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SYNAVANT INC.
NON-EMPLOYEE DIRECTORS' COMPENSATION PROGRAM
1. PURPOSE OF THE PROGRAM; IMPLEMENTATION UNDER 2000 STOCK INCENTIVE PLAN
The purpose of this Non-Employee Directors' Compensation Program (the
"Program") is to aid the Company and its Subsidiaries in securing and retaining
non-employee directors of outstanding ability and to motivate such persons to
exert their best efforts on behalf of the Company and its Subsidiaries by
providing incentives through the granting of Awards. The Company expects that it
will benefit from the added interest which directors will have in the welfare of
the Company as a result of their proprietary interest in the Company's success.
In authorizing grants of Deferred Stock Units, Options, and Shares, the
Program implements the 2000 Stock Incentive Plan (the "2000 Plan"), including
the authority to grant Other-Stock Based Awards under Section 8 and Options
under Section 6 of the 2000 Plan. Terms of the Program relating to cash
deferrals are implemented under the general authority of the Board of Directors
to specify compensation of directors. All of the terms, conditions and other
provisions of the 2000 Plan are hereby incorporated by reference into this
Program. Capitalized terms used in this Program but not defined herein shall
have the same meanings as in the 2000 Plan. If there is any conflict between the
provisions of this Program and the provisions of the 2000 Plan, the provisions
of the 2000 Plan shall govern.
2. DEFINITIONS
In addition to the terms defined in the 2000 Plan, the following
capitalized terms used in the Program have the respective meanings set forth in
this Section:
(a) ACT: The Securities Exchange Act of 1934, as amended. References
to any provision of the Act or rule thereunder shall include any successor
provision or rule.
(b) ADMINISTRATOR: As defined in Section 4.
(c) DEFERRED CASH: A bookkeeping entry representing a right to receive
cash at the end of the applicable deferral period, credited in accordance
with Section 8(d) of the Program.
(d) DEFERRED STOCK UNIT: A bookkeeping entry representing a
conditional or unconditional right to receive a Share at the end of the
applicable deferral period, granted under Section 6 or credited in
accordance with Section 8(c) of the Program.
(e) DETERMINATION DATE: As defined in Section 9(e).
(f) FAIR MARKET VALUE: As defined in Section 2 of the 2000 Plan,
provided that, if Fair Market Value of a share is to be determined at the
date of the Spinoff or prior thereto, such Fair Market Value shall be the
Fair Market Value of a share at the first date on which Shares are traded
regular way on the principal national securities exchange on which such
shares are listed or admitted to trading.
(g) SPINOFF: The distribution of the Shares owned by IMS Health to the
holders of record of shares of IMS Health.
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3. SHARES SUBJECT TO THE PROGRAM
Shares that may be issued and/or delivered under the Program shall be
shares authorized under the 2000 Plan.
4. ADMINISTRATION
The Administrator shall be the Company's Chief Human Resources Officer or,
if that officer is unavailable, the Company's Chief Financial Officer; provided,
however, that the Board may designate a different individual or committee to
serve as Administrator. In any case in which a director is the Administrator (or
on a committee acting as such), such director shall not act on or decide any
matter relating solely to himself or herself or any of his or her rights or
benefits under the Program. The Administrator shall be authorized to make
determinations regarding the administration of the Program, which shall include
prescribing filing deadlines and appropriate election forms and other documents
under the Program, but which shall not include authorizing any discretionary
grant of Awards under the Program.
5. ELIGIBILITY
Each non-employee director of the Company who is paid fees for service on
the Board or a Board committee may participate in the Program, subject to the
terms hereof. No person other than those specified in this Section 5 will be
eligible to participate in the Program. The Administrator will notify each
person of his or her eligibility to participate in the Program on an elective
basis not later than 15 days (or such other period as may be determined by the
Administrator) prior to any deadline for filing an election form.
6. INITIAL GRANT OF DEFERRED STOCK UNITS
Deferred Stock Units shall be granted to non-employee directors in
accordance with policies established from time to time by the Board specifying
the classes of directors to be granted such Awards, the number of Deferred Stock
Units to be granted, and the time or times at which Deferred Stock Units will be
granted.
