**EXHIBIT10.3**

 

FORM A (ForExecutives with Change-in-Control Agreements)

 

RESTRICTED STOCKUNITS AGREEMENT

 

RESTRICTED STOCKUNITS GRANTED

UNDER THE 1998 IMSHEALTH INCORPORATED

EMPLOYEES’ STOCKINCENTIVE PLAN

 

This Restricted StockUnits Agreement (the Agreement) confirms the grant of Restricted Stock Units(RSUs) as of                               (the Grant Date) by the Compensation and Benefits Committee (the Committee) ofthe Board of Directors of IMS Health Incorporated (the Company) as follows:

 
| Participant Granted  RSUs: |   |
|----------------------------|--------|
|                       |   |
| Number of RSUs Granted:    |   |
|                       |   |
| Scheduled Lapse Date:      |   |

 

TheRSUs are granted under the 1998 IMS Health Incorporated Employees’ StockIncentive Plan (the Plan).  The RSUs aresubject to all the terms and conditions of the Plan, which is attached heretoand incorporated herein by reference, and are subject to the terms andconditions of this Agreement, including the Terms and Conditions attachedhereto, which are incorporated herein by reference.

 

Participantacknowledges and agrees that (i), until an RSU has become vested in accordancewith Section 2(a) hereof, such RSU will be subject to a risk of forfeitureto the extent provided in Section 2 hereof, and (ii), until the [later ofthe]* time each RSU becomes vested [or the end of any additional period ofdeferral elected by Participant in accordance with Section 4 hereof]*,such RSU shall be generally nontransferable, as provided in Section 3hereof.

 

IN WITNESS WHEREOF, IMSHealth Incorporated has caused this Agreement to be executed by its officerthereunto duly authorized.

 

Bythe Company’s signature, and your acceptance of theseRSUs (as described in the attached Terms and Conditions), you and the Companyagree to the terms of this Agreement. [If you make any deferral election in this Agreement, you must sign theAgreement and return it to the Executive Compensation & Equity PlansDepartment by the date specified in the attached Terms and Conditions.]*

 
|   | IMS HEALTH INCORPORATED               |
|--------|---------------------------------------|
|   |                                  |
|   | David M. Thomas                       |
|   | Chairman and Chief  Executive Officer |

 

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Terms andConditions

 

ofRestricted Stock Units

 

1.                                       RestrictedStock Units

 

Each Restricted StockUnit (RSU) represents a generally nontransferable, conditional right to receiveone share of the Company’s Common Stock (a Share) at a specified future date,together with a right to Dividend Equivalents and other rights, subject to theterms and conditions of the Employees’ Stock Incentive Plan (the Plan) and thisAgreement.  RSUs are bookkeeping units,and do not represent ownership of Shares or any other equity security. TheCompany shall maintain a bookkeeping account for Participant (the Account)reflecting the number of RSUs then credited to Participant hereunder as aresult of this grant of RSUs and any crediting of additional RSUs to Participantpursuant to payments equivalent to dividends paid on Shares under Section 5(Dividend Equivalents).  For purposes ofthis Agreement, the term RSUs includes RSUs as to which the risk of forfeitureunder Section 2 has lapsed but which remain subject to deferral ofsettlement.

 

2.                                       Vestingand Forfeiture

 

(a)                                  RSUsgranted hereunder shall vest (meaning that the risk of forfeiture of such RSUsunder this Section 2 shall lapse; such RSUs shall remain subject to Section 6)at the scheduled lapse date set forth on the cover page of this Agreement,except that all RSUs shall vest on an accelerated basis upon the earliest of(i) Termination of Employment (as defined below) by reason of a Retirement, butonly if the Committee has specifically approved the accelerated vesting of theRSUs upon such Retirement, (ii) Termination of Employment by reason of death orDisability, (iii) the occurrence of a Change in Control, or (iv) any otherevent  specified as resulting inacceleration of RSUs in an employment agreement between the Company andParticipant in effect at the time of Termination of Employment.  Each RSU credited as a result of DividendEquivalents on a forfeitable RSU under Section 5(a) shall vest at the timeof vesting of the forfeitable RSU which gives rise, directly or indirectly, tothe crediting of such Dividend Equivalent RSU. Each RSU credited as a result of Dividend Equivalents on a thennon-forfeitable RSU under Section 5(a) shall be fully vested andnonforfeitable from and after the date of such crediting (subject to Section 6).

 

(b)                                 Inthe event of Participant’s Termination of Employment, all RSUs that are notvested at or prior to the time of such Termination shall be forfeited, unlessotherwise determined by the Committee. Thus, upon Participant’s voluntary Termination of Employment or aTermination of Employment by the Company for Cause, unvested RSUs generallywill be forfeited.

 

(c)                                  Forpurposes of this Agreement, a Termination of Employment shall mean atermination of Participant’s employment with the Company or a subsidiary oraffiliate of the Company if, immediately thereafter, Participant is notemployed by any of the Company or its subsidiaries or affiliates.

 

(d)                                 Forpurposes of this Agreement, Cause shall have the meaning defined in an employmentagreement between the Company and Participant in effect at the time ofTermination of Employment or, if there is no such employment agreement, Causeshall mean  (1) willful malfeasance orwillful misconduct by Participant in connection with his or her employment, (2)continuing failure to perform such duties as are requested by any employee towhom the Participant reports, directly or indirectly, or by the board ofdirectors of either the Company or the subsidiary or affiliate employsParticipant, (3) failure by Participant to observe

 

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policiesof the Company or his or her employer applicable to Participant, or (4) thecommission by Participant of (i) any felony or (ii) any misdemeanor involvingmoral turpitude.

