Document:

Exhibit 10.35.2

IMS HEALTH INCORPORATED

 

Executive Annual Incentive Plan

Performance Restricted Stock
Incentive Plan

 

Summary of 2006 Performance
Goals

And Award Opportunities

 

This
is a summary of the terms of authorization of awards for 2006 under the Executive
Annual Incentive Plan (“AIP”) and the related Performance Restricted Stock
Incentive Plan (“PERS Plan”). The PERS Plan is an established program of IMS
Health Incorporated (the “Company”) implemented under the 1998 Employees’ Stock
Incentive Plan (the “ESIP”). These awards are authorized, and the AIP and PERS
Plan administered, by the Compensation and Benefits Committee (the
“Committee”). If there is any conflict between the terms of this summary and
the AIP, PERS Plan (as implemented in resolutions of the Committee or
otherwise), ESIP, or any resolution, award agreement, or other document having
legal effect with respect to the matters summarized herein, such other plan or
document shall govern.

 

Part I.               2006
Performance Goal

 

(a)           AIP.  Individuals
selected to participate in the AIP for 2006 shall earn the AIP annual incentive
award for 2006 based on the achievement of financial performance goals and
other measures of performance and discretionary factors that may be considered
by the Committee. The AIP 2006 financial performance goals will be weighted 50%
for revenue and 50% for operating income, each determined on a consolidated
basis. In addition, if such financial performance equals or exceeds 80% of the
targeted level of performance for each of the revenue and operating income
components of the financial performance goal, the Committee may exercise
discretion to adjust the award upward, subject to the determinations of the
Committee and in no event to result in a payout in excess of 200% of the individual’s
target payout or in excess of the maximum individual award under the AIP. The
Committee intends to exercise this discretion as follows:

 

•                  Progress in
achieving strategic objectives: The level of achievement of strategic
objectives will be determined by the CEO and reported to the Committee with a
recommendation as to adjustments, if any; the Committee will determine whether
to adjust the payout levels upward or downward with respect to each financial
objective by up to 10% based on achievement of strategic objectives. With
respect to the CEO, the level of achievement of strategic objectives will be
determined by the Committee.

•                  Individual
performance under PMP:  Individual awards
will be further adjusted upward or downward in accordance with the Annual
Incentive Payout Guidelines under the Performance Management Program (“PMP”),
which assesses individual achievement of goals and work-related
skills/behaviors.

•                  Other
discretionary adjustment:  The Committee
also retains discretion to adjust awards upward or downward by 20% based on
such other factors as the Committee may deem relevant.

 

These are guidelines representing the
intent of the Committee, but the Committee retains discretion, consistent with
the terms of the Plan, to adjust any award downward and, if any upward
adjustment is authorized, to determine the basis for and amount of such
adjustment, subject to the individual maximum specified above and the
applicable award limits under the AIP.

 

(b)           PERS Plan.  For 2006, each participant
shall be awarded PERS (restricted stock units) having a value equal to the AIP
annual incentive earned and paid for 2006 performance.

 

 

PERS
shall vest and become non-forfeitable if the participant remains in service
until the first business day of January, 2009, subject to the terms of the
ESIP, any Employment Agreement between the participant and the Company, and the
customary terms of the form of restricted stock units (PERS) agreement
previously approved by the Committee. The maximum PERS award that may be earned
shall be limited in accordance with applicable award limits under the ESIP.

 

(c)           Financial Performance Goal.

