**Exhibit10.3**

 

IMSHEALTH INCORPORATED

 

SUPPLEMENTALEXECUTIVE RETIREMENT PLAN

 

 

AsAmended and Restated Effective as of January 1, 2005

 

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**TABLE OF CONTENTS**

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

 

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| ** **     | ** **                                    | **Page** |
|----------------|-----------------------------------------------|----------|
|           |                                          |     |
| 1.28           | “Plan  Administrator”               | 12       |
|           |                                          |     |
| 1.29           | “Potential  Change in Control”      | 12       |
|           |                                          |     |
| 1.30           | “Regulations”                       | 12       |
|           |                                          |     |
| 1.31           | “Retirement”                        | 13       |
|           |                                          |     |
| 1.32           | “Retirement  Benefits”              | 13       |
|           |                                          |     |
| 1.33           | “Separation  from Service”          | 13       |
|           |                                          |     |
| 1.34           | “Service”                           | 13       |
|           |                                          |     |
| 1.35           | “Specified  Employee”               | 14       |
|           |                                          |     |
| 1.36           | “Surviving  Spouse”                 | 15       |
|           |                                          |     |
| 1.37           | “Surviving  Spouse’s Benefits” | 15       |
|           |                                          |     |
| 1.38           | “Vested  Former Member”             | 15       |
|           |                                          |     |
| SECTION 2 | - PARTICIPATION                               | 15       |
|           |                                          |     |
| 2.1            | Commencement  of Participation                | 15       |
|           |                                          |     |
| 2.2            | Termination  of Participation                 | 15       |
|           |                                          |     |
| SECTION 3 | - AMOUNT AND  FORM OF BENEFITS           | 16       |
|           |                                          |     |
| 3.1            | Retirement  Benefits                          | 16       |
|           |                                          |     |
| 3.2            | Deferred  Vested Benefit                      | 17       |
|           |                                          |     |
| 3.3            | Time  and Form of Payment                | 19       |
|           |                                          |     |
| 3.4            | Lump  Sum Calculation                         | 22       |
|           |                                          |     |
| 3.5            | Nonpayment  of Benefits                       | 22       |
|           |                                          |     |
| 3.6            | Notification  of Nonpayment of Benefits       | 24       |
|           |                                          |     |
| 3.7            | Repayment  of Benefits Paid as Lump Sum       | 24       |
|           |                                          |     |
| 3.8            | Change  in Control                            | 25       |
|           |                                          |     |
| SECTION 4 | - DISABILITY BENEFITS                         | 27       |
|           |                                          |     |
| 4.1            | Disability  Benefits                          | 27       |
|           |                                          |     |
| SECTION 5 | - SURVIVING SPOUSE’S  BENEFITS           | 27       |
|           |                                          |     |
| 5.1            | Death  Prior to Benefit Payment               | 27       |
|           |                                          |     |
| 5.2            | Death  On or After Benefit Payment            | 28       |
|           |                                          |     |
| 5.3            | Payment  of Surviving Spouse’s Benefit   | 28       |
|           |                                          |     |
| 5.4            | Reduction                                     | 28       |
|                |                                               |          |  |

 

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| ** **     | ** **                  | **Page** |
|----------------|-----------------------------|----------|
|           |                        |     |
| SECTION 6 | - PLAN ADMINISTRATOR        | 28       |
|           |                        |     |
| 6.1            | Duties  and Authority       | 28       |
|           |                        |     |
| 6.2            | Presentation  of Claims     | 29       |
|           |                        |     |
| 6.3            | Claims  Denial Notification | 29       |
|           |                        |     |
| 6.4            | Claims  Review Procedure    | 30       |
|           |                        |     |
| 6.5            | Timing                      | 31       |
|           |                        |     |
| 6.6            | Final  Decision             | 31       |
|           |                        |     |
| 6.7            | Delayed  Payments           | 32       |
|           |                        |     |
| SECTION 7 | - MISCELLANEOUS             | 32       |
|           |                        |     |
| 7.1            | Amendment;  Suspension      | 32       |
|           |                        |     |
| 7.2            | Termination                 | 33       |
|           |                        |     |
| 7.3            | No  Employment Rights       | 35       |
|           |                        |     |
| 7.4            | Unfunded  Status            | 35       |
|           |                        |     |
| 7.5            | Arbitration                 | 36       |
|           |                        |     |
| 7.6            | No  Alienation              | 37       |
|           |                        |     |
| 7.7            | Withholding                 | 37       |
|           |                        |     |
| 7.8            | Governing  Law              | 37       |
|           |                        |     |
| 7.9            | Successors                  | 38       |
|           |                        |     |
| 7.10           | Integration                 | 38       |
|                |                             |          |  |

 

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IMSHEALTH INCORPORATED

 

SUPPLEMENTALEXECUTIVE RETIREMENT PLAN

 

AsAmended and Restated Effective January 1, 2005

 

**INTRODUCTION**

 

Effective as of July 1**,**1998, the IMS Health Incorporated Supplemental ExecutiveRetirement Plan (the “Plan”) was established to provide a means of ensuring thepayment of a competitive level of retirement income and disability and survivorbenefits, and thereby attract, retain and motivate a select group of executivesof IMS Health Incorporated and its affiliated employers.  This document represents a completerestatement of the Plan effective as of January 1, 2005. The provisions ofthis amendment and restatement of the Plan shall apply to Members of the Planwho have not retired or terminated employment with the Company as of January 1,2005.  The rights to benefits, if any, ofany Former Member or Vested Former Member who retired or otherwise terminatedemployment before January 1, 2005, together with the amount of suchbenefits, shall continue to be governed by the provisions of the Plan in effectas of the date of such retirement or termination of employment.

 

**SECTION 1 -DEFINITIONS**

 

 1.1                              “ActuarialEquivalent Value” shall mean a benefit of equivalent value computed on thebasis of the mortality table and interest rateused to calculate accrued benefits under the Basic Plan unless otherwisespecifically provided in this Plan.

 

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

 

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 1.3                              “AverageFinal Compensation” shall mean a Member’s average annual Compensationduring the five consecutive 12-month periods in the last ten consecutive12-month periods of his or her Service (or during the total number ofconsecutive 12-month periods if fewer than five), immediately prior to themonth following the earlier of:  (a) theMember’s termination of employment with the Company or an Affiliated Employer, (b) theMember’s removal from participation under this Plan, or (c) thecommencement of benefits to the Member under the Basic Disability Plan,affording the highest such Average Final Compensation.

