Ex-10.23



 



EXHIBIT 10.23


PHARMA SERVICES HOLDING, INC.

STOCK INCENTIVE PLAN



Section 1. Purpose


     The Plan authorizes the Committee to provide Employees, who are in a
position to contribute to the long-term success of the Company or its
subsidiaries, with Shares or Options to acquire Shares in the Company. The
Company believes that this incentive program will cause those persons to
increase their interest in the welfare of the Company and its subsidiaries, and
aid in attracting, retaining and motivating Employees of outstanding ability.


Section 2. Definitions


     Capitalized terms not otherwise defined herein shall have the meanings set
forth in this Section.


     (a)  “Affiliate” means, with respect to any Person, any other Person that
controls, is controlled by or is under common control with such Person. For
the purposes of this definition, “control” (including, with its correlative
meanings, the terms “controlled by” and “under common control with”), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of securities, by contract or
otherwise.


     (b)  “Board” shall mean the Board of Directors of the Company.


     (c)  “Cause” shall have the meaning ascribed thereto in any employment
agreement between the Company or any of its subsidiaries and the Grantee, or,
if there is no employment agreement or if any such employment agreement does
not contain a definition of “cause”, then Cause shall mean a finding by the
Committee that the Grantee has (i) been charged with a felony or a crime
involving moral turpitude, (ii) committed an act of fraud or embezzlement
against the Company or its subsidiaries, (iii) materially violated any policy
of the Company or its subsidiaries, (iv) failed, refused or neglected to
substantially perform his duties (other than by reason of a physical or mental
impairment) or to implement the directives of the Company, or (v) willfully
engaged in conduct that is materially injurious to the Company, monetarily or
otherwise.


     (d)  “Company” shall mean Pharma Services Holding, Inc., a corporation
organized under the laws of the state of Delaware.


     (e)  “Committee” shall mean the committee of the Board designated by the
Board to administer the Plan, or in the absence of any such designation, the
Board.


     (f)  “Effective Date” shall have the meaning set forth in Section 11.


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     (g)  “Employee” shall mean any person or entity that is providing, or has
agreed to provide, services to the Company or a subsidiary of the Company,
whether as an employee, director or independent contractor.


     (h)  “Fair Market Value” of a Share on any given date shall be determined
in good faith by the Committee, taking into account such factors as the
Committee determines are appropriate.


     (i)  “Grant Certificate” shall mean a certificate accepted by the Grantee,
or other written agreement between the Company and the Grantee, evidencing the
grant of an Option or Shares hereunder and containing such terms and
conditions, not inconsistent with the Plan, as the Committee shall approve.


     (j)  “Grantee” shall mean an Employee granted an Option or Shares under the
Plan.


     (k)  “ISO” shall mean any Option or portion thereof that is designated in a
Grant Certificate as an ISO and meets the requirements of an incentive stock
option under Section 422 of the Internal Revenue Code of 1986.


     (l)  “Majority Common Stockholders” shall mean the stockholders of the
Company holding a majority of the outstanding Shares who are parties to the
Stockholders Agreement.


     (m)  “Nonqualified Option” shall mean any Option or portion thereof that
either is designated by the Committee as such or is otherwise not an ISO.


     (n)  “Options” shall refer to options issued under and subject to the Plan.


     (o)  “Permitted Transferee” means (A) the Grantee’s spouse, (B) any lineal
ancestor or descendant (including by adoption and stepchildren) of the Grantee,
(C) any trust of which the Grantee is the controlling trustee and which is
established solely for the benefit of any of the foregoing individuals, (D) the
estate of the Grantee established by reason of the Grantee’s death, or (E) any
corporation, limited liability company or partnership, all of the interests of
which are (or is) owned by one or more of the persons identified in this clause
(A), (B), (C) or (D).


     (p)  “Person” means an individual, partnership, corporation, limited
liability company or partnership, trust, unincorporated organization, joint
venture, government (or agency or political subdivision thereof) or any other
entity of any kind.


     (q)  “Plan” shall mean the Pharma Services Holding, Inc. Stock Incentive
Plan as set forth herein and as amended from time to time.


     (r)  “Qualifying Offering” means the consummation of an underwritten public
offering of Shares registered under the Securities Act of 1933 that together
with the


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consummation of any other prior underwritten public offerings of Shares
registered under the Securities Act of 1933 results in gross proceeds to the
Company of at least $100 million in the aggregate.


     (s)  “Restrictive Covenant” shall mean any agreement made by the Grantee
with the Company or its subsidiaries relating to nondisclosure of confidential
information or trade secrets, noncompetition, or nonsoliciation of clients or
employees.


