EMPLOYMENT AND NON-COMPETITION AGREEMENT BETWEEN Bruce A. Teplitzky AND PHARMACEUTICAL RESEARCH ASSOCIATES, INC.
Exhibit 10.1
EMPLOYMENT AND NON-COMPETITION AGREEMENT
BETWEEN
Xxxxx X. Xxxxxxxxx
AND
PHARMACEUTICAL RESEARCH ASSOCIATES, INC.
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the 30th day of
September, 2005 (the “Effective Date”), by and between Pharmaceutical Research Associates, Inc., a
Virginia corporation (“Employer”), having its principal office in the Commonwealth of Virginia,
which is a wholly-owned subsidiary of PRA International, a Delaware corporation (“PRA
International”), and Xxxxx X. Xxxxxxxxx (“Employee”).
WHEREAS, Employer and Employee desire to enter into an agreement for the employment by
Employer of Employee commencing on the Effective Date.
WHEREAS, by entering into this Agreement, the terms of the Employee’s employment with the
Employer will be governed by the terms and conditions of this Agreement and any other prior
agreement between the Employee and the Employer relating to the Employee’s employment with the
Employer or any of its affiliated entities is superseded by the terms of the Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth
below, which consideration is acknowledged by both parties to be good and sufficient, the parties
hereto agree as follows:
1. Position. Employer hereby agrees to employ Employee as of the Effective Date (as
defined herein) and Employee hereby accepts employment as of the Effective Date in the position of
Executive Vice President with appropriate title, rank, status and responsibilities as determined
from time to time by the President and CEO of Employer (“President and CEO”) upon the terms and
conditions hereinafter set forth.
2. Employment Period.
(a) The period of employment under this Agreement shall begin on the Effective Date and shall
end on February 28, 2006, unless terminated sooner pursuant to Section 7 of this Agreement.
(b) The period during which Employee is employed under the terms of this Agreement is the
“Employment Period.”
3. Duties. The President and CEO shall have the power to determine the specific
duties that shall be performed by Employee and the means and manner by which those duties shall be
performed, but such duties shall be consistent with the executive position of Employee.
(a) During the Employment Period, Employee agrees to use his best efforts in the business of
Employer and to devote his full time, skill, attention and energies to the business of Employer.
Employee shall not be engaged in any other business activity which shall be competitive with the
business of Employer or which may (i) interfere with Employee’s ability to discharge his
responsibilities to Employer; or (ii) detract from the business of Employer. Employee shall not:
(i) work either on a part-time or independent contracting basis for any other
company, business or enterprise without the prior written consent of the President
and CEO; or
(ii) serve on the board of directors or comparable governing body of any other
material business, civic or community corporation or similar entity without the
prior written consent of the President and CEO (excluding those positions Employee
holds and boards of directors on which Employee serves as of the date of this
Agreement, which positions and boards, if any, are listed on Exhibit A hereto),
such consent which shall not be unreasonably withheld.
(b) Employee agrees to use his reasonable efforts to impart his skill and knowledge relating
to the business of Employer to such individuals as are designated by Employer, and to train such
individuals in the aspects of the business with which Employee is familiar. In addition, at the
request of Employer and without additional compensation, Employee shall use his best efforts to
record and document his knowledge relating to the business of Employer.
4. Compensation. For all services rendered by Employee under this Agreement, for, and
in consideration of, Employee’s agreements and undertaking contained in this Agreement (including,
without limitation, those contained in Sections 9 and 10 below), and, subject to Sections 7 and 8
below, during the Employment Period, Employer shall provide Employee with the following:
(a) Base Salary. Employer shall pay to Employee, in equal bi-monthly installments, a
base salary of USD$195,000 per year, less relevant deductions. Employee shall be eligible for
salary increases, which may be based on performance and/or competitive market factors, as
determined under the provisions of any salary policy of Employer that is generally applicable to
Employer’s employees, provided that any such increases shall be reviewed and approved in advance by
the Compensation Committee of the Board of Directors of Employer (the “Board”). Employee shall be
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eligible for such other increases in compensation as are otherwise imposed by the Board, in
its discretion, from time to time.
