**Exhibit 10.2**

 

IMS HEALTH INCORPORATED

 

EXECUTIVE ANNUAL INCENTIVE PLAN

 

(As Amended and Restated June 26, 2008)

 

1.  Purpose of the Plan

 

The purpose of the Plan is to advance the interests of the Company andits stockholders by providing incentives in the form of periodic cash bonusawards to certain management employees of the Company and its subsidiaries,thereby motivating such employees to attain corporate performance goalsarticulated under the Plan.

 

2.  Definitions

 

The following capitalized terms used in the Plan have the respectivemeanings set forth in this Section:

 

(a) Act: The Securities Exchange Act of 1934, as amended, or anysuccessor thereto.

 

(b) Award: A periodic cash bonus award granted pursuant to thePlan.

 

(c) Beneficial Owner: As such term is defined in Rule 13d-3under the Act (or any successor rule thereto).

 

(d) Board: The Board of Directors of the Company.

 

(e) Change in Control: The occurrence of any of the followingevents:

 

(i)            any Person (other than the Company, anytrustee or other fiduciary holding securities under an employee benefit plan ofthe Company, or any company owned, directly or indirectly, by the stockholdersof the Company in substantially the same proportions as their ownership ofstock of the Company), becomes the Beneficial Owner, directly or indirectly, ofsecurities of the Company representing 20% or more of the combined voting powerof the Company’s then-outstanding securities;

 

(ii)           during any period of twenty-four months (notincluding any period prior to the Effective Date), individuals who at thebeginning of such period constitute the Board, and any new director (other than(A) a director nominated by a Person who has entered into an agreementwith the Company to effect a transaction described in Sections (2)(e)(i), (iii) or(iv) of the Plan, (B) a director nominated by any Person (includingthe 

 

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Company) who publicly announces an intention to take or to considertaking actions (including, but not limited to, an actual or threatened proxycontest) which if consummated would constitute a Change in Control or (C) adirector nominated by any Person who is the Beneficial Owner, directly orindirectly, of securities of the Company representing 10% or more of thecombined voting power of the Company’s securities) whose election by the Boardor nomination for election by the Company’s stockholders was approved inadvance by a vote of at least two-thirds (2/3) of the directors then still inoffice who either were directors at the beginning of the period or whoseelection or nomination for election was previously so approved, cease for anyreason to constitute at least a majority thereof;

 

(iii)          the stockholders of the Company approve anytransaction or series of transactions under which the Company is merged or consolidatedwith any other company, other than a merger or consolidation (A) whichwould result in the voting securities of the Company outstanding immediatelyprior thereto continuing to represent (either by remaining outstanding or bybeing converted into voting securities of the surviving entity) more than 662/3% of the combined voting power of the voting securities of the Company orsuch surviving entity outstanding immediately after such merger orconsolidation and (B) after which no Person holds 20% or more of thecombined voting power of the then-outstanding securities of the Company or suchsurviving entity; or

 

(iv)          the stockholders of the Company approve aplan of complete liquidation of the Company or an agreement for the sale ordisposition by the Company of all or substantially all of the Company’s assets.

 

(f) Code: The Internal Revenue Code of 1986, as amended, or anysuccessor thereto.

 

(g) Committee: The Human Resources Committee of the Board.

 

(h) Company: IMS Health Incorporated, a Delaware corporation.

 

(i) Covered Employee: As such term is defined in Section 162(m) ofthe Code (or any successor section thereto).

 

(j) Covered Participant: A Participant who is, or who isanticipated to become, a Covered Employee.

 

(k) Effective Date: The date on which the Plan takes effect, asdefined pursuant to Section 13 of the Plan.

 

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(l) Participant: An employee of the Company or any of itsSubsidiaries who is selected by the Committee to participate in the Planpursuant to Section 4 of the Plan.

 

(m) Performance Period: The calendar year or any other period thatthe Committee, in its sole discretion, may determine.

 

(n) Person: As such term is used for purposes of Sections 13(d) or14(d) of the Act (or any successor sections thereto).

 

(o) Plan: The IMS Health Incorporated Executive Annual IncentivePlan.

 

(p) Shares: Shares of common stock, par value $0.01 per Share, ofthe Company.

 

(q) Subsidiary: A subsidiary corporation, as defined in Section 424(f) ofthe Code (or any successor section thereto).

