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                                                                  Exhibit 10.187

                    PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
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                    Deferred Compensation Plan for Directors




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                                   Prepared By

                        Mercer Human Resource Consulting
                       462 South Fourth Avenue, Suite 1500
                              Louisville, KY 40202
                                  502/561-4500

                                  11 June 2002

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                    PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
ARTICLE      SECTION                                                               PAGE
-------      -------                                                               ----
<S>                                                                                <C>
  I          Purpose and Effective Date ........................................     1
             --------------------------
              1.01        Title ................................................     1
              1.02        Purpose ..............................................     1
              1.03        Effective Date .......................................     1

  II         Definitions and Construction of the Plan Document .................     2
             -------------------------------------------------
              2.01        Beneficiary ..........................................     2
              2.02        Board ................................................     2
              2.03        Change in Control ....................................     2
              2.04        Code .................................................     3
              2.05        Committee ............................................     3
              2.06        Common Stock .........................................     3
              2.07        Company ..............................................     3
              2.08        Compensation .........................................     3
              2.09        Consideration Shares .................................     3
              2.10        Crediting Rate .......................................     3
              2.11        Date of Exercise .....................................     3
              2.12        Deferral .............................................     3
              2.13        Deferral Account .....................................     3
              2.14        Deferral Account Balance .............................     3
              2.15        Deferred Compensation ................................     4
              2.16        Director .............................................     4
              2.17        Disabled .............................................     4
              2.18        Election Date ........................................     4
              2.19        Election Form ........................................     4
              2.20        ERISA ................................................     4
              2.21        Exchange Act .........................................     4
              2.22        Fair Market Value ....................................     4
              2.23        Gain Shares ..........................................     4
              2.24        Gain Share Account ...................................     4
              2.25        Participant ..........................................     5
              2.26        Plan .................................................     5
              2.27        Plan Year ............................................     5
              2.28        Share Units ..........................................     5
              2.29        Stock Option .........................................     5
              2.30        Stock Option Gain Deferral Agreement .................     5
              2.31        Stock Option Plan ....................................     5
              2.32        Termination of Service ...............................     5
</TABLE>

                                        i

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<TABLE>
<S>                                                                                                  <C>
              2.33        Unforeseeable Financial Emergency ........................................  5
              2.34        Valuation Date ...........................................................  5
              2.35        Gender and Number ........................................................  5
              2.36        Titles ...................................................................  5

   III       Eligibility and Participation .........................................................  6
             -----------------------------
              3.01        Eligibility ..............................................................  6
              3.02        Participation ............................................................  6

    IV       Participant Deferrals of Compensation .................................................  7
             -------------------------------------
              4.01        Deferred Compensation ....................................................  7
              4.02        Duration of Election Form ................................................  7
              4.03        Election to Modify or Terminate Future Contributions .....................  7
              4.04        Vesting                                                                     7

     V       Stock Option Deferrals ................................................................  8
             ----------------------
              5.01        Deferral of Stock Option Gain ............................................  8
              5.02        Timing of Filing Stock Option Gain Deferral Agreement ....................  8
              5.03        Contents of Stock Option Gain Deferral Agreement .........................  8
              5.04        Manner of Exercising Option Shares .......................................  8
              5.05        Determination of Gain Shares .............................................  8
              5.06        Changes to the Stock Option Gain Deferral Agreement ......................  9
              5.07        Failure to Properly Exercise .............................................  9
              5.08        Vesting ..................................................................  9

    VI       Deferral Accounts, Gain Share Accounts and Credit Rating ..............................  10
             --------------------------------------------------------
              6.01        Deferral Account .........................................................  10
              6.02        Maintenance of Accounts ..................................................  10
              6.03        Interest .................................................................  10
              6.04        Valuation of Gain Share Accounts .........................................  10
              6.05        Common Stock Adjustments .................................................  10
              6.06        Section 16(b) ............................................................  11
              6.07        Statement Accounts .......................................................  11

   VII       Distribution ..........................................................................  12
             ------------
              7.01        Distribution of Deferral Account .........................................  12
              7.02        Form of Distribution .....................................................  12
              7.03        Timing of Distribution ...................................................  12
              7.04        Death or Disability Prior to Commencement of
                            Benefit Payments .......................................................  12
              7.05        Death of a Participant Subsequent to Commencement of
                            Benefit Payments .......................................................  12
              7.06        Redeferral Election ......................................................  12
              7.07        Taxes ....................................................................  12

</TABLE>

                                       ii

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<TABLE>
<S>                                                                                               <C>
  VIII       Withdrawals .....................................................................    13
             -----------
              8.01     Withdrawals for Unforeseeable Financial Emergency .....................    13
              8.02     Other Premature Withdrawals ...........................................    13
              8.03     Withdrawal Processing .................................................    13

    IX       Beneficiary .....................................................................    15
             -----------
              9.01     Beneficiary Designation ...............................................    15
              9.02     Proper Beneficiary ....................................................    15
              9.03     Minor or Incompetent Beneficiary ......................................    15
              9.04     No Beneficiary Designation ............................................    15

     X       Administration of the Plan ......................................................    16
             --------------------------
             10.01     Majority Vote .........................................................    16
             10.02     Finality of Determination .............................................    16
             10.03     Certificates and Reports ..............................................    16
             10.04     Indemnification and Exculpation .......................................    16
             10.05     Expenses ..............................................................    16