     (t)  “Sale of the Company” shall mean the sale of the Company (whether by
merger, consolidation, recapitalization, reorganization, sale of securities,
sale of assets or otherwise) in one transaction or series of related
transactions to a Person or Persons pursuant to which such Person or Persons
(together with its Affiliates) acquires (i) securities representing at least a
75% of the voting power of all securities of the Company, assuming the
conversion, exchange or exercise of all securities convertible, exchangeable or
exercisable for or into voting securities, or (ii) all or substantially all of
the Company’s assets on a consolidated basis; provided that for purposes of
Section 9, such a sale to a Person that is a stockholder of the Company or a
Permitted Transferee of any stockholder shall not be a Sale of the Company.


     (u)  “Share” shall mean a share of the Company’s common stock, par value
$.01.


     (v)  “Stockholders Agreement” means any stockholders agreement that may be
in effect from time to time among the Company and the majority of its
stockholders.


     (w)  “Unvested Shares” shall have the meaning set forth in Section 6.


     (x)  “Vested Shares” shall have the meaning set forth in Section 6.


Section 3. Shares Available under the Plan


     The total number of Shares that may be issued under the Plan shall not
exceed 14,452,208, provided that Shares reacquired by the Company pursuant to
Section 8(c) at a price less than the Fair Market Value thereof shall again be
available for issuance.


Section 4. Administration of the Plan


     (a)  Authority of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions
of the Plan:



		
	 	     (i) to select the Employees to whom Options and Shares may be
granted, and the number of Shares relating thereto;




		
	 	     (ii) to determine the terms and conditions of any Option granted
under the Plan, including the exercise price, conditions relating to
exercise, and termination of the right to exercise;



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	 	     (iii) to determine whether Shares issued under the Plan shall be
Unvested Shares or Vested Shares, and the conditions pursuant to which
Unvested Shares shall become Vested Shares;




		
	 	     (iv) to determine whether any Option shall be an ISO or a
Nonqualified Option;
	 
	 	     (v) to determine the restrictions or conditions related to the
delivery, holding and disposition of Shares issued under the Plan;
	 
	 	     (vi) to prescribe the form of each Grant Certificate;
	 
	 	     (vii) to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;
	 
	 	     (viii) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Grant Certificate or other instrument hereunder; and
	 
	 	     (ix) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.



     (b)  Manner of Exercise of Committee Authority. Any action of the
Committee with respect to the Plan shall be final, conclusive and binding on
all persons, including the Company, subsidiaries of the Company, Grantees, or
any person claiming any rights under the Plan from or through any Grantee. If
not specified in the Plan, the time at which the Committee must or may make any
determination shall be determined by the Committee, and any such determination
may thereafter be modified by the Committee (subject to Section 11). The
express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. The Committee may delegate to officers or managers
of the Company or any subsidiary of the Company the authority, subject to such
terms as the Committee shall determine, to perform such functions as the
Committee may determine, to the extent permitted under applicable law.


     (c)  Limitation of Liability. The Committee shall be entitled to, in good
faith, rely or act upon any report or other information furnished to it by any
officer or other employee of the Company or any of its subsidiaries, the
Company’s independent certified public accountants or any executive
compensation consultant, legal counsel or other professional retained by the
Company to assist in the administration of the Plan. To the fullest extent
permitted by applicable law, neither any member of the Committee, nor any
officer or employee of the Company acting on its behalf, shall be personally
liable for any action, determination or interpretation taken or made in good
faith with respect to the Plan, and each member of the Committee and any
officer or employee of the Company acting on its behalf shall, to the extent


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permitted by law, be fully indemnified and protected by the Company with
respect to any such action, determination or interpretation.


Section 5. Terms Relating to Options.


     (a)  Generally. Options granted under the Plan shall be subject to the
terms of the Plan and such other terms as the Committee shall set forth in a
Grant Certificate.


     (b)  Termination of Options. Except as provided in a Grant Certificate,
upon the Grantee’s termination of employment with the Company and its
subsidiaries for any reason, (i) Options that are not then vested and
exercisable shall immediately terminate, and (ii) Options that are vested and
exercisable shall generally remain exercisable until, and terminate upon, the
91st day following such termination of employment (or the 366th day following
such termination where such termination is by reason of death, or a disability,
retirement or redundancy that is approved by the Committee for purposes of
hereof); provided, however, that if such termination is for Cause or following
such termination the Grantee violates a Restrictive Covenant, all Options will
terminate immediately; provided, further, that in any event, each Option will
terminate upon the tenth anniversary of the date of grant, or such earlier time
as may be provided by action of the Committee pursuant to Section 7.