 

 1.4                              “BasicDisability Plan” shall mean as to any Member the long-term disability planof the Company or an Affiliated Employer pursuant to which long-term disabilitybenefits are payable to such Member.

 

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

 

 1.6                              “BasicPlan” shall mean as to any Member or Vested Former Member the definedbenefit pension plan of the Company or an Affiliated Employer intended to meetthe requirements of Code Section 401(a) pursuant to which retirementbenefits are payable to such Member or Vested Former Member or to the SurvivingSpouse or designated beneficiary of a deceased Member or Vested Former Member.

 

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

 

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

 

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

 

(a)                                  willfuland continued failure to substantially perform his or her duties (other thanany such failure resulting from incapacity due to physical or mental illness orDisability or any failure after the issuance of a notice of termination by theMember for Good Reason) which failure is demonstrably and materially damagingto the financial condition or reputation of the Company and/or its AffiliatedEmployers, and which failure continues more than 48 hours after a writtendemand for substantial performance is delivered to the Member by the Board,which demand specifically identifies the manner in which the Board believesthat the Member has not substantially performed his or her duties; or

 

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

 

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No act, or failure toact, on the part of the Member shall be deemed “willful” unless done, oromitted to be done, by the Member not in good faith and without reasonablebelief that his or her action or omission was in the best interest of theCompany.  Notwithstanding the foregoing,the Member shall not be deemed to have been terminated for Cause unless anduntil there shall have been delivered to the Member a copy of the resolutionduly adopted by the affirmative vote of not less than three-quarters (3/4) ofthe entire membership of the Board at a meeting of the Board (after reasonablenotice to the Member and an opportunity for the Member, together with theMember’s counsel, to be heard before the Board) finding that, in the good faithopinion of the Board, the Member was guilty of conduct set forth above in thisdefinition and specifying the particulars thereof in detail.

 

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

 

 1.11                        “Changein Control”.  If a “Change in Control”shall have occurred or shall be deemed to have occurred under the terms of aMember’s or Vested Former Member’s Change in Control Agreement or employmentagreement with the Company, if any, then a “Change in Control” shall be deemedto have occurred under this Plan. Otherwise a “Change in Control” shall bedeemed to have occurred if:

 

(a)                                  any“Person” as such term is used for purposes of Sections 13(d) or 14(d) of the Securities Exchange Act of1934, as amended (the “Exchange Act”) (other than the Company, any trustee orother fiduciary holding securities under an employee benefit plan of theCompany, or any company owned, directly or indirectly, by the

 

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stockholders of the Company in substantially the same proportions astheir ownership of stock of the Company), becomes the “Beneficial Owner” (asdefined in Rule 13d-3 of the Exchange Act), directly or indirectly, ofsecurities of the Company representing 20% or more of the combined voting powerof the Company’s then outstanding securities;

 

(b)                                 duringany period of 24 months (not including any period prior to the Effective Date),individuals who at the beginning of such period constitute the Board, and anynew director (other than (i) a director nominated by a Person who hasentered into an agreement with the Company to effect a transaction described inSections 1.11(a), (c), or (d) hereof, (ii) a director nominated byany Person (including the Company) who publicly announces an intention to takeor to consider taking actions (including, but not limited to, an actual orthreatened proxy contest) which if consummated would constitute a Change inControl, or (iii) a director nominated by any Person who is the BeneficialOwner, directly or indirectly, of securities of the Company representing 10% ormore of the combined voting power of the Company’s securities) whose electionby the Board or nomination for election by the Company’s stockholders wasapproved in advance by a vote of at least two-thirds (2/3) of the directorsthen still in office who either were directors at the beginning of the periodor whose election or nomination for election was previously so approved, ceasefor any reason to constitute at least a majority thereof;

 

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(c)                                  anytransaction (or series of transactions) is consummated under which the Companyis merged or consolidated with any other company, other than a merger orconsolidation (i) which would result in the voting securities of the Companyoutstanding immediately prior thereto continuing to represent (either byremaining outstanding or by being converted into voting securities of thesurviving entity) more than 66 2/3% of the combined voting power of the votingsecurities of the Company or such surviving entity outstanding immediatelyafter such merger or consolidation, and (ii) after which no Person holds20% or more of the combined voting power of the then outstanding securities ofthe Company or such surviving entity;

 

(d)                                 asale or disposition by the Company of all or substantially all of the Company’sassets is consummated or the stockholders of the Company approve a plan ofcomplete liquidation of the Company; or

 

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

 

 1.12        “Changein Control Agreement” shall mean any written agreement in effect betweenany Member or Former Member or Vested Former Member and the Company or anAffiliated Employer pursuant to which benefits may be payable to such Member orFormer Member or Vested Former Member in connection with a Change in Control.

 

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

 

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

 

 1.15                        “Company”shall mean IMS Health Incorporated.

 

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

 

 1.17                        “CoveredEarnings” shall mean a Member’s Compensation in the 12 months immediatelypreceding the onset of the Member’s Disability.

 

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

 

 1.19                        “Disability”or “Disabled” shall mean that the Member has been determined to be disabledin accordance with the Basic Disability Plan by reason of any medically

 

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determinablephysical or mental impairment that can be expected to result in death or can beexpected to last for a continuous period of not less than 12 months and theMember has received at least three months of benefits under the Company’sshort-term disability plan and/or the Basic Disability Plan..

 

 1.20                        “DisabilityBenefits” shall mean the benefits provided as described in Section 4.1(b) hereof.

 

 1.21                        “EffectiveDate” shall mean July 1, 1998. The effective date of this amendment and restatement of the Plan shallmean January 1, 2005.

