Document:

Exhibit 10.2

 

Closing Agreement
On Final Determination

Covering Specific
Matters

 

	
  Under sections 7121 and
  6224(c) of the Internal Revenue Code, IMS Health Licensing

  
	
   

  
	
  Associates L.L.C.,
  f/k/a IMS Health Licensing Associates, L.P., f/k/a Cognizant Licensing

  
	
   

  
	
  Associates, LP f/k/a
  Duns Licensing Associates, L.P., c/o IMS Health Incorporated,

  
	
  (Taxpayer’s name,
  address, and identifying number)

  
	
   

  
	
  1499 Post Rd.
  Fairfield, CT. 06824, EIN #98-0137321

  

 

and the Commissioner of
Internal Revenue make the following closing agreement:

 

A.            WHEREAS, IMS Health Licensing Associates, L.L.C., f/k/a
IMS Health Licensing Associates, L.P., f/k/a Cognizant Licensing Associates,
L.P., f/k/a Duns Licensing Associates, L.P., the entity referred to in the
caption above (the “Partnership”), was organized under Delaware law on June 7,
1993, and, during 1998-2003, the following entities held partnership interests
in the Partnership: IMS AG, f/k/a IMS Pharminform Holding AG, held a general
partnership interest (“IMS Pharminform”), and Media Licensing Associates, Inc.,
Utrecht-America Finance Co., Edam LLC, and Coordinated Management Systems, Inc.
(“CMS”) held limited partnership interests. IMS Health Incorporated is the tax
matters partner of the Partnership.

 

B.            WHEREAS, a dispute has arisen between the Partnership and
the Commissioner of Internal Revenue for taxable years ending December 31, 1998
through December 31, 2003 regarding the validity of the Partnership for tax
purposes, including, but not limited to, whether or not (a) the terms “Partnership”
and “partner” have any legal effect; (b) the Partnership was a valid
partnership; (c) all the partners of the Partnership were valid partners;(d)
Edam LLC and Utrecht-America Finance Co. were partners in, rather than lenders
to, the Partnership; (e) the Partnership’s activities had economic substance;
(f) the partners of the Partnership had a business purpose for becoming
partners in the Partnership; (g) the Partnership’s adjustments and/or election
under I.R.C. sections 734(b), 743(b) and 754 and the regulations thereunder are
valid; and (h) the amount and timing of tax amortization deductions for the
Partnership’s assets are allowable.

 

C.            WHEREAS, the Partnership and the Commissioner of Internal
Revenue desire to resolve this dispute with respect to taxable years ending
December 31, 1998 through December 31, 2003 and December 31, 2004 through
December 31, 2013 with finality under the terms set forth in this agreement
(the “Partnership Closing Agreement”).

 

 

NOW IT IS
HEREBY DETERMINED AND AGREED FOR FEDERAL TAX PURPOSES THAT:

 

1.             For taxable years ending after December 31, 2003, the
Partnership agrees that it will not make any further adjustments to the basis
of Partnership assets under section 734 or section 743, nor will it make any further
elections under section 754.

 

2.             There will be no adjustments to partnership items and
affected items in taxable years ending December 31, 1998 through December 31,
2003 and December 31, 2004 through December 31, 2013 relating to the disputed
issue addressed in this Partnership Closing Agreement, including, but not
limited to, whether or not (a) the terms “Partnership” and “partner” have any
legal effect; (b) the Partnership was a valid partnership; (c) all the partners
of the Partnership were valid partners;(d) Edam LLC and Utrecht-America Finance
Co. were partners in, rather than lenders to, the Partnership; (e) the
Partnership’s activities had economic substance; (f) the partners of the
Partnership had a business purpose for becoming partners in the Partnership;
(g) the Partnership’s adjustments and/or election under I.R.C. sections 734(b),
743(b) and 754 and the regulations thereunder are valid; and (h) the amount and
timing of tax amortization deductions for the Partnership’s assets are
allowable.

 

3.             The Partnership is not subject to any penalty, including
penalties under section 6662 of the Internal Revenue Code, in connection with
the matters covered by this Partnership Closing Agreement.

 

4.             The resolution of the Partnership items and affected
items for the Partnership for the taxable years ending December 31, 2004
through December 31, 2013, as reflected in this Partnership Closing Agreement,
does not constitute an examination of its books and records for purposes of
I.R.C. § 7605.

