1998 Ims Health Incorporated Replacement Plan

Exhibit 10.8


1998 IMS HEALTH INCORPORATED REPLACEMENT PLAN
FOR CERTAIN EMPLOYEES HOLDING
COGNIZANT CORPORATION EQUITY-BASED AWARDS


1. Purpose of the Plan


The purpose of the 1998 IMS Health Incorporated Replacement Plan for Certain Employees Holding Cognizant Corporation Equity-Based Awards (the "Plan") is to provide for the award of substantially identical replacement stock options, replacement limited stock appreciation rights and replacement restricted stock to certain employees (the "Eligible Holders") of IMS Health Incorporated (the "Company") whose awards under the 1996 Cognizant Corporation Key Employees Stock Incentive Plan and 1996 Cognizant Corporation Replacement Plan for Certain Employees Holding The Dun & Bradstreet Corporation Equity-Based Awards (the "Cognizant Plans") were cancelled pursuant to the spinoff of the Company from Cognizant Corporation ("Cognizant"). The Company expects that the Plan will allow it to retain such employees and to motivate them to exert their best efforts on behalf of the Company and its subsidiaries by providing incentives through the replacement awards. The Company also expects that it will benefit from the added interest which such employees will have in the welfare of the Company as a result of their proprietary interest in the Company's success. It is the intention of the Company that the terms of the replacement awards will (i) preserve the economic value of the cancelled Cognizant awards and (ii) except for the terms described in Sections 7, 8, 9 and 10 of this Plan, remain substantially identical to the terms of the cancelled Cognizant awards.


2. Definitions


The following capitalized terms used in the Plan have the respective meanings set forth in this Section:


(a) Act: The Securities Exchange Act of 1934, as amended, or any successor
thereto.


(b) Award: A replacement Option, replacement stock appreciation right or
replacement restricted stock granted pursuant to the Plan.


(c) Beneficial Owner: As such term is defined in Rule 13d-3 under the Act
(or any successor rule thereto).


(d) Board: The Board of Directors of the Company.
2


(e) Change in Control: With respect to D&B Replacement Stock Options, as
defined in the 1996 Cognizant Corporation Replacement Plan for Certain
Employees Holding The Dun & Bradstreet Corporation Equity-Based
Awards. Otherwise, the occurrence of any of the following events:


(i) any Person (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or
any company owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
stock of the Company), becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Company's then-outstanding
securities;


(ii) during any period of twenty-four months (not including any period
prior to the Effective Date), individuals who at the beginning of such
period constitute the Board, and any new director (other than (A) a
director nominated by a Person who has entered into an agreement with
the Company to effect a transaction described in Sections 2(e)(i),
(iii) or (iv) of the Plan, (B) a director nominated by any Person
(including the Company) who publicly announces an intention to take or
to consider taking actions (including, but not limited to, an actual
or threatened proxy contest) which if consummated would constitute a
Change in Control or (C) a director nominated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's
securities) whose election by the Board or nomination for election by
the Company's stockholders was approved in advance by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;


(iii) the stockholders of the Company approve any transaction or
series of transactions under which the Company is merged or
consolidated with any other company, other than a merger or
consolidation (A) which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into


3


voting securities of the surviving entity) more than 66 2/3% of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation and (B) after which no Person holds 20% or more of the
combined voting power of the then-outstanding securities of the
Company or such surviving entity; or


(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.


(f) Code: The Internal Revenue Code of 1986, as amended, or any successor
thereto.


(g) Cognizant Replacement Stock Option: A stock option granted pursuant to
Section 7 of the Plan as a replacement for a stock option previously
granted under the 1996 Cognizant Corporation Key Employees Stock
Incentive Plan.


(h) Cognizant Restricted Stock: Restricted stock held by an Eligible
Holder that was granted under the Cognizant Plans.


(i) Committee: The Compensation and Benefits Committee of the Board.


