Document:

Exhibit 4.3

 

Genworth Life and Annuity
Insurance Company

 

Funding
Agreement

 

POLICYHOLDER:  Genworth Global Funding Trust 2008-21, its successors and permitted
assignees

 

POLICY
NUMBER: GS-R6037

 

EFFECTIVE
DATE: May 1, 2008

 

ISSUE
STATE:  Virginia

 

Genworth
Life and Annuity Insurance Company (“GLAIC”) (which term includes its
successors and permitted assignees) and the Policyholder hereby agree to the
terms of this funding agreement (this “Policy”).  This Policy, including the attached
Accumulation Fund Schedule, and any amendments thereto, constitutes the entire
contract between GLAIC and the Policyholder.  
This Policy is delivered in the Issue State and governed by the laws of
that state.

 

In
witness whereof, GLAIC and the Policyholder have agreed to this Policy as of
the Effective Date and caused the same to be in full force and effect.

 

 

	
   

  	
  /s/ Thomas E. Duffy

  	
   

  	
  /s/Pamela S. Schutz

  
	
   

  	
  Secretary

  	
   

  	
  President

  

 

 

Genworth Life and Annuity
Insurance Company

6610 West Broad Street

Richmond, VA  23230

1-800-635-8056

 

 

Table of Contents

 

	
  Section 1 –
  Accumulation Fund – Establishment and Operation

  
	
   

  
	
  Section 2 –
  Payments From the Accumulation Fund

  
	
   

  
	
  Section 3 –
  Termination of Agreement

  
	
   

  
	
  Section 4 –
  General Provisions

  
	
   

  
	
  Section 5 –
  Definitions

  

 

 

SECTION 1 – ACCUMULATION FUND – ESTABLISHMENT AND
OPERATION

 

1.1        POLICY PAYMENTS.  The Policyholder
agrees to pay to GLAIC in the currency specified in the Accumulation Fund
Schedule (the “Specified Currency”), and by wire transfer, the Net Deposit
Amount on the Deposit Date.  Regardless
of the Effective Date of the Policy or the Deposit Date specified in the
Accumulation Fund Schedule, this Policy shall become effective only upon the
receipt by GLAIC, or its designee, of the Net Deposit Amount.

 

1.2        ESTABLISHMENT OF THE ACCUMULATION FUND.  Upon the receipt by
GLAIC of the Net Deposit Amount, GLAIC will establish an Accumulation
Fund.  The Accumulation Fund is a general
account record that reflects the Fund Balance under this Policy.  GLAIC is neither a trustee nor a fiduciary
with respect to the Accumulation Fund. 
The Net Deposit Amount is allocated to GLAIC’s general account for
investment but all funds received under this Policy will become the exclusive
property of GLAIC without any duty or requirement for segregation or separate
investment.  The Fund Balance is not
affected by the investment results of the assets held in the general account.

 

1.3        INTEREST ON THE ACCUMULATION FUND.  The Guaranteed Rate
for the Accumulation Fund is effective until the Fund Balance is paid in full
to the Policyholder.  Interest is
credited based upon the methodology specified in the Accumulation Fund
Schedule.

 

1.4        VALUE OF THE ACCUMULATION FUND.  The Fund Balance on
any given day equals the Deposit Amount plus interest, if any, credited thereon
at the Guaranteed Rate, less any payments made under Section 2 of the
Policy.

 

SECTION 2 – PAYMENTS FROM THE ACCUMULATION FUND

 

2.1        PERIODIC PAYMENTS.  GLAIC will pay the
Policyholder the amounts specified in the Accumulation Fund Schedule as Periodic
Payouts, including the Maturity Payout, on the dates specified (subject to Section 4.7).  Such payment amounts are adjusted to reflect
any other payment payable under this Section of the Policy.  The interest factor used in making such
adjustments is the Guaranteed Rate.

 

2.2        OPTIONAL REPAYMENT.  If so indicated in the Accumulation Fund
Schedule, GLAIC shall pay to the Policyholder the amount the Policyholder needs
to redeem or repay any notes or other instruments issued by the Policyholder
and backed by this Policy, pursuant to any limited right of redemption or
repayment contained in such note or instrument. 
GLAIC may require reasonable evidence that the redemption or repayment
request satisfies all the terms and conditions described in the prospectus,
prospectus supplement and/or pricing supplement applicable to such note or
other instrument.  Additional
restrictions, if any, on the Policyholder’s reimbursement rights under this Section may
be included in the Accumulation Fund Schedule.

 

1

 

2.3        OPTIONAL REDEMPTION.  If so indicated in the Accumulation Fund
Schedule, GLAIC may elect to
pay the Policyholder all or any part of the Fund Balance on the Call Dates
specified in the Accumulation Fund Schedule. 
Unless otherwise provided in the Accumulation Fund Schedule, GLAIC will
give the Policyholder at least thirty-five (35) calendar days and no more than
seventy-five (75) calendar days notice of its intent to make such
pre-payment.  No adjustment will be made
to the amount of such payment, unless such adjustment is specifically provided
for in the Accumulation Fund Schedule.