(b) Bonus. Employee shall participate in an Executive Bonus Plan approved by the
Board with a minimum annual bonus target of USD$120,000 less relevant deductions. The performance
criteria will be determined by the Compensation Committee of the Board.
(c) Long Term Incentives. Employee shall participate under the terms of the PRA
International 2004 Incentive Award Plan (“Incentive Award Plan”), according to the terms set forth
in Exhibit B.
(d) Review. It is understood and agreed that the Compensation Committee of the Board
will review compensation matters of Employer on a regular basis, and will (on at least an annual
basis) set all annual bonus targets, salaries and benefits in which Employee shall be eligible to
participate.
5. Benefits. Employee shall be eligible to participate in Employer’s standard
benefits programs, which presently include health, life and disability insurance, and those
additional benefits (the “Additional Benefits”) currently offered to Employer’s executive staff,
including club membership and monthly car allowance, as described in Exhibit C. It is agreed that
the nature and amount of the Additional Benefits, if any, shall be determined from time to time by
the Compensation Committee of the Board, in its discretion, provided that no Additional Benefits
(as defined above) will be materially reduced. Employee shall be entitled to paid vacation in
accordance with the Employer’s vacation policies in effect for executive staff during the
Employment Period. Employee shall be covered by the holiday policy of the Employer and, by any
other pension or retirement plan, disability benefit plan or any other benefit plan or arrangement
of Employer determined by the Board to be applicable to Employee.
6. Expense Reimbursement. Subject to such conditions as Employer may from time
to time determine and pursuant to Employer’s travel policy then in place for executives, Employer
shall reimburse Employee for reasonable expenses incurred by Employee in connection with the
business of Employer and the performance of Employee’s duties hereunder.
7. Termination. This Agreement may be terminated under the following circumstances,
having the consequences described in Sections 7 and 8:
(a) Death of Employee. This Agreement shall terminate immediately upon the death of
Employee. Should this Agreement be terminated pursuant to this Section 7(a), Employee shall be
entitled to Termination Payments as provided for in Section 7(g).
(b) Termination by Employer for Disability of Employee. If during the Employment
Period, Employee shall be prevented from performing his duties
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for a continuous period of one hundred and eighty (180) days by reason of disability that
renders Employee physically or mentally incapable of performing substantially all of his duties
under this Agreement (excluding infrequent and temporary absences due to illness), Employer may
terminate Employee’s employment hereunder. If after a period of disability commences (but prior to
termination of Employee’s employment), Employee returns to work for a period of at least twenty
(20) consecutive work days, the period of disability shall terminate and not be counted towards any
period of subsequent disability. For purposes of this Agreement, Employer, upon the advice of a
qualified and impartial physician, at Employer’s expense, shall determine whether Employee has
become physically or mentally incapable of performing substantially all of his duties under this
Agreement. Employer shall give Employee (or his guardian, as applicable) thirty (30) days’ written
notice of termination of the Employment Period under this Section 7(b). Should the Employee be
terminated pursuant to this Section 7(b), Employee shall be entitled to Termination Payments as
provided for in Section 7(g).
