any supplemental executive disability plan of the Company or any Affiliated Employer or from any other contract, agreement or other arrangement with the Company or an Affiliated Employer (excluding any Basic Disability Plan).

 

1.26          “Other Retirement Income” shall mean the retirement income payable to a Member or Vested Former Member from any ‘excess benefit plan’ as that term is defined in Section 3(36) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any plan described in Section 201(2) of ERISA, and any other contract, agreement or other arrangement providing a defined pension benefit or defined contribution retirement benefit, in any case, maintained or entered into with the Company or an Affiliated Employer (excluding this Plan, any Basic Plan, any defined contribution plan intended to meet the requirements of Code Section 401(a) and any elective plan of deferred compensation).

 

1.27          “Plan” shall mean this IMS Health Incorporated Executive Pension Plan, as embodied herein, and any amendments thereto.

 

1.28          “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 delegate of such duly authorized committee or person(s).

 

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1.29          “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 1.11(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

 

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

 

1.31          “Retirement” shall mean the Separation from Service of a Member or Vested Former Member with the Company or an Affiliated Employer other than by reason of death after attaining age 65 and completing five years of Service.  In determining whether age 65 has been attained under this definition, there shall be included as years of age the number of additional years credited as “age” for purposes of the Plan to the Member or Vested Former Member under this Plan, a

 

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then-effective employment agreement between the Company and such person, a then-effective Change in Control Agreement between the Company and such Person, or otherwise approved by the Committee.

 

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

 

1.33          “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).

 

1.34          “Service” shall mean a Member’s service defined as Vesting Service in the Basic Plan, which is taken into account for vesting purposes thereunder, except that (a) Service will also include that period of time during which the Member is receiving benefits under the Basic Disability Plan until Retirement Benefits or Deferred Vested Benefits, as the case may be, are paid to such Member; provided, however, that if a Member who is receiving benefits under the Basic Disability Plan has a Separation from Service that is initiated by the Company for any reason other than Cause, such Member shall receive service credit for purposes of calculating such Member’s Retirement Benefits or Deferred Vested Benefits, as the case may be, for the maximum period of time during which such Member is eligible to receive benefits under the Basic Disability Plan; (b) 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

 

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date of acquisition will not constitute Service hereunder unless otherwise approved by the Committee; (c) upon commencement of participation hereunder in accordance with Section 2.1 hereof, the Committee may limit any service that would otherwise constitute Service hereunder with respect to periods prior to the date of participation in the Plan; (d) 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; and (e) service prior to the date an individual becomes a Member shall initially not be counted for purposes of determining the amount of the Member’s Retirement Benefit pursuant to Section 3.1(b)(i) or the Member’s Deferred Vested Benefit pursuant to Section 3.2(b)(i), but for such purposes shall be deemed to accrue at the rate of 20% of such prior service for each year of Service completed after such individual becomes a Member until 100% accrued.  The foregoing notwithstanding, there shall be included as Service for all purposes under the Plan 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, an employment agreement between the Company or an Affiliated Employer and such person or a Change in Control Agreement in effect at the time of such person’s termination of employment, or otherwise approved by the Committee.

 

1.35          “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

 

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Employee for the twelve-month period beginning on the first day of the fourth month immediately following the end of such calendar year.

 

1.36          “Surviving Spouse” shall mean the spouse of a deceased Member or Vested Former Member to whom such Member or Vested Former Member is married under applicable state law immediately preceding such Member or Vested Former Member’s death.

 

1.37          “Surviving Spouse’s Benefits” shall mean the benefits described in Section 5 hereof.

 

1.38          “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 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.

 

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2.2            Termination of Participation .  A Member’s participation in the Plan shall terminate upon termination of his or her employment with the Company or any Affiliated Employer. Prior to termination of employment, a Member may be removed, upon written notice by the CEO, and as approved by the Comm