     (c)  Exercise of Options. Only the vested portion of any Option may be
exercised. A Grantee shall exercise an Option by delivery of written notice to
the Company setting forth the number of Shares with respect to which the Option
is to be exercised, together with a certified check or bank draft payable to
the order of the Company for an amount equal to the sum of the exercise price
for such Shares and any employment tax required to be withheld. The Committee
may, in its sole discretion, permit other forms of payment, including notes or
other contractual obligations of a Grantee to make payment on a deferred basis.
Before the Company issues any Shares to a Grantee pursuant to the exercise of
an Option, the Company shall have the right to require that the Grantee make
such provision, or furnish the Company such authorization, necessary or
desirable so that the Company may satisfy its obligation under applicable
income tax laws to withhold for income or other taxes due upon or incident to
such exercise. The Committee, may, in its discretion, permit such withholding
obligation to be satisfied through the withholding of Shares that would
otherwise be delivered upon exercise of the Option. Unless otherwise provided
in a Grant Certificate, Shares acquired upon exercise of an Option shall be
Vested Shares.


     (d)  Transferability. No Option may be sold, transferred, assigned,
pledged or otherwise encumbered, and an Option shall be exercisable only by the
Grantee, provided that the Committee may permit transfers to a Permitted
Transferee. Any such Permitted Transferee shall be subject to all the terms
and conditions of the Plan and Grant Certificate, including the provisions
relating to the termination of the right to exercise the Option.


     (e)  Shares. Shares issued upon exercise of Options shall be treated as
Shares issued under the Plan for all purposes of the Plan, including the
provisions of Section 3 and Section 8, and, unless otherwise provided in a
Grant Certificate, Shares issued upon exercise of an Option shall be treated as
Vested Shares for purposes Section 8.


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Section 6. Terms Relating to Awards of Shares.


     The Committee may award Shares to a Grantee that may or may not be
conditional upon the passage of time, the Grantee’s future performance of
services and/or achievement of specified performance targets. Shares granted
under the Plan that are so conditional are referred to as “Unvested Shares”,
and Shares that are not so conditional are referred to as “Vested Shares”.
Except to the extent restricted under the terms of the Plan and any Grant
Certificate, a Grantee awarded Unvested Shares shall have all of the rights of
a stockholder including, without limitation, the right to vote Unvested Shares
or the right to receive dividends thereon. The Committee may require the
Grantee to pay (in cash or such other form as determined by the Committee,
including notes or other contractual obligations of a Grantee to make payment
on a deferred basis) for Shares at a price per Share up to the Fair Market
Value thereof. The grant of Shares or the lapse of restrictions on Unvested
Shares shall be conditional on the Grantee’s satisfaction of any withholding
tax obligation that arises in connection therewith.


Section 7. Adjustment Upon Changes in Capitalization


     In the event any recapitalization, forward or reverse split,
reorganization, merger, consolidation, incorporation, spin-off, combination,
repurchase, exchange of Shares or other securities, dividend or distribution of
Shares or other special and nonrecurring dividend or distribution (whether in
the form of cash, securities or other property), liquidation, dissolution, sale
or purchase of assets or other similar transactions or events, affects the
Shares such that an adjustment is, in the sole discretion of the Committee,
appropriate in order to prevent dilution or enlargement of the rights of
Grantees under the Plan, then the Committee shall equitably adjust any or all
of (i) the number and kind of securities deemed to be available thereafter for
grants of awards under Section 3, (ii) the number and kind of securities
subject to Unvested Shares or outstanding Options, and (iii) the exercise price
per Share subject to Options. In addition, the Committee is authorized to make
adjustments in the terms and conditions of, and the criteria included in,
Unvested Shares or Options (including, without limitation, acceleration of the
expiration date of Options, cancellation of Options in exchange for the
intrinsic (i.e., in-the-money) value, if any, of the vested portion thereof, or
substitution of Unvested Shares or Options using securities or other
obligations of a successor or other entity) in recognition of unusual or
nonrecurring events (including, without limitation, a Sale of the Company or an
event described in the preceding sentence) affecting the Company or any
subsidiary of the Company or the financial statements of the Company or any
subsidiary of the Company, or in response to changes in applicable laws,
regulations, or accounting principles.


Section 8. Restrictions on Shares.


     (a)  Restrictions on Issuing Shares. No Shares shall be issued or
transferred to an Employee under the Plan unless and until all applicable legal
requirements have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition the award or delivery of Shares or
exercise of any Option on the Grantee’s undertaking in writing to comply with
such restrictions on any subsequent disposition of the Shares issued or


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transferred thereunder as the Committee shall deem necessary or advisable
as a result of any applicable law, regulation, official interpretation thereof,
or any underwriting agreement.