 

3.  Administration

 

The Plan shall be administered by the Committee or such other personsdesignated by the Board.  The Committeemay delegate its duties and powers in whole or in part to any subcommitteethereof consisting solely of at least two individuals who are each “non-employeedirectors” within the meaning of Rule 16b-3 of the Act (or any successor rule thereto)and “outside directors” within the meaning of Section 162(m) of theCode (or any successor section thereto). The Committee shall have the authority to select the employees to begranted Awards under the Plan, to determine the size and terms of an Award(subject to the limitations imposed on Awards in Section 5 below), tomodify the terms of any Award that has been granted (except for any modificationthat would increase the amount of the Award payable to a Covered Participant),to determine the time when Awards will be made and the Performance Period towhich they relate, to establish performance objectives in respect of suchperformance periods and to certify that such performance objectives wereattained; provided, however, that any such action shall be consistent with theapplicable provisions of Section 162(m) of the Code.  The Committee is authorized to interpret thePlan, to establish, amend and rescind any rules and regulations relatingto the Plan, and to make any other determinations that it deems necessary ordesirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcileany inconsistency in the Plan in the manner and to the extent the Committeedeems necessary or desirable.  Anydecision of the Committee in the interpretation and administration of the Plan,as described herein, shall lie within its sole and absolute discretion andshall be final, conclusive and binding on all parties concerned.  Determinations made by the Committee underthe Plan need not be uniform and may be made selectively among Participants,whether or not such Participants are similarly situated.  The Committee shall have the right to deductfrom any payment made under the Plan any federal, state, local or foreignincome or other taxes required by law to be withheld with respect to suchpayment.  To the extent consistent withthe applicable provisions of Section 162(m) of the Code, theCommittee 

 

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may delegate to one or more employees of the Company or any of itsSubsidiaries the authority to take actions on its behalf pursuant to the Plan.

 

4.  Eligibility and Participation

 

The Committee shall designate those persons who shall be Participantsfor each Performance Period. Participants shall be selected from among the employees of the Companyand any of its Subsidiaries who are in a position to have a material impact onthe results of the operations of the Company or of one or more of itsSubsidiaries.  The designation ofParticipants may be made individually or by groups or classifications ofemployees, as the Committee deems appropriate.

 

5.  Awards

 

(a) Performance Goals.  AParticipant’s Award shall be determined based on the attainment of writtenperformance goals approved by the Committee for a Performance Periodestablished by the Committee (i) while the outcome for that PerformancePeriod is substantially uncertain and (ii) no more than 90 days after thecommencement of the Performance Period to which the performance goal relatesor, if less than 90 days, the number of days which is equal to 25 percent ofthe relevant Performance Period.  Theperformance goals, which must be objective with respect to CoveredParticipants, shall be based upon one or more of the following criteria: (i) consolidatedearnings before or after taxes (including earnings before interest, taxes,depreciation and/or amortization); (ii) net income; (iii) operatingincome; (iv) earnings per Share; (v) book value per Share; (vi) returnon stockholders’ equity; (vii) expense management; (viii) return oninvestment; (ix) improvements in capital structure; (x) profitabilityof an identifiable business unit or product; (xi) maintenance or improvement ofprofit margins; (xii) stock price; (xiii) market share; (xiv) revenues orsales; (xv) costs; (xvi) cash flow; (xvii) working capital; (xviii) return onassets; (xix) economic value created; (xx) total shareholder return (stockprice appreciation plus dividends and distributions); (xxi) operatingmanagement goals; (xxii) execution of pre-approved corporate strategy,(xxiii) operating margin and (xxiv) measures of customer satisfactionand employee satisfaction.  In addition,with respect to Participants who are not Covered Participants, the Committeemay approve performance goals based on other criteria, which may or may not beobjective.  The foregoing criteria mayrelate to the Company, one or more of its Subsidiaries or one or more of itsdivisions, units, partnerships, joint venturers or minority investments,product lines or products or any combination of the foregoing, and may beapplied on an absolute basis and/or be relative to one or more peer groupcompanies or indices, or any combination thereof, all as the Committee shalldetermine.  In addition, to the degreeconsistent with Section 162(m) of the Code (or any successor sectionthereto), the performance goals may be calculated without regard toextraordinary items.  The maximum amountof an Award to any Participant with respect to a fiscal year of the Companyshall be $3,000,000.

 

(b) Payment.  The Committeeshall determine whether, with respect to a Performance Period, the applicableperformance goals have been met with respect to a 

 

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given Participant and, if they have, to so certify and ascertain theamount of the applicable Award.  NoAwards will be paid for such performance period until such certification ismade by the Committee.  The amount of theAward actually paid to a given Participant may be less or, with respect toParticipants who are not Covered Participants, more than the amount determinedby the applicable performance goal formula, at the discretion of theCommittee.  The amount of the Awarddetermined by the Committee for a performance period shall be paid to theParticipant at such time as determined by the Committee in its sole discretionafter the end of such Performance Period.

 

(c) Termination of Employment. If a Participant who is not a Covered Participant dies, retires, isassigned to a different position, is granted a leave of absence, or if theParticipant’s employment is otherwise terminated (except with cause by theCompany) during a Performance Period, a pro rata share of the Participant’saward based on the period of actual participation may, at the Committee’sdiscretion, be paid to the Participant after the end of the Performance Periodif it would have become earned and payable had the Participant’s employmentstatus not changed.

 

(d) Compliance with Section 162(m) of the Code.  The provisions of this Section 5 shallbe administered and interpreted in accordance with Section 162(m) ofthe Code to ensure the deductibility by the Company or its Subsidiaries of thepayment of Awards.

