Ex-10.40 Form of Employee Restricted Stock Unit Ag



 




Exhibit 10.40

PHARMANET DEVELOPMENT GROUP, INC.

RESTRICTED STOCK UNIT ISSUANCE AGREEMENT




     RECITALS


A. The Board has adopted the Plan for the purpose of attracting and retaining the services of
selected employees who provide services to the Company (or any Related Corporations).



B. *** (the “Participant”) is to render valuable services to the Company (or a Related Corporation)
and the Committee has approved the award of restricted stock units to the Participant pursuant to
this Agreement.



C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached
Appendix A.




     NOW, THEREFORE, it is hereby agreed as follows:



          1. Grant of Restricted Stock Units. The Company hereby awards to the Participant, as
of the Award Date, an award (the “Award”) of restricted stock units under the Plan. Each
restricted stock unit represents the right to receive one share of Common Stock on the vesting date
of that unit. The number of shares of Common Stock subject to the awarded restricted stock units,
the applicable vesting schedule for the restricted stock units and the underlying shares, the dates
on which those vested shares shall be issued to the Participant and the remaining terms and
conditions governing the Award shall be as set forth in this Agreement.




AWARD SUMMARY




	 	 	 
	Award Date:

	 	***






	 	 	 
	Number of Shares
	 	 
	 Subject to Award:

	 	*** shares of Common Stock (the “Shares”)
	 
	Vesting Schedule:

	 	The Participant shall vest with respect to
one-sixth of the Shares on June 30 and
December 31 and of each year commencing
December 31, 2006, provided the Participant
remains in continuous employment through each
such date. The Shares may vest on an
accelerated basis prior to these vesting dates
in accordance with the provisions of Paragraph
4 of this Agreement. In no event shall any
Shares vest after the date of the
Participant’s termination of employment.
	 
	Issuance Dates:

	 	Each Share in which the Participant vests in
accordance with the foregoing Vesting Schedule
shall be issued on the date (the “Issue Date”)
on which that Share so vests or as soon
thereafter as administratively practicable,
but in no event later than the close of the
calendar year in which such Issue Date occurs
or (if later) the fifteenth (15th) day of the
third calendar month following such Issue
Date. The issuance of the Shares shall be
subject to






 









 






	 	 	 
	 

	 	the Company’s collection of any
applicable Withholding Taxes in accordance the
procedures set forth in Paragraph 6 of this
Agreement.






          2. Limited Transferability. Prior to actual receipt of the Shares which vest and
become issuable hereunder, the Participant may not transfer any interest in the Award or the
underlying Shares. Any Shares which vest hereunder but which otherwise remain unissued at the time
of the Participant’s death may be transferred pursuant to the provisions of the Participant’s will
or the laws of inheritance.




          3. Cessation of Employment. Except as otherwise provided for in Participant’s
employment agreement, should the Participant cease employment for any reason prior to vesting in
one or more Shares subject to this Award, then the Award will be immediately cancelled with respect
to those unvested Shares, and the number of restricted stock units will be reduced accordingly. The
Participant shall thereupon cease to have any right or entitlement to receive any Shares under
those cancelled units. For purposes of this Agreement, the Participant’s period of employment
shall not include any period of notice of termination of employment, whether expressed or implied.
The Participant’s date of termination shall mean the date upon which he or she ceases active
employment following the provision of notification of termination or resignation from employment
and shall be determined solely by this Agreement and without reference to any other agreement,
written or oral, including the Participant’s contract of employment.




          4. Change in Control.




               (a) Any restricted stock units subject to this Award at the time of a Change in Control may be
assumed, or replaced with an economically equivalent award, by the successor corporation or a
parent or subsidiary of the successor corporation. In the event the restricted stock units are not
to be so assumed or replaced, then the Participant shall fully vest in the Award immediately prior
to the effective date of the Change in Control. The Shares subject to those vested units will be
issued on the Issue Date triggered by the Change in Control (or otherwise converted into the right
to receive the same consideration per share of Common Stock payable to the other stockholders of
the Company in consummation of that Change in Control and distributed at the same time as such
stockholder payments), subject to the Company’s collection of any applicable Withholding Taxes
pursuant to the provisions of Paragraph 6.