 

3.                                       Nontransferability

 

Until RSUs becomesettleable under Section 4 hereof, RSUs shall not be transferable otherthan by will or by the laws of descent and distribution or to a designatedbeneficiary in the event of Participant’s death, and no such transfer shall beeffective to bind the Company unless the Committee shall have been furnishedwith a copy of such will or such other evidence as the Committee may deemnecessary to establish the validity of the transfer.

 

[4.                                   Settlementand Election to Defer Settlement

 

RSUs granted hereunder,together with RSUs credited as a result of Dividend Equivalents, shall besettled by delivery of one Share for each RSU being settled.  Settlement of an RSU granted hereunder shalloccur upon the lapse of the risk of forfeiture of such RSU under Section 2,except settlement shall be deferred in certain cases if so elected byParticipant in accordance with this Section 4.  Settlement of RSUs that directly orindirectly result from Dividend Equivalents on RSUs granted hereunder shalloccur at the time of settlement of the granted RSU.

 

By filling out this Section 4,signing, and returning this Agreement to the Executive Compensation &Equity Plans Department at least six months prior to Scheduled Lapse Date forany affected RSUs (or such other deadline as may be specified by the VicePresident, Global Human Resources), Participant may elect to defer the date ofsettlement of RSUs.  An electionhereunder shall be effective only in the case of RSUs which, but for theelection, would have been settled more than six months after the filing of theelection.

 

Check Only One:

 

o                                    I hereby elect tohave my RSUs settled upon the lapse of the risk of forfeiture under Section 2(Note: This election will apply if you do not return the Agreement to theCompany or if you do not check any box).

 

o                                    I hereby elect todefer the settlement of my RSUs until the first business day of month                                          in the year              (subject to accelerated settlement in the event of a Change in Control, deathof the Participant, or Termination of Employment by Retirement).

 

o                                    I hereby elect todefer the settlement of my RSUs until my Termination of Employment for anyreason.  Termination of Employmentincludes my death or Disability (subject to accelerated settlement in the eventof a Change in Control).

 

Any elective deferralwill be subject to such additional terms and conditions as the Committee mayimpose, including terms and conditions under the Company’s DeferredCompensation Plan.  Please note that evenif you elect to defer settlement, the Company is required to withhold from youMedicare taxes at the applicable minimum statutory rate on the scheduled lapsedate for the deferred RSUs.  Suchwithholding will be based upon the aggregate Fair Market Value of the Sharesunderlying the deferred RSUs on the scheduled lapse date and will normally bededucted from your salary in the payroll that immediately follows the scheduledlapse date.]*

 

5.                                       DividendEquivalents and Adjustments

 

(a)                                  DividendEquivalents shall be paid or credited on RSUs (other than RSUs that, at therelevant record date, previously have been settled or forfeited) as follows:

 

(i)                                     *Cash Dividends*.  Ifthe Company declares and pays a dividend or distribution on Common Stock in theform of cash, then a Participant shall be entitled to

 

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dividend equivalents asfollows: Dividend equivalents resulting from cash dividend payments prior to August 1,2002 shall be credited to Participant’s Account as of the payment date for suchdividend or distribution and converted into additional RSUs at that date basedon the Fair Market Value of Shares on the date credited.  From and after August 1, 2002, dividendequivalents relating to cash dividends, the record date for which is prior tosettlement of an RSU, shall be calculated at the time of such settlement andcredited and paid in cash at settlement, without interest.

 

(ii)                                  *Non-Share Dividends*. If the Company declares and pays a dividend or distribution on CommonStock in the form of property other than Shares, then a number of additionalRSUs shall be credited to Participant’s Account as of the payment date for suchdividend or distribution equal to the number of RSUs credited to the Account asof the record date for such dividend or distribution multiplied by the FairMarket Value of such property actually paid as a dividend or distribution oneach outstanding Share at such payment date, divided by the Fair Market Valueof a Share at such payment date.

 

(iii)                               *Common Stock Dividends and Splits*.  If the Company declares and pays a dividendor distribution on Common Stock in the form of additional Shares, or thereoccurs a forward split of Common Stock, then a number of additional RSUs shallbe credited to Participant’s Account as of the payment date for such dividendor distribution or forward split equal to the number of RSUs credited to theAccount as of the record date for such dividend or distribution or splitmultiplied by the number of additional Shares actually paid as a dividend ordistribution or issued in such split in respect of each outstanding Share.

 

(b)                                 Thenumber of RSUs credited to Participant’s Account shall be appropriatelyadjusted, in order to prevent dilution or enlargement of Participants’ rightswith respect to RSUs, to reflect any changes in the outstanding Sharesresulting from any event referred to in Section 10(a) of the Plan, takinginto account any RSUs credited to Participant in connection with such eventunder Section 5(a) hereof.