    XI       Claims Procedure ................................................................    17
             ----------------
             11.01     Written Claim .........................................................    17
             11.02     Denied Claim ..........................................................    17
             11.03     Review Procedure ......................................................    17
             11.04     Committee Review ......................................................    17

   XII       Nature of Company's Obligation ..................................................    18
             ------------------------------
             12.01     Company's Obligation ..................................................    18
             12.02     Creditor Status .......................................................    18

  XIII       Amendment and Termination of Plan ...............................................    19
             ---------------------------------
             13.01     Amendment .............................................................    19
             13.02     Change in Control .....................................................    19
             13.03     Termination ...........................................................    19

   XIV       Miscellaneous ...................................................................    20
             -------------
             14.01     Written Notice ........................................................    20
             14.02     Change of Address .....................................................    20
             14.03     Merger, Consolidation or Acquisition ..................................    20
             14.04     Employment ............................................................    20
             14.05     Non-transferability ...................................................    20
             14.06     Legal Fees ............................................................    20
             14.07     Tax Withholding .......................................................    20
             14.08     Acceleration of Payment ...............................................    20
             14.09     Applicable Law ........................................................    21
             14.10     Invalidity of Certain Provisions
</TABLE>

                                       iii

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                                    ARTICLE I

                           PURPOSE AND EFFECTIVE DATE

     1.01  Title. This Plan shall be known as Pharmaceutical Product
Development, Inc. Deferred Compensation Plan for Directors (hereinafter referred
to as the "Plan").

     1.02  Purpose. The purpose of the Plan is to permit members of the Board of
Directors of Pharmaceutical Product Development, Inc. to defer pre-tax
compensation. The Plan constitutes an unfunded "top hat" arrangement under Title
I of ERISA as well as for income tax purposes.

     1.03  Effective Date. The effective date of this Plan shall be June 15,
2002.

                                        1

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                                   ARTICLE II

                DEFINITIONS AND CONSTRUCTION OF THE PLAN DOCUMENT

     2.01  Beneficiary. "Beneficiary" shall mean the person or persons
designated, pursuant to Article IX, by the Participant to receive such payments
as may become payable hereunder after the death of said Participant.

     2.02  Board. "Board" shall mean the Board of Directors of the Company.

     2.03  Change in Control. "Change in Control" shall be deemed to have
occurred if:

           (a) Any "Person" as defined in Section 3(a)(9) of the Exchange Act,
including a "group" (as that term is used in Sections 13(d)(3) and 14(3)(2) of
the Exchange Act), but excluding the Company and any employee benefit plan
sponsored or maintained by the Company, including any trustee of such plan
acting as trustee, who:

               (i)  makes a tender or exchange offer for any shares of the
Common Stock pursuant to which any shares of the Common Stock are purchased (an
"Offer"); or

               (ii) together with its "affiliates" and "associates" (as those
terms are defined in Rule 12b-2 under the Exchange Act) becomes the "Beneficial
Owner" (within the meaning of Rule 13d-3 under the Exchange Act) of at least 20%
of the Common Stock (an "Acquisition");

           (b) The shareholders of the Company approve a definitive agreement or
plan to merge or consolidate the Company with or into another corporation, to
sell or otherwise dispose of all or substantially all of its assets, or to
liquidate the Company (individually, a "Transaction"); or

           (c) When, during any period of 24 consecutive months during the
existence of the Plan, the individuals who constitute the Board (the "Incumbent
Directors") at the beginning of such period cease for any reason other than
death to constitute at least a majority thereof; provided, however, that a
director who was not a director at the beginning of such 24-month period shall
be deemed to have satisfied such 24-month requirement, and be an Incumbent
Director, if such director was elected by, or on the recommendation of or with
the approval of, at least two-thirds of the directors who then qualify as
Incumbent Directors either actually, because they were directors at the
beginning of such 24-month period, or by prior operation of this Section
2.03(c).

           (d) An Offer, Acquisition or Transaction, as the case may be, is
approved by a majority of the Directors serving as members of the Board at the
time of the Offer, Acquisition or Transaction.

                                        2

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     2.04  Code. "Code" shall mean the Internal Revenue Code of 1986, as may be
amended from time to time.

     2.05  Committee. "Committee" shall mean the Committee established by the
Board of Directors designated to administer the Plan.

     2.06  Common Stock. "Common Stock" shall mean the Common Stock of
Pharmaceutical Product Development, Inc., $0.10 par value per share.

     2.07  Company. "Company" shall mean Pharmaceutical Product Development,
Inc. and any subsidiary or affiliated companies that adopt the Plan, with the
Company's approval, for their Directors.

     2.08  Compensation. "Compensation" shall mean the compensation paid to a
Director by the Company for services as rendered to the Company as a Director in
the form of either annual retainer or meeting fees.

     2.09  Consideration Shares. "Consideration Shares" shall mean shares of
Common Stock acquired by a Participant (a) on the open market or (b) through the
exercise of a nonqualified Stock Option that has been owned by the Participant
for at least (6) six months.

     2.10  Crediting Rate. "Crediting Rate" shall mean an interest rate equal to
the three month London Interbank Offered Rate (or similar index designated by
the Committee) plus 1.5%.

     2.11  Date of Exercise. "Date of Exercise" shall mean the date on or after
which Stock Options designated in a Stock Option Gain Deferral Agreement will be
exercised and any gain derived therefrom will be deferred pursuant to Article V
of this Plan; provided that such date shall be at least six months from the date
of the Stock Option Gain Deferral Agreement.