(c) Termination by Employer for Cause. Employer may terminate Employee’s employment
at any time for Cause. For purposes of this Agreement, “Cause” includes, but is not limited to:
(i) a material breach of this Agreement by Employee (where Employee fails to cure such breach
within ten (10) business days after being notified in writing by Employer of such breach); (ii)
Employee’s willful failure to perform his material assigned duties without an excuse that is
reasonably acceptable to Employer; (iii) Employee engages in an act (or causes an act) that has a
material adverse impact on the reputation, business, business relationships or financial condition
of Employer; (iv) the conviction of or plea of guilty or nolo contendre by Employee to a felony or
any crime involving moral turpitude, fraud or misrepresentation; (v) misappropriation or
embezzlement by Employee of funds or assets of Employer; or (vi) Employee’s willful refusal to
perform specific directives of the President and CEO which are consistent with the scope, ethics
and nature of Employee’s duties and responsibilities hereunder. Notwithstanding the foregoing,
“Cause” shall not include a situation whereby Employer asks Employee to be based at any office or
location or to relocate to any location other than within 20 miles of Employee’s then current
location and Employee declines to do so. Termination by Employer for Cause hereunder shall not
abrogate the rights and remedies of Employer in respect of the breach or wrongful act giving rise
to such termination. In the event of termination by Employer for Cause, Employee shall receive
any and all accrued but unpaid base salary compensation (including accrued paid time off, as
applicable) due to Employee as of the Termination Date.
(d) Termination by Employer without Cause. This Agreement may be terminated by
Employer for reasons other than death, disability or Cause upon thirty (30) days’ written notice
given to Employee. Should the Employee be terminated pursuant to this Section 7(d), Employee shall
be entitled to Termination Payments as provided for in Section 7(g).
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(e) Termination by the Employee without Good Reason. This Agreement may be terminated
by Employee upon sixty (60) days’ written notice given to Employer. The sixtieth (60th)
day after giving of such notice shall be the Employee’s Termination Date. In the event of
termination by Employee without Good Reason, Employee shall receive any and all accrued but unpaid
base salary compensation (including accrued paid time off, as applicable) due to Employee as of the
Termination Date.
(f) Termination by Employee for Good Reason. This Agreement may be terminated by
Employee at any time for Good Reason. For purposes of this Agreement, “Good Reason”
shall mean (i) any material breach of this Agreement by Employer (where Employer fails to cure such
breach within ten (10) business days after being notified in writing by Employee of such breach);
(ii) the diminution, without Employee’s written consent, of Employee’s position, title, authority,
duties or responsibilities as indicated in this Agreement; or (iii) the Company requiring the
Employee, without Employee’s written consent, to be based at any office or location or to relocate
to any location other than within 20 miles of Employee’s then current location. Termination by
Employee hereunder in this Section 7(f) shall not abrogate the rights and remedies of Employee in
respect of the breach giving rise to such termination.
(g) Termination Payments.
A. If Employee’s employment is terminated pursuant to Section 7(a) (Employee’s Death), 7(b)
(by Employer for Employee’s Disability), 7(d) (by Employer without Cause) or 7(f) (by Employee for
Good Reason) (each of the circumstances in this Section 7(g)(A) being known as a “Termination
Event”), Employer shall provide Employee (or, in the case of his death, his estate, heirs or legal
representatives) the following (collectively, the “Termination Payments”):
(i) any and all accrued but unpaid base salary compensation
(including accrued paid time off, as applicable) due to Employee
as of the date on which the Employment Period ends (the
“Termination Date”), which shall be paid on the Termination Date;
and
(ii) Employee’s full base salary (payable bi-monthly at the same
time Employee would otherwise receive such base salary if Employee
were still employed by Employer) for twelve (12) months after the
Termination Date; and
(iii) health benefits after the Termination Date pursuant to COBRA
coverage (reimbursed by Employer for the first twelve (12) months)
under Employer’s health benefit plan under which Employee was
receiving coverage during the Employment Period.
