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EXHIBIT 10.01
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement"), dated as of March
13, 2001, is made and entered into by QUINTILES TRANSNATIONAL CORP., a North
Carolina corporation (hereinafter the "Company") and XX. XXXXXX XXXXXXXXX XXXXX
(hereinafter the "Executive"). The Company desires to employ Executive as its
Chief Executive Officer, Quintiles Transnational Corp., reporting to the
Chairman of the Company, and provide adequate assurances to Executive and
Executive desires to accept such employment on the terms set forth below, and
the terms Executive agreed to in Executive's offer letter, which offer letter is
incorporated herein by reference.
In consideration of the mutual promises set forth below and other good
and valuable new consideration, the receipt and sufficiency of which the parties
acknowledge, the Company and Executive agree as follows:
1. EMPLOYMENT. The Company employs Executive and Executive accepts
employment on the terms and conditions set forth in this Agreement.
2. NATURE OF EMPLOYMENT. Executive shall serve as Chief Executive
Officer, Quintiles Transnational Corp., and have such responsibilities and
authority as the Company may reasonably assign from time to time. Additionally,
Executive agrees to perform such other duties provided that they are always
consonant with those of a Chief Executive Officer as the Company may set from
time to time.
2.1 Executive shall perform all duties and exercise all
authority in accordance with, and shall otherwise comply with, all Company
policies, procedures, practices and directions.
2.2 Executive shall devote all working time, best efforts,
knowledge and experience to perform successfully her duties and advance the
Company's and/or its Affiliates' interests. During her employment, Executive
shall not engage in any other business activities of any nature whatsoever
(including board memberships) for which she receives compensation without the
Company's prior written consent; provided, however, this provision does not
prohibit her from personally owning and trading in stocks, bonds, securities,
real estate, commodities or other investment properties for her own benefit,
which do not create actual or potential conflicts of interest with the
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Company and/or its Affiliates. As used in this Agreement, "Affiliates" shall
mean: (i) any Company's parent, subsidiary or related entity; and/or (ii) any
entity directly or indirectly controlled or beneficially owned in whole or part
by the Company or Company's parent, subsidiary or related entity.
2.3 Executive's base of operation shall be Durham, North
Carolina, subject to business travel as may be necessary in the performance of
Executive's duties.
3. COMPENSATION.
3.1 BASE SALARY. Executive's monthly salary for all services
rendered shall be $45,833.33 (less applicable withholdings), payable in
accordance with the Company's policies, procedures and practices as they may
exist from time to time. Executive's salary shall be reviewed in accordance with
the Company's policies, procedures and practices as they may exist from time to
time.
3.2 EXECUTIVE COMPENSATION PLAN. Executive may participate as
a LEVEL 1.5 employee in the Executive Compensation Plan (or successor plans)
("ECP") which may be made available from time to time to Company executives at
Executive's level; provided, however, that Executive's participation is subject
to the applicable terms, conditions and eligibility requirements of the plan
documents, some of which are within the plan administrator's discretion, as they
may exist from time to time.
3.3 TAX RETURNS. Executive shall be entitled to tax return
preparation and reasonable financial planning, consultation and advice by the
Company's accounting firm and/or legal counsel and/or financial consultants as
the Company may provide from time to time to Company executives at Executive's
level.
3.4 OTHER BENEFITS. Executive may participate in all medical,
dental and disability insurance, 401(k), pension, personal leave, car allowance
and other employee benefit plans and programs, except Executive may not receive
severance payments other than specified in this Agreement; provided, however,
that Executive's participation in benefit plans and programs is subject to the
applicable terms, conditions and eligibility requirements of these plans and
programs, some of which are within the plan administrator's discretion, as they
may exist from time to time.
