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EXHIBIT 10.1




PAREXEL INTERNATIONAL




PAREXEL Management Incentive Plan




Updated December 2004




 









 








PAREXEL MANAGEMENT INCENTIVE PLAN



DEFINITIONS



MIP



PAREXEL Management Incentive Plan



Company



PAREXEL International Corporation



Manager



An employee who has both administrative and functional responsibilities for
subordinate staff.



Key Individual Contributor



An employee who, although not managing staff, provides significant
contributions to the overall attainment of Corporate, SBU and/or Operating Unit
goals.



Participant



An employee of the Company who participates in the MIP.



Individual Performance Objectives



Measurable goals or objectives specific to the Participant’s own role, jointly
agreed upon between the Participant and his/her manager. This term may also
refer to strategic team goals for certain selected management employees.



SBU



Strategic Business Unit



Operating Unit



Business segment or functional group, reporting into the SBU Head/BRC Member.



Actual Salary



In the context of the MIP , Actual Salary refers to the amount of base salary
paid to a Participant during the MIP year. It does not include any additional
payments that may be made, such as overtime pay, bonus payments, etc.



PURPOSE



The MIP has been developed to focus Managers and Key Individual Contributors on
the accomplishment of organizational goals and specific individual performance
objectives identified as critical to the success of the Company.



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The MIP serves as a means to communicate the Company’s priorities, support the
Company’s business plans, and encourage cooperation among Managers and Key
Individual Contributors within and between different organizational units. The
MIP also provides a consistent means to reward successful Management and Key
Individual Contributor performance.



PARTICIPATION



Employees in Management and Key Individual Contributor positions are
recommended for participation in the MIP. New hires require the approval of the
Business Review Committee and the Vice President of Human Resources of the
Company before being added to the MIP.



DETERMINATION OF PAYMENTS UNDER THE MIP



The payments made to Participants under the MIP will generally be based on each
Participant’s “target award” and the achievement of financial performance
measures and Individual Performance Objectives as described below.



However, the ultimate determination as to the amount of any incentive payment
to be paid to a Participant under the MIP shall be made by the Chief Executive
Officer of the Company, acting in his sole discretion, who shall have the right
to adjust any target award, financial performance measure, Individual
Performance Objective or award payment (including the right, in his discretion,
to reduce any target award or award payment to zero notwithstanding the
achievement of any or all of the financial performance measures or Individual
Performance Objectives).



TARGET AWARDS



Participants have a designated annual “target award”. The “target award” is
expressed as a percent of each Participant’s Actual Salary paid during the
fiscal year. The “target award” varies by job level and the Participant’s
anticipated impact on Company goal achievement.



When a Participant’s “target award” changes during the fiscal year, the “target
award” for that fiscal year is pro-rated based on the portion of the fiscal
year spent at each “target award” level.



PERFORMANCE MEASURES



A “target award” has two components: a financial performance component and an
individual performance component.



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Financial Performance Component



Determination of a Participant’s financial performance component of the target
award is dependent on the achievement of annually specified financial goals,
which will generally fall in one or more of the categories listed below or such
other categories as the Business Review Committee may from time to time
determine in its discretion, and will vary from year to year:





	•	 	PAREXEL Worldwide Corporate Pre-Tax Income $
	 
	•	 	SBU Business Operating Margin $
	 
	•	 	CRU/Operating Unit Gross Margin $or Business Operating Margin $




The specific categories for a particular year and the exact financial target
for each category for such year shall be determined by the Business Review
Committee, in its sole discretion. The exact financial target for each
category will be based on approved Budgets for the year.



The financial targets shall include, as applicable, accruals for payments to be
made pursuant to the MIP.



Under the MIP and subject to the CEO’s discretion:



Performance at plan (100%) would result in a payment of 100% of the financial
performance component of the target award.



Financial performance above 100% of plan would result in payments above target
for the financial performance component of the target award. For example, a
110% achievement results in a payment of 120% of the financial performance
component of the target award. Participants can receive up to 150% of the
financial performance component of the target award where financial performance
reaches 125% of plan. Payments for the financial performance component of the
target award are capped at 150% of the target award.



Financial performance between 90% and 100% of plan would result in reduced
payments for the financial performance component of the target award. For
example, a 90% achievement would result in a payment of only 20% of the
financial performance component of the target award. However, as financial
performance would increase over 90%, the % of the target award would increase
rapidly.



Financial performance below the 90% level can also be recognized by a reduced
payment for the financial performance component of the target award at the
discretion of the CEO or his designee.



Individual Performance Component



Determination of a Participant’s individual performance component of the target
award is dependent on the achievement of annually specified Individual
Performance Objectives.



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Individual Performance Objectives are measurable goals or objectives specific
to the Participant’s role with the Company, jointly agreed upon between the
Participant and his/her manager.



Under the MIP and subject to the CEO’s discretion, achievement of 100% of the
individual performance component of the target award would result in a payment
of 100% of the individual performance component of the target award.



QUARTERLY REVIEW



Participants will receive a quarterly update of Company and Business Unit
overall performance and specific established performance measures.



