Exhibit 10.31.1


 


Exhibit
A


 


IMS HEALTH
INCORPORATED


 


Long-Term
Incentive Program


 


 


Designation of
2005-06 Performance Period, Performance Goal


And Award
Opportunities


 


In furtherance
of Section 4 of the Long-Term Incentive Program (the “Program”), for the period
January 1, 2005 through December 31, 2006 (the “2005-06 Performance
Period”) the Performance Goal, Award Opportunities, and participation shall be
as set forth in this Designation.  Terms
used in this Designation have the meanings defined in the Program.


 


Part I.              2005-06
Performance Goal and Award Opportunities


 


(a)     For the 2005-06 Performance Period, the Performance Goal
shall be a blended goal weighted 60% based on revenues of the Company and 40%
based on operating income.  The Award
Opportunity earnable by each Participant shall range from 0% to 200% of the
Participant’s target Award Opportunity, and shall relate to the Performance
Goal as set forth in (i) through (iii) below:


 


(i)        Performance Goal.  The “Component Payout Percentage Table “ for
the Performance Goals for the 2005-06 Performance Period shall be as follows
(subject to Section 4(c) of the Program). 
Percentages appearing in the table are referred to in this Designation
as Component Payout Percentages:


 


	
  Performance

  	
   

  	
  Floor

  	
   

  	
  Downside

  Minimum

  	
   

  	
  Downside

  Cliff

  	
   

  	
  Target

  	
   

  	
  Upside

  Potential

  	
   

  	
  Maximum

  	
   

  
	
  Revenue Component

  	
   

  	
  < 0

  	
  %

  	
  75

  	
  %

  	
  85

  	
  %

  	
  100

  	
  %

  	
  125

  	
  %

  	
  200

  	
  %

  
	
  Operating Income Component

  	
   

  	
  < 0

  	
  %

  	
  75

  	
  %

  	
  90

  	
  %

  	
  100

  	
  %

  	
  125

  	
  %

  	
  200

  	
  %

  



 


The
Committee has separately specified the levels of Revenue and Operating Income that
correspond to the Floor, Downside Minimum, Downside Cliff, Target, Upside
Potential, and Maximum performance levels. 
The Committee may adjust the components of the Performance Goal
specified above at any time, provided that, in the case of a Covered Employee,
the level of any element of the Performance Goal as adjusted shall be not less
than the corresponding element of the Performance Goal as set forth in the
above Table.  Thus, for purposes of Section 162(m),
the Performance Goal shall be deemed to be the minimum level specified in the
preceding sentence, with any specification of a different Performance Goal
permitted hereunder in respect of a Covered Employee representing an exercise
of negative discretion decreasing the payouts that otherwise would be
authorized for achievement of such minimum levels of performance.


 





















 


(ii)     Award Opportunities Earned For
Performance.  Award opportunities shall be deemed earned at
the end of the Performance Period as follows: 
First, the Committee shall determine the level of achievement of the
revenue component of the Performance Goal and the operating income component of
the Performance Goal, and for each the corresponding “Component Payout
Percentage.”  (Example:  Revenue at target has a Component Payout
Percentage of 100%.)  For component
performance between any two performance levels (e.g., between “Floor” and “Downside
Minimum”), the Component Payout Percentage will be interpolated.  For performance below the “Floor” level, the
Component Payout Percentage will be zero, and for performance above the Upside
Maximum, the Component Payout Percentage will be 200%.  Second, the “Final Payout Percentage” will be
determined as the sum of 60% of the Component Payout Percentage for revenues
and 40% of the Component Payout Percentage for operating income.  Third, the Participant’s target Award
Opportunity will be deemed earned at the Final Payout Percentage.  Any portion of the Award Opportunity not
earned will be canceled.


 


(iii)  Adjustments to Performance Goal.  The Committee may determine in its discretion
to adjust the Performance Goal, and each component thereof, as specified in (i)
above and shall adjust the components of the Performance Goal to eliminate the
positive and negative effects of extraordinary items, including acquisitions,
and changes in accounting principles from 2004, including the adoption of
FAS123r, provided that no such adjustment is authorized or may be made with
respect to a Covered Employee if and to the extent that such authorization or
adjustment would cause the Performance Goal not to meet the applicable
requirements of Treasury Regulation 1.162-27(e)(2) under the Code.


 


Part II.            Denomination
of Award Opportunity


 


Subject to the terms of the Plans and the Program, 50% of
the Award Opportunity of each Participant shall be denominated in Restricted
Stock Units and 50% of such Award Opportunity shall be denominated in
cash.  For this purpose, a Restricted
Stock Unit, if earned, may only be settled by issuance or delivery of a
Share.  The number of Restricted Stock
Units earnable by a Participant for Target performance shall equal the dollar
amount of 50% of his or her Target Award Opportunity divided by $23.31, which
represents the average closing price per Share over the final 20 trading days
of 2004.  For performance other than
Target performance, the number of Restricted Stock Units (as distinguished from
the initial dollar value of the Restricted Stock Units) and the dollar amount
of the cash-denominated portion of the Award Opportunity will each be
multiplied by the applicable Final Payout Percentage under Part I (ii) above to
determine the amount of the Award Opportunity earned.


 


Part III.           Stated
Vesting Schedule and Settlement


 


Subject to the terms of the Plans and the Program, any of
the cash-denominated portion of a Participant’s Award Opportunity deemed earned
for the 2005-06 Performance Period shall become vested in full at December 31,
2006 if the Participant remains employed by the Company or a Subsidiary through
that date, and any of the Restricted Stock Units portion of the Award
Opportunity deemed earned for the 2005-06 Performance Period shall become
vested in full at December 31, 2008 if the Participant remains employed by
the Company or a Subsidiary through that date. 
Subject to any permitted deferrals under the Plans and the Program, each
portion of the Participant’s Award shall be settled as promptly as practicable
upon such portion becoming vested.


 





















 


Part IV.                                 Participants and Target Award
Opportunities


 


The Participants in the Program for the 2005-06 Performance
Period, and the target Award Opportunity of each, are set forth by the Chairman
of the Board and Chief Executive Officer and approved by the Compensation &
Benefits committee annually and may from time to time be revised or supplemented.  Award Opportunities granted to any such
Participant who is, at February 14, 2005, an executive officer of the
Company and Shares that may be issued or delivered in settlement of such
Participants’ Awards shall be governed by and drawn from the ESIP, and Award
Opportunities granted to other Participants and Shares that may be issued or
delivered in settlement of such Participants’ Awards shall be governed by and
drawn from the 2000 Plan.  The foregoing
notwithstanding, the Chief Executive Officer of the Company may modify or
cancel any Award Opportunity or Award granted to any Participant in order to
comply with local laws or customs in any jurisdiction other than the United
States, or to avoid undue administrative expense with respect to such foreign
jurisdiction, and may designate a Participant whose participation would
otherwise be governed by the 2000 Plan as instead to be governed by the ESIP.