(a) INITIAL POLICY. The initial policy with respect to Deferred Stock Units
under this Section 6, effective as of the Spinoff Date and continuing until
modified or revoked by the Board, shall be to grant to each person serving as a
director of the Company at the time of the Spinoff and each person who
thereafter is initially elected or appointed as a member of the Board, in each
case if such person is then a non-employee director eligible to participate, a
number of Deferred Stock Units equal to $50,000 divided by the then-Fair Market
Value of one Share.
(b) TERMS OF DEFERRED STOCK UNITS GRANTED UNDER SECTION 6. Deferred Stock
Units granted under this Section 6 shall be subject to the following terms and
conditions, unless otherwise determined by the Board.
(i) VESTING AND FORFEITURE. An Award granted under this Section 6, if
not previously forfeited, shall become vested and non-forfeitable as
to one-fifth of the number of Deferred Stock Units at the close of
business on each of the first five anniversaries of the date of
grant of such Award, rounded to the nearest number of whole shares;
provided, however, that if such Award was not previously forfeited,
it shall vest and become non-forfeitable upon the termination of the
Participant's service as a director due to death, Disability or
Retirement or upon a Change in Control. Unless otherwise determined
by the Board, Deferred Stock Units not vested at or before the
Participant's termination of service as a director
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for any reason other than death, Disability or Retirement will cease
to vest and will be forfeited.
(ii) DEFERRED STOCK UNITS CREDITED AS DIVIDEND EQUIVALENTS. Dividend
equivalents will be credited on the Deferred Stock Units in
accordance with Section 9(c). Unless otherwise determined by the
Board, Deferred Stock Units credited as a result of dividend
equivalents shall be subject to the same terms, including risk of
forfeiture, as the Deferred Stock Units with respect to which the
dividend equivalents were credited.
(iii) SETTLEMENT. Deferred Stock Units granted under this Section 6 will
be settled at the time the risk of forfeiture of such Deferred Stock
Units lapses, unless the Participant has validly deferred settlement
in accordance with Section 9(e) and 9(f)
7. ANNUAL GRANTS OF OPTIONS
Options shall be granted to non-employee directors in accordance with
policies established from time to time by the Board specifying the classes of
directors to be granted such Awards, the number of shares to be subject to each
Option granted, and the time or times at which Options will be granted. Each
Option shall be a non-qualified stock option.
(a) INITIAL POLICY. The initial policy with respect to Options under this
Section 7, effective as of the Spinoff Date and continuing until modified or
revoked by the Board, shall be to grant to each person serving as a non-employee
director of the Company at the time of the Spinoff an Option to purchase 7,500
shares, and to grant to each person who is serving as a non-employee director at
the close of business on the date of the annual meeting of stockholders in 2001
or each year thereafter an Option to purchase 7,500 shares, provided that in
each case such non-employee director is eligible to participate in the Program
at the grant date. The number of shares covered by these automatic grants of
Options shall be subject to adjustment as provided in Section 9(a) of the 2000
Plan.
(b) TERMS OF OPTIONS GRANTED UNDER SECTION 7. Options granted under this
Section 7 shall be subject to the following terms and conditions, unless
otherwise determined by the Board.
(i) EXERCISE PRICE. The exercise price per share purchasable under an
Option will be equal to 100% of the Fair Market Value of a share on
the date of grant of the Option.
(ii) OPTION TERM. Options, to the extent not previously forfeited, shall
expire at the earlier of (i) ten years after the date of grant, (ii)
five years after termination of the Participant's service as a
director due to death, (iii) the later of five years after
termination of the Participant's service as a director due to
Disability or Retirement or one year after the Participant's death,
or (iv) 90 days after termination of the Participant's service as a
director for any reason other than death, Disability or Retirement,
provided that, during such 90-day period, the Option will be
exercisable only to the extent it was exercisable at the time of
such termination of service.
