Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (this “Agreement”), entered into on August 16, 2018,
between PRA Health Sciences, Inc., a Delaware corporation (the “Company”) and
Colin Shannon (the “Executive”).

 

WITNESSETH:

 

WHEREAS, the Executive has rendered services to the Company upon and subject to
the terms, conditions and other provisions of that certain Employment Agreement
effective July 1, 2014 between the Executive and the Company (the “Prior
Agreement), which Prior Agreement by its terms expired on July 1, 2018.

 

WHEREAS, the Company desires to continue to assure itself of the services of the
Executive and wishes the Executive to remain the President and Chief Executive
Officer of the Company, and the Executive is willing to enter into an agreement
to that end, upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereby covenant
and agree as follows:

 

1.              Employment

 

The Company hereby agrees to continue to employ the Executive, and the Executive
hereby agrees to remain in the employ of the Company, on and subject to the
terms and conditions of this Agreement.

 

2.              Term

 

The period of this Agreement (the “Agreement Term”) shall commence on July 1,
2018 (the “Effective Date” and shall continue until terminated in accordance
with Section 6 hereof.

 

3.              Position, Duties and Responsibilities

 

(a)                           The Executive shall serve as, and with the title,
office and authority of, the President and Chief Executive Officer of the
Company.  The Executive shall also hold similar titles, offices and authority
with the Company’s subsidiaries, as directed by the Company’s Board of Directors
(the “Board”) from time to time.

 

(b)                           The Executive shall have all powers, authority,
duties and responsibilities usually incident to the positions and offices of
President and Chief Executive Officer of the Company.  The Executive shall
report directly to the Board.

 

(c)                            The Executive shall continue as a member of the
Board for so long as he is duly elected as such and the Company shall nominate
the Executive for re-election to the Board upon the expiration of each of the
Executive’s terms as a director that occurs during the Agreement Term.

 

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(d)                           The Executive agrees to devote substantially all
of his business time, efforts and skills to the performance of his duties and
responsibilities under this Agreement; provided, however, that nothing in this
Agreement shall preclude the Executive from devoting reasonable periods required
for (i) participating in professional, educational, philanthropic, public
interest, charitable, social or community activities, (ii) serving as a director
or member of an advisory committee of any corporation or other entity that the
Executive is serving on as of the Effective Date or, subject to prior approval
of the Board, any other corporation or entity that is not in competition with
the Company, or (iii) managing his personal investments; provided, further, that
any such activities set forth in clauses (i) through (iii) above do not
materially interfere with the Executive’s regular performance of his duties and
responsibilities hereunder.

 

(e)                            The Executive shall perform his duties at the
offices of the Company located in Raleigh, North Carolina, but from time to time
the Executive may be required to travel to other locations in the proper conduct
of his responsibilities under this Agreement.

 

4.              Compensation and Benefits

 

In consideration of the services rendered by the Executive during the Agreement
Term, the Company shall pay or provide the Executive the compensation and
benefits set forth below.

 

(a)                           Salary. The Company shall pay the Executive a base
salary (the “Base Salary”) equal to $950,000 per annum. The Base Salary will be
periodically reviewed by the Compensation Committee of the Board (the
“Compensation Committee”) for possible merit increases as the Compensation
Committee deems appropriate. The Base Salary may not be reduced following the
Effective Date. The Base Salary shall be paid in arrears in substantially equal
installments at monthly or more frequent intervals, in accordance with the
normal payroll practices of the Company.

 

(b)                           Annual Incentive Bonuses. Each year during the
Agreement Term, the Executive shall be eligible to participate in a
performance-based bonus compensation program pursuant to which the Executive
will have an aggregate target bonus of 60% of the Executive’s Base Salary (the
“Target Bonus Amount”), as determined by the Compensation Committee in its
discretion (the “Annual Bonus”).  The amount, if any, of such Annual Bonus shall
be determined based upon the Company’s and/or the Executive’s attainment of
reasonable performance goals approved by the Compensation Committee in its sole
discretion.  Each such Annual Bonus shall be payable on such date or dates as is
determined by the Compensation Committee.  Notwithstanding any other provision
of this Section 4(b), no bonus shall be payable pursuant to this
Section 4(b) unless the Executive remains continuously employed with the Company
through the applicable bonus payment date.

 

(c)                            Benefits and Perquisites. The Executive will
participate in all executive compensation plans, including cash-based long-term
incentive plans, and in the same benefits and perquisites maintained by the
Company for senior executives.

 

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5.              Equity Incentives

 

During the Agreement Term, the Executive will be eligible for such equity
incentive awards under the PRA Health Sciences, Inc. 2018 Stock Incentive Plan
(the “Plan”) (or any successor plan), as the Compensation Committee shall
determine in its discretion.

