**Exhibit10.5**

 

IMSHEALTH INCORPORATED

 

U.S.EXECUTIVE 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”                | 2 |
|                                                            |       |                                           |   |
|                                                            | 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”                 | 3 |
|                                                            |       |                                           |   |
|                                                            | 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”                               | 7 |
|                                                            |       |                                           |   |
|                                                            | 1.14       | “Committee”                          | 7 |
|                                                            |       |                                           |   |
|                                                            | 1.15       | “Company”                            | 7 |
|                                                            |       |                                           |   |
|                                                            | 1.16       | “Compensation”                       | 7 |
|                                                            |       |                                           |   |
|                                                            | 1.17       | “Covered Earnings”                   | 7 |
|                                                            |       |                                           |   |
|                                                            | 1.18       | “Deferred Vested Benefit”            | 8 |
|                                                            |       |                                           |   |
|                                                            | 1.19       | “Disability” or “Disabled” | 8 |
|                                                            |       |                                           |   |
|                                                            | 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”               | 11 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.29       | “Potential Change in Control”      | 11 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.30       | “Regulations”                      | 12 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.31       | “Retirement”                       | 12 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.32       | “Retirement Benefits”              | 13 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.33       | “Separation from Service”          | 13 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.34       | “Service”                          | 13 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.35       | “Specified Employee”               | 14 |
|                                                                                 |       |                                         |   |
|                                                                                 | 1.36       | “Surviving Spouse”                 | 14 |
|                                                                                 |       |                                         |   |
|                                                                                 | 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                      | 18 |
|                                                                                 |       |                                         |   |
|                                                                                 | 3.3        | Time Form of Payment                    | 20 |
|                                                                                 |       |                                         |   |
|                                                                                 | 3.4        | Lump Sum Calculation                         | 23 |
|                                                                                 |       |                                         |   |
|                                                                                 | 3.5        | Nonpayment of Benefits                       | 23 |
|                                                                                 |       |                                         |   |
|                                                                                 | 3.6        | Notification of Nonpayment of Benefits       | 25 |
|                                                                                 |       |                                         |   |
|                                                                                 | 3.7        | Repayment of Benefits Paid as Lump Sum       | 25 |
|                                                                                 |       |                                         |   |
|                                                                                 | 3.8        | Change in Control                            | 26 |
|                                                                                 |       |                                         |   |
| SECTION 4      - DISABILITY BENEFITS              | 28         |
|                                                                                 |       |
|                                                                                 | 4.1        | Disability Benefits                          | 28 |
|                                                                                 |       |                                         |   |
| SECTION 5      - SURVIVING SPOUSE’S BENEFITS | 28         |
|                                                                                 |       |
|                                                                                 | 5.1        | Death Prior to Benefit Payment               | 28 |
|                                                                                 |       |                                         |   |
|                                                                                 | 5.2        | Death On or After Benefit Payment            | 29 |
|                                                                                 |       |                                         |   |
|                                                                                 | 5.3        | Payment of Surviving Spouse’s Benefit   | 29 |
|                                                                                 |       |                                         |   |
|                                                                                 | 5.5        | Reduction                                    | 29 |
|                                                                                 |       |                                         |   |
| SECTION 6      - PLAN ADMINISTRATOR               | 30         |
|                                                                                 |       |
|                                                                                 | 6.1        | Duties and Authority                         | 30 |
|                                                                                      |            |                                              |  |  |

 

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| ** **                                                         | ** ** | **Page**                   |
|--------------------------------------------------------------------|------------|----------------------------|
|                                                               |       |                       |
|                                                               | 6.2        | Presentation of Claims     | 30 |
|                                                               |       |                       |   |
|                                                               | 6.3        | Claims Denial Notification | 31 |
|                                                               |       |                       |   |
|                                                               | 6.4        | Claims Review Procedure    | 31 |
|                                                               |       |                       |   |
|                                                               | 6.5        | Timing                     | 32 |
|                                                               |       |                       |   |
|                                                               | 6.6        | Final Decision             | 32 |
|                                                               |       |                       |   |
|                                                               | 6.7        | Delayed Payments           | 33 |
|                                                               |       |                       |   |
| SECTION 7       - MISCELLANEOUS | 33         |
|                                                               |       |
|                                                               | 7.1        | Amendment; Suspension      | 33 |
|                                                               |       |                       |   |
|                                                               | 7.2        | Termination                | 34 |
|                                                               |       |                       |   |
|                                                               | 7.3        | No Employment Rights       | 36 |
|                                                               |       |                       |   |
|                                                               | 7.4        | Unfunded Status            | 37 |
|                                                               |       |                       |   |
|                                                               | 7.5        | Arbitration                | 37 |
|                                                               |       |                       |   |
|                                                               | 7.6        | No Alienation              | 38 |
|                                                               |       |                       |   |
|                                                               | 7.7        | Withholding                | 38 |
|                                                               |       |                       |   |
|                                                               | 7.8        | Governing Law              | 38 |
|                                                               |       |                       |   |
|                                                               | 7.9        | Successors                 | 39 |
|                                                               |       |                       |   |
|                                                               | 7.10       | Integration                | 40 |
|                                                                    |            |                            |  |  |

 

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IMSHEALTH INCORPORATED

 

U.S.EXECUTIVE RETIREMENT PLAN

 

AsAmended and Restated Effective January 1, 2005

 

**INTRODUCTION**

 

Effective as of July 25**,**2000, the IMS Health Incorporated U.S. 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 complete restatementof the Plan effective as of January 1, 2005. The provisions of thisamendment and restatement of the Plan shall apply to Members of the Plan whohave 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                                 “Actuarial Equivalent Value” shall mean a benefit of equivalent valuecomputed on the basis of the mortality table andinterest rate used to calculate accrued benefits under the Basic Plan unlessotherwise specifically provided in this Plan.