 

(e)  The Committee may establish anAward pool, which shall be an unfunded pool, for purposes of measuringperformance in a specified Performance Period for purposes of Awards.  The amount of such Award pool shall be basedupon the achievement of a performance goal or goals based on one or more of thebusiness criteria set forth in Section 5(a) during the givenPerformance Period, as specified by the Committee.  The Committee may specify the amount of theAward pool as a percentage of any of such business criteria, a percentagethereof in excess of a threshold amount, or as another amount which need notbear a strictly mathematical relationship to such business criteria, providedthat the dollar amount of the Award pool can be calculated based on the levelof achievement of the performance goal. The Committee may specify Awards for any one Participant as a percentageof the Award pool or otherwise in a mathematically determinable way, subject tosuch terms and conditions as the Committee may specify, provided that theaggregate percentage of the Award pool allocated to Participants may not exceed100% of the Award pool, and for any Covered Employee the maximum payout fromthe Award pool shall be specified (and shall be subject to the maximumlimitation under Section 5(a) in any event).

 

6.  Amendments or Termination

 

The Board may amend, alter or discontinue the Plan, but no amendment,alteration or discontinuation shall be made which would impair any of therights or obligations under any Award theretofore granted to a Participantunder the Plan without such Participant’s consent; provided, however, that theCommittee may amend the Plan in such manner as it deems necessary to permit thegranting of Awards meeting the 

 

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requirements of the Code orother applicable laws.  Notwithstandinganything to the contrary herein, the Board may not amend, alter or discontinuethe provisions relating to Section 10(b)(ii) of the Plan after theoccurrence of a Change in Control.

 

7.  No Right to Employment

 

Neither the Plan nor any action taken hereunder shall be construed asgiving any Participant or other person any right to continue to be employed byor perform services for the Company or any Subsidiary, and the right toterminate the employment of or performance of services by any Participant atany time and for any reason is specifically reserved to the Company and itsSubsidiaries.

 

8.  Nontransferability of Awards

 

An Award shall not be transferable or assignable by the Participantotherwise than by will or by the laws of descent and distribution.

 

9.  Reduction of Awards

 

Notwithstanding anything to the contrary herein, the Committee, in itssole discretion (but subject to applicable law), may reduce any amounts payableto any Participant hereunder in order to satisfy any liabilities owed to theCompany or any of its Subsidiaries by the Participant.

 

10.  Adjustments Upon CertainEvents

 

(a) Generally.  In the eventof any change in the outstanding Shares by reason of any Share dividend orsplit, reorganization, recapitalization, merger, consolidation, spin-off,combination or exchange of Shares or other corporate exchange, or anydistribution to stockholders of Shares other than regular cash dividends, theCommittee in its sole discretion and without liability to any person may makesuch substitution or adjustment, if any, as it deems to be equitable, as to anyaffected terms of outstanding Awards.

 

(b) Change in Control. Notwithstanding any other provision in the Plan to the contrary, in theevent of a Change in Control, (i) the Committee in its sole discretion andwithout liability to any person may take such actions, if any, as it deemsnecessary or desirable with respect to any Award (including, withoutlimitation, (A) the acceleration of an Award, (B) the payment of acash amount in exchange for the cancellation of an Award and/or (C) therequiring of the issuance of substitute Awards that will substantially preservethe value, rights and benefits of any affected Awards previously grantedhereunder) as of the date of the consummation of the Change in Control and (ii) anyParticipant who, as a result of a Change in Control, receives payments pursuantto a Change-in-Control agreement shall receive, subject to the same terms andconditions under which such payments are made, an amount in cash equal to (A) theannual target bonus under the Plan for the year in which the Change in Controloccurs, multiplied by a fraction, (I) the numerator of which equals thenumber of full or partial days in such 

 

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annual performance periodduring which he or she was employed by the Company and (II) thedenominator of which is 365, and (B) the entire target bonus opportunitywith respect to all other performance periods in progress under this Plan atthe time of his or her termination of employment from the Company.

 

11.  Miscellaneous Provisions

 

The Company is the sponsor and legal obligor under the Plan and shallmake all payments hereunder, other than any payments to be made by any of theSubsidiaries (in which case shall be made by such Subsidiary, asappropriate).  The Company shall not berequired to establish any special or separate fund or to make any othersegregation of assets to ensure the payment of any amounts under the Plan, andthe Participants’ rights to the payment hereunder shall be no greater than therights of the Company’s (or Subsidiary’s) unsecured creditors.  All expenses involved in administering thePlan shall be borne by the Company.

 

12.  Choice of Law

 

The Plan shall be governed by and construed in accordance with the lawsof the State of New York applicable to contracts made and to be performed inthe State of New York.

 

13.  Effectiveness of the Plan

 

The Plan became effective as of July 1, 1998. This amendment andrestatement of the Plan shall be effective as of June 26, 2008.

 

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