 

6.              Termination of Employment

 

The Agreement Term will be terminated upon the occurrence of any of the
following events:

 

(a)                                 Resignation for Good Reason. The Executive
may voluntarily terminate his employment hereunder for Good Reason. For purposes
of this Agreement, “Good Reason” shall mean any of the following:

 

(i)                                     Any material breach of this Agreement by
the Company (where the Company fails to cure such breach within ten
(10) business days after being notified in writing by the Executive of such
breach);

 

(ii)                                  The material diminution, without the
Executive’s written consent, of the Executive’s position, title, authority,
duties or responsibilities as indicated herein, including, without limitation,
the failure to be reelected to the Board, or the appointment of any other
person, without the Executive’s written consent, to perform any material part of
such duties, including without limitation, the failure of the Executive to have
such duties and responsibilities with respect to the acquiring entity following
a Change in Control (as defined below);

 

(iii)                               The involuntary material relocation of the
Executive’s then current principal place of business to a location more than 50
miles from the Executive’s current principal place of business; or

 

(iv)                              The failure by the Company to obtain the
assumption in writing of its obligation to perform under this Agreement by any
successor to all or substantially all of the assets of the Company.

 

The Executive may terminate his employment for Good Reason by providing the
Company thirty (30) days’ written notice setting forth in reasonable specificity
the event that constitutes Good Reason, within ninety (90) days of the
occurrence of such event.

 

During such thirty (30) day notice period, the Company shall have the
opportunity to cure (if curable) the event that constitutes Good Reason, and if
not cured within such period, the Executive’s termination will be effective upon
the expiration of such cure period. For purposes of this Agreement, “Change in
Control” shall be as defined under the Plan on the date of the Change in Control
or as defined under the Plan on the date hereof, whichever is more favorable to
the Executive.

 

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(b)                                 Resignation without Good Reason. The
Executive may voluntarily terminate his employment hereunder for any reason at
any time upon 90 days’ written notice to the Company, including for any reason
that does not constitute Good Reason.

 

(c)                                  Termination for Cause. The Company may
terminate the Executive’s employment hereunder for Cause. For purposes of this
Agreement, the Executive shall be considered to be terminated for “Cause” only
upon the occurrence of any of the following:

 

(i)                                     A material breach of this Agreement by
the Executive (where the Executive fails to cure such breach within ten
(10) business days after being notified in writing by the Company of such
breach);

 

(ii)                                  The Executive’s failure (except where due
to a physical or mental incapacity) to substantially perform his material duties
with respect to the Company which continues beyond ten (10) days after a written
demand for substantial performance is delivered to the Executive by the Company;

 

(iii)                               The Executive engaging in or causing an act
of willful misconduct that has a material adverse impact on the reputation,
business, business relationships or financial condition of the Company;

 

(iv)                              The Executive’s conviction of, or plea of
guilty or nolo contendere to, a felony, or any crime involving moral turpitude
not involving a traffic offense; or

 

(v)                                 The Executive’s willful refusal to perform
the specific lawful directives of the Board which are consistent with the scope
of the Executive’s duties and responsibilities hereunder;

 

provided, however, that no action taken by the Executive in the reasonable, good
faith belief that it was in the best interest of the Company shall be treated as
a basis for termination of the Executive’s employment for Cause under clause
(i) above, and no failure of the Executive or the Company to achieve performance
goals, alone, shall be treated as a basis for termination of the Executive’s
employment for Cause under clause (ii) or (v) above.

 

(d)                                 Termination without Cause. The Board shall
have the right to terminate the Executive’s employment hereunder other than for
Cause at any time, subject to the consequences of such termination as set forth
in this Agreement.

 

(e)                                  Disability. The Executive’s employment
hereunder shall terminate upon his Disability. For purposes of this Agreement,
“Disability” shall mean the Executive is eligible for disability payments under
the Company’s long-term disability plan as in effect on the date hereof.

 

(f)                                   Death. The Executive’s employment
hereunder shall terminate upon his death.