 

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1.2                                 “Affiliated Employer” shall mean an entity affiliated with theCompany.

 

1.3                                 “Average Final Compensation” shall mean a Member’s average annualCompensation during the five consecutive 12-month periods in the last tenconsecutive 12-month periods of his or her Service (or during the total numberof consecutive 12-month periods if fewer than five), immediately prior to themonth following the earlier of:  (a) the Member’s termination of employmentwith the Company or an Affiliated Employer, (b) the Member’s removal fromparticipation under this Plan, or (c) the commencement of benefitsto the Member under the Basic Disability Plan, affording the highest suchAverage Final Compensation.

 

1.4                                 “Basic Disability Plan” shall mean as to any Member thelong-term disability plan of the Company or an Affiliated Employer pursuant towhich long-term disability benefits are payable to such Member.

 

1.5                                 “Basic Disability Plan Benefit” shall mean the amount of benefitspayable to a Member from the Basic Disability Plan.

 

1.6                                 “Basic Plan” shall mean as to any Member or VestedFormer Member the defined benefit pension plan of the Company or an AffiliatedEmployer intended to meet the requirements of Code Section 401(a) pursuantto which retirement benefits are payable to such Member or Vested Former Memberor to the Surviving Spouse or designated beneficiary of a deceased Member orVested Former Member.

 

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1.7                                 “Basic Plan Benefit” shall mean the amount of benefitspayable from the Basic Plan to a Member or Vested Former Member.

 

1.8                                 “Board” shall mean the Board of Directors of IMS HealthIncorporated, except that any action authorized to be taken by the Board hereundermay also be taken by a duly authorized committee of the Board or its dulyauthorized delegees.

 

1.9                                 “Cause”.  A Membershall not be deemed to have been terminated for “Cause” under this Plan unlesssuch Member shall have been terminated for “Cause” under the terms of suchMember’s employment agreement or Change in Control Agreement with the Company,if any.  If no such employment agreementor Change in Control Agreement containing a definition of “Cause” shall be ineffect, for purposes of this Plan  “Cause”shall mean a Member’s:

 

(a)                                  willful and continued failure tosubstantially perform his or her duties (other than any such failure resultingfrom incapacity due to physical or mental illness or Disability or any failureafter the issuance of a notice of termination by the Member for Good Reason)which failure is demonstrably and materially damaging to the financialcondition or reputation of the Company and/or its Affiliated Employers, andwhich failure continues more than 48 hours after a written demand forsubstantial performance is delivered to the Member by the Board, which demandspecifically identifies the manner in which the Board believes that the Memberhas not substantially performed his or her duties; or

 

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(b)                                 the willful engaging by the Member inconduct which is demonstrably and materially injurious to the Company,monetarily or otherwise.

 

No act, or failureto act, on the part of the Member shall be deemed “willful” unless done, or omittedto be done, by the Member not in good faith and without reasonable belief thathis or her action or omission was in the best interest of the Company.  Notwithstanding the foregoing, the Membershall not be deemed to have been terminated for Cause unless and until thereshall have been delivered to the Member a copy of the resolution duly adoptedby the affirmative vote of not less than three-quarters (3/4) of the entiremembership of the Board at a meeting of the Board (after reasonable notice tothe Member and an opportunity for the Member, together with the Member’scounsel, to be heard before the Board) finding that, in the good faith opinionof 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 theCompany.

 

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

 

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(a)                                  any “Person” as such term is used forpurposes 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 stockholders ofthe Company in substantially the same proportions as their ownership of stockof the Company), becomes the “Beneficial Owner” (as defined in Rule 13d-3of the Exchange Act), directly or indirectly, of securities of the Companyrepresenting 20% or more of the combined voting power of the Company’s thenoutstanding securities;

 

(b)                                 during any period of 24 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(i) a director nominated by a Person who has entered into an agreementwith the Company to effect a transaction described in Sections 1.11(a), (c), or(d) hereof, (ii) a director nominated by any Person (including theCompany) who publicly announces an intention to take or to consider takingactions (including, but not limited to, an actual or threatened proxy contest)which if consummated would constitute a Change in Control, or (iii) 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 

 

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election was previously so approved, cease for any reason to constituteat least a majority thereof;

 

(c)                                  any transaction (or series oftransactions) is consummated under which the Company is merged or consolidatedwith any other company, other than a merger or consolidation (i) 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 (ii) after which no Person holds 20% or more of thecombined voting power of the then outstanding securities of the Company or suchsurviving entity;

 

(d)                                 a sale or disposition by the Company ofall or substantially all of the Company’s assets is consummated or thestockholders of the Company approve a plan of complete liquidation of theCompany; or

 

(e)                                  the Board adopts a resolution to theeffect that, for purposes of this Plan, a Change in Control has occurred.

 

1.12                           “Change in Control Agreement” shall mean any written agreement ineffect between any Member or Former Member or Vested Former Member and theCompany or an 

 

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Affiliated Employer pursuant to which benefits may be payable to suchMember or Former Member or Vested Former Member in connection with a Change inControl.

 

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

 

1.14                           “Committee” shallmean the Human Resources Committee of the Board (the Compensation and BenefitsCommittee before January 1, 2007) or any successor thereto.

 

1.15                            “Company” shall mean IMS Health Incorporated.

 

1.16                           “Compensation” shall mean base salary, annual bonuses,commissions, overtime and shift pay, in each case prior to reductions forelective contributions under Sections 401(k), 125 and 132(f)(4) of theCode and deferred compensation under any nonqualified deferred compensationplan.  Notwithstanding the foregoing,Compensation shall exclude severance pay (including, without limitation,severance pay under the Company’s Employee Protection Plan), stay-on bonuses,long-term bonuses, retirement income, change-in-control payments, contingentpayments, amounts paid under this Plan or any other retirement plan or deferredcompensation plan, income derived from stock options, stock appreciation rightsand other equity-based compensation and other forms of special remuneration.

