SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
IMS HEALTH INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):*
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
-------------------------------------------------------
4) Date Filed:
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<PAGE>
IMS HEALTH [LOGO]
IMS HEALTH INCORPORATED
200 Nyala Farms, Westport, CT 06880
March 17, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
of IMS Health Incorporated on April 10, 2000, at 9:30 A.M. at 1209 Orange
Street, Wilmington, Delaware.
The Notice of Annual Meeting and Proxy Statement accompanying this letter
describes the business to be conducted at the meeting and provides information
about IMS HEALTH.
Your vote is important. Whether you plan to attend the meeting or not,
please complete, sign and return the enclosed proxy card promptly or vote by
telephone or over the Internet. If you attend the meeting and prefer to vote in
person, you may withdraw your proxy and vote your shares.
Sincerely,
/s/ Victoria R. Fash
VICTORIA R. FASH
President and Chief Executive Officer
<PAGE>
IMS HEALTH [LOGO]
IMS HEALTH INCORPORATED
200 Nyala Farms, Westport, CT 06880
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
---------------
DATE: April 10, 2000
TIME: 9:30 A.M.
PLACE: 1209 Orange Street
Wilmington, Delaware
ITEMS OF
BUSINESS: 1. To elect three Class I directors for a three-year term.
2. To ratify the appointment of PricewaterhouseCoopers LLP as
our independent public accountants for 2000.
3. To transact any other business that may properly come
before the meeting.
RECORD DATE: Holders of IMS HEALTH Common Stock of record at the
close of business on February 29, 2000 are entitled to vote at
the meeting.
ANNUAL REPORT: IMS HEALTH's 1999 Annual Report, which is not a part of the
proxy soliciting material, is enclosed.
PROXY VOTING: It is important that your shares be represented and voted at
the meeting. You can vote your shares by completing and
returning the proxy card sent to you. Most shareholders can
also vote their shares over the Internet or by telephone. If
Internet or telephone voting is available to you, voting
instructions are printed on the proxy card sent to you. You
can revoke a proxy at any time prior to its exercise at the
meeting by following the instructions in the accompanying
proxy statement.
By Order of the Board of Directors,
/s/ DAVID J. STEVENS
David J. Stevens
Senior Vice President, General Counsel
and Secretary
Dated: March 17, 2000
<PAGE>
---------------
PROXY STATEMENT
---------------
The Company
IMS Health Incorporated ("IMS HEALTH" or the "Company") is the world's
leading provider of information solutions to the pharmaceutical and healthcare
industries. We have operations in 100 countries and employ approximately 9000
full-time equivalent employees worldwide. Our principal executive offices are
located at 200 Nyala Farms, Westport, CT 06880. Our telephone number is (203)
222-4200.
Proxy Solicitation
On March 17, 2000, we began mailing these proxy materials to all
shareholders of record at the close of business on February 29, 2000. We have
sent this Proxy Statement to you because the Board of Directors of the Company
is soliciting your proxy to vote at the 2000 Annual Meeting. IMS HEALTH will
request banks and brokers to solicit proxies from their customers where
appropriate and will reimburse them for reasonable out-of-pocket expenses. The
Company may retain ADP Investor Communication Services to assist with this
solicitation for a fee estimated at $3,500 plus expenses and will pay all
expenses related to proxy solicitation.
Voting
You may vote on matters presented at the Annual Meeting in the following
ways:
o By Proxy -- Most shareholders have a choice of voting:
- over the Internet,
- by using a toll-free telephone number, or
- by completing a proxy card and mailing it in the postage-paid
envelope provided.
Please refer to your proxy card or the information forwarded by your bank,
broker or other holder of record to see which of the above choices are available
to you. A control number, located on your proxy card, is designed to verify your
identity and allow you to vote your shares, and confirm that your voting
instructions have been properly recorded when voting over the Internet or by
telephone. Please be aware that if you vote over the Internet, you may incur
costs such as telephone and Internet access charges for which you will be
responsible. The Internet and telephone voting facilities for shareholders of
record will close at 11:00 p.m. E.D.T. on April 9, 2000.
The method by which you vote will in no way limit your right to vote at the
meeting if you later decide to attend in person.
Regardless of the method you choose to vote, the individuals named on the
enclosed card (your "proxies") will vote your shares in the way that you
indicate. When completing the Internet or telephone processes or the proxy card,
you may specify whether your shares should be voted for all, some or none of the
nominees for director and whether your shares should be voted for or against the
ratification of PricewaterhouseCoopers. If you do not indicate how your shares
should be voted on a matter, the shares represented by your properly completed
proxy will be voted as the Board of Directors recommends.
If you choose to vote over the Internet or by telephone, you must complete
the process no later than 11:00 p.m. E.D.T. on April 9, 2000. If you vote over
the Internet or by telephone, it is not necessary to return your proxy card.
If you choose to vote by mailing a proxy card, your proxy card must be
filed with the secretary of the Annual Meeting prior to or at the commencement
of the Annual Meeting.
o In Person -- You may attend the Annual Meeting and cast your vote
there.
<PAGE>
Voting over the Internet, by telephone or by sending in a signed proxy
will not prevent you from attending the Annual Meeting and voting in person. You
have the right to revoke a proxy, whether delivered over the Internet, by
telephone or by mail, at any time before it is exercised, by voting again at a
later date through any of the methods available to you, by giving written notice
of revocation to the Secretary of IMS HEALTH, or by attending the Annual Meeting
and voting in person.
For Participants in the IMS Health Savings Plan. If you participate in the
IMS Health Incorporated Savings Plan (the "Plan") and have contributions
invested in IMS HEALTH Common Stock, the proxy card will serve as a voting
instruction for the trustee of the Plan. You must return your proxy card to the
trustee prior to March 28, 2000. If your proxy card is not received by the
trustee before that date or if you sign and return the proxy card without
instructions marked in the boxes, the trustee will vote your shares of Common
Stock in the same proportion as other shares of Common Stock held in the Plan
for which the trustee received timely instructions.
Record Date, Quorum and Voting Requirements
Only holders of record of Common Stock at the close of business on February
29, 2000 will be eligible to vote at the Annual Meeting. As of the close of
business on February 29, 2000, IMS HEALTH had outstanding 298,339,602 shares of
Common Stock. Each share of Common Stock is entitled to one vote.
A quorum of shares is necessary to hold a valid shareholders' meeting. IMS
HEALTH's by-laws provide that a majority of the shares entitled to vote, present
in person or represented by proxy, will constitute a quorum at meetings of
shareholders. Shares that abstain from voting, as well as shares that a broker
holds in "street name" and votes on some matters but not others ("broker
non-votes"), will be counted for purposes of establishing a quorum.
Directors will be elected by a plurality of votes cast at the Annual
Meeting. This means that the three nominees for director who receive the most
votes will be elected. If you are present at the meeting but do not vote for a
particular nominee, or if you have given a proxy and properly withheld authority
to vote for a nominee, or if there are broker non-votes, the shares withheld or
not voted will not be counted for purposes of the election of directors.
The affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote on the matter at the Annual Meeting is
required to ratify the appointment of independent auditors. If you are present
at the meeting but do not vote on this proposal, or if you have given a proxy
and properly withheld authority to vote on this proposal, or if there are broker
non-votes, the shares withheld or not voted will have the same effect as if you
voted against this proposal.
SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS
The following table shows the number of shares of Common Stock
"beneficially owned" by each of the directors, the executive officers named in
the Summary Compensation Table below, all present directors and executive
officers of the Company as a group, at December 31, 1999, and all persons known
to the Company to be the beneficial owners of more than 5% of the outstanding
Common Stock on December 31, 1999. "Beneficial ownership" includes shares a
shareholder has the power to vote or the power to transfer, and also includes
stock options that were exercisable at that date, or as of that date will become
exercisable within 60 days thereafter. Percentages are based upon the number of
shares of Common Stock outstanding at December 31, 1999, plus, where applicable,
the number of shares that the indicated person or group had a right to acquire
within 60 days of such date.
The information in the table is based upon information provided by each
director and executive officer and, in the case of the beneficial owners of more
than 5% of the outstanding Common Stock, the information is based upon Schedules
13G filed with the Securities and Exchange Commission ("SEC"). Unless otherwise
stated, the indicated persons have sole voting and investment power over the
shares listed.