 

2.4        MATURITY PAYMENTS.  GLAIC shall pay the
Policyholder the Fund Balance on the Maturity Date.

 

2.5        FORM OF PAYMENT.  All payments GLAIC makes to the Policyholder
will be made in the Specified Currency, by wire transfer, unless otherwise
agreed in writing by the parties hereto. Unless otherwise stated in the
Accumulation Fund Schedule, all payments GLAIC makes will be net of any applicable
withholding or deduction for or on account of any present or future taxes, duties,
levies, assessments or other governmental charges of whatever nature imposed or
levied by or on behalf of any governmental authority having the power to
tax.  Unless otherwise specified in the Accumulation
Fund Schedule, such net payments fully satisfy GLAIC’s obligation to the Policyholder
with respect to the full amount due.

 

SECTION 3 –
TERMINATION OF AGREEMENT

 

3.1        AUTOMATIC TERMINATION/ACCELERATION.  This Policy terminates
with respect to the Accumulation Fund when the Fund Balance is zero and GLAIC’s
obligations hereunder shall automatically accelerate upon the occurrence of an
Event of Default described in Section 3.3(a).

 

3.2        EARLY TERMINATION/ACCELERATION.  The Policyholder may
accelerate this Policy by giving GLAIC not less than two (2) Business Days’
written notice upon the occurrence of an Event of Default specified in Section 3.3
b., c. or d. below.  GLAIC may accelerate
this Policy, in whole but not in part, by giving the Policyholder not less than
forty-five (45) days’, but no more than seventy-five (75) days’, prior written
notice of the occurrence of a Tax Event as described in Section 3.4,
provided, however that this Policy shall not be terminated until the Fund
Balance has been paid to the Policyholder in full.

 

3.3        EVENTS OF DEFAULT.  An Event of Default occurs if:

 

	
   

  	
  a.

  	
  GLAIC is
  dissolved or a resolution is passed or proceeding is instituted for the
  winding-up, liquidation or similar arrangement of GLAIC (other than pursuant
  to a consolidation, amalgamation or merger);

  
	
   

  	
  b.

  	
  GLAIC breaches
  any material obligation, representation or certification contained herein,
  provided that there is no bona fide dispute as to whether such breach has
  occurred and that such breach continues for fifteen (15) Business Days
  following the Policyholder’s written notice to GLAIC of such breach;

  

 

2

 

	
   

  	
  c.

  	
  GLAIC fails to
  make any required Periodic Payout (other than the Maturity Payout) described
  in the Accumulation Fund Schedule or any other payment described in Sections
  2.2 or 2.3 of this Policy or any other funding agreement GLAIC issues in
  connection with the Program, and such failure continues for seven (7) Business
  Days after the due date thereof;

  
	
   

  	
  d.

  	
  GLAIC fails to
  make the Maturity Payout described in the Accumulation Fund Schedule or in
  any other funding agreement GLAIC issues in connection with the Program and
  such failure is continuing as of the end of the Business Day following the
  due date thereof.

  

 

3.4        TAX EVENT.  A “Tax Event” occurs if GLAIC has received an
opinion of independent legal counsel stating in effect that there is more than
an insubstantial risk that as a result of 
any amendment to, or change (including any announced prospective change)
in, the laws (or regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any governmental authority in the United States, which amendment or change is
enacted, promulgated, issued or announced on or after the Deposit Date, the
Policyholder is or will be within ninety (90) days of the date thereof, (1) subject
to an entity level U.S. federal income tax with respect to interest accrued or
received on this Policy or (2) subject to more than a de minimis amount of
taxes, duties or other governmental charges.

 

Notwithstanding anything to the
contrary in this Section 3, if GLAIC shall comply in all respects with the
requirements of this Section 3, but an event of default has occurred with
respect to the notes backed by the Policy and as a result payments with respect
to the notes have been accelerated, otherwise than by reason of any default
under this Policy by GLAIC, no Event of Default (as defined above) under this
Policy shall be deemed to have occurred, no payments with respect to this Policy
shall be accelerated and GLAIC will remain obligated to make payments under
this Policy as if no Event of Default had occurred with respect to the notes.

 

SECTION 4 – GENERAL
PROVISIONS

 

4.1        PAYMENT UPON TERMINATION.  Unless otherwise
specified in the Accumulation Fund Schedule, GLAIC shall pay the Policyholder
the Fund Balance on the Maturity Date. 
Such payment fully discharges GLAIC’s obligation to the Policyholder
under this Policy.

 

4.2        DISCLAIMER OF RESPONSIBILITY.  GLAIC’s only liability
is as set out in this Policy, including the Accumulation Fund Schedule attached
hereto.  In performing its obligations
under this Policy, GLAIC is not acting as a fiduciary or agent for the
Policyholder or anyone else regardless of whether or not they are directly or
indirectly associated with the Policyholder.

 

4.3        NOTICES.  All agreements, notices, directions,
consents, elections or other communication (“Notices”) required by this Policy
must be in writing, directed to the applicable address designated on the face
page.  Any such Notices may be given by
facsimile transmission or other acceptable electronic means.  All Notices are effective when received.