 

(i)            Component Payout
Percentage Table. The “Component Payout Percentage Table” for the AIP
financial performance goal for 2006 shall be as follows. Percentages appearing
in the table are referred to in this Summary as Component Payout Percentages:

 

	
  Performance

  	
   

  	
  Floor

  	
   

  	
  Downside

  Minimum

  	
   

  	
  Downside

  Cliff

  	
   

  	
  Target

  	
   

  	
  Upside

  Potential

  	
   

  	
  Upside

  Maximum

  	
   

  
	
  Revenue Component

  	
   

  	
  0

  	
  %

  	
  75

  	
  %

  	
  85

  	
  %

  	
  100

  	
  %

  	
  150

  	
  %

  	
  200

  	
  %

  
	
  Operating

  Income

  Component

  	
   

  	
  0

  	
  %

  	
  75

  	
  %

  	
  90

  	
  %

  	
  100

  	
  %

  	
  150

  	
  %

  	
  200

  	
  %

  

 

The Committee has separately specified
the levels of Revenue and Operating Income that correspond to the Floor,
Downside Minimum, Downside Cliff, Target, Upside Potential, and Maximum performance
levels.

 

(ii)           Award
Opportunities Earned For Financial Performance. The financial Performance
Goal shall be deemed achieved at the end of the Performance Period in
accordance with the following:  First,
the Committee shall determine the level of achievement of the revenue component
of the Performance Goal and the operating income component of the Performance
Goal, and for each the corresponding “Component Payout Percentage.”  (Example: 
Revenue at target has a Component Payout Percentage of 100%.)  For component performance between any two
performance levels (e.g., between “Floor” and “Downside Minimum”), the
Component Payout Percentage will be interpolated. For performance below the
“Floor” level, the Component Payout Percentage will be zero, and for performance
above the Upside Maximum, the Component Payout Percentage will be 200%. Second,
the “Financial Performance Payout Percentage” will be determined as the sum of
50% of the Component Payout Percentage for revenues and 50% of the Component
Payout Percentage for operating income.

 

(d)           Discretionary Adjustments. If
the threshold performance requirement specified in Part I(a) above is met, the
Committee will consider whether to make discretionary adjustments to the
participant’s award (expressed as a percentage of the target payout) based on
progress toward strategic objectives, assessed individual performance under the
PMP, and other discretionary considerations (as specified in Part I(a)).

 

(e)           Final Annual Incentive Award. The
Committee will calculate the participant’s final AIP incentive award for 2006
by multiplying his or her Target Award by the percentage determined under Part
I(c) and (d) above,  In no event,
however, will the final AIP annual incentive exceed the applicable maximum
award limit specified in the AIP.

 

(f)            Adjustments to Performance Goals.
The Committee may determine in its discretion to adjust each component of the
financial Performance Goal and the threshold

 

 

performance required for the individual Performance Goal, and shall adjust
such components to eliminate the positive and negative effects of extraordinary
items, including acquisitions (including effects in 2006 from the proposed
merger with VNU NV), and changes in accounting principles from 2005, including
the adoption of FAS123R, provided that no such adjustment is authorized or may
be made with respect to a Covered Employee if and to the extent that such
authorization or adjustment would cause the Performance Goal not to meet the
applicable requirements of Treasury Regulation § 1.162-27(e)(2) under the Code.
In addition, the Committee retains “negative discretion” to limit or eliminate
the amount payable in settlement of any Award.

 

Part II.              Award
Payout/PERS Grant

 

A participant’s annual incentive award
earned under the AIP for 2006 performance will be payable promptly upon
determination by the Committee, and in no event more than 2.5 months after the
end of the Company’s 2006 fiscal year, unless such award is validly deferred
under a deferral plan of the Company. In addition, PERS will be granted to such
participant at the time the annual incentive award is payable to the
participant (disregarding any elective deferral) in an amount equal to the
amount of such annual incentive divided by the average closing price per share of
Company Common Stock over the final 20 trading days of 2006. Unless otherwise
determined by the Committee (and subject to the terms of the AIP and any
employment agreement or change-in-control agreement between the participant and
the Company), no amount will be payable under the AIP and no PERS will be
granted to a participant who does not remain employed by the Company or a
subsidiary at the payment date determined by the Committee under this Part II.