 

6.                                       Forfeitureof RSUs and Shares Acquired Upon Prior Vesting and Settlement

 

The greatestassets of IMS HEALTH and its affiliates (each, an “IMS HEALTH Company”) are itsemployees, technology and customers.  Inrecognition of the increased risk of unfairly losing any of these assets to itscompetitors, IMS HEALTH has adopted the following policy:

 

If you directly or indirectly engage inany of the “Detrimental Activities” defined below:

 

(a)                                  anyunvested RSUs shall automatically be forfeited on the later of the date of yourTermination of Employment or the date IMS HEALTH becomes aware of yourDetrimental Activity, without regard to the provisions of Section 2; and

 

(b)                                 you shall forfeit to the Company any RSUs that vested andthe resulting Shares acquired upon settlement during the one year prior to, orat any time after, the date of the earliest actual occurrence of yourDetrimental Activity (the “Forfeiture Period”). These Shares shall be forfeited by you and are payable to the Company atthe later of the date of your Termination of Employment or the date IMS HEALTHbecomes aware of your Detrimental Activity. If you have disposed of such Shares during the Forfeiture Period, yourobligation to repay Shares upon such forfeiture will continue (payment of cashor other property is not permitted), so that you will be required to acquirereplacement Shares and deliver them to the Company in settlement of yourforfeiture obligation without regard to any subsequent market price increase ordecrease from the date of exercise.  Ifyou fail to promptly deliver forfeited Shares and if, apart from thisAgreement, the Company is obligated to pay any cash amount to you, the Company,as a setoff, may use such cash to purchase Shares in the open market

 

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on your behalf, which Shares willbe retained by the Company in settlement of your forfeiture obligationhereunder.

 

Detrimental Activities are defined as:

 

•                  using or disclosing any information that hasbeen treated by an IMS HEALTH Company as confidential or proprietary and is ofcompetitive advantage to such IMS HEALTH Company, unless you are using ordisclosing it in the course of your job with such IMS HEALTH Company;

•                  duringthe period beginning the Date of Grant and ending twelve months after you leaveyour employment with any IMS HEALTH Company (the “Prohibited Period”),soliciting, inducing, enticing or procuring for anyone other than an IMS HEALTHCompany the trade or business of any entity that was a customer (including “near-permanent”customers), prospective customer or data supplier of an IMS HEALTH Company, inorder to sell to such customer or prospective customer, or obtain from suchdata supplier, the same, similar or related services IMS HEALTH offers to itscustomers, or such data supplier provided to IMS HEALTH, during the period thatyou worked for any IMS HEALTH Company;

•                  duringthe Prohibited Period, soliciting, inducing, enticing or procuring any employeeof any IMS HEALTH Company to leave his or her employment; or employing orotherwise using the services of any person who is or was an IMS HEALTH Companyemployee during the last twelve months that you worked for an IMS HEALTHCompany; or

•                  duringthe Prohibited Period, directly or indirectly (including without limitation asan officer, director, employee, advisor, agent, consultant or investor, otherthan by the ownership of a passive investment interest of not more than 1% in acompany with publicly traded equity securities), (i) seeking or accepting anyemployment or other work with or providing assistance to any person or entitythat offers Competitive Services (as defined below) to any person or entitythat was a customer or potential customer of any IMS HEALTH Company at any timeduring the last two years of your employment with any IMS HEALTH Company, or(ii) otherwise providing Competitive Services.

 

For purposes hereof, “CompetitiveServices” means engaging in the following activities anywhere in the world inrelation to the pharmaceutical and healthcare industries (it being understoodthat the global market in which any of the businesses of IMS is conducted andto which their goodwill extends is not limited to any particular region in theworld and that given the informational nature of such businesses, they may beengaged effectively from any location in the world):

 

•                  providinginformation services for the management of sales forces engaged in the sale ofprescription or over-the-counter drugs, medical devices, or medical or surgicalproducts;

•                  providinginformation services for the measurement of sales force performance or productperformance for prescription or over-the-counter drugs, medical devices, ormedical or surgical products;

•                  creatingor providing physician profiles for purposes of assisting others in thetargeting of promotion or sales activities in relation to prescription orover-the-counter drugs, medical devices, or medical or surgical products;

•                  creatingor providing micromarketing programs based on prescribing behavior or attitudesof physicians or other prescribers in relation to prescription orover-the-counter drugs, medical devices, or medical or surgical products;

•                  creatingor providing market research reports or audits relating to the use, sale,marketing/promotion, distribution or warehousing of any prescription orover-the-counter drugs, medical devices, or medical or surgical products;

 

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•                  usingor developing technology, methodologies or processes which have functionalityor produce results similar to the technology, methodologies or processesemployed or offered by IMS HEALTH to process pharmaceutical or healthcare information,including but not limited to internal processing technology, decision supporttools, data warehousing applications and data mining applications;

•                  creatingor providing reference files, classification schemes, master files or othermethods of categorizing, classifying, organizing or identifying products,procedures, medical facilities, pharmacies, warehouses, distributors,prescribers, pharmacists or other entities, activities or persons associatedwith the use, sale, marketing/promotion, distribution or warehousing of anyprescription or over-the-counter drugs, medical devices, or medical or surgicalproducts; or

•                  providingmarket research consulting, sales management consulting, information technologyconsulting or market event management consulting, or any other consultingservices in connection with any of the foregoing activities or otherwiserelating to the use, sale, marketing/promotion, distribution or warehousing ofany prescription or over-the-counter drugs, medical devices, or medical or surgicalproducts.

 

7.                                       OtherTerms Relating to RSUs

 

(a)                                  Thenumber of RSUs credited to a Participant’s Account shall include fractionalRSUs calculated to at least three decimal places, unless otherwise determinedby the Committee.  Upon settlement of RSUs,Participant shall be paid, in cash, an amount equal to the value of anyfractional share that would have otherwise been deliverable in settlement ofsuch RSUs, unless the Company arranges to deliver shares to an account ofParticipant to which fractional shares may be credited without requiring theCompany to in fact issue a fractional share.

