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IMS HEALTH INCORPORATED
200 Nyala Farms
Westport, CT 06880
MEMORANDUM
(Selected Portions)
TO: Executives Eligible to Participate in the IMS Health Incorporated
Executive Deferred Compensation Plan
FROM: IMS Health Incorporated
DATE: September 27 1999
RE: Cash Deferrals Under the Executive Deferred Compensation Plan: Terms and
Conditions and Related Information
PART II -- TERMS AND CONDITIONS OF DEFERRALS
PLAN INCORPORATED BY REFERENCE AND APPLICABLE TO DEFERRALS.
All of the terms and conditions set forth in the Executive Deferred
Compensation Plan (the "Plan") apply to a participant's election to defer and
the resulting deferrals under the Plan. These terms are incorporated by
reference into the agreement that arises between IMS Health Incorporated (the
"Company" or "IMS Health") and the participant as a result of any election to
defer. If any term, condition, or disclosure in this memorandum is inconsistent
with a Plan provision, the Plan provision will govern.
COMPENSATION THAT MAY BE DEFERRED; DEFERRAL LIMITS.
The Compensation and Benefits Committee of the Board of Directors of the
Company (the "Committee") has authorized the deferral of the following types of
compensation:
(1) Cash compensation otherwise payable in the form of:
o Salary; and
o Annual incentive awards; and
(2) Compensation payable in the form of the Company's Common Stock
("Stock"), specifically:
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o Restricted stock units awarded under the Company's
Performance-Based Restricted Stock Program (these restricted
stock units are referred to as "PERS");
o Other awards of restricted stock units awarded under any Company
plan; and
o Shares representing the pre-tax "profit" realized on exercise of
options in specified circumstances, as described in more detail
in the Stock Deferral Prospectus Supplement.
The Plan imposes limits on the amount of compensation that may be deferred.
Under these limits, a participant may defer compensation in a given year only to
the extent that it exceeds the social security wage base ($72,600 in 1999; the
amount for 2000 will be available in November) plus the amount necessary to
satisfy Medicare (1.45% of wages in excess of the social security wage base in
2000) and all other payroll taxes (other than income tax withholdings) imposed
on the participant's wages. For administrative convenience, this limit will be
applied to cash compensation (and not to Stock-denominated deferrals), so that,
regardless of a participant's deferral elections, salary and annual incentive
compensation at least equal to this minimum amount will be paid on a
non-deferred basis.
For purposes of this memorandum, a "deferral" refers to the time at which
compensation otherwise would have been payable to the participant, but for his
or her prior election to defer the compensation hereunder. Thus, the deferral
results from the participant's election to defer, but the election occurs
earlier in time than the deferral.
Certain participant rights and benefits under other Company plans are
determined based upon the amount of cash compensation paid to an employee. To
the extent practicable and consistent with laws and regulations governing
Company plans, a participant's cash compensation will be deemed to include
amounts of cash compensation deferred under the Plan and exclude payout of
amounts previously deferred so that participation in the Plan will not affect
the participant's rights and benefits under such other plans.
The Company will make no matching contributions or other contributions to a
participant's account under the Plan, aside from the Company's obligation to
pay, at settlement, the value of the deferral account as adjusted to reflect the
investment performance of the investment vehicle in which the deferral account
balance has been deemed invested.
INVESTMENT VEHICLES.
Choices of Investment Vehicles. The participant will be permitted to direct
the manner in which cash amounts deferred will be deemed to be invested (this
flexibility does not apply to Stock-denominated deferrals, which are deemed
solely invested in Deferred Stock). The list of investment vehicles from which a
participant may choose will be specified from time to time by the Company.
Deferrals will be "deemed" to be invested in these investment vehicles on a
hypothetical or "notional" basis -- as though the deferred amounts had been
invested in the investment vehicles and any earnings reinvested in such
investment vehicles. The Plan does not require that the Company actually make
such investments, although, as discussed below, the Company may make actual
investments in the investment vehicles in certain circumstances. See
"--Investment Vehicles--Measurement of Value Based on Trust Assets."