 

1.17                           “Covered Earnings” shall mean a Member’s Compensation inthe 12 months immediately preceding the onset of the Member’s Disability.

 

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

 

1.19                           “Disability” or “Disabled” shall mean that the Member has beendetermined to be disabled in accordance with the Basic Disability Plan byreason of any medically determinable physical or mental impairment that can beexpected to result in death or can be expected to last for a continuous periodof not less than 12 months and the Member has received at least three months ofbenefits under the Company’s short-term disability plan and/or the BasicDisability Plan.

 

1.20                           “Disability Benefits” shall mean the benefits provided asdescribed in Section 4.1(b) hereof.

 

1.21                           “Effective Date” shall mean July 25, 2000.  The effective date of this amendment andrestatement of the Plan shall mean January 1, 2005.

 

1.22                           “Former Member” shall mean (a) a Member whoseemployment with the Company or an Affiliated Employer terminates with a  Vested Percentage equal to 0%, or (b) aMember who was removed from participation in the Plan, in accordance with Section 2.2hereof, with a Vested Percentage equal to 0%.

 

1.23                           “Good Reason”. If a Member shall have terminated employment for “Good Reason” under theterms of such Member’s Change in Control Agreement or employment agreement withthe Company, if any, then such Member shall be deemed to have terminatedemployment for “Good Reason” under this Plan. Otherwise “Good Reason” shall mean, without the Member’s express writtenconsent, the occurrence of any of the 

 

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following circumstances unless such circumstances are fully correctedprior to the date of termination specified in the notice of termination givenin respect thereof:

 

(a)              the assignment to the Member of anyduties inconsistent with the Member’s position in the Company, or an adversealteration in the nature or status of the Member’s responsibilities or theconditions of the Member’s employment;

 

(b)             a reduction by the Company in the Member’sannual base salary, target bonus or perquisites except for across-the-boardperquisite reductions similarly affecting all senior executives of the Companyand all senior executives of any Person, as such term is used for purposes ofSections 13(d) or 14(d) of the Securities Exchange Act of 1934, asamended, in control of the Company;

 

(c)              the relocation of the principal place ofthe Member’s employment to a location more than 50 miles from the location ofsuch place of employment; for this purpose, required travel on the Company’sbusiness will not constitute a relocation so long as the extent of such travelis substantially consistent with the Member’s customary business travelobligations;

 

(d)             the failure by the Company to pay to theMember any portion of the Member’s compensation or to pay to the Member anyportion of an installment of deferred compensation under any deferredcompensation program of the Company within seven days of the date suchcompensation is due;

 

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(e)              the failure by the Company to continue ineffect any material compensation or benefit plan in which the Memberparticipated unless an equitable arrangement (embodied in an ongoing substituteor alternative plan) has been made with respect to such plan, or the failure bythe Company to continue the Member’s participation therein (or in suchsubstitute or alternative plan) on a basis not materially less favorable, bothin terms of the amounts of benefits provided and the level of the Member’sparticipation relative to other participants;

 

(f)                the failure of the Company to obtain asatisfactory agreement from any successor to the Company to fully assume theCompany’s obligations and to perform under this Plan, as contemplated in Section 7.9hereof;

 

(g)             with respect to any Member who is a partyto an employment agreement or a Change in Control Agreement, any purportedtermination of such Member’s employment that is not effected pursuant to thenotice provisions, if any, in such Member’s employment agreement or Change inControl Agreement.

 

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

 

1.25                           “Other Disability Income” shall mean (a) the disabilityinsurance benefit that the Member is entitled to receive under the FederalSocial Security Act while he or she is receiving the Basic Disability PlanBenefit and (b) the disability income payable to a 

 

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Member from any supplemental executive disability plan of the Companyor any Affiliated Employer or from any other contract, agreement or otherarrangement with the Company or an Affiliated Employer (excluding any BasicDisability Plan).

 

1.26                           “Other Retirement Income” shall mean the retirement income payableto a Member or Vested Former Member from any ‘excess benefit plan’ as that termis defined in Section 3(36) of the Employee Retirement Income Security Actof 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 U.S. ExecutiveRetirement Plan, as embodied herein, and any amendments thereto.

 

1.28                           “Plan Administrator” shall mean the Company, except that anyaction authorized to be taken by the Plan Administrator hereunder may also betaken by any committee or person(s) duly authorized by the Board or theduly authorized delegees of such duly authorized committee or person(s).

 

1.29                           “Potential Change in Control”. If a “Potential Change in Control” shall have occurred or shall bedeemed to have occurred under the terms of a Member’s Change in Control 

 

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Agreement or employment agreement with the Company, ifany, a “Potential Change in Control” shall be deemed to have occurred underthis Plan, otherwise a “Potential Change in Control” shall be deemed to haveoccurred if:

 

(a)              the Company enters into an agreement, theconsummation of which would result in the occurrence of a Change in Control;

 

(b)             any Person (including the Company), asdefined in Section 1.11(a) hereof, publicly announces an intention totake or to consider taking actions which if consummated would constitute aChange in Control; or

 

(c)              the Board adopts a resolution to theeffect that, for purposes of this Plan, a Potential Change in Control hasoccurred.

 

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

 

1.31                           “Retirement” shall mean the Separation from Serviceof a Member or Vested Former Member with the Company or an Affiliated Employerother than by reason of death after attaining age 55 and completing one year ofService.  In determining whether age 55has been attained under this definition, there shall be included as years ofage the number of additional years credited as “age” for purposes of the Planto the Member or Vested Former Member under this Plan, a then-effectiveemployment agreement between the 

 

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Company and such person, a then-effective Change in Control Agreementbetween the Company and such person, or otherwise as approved by the Committee.