2
<PAGE>
<TABLE>
<CAPTION>
Name Number of Shares and Nature of Ownership
---- ----------------------------------------
<S> <C> <C>
Clifford L. Alexander, Jr........... 9,106 Direct
2,159 Restricted Stock Grant (1)
9,429 Right to Acquire Within 60 Days by Exercise of Options
-------
20,694
J. Michal Conaway .................. 49,175(2) Direct
55,884 Right to Acquire Within 60 Days by Exercise of Options
-------
105,059
Victoria R. Fash.................... 121,738(2) Direct
61,844(2) Restricted Stock Grant (3)
532,157 Right to Acquire Within 60 Days by Exercise of Options
-------
715,739(4)
John P. Imlay, Jr................... 20,000 Direct
2,159 Restricted Stock Grant (1)
3,048(2) Deferred Restricted Stock Units (5)
14,361 Right to Acquire Within 60 Days by Exercise of Options
-------
39,568
Robert J. Kamerschen................ 27,725 Direct
2,159 Restricted Stock Grant (1)
14,361 Right to Acquire Within 60 Days by Exercise of Options
-------
44,245
Alan J. Klutch...................... 125,315 Direct
202,861 Right to Acquire Within 60 Days by Exercise of Options
-------
328,176
Craig S. Kussman ................... 6,500(2) Direct
257,147 Right to Acquire Within 60 Days by Exercise of Options
-------
263,647
Robert J. Lanigan .................. 14,200 Direct (6)
2,159 Restricted Stock Grant (1)
14,361 Right to Acquire Within 60 Days by Exercise of Options
-------
30,720
H. Eugene Lockhart.................. 4,400 Direct
2,159 Restricted Stock Grant (1)
1,336(2) Deferred Restricted Stock Units (5)
14,361 Right to Acquire Within 60 Days by Exercise of Options
-------
22,256
James C. Malone .................... 4,694 Direct
322,193 Right to Acquire Within 60 Days by Exercise of Options
-------
326,887
David H. Owen....................... 44,707 Right to Acquire Within 60 Days by Exercise of Options
M. Bernard Puckett ................. 7,200 Direct
2,009 Restricted Stock Grant (1)
13,565 Right to Acquire Within 60 Days by Exercise of Options
-------
22,774
William C. Van Faasen .............. 3,200 Direct
1,336 Restricted Stock Grant (1)
1,050(2) Deferred Restricted Stock Units (5)
6,962 Right to Acquire Within 60 Days by Exercise of Options
-------
12,548
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Name Number of Shares and Nature of Ownership
---- ----------------------------------------
<S> <C> <C>
Robert E. Weissman ................. 692,184 Direct
35,930(2) Restricted Stock Grant (7)
1,370,995 Right to Acquire Within 60 Days by Exercise of Options
---------
2,099,109
All Current Directors and
Executive Officers as a
Group (15 in number) ............ 3,711,755(8)
FMR Corp.
82 Devonshire Street
Boston, MA 02109 ................ 38,848,019(9)(10)
Mutuelles AXA, AXA and
AXA Financial ................... 20,398,663(11)(12)
</TABLE>
- ----------
(1) Represents shares of restricted stock granted under the 1998 IMS Health
Incorporated Non-Employee Directors' Stock Incentive Plan, which shares are
scheduled to vest on November 15, 2001 in the case of directors other than
Mr. Van Faasen and on April 21, 2003 in the case of Mr. Van Faasen. Prior
to the spin-off of most of the Company's equity interest in Gartner Group,
Inc., these restricted shares were canceled as of July 15, 1999. They were
then adjusted to provide the economic equivalent of the Gartner Group
dividend and subsequently re-granted to all named Directors on July 27,
1999.
(2) Amounts include fractional restricted stock units accumulated as a result
of dividend equivalents paid during 1999. All numbers have been rounded to
the nearest whole share.
(3) Represents restricted stock units granted under the 1998 IMS Health
Incorporated Employees' Stock Incentive Plan, 44,708 of which are scheduled
to vest in two equal annual installments commencing on December 14, 2000,
and 17,136 of which are scheduled to vest on January 1, 2001.
(4) Ms. Fash also owns 6,500 shares of Class A Common Stock of IMS HEALTH's
subsidiary Cognizant Technology Solutions Corporation ("CTS Common Stock"),
a publicly traded company, and has the right to acquire within 60 days
13,000 shares of CTS Common Stock through the exercise of stock options.
These amounts reflect the two-for-one stock split announced by CTS on
February 11, 2000. (5) Represents restricted stock units deferred under
the IMS Health Incorporated Non-Employee Director's Deferred Compensation
Plan.
(6) 2,400 of these shares are held in an IRA account for the benefit of Mr.
Lanigan and 11,800 of such shares are held in a family limited partnership
of which Mr. Lanigan is the sole shareholder of the corporate general
partner. Mr. Lanigan has sole investment and voting rights with respect to
these shares.
(7) Represents restricted stock units granted under the 1998 IMS Health
Incorporated Employees' Stock Incentive Plan which are scheduled to vest on
January 1, 2001. (8) Includes all shares beneficially owned, regardless of
nature of ownership, and all rights to acquire shares within 60 days.
Represents 1.2% of the total outstanding Common Stock on December 31, 1999.
Excludes shares owned by Messrs. Conaway and Klutch, who were not executive
officers as of December 31, 1999.
(9) Represents 12.86% of the total outstanding Common Stock on December 31,
1999.
(10) FMR Corp., its wholly owned subsidiary, Fidelity Management & Research
Company ("Fidelity"), Fidelity Growth & Income Fund (the "Growth Fund"),
Edward C. Johnson, 3rd, Chairman of FMR Corp., and Abigail P. Johnson,
jointly filed an Amendment No. 2 to Schedule 13G with the SEC on February
14, 2000. This Schedule 13G/A shows that as of December 31, 1999, Fidelity,
a registered investment advisor, beneficially owned 36,660,780 shares of
Common Stock, as a result of acting as investment adviser to various
registered investment companies (the "Funds"), and that one of the Funds,
the Growth Fund, owned 17,293,400 shares of Common Stock. Mr. Johnson, FMR
Corp. and the Funds each has sole dispositive power (but no voting power)
over the shares beneficially owned by Fidelity. Voting power with respect
to such shares resides with the respective Boards of Trustees of each of
the Funds. In addition, Mr. Johnson and FMR Corp., through its control of
Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp.
and a bank as defined under the Securities Exchange Act of 1934, as
amended, each has sole dispositive power over 2,113,039 shares and sole
power to vote or to direct the voting of 1,192,439 of such shares, and no
power to vote or to direct the voting of 920,600 of such shares. Fidelity
International Limited, a partnership controlled by Mr. Johnson and members
of his family, is the beneficial owner of 74,200 shares of Common Stock.
(11) Represents 6.75% of the total outstanding Common Stock on December 31,
1999.
(12) AXA Conseil Vie Assurance Mutuelle ("Conseil"), AXA Assurances I.A.R.D.
Mutuelle ("IARD"), and AXA Courtage Assurance Mutuelle ("Courtage"), as a
group (collectively, the "Mutuelles AXA"), together with AXA and with AXA
Financial, Inc. (f.k.a. The Equitable Companies Incorporated) ("AXA
Financial"), filed a joint Amendment No. 1 to Schedule 13G with the SEC on
February 14, 2000. The Schedule 13G/A shows
4
<PAGE>
that Mutuelles AXA, AXA, and AXA Financial together may be deemed to
beneficially own the number of shares reported in the table above,
including sole power to vote 7,000,024 shares, shared power to vote
6,715,550 shares, sole power to dispose of 20,208,910 shares, and shared
power to dispose of 77,621 shares. All of the shares are beneficially owned
through subsidiaries of AXA Financial. AXA owns a majority interest in AXA
Financial, and Mutuelles AXA as a group controls AXA. Addresses of these
entities are as follows: Conseil, 100-101 Terrasse Boieldieu, 92042 Paris
La Defense France; IARD, 21, rue de Chateaudun, 75009 Paris France;
Courtage, 26, rue Louis le Grand, 75002 Paris France; AXA, 9 Place Vendome,
75001 Paris France; and AXA Financial, 1290 Avenue of the Americas, New
York, New York 10104.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The members of the Board of Directors of the Company are grouped into three
classes. Only one class of directors is elected at each Annual Meeting of
Shareholders to hold office for a three-year term and until successors are
elected and have qualified.
The Board of Directors has nominated John P. Imlay, Jr., Robert J.
Kamerschen and H. Eugene Lockhart for election as Class I Directors at the 2000
Annual Meeting for a three-year term expiring at the 2003 Annual Meeting.
Messrs. Imlay, Kamerschen and Lockhart have served as directors since June 15,
1998, shortly before IMS HEALTH became an independent public company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION AS DIRECTORS OF
THE NOMINEES NAMED ABOVE.
Unless you otherwise instruct, proxies will be voted for election of all
the nominees, all of whom are now members of the Board. If any nominee is
unwilling or unable to serve as a director and the Board does not, in that
event, choose to reduce the size of the Board and the number of Class I
Directors, the persons voting the proxy may vote for the election of another
person in accordance with their judgment.
The following table provides, for each nominee for election as a Class I
Director, the nominee's name, position with IMS HEALTH, the year the nominee
first became a director, principal occupations during the last five years, age,
and other directorships in public companies.
Nominees For Class I Directors for terms expiring at the 2003 Annual Meeting:
<TABLE>
<CAPTION>
Principal
Positions Occupations
with Director During Last Other
Name IMS HEALTH Since Five Years Age Directorships
---- ---------- -------- ----------- --- -------------
<S> <C> <C> <C> <C> <C>
John P. Imlay, Jr. Director 1998 Chairman, Imlay Investments, 63 Gartner Group, Inc.;
Inc., Atlanta, GA Metromedia
(private venture capital International Group,
investments), 1990 to Inc.;World
present; Chairman, Access, Inc.
Dun & Bradstreet Software
Services, Inc., Atlanta, GA
(software company), 1/90 to
11/96, and Principal
Executive Officer, 1/90 to
1/93, and President of that
company, 1/90 to 3/92.