 

3

 

4.4        AMENDMENTS.  This Policy may be amended only by mutual
written agreement between the parties hereto.

 

4.5        CONFLICT.  To the extent that there is a conflict in
terms between the Policy and the Accumulation Fund Schedule, the Accumulation
Fund Schedule will control the conduct of the parties.

 

4.6        TRANSFERABILITY/ASSIGNMENT.  This Policy and the
Accumulation Fund established pursuant to it may solely be sold, assigned,
transferred or pledged in accordance with, and for the purposes contemplated
by, the documents and agreements governing the establishment and operation of
the Program.  GLAIC will maintain a
record of ownership of this Policy on its books and records.

 

4.7        PAYMENTS BY GLAIC.  When this Policy
provides that GLAIC will make a payment to the Policyholder, such payment shall
be made to the Policyholder or to the agent the Policyholder designates.  Unless otherwise specified in the Accumulation
Fund Schedule, if a payment date is not a Business Day, GLAIC will pay such
amount on the next Business Day.

 

4.8        WAIVER
BY GLAIC.  At the Policyholder’s request, GLAIC may
waive any terms, conditions or adjustments provided for in this Policy.  Any such waiver is subject to any limitations
GLAIC specifies in making the waiver and does not require GLAIC to grant
similar future waivers to the Policyholder or anyone else.  A failure or delay in exercising a right
under this Policy does not waive GLAIC’s right or ability to assert such right
in the future.

 

4.9        MUTUAL REPRESENTATIONS.  The parties mutually
represent and warrant, each to the other, that:

 

a.     This Policy is
its legal, valid and binding obligation, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditor’s rights, and subject, as to enforceability,
to general principals of equity, regardless of whether enforcement is sought in
proceeding in equity or law;

b.     It has the power
to enter into this Policy and to consummate the transactions contemplated
hereby;

c.     All information
provided in connection with this Policy is, to the best of its knowledge and
belief, true, correct and complete;

d.     The execution
and the delivery of this Policy and the performance of obligations hereunder do
not and will not constitute or result in a default, breach or violation, of the
terms or provisions of its certificate, articles or charter of incorporation,
declaration of trust, by-laws or any agreement, instrument, mortgage, judgment,
injunction or order applicable to it or any of its property.

 

4

 

4.10      TAX PROVISIONS.  The Policyholder and each transferee and
assignee of this Policy, to the extent required by law, agree to provide GLAIC
with any properly completed tax forms that are needed for GLAIC to satisfy its
tax reporting obligations with respect to amounts held under this  Policy. 
This Policy is intended to be ignored for U.S. federal, state and local
income and franchise  tax purposes. To
the extent it cannot be ignored, GLAIC and the Policyholder and each transferee  and assignee of this Policy agree to treat
this Policy as GLAIC’s debt obligation for U.S. federal,  state and local income and franchise tax
purposes.

 

SECTION 5 –
DEFINITIONS

 

5.1        POLICY
DEFINITIONS.  The
following terms have the meanings indicated:

 

“Accumulation
Fund” is the accounting record GLAIC will establish under
this Policy as described in Section 1.2.

 

“Accumulation
Fund Schedule” is attached to this Policy and establishes the
terms of the Accumulation Fund.

 

“Business
Day” is any day, other than Saturday or Sunday, that is
neither a legal holiday nor a day on which commercial banks are authorized or
required by law, regulation or executive order to close, or are otherwise
closed, in each Business Day City specified in the Accumulation Fund Schedule.

 

“Call
Date” is the day or days prior to the Stated Maturity Date,
if any, specified in the Accumulation Fund Schedule attached to this Policy, on
which GLAIC may elect to pay the Policyholder all or any part of the Fund
Balance.  If no Call Date is indicated in
an Accumulation Fund Schedule, GLAIC will pay to the Policyholder the Fund
Balance prior to the Stated Maturity Date only to the extent provided in Section 3.2.

 

“Deposit
Amount” is the amount GLAIC credits to the Accumulation Fund
on the Deposit Date as set forth in the Accumulation Fund Schedule.

 

“Deposit
Date” is the date, specified in the Accumulation Fund
Schedule, on which GLAIC receives the Net Deposit Amount.

 

“Event
of Default” has the meaning described in Section 3.3.

 

“Fund
Balance” is the value of the Accumulation Fund, determined
pursuant to Section 1.4.

 

“Guaranteed
Rate” is the interest rate, if any, applied to the
Accumulation Fund, as stated in the Accumulation Fund Schedule.

 

“Indenture”
is that certain indenture agreement, made between the Policyholder and the
Indenture Trustee related to the notes to be supported by this Policy as such
agreement may be amended, supplemented or replaced from time to time.

 

5

 

“Indenture
Trustee” is the party specified as trustee under the
Indenture, or its successor.

 

“Maturity
Date” is the earlier of (i) the Stated Maturity Date and
(ii) each date on which the Fund Balance is payable in full to the
Policyholder pursuant to an Event of Default, Optional Repayment, Optional
Redemption or otherwise.  Unless
otherwise indicated in the Accumulation Fund Schedule, if any of the foregoing
dates is not a Business Day, the Maturity Date is the next following Business
Day.  Interest accrues during such delay
only if specified in the Accumulation Fund Schedule.