     2.12  Deferral. "Deferral" shall mean that portion of a Participant's
Compensation to be paid during a Plan year which a Participant elects to have
and is deferred during any one Plan Year. In the event of a Participant's
Termination of Service prior to the end of a Plan Year, such year's Deferral
shall be the actual amount deferred and withheld prior to such Termination of
Service.

     2.13  Deferral Account. "Deferral Account" shall mean the record of a
Participant's interest in this Plan represented by the Deferrals, with all
earnings thereon credited to such Account on behalf of the Participant under
this Plan, and all withdrawals and distributions thereon debited from such
Account.

     2.14  Deferral Account Balance. "Deferral Account Balance" shall mean with
respect to a Participant the sum of (i) his or her Deferred Compensation, plus
(ii) interest credited in accordance with Article V of this Plan, less (iii) all
withdrawals and distributions. This account shall be a bookkeeping entry only
and shall be utilized solely as a device for the measurement and determination
of the amounts to be paid to a Participant pursuant to this Plan.

                                        3

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     2.15  Deferred Compensation. "Deferred Compensation" shall mean the sum of
all of a Participant's Deferrals.

     2.16  Director. "Director" shall mean a non-employee member of the Board.

     2.17  Disabled. "Disabled" shall mean the total and permanent disability of
a Participant, as determined under the terms of the long-term disability plan of
the Company, or, in the absence of a long-term disability plan, as determined by
the Board, in its sole and absolute discretion.

     2.18  Election Date. "Election Date" shall mean the date established by the
Committee as the date before which a Director must submit a valid Election Form
to the Committee to effect a Deferral hereunder. The applicable Election Dates
can be no later than the following: (a) 30 days after the Effective Date of the
Plan for Directors who are eligible to participate at the time the Plan is
adopted, (b) 30 days after a newly eligible Director is notified of the right to
participate in the Plan, or (c) December 15 prior to any following Plan Year if
(a) or (b) above do not apply.

     2.19  Election Form. "Election Form" shall mean the form established from
time to time by the Committee that a Director completes, signs and returns to
the Committee to make a Deferral under the Plan.

     2.20  ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.

     2.21  Exchange Act. "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and all rules and regulations promulgated thereunder.

     2.22  Fair Market Value. "Fair Market Value," with respect to a share of
Common Stock as of any date, shall mean (a) the closing sales price of the
Common Stock on the NASDAQ National Market System or on any such other exchange
on which the Common Stock is traded on such date, or in the absence of reported
sales on such date, the closing sales price on the immediately preceding date on
which sales were reported, or (b) in the event there is no public market for the
Common Stock on such date, the Fair Market Value as determined in good faith by
the Committee in its sole and absolute discretion.

     2.23  Gain Shares. "Gain Shares" shall mean the shares of Common Stock
determined in accordance with the provisions of Section 5.05 hereof resulting
from the exercise of any Stock Option pursuant to Article V of this Plan.

     2.24  Gain Share Account. "Gain Share Account" shall mean the record of a
Participant's interest in this Plan represented by the number of the Share Units
related to Gain Shares, adjusted for hypothetical gains, earnings dividends,
losses, distributions, withdrawals and other similar activities.

                                        4

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     2.25  Participant. "Participant" shall mean a Director who has Deferred
Compensation pursuant to the terms of this Plan, and whose Deferral Account
Balance and/or Gain Share Account Balance has not yet been fully distributed.

     2.26  Plan. "Plan" shall mean the Pharmaceutical Product Development, Inc.
Deferred Compensation Plan for Directors as described in this instrument and as
amended from time to time.

     2.27  Plan Year. "Plan Year" shall mean a calendar year.

     2.28  Share Units. "Share Units" shall mean units of deemed investment in
shares of Common Stock in accordance with Article V of the Plan.

     2.29  Stock Option. "Stock Option" shall mean an option to purchase Common
Stock from the Company that was granted under a Stock Option Plan.

     2.30  Stock Option Gain Deferral Agreement. "Stock Option Gain Deferral
Agreement" shall mean the form established from time to time by the Committee
that a Director completes, executes and returns to the Committee to defer
receipt of Gain Shares received from the exercise of a Stock Option pursuant to
Article V hereof.

     2.31  Stock Option Plan. "Stock Option Plan" shall mean collectively the
equity incentive plans adopted by the Company from time to time or under which
the Company has Stock Options outstanding, and individually, such equity
incentive plan governing any particular Stock Option.

     2.32  Termination of Service. "Termination of Service" or similar
expression shall mean the termination of the Participant's service as a Director
of the Company and of any division, subsidiary or affiliate thereof for any
reason. A Disabled Participant shall be deemed to have terminated service for
purposes of this Plan.

     2.33  Unforeseeable Financial Emergency. "Unforeseeable Financial
Emergency" shall mean an unanticipated emergency that is caused by an event
beyond the control of the Participant that would result in severe financial
hardship to the Participant resulting from (i) a sudden and unexpected illness
or accident of the Participant or a dependent of the Participant, (ii) a loss of
the Participant's property due to casualty, or (iii) such other extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Participant, all as determined in the sole discretion of the Committee.

     2.34  Valuation Date. "Valuation Date" shall mean, for purposes of Deferral
Accounts, the last day of each calendar quarter; and for purposes of the
valuation of, or distribution or withdrawal from a Gain Share Account, the date
of such valuation, distribution, or withdrawal.

     2.35  Gender and Number. Wherever the context so requires, masculine
pronouns include the feminine and singular words shall include the plural.