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3.5 BUSINESS EXPENSES. Executive shall be reimbursed for
reasonable and necessary expenses actually incurred by her in performing
services under this Agreement in accordance with and subject to the terms and
conditions of the applicable Company reimbursement policies, procedures and
practices as they may exist from time to time. Expenses covered by this
provision include but are not limited to travel, entertainment, professional
dues, subscriptions and dues, fees and expenses associated with membership in
various professional, and business and civic associations of which Executive's
participation is in the Company's best interest.
3.6 Nothing in this Agreement shall require the Company to
create, continue or refrain from amending, modifying, revising or revoking any
of the plans, programs or benefits set forth in Sections 3.2 through 3.5,
provided that no less favorable benefits to executives at Executive's level are
provided in their place at all times. Any amendments, modifications, revisions
and revocations of these plans, programs and benefits shall apply to Executive.
3.7 If, at any time during which Executive is receiving salary
or post-termination payments from the Company, she receives payments on account
of mental or physical disability from any Company-provided plan, then the
Company, at its discretion, may reduce her salary or post-termination payments
by the amount of such disability payments.
4. TERM OF EMPLOYMENT. The original term of employment shall be for a
two (2) year period commencing on April 2, 2001, and terminating on April 2,
2003 ("Original Term"), subject to the following provisions:
4.1 Upon the expiration of the original or any renewal term of
employment, Executive's employment shall be automatically renewed for an
additional one (1) year period ("Renewal Term") unless, at least ninety (90)
days prior to the renewal date, either party gives the other party written
notice of its intent not to continue the employment relationship. During any
renewal term of employment, the terms, conditions and provisions set forth in
this Agreement shall remain in effect unless modified in accordance with Section
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4.2 Either party may terminate the employment relationship
without cause at any time upon giving the other party ninety (90) days written
notice.
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4.3 The Company may terminate the Executive's employment
relationship immediately without notice at any time for the following reasons
which shall constitute "Cause": (i) Executive's death; (ii) Executive's physical
or mental inability to perform the essential functions of her duties
satisfactorily for a period of 180 consecutive days or 180 days in total within
a 365-day period as determined by the Company in its reasonable discretion and
in accordance with applicable law; (iii) any act or omission of Executive
constituting willful or gross misconduct (including willful violation of the
Company's policies), gross negligence, fraud, misappropriation, embezzlement,
criminal behavior, conflict of interest or competitive business activities
which, as determined by the Company in its reasonable discretion, shall cause
material harm, or any other actions that are materially detrimental to the
Company or any Affiliates' interest; (iv) any other reason recognized as "cause"
under applicable law; or (v) Executive's material and fundamental breach of this
Agreement. Where any act or failure to act by the Executive might constitute
"cause" under this Section 4.3, but is capable of curing, the Company is obliged
to give the Executive notice of the alleged "cause" and at least 30 days to cure
the act or failure to act before terminating the Executive's employment
hereunder.
4.4 Executive may terminate Executive's employment with the
Company as a result of the Company's failure to cure its material and
fundamental breach of this Agreement after Executive has given the Company
notice of the material breach and at least thirty (30) days to cure the breach
(or such longer period as may be reasonably required to cure the breach as long
as the Company is making good faith efforts to do so).
4.5 This Agreement shall terminate upon the termination of the
employment relationship with the following exceptions: Section 6 (Trade Secrets,
Confidential Information, Company Property and Competitive Business Activities),
7 (Intellectual Property Ownership), 8 (License), 9 (Release), and 12 (Change in
Control) shall survive the termination of Executive's employment and/or the
expiration or termination of this Agreement, regardless of the reasons for such
expiration or termination.
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5. COMPENSATION AND BENEFITS UPON TERMINATION.
5.1 The Company's obligation to compensate Executive ceases on
the effective termination date except as to: (i) amounts due at that time; (ii)
any amount subsequently due pursuant to the plan described in Section 3.2; and
(iii) any compensation and/or benefits to which she may be entitled to receive
pursuant to Sections 5.2, 5.3, 5.4 or 5.5.