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Initially, the Company will make available, as investment vehicles for cash
deferrals, notional investments in the types of index fund investment vehicles
currently available under the Company's 401(k) Plan. The indexes upon which
these funds will be based are listed on the attached "Investment Directions Form
Under the Executive Deferred Compensation Plan." Information regarding the past
history of these indexes accompanies this memorandum. A notional version of the
IMS Stock fund under the 401(k) Plan is not an investment vehicle under the
Plan. Moreover, notional investment of cash deferrals in IMS Stock -- through
the Deferred Stock feature of the Plan -- is not an investment vehicle available
at this time. The financial services company which will sponsor and manage the
index funds to be investment vehicles under the Plan has not been finally
determined at the date of this memorandum.
The investment return of funds that attempt to replicate the results of
financial indexes may differ from the results charted by the index, due to a
variety of circumstances affecting the funds. One significant difference that
can result in funds underperforming the index on which they are based is that
the fund must buy and sell securities, incurring transaction costs, and the fund
will be reduced by the amount of management fees paid. There can be no assurance
that the index funds that will be available under the Plan as investment
vehicles can produce returns in the future that equal the results of the index
or equal the returns of the index funds currently available under the Company's
401(k) Plan.
The Company reserves the right to disapprove any investment direction given
by a participant, in which case the participant will be permitted to give an
alternative investment direction (subject to approval of the Company). In the
absence of an approved investment election, deferrals will be deemed invested in
the investment vehicle most closely approximating cash equivalents, unless
otherwise directed by the Committee.
Participant Has No Direct Interest in Investment Vehicles. As stated above,
cash deferrals under the Plan do not represent actual investments by the
participant in these investment vehicles. Rather, the investment vehicle is used
to measure the appreciation or depreciation of the amount deferred and earnings
and distributions thereon. Upon settlement of the deferral account, the Company
is obligated to pay an amount measured based on the investment vehicle.
Measurement of Value Based on Trust Assets. The Company is authorized under
the Plan to establish one or more grantor trusts -- commonly referred to as
"rabbi trusts" -- into which funds may be deposited to be used to purchase
assets that match the investment vehicles elected by participants. See "Part II
- - -- Rabbi Trust." Initially, the Company intends to establish and use such a
trust in connection with the Plan for deferrals other than those deemed invested
in Deferred Stock, although the Company is not obligated to continue this
practice. In such case, the time at which deferred cash amounts will be deemed
invested in those investment vehicles, including upon deferral of cash or
reallocation of previously deferred amounts, will be tied to the timing of the
parallel transactions by the trust, and the valuation of your deferral and any
earnings thereon or appreciation or loss of value thereof will be measured by
the value of the assets of the rabbi trust. This will simplify the
administration of the Plan and provide the Company with income that offsets any
additional expense relating to its deferred compensation obligation to
participants. Note that the use of a rabbi trust may result in delays, expected
not to exceed one or two business days, between the date of a cash deferral (the
date cash compensation otherwise would have been paid) and the date the Company
invests funds through the rabbi trust, and possibly similar delays when
participant's make other transactions permitted under the Plan affecting their
Deferral Accounts.
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Participant's Change in Choice of Investment Vehicles; Discontinued
Investment Vehicles. Once you have commenced participation in the Plan, you will
be able to change your investment directions for cash deferrals in two ways.
First, you may change the investment vehicles in which cash amounts deferred
after the date of your new election are deemed invested - i.e., a change in
investment directions covering future deferrals.
EXAMPLE: A participant elects in September 1999 to defer $30,000 of annual
incentive, if such amount would otherwise become payable in February 2000,
and directs that the deferred amount be deemed invested in a money market
fund. In January 2000, the participant files a new investment direction
directing that all subsequent cash deferrals be deemed invested in an
equity index fund. As a result of this new investment direction, the
February 2000 deferral of annual incentive (if it is paid) will be deemed
invested in the equity index fund.
