Exhibit 10.7
EMPLOYMENT AND NON-COMPETITION AGREEMENT
BETWEEN
XXXXX XXXXXXXX
AND
PHARMACEUTICAL RESEARCH ASSOCIATES, INC.
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of the
27th day of October, 2004 (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 Xxxxxxxx ("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of its affiliated entities is superseded by the terms of the Agreement.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$225,000 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$100,000 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 for twelve (12)
months 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.
0000 Xxxxxxxxxx Xxxxx, 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 that person's then current
business address
If to Employee, to:
Xxxxx Xxxxxxxx
000 X. Xxxxx Xxxxxx
Xxxxxxxxxx, 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 XXXXXXXX
--------------------------------------------
Print Name Xxxxx Xxxxxxxx
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EXHIBIT A
Positions and Boards of Directors on which Employee Serves as of the Date of
this 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:
First, upon the initial public offering ("IPO") being effective and
following a 4-1 stock split, Employee will be granted 50,000 PRA International
stock options at the IPO effective strike price. 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.
Second, upon the IPO becoming effective and beginning in 2005 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: USD$10,800
Annual Club Membership: USD$1,200
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