Exhibit 10.3


 


TIER-2


CHANGE-IN-CONTROL
AGREEMENT


FOR CERTAIN
EXECUTIVES


OF IMS HEALTH
INCORPORATED


 


PERSONAL AND CONFIDENTIAL


 


Mr. Robert
H. Steinfeld


Senior
Vice President, General Counsel & Corporate Secretary


IMS
Health Incorporated


901 Main
Avenue, Suite 612


Norwalk,
CT  06851


 


Dear Mr. Steinfeld:


 


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 to amend and restate this Change in Control
Agreement (the “Agreement”) as follows effective as of November 1, 2008:


 


1. Term of Agreement.


 


(a) Generally.  Except as provided in Section 1(b) hereof,
(i) this Agreement shall be effective as of the date on which the shares
of common stock of the Company that are owned by Cognizant Corporation (“Cognizant”)
are distributed to the holders of record of shares of Cognizant (July 1,
1998) and shall continue in effect through December 31, 2001, and (ii) commencing
on January 1, 2002, and each January 1 thereafter, this Agreement
shall be automatically extended for one additional year unless, not later than September 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) the
stockholders of the Company approve any transaction or series of transactions
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) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets; or


 


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


 


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(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;


 


(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,
subject only to the claims of creditors of the Company in the event of
insolvency or bankruptcy of the Company.


 


(e)    Acceleration
of Awards Upon a Change in Control. In the event of a Change in
Control, all outstanding stock options, restricted stock units, stock
appreciation rights, restricted stock, and other equity-based awards that you
hold shall become vested, and in the case of options and stock appreciation
rights, exercisable.  In the event that
any such vested equity-based award that is subject to Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), cannot be paid to you
upon such Change in Control because such Change in Control does not qualify as
a change in control within the meaning provided by Section 1.409A-3(i)(5) of
the Treasury Regulations, you will have the right to elect to denominate such
award in cash both at the time of the Change in Control (as defined in Section 2(a) of
this Agreement) and again upon your termination of employment following the
Change in Control.  If you elect to
denominate such award in cash, the Company will adjust the cash 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 the award was denominated in cash (or the most
appropriate surrogate for such rate if such rate is not available) multiplied
by a fraction, the numerator of which is the number of days from and including
the date on which the award was denominated in cash until and including the
date of payment of such award to you and the denominator of which is 365 and
pay such adjusted amount to you.


 


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(f)            Gross-up If Excise Tax Would
Apply.  In the event you become entitled to any amounts or benefits
payable in connection with a Change in Control or other change in ownership or
control (whether or not such amounts are payable pursuant to this Agreement)
(the “Change in Control Payments”), if any of such Change in Control 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 will pay to you at the time specified in Section 2(f)(iii) hereof
an additional amount (the “Gross-Up Payment”) such that the net amount you
retain, 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
payments provided for by this Section 2(f), shall be equal to the Total
Payments.


 


(i) For purposes of
determining whether any of the Change in Control Payments will be subject to
the Excise Tax and the amount of such Excise Tax:


 


(A)  any
payments or benefits received or to be received by you in connection with a
Change in Control or other change in ownership or 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 Change in Control 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;


 


(B) the amount of
the Total Payments which shall be treated as subject to the Excise Tax shall be
equal to the lesser of (I) the total amount of the Total Payments and (II) the
amount of excess parachute payments within the meaning of Section 280G(b)(1) of
the Code (after applying Section 2(f)(i)(A) hereof); and


 


(C) the value of any
non-cash benefits or any deferred payments or benefits 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.