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B. If a Termination Event (other than the death of Employee as specified in Section 7(a))
occurs within twelve months after a Change in Control, then Employee is entitled to the Termination
Payments as stated in Section 7(g)(A)(i) (ii) and (iii) above, except that the period for which
salary and benefits are provided in Sections 7(g)(A)(ii) and (iii) shall be twenty-four (24)
months, and all payments to be made pursuant to those sections shall be paid to Employee in a lump
sum within fifteen (15) days after the Termination Event. For purposes of this Section and this
Agreement, “Change in Control” shall mean: (i) the sale of all or substantially all of the assets
of PRA International; or (ii) the consummation of a merger or consolidation of PRA International
with any other corporation other than (A) a merger or consolidation which would result in the
voting securities of PRA International outstanding immediately prior thereto continuing to
represent more than fifty percent (50%) of the combined voting power of the voting securities of
PRA International, or such surviving entity, outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation effected to implement a recapitalization of PRA
International (or similar transaction) in which no “person” (as defined below) acquires more than
thirty percent (30%) of the combined voting power of PRA International’s then-outstanding
securities; or (iii) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than (1) PRA International
or (2) any corporation owned, directly or indirectly, by PRA International or the shareholders of
PRA International in substantially the same proportions as their ownership of stock in PRA
International), becomes after the Effective Date the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of PRA International representing
thirty percent (30%) or more of the combined voting power of PRA International’s then outstanding
securities.
C. Employer’s obligation to make any Termination Payments provided in Section 7(g)(A) and (B)
above is conditioned upon Employee’s execution and non-recision of a general release in the
reasonable form provided by Employer.
(h) Tax Provisions. In the event that any payments under this Agreement or any other
compensation, benefit or other amount from Employer for the benefit of Employee are subject to the
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”)
(including any applicable interest and penalties, the “Excise Tax”), no such payment (“Parachute
Payment”) shall be reduced (except for required tax withholdings) and Employer shall pay to
Employee by the earlier of the date such Excise Tax is withheld from payments made to Employee or
the date such Excise Tax becomes due and payable by Employee, an additional amount (the “Gross-Up
Payment”) such that the net amount retained by Employee (after deduction of any Excise Tax on the
Parachute Payments, taxes based upon the Tax Rate (as defined below) upon the payment provided for
by this Section 7(h) and Excise Tax upon the payment provided for by this Section 7(h)), shall be
equal to the amount Employee would have received if no Excise Tax had been imposed. A tax counsel
chosen by the Employer’s independent auditors, provided such person is reasonably acceptable to the
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Employee (“Tax Counsel”), shall determine in good faith whether any of the Parachute Payments
are subject to the Excise Tax and the amount of any Excise Tax, and Tax Counsel shall promptly
notify Employee of its determination. Employer and Employee shall file all tax returns and reports
regarding such Parachute Payments in a manner consistent with Employer’s reasonable good faith
determination. For purposes of determining the amount of the Gross-Up Payment, Employee shall be
deemed to pay taxes at the Tax Rate applicable at the time of the Gross-Up Payment. In the event
that the Excise Tax is subsequently determined to be less than the amount taken into account
hereunder at the time a Parachute Payment is made, Employee shall repay to Employer promptly
following the date that the amount of such reduction in Excise Tax is finally determined the
portion of the Gross-Up Payment attributable to such reduction (without interest). In the event
that the Excise Tax is determined to exceed the amount taken into account hereunder at the time a
Parachute Payment is made (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), Employer shall pay the Employee an
additional amount with respect to the Gross-Up Payment in respect of such excess (plus any interest
or penalties payable in respect of such excess) at the time that the amount of such excess is
finally determined. Employer shall reimburse Employee for all reasonable fees, expenses, and costs
related to determining the reasonableness of Employer’s position in connection with this paragraph
and preparation of any tax return or other filing that is affected by any matter addressed in this
paragraph, and any audit, litigation or other proceeding that is affected by any matter addressed
in this Section 7(h) and an amount equal to the tax on such amounts at Employee’s Tax Rate. For
the purposes of the foregoing, “Tax Rate” means the Employee’s effective tax rate based upon the
combined federal and state and local income, earnings, Medicare and any other tax rates applicable
to Employee, all at the highest marginal rate of taxation in the country and state of Employee’s
residence on the date of determination, net of the reduction in federal income taxes which could be
obtained by deduction of such state and local taxes.
8. Survival of Sections of this Agreement. Without regard to the reason for
termination of this Agreement or the employment of Employee, and notwithstanding anything contained
in this Agreement to the contrary, it is expressly understood and agreed that Employee’s
obligations under Sections 9, 10, 11 and 12 of this Agreement shall survive termination of this
Agreement in any and all events.