 

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7. Compensation Upon Termination of Employment

 

In the event the Executive’s employment by the Company is terminated during the
Agreement Term, the Executive shall be entitled to the severance payments and
benefits specified below:

 

(a)                                      Resignation for Good Reason;
Termination without Cause. In the event the Executive voluntarily terminates his
employment hereunder for Good Reason or is terminated by the Company other than
for Cause, the Company shall pay the Executive and provide him with the
following:

 

(i)                                     Accrued Obligations. The Company shall
pay and provide the Executive with his Accrued Obligations. For purposes of this
Agreement, “Accrued Obligations” shall consist of the following: (A) accrued and
unpaid Base Salary and accrued and unused paid time off through the date of
termination; (B) any accrued but unpaid annual bonus with respect to any
completed fiscal year of the Company which has ended prior to the date of
termination (except upon an involuntary termination for Cause or the existence
of Cause is found following a voluntary termination); (C) all accrued and vested
benefits under employee pension (including 401(k)) and welfare plans in which
the Executive participates, in accordance with applicable plan terms; and
(D) unreimbursed business expenses incurred through the termination date, in
accordance with Company business expense reimbursement policy.

 

(ii)                                  Severance Payment. The Company shall pay
the Executive an amount equal to the sum of the Executive’s annual Base Salary
and an amount equal to the Target Bonus Amount for the calendar year immediately
preceding the date of the termination of employment (such sum hereinafter
defined as the “Severance Amount”). The Severance Amount shall be paid over the
twelve (12) calendar months beginning in the calendar month immediately
following the date of the termination of employment, in arrears in substantially
equal installments at monthly or more frequent intervals and in accordance with
the normal payroll practices of the Company.

 

(iii)                               Equity Rights. The vesting and
exercisability of any outstanding stock options or other equity awards held by
the Executive at the time of termination of employment will be governed by the
terms of such awards.

 

(iv)                              Company-Paid Continuation Coverage. Following
the date of the Executive’s termination of employment, the Executive and his
eligible dependents shall be entitled to continue participating in the Company’s
group medical, dental, and other health benefit coverages as required under the
health care continuation requirements of the Consolidated Omnibus Reconciliation
Act of 1985 (“COBRA”). Such coverages shall be provided to the Executive and his
eligible dependents for the 12-month period following the date of the
Executive’s termination of employment with the same employee cost-sharing as is
provided to employees of the Company generally during this 12-month period;
provided, however, that if the Company providing any payment or benefit pursuant
to this Section 7(a)(iv) would violate the nondiscrimination rules applicable to
non-grandfathered plans, or result in the imposition of penalties under, the
Patient Protection and Affordable Care Act of 2010 (“PPACA”) and related
regulations and guidance promulgated thereunder, the parties agree to reform
this Section 7(a)(iv) in such manner as is necessary to comply with PPACA (the
“Company-Paid Continuation Coverage”).

 

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(b)                                      Resignation without Good Reason;
Termination for Cause; Death; Disability. In the event the Executive voluntarily
terminates his employment hereunder other than for Good Reason, is terminated by
the Company for Cause, or is terminated on account of death or Disability, the
Company shall have no obligations to the Executive under this Agreement other
than to pay the Executive and provide him with any Accrued Obligations. The
vesting and exercisability of any outstanding stock options or other equity
awards held by the Executive at the time of any such termination of employment
will be governed by the terms of such awards.

 

8.              Change in Control

 

In the event that the employment of the Executive is terminated on or prior to
the expiration of the one-year period immediately following a Change in Control
either (a) by the Executive for Good Reason or (b) by the Company other than for
Cause: (i) in lieu of the Severance Amount payable pursuant to
Section 7(a)(ii) hereof, the Executive will be entitled to a lump-sum payment
equal to two times the Severance Amount (as calculated under
Section 7(a)(ii) hereof), payable within fifteen (15) days of termination of
employment; and (ii) in lieu of the Company-Paid Continuation Coverage being
provided for twelve (12) months pursuant to Section 7(a)(iv) hereof, the
Executive will be entitled to Company-Paid Continuation Coverage for twenty-four
(24) months following termination of employment.

 

9.              Effect of Excise Tax and Limit on Golden Parachute Payments.

 

(a)                                 Contingent Reduction of Parachute Payments.
If there is a change in ownership or control of the Company that would cause any
payment or distribution by the Company or any of its subsidiaries or any other
person or entity to the Executive or for the Executive’s benefit (whether paid
or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (each, a “Payment”, and collectively, the “Payments”) to
be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”) (such excise tax, together with any
interest or penalties incurred by the Executive with respect to such excise tax,
the “Excise Tax”), then the Executive will receive the greatest of the
following, whichever gives the Executive the highest net after-tax amount (after
taking into account federal, state, local and social security taxes): (1) the
Payments or (2) one dollar less than the amount of the Payments that would
subject the Executive to the Excise Tax (the “Safe Harbor Amount”). If a
reduction in the Payments is necessary so that the Payments equal the Safe
Harbor Amount, then the reduction will be determined in a manner which has the
least economic cost to the Executive and, to the extent the economic cost is
equivalent, will be reduced in the inverse order of when payment would have been
made to the Executive, until the reduction is achieved.  Any reductions pursuant
to this Section shall be made in a manner intended to be consistent with the
requirements of Section 409A of the Code and the Department of Treasury
Regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or other guidelines that may be issued after the
Effective Date (“Section 409A”).