(iii) VESTING AND EXERCISABILITY. An Option not previously forfeited shall
vest and become exercisable by a Participant as to one-third of the
number of underlying shares at the close of business on the day
preceding the annual meeting of stockholders (or, if earlier, at the
anniversary of the date of grant) in each of the three calendar
years following the date of grant of the Option, rounded to the
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nearest number of whole Shares; provided, however, that if the
Option was not previously vested or forfeited, it shall vest and
become exercisable upon the termination of the Participant's service
as a director due to death, Disability, or Retirement or upon a
Change in Control. Unless otherwise determined by the Board, an
Option not vested at or before the Participant's termination of
service as a director for any reason other than death, Disability or
Retirement will cease to vest and will be forfeited.
To the extent the terms and conditions of Options specified in this Section 7(b)
differ from the default terms set forth in Section 6 of the 2000 Plan, the terms
and conditions specified herein shall control (as permitted by Section 6 of the
2000 Plan).
(c) MANNER OF EXERCISE. The manner in which an Option may be exercised is
set forth in Section 6(c) of the 2000 Plan.
8. VOLUNTARY ELECTION AS TO FORM OF PAYMENT OF CASH COMPENSATION
A Participant may voluntarily elect to receive payment of his or her cash
compensation, or defer receipt of his or her cash compensation, in the manner
specified in this Section 8. For this purpose, cash compensation includes, but
is not limited to, annual retainer, Board meeting fees, committee meeting fees
and committee chairman fees:
(a) METHOD OF ELECTION. In order to make a voluntary election pursuant to
the Program, the Participant must complete and deliver to the Administrator a
written election, not later than 30 days after the date on which he or she
commences service as a director of the Company or, in subsequent years, not
later than the anniversary of the normal commencement date for such director's
term (or at such other date as the Administrator may specify, provided that any
such date shall ensure effective deferral of taxation if so intended by the
director), designating (i) the portion of his or her cash compensation for a
year of service as a director that is to be (i) paid in the form of Shares, (ii)
deferred into Deferred Stock Units, and/or (iii) deferred into Deferred Cash.
Such an election shall only be effective with respect to the annual retainer and
other fees earned after the date of the election. Such election shall remain
effective for all future years of service unless the Participant makes a new
election in a subsequent year.
(b) RECEIPT OF FEES IN THE FORM OF SHARES. If and to the extent that a
Participant has elected to receive fees in the form of Shares, at any date that
such fees otherwise would become payable, the Company will, in lieu of payment
of cash, issue to the Participant a number of shares determined by dividing the
amount of such fees otherwise payable by the Fair Market Value of one share at
that date. The Administrator may determine to deliver certificates representing
the shares to the Participant or, for administrative convenience, may require
the Participant to designate a brokerage account into which such shares may be
directly deposited. The Administrator may also determine, in his discretion,
whether to pay cash in lieu of issuance of fractional shares, carry forward to a
subsequent payment date any cash that would have purchased a fractional share,
or such other method of dealing with such cash amounts as he may deem equitable.
Shares acquired under this Section 8(b) shall be at all times freely
transferable by the Participant and non-forfeitable.
(c) DEFERRED STOCK UNITS. If and to the extent that a Participant has
elected to defer fees into Deferred Stock Units, at any date that such fees
otherwise would become payable, the Company will, in lieu of payment of cash,
credit to an account maintained for the Participant on the books of the Company
a number of Deferred Stock Units determined by dividing the amount of such fees
otherwise payable by the Fair Market Value of one share at that date. Dividend
equivalents will be credited on the Deferred Stock Units in accordance with
Section 9(c). Deferred Stock Units acquired under this Section 8(c) shall be at
all times non-forfeitable.
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(d) DEFERRED CASH. If and to the extent that a Participant has elected to
defer fees into Deferred Cash, at any date that such fees otherwise would become
payable, the Company will, in lieu of payment of cash, credit to an account
maintained for the Participant on the books of the Company the amount of such
fees otherwise payable at that date. A Participant's account shall be credited
with additional Deferred Cash equal to the amount of notional interest earned on
the account, assuming that such interest is earned at the then-prevailing prime
rate of The Chase Manhattan Bank (or of such other bank as the Administrator may
determine) as in effect from time to time (to be determined by the Administrator
but adjusted at least annually) and compounded on an annual basis. Deferred Cash
acquired under this Section 8(c) shall be at all times non-forfeitable.