 

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

 

1.33                           “Separationfrom 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 VestingService in the Basic Plan, which is taken into account for vesting purposesthereunder (including any such service prior to the date such individualbecomes a Member but not including any such service after participationhereunder terminates), except that (a) Service will also include thatperiod of time during which the Member is receiving benefits under the BasicDisability Plan until Retirement Benefits or Deferred Vested Benefits, as thecase may be, are paid to such Member; provided, however, that if a Member whois receiving benefits under the Basic Disability Plan has a Separation fromService that is initiated by the Company for any reason other than Cause, suchMember shall receive service credit for purposes of calculating such Member’sRetirement Benefits or Deferred Vested Benefits, as the case may be, for themaximum period of time during which such Member is eligible to receive benefitsunder the Basic DisabilityPlan; (b) if a Member was employed by a company acquired by theCompany or an Affiliated Employer after the Effective Date,

 

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such Member’s service with that company prior to the date ofacquisition will not constitute Service hereunder unless otherwise approved bythe Committee; (c) upon commencement of participation hereunder inaccordance with Section 2.1 hereof, the Committee may limit any servicethat would otherwise constitute Service hereunder with respect to periods priorto the date of participation in the Plan; and (d) no service of a FormerMember or Vested Former Member during any period after removal fromparticipation under Section 2.2 shall constitute Service for purposes ofthe 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 agreementbetween the Company or an Affiliated Employer and such person or a Change inControl Agreement in effect at the time of such person’s termination ofemployment, or otherwise approved by the Committee.

 

1.35                           “SpecifiedEmployee” shallmean an employee who satisfies the requirements for being designated a “keyemployee” under Section 416(i)(1)(A)(i), (ii) or (iii) of theCode without regard to Section 416(i)(5) of the Code at any timeduring a calendar year, in which case such employee shall be considered aSpecified Employee for the twelve-month period beginning on the first day ofthe fourth month immediately following the end of such calendar year.

 

1.36                           “Surviving Spouse” shall mean the spouse of a deceasedMember or Vested Former Member to whom such Member or Vested Former Member ismarried under applicable state law immediately preceding such Member or VestedFormer Member’s death.

 

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

 

1.38                           “Vested Former Member” shall mean (a) a Member whoseemployment with the Company or an Affiliated Employer terminates on or afterthe date on which his or her Vested Percentage is greater than 0%, or (b) aMember who was removed from participation in the Plan, in accordance with Section 2.2hereof, on or after the date on which his or her Vested Percentage is greaterthan 0%.

**SECTION 2 -PARTICIPATION**

 

2.1                                 Commencement of Participation. Such key executives of the Corporation and its Affiliated Employers asare designated by the CEO in writing and approved by the Committee shallparticipate in the Plan as of a date determined by the Committee.

 

2.2                                 Termination of Participation. A Member’s participation in the Plan shall terminate upon termination ofhis or her employment with the Company or any Affiliated Employer. Prior totermination of employment, a Member may be removed, upon written notice by theCEO, and as approved by the Committee, from further participation in the Plan.As of the date of termination or removal, no further benefits shall accrue tosuch individual hereunder.

 

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**SECTION 3 - AMOUNTAND FORM OF BENEFITS**

 

3.1                                 Retirement Benefits.

 

(a)                        Eligibility.  Upon the Retirement of a Member or Vested Former Member from the Companyor an Affiliated Employer, he or she shall be entitled to receive a percentage(the “Vested Percentage”) of the Retirement Benefit described in Section 3.1(b) hereof,payable in the form specified in Section 3.3.  Notwithstanding the provisions of Section 1.34of the Plan to the contrary, solely for the purpose of determining the VestedPercentage under the following schedule, Service shall exclude any such serviceprior to the date the individual becomes a Member, except to the extentotherwise determined by the CEO, in his or her sole discretion.

 
| **If the Member’s Service is:** | ** ** | **The Vested Percentage is:** | ** ** |
|----------------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                               | ** ** | ** **                                   | ** ** |
| Less than 1 year                                         |       |                                         | 0          | % |
| At least 1 but less than 2 years                         |       |                                         | 33         | % |
| At least 2 but less than 3 years                         |       |                                         | 67         | % |
| 3 or more years                                          |       |                                         | 100        | % |

 

(b)                       Amount.  TheRetirement Benefit of a Member or Vested Former Member shall be an annualbenefit equal to the difference between (i) and the sum of (ii) and(iii), where:

 

(i)                                     is 1.67% of his or her Average FinalCompensation multiplied by the number of his or her years of Service not inexcess of 36 years;

 

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(ii)                                  is the Basic Plan Benefit payable to theMember or Vested Former Member as of the date of his or her Retirementexpressed in the form of an annual life annuity, or, if the Basic Plan Benefitbecomes payable after the Member’s or Vested Former Member’s date ofRetirement, the Actuarial Equivalent Value of the Basic Plan Benefit payable inthe form of an annual life annuity as of such date, regardless of whether suchdate precedes the earliest possible payment date under the terms of the BasicPlan; and

 

(iii)                               is the Other Retirement Income payable to the Memberor Vested Former Member as of the date of his or her Retirement expressed inthe form of an annual life annuity, or, if the Other Retirement Income becomespayable after the Member’s or Vested Former Member’s date of Retirement, theActuarial Equivalent Value of the Other Retirement Income payable in the form ofan 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.

 

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3.2                                 Deferred Vested Benefit.