You may also reallocate or "switch" the investment vehicles in which previously
deferred cash amounts are deemed invested. This "switching" election is a change
in investment directions affecting existing deferral account balances (prior
deferrals) but not affecting amounts deferred in the future.
Changes in investment directions that affect future deferral and
"switching" changes that affect prior deferred amounts will both be implemented
as promptly as administratively practicable. Initially, these changes will be
permitted no more frequently that once per month, but the Company may alter the
frequency of such changes to promote efficient administration of the Plan.
The investment vehicles available under the Plan may change from time to
time. In the event an investment vehicle you have previously elected is
discontinued, you will be given an opportunity to reallocate prior cash
deferrals allocated to that investment vehicle and to direct future deferrals to
an alternative investment vehicle. If you fail to give timely directions
regarding such a change, however, your deferral account balance in that
investment vehicle will be automatically reallocated, and your future deferrals
will be directed to the investment vehicle that most closely represents cash or
cash equivalents.
A deferral account balance deemed invested in an investment vehicle under
the Plan will be credited with amounts equivalent to dividends and distributions
on the specified investment vehicle. To the extent reasonably practicable, these
amounts will be deemed reinvested in the same investment vehicle. To the extent
the investment vehicle provides a dividend reinvestment plan, dividends may be
"reinvested" pursuant to such plan.
RISKS INHERENT IN PLAN DEFERRALS AND INVESTMENT VEHICLES
There are two distinct investment risks under the Plan. First is the risk
that the value of the amount deferred will go down or fail to go up at a rate
deemed satisfactory by the participant. Any such investment return is based on
the investment vehicle selected by the participant, into which amounts deferred
are deemed invested. Most of the investment vehicles, particularly those that
relate to equity securities, have a substantial risk that they will go down in
value based on market conditions and other factors. In such case, the
Participant may receive little or nothing upon settlement of his deferral
account under the Plan. The Company, the Committee, any trustee of a rabbi trust
relating to the Plan, and employees and agents of the Company make no
recommendation as to any of the investment vehicles and make no guarantee of the
performance of any of the investment vehicles. You are urged to
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consult with a financial advisor or other professional in determining whether to
defer compensation under the Plan and in selecting investment vehicles into
which amounts will be deferred or reallocated from time to time.
Second is the risk that the Company is unable or unwilling to pay amounts
to which the participant is entitled in settlement of his or her deferral
account. As stated above, the "notional" investment in a given investment
vehicle is used only to measure the value of the participant's deferral account.
Even if the participant has chosen an investment vehicle that has performed well
and appreciated in value, the participant still depends on the Company's
financial soundness and willingness to pay in order to receive payment in
settlement of the deferred compensation. In this regard, if and to the extent
that funds are deposited in the rabbi trust, the trustee will be obligated to
pay assets out in settlement of deferred compensation obligations under the
Plan, unless such assets become subject to claims of creditors of the Company.
ELECTIONS RELATING TO DEFERRALS.
Participants will be entitled to make elections that have three distinct
elements under the Plan:
(1) One element will specify the type and amount of cash compensation to
defer, including salary and annual incentive awards (note:
Stock-denominated deferrals of PERS, other restricted stock units, and
"profit shares" upon exercise of options are discussed in the
Prospectus Supplement dated September 27, 1999 (the "Stock Deferral
Prospectus Supplement"));
(2) In the case of cash deferrals, one element will specify the type of
investment vehicles in which the deferred amounts are deemed invested,
including (i) elections applicable to future deferrals and (ii)
"switching" elections reallocating existing deferral account balances;
and
(3) One element will specify the time at which deferrals will be settled.
Elections, which further defer the settlement date (so-called
"second-look" elections) will be permitted in certain cases.
