Exhibit 10.18
AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment to Executive Employment Agreement ("Amendment") is made
and entered into this the 31st day of March, 2003, by and between QUINTILES
TRANSNATIONAL CORP., a North Carolina Corporation (hereinafter the "Company"),
and XXXXX X. XXXXXXX (hereinafter the "Executive").
WHEREAS, the Company and Executive are parties to an Executive
Employment Agreement dated as of June 16, 1998 (the "Employment Agreement"); and
WHEREAS, the Company and Executive desire to amend the Employment
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the legal sufficiency and adequacy of which are hereby acknowledged, the
parties agree to amend the Employment Agreement as follows:
1. The Employment Agreement is amended by deleting Section 3.9
thereof in its entirety and inserting the following Section 19 at the end
thereof:
19. CHANGE IN CONTROL.
19.1 For purposes of this Agreement, a "Change in Control" shall
mean the occurrence of any one of the following
19.1(1) An acquisition (other than directly from the
Company) of any voting securities of the Company by any "Person" (as such term
is used in Sections 3(a)(9), 13(d)(3) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Act")), after which such Person, together with its
"affiliates" and "associates" (as such terms are defined in Rule 12b-2 under the
Act), becomes the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of more than one-third (33.33%) of the
total voting power of the Company's then outstanding voting securities, but
excluding any such acquisition by the Company, any Person of which a majority of
its voting power or its voting equity securities or equity interests is owned,
directly or indirectly, by the Company (for purposes hereof, a "Subsidiary"),
any employee benefit plan of the Company or any of its Subsidiaries (including
any Person acting as trustee or other fiduciary for any such plan), or Xxxxxx X.
Xxxxxxxx;
19.1(2) The shareholders of the Company approve a
merger, share exchange, consolidation or reorganization involving the Company
and any other corporation or other entity that is not controlled by the Company,
as a result of which less than two-thirds (66.66%) of the total voting power of
the outstanding voting securities of the Company or of the successor corporation
or entity after such transaction are held in the aggregate by the holders of the
Company's voting securities immediately prior to such transaction;
19.1(3) The shareholders of the Company approve a
liquidation or dissolution of the Company, or approve the sale or other
disposition by the Company of all or
substantially all of the Company's assets to any Person (other than a transfer
to a Subsidiary of the Company);
19.1(4) During any period of twenty-four (24)
consecutive months, the individuals who constitute the Board of Directors of the
Company at the beginning of such period (the "Incumbent Directors") cease for
any reason to constitute at least two-thirds (66.66%) of the Board of Directors;
provided, however, that a director who is not a director at the beginning of
such period shall be deemed to be an Incumbent Director if such director is
elected or recommended for election by at least two-thirds (66.66%) of the
directors who are then Incumbent Directors.
19.2 TERMINATION FOLLOWING CHANGE IN CONTROL. After the occurrence
of a Change in Control, Executive shall be entitled to receive payments and
benefits pursuant to this Agreement if his employment is terminated pursuant to
Section 19.2(1) or (2) below.
19.2(1) Within eighteen (18) months following a
Change in Control, Executive terminates his employment with Company by giving
written notice of such termination to Company.
19.2(2) Within eighteen (18) months following a
Change in Control, Company terminates Executive's employment other than for any
of the reasons described in Section 4.3 of this Agreement.
19.3 SEVERANCE PAY AND BENEFITS. If Executive's employment with the
Company terminates under circumstances as described in Section 19.2 above,
Executive shall be entitled to receive all of the following:
19.3(1) all accrued compensation through the
termination date, plus any Bonus for which the Executive otherwise would be
eligible in the year of termination, prorated through the termination date,
payable in cash. For purposes of Sections 19.3(1) and 19.3(2), "Bonus" shall be
defined as any benefits for which Executive would be eligible under the ECP
described in Section 3.2 of this Agreement. The amount of such Bonus shall be
paid in cash and, for purposes of Sections 19.3(1) and 19.3(2), shall be
calculated as if Executive had achieved 100% of Executive's performance goals
for that year.
19.3(2) a severance payment equal to two and
ninety-nine hundredths (2.99) times the amount of Executive's most recent annual
compensation, including the amount of his most recent annual Bonus. The
severance amount shall be paid (i) in cash in thirty-four (34) equal monthly
installments commencing one month after the termination date, or (ii) in a lump
sum, within one month after the termination date, at the sole option of
Executive.
19.3(3) the Company shall maintain in full force and
effect, for eighteen (18) months after the termination date, all life insurance,
health, accidental death and dismemberment, disability plans and other benefit
programs in which Executive is entitled to participate immediately prior to the
termination date, provided that Executive's continued participation is possible
under the general terms and provisions of such plans and programs.
