Exhibit 10.9
EMPLOYMENT AND
NON-COMPETITION AGREEMENT
BETWEEN
Bruce A.
Teplitzky
AND
PHARMACEUTICAL
RESEARCH ASSOCIATES, INC.
THIS EMPLOYMENT AGREEMENT (this
“Agreement”) is made as of the 27 th 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 Brace A. Teplitzky
(“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Employer or any of its affiliated entities is superseded by the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 Senior 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
bimonthly installments, a base salary of USD$195,000 per year, less
relevant deductions. Employee shall be eligible for salary
increases, which may be based on performance and/or competitive
market factors, as determined under the provisions of any salary
policy of Employer that is generally applicable to Employer’s
employees, provided that any such increases shall be reviewed and
approved in advance by the Compensation Committee of the Board of
Directors of Employer (the “Board”). Employee shall
be
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eligible for such other
increases in compensation as are otherwise imposed by the Board, in
its discretion, from time to time.
(b)
Bonus . Employee shall participate in an Executive Bonus
Plan approved by the Board with a minimum annual bonus target of
USD$ 120,000 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 (60 th ) 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 nine (9) months
after the Termination Date; and
(iii) health benefits after the Termination Date pursuant to
COBRA coverage (reimbursed by Employer for the first nine (9)
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 eighteen
(18) 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
Employee (“Tax Counsel”), shall determine in good faith
whether any of the Parachute
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Payments are subject to the
Excise Tax and the amount of any Excise
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