 

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

 

 1.23                        “GoodReason”.  If a Member shall haveterminated employment for “Good Reason” under the terms of such Member’s Changein Control Agreement or employment agreement with the Company, if any, thensuch Member shall be deemed to have terminated employment for “Good Reason”under this Plan.  Otherwise “Good Reason”shall mean, without the Member’s express written consent, the occurrence of anyof the following circumstances unless such circumstances are fully correctedprior to the date of termination specified in the notice of termination givenin respect thereof:

 

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(a)           theassignment to the Member of any duties inconsistent with the Member’s positionin the Company, or an adverse alteration in the nature or status of the Member’sresponsibilities or the conditions of the Member’s employment;

 

(b)                                 areduction by the Company in the Member’s annual base salary, target bonus orperquisites except for across-the-board perquisite reductions similarlyaffecting all senior executives of the Company and all senior executives of anyPerson, as such term is used for purposes of Sections 13(d) or 14(d) ofthe Securities Exchange Act of 1934, as amended, in control of the Company;

 

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

 

(d)                                 thefailure by the Company to pay to the Member any portion of the Member’scompensation or to pay to the Member any portion of an installment of deferredcompensation under any deferred compensation program of the Company withinseven days of the date such compensation is due;

 

(e)                                  thefailure by the Company to continue in effect any material compensation orbenefit plan in which the Member participated unless an equitable arrangement(embodied in an ongoing substitute or alternative plan) has been made with

 

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respect to such plan, or the failure by the Company to continue theMember’s participation therein (or in such substitute or alternative plan) on abasis not materially less favorable, both in terms of the amounts of benefitsprovided and the level of the Member’s participation relative to otherparticipants;

 

(f)            thefailure of the Company to obtain a satisfactory agreement from any successor tothe Company to fully assume the Company’s obligations and to perform under thisPlan, as contemplated in Section 7.9 hereof;

 

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

 

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

 

 1.25                        “OtherDisability Income” shall mean (a) the disability insurance benefit thatthe Member is entitled to receive under the Federal Social Security Act whilehe or she is receiving the Basic Disability Plan Benefit and (b) thedisability income payable to a Member from any supplemental executivedisability plan of the Company or any Affiliated Employer or from any othercontract, agreement or other arrangement with the Company or an AffiliatedEmployer (excluding any Basic Disability Plan). If the disability income

 

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provided in (b) above is payable in a lump sum, it shall beconverted to the Actuarial Equivalent Value of monthly payments for 24 months.

 

 1.26                        “OtherRetirement Income” shall mean:

 

(a)                                  theSocial Security retirement benefit that the Member or Former Member is entitledto receive under the Federal Social Security Act, assuming that for years priorto the Member’s employment with the Company and for years following the Member’stermination of employment with the Company until the Member attains age 62, theMember earned compensation so as to accrue the maximum Social Securitybenefits, and

 

(b)                                 theretirement income payable to a Member or Vested Former Member from any ‘excessbenefit plan’ as that term is defined in Section 3(36) of the EmployeeRetirement Income Security Act of 1974, as amended (“ERISA”), any plandescribed in Section 201(2) of ERISA, and any other contract,agreement or other arrangement providing a defined pension benefit or definedcontribution retirement benefit, in any case, maintained or entered into withthe Company or an Affiliated Employer (excluding this Plan, any Basic Plan, anydefined contribution plan intended to meet the requirements of Code Section 401(a) andany elective plan of deferred compensation).

 

 1.27                        “Plan”shall mean the IMS Health Incorporated Supplemental Executive Retirement Plan,as embodied herein, and any amendments thereto.

 

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 1.28                        “PlanAdministrator” shall mean the Company, except that any action authorized tobe taken by the Plan Administrator hereunder may also be taken by any committeeor person(s) duly authorized by the Board or the duly authorized delegeesof such duly authorized committee or person(s).

 

 1.29                        “PotentialChange in Control”.  If a “PotentialChange in Control” shall have occurred or shall be deemed to have occurredunder the terms of a Member’s Change in Control Agreement or employmentagreement with the Company, if any, a “Potential Change in Control” shall bedeemed to have occurred under this Plan, otherwise a “Potential Change inControl” shall be deemed to have occurred if:

 

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

 

(b)                                 anyPerson (including the Company), as defined in Section 1.11(a) hereof,publicly announces an intention to take or to consider taking actions which ifconsummated would constitute a Change in Control; or

 

(c)           the Boardadopts a resolution to the effect that, for purposes of this Plan, a PotentialChange in Control has occurred.

 

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

 

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 1.31                        “Retirement”shall mean the Separation from Service of a Member or Vested Former Member withthe Company or an Affiliated Employer other than by reason of death afterattaining age 55 and completing five years of Service.  In determining whether age 55 has been attainedunder this definition, there shall be included as years of age the number ofadditional years credited as “age” for purposes of the Plan to the Member orVested Former Member under this Plan, a then-effective employment agreementbetween the Company and such person, a then-effective Change in ControlAgreement between the Company and such person, or otherwise approved  by the Committee.

 

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

 

 1.33                        “Separation from Service”shall mean termination of employment with the Company and any AffiliatedEmployer.  Whether a Member or VestedFormer Member has had a Separation from Service shall be determined by the PlanAdministrator on the basis of all relevant facts and circumstances and withreference to Regulations Section 1.409A-1(h).

 

 1.34                        “Service”shall mean a Member’s service defined as Vesting Service in the Basic Plan,which is taken into account for vesting purposes thereunder (including any suchservice prior to the date such individual becomes a Member but not includingany such service after participation hereunder terminates), except that (a) (a) Servicewill also include that period of time during which the Member is receivingbenefits under the Basic Disability Plan until Retirement Benefits or DeferredVested Benefits, as the case may be, are paid to such Member; provided,however, that if a Member who is receiving benefits under the Basic DisabilityPlan has a Separation from Service that is initiated by the Company for

 

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any reason other than Cause, such Member shall receive service creditfor purposes of calculating such Member’s Retirement Benefits or DeferredVested Benefits, as the case may be, for the maximum period of time duringwhich such Member is eligible to receive benefits under the Basic DisabilityPlan; (b) if a Member was employed by a company acquired by the Company oran Affiliated Employer after the Effective Date, such Member’s service withthat company prior to the date of acquisition will not constitute Servicehereunder unless otherwise approved by the Committee; (c) uponcommencement of participation hereunder in accordance with Section 2.1hereof, the Committee may limit any service that would otherwise constituteService hereunder with respect to periods prior to the date of participation inthe Plan; and (d) no service of a Former Member or Vested Former Memberduring any period after removal from participation under Section 2.2 shallconstitute Service for purposes of the Plan. The foregoing notwithstanding,there shall be included as Service for all purposes under the Plan the numberof additional years (or other additional period) credited as “service” forpurposes of the Plan to the Member or Former Member or Vested Former Memberunder this Plan, an employment agreement between the Company or an AffiliatedEmployer and such person or a Change in Control Agreement in effect at the timeof such person’s termination of employment, or otherwise approved by theCommittee.

