PRA INTERNATIONAL FORM OF OPTION AGREEMENT (Senior Vice Presidents, Executive Vice Presidents and President)
Exhibit 10.2
FORM
OF OPTION AGREEMENT
(Senior Vice Presidents, Executive Vice Presidents and President)
(Senior Vice Presidents, Executive Vice Presidents and President)
THIS OPTION AGREEMENT (the “Agreement”) evidences an agreement made as of the ___th day of
,
200___ (the “Date of Grant”), by and between
(the “Optionee”), and PRA
INTERNATIONAL, a Delaware corporation (the “Corporation”).
WHEREAS, Optionee is an employee of Pharmaceutical Research Associates, Inc., a Virginia
corporation, or another subsidiary of the Corporation (the “Employer”).
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein set forth, it
is agreed as follows:
1. Option. In consideration of the Optionee’s employment with the Employer, the
Corporation hereby grants to the Optionee the option to purchase that number of shares of the
Corporation’s Common Stock at the exercise price set forth on Schedule 1 hereto (the
“Option”), subject to the terms and conditions of this Option Agreement and the PRA International
2004 Incentive Award Plan (the “Plan”) (attached at Exhibit 1). The Option is intended to qualify
as an “incentive stock option” within the meaning of Section 422 of the Code. To the extent that
the Option does not so qualify that portion of the Option shall be treated as a non-qualified
option under Section 422 of the Code. All capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in the Plan.
2. Vesting of Options.
(a) The Option shall vest in accordance with the terms set forth on Schedule 1 and the
terms of Section 3 hereof.
(b) Unless sooner terminated in accordance with the terms hereof, the Option shall terminate
(whether or not vested) on the seventh (7th) anniversary of the Date of Grant.
3. Expiration of the Option.
(a) Death or Disability of Employee. In the event that the Optionee’s employment is
terminated by reason of death or disability, the unvested portion of the Option that would
otherwise vest on the next anniversary of the Date of Grant will automatically vest on a pro rata
basis for the period commencing on the Date of Grant or, if applicable, the most recent anniversary
of the Date of Grant and ending on the date the Optionee’s employment is so terminated, and all
other unvested Options will automatically terminate. The vested portion of the Option shall be
exercisable by the Optionee’s beneficiary or estate for a period of the earlier
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of (i) eighteen (18) months following Optionee’s death or disability or (ii) the seventh
(7th) anniversary of the Date of Grant. If the vested portion of the Option is not
exercised within the earlier of (i) eighteen (18) months following Optionee’s death or disability
or (ii) the seventh (7th) anniversary of the Date of Grant, then such vested portion of
the Option shall expire and shall no longer be exercisable.
(b) Cause. In the event that the Optionee’s employment is terminated by the Employer
for Cause (as defined below) the Option will automatically terminate and
expire and shall no longer
be exercisable, whether or not previously vested. For purposes of this Agreement, “Cause” shall
mean: (i) Optionee’s failure to competently perform his material assigned duties as reasonably
determined by Employer; (ii) Optionee engaging in or causing an act that has a material adverse
impact on the reputation, business, business relationships or financial condition of Employer;
(iii) the conviction of or plea of guilty or nolo contendere by Optionee to a felony or any crime
involving moral turpitude; (iv) Optionee’s gross misconduct, dishonesty, or fraud; or (v)
Optionee’s willful refusal to perform specific directives of the Employer’s President and CEO, or
his authorized designee, which are consistent with the scope, ethics, and nature of Optionee’s
duties and responsibilities.
(c) Other Termination. In the event that the Optionee’s employment is terminated for
any reason other than death, disability or Cause, the unvested portion of the Option will
automatically terminate. The Optionee shall have the right, in the Optionee’s sole discretion, for
a period of thirty (30) days following such termination of employment to exercise the Option. If
the Optionee does not exercise the vested portion of the Option within 30 days after his/her
employment so terminates, then the Option shall expire and shall no longer be exercisable.
(d) Forfeiture for Competition.
(1) With the exception of when a Termination Event occurs under Section 7(g)(B) of Optionee’s
Employment and Non-Competition Agreement (hereby incorporated by reference) (in which case, Section
3(d)(2) of this Agreement applies), Optionee agrees that during Optionee’s employment and during a
period of [ ] months thereafter (the “Noncompetition Period”), Optionee, shall not, 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 related to the
Customer Services that Optionee performed for Employer at any time during the twenty-four (24)
months prior to the termination of Optionee’s employment (the “Prohibited Services”).
(2) If a Termination Event occurs under Section 7(g)(B) of Optionee’s Employment and
Non-Competition Agreement, Optionee agrees that for a period of [ ] months after Optionee’s
employment with Employer ceases (the “Change in Control Noncompetition Period”), Optionee will not
whether as owner, manager,
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officer, director, employee, consultant or otherwise, be engaged or employed by a Change in Control
Competing CRO to provide Customer Services that are the same or substantially related to the
Customer Services that Employee performed for Employer at any time during the twenty-four (24)
months prior to the Termination Date.