 

Part III.             Participants
and Target Award Opportunities

 

The participants in the AIP and PERS Plan
for 2006, and the target Award opportunities of each, are set forth by the
Chairman of the Board and Chief Executive Officer and approved by the Committee
annually, and may from time to time be revised or supplemented. AIP award
opportunities are designated under the AIP. With respect to PERS, Award
opportunities and shares that may be issued or delivered in settlement of PERS
shall be governed by and drawn from the ESIP. The foregoing notwithstanding,
the Chief Executive Officer of the Company may modify or cancel any Award
opportunity or Award granted to any participant in order to comply with local
laws or customs in any jurisdiction other than the United States, or to avoid
undue administrative expense with respect to such foreign jurisdiction, but no
such modification or cancellation is authorized with respect to a person likely
to be a Covered Employee as defined in the AIP at the time compensation is
payable hereunder.Exhibit 10.36.2

 

Exhibit A

 

IMS HEALTH INCORPORATED

Long-Term Incentive Program

 

Designation of 2006-07
Performance Period, Performance Goal

And Award Opportunities

 

In furtherance of
Section 4 of the Long-Term Incentive Program (the “Program”), for the period
January 1, 2006 through December 31, 2007 (the “2006-07 Performance Period”)
the Performance Goal, Award Opportunities, and participation shall be as set
forth in this Designation. Terms used in this Designation have the meanings
defined in the Program.

 

Part I.                      2006-07 Performance Goal and
Award Opportunities

(a)                                  For the
2006-07 Performance Period, the Performance Goal shall be a blended goal
weighted 50% based on revenues of the Company and 50% based on operating
income. The Award Opportunity earnable by each Participant shall range from 0%
to 200% of the Participant’s target Award Opportunity, and shall relate to the
Performance Goal as set forth in (i) through (iii) below:

 

(i)            Performance Goal.
The “Performance Goal” table for the 2006-07 Performance Period shall be as
follows (subject to Section 4(c) of the Program) (numbers in millions of U.S.
dollars, except Payout Percentages):

 

	
  Performance

  	
   

  	
  Floor

  	
   

  	
  Downside

  Minimum

  	
   

  	
  Downside

  Cliff

  	
   

  	
  Target

  	
   

  	
  Upside

  Potential

  	
   

  	
  Maximum

  	
   

  
	
  Revenue

  	
   

  	
  <3,438

  	
   

  	
  3,438

  	
   

  	
  3,744

  	
   

  	
  3,820

  	
   

  	
  4,012

  	
   

  	
  4,202

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payout

  Percentage

  	
   

  	
  0

  	
  %

  	
  75

  	
  %

  	
  85

  	
  %

  	
  100

  	
  %

  	
  150

  	
  %

  	
  200

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating

  Income

  	
   

  	
  <894

  	
   

  	
  894

  	
   

  	
  930

  	
   

  	
  940

  	
   

  	
  988

  	
   

  	
  1,016

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payout

  Percentage

  	
   

  	
  0

  	
  %

  	
  75

  	
  %

  	
  90

  	
  %

  	
  100

  	
  %

  	
  150

  	
  %

  	
  200

  	
  %

  

 

The Committee may adjust
the components of the Performance Goal specified above at any time, provided
that, in the case of a Covered Employee, the level of any element of the
Performance Goal as adjusted shall be not less than the Downside Minimum level
specified for that element of the Performance Goal as set forth in the above
Table. Thus, for purposes of Section 162(m), the Performance Goal shall be
deemed to be the Downside Minimum level of performance which shall authorize
the Committee to award up to the Maximum level of payout, with any
specification of a different Performance Goal permitted hereunder in respect of
a Covered Employee representing an exercise of negative discretion decreasing
the payouts that otherwise would be authorized for achievement of such minimum
levels of performance.