With regard to the first element of elections, as to the type and amount of
compensation to defer, strict timing rules apply as to the time such elections
must be filed with the Company:
o Salary deferrals -- at least 15 days prior to the beginning of the
next calendar quarter, at which time the salary deferral will
commence;
o Annual incentive award deferrals -- no later than October 15, 1999 for
annual incentive awards potentially payable in January or February
2000 in respect of 1999 performance; after the Plan start-up year of
1999, these elections must be filed by the end of the third quarter of
the year for which the award will be payable (e.g., September 30, 2000
for annual incentive awards potentially payable in January or February
2001)
o PERS and other restricted stock units -- at least six months before
the date of vesting of the award, except that a filing by October 15,
1999 will be deemed timely for all restricted stock units vesting
thereafter during 1999
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o "Profit shares" acquired upon exercise of options -- at least six
months before the date the option is exercised
These elections become irrevocable upon filing with the Company.
With regard to the second element of the election, covering the type of
investment vehicles in which cash deferrals are deemed invested, an election
must be filed with (or prior to) the time any election to defer cash
compensation becomes effective. Rules as to the timing of filing a change in the
type of investment vehicles elected are discussed under the caption
"--Investment Vehicles--Participant's Change in Choice of Investment Vehicles;
Discontinued Investment Vehicles."
The third type of election, as to the time at which deferrals will be
settled, is discussed in the next part of the memorandum, under the caption
"--Settlement--Timing and Form of Payment."
SETTLEMENT--TIMING AND FORM OF PAYMENT.
Permitted Elections as to Time of Settlement. The Plan permits considerable
flexibility in electing the time of settlement of a participant's deferral
account. The primary limitation on these elections is that not more than ten
installments may be elected, with the final installment payable not later than
ten years after termination of employment due to retirement, death or disability
(a "Qualifying Termination"). (The definition of the terms "retirement" and
"disability" is set forth below under the caption "--Accelerated Settlement,
Including Upon Non-Qualifying Termination.") A participant may elect payout in a
lump-sum or installments, at a fixed date which may be during employment or
after a Qualifying Termination, or at dates specified in relation to a
Qualifying Termination. Generally, these elections will apply to all deferred
balances resulting from deferrals of amounts that would have otherwise become
payable in a given year.
Thus, for example, a participant could elect that all deferral account
balances resulting from deferrals in 2000 be settled (i) 100% on the first
anniversary of the participant's retirement or other Qualifying Termination,
(ii) 50% on the first business day in January 2006 and 50% on the first business
day in January 2010, or (iii) $50,000 per year on the first business day in
January 2006 through 2009 (to fund child education) and lump sum balance one
year after retirement. The participant could elect different settlement dates
for year 2001 deferrals. Any payment which otherwise would be due on a
non-business day will be deferred to the next business day.
A participant generally must elect a time of settlement not later than the
time the original election to defer is filed. If no new election as to the time
of settlement is filed with a new deferral election, the participant's prior
election as to the time of settlement of prior deferrals will continue to be in
effect for any new deferrals.
Election to Further Defer Settlement of Deferred Amounts. Elections which
further defer the settlement date of existing deferral account balances (i.e.,
"second-look" elections) will be permitted in the following circumstances.
Unless otherwise determined by the Committee, such elections (i) may only be
filed while the participant remains employed by the Company or a subsidiary,
(ii) may only operate to further extend the deferral period, and not to
accelerate the end of the deferral period for any portion of the deferral
account balance, and (iii) must be filed
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at least one year before the date the deferral period to be extended would
otherwise end. Thus, for example, a participant who has elected a lump sum
payment of the entire deferral account balance one year after termination could,
immediately prior to a Qualifying Termination, elect ten annual installment
payments commencing on the first anniversary of the Qualifying Termination.
Accelerated Settlement, Including Upon Non-Qualifying Termination.