 

 1.35        “Specified Employee”  shall mean an employee who satisfies therequirements 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) ofthe Code at any time during a calendar year, in which case such employee shallbe considered a Specified Employee for the twelve-

 

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month period beginning on the first day of the fourth month immediatelyfollowing the end of such calendar year.

 

 1.36        “SurvivingSpouse” shall mean the spouse of a deceased Member or Vested Former Memberto whom such Member or Vested Former Member is married under applicable statelaw immediately preceding such Member or Vested Former Member’s death.

 

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

 

 1.38        “VestedFormer Member” shall mean (a) a Member whose employment with theCompany or an Affiliated Employer terminates on or after the date on which heor she has completed five or more years of Service, or (b) a Member whowas removed from participation in the Plan, in accordance with Section 2.2hereof, on or after the date on which he or she has completed five or moreyears of Service.

 

**SECTION 2 -PARTICIPATION**

** **

 2.1          Commencementof Participation.  Such keyexecutives of the Corporation and its Affiliated Employers as are designated bythe CEO in writing and approved by the Committee, shall participate in the Planas of a date determined by the Committee.

 

 2.2          Terminationof Participation.  A Member’sparticipation in the Plan shall terminate upon termination of his or heremployment with the Company or any Affiliated Employer. Prior to termination ofemployment, a Member may be removed, upon written notice by the CEO, and as approvedby the Committee, from further participation in the Plan. As of

 

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the date of termination or removal, no further benefits shall accrue tosuch individual hereunder.

 

**SECTION 3 - AMOUNTAND FORM OF BENEFITS**

 

 3.1                              RetirementBenefits.

 

(a)                                  Eligibility.   Upon the Retirement of a Member or VestedFormer Member from the Company or an Affiliated Employer, he or she shall beentitled to the Retirement Benefit described in Section 3.1(b) hereof,payable in the form specified in Section 3.3.

 

(b)                                 Amount.  The Retirement Benefit of a Member or VestedFormer Member shall be an annual benefit equal to the difference between (i) andthe sum of (ii) and (iii), where:

 

(i)            is 5% ofhis or her Average Final Compensation multiplied by the number of his or heryears of Service not in excess of ten years, plus 2% of such Average FinalCompensation multiplied by the number of his or her years of Service over tenbut not in excess of 15 years;

 

(ii)           is theBasic Plan Benefit payable to the Member or Vested Former Member as of the dateof his or her Retirement expressed in the form of an annual life annuity, or,if the Basic Plan Benefit becomes payable after the Member’s or Vested FormerMember’s date of Retirement, the Actuarial

 

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Equivalent Value of the Basic Plan Benefit payable in the form of anannual life annuity as of such date, regardless of whether such date precedesthe earliest possible payment date under the terms of the Basic Plan; and

 

(iii)          isthe Other Retirement Income payable to the Member or Vested Former Member as ofthe date of his or her Retirement expressed in the form of an annual lifeannuity, or, if the Other Retirement Income becomes payable after the Member’sor Vested Former Member’s date of Retirement, the Actuarial Equivalent Value ofthe Other Retirement Income payable in the form of an annual life annuity as ofsuch date, regardless of whether such date precedes the earliest possiblepayment date of the Other Retirement Income under the terms of the appropriateretirement arrangement.

 

 3.2                              DeferredVested Benefit.

 

(a)           Eligibility.  Each Member and Vested Former Member who hascompleted five or more years of Service and who has a Separation from Serviceprior to Retirement, for a reason other than Cause or death shall be entitledto the Deferred Vested Benefit described in Section 3.2(b) hereof,payable in the form specified in Section 3.3.

 

(b)           Amount.  The Deferred Vested Benefit of a Member orVested Former Member who has a Separation from Service and who meets theeligibility requirements of

 

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Section 3.2(a) shall be an annual benefit equal to thedifference between (i) and the sum of (ii) and (iii), where:

 

(i)            is 5% ofhis or her Average Final Compensation, multiplied by the number of his or heryears of Service not in excess of ten years, plus 2% of such Average FinalCompensation multiplied by the number of his or her years of Service over tenbut not in excess of 15 years;

 

(ii)           is theBasic Plan Benefit payable to the Member or Vested Former Member as of the datehis or her Deferred Vested Benefit commences expressed in the form of an annuallife annuity, or, if the Basic Plan Benefit becomes payable after the date thatthe Member’s or Vested Former Member’s Deferred Vested Benefit commences, theActuarial Equivalent Value of the Basic Plan Benefit payable in the form of anannual life annuity as of such date, regardless of whether such date precedesthe earliest possible payment date under the terms of the Basic Plan; and

 

(iii)          isthe Other Retirement Income payable to the Member or Vested Former Member as ofthe date his or her Deferred Vested Benefit commences expressed in the form of anannual life annuity, or, if the Other Retirement Income becomes payable afterthe date that the Member’s or Vested Former Member’s Deferred Vested Benefitcommences, the Actuarial Equivalent Value of the Other Retirement Incomepayable in the form of

 

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an annual life annuity as of such date, regardless of whether such dateprecedes the earliest possible payment date of the Other Retirement Incomeunder the terms of the appropriate retirement arrangement.

 

 3.3                              Timeand Form of Payment.

 

(a)                                  Anylump sum election made in accordance with the terms of the Plan in effect priorto January 1, 2005 shall continue to be effective with respect to aRetirement Benefit or Deferred Vested Benefit payable before January 1,2009.  On and after January 1, 2009,the Retirement Benefit or Deferred Vested Benefit under this Plan, as the casemay be, shall automatically be payable in a lump sum and, except as otherwise provided in Section 3.8,on the first day of the calendar month next following the calendar month in which occurs the later of: (i) theMember’s or Vested Former Member’s attainment of age 55; or (ii) theMember’s or Vested Former Member’s Separation from Service.

 

(b)                                 Anythingin this Plan to the contrary notwithstanding, payment to any Specified Employee upon Separation fromService shall not be made before the date that is six months after the date ofSeparation from Service (or, if earlier, the date of death of such SpecifiedEmployee). Any payment due within such six-month period will be adjusted toreflect the deferred payment date by multiplying the payment by the product ofthe six-month CMT Treasury Bill annualized yield rate as published by the U.S.Treasury for the date on which such payment would have been made but for thedelay multiplied by a fraction, the numerator of which is

 

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the number of days by which such payment was delayed andthe denominator of which is 365. The adjusted lump sum payment shall be made atthe beginning of the seventh month following such Specified Employee’sSeparation from Service.  The six-monthdelay in payment described herein shall not apply, however, to any paymentmade under the circumstances described in Section 3.3(c).