 

(a)                                  Eligibility. Each Member and Vested Former Member who has a Vested Percentage (asdefined below) greater than 0% and who has a Separation from Service with theCompany or an Affiliated Employer prior to Retirement, for a reason other thanCause or death, shall be entitled to receive a percentage (the “VestedPercentage”) of the Deferred Vested Benefit described in Section 3.2(b) hereof,payable in the form specified in Section 3.3.  Notwithstanding the provisions of Section 1.34of the Plan to the contrary, solely for the purpose of determining the VestedPercentage under the following schedule, Service shall exclude any such serviceprior to the date the individual becomes a Member,  except to the extent otherwise determined bythe CEO, in his or her sole discretion.

 
| **If the Member’s Service is:** | ** ** | **The Vested Percentage is:** | ** ** |
|----------------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                               | ** ** | ** **                                   | ** ** |
| Less than 1 year                                         |       | 0                                            | %          |
| At least 1 but less than 2 years                         |       | 33                                           | %          |
| At least 2 but less than 3 years                         |       | 67                                           | %          |
| 3 or more years                                          |       | 100                                          | %          |

 

(b)                                 Amount.  The DeferredVested Benefit of a Member or Vested Former Member who has a Separation fromService and who meets the eligibility requirements of 

 

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

 

(i)                                     is 1.67% of his or her Average FinalCompensation multiplied by the number of his or her years of Service not inexcess of 36;

 

(ii)                                  is the Basic Plan Benefit payable to theMember or Vested Former Member as of the date his or her Deferred VestedBenefit commences expressed in the form of an annual life annuity, or, if theBasic Plan Benefit becomes payable after the date that the Member’s or VestedFormer Member’s Deferred Vested Benefit commences, the Actuarial EquivalentValue of the Basic Plan Benefit payable in the form of an annual life annuityas of such date, regardless of whether such date precedes the earliest possiblepayment date under the terms of the Basic Plan; and

 

(iii)                               is the Other Retirement Income payable to the Memberor Vested Former Member as of the date his or her Deferred Vested Benefitcommences expressed in the form of an annual life annuity, or, if the OtherRetirement Income becomes payable after the date that the Member’s or VestedFormer Member’s Deferred Vested Benefit commences, the Actuarial EquivalentValue of the Other Retirement Income payable in the form of an annual lifeannuity as of such date, regardless of whether such date 

 

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precedes the earliest possible payment date of the Other RetirementIncome under the terms of the appropriate retirement arrangement.

 

 3.3                              Time and 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 otherwiseprovided in Section 3.8, on the first day of the calendar month nextfollowing the calendar month in which occurs the later of:  (i) the date the Member or Vested FormerMember attains age 55; or (ii) the Member’s or Vested Former Member’sSeparation from Service.

 

(b)                                 Anything in this Plan to the contrarynotwithstanding, payment toany Specified Employee upon Separation from Service shall not be made before thedate that is six months after the date of Separation from Service (or, ifearlier, the date of death of such Specified Employee). Any payment due withinsuch six-month period will be adjusted to reflect the deferred payment date bymultiplying 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 

 

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which is 365. The adjusted lump sum payment shall be madeat the 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 payment madeunder the circumstances described in Section 3.3(c).

 

(c)                                  The provisions of Sections 3.3(a), and (b) tothe contrary notwithstanding, a payment to or on behalf of a Member or VestedFormer Member shall be accelerated under each of the following circumstances:

 

(i)                                     if payment is required to be made to anindividual other than the Member or Vested Former Member to fulfill a domesticrelations order as defined in Section 414(p)(1)(B) of the Code;

 

(ii)                                  to the extent that payment is reasonablynecessary to avoid the violation of an applicable Federal, state, local orforeign 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 orDeferred Vested Benefit payable to a Member, Vested Former Member or SurvivingSpouse constitutes taxable income to such Member, Vested Former Member orSurviving Spouse for any taxable year that is prior to the taxable year inwhich such Retirement Benefit or Deferred Vested Benefit is to be paid to suchMember, Vested Former Member or Surviving Spouse as a result of the Plan’sfailure to comply with the requirements of Section 409A of the Code andthe Regulations thereunder, the applicable Retirement 

 

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Benefit or Deferred Vested Benefit shall be immediately paid to suchMember, Vested Former Member or Surviving Spouse to the extent that suchRetirement Benefit or Deferred Vested Benefit is required to be included inincome.  As provided in Section 7.8,the Company shall reimburse such Member, Vested Former Member or SurvivingSpouse on a fully grossed-up and after-tax basis for any tax penalty orinterest payable in connection with such income inclusion (so that the recipient of suchreimbursement is held economically harmless).

 

(d)                                 The provisions of Section 3.3(a) tothe contrary notwithstanding, a payment to a Member or Vested Former Member (orhis or her Surviving Spouse) may be delayed to a date after the designatedbenefit payment date if calculation of the amount of the payment is notadministratively practicable due to events beyond the control of the Member orVested Former Member (or his or her Surviving Spouse) and such delay is forreasons that are commercially reasonable, provided that payment is made as soonas payment is administratively practicable. Any payment delayedpursuant to this Section 3.3(d) will be adjusted to reflect thedeferred payment date by multiplying the payment by the product of thesix-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 the number of days bywhich such payment was delayed and the denominator of which is 365.

 

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3.4                                 Lump Sum Calculation. The lump sum payment of a Member’s or aVested Former Member’s Retirement Benefit or Deferred Vested Benefit shallequal the present value of such benefit, and such present value shall bedetermined:  (a) on the assumptionthat it is payable in the form of a fully subsidized joint and 50 percentsurvivor annuity if such Member or Vested Former Member is married; and (b) onthe basis of (i) a discount rate equal to 85% of the average of the15-year non-callable U.S. Treasury bond yields (or, in the event that 15-yearnon-callable U.S. Treasury bond yields are unavailable, such proxy for the sameas the Plan Administrator may reasonably select) as of the close of business onthe last business day of each of the three months immediately preceding thebenefit payment date provided in Section 3.3(a), and (ii) the 1983Group Annuity Mortality Table.