Robert J. Kamerschen Director 1998 Chairman & Chief Executive 64 Micrografx, Inc.;
Officer, DIMAC Marketing R.H. Donnelley
Corporation, Atlanta, GA Corp.; Tandy Corp.
(direct mail marketing),
10/99 to present; Retired
Chairman & Senior Executive
Consultant to ADVO, Inc.,
Windsor, CT (direct mail
marketing services), 7/99 to
10/99; Chairman, ADVO, Inc.,
11/88 to 7/99, and Chairman
and Chief Executive Officer
of that company, 11/88 to
1/99.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Principal
Positions Occupations
with Director During Last Other
Name IMS HEALTH Since Five Years Age Directorships
---- ---------- -------- ----------- --- -------------
<S> <C> <C> <C> <C> <C>
H. Eugene Lockhart Director 1998 President-Consumer Services, 50 Nabisco Group
AT&T Corp., New York, NY Holdings Corp.;
(telecommunications), 7/99 to First Republic Bank
2/00; Executive Vice
President and Chief Marketing
Officer, AT&T Corp., 2/99 to
6/99; President, Global Retail
Bank, Bank of America
Corporation, San Francisco, CA
(financial services), 4/97 to 10/98;
President and Chief Executive
Officer, MasterCard
International Inc., Purchase, NY
(credit card company), 3/94 to 4/97.
</TABLE>
The following tables provide, for each Class II and Class III Director
continuing in office, the director's name, position with IMS HEALTH, the year
the director first became a director, principal occupations during the last five
years, age, and other directorships in public companies.
Class II Directors holding office for terms expiring at the 2001 Annual Meeting:
<TABLE>
<CAPTION>
Principal
Positions Occupations
with Director During Last Other
Name IMS HEALTH Since Five Years Age Directorships
---- ---------- -------- ----------- --- -------------
<S> <C> <C> <C> <C> <C>
Clifford L.
Alexander, Jr. Director 1998 Chairman and Chief Executive 66 The Dun &
Officer, The Dun & Bradstreet Bradstreet
Corporation, Murray Hill, NJ Corporation;
(information services), 10/99 Dreyfus Third
to present; President, Century Fund;
Alexander & Associates, Inc., Dreyfus General
Washington, DC (consulting Family of Funds;
firm specializing in workforce Dreyfus Premier
inclusiveness), 1/81 to present. Family of Funds;
Mutual of America Life
Insurance Company;
American Home Products Corp.;
MCI WorldCom, Inc.
Robert E. Weissman Chairman and 1998 Chairman, IMS Health 59 State Street Boston
Director Incorporated, 3/99 to present; Corporation
Chairman and Chief Executive
Officer, IMS Health
Incorporated, 2/98 to
3/99; Chairman and Chief
Executive Officer,
Cognizant Corporation,
Westport, CT (information
services), 9/96 to 7/98;
Chairman and Chief
Executive Officer, The Dun
& Bradstreet Corporation,
Wilton, CT (information
services), 4/95 to 10/96;
President and Chief
Executive Officer, 1/94 to
3/95, and President and
Chief Operating Officer of
that company, 1/85 to
12/93.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Principal
Positions Occupations
with Director During Last Other
Name IMS HEALTH Since Five Years Age Directorships
---- ---------- -------- ----------- --- -------------
<S> <C> <C> <C> <C> <C>
William C. Van Faasen Director 1998 President and Chief 51 BankBoston
Executive Officer, Blue Corporation
Cross and Blue Shield of
Massachusetts, Boston, MA
(health insurance), 9/92
to present.
Class III Directors holding office for terms expiring at the 2002 Annual Meeting:
</TABLE>
<TABLE>
<CAPTION>
Principal
Positions Occupations
with Director During Last Other
Name IMS HEALTH Since Five Years Age Directorships
---- ---------- -------- ----------- --- -------------
<S> <C> <C> <C> <C> <C>
Victoria R. Fash President, 1998 President and Chief 49 Cognizant
Chief Executive Executive Officer, Technology
Officer and IMS Health Incorporated, 3/99 Solutions
Director to present; President and Corporation;
Chief Operating Officer, Edwards
IMS Health Incorporated, Lifesciences
2/98 to 3/99; Executive Corporation
Vice President and
Chief Financial Officer,
Cognizant Corporation,
Westport, CT (information
services), 9/96 to 7/98;
Senior Vice President-Business
Strategy, The Dun & Bradstreet
Corporation, Wilton, CT
(information services), 4/95
to 11/96, and Vice
President-Business Operations
Planning of that company,
5/94 to 4/95.
Robert J. Lanigan Director 1998 Limited Partner, Palladium 71 Owens-
Equity Partners, New York, Illinois, Inc.;
NY (private investment firm), DaimlerChrysler
6/96 to present; Chairman AG
Emeritus, Owens-Illinois,
Inc., Toledo, OH (glass,
plastics and other
packaging products), 1/92
to present, and Chairman
of the Board, 4/84 to
10/91, and Chief Executive
Officer of that company,
1/84 to 9/90.
M. Bernard Puckett Director 1998 Private Investor, 1/96 to 55 P-Com, Inc.; R.R.
present; President and Chief Donnelley &
Executive Officer, Mobile Sons Company;
Telecommunication Technologies Software.com;
Corp., Jackson, MS (telecom- Softwork Inc.
munications), 5/95 to 1/96,
and President and Chief
Operating Officer of that
company, 1/94 to 5/95.
</TABLE>
7
<PAGE>
Committees of the Board and Meetings
The Board of Directors has three standing committees; each made up of
non-employee Directors:
o Audit Committee
o Compensation and Benefits Committee
o Nominating Committee
The Audit Committee of the Board of Directors consists of Messrs. Alexander
(Chairman), Lanigan and Lockhart. It held two meetings in 1999. The primary
functions of the Audit Committee are to:
o Review the activities of the internal audit function and the
independent auditors.
o Review the scope of the audits of IMS HEALTH's internal audit function
and its evaluation of internal controls.
o Review the scope of the audit of the Company's consolidated financial
statements by independent public accountants and their report on the
audit.
o Recommend the appointment of the Company's independent public
accountants to the full Board.
The Compensation and Benefits Committee of the Board of Directors consists
of Messrs. Puckett (Chairman), Imlay, Kamerschen and Van Faasen. It held three
meetings during 1999. The primary functions of the Compensation and Benefits
Committee are to:
o Establish and review all compensation arrangements for certain
executives of IMS HEALTH consistent with a statement of executive
compensation philosophy adopted by the Board of Directors.
o Establish and review IMS HEALTH's executive and employee benefit
policies.
o Administer IMS HEALTH's executive and employee compensation and
benefit plans.
The Nominating Committee of the Board of Directors consists of Messrs.
Alexander, Imlay, Kamerschen, Lanigan, Lockhart, Puckett and Van Faasen. It held
no meetings in 1999. The primary function of the Nominating Committee is to:
o Screen candidates for membership on the Board of Directors and make
recommendations to the full Board. Shareholders' recommendations of
nominees for membership on the Board of Directors will be considered
by the Nominating Committee. Although the Nominating Committee has not
adopted formal procedures for the submission of recommendations,
shareholders may recommend nominees for membership on the Board of
Directors to the Nominating Committee by submitting the names in
writing to: David J. Stevens, Senior Vice President, General Counsel
and Secretary, IMS Health Incorporated, 200 Nyala Farms, Westport,
Connecticut 06880. IMS HEALTH's By-laws specify certain time
limitations, notice requirements and other procedures applicable to
the submission of nominations before an Annual or Special Meeting.
The Board of Directors held six meetings during 1999. No Director attended
fewer than 75% of the total number of meetings of the Board of Directors and of
the committees of the Board on which the Director serves.
8
<PAGE>
Compensation of Directors
Of the current Board members, only Mr. Weissman and Ms. Fash are salaried
employees of the Company. Board members who are not salaried employees of IMS
HEALTH receive compensation for Board service. That compensation currently
consists of the following:
Annual Retainer: $30,000 (payable in quarterly installments)
Committee Chairman Fees: $5,000 annually (payable in quarterly
installments)
Attendance Fees: $1,000 for each Board meeting
$1,000 for each Board committee meeting
Expenses related to attendance
Stock Options: 9,000 shares annually (these options become
exercisable in three equal annual installments,
or earlier upon termination of service, and
expire ten years after grant, or earlier
following termination of service)
Restricted Stock: One time grant of $40,000 worth of Common Stock
upon initial election as a director (these
shares have a restricted period of five years
but restrictions lapse upon death, disability,
or upon termination in other circumstances
determined by the Compensation and Benefits
Committee; dividends are unrestricted)
Directors may elect to defer all or part of their compensation under the
Company's Non-Employee Directors' Deferred Compensation Plan, a non-qualified
plan. Under this plan, the participating directors may elect to defer their
compensation to an account credited with deferred cash or with deferred share
units.
If there is a change-in-control of IMS HEALTH, the Compensation and
Benefits Committee may take such action as it deems necessary or desirable with
respect to directors' stock options or restricted stock units. For this purpose,
the term "change-in-control" has the same meaning as under the Change-in-Control
Agreements, described below. These Committee actions could include acceleration
of vesting, exercisability or settlement, payment of cash in exchange for
cancellation, or issuing substitute awards that substantially preserve the
value, rights and benefits of previously granted options or restricted stock
units.