     2.36  Titles. Titles of the Articles of this Plan are included for ease of
reference only and are not to be used for the purpose of construing any portion
or provision of this Plan document.

                                        5

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                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

     3.01   Eligibility. All Directors are eligible to participate in the Plan.

     3.02   Participation. A Director may elect to participate in the Plan by
completing, signing and returning to the Committee a duly executed Election Form
no later than the applicable Election Date or a Stock Option Gain Deferral
Agreement. A Deferral Account and/or a Gain Share Account, as the case may be,
will be established for each Director at the time an Election Form and/or Stock
Option Gain Deferral Agreement is received by the Committee.

                                        6

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                                   ARTICLE IV

                      PARTICIPANT DEFERRALS OF COMPENSATION

     4.01   Deferred Compensation. A Director may elect to defer up to 100% of
his or her annual Compensation until the earlier to occur of such Director's
Termination of Service, death or Disability. A Director who desires to make a
Deferral shall file an election Form pursuant to procedures specified by the
Committee (a) specifying the applicable Deferral; (b) authorizing such
Director's Compensation payable for a Plan Year to be so reduced and deferred
hereunder; and (c) indicating the form of payment of amounts deferred hereunder.
The amounts deferred, which are the Participant's Deferred Compensation, shall
be added to the Participant's Deferral Account.

     4.02   Duration of Election Form. If properly received by the Committee on
or before the applicable Election Date, a Deferral hereunder will be effective
only with respect to Compensation paid in the Plan Year to which the Deferral
applies. A Participant's Deferral may be modified or terminated as provided in
Section 4.03. Future deferrals will be terminated automatically for any
Participant who is deemed (by the Committee) to no longer be eligible for
participation in the Plan.

     4.03   Election to Modify or Terminate Future Contributions. Subject to the
provisions of Sections 8.01 and 8.02 hereof, all Deferrals hereunder are
irrevocable. A Participant who desires to modify or terminate the amount of
future Compensation being deferred under the Plan or to change the form of
payment of Deferrals must notify the Committee in writing on an Election Form
provided by the Committee. Elections to decrease or terminate deferrals of
future Compensation shall become effective as soon as administratively possible.
Elections to increase deferrals of future Compensation shall become effective on
January 1 of the next Plan Year. Elections to change the form of payment of
Deferrals hereunder must be made at least twelve (12) months prior to the
payment or commencement of payment of such Deferrals.

     4.04   Vesting. A Participant shall be fully vested at all times in his or
her Deferral Account Balance.

                                        7

<PAGE>

                                    ARTICLE V

                           STOCK OPTION GAIN DEFERRALS

     5.01   Deferral of Stock Option Gain. Subject to provisions of this Article
V, Directors may elect to defer the receipt and distribution of the gain related
to the exercise of Stock Options until the earlier to occur of Termination of
Service, death or Disability, by filing a Stock Option Gain Deferral Agreement
with the Committee. A Stock Option Gain Deferral Agreement may be filed at any
time with respect to any number of Stock Options.

     5.02   Timing of Filing Stock Option Gain Deferral Agreement. A Stock
Option Gain Deferral Agreement must be filed at least six months prior to the
Date of Exercise and no later than the day immediately preceding the first day
of the six-month period ending on the expiration date of the Stock Option. A
Stock Option with respect to which a Stock Option Gain Deferral Agreement has
been filed may not be exercised prior to the date specified in the Stock Option
Gain Deferral Agreement. A Participant must be a Director on the Date of
Exercise to effect a Deferral of Gain Shares hereunder.

     5.03   Contents of Stock Option Gain Deferral Agreement. Each Stock Option
Gain Deferral Agreement shall set forth: (a) the number of Stock Options to be
exercised; (b) the date of grant of the Stock Options; (c) the Date of Exercise;
(d) the form of payment of the Gain Shares; and (e) any other item determined to
be appropriate by the Committee. Gain Shares shall be distributed in the form of
Common Stock.

     5.04   Manner of Exercising Option Shares. A Participant who desires to
exercise a Stock Option and to defer current receipt and distribution of the
related Gain Shares must follow the procedures and requirements that are
applicable to the Stock Option under the Stock Option Plan, including the
procedures and requirements relating to the exercise of an Option; provided,
however, that in the case of a deferral of Gain Shares under this Plan, the
Participant shall only be permitted to tender Consideration Shares to pay the
entire exercise price for any such Stock Option exercised. Notwithstanding the
foregoing, the Committee may in its discretion accept documentation that the
Participant owns the number of Consideration Shares necessary to pay the
exercise price for the Stock Options.

     5.05   Determination of Gain Shares. Upon exercise of a Stock Option, the
Gain Shares resulting from the exercise of the Stock Option which the
Participant has elected to defer hereunder shall be determined as follows: (a)
the aggregate exercise price for all Stock Options to be exercised shall be
determined by multiplying the exercise price of the Stock Option by the number
of Stock Options to be exercised at that price; (b) the number of Consideration
Shares needed to pay the exercise price for such Stock Options shall be
determined by dividing the aggregate exercise price from (a) above by the Fair
Market Value of one share of Common Stock on the Date of Exercise; and (c) the
difference between the aggregate Fair Market Value on the Date of Exercise of
the shares of Common Stock acquired upon the exercise of the Stock Options and
the aggregate exercise price of such Stock Options, divided by the Fair Market
Value of one

                                        8

<PAGE>

share of Common Stock on the Date of Exercise, shall be the number of Gain
Shares resulting from such exercise.