 

(b)                                 Itshall be a condition to the obligation of the Company to issue and deliverShares in settlement of the RSUs that the Participant (or any Beneficiary) payto the Company or a Participating Company, upon its demand, such amount as maybe requested by the Company for the purpose of satisfying the minimum statutorywithholding liabilities for federal, state, or local income or other taxes.  If the amount requested is not paid, theCompany may refuse to deliver the shares in settlement of the RSUs until suchamount is paid.  The Committee may, inits discretion, permit a Participant (or any Beneficiary of a Participant) topay all or a portion of the amount requested by the Company for such taxes atsuch time and in such manner as the Committee shall deem to be appropriate,including by authorizing, and the Participant hereby authorizes, the Company towithhold from the shares to be delivered in settlement, or by agreeing tosurrender to the Company on or about the date such tax liability isdeterminable, Shares having a fair market value (The fair market value is equalto the average high/low on the day in which the Shares are surrendered.) equalto the amount of such tax liability or a specified portion of such taxliability.

 

(c)                                  Anindividual statement of each Participant’s Account will be issued to eachParticipant not less frequently than annually. Such statements shall reflect the amount of RSUs credited to Participant’sAccount, transactions therein during the period covered by the statement, andother information deemed relevant by the Vice President of Global HumanResources.  Such a statement may becombined with or include information regarding other plans and compensatoryarrangements relating to Participant.  AParticipant’s statements shall be deemed a part of this Agreement, and shallevidence the Company’s obligations in respect of RSUs, including the number ofRSUs credited as a result of Dividend Equivalents (if any); provided, however,that any statement containing an error shall not represent a binding obligationto the extent of such error.

 

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8.                                       Miscellaneous

 

(a)                                  ThisAgreement shall be legally binding when executed by the Company and accepted bythe Participant as described below, provided that no election of Participantwill be binding unless Participant has executed the Agreement and returned itto the Executive Compensation & Equity Plans Department of the Company.

 

(b)                                 ThisAgreement shall be binding upon the heirs, executors, administrators andsuccessors of the parties.  ThisAgreement constitutes the entire agreement between the parties with respect tothe RSUs, and supersedes any prior agreements or documents with respect to theRSUs.  No amendment, alteration,suspension, discontinuation or termination of this Agreement which may imposeany additional obligation upon the Company or impair the rights of Participantwith respect to the RSUs shall be valid unless in each instance such amendment,alteration, suspension, discontinuation or termination is expressed in awritten instrument duly executed in the name and on behalf of the Company andby Participant.

 

(c)                                  AnyBeneficiary designation made by Participant in accordance with this provisionmay be changed from time to time, without the consent of any previouslydesignated Beneficiary (but subject to any spousal consent as may be required)by filing with the Executive Compensation & Equity Plans Department anotice of such change.   The change ofBeneficiary designation shall become effective upon receipt by the ExecutiveCompensation & Equity Plans Department. In the event Participant’s Beneficiary would otherwise become entitledto a distribution hereunder, and all Beneficiaries designated by Participantare not then living, or if no valid Beneficiary designation is in effect,Participant’s estate or duly authorized personal representative shall be deemedto have been designated by Participant.

 

(d)                                 Anyprovision for distribution in settlement of Participant’s Account hereundershall be by means of bookkeeping entries on the books of the Company and shallnot create in Participant or any Beneficiary any right to, or claim againstany, specific assets of the Company, nor result in the creation of any trust orescrow account for Participant or any Beneficiary.  Participant or any Beneficiary entitled toany distribution hereunder shall be a general creditor of the Company.

 

(e)                                  Capitalizedterms used in this Agreement but not defined herein shall have the samemeanings as in the Plan.  If there is anyconflict between the provisions of this Agreement and the provisions of thePlan, the provisions of the Plan shall govern.

 

***  * *  *  ***

 

You do not need to do anything if you want to accept yourRSUs on the terms set out in this Agreement. If you do not want to accept your RSUs onthe terms set out in this Agreement, please write to the Company at the addressbelow, marking your envelope to the attention of Kristin Johnson, no later than                                         .

 

IMSHealth

ExecutiveCompensation & Equity Plans

660 W.Germantown Pike

PlymouthMeeting, Pennsylvania 19462

U.S.A.

 

Your RSUs will then be cancelled.  If you do not write to us telling us that youdo not want your RSUs by                                          ,you will have accepted your RSUs and agreed to the terms set out in thisAgreement.

 

[By signing below andreturning this Agreement to the Executive Compensation & Equity PlansDepartment, I elect to defer settlement of the RSUs until the applicable date

 

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specifiedin Section 4, subject to earlier settlement in accordance with Section 4and the other terms of the Plan and this Agreement.  (**Note: If you do not wishto defer settlement past the Scheduled Lapse Date you do not need to sign belowand return this Agreement to the Executive Compensation & Equity PlansDepartment. **If you elect tofurther defer settlement or name a beneficiary, you should retain a copy ofthis Agreement for your records.)]*

 
| PARTICIPANT: |   | Date:  |
|--------------|--------|--------|
|         |   |   |
|         |   |   |
| Print Name:  |   |   |

 

For HR Use Only: DateReceived by Executive Compensation & Equity Plans Department:                          

 

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****This language is not included in agreements withemployees outside the United States.***

 

***Agreements covering Performance-Based Restricted Stock Unitsinclude the following language:  The RSUsare granted based upon the achievement of performance conditions during                         ,in accordance with the Company’s Performance-Based Restricted Stock Program(the PERS program) under the 1998 IMS Health Incorporated Employees’ StockIncentive Plan (the Plan).  Accordingly,the RSUs represent performance-based restricted stock units or PERS as to whichthe performance conditions have been satisfied.***