During 1998, the Board of Directors adopted share ownership guidelines for
non-employee directors because it believes that each director should maintain a
meaningful investment in the Company. The guidelines require each director to
own a specified number of shares or share units within five years of the later
of January, 1999 and the date of a Director's first election to the Board, with
mandatory ownership of 25% of the targeted number of shares within three years.
The Board set ownership targets for outside directors at shares having a market
value, measured at the time the guidelines were adopted, of ten times the then
annual Board retainer.
PROPOSAL NO. 2: APPOINTMENT OF AND RELATIONSHIP
WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors selects and hires independent
public accountants to audit the Company's consolidated financial statements.
The Audit Committee's selection for 2000 must be approved by you. The Audit
Committee selected PricewaterhouseCoopers LLP as the Company's independent
public accountants for 2000. This firm has acted as the Company's independent
public accountants since July, 1998 when IMS HEALTH became an independent
publicly traded company. In connection with its audit of the consolidated
financial statements, PricewaterhouseCoopers also audited the separate financial
statements of certain subsidiaries of the Company, reviewed certain filings with
the SEC and performed certain non-audit services.
A representative of PricewaterhouseCoopers is expected to be available to
answer appropriate questions at the Annual Meeting and is free to make
statements during the meeting.
9
<PAGE>
If the ratification of appointment of PricewaterhouseCoopers is not
approved, the Board will appoint other independent accountants. Any engagement
of new accountants for periods following the 2001 Annual Meeting will be subject
to ratification by you at that meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS.
COMPENSATION OF EXECUTIVE OFFICERS
Report of the Compensation and Benefits Committee on Executive Compensation
This report of the Compensation and Benefits Committee of the Board of
Directors discusses our compensation program for senior executives; in
particular, compensation paid for services in 1999. As of the date of this Proxy
Statement, the Committee reviews and approves the cash and equity components of
the compensation program for 12 senior executives of IMS HEALTH (including
certain executive and non-executive officers) (the "Board Review Group"). Only
non-employee directors serve on the Committee. We consult with independent
experts, experienced in the design and implementation of executive compensation
arrangements, for advice on compensation matters. We have delegated to the
Chairman of the Board or Chief Executive Officer limited authority over cash
compensation decisions for two of our executive officers who are not members of
the Board Review Group; equity based compensation for these two executive
officers is reviewed and approved by the Committee.
Executive Compensation Philosophy
Our Committee and the Board of Directors believe that to build shareholder
value IMS HEALTH should closely align the financial interests of its employees
with the financial interests of shareholders. Moreover, we believe top-caliber
executives and employees can drive shareholder value, particularly by delivering
customer satisfaction. We want senior executives to operate our business with a
long-term perspective while striving to deliver annual results in accordance
with the Company's approved strategy and growth objectives.
IMS HEALTH relies heavily on incentive compensation programs to motivate
superior performance, both short- and long-term. These programs, which provide
compensation in cash and stock, place a major portion of our senior executives'
compensation at risk. Compensation under these programs varies depending on the
performance of IMS HEALTH as a whole and the performance of the business unit
for which the executive is responsible. Such programs hold executives directly
accountable for results and promote a sharp and continuing focus on building
shareholder value.
Therefore, we intend that total compensation opportunities be highly
performance-driven in form and nature so that senior executives who successfully
enhance shareholder value will be eligible to receive financial rewards at
levels consistent with the compensation offered by other high-performing
companies that are likely to compete for the services of our executives. This
approach enables us to attract and retain the highest caliber of executive
talent in an increasingly competitive market.
During 1998, the Board of Directors instituted stock ownership guidelines
for senior executives to foster a deep commitment on the part of our global
management team to IMS HEALTH and its shareholders. The guidelines require that
each participant own a specified number of shares of Common Stock by 2003, with
mandatory ownership of 25% of the targeted number of shares by 2001. We set
ownership target levels quite high -- we believe them to be among the highest in
effect at major U.S. companies. Based on the market value of Common Stock at the
time the program commenced, these target ownership levels range up to ten times
annual salary for the Chairman of the Board, and from three to seven times
annual salary for the other senior executives covered by the program. Unlike
some companies' ownership guidelines, the targeted number of shares to be owned
does not fluctuate with changes in the market price. Executives and directors
may obtain shares to meet the ownership guidelines through open-market purchases
and acquisitions of shares under IMS HEALTH plans. Prior to exercise, stock
options will not count while 50% of Performance Restricted Stock Units ("PERS")
will count towards meeting these ownership guidelines.
10
<PAGE>
Components of the Compensation Program
Our Committee believes that the form and level of executive compensation
helps IMS HEALTH attract and retain highly motivated and effective executives
who are critical to the future success of the business.
In determining compensation opportunities and payments to executives, we
look at the competitive opportunities and payments among a comparator group of
companies. The companies used for comparison purposes include several pharma
service providers, companies engaged in other service industries and
pharmaceuticals, as well as other companies with which the Company competes for
executive talent. These other companies have one or more characteristics
comparable to IMS HEALTH, such as:
o projected revenues, growth, operating income, assets, market value and
total shareholder returns,
o significant market presence outside the United States,
o leading market shares in significant or emerging markets, and
o similarities in scope of position responsibilities, executive
expertise and the magnitude of performance challenges faced.
The group of comparator companies for compensation purposes differs from the
peer group used for comparison in the Total Shareholder Return Graph on page 14.
Compensation data for the comparator companies comes from benchmarking
surveys conducted by independent compensation consultants. In reviewing the
data, we take into account how IMS HEALTH's compensation policies and overall
performance compare to similar indices for the comparator group. In general, we
seek to target an executive's total compensation opportunity, earnable for
strong performance by IMS HEALTH, between the 50th and 75th percentile of
comparator group compensation for the corresponding position. Our decisions,
however, take into account other factors including individual, business unit and
Company performance and shareholder returns.
The compensation program for IMS HEALTH executives has three main
components: base salary, annual cash incentives, and long-term incentives in the
form of PERS and stock options. We grant restricted stock or stock units in some
cases as an additional element of long-term compensation.
Base Salary. Base salary compensates an executive for ongoing performance
of assigned responsibilities. Our Committee reviews base salaries annually. In
determining whether to adjust the base salary of an executive, including the
Chief Executive Officer, we take into account salaries paid for comparable
positions at other companies, changes in the executive's responsibilities, the
individual performance of the executive and IMS HEALTH's compensation philosophy
favoring variable, performance-based compensation. For 1999, we approved merit
increases, ranging from 2% to 5%, to the base salaries of executive officers in
the Board Review Group, other than Mr. Weissman and Ms. Fash, who are discussed
separately in the CEO Compensation section.
Annual Incentives. An annual incentive generally rewards an executive for
financial results achieved for the year. These awards depend on the level of
achievement of financial targets set at the beginning of the plan year. For
1999, we set financial targets based on the performance measures of revenue
growth and operating income of each executive's business unit or IMS HEALTH's
consolidated results. In addition, we included for 1999 a qualitative
performance goal -- customer satisfaction -- to focus our executives on the
customer as critical to the Company's long-term success. Further, there may be a
"booster" based on the Company's earnings per share performance.
With respect to each performance measure, the executive does not earn an
annual incentive unless performance exceeds a predetermined "floor" for that
measure. The bonus opportunity with respect to a measure is earned if the target
is achieved, with performance between the floor and the target resulting in a
lower bonus with respect to that performance measure. An amount larger than the
bonus opportunity for each performance measure can be earned, up to a specific
limit, for exceeding the target for that measure.
Performance Restricted Stock Units. Performance Restricted Stock Units, or
PERS, provide a long-term incentive opportunity for senior executives based on
achievement of the same pre-established annual financial and
11
<PAGE>
customer satisfaction goals used for purposes of the annual incentive awards. We
use this program to bring total compensation opportunities and long-term
compensation opportunities within the desired range relative to the comparator
group, as discussed above, and enhance retention by requiring a period of future
service to "earnout" the shares representing the PERS awarded. In addition,
through this program we enable executives to increase their stock ownership
based on performance, which creates momentum toward achievement of the stock
ownership guidelines adopted by the Board while assisting in executive
retention.
Under this program, we grant a matching PERS award equal in value to the
annual incentive award earned by the executive. As an award of restricted stock
units, PERS confer on an executive an opportunity to receive one share for each
unit at the end of a set deferral period. The number of PERS granted equals the
dollar amount of the executive's annual incentive award divided by the fair
market value of IMS HEALTH stock at the end of the performance year. After
grant, PERS fluctuate with the price of IMS HEALTH stock for two years after
which time the PERS vest (they remain subject to a risk of forfeiture during
this period in the event of termination of the executive's employment, with
exceptions for death, disability, retirement, or a change in control).
Stock Options. We use stock options as our primary long-term incentive
mechanism because options reward executives to the extent shareholders benefit
from date of grant. Executives may benefit from options only when and to the
extent that the market value of the underlying shares, and hence shareholder
value, has increased. Prior to 1999, we issued options to executives in
multi-year cycles. Review of our stock option grant philosophy resulted in our
shifting to an annual stock option grant cycle in 1999. Factors considered,
although not weighted, when we determine senior executive options grants,
include:
o competitiveness of total compensation,
o level of responsibility,
o individual performance,
o potential future contributions, and
o whether the option grant would provide an appropriate reward and
incentive for the executive to sustain and enhance shareholder value
over the long-term.