(j) Company: IMS Health Incorporated, a Delaware corporation.


(k) D&B Plans: The 1991 Key Employees Stock Option Plan for The Dun &
Bradstreet Corporation and Subsidiaries and the 1982 Key Employees
Stock Option Plan for The Dun & Bradstreet Corporation.


(l) D&B Replacement Stock Option: A stock option granted pursuant to
Section 7 of the Plan as a replacement for a stock option previously
granted under the 1996 Cognizant Corporation Replacement Plan for
Certain Employees Holding The Dun & Bradstreet Corporation
Equity-Based Awards.


(m) Daily Average Trading Price: the average of the high and low trading
prices for stock on a given day.


(n) Disability: Inability to engage in any substantial gainful activity by
reason of a medically determinable physical or mental impairment which
constitutes a permanent and total disability, as


4


defined in Section 22(e)(3) of the Code (or any successor section
thereto). The determination whether an Eligible Holder has suffered a
Disability shall be made by the Committee based upon such evidence as
it deems necessary and appropriate. An Eligible Holder shall not be
considered disabled unless he or she furnishes such medical or other
evidence of the existence of the Disability as the Committee, in its
sole discretion, may require.


(o) Effective Date: The date on which the Plan takes effect, as defined
pursuant to Section 15 of the Plan.


(p) Eligible Holder: As such term is defined in Section 1 of the Plan.


(q) Fair Market Value: On a given date, the arithmetic mean of the high
and low prices of the Shares asreported on such date on the Composite
Tape of the principal national securities exchange on which such
Shares are listed or admitted to trading, or, if no Composite Tape
exists for such national securities exchange on such date, then on the
principal national securities exchange on which such Shares are listed
or admitted to trading, or, if the Shares are not listed or admitted
on a national securities exchange, the arithmetic mean of the per
Share closing bid price and per Share closing asked price on such date
as quoted on the National Association of Securities Dealers Automated
Quotation System (or such market in which such prices are regularly
quoted), or, if there is no market on which the Shares are regularly
quoted, the Fair Market Value shall be the value established by the
Committee in good faith. If no sale of Shares shall have been reported
on such Composite Tape or such national securities exchange on such
date or quoted on the National Association of Securities Dealer
Automated Quotation System on such date, then the immediately
preceding date on which sales of the Shares have been so reported or
quoted shall be used.


(r) IMS Health Restricted Stock: Restricted stock received by an Eligible
Holder as a result of the Spinoff.


(s) Option: A Cognizant Replacement Stock Option and a D&B Replacement
Stock Option.
5


(t) Person: As such term is used for purposes of Section 13(d) or 14(d) of
the Act (or any successor sectionthereto).


(u) Plan: As such term is defined in Section 1 hereof.


(v) Post-Retirement Exercise Period: As such term is defined in Section
7(f) of the Plan.


(w) Shares: Shares of common stock, par value $0.01 per Share, of the
Company.


(x) Special Exercise Period: As such term is defined in Section 7(f) of
the Plan.


(y) Spinoff: the distribution of the Shares owned by Cognizant to the
holders of record of shares of Cognizant.


(z) Spinoff Date: The date on which the Spinoff was effected.


(aa) Subsidiary: A subsidiary corporation, as defined in Section 424(f) of
the Code (or any successor sectionthereto).


3. Shares Subject to the Plan


The total number of Shares which may be issued under the Plan is equal to the aggregate number of shares subject to replacement awards, as calculated pursuant to Sections 7(a), 8(a) and 9 of this Plan. The Shares may consist, in whole or in part, of unissued shares or treasury shares. Issuance of Shares upon exercise of an option or reduction of the number of Shares subject to an option upon exercise of a stock appreciation right shall reduce the total number of Shares available under the Plan. In addition, Shares which are subject to unexercised stock options which terminate or lapse may not be optioned again under the Plan.


4. Administration


The Plan sh ...