 

(c)           The provisions ofSections 3.3(a) and (b) to the contrary notwithstanding, a payment toor on behalf of a Member or Vested Former Member shall be accelerated undereach of the following circumstances:

 
| (i)    |   | if payment is required to be made to an individual  other than the Member or Vested Former Member to fulfill a domestic relations  order as defined in Section 414(p)(1)(B) of the Code;                                                                                                                                                                                                                                                                                                                        |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (ii)   |   | to the extent that payment is reasonably necessary  to avoid the violation of an applicable Federal, state, local or foreign  ethics law or conflicts of interest law as provided in Regulations  Section 1.409A-3(j)(4)(iii); or                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (iii)  |   | if all or a portion of the Retirement Benefit or  Deferred Vested Benefit payable to a Member, Vested Former Member or Surviving  Spouse constitutes taxable income to such Member, Vested Former Member or  Surviving Spouse for any taxable year that is prior to the taxable year in  which such Retirement Benefit or Deferred Vested Benefit is to be paid to  such Member, Vested Former Member or Surviving Spouse as a result of the  Plan’s failure to comply with the requirements of Section 409A of |

 

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|   |   | the Code and the Regulations thereunder, the  applicable Retirement Benefit or Deferred Vested Benefit shall be immediately  paid to such Member, Vested Former Member or Surviving Spouse to the extent  that such Retirement Benefit or Deferred Vested Benefit is required to be  included in income. As provided in Section 7.8, the Company shall reimburse  such Member, Vested Former Member or Surviving Spouse on a fully grossed-up  and after-tax basis for any tax penalty or interest payable in connection  with such income inclusion (so  that the recipient of such reimbursement is held economically harmless). |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

(d)                                 Theprovisions of Section 3.3(a) to the contrary notwithstanding, apayment to a Member or Vested Former Member (or his or her Surviving Spouse)may be delayed to a date after the designated benefit payment date ifcalculation of the amount of the payment is not administratively practicabledue to events beyond the control of the Member or Vested Former Member (or hisor her Surviving Spouse) and such delay is for reasons that are commerciallyreasonable, provided that payment is made as soon as payment isadministratively practicable.  Any payment delayed pursuant to thisSection 3.3(d) will be adjusted to reflect the deferred payment dateby multiplying the payment by the product of the six-month CMT Treasury Billannualized yield rate as published by the U.S. Treasury for the date on whichsuch payment would have been made but for the delay multiplied by a fraction,the numerator of which is the number of days by which such payment was delayedand the denominator of which is 365.

 

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 3.4          Lump Sum Calculation.The lump sum payment of a Member’s or a Vested Former Member’s RetirementBenefit or Deferred Vested Benefit shall equal the present value of suchbenefit, and such present value shall be determined:  (a) on the assumption that it is payablein the form of a fully subsidized joint and 50 percent survivor annuity if suchMember or Vested Former Member is married; and (b) on the basis of (i) adiscount rate equal to 85% of the average of the 15-year non-callable U.S.Treasury bond yields (or, in the event that 15-year non-callable U.S. Treasurybond yields are unavailable, such proxy for the same as the Plan Administratormay reasonably select) as of the close of business on the last business day ofeach of the three months immediately preceding the benefit payment dateprovided in Section 3.3(a), and (ii) the 1983 Group Annuity MortalityTable.

 

 3.5          Nonpayment ofBenefits.  Subject to Section 3.8hereof, no benefits shall be paid to a Member, Vested Former Member orSurviving Spouse if the Member or Vested Former Member has:

 

(a)           becomea stockholder (unless such stock is listed on a national securities exchange ortraded on a daily basis in the over-the-counter market and the Member’s orVested Former Member’s ownership interest is not in excess of 2% of the companywhose shares are being purchased), employee, officer, director or consultant ofor to a company, or a member or an employee of or a consultant to a partnershipor any other business or firm, which competes with any of the businessesidentified in the Company’s Employee Protection Plan, or such 

 

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Member or Vested Former Member accepts any form of compensation fromsuch competing entity;

 

(b)           beendischarged from employment with the Company or any Affiliated Employer forCause;

 

(c)           failed toretain in confidence any and all confidential information concerning theCompany or any Affiliated Employer and its respective business which was knownor became known to the Member or Vested Former Member, except as otherwiserequired by law and except information (i) ascertainable or obtained frompublic information, (ii) received by the Member or Vested Former Member atany time after the Member’s or Vested Former Member’s employment by the Companyor any Affiliated Employer terminated, from a third party not employed by orotherwise affiliated with the Company or any Affiliated Employer, or (iii) whichwas or became known to the public by any means other than a breach of this Section 3.5;or

 

(d)           madedisparaging comments about the Company or any Affiliated Employer in anycommunications, written or oral, with any individual, company, government bodyor agency or any other entity whatsoever. For purposes hereof,  “disparage”shall mean any communication, including, but not limited to, any statements,actions or insinuations, made either directly or through a third party, thatwould tend to lessen the standing or stature of the Company or any Affiliated Employer 

 

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in the eyes of a customer, a prospective customer, a shareholder or aprospective shareholder.

 

 3.6          Notification ofNonpayment of Benefits.  Subject to Section 3.8hereof, in any case described in Section 3.5, the Member, Vested FormerMember or Surviving Spouse shall be given prior written notice that no benefitswill be paid to such Member, Vested Former Member or Surviving Spouse and shall be provided an opportunityto be heard prior to any such nonpayment of benefits.  Such written notice shall specify theparticular act(s), or failures to act, and the basis on which the decision notto pay his or her benefits has been made.

 

 3.7          Repayment of BenefitsPaid as Lump Sum.

 

(a)           Subjectto Section 3.8 hereof, a Member or Vested Former Member who engages in anyof the acts described in Section 3.5 shall, within 60 days after written notice by the Company, repay to theCompany the amount described in Section 3.7(b).

 

(b)           Theamount described in this Section shall equal the amount of the Member’s orVested Former Member’s lump sum benefit paid under this Plan to which suchMember or Vested Former Member would not have been entitled, if such lump sumbenefit had instead been payable in the form of an annual life annuity under thisPlan and such annuity payments were subject to the provisions of Section 3.5.

 

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 3.8          Change in Control.