     (b)  Transfer Restrictions. Except for transfers made in connection with a
Sale of the Company or pursuant to Sections 8(c) or (d) below, Shares issued to
a Grantee pursuant to the Plan may not be sold, pledged, encumbered or
otherwise transferred other than to a Permitted Transferee. Any such Permitted
Transferee shall be subject to all the terms and conditions of the Plan and
Grant Certificate, including the provisions of this Section 8.


     (c)  Repurchase Right.


          (i) Unless otherwise provided in a Grant Certificate, the Company shall
have the right (but not the obligation) to repurchase any or all of the Shares
issued pursuant to the Plan upon a Grantee’s termination of employment with the
Company and its subsidiaries for any reason. Such right shall be exercisable
by the Company during the one year period following the later of the date of
termination or the date the Grantee acquires the Shares, or such longer period
as may be necessary so that the exercise of such right does not give rise to a
compensation expense pursuant to Accounting Principles Board Opinion 25 (or any
successor thereto).



          (ii) Unless otherwise provided in a Grant Certificate, the price per Share
to be paid by the Company should it choose to exercise its repurchase right
shall equal, in the case of Unvested Shares, the price per Share paid by the
Grantee (if any), and shall equal, in the case of Vested Shares, the Fair
Market Value per Share; provided, however, that the price per Share to be paid
by the Company for any Vested Shares shall not exceed the price per Share paid
by the Grantee (if any) if the Shares are to be repurchased following (x) the
Grantee’s termination of employment within 18 months of the Effective Date that
causes the Grantee to be eligible for enhanced change in control severance
benefits pursuant to Grantee’s employment agreement with the Company or any of
its subsidiaries, (y) the Grantee’s termination for Cause, or (z) a breach by
the Grantee of any Restrictive Covenant.



          (iii) The price per Share to be paid by the Company should it choose to
exercise its repurchase right shall be paid by in cash or plain check against
delivery of certificates representing the repurchased Shares. Notwithstanding
the foregoing, if at the time of the exercise of the repurchase right or
payment for the Shares pursuant thereto, such exercise or repurchase would
result in a default or breach on the part of the Company or any subsidiary
under any loan or other agreement, or if the repurchase would not be permitted
under the Delaware General Corporation Law, then the Company shall take
possession of the Shares to be repurchased and payment shall be deferred until
the first business day that it may occur without any such event existing or
resulting. The Company may offset against the payment of the repurchase price
any amounts owed by the Grantee to the Company or any Affiliate of the Company.



          (iv) Should the Company choose not to exercise its repurchase right, One
Equity Partners LLC (“OEP”) or any Affiliate of OEP designated by OEP may
exercise such right as if it were the Company, and if OEP or any such Affiliate
chooses to exercise such right, Temasek Life Sciences Investments Private
Limited, a Singapore Corporation (“Temasek”) or




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any Affiliate of Temasek designated by Temasek and TPG Quintiles Holdco
LLC, a Delaware limited liability company (“TPG”) or any Affiliate of TPG
designated by TPG may each participate in the exercise of such right on a pro
rata basis, and OEP, Temasek and TPG shall be third party beneficiaries of the
Plan and any Grant certificate with respect to the exercise of such right.


     (d)  Drag-Along Right. If the Majority Common Stockholders notify a holder
of Shares issued under the Plan that the Majority Common Stockholders desire to
effect a Sale of the Company and specify the terms and conditions of such
proposed sale then, such holder shall take all necessary and desirable actions
reasonably requested by such Majority Common Stockholders in connection with
the consummation of such Sale of the Company, and within ten (10) business days
of the receipt of such notice (or such longer period of time as such Majority
Common Stockholders shall designate in such notice) such holder shall cause a
pro rata number of his Shares to be sold to the designated purchaser on the
same terms and conditions for the same per share consideration and at the same
time as the Shares being sold by such Majority Common Stockholders, provided,
that before the payment of any consideration in connection with such Sale of
the Company to the holders of Shares, the holders of shares of the Company’s
Series A Preferred Stock shall be entitled to receive the Series A Liquidation
Preference (as defined in the Certificate of Incorporation of the Company) in
connection with any Sale of the Company. In furtherance, and not in
limitation, of the foregoing, in connection with a Sale of the Company, such
holder will, (a) consent to and raise no objections against the Sale of the
Company or the process pursuant to which it was arranged, (b) waive any
dissenter’s rights and other similar rights and (c) execute all documents
containing such terms and conditions as those executed by such Majority Common
Stockholders as directed by such Majority Common Stockholders.


