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EXHIBIT 10.20
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 ("Employer"), and XXXX X. XXXXXXXXX ("Employee")
dated as of January 1, 1998 and first amended as of January 13, 2000 (the
"Employment Agreement"), and is entered into between Employer and Employee 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 7 of the Employment Agreement is amended to read as
follows:
Section 7. Termination.
(a) For purposes of this Agreement "Cause" shall mean (A) the
Employee is arrested for, convicted of, or has plead guilty or nolo contendere
to, a felony; (B) the willful and continued failure by the Employee to perform
his duties with the Employer (other than any such failure resulting from
incapacity due to physical or mental illness) after a demand for performance is
delivered to the Employee by the Employer which specifically identifies the
manner in which the Employer believes the Employee has not performed his duties;
(C) the Employee 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 Employee; or (E) the Employee's breach of fiduciary
duty to the Employer. The Employee shall have 30 days to address the Employer
Board and to effect a cure if possible for any alleged breach of duty.
In the event of termination of the Employee's employment by the
Employer for Cause, the Employee 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 Employer referred to in
Section 5.
(b) Death, Retirement or Disability. In the event of the death,
Retirement or Disability (as such terms are defined below) of the Employee, the
Employee's employment shall be terminated as of the date of such death,
Retirement or Disability, and the Employee,
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or the Employee'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 Employer's long term disability plan for senior
executives (or such other Employer-provided long-term disability benefit plan
sponsored by the Employer in which Employee participates at the time the
determination of Disability is made) (the "Disability Plan"); provided, however,
that no termination of the employment of Employee for Disability shall become
effective (x) prior to the expiration of six (6) months after the date the
Employee first incurs the condition giving rise to the Disability or (y) while
the Employee is substantially performing the regular duties associated with his
employment hereunder.
(ii) "Retirement" shall mean a voluntary decision by the
Employee 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 Employer should terminate the Employee'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 Employee terminates employment for
Good Reason or Employer gives notice of its intent not to renew this Agreement
under Section 2, 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 Employee continues to be employed by the
Employer.
(ii) The Employee 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 Employer's
established policies.
(iii) In the event of the termination of employment of the
Employee by the Employer without Cause (other than as a result of a Change of
Control) or by the Employee for Good Reason (other than resignation following a
Change of Control), then the Employer shall pay the Employee, 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 Employee received for performance during the Employer'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
Employee by the Employer following a Change of Control as set forth in paragraph
(f) of this Section or resignation by the Employee within the ninety (90) day
period following a Change of Control pursuant to paragraph (e) of this Section,
then:
(A) The Employer shall pay to the Employee 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
Employee received for performance during the Employer's immediately preceding
fiscal year or the current annual bonus target in effect at the time of such
termination or resignation.
(B) The Employer shall pay to Employee 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 Employee or the current annual bonus target in effect at the
time of such termination or resignation.
(C) The Employer shall pay to Employee upon such
termination or resignation, in exchange for Employee agreeing not to solicit any
of the then current customers or employees of the Employer 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 Employee or the current annual
bonus target in effect at the time of such termination or resignation.
Employee 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 Employer 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 Employee's then current base
salary (other than as part of a reduction affecting all of the 5 most senior
management employees of the Employer and its subsidiaries); (BB) any material
diminution in the employee's duties or responsibilities; or (CC) any material
breach by the Employer of any provision of this Agreement.
(d) Termination Without Good Reason. In the event of a termination
of employment by the Employee without Good Reason (other than a termination due
to death, Retirement or Disability), the Employee shall have the same
entitlements as provided in paragraph (a) of this Section for termination for
Cause.
(e) If the Employee 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 Employee
for Good Reason for purposes of Section 7(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 Employee'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 Employer; or (iii) if any reduction in the Employee's salary
paid to him by the Employer 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 Employee'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 Employer to
the Employee and in which the Employee is participating or under which the
Employee is covered, all as in effect immediately prior to any Change of
Control; or (v) if there is any requirement by the Employer that the Employee's
position and principal office be based and located more than twenty (20) miles
outside the boundaries of the principal office of the Employee immediately prior
to the Change of Control; or (vi) if any failure or refusal of the Employer to
renew this Agreement under Section 2 after any Change of Control shall have
occurred.
(g) In the event of the termination of employment of the Employee
by the Employer without Cause or by the Employee for Good Reason or resignation
following a Change of Control, if the Employee 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 Employer shall pay the Employee
the amount necessary to place the Employee 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. EMPLOYEE
By:
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XXXX X. XXXXXXXXX
Title:
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