EMPLOYMENT AGREEMENT
Exhibit 10.1
EMPLOYMENT AGREEMENT, dated as of 4 June, 2007 (this “Agreement”), between PRA International,
a Delaware corporation (the “Company”), and Xxxxx Xxxxxxx (the “Executive”).
W I T N E S S E T H:
WHEREAS, the Company wishes Executive to become Executive Vice President and Chief Financial
Officer of the Company and the Executive is willing to enter into an agreement to that end, upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby covenant and agree as follows:
1. Employment
The Company hereby agrees to employ the Executive, and the Executive hereby agrees to remain
in the employ of the Company, on and subject to the terms and conditions of this Agreement.
2. Term
The period of this Agreement (the “Agreement Term”) shall commence on June 4, 2007 (the
“Effective Date”) and shall expire on the fourth anniversary of the Effective Date.
3. Position, Duties and Responsibilities
(a) The Executive shall serve as, and with the title, office and authority of, Executive
Vice President and Chief Financial Officer of the Company. The Executive shall also hold similar
titles, offices and authority with the Company’s subsidiaries and its successors.
(b) The Executive shall have all powers, authority, duties and responsibilities usually
incident to the positions and offices of Executive Vice President and Chief Financial Officer of
the Company. The Executive shall report directly to the Company’s Chief Executive Officer.
(c) The Executive agrees to devote substantially all of her business time, efforts and
skills to the performance of her duties and responsibilities under this Agreement;
provided, however, that nothing in this Agreement shall preclude the Executive from
devoting reasonable periods required for (i) participating in professional, educational,
philanthropic, public interest, charitable, social or community activities, (ii)
serving as a director or member of an advisory committee of any corporation or other entity
that the Executive is serving on as of the Effective Date or, subject to prior approval of the
Board of Directors of the Company (the “Board”), any other corporation
or entity that is not in
competition with the Company, or (iii) managing her personal investments; provided,
further, that any such activities set forth in clauses (i) through (iii) above do not
materially interfere with the Executive’s regular performance of her duties and responsibilities
hereunder.
(d) The Executive shall perform her duties at the offices of the Company located in
Reston, Virginia, but from time to time the Executive may be required to travel to other locations
in the proper conduct of her responsibilities under this Agreement.
4. Compensation and Benefits
In consideration of the services rendered by the Executive during the Agreement Term, the
Company shall pay or provide the Executive the compensation and benefits set forth below.
(a) Salary. The Company shall pay the Executive a base salary (the “Base
Salary”) equal to $300,000 per annum. The Base Salary will be periodically reviewed by the
Compensation Committee of the Board (the “Compensation Committee”) for possible merit increases as
the Compensation Committee deems appropriate. The Base Salary may not be reduced following the
Effective Date. The Base Salary shall be paid in arrears in substantially equal installments at
monthly or more frequent intervals, in accordance with the normal payroll practices of the Company.
(b) Annual Incentive Bonuses. The Company shall provide the Executive with the
opportunity to earn an annual target bonus of $135,000 (the “Target Bonus Amount”) for each
calendar year of the Company ending during the Agreement Term, provided that Executive’s maximum
bonus opportunity for extraordinary performance shall be governed by the provisions of the
Company’s annual MIP bonus plan. With respect to calendar year 2007, Executive’s Target Bonus
Amount shall be $135,000 and such amount will not be pro-rated for the partial year of service in
2007. Any annual target bonus hereunder shall otherwise be payable under the terms of the
Company’s annual bonus program for its senior officers.
(c) Sign-On Bonus. The Company shall pay Executive a cash payment in an amount
of $50,000. Such amount will be paid as soon as practicable following the Effective Date
(d) Benefits and Perquisites. Executive will participate in all executive
compensation plans, including cash-based long-term incentive plans, and in the same benefits and
perquisites maintained by the Company for senior executives, except that Executive will not be
considered for additional equity-based grants until 2010.
(e) Relocation and Living Allowance. The Company will reimburse the Executive
with her and her family’s relocation to the Reston, Virginia area, provided that the aggregate
amount of such reimbursement shall not exceed $200,000.
