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EXHIBIT 10.21
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
This AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT (the "Amendment No. 2")
amends that certain EMPLOYMENT AGREEMENT by and between CLINTRIALS RESEARCH
INC., a Delaware corporation ("Company"), and S. XXXXX XXXXX ("Executive") dated
as of October 22, 1998 and first amended as of January 13, 2000 (the "Employment
Agreement"), and is entered into between Company and Executive this 15th day of
August, 2000.
WHEREAS, the parties wish to amend the Employment Agreement as set
forth below;
IT IS, ACCORDINGLY, AGREED AS FOLLOWS:
1. Section 5 of the Employment Agreement is amended to read as
follows:
Section 5. Termination.
(a) For purposes of this Agreement "Cause" shall mean (A) the
Executive is arrested for, convicted of, or has plead guilty or nolo contendere
to, a felony; (B) the willful and continued failure by the Executive to perform
his duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness) after a demand for performance is
delivered to the Executive by the Company which specifically identifies the
manner in which the Company believes the Executive has not performed his duties;
(C) the Executive engages in conduct that constitutes neglect or willful
misconduct in carrying out his duties under this Agreement; (D) material breach
of this Agreement by the Executive; or (E) the Executive's breach of fiduciary
duty to the Company. The Executive shall have 30 days to address the Company
Board and to effect a cure if possible for any alleged breach of duty.
In the event of termination of the Executive's employment by the
Company for Cause, the Executive shall only be entitled to:
(i) any accrued but unpaid Base Salary through his date
of termination;
(ii) any earned but unpaid bonus from a prior fiscal year;
(iii) reimbursement of reasonable business expenses
incurred prior to the date of termination; and
(iv) other or additional benefits, if any, in accordance
with the applicable employee benefit programs of the Company referred to in
Section 3(a).
(b) Death, Retirement or Disability. In the event of the death,
Retirement or Disability (as such terms are defined below) of the Executive, the
Executive's employment shall be terminated as of the date of such death,
Retirement or Disability, and the Executive,
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or the Executive's estate or legal representative, as appropriate, shall be
entitled to the amounts referred to in paragraph (a) of this Section.
For purposes of this Agreement:
(i) "Disability" shall mean "total and permanent
disability", as defined in the Company's long term disability plan for senior
executives (or such other Company-provided long-term disability benefit plan
sponsored by the Company in which Executive participates at the time the
determination of Disability is made) (the "Disability Plan"); provided, however,
that no termination of the employment of Executive for Disability shall become
effective (x) prior to the expiration of six (6) months after the date the
Executive first incurs the condition giving rise to the Disability or (y) while
the Executive is substantially performing the regular duties associated with his
employment hereunder.
(ii) "Retirement" shall mean a voluntary decision by the
Executive to retire at any time after attaining age 60.
(c) Termination Without "Cause" or for "Good Reason" (as such term
is defined below). If the Company should terminate the Executive's employment
for any reason (including a termination as a result of a Change of Control)
other than for Cause, or in the event the Executive terminates employment for
Good Reason or Company gives notice of its intent not to renew this Agreement
under Section 1(b), then:
(i) All unvested stock options shall become fully vested
and shall remain exercisable for the remainder of the stated term of such stock
options, regardless of whether the Executive continues to be employed by the
Employer.
(ii) The Executive shall be entitled to: (A) the amounts
referred to in paragraph (a) of this Section; (B) continued participation in the
medical, dental, hospitalization and group life insurance coverage in which he
was participating on the date of the termination of his employment until the
earlier of the end of the twelve (12) month period following his termination of
employment and the date, or dates, he receives substantially similar coverage
and benefits under the plans and programs of a subsequent employer; and (C)
reimbursement for outplacement counseling in accordance with the Company's
established policies.
(iii) In the event of the termination of employment of the
Executive by the Company without Cause (other than as a result of a Change of
Control) or by the Executive for Good Reason (other than resignation following a
Change of Control), then the Company shall pay the Executive, in a lump sum
within ten (10) days following such termination of employment, an amount equal
to 300% of the sum of his Base Salary plus an amount equal to the greater of the
Annual Bonus Executive received for performance during the Company's immediately
preceding fiscal year or the current Annual Bonus target in effect at the time
of such termination or resignation.