 

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FORM B (For AllOther Participating Employees)

 

RESTRICTED STOCKUNITS AGREEMENT

 

RESTRICTED STOCKUNITS GRANTED

UNDER THE [1998IMS HEALTH INCORPORATED

EMPLOYEES’ STOCKINCENTIVE PLAN/IMS HEALTH INCORPORATED

2000 STOCKINCENTIVE PLAN]

 

This Restricted Stock UnitsAgreement (the Agreement) confirms the grant of Restricted Stock Units (RSUs)as of                               (the Grant Date) by the Compensation and Benefits Committee (the Committee) ofthe Board of Directors of IMS Health Incorporated (the Company) as follows:

 
| Participant Granted  RSUs: |   |
|----------------------------|--------|
|                       |   |
| Number of RSUs Granted:    |   |
|                       |   |
| Scheduled Lapse Date:      |   |

 

TheRSUs are granted under the [1998 IMS Health Incorporated Employees’ StockIncentive Plan/IMS Health Incorporated 2000 Stock Incentive (the Plan)].  The RSUs are subject to all the terms andconditions of the Plan, which is attached hereto and incorporated herein byreference, and are subject to the terms and conditions of this Agreement,including the Terms and Conditions attached hereto, which are incorporatedherein by reference.

 

Participantacknowledges and agrees that (i), until an RSU has become vested in accordancewith Section 2(a) hereof, such RSU will be subject to a risk of forfeitureto the extent provided in Section 2 hereof, and (ii), until the [later ofthe]* time each RSU becomes vested [or the end of any additional period ofdeferral elected by Participant in accordance with Section 4 hereof]*,such RSU shall be generally nontransferable, as provided in Section 3hereof.

 

IN WITNESS WHEREOF, IMSHealth Incorporated has caused this Agreement to be executed by its officerthereunto duly authorized.

 

Bythe Company’s signature, and your acceptance of theseRSUs (as described in the attached Terms and Conditions), you and the Companyagree to the terms of this Agreement. [If you make any deferral election in this Agreement, you must sign theAgreement and return it to the Executive Compensation & Equity PlansDepartment by the date specified in the attached Terms and Conditions.]*

 
|   | IMS HEALTH INCORPORATED               |
|--------|---------------------------------------|
|   |                                  |
|   | David M. Thomas                       |
|   | Chairman and Chief  Executive Officer |

 

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Terms andConditions

 

ofRestricted Stock Units

 

1.                                       RestrictedStock Units

 

Each Restricted StockUnit (RSU) represents a generally nontransferable, conditional right to receiveone share of the Company’s Common Stock (a Share) at a specified future date,together with a right to Dividend Equivalents and other rights, subject to theterms and conditions of the Employees’ Stock Incentive Plan (the Plan) and thisAgreement.  RSUs are bookkeeping units,and do not represent ownership of Shares or any other equity security. TheCompany shall maintain a bookkeeping account for Participant (the Account)reflecting the number of RSUs then credited to Participant hereunder as a resultof this grant of RSUs and any crediting of additional RSUs to Participantpursuant to payments equivalent to dividends paid on Shares under Section 5(Dividend Equivalents).  For purposes ofthis Agreement, the term RSUs includes RSUs as to which the risk of forfeitureunder Section 2 has lapsed but which remain subject to deferral ofsettlement.

 

2.                                       Vestingand Forfeiture

 

(a)                                  RSUsgranted hereunder shall vest (meaning that the risk of forfeiture of such RSUsunder this Section 2 shall lapse; such RSUs shall remain subject to Section 6)at the scheduled lapse date set forth on the cover page of this Agreement,except that all RSUs shall vest on an accelerated basis upon the earliest of(i) Termination of Employment (as defined below) by reason of a Retirement, butonly if the Committee has specifically approved the accelerated vesting of theRSUs upon such Retirement, (ii) Termination of Employment by reason of death orDisability, (iii) the occurrence of a Change in Control, or (iv) any otherevent  specified as resulting inacceleration of RSUs in an employment agreement between the Company andParticipant in effect at the time of Termination of Employment.  Each RSU credited as a result of DividendEquivalents on a forfeitable RSU under Section 5(a) shall vest at the timeof vesting of the forfeitable RSU which gives rise, directly or indirectly, tothe crediting of such Dividend Equivalent RSU. Each RSU credited as a result of Dividend Equivalents on a then non-forfeitableRSU under Section 5(a) shall be fully vested and nonforfeitable from andafter the date of such crediting (subject to Section 6).

 

(b)                                 Inthe event of Participant’s Termination of Employment, all RSUs that are notvested at or prior to the time of such Termination shall be forfeited, unlessotherwise determined by the Committee. Thus, upon Participant’s voluntary Termination of Employment or aTermination of Employment by the Company for Cause, unvested RSUs generallywill be forfeited.

 

(c)                                  Forpurposes of this Agreement, a Termination of Employment shall mean atermination of Participant’s employment with the Company or a subsidiary oraffiliate of the Company if, immediately thereafter, Participant is notemployed by any of the Company or its subsidiaries or affiliates.