We believe this approach effectively aligns executive interests and
shareholder interests, reinforces an entrepreneurial mindset, builds a
high-performance culture and increases the "at risk" portion of each executive's
compensation. This program also helps us to attract and retain high quality
personnel in an increasingly competitive employment market.
Apart from regular option grants, we grant options to newly hired and newly
promoted executives. These awards have also included "purchased" option grants.
Purchased options provide the opportunity for an employee to acquire additional
options by paying an amount equal to ten-percent of the value of the shares
subject to the option. The remaining ninety percent remains payable at exercise.
The employee forfeits the prepaid ten-percent of the purchase price if the
options vest and expire without being exercised, and the portion of the purchase
price attributable to vested options is also forfeitable upon termination of
employment in certain circumstances.
To facilitate share ownership, align employee and shareholder interests,
and provide all employees with an equity stake in the business, substantially
all employees of IMS HEALTH worldwide were granted stock options during 1999.
Restricted Stock or Units. Restricted stock or units may be granted at
Committee discretion to executive officers upon hiring, promotion or assignment
of additional responsibilities. These are granted as an inducement and reward
for the new or increased commitment to IMS HEALTH, and in some cases to offset
valuable benefits lost by the executive upon leaving a previous employer to join
our Company.
Other Benefits. We provide a variety of employment benefits in order to be
competitive in attracting and retaining talented executives to work for IMS
HEALTH. Among the more important are retirement benefits provided under our
various pension programs and severance benefits provided under the Employee
Protection Plan and the Change-in-Control Agreements entered into with
executives, as described beginning on p. 19 of this Proxy Statement. In 1999, we
implemented the Executive Deferred Compensation Plan. This plan permits certain
senior
12
<PAGE>
executives to defer cash, salary and bonus amounts until retirement or
termination. Such amounts are treated as though invested in various indexed
funds. The plan also permits these executives to elect to defer settlement of
restricted stock units beyond the scheduled settlement date, and defer delivery
of option profit shares upon exercise of an option. These deferral features
offer tax advantages, and encourage IMS HEALTH executives to hold and remain
invested in our shares on a long-term basis. The Company has created a "rabbi"
trust to hold assets that offset its cash-denominated deferred compensation
obligations. The terms of the plans vary in the case of executives who are not
United States residents in order to conform to local tax laws and other laws
different from those in the United States and may result in, among other things,
limits on the type of compensation that may be deferred.
CEO Compensation. Mr. Weissman served as Chairman of the Board and Chief
Executive Officer until March 1999, at which time he stepped down as Chief
Executive Officer and continued his responsibilities as Chairman. At that time,
Ms. Fash was promoted to Chief Executive Officer while continuing as President.
Mr. Weissman and Ms. Fash each participate in the executive compensation
and benefits programs described in this report on the same basis as all other
senior executives of IMS HEALTH. The only exception is that Mr. Weissman did not
participate in the PERS program for the 1999 performance year. Mr. Weissman's
1999 cash compensation level and opportunities consisted of a base salary of
$775,000 and a target annual incentive opportunity of $785,000, unchanged from
1998. Ms. Fash's 1999 cash compensation level and opportunities consisted of a
base salary of $650,000 and a target annual incentive opportunity of $585,000,
which was increased in recognition of her new responsibilities as Chief
Executive Officer.
1999 annual incentive award opportunities for Mr. Weissman and 1999 annual
incentive and PERS award opportunities for Ms. Fash were based on overall
corporate results with a 50% weighting on revenue performance, 40% weighting on
operating income performance, a 10% weighting on the Company's customer
satisfaction rating plus the "EPS Booster". Based on 1999 performance, the
awards were paid out at 124.4% of bonus opportunity.
In 1999, we granted stock options to Mr. Weissman and Ms. Fash in
accordance with our option grant philosophy, described above. In determining
these grants, we did not apply a particular weighting to the factors considered.
However, Ms. Fash's grant was increased in recognition of her new
responsibilities and performance.
We believe the 1999 compensation of Mr. Weissman and Ms. Fash, who each
served as Chief Executive Officer during the year, is consistent with the
Committee's executive compensation philosophy, and appropriate relative to the
performance of IMS HEALTH.
Tax Deductibility. Section 162(m) of the Internal Revenue Code of 1986
imposes limitations on the deductibility of compensation paid to a public
company's chief executive officer and the other four most highly compensated
executive officers. The Committee's policy is to seek to preserve such corporate
tax deductibility to the greatest extent practicable, while maintaining the
flexibility to approve, when appropriate, compensation arrangements in the best
interests of our Company and its shareholders, but which may not always qualify
for full tax deductibility. Accordingly, we have taken the steps we believe are
required, including shareholder approval, to enable annual incentive awards,
PERS, and options granted to senior executives to qualify as "performance-based"
compensation not subject to Section 162(m)'s limits on tax deductibility.
The Compensation and Benefits Committee
M. Bernard Puckett, Chairman
John P. Imlay, Jr.
Robert J. Kamerschen
William C. Van Faasen
13
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN TO SHAREHOLDERS
JUNE 23, 1998 TO DECEMBER 31, 1999
This graph compares the total shareholder return of IMS HEALTH, the
Standard and Poor's 500 Index, the Drug Manufacturers' Index and a selected
comparator group from June 23, 1998, the first day of when-issued trading in IMS
HEALTH Common Stock until December 31, 1999. While there is no widely recognized
standard industry group or individual companies that are pure peers of IMS
HEALTH, a group was selected comprised of six companies that provide
pharmaceutical companies with contract research, contract sales and drug
wholesale services. Although they do not compete directly with IMS HEALTH, their
customers are the same and their share price performance is influenced by many
of the same variables as IMS HEALTH. This Pharmaceutical Services Group consists
of: McKesson HBOC, Inc., Cardinal Health Inc., Covance Inc., Dendrite
International Inc., National Data Corporation and Quintiles Transnational
Corporation.
Compound
Annual
6/23/98 12/31/98 12/31/99 Return Rate
------- -------- -------- -----------
IMS HEALTH $100.00 $143.14 $127.60 17.4%
Pharmaceutical Services Group* 100.00 116.61 52.57 -34.5%
S&P Drugs 100.00 120.43 99.11 -0.6%
S&P 500 100.00 110.66 133.94 21.2%
- ----------
* The Pharmaceutical Services Group includes McKesson HBOC, Cardinal
Health, Covance, Dendrite International, National Data and Quintiles
Transnational.
Note: All prices have been adjusted to reflect dividend reinvestment of the
value of the shares distributed in the Gartner Group, Inc. spin-off into
additional shares of stock in IMS HEALTH.
14
<PAGE>
Executive Compensation Tables
Summary Compensation Table
The following tables show annual and long-term compensation paid or accrued
by IMS HEALTH for services rendered for the fiscal year's indicated by the
Company's Chief Executive Officer and the four most highly compensated officers
and two former executive officers who would have appeared in the table had they
been executive officers at the end of the year ("the named executives").
During 1999, IMS HEALTH had a two-for-one stock split and distributed the
majority of its equity interest in Gartner Group, Inc. in a tax-free spin-off.
This split and spin-off required all outstanding equity awards to be adjusted in
order to preserve the then existing intrinsic economic value of the awards at
the time of the split and the spin-off. All 1999 and prior year awards have been
restated to reflect these two transactions.
Six of the named executives were employees when IMS HEALTH was spun-off
from Cognizant in 1998. The Summary Compensation Table reflects compensation
earned at both Cognizant and IMS Health during that calendar year. All 1997
compensation was paid by Cognizant.