     (e)  Voting. As to the election of members of the Board, each holder of
Shares issued under the Plan shall vote, consent or take other action as
directed by the Board which shall be consistent with the provisions of the
Stockholders Agreement, whether or not such holder is a party thereto.


     (f)  Transfer of ISO Shares. The Grantee shall notify the Company of any
transfer of Shares that were acquired upon exercise of an ISO that occurs
within one year of such exercise or two years of the date the ISO was granted.


     (g)  Qualifying Offering. The restrictions contained in subsections (b),
(c), (d) and (e) above shall lapse upon a Qualifying Offering; provided,
however, that (i) the repurchase rights set forth in Section 8(c) in respect of
any termination of employment occurring prior to the Qualifying Offering may
continue to be exercised, and the repurchase right arising under the
circumstances described in clause (x), (y) or (z) of Section 8(c)(ii) may
continue to be exercised, regardless of when termination of employment occurs,
and (ii) unless otherwise determined by the Committee, no Shares shall be sold
or distributed during the 180-day period beginning on the effective date of the
Qualifying Offering (except as part of such underwritten registration) and each
Grantee shall enter into such standstill agreements and related agreements as
the managing underwriters of such Qualifying Offering may request.


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     (h)  Certificates for Shares. Shares issued under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Shares are registered in the name of a Grantee, such certificates
may bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Shares, and the Company may retain physical
possession of the certificates, in which case the Grantee shall be required to
have delivered a power of transfer to the Company, endorsed in blank, relating
to the Shares.


Section 9. Acceleration of Vesting.


     Unless otherwise determined by the Committee, all Options and Unvested
Shares held by a Grantee shall become fully vested immediately prior to a Sale
of the Company.


Section 10. General Provisions


     (a)  Each Option and Share grant shall be evidenced by a Grant Certificate.
The terms and provisions of such certificates may vary among Grantees and
among different Options and Shares granted to the same Grantee.


     (b)  The grant of an Option or Shares in any year shall not give the
Grantee any right to similar grants in future years, any right to continue such
Grantee’s employment relationship with the Company or its subsidiaries (for the
applicable vesting period or otherwise), or, until Shares are issued pursuant
to the exercise of an Option, any rights as a stockholder of the Company. All
Grantees shall remain subject to discharge to the same extent as if the Plan
were not in effect. For purposes of the Plan, a sale of any subsidiary of the
Company that employs a Grantee shall be treated as the termination of such
Grantee’s employment unless such Grantee remains employed by the Company or
another subsidiary of the Company.


     (c)  No Grantee, and no beneficiary or other persons claiming under or
through the Grantee, shall have any right, title or interest by reason of any
award under the Plan to any particular assets of the Company or subsidiaries of
the Company, or any Shares allocated or reserved for the purposes of the Plan
or subject to any award except as set forth herein. The Company shall not be
required to establish any fund or make any other segregation of assets to
assure satisfaction of the Company’s obligations under the Plan.


     (d)  The Plan shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York, except to the extent that the
Delaware General Corporation Law applies as a result of the Company being
incorporated in the State of Delaware, in which case the Delaware General
Corporation Law shall apply. Each Grantee, and each beneficiary or other
person claiming under or through the Grantee consents to the exclusive
jurisdiction of any state or federal court located within the State of New York
and irrevocably agrees that all actions or proceedings relating to the Plan
shall be litigated in such courts. Each Grantee, and each beneficiary or other
person claiming under or through the Grantee accepts generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts and waives
any defense of forum non conveniens, and irrevocably agrees to


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be bound by any final and nonappealable judgment rendered thereby in
connection with the Plan. Each Grantee, and each beneficiary or other person
claiming under or through the Grantee further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof via overnight courier, such
service to become effective fourteen calendar days after such mailing.


Section 11. Effective Date; Amendment or Termination


     The Plan shall become effective upon the closing of the transactions
contemplated by the Agreement and Plan of Merger, dated as of April 10, 2003,
by and among the Company, Pharma Services Acquisition Corp, a North Carolina
corporation and wholly-owned subsidiary of the Company and Quintiles
Transnational Corp., a North Carolina corporation (the “Effective Date”). The
Committee may, at any time, alter, amend, suspend, discontinue or terminate the
Plan; provided, however, that no such action shall adversely affect the rights
of Grantees with respect to Options or Shares previously granted hereunder. The
Committee shall also have the authority to establish separate sub-plans under
the Plan with respect to Grantees resident in a particular jurisdiction (the
terms of which shall not be inconsistent with those of the Plan) if necessary
or desirable to comply with the applicable laws of such jurisdiction.



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