 

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(b)                                 Determination of the Payments. All
determinations required to be made under this Section, including whether and
when the Safe Harbor Amount is required and the amount of the reduction of the
Payments and the assumptions to be utilized in arriving at such determination,
shall be made by a certified public accounting firm designated by the Company
(the “Accounting Firm”) which shall provide detailed supporting calculations
both to the Company and the Executive within fifteen (15) business days of the
receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. The
Executive shall cooperate with any reasonable requests by the Company in
connection with any contests or disputes with the Internal Revenue Service in
connection with the Excise Tax.

 

(c)                                  Adjustments.                        As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of a determination hereunder, it is possible that Payments will be made
which should not have been made under clause (a) of this Section (“Overpayment”)
or that additional Payments which are not made pursuant to clause (a) of this
Section should have been made (“Underpayment”).  In the event that there is a
final determination by the Internal Revenue Service, or a final determination by
a court of competent jurisdiction, that an Overpayment has been made, any such
Overpayment shall be treated for all purposes as a loan to the Executive which
the Executive shall repay to the Company together with interest at the
applicable Federal rate provided for in Section 7872(f)(2) of the Code.  In the
event that there is a final determination by the Internal Revenue Service, a
final determination by a court of competent jurisdiction or a change in the
provisions of the Code or regulations pursuant to which an Underpayment arises
under this Agreement, any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive, together with interest at the
applicable Federal rate provided for in Section 7872(f)(2) of the Code.

 

(d)                                 Consultation.  The Company shall consult
with the Executive in good faith regarding the implementation of the provisions
of this Section and the application of Sections 4999 and 409A of the Code;
provided, that neither the Company nor any of its subsidiaries, employees or
representatives shall have any liability to the Executive with respect thereto.

 

10.       No Mitigation

 

The Executive shall not be required to seek other employment or to reduce any
severance payment or benefit payable to him under Section 7 or 8 hereof, and no
such severance benefit shall be reduced on account of any compensation received
by the Executive from other employment.

 

11.       Release

 

Notwithstanding any other provision of this Agreement, all payments and benefits
provided under Section 7(a)(ii) and (iv) or Section 8 hereof, as applicable,
shall be conditioned upon the Executive executing and honoring a release of
claims in favor of the Company in the Company’s standard form for Company
officers in accordance with Section 22(c) hereof (the “Release”).

 

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12.       Tax Withholding

 

All compensation payable pursuant to this Agreement shall be subject to
reduction by all applicable withholding, social security and other federal,
state and local taxes and deductions.

 

13.       Restrictive Covenants

 

(a)                                 Covenant Not to Disclose Confidential
Information. The Executive acknowledges that during the course of his
affiliation with the Company he has or will have access to and knowledge of
certain information and data which the Company considers confidential and the
release of such information or data to unauthorized persons would be extremely
detrimental to the Company. As a consequence, the Executive hereby agrees and
acknowledges that he owes a duty to the Company not to disclose, and agrees that
without the prior written consent of the Company, at any time, either during or
after his employment with the Company, he will not communicate, publish or
disclose, to any person anywhere or use, any Confidential Information (as
hereinafter defined), except as may be necessary or appropriate to conduct his
duties hereunder, provided the Executive is acting in good faith and in the best
interests of the Company, or as may be required by law or judicial process or as
provided below in Section 13(f). The Executive will use his best efforts at all
times to hold in confidence and to safeguard any Confidential Information from
falling into the hands of any unauthorized person and, in particular, will not
permit any Confidential Information to be read, duplicated or copied. The
Executive will promptly return to the Company all Confidential Information in
the Executive’s possession or under the Executive’s control whenever the Company
shall so request, and in any event will promptly return all such Confidential
Information if the Executive’s relationship with the Company is terminated for
any or no reason and will not retain any copies thereof. For purposes hereof the
term “Confidential  Information” shall mean any information or data used by or
belonging or relating to the Company or any of its subsidiaries or affiliates
that is not known generally to the industry and which the Company maintains on a
confidential basis, including, without limitation, any and all trade secrets,
proprietary data and information relating to the Company’s business and
products, price lists, customer lists, processes, procedures or standards,
know-how, manuals, business strategies, records, drawings, specifications,
designs, financial information, whether or not reduced to writing, or
information or data which the Company advises the Executive should be treated as
confidential information.