 

(ii)           Award
Opportunities Earned For Performance. Award opportunities shall be deemed
earned at the end of the Performance Period as follows:  First, the Committee shall determine the
level of achievement of the revenue component of the Performance Goal and the
operating income component of the Performance Goal, and for each the
corresponding “Component Payout Percentages.” 
(Example:  Revenue at

 

 

target has a Component Payout Percentage of 100%.)  For component performance between any two
performance levels (e.g., between “Downside Minimum” and “Downside Cliff”), the
Component Payout Percentage will be interpolated. For performance at the
“Floor” level, the Component Payout Percentage will be zero, and for
performance above the Upside Maximum, the Component Payout Percentage will be
200%. Second, the “Final Payout Percentage” will be determined as the sum of
50% of the Component Payout Percentage for revenues and 50% of the Component
Payout Percentage for operating income. Third, the Participant’s target Award
Opportunity will be deemed earned at the Final Payout Percentage. Any portion
of the Award Opportunity not earned will be canceled.

 

(iii)          Adjustments to
Performance Goal. The Committee may determine in its discretion to adjust
the Performance Goal, and each component thereof, as specified in (i) above and
shall adjust the components of the Performance Goal to eliminate the positive
and negative effects of extraordinary items, including to eliminate the
positive or negative effects of adoption of FAS 123r and of acquisitions
(including effects in 2006 and 2007, if any, from the proposed merger with VNU
NV), provided that no such adjustment is authorized or may be made with respect
to a Covered Employee if and to the extent that such authorization or
adjustment would cause the Performance Goal not to meet the applicable
requirements of Treasury Regulation 1.162-27(e)(2) under the Code.

 

Part II.                    Denomination
of Award Opportunity

 

Subject
to the terms of the Plans and the Program, 50% of the Award Opportunity of each
Participant shall be denominated in Restricted Stock Units and 50% of such
Award Opportunity shall be denominated in cash. For this purpose, a Restricted
Stock Unit, if earned, may only be settled by issuance or delivery of a Share.
The number of Restricted Stock Units earnable by a Participant for Target
performance shall equal the dollar amount of 50% of his or her Target Award
Opportunity divided by $24.77, which represents the average closing price per
Share over the final 20 trading days of 2005. For performance other than Target
performance, the number of Restricted Stock Units (as distinguished from the
initial dollar value of the Restricted Stock Units) and the dollar amount of
the cash-denominated portion of the Award Opportunity will each be multiplied
by the applicable Final Payout Percentage under Part I (ii) above to determine
the amount of the Award Opportunity earned.

 

Part III.                   Stated
Vesting Schedule and Settlement

 

Subject
to the terms of the Plans and the Program, any of the cash-denominated portion
of a Participant’s Award Opportunity deemed earned for the 2006-07 Performance
Period shall become vested in full at December 31, 2007 if the Participant
remains employed by the Company or a Subsidiary through that date, and any of
the Restricted Stock Units portion of the Award Opportunity deemed earned for
the 2006-07 Performance Period shall become vested in full at December 31, 2009
if the Participant remains employed by the Company or a Subsidiary through that
date. Subject to any permitted deferrals under the Plans and the Program, each
portion of the Participant’s Award shall be settled as promptly as practicable
upon such portion becoming vested.

 

Part IV.                   Participants
and Target Award Opportunities

 

The names of the Participants in the Program for the
2006-07 Performance Period, and the target Award Opportunity of each, are set
forth in Schedule I (as such Schedule may from time

 

 

to time be revised or supplemented). Award
Opportunities granted to any such Participant who is, at February 07, 2006, an
executive officer of the Company and Shares that may be issued or delivered in
settlement of such Participants’ Awards shall be governed by and drawn from the
ESIP, and Award Opportunities granted to other Participants and Shares that may
be issued or delivered in settlement of such Participants’ Awards shall be
governed by and drawn from the 2000 Plan. The foregoing notwithstanding, the
Chief Executive Officer of the Company may modify or cancel any Award
Opportunity or Award granted to any Participant in order to comply with local
laws or customs in any jurisdiction other than the United States, or to avoid
undue administrative expense with respect to such foreign jurisdiction, and may
designate a Participant whose participation would otherwise be governed by the
2000 Plan as instead to be governed by the ESIP.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]