SPECIAL BONUS PLAN



 



Exhibit 10.12


Adopted 1-9-03


Quintiles Transnational Corp.

Special Bonus Plan


     1.  Objectives of the Plan. The Special Committee of the Board of
Directors (the “Special Committee”) of Quintiles Transnational Corp. (the
“Company”) is in the process of evaluating the Company’s strategic
alternatives. The objectives of this Special Bonus Plan (the “Plan”) are to
recognize and compensate participating managers for the additional duties and
burdens imposed on them by the strategic alternatives process, to provide
participating managers with an incentive to maintain a level playing field for
potential buyers and to counterbalance any incentive to sell the Company that
might be created by the change-in-control provisions of certain managers’
employment agreements.


     2.  Administration of the Plan. The Plan shall be administered by the
Special Committee. The Special Committee shall have the sole and complete
authority and discretion to determine the managers who shall be participants in
the Plan (the “Participants”), to determine the amount of each bonus payable
under the Plan, to construe and interpret the terms of the Plan and to make all
decisions and determinations it deems necessary or advisable for the
administration of the Plan. All interpretations, decisions and determinations
of the Special Committee shall be final.


     3.  Operation of the Plan. The Plan shall consist of two plans, one to
provide recognition and incentives in connection with the conduct of the
strategic alternatives process (“Plan I”) and one to encourage the giving of
appropriate consideration to strategic alternatives that do not involve a
change in control of the Company (“Plan II”).


     4.  Plan I: Conduct of Strategic Alternatives Process.


          a.     Participants. Participants in Plan I shall be those executives who are
critical to the strategic alternatives process, as determined by the Special
Committee in its sole discretion. Any Participant who commits himself or
herself to a specific potential bidder in an exclusive or inappropriate manner,
as determined by the Special Committee in its sole discretion, shall be
excluded from participation in Plan I, unless the Special Committee has
otherwise agreed in writing to permit such Participant to participate with a
bidder.


          b.     Bonus Pool. Plan I shall have a fixed bonus pool equal to fifty
percent (50%) of the aggregate of the 2002 base salaries of all of the
Participants in Plan I; provided, however, that the Plan I bonus pool shall in
no case be less than One Million Dollars ($1,000,000) nor more than Two Million
Five Hundred Thousand Dollars ($2,500,000).


          c.     Allocation of Bonus Pool.


               (1)  Fifty percent (50%) of the Plan I bonus pool shall be allocated pro
rata to all Plan I Participants who meet minimum performance standards, as
determined by the


 






 


Special Committee in its sole discretion, in the same proportion that each Plan
I Participant’s 2002 base salary bears to the total 2002 base salaries of all
Plan I Participants.


               (2)  The remaining fifty percent (50%) of the Plan I bonus pool shall be
allocated among the Plan I Participants as determined by the Special Committee
in its sole discretion, based on, among other things, the Special Committee’s
assessment of each Participant’s contributions to the strategic alternatives
process and his or her performance of such tasks or services as may be
requested by the Special Committee or its financial or legal advisors during
the course of the strategic alternatives process.


          d.     Payment Schedule. To provide incentives throughout the entire
strategic alternatives process, the total Plan I bonus due each recipient shall
be paid in two tranches:


               (1)  The payments referred to in Section 4(c)(1) above shall be paid upon
the earlier of June 30, 2003 or the public announcement of a sale or other
change-in-control transaction whereby the Company is to be acquired; and


               (2)  The payments referred to in Section 4(c)(2) above shall be paid upon
the closing of a sale or other change-in-control transaction whereby the
Company is acquired or, if no sale or other change-in-control transaction has
been announced as of December 31, 2003 (or has been announced and terminated or
abandoned and no such other transaction is then pending), on December 31, 2003.
If such payments are not made because a sale or other change-in-control
transaction whereby the Company is to be acquired is pending on the payment
date, and the sale or other change-in-control transaction is subsequently
terminated or abandoned, such payments shall be made on the date that is three
(3) months after the first public announcement of such termination or
abandonment to those Participants who are employed by the Company or a
subsidiary of the Company on such date.