     5.06   Changes to the Stock Option Gain Deferral Agreement. Subject to the
provisions of Article VIII, all deferrals of Gain Shares hereunder are
irrevocable. A Participant may not increase the amount of his Gain Share
deferrals occurring under any given Stock Option Gain Deferral Agreement
following submission of the Stock Option Gain Deferral Agreement. A Participant
may decrease or terminate a Gain Share deferral any time prior to the Date of
Exercise by filing, on such forms and subject to such limitations and
restrictions as the Committee may prescribe in its discretion, a revised Stock
Option Gain Deferral Agreement with the Committee. Under no circumstances may a
Participant's Stock Option Gain Deferral Agreement be made, modified or revoked
retroactively. Elections to change the form of payment of Gain Shares hereunder
must be made at least twelve (12) months prior to the payment or commencement of
payment of such Gain Shares.

     5.07   Failure to Properly Exercise. If a Participant makes a valid
election under this Article V to defer Gain Shares and if the Stock Option
expires without a proper exercise of the Stock Option by the Participant, or if
the Participant fails to properly tender or attest to the Consideration Shares
by the last day of the Stock Option term, the Participant shall forfeit any
opportunity to exercise the Stock Option and the Stock Option shall be canceled
as of the end of the last business day of the Stock Option term, according to
the terms of the Stock Option Plan.

     5.08   Vesting. A Participant shall be fully vested at all times in his or
her Gain Share Account.

                                        9

<PAGE>

                                   ARTICLE VI

            DEFERRAL ACCOUNTS, GAIN SHARE ACCOUNTS AND CREDITING RATE

     6.01   Deferral Account. A Participant's Deferrals hereunder will be
credited to the Participant's Deferral Account as of the date on which the
Participant's Compensation would otherwise have been paid to the Participant had
it not been deferred. All amounts credited to a Participant's Deferral Account
shall be treated as a reduction of Compensation otherwise payable to such
Participant. Gain Shares deferred hereunder shall be credited by the Committee
to the Participant's Gain Share Account as of the Date of Exercise.
Distributions and withdrawals pursuant to Articles VII and VIII shall be debited
against a Participant's Deferral Account and Gain Share Account, as the case may
be.

     6.02   Maintenance of Accounts. Separate Deferral Accounts and Gain Share
Accounts shall be maintained for each Participant, and more than one Deferral
Account and Gain Share Account may be maintained for a Participant, as deemed
necessary by the Committee for administrative purposes. A Participant's Deferral
Account(s) and Gain Share Account(s) shall be utilized solely as a device for
the measurement and determination of the amounts to be paid to the Participant
pursuant to this Plan, and shall not constitute or be treated as a trust fund of
any kind. The Committee shall determine the balance of each Deferral Account and
each Gain Share Account as of each Valuation Date, by adjusting the balance of
such Deferral Account and Gain Share Account as of each Valuation Date to
reflect changes in the value of the Common Stock (in the case of Gain Share
Accounts), interest credits pursuant to this Article VI (in the case of Deferral
Accounts), and distributions and withdrawals pursuant to Articles VII and VIII
hereof.

     6.03   Interest. Prior to any distribution of a Participant's Deferral
Account Balance under Article VI herein, the Company shall credit the Deferral
Account with interest on each Valuation Date at the Crediting Rate. Interest
credits to the Deferral Account Balance in accordance with this Article VI shall
continue until the Deferral Account Balance is paid in full to the Participant
or the Participant's Beneficiary.

     6.04   Valuation of Gain Share Accounts. Gain Share Accounts are
bookkeeping accounts, the value of which shall be based upon the performance of
the Common Stock. Any and all dividends paid with respect to the Common Stock
will be deemed to be immediately reinvested in Common Stock. It is understood
and agreed that the Company assumes no risk of any decrease in the value of the
Common Stock, and the Company's sole obligations are to maintain the
Participant's Gain Share Account and make payments to the Participant as herein
provided.

     6.05   Common Stock Adjustments. In the event of a stock dividend, split-up
or combination of the Common Stock, merger, consolidation, reorganization or
recapitalization affecting the Common Stock, such that an adjustment is
determined by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under this Plan, then the Committee may make appropriate

                                       10

<PAGE>

adjustments to the number of Share Units credited to any Gain Share Account. The
determination of the Committee as to such adjustments, if any, shall be binding
and conclusive.

     6.06   Section16(b). Notwithstanding any other provision of this Plan, the
Committee shall adopt such procedures as it may determine are necessary to
ensure that with respect to any Participant who is actually or potentially
subject to Section 16(b) of the Exchange Act, the crediting of deemed shares to
such Participant's Gain Share Account is not deemed to be a nonexempt purchase
for purposes of such Section 16(b), including without limitation requiring that
no shares of Common Stock relating to such deemed shares may be distributed for
six months after being credited to such Gain Share Account.

     6.07   Statement Accounts. The Committee shall provide periodically to each
Participant a statement setting for the balance of such Participant's Deferral
Account(s) and Gain Share Account(s) as of the end of the most recently
completed accounting period, in such form as the Committee deems desirable.