 

“Net
Deposit Amount” is the amount GLAIC receives from the
Policyholder on the Deposit Date as set forth in the Accumulation Fund
Schedule.

 

“Program”
is the Genworth Global Funding program, as described in the prospectus relating
thereto, including the applicable prospectus supplement or pricing supplement
or in any amendment thereto.

 

“Stated
Maturity Date” is the date, as set forth on the Accumulation
Fund Schedule, when the Fund Balance is originally due and payable to the
Policyholder.

 

“Tax
Event” has the meaning described in Section 3.4.

 

5.2        OTHER DEFINITIONS.  Other capitalized terms appearing in this
Policy have the meanings indicated on the Policy’s face page or in the
Accumulation Fund Schedule.

 

6

 

GLAIC

Accumulation Fund Schedule – Fixed Rate

 

Policy Number: GS-R6037

 

	
  Deposit
  Date:

  	
  May 1, 2008
  or the date the deposit is actually received by GLAIC

  
	
   

  	
   

  
	
  Specified
  Currency:

  	
  United States Dollars

  
	
   

  	
   

  
	
  Deposit
  Amount:

  	
  $8,392,000.00

  
	
   

  	
   

  
	
  Net
  Deposit Amount:

  	
  $8,182,200.00

  
	
   

  	
   

  
	
  Stated
  Maturity Date:

  	
  May 15,
  2033

  
	
   

  	
   

  
	
  Guaranteed
  Rate:

  	
  6.30%

  
	
   

  	
   

  
	
  Crediting
  Period:

  	
  The first
  Crediting Period shall be a long period commencing on 

  
	
   

  	
  the Deposit Date
  to but excluding November 15, 2008. Each subsequent Crediting Period
  shall be the semi-annual period occurring between the 15th of each
  May and November thereafter. The final Crediting Period will be the
  period from and including November 15, 2032, to but excluding May 15,
  2033.

  
	
   

  	
   

  
	
  Interest
  Crediting:

  	
  Interest is
  credited based upon a 30/360 basis,
  applied to the Fund 

  
	
   

  	
  Balance each
  day.

  
	
   

  	
   

  
	
  Periodic
  Payouts:

  	
  On the 15th of each May and November, GLAIC will
  pay the 

  
	
   

  	
  Policyholder all
  accrued and unpaid interest (if such date is not a Business Day, the Periodic
  Payout will be made on the next following Business Day, and in such cases the
  amount of interest shall not be adjusted for non-Business Days) (each, an “Interest
  Payment Date”); provided, however,
  that the final Periodic Payout shall be on the Maturity Date, on which date
  all accrued and unpaid interest will be paid.

  
	
   

  	
   

  
	
  Optional
  Repayment:

  	
  Optional
  Repayments under Section 2.2 of the Policy may be made 

  
	
   

  	
  solely with
  respect to the “Survivor’s Option” described in Pricing Supplement No. 026
  dated April 21, 2008 to the Prospectus Supplement dated December 9,
  2005 related to the Program.

  
					

 

	
  Call
  Terms:

  	
  Under Section 2.3
  of the Policy, GLAIC may elect to pay the 

  
	
   

  	
  Policyholder all
  of the Fund Balance on May 15, 2013, or as of any date thereafter when a
  Periodic Payout is due (the “Call Dates”).

  
	
   

  	
   

  
	
  Maturity
  Payout:

  	
  On the Maturity
  Date, GLAIC will pay to the Policyholder the 

  
	
   

  	
  Fund Balance. If
  such date is not a Business Day, the Maturity Payout will be made on the next
  following Business Day; provided, however, that interest shall not accrue beyond the
  Maturity Date.

  
	
   

  	
   

  
	
  Business
  Day City(s):

  	
  New York, New
  York

  
	
   

  	
   

  
	
  Other
  Terms:

  	
  None

  
				

 

7

 

*********************

 

The calculation of the Guaranteed Rate and all
other payment terms of this Policy will be determined in the manner described
in the “Description of the Notes” section in the Prospectus Supplement.

 

*********************

 

	
  GENWORTH LIFE
  AND ANNUITY

  	
   

  	
  GENWORTH GLOBAL
  FUNDING TRUST 2008-21

  
	
  INSURANCE COMPANY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
    /s/
  Pamela C. Asbury

  	
   

  	
  By*:

  	
    /s/
  Patricia M. Child

  
	
   

  	
  Pamela C. Asbury

  	
   

  	
   

  	
  Patricia M.
  Child

  
	
   

  	
   

  	
   

  	
   

  
	
  Official Title:

  	
  Vice President

  	
   

  	
  Official Title:

  	
    Vice
  President

  
	
   

  	
   

  	
   

  
	
  Date:

  	
     April 29,
  2008

  	
   

  	
  Date:

  	
     April 29,
  2008

  
											

 

* It is expressly
understood and agreed that (a) this Policy is executed and delivered by
U.S. Bank National Association (“USB”) not individually or personally, but
solely as Trustee of the Genworth Global Funding Trust 2008-21 in the exercise
of powers and authority conferred and vested in it (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by USB but is made and intended for the purpose of binding only the
Trust, (c) nothing herein contained shall be construed as creating any
liability on USB individually or personally, to perform any covenant either
express or implied contained herein, all such liability, if any being expressly
waived by the parties hereto and by any person claiming by, through or under
the parties hereto and (d) under no circumstances shall USB be personally
liable for the payment of any indebtedness or expenses of the Trust or be
liable for the breach or failure of any obligation, representation, warrant or
covenant made or undertaken by the Trust under this Policy or any other related
documents.