5.2 If the Company terminates Executive's employment pursuant
to Sections 4.1 (notice of non-renewal) or 4.2 (without cause), then the
Company's sole obligation shall be to pay Executive: (i) amounts due on the
effective termination date; (ii) any amounts subsequently due pursuant to the
plan described in Section 3.2; and (iii) subject to Executive's compliance with
Sections 6,7,8 and 9 and subject to Sections 3.7 and 5.6, an amount equal to her
then current monthly salary (less applicable withholdings) for the twenty-four
(24) month non-competition period set forth in Section 6.3, payable in equal
monthly installments.
5.3 During the period during which Executive receives
post-termination payments pursuant to Section 5.2, she may continue to
participate, to the extent permitted by the applicable plans and subject to
their terms, conditions and eligibility requirements, in all employee welfare
benefits plans (as defined by the Employee Retirement Income Security Act of
1974, as amended) in which Executive participated on her effective termination
date. The Company will pay or, at the Company's discretion, reimburse Executive
for the premiums actually paid, to continue coverage under such plans during the
period. Notwithstanding the Company's payment of or reimbursement for the
premiums, any coverage under such plans shall be subject to the terms,
conditions and eligibility requirements of such plans, and nothing in this
Section shall constitute any guaranty of coverage.
5.4 If the Company terminates Executive's employment as
provided in Sections 4.3 (i) (death), (ii) (physical or mental inability to
perform), (iii) (materially harmful acts or omissions), (iv) (other reasons
recognized as "cause") or (v) (Executive's material breach) or if the Executive
terminates her employment pursuant to Section 4.1 (notice of non-renewal) or
Section 4.2 (without cause), then the Company's sole obligation shall be to pay
Executive: (i) amounts due on the effective termination date and (ii) any
amounts subsequently due pursuant to the plan described in Section 3.2.
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Executive, except when employment terminates pursuant to Section 4.3(i) (death),
shall comply with Sections 6,7,8 and 9 of this Agreement upon expiration or
termination of this Agreement.
5.5 If Executive terminates the employment relationship as a
result of the Company's failure to cure its material breach of this Agreement
after she has given the Company notice of the material breach and 30 days in
which to cure the breach (or such longer period as may be reasonably required to
cure the breach as long as the Company is making good faith efforts to do so),
pursuant to Section 4.4 of this Agreement, then the Company's sole obligation to
Executive in lieu of any other damages or other relief to which she otherwise
may be entitled shall be (i) an amount equal to amounts due at the time of her
termination; and (ii) subject to Executive's compliance with Sections 6, 7, 8
and 9 and subject to Sections 3.7 and 5.6, liquidated damages in an amount equal
to her then current monthly salary (less applicable withholdings) for the
twenty-four (24) month non-competition period set forth in Section 6.3, payable
in equal monthly installments.
5.6 The Company's obligation to provide the payments under
Sections 5.2 and 5.5 is conditioned upon Executive's execution of an enforceable
release of all claims and her compliance with Sections 6, 7, 8 and 9 of this
Agreement. If Executive chooses not to execute such a release or fails to comply
with these sections, then the Company's obligation to compensate her ceases on
the effective termination date except as to amounts due at that time and any
amount subsequently due pursuant to the plan described in Section 3.2.
5.7 Executive is not entitled to receive any compensation or
benefits upon her termination except as: (i) set forth in this Agreement; (ii)
otherwise required by law; or (iii) otherwise required by any employee benefit
plan in which she participates. Nothing in this Agreement, however, is intended
to waive or supplant any death, disability, retirement, 401(k) or pension
benefits to which she may be entitled under employee benefit plans in which she
participates.