 


(ii) 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 in the calendar year in which the Gross-Up Payment
is to be made, net of the maximum reduction in federal income taxes which could
actually be obtained from deduction of such state and local taxes by you.  In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account and paid
to you hereunder, you shall file for a refund of such excess Excise Tax.  You shall repay to the Company the excess
Excise Tax amount actually refunded to you by the Internal Revenue Service
within ten business days after the later of (A) the date that the Internal
Revenue Service makes a final 


 


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determination (within the
meaning of Section 1313 of the Code) that an overpayment of such Excise
Tax was made (and including a final determination of the amount thereof) and (B) the
actual receipt of the refund check from the Internal Revenue Service for the
amount of such overpayment of Excise Tax by you; provided, however, if no
refund shall be due to you because such overpayment of the Excise Tax has been
applied to satisfy your other tax liabilities, you shall notify the Company of
such application of the overpayment to your other tax liabilities and shall pay
to the Company within ten business days after such application of the
overpayment to your other tax liabilities the amount of the Excise Tax that
would otherwise have been refunded. In the event that the Excise Tax is
determined to exceed the amount taken into account and paid hereunder, the
Company shall make an additional Gross-Up Payment in respect of such excess
within ten business days after the time that the amount of such excess is
determined but in no event later than 30 days after the Change in Control. In
no event shall any Gross-Up Payment be made under this Section 2(f) later
than the last day of the taxable year next following the taxable year in which
you remit the Excise Tax.  Anything in
this Section 2(f) to the contrary notwithstanding, any Gross-Up
Payment to be made hereunder shall be subject to such delay in payment as may
apply under Section 3(c) of this Agreement (including but not limited
to Section 3(c)(vi)) in the event that such payment is made in connection
with your termination of employment and is subject to Section 409A of the
Code.


 


(iii) The Gross-Up
Payment provided for in this Section 2(f) shall be made at the same
time as any payments giving rise to an Excise Tax are made; provided,
however, that if the amount of such Gross-Up Payment cannot be finally
determined at the same time as any payments giving rise to an Excise Tax are
made, the Company shall pay you at the time the payments giving rise to an
Excise Tax are made an estimate, as determined in good faith by the Company
pursuant to Section 2(f)(iv) hereof, of the amount of such Gross-Up
Payment and shall pay the remainder of such Gross-Up Payment at the time
provided in Section 2(f)(ii) above. 
Your right to payments under this Section 2(f) shall be
treated as a right to a series of separate payments under Section 1.409A-2(b)(2)(iii) of
the Treasury Regulations.


 


(iv) All
determinations under this Section 2(f) shall be made by the Company
at its expense using a nationally recognized public accounting firm you have
selected, and such determination shall be binding upon you and 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 equity, compensation or 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 by the Company without Cause or by
you for Good Reason after a Potential Change in Control but prior to the Change
in Control contemplated by such Potential Change in Control, the Protected
Period shall 


 


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commence upon the
subsequent occurrence of such 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 such 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 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 equity, compensation or benefit plan of the Company, at
the time such payments are due in accordance with the terms of such equity,
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 two 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,
incentive or award 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 or vesting period in progress under all Bonus
Plans in effect at the time of termination; provided, however, if you have
previously deferred any award payable under any such Bonus Plan, the terms of
the applicable Bonus Plan shall determine the time of payment of the cash
amount that is payable under this Section 3(b)(iii) in lieu of such
award and in the event that any such cash payment must be delayed by reason of
your previous deferral of the corresponding award under such Bonus Plan or by
reason of the application of Section 3(c) of this Agreement, such
cash amount will be adjusted to reflect the deferred payment date by
multiplying the cash amount 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
the cash amount would have been paid to you under this Section 3(b)(iii) but
for such delay (or the most appropriate surrogate for such rate if such rate is
not available) multiplied by a fraction, the numerator of which is the number
of days from and including the date on which the cash amount would have been
paid to you under this Section 3(b)(iii) but for such delay and
including the date of payment of such cash 


 


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amount to you and the
denominator of which is 365 and the Company pay such adjusted cash amount to
you.


 


(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 before the
last day of the second calendar year following the calendar year in which your
Date of Termination occurs. 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, but in no event later than the last day of the third
calendar year following the calendar year in which your Date of Termination
occurs.