 

(a)           Anythingin this Plan to the contrary notwithstanding:

 

(i)            AnyMember, whose employment with the Company or an Affiliated Employer isinvoluntarily terminated by the Company or an Affiliated Employer at or withintwo years following a Change in Control for a reason other than Cause or whoseemployment is voluntarily terminated by the Member with Good Reason at orwithin two years following a Change in Control shall be deemed to havecompleted five years of Service for purposes of Section 3.2(a) hereofand shall be credited with three additional years of Service for purposes ofcalculating the benefits payable under Sections 3.1(b) or 3.2(b) hereof,as the case may be.  Notwithstanding theprovisions of Section 3.3(a) of this Plan to the contrary, payment ofthe Actuarial Equivalent Value of such benefits shall be made at the time andin the form provided in Section 3.3 provided that with respect to DeferredVested Benefits, the time of payment shall be determined without regard towhether the Member has attained age 55 and, provided further, that theActuarial Equivalent Value of such benefits shall be determined on theassumption that unreduced benefits are payable upon the Member’s attainment ofage 55 and, for this purpose, by crediting such Member with three additionalyears of age.  Moreover, the interest andmortality factors specified in Section 3.4 shall apply for purposes ofcalculating the lump sum payment of such benefits.  In 

 

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addition, in the event that a Member’s Service shall have been limitedpursuant to Section 1.34(c) to disregard Service prior to such Member’sparticipation in the Plan, such limitation shall be eliminated in the event ofsuch Member’s termination of employment at or within two years following aChange in Control as provided above in this subsection (i).

 

(ii)           Inthe event of a Potential Change in Control or Change in Control, the Companyshall, not later than 15 days thereafter, have established one or moreso-called “rabbi” trusts and shall deposit therein cash in an amount sufficientto provide for full payment of all potential benefits payable under the Plan ator following a Change in Control; provided, however, that no such deposit shall be made if it would cause aviolation of  the funding limitations of Section 409A(b)(3) ofthe Code.  Such rabbi trust(s) shallbe irrevocable and shall provide that the Company may not, directly orindirectly, use or recover any assets of the trust(s) until such time asall obligations which potentially could arise hereunder have been settled andpaid in full, subject only to the claims of creditors of the Company in theevent of insolvency or bankruptcy of the Company; provided, however, that if noChange in Control has occurred within two years after such Potential Change inControl, such rabbi trust(s) shall at the end of such two-year periodbecome revocable and may thereafter be revoked by the Company.

 

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(iii)          The provisions of Sections 3.5 through 3.7shall be of no force or effect with respect to Members who Retire or who have aSeparation from Service forthe reasons described in Section 3.8(a)(i) within a two-yearperiod following a Change in Control.

 

**SECTION 4 -DISABILITY BENEFITS**

 

 4.1          Disability Benefits.

 

(a)           Eligibility.  AMember who has become Disabled shall be entitled to the Disability Benefitdescribed in Section 4.1(b).

 

(b)           Amount.  TheDisability Benefit of a Member entitled thereto shall be an annual benefitpayable in monthly installments under this Plan during the same period asdisability benefits are actually paid by the Basic Disability Plan, in anamount equal to 60% of the Member’s Covered Earnings, offset by the Member’s (i) BasicDisability Plan Benefit, (ii) Basic Plan Benefit, if the Basic DisabilityPlan Benefit is offset by such Basic Plan Benefit, and (iii) OtherDisability Income.

 

**SECTION 5 -SURVIVING SPOUSE’S BENEFITS**

 

 5.1          Death Prior toBenefit Payment.  Upon the death of aMember or Vested Former Member, prior to the payment of his or her RetirementBenefit or Deferred Vested Benefit hereunder, any such Member shall be deemedto have completed five years of Service for purposes of Section 3.2(a) andhis or her Surviving Spouse will be entitled to

 

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a Surviving Spouse’s Benefit under this Plan equal to 50% of theRetirement or Deferred Vested Benefit that would have been provided from thePlan had the Member or Vested Member retired from or terminated employment withthe Company or an Affiliated Employer without Cause on the date of death andreceived payment on the later of the date the Member would have attained age 55or the date of the Member’s death.

 

 5.2          Death On or AfterBenefit Payment.  No benefit shall bepayable under this Section 5**to the extenta Retirement Benefit or Deferred Vested Benefit was previously paid to a Memberor Vested Former Member.

 

 5.3          Payment of SurvivingSpouse’s Benefit.  The SurvivingSpouse’s Benefit provided under Section 5.1 will be payable in a lumpsum.  The amount of such lump sum paymentshall be determined using the actuarial assumptions set forth in Section 3.4applicable to such spouse.  The lump sumshall be paid on the first day of the calendar month next following thecalendar month in which the Member’s or Vested Former Member’s death occurred.

 

 5.4          Reduction.  Notwithstanding the foregoing provisions ofthis Section 5, the amount of a Surviving Spouse’s Benefit shall bereduced by one percentage point for each year (where a half year or more istreated as a full year) in excess of ten years that the age of the Member orVested Former Member exceeds the age of the Surviving Spouse.

 

**SECTION 6 - PLANADMINISTRATOR**

 

 6.1          Duties and Authority.  The Plan Administrator shall be responsiblefor the administration of the Plan and may delegate to any management committee,employee, director or agent

 

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its responsibility to perform any act hereunder, including, withoutlimitation, those matters involving the exercise of discretion; provided, thatsuch delegation shall be subject to revocation at any time at the PlanAdministrator’s discretion.  The PlanAdministrator shall have the sole discretion to determine all questions arisingin connection with the Plan, to interpret the provisions of the Plan and toconstrue all of its terms, to adopt, amend, and rescind rules andregulations for the administration of the Plan, and generally to conduct andadminister the Plan and to make all determinations in connection with the Planas may be necessary or advisable.  Allsuch actions of the Plan Administrator shall be conclusive and binding upon allMembers, Former Members, Vested Former Members, Surviving Spouses and otherpersons.

 

 6.2          Presentation of Claims.  Claims for benefits shall be filed in writingwith the Plan Administrator.  Written orelectronic notice of the disposition of a claim shall be furnished to theclaimant within 90 days after the claim is filed (or within 180 days if specialcircumstances require an extension of time for processing the claim and ifnotice of such extension and circumstances is provided to the claimant withinthe initial 90-day period.)