9. Confidential Information and Certain Property Matters.
(a) Employee recognizes that information, knowledge, contacts and experience relating to the
businesses, operations, properties, assets, liabilities and financial condition of Employer and the
markets and industries in which it operates, including, without limitation, information relating to
business plans and ideas, trade secrets, intellectual property, know-how, formulas, processes,
research and development, methods, policies, materials, results of operations, financial and
statistical data, personnel data and customers in and related to the markets and industries in
which Employer operates (“Confidential Information”), is considered by Employer to be valuable,
secret, confidential and proprietary. Employee hereby acknowledges and agrees that the
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Confidential Information is valuable, secret, confidential and proprietary to Employer, and
further agrees that he shall not, at any time (whether during or after the Employment Period), make
public, disclose, divulge, furnish, release, transfer, sell or otherwise make available to any
person any of the Confidential Information, or otherwise use or disclose any of the same or allow
any of the same to be used or disclosed for any purpose, other than as may be permitted to Employee
under this Agreement. Notwithstanding the foregoing, Employee may, without violating this Section
9(a), disclose Confidential Information if (i) such disclosure is required to comply with a valid
court order or any administrative law order or decree; (ii) Employee gives Employer advance written
notice of the required disclosure so that Employer may, if it wishes, seek an appropriate
protective order; and (iii) Employee, in any event, requests that any disclosed information be
afforded confidential treatment, to the greatest extent possible.
(b) Employee shall fully disclose to Employer all Inventions made or conceived by him during
the Employment Period that would be deemed applicable, useful or otherwise beneficial to or in
respect of the current business of Employer, in whole or in part. “Inventions” include, but are
not limited to, customer list compilations, machinery, apparatus, products, processes, results of
research and development (including without limitation results that constitute trade secrets, ideas
and writings), computer hardware, information systems, software (including without limitation
source code, object code, documentation, diagrams and flow charts) and any other discoveries,
concepts and ideas, whether patentable or not (including without limitation processes, methods,
formulas, and techniques, as well as improvements thereof or know-how related thereto, concerning
any present or prospective business activities of Employer). Any and all Inventions shall be the
absolute property of Employer or its designees, and Employee acknowledges that he shall have no
interest whatsoever in such Inventions. At the request of Employer and without additional
compensation, Employee (i) shall make application in due form for United States letters patent and
foreign letters patent on such Inventions, and shall assign to Employer all his right, title and
interest in such Inventions; (ii) shall execute any and all instruments and do any and all acts
necessary or desirable in connection with any such application for letters patent or in order to
establish and perfect in Employer the entire right, title and interest in such Inventions, patent
applications or patents; and (iii) shall execute any instruments necessary or desirable in
connection with any continuations, renewals or reissues thereof or in the conduct of any related
proceedings or litigation. Except as authorized by Employer in writing, Employee shall not
disclose, directly or indirectly, to any person other than Employer, any information relating to
any Invention or any patent application relating thereto.
(c) Employee hereby acknowledges and agrees that the work performed by Employee pursuant to
his employment by Employer will be specifically ordered or commissioned by Employer, and that such
work shall be considered a “work for hire” as defined in the Copyright Revision Act of 1976 (the
“Act”), granting Employer full ownership to the work and all rights comprised therein. In
addition, Employee hereby waives in favor of Employer any and all moral rights in the work
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contemplated by this Section 9(c) that Employer now has or in the future may have. Should any
work not fall within the definition of a “work for hire” as set forth in such Act, Employee hereby
transfers and assigns to Employer full ownership of the copyright to the work and all rights
comprised therein. Employee shall sign all applications for registration of such copyright as are
requested by Employer, and shall sign all other writings and instruments and perform all other acts
necessary or desirable to carry out the terms of this Agreement.
