PRA INTERNATIONAL FORM OF OPTION AGREEMENT (Directors)
Exhibit
10.3
FORM
OF OPTION AGREEMENT
(Directors)
(Directors)
THIS
OPTION AGREEMENT (the “Agreement”) evidences
an agreement made as of the ___th day of
___, 200___ (the “Date of
Grant”), by and between ______ (the “Optionee”), and PRA
INTERNATIONAL, a Delaware corporation (the “Corporation”).
1. Option. In consideration of the Optionee’s directorship with the Corporation, the
Corporation hereby grants to the Optionee the option to purchase that number of shares of the
Corporation’s Common Stock at the exercise price set forth on Schedule 1 hereto (the
“Option”), subject to the terms and conditions of this Option Agreement and the PRA International
2004 Incentive Award Plan (the “Plan”) (attached at Exhibit 1). The Option is intended to qualify
as an “incentive stock option” within the meaning of Section 422 of the Code. To the extent that
the Option does not so qualify that portion of the Option shall be treated as a non-qualified
option under Section 422 of the Code. All capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in the Plan.
2. Vesting of Options.
(a) The Option shall vest in accordance with the terms set forth on Schedule 1 and the
terms of Section 3 hereof.
(b) Unless sooner terminated in accordance with the terms hereof, the Option shall terminate
(whether or not vested) on the seventh (7th) anniversary of the Date of Grant.
3. Expiration of the Option.
(a) Death or Disability of Employee. In the event that the Optionee’s directorship is
terminated by reason of death or disability, the unvested portion of the Option that would
otherwise vest on the next anniversary of the Date of Grant will automatically vest on a pro rata
basis for the period commencing on the Date of Grant or, if applicable, the most recent anniversary
of the Date of Grant and ending on the date the Optionee’s directorship is so terminated, and all
other unvested Options will automatically terminate. The vested portion of the Option shall be
exercisable by the Optionee’s beneficiary or estate for a period of the earlier of (i) eighteen
(18) months following Optionee’s death or disability or (ii) the seventh (7th)
anniversary of the Date of Grant. If the vested portion of the Option is not exercised within the
earlier of (i) eighteen (18) months following Optionee’s death or disability or (ii) the seventh
(7th) anniversary of the Date of Grant, then such vested portion of the Option shall
expire and shall no longer be exercisable.
(b) Cause. In the event that the Optionee’s directorship is terminated by the
Corporation for Cause (as defined below) the Option will automatically terminate and
expire and shall no longer be exercisable, whether or not previously vested. For purposes of
this Agreement, “Cause” shall mean: (i) a material failure of the Optionee to perform his duties
and functions as a director; (ii) Optionee engaging in or causing an act that has a material
adverse impact on the reputation, business, business relationships or financial condition of the
Corporation; (iii) the conviction of or plea of guilty or nolo contendere by Optionee to a felony
or any crime involving moral turpitude; or (iv) Optionee’s gross misconduct, dishonesty, or fraud.
(c) Other Termination. In the event that the Optionee’s directorship is terminated
for any reason other than death, disability or Cause, the unvested portion of the Option will
automatically terminate. The Optionee shall have the right, in the Optionee’s sole discretion, for
a period of thirty (30) days following such termination of directorship to exercise the Option.
If the Optionee does not exercise the vested portion of the Option within 30 days after his/her
directorship so terminates, then the Option shall expire and shall no longer be exercisable.
(d) Forfeiture for Competition. In the event that during Optionee’ directorship or
during a period of 15 months thereafter (the “Noncompetition Period”), Optionee, whether as owner,
manager, officer, director, employee, consultant or otherwise, is engaged or employed by a
Competing CRO to provide Customer Services that are the same or substantially similar to the
Customer Services that Optionee performed for the Corporation at any time during the twenty-four
(24) months prior to the termination of Optionee’s directorship (the “Prohibited Services”), then
in addition to other remedies available to the Corporation, Optionee shall immediately forfeit all
rights under the Option that may have been granted to Optionee or to which Optionee may be
entitled, whether the same are then vested or not. In addition, to the extent that Optionee
exercises any of the Option during the Noncompetition Period and provides Prohibited Services then
such exercise shall be rescinded and all such shares of common stock of the Corporation purchased
by Optionee pursuant to the exercise of such Option during the Noncompetition Period may be
repurchased by the Corporation, in its sole discretion, at the price paid by Optionee for such
shares of common stock. To the extent that the Optionee has sold or otherwise disposed of any
shares acquired upon exercise of the Option, then the Optionee shall pay back to the Corporation
any and all proceeds received by the Optionee as a result of such sale or other disposition. The
Optionee shall also return all dividends or other distributions, if any, paid on such shares.
The Corporation acknowledges and agrees that ownership by Optionee of not more than one
percent (1.0%) of the shares of any corporation having a class of equity securities actively
traded
on a national securities exchange shall not be deemed, in and of itself, to violate the
prohibitions set forth in this section.