 

 6.3          Claims Denial Notification.  If a claim is wholly or partially denied, thePlan Administrator shall furnish to the claimant a written notice setting forthin a manner calculated to be understood by the claimant:

 

(a)           thespecific reason(s) for denial;

 

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(b)                                 specificreference(s) to pertinent Plan provisions on which any denial is based;

 

(c)                                  adescription of any additional material or information necessary for theclaimant to perfect the claim, and an explanation of why such material orinformation is necessary;

 

(d)                                 anexplanation of the Plan’s claims review procedures and the applicable timelimits for such procedures; and

 

(e)                                  astatement that the claimant has a right to bring a civil action under Section 502(a) ofERISA following an adverse determination on review.

 

 6.4                              ClaimsReview Procedure.  Upon a denial, theclaimant is entitled (either in person or by his duly authorizedrepresentative) to:

 

(a)                                  requesta subsequent review of the claim by the Plan Administrator upon writtenapplication for review made to the Plan Administrator.  In the case of a denial as to which writtennotice of denial has been given to the claimant, any such request for review ofthe claim must be made within 60 days after receipt by the claimant of suchnotice.  A claimant must submit a writtenapplication for review before the claimant is permitted to bring a civil actionfor benefits;

 

(b)                                 reviewpertinent documents relating to the denial; and

 

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(c)                                  submitwritten comments, documents, records and other information relating to theclaim.

 

 6.5                              Timing.  The Plan Administrator shall make itsdecision and notify the claimant with respect to a claim not later than 60 daysafter receipt of the request.  Such60-day period may be extended for another period of 60 days if the PlanAdministrator finds that special circumstances require an extension of time forprocessing and notice of the extension and special circumstances is provided tothe claimant within the initial 60-day period.

 

 6.6                              FinalDecision.  The claim for review shallbe given a full and fair review that takes into account all comments,documents, records and other information submitted that relates to the claim,without regard to whether such information was submitted or considered in theinitial benefit determination.  The PlanAdministrator shall provide the claimant with written or electronic notice ofthe decision in a manner calculated to be understood by the claimant.  The notice shall include specific reasons forthe decision, specific references to the pertinent Plan provisions on which thedecision is based, a statement that the claimant has a right to bring a civilaction under Section 502(a) of ERISA, and a statement that theclaimant is entitled to receive, upon request and free of charge, reasonableaccess to and copies of all documents, records and other information relevantto the claim.  A document is relevant tothe claim if it was relied upon in making the determination, was submitted,considered or generated in the course of making the determination ordemonstrates that benefit determinations are made in accordance with the Planand that Plan provisions have been applied consistently with respect tosimilarly situated claimants.

 

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 6.7                              DelayedPayments.  If the Plan Administratorshall approve the payment of a claim for benefits filed in accordance with theclaims procedures set forth hereinabove, any payment delayed pending theresolution of such claim will be adjusted to reflect the deferred payment dateby multiplying the payment by the product of the six-month CMT Treasury Billannualized yield rate as published by the U.S. Treasury for the date on whichsuch payment would have been made but for the delay multiplied by a fraction,the numerator of which is the number of days by which such payment was delayedand the denominator of which is 365.

 

**SECTION 7-MISCELLANEOUS**

 

 7.1                              Amendment;Suspension.  The Board may, in its sole discretion,suspend or amend this Plan at any time or from time to time, in whole or inpart, and the Employee Benefits Committee of the Company may amend the Planwithout the approval of the Board with respect to amendments that suchCommittee determines do not have a significant effect on the cost of the Plan;provided, however, that no such suspension or amendment of the Plan may (a) adverselyaffect a Member’s or Vested Former Member’s benefit under the Plan to which heor she has become entitled in accordance with the Plan as in effect on the dateimmediately preceding the date of such suspension or amendment, or (b) adverselyaffect a Member’s or Vested Former Member’s right or the right of a SurvivingSpouse to receive a benefit in accordance with the Plan as in effect on thedate immediately preceding the date of such suspension or amendment, or (c) causeany payment that a Member, Vested Former Member or Surviving Spouse is entitledto

 

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receive under this Plan to become subject to an income tax penalty orinterest payable under Section 409A of the Code.

 

 7.2                              Termination. This Plan may be terminatedand lump sum distributions made to Members and Vested Former Members (or theirSurviving Spouses) of their Retirement Benefits and Deferred Vested Benefitshereunder only in accordance with one of the following methods:

 

(a)                                  within twelve months of adissolution of the Company taxed under Section 331 of the Code, or withthe approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1(A),provided that Members’ or Vested Former Members’ Retirement Benefits orDeferred Vested Benefits are included in their gross incomes in the latest of:  (i) the calendar year in whichthe Plan termination and liquidation occurs; or (ii) the first calendaryear in which the payment is administratively practicable;

 

(b)                                 within the thirty days preceding orthe twelve months following a change in control as defined in Regulations Section 1.409A-2(g)(4)(i),provided that all agreements, methods, programs, and other arrangementssponsored by the service recipient, as defined in Regulations Section 1.409A-1(g),immediately after the time of the change in control event with respect to whichdeferrals of compensation are treated as having been deferred under a singleplan under Regulations Section 1.409A-1(c)(2) are terminated andliquidated with respect to each participant who experienced the change incontrol event, so that under the

 

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terms of the termination and liquidation all suchparticipants are required to receive all amounts of compensation deferred underthe terminated agreements, methods, programs, and other arrangements withintwelve months of the date the service recipient irrevocably takes all necessaryaction to terminate and liquidate the agreements, methods, programs, and otherarrangements, provided that the service recipient with the discretion toliquidate and terminate the agreements, methods, programs, and otherarrangements is the service recipient that is primarily liable immediatelyafter the transaction for the payment of the deferred compensation;

 

(c)                                  (i) the termination andliquidation does not occur proximate to a downturn in the financial health ofthe Company; (ii) all arrangements sponsored by the Company that would beaggregated with any terminated arrangement under Regulations Section 1.409A-1(c) ifthe same Member or Vested Former Member participated in all of the arrangementsare terminated; (iii) no payments other than payments that would bepayable under the terms of the arrangements if the termination had not occurredare made within twelve months of the date the Company takes all necessaryaction to irrevocably terminate and liquidate the arrangements; (iv) allpayments are made within twenty-four months of the date the Company takes allnecessary action to irrevocably terminate and liquidate the arrangements; and (v) theCompany does not adopt a new arrangement that would be aggregated with anyterminated arrangement under Regulations Section 1.409A-1(c) if thesame Member or Vested Former Member participated in both arrangements, at anytime

 

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within three years following the date the Company takesall necessary action to irrevocably terminate and liquidate the arrangements;or

 

(d)                                 such other events and conditions asthe Internal Revenue Service may prescribe.