10. Non-Competition and Non-Solicitation
(a) Employee agrees that during the Employment Period and for a period of twelve (12) months
after Employee’s employment with Employer ceases, for whatever reason (the “Noncompetition
Period”), Employee will not, within the country where Employee’s office with Employer was located
at the Termination Date, whether as owner, manager, officer, director, employee, consultant or
otherwise, be engaged or employed by a Competing CRO to provide Customer Services that are the same
or substantially similar to the Customer Services that Employee performed for Employer at any time
during the twenty-four (24) months prior to the Termination Date.
Employer acknowledges and agrees that ownership by Employee 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 or on the Nasdaq Stock Market 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 Employer 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 the Employment Period or (ii) about which Employee has material knowledge and
that Employee knows Employer will provide or has contracted to provide to third parties during the
twelve (12) months following the Employment Period. “Customer” means any person or legal entity
(and its subsidiaries, agents, employees and representatives) about whom Employee has acquired
material information based on employment with Employer and as to whom Employee has been informed
that Employer provides 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 Employer in the provision of
Customer Services to Customers: Xxxxxxx River Laboratories International, Inc., Covance Inc., ICON
plc, Xxxxxx International Inc., MDS Pharma Services, PAREXEL International Corporation,
Pharmaceutical Product Development, Inc., PharmaNet, Quintiles Transnational Corp., and United
HealthCare Corporation.
(b) Employee agrees that he shall not, during the Noncompetition Period, directly or
indirectly, whether as owner, manager, officer, director, employee, consultant or otherwise,
solicit the business of, or accept business
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from any Customer of Employer at the Termination Date, unless the business being solicited or
accepted is not in competition with or substantially similar to Employer’s Customer Services.
(c) Employee agrees that he shall not, during the Noncompetition Period, directly or
indirectly, solicit or induce (or attempt to solicit or induce) to leave the employ of Employer or
any of its affiliates for any reason whatsoever any person employed by Employer or any of its
affiliates at the time of the act of solicitation or inducement.
(d) During and after the Employment Period, Employee agrees not to disparage Employer or any
of its affiliates. During and after the Employment Period, the officers with whom Employer worked
in any twenty four (24) months prior to the Termination Date agree not to disparage the character
of Employee.
(e) Employee hereby specifically acknowledges and agrees that the provisions of this Section
10 are reasonable and necessary to protect the legitimate interests of Employer, and that Employee
desires to agree to the provisions of this Section 10. In the event that any of the provisions of
this Section 10 should ever be held to exceed the time, scope or geographic limitations permitted
by applicable law, it is hereby declared to be the intention of the parties hereto that such
provision be reformed to reflect the maximum time, scope and geographic limitations that are
permitted by such law.
(f) Employee hereby acknowledges and agrees that, owing to the special, unique and
extraordinary nature of the matters covered by this Section 10, in the event of any breach or
threatened breach by Employee of any of the provisions hereof, Employer would suffer substantial
and irreparable injury, which could not be fully compensated by monetary award alone, and Employer
would not have adequate remedy at law. Therefore, Employee agrees that, in such event, Employer
shall be entitled to temporary and/or permanent injunctive relief against Employee, without the
necessity of proving actual damages or of posting bond to enforce any of the provisions of this
Section 10, and Employee hereby waives the defenses, claims, or arguments that the matters are not
special, unique, and extraordinary, that Employer must prove actual damages, and that Employer has
an adequate remedy at law.
(g) Employee further agrees that the rights and remedies described in this Section 10 are
cumulative and shall be in addition to and not in lieu of any other rights and remedies otherwise
available under this Agreement, or at law or in equity, including but not limited to monetary
damages.
(h) Notwithstanding any other provision of this Agreement, Employee further agrees that in the
event of any breach by Employee of any of the provisions of this Section 10, all obligations and
liabilities of Employer under this
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Agreement (including, but not limited to, Sections 6 and 7 hereof) shall immediately terminate and
be extinguished.