 


(v) During the
36-month period following your termination of employment, you will continue to
participate in the Company’s health and life insurance plans and programs in
which you were participating immediately prior to your termination, the terms
of which allow your continued participation, as if you had continued in
employment with the Company during such period, and on terms no less favorable
than the terms applicable to you before the Change in Control. For so long as
you participate in the Company plans and programs referred to in this Section 3(b)(v),
you shall receive cash payments equal on an after-tax basis to your cost for
participating in such plans and programs, with such payments to be made by the
Company to you on a monthly basis and in accordance with Section 3(c) of
this Agreement.  If and when the terms of
the Company plans and programs referred to in this Section 3(b)(v) do
not allow your continued participation, you shall instead be paid cash payments
equivalent on an after-tax basis to the value of the additional benefits
described in this Section 3(b)(v) that you would have received under
such plans or programs had you continued to be employed during such period,
with such payments to be made by the Company to you on a monthly basis during
such period and in accordance with Section 3(c) of this Agreement (it
being understood that the Company payments to you attributable to these
benefits will be equal on an after-tax basis to the full monthly premium cost
to you to purchase such benefits independently, and shall not be limited to the
value of the Company contribution, if any, to the cost of an employee’s
coverage under any such health or life insurance plan, but 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)(v) 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.  In addition, notwithstanding the foregoing,
nothing in this Section 3(b)(v) shall alter any right you may have to
participate in any Company health or life insurance plan or program that covers
former employees of the Company in accordance with the generally applicable
terms of such plan or program.


 


(vi) 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, for so long as you are eligible to participate in those plans.  If and when you are not eligible to
participate in the Company’s retiree health and life insurance plans
(including, but not limited to, as a result of such plans’ termination), 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


 


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under the Company’s
retiree health and life insurance plans (providing benefits no less than those
provided on August 6, 1998) 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
retiree health and life insurance benefits will be equal on an after-tax basis
to the full monthly premium cost to you to purchase such benefits
independently, and shall not be limited to the value of the Company
contribution, if any, to the cost of coverage under the Company’s retiree
health and life insurance plans, but 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)(vi) 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) Reimbursements;
Section 409A Exemptions; Delayed Payments Under Section 409A.


 


(i) Any
reimbursements made or in-kind benefits provided under this Agreement shall be
subject to the following conditions:


 


(A) the amount of
expenses eligible for reimbursement or in-kind benefits provided in any one
taxable year shall not affect the amount of expenses eligible for reimbursement
or in-kind benefits provided in any other taxable year;


 


(B) the
reimbursement of any expense shall be made each calendar quarter and not later
than the last day of the taxable year following the taxable year in which the
expense was incurred (unless this Agreement specifically provides for
reimbursement by an earlier date);


 


(C) the right to
reimbursement of an expense or payment of an in-kind benefit shall not be
subject to liquidation or exchange for another benefit.


 


(ii) Any
reimbursement under Sections 3(b)(v) or 3(b)(vi) for expenses for
medical coverage purchased by you that are made during the period of time you
would be entitled (or would, but for such reimbursement, be entitled) to
continuation coverage under the Company’s Health Plan pursuant to COBRA if you
had elected such coverage and paid the applicable premiums shall be exempt from
Section 409A of the Code and the six-month delay in payment described
hereinbelow pursuant to Section 1.409A-1(b)(9)(v)(B) of the Treasury
Regulations.


 


(iii) Any
reimbursement under Section 3(b)(iv) relating to outplacement
expenses shall be exempt from Section 409A of the Code and the six-month
delay in payment described hereinbelow pursuant to Section 1.409A-1(b)(9)(v)(A) of the
Treasury Regulations and shall not be subject to Section 3(c)(i) above.


 


(iv) Your right to
reimbursements under this Agreement shall be treated as a right to a series of
separate payments under Section 1.409A-2(b)(2)(iii) of the Treasury
Regulations.


 


(v) It is intended
that payments made under this Agreement due to your termination of employment
which are paid on or before the 15th day of 


 


8

















 


the third month following
the end of the taxable year in which your termination of employment occurs
shall be exempt from compliance with Section 409A of the Code pursuant to
the exemption for short-term deferrals set forth in Section 1.409A-1(b)(4) of
the Treasury Regulations.