9. OTHER TERMS OF DEFERRED STOCK UNITS, DEFERRED CASH, AND ACCOUNTS
(a) NATURE OF DEFERRED STOCK UNITS AND DEFERRED CASH. Each Deferred Stock
Unit represents a right to receive one Share upon settlement at the end of the
deferral period, subject to the terms and conditions set forth in the Program
and the 2000 Plan and otherwise set by the Board and the Administrator. Deferred
Cash represents a right to receive a cash amount equal to the Deferred Cash
account balance upon settlement at the end of the deferral period, subject to
the terms and conditions set forth in the Program and otherwise set by the Board
and the Administrator. Deferred Stock Units, Deferred Cash, and other items
reflected in the Participant's account represent only bookkeeping entries by the
Company to evidence unfunded obligations of the Company under the Program.
(b) RESTRICTION ON TRANSFERABILITY DURING DEFERRAL PERIOD. During the
applicable deferral period, a Participant shall not be permitted to sell,
transfer, pledge, or otherwise encumber Deferred Stock Units, Deferred Cash, or
any of the Participant's rights relating thereto, and any rights to make
elections under the Program may only be exercised by the Participant; provided,
however, that Awards and related rights shall be transferred to a Participant's
beneficiaries upon the death of the Participant.
(c) DIVIDEND EQUIVALENTS AND ADJUSTMENTS. Deferred Stock Units credited to
a Participant's account will be credited with dividend equivalents and subject
to adjustment as provided in this Section 9(c):
(i) CASH DIVIDENDS. If the Company declares and pays a cash dividend on
Shares, then a number of additional Deferred Stock Units shall be
credited to the Participant as of the payment date for such dividend
equal to (i) the number of Deferred Stock Units credited to the
Participant as of the record date for such dividend, multiplied by
(ii) the amount of cash actually paid as a dividend on each share at
such payment date, divided by (iii) the Fair Market Value of a share
at such payment date.
(ii) NON-SHARE DIVIDENDS. If the Company declares and pays a non-cash
dividend on Shares in the form of property other than Shares, then a
number of additional Deferred Stock Units shall be credited to the
Participant as of the payment date for such dividend equal to (i) the
number of Deferred Stock Units credited to the Participant as of the
record date for such dividend, multiplied by (ii) the fair market
value of any property other than shares actually paid as a dividend on
each share at such payment date, divided by (iii) the Fair Market
Value of a Share on the day after such payment date.
(iii) SHARE DIVIDENDS AND SPLITS. If the Company declares and pays a
dividend on Shares in the form of additional Shares, or there occurs a
forward split of Shares,
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then a number of additional Deferred Stock Units shall be credited to
the Participant as of the payment date for such dividend or forward
split equal to (i) the number of Deferred Stock Units credited to the
Participant as of the record date for such dividend or split,
multiplied by (ii) the number of additional shares actually paid as a
dividend or issued in such split in respect of each Share.
(iv) MODIFICATIONS TO DIVIDEND EQUIVALENTS POLICY. Other provisions of this
Section 9(c) notwithstanding, the Administrator may modify the manner
of payment or crediting of dividend equivalents hereunder for
administrative convenience or for any other reason.
(v) ADJUSTMENTS. The number of Deferred Stock Units credited to a
Participant may be adjusted by the Board in order to prevent dilution
or enlargement of the Participant's rights with respect to Deferred
Stock Units, in the event of any unusual corporate transaction or
event which affects the value of Shares (as specified under Section
9(a) of the 2000 Plan), provided that any such adjustment shall be
made taking into account any crediting of Deferred Stock Units to the
Participant under other provisions of this Section 9 in connection
with such transaction or event.
(vi) OTHER TERMS APPLICABLE TO DEFERRED STOCK UNITS RESULTING FROM
DIVIDENDS, SPLITS OR ADJUSTMENTS. Additional Deferred Stock Units
credited under this Section 9(c) will be subject to the same terms,
including any risk of forfeiture, as the underlying Deferred Stock
Units. No such additional Deferred Stock Units will be credited to a
Participant in respect of Deferred Stock Units forfeited on or before
the payment date for the dividend or distribution.