 

(b)                                 Covenant Not to Compete. The Executive
acknowledges that he has established and will continue to establish favorable
relations with the customers, clients and accounts of the Company and will have
access to Confidential Information and trade secrets of the Company. Therefore,
in consideration of such relations and to further protect Confidential
Information and trade secrets, directly or indirectly, of the Company, the
Executive agrees that, at all times during his employment by the Company
(including prior to the Effective Date) and for a period of twelve (12) months
from the date of termination of the Executive, the Executive has not and will
not, directly or indirectly, without the express written consent of the Company:

 

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(i)                                     within (A) the country, region of the
country, state, and/or surrounding states in which the Executive’s office with
the Company was located at the time of the Executive’s termination, or (B) fifty
(50) miles of the location of the Executive’s office with the Company at the
time of Executive’s termination, be engaged as or employed by or provide
services or advice to a Competing CRO (as defined below), whether as owner,
manager, officer, director, employee, consultant or otherwise (1) provide
products or services that are the same or substantially similar to the products
and services provided by the Company and its affiliates or (2) perform duties
and responsibilities that are the same or substantially related to the duties
and responsibilities that the Executive performed for the Company at any time
during the twenty-four (24) months prior to the Executive’s termination.
“Competing CRO” means any entity (and its respective affiliates and successors)
that competes with the Company and its affiliates in the provision of Customer
Services (as defined below). “Customer Services” means any product or service
provided by the Company and/or its affiliates 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, and/or recruiting, staffing and placement of personnel in
the areas of clinical research, medical writing, biostatistics and programming,
in each case (A) during the period of the Executive’s employment with the
Company prior to the date of this Agreement, through the end of the Agreement
Term or (B) about which the Executive has knowledge and that which the Executive
had knowledge that the Company and/or its affiliates will provide or has
contracted to provide to third parties during the twelve (12) months following
the Agreement Term;

 

(ii)                                  whether as owner, manager, officer,
director, employee, consultant or otherwise, solicit the business of, or accept
business from any Customer (as defined below) of the Company and/or its
affiliates, unless the business being solicited or accepted is not in
competition with or substantially similar to the business of the Company and/or
its affiliates. For the purposes of this Section 13(b), “Customer” means any
person or legal entity (and its subsidiaries, agents, employees and
representatives) about whom the Executive has acquired information during the
period of the Executive’s employment with the Company prior to the date of this
Agreement, through the end of the Agreement Term and as to whom the Executive
has knowledge that the Company and/or its affiliates has provided or does
provide services at any time upon, or during the twenty-four (24) months prior
to, the Executive’s termination, or will during the twelve (12) months following
the Agreement Term provide services; or

 

(iii)                               (A) solicit or induce (or attempt to solicit
or induce) to leave the employ of the Company or any of its affiliates for any
reason whatsoever any person employed by the Company or any of its affiliates at
the time of the act of solicitation or inducement, including by (1) identifying
for any third party employees of the Company or any of its affiliates who have
special knowledge concerning the processes, methods or confidential affairs of
the Company and/or its affiliates or (2) commenting about the quality of work,
special knowledge, compensation, skills or personal characteristics of any
employee of the Company or any of its affiliates to any third party or (B) hire
any person who was employed by the Company or any of its affiliates at the time
of the Executive’s termination or at any time during the six months prior to the
Executive’s termination.

 

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(c)                                  Non-Disparagement. At all times during his
employment by the Company (including prior to the Effective Date) and
thereafter, the Executive shall express no opinions or views or knowingly take
any other actions that will adversely affect the business reputation or goodwill
of the Company, its affiliates, directors, officers or employees.

 

(d)                                 Specific Performance. Recognizing that
irreparable damage will result to the Company in the event of the breach or
threatened breach of any of the foregoing covenants and assurances by the
Executive contained in paragraphs (a), (b) or (c) hereof, and that the Company’s
remedies at law for any such breach or threatened breach will be inadequate, the
Company and each of its successors and assigns, in addition to such other
remedies which may be available to them, shall be entitled to an injunction,
including a mandatory injunction, to be issued by any court of competent
jurisdiction ordering compliance with this Agreement or enjoining and
restraining the Executive, and each and every person, firm or company acting in
concert or participation with him, from the continuation of such breach and, in
addition thereto, the Executive shall pay to the Company all ascertainable
damages, including costs and reasonable attorneys’ fees sustained by the Company
by reason of the breach or threatened breach of said covenants and assurances.
The obligations of the Executive and the rights of the Company, its successors
and assigns under this Section 13 shall survive the termination of this
Agreement for the periods set forth above. The covenants and obligations of the
Executive set forth in this Section 13 are in addition to and not in lieu of or
exclusive of any other obligations and duties of the Executive to the Company,
whether express or implied in fact or in law. In addition, the Executive further
acknowledges that if he breaches any provision of this Section 13 following his
termination of employment with the Company, the Executive will forfeit the right
to any unpaid severance or other payments under this Agreement. For purposes of
this Section 13, “Company” shall include all subsidiaries of the  Company.