Regardless of any elections as to the period of deferral, in the event of a
termination of employment that is not a Qualifying Termination, the
participant's deferral account will be settled as promptly as practicable
following such termination. Thus, if the participant terminates employment
voluntarily, or is terminated by the Company or a subsidiary with or without
cause -- assuming the termination does not qualify as a retirement or a
termination due to disability or death -- the participant will receive a lump
sum settlement which generally will subject the participant to federal income
taxation of the amount distributed in the year of the settlement.
For purposes of the Plan, the term "retirement" means a voluntary
termination of employment (i) at or after attaining age 65 or (ii) prior to
attaining age 65 if such termination is approved in advance by the Committee.
For purposes of the Plan, the term "disability" means a physical or mental
impairment of sufficient severity such that the participant is both eligible for
and in receipt of benefits under the long-term disability provisions of the
Company's benefit plans.
Settlement will be accelerated in the event of a Change in Control, as
discussed below under the caption "--Effect of Change in Control and Related
Transactions." In addition, the Committee may, in connection with a termination
of the Plan or otherwise, accelerate the settlement of the deferral account of
any or all participants.
Mandatory Deferrals. The Plan permits the Company to mandate deferrals of
awards under other compensation plans and arrangements, with those deferrals to
be governed by Plan terms and conditions. The authority to implement
compensatory awards under other plans with deferral periods is implicit in those
other plans; this provision simply allows the Plan to provide the framework for
conveniently administering any such deferrals. The Plan does not authorize the
Company to mandatorily defer compensation, such as salary, to which a
participant has a legally enforceable right, but it does permit the Company to
mandate deferral of compensation awarded as a bonus or as to which the
participant has agreed to permit deferrals in the discretion of the Company.
In this regard, in electing to defer compensation under the Plan, the
participant agrees that the Company may impose a mandatory deferral of
settlement of the deferred compensation to the extent necessary to ensure that
the settlement of the deferred compensation will not result in payment of
non-tax deductible compensation by the Company. Under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), compensation paid to a
person who is a "covered employee," which means the Company's Chief Executive
Officer and other four other most highly compensated executive officers for the
given year, is not deductible by the Company to the extent that the compensation
exceeds $1 million and is not qualified "performance-based" compensation
(subject to limited exceptions not here relevant). This mandatory deferral would
apply only to the extent that the participant has elected a settlement prior to
termination of employment, only as to deferrals that do not qualify as
"performance-based" compensation, and only to the extent that the settlement,
when added to other non-performance-based compensation paid to the participant
in a given year or which the Committee deems likely to be paid in such given
year, will exceed $1 million. Such
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mandatory deferral would extend only to the earliest time that the compensation
could be paid without loss of a tax deduction by the Company under Section
162(m).
With regard to "performance-based" compensation deferred under the Plan,
the Plan provides that (i) if the participant is likely to be a "covered
employee" in the year of settlement and (ii) if the compensation would lose its
status as "performance-based" compensation due to deferral or the operation of
any term of the Plan, then terms of the deferral will be automatically modified
to the extent necessary to ensure that the compensation would not, at
settlement, be disqualified as "performance-based compensation."
Form of Payment Upon Settlement. Upon any settlement of the participant's
deferral account, he or she will receive, with respect to cash deferrals,
payment of the value of his or her deferral account at the settlement date in
cash or, in the discretion of the Committee, delivery of other assets having a
fair market value equal to the amount otherwise payable in cash. It is the
intention of the Company that, if assets other than cash are to be delivered,
only assets that correspond in type and amount to the investment vehicles in
which the participant's deferral amounts are deemed invested immediately prior
to settlement will be delivered to the participant. Any such cash or property
may be delivered out of the rabbi trust relating to the Plan in settlement of
the Company's obligation. See "--Rabbi Trust."