                                       11

<PAGE>

                                   ARTICLE VII

                                  DISTRIBUTION

     7.01   Distribution of Deferral Account. Distribution of the value of a
Participant's Deferral Account Balance and Gain Share Account Balance shall be
in a lump sum or in semi-annual installments over a period of five (5) years, as
specified on the Participant's Election Form and/or Stock Option Gain Deferral
Agreement. If a payment form is not specified on an Election Form for any
particular Plan Year in which the Participant made a Deferral, a Participant's
Deferral Account Balance and/or Gain Share Account balance for that Plan Year
shall be distributed as a lump sum upon the Participant's Termination of
Service. If the Participant has elected to receive payments from a Deferral
Account or Gain Share Account in installments, the Company shall make
semi-annual payments in cash from such Deferral Account or in Common Stock from
such Gain Share Account, each of which shall consist of an amount equal to (i)
the balance of such Deferral Account or Gain Share Account as of the Valuation
Date preceding the payment date, times (ii) a fraction, the numerator of which
is one and the denominator of which is the number of remaining installments
(including the installment being made). The first such installment shall be paid
on the first to occur of January 1 or July 1 immediately following the
Participant's Termination of Service and each subsequent installment shall be
paid on or about each January 1 and July 1 thereafter for the five (5) year
period.

     7.02   Form of Distribution. All distributions of a Participant's Deferral
Account shall be made in cash only. All distributions of a Participant's Gain
Share Account shall be in the form of shares of Common Stock, based upon the
Fair Market Value of the Common Stock on the date of distribution.

     7.03   Timing of Distribution. Distributions shall commence, or be paid in
a lump sum if so elected, on the first January 1 or July 1 immediately following
the earliest to occur of a Participant's Termination of Service, death or
Disability.

     7.04   Death or Disability Prior to Commencement of Benefit Payments. In
the event of a Participant's death or Disability prior to the commencement of
benefit payments hereunder, an amount equal to the Participant's Deferral
Account Balance and/or Gain Share Account balance shall be paid to the
Participant's Beneficiary in a lump sum or in semi-annual installments over a
period of five (5) years, as specified on the Participant's Election Form and/or
Stock Option Gain Deferral Agreement, on the first January 1 or July 1
immediately following the Participant's death or Disability.

     7.05   Death of a Participant Subsequent to Commencement of Benefit
Payments. In the event of the death of a Participant subsequent to commencement
of benefit installment payments hereunder but prior to completion of such
payments, the installments shall continue and shall be paid to the designated
Beneficiary as if the Participant had survived.

     7.06   Redeferral Election. Notwithstanding the foregoing, a Participant
will be permitted to elect to change the form of payments for previous
Deferrals, provided that the redeferral election must be made at least one full
calendar year prior to the date on which such distribution would be made or
commence to be made in the absence of such redeferral. A

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redeferral election may be made by submitting an amended Deferral Election Form
or Stock Option Gain Deferral Agreement, as the case may be, or in such other
manner as is provided by the Committee.

     7.07   Taxes. Each Participant shall be responsible for the payment of any
and all income and employment taxes which are due and payable on amounts
distributed hereunder.

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                                  ARTICLE VIII

                                   WITHDRAWALS

     8.01   Withdrawals for Unforeseeable Financial Emergency. At the request of
a Participant in the event of an Unforeseeable Financial Emergency or at the
request of any of the Participant's Beneficiaries after the Participant's death,
the Committee may, in its sole discretion, accelerate and pay all or part of the
value of a Participant's Deferral Account balance or Gain Share Account balance.
An accelerated distribution hereunder for an Unforeseeable Financial Emergency
must be limited to only that amount necessary to relieve the Unforeseeable
Financial Emergency (plus any appropriate taxes). Amounts to be distributed to a
Participant hereunder will be subject to applicable tax withholding.

     8.02   Other Premature Withdrawals. A Participant may request the
withdrawal of all or part of such Participant's Deferral Account or Gain Share
Account (not in excess of the balance of such Deferral Account or Gain Share
Account) prior to date of distribution under this Plan, for reasons other than a
financial need. The Participant will acknowledge and agree that in consideration
for the current payment of the relevant portion of the Participant's Deferral
Account or Gain Share Account, the Participant will forfeit ten percent (10%) of
the total pre-withdrawal value of such portion of the Participant's Deferral
Account or Gain Share Account. In addition, the Participant will be precluded
from further participation in the Plan for a period of twelve (12) months
following the month during which the Participant's withdrawal request is
received by the Committee.

     8.03   Withdrawal Processing.

            (a) Minimum Amount. There is no minimum payment for any type of
withdrawal.

            (b) Application by Participant. To apply for any type of withdrawal,
a Participant must submit to the Committee a withdrawal request, in accordance
with such uniform and nondiscriminatory procedure as will be established by the
Committee.

            (c) Approval by Committee. The Committee is responsible for
determining that a withdrawal request conforms to the requirements described in
this Article and notifying the Company of any payments to be made in a timely
manner. With respect to any withdrawal request under Section 8.01 hereof, the
Committee's decision to allow a Participant to withdraw all or part of such
Participant's Deferral Account or Gain Share Account in connection with an
Unforeseeable Financial Emergency will be based on the facts and circumstances
of each case. However, in no event will the amount withdrawn exceed the lesser
of the amount which the Committee deems necessary to satisfy such financial need
(plus any appropriate taxes) or the balance of such Participant's Deferral
Account or Gain Share Account. Any request to make a withdrawal by a member of
the Committee may be approved only by disinterested members of the Committee, or
if none, by the Board.

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<PAGE>

            (d) Time of Processing. The Company will make payment to the
Participant as soon as is administratively feasible following approval of the
withdrawal request.