               (b) For the purposes of this Paragraph 4, the Award shall be considered “assumed” if,
following the Change in Control, the Award confers the right to receive, for each share of Common
Stock subject to the Award immediately prior to the Change in Control, the consideration (whether
stock, cash, securities or other property) received in the Change in Control by holders of Common
Stock for each share of Common Stock held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type



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of consideration chosen by the holders of a majority of the outstanding shares of Common
Stock); provided, however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its parent, the Committee may, with the consent
of the successor corporation, provide that the consideration to be received for each share of
Common Stock which vests and become issuable under this Award shall be comprised solely of common
stock of the successor corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in Control.




               (c) This Agreement shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.



               (d) Notwithstanding anything to the contrary contained herein, the vesting of Participant’s
restricted stock units under the Award shall be subject to acceleration as provided for in
Participant’s employment agreement.



          5. Adjustment in Shares. In the event of any of the following transactions affecting
the outstanding Common Stock as a class without the Company’s receipt of consideration: any stock
split, reverse stock split, stock dividend, combination or exchange of shares, reclassification,
spin-off, extraordinary distribution (whether in cash, securities or other property) or any other
similar transaction affecting the Common Stock without the Company’s receipt of consideration
(other than a conversion of any convertible securities of the Company), equitable adjustments shall
be made to the total number and/or class of securities issuable pursuant to this Award. The
adjustments shall be made by the Committee in such manner as the Committee deems appropriate in
order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.




          6. Issuance of Shares of Common Stock.




               (a) On the Issuance Date or as soon thereafter as practicable, the Company shall issue to or
on behalf of the Participant a certificate (which may be in electronic form) for the number of
shares of Common Stock underlying the restricted stock units which vest under the Award on such
date, subject, however, to the Company’s collection of any applicable Withholding Taxes.



               (b) Until such time as the Company provides the Participant with notice to the contrary, the
Company shall collect any Withholding Taxes required to be withheld with respect to the issuance of
the vested Shares hereunder through an automatic Share withholding procedure pursuant to which the
Company will withhold, at the time of such issuance, a portion of the Shares with a Fair Market
Value (measured as of the issuance date) equal to the amount of those taxes (the “Share
Withholding Method”); provided, however, that the amount of any Shares so withheld shall not exceed
the amount necessary to satisfy the Company’s required withholding obligations using the minimum
statutory withholding rates. The Participant shall be notified in writing in the event such Share
Withholding Method is no longer available.



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               (c) Should any Shares be issued at a time when the Share Withholding Method is not available,
then the Participant shall pay any Withholding Taxes required to be withheld with respect to the
issuance of vested Shares hereunder by delivering a check to the Company in the amount of the
Withholding Taxes.



               (d) In no event will any fractional shares be issued.



               (e) The holder of this Award shall not have any stockholder rights, including voting or
dividend rights, with respect to the Shares subject to the Award until the Participant becomes the
record holder of those Shares following their actual issuance after the satisfaction of the
applicable Withholding Taxes.



          7. Compliance with Laws and Regulations.




               (a) The issuance of shares of Common Stock pursuant to the Award shall be subject to
compliance by the Company and the Participant with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq Stock Market, if
applicable) on which the Common Stock may be listed for trading at the time of such issuance.



               (b) The inability of the Company to obtain approval from any regulatory body having authority
deemed by the Company to be necessary to the lawful issuance of any Common Stock hereby shall
relieve the Company of any liability with respect to the non-issuance of the Common Stock as to
which such approval shall not have been obtained. The Company, however, shall use its best efforts
to obtain all such approvals.



          8. Successors and Assigns. Except to the extent otherwise provided in this Agreement,
the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company
and its successors and assigns and the Participant, the Participant’s assigns, the legal
representatives, heirs and legatees of the Participant’s estate and any beneficiaries of the Award
designated by the Participant.