 


(vi)   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(e)(vi) on
the date of your termination of employment. 
Any payment or reimbursement due within such six-month period shall be
delayed to the end of such six-month period. The Company will adjust the
payment or reimbursement to reflect the deferred payment date by multiplying
the payment or reimbursement 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 or reimbursement would have been made but for the delay (or the
most appropriate surrogate for such rate if such rate is not available)
multiplied by a fraction, the numerator of which is the number of days by which
such payment or reimbursement was delayed and the denominator of which is
365.  In the event of a reimbursement that
is required by other terms of this Agreement to be made on an after-tax basis
and which is subject to the six-month delay provided herein, the reimbursement
as adjusted in accordance with this Section 3(c)(vi) to reflect the
deferred payment date shall be paid to you on an after-tax and fully grossed-up
basis so that you are held economically harmless. The Company will pay the
adjusted payment or reimbursement at the beginning of the seventh month
following your termination of employment. Notwithstanding the foregoing, if
calculation of the amounts payable by any payment date specified in this
Agreement 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 Treasury
Regulations thereunder.  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.


 


(d) 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.


 


(e) Certain
Definitions.  For purposes of this
Agreement and except as otherwise indicated in this Agreement, all definitions
in this Section 3(e) 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 


 


9

















 


you not in good faith and
without reasonable belief that your action or omission was 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(e)(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 by you 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(e)(iv)(A),
(E), (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 principal 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;


 


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(E) the failure by
the Company to continue in effect any material compensation or benefit plan in
which you participated immediately prior to 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 6 hereof;


 


(G) any purported
termination of your employment that is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 3(e)(v) (and, if
applicable, the requirements of Section 3(e)(i) hereof), which
purported termination shall not be effective for purposes of this Agreement; or


 


(H) the lapse of
twelve months following the last day of the month in which the Change in
Control occurs.


 


Notwithstanding anything
in this Agreement to the contrary, if you terminate your employment after a
Potential Change in Control but prior to the Change in Control contemplated by
such Potential Change in Control, a determination as to whether you will be
deemed to have terminated your employment for Good Reason upon such Change in
Control as provided in Section 3(b) of this Agreement will be made by
substituting “Potential Change in Control” for “Change in Control” each place
it appears in this Section 3(e)(iv) above except Section 3(e)(iv)(H).


 


(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)(6).


 


4. Mitigation. 
Except as provided in Sections 3(b)(v) and (vi) 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 


 


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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.  Costs of Proceedings  The Company shall pay all costs and expenses,
including all attorneys’ fees and disbursements, of the Company and you in
connection with any legal proceedings, whether or not instituted by the Company
or you, relating to the interpretation or enforcement of any provision of this
Agreement; provided that if you instituted the proceeding and a finding (no
longer subject to appeal) is entered that you instituted the proceeding in bad
faith, you shall pay all of your costs and expenses, including attorneys’ fees
and disbursements. The Company shall pay prejudgment interest on any money
judgment obtained by you as a result of such proceeding, calculated at the rate
provided in Section 13 of this Agreement. Any such payment or
reimbursement shall be made on an after-tax basis each calendar quarter for all
costs and expenses actually incurred as provided in this Section 5 and in
accordance with the provisions of Section 3(c) of this Agreement, but
not later than the last day of the year in which the expense was incurred.


 


6. 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.


 


(c)  Neither this
Agreement nor the rights or obligations hereunder of the parties hereto shall
be transferable or assignable by you, except in accordance with the laws of
descent and distribution or as specified in Section 6(b), or by the
Company except to a successor as defined in Section 6(a).