EFFECT OF CHANGE IN CONTROL AND RELATED TRANSACTIONS
Special rules apply to any Change in Control and related transactions. For
purposes of the Plan, a "Change in Control" has the meaning defined in any
employment agreement or change-in-control severance agreement between the
Company and the participant or, if no such agreement is in effect at the
relevant date, the meaning as defined in the Company's Employees' Stock
Incentive Plan. However, no transaction in which the participant is actively
participating in a capacity other than as a director, officer, employee or
stockholder of the Company will constitute a Change in Control for purposes of
that participant's deferral account.
Upon a Change in Control:
o All deferral periods will be automatically accelerated to end at the
time of the Change in Control and deferral accounts will be settled
within five business days thereafter, provided that the Committee may
accelerate this settlement (for all or specified parts of a deferral
account) in anticipation of a Change in Control for any reason
(including to permit the participant to participate in a transaction
related to but preceding the Change in Control), subject to such
conditions as the Committee may impose.
WITHDRAWALS FOR FINANCIAL EMERGENCY
A participant may make a written application to the Committee seeking a
withdrawal of all or a portion of his or her deferral account to respond to a
financial emergency of the participant. The Committee may disapprove such a
withdrawal for any reason, and will consider approving such an application only
if the participant's financial emergency is of a substantial nature and beyond
the participant's control, and if the Participant lacks other readily available
assets that could be used to timely address the emergency, such that the payment
to the participant of amounts previously deferred under the Plan is warranted.
Upon such an approval of an emergency withdrawal, the Committee may specify the
amount to be paid out to the participant and the time and manner of such
payment. It is expected that withdrawals for
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financial emergencies will be approved only in highly unusual circumstances, and
not to permit participant's to respond to financial circumstances that could
have been anticipated.
VOLUNTARY WITHDRAWAL SUBJECT TO A 10% PENALTY
A participant may voluntarily withdraw all or a portion of his or her
deferral account balance upon 30 days' notice to the Committee, subject to a
penalty equal to 10% of the amount withdrawn. The amount of this penalty will be
forfeited and paid over to the Company.
NATURE OF DEFERRED COMPENSATION OBLIGATIONS UNDER THE PLAN
A participant's rights under the Plan are similar to those of an unsecured
creditor of the Company, but subject to certain additional limitations. The
obligations of the Company in respect of deferrals under the Plan, including any
earnings or appreciation relating to the deferrals, is to make payments to a
participant and his or her beneficiaries in accordance with the terms of the
Plan (the "Obligations"). The Obligations are unsecured general obligations of
the Company, and rank PARI PASSU with other unsecured and unsubordinated
indebtedness and other liabilities, including trade payables, of the Company
from time to time outstanding. The Obligations, which are denominated and
payable in United States dollars, are not convertible into another security of
the Company. The Obligations do not have the benefit of a negative pledge or any
other affirmative or negative covenant on the part of the Company. Accordingly,
the Company is subject to no limits in its ability to incur other liabilities
that would have priority over the Obligations in a bankruptcy. No trustee
(including any trustee of a rabbi trust, if one is created and used under the
Plan) has been or will be appointed having the authority to take action which
would provide any substantial protections to participants with respect to the
Obligations, and each participant is responsible for acting independently with
respect to, among other things, the giving of notices, responding to any
requests for consents, waivers or amendments pertaining to the Obligations,
enforcing agreements of the Company and taking action upon any default by the
Company. No specific events are defined as events of default with respect to the
Obligations. The deposit of any assets to a rabbi trust under the Plan will
provide no substantial assurance that the Company will not default in the
Obligations, and the Company will not otherwise segregate or set aside assets in
respect of the Obligations.
To the extent that the Company conducts operations through subsidiaries,
all of the assets of its subsidiaries will be used to satisfy the creditors of
the subsidiaries before any of such assets are available to the Company or its
creditors, including participants. The Company's subsidiaries have numerous
liabilities, and Plan participants have no protection from any restriction on
subsidiaries incurring additional liabilities. In addition, dividends, loans and
advances from certain subsidiaries to the Company may be restricted under debt
covenants or other regulations or contractual restrictions.