6. TRADE SECRETS, CONFIDENTIAL INFORMATION, COMPANY PROPERTY AND
COMPETITIVE BUSINESS ACTIVITIES. Executive acknowledges that: (i) the Company
and its Affiliates have worldwide business operations, a worldwide customer
base, and are engaged in the business of
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contract research, sales and marketing, healthcare policy consulting and health
information management services to the worldwide pharmaceutical, biotechnology,
medical device and healthcare industries; (ii) by virtue of her employment by
and upper-level position with the Company, she has or will have access to Trade
Secrets and Confidential Information (as defined in Sections 6.1(5) and 6.1(6))
of the Company and its Affiliates, including valuable information about their
worldwide business operations and entities with whom they do business in various
locations throughout the world, and has developed or will develop relationships
with their customers and others with whom they do business in various locations
throughout the world; and (iii) the Trade Secret, Confidential Information and
Competitive Business Activities' provisions set forth in this Agreement are
reasonably necessary to protect the Company's and its Affiliates' legitimate
business interests, are reasonable as to the time, territory and scope of
activities which are restricted, do not interfere with public policy or public
interest and are described with sufficient accuracy and definiteness to enable
her to understand the scope of the restrictions imposed on her.
6.1 TRADE SECRETS AND CONFIDENTIAL INFORMATION. Executive
acknowledges that: (i) the Company and/or its Affiliates will disclose to her
certain Trade Secrets and Confidential Information; (ii) Trade Secrets and
Confidential Information are the sole and exclusive property of the Company
and/or its Affiliates (or a third party providing such information to the
Company and/or its Affiliates) and the Company and/or its Affiliates or such
third party owns all worldwide rights therein under patent, copyright,
trademarks, trade secret, confidential information or other property right; and
(iii) the disclosure of Trade Secrets and Confidential Information to Executive
does not confer upon her any license, interest or rights of any kind in or to
the Trade Secrets or Confidential Information.
6.1(1) Executive may use the Trade Secrets and
Confidential Information only while she is employed or otherwise retained by the
Company and only then in accordance with applicable Company policies and
procedures and solely for the Company's benefit. Except as authorized in the
performance of services for the Company, Executive will hold in confidence and
will not, either or indirectly, in any form, by any means, or for any purpose,
disclose, reproduce, distribute, transmit, reverse engineer, decompile,
disassemble, or transfer Trade Secrets or Confidential Information or any
portion thereof. Upon the Company's request, Executive shall return Trade
Secrets and Confidential Information and all related materials.
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6.1(2) If Executive is required to disclose Trade
Secrets or Confidential Information pursuant to a court order, subpoena or other
government process or such disclosure is necessary to comply with applicable law
or defend against claims, she shall: (i) notify the Company promptly before any
such disclosure is made; (ii) at the Company's request and expense take all
reasonably necessary steps to defend against such disclosure, including
defending against the enforcement of the court order, other government process
or claims; and (iii) permit the Company to participate with counsel of its
choice in any proceeding relating to any such court order, subpoena, other
government process or claims; provided that nothing in this Agreement shall
oblige the Executive to act (or fail to act) in contravention to any legal
obligation.
6.1(3) Executive's obligations with regard to Trade
Secrets shall remain in effect for as long as such information shall remain a
trade secret under applicable law.
6.1(4) Executive's obligations with regard to
Confidential Information shall remain in effect while she is employed or
otherwise retained by the Company and/or its Affiliates and for fifteen (15)
years thereafter.
6.1(5) As used in this Agreement, "Trade Secrets"
means information of the Company, its Affiliates and its and/or their licensors,
suppliers, customers, or prospective licensors or customers, including, but not
limited to, data, formulas, patterns, compilations, programs, devices, methods,
techniques, processes, financial data, financial plans, product plans, or lists
of actual or potential customers or suppliers, which: (i) derives independent
actual or potential commercial value, from not being generally known to or
readily ascertainable through independent development or reverse engineering by
persons or entities who can obtain economic value from its disclosure or use;
and (ii) is the subject of efforts that are reasonable under the circumstances
to maintain its secrecy.