Executive's continued participation in such plans and programs shall be at no
greater cost to Executive than the cost he bore for such participation
immediately prior to the termination date. If Executive's participation in any
such plan or program is barred, Company shall arrange upon comparable terms, and
at no greater cost to Executive than the cost be bore for such plans and
programs prior to the termination date, to provide Executive with benefits
substantially similar to, or greater than, those which he is entitled to receive
under any such plan or program; and
19.3(4) a lump sum payment (or otherwise as
specified by Executive to the extent permitted by the applicable plan) of any
and all amounts contributed to a Company pension or retirement plan which
Executive is entitled to under the terms of any such plan through the date of
termination.
19.4 STOCK OPTIONS.
19.4(1) Upon a Change in Control, all options
("Options") to purchase Common Stock of the Company held by Executive as of the
date of the Change in Control shall become fully vested and exercisable.
19.4(2) If Executive's employment with the Company
terminates pursuant to Section 19.2, then the Options shall remain exercisable
until the later of:
(i) the expiration of the applicable
period for exercise following termination of employment set forth in the Option
agreements (or in any other agreement between Executive and the Company that
supersedes the Option agreements); or
(ii) three (3) years after the date of
termination (to the extent of the terms of the Options); provided, however, that
any "incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), that are exercised more than
ninety (90) days after the date of termination pursuant Section 19.2 shall be
treated for tax purposes as nonqualified stock options.
19.5 EXCISE TAX PAYMENTS.
19.5(1) If any payment or benefit (within the
meaning of Section 280G(b)(2) of the Code), to Executive or for his benefit
pursuant to this Agreement (a "Payment") is subject to the excise tax imposed by
Section 4999 of the Code (the "Excise Tax"), then the amount of the Payment net
of all taxes other than the Excise Tax (the "Net Amount") shall be calculated.
Executive shall then receive, in addition to the Payment, an additional payment
(the "Gross-Up Payment"), which shall be an amount such that, after payment of
all taxes (including the Excise Tax) on the Payment and the Gross-Up Payment,
Executive shall retain an amount equal to the Net Amount.
19.5(2) An initial determination as to whether a
Gross-Up Payment is required pursuant to this Agreement and the amount of such
Gross-Up Payment shall be made at Company's expense by an accounting firm
selected by Company and reasonably acceptable to Executive which is designated
as one of the five largest accounting firms in the United States
(the "Accounting Firm"). The Accounting Firm shall provide its determination
(the "Determination"), together with detailed supporting calculations and
documentation to Company and Executive within ten (10) days of the date
Executive's employment terminates if applicable, or such other time as requested
by Company or by Executive (provided Executive reasonably believes that any of
the Payments may be subject to the Excise Tax) and if the Accounting Firm
determines that no Excise Tax is payable by Executive with respect to a Payment,
it shall furnish Executive with an opinion reasonably acceptable to Executive
that no Excise Tax will be imposed with respect to any such Payment. Within ten
(10) days of the delivery of the Determination to Executive, Executive shall
have the right to dispute the Determination (the "Dispute"). The Gross-Up
Payment, if any, as determined pursuant to this Section 19.5 shall be paid by
Company to Executive within five (5) days of the receipt of the Accounting
Firm's determination. The existence of the Dispute shall not in any way affect
Executive's right to receive the Gross-Up Payment in accordance with the
Determination. Upon the final resolution of a Dispute, Company shall promptly
pay to Executive any additional amount required by such resolution. If there is
no Dispute, the Determination shall be binding, final and conclusive upon
Company and Executive subject to the application of Section 19.5(3) below.
19.5(3) Notwithstanding anything in this Amendment
to the contrary, in the event that, according to the Determination, an Excise
Tax will be imposed on any Payment, Company shall pay to the applicable
government taxing authorities as Excise Tax withholding, the amount of the
Excise Tax that the Company has actually withheld from the Payment and the
Gross-Up Payment, as applicable.
19.5(4) If Executive is subject to taxation under a
non-United States taxing authority and an excise tax similar to the Excise Tax
is imposed on any Payment by such non-United States taxing authority, then
Executive shall be entitled to receive a Gross-Up Payment as calculated pursuant
to Section 19.5(1) above, based upon the lesser of such non-United States excise
tax imposed and the Excise Tax that would have been imposed had the Payment been
subject to United States taxation.
2. Except as herein set forth, the Employment Agreement is not
modified or amended and the parties hereto reaffirm and agree to all of the
terms and provisions of the Employment Agreement, as herein amended, in all
respects.
IN WITNESS WHEREOF, the parties have executed this Amendment to
Executive Employment Agreement as of the day and year first written above.
/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
QUINTILES TRANSNATIONAL CORP.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Vice President, Deputy General Counsel