 

*********************Exhibit 10.1

 

 

	
  Notice of Grant and Agreement
  and Consent 

  under the 1998 IMS Health Incorporated 

  Employees Stock Incentive Plan

  	
   

  	
  IMS Health Incorporated

  
	
   

  	
   

  	
  ID: 06-1506026

  
	
   

  	
   

  	
  901 Main Avenue

  
	
   

  	
   

  	
  Norwalk, CT
  06851

  

 

	
  THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
  COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
  1933

  
	
   

  

 

IMS Health Incorporated (“IMS HEALTH” or the “Company”) hereby grants
to you a stock appreciation right (“Stock Appreciation Rights” or “SARs”) on
             Shares
of the Company’s common stock at the exercise price per Share of
$            .  This grant is effective as of
                
(the “Grant Date”).

 

Your SARs are granted under the 1998 IMS Health Incorporated Employees’
Stock Incentive Plan (the “Plan”).  The
Plan is discretionary in nature and IMS Health may amend, cancel or terminate
the Plan at any time.  The grant of IMS
HEALTH Stock Appreciation Rights is a one-time benefit solely offered to
employees and does not create any contractual or other right for you to receive
a grant of IMS HEALTH stock appreciation rights or benefits in lieu of IMS
HEALTH stock appreciation rights in the future. 
Future grants, if any, will be at the sole discretion of IMS HEALTH,
including, but not limited to, the timing of any grant, the number of IMS
Health Stock Appreciation Rights, vesting provisions and the exercise price.

 

Each SAR entitles you, upon exercise, to an amount (the “Stock
Appreciation”) equal to (i) the excess of (A) the Fair Market Value
on the exercise date of one Share over (B) the exercise price per Share,
times (ii) the number of Shares as to which you are exercising the
SAR.  The future value of the underlying
IMS HEALTH Shares is unknown and cannot be predicted with certainty.  If the underlying IMS HEALTH Shares do not
increase in value, you will realize no value from your SARs.

 

Your SARs are
subject to and governed by the terms of the Plan. The provisions of the Plan
are incorporated into this Notice of Grant and Agreement and Consent
(“Agreement”) by reference.  All
capitalized terms used in this Agreement but not defined shall have the
meanings set forth in the Plan.  In the
event the Plan and this Agreement are not consistent, the terms of the
Agreement shall govern, including without limitation that the provisions
related to Termination of Employment as set out below shall prevail over any
inconsistent terms contained in the Plan. 
In addition, certain terms of your SARs may be specified in your
Employment Agreement (the “Employment Agreement”), in which event the SARs
shall be governed by the applicable terms of your Employment Agreement to the
extent that such terms are more favorable. 
Any provision of the Employment Agreement applicable to stock options shall
apply equally to SARs, and, if the Employment Agreement provides to you any
terms, conditions and rights with respect to stock options or SARs that are
more favorable to you than the applicable terms, conditions and rights of the
Plan or this Agreement, the applicable terms, conditions and rights of the Employment
Agreement shall control.  Conversely, if
the Plan or this Agreement provides to you any terms, conditions and rights
with respect to stock options or SARs that are more favorable to you than the
applicable terms, conditions and rights of your Employment Agreement, the
applicable terms, conditions and rights of the Plan or this Agreement shall
control.  The SARs are intended to be
Non-409A Awards.

 

Your participation in the
Plan and your execution of this Agreement is voluntary.  The value of IMS HEALTH stock appreciation
rights generally and your SARs specifically are an extraordinary item of
compensation outside the scope of your Employment Agreement or other employment
contract, if any.  As such, neither IMS Health stock appreciation rights
generally nor your SARs specifically are part of normal or expected
compensation for purposes of calculating any termination, severance,
resignation, redundancy, end of service payments, bonuses, long service awards,
pension or retirement benefits, or similar payments.

 

 

 

 

Your SARs and the
terms thereof are subject to adjustment as provided under Section 10(a) of
the Plan.

 

Vesting and Stated
Expiration Date

 

Your SARs will vest in
four equal annual installments on each of the first four anniversaries of the
Grant Date if your employment with the Company or a Subsidiary continues
through the applicable vesting date; provided, however, that the SARs
will vest earlier in full upon your Termination of Employment by the Company
without Cause or by you for Good Reason, as the terms “Cause” and “Good Reason”
are defined in your Employment Agreement or Change in Control Agreement, and
upon a Change in Control as defined below. 
Your SARs will expire on the seventh anniversary of the Grant Date (the
“Stated Expiration Date”), subject to earlier forfeiture or expiration as
specified in your Employment Agreement, the Plan and this Agreement.