 

(e)                                  Potential Unenforceability of Any
Provision. If a final judicial determination is made that all or any portion of
any provision of this Agreement is an unenforceable restriction against the
Executive in any jurisdiction, such provision, or portion thereof, shall be
rendered void, but only to the extent that such judicial determination finds
such provision, or portion thereof, unenforceable and only in such jurisdiction
and such unenforceable provision, or portion thereof, shall automatically be
reconstituted in such jurisdiction, whether as to duration, scope or otherwise,
in a manner that is, to the maximum degree or level permitted, enforceable under
the laws of such jurisdiction and as so reconstituted, shall become a part of
this Agreement, effective as of the Effective Date.

 

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(f)                                   Certain Permissible Disclosures and
Communications.  Nothing in this Agreement, including this Section 13, shall
prohibit or impede the Executive from communicating, cooperating or filing a
complaint with any U.S. federal, state or local governmental or law enforcement
branch, agency or entity (collectively, a “Governmental Entity”) with respect to
possible violations of any U.S. federal, state or local law or regulation, or
otherwise making disclosures to any Governmental Entity, in each case, that are
protected under the whistleblower provisions of any such law or regulation,
provided that in each case such communications and disclosures are consistent
with applicable law.  The Executive does not need the prior authorization of (or
to give notice to) the Company regarding any such communication or disclosure. 
The Executive hereby confirms that the Executive understands and acknowledges
that an individual shall not be held criminally or civilly liable under any
federal or state trade secret law for the disclosure of a trade secret that is
made (i) in confidence to a federal, state, or local government official or to
an attorney solely for the purpose of reporting or investigating a suspected
violation of law, or (ii) in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal.  The Executive understands
and acknowledges further that an individual who files a lawsuit for retaliation
by an employer for reporting a suspected violation of law may disclose the trade
secret to the attorney of the individual and use the trade secret information in
the court proceeding, if the individual files any document containing the trade
secret under seal; and does not disclose the trade secret, except pursuant to
court order.  Notwithstanding the foregoing, under no circumstance will the
Executive be authorized to disclose any information covered by the Company’s
attorney-client privilege or the Company’s attorney work product (i) without
prior written consent of the Company’s General Counsel or other officer
designated by the Company, or (ii) unless such disclosure of that information
would otherwise be permitted pursuant to 17 CFR 205.3(d)(2), applicable state
attorney conduct rules, or otherwise under applicable law or court order.

 

14.       Indemnification

 

To the fullest extent permitted by the indemnification provisions of the
Certificate of Incorporation and Bylaws of the Company in effect as of the date
of this Agreement, and the indemnification provision of the laws of the
jurisdiction of the Company’s incorporation in effect from time to time, the
Company shall indemnify the Executive as a director, senior officer or employee
of the Company against all liabilities and reasonable expenses that may be
incurred in any threatened, pending or completed action, suit or proceeding, and
shall pay for the reasonable expenses incurred by the Executive in the defense
of or participation in any such action, suit or proceeding to which the
Executive is a party because of his service to the Company. The rights of the
Executive under this indemnification provision shall survive the termination of
employment with respect to events occurring prior to termination of employment
on a basis not less favorable than is provided for any other officer of the
Company. In addition, during the Agreement Term, the Executive will be provided
with Director & Officer coverage to the same extent as any other officer the
Company.

 

15.       Successors

 

(a)                                 This Agreement shall be binding upon and
shall inure to the benefit of the Company and each of its successors and any
person, firm, corporation or other entity which succeeds to all or substantially
all of the business, assets or property of the Company. As used in this
Agreement, the “Company” shall mean the Company as hereinbefore defined and any
successor to its business, assets or property as aforesaid which executes and
delivers an agreement provided for in this Section 15 or which otherwise becomes
bound by all the terms and provisions of this Agreement by operation of law.
Notwithstanding the foregoing provisions of this Section 15(a), this Agreement
shall not be assignable by the Company without the prior written consent of the
Executive.

 

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(b)                                      This Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amounts are due and payable to him hereunder, all such amounts,
unless otherwise provided herein, shall be paid to the Executive’s designated
beneficiary or, if there be no such designated beneficiary, to the legal
representatives of the Executive’s estate.