6.1(6) As used in this Agreement, "Confidential
Information" means information other than Trade Secrets, that is of value to its
owner and is treated as confidential, including, but not limited to, future
business plans, licensing strategies, advertising campaigns, information
regarding executives and employees, and the terms and conditions of this
Agreement; provided, however, Confidential Information shall not
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include information which is in the public domain or becomes public knowledge
through no fault of Executive.
6.2 COMPANY PROPERTY. Upon termination of her employment,
Executive shall: (i) deliver to the Company all records, memoranda, data,
documents and other property of any description which refer or relate in any way
to Trade Secrets or Confidential Information, including all copies thereof,
which are in her possession, custody or control; (ii) deliver to the Company all
Company and/or Affiliates property (including, but not limited to, keys, credit
cards, client files, contracts, proposals, work in process, manuals, forms,
computer stored work in process and other computer data, research materials,
other items of business information concerning any Company and/or Affiliates
client, or Company and/or Affiliates business or business methods, including all
copies thereof) which is in her possession, custody or control; (iii) bring all
such records, files and other materials up to date before returning them; and
(iv) fully cooperate with the Company in winding up her work and transferring
that work to other individuals designated by the Company.
6.3 COMPETITIVE BUSINESS ACTIVITIES. During her employment and
the twenty-four (24) months following her effective termination date (regardless
of the reason for the termination), Executive will not engage in the following
activities:
(A) on Executive's own or another's behalf, whether
as an officer, director, stockholder, partner, associate, owner, employee,
consultant or otherwise, directly or indirectly:
(i) compete with the Company or its
Affiliates within the geographical areas set forth in Section 6.3(1); except
that Executive, without violating this provision, may become employed by any
company which is engaged in the integrated development, discovery, manufacture,
marketing and sale of pharmaceutical drugs that does not engage in contract
sales and/or contract research within the meanings commonly understood in the
CRO and CSO industries, respectively, with the purpose or effect of being or
becoming a competitor to the Company or its Affiliates in either the contract
sales or contract research businesses;
(ii) within the geographical areas set forth
in Section 6.3(1), solicit or do business which is the same, similar to or
otherwise in competition
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with the business engaged in by the Company or its Affiliates, from or with
persons or entities: (a) who are customers of the Company or its Affiliates; (b)
who Executive or someone for whom she was responsible solicited, negotiated,
contracted or serviced on the Company's or its Affiliates' behalf; or (c) who
were customers of the Company or its Affiliates at any time during the last year
of Executive's employment with the Company;
(iii) offer employment to or otherwise
solicit for employment any employee or other person who had been employed by the
Company or its Affiliates during the last year of Executive's employment with
the Company; or
(B) make or publish any public or private statement
harmful to the Company, or its Affiliates, goodwill, name, business and
operations.
6.3(1) The restrictions set forth in Section 6.3
apply to the following geographical areas; (i) within a 60-mile radius of the
Company and/or its Affiliates where the Executive had an office during the
Executive's employment with the Company and/or its Affiliates; (ii) any city,
metropolitan area, county (or similar political subdivision in foreign
countries) in which Executive's substantial services were provided, or for which
Executive had substantial responsibility, or in which Executive performed
substantial work on Company and/or Affiliates' projects, while employed by the
Company; and (iii) any city, metropolitan area, county (or similar political
subdivisions in foreign countries) in which the Company or its Affiliates is
located or does or, during Executive's employment with Company, did business.
6.3(2) Notwithstanding the foregoing, Executive's
ownership, directly or indirectly, of not more than one percent of the issued
and outstanding stock of a corporation the shares of which are regularly traded
on a national securities exchange or in the over-the-counter market shall not
violate Section 6.3.
6.4 REMEDIES. Executive acknowledges that her failure to abide
by the Trade Secrets, Confidential Information, Company Property or Competitive
Business Activities provisions of this Agreement would cause irreparable harm to
the Company and/or its Affiliates for which legal remedies would be inadequate.