 

3.5                                 Nonpayment of Benefits. Subject to Section 3.8 hereof, no benefits shall be paid to aMember, Vested Former Member or Surviving Spouse if the Member or Vested FormerMember has:

 

(a)                        become a stockholder (unless such stockis listed on a national securities exchange or traded on a daily basis in theover-the-counter market and the Member’s or Vested Former Member’s ownershipinterest is not in excess of 2% of the company whose shares are beingpurchased), employee, officer, director or consultant of or to a company, or amember or an employee of or a consultant to a partnership or any other businessor firm, which competes with any of the businesses identified in the Company’sEmployee Protection Plan, or such 

 

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Member or Vested Former Member accepts any form ofcompensation from such competing entity;

 

(b)                                 been discharged from employment with theCompany or any Affiliated Employer for Cause;

 

(c)                                  failed to retain in confidence any andall confidential information concerning the Company or any Affiliated Employerand its respective business which was known or became known to the Member orVested Former Member, except as otherwise required by law and except information(i) ascertainable or obtained from public information, (ii) receivedby the Member or Vested Former Member at any time after the Member’s or VestedFormer Member’s employment by the Company or any Affiliated Employerterminated, from a third party not employed by or otherwise affiliated with theCompany or any Affiliated Employer, or (iii) which was or became known tothe public by any means other than a breach of this Section 3.5; or

 

(d)                                 made disparaging comments about theCompany or any Affiliated Employer in any communications, written or oral, withany individual, company, government body or agency or any other entitywhatsoever.  For purposes hereof,  “disparage” shall mean any communication,including, but not limited to, any statements, actions or insinuations, madeeither directly or through a third party, that would tend to lessen thestanding or stature of  the Company orany Affiliated Employer 

 

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

 

3.6           Notification of Nonpayment of Benefits. Subject to Section 3.8 hereof, in any case described in Section 3.5,the Member, Vested Former Member or Surviving Spouse shall be given priorwritten notice that no benefits will be paid to such Member, Vested FormerMember or Surviving Spouse andshall be provided an opportunity to be heard prior to any such nonpayment ofbenefits.  Such written noticeshall specify the particular act(s), or failures to act, and the basis on whichthe decision not to pay his or her benefits has been made.

 

3.7           Repayment of Benefits Paid as Lump Sum.

 

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

 

(b)                           The amount described in this Section shallequal the amount of the Member’s or Vested Former Member’s lump sum benefitpaid under this Plan to which such Member or Vested Former Member would nothave been entitled, if such lump sum benefit had instead been payable in theform of an annual life annuity under this Plan and such annuity payments weresubject to the provisions of Section 3.5.

 

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3.8           Change in Control.

 

(a)                        Anything in this Plan to the contrarynotwithstanding:

 

(i)                                         Any Member, whose employment with theCompany or an Affiliated Employer is involuntarily terminated by the Company oran Affiliated Employer at or within two years following a Change in Control fora reason other than Cause or whose employment is voluntarily terminated by theMember with Good Reason at or within two years following a Change in Controlshall be deemed to have completed three years of Service for purposes ofSections 3.1(a) and 3.2(a) hereof and shall be credited with threeadditional years of Service for purposes of calculating the benefits payableunder Sections 3.1(b) or 3.2(b) hereof, as the case may be.  Notwithstanding the provisions of Section 3.3of this Plan to the contrary, payment of the Actuarial Equivalent Value of suchbenefits shall be made at the time and in the form provided in Section 3.3provided that with respect to Deferred Vested Benefits, the time of paymentshall be determined without regard to whether the Member has attained age 55and, provided further, that the Actuarial Equivalent Value of such benefitsshall be determined on the assumption that unreduced benefits are payable uponthe Member’s attainment of age 55 and, for this purpose, by crediting suchMember with three additional years of age. Moreover, the interest and mortality factors specified in Section 3.4shall apply for purposes of calculating 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)                                  In the event of a Potential Change inControl or Change in Control, the Company shall, not later than 15 daysthereafter, have established one or more so-called “rabbi” trusts and shalldeposit therein cash in an amount sufficient to provide for full payment of allpotential benefits payable under the Plan at or following a Change in Control; provided, however, that no suchdeposit shall be made if it would cause a violation 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 or indirectly,use or recover any assets of the trust(s) until such time as allobligations which potentially could arise hereunder have been settled and paidin full, subject only to the claims of creditors of the Company in the event ofinsolvency or bankruptcy of the Company; provided, however, that if no Changein 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 through3.7 shall be of no force or effect with respect to Members who Retire or whohave a Separation from Service for the reasons described in Section 3.8(a)(i) withina two-year period following a Change in Control.

 

**SECTION 4 -DISABILITY BENEFITS**

 

4.1                                       Disability Benefits.

 

(a)                        Eligibility. A Member who has become Disabled shallbe entitled to the Disability Benefit described in Section 4.1(b).

 

(b)                       Amount.  The DisabilityBenefit of a Member entitled thereto shall be an annual benefit payable inmonthly installments under this Plan during the same period as disabilitybenefits are actually paid by the Basic Disability Plan, in an amount equal to60% 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 to Benefit Payment. Upon the death of a Member or Vested Former Member, prior to the paymentof his or her Retirement Benefit or Deferred Vested Benefit hereunder, any suchMember shall be deemed to have completed three years of Service for purposes ofSection 3.1(a) and Section 3.2(a) and his or her SurvivingSpouse will be entitled to a Surviving Spouse’s Benefit under this Plan equalto 50% of 

 

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the Retirement or Deferred Vested Benefit that would have been providedfrom the Plan had the Member or Vested Member retired from or terminatedemployment with the Company or an Affiliated Employer without Cause on the dateof death and received payment on the later of the date the Member would haveattained age 55 or the date of the Member’s death.

 

5.2                                 Death On or After Benefit Payment. No benefit shall be payable under this Section 5**to the extent a Retirement Benefit or Deferred VestedBenefit was previously paid to a Member or Vested Former Member.

 

5.3                                 Payment of Surviving Spouse’s Benefit. The Surviving Spouse’s Benefit provided under Section 5.1 will bepayable in a lump sum..  The amount ofsuch lump sum payment shall be determined using the actuarial assumptions setforth in Section 3.4 applicable to such spouse.  The lump sum shall be paid on the first dayof the calendar month next following the calendar month in which the Member’sor Vested Former Member’s death occurred.