 

Anything in this Section 7 to the contrarynotwithstanding, no such termination of the Plan may (a) adversely affecta Member’s or Vested Former Member’s benefit under the Plan to which he or shehas become entitled in accordance with the Plan as in effect on the dateimmediately preceding the date of such termination, or (b) adverselyaffect a Member’s or Vested Former Member’s right or the right of a SurvivingSpouse to receive a benefit in accordance with the Plan as in effect on thedate immediately preceding the date of such termination, or (c) cause anypayment that a Member, Vested Former Member or Surviving Spouse is entitled toreceive under this Plan to become subject to an income tax penalty or interestpayable under Section 409A of the Code.

 

 7.3                              NoEmployment Rights.  Nothing containedherein will confer upon any Member, Former Member or Vested Former Member theright to be retained in the service of the Company or any Affiliated Employer,nor will it interfere with the right of the Company or any Affiliated Employerto discharge or otherwise deal with Members, Former Members or Vested Former Memberswith respect to matters of employment.

 

 7.4                              UnfundedStatus.  Members and Vested FormerMembers shall have the status of general unsecured creditors of the Company,and this Plan constitutes a mere promise by the Company to make benefitpayments at the time or times required hereunder. It is the

 

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intention of the Company that this Plan be unfunded for tax purposesand for purposes of Title I of ERISA and any trust created by the Company andany assets held by such trust to assist the Company in meeting its obligationsunder the Plan shall meet the requirements necessary to retain such unfundedstatus.

 

 7.5                              Arbitration.  Any dispute or controversy arising under orin connection with the Plan shall be settled exclusively by arbitration inFairfield, Connecticut in accordance with the rules of the AmericanArbitration Association in effect at the time of such arbitration. The Company shall promptly pay orreimburse on a fully grossed-up and after-tax basis (so that the recipient ofsuch reimbursement is held economically harmless) all reasonable costs andexpenses (including fees and disbursements of counsel and pension experts)incurred by a Member, Vested Former Member, Former Member or Surviving Spouseto assert rights under this Plan, for so long as such rights may exist, or inany proceeding in connection therewith brought by a Member, Vested FormerMember, Former Member or Surviving Spouse, whether or not such Member, VestedFormer Member, Former Member or Surviving Spouse is ultimately successful inenforcing such rights or in such proceeding; provided, however, that noreimbursement shall be owed with respect to expenses relating to anyunsuccessful assertion of rights or proceeding if and to the extent that suchassertion or proceeding was initiated or maintained in bad faith or wasfrivolous as determined by the arbitrators or a court having jurisdiction overthe matter.  The amount of expenseeligible for reimbursement in any one taxable year of the Member, Vested FormerMember, Former Member or Surviving Spouse shall not affect the amount ofexpense eligible for reimbursement in any other taxable year of the Member,Vested Former Member, Former Member or Surviving Spouse.  The

 

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reimbursement of expenses shall bemade each calendar quarter and not later than the last day of the taxable yearof the Member, Vested Former Member, Former Member or Surviving Spouse in whichthe expense was incurred.  The right toreimbursement of any expense under this Section 7.5 shall not be subjectto liquidation or exchange for another benefit.

 

 7.6                              NoAlienation.  Except as otherwiseprovided in Section 3.3(c)(i), a Member’s or Vested Former Member’s rightto benefit payments under the Plan shall not be subject in any manner toanticipation, alienation, sale, transfer, assignment, pledge, encumbrance,attachment or garnishment by creditors of such Member or Vested Former Memberor his or her Surviving Spouse.

 

 7.7                              Withholding.  The Company may withhold from any benefitunder the Plan an amount sufficient to satisfy its tax withholding obligations.

 

 7.8                              GoverningLaw.  The Plan shall be governed by and construed in accordancewith the laws of the State of Connecticut applicable to contracts made and tobe performed in such state to the extent not preempted by federal law. Anythingin this Plan to the contrary notwithstanding, the terms of this Plan shall beinterpreted and applied in a manner consistent with the requirements of Section 409Aof the Code and the Regulations thereunder so as not to subject any Member,Vested Former Member or Surviving Spouse to the payment of any tax penalty orinterest which may be imposed by Section 409A of the Code and the Companyshall have no right to accelerate or make any payment under this Plan except tothe extent such action would not subject any Member, Vested Former

 

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Member or Surviving Spouse to thepayment of any tax penalty or interest under Section 409A of theCode.  If a Member, Vested Former Memberor Surviving Spouse becomes subject to any tax penalty or interest under Section 409Aof the Code by reason of his or her participation in this Plan, the Companyshall reimburse such Member, Vested Former Member or Surviving Spouse, as thecase may be, on a fully grossed-up and after-tax basis for any such tax penaltyor interest (so that the recipient of such reimbursement is held economicallyharmless) ten business days prior to the date such tax penalty or interest isdue and payable by such Member, Vested Former Member or Surviving Spouse to thegovernment.

 

 7.9                              Successors.  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 toexpressly assume and agree to perform the obligations of the Company under thisPlan in the same manner and to the same extent that the Company would have beenrequired to perform such obligations if no such succession had taken place andsuch assumption shall be an express condition to the consummation of any suchpurchase, merger, consolidation or other transaction.

 

 7.10                        Integration.  In the event of any conflict or ambiguitybetween this Plan and the terms of any employment agreement between a Memberand the Company or any Change in Control Agreement between a Member and theCompany (this Plan and any such employment agreement or Change in ControlAgreement being collectively referred to herein as the “arrangements”), suchconflict or ambiguity shall be resolved in accordance with the terms of thatarrangement which are most beneficial to the Member; provided,

 

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however, that no such resolution of any such conflict or ambiguityshall operate to cause the Member to receive duplicate payments or benefitsunder the arrangements.

 

 
|   | IMS Health Incorporated                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------|
|   |                                                                                                            |
|   |                                                                                                            |
|   | By:                                                                                                             |   |
|   |                                                                                                            |
|   | Senior Vice President,  Human Resources,  on behalf of the IMS Health Incorporated  Employee Benefits Committee |
|   |                                                                                                            |
|   |                                                                                                            |
|   | Date:                                                                                                           |   |
|        |                                                                                                                 |  |  |

 

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