15
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------------------------------------
Annual Compensation Awards Payouts
-------------------------------- ------------------------- --------------------
Other Securities
Annual Restricted Underlying Long-Term All Other
Compen- Stock Options/ Incentive Compensa-
Name and Principal Salary Bonus(1) sation(2) Award(s)(3) SARs(4) Payouts tion (5)
Position Year ($) ($) ($) ($) (#) ($) ($)
------------------ ---- ------- ---------- -------- ----------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert E. Weissman ............. 1999 775,000 976,363 0 0 172,124(a) 0 66,525
----------------------------------------------------------------------------------------------
Chairman ..................... 1998 775,000 1,123,429 0 1,123,429 160,337 0 56,147
886,779
---------
1,047,116(b)
----------------------------------------------------------------------------------------------
1997 750,000 1,007,100 1,006 0 0 0 72,568
----------------------------------------------------------------------------------------------
Victoria R. Fash ............... 1999 652,461 727,608 148,156 727,608 199,396(a) 0 37,081
----------------------------------------------------------------------------------------------
President and ................ 1998 602,083 535,776 108,275 2,577,651 52,665 0 29,780
Chief Executive Officer ...... 229,227
---------
281,892(b)
----------------------------------------------------------------------------------------------
1997 375,000 349,128 0 268,938 6,500(6) 0 19,655
----------------------------------------------------------------------------------------------
David H. Owen (7) .............. 1999 338,710 168,542 0 168,542 44,707(a) 0 18,114
----------------------------------------------------------------------------------------------
Senior Vice President, ....... 1998 36,959 0 0 0 89,415(a) 0 0
Global Human Resources
----------------------------------------------------------------------------------------------
James C. Malone ................ 1999 258,336 172,387 554,310 172,387 67,061(a) 0 14,145
----------------------------------------------------------------------------------------------
Senior Vice President, ....... 1998 248,400 188,908 491,914 0 25,215(b) 0 13,421
----------------------------------------------------------------------------------------------
Controller and Acting Chief .. 1997 240,625 167,850 0 136,538 0 0 3,412
Financial Officer
----------------------------------------------------------------------------------------------
Craig S. Kussman ............... 1999 254,100 141,850 0 0 67,061(a) 0 12,499
----------------------------------------------------------------------------------------------
Senior Vice President, ....... 1998 242,000 151,126 0 124,500 19,872(b) 0 11,008
----------------------------------------------------------------------------------------------
Corporate Development ........ 1997 219,500 114,102 0 0 0 0 2,719
----------------------------------------------------------------------------------------------
J. Michal Conaway (8) .......... 1999 487,216 323,546 1,858,172 0 44,707(a) 0 1,658
----------------------------------------------------------------------------------------------
Former Chief ................. 1998 525,000 400,252 1,503,428 1,477,640 223,538(a) 0 0
Financial Officer ............ 111,769
---------
335,307(b)
----------------------------------------------------------------------------------------------
Alan J. Klutch (8) ............. 1999 324,704 485,216 0 0 67,061(a) 0 412,523
----------------------------------------------------------------------------------------------
Former Senior Vice ........... 1998 325,000 355,776 0 355,776 40,183 0 19,629
President--Finance ........... 203,522
---------
243,705(b)
----------------------------------------------------------------------------------------------
1997 325,000 303,473 0 0 0 0 22,637
----------------------------------------------------------------------------------------------
</TABLE>
- ----------
a) Option grants
b) Options have been restated to reflect the IMS HEALTH 2 for 1 stock split
and the Gartner Group spin-off.
16
<PAGE>
1. Bonus amounts represent cash bonus amounts earned in a given fiscal
year which are generally paid in the following year and include the
value of performance related restricted stock vesting during the
current year.
2. The value of certain personal benefits is not included since it does
not exceed the lesser of 10% of salary and bonus or $50,000 for Mssrs.
Weissman, Owen, Kussman and Klutch. Amounts shown for Ms. Fash reflect
a $129,561 cost of living adjustment, including a tax gross up in
connection with her international assignment. Amounts shown for Mr.
Malone include $323,617 for living accommodations and foreign taxes
paid associated with his international assignment. Amounts shown for
Mr. Conaway include $934,744 for taxes due on the vesting of 39,175
restricted shares and $708,265 for cost of living expenses and other
costs associated with his foreign assignment.
3. The following IMS Health executives earned performance-based
restricted stock units ("PERS") based on financial performance in the
following amounts: Ms. Fash, 28,390; Mr. Malone, 6,726; and Mr. Owen,
6,707. PERS are subject to a risk of forfeiture upon termination of
employment in certain circumstances for a period of two years,
measured from their date of grant in 2000. PERS are credited with
dividend equivalents equal to dividends on IMS HEALTH Common Stock. At
December 31, 1999, the named executives held restricted stock unit
awards relating to a number of shares having a fair market value at
that date as follows (excluding PERS which were not issued until 2000
with respect to 1999 performance): Mr. Weissman, 35,930 shares valued
at $971,233; and Ms. Fash, 61,844 shares valued at $1,671,720.
4. Each executive received a new option grant in 1999. These options were
awarded in January, vest at 33.33% per annums and have a 10-year term.
5. The amounts shown for 1999 include aggregate annual Company
contributions for the account of each named executive officer under
the IMS Health Incorporated Savings Plan and IMS Health Incorporated
Savings Equalization Plan, as follows: Mr. Weissman, $59,377; Ms.
Fash, $37,081; Mr. Klutch, $14,449; Mr. Malone, $13,495; and Mr.
Kussman, $12,499. The amount for Mr. Klutch also includes a one-time
lump sum payment upon retirement equal to $396,748 under the IMS
Health Incorporated Retirement Excess Plan. The amount shown for Mr.
Owen includes aggregate Company contributions of $8,647 under the
Company's "qualified" plan and an additional $9,467 Company
contribution for wages in excess of the United Kingdom earnings cap.
Amounts shown include imputed income resulting from premiums paid for
life insurance as follows: Mr. Weissman, $7,148; Mr. Malone, $650; Mr.
Conaway, $1,658; and Mr. Klutch, $1,327.
6. Represents options to purchase shares of Class A Common Stock of
Cognizant Technology Solutions Corporation, a majority-owned
subsidiary of IMS HEALTH. This amount does not reflect the two-for-one
stock split announced by CTS on February 11, 2000.
7. Amounts paid in Sterling to Mr. Owen were converted to U.S. dollars at
a rate of GBP .6046 to $1.00 for 1998 and GBP .6200 to $1.00 for 1999,
in each case the average exchange rate during such year.
8. Mr. Conaway's salary represents compensation through December 3, 1999.
Mr. Klutch's salary represents compensation through April 30, 1999
plus other amounts paid to him through the end of the year.
17
<PAGE>
Option/SAR Grants in Last Fiscal Year
The Table below shows the grants of stock options made to the named
executive officers in 1999. The options have an exercise price equal to the fair
market value of the stock on the date of grant, vest over a three-year period,
and expire 10 years after grant or earlier in the event of certain terminations
of employment.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of
Securities
Underlying % of Total
Options/ Options/SARs Exercise Grant
SARs Granted to or Base Date
Granted(1) Employees in Price(1) Expiration Present(2)
Name (#) Fiscal Year ($/Share) Date Value ($)
---- --------- ------------ -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Weissman ................... Stock Options 172,124 1.8% $31.1467 1/14/09 $1,300,485
Victoria R. Fash ..................... Stock Options 199,396 2.1% $31.1467 1/14/09 $1,506,538
David H. Owen ........................ Stock Options 44,707 0.5% $31.1467 1/14/09 $ 337,784
James C. Malone ...................... Stock Options 67,061 0.7% $31.1467 1/14/09 $ 506,680
Craig S. Kussman ..................... Stock Options 67,061 0.7% $31.1467 1/14/09 $ 506,680
J. Michal Conaway(3) ................. Stock Options 44,707 0.5% $31.1467 1/14/09 $ 337,784
Alan J. Klutch ....................... Stock Options 67,061 0.7% $31.1467 1/14/09 $ 506,680
</TABLE>
- ----------
1. Stock options held by IMS HEALTH employees were adjusted to reflect the
two-for-one stock split and the spin-off of most of the Company's equity
ownership of Gartner Group. The adjustment formula took into account the
July 26 closing price of IMS HEALTH stock on an ex-dividend "when issued"
basis and the July 26 closing price of IMS HEALTH stock on a "regular way"
basis in accordance with applicable accounting rules. The formula was
applied to preserve the economic value of the options at the time of the
spin-off.
2. Grant date present value is based on the Black-Scholes Option Pricing Model
and assumes an expected stock-price volatility factor of 35%, a risk-free
rate of return of 4.8%, an average annual dividend yield of .30%, an
assumed time of exercise of 3 years from grant dates and a reduction to
reflect the probability of forfeiture due to termination prior to vesting
of 16.11%. These assumptions may or may not be fulfilled, and the amounts
shown cannot be considered predictions of future value. Options will have
value at the exercise date only to the extent the stock price exceeds the
option exercise price.
3. As of December 31, 1999, these options have expired as they were not vested
upon Mr. Conaway's departure from the Company.
18
<PAGE>
Aggregate Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
The following table provides information related to option exercises by
each of the named executive officers during 1999, the number of unexercised
options at year-end and the value of unexercised in-the-money stock options at
year-end. All amounts represented have been adjusted to reflect the two-for-one
stock split and subsequent Gartner Group spin-off.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at Fiscal In-the-Money Options/SARs
Shares Year-End (1) at Fiscal Year-End (2)
Acquired Value (#) ($)
on Exercise Realized ---------------------------- -----------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Weissman ........... 0 $ 0 798,278 1,900,892 $ 5,135,637 $11,772,090
Victoria R. Fash ............. 0 $ 0 254,269 810,175 $ 1,829,314 $ 4,827,898
CTS Options(3) 0 $ 0 6,500 0 $ 651,511 $ 0
David H. Owen ................ 0 $ 0 29,805 104,317 $ 0 $ 0
James C. Malone .............. 10,000 $123,627 183,708 316,129 $ 2,019,405 $ 2,682,804
Craig S. Kussman ............. 38,465 $463,703 167,299 215,301 $ 1,845,190 $ 1,541,678
J. Michal Conaway ............ 0 $ 0 55,884 0 $ 0 $ 0
Alan J. Klutch ............... 0 $ 0 182,211 465,685 $ 1,135,115 $ 2,717,067
</TABLE>
- ----------
(1) Represents options to purchase shares of Class A Common Stock of IMS HEALTH
and in the case of Ms. Fash, IMS HEALTH and Cognizant Technology Solutions
Corporation ("CTS"), a majority owned subsidiary of IMS HEALTH. The number
of shares does not reflect the two-for-one split announced by CTS on
February 11, 2000.
(2) The values shown equal the difference between the exercise price of the
exercisable and unexercisable options and the market price of the
underlying common stock at the close of business on December 31, 1999 of
$27.1875 for IMS HEALTH and $109.3125 for CTS.