 

(d)                                 Forpurposes of this Agreement, Cause shall have the meaning defined in anemployment agreement between the Company and Participant in effect at the timeof Termination of Employment or, if there is no such employment agreement,Cause shall mean  (1) willful malfeasanceor willful misconduct by Participant in connection with his or her employment,(2) continuing failure to perform such duties as are requested by any employeeto whom the Participant reports, directly or indirectly, or by the board ofdirectors of either the Company or the subsidiary or affiliate employsParticipant, (3) failure by Participant to observe

 

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policiesof the Company or his or her employer applicable to Participant, or (4) thecommission by Participant of (i) any felony or (ii) any misdemeanor involvingmoral turpitude.

 

3.                                       Nontransferability

 

Until RSUs becomesettleable under Section 4 hereof, RSUs shall not be transferable otherthan by will or by the laws of descent and distribution or to a designatedbeneficiary in the event of Participant’s death, and no such transfer shall beeffective to bind the Company unless the Committee shall have been furnishedwith a copy of such will or such other evidence as the Committee may deemnecessary to establish the validity of the transfer.

 

[4.                                   Settlementand Election to Defer Settlement

 

RSUs granted hereunder,together with RSUs credited as a result of Dividend Equivalents, shall besettled by delivery of one Share for each RSU being settled.  Settlement of an RSU granted hereunder shalloccur upon the lapse of the risk of forfeiture of such RSU under Section 2,except settlement shall be deferred in certain cases if so elected byParticipant in accordance with this Section 4.  Settlement of RSUs that directly orindirectly result from Dividend Equivalents on RSUs granted hereunder shalloccur at the time of settlement of the granted RSU.

 

By filling out this Section 4,signing, and returning this Agreement to the Executive Compensation &Equity Plans Department at least six months prior to Scheduled Lapse Date forany affected RSUs (or such other deadline as may be specified by the VicePresident, Human Resources), Participant may elect to defer the date ofsettlement of RSUs.  An electionhereunder shall be effective only in the case of RSUs which, but for theelection, would have been settled more than six months after the filing of theelection.

 

Check Only One:

 

o                                    I hereby elect tohave my RSUs settled upon the lapse of the risk of forfeiture under Section 2(**Note: This election will apply if you do notreturn the Agreement to the Company or if you do not check any box**).

 

o                                    I hereby elect todefer the settlement of my RSUs until the first business day of month                                            in the year                (subject to accelerated settlement in the event of the death of theParticipant, or Termination of Employment by Retirement).

 

o                                    I hereby elect todefer the settlement of my RSUs until my Termination of Employment for anyreason.  Termination of Employmentincludes my death or Disability.

 

Any elective deferralwill be subject to such additional terms and conditions as the Committee mayimpose, including terms and conditions under the Company’s DeferredCompensation Plan.  Please note that evenif you elect to defer settlement, the Company is required to withhold from youMedicare taxes at the applicable minimum statutory rate on the scheduled lapsedate for the deferred RSUs.  Suchwithholding will be based upon the aggregate Fair Market Value of the Sharesunderlying the deferred RSUs on the scheduled lapse date and will normally bededucted from your salary in the payroll that immediately follows the scheduledlapse date.]*

 

5.                                       DividendEquivalents and Adjustments

 

(a)                                  DividendEquivalents shall be paid or credited on RSUs (other than RSUs

 

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that,at the relevant record date, previously have been settled or forfeited) asfollows:

 

(i)                                     *Cash Dividends*.  Ifthe Company declares and pays a dividend or distribution on Common Stock in theform of cash, then a Participant shall be entitled to dividend equivalents asfollows: Dividend equivalents resulting from cash dividend payments prior to August 1,2002 shall be credited to Participant’s Account as of the payment date for suchdividend or distribution and converted into additional RSUs at that date basedon the Fair Market Value of Shares on the date credited.  From and after August 1, 2002, dividendequivalents relating to cash dividends, the record date for which is prior tosettlement of an RSU, shall be calculated at the time of such settlement andcredited and paid in cash at settlement, without interest.

 

(ii)                                  *Non-Share Dividends*. If the Company declares and pays a dividend or distribution on CommonStock in the form of property other than Shares, then a number of additionalRSUs shall be credited to Participant’s Account as of the payment date for suchdividend or distribution equal to the number of RSUs credited to the Account asof the record date for such dividend or distribution multiplied by the FairMarket Value of such property actually paid as a dividend or distribution oneach outstanding Share at such payment date, divided by the Fair Market Valueof a Share at such payment date.

 

(iii)                               *Common Stock Dividends and Splits*.  If the Company declares and pays a dividendor distribution on Common Stock in the form of additional Shares, or thereoccurs a forward split of Common Stock, then a number of additional RSUs shallbe credited to Participant’s Account as of the payment date for such dividendor distribution or forward split equal to the number of RSUs credited to theAccount as of the record date for such dividend or distribution or splitmultiplied by the number of additional Shares actually paid as a dividend ordistribution or issued in such split in respect of each outstanding Share.

 

(b)                                 Thenumber of RSUs credited to Participant’s Account shall be appropriatelyadjusted, in order to prevent dilution or enlargement of Participants’ rightswith respect to RSUs, to reflect any changes in the outstanding Sharesresulting from any event referred to in Section 10(a) of the Plan, takinginto account any RSUs credited to Participant in connection with such eventunder Section 5(a) hereof.