Therefore, in addition to any legal or other relief to which the Company and/or
its Affiliates may be entitled by virtue of Executive's failure to abide by
these provisions: (i) the Company will be released of its obligations under this
Agreement to make any post-termination
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payments, including but not limited to those otherwise available pursuant to
Sections 5.2, 5.3, 5.4, 5.5; (ii) the Company may seek legal and equitable
relief, including but not limited to preliminary and permanent injunctive
relief, for Executive's actual or threatened failure to abide by these
provisions; and (iii) Executive will return all post-termination payments
received pursuant to this Agreement, including but not limited to those received
pursuant to Sections 5.2, 5.3, 5.4, 5.5.
6.5 TOLLING. The period during which Executive must refrain
from the activities set forth in Sections 6.1 and 6.3 shall be tolled during any
period in which she fails to abide by these provisions.
6.6 OTHER AGREEMENTS. Nothing in this Agreement shall
terminate, revoke or diminish Executive's obligations or the Company's and/or
its Affiliates' rights and remedies under law or any agreements relating to
trade secrets, confidential information, non-competition or intellectual
property which Executive has executed in the past or may execute in the future
or contemporaneously with this Agreement.
7. INTELLECTUAL PROPERTY OWNERSHIP.
7.1 As used in this Agreement, "Work Product" shall mean the
data, materials, documentation, computer programs, inventions (whether or not
patentable), improvements, modifications, discoveries, methods, developments,
picture, audio, video, artistic works and all works of authorship, including all
worldwide rights therein under patent, copyright, trademark, trade secret,
confidential information or other property right, created or developed in whole
or in part by Executive, while employed by the Company (whether developed during
work hours or not), whether prior or subsequent to the date of this Agreement.
7.2 All Work Product shall be considered work made for hire by
Executive and owned by the Company. If any of the Work Product may not, by
operation of law be considered work made for hire by Executive for the Company,
or if ownership of all right, title, and interest of the intellectual property
rights therein shall not otherwise vest exclusively in the Company, Executive
hereby assigns to the Company, and upon the future creation thereof
automatically assigns to the Company, without further consideration, the
ownership of all Work Product. The Company shall have the right to obtain and
hold in its own name copyrights, registrations and any other protection
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available in the Work Product. Executive agrees to perform, during or after her
employment, such further acts which the Company requests as may be necessary or
desirable to transfer, perfect and defend its ownership of the Work Product.
7.3 Notwithstanding the foregoing, this Agreement shall not
require assignment of any invention that: (i) Executive developed entirely on
her own time without using the Company's equipment, supplies, facilities, Trade
Secrets or Confidential Information; and (ii) does not relate to the Company's
business or actual or anticipated research or development or result from any
work performed by Executive for the Company.
7.4 Executive shall promptly disclose to the Company in
writing all Work Product conceived, developed or made by her, individually or
jointly.
8. LICENSE. To the extent that any preexisting materials are contained
in Work Product which Executive delivers to the Company or its customers,
Executive grants to the Company an irrevocable, nonexclusive, worldwide,
royalty-free license to: (i) use and distribute (internally or externally)
copies of, and prepare derivative works based upon, such preexisting materials
and derivative works thereof; and (ii) authorize others to do any of the
foregoing.
9. RELEASE. Executive acknowledges that as a part of her services, she
may provide for the Company or its Affiliates use, her image, likeness and
voice, for publication and Executive expressly releases the Company, its
Affiliates and its agents from any claims regarding such use and publication.
10. EMPLOYEE REPRESENTATION. Executive represents and warrants that her
employment and obligations under this Agreement will not (i) breach any duty or
obligation she owes to another or (ii) violate any law, recognized ethics
standard or recognized business custom.