 

5.4                                 Reduction. Notwithstanding the foregoing provisions of this Section 5, theamount of a Surviving Spouse’s Benefit shall be reduced by one percentage pointfor each year (where a half year or more is treated as a full year) in excessof ten years that the age of the Member or Vested Former Member exceeds the ageof the Surviving Spouse.

 

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**SECTION 6 - PLANADMINISTRATOR**

 

6.1                                 Duties and Authority. The Plan Administrator shall be responsible for the administration ofthe Plan and may delegate to any management committee, employee, director oragent 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 and administerthe Plan and to make all determinations in connection with the Plan as may benecessary or advisable.  All such actionsof the Plan Administrator shall be conclusive and binding upon all Members,Former Members, Vested Former Members, Surviving Spouses and other persons.

 

6.2                                 Presentationof Claims.  Claims forbenefits shall be filed in writing with the Plan Administrator.  Written or electronic notice of thedisposition of a claim shall be furnished to the claimant within 90 days afterthe claim is filed (or within 180 days if special circumstances require anextension of time for processing the claim and if notice of such extension andcircumstances is provided to the claimant within the initial 90-day period.)

 

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6.3                                 ClaimsDenial 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)                        the specific reason(s) for denial;

 

(b)                       specific reference(s) to pertinentPlan provisions on which any denial is based;

 

(c)                        a description of any additional materialor information necessary for the claimant to perfect the claim, and anexplanation of why such material or information is necessary;

 

(d)                       an explanation of the Plan’s claimsreview procedures and the applicable time limits for such procedures; and

 

(e)                        a statement that the claimant has a rightto bring a civil action under Section 502(a) of ERISA following anadverse determination on review.

 

6.4                                 Claims Review Procedure. Upon a denial, the claimant is entitled (either in person or by his dulyauthorized representative) to:

 

(a)                        request a subsequent review of the claimby the Plan Administrator upon written application for review made to the PlanAdministrator.  In the case of a denialas to which written notice of denial has been given to the claimant, any suchrequest 

 

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for review of the claim must be made within 60 days after receipt bythe claimant of such notice.  A claimantmust submit a written application for review before the claimant is permittedto bring a civil action for benefits;

 

(b)                       review pertinent documents relating tothe denial; and

 

(c)                        submit written comments, documents,records and other information relating to the claim.

 

6.5                                 Timing.  The PlanAdministrator shall make its decision and notify the claimant with respect to aclaim not later than 60 days after receipt of the request.  Such 60-day period may be extended foranother period of 60 days if the Plan Administrator finds that specialcircumstances require an extension of time for processing and notice of theextension and special circumstances is provided to the claimant within theinitial 60-day period.

 

6.6                                 Final Decision. The claim for review shall be given a full and fair review that takesinto account all comments, documents, records and other information submittedthat relates to the claim, without regard to whether such information wassubmitted or considered in the initial benefit determination.  The Plan Administrator shall provide theclaimant with written or electronic notice of the decision in a mannercalculated to be understood by the claimant. The notice shall include specific reasons for the decision, specificreferences to the pertinent Plan provisions on which the decision is based, astatement that the claimant has a right to bring a civil action under Section 502(a) ofERISA, and a 

 

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statement that the claimant is entitled to receive, upon request andfree of charge, reasonable access to and copies of all documents, records andother information relevant to the claim. A document is relevant to the claim if it was relied upon in making thedetermination, was submitted, considered or generated in the course of makingthe determination or demonstrates that benefit determinations are made inaccordance with the Plan and that Plan provisions have been applied consistentlywith respect to similarly situated claimants.

 

 6.7                               Delayed Payments. If the Plan Administrator shall approve the payment of a claim forbenefits filed in accordance with the claims procedures set forth hereinabove,any payment delayed pending the resolution of such claim 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 the number of days bywhich such payment was delayed and the denominator of which is 365.

** **

**SECTION 7-MISCELLANEOUS**

 

7.1                                 Amendment; Suspension.  The Board, may, in its sole discretionsuspend 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 

 

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Plan may (a) adversely affect aMember’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 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) cause any payment that a Member, VestedFormer Member or Surviving Spouse is entitled to receive under this Plan tobecome subject to an income tax penalty or interest payable under Section 409Aof the Code.

 

7.2                                 Termination. This Plan may be terminated and lump sum distributions madeto Members, Vested Former Members (or their Surviving Spouses) of their RetirementBenefits and Deferred Vested Benefits hereunder only in accordance with one ofthe following methods:

 

(a)                                  withintwelve months of a dissolution of the Company taxed under Section 331 ofthe Code, or with the 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 latestof:  (i) the calendar year in whichthe Plan termination and liquidation occurs; or (ii) the first calendaryear in which the payment is administratively practicable;

 

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(b)                                 withinthe thirty days preceding or the twelve months following a change in control asdefined in Regulations Section 1.409A-2(g)(4)(i), provided that allagreements, methods, programs, and other arrangements sponsored by the servicerecipient, as defined in Regulations Section 1.409A-1(g), immediatelyafter the time of the change in control event with respect to which deferralsof compensation are treated as having been deferred under a single plan underRegulations Section 1.409A-1(c)(2) are terminated and liquidated withrespect to each participant who experienced the change in control event, sothat under the terms of the termination and liquidation all such participantsare required to receive all amounts of compensation deferred under theterminated agreements, methods, programs, and other arrangements within twelvemonths of the date the service recipient irrevocably takes all necessary actionto 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) thetermination and liquidation does not occur proximate to a downturn in thefinancial health of the Company; (ii) all arrangements sponsored by theCompany that would be aggregated with any terminated arrangement underRegulations Section 1.409A-1(c) if the same Member or Vested FormerMember participated in all of the arrangements are terminated; (iii) nopayments other than payments that would be payable under the terms of thearrangements if the termination had 

 

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not occurred are made within twelve months of the date theCompany takes all necessary action to irrevocably terminate and liquidate thearrangements; (iv) all payments are made within twenty-four months of thedate the Company takes all necessary action to irrevocably terminate andliquidate the arrangements; and (v) the Company does not adopt a newarrangement that would be aggregated with any terminated arrangement underRegulations Section 1.409A-1(c) if the same Member or Vested FormerMember participated in both arrangements, at any time within three yearsfollowing the date the Company takes all necessary action to irrevocablyterminate and liquidate the arrangements; or

 

(d)                            suchother events and conditions as the Internal Revenue Service may prescribe.