 

5.             This agreement is final and conclusive except:

 

(1)  the matter it relates to may
be reopened in the event of fraud, malfeasance, or misrepresentation of
material fact;

 

(2)  it is subject to the
Internal Revenue Code sections that expressly provide that effect be given to
their provisions (including any stated exception for Code section 7121)
notwithstanding any other law or rule of law; and

 

(3)  if it relates to a tax
period ending after the date of this agreement, it is subject to any law,
enacted after the agreement date that applies to that tax period.

 

2

 

By signing, the above parties certify that they have read and
agreed to the terms of this document.

 

 

	
  Taxpayer (other than
  individual)

  	
   

  	
  IMS Health Licensing Associates
  L.L.C.

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  IMS Health
  Incorporated, Tax Matters Partner

  	
   

  	
  Date Signed

  	
  March 14, 2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Robert H. Steinfeld

  	
   

  
	
   

  	
   

  	
   Robert
  H. Steinfeld

  	
   

  
	
   

  	
   

  	
   Senior
  Vice President and General Counsel

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Commissioner of
  Internal Revenue

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Christine C.
  Haveles

  	
   

  	
  Date Signed

  	
  March 15, 2006

  	
   

  
	
   

  	
   

  	
   Christine
  C. Haveles

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
  Appeals
  Team Case Leader

  	
   

  
												

 

3Exhibit 10.3

 

Compensation of Directors

 

Board members who are not employees of IMS
receive compensation for Board service. Mr. Carlucci is the only IMS
employee now serving on the Board. This summarizes the policy of IMS for
compensation payable to non-employee Directors as in effect at April 18,
2006.

 

	
  Annual Retainer

  	
   

  	
  $45,000, payable in quarterly installments

  
	
   

  	
   

  	
   

  
	
  Committee Chairman Fees:

  	
   

  	
  $10,000 annually, payable in quarterly installments

  
	
   

  	
   

  	
   

  
	
  Lead Director Fees:

  	
   

  	
  $30,000 annually, payable in quarterly installments

  
	
   

  	
   

  	
   

  
	
  Attendance Fees:

  	
   

  	
  $1,500 for each Board meeting, $1,500 for each Board committee
  meeting

  
	
   

  	
   

  	
   

  
	
  Restricted Stock Units:

  	
   

  	
  2,250 restricted stock units annually; these units are subject to a
  risk of forfeiture upon termination of service and restrictions on
  transferability for a one-year period, subject to acceleration upon death,
  disability or upon termination in other circumstances as determined by the
  Compensation & Benefits Committee; the units are settled by delivery
  of shares, and until that time do not have voting rights but carry a right to
  payment of dividend equivalents, subject to vesting of the units and payable
  upon settlement.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  In addition, in 2006, a grant of restricted stock units with a value
  of $50,000; these units are subject to a risk of forfeiture upon termination
  of service and restrictions on transferability which lapse as to 25% of the
  units each year over a four-year period, subject to acceleration upon death,
  disability or upon termination in other circumstances as determined by the
  Compensation & Benefits Committee; the units are settled by delivery
  of shares, and until that time do not have voting rights but carry a right to
  payment of dividend equivalents, subject to vesting of the units and payable
  upon settlement.

  
	
   

  	
   

  	
   

  
	
  Restricted Stock:

  	
   

  	
  One-time grant of Common Stock with a value of $40,000 upon initial
  election as a Director; these shares are subject to a risk of forfeiture for
  five years but restrictions lapse upon death, disability or upon termination
  in other circumstances as determined by the Compensation and Benefits
  Committee; 

  

 

 

	
   

  	
   

  	
  dividends are unrestricted.

  

 

Directors may elect to defer all or part of
their compensation under our Non-Employee Directors’ Deferred Compensation
Plan, a non-qualified plan. Under this plan, the participating Directors may direct
deferrals to an account to be credited as deferred cash or deferred share
units. The number of share units acquired is determined by dividing the cash
amount deferred by 100% of the fair market value of the stock at the deferral
date. A feature of the Plan permitting deferral of cash compensation into stock
options is not available in 2006. Deferrals of restricted stock units are also
permitted. Deferrals are non-forfeitable.

 

If there is a change
in control of IMS, Directors’ stock options, restricted stock or restricted
stock units generally will become vested. For this purpose, the term “change in
control” has the same meaning as under the Change-in-Control Agreements, described
in the Company’s proxy statement for its 2006 Annual Meeting of Shareholders,
filed with the Securities and Exchange Commission on March 24, 2006.

 

Expenses for
attending Board and committee meetings and fulfilling other duties as directors
are reimbursed by IMS.

 

The Board of
Directors has adopted share ownership guidelines for non-employee Directors
because it believes that each non-employee Director should maintain a
meaningful investment in IMS.

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