In addition, the restrictions on a participant's right to transfer or
encumber the Obligations, any risk of forfeiture of awards granted under other
Company plans but deferred under the Plan, and the inability of a participant to
negotiate the terms of the Obligations cause the rights of a participant to be,
in these respects, more restricted than those of other unsecured creditors of
the Company.
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RABBI TRUST
The Company intends, but is not obligated, to establish an irrevocable
grantor trust -- generally referred to as a "rabbi trust" -- for purposes of
measuring the performance of the investment vehicles relating to cash
compensation deferred under the Plan, to provide income to offset changes in the
amount of the Company's deferred compensation obligations resulting from
investment performance, and otherwise to facilitate the operation and
administration of the Plan. Such trust provides no substantial protection to
participants with regard to risks as to the creditworthiness of the Company,
because the assets of the trust will remain subject to claims of the creditors
of the Company. The Company may direct the trustee to pay cash or deliver assets
in kind to a participant in settlement of his or her deferral account.
FICA/HI TAX OBLIGATIONS; TAX WITHHOLDING; SETOFFS.
Under U.S. law, amounts deferred under the Plan generally are subject to
Social Security and Medicare withholding (FICA/HI) at the time of deferral. A
participant who elects to defer under the Plan will have to meet these
obligations out of other cash income, and must authorize the Company or a
subsidiary or affiliate to withhold other cash compensation to meet these
obligations. In other words, no part of the amount deferred will be used to
satisfy the FICA/HI obligations. Once deferred, any earnings or appreciation in
value of the deferral balance should not subject the participant to additional
FICA/HI obligations.
All withdrawals and payments in settlement of a participant's deferral
account are subject to withholding for U.S. federal, state and local income and
employment taxes. Similar income, employment and withholding taxes also may
apply to participants who are resident in foreign jurisdictions. These may apply
at the time of deferral, during any deferral period, or at the time of a
withdrawal or payment in settlement of the participant's account.
Moreover, any withdrawal or payment in settlement of a participant's
account may be reduced or retained by the Company and applied to the payment of
any deficit of the participant or other obligation of the participant to the
Company, the participant's employer, or any affiliate of the Company or such
employer. By deferring compensation and participating in the Plan, each
participant consents to the right of setoff of the Company, his or her employer,
and their affiliates.
NON-TRANSFERABILITY
A participant's account balances, rights to withdraw and rights to
settlement of his or her deferral account, and all other rights under the Plan
are not transferable except, in the event of the participant's death, by will or
by the laws of descent and distribution or to a beneficiary designated by the
participant in accordance with the Plan and any regulations adopted by the
Committee permitting such designation. Likewise, a participant's account
balances, rights to withdraw and rights to settlement of his or her deferral
account, and all other rights under the Plan are not subject to alienation,
pledge, encumbrance, attachment, garnishment, levy, or other legal process.
RELIANCE ONLY ON WRITTEN DOCUMENTS; COPY OF PLAN
The terms of the Plan are set forth in the Plan document, any written
rules, regulations, or forms approved by the Committee for use under the Plan,
and the portion of this memorandum captioned "Part II -- Terms and Conditions of
Deferrals." No person is authorized to make any representation or commitment to
a participant or beneficiary that is inconsistent
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with such written documents, and no statement regarding the Plan should be
relied on unless it is set forth in writing by the Company. This memorandum is
intended only to provide a summary of significant terms of the Plan document,
and it does not purport to be a complete description of all terms of the Plan.
This memorandum is qualified in its entirety by the Plan document.
A participant may obtain a copy of the Plan document by contacting the
Company's Executive Compensation Department at the address set forth below:
IMS Health Incorporated
660 W. Germantown Pike
Plymouth Meeting, PA 19462
(610) 832-5867
STATEMENTS TO PARTICIPANTS
The Company intends to provide a statement to each participant recording
transactions and balances in the participant's the Plan account since close of
the period covered in a previous statement not less frequently than annually.