 

6.                                       Forfeitureof RSUs and Shares Acquired Upon Prior Vesting and Settlement

 

The greatestassets of IMS HEALTH and its affiliates (each, an “IMS HEALTH Company”) are itsemployees, technology and customers.  Inrecognition of the increased risk of unfairly losing any of these assets to itscompetitors, IMS HEALTH has adopted the following policy:

 

If you directly or indirectly engage inany of the “Detrimental Activities” defined below:

 

(c)                                  anyunvested RSUs shall automatically be forfeited on the later of the date of yourTermination of Employment or the date IMS HEALTH becomes aware of yourDetrimental Activity, without regard to the provisions of Section 2; and

 

(d)                                 you shall forfeit to the Company any RSUs that vested andthe resulting Shares acquired upon settlement during the one year prior to, orat any time after, the date of the earliest actual occurrence of yourDetrimental Activity (the “Forfeiture Period”). These Shares shall be forfeited by you and are payable to the Company atthe later of the date of your Termination of Employment or the date IMS HEALTHbecomes aware of your Detrimental Activity. If you have disposed of such Shares during the Forfeiture Period, yourobligation to repay Shares upon such forfeiture will continue (payment of cashor other property is not permitted), so that you will be required to acquirereplacement Shares and deliver them to the Company in settlement of yourforfeiture obligation without

 

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regard to any subsequent marketprice increase or decrease from the date of exercise.  If you fail to promptly deliver forfeitedShares and if, apart from this Agreement, the Company is obligated to pay anycash amount to you, the Company, as a setoff, may use such cash to purchaseShares in the open market on your behalf, which Shares will be retained by theCompany in settlement of your forfeiture obligation hereunder.

 

Detrimental Activities are defined as:

 

•                  using or disclosing any information that hasbeen treated by an IMS HEALTH Company as confidential or proprietary and is ofcompetitive advantage to such IMS HEALTH Company, unless you are using ordisclosing it in the course of your job with such IMS HEALTH Company;

•                  duringthe period beginning the Date of Grant and ending twelve months after you leaveyour employment with any IMS HEALTH Company (the “Prohibited Period”),soliciting, inducing, enticing or procuring for anyone other than an IMS HEALTHCompany the trade or business of any entity that was a customer (including “near-permanent”customers), prospective customer or data supplier of an IMS HEALTH Company, inorder to sell to such customer or prospective customer, or obtain from suchdata supplier, the same, similar or related services IMS HEALTH offers to itscustomers, or such data supplier provided to IMS HEALTH, during the period thatyou worked for any IMS HEALTH Company;

•                  duringthe Prohibited Period, soliciting, inducing, enticing or procuring any employeeof any IMS HEALTH Company to leave his or her employment; or employing orotherwise using the services of any person who is or was an IMS HEALTH Companyemployee during the last twelve months that you worked for an IMS HEALTHCompany; or

•                  duringthe Prohibited Period, directly or indirectly (including without limitation asan officer, director, employee, advisor, agent, consultant or investor, otherthan by the ownership of a passive investment interest of not more than 1% in acompany with publicly traded equity securities), (i) seeking or accepting anyemployment or other work with or providing assistance to any person or entitythat offers Competitive Services (as defined below) to any person or entitythat was a customer or potential customer of any IMS HEALTH Company at any timeduring the last two years of your employment with any IMS HEALTH Company, or(ii) otherwise providing Competitive Services.

 

For purposes hereof, “CompetitiveServices” means engaging in the following activities anywhere in the world inrelation to the pharmaceutical and healthcare industries (it being understoodthat the global market in which any of the businesses of IMS is conducted andto which their goodwill extends is not limited to any particular region in theworld and that given the informational nature of such businesses, they may beengaged effectively from any location in the world):

 

•                  providinginformation services for the management of sales forces engaged in the sale ofprescription or over-the-counter drugs, medical devices, or medical or surgicalproducts;

•                  providinginformation services for the measurement of sales force performance or productperformance for prescription or over-the-counter drugs, medical devices, ormedical or surgical products;

•                  creatingor providing physician profiles for purposes of assisting others in thetargeting of promotion or sales activities in relation to prescription orover-the-counter drugs, medical devices, or medical or surgical products;

•                  creatingor providing micromarketing programs based on prescribing behavior or attitudesof physicians or other prescribers in relation to prescription orover-the-counter

 

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drugs, medical devices, ormedical or surgical products;

•                  creatingor providing market research reports or audits relating to the use, sale,marketing/promotion, distribution or warehousing of any prescription orover-the-counter drugs, medical devices, or medical or surgical products;

•                  usingor developing technology, methodologies or processes which have functionalityor produce results similar to the technology, methodologies or processesemployed or offered by IMS HEALTH to process pharmaceutical or healthcareinformation, including but not limited to internal processing technology,decision support tools, data warehousing applications and data miningapplications;

•                  creatingor providing reference files, classification schemes, master files or othermethods of categorizing, classifying, organizing or identifying products,procedures, medical facilities, pharmacies, warehouses, distributors,prescribers, pharmacists or other entities, activities or persons associatedwith the use, sale, marketing/promotion, distribution or warehousing of anyprescription or over-the-counter drugs, medical devices, or medical or surgicalproducts; or

•                  providingmarket research consulting, sales management consulting, information technologyconsulting or market event management consulting, or any other consultingservices in connection with any of the foregoing activities or otherwiserelating to the use, sale, marketing/promotion, distribution or warehousing ofany prescription or over-the-counter drugs, medical devices, or medical orsurgical products.

 

7.                                       OtherTerms Relating to RSUs

 

(a)                                  Thenumber of RSUs credited to a Participant’s Account shall include fractionalRSUs calculated to at least three decimal places, unless otherwise determinedby the Committee.  Upon settlement ofRSUs, Participant shall be paid, in cash, an amount equal to the value of anyfractional share that would have otherwise been deliverable in settlement ofsuch RSUs, unless the Company arranges to deliver shares to an account ofParticipant to which fractional shares may be credited without requiring theCompany to in fact issue a fractional share.