(d) OTHER MATTERS RELATING TO ACCOUNTS.
(i) STATEMENTS. The Administrator will furnish statements to each
Participant reflecting the amount credited to a Participant's
account, transactions therein, and other related information no less
frequently than once each calendar year.
(ii) REALLOCATION OF ACCOUNTS. A Participant shall have no right to have
amounts credited as Deferred Cash reallocated or switched to Deferred
Stock Units or amounts credited as Deferred Stock Units reallocated or
switched to Deferred Cash, unless otherwise determined by the Board.
(iii) FRACTIONAL SHARES. The amount of Deferred Stock Units credited to a
Participant's account shall include fractional shares calculated to at
least three decimal places, unless otherwise determined by the
Administrator.
(e) TIME OF SETTLEMENT OF DEFERRED STOCK UNITS AND DEFERRED CASH ACCOUNTS.
Deferred Stock Units and Deferred Cash account balances will be settled as
follows: If no valid election as to the time of settlement has theretofore been
filed by the Participant, Deferred Stock Units granted under Section 6 will be
settled in accordance with Section 6(b)(iii), and Deferred Stock Units credited
under Section 8 and Deferred Cash account balances shall be settled as of the
first business day of the calendar year immediately following the date on which
a Participant terminates service as a director of the Company. The
Administrator may permit Participants to elect alternative settlement dates,
provided that (i) no election may be made that would result in deferral periods
ending within the calendar year next following the year of election, (ii) no
election may be made that would result in a deferral period ending within one
year after the Deferred Stock Units or Deferred Cash were initially credited
(except for Deferred Stock Units resulting from dividend equivalents), (iii)
once an election is made as to the time of settlement, it may not be
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modified or revoked, and (iv) the Administrator shall otherwise specify terms
for the making of elections that ensure effective deferral of taxation. The
foregoing notwithstanding, the applicable deferral period will end, and the
Participant's accounts will be settled, (i) immediately upon a Change in
Control (unless the Administrator permits the Participant to waive such
settlement and such settlement is validly waived), or (ii) on a date selected
by the Administrator but not later than 60 days after the Participant's death.
In addition, other provisions of the Program notwithstanding, if, upon the
written application of a Participant, the Board determines that the Participant
has a financial emergency of such a substantial nature and beyond the
Participant's control that payment of amounts previously deferred under the
Program is warranted, the Board may direct the payment to the Participant of
all or a portion of the balance of a Participant's deferral account and the
time and manner of such payment. The applicable date of settlement under this
Section 9(e) shall be the "Determination Date."
(f) MANNER OF SETTLEMENT OF DEFERRED STOCK UNITS AND DEFERRED CASH
ACCOUNTS. To settle Deferred Stock Units, the Company shall issue to the
Participant a number of shares equal to the number of Deferred Stock Units
being settled at the Determination Date. The Administrator may determine to
deliver certificates representing the shares to the Participant or, for
administrative convenience, may require the Participant to designate a
brokerage account into which such shares may be directly deposited. The
Administrator may also determine, in his discretion, whether to pay cash in
lieu of issuance of fractional shares, carry forward to a subsequent payment
date any cash that would have purchased a fractional share, or such other
method of dealing with fractional shares as he may deem equitable. To settle
Deferred Cash, the Company will pay cash to the Participant in the amount of
the Deferred Cash being settled at the Determination Date.
10. MISCELLANEOUS PROVISIONS
(a) NONEXCLUSIVITY OF THE PROGRAM. The adoption of the Program by the
Board shall not be construed as creating any limitations on the power of the
Board to adopt such other compensatory arrangements as it may deem desirable,
including, without limitation, the granting of awards otherwise than under the
Plan, and such other arrangements may be either applicable generally or only in
specific cases.
(e) EFFECTIVENESS, AMENDMENT AND TERMINATION OF THE PROGRAM. The Program
shall be effective as of the date of the Spinoff. The Board may amend or
terminate the Program at any time, except that no such action shall materially
and adversely affect the rights of a Participant with respect to Deferred Stock
Units or Deferred Cash previously granted or credited unless the Participant
has consented in writing to such action.
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