            (e) Medium and Form of Payment. The medium of payment for
withdrawals from Deferral Accounts is cash. The medium of payment for
withdrawals from Gain Share Accounts is Common Stock. The form of payment for
all withdrawals will be a single-sum payment.

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<PAGE>

                                   ARTICLE IX

                                   BENEFICIARY

     9.01   Beneficiary Designation. A Participant shall designate a Beneficiary
to receive benefits under the Plan on the Election Form provided by the
Committee. If more than one Beneficiary is named, the share and/or precedence of
each Beneficiary shall be indicated. A Participant shall have the right to
change the Beneficiary by submitting to the Committee a new Election Form.

     9.02   Proper Beneficiary. If the Committee has any doubt as to the proper
Beneficiary to receive payments hereunder, the Committee shall have the right to
withhold such payments until the matter is finally adjudicated. However, any
payment made by the Committee, in good faith and in accordance with this Plan,
shall fully discharge the Company from all further obligations with respect to
that payment.

     9.03   Minor or Incompetent Beneficiary. In making any payments to or for
the benefit of any minor or an incompetent Beneficiary, the Committee, in its
sole and absolute discretion, may make a distribution to a legal or natural
guardian or other relative of a minor or court appointed committee of such
incompetent. Alternatively, it may make a payment to any adult with whom the
minor or incompetent temporarily or permanently resides. The receipt by a
guardian, committee, relative or other person shall be a complete discharge to
the Company. Neither the Company nor the Committee shall have any responsibility
to see to the proper application of any payments so made.

     9.04   No Beneficiary Designation. If a Participant fails to designate a
Beneficiary as provided in Section 9.01 above, or if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant's benefits, then the Participant's designated Beneficiary
shall be deemed to be his or her surviving spouse. If the Participant has no
surviving spouse, the benefits remaining under the Plan to be paid to a
Beneficiary shall be payable to the executor or personal representative of the
Participant's estate.

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<PAGE>

                                    ARTICLE X

                           ADMINISTRATION OF THE PLAN

     10.01  Majority Vote. All resolutions or other actions taken by the
Committee shall be by vote of a majority of those present at a meeting at which
a majority of the members are present, or in writing by all the members at the
time in office if they act without a meeting. Such resolutions or actions shall
be confirmed in writing by a Board resolution.

     10.02  Finality of Determination. Subject to the Plan, the Committee shall,
from time to time, establish rules, forms and procedures for the administration
of the Plan. Except as herein otherwise expressly provided, the Committee shall
have the exclusive right to interpret the Plan and to decide any and all matters
arising thereunder or in connection with the administration of the Plan, and it
shall endeavor to act, whether by general rules or by particular decisions, so
as not to discriminate in favor of or against any person. The interpretations,
decisions, actions and records of the Committee shall be conclusive and binding
upon the Company and all persons having or claiming to have any right or
interest in or under the Plan, and cannot be overruled by a court of law unless
arbitrary or capricious.

     10.03  Certificates and Reports. The members of the Committee and the
officers and directors of the Company shall be entitled to rely on all
certificates and reports made by any duly appointed accountants, and on all
opinions given by any duly appointed legal counsel, which legal counsel may be
counsel for the Company.

     10.04  Indemnification and Exculpation. The Company shall indemnify and
hold harmless each current and former member of the Committee and each current
and former member of the Board against any and all expenses and liabilities (to
the extent not indemnified under any liability insurance contract or other
indemnification agreement) which the person incurs on account of any act or
failure to act in connection with the good faith administration of the Plan.
Expenses against which a member of the Committee shall be indemnified hereunder
shall include, without limitation, the amount of any settlement or judgment,
costs, counsel fees, and related charges reasonably incurred in connection with
a claim asserted, or a proceeding brought or settlement thereof. The foregoing
right of indemnification shall be in addition to any other rights to which any
such member of the Committee may be entitled as a matter of law, but shall be
conditioned upon the person's notifying the Company of the claim of liability
within 60 days of the notice of that claim and offering the Company the right to
participate in and control the settlement and defense of the claim. The
foregoing provision will not be applicable to any person if the loss, cost,
liability or expense is due to such person's gross negligence or willful
misconduct.

     10.05  Expenses. The expenses of administering the Plan shall be borne by
the Company.

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<PAGE>

                                   ARTICLE XI

                                CLAIMS PROCEDURE

     11.01  Written Claim. Benefits shall be paid in accordance with the
provisions of this Plan. The Participant, or a designated Beneficiary or any
other person claiming through the Participant shall make a written request for
benefits under this Plan. This written claim shall be mailed or delivered to the
Committee. Such claim shall be reviewed by the Committee or a delegate.

     11.02  Denied Claim. If the claim is denied, in full or in part, the
Committee shall provide a written notice within ninety (90) days setting forth
the specific reasons for denial, and any additional material or information
necessary to perfect the claim, and an explanation of why such material or
information is necessary, and appropriate information and explanation of the
steps to be taken if a review of the denial is desired.

     11.03  Review Procedure. If the claim is denied and a review is desired,
the Participant (or Beneficiary) shall notify the Committee in writing within
sixty (60) days after receipt of the written notice of denial. In requesting a
review, the Participant or Beneficiary may request a review of pertinent
documents with regard to the benefits created under this agreement, may submit
any written issues and comments, may request an extension of time for such
written submission of issues and comments, and may request that a hearing be
held, but the decision to hold a hearing shall be within the sole discretion of
the Committee.