 

Notwithstanding
anything to the contrary in this Agreement, upon occurrence of a “Change in
Control” (as such term is defined in your Employment Agreement or Change in
Control Agreement), any unvested portion of your SARs not previously forfeited
or expired will become immediately exercisable.

 

Exercise of SARs

 

You may exercise your
SARs at such time as they have become vested only in accordance with the Plan,
your Employment Agreement, and any procedures that the Committee may approve
from time to time; provided, however, that, upon your termination of employment
by the Company without Cause or by you for Good Reason, as the terms “Cause”
and “Good Reason” are defined in your Employment Agreement or Change in Control
Agreement, the SARs shall be exercisable thereafter (i), if such termination
occurs simultaneously with or within 24 months following a Change in Control,
until the Stated Expiration Date of the SARs, or (ii), if such termination is
not simultaneous with or within 24 months following a Change in Control, until
the earlier of the Stated Expiration Date of the SARs or the fifth anniversary
of the date of such termination of employment (whereupon the SARs will expire).

 

The date on which a
notice of exercise is received by the Company shall be the exercise date.  Payment shall be made to you upon exercise by
delivery of a number of Shares equal to the Stock Appreciation divided by the
Fair Market Value of one Share at the exercise date (subject to any applicable
tax withholding, as specified below). 
SARs may be exercised from time to time upon actual receipt by the
Company of written notice of exercise stating the number of vested SARs being
exercised.  Notwithstanding the
foregoing, the Company may in its sole discretion establish alternative means
to exercise SARs, including electronic forms using electronic signatures and
interactive voice response systems using PIN numbers, in a manner directed by
the Company, and your SARs shall be deemed to be exercised upon fulfillment of
such alternative means.  You may only
exercise the SAR as to a given underlying Share one time.  Unless otherwise determined by the Company,
no fractional Shares will be issued in payment upon exercise of SARs and the
number of Shares to be delivered will be rounded downward to the nearest whole
Share.  Upon exercise, you shall be paid,
in cash, an amount equal to the value of any fractional Share that would have
otherwise been payable at the time of exercise (after giving effect to any
Share withholding for mandatory taxes), unless the Company arranges to deliver
Shares to an account to which fractional Shares may be credited without requiring
the Company to in fact issue a fractional Share.

 

You may exercise
your SARs at such time as they have become exercisable only in accordance with
the Plan and with any procedures that the Committee may set forth.  If the SARs remain outstanding but unexercised
at the Stated Expiration Date or any earlier applicable date on which the SARs
would terminate, and if the Stock Appreciation at that date would be a positive
amount, the SARs, to the extent then exercisable, shall be automatically
exercised.

 

 

 

 

 

Termination of Employment

 

Provisions relating to vesting and post-termination exercise periods
applicable to stock options, as specified in Section 7 of the Plan, shall
apply equally to the SARs (including without limitation
Section 7(e) relating to death and disability,
Section 7(f) relating to Retirement, and
Section 7(g) relating to other terminations), provided however,
that the provisions of this Agreement addressing termination of your employment
by the Company without Cause or by you for Good Reason and the consequences
thereof (including without limitation provisions relating to vesting and
post-termination exercise of the SARs) shall prevail and control over any
inconsistent provisions contained in the Plan to the extent that the provisions
of this Agreement are more favorable to you. 
Notwithstanding anything to the contrary, to the extent that your
Employment Agreement or Change in Control Agreement provides any termination
provisions that are more favorable to you (including without limitation
provisions relating to vesting and post-termination exercise of options or
SARs) than the Plan or this Agreement, such provisions of your Employment
Agreement or Change in Control Agreement shall prevail and control, including
in the event of your termination by the Company without Cause  or by you for Good Reason or your termination
due to death, disability or Retirement. 
Conversely, to the extent that the Plan or this Agreement provides any
termination provisions that are more favorable to you (including without
limitation provisions relating to vesting and post-termination exercise of
options or SARs) than your Employment Agreement or Change in Control Agreement,
such provisions of the Plan or this Agreement shall prevail and control,
including in the event of your termination by the Company without Cause  or by you for Good Reason or your termination
due to death, disability or Retirement.

 

Except
as otherwise provided herein, in connection with any termination of your
employment for any reason, whether such termination is occasioned by you, by
the Company or any of its Subsidiaries with or without cause, or by mutual
agreement (“Termination of Employment”), any portion of the SARs not vested at
or before Termination of Employment (or subject to non-forfeiture in the case
of Retirement) pursuant to Section 7 of the Plan will be forfeited.

 

You acknowledge and agree that you will
have no claim or entitlement (1) to compensation or damages in consequence
of the Termination of Employment with IMS Health or any of its Subsidiaries for
any reason whatsoever and whether or not in breach of contract, insofar as such
claim or entitlement arises or may arise from your ceasing to have any rights
under the Plan or this Agreement, (2) to exercise your SARs as a result of
such Termination of Employment except as expressly provided in this Agreement,
or (3) from the loss or diminution in value of your SARs; and, upon the
grant of your SARs and in partial consideration for your participation in the
Plan and this Agreement, you shall be deemed irrevocably to have waived any
such claim or entitlement.