(3) In the event that Optionee breaches either Section 3(d)(1) or 3(d)(2) of this Agreement,
then in addition to other remedies available to the Corporation, Optionee shall immediately forfeit
all rights under the Option that may have been granted to Optionee or to which Optionee may be
entitled, whether the same are then vested or not. In addition, to the extent that Optionee
exercises any of the Option during the Noncompetition Period and provides Prohibited Services then
such exercise shall be rescinded and all such shares of common stock of the Corporation purchased
by Optionee pursuant to the exercise of such Option during the Noncompetition Period may be
repurchased by the Corporation, in its sole discretion, at the price paid by Optionee for such
shares of common stock. To the extent that the Optionee has sold or otherwise disposed of any
shares acquired upon exercise of the Option, then the Optionee shall pay back to the Corporation
any and all proceeds received by the Optionee as a result of such sale or other disposition. The
Optionee shall also return all dividends or other distributions, if any, paid on such shares.The
Corporation acknowledges and agrees that ownership by Optionee 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 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 Optionee’s employment with Employer or (ii) about which Optionee has material
knowledge and that Optionee knows Employer will provide or has contracted to provide to third
parties during the twelve (12) months following the Optionee’s employment with Employer.
“Customer” means any person or legal entity (and its subsidiaries, agents, employees and
representatives) about whom Optionee has acquired material information based on employment with
Employer and as to whom Optionee 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, INC Research, Inc., Xxxxxx International
Inc., MDS Pharma Services, Omnicare, Inc., PAREXEL International Corporation, Pharmaceutical
Product Development, Inc., Quintiles Transnational Corp., SFBC International, Inc., United
BioSource Corporation, and United HealthCare Corporation. “Change in Control Competing CRO” means
any entity (and its respective affiliates and successors) that competes with Employer in the
provision of Customer Services to Customers as a contract research organization and assumes, as an
independent contractor with a drug
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sponsor, one or more of the obligations of a drug sponsor, e.g., design of a protocol, selection or
monitoring of investigations, evaluating reports, and preparation of material to be submitted to
the Food and Drug Administration or applicable regulatory agency. For purposes of 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.
4. Exercise of Option. To the extent exercisable, the Optionee may exercise the
vested portion of the Option at anytime in whole or in part prior to its termination under Section
2(b) or Section 3 above by giving written notice of such exercise to the Corporation, in such form
and at such time as the Corporation may specify from time to time. As a condition to the exercise
of any portion of the Option, the Optionee may be required to execute such documents and make such
representations as the Corporation may require in order to comply with applicable law. The Option
may not be exercised until Optionee shall have delivered to the Corporation the aggregate exercise
price per Share of the number of Shares for which the Option is being exercised. The exercise
price may be paid by any method prescribed in Section 5.1(c) of the Plan.
5. Construction and Binding Effect. This Agreement shall be construed according to
the laws of the State of Delaware, without giving effect to any conflict or choice of law
provision, and shall bind the parties, their permitted assigns and their personal representatives.
6. Invalidity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the other provisions, and the Agreement shall be construed in all
respects as if an invalid or unenforceable provision were omitted.
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7. Entire Agreement. This document contains the entire agreement between the parties
and no modification or change in this Agreement shall be valid unless the same shall be in writing
and signed by the parties hereto.
8. Notices. All notices, requests, consents, payments, demands and other
communications required or contemplated under this Agreement (“Notices”) shall 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 nationally
recognized overnight delivery service (for next business day delivery), shipping prepaid, as
follows:
If to Employer, to:
PRA International
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: President and Chief Executive Officer
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: President and Chief Executive Officer
If to Optionee, to:
The Optionee’s then home address currently on file with the Corporation
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 9, or, if sent by
Federal Express or other nationally recognized overnight delivery service, one business day after
such sending.
9. 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.
10. No Right to Future Grants. The grant of this Option is a voluntary act by the
Corporation and does not give the Optionee any right to, or otherwise obligate the Corporation to
grant any additional options in the future.
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IN WITNESS WHEREOF, the parties hereto have signed this Option Agreement as of the date first
above written.
| CORPORATION: | ||||
| PRA INTERNATIONAL | ||||
| By: | ||||
| Title: | President and CEO |
|||
| OPTIONEE: | ||||
| Address: | ||||
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SCHEDULE 1
Options for Shares (the “Time Vesting Options”) will vest on each of
(contingent upon employment with the Corporation or one of its
subsidiaries at that time).
The exercise price for all such Options shall be $ per share.
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EXHIBIT 1
PRA International 2004 Incentive Award Plan