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5. Equity Incentives
As further consideration for the services rendered by the Executive during the Agreement Term,
the Executive shall be granted a stock option (the “Stock Option”) to purchase 225,000 shares of
the Company’s common stock under the terms of the Company’s 2004 Incentive Award Plan (the “Plan”).
Such Stock Option will be granted on the Effective Date, will have an exercise price equal to the
fair market value of the Company’s common stock on the date of grant for purposes of the Plan, and
will have a seven year term. The vested portion of the Stock Option shall continue to be
exercisable for 90 days following any termination of employment, and for such longer period as
Executive is precluded from selling shares because of the Company’s policies on xxxxxxx xxxxxxx or
applicable securities laws restrictions (but not beyond expiration of the term), except: (i) the
vested portion of the Stock Option shall continue to be exercisable for a period of 18 months (but
not beyond expiration of the term) following death or termination due to Disability (as the term is
defined under the Plan); (ii) the unexercised portion of the Stock Option, whether vested or
unvested, shall be cancelled and forfeited upon a termination for Cause (but Executive’s right to
exercise shall be suspended pending resolution of any dispute as to existence of “Cause” and
preserved as exercisable for 90 days if such termination is determined to be not for Cause); and
(iii) the unexercised portion of the Stock Option, whether vested or unvested, shall be cancelled
and forfeited upon a judicial determination that there has been a breach of the noncompetition
covenant; provided, that Executive’s right to exercise shall be suspended pending
resolution of any dispute as to such breach.
The Stock Option will vest in accordance with the following:
(a) Time-Vested Option. As to 135,000 shares covered by the Stock Option
(the “Time-Vested Option”), Executive shall become vested in and eligible to exercise the
Option as to 33,750 shares on each of the first four anniversaries of the Effective Date,
provided, that Executive is employed on the applicable anniversary for such installment of
the option to so vest; and provided, further, that, (i) upon a Change in Control
(for purposes of this Section 5, as defined in the Plan on the date hereof) occurring on or before
December 31, 2007, while Executive is employed, 50% of the Time-Vested Option will become fully
vested and exercisable and (ii) upon a Change in Control occurring after December 31, 2007, while
Executive is employed, 100% of the Time-Vested Option will become fully vested and exercisable.
Any portion of the Time-Vested Option not vested upon a Change in Control on or before December 31,
2007 will be forfeited and cancelled.
(b) Performance-Vested Option. As to the other 90,000 shares covered by the
Stock Option (the “Performance-Vested Option”), vesting and exercisability shall be
based on the attainment of the following closing share prices for 30 consecutive trading days
at any time during the Executive’s employment with the Company:
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| Options | Total | |||||||
| Share Price | Vesting | Vesting | ||||||
$32.00 |
22,500 | 22,500 | ||||||
$40.00 |
22,500 | 45,000 | ||||||
$50.00 |
22,500 | 67,500 | ||||||
$60.00 |
22,500 | 90,000 | ||||||
Upon a Change in Control at any time during the option term while Executive is employed, the
Performance-Vested Option will vest in whole or in part, or not vest, in accordance with the table
above based on the share price paid by the acquirer in the Change in Control. Any portion of the
Performance-Vested Option not vested upon a Change in Control will be forfeited and cancelled.
(c) Future Equity Awards. Executive will be eligible for annual equity and other
long-term incentive awards under the Plan (or successor plan), in the discretion of the
Compensation Committee, commencing with annual equity awards granted to senior executives in 2010.
6. Termination of Employment
The Agreement Term will be terminated upon the occurrence of any of the following events:
(a) Resignation for Good Reason. The Executive may voluntarily terminate her
employment hereunder for Good Reason. For purposes of this Agreement, “Good Reason” shall mean:
(i) Any material breach of this Agreement by the Company (where the Company fails to cure
such breach within ten (10) business days after being notified in writing by Executive of
such breach);
(ii) The material diminution, without Executive’s written consent, of Executive’s
position, title, authority, duties or responsibilities as indicated in the Employment
Agreement, or the appointment of any other person, without Executive’s written consent, to
perform any material part of such duties, including without limitation, the failure of
Executive to have such duties and responsibilities with respect to the acquiring entity
following a Change in Control (as defined below); and
(iii) The failure by the Company to obtain the assumption in writing of its obligation to
perform under the Agreement by any successor to all or substantially all of the assets of
the Company.