     11.04  Committee Review. The decision on the review of the denied claim
shall be rendered by the Committee within sixty (60) days after the receipt of
the request for review (if no hearing is held) or within sixty (60) days after
the hearing if one is held. The decision shall be written and shall state the
specific reasons for the decision including reference to specific provisions of
this Plan on which the decision is based.

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<PAGE>

                                   ARTICLE XII

                         NATURE OF COMPANY'S OBLIGATION

     12.01  Company's Obligation. The Company's obligations under this Plan
shall be an unfunded and unsecured promise to pay. The Company shall not be
obligated under any circumstances to fund its financial obligations under this
Plan.

     12.02  Creditor Status. Any assets which the Company may acquire or set
aside to help cover its financial liabilities hereunder are and must remain
general assets of the Company subject to the claims of its general unsecured
creditors. Neither the Company nor this Plan gives a Participant or Beneficiary
any beneficial ownership interest in any asset of the Company. In the event that
the Company elects to invest funds to pay Deferral Account Balances or Gain
Share Account Balances under the terms of this Plan, title to and beneficial
ownership of such assets shall at all times remain in the Company. All Plan
Participants and Beneficiaries shall be unsecured general creditors of the
Company.

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<PAGE>

                                  ARTICLE XIII

                        AMENDMENT AND TERMINATION OF PLAN

     13.01  Amendment. The Board reserves the right to amend this Plan from time
to time in whole or in part; provided, however, that no such amendment may
reduce, or relieve the Company of, any obligation with respect to the balance of
any Deferral Account(s) and Gain Share Account(s) maintained under this Plan as
accrued at the time of such amendment, nor shall any amendment otherwise have a
retroactive effect, without the written consent of the affected Participant or
Beneficiary as the case may be.

     13.02  Change in Control. Upon the occurrence of a Change in Control, the
Board may terminate the Plan and distribute Deferral Account Balances and Gain
Share Account Balances in a lump sum or in semi-annual installments over a
period of five (5) years, as specified on the Participant's Election Form and/or
Stock Option Gain Deferral Agreement, in accordance with this Plan.

     13.03  Termination. The Company, by action of the Board, reserves the right
to prospectively terminate this Plan for any reason, provided the Company pays
to each Participant and Beneficiary, the accrued balance of the Participant's
Deferral Account and Gain Share Account (determined as of the date of
termination) as of the date of termination. Such payment will be paid as soon as
administratively possible, but not later than 30 days following the date of
termination.

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<PAGE>

                                   ARTICLE XIV

                                  MISCELLANEOUS

     14.01  Written Notice. Any notice which shall be or may be given under the
Plan shall be in writing and shall be mailed by United States mail, postage
prepaid. If notice is to be given to the Company, such notice shall be addressed
to the Committee at the Company. If notice is to be given to the Participant,
such notice shall be sent to the Participant's last known address.

     14.02  Change of Address. Any party may, from time to time, change the
address to which notices shall be mailed by giving written notice of such new
address.

     14.03  Merger, Consolidation or Acquisition. The Plan shall be binding upon
the Company, its assigns, and any successor to the Company which shall succeed
to substantially all of its assets and business through merger, acquisition or
consolidation, and upon a Participant, a Beneficiary, assigns, heirs, executors
and administrators.

     14.04  Employment. Neither the creation of this Plan or anything contained
herein shall be construed as giving any Participant hereunder any right to
continuous service with the Company as a Director.

     14.05  Non-transferability. Except insofar as prohibited by applicable law,
no sale, transfer, alienation, assignment, pledge, collateralization or
attachment of any benefits under this Plan shall be valid or recognized by the
Company. Neither the Participant, spouse, or designated Beneficiary shall have
any power to hypothecate, mortgage, commute, modify, or otherwise encumber in
advance of any of the benefits payable hereunder, nor shall any of said benefits
be subject to seizure for the payment of any debts, judgments, alimony
maintenance, owed by the Participant or Beneficiary, or be transferable by
operation of law in the event of bankruptcy, insolvency, or otherwise.

     14.06  Legal Fees. All reasonable legal fees incurred by any Participant
(or former Participant) to successfully enforce valid rights under this Plan
shall be paid by the Company in addition to sums due under this Plan.

     14.07  Tax Withholding. The Company may withhold from a payment any
federal, state, or local taxes required by law to be withheld with respect to
such payment and such sum as the Company may reasonably estimate as necessary to
cover any taxes for which the Company may be liable and which may be assessed
with regard to such payment.

     14.08  Acceleration of Payment. The Company reserves the right to
accelerate the payment of any benefits payable under this Plan at any time
without the consent of the Participant, the Participant's estate, a Beneficiary
or any other person claiming through the Participant.

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<PAGE>

     14.09  Applicable Law. This Plan shall be governed by the laws of the State
of North Carolina, without regard to the conflicts-of-law rules of such State,
to the extent not preempted by the laws of the United States of America.

     14.10  Invalidity of Certain Provisions. If any provision of this Plan is
held invalid or unenforceable, such invalidity or unenforceability will not
affect any other provisions hereof and this Plan will be construed and enforced
as if such provisions, to the extent invalid or unenforceable, had not been
included.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly
authorized officer on this 17/th/ day of June, 2002, effective as of the 15/th/
day of June, 2002.

PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.

By  /s/ Fredric N. Eshelman
   -----------------------------
    Chief Executive Officer
              (Title)

ATTEST:

By  /s/ B. Judd Hartman
   -----------------------------
    Secretary

[SEAL]

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