          9. Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be in writing and addressed to the Company at its principal corporate
offices. Any notice required to be given or delivered to the Participant shall be in writing and
addressed to the Participant at the address indicated below Participant’s signature line on this
Agreement. All notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.




          10. Construction. This Agreement and the Award evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Committee with respect to any question or issue arising under the Plan or this
Agreement shall be conclusive and binding on all persons having an interest in the Award. In
addition to the foregoing, the terms of this Restricted Stock Issuance Agreement are subject to the
Participant’s employment agreement with the Company, dated June 30, 2006,

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and if any of the terms of this Agreement conflict with the Participant’s employment
agreement, the employment agreement shall control.




          11. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Delaware without resort to that State’s
conflict-of-laws rules.




          12. Employment at Will. Except as may otherwise be set forth in the Participant’s
employment agreement, nothing in this Agreement or in the Plan shall confer upon the Participant
any right to continue in service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company (or any Related Corporation employing or retaining
the Participant) or of the Participant, which rights are hereby expressly reserved by each, to
terminate the Participant’s service at any time for any reason, with or without cause.




          13. Nature of Grant; No Entitlement; No Claim for Compensation. In accepting the
grant of this Award for the number of Shares as specified above, the Participant acknowledges the
following:




               (a) The Plan is established voluntarily by the Company, it is discretionary in nature and may
be modified, amended, suspended or terminated by the Company at any time.



               (b) The grant of this Award is voluntary and occasional and does not create any contractual or
other right to receive future grants of awards, or benefits in lieu of awards, even if awards have
been granted repeatedly in the past.



               (c) All decisions with respect to future awards, if any, will be at the sole discretion of the
Committee.



               (d) The Participant is voluntarily participating in the Plan.



               (e) This Award is an extraordinary item that does not constitute compensation of any kind for
services of any kind rendered to the Company or its Related Corporations (including, as applicable,
the Participant’s employer) and which is outside the scope of the Participant’s employment
contract, if any.



               (f) This Award is not part of the Participant’s normal or expected compensation or salary for
any purpose, including, but not limited to, calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits
or similar payments.



               (g) In the event that the Participant’s employer is not the Company, the grant of the Award
will not be interpreted to form an employment contract or relationship with the Company and,
furthermore, the grant of the Award will not be interpreted to form an employment contract with the
Participant’s employer or any Related Corporations.



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               (h) The future value of the underlying Shares is unknown and cannot be predicted with
certainty.



               (i) In consideration of the grant of this Award, no claim or entitlement to compensation or
damages shall arise from termination of the Award or diminution in value of the Award or any of the
Shares issuable under the Award from termination of the Participant’s employment by the Company or
the Participant’s employer, as applicable (and for any reason whatsoever and whether or not in
breach of contract or local labor laws), and the Participant irrevocably releases the Participant’s
employer, the Company and its Related Corporations, as applicable, from any such claim that may
arise; if, notwithstanding the foregoing, any such claim is found by a court of competent
jurisdiction to have arisen, then, by signing this Agreement, the Participant shall be deemed to
have irrevocably waived his or her entitlement to pursue such claim.



          14. Data Privacy.




               (a) The Participant hereby explicitly and unambiguously consents to the collection, use and
transfer, in electronic or other form, of the Participant’s personal data as described in this
Agreement by and among, as applicable, his or her employer, the Company and its Related
Corporations for the exclusive purpose of implementing, administering and managing Participant’s
participation in the Plan.