(3) Ms. Fash is currently a director of CTS.
Retirement Benefits
The information set forth in the table below is applicable for Mr. Weissman
and Ms. Fash and illustrates the estimated aggregate annual benefits payable
under the IMS Health Incorporated Retirement Plan, the IMS Health Incorporated
Supplemental Executive Retirement Plan and the IMS Health Incorporated
Retirement Excess Plan to persons in specified average final compensation and
credited service classifications upon retirement at age 65. Amounts shown in the
table include U.S. Social Security benefits and benefits payable under
predecessor plans of Dun & Bradstreet which would be deducted in calculating
benefits payable under these plans. These aggregate annual retirement benefits
do not increase as a result of additional credited service after 15 years.
Benefits vest after five years of credited service and are calculated at 5%
of average final compensation per year for the first 10 years of credited
service, and 2% per year for the next five years, up to a maximum of 60% of
average final compensation after 15 years of credited service. Except as
described below, average final compensation is defined as the highest average
annual compensation during five consecutive twelve-month periods in the last ten
consecutive twelve-month periods of the member's credited service.
<TABLE>
<CAPTION>
Estimated Aggregate Annual Retirement Benefit
Average Assuming Credited Service of:
Final -----------------------------------------------------------------------------------------
Compensation 10 Years 15 Years 20 Years 25 Years 30 Years
------------ ---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 700,000 $ 350,000 $ 420,000 $ 420,000 $ 420,000 $ 420,000
850,000 425,000 510,000 510,000 510,000 510,000
1,000,000 500,000 600,000 600,000 600,000 600,000
1,300,000 650,000 780,000 780,000 780,000 780,000
1,600,000 800,000 960,000 960,000 960,000 960,000
1,900,000 950,000 1,140,000 1,140,000 1,140,000 1,140,000
2,200,000 1,100,000 1,320,000 1,320,000 1,320,000 1,320,000
</TABLE>
19
<PAGE>
The benefits shown in the table above are calculated on a straight-life
annuity basis. The number of years of credited service for Mr. Weissman and Ms.
Fash are, respectively, 20 and 10.
Compensation, for the purpose of determining retirement benefits, consists
of base salary, annual bonuses, commissions, overtime and shift pay, and include
earned compensation deferred under the Executive Deferred Compensation Plan.
Severance pay, income derived from equity-based awards, contingent payments and
other forms of special remuneration are excluded. A portion of the bonuses
included in the Summary Compensation Table above were not paid until the year
following the year in which they were accrued and expensed; therefore,
compensation for purposes of determining retirement benefits varies from the
Summary Compensation Table amounts in that bonuses expensed in the previous year
but paid in the current year are part of retirement compensation in the current
year and any unpaid current year's bonuses accrued and included in the Summary
Compensation Table are not. For 1999, compensation which would be included in
calculating final average compensation for Mr. Weissman and Ms. Fash was,
respectively, $1,898,429 and $1,188,237, however, Mr. Weissman's and Ms. Fash's
employment agreements provide in certain circumstances for a higher average
final compensation than would otherwise be determined under the plan. See
"Employment Agreements."
Retirement benefits for Mr. Owen are determined solely under the IMS (UK)
Pension Plan. Benefits under this plan vest after two years of service and are
calculated at 2% of average final compensation per year of credited service. The
number of years of credited service as of December 31, 1999 for Mr. Owen is 1.1.
Compensation for determining his retirement benefit includes base salary plus
overtime, local management bonus and loyalty bonus. The calculation excludes
one-time special awards, any salary adjustment, car allowance, relocation
expenses, special payments upon termination, long term incentive payments and
any other similar payments as agreed by the Company in the determination of
compensation for retirement benefits. Plan compensation is limited to that
provided under the Earnings Cap Legislation, which in 1999 was (pound)90,600 (or
$146,130). The estimated annual retirement benefits payable to Mr. Owen at
retirement age 65 based upon service to December 31, 1999 was (pound)2,004 (or
$3,230) per annum under this qualified plan.
Retirement benefits for Messrs. Klutch, Kussman and Malone are determined
solely under the IMS Health Incorporated Retirement Plan and the IMS Health
Incorporated Retirement Excess Plan. Under these plans, IMS HEALTH contributes
6% of the participant's compensation monthly to the participant's retirement
account in the plans. The retirement account earns monthly investment credits
based on the yield on 30-year Treasury bonds, which is adjusted periodically.
These plans also include a minimum monthly benefit for certain employees who had
attained age 50 with 5 years of service as of October 31, 1996, including Mr.
Klutch. The minimum benefit is equal to the excess of (i) 1.7% of final average
compensation multiplied by years of credited service not in excess of 25, and
1.0% of final average compensation multiplied by years of credited service in
excess of 25, over (ii) 1.7% of the primary Social Security insurance benefits
multiplied by years of credited service not in excess of 25, and 0.5% of primary
Social Security insurance benefits multiplied by years of credited service in
excess of 25. Under the Retirement Plan, Mr. Klutch's annual benefits payable
upon his retirement effective May 1, 1999 is $39,116, based upon his credited
service through his date of retirement on April 30, 1999 of 24.8 years. The
estimated annual retirement benefit payable to Messrs. Kussman and Malone at
retirement age 65 based upon service to December 31, 1999 are $65,828 and
$55,560, respectively. For Messrs. Kusssman and Malone, this amount includes
benefits payable under predecessor plans of Dun & Bradstreet, which would be
deducted from the amount payable under these plans. For 1999, compensation for
purposes of determining retirement benefits for Messrs. Klutch, Kussman and
Malone was $467,359, $405,226 and $447,244, respectively.
Change-in-Control Agreements
We have entered into Change-in-Control Agreements with certain of our
executives. These provide for severance and other benefits if, following a
change-in-control of IMS HEALTH, the executive's employment terminates in a way
adverse to the executive. These agreements cover all executive officers as well
as certain other officers and selected key employees.
In the event of a change-in-control, unvested options held by executives
with Change-in-Control Agreements will accelerate.
20
<PAGE>
Under the Change-in-Control Agreements, an executive commits to remain
employed for 180 days following an event that represents a potential
change-in-control to maintain stable operations while a change-in-control
proceeds. If a named executive officer's employment ends within two years
following a change-in-control either because the Company terminates him or her
without cause or because the executive resigns under circumstances constituting
"good reason," the executive will be entitled to:
o payment of target bonus for the year, prorated to reflect the part of
the year he or she worked,
o payment of a lump sum of three times his or her base salary plus
annual target bonus for the year (or two times in the case of certain
executives); if no target bonus has been determined for the year, the
annual bonus actually earned in the preceding year will be used,
o in the case of Mr. Weissman and Ms. Fash, full vesting under any
non-qualified retirement plan and crediting of service up to the
maximum credited service allowed to be taken into account under
certain retirement plans, and final average compensation deemed to be
$2,000,000 and $1,971,755 respectively,
o vesting and deemed achievement of target performance and payment for
outstanding long-term performance awards,
o payment of an allowance for outplacement expenses,
o life and health insurance benefits for 36 months after termination (24
months in the case of certain executives), and
o certain retiree medical and life benefits commencing at age 55.
If payments trigger the "golden parachute" excise tax imposed by the U.S.
Internal Revenue Code, the Company will pay an additional "gross-up" amount so
that his or her after-tax benefits are the same as though no excise tax had
applied, and we will reimburse an executive for expenses incurred in enforcing
the agreement unless incurred in bad faith.
Under the agreement, "good reason" means an adverse change in employment
status, compensation or benefits, or a required move to a new work location not
otherwise specified in the agreement, and in the case of certain executives (not
including those in the Board Review Group), the elapsing of 12 months following
a change-in-control.
A "change-in-control" is defined in the agreement to occur if a person
becomes the beneficial owner of 20% or more of the combined voting power of IMS
HEALTH's securities, if a majority of the Board changes in a 24-month period
without the specified approval of incumbent directors, if IMS HEALTH merges with
another entity in a way that substantially changes the ownership of existing
shareholders, if we sell substantially all assets or liquidate IMS HEALTH, or if
the Board of Directors otherwise determines that a change in control has
occurred. If a potential change-in-control occurs, IMS HEALTH must deposit funds
into a "rabbi" trust to fund potential obligations under the agreements.
Employment Agreements
We have employment agreements with Mr. Weissman and Ms. Fash. These
agreements employ each of them in their current positions through June 30, 2001,
with automatic one-year renewals thereafter. The agreements specify annual base
salaries, which must be reviewed at least annually and may be increased but not
decreased from the amount previously in effect. Currently, Mr. Weissman receives
an annual salary of $775,000 and Ms. Fash receives an annual salary of $700,000
as of January 1, 2000. The agreements entitle each executive to earn annual
incentive compensation based on achievement of performance objectives set by the
Compensation and Benefits Committee, in an amount not less than the incentive
opportunity in the prior year and in any case not less than 100% of current
salary, in the case of Mr. Weissman, and 90% of current salary, in the case of
Ms. Fash. Each executive also must be permitted to participate in plans and
programs offering compensation opportunities and benefits as favorable as those
in effect in 1998. In addition, Mr. Weissman's agreement specifies that his
average final compensation for purposes of the Supplemental Executive Retirement
Plan will not be less than $1,722,254 as of December 31, 1999. This amount will
increase by 5.9% in 2000 and 5% per annum thereafter. The agreements impose
obligations on the executives as to confidentiality, non-competition,
non-disparagement of IMS
21
<PAGE>
HEALTH, and similar matters during employment and for specified periods
following termination. The breach of these obligations can trigger forfeiture of
certain options.