 

16.       No Assignment

 

Except as to withholding of any tax under the laws of the United States or any
other country, state or locality, neither this Agreement nor any right or
interest hereunder nor any amount payable at any time hereunder shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, attachment, or
other legal process, or encumbrance of any kind by the Executive or the
beneficiaries of the Executive or by his legal representatives without the
Company’s prior written consent, nor shall there be any right of set-off or
counterclaim in respect of any debts or liabilities of the Executive, his
beneficiaries or legal representatives, except in the case of termination of
employment for Cause (other than with respect to any set-off on nonqualified
deferred compensation that is subject to Section 409A); provided, however, that
nothing in this Section 16 shall preclude the Executive from designating a
beneficiary to receive any benefit payable on his death, or the legal
representatives of the Executive from assigning any rights hereunder to the
person or persons entitled thereto under his will or, in case of intestacy, to
the person or persons entitled thereto under the laws of intestacy applicable to
his estate.

 

17.       Entire Agreement

 

This Agreement contains the entire understanding of the parties with respect to
the subject matter hereof and, except as specifically provided herein, cancels
and supersedes any and all other agreements between the parties with respect to
the subject matter hereof, including but not limited to the Prior Agreement. Any
amendment or modification of this Agreement shall not be binding unless in
writing and signed by the Company and the Executive.

 

18.       Severability

 

In the event that all or any portion of any provision of this Agreement is
determined to be invalid or unenforceable, the remaining terms and conditions of
this Agreement shall be unaffected and shall remain in full force and effect,
and any such determination of invalidity or unenforceability shall not affect
the validity or enforceability of any other provision of this Agreement.

 

19.       Notices

 

All notices which may be necessary or proper for the Company or the Executive to
give to the other shall be in writing and shall be delivered by hand or sent by
registered or certified mail, return receipt requested, or by air courier, as
follows:

 

(i)                                to the Executive at the following address (or
such other address as the Executive may designate by written notice to the
Company):

 

Colin Shannon
2015 Giovanni Court

Cary, NC   27518

 

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(ii)                             to the Company, at the Company’s principal
executive offices at: 4130 ParkLake Avenue, Suite 400, Raleigh, North Carolina
27612, to the attention of the Secretary of the Company.

 

Any such notice shall be deemed given when sent, provided that any notice
required under Section 6 hereof shall be deemed given only when received. Any
party may, by like notice to the other party, change the address at which she or
they are to receive notices hereunder.

 

20.       Governing Law

 

This Agreement shall be governed by and enforceable in accordance with the laws
of the State of North Carolina, without giving effect to the principles of
conflict of laws thereof.

 

21.       Arbitration

 

Except to the extent that injunctive relief is sought for any breach of
restrictive covenants, any controversy or claim arising out of, or related to,
this Agreement, or the breach thereof, shall be settled by binding arbitration
in Raleigh, North Carolina, in accordance with the rules of the American
Arbitration Association then in effect, and the arbitrator’s decision shall be
binding and final, and judgment upon the award rendered may be entered in any
court having jurisdiction thereof. Each party will pay one-half of the
arbitration expenses and his or its own legal fees and costs; provided, in any
dispute after a Change in Control, the Company (or successor) will pay all
arbitration fees, and all of the Executive’s reasonable legal expenses if the
Executive prevails on at least one material issue in dispute, as determined by
the arbitrator. Notwithstanding any other provision of this Agreement,
obligations of the parties under this Section 21 shall survive any termination
of employment.

 

22.       Section 409A

 

(a)                                 General. The parties hereto acknowledge and
agree that, to the extent applicable, this Agreement shall be interpreted in
accordance with, and incorporate the terms and conditions required by,
Section 409A. Notwithstanding any provision of this Agreement to the contrary,
in the event that the Company determines that any amounts payable hereunder will
be immediately taxable to the Executive under Section 409A, the Company reserves
the right (without any obligation to do so or to indemnify the Executive for
failure to do so) to (a) adopt such amendments to this Agreement and appropriate
policies and procedures, including amendments and policies with retroactive
effect, that the Company determines to be necessary or appropriate to preserve
the intended tax treatment of the benefits provided by this Agreement, to
preserve the economic benefits of this Agreement and to avoid less favorable
accounting or tax consequences for the Company and/or (b) take such other
actions as the Company determines to be necessary or appropriate to exempt the
amounts payable hereunder from Section 409A or to comply with the requirements
of Section 409A and thereby avoid the application of penalty taxes thereunder.
Notwithstanding anything herein to the contrary, no provision of this Agreement
shall be interpreted or construed to transfer any liability for failure to
comply with the requirements of Section 409A from the Executive or any other
individual to the Company or any of its affiliates, employees or agents and
neither the Company nor any of its affiliates shall be liable for any additional
tax, interest, or penalties that may be imposed on the Executive as a result of
Section 409A or any damages for failing to comply with Section 409A (other than
for withholding obligations or other obligations applicable to employers, if
any, under Section 409A).