(i) Employee agrees that Employer shall have the right to disclose this Agreement or its
contents to any future employer of Employee for the purpose of providing notice of the
post-employment restrictions contained herein. Employer shall provide Employee with written notice
if and when Employer discloses the existence of this Agreement to any future employer of Employee.
11. Records. Upon termination of this Agreement for any reason, Employee shall
promptly deliver to Employer all property of Employer then in Employee’s possession or under his
control, including but not limited to: (i) any and all correspondence, mailing lists, drawings,
blueprints, manuals, letters, records, notes, notebooks, reports, flow-charts, programs, proposals,
computer tapes, discs and diskettes; (ii) any and all documents concerning or relating to
Employer’s business, clients, customers, investors or lenders, or concerning products, processes or
technologies used by Employer; and (iii) any and all documents or materials containing or
constituting Confidential Information.
12. Arbitration. Except with respect to any attempt to obtain preliminary injunctive
relief to enforce the post-employment restrictive provisions of this Agreement (in which case any
such matter may be brought initially in a court of competent jurisdiction for purposes of resolving
any request for preliminary injunctive relief), all disputes between Employer and Employee
hereunder, or otherwise arising out of the employment or termination of employment of Employee,
including but not limited to disputes arising under any state or federal employment discrimination
law, shall be settled by arbitration pursuant to the rules of the American Arbitration Association,
in Washington, D.C. Arbitration hereunder shall be by a single arbitrator appointed by mutual
agreement of the parties. The single arbitrator shall have the authority to summarily dismiss any
claim or claims brought in arbitration prior to a hearing on the merits. The award rendered by the
arbitrator shall be conclusive and binding upon the parties hereto. Each party shall pay its own
expenses of arbitration and the expenses of the arbitrator shall be equally shared.
13. Full Settlement; Mitigation, Costs after a Change in Control. In no event shall
Employee be obligated to seek other employment or take any other action by way of mitigation of the
amounts (including amounts for damages for breach) payable to Employee under any of the provisions
of this Agreement, and such amounts shall not be reduced whether Employee obtains other employment.
In addition, following a Change in Control only, Employer’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
Employer may have against Employee or others. Notwithstanding any other provisions in this
Agreement to the contrary, in the event that, following a Change in Control, any successor in
interest to Employer unsuccessfully contests and/or challenges any of
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Employer’s rights under this Agreement, then the successor in interest to Employer shall pay
Employee’s reasonable attorney’s fees and costs incurred in such contest or challenge.
14. Entire Agreement. This Agreement (together with Exhibits A, B, and C hereto)
supersedes and terminates any and all prior agreements or contracts, written or oral, entered into
between Employer and Employee with regard to the subject matter hereof. Employee acknowledges and
agrees that Employee is not entitled to any salary, bonus, benefits, severance, deferred
compensation or similar payments from Employer or any of its affiliates except as expressly set
forth herein. This instrument contains the entire agreement between Employer and Employee
regarding the employment of Employee by Employer, and any representation, promise or condition in
connection therewith not in writing shall not be binding upon either party. No amendment,
alteration or modification of this Agreement shall be valid unless in each instance such amendment,
alteration or modification is expressed in a written instrument duly executed in the name of the
party or parties making such amendment, alteration or modification.
15. 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.
16. Governing Law. This Agreement is to be governed by and interpreted under the laws
of the state of Delaware, without regard to the conflicts of laws provisions or rules of such
State’s law.
17. Headings; Form of Words. The headings contained in this Agreement have been
inserted for the convenience of reference only, and neither such headings nor the placement of any
term hereof under any particular heading shall in any way restrict or modify any of the terms or
provisions hereof. Terms used in the singular shall be read in the plural, and vice versa, and
terms used in the masculine gender shall be read in the feminine or neuter gender when the context
so requires. The term “person” as used herein refers to a natural person, a corporation, a limited
liability company, a partnership, a joint venture, or other entity or association, as the context
requires.