 

Your sales of
Shares acquired upon exercise of your SARs will be subject to applicable
restrictions under the Company’s policies regulating insider trading by
employees.

 

Nontransferability
of Your SARs

 

Except as may be provided
otherwise under the Plan, you cannot transfer, give, assign, sell, encumber, or
in any way transfer or alienate your SARs to anyone except after your death by
your will or by applicable inheritance laws, and during your lifetime your SARs
shall be exercisable only by you or your legal representative.

 

Tax Withholding

 

It shall be a
condition to the obligation of the Company to issue and deliver Shares upon
exercise of the SARs that you (or any Beneficiary) pay to the Company (or a
subsidiary or affiliate), upon its demand, such amount as may be requested by
the Company for the purpose of satisfying the minimum statutory withholding
liabilities for federal, state, or local income and other taxes.  Unless otherwise determined by the Committee,
the Company shall withhold from the Shares to be delivered upon exercise of the
SARs that number of Shares having a fair market value equal to the amount of
such withholding tax liability (or as nearly equal as possible without
exceeding the amount of such tax liability). 
For this purpose, the fair market value of the withheld Shares shall be
the average high/low sales prices in composite trading of New York Stock
Exchange-listed securities on the day on which the Shares are withheld.

 

 

 

 

Forfeiture of Unexercised Portion of Your SARs and
Certain Gain

 

The greatest assets of IMS HEALTH and its affiliates (each, an “IMS
HEALTH Company”) are its employees, technology and customers.  In recognition of the increased risk of
unfairly losing any of these assets to its competitors, IMS HEALTH has adopted
the following policy:

 

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

 

	
   

  	
  (a)

  	
   

  	
  any unexercised portion of your SARs shall automatically
  expire (regardless of vesting) on the later of the date of your Termination
  of Employment or the date IMS HEALTH becomes aware of your Detrimental
  Activity; and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
   

  	
  you shall forfeit to the Company the Shares acquired
  upon any exercise of your SARs by you during the one year prior to, or at any
  time after, the date of the earliest actual occurrence of your Detrimental
  Activity (the “Forfeiture Period”). Such Shares shall be forfeited by you and
  payable to the Company at the later of (i) the date of your Termination
  of Employment or (ii) the date of your Detrimental Activity. If you have
  disposed of the Shares during the Forfeiture Period, your obligation to repay
  Shares upon such forfeiture will continue (payment of cash or other property
  is not permitted), so that you will be required to acquire replacement Shares
  and deliver them to the Company in settlement of your forfeiture obligation
  without regard to any subsequent market price increase or decrease from the
  date of exercise. If you fail to promptly deliver forfeited Shares and if,
  apart from and independent of this Agreement, the Company is obligated to pay
  any cash amount to you, the Company, as a setoff, may use such cash to
  purchase Shares in the open market on your behalf, which Shares will be
  retained by the Company in settlement of your forfeiture obligation
  hereunder.

  

 

Detrimental
Activities are defined as:

 

	
   

  	
  ·

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

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

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

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

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

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

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

  

 

For purposes hereof,
“Competitive Services” means engaging in the following activities anywhere in 

 

 

 

 

the world in relation to
the pharmaceutical and healthcare industries (it being understood that the
global market in which any of the businesses of IMS is conducted and to which
their goodwill extends is not limited to any particular region in the world and
that given the informational nature of such businesses, they may be engaged
effectively from any location in the world):

 

	
   

  	
  ·

  	
  providing information services for the management of
  sales forces engaged in the sale of prescription or over-the-counter drugs,
  medical devices, or medical or surgical products;

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  providing information services for the measurement
  of sales force performance or product performance for prescription or
  over-the-counter drugs, medical devices, or medical or surgical products;

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  creating or providing physician profiles for
  purposes of assisting others in the targeting of promotion or sales
  activities in relation to prescription or over-the-counter drugs, medical
  devices, or medical or surgical products;

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  creating or providing micromarketing programs based
  on prescribing behavior or attitudes of physicians or other prescribers in
  relation to prescription or over-the-counter drugs, medical devices, or
  medical or surgical products;

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

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

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  using or developing technology, methodologies or
  processes which have functionality or produce results similar to the
  technology, methodologies or processes employed or offered by IMS HEALTH to
  process pharmaceutical or healthcare information, including but not limited
  to internal processing technology, decision support tools, data warehousing
  applications and data mining applications;

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  creating or providing reference files,
  classification schemes, master files or other methods of categorizing,
  classifying, organizing or identifying products, procedures, medical
  facilities, pharmacies, warehouses, distributors, prescribers, pharmacists or
  other entities, activities or persons associated with the use, sale,
  marketing/promotion, distribution or warehousing of any prescription or
  over-the-counter drugs, medical devices, or medical or surgical products; or

  
	
   

  	
   

  	
   

  
	
   

  	
  ·

  	
  providing market research consulting, sales
  management consulting, information technology consulting or market event
  management consulting, or any other consulting services in connection with
  any of the foregoing activities or otherwise relating to the use, sale,
  marketing/promotion, distribution or warehousing of any prescription or
  over-the-counter drugs, medical devices, or medical or surgical products.