For the purposes of this Agreement, the term “Customer Services” means any product or service
provided by the Corporation or any of its affiliates to a third party for remuneration, including,
but not limited to on a contract or outsourced basis, assisting pharmaceutical or biotechnology
companies in developing and taking drug compounds, biologics, and drug delivery devices through
appropriate regulatory approval processes, (i) during Optionee’s directorship with the Corporation
or (ii) about which Optionee has material knowledge and that
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Optionee knows the Corporation will provide or has contracted to provide to third parties
during the twelve (12) months following the Optionee’s directorship with the Corporation.
“Customer” means any person or legal entity (and its subsidiaries, agents, employees and
representatives) about whom Optionee has acquired material information based on directorship with
the Corporation and as to whom Optionee has been informed that the Corporation or any of its
affiliates provide or will provide Customer Services. “Competing CRO” means any of the following
entities and their affiliates and successors to the extent that and for so long as those said
entities, affiliates, and successors directly compete with the Corporation in the provision of
Customer Services to Customers: Xxxxxxx River Laboratories International, Inc., Covance Inc., ICON
plc, INC Research, Inc., Xxxxxx International Inc., MDS Pharma Services, Omnicare, Inc., PAREXEL
International Corporation, Pharmaceutical Product Development, Inc., Quintiles Transnational Corp.,
SFBC International, Inc., United BioSource Corporation, and United HealthCare Corporation.
4. Exercise of Option. To the extent exercisable, the Optionee may exercise the
vested portion of the Option at anytime in whole or in part prior to its termination under Section
2(b) or Section 3 above by giving written notice of such exercise to the Corporation, in such form
and at such time as the Corporation may specify from time to time. As a condition to the exercise
of any portion of the Option, the Optionee may be required to execute such documents and make such
representations as the Corporation may require in order to comply with applicable law. The Option
may not be exercised until Optionee shall have delivered to the Corporation the aggregate exercise
price per Share of the number of Shares for which the Option is being exercised. The exercise
price may be paid by any method prescribed in Section 5.1(c) of the Plan.
5. Construction and Binding Effect. This Agreement shall be construed according to
the laws of the State of Delaware, without giving effect to any conflict or choice of law
provision, and shall bind the parties, their permitted assigns and their personal representatives.
6. Invalidity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the other provisions, and the Agreement shall be construed in all
respects as if an invalid or unenforceable provision were omitted.
7. Entire Agreement. This document contains the entire agreement between the parties
and no modification or change in this Agreement shall be valid unless the same shall be in writing
and signed by the parties hereto.
8. Notices. All notices, requests, consents, payments, demands and other
communications required or contemplated under this Agreement (“Notices”) shall be in writing and
(a) personally delivered; (b) deposited in the United States mail, registered or certified mail,
return receipt requested, with postage prepaid; or (c) sent by Federal Express or other nationally
recognized overnight delivery service (for next business day delivery), shipping prepaid, as
follows:
If to the Corporation, to:
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PRA International
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: President and Chief Executive Officer
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: President and Chief Executive Officer
If to Optionee, to:
The Optionee’s then home address currently on file with the Corporation
or such other persons or address as any party may request by notice given as aforesaid. Notices
shall be deemed given and received at the time of personal delivery or, if sent by U.S. mail, five
(5) business days after the date mailed in the manner set forth in this Section 9, or, if sent by
Federal Express or other nationally recognized overnight delivery service, one business day after
such sending.
9. Severability. The provisions of this Agreement shall be deemed severable, and if
any part of any provision is held to be illegal, void, voidable, invalid, nonbinding or
unenforceable in its entirety or partially or as to any party, for any reason, such provision may
be changed, consistent with the intent of the parties hereto, to the extent reasonably necessary to
make the provision, as so changed, legal, valid, binding and enforceable. If any provision of this
Agreement is held to be illegal, void, voidable, invalid, nonbinding or unenforceable in its
entirety or partially or as to any party, for any reason, and if such provision cannot be changed
consistent with the intent of the parties hereto to make it fully legal, valid, binding and
enforceable, then such provision shall be stricken from this Agreement, and the remaining
provisions of this Agreement shall not in any way be affected or impaired, but shall remain in full
force and effect.
10. No Right to Future Grants. The grant of this Option is a voluntary act by the
Corporation and does not give the Optionee any right to, or otherwise obligate the Corporation to
grant any additional options in the future.
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IN WITNESS WHEREOF, the parties hereto have signed this Option Agreement as of the date first
above written.
| CORPORATION: | ||||
| PRA INTERNATIONAL | ||||
| By: | ||||
| Title: | President and CEO | |||
| OPTIONEE: | ||||
| Address: | ||||
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SCHEDULE 1
Options for Shares (the “Time Vesting Options”) will vest on each of
(contingent upon employment with the Corporation or one of its
subsidiaries at that time).
The exercise price for all such Options shall be $ per share.