Executive may terminate her employment for Good Reason by providing the Company thirty (30) days’
written notice setting forth in reasonable specificity the event that constitutes Good Reason,
within ninety (90) days of the occurrence of such event.
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During such thirty (30) day notice
period, the Company shall have the opportunity to cure (if curable) the event that constitutes Good
Reason, and if not cured within such period, Executive’s termination will be effective upon the
expiration of such cure period. For purposes of this Agreement (other than Section 5 hereof),
“Change in Control” shall be as defined under the Plan on the date of the Change in Control or as
defined under the Plan on the date hereof, whichever is more favorable to Executive.
(b) Resignation without Good Reason. The Executive may voluntarily terminate her
employment hereunder for any reason at any time, including for any reason that does not constitute
Good Reason.
(c) Termination for Cause. The Company may terminate the Executive’s employment
hereunder for Cause. For purposes of this Agreement, the Executive shall be considered to be
terminated for “Cause” only upon the occurrence of the following:
(i) A material breach of this Agreement by Executive (where Executive fails to cure such
breach within ten (10) business days after being notified in writing by the Company of such
breach);
(ii) Executive’s failure (except where due to a physical or mental incapacity) to
substantially perform her material duties with respect to the Company which continues
beyond ten (10) days after a written demand for substantial performance is delivered to
Executive by the Company;
(iii) Executive engaging in or causing an act of willful misconduct that has a material
adverse impact on the reputation, business, business relationships or financial condition
of the Company;
(iv) Executive’s conviction of, or plea of guilty or nolo contendere to, a felony, or any
crime involving moral turpitude not involving a traffic offense;
(v) Executive’s willful refusal to perform the specific lawful directives of the Board
which are consistent with the scope of Executive’s duties and responsibilities hereunder.
provided, however, that no action taken by Executive in the reasonable, good faith belief that it
was in the best interests of the Company shall be treated as a basis for termination of Executive’s
employment for Cause under clause (i) above, and no failure of Executive or the Company to achieve
performance goals, alone, shall be treated as a basis for termination of Executive’s employment for
Cause under clause (ii) or (v) above.
(d) Termination without Cause. The Board shall have the right to terminate the
Executive’s employment hereunder without Cause at any time, subject to the consequences of such
termination as set forth in this Agreement.
(e) Disability. The Executive’s employment hereunder shall terminate upon her
Disability. For purposes of this Agreement, “Disability” shall mean Executive is
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eligible for
disability payments under the Company’s long-term disability plan, as in effect on the date hereof.
(f) Death. The Executive’s employment hereunder shall terminate upon her death.
7. Compensation Upon Termination of Employment
In the event the Executive’s employment by the Company is terminated during the Agreement
Term, the Executive shall be entitled to the severance payments and benefits specified below:
(a) Resignation for Good Reason; Termination without Cause. In the event the
Executive voluntarily terminates her employment hereunder for Good Reason or is terminated by the
Company without Cause, the Company shall pay the Executive and provide her with the following:
(i) Accrued Obligations. The Company shall pay and provide the Executive with
her Accrued Obligations. For purposes of this Agreement, “Accrued Obligations” shall
consist of the following: (A) accrued and unpaid Base Salary and accrued and unused paid
time off through the date of termination, (B) any unpaid annual bonus with respect to any
completed fiscal year of the Company which has ended prior to the date of termination
(except upon an involuntary termination for Cause or the existence of Cause is found
following a voluntary termination), (C) all accrued and vested benefits under employee
pension (including 401(k)) and welfare plans in which Executive participates, in accordance
with applicable plan terms, and (D) unreimbursed business expenses incurred through the
termination date, in accordance with Company business expense reimbursement policy.