               (b) The Participant understands that his or her employer, the Company and its Related
Corporations, as applicable, hold certain personal information about Participant regarding his or
her employment, the nature and amount of the Participant’s compensation and the fact and conditions
of the Participant’s participation in the Plan, including, but not limited to, the Participant’s
name, home address and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or directorships held in
the Company and its Related Corporations, details of all options, awards or any other entitlement
to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the
Participant’s favor, for the purpose of implementing, administering and managing the Plan (the
“Data”). The Participant understands that the Data may be transferred to any third parties
assisting in the implementation, administration and management of the Plan, that these recipients
may be located in the Participant’s country, or elsewhere, and that the recipient’s country may
have different data privacy laws and protections than the Participant’s country. The Participant
understands that the Participant may request a list with the names and addresses of any potential
recipients of the Data by contacting his or her local human resources representative. The
Participant authorizes the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and managing the
Participant’s participation in the Plan, including any requisite transfer of such Data as may be
required to a broker or other third party. The Participant understands that the Data will be held
only as long as is necessary to implement, administer and manage the Participant’s participation in
the Plan. The Participant understands that he or she may, at any time, view the Data, request
additional information about the storage and processing of the Data, require any necessary
amendments to the Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing the Participant’s local human resources



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representative. The Participant understands, however, that refusing or withdrawing his or her
consent may affect the Participant’s ability to participate in the Plan. For more information on
the consequences of refusal to consent or withdrawal of consent, the Participant understands that
the Participant may contact his or her local human resources representative.



IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated
above.




	 	 	 	 	 	 	 
	 	 	PHARMANET DEVELOPMENT GROUP, INC.
	 
	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 

	 	Name:
	 	Jeffrey P. McMullen	 	 
	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	PARTICIPANT
	 
	 	 	 	 	 	 
	 

	 	Signature:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 






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APPENDIX A

DEFINITIONS




The following definitions shall be in effect under the Agreement:




          A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.




          B. Award shall mean the award of restricted stock units made to the
Participant pursuant to the terms of the Agreement.




          C. Award Date shall mean the date the restricted stock units are awarded to
the Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of
the Agreement.




          D. Board shall mean the Company’s Board of Directors.




          E. Change in Control shall mean the occurrence of any of the following events:





          (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the total voting power represented by the Company’s
then outstanding voting securities;




          (ii) the consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets; or




          (iii) the consummation of a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or
consolidation.



          F. Code shall mean the Internal Revenue Code of 1986, as amended.




          G. Committee shall mean the committee of the Board acting in its capacity as
administrator of the Plan.




          H. Common Stock shall mean shares of the Company’s common stock.




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          I. Company shall mean PharmaNet Development Group, Inc., a Delaware
corporation, and any successor corporation to all or substantially all of the assets or
voting stock of PharmaNet Development Group, Inc. which shall by appropriate action adopt
the Plan.




          J. Exchange Act shall mean the Securities Exchange Act of 1934, as amended.




          K. Fair Market Value per share of Common Stock on any relevant date shall be
determined as of the last trading day prior to the relevant date in accordance with the
following provisions:





          (i) the closing price on the principal market if the Common Stock is at the
time listed on a national securities exchange, the Nasdaq Stock Market (“Nasdaq”) or
the National Association of Securities Dealers, Inc.’s Over the Counter Bulletin
Board Exchange;




          (ii) if the Common Stock is not listed on a national securities exchange,
Nasdaq or the Bulletin Board, then the closing price if reported or the average bid
and asked price for the Company’s shares as listed in the National Quotation
Bureau’s “pink sheets”;




          (iii) if there are no prices available under clause (i) or (ii), then fair
market value shall be based upon the average closing bid and asked price as
determined following a polling of all dealers making a market in the Common Stock;
or




          (iv) if there is no regularly established trading market for the Common Stock,
the fair market value shall be established by the Board or the Committee taking into
consideration all relevant factors including the most recent price at which the
Common Stock was sold.



          L. Plan shall mean the Company’s Amended and Restated 1999 Stock Option Plan.




          M. Participant shall mean the person to whom the Award is made pursuant to the
Agreement.




          N. Stock Exchange shall mean the American Stock Exchange or the New York Stock
Exchange.




          O. Related Corporation shall mean a corporation which is a subsidiary
corporation with respect to the Company within the meaning of Section 425(f) of the Code.




          P. Withholding Taxes shall mean the income tax, employment tax, social
insurance, payroll tax, contributions, payment on account obligations or other




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amounts required to be withheld by the Company in connection with the issuance of the
shares of Common Stock under the Award.





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