  

 

By
accepting your SARs, you consent to a deduction from any amounts the Company or
your employer owes you from time to time equal to the forfeiture amount, to the
extent such deduction is permitted by applicable law.  Any such deduction from an amount that
constitutes a deferral of compensation under Code Section 409A may only
take place at the time the amount would otherwise be payable to you.

 

Governing Law

 

THE
PLAN AND THIS AGREEMENT SHALL BE GOVERENED BY THE LAWS OF THE STATE OF NEW YORK
AND ANY APPLICABLE FEDERAL LAWS. 
INTERPRETATION OF THE PLAN AND THIS AGREEMENT SHALL BE GOVERENED BY THE
LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE FEDERAL LAWS.

 

ANY LEGAL PROCEEDING ARISING OUT OF THIS PLAN OR
THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE FEDERAL OR STATE COURTS
LOCATED IN THE STATE OF NEW YORK.  YOU
AGREE TO SUBMIT TO PERSONAL JURISDICTION AND TO VENUE IN THOSE COURTS.  YOU FURTHER AGREE TO WAIVE ALL LEGAL
CHALLENGES AND DEFENSES TO THE APPROPRIATENESS OF NEW YORK AS THE SITE OF ANY
SUCH LEGAL PROCEEDING AND TO THE APPLICATION OF THE LAWS OF THE STATE OF NEW
YORK AND ANY APPLICABLE FEDERAL LAWS.

 

 

 

 

Intended
Accounting Treatment; Reform of Contract

 

The
Company intends that your SARs shall qualify for fixed accounting under FAS
123R, with the compensation measurement date for accounting purposes to occur
at the Grant Date, unless the Committee specifically determines otherwise.  Therefore, other provisions of this Agreement
notwithstanding, in order to preserve this fundamental objective of your SARs,
if any provision of this Agreement or otherwise applicable to your SARs would
result in “variable” accounting or a measurement date other than the Grant
Date, if the Committee was not specifically aware of such accounting
consequence at the time such provision became effective, such provision shall
be modified and reformed to the extent necessary to preserve the accounting
treatment of your SARs intended by the Committee.

 

Acknowledgements and Acceptance

 

You voluntarily acknowledge and consent
to the collection, use, processing and transfer of personal data as described
in this paragraph.  You are not obliged
to consent to such collection, use, processing and transfer of personal
data.  However, failure to provide the
consent may affect your ability to participate in the Plan.  IMS HEALTH, its Subsidiaries and your
employer hold certain personal information about you, including your name, home
address and telephone number, date of birth, social insurance number or other
employee identification number, salary, nationality, job title, any Shares of
stock or directorships held in IMS HEALTH, details of your SARs, all IMS Health
stock options or any other rights or entitlements to Shares of stock in your
favor, for the purpose of managing and administering the Plan (“Data”).  IMS HEALTH and/or its Subsidiaries will
transfer Data amongst themselves as necessary for the purpose of
implementation, administration and management of your participation in the
Plan, and IMS HEALTH and/or any of its Subsidiaries may each further transfer
Data to any third parties assisting IMS HEALTH in the implementation,
administration and management of the Plan. 
These recipients may be located in the European Economic Area, or
elsewhere throughout the world, such as the United States.  You authorize them to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing your participation in the Plan,
including any requisite transfer of such Data as may be required for the
administration of the Plan and/or the subsequent holding of Shares on your
behalf to a broker or other third party with whom you may elect to deposit any
Shares acquired pursuant to the Plan. 
You may, at any time, review Data, require any necessary amendments to
it or withdraw the consents herein in writing by contacting IMS HEALTH;
however, withdrawing your consent may affect your ability to participate in the
Plan.  You acknowledge and agree that
your consent shall apply to any and all awards of stock appreciation rights
made to you under the Plan or this Agreement, whether now or in the future.

 

You do not need to
do anything if you want to accept your SAR(s) on the terms set out in this
Agreement.  It would however help us if
you would sign this Agreement in the space indicated below and return a copy to
us by mail to:

 

Equity Programs

Shared Business Services

861 Marcon Boulevard

Allentown, Pennsylvania 18109

U.S.A.

 

If
you do not want to accept your SAR(s) on the terms set out in this
Agreement, the Plan and all related documents, please notify us of your
rejection of the SAR(s) by writing to the Company at the above address,
marking your envelope to the attention of
                          ,
no later than                             .  Your SAR(s) will then be cancelled.  If you do not write to us telling us that you
do not want your SAR(s) by                               ,
you will be deemed to have accepted your SAR(s) and to agree to the terms
set out in this Agreement.

 

Copies of the Plan and such
related documents are being provided to you as part of this Agreement.

 

 

 

IMS
HEALTH INCORPORATED

 

David R. Carlucci

Chairman and Chief Executive Officer

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