(ii) Severance Payment. The Company shall pay the Executive an amount equal
to the sum of Executive’s annual Base Salary and an amount equal to the Target Bonus Amount
at the time of termination of employment (such sum hereinafter defined as the “Severance
Amount”). The Severance Amount shall be paid in 12 equal monthly installments beginning in
the month immediately following the date of the termination of employment.
(iii) Equity Rights. The vesting and exercisability of any outstanding stock
options or other equity awards held by Executive at the time of termination of employment
will be governed by the terms of such awards.
(iv) Company-Paid Continuation Coverage. Following the date of the
Executive’s termination of employment, the Executive and her eligible dependents shall be
entitled to continue participating in the Company’s group medical, dental, and other heath
benefit coverages as required under the health care continuation requirements of the
Consolidated Omnibus Reconciliation Act of 1985
(“COBRA”). Such coverages shall be provided to Executive and her eligible dependents
for the 12-month period following the date of the Executive’s
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termination of employment
with the same employee cost-sharing as is provided to employees of the Company generally
during this 12-month period (the “Company-Paid Continuation Coverage”).
(b) Resignation without Good Reason; Termination for Cause; death; Disability.
In the event the Executive voluntarily terminates her employment hereunder other than for Good
Reason, is terminated by the Company for Cause, or is terminated on account of death or Disability,
the Company shall have no obligations to Executive under this Agreement other than to pay Executive
and provide her with any Accrued Obligations. The vesting and exercisability of any outstanding
stock options or other equity awards held by Executive at the time of any such termination of
employment will be governed by the terms of such awards.
8. Change
of Control In the event that the employment of the Executive is terminated on or
prior to the expiration of the one-year period immediately following a Change of Control either (i)
by the Executive for Good Reason or (ii) by the Company other than for Cause, Executive will be
entitled to the payments and benefits provided in Section 7(a) hereof; provided that (A) if the
Change in Control occurs on or before December 31, 2007, the Severance Amount provided in Section
7(a)(ii) hereof will be paid in a lump-sum within fifteen days following termination of employment
and (B) if the Change in Control occurs after December 31, 2007, Executive will be entitled to a
lump-sum payment equal to two times the Severance Amount (as provided in Section 7(a)(ii) hereof),
payable within fifteen days of termination of employment, and be entitled to Company-Paid
Continuation Coverage (as defined in Section 7(a)(iv) hereof) for 24 months following termination
of employment instead of the 12 months provided in Section 7(a)(iv).
9. Parachute Tax Indemnity
(a) If it shall be determined that any amount paid, distributed or treated as paid or
distributed by the Company to or for the Executive’s benefit (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section 9) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Executive with respect to such excise tax (such excise tax, together with any such
interest and penalties, being hereinafter collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by the Executive of all federal, state and local taxes (including any
interest or penalties imposed with respect to such taxes), including, without limitation, any
income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. Notwithstanding the foregoing, if all taxes under Section
4999 of the Code could be eliminated if the
aggregate value of the Payments were reduced by no more than 10%, then such Payments will be
so reduced.
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(b) All determinations required to be made under this Section 9, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by a nationally recognized accounting
firm (the “Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the Company. The Accounting Firm
shall be mutually agreed to by the Company and Executive. All fees and expenses of the Accounting
Firm shall be borne by the Company. Any Gross-Up Payment, as determined pursuant to this Section
9, shall be paid by the Company to the Executive within five days of the receipt of the Accounting
Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company
and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to this Section 9 and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to
or for the Executive’s benefit.
(c) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later then ten business days after
the Executive is informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive shall: (i) give the
Company any information reasonably requested by the Company relating to such claim; (ii) take such
action in connection with contesting such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company; (iii) cooperate with the Company in
good faith in order to effectively contest such claim; and (iv) permit the Company to participate
in any proceeding relating to such claim; provided, however, that the Company shall
bear and pay directly all costs and expenses (including additional interest and penalties) incurred
in connection with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and expense. Without
limitation on the foregoing provisions of this Section 9, the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and xxx for a refund or contest the claim in any
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permissible manner, and the
Executive agrees to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay such
claim and xxx for a refund, the Company shall advance the amount of such payment to the Executive,
on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with respect to such
advance; and further provided that any extension of the statute of limitations relating to payment
of taxes for the Executive’s taxable year with respect to which such contested amount is claimed to
be due is limited solely to such contested amount. Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority, so long as such action
does not have a material adverse effect on the contest being pursued by the Company.