 

Anything in this Section 7 to thecontrary notwithstanding, no such termination 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 termination, or (b) adversely affecta Member’s or Vested Former Member’s right or the right of a Surviving Spouseto receive a benefit in accordance with the Plan as in effect on the dateimmediately 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                                 No Employment Rights. Nothing contained herein will confer upon any Member, Former Member orVested Former Member the right to be retained in the service of the 

 

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Company or any Affiliated Employer, nor will it interfere with theright of the Company or any Affiliated Employer to discharge or otherwise dealwith Members, Former Members or Vested Former Members with respect to mattersof employment.

 

7.4                                 Unfunded Status. Members and Vested Former Members shall have the status of generalunsecured creditors of the Company, and this Plan constitutes a mere promise bythe Company to make benefit payments at the time or times required hereunder.It is the 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 or in connection with the Planshall be settled exclusively by arbitration in Fairfield, Connecticut inaccordance with the rules of the American Arbitration Association ineffect at the time of such arbitration. TheCompany shall promptly pay or reimburse on a fully grossed-up and after-taxbasis (so that the recipient of such reimbursement is held economicallyharmless) all reasonable costs and expenses (including fees and disbursementsof counsel and pension experts) incurred by a Member, Vested Former Member,Former Member or Surviving Spouse to assert rights under this Plan for so longas such rights may exist or in any proceeding in connection therewith broughtby a Member, Vested Former Member, Former Member or Surviving Spouse, whetheror not such Member, Vested Former Member, Former Member or Surviving Spouse isultimately successful in enforcing such rights or in such proceeding; provided,however, that no 

 

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reimbursement shall be owed withrespect to expenses relating to any unsuccessful assertion of rights orproceeding if and to the extent that such assertion or proceeding was initiatedor maintained in bad faith or was frivolous as determined by the arbitrators ora court having jurisdiction over the matter. The amount of expense eligible for reimbursement in any one taxable yearof the Member, Vested Former Member, Former Member or Surviving Spouse shallnot affect the amount of expense eligible for reimbursement in any othertaxable year of the Member, Vested Former Member, Former Member or SurvivingSpouse.  The reimbursement of expensesshall be made each calendar quarter and not later than the last day of thetaxable year of the Member, Vested Former Member, Former Member or SurvivingSpouse in which the expense was incurred. The right to reimbursement of any expense under this Section 7.5shall not be subject to liquidation or exchange for another benefit.

 

7.6           No Alienation. Except as otherwise provided in Section 3.3(c)(i), a Member’s orVested Former Member’s right to benefit payments under the Plan shall not besubject in any manner to anticipation, alienation, sale, transfer, assignment,pledge, encumbrance, attachment or garnishment by creditors of such Member orVested Former Member or his or her Surviving Spouse.

 

7.7           Withholding. The Company may withhold from any benefit under the Plan an amountsufficient to satisfy its tax withholding obligations.

 

7.8           Governing Law.  The Plan shall be governed by andconstrued in accordance with the laws of the State of Connecticut applicable tocontracts made and to be performed in such 

 

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state to the extentnot preempted by federal law. Anything in this Plan to the contrarynotwithstanding, the terms of this Plan shall be interpreted and applied in amanner consistent with the requirements of Section 409A of the Code andthe Regulations thereunder so as not to subject any Member, Vested FormerMember or Surviving Spouse to the payment of any tax penalty or interest whichmay be imposed by Section 409A of the Code and the Company shall have noright to accelerate or make any payment under this Plan except to the extentsuch action would not subject any Member, Vested Former Member or SurvivingSpouse to the payment of any tax penalty or interest under Section 409A ofthe Code. If a Member, Vested Former Member or Surviving Spouse becomes subjectto any tax penalty or interest under Section 409A of the Code by reason ofhis or her participation in this Plan, the Company shall reimburse such Member,Vested Former Member or Surviving Spouse, as the case may be, on a fullygrossed-up and after-tax basis for any such tax penalty or interest (so thatthe recipient of such reimbursement is held economically harmless) ten businessdays prior to the date such tax penalty or interest is due and payable by suchMember, Vested Former Member or Surviving Spouse to the government.

 

7.9                                 Successors. The Company shall require any successor (whether direct or indirect, bypurchase, merger, consolidation or otherwise) to all or substantially all ofthe business and/or assets of the Company to expressly assume and agree toperform the obligations of the Company under this Plan in the same manner andto the same extent that the Company would have been required to perform suchobligations if no such succession had taken place and such assumption shall bean express condition to the consummation of any such purchase, merger,consolidation or other transaction.

 

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7.10         Integration. In the event of any conflict or ambiguity between this Plan and theterms of any employment agreement between a Member and the Company or anyChange in Control Agreement between a Member and the Company (this Plan and anysuch employment agreement or Change in Control Agreement being collectivelyreferred to herein as the “arrangements”), such conflict or ambiguity shall beresolved in accordance with the terms of that arrangement which are mostbeneficial to the Member; provided, however, that no such resolution of anysuch conflict or ambiguity shall operate to cause the Member to receiveduplicate payments or benefits under 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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