 


7. Notice. 
Whenever under this Agreement it becomes necessary to give notice, such
notice shall be in writing, signed by the party or parties giving or making the
same, and shall be served on the person or persons for whom it is intended or
who should be advised or notified, by Federal Express or other similar
overnight service or by certified or registered mail, return receipt requested,
postage prepaid and addressed to such party at the respective address set forth
on the first page of this Agreement, or to such other address as may be
designated by such party by like notice, provided that any notice to the
Company shall be directed to the attention of the Chief Executive Officer.  If the parties by mutual agreement supply
each other with telecopier numbers for the purposes of providing notice by
facsimile, such notice shall also be proper notice under this Agreement. In the
case of Federal Express or other similar overnight service, such notice or
advice shall be effective when sent, 


 


12

















 


and, in the cases of certified or registered mail, shall be effective
two days after deposit into the mails by delivery to the U.S. Post Office.


 


8. Miscellaneous.  No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and 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.  All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections.  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.


 


9. 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.


 


10. 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.


 


11. Entire Agreement.  During the term of this Agreement, this
Agreement cancels and supersedes any and all prior agreements and
understandings between you and the Company with respect to the subject matter
contained herein, except for your Employment Agreement with the Company and
contracts, plans or arrangements relating to compensation, equity or benefits
under executive compensation, equity or benefit plans of the Company and its
subsidiaries.  Notwithstanding the foregoing, in the event of any conflict
or ambiguity between this Agreement and your Employment Agreement with the
Company or the Employee Protection Plan as applicable to you or the Executive
Pension Plan (“EXPP”) or U.S. Executive Retirement Plan (“USERP”), the
provisions of your Employment Agreement shall govern except that you shall
remain entitled to any provision, right or benefit under this Agreement or the
Employee Protection Plan or the EXPP or the USERP for so long as such plan or
agreement remains in effect, if and to the extent that such provision, right or
benefit in such plan or agreement is more favorable to you than a corresponding
provision, right or benefit under your Employment Agreement (or if there is no
corresponding provision, right or benefit under your Employment
Agreement).  If any provision, right or
benefit under this Agreement or the Employee Protection Plan or the EXPP or the
USERP is more favorable to you than a corresponding provision, right or benefit
under your Employment Agreement (or if there is no corresponding provision,
right or benefit under your Employment Agreement), such provision, right or benefit
under this Agreement or the Employee Protection Plan or the EXPP or the USERP,
as the case may be, shall be deemed included in your Employment Agreement
without any requirement to give effect to the entirety of this Agreement or the
Employee Protection Plan or the EXPP or the USERP from which such provision, right
or benefit arose.  Notwithstanding the
foregoing, no payment or benefit under this Agreement or the Employee
Protection Plan or the EXPP or the USERP shall be made or extended which
duplicates any payment or benefit under your Employment Agreement.


 


12.  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, 


 


13

















 


without regard to its 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. 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 Treasury Regulations so as not to subject you to the payment of any tax
penalty or interest which may be imposed by Section 409A of the Code and
the Company shall have no right to accelerate or make any payment under this
Agreement except to the extent such action would not subject you to the payment
of any tax penalty or interest under Section 409A of the Code.  If all or a portion of the benefits and
payments provided under this Agreement constitute taxable income to you for any
taxable year that is prior to the taxable year in which such payments and/or
benefits are to be paid to you as a result of the Agreement’s failure to comply
with the requirements of Section 409A of the Code and the Regulations, the
applicable payment or benefit shall be paid immediately to you to the extent
such payment or benefit is required to be included in your income.  If you become subject to any tax penalty or
interest under Section 409A of the Code by reason of this Agreement, the Company
shall reimburse you on a fully grossed-up and after-tax basis for any such tax
penalty or interest (so that you are held economically harmless) ten business
days prior to the date such tax penalty or interest is due and payable by you
to the government.


 


13.  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 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 Sections 2(e), 3(b)(iii) and 3(c)(vi) of this Agreement
(concerning interest payable with respect to certain delayed payments that are
subject to Section 409A of the Code).


 


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.


 


	
   

  	
   

  	
  IMS HEALTH INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David R.
  Carlucci

  
	
   

  	
   

  	
   

  	
  Chairman and Chief
  Executive Officer

  



 


 


Agreed to this 24th
day


 


of October, 2008.


 


	
  /s/ Robert H. Steinfeld

  	
   

  	
   

  	
   

  



 


 


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