(d) If, after the Executive’s receipt of an amount advanced by the Company pursuant to this
Section 9, the Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of this Section 9)
promptly pay to the Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the Executive’s receipt of an amount advanced
by the Company pursuant to this Section 9, a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
10. No Mitigation
The Executive shall not be required to seek other employment or to reduce any severance
benefit payable to her under Section 7 or 8 hereof, and no such severance benefit shall be reduced
on account of any compensation received by the Executive from other employment.
11. Release
All payments and benefits provided under Section 7(a)(ii) and (iv) hereof shall be conditioned
upon Executive’s executing and honoring a release of claims in favor of the Company in the
Company’s standard form for Company officers.
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12. Tax Withholding
All compensation payable pursuant to this Agreement shall be subject to reduction by all
applicable withholding, social security and other federal, state and local taxes and deductions.
13. Restrictive Covenants
(a) Covenant Not to Disclose Confidential Information. The Executive acknowledges
that during the course of her affiliation with the Company she has or will have access to and
knowledge of certain information and data which the Company considers confidential and the release
of such information or data to unauthorized persons would be extremely detrimental to the Company.
As a consequence, the Executive hereby agrees and acknowledges that she owes a duty to the Company
not to disclose, and agrees that without the prior written consent of the Company, at any time,
either during or after her employment with the Company, she will not communicate, publish or
disclose, to any person anywhere or use, any Confidential Information (as hereinafter defined),
except as may be necessary or appropriate to conduct her duties hereunder, provided the Executive
is acting in good faith and in the best interest of the Company, or as may be required by law or
judicial process. The Executive will use her best efforts at all times to hold in confidence and
to safeguard any Confidential Information from falling into the hands of any unauthorized person
and, in particular, will not permit any Confidential Information to be read, duplicated or copied.
The Executive will return to the Company all Confidential Information in the Executive’s possession
or under the Executive’s control whenever the Company shall so request, and in any event will
promptly return all such Confidential Information if the Executive’s relationship with the Company
is terminated for any or no reason and will not retain any copies thereof. For purposes hereof the
term “Confidential Information” shall mean any information or data used by or belonging or relating
to the Company or any of its subsidiaries or Affiliates that is not known generally to the industry
in which the Company is or may be engaged and which the Company maintains on a confidential basis,
including, without limitation, any and all trade secrets, proprietary data and information relating
to the Company’s business and products, price list, customer lists, processes, procedures or
standards, know-how, manuals, business strategies, records, drawings, specifications, designed,
financial information, whether or not reduced to writing, or information or data which the Company
advises the Executive should be treated as confidential information.
(b) Covenant Not to Compete. The Executive acknowledges that she has established and
will continue to establish favorable relations with the customers, clients and accounts of the
Company and will have access to trade secrets of the Company. Therefore, in consideration of such
relations and to further protect trade secrets, directly or indirectly, of the Company, the
Executive agrees that during the term of her employment by the Company and for a period of twelve
months from the date of termination of the Executive, the Executive will not, directly or
indirectly, without the express written consent of the Company:
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(i) own or have any interest in or act as an officer, director, partner, principal,
employee, agent, representative, consultant or independent contractor of, or in any way
assist in, any business that competes with any business engaged in by the Company (the
“Competitive Businesses”);
(ii) solicit clients, customers or accounts of the Company for, on behalf of or
otherwise related to any such Competitive Businesses or any products related thereto; or
(iii) solicit or in any manner influence or encourage any person who is or shall be in
the employ or service of the Company to leave such employ or service for any other
employment opportunity.
Notwithstanding anything in this Agreement to the contrary, the Company shall have the option to
continue to bind Executive to the provisions of this Section 13(b) for a period of twelve months
following a termination of employment which occurs after the expiration of the Agreement and the
Agreement Term, provided that, the Company provides Executive with the payments and benefits set
forth in Section 7(a) hereof.