18. Notices. All notices, requests, consents, payments, demands and other
communications required or contemplated under this Agreement (“Notices”) shall
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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 internationally recognized overnight delivery service (for next business
day delivery), shipping prepaid, as follows:
If to Employer, to:
Pharmaceutical Research Associates, Inc.
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
With a copy (which shall not constitute notice) to :
The Chairman of the Board at the time notice is required at that person’s
then current business address
then current business address
If to Employee, to:
Xxxxx X. Xxxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
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 18, or, if sent by
Federal Express or other nationally recognized overnight delivery service, one business day after
such sending.
19. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
20. Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of Employee and Employee’s heirs and legal representatives and Employer and its successors
and assigns. Employee’s rights and obligations under this Agreement are personal to Employee and
shall not be assignable or transferable by Employee (except that Employee’s rights may be
transferred upon his death by will, trust, or the laws of intestacy). Employer shall require any
successor (whether direct or indirect, by purchase, merger, consolidation, share exchange or
otherwise) to all or substantially all of the business and/or assets of Employer to expressly
assume in writing and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken place, except that no
such assumption and agreement will be required if the successor is bound by operation of law to
perform this Agreement. In this Agreement, the term “Employer”
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shall include any successor to Employer’s business and assets that assumes and agrees to
perform this Agreement (either by agreement or by operation of law).
21. Cooperation. Each party to this Agreement agrees to cooperate with the other
party hereto to carry out the purpose and intent of this Agreement, including without limitation
the execution and delivery to the appropriate party of all such further documents as may reasonably
be required in order to carry out the terms of this Agreement.
22. Waiver. Any waiver of any provision hereof (or in any related document or
instrument) shall not be effective unless made expressly and in a writing executed in the name of
the party sought to be charged. The failure of any party to insist, in any one or more instances,
on performance of any of the terms or conditions of this Agreement shall not be construed as a
waiver or relinquishment of any rights granted hereunder or of the future performance of any such
term, covenant or condition, but the obligations of the parties with respect thereto shall continue
in full force and effect.
23. Indemnification. Employee shall be entitled to be indemnified by Employer to the
fullest extent permitted by the applicable state law and consistent with Employer’s Articles of
Incorporation. Employer further agrees to indemnify Employee to the extent permitted under
applicable law for all actions taken in good faith within the scope, and in the course, of
Employee’s employment under this Agreement during the Employment Period for the life of any claim.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above
written.
| Employer: | PHARMACEUTICAL RESEARCH | |||
| ASSOCIATES, INC. | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Print Name: Xxxxxxx X. Xxxxxxxx | ||||
| Print Title: President and CEO | ||||
Employee: |
/s/ Xxxxx X. Xxxxxxxxx | |||
| Print Name | Xxxxx X. Xxxxxxxxx | |||
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EXHIBIT A
Positions and Boards of Directors on which Employee Serves as of the Date of this
Agreement
Agreement
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EXHIBIT B
Incentive Award Plan
Employee is eligible to participate, at Employee’s election, in the Incentive Award Plan as
follows:
Employee will be granted 50,000 PRA International stock options at a strike price and a date
of grant to be determined by the Board. All matters involving the PRA International stock options,
including but not limited to their vesting, their exercise, and their termination will be governed
by the terms of the Incentive Award Plan and an option agreement to be entered into by Employee in
a form provided by PRA International.
Under the PRA International Management Stock Purchase Plan (“MSPP”), Employee will be provided
the opportunity to purchase PRA International stock in the form of Restricted Stock Units (“RSUs”)
with Employer matching in additional stock 100% of the purchase amount. As part of the MSPP,
Employee has the opportunity to voluntarily purchase RSUs on a pre-tax basis by allocating and
deferring a portion of Employee’s annual final cash bonus into the plan in advance of the plan
year. The deferral amount would be capped at a maximum of 50%. All matters involving the MSPP
will be governed by the terms of the MSPP plan documents.
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EXHIBIT C
Additional Benefits
Annual Car Allowance: Annual Club Membership: |
USD$10,800 USD$1,200 |
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