In all events, a Participant must be employed by the Company or a subsidiary of
the Company on the applicable payment date in order to be eligible to receive a
Plan I bonus payment.


          e.     Other Compensation. Any Plan I bonus shall be in addition to any other
compensation otherwise due to Participants, including normal year-end bonuses,
change-in-control payments, and any bonuses under Plan II below.


     5.  Plan II: Stand-Alone Scenario Bonus.


          a.     Participants. Participants in Plan II shall be certain executives who
have change-in-control provisions in their employment agreements and who are
critical to the strategic alternatives process, as determined by the Special
Committee in its sole discretion. Any Participant who commits himself or
herself to a specific potential bidder in an exclusive or inappropriate manner,
as determined by the Special Committee in its sole discretion, shall be
excluded from participation in Plan II, unless the Special Committee has
otherwise agreed in writing to permit such Participant to participate with a
bidder.


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          b.     Bonus Pool. Plan II shall have a fixed bonus pool of One Million Five
Hundred Thousand Dollars ($1,500,000).


          c.     Allocation of Bonus Pool. One hundred percent (100%) of the Plan II
bonus pool shall be allocated among the Plan II Participants as determined by
the Special Committee in its sole discretion, based on, among other things, the
Special Committee’s assessment of each Participant’s contributions to the
strategic alternatives process and his or her performance of such tasks or
services as may be requested by the Special Committee or its advisors during
the course of the strategic alternatives process.


          d.     Payment Schedule. The total Plan II bonus pool shall be paid on the
same date as normal 2003 cash bonuses are paid by the Company, provided that
the Company has not announced, on or before the payment date, a sale or other
change-in-control transaction whereby the Company is to be acquired (other than
a sale or other change-in-control transaction that has been terminated or
abandoned). A Plan II Participant must be employed by the Company or a
subsidiary of the Company on the date Plan II bonuses are paid in order to be
eligible to receive a Plan II bonus payment. If Plan II bonus payments are not
made because a sale or other change-in-control transaction whereby the Company
is to be acquired is pending on the payment date, and the sale or other
change-in-control transaction is subsequently terminated or abandoned, Plan II
bonus payments shall be made on the date that is three (3) months after the
first public announcement of such termination or abandonment to those Plan II
Participants who are employed by the Company or a subsidiary of the Company on
such date.


          e.     Sale or Change-in-Control Contingency. In the event that a sale or
other change-in-control transaction whereby the Company is to be acquired is
announced within six (6) months after payment of the Plan II bonus, any
change-in-control payment due to an executive as a result of such transaction
(including any modification thereof) shall be reduced by the amount of the Plan
II bonus paid to such executive. Payments under Plan II shall be conditioned
upon receipt by the Company of the agreement of the Participant receiving the
payment, in form and substance satisfactory to the Special Committee, to
provide for any such reduction that may be required under this Section 5(e).


          f.     Other Compensation. Except as otherwise provided herein, any Plan II
bonus paid shall be in addition to any other compensation otherwise due to
Participants, including normal year-end bonuses, change-in-control payments,
and any bonuses under Plan I above.


     6.  Employment Status. The Plan shall not constitute a contract of
employment or impose on any Participant or on the Company any obligation for
the Participant to remain an employee or contractor of the Company. The Plan
shall not change the status of a Participant’s employment or the Company’s
policies regarding termination of employment. The employment of those
Participants who are employees is and shall continue to be at-will, as defined
under applicable law, or as otherwise set forth in an applicable employment
agreement.


     7.  Amendment and Termination. Upon notice to the affected Participants,
the Company shall have the right to amend or terminate this Plan at any time
prior to the time


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bonuses are paid. Bonuses shall not be considered earned under this Plan
unless and until paid. Bonuses that have been paid under this Plan may not be
revoked or rescinded.


     8.  Assignments and Transfers. The rights and interests of Participants
under the Plan may not be assigned, encumbered or transferred except by will or
the laws of descent and distribution.


     9.  Withholding. The Company shall have the right to deduct from all
amounts paid under this Plan any taxes required by law to be withheld from such
payments.


     10.  Term of Plan. The Plan is effective as of the date hereof and,
subject to Section 7 hereof, shall continue until the bonuses provided for
under the Plan have been distributed.


     11.  Governing Law. This Plan shall be governed by the laws of the State
of North Carolina.



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