(c) Non-Disparagement. At all times following the date hereof, the Executive shall
express no opinions or views or knowingly take any other actions that will adversely affect the
business reputation or goodwill of the Company, its affiliates, directors, officers or employees.
(d) Specific Performance. Recognizing the irreparable damage will result to the
Company in the event of the breach or threatened breach of any of the foregoing covenants and
assurances by the Executive contained in paragraphs (a), (b) or (c) hereof, and that the Company’s
remedies at law for any such breach or threatened breach will be inadequate, the Company and its
successors and assigns, in addition to such other remedies which may be available to them, shall be
entitled to an injunction, including a mandatory injunction, to be issued by any court of competent
jurisdiction ordering compliance with this Agreement or enjoining and restraining the Executive,
and each and every person, firm or Company acting in concert or participation with him, from the
continuation of such breach and, in addition thereto, she shall pay to the Company all
ascertainable damages, including costs and reasonable attorneys’ fees sustained by the Company by
reason of the breach or threatened breach of said covenants and assurances. The obligations of the
Executive and the rights of the Company, its successors and assigns under this Section 13 shall
survive the termination of this Agreement for the periods set forth above. The covenants and
obligations of the Executive set forth in this Section 13 are in addition to and not in lieu of or
exclusive of any other obligations and duties of the Executive to the Company, whether express or
implied in fact or in law. In addition, the Executive further acknowledges that if she breaches
any provision of this Section 13 following her termination of employment with the Company, the
Executive will forfeit the right to any unpaid severance of other payments under this
Agreement. For purposes of this Section 13, “Company” shall include all subsidiaries of the
Company.
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(e) Potential Unenforceability of Any Provision. If a final judicial determination is
made that any provision of this Agreement is an unenforceable restriction against the Executive,
the provisions hereof shall be rendered void only to the extent that such judicial determination
finds such provisions unenforceable, and such unenforceable provisions shall automatically be
reconstituted and become a part of this Agreement, effective as of the date first written above, to
the maximum extent in favor of the Company that is lawfully enforceable. A judicial determination
that any provision of this Agreement is unenforceable shall in no instance render the entire
Agreement unenforceable, but rather the Agreement will continue in full force and effect absent any
unenforceable provision to the maximum extent permitted by law.
14. Indemnification
To the fullest extent permitted by the indemnification provisions of the Articles of
Incorporation and Bylaws of the Company in effect as of the date of this Agreement, and the
indemnification provision of the laws of the jurisdiction of the Company’s incorporation in effect
from time to time, the Company shall indemnify the Executive as a director, senior officer or
employee of the Company against all liabilities and reasonable expenses that may be incurred in any
threatened, pending or completed action, suit or proceeding, and shall pay for the reasonable
expenses incurred by the Executive in the defense of or participation in any proceeding to which
the Executive is a party because of her service to the Company. The rights of the Executive under
this indemnification provision shall survive the termination of employment with respect to events
occurring prior to termination on a basis not less favorable than is provided for any other officer
of the Company (other than the Chief Executive Officer). In addition, during the Agreement Term,
Executive will be provided with Director & Officer coverage to the same extent as any other officer
of the Company (other than the Chief Executive Officer).
15. Successors
(a)
This Agreement shall be binding upon and shall inure to the benefit of the Company,
its successors and any person, firm, corporation or other entity which succeeds to all or
substantially all of the business, assets or property of the Company. As used in this Agreement,
the “Company” shall mean the Company as hereinbefore defined and any successor to its business,
assets or property as aforesaid which executes and delivers an agreement provided for in this
Section 15 or which otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law. Notwithstanding the foregoing provisions of this Section 15(a), this Agreement
shall not be assignable by the Company without the prior written consent of the Executive.
(b) This Agreement and all rights of the Executive hereunder shall inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should die while any
amounts are due and payable to her hereunder, all such amounts, unless otherwise provided herein,
shall be paid to the Executive’s designated
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beneficiary or, if there be no such designated beneficiary, to the legal representatives of the
Executive’s estate.