11. OFFICERS AND DIRECTORS INDEMNIFICATION PROVISIONS. To the extent
Executive serves as a Company and/or Affiliate officer or director, Executive
shall be entitled to insurance under Company's directors and officers'
indemnification policies comparable to any such insurance covering executives of
the applicable entity serving in similar capacities. Further, the Company's
bylaws shall
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contain provisions granting to Executive the maximum indemnity protection
allowed under applicable law and the Company hereby agrees to indemnify and hold
harmless Executive in accordance with such maximum indemnity protection allowed
under applicable law.
12. CHANGE IN CONTROL.
12.1 For purposes of this Agreement, a "Change in Control"
shall mean the occurrence of any one of the following:
(A) 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;
(B) 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 is held in the aggregate by the holders of the
Company's voting securities immediately prior to such transaction;
(C) 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);
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(D) During any period of 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 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.
12.2 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, at the time of the Change
in Control, (i) Executive is in ECP Levels 1 to 2 and her employment is
terminated pursuant to Sections 12.2(A), (B), or (C) below, or (ii) Executive is
in ECP Levels 2.5 to 4 and her employment is terminated pursuant to Sections
12.2(B) or (C) below.
(A) Within eighteen (18) months following a Change in
Control, Executive terminates her employment with Company by giving written
notice of such termination to Company.
(B) Within eighteen (18) months following a Change in
Control, Company terminates Executive's employment for reasons other than
"Cause" as such term is defined in Section 4.3 hereof.
(C) Within eighteen (18) months following a Change in
Control, Executive terminates her employment with the Company for "Good Reason."
For purposes of this Agreement, "Good Reason" shall mean the occurrence after a
Change in Control of any of the following events or conditions:
(i) a change in Executive's status, title,
position or responsibilities (including reporting responsibilities) which, in
Executive's reasonable judgment, represents an adverse change from her status,
title, position or responsibilities in effect immediately prior thereto; the
assignment to Executive of any duties or responsibilities which in Executive's
reasonable judgment, are inconsistent with her status, title, position or
responsibilities; or any removal of Executive from or failure to
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reappoint or reelect her to any such positions, status, or title except in
connection with the termination of her employment for Cause or by Executive
other than for Good Reason;
(ii) a reduction in Executive's base salary;
(iii) the Company's requiring Executive to
be based at any place outside a thirty (30) mile radius from Executive's
principal place of residence, except for reasonably required travel on Company's
business which is not greater than such travel requirements prior to the Change
in Control;
(iv) the failure by the Company to continue
in effect any compensation, welfare or benefit plan in which Executive is
participating at the time of a Change in Control, including benefits pursuant to
the Executive Compensation Plan or similar plans, without substituting plans
providing Executive with substantially similar or greater benefits, or the
taking of any action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under any such plans
or deprive Executive of any material fringe benefit enjoyed by Executive at the
time of the Change in Control;
(v) any purported termination of Executive's
employment for Cause without grounds therefor;
(vi) the insolvency or the filing (by any
party including the Company) of a petition for bankruptcy of the Company;
(vii) any material breach by the Company of
any provision of this Agreement after Executive has given the Company notice of
the material breach and at least thirty (30) days to cure the breach (or such
longer period as may be reasonably required to cure the breach as long as the
Company is making good faith efforts to do so.); or
(viii) the failure of the Company to obtain
an agreement, satisfactory to Executive, from any successor or assign of the
Company to assume and agree to perform this Agreement.
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12.3 SEVERANCE PAY AND BENEFITS. If Executive's employment
with the Company terminates under circumstances as described in Section 12.2.
above, Executive shall be entitled to receive all of the following:
(A) 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 12.3(A) and 12.3(B), "Bonus" shall be defined as any
benefits for which Executive would be eligible under the Executive Compensation
Plan described in Section 3.2 of this Agreement. The amount of such Bonus shall
be paid in cash and, for purposes of Sections 12.3(A) and 12.3(B), shall be
calculated as if Executive had achieved 100% of Executive's performance goals
for that year.
(B) 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 her 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 the
Executive.