The agreements require IMS HEALTH to provide termination payments and
benefits to each executive, in addition to amounts previously accrued. If
employment terminates due to retirement after age 55, approved early retirement,
death or disability, the executive will receive annual incentive compensation
for that year prorated to reflect the part of the year worked and, in the case
of disability, continued participation in health and other benefit plans until
age 65. If we terminate the executive's employment not for cause or executive
terminates for "good reason," he or she will receive payment of a prorated
portion of target bonus for that year; severance payments equal to two times the
amount of annual cash compensation (annual salary plus the greater of that
year's target bonus or the bonus paid in the prior year) paid in 24 monthly
installments; accelerated vesting of options, restricted stock, restricted stock
units, performance awards and other awards, with any performance objectives
deemed achieved at target levels; crediting of additional years of age and
service so that termination qualifies as retirement under the Supplemental
Executive Retirement Plan; continued participation in health and other benefit
plans for up to two years after termination, unless comparable benefits are
provided by a subsequent employer. If such a termination occurs at any time
following a change-in-control, the executive will receive the same benefits,
except the severance benefit will be a lump sum equal to the annual cash amount
multiplied by three, any option granted during the term of the agreement will
remain outstanding until its stated expiration date, additional years credited
under the Supplemental Executive Retirement Plan will qualify the executive for
the maximum retirement benefit, average final compensation under that plan will
be calculated as not less than $2.000 million for Mr. Weissman and $1.972
million for Ms. Fash, and participation will continue in benefit plans for up to
three years. If payments following a change-in-control trigger the "golden
parachute" excise tax, IMS HEALTH will pay the executive an additional
"gross-up" amount so that his or her after-tax benefits are the same as though
no excise tax had applied. Upon occurrence of a potential change-in-control
event, we must deposit amounts into a "rabbi" trust to fund potential
obligations under the agreements.
On January 3, 2000 the Company loaned $3,558,013 to Ms. Fash, President and
Chief Executive Officer and a Director. $631,639 was repaid on January 12, 2000,
leaving a principal amount of $2,926,374. The loan, which accrues interest at
6.21% per annum and is secured by 81,260 shares of Common Stock, was to enable a
personal transaction without the sale of any Company stock. Principal and
interest will be due December 31, 2008, with earlier payment permitted,
accelerated payment required, and the loan forgiven under certain circumstances.
Certain bonus payments that may become payable to Ms. Fash are also to be used
to prepay the loan, and the Company has certain rights of setoff against amounts
that may become due to Ms. Fash.
For purposes of the agreements, "good reason" means a demotion or adverse
change in the executive's employment status, compensation or benefits, a
required relocation, a failure of IMS HEALTH to abide by other important
provisions of the agreements or to renew the term of the agreements. IMS HEALTH
must fully indemnify the executives, continue officers' and directors' liability
insurance during employment and for up to six years thereafter, and reimburse
the executives for expenses incurred in enforcing the agreements unless incurred
in bad faith or frivolous. A "change-in-control" has the same meaning as under
the Change-in-Control Agreements, described above.
Employee Protection Plan and Other Termination Benefits
The IMS HEALTH Employee Protection Plan, or EPP, provides severance
benefits to employees, including executive officers other than Mr. Weissman, Ms.
Fash and Mr. Owen. The terms of Mr. Weissman's and Ms. Fash's severance benefits
are described in their Employment Agreements. Certain executive officers not
resident in the United States are covered by individual severance arrangements.
In the case of Mr. Owen, we will pay him an amount equal to certain annual
compensation in the event he is terminated without cause. The EPP provides for
the payment of severance benefits if IMS HEALTH terminates the executive
officer's employment not for cause. An executive thereby terminated will receive
salary and benefits continuation for not less than 26 weeks nor more than 104
weeks, determined on the basis of 1.5 weeks for each $10,000 of salary plus
three weeks for each year of service, but limited to 26 weeks if the employee
has less than one year of service at termination. Benefits under the EPP cease
when the employee earns or accrues compensation from any new employer or other
third party.
22
<PAGE>
These benefits do not apply to certain executive officers terminated within two
years after a change-in-control, who are covered by the Change-in-Control
agreements described above.
In addition to continuation of salary, the EPP provides terminated eligible
employees with:
o continued medical, dental and life insurance coverage for the salary
continuation period,
o payment of the annual bonus for the year of termination that would
have been paid if employment continued, prorated to reflect the number
of months worked during that year, but only if the employee worked for
at least six months in that year and termination was not due to the
employee's unsatisfactory performance, and
o outplacement services and financial counseling in some cases.
The Chief Executive Officer retains discretion to increase or decrease EPP
benefits for individual executives and other employees.
CERTAIN TRANSACTIONS
For information regarding a transaction between the Company and the Chief
Executive Officer, see "Employment Agreements".
OTHER MATTERS
IMS HEALTH knows of no matters, other than those referred to in this Proxy
Statement, which will be presented at the Annual Meeting. If, however, any other
appropriate business should properly be presented at the meeting, the persons
named in the enclosed form of proxy will vote the proxies in accordance with
their best judgment.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
If you wish to submit proposals to be included in our 2001 proxy statement,
we must receive them on or before October 27, 2000.
Under the Company's By-Laws, if you wish to submit a proposal not intended
to be included in the proxy material for the Annual Meeting of Shareholders in
2001, we must receive them on or before December 20, 2000. These proposals must
comply with the provisions contained in IMS HEALTH's By-Laws relating to
Shareholder proposals.
REDUCE MAILINGS
If more than one copy of the Company's 2000 Annual Report and Proxy
Statement has been mailed to your address and you wish to reduce the number of
reports you receive and save the Company the cost of producing and mailing these
reports or if you wish to receive your reports via the Internet, please let us
know. We will discontinue mailing of reports on the accounts you select if you
mark the designated box on the appropriate proxy card(s). At least one account
must continue to receive the Annual Report and Proxy Statement either via mail
or via Internet delivery.
March 17, 2000
23
<PAGE>
IMS HEALTH INCORPORATED
PROXY/VOTING INSTRUCTIONS FOR THE ANNUAL MEETING TO BE HELD APRIL 10, 2000
AT 9:30 A.M. AT 1209 ORANGE STREET, WILMINGTON, DELAWARE
ROBERT E. WEISSMAN, VICTORIA R. FASH and DAVID J. STEVENS or any of them,
with full power of substitution, are hereby authorized and/or instructed to
represent and/or vote all the shares of Common Stock of IMS Health Incorporated
which the undersigned is entitled to vote at the Annual Meeting of Shareholders
on April 10, 2000, and at any adjournment thereof:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF ALL NOMINEES
IDENTIFIED IN ITEM (1) AND FOR ITEM (2).
(1) Election of Class I Directors for a three-year term expiring at the
2003 Annual Meeting of Shareholders. Nominees: John P. Imlay, Jr.,
Robert J. Kamerschen and H. Eugene Lockhart.
[ ] FOR all nominees listed above, except [ ] WITHHOLD authority to
vote withheld from the following vote for all nominees
nominees (if any):
__________________________________
(2) Ratification of the appointment of PricewaterhouseCoopers LLP as
independent public accountants to audit the Company's consolidated
financial statements for 2000. Mark only one.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please Turn Over and Sign)
<PAGE>
IMS HEALTH INCORPORATED
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. A PROXY WHICH IS SIGNED
AND RETURNED BY A SHAREHOLDER OF RECORD WITHOUT SPECIFICATION MARKED IN THE
INSTRUCTION BOXES WILL BE VOTED FOR ELECTION OF ALL NOMINEES IDENTIFIED IN ITEM
(1), AND FOR ITEM (2).
Notice to Participants in Certain Benefit Plans.
- ------------------------------------------------
The trustee of the IMS Health Incorporated Savings Plan has agreed that
this proxy will also serve as voting instructions from participants in the plan
who have plan contributions for their respective account invested in shares of
Common Stock of IMS Health Incorporated ("Plan Shares"). Proxies covering shares
in this plan must be received prior to March 28, 2000. If a proxy covering Plan
Shares has not been received prior to March 28, 2000 or if it is signed and
returned without specification marked in the instruction boxes, the trustee of
this plan will vote the Plan Shares in the same proportion as the other Plan
Shares for which it has received instructions.
PLEASE INDICATE WHETHER YOU EXPECT TO ATTEND THE ANNUAL MEETING:
[ ] Yes [ ] No
Date _____________________________, 2000
________________________________________
________________________________________
Signature(s)
Please sign exactly as name appears at
left. Joint owners should each sign.
Executors, administrators, trustees,
etc. should so indicate when signing and
sign as required by the authority held.
Proxy form begins on the reverse side.
Please vote, date, sign and return
immediately.
[ ] I DO NOT WISH TO RECEIVE ANNUAL
REPORTS OR PROXY STATEMENTS FOR THIS
ACCOUNT AT THIS ADDRESS.