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(iv) In the event of the termination of employment of the
Executive by the Company following a Change of Control as set forth in paragraph
(f) of this Section or resignation by the Executive within the ninety (90) day
period following a Change of Control pursuant to paragraph (e) of this Section,
then:
(A) The Company shall pay to the Executive in a
lump sum upon such termination or resignation an amount equal to 150% of the sum
of his Base Salary plus an amount equal to the greater of the Annual Bonus
Executive received for performance during the Company's immediately preceding
fiscal year or the current Annual Bonus target in effect at the time of such
termination or resignation.
(B) The Company shall pay to Executive upon such
termination or resignation, as a retention bonus for services actually rendered
on and after the date of the Change in Control, a lump sum payment equal to 50%
of the sum of his Base Salary and the greater of the most recent Annual Bonus
paid or earned by Executive or the current Annual Bonus target in effect at the
time of such termination or resignation.
(C) The Company shall pay to Executive upon such
termination or resignation, in exchange for Executive agreeing not to solicit
any of the then current customers or employees of the Company for a period of
twelve (12) months following his termination or resignation of employment, a
lump sum payment equal to 100% of the sum of his Base Salary and the greater of
the most recent Annual Bonus paid or earned by Executive or the current Annual
Bonus target in effect at the time of such termination or resignation.
Executive must reasonably give thirty (30) days prior written notice of
his intent to terminate employment for Good Reason which notice sets forth in
detail the event or circumstances believed to constitute Good Reason. Upon
receipt of such notice, the Company shall have twenty (20) days to cure its
conduct, to the extent such cure is possible.
For purposes of this Agreement, "Good Reason" shall mean any of the
following: (AA) reduction in the amount of the Executive's then current Base
Salary (other than as part of a reduction affecting all of the 5 most senior
management employees of the Company and its subsidiaries); (BB) any material
diminution in the employee's duties or responsibilities; or (CC) any material
breach by the Company of any provision of this Agreement.
(d) Termination Without Good Reason. In the event of a termination
of employment by the Executive without Good Reason (other than a termination due
to death, Retirement or Disability), the Executive shall have the same
entitlements as provided in paragraph (a) of this Section for termination for
Cause.
(e) If the Executive resigns from employment for any reason, other
than Retirement or Disability, during the 90-day period following a Change of
Control, such resignation shall be deemed to be a termination by the Executive
for Good Reason for purposes of Section 5(c).
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(f) Termination shall be deemed to be a result of a Change of
Control: (i) if such termination occurs within twelve (12) months following the
Change of Control; or (ii) if any change in the Executive's title, reporting
relationship, responsibilities or authority as in effect immediately prior to
any Change of Control is made within twelve (12) months of such Change of
Control and which adversely affects to a material degree his role in the
management of the Company; or (iii) if any reduction in the Executive's salary
paid to him by the Company as in effect immediately prior to any Change of
Control or, if such salary has been subsequently increased at any time or from
time to time; any reduction in such increased salary; or (iv) if any termination
of the Executive's employee benefit programs, including, but not limited to, any
stock option plan, investment plan, savings plan, incentive compensation plan or
life insurance, medical plans or disability plans provided by the Company to the
Executive and in which the Executive is participating or under which the
Executive is covered, all as in effect immediately prior to any Change of
Control; or (v) if there is any requirement by the Company that the Executive's
position and principal office be based and located more than twenty (20) miles
outside the boundaries of the principal office of the Executive immediately
prior to the Change of Control; or (vi) if any failure or refusal of the Company
to renew this Agreement under Section 1(b) after any Change of Control shall
have occurred.
(g) In the event of the termination of employment of the Executive
by the Company without Cause or by the Executive for Good Reason or resignation
following a Change of Control, if the Executive is required, pursuant to Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code"), to pay
(through withholding or otherwise) an excise tax on "excess parachute payments"
(as defined in Section 280G of the Code), the Company shall pay the Executive
the amount necessary to place the Executive in the same after-tax financial
position that he would have been in if he had not incurred any excise tax
liability under Section 4999 of the Code.
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2. In all other respects the Employment Agreement is hereby
ratified and affirmed.
CLINTRIALS RESEARCH INC. EXECUTIVE
By:
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S. XXXXX XXXXX
Title:
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