16. No Assignment
Except as to withholding of any tax under the laws of the United States or any other country,
state or locality, neither this Agreement nor any right or interest hereunder nor any amount
payable at any time hereunder shall be subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment, or other legal process, or encumbrance of any kind by the Executive
or the beneficiaries of the Executive or by her legal representatives without the Company’s prior
written consent, nor shall there be any right of set-off or counterclaim in respect of any debts or
liabilities of the Executive, her beneficiaries or legal representatives, except in the case of
termination of employment for Cause; provided, however, that nothing in this
Section 16 shall preclude the Executive from designating a beneficiary to receive any benefit
payable on her death, or the legal representatives of the Executive from assigning any rights
hereunder to the person or persons entitled thereto under her will or, in case of intestacy, to the
person or persons entitled thereto under the laws of intestacy applicable to her estate.
17. Entire Agreement
This Agreement contains the entire understanding of the parties with respect to the subject
matter hereof and, except as specifically provided herein, cancels and supersedes any and all other
agreements between the parties with respect to the subject matter hereof. Any amendment or
modification of this Agreement shall not be binding unless in writing and signed by the Company and
the Executive. Notwithstanding the foregoing, the parties hereto shall enter into stock option
agreements in respect of the Time-Vested Option and the Performance-Vested Options, setting forth
terms and conditions consistent with the provisions of this Agreement and such other terms and
conditions approved by the Compensation Committee and consistent with the Plan.
18. Severability
In the event that any provision of this Agreement is determined to be invalid or
unenforceable, the remaining terms and conditions of this Agreement shall be unaffected and shall
remain in full force and effect, and any such determination of invalidity or unenforceability shall
not affect the validity or enforceability of any other provision of this Agreement.
19. Notices
All notices which may be necessary or proper for either the Company or the Executive to give
to the other shall be in writing and shall be delivered by hand or sent by registered or certified
mail, return receipt requested, or by air courier, to the Executive at the following address (or
such other address as the Executive may designate by written notice to the Company):
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and shall be sent in the manner described above to the Secretary of the Company at the Company’s
principal executives offices at 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 or
delivered by hand to the Secretary of the Company, and shall be deemed given when sent, provided
that any notice required under Section 6 hereof shall be deemed given only when received. Any
party may by like notice to the other party change the address at which she or they are to receive
notices hereunder.
20. Governing Law
This Agreement shall be governed by and enforceable in accordance with the laws of the State
of Virginia, without giving effect to the principles of conflict of laws thereof.
21. Arbitration
Except that injunctive relief is available for any breach of restrictive covenants, any
controversy or claim arising out of, or related to, this Agreement, or the breach thereof, shall be
settled by binding arbitration in Fairfax County, Virginia in accordance with the rules then
obtaining of the American Arbitration Association, and the arbitrator’s decision shall be binding
and final, and judgment upon the award rendered may be entered in any court having jurisdiction
thereof. Each party will pay one-half of the arbitration expenses and her or its own legal fees
and costs; provided, in any dispute after a Change in Control, the Company (or successor) will pay
all arbitration fees, and all of Executive’s reasonable legal expenses if Executive prevails on at
least one material issue in dispute, as determined by the arbitrator. Notwithstanding any other
provision of this Agreement, obligations of the parties under this Section 21 shall survive any
termination of employment.
22. Section 409A
To the extent applicable, it is intended that this Agreement comply with the provisions of
Section 409A of the Code, and this Agreement shall be construed and applied in a manner consistent
with this intent. To the extent the Company determines necessary to comply with Section 409A of
the Code, payments hereunder will be delayed for six months or such longer period following
Executive’s termination of employment to the extent such delay is necessary to avoid adverse tax
consequences under Section 409A of the Code.
[Rest of page intentionally omitted]
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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date
first above written.
| EXECUTIVE | ||||
| /s/ Xxxxx Xxxxxxx | ||||
| Xxxxx Xxxxxxx | ||||
| PRA INTERNATIONAL | ||||
| /s/ Xxxxxxxx X. Xxxxxx | ||||
| By: Xxxxxxxx X. Xxxxxx | ||||
| Title: Chief Executive Officer |
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