 

(b)                                 Itshall be a condition to the obligation of the Company to issue and deliverShares in settlement of the RSUs that the Participant (or any Beneficiary) payto the Company or a Participating Company, upon its demand, such amount as maybe requested by the Company for the purpose of satisfying the minimum statutorywithholding liabilities for federal, state, or local income or othertaxes.  If the amount requested is notpaid, the Company may refuse to deliver the shares in settlement of the RSUsuntil such amount is paid.  The Committeemay, in its discretion, permit a Participant (or any Beneficiary of aParticipant) to pay all or a portion of the amount requested by the Company forsuch taxes at such time and in such manner as the Committee shall deem to beappropriate, including by authorizing, and the Participant hereby authorizes,the Company to withhold from the shares to be delivered in settlement, or byagreeing to surrender to the Company on or about the date such tax liability isdeterminable, Shares having a fair market value (The fair market value is equalto the average high/low on the day in which the Shares are surrendered.) equalto the amount of such tax liability or a specified portion of such taxliability.

 

(c)                                  Anindividual statement of each Participant’s Account will be issued to eachParticipant not less frequently than annually. Such statements shall reflect the amount of RSUs credited to Participant’sAccount, transactions therein during the period covered by the statement, andother information deemed relevant by the Vice President of Global HumanResources.  Such a statement may becombined with or include information regarding other plans and compensatory arrangementsrelating to Participant.  A Participant’sstatements shall be deemed a part of this Agreement, and shall evidence theCompany’s obligations in respect of 

 

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RSUs, including thenumber of RSUs credited as a result of Dividend Equivalents (if any); provided,however, that any statement containing an error shall not represent a bindingobligation to the extent of such error.

 

8.                                       Miscellaneous

 

(a)                                  ThisAgreement shall be legally binding when executed by the Company and accepted bythe Participant as described below, provided that no election of Participantwill be binding unless Participant has executed the Agreement and returned itto the Executive Compensation & Equity Plans Department of the Company.

 

(b)                                 ThisAgreement shall be binding upon the heirs, executors, administrators andsuccessors of the parties.  ThisAgreement constitutes the entire agreement between the parties with respect tothe RSUs, and supersedes any prior agreements or documents with respect to theRSUs.  No amendment, alteration,suspension, discontinuation or termination of this Agreement which may imposeany additional obligation upon the Company or impair the rights of Participantwith respect to the RSUs shall be valid unless in each instance such amendment,alteration, suspension, discontinuation or termination is expressed in awritten instrument duly executed in the name and on behalf of the Company andby Participant.

 

(c)                                  AnyBeneficiary designation made by Participant in accordance with this provisionmay be changed from time to time, without the consent of any previouslydesignated Beneficiary (but subject to any spousal consent as may be required)by filing with the Executive Compensation & Equity Plans Department anotice of such change.   The change ofBeneficiary designation shall become effective upon receipt by the ExecutiveCompensation & Equity Plans Department. In the event Participant’s Beneficiary would otherwise become entitledto a distribution hereunder, and all Beneficiaries designated by Participant arenot then living, or if no valid Beneficiary designation is in effect,Participant’s estate or duly authorized personal representative shall be deemedto have been designated by Participant.

 

(d)                                 Anyprovision for distribution in settlement of Participant’s Account hereundershall be by means of bookkeeping entries on the books of the Company and shallnot create in Participant or any Beneficiary any right to, or claim againstany, specific assets of the Company, nor result in the creation of any trust orescrow account for Participant or any Beneficiary.  Participant or any Beneficiary entitled toany distribution hereunder shall be a general creditor of the Company.

 

(e)                                  Capitalizedterms used in this Agreement but not defined herein shall have the same meaningsas in the Plan.  If there is any conflictbetween the provisions of this Agreement and the provisions of the Plan, theprovisions of the Plan shall govern.

 

***  * *  *  ***

 

You do not need to do anything if you want to accept yourRSUs on the terms set out in this Agreement. If you do not want to accept your RSUs onthe terms set out in this Agreement, please write to the Company at the addressbelow, marking your envelope to the attention of Kristin Johnson, no later than                                          .

 

IMSHealth

ExecutiveCompensation & Equity Plans

660 W.Germantown Pike

PlymouthMeeting, Pennsylvania 19462

U.S.A.

 

Your RSUs will then be cancelled.  If you do not write to us telling us that youdo not want your RSUs by                                             ,you will have accepted your RSUs and agreed to the terms

 

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set out in this Agreement.

 

[By signing below andreturning this Agreement to the Executive Compensation & Equity PlansDepartment, I elect to defer settlement of the RSUs until the applicable datespecified in Section 4, subject to earlier settlement in accordance with Section 4and the other terms of the Plan and this Agreement.  (**Note: If you do not wishto defer settlement past the Scheduled Lapse Date you do not need to sign belowand return this Agreement to the Executive Compensation & Equity PlansDepartment. **If you elect tofurther defer settlement or name a beneficiary, you should retain a copy ofthis Agreement for your records.)]*

 
| PARTICIPANT: |   | Date:  |
|--------------|--------|--------|
|         |   |   |
|         |   |   |
| Print Name:  |   |   |

 

For HR Use Only: DateReceived by Executive Compensation & Equity Plans Department:]                         

 

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****This language is not included in agreements withemployees outside the United States.***

 

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