 

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(b)                                 Separation from Service under Section 409A.
Notwithstanding any provision to the contrary in this Agreement: (i) no amount
shall be payable pursuant to Section 7 or 8 unless the termination of the
Executive’s employment constitutes a “separation from service” within the
meaning of Section 1.409A-1(h) of the Department of Treasury Regulations;
(ii) for purposes of Section 409A, the Executive’s right to receive any
installment payments or benefits pursuant to Section 7(a) shall be treated as a
right to receive a series of separate and distinct payments within the meaning
of Section 409A; and (iii) to the extent that any reimbursement of expenses or
in-kind benefits constitutes “deferred compensation” under Section 409A, such
reimbursement or benefit shall be provided no later than December 31 of the year
following the year in which the expense was incurred. The amount of expenses
reimbursed in one year shall not affect the amount eligible for reimbursement in
any subsequent year. The amount of any in-kind benefits provided in one year
shall not affect the amount of in-kind benefits provided in any other year.
Notwithstanding anything in this Agreement to the contrary, if the Executive is
deemed by the Company at the time of the Executive’s separation from service to
be a “specified employee” for purposes of Section 409A and to the extent delayed
commencement of any portion of the payments to which the Executive is entitled
under this Agreement is required in order to avoid subjecting the Executive to
additional tax or interest (or both) under Section 409A, then any such payment
shall not be provided to the Executive prior to the earlier of (A) the
expiration of the six (6) month period measured from the date of the separation
from service or (B) the date of the Executive’s death. Upon the first business
day following the expiration of the applicable period, all payments deferred
pursuant to the preceding sentence shall be paid in a lump sum to the Executive
(or, if applicable, the Executive’s estate, heirs or legal representatives), and
any remaining payments due to the Executive under this Agreement shall be paid
as otherwise provided herein.

 

(c)                                  Release. Notwithstanding anything to the
contrary in this Agreement, to the extent that any payments of “nonqualified
deferred compensation” (within the meaning of Section 409A) due under this
Agreement as a result of the Executive’s termination of employment are subject
to the Executive’s execution and delivery of a Release as provided under this
Agreement: (i) the Company shall deliver the Release to the Executive within ten
(10) business days following the date of Executive’s termination of employment,
and the Company’s failure to deliver a Release prior to the expiration of such
ten (10) business day period shall constitute a waiver of any requirement to
execute a Release; (ii) if the Executive fails to execute the Release on or
prior to the Release Expiration Date (as defined below) or timely revokes his
acceptance of the Release thereafter, the Executive shall not be entitled to any
payments or benefits otherwise conditioned on the Release; and (iii) in any case
where the date of Executive’s termination of employment and the Release
Expiration Date fall in two separate taxable years, any payments required to be
made to the Executive that are conditioned on the Release and are treated as
nonqualified deferred compensation for purposes of Section 409A shall be made in
the later taxable year. For purposes of this Section 22(c), “Release Expiration
Date” shall mean the date that is twenty-one (21) days following the date upon
which the Company timely delivers the Release to the Executive, or, in the event
that the Executive’s termination of employment is “in connection with an exit
incentive or other employment termination program” (as such phrase is defined in
the Age Discrimination in Employment Act of 1967), the date that is forty-five
(45) days following such delivery date. To the extent that any payments of
nonqualified deferred compensation (within the meaning under Section 409A) due
under this Agreement as a result of the Executive’s termination of employment
are delayed pursuant to this Section 22(c), such amounts shall be paid in a lump
sum on the first payroll date following the date that the Executive executes and
does not revoke the Release (and the applicable revocation period has expired)
or, in the case of any payments subject to Section 22(c)(iii), on the first
payroll period to occur in the subsequent taxable year, if later.

 

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23.       Counterparts

 

This Agreement may be executed in counterparts, and by different parties on
separate counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.

 

[Rest of page intentionally omitted]

 

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement
as of the date first above written.

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Colin Shannon

 

Colin Shannon

 

 

 

 

 

PRA HEALTH SCIENCES, INC.

 

 

 

 

 

/s/ Linda Grais

 

By: Linda S. Grais, M.D.

 

Title: Chairperson, Compensation Committee

 

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