(C) 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 she 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 she bore for such plans and programs prior to the
termination date, to provide Executive with benefits substantially similar to,
or greater than, those which she is entitled to receive under any such plan or
program; and
(D) a lump sum payment (or otherwise as specified by
Executive to the extent permitted by the applicable plan) of any and all amounts
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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.
12.4 STOCK OPTIONS.
(A) 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.
(B) If Executive's employment with the Company
terminates pursuant to Section 12.2, 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 12.2 shall be
treated for tax purposes as nonqualified stock options.
12.5 EXCISE TAX PAYMENTS.
(A) If any payment or benefit (within the meaning of
Section 280G(b)(2) of the Code), to Executive or for her 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.
(B) 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
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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 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 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 12.5 shall be
paid by Company to Executive within five 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 (C) below.
(C) Notwithstanding anything in this Agreement 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.
(D) 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 12.5(a) 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.
13. NOTICES. All notices, requests, demands and other communications
required or permitted to be given in writing pursuant to this Agreement shall be
deemed
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given and received: (A) upon delivery if delivered personally; (B) on the fifth
(5th) day after being deposited with the U.S. Postal Service if mailed by first
class mail, postage prepaid, registered or certified with return receipt
requested, at the addresses set forth below; (C) on the next day after being
deposited with a reliable overnight delivery service; or (D) upon receipt of an
answer back confirmation, if transmitted by telefax, addressed to the below
indicated telefax number. Notice given in another manner shall be effective only
if and when received by the addressee. For purposes of notice, the addresses and
telefax number (if any) of the parties shall be as follows:
If to the Executive, to: Xxxxxx Xxxxx
Xxxxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
If to the Company, to: Quintiles Transnational Corp.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: General Counsel
provided that: (A) each party shall have the right to change its address for
notice, and the person who is to receive notice, by the giving of fifteen (15)
days' prior written notice to the other party in the manner set forth above; and
(B) notices shall be effective if given to the other party in the manner set
forth above regardless of whether a copy was received by the additional
addressee specified above.
14. WAIVER OF BREACH. The Company's or Executive's waiver of any breach
of a provision of this Agreement shall not waive any subsequent breach by the
other party.
15. ENTIRE AGREEMENT. Except as expressly provided in this Agreement,
this Agreement: (i) supersedes all other understandings and agreements, oral or
written, between the parties with respect to the subject matter of this
Agreement; and (ii) constitutes the sole agreement between the parties with
respect to this subject matter. Each party acknowledges that: (i) no
representations, inducements, promises or agreements, oral or written, have been
made by any party or by anyone acting on behalf
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of any party, which are not embodied in this Agreement; and (ii) no agreement,
statement or promise not contained in this Agreement shall be valid. No change
or modification of this Agreement shall be valid or binding upon the parties
unless such change or modification is in writing and is signed by the parties.
16. SEVERABILITY. If a court of competent jurisdiction holds that any
provision or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement. Additionally, if any of the provisions,
clauses or phrases in the Trade Secrets, Confidential Information or Competitive
Business Activities provisions set forth in this Agreement are held
unenforceable by a court of competent jurisdiction, then the parties desire that
they be "blue-penciled' or rewritten by the court to the extent necessary to
render them enforceable.
17. PARTIES BOUND. The terms, provisions, covenants and agreements
contained in this Agreement shall apply to, be binding upon and inure to the
benefit of the Company's successors and assigns. The Company, at its discretion,
may assign this Agreement to Affiliates. Because this Agreement is personal to
Executive, Executive may not assign this Agreement.
18. GOVERNING LAW. This Agreement and the employment relationship
created by it shall be governed by North Carolina law without giving effect to
North Carolina choice of law provisions.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
day and year first written above.
/s/ Xx. Xxxxxx Xxxxxxxxx Xxxxx
----------------------------------------------
Xx. Xxxxxx Xxxxxxxxx Xxxxx
QUINTILES TRANSNATIONAL CORP.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------
Title: Senior Vice President & General Counsel
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