AWARD PAYMENTS



Subject to the exercise of the CEO’s discretion, the annual award will be
determined using the Participant’s Actual Salary for the MIP Year ending June
30 (ie. the fiscal year upon which the award was based). If a Participant’s
target award level has been changed during the year, the award will be
pro-rated accordingly. Payment of any award payments will be made to each
Participant approximately 90 days after the end of the fiscal year.



TERMINATION OF EMPLOYMENT



If termination of a Participant’s employment by reasons of death, disability,
or normal retirement occurs prior to, or at the time, an award payment being
made, the Participant (or the Participant’s beneficiary or estate in the event
of death) will be eligible for a pro-rated award for the year based on time
employed and financial performance objectives and Individual Performance
Objectives accomplished during the year.



If a Participant resigns or gives notice of termination, or if his/her
employment terminates with the Company for any other reason (whether
voluntarily or involuntarily) prior to, or at the time, an award payment being
made, the Participant will forfeit the opportunity to earn any awards under the
MIP for the fiscal year upon which the award is based. Any exceptions to this
rule must be approved by the CEO or his designee.



Notwithstanding any other provision of the MIP, the CEO or his designee may, at
his sole discretion, permit continued participation, pro-ration or early
distribution (or a combination thereof) of awards that would otherwise be
forfeited.



NEW HIRES AND PROMOTIONS



Individuals hired or promoted into positions that would qualify for MIP
participation will be added to the MIP, subject to the approval of the CEO or
his designee. Participants in the qualifying position will be eligible to
receive a pro-rated award beginning in the month they became eligible.



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PARTICIPANT PERFORMANCE



Participants with less than satisfactory performance during the MIP Year will
not be entitled to receive an award. If a Participant has undergone formal
disciplinary action for poor performance or behavior during the MIP Year, or is
undergoing formal disciplinary action for poor performance or behavior at the
time the payment is made, he/she will not be eligible to receive any award
payment, unless the disciplinary action is spent and/or performance/behavior
has reached the required standard, in which case a partial or pro-rated payment
may be made. The CEO or his designee has total discretion to determine whether
a payment is made in the case of poor performance or behavior, and the head of
the SBU or functional group, in consultation with Human Resources, will make a
recommendation as to the amount of the payment if appropriate.



ADJUSTMENTS



The CEO or his designee may make performance measure adjustments at any time
during or at the end of the fiscal year, when extraordinary events occur that
significantly alter or impact established Company or business unit performance
measures. These adjustments are conclusive and binding upon all parties
concerned. Such events may include without limitation, changes in accounting
rules or regulations, changes in regulatory rulings that affect the business of
the organization, and significant unexpected changes in economic conditions
affecting the Company.



MIP ADMINISTRATION



The CEO or his designee has the authority to interpret the provisions of the
MIP and make decisions necessary to administer the MIP. This authority includes
but is not limited to the following administrative provisions.





	•	 	Approval of MIP Participants
	 
	•	 	Establishment of MIP Levels
	 
	•	 	Establishment of Performance Goals
	 
	•	 	Goals Weighting
	 
	•	 	Certification of Performance against established MIP Goals
	 
	•	 	Adjustment of Goals due to extraordinary events, and;
	 
	•	 	Approval of payoffs in accordance with the MIP




Any determination made under this MIP regarding an “executive officer” of the
Company (as defined by Rule 16a-1(f) under the Securities Exchange Act of 1934,
as amended) must be approved by the Compensation Committee of the Board of
Directors of the Company and, as it relates to any determination made under
this MIP regarding executive officers, the term “CEO” used herein shall mean
and include the Compensation Committee.



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The CEO or his designee, in making any determination under the MIP, is entitled
to rely on opinions, reports or statements of officers of the organization,
counsel, public accountants, and other experts or third parties.



ASSIGNMENT AND EMPLOYEE RIGHTS



No employee has any claim or right to be a Participant in the MIP or granted an
award under the MIP, and there is no obligation for uniformity of treatment of
eligible employees or Participants under the MIP. Participation in the MIP
does not give an employee the right to be retained in the employment of the
Company. Moreover, the decision about whether awards should be made under the
plan, in total or with respect to any Participant, is entirely within the
discretion of the CEO or his designee.



DESIGNATION OF BENEFICIARIES



A Participant may designate a beneficiary or beneficiaries to receive all or
part of the amounts to be distributed to the Participant under the MIP in the
event of a Participant’s death. A designated beneficiary may be replaced by a
new designation or revoked by the Participant at any time. A designation or
revocation must be on a form provided for such purpose and signed by the
Participant. It must be delivered to the Company prior to the Participant’s
death. Any amount that is distributable to a Participant upon death and not
subject to such a beneficiary designation is distributed to the Participant’s
estate. If there is a question as to the legal right of the beneficiary to
receive a distribution under the MIP, the amount in question may be paid to the
estate of the Participant, in which event the Company shall have no further
liability to anyone with respect to such amounts.



AMENDMENT OR TERMINATION



This MIP may be amended, suspended or revoked at any time and without notice.
In the case of termination of the MIP, the CEO or his designee, if necessary or
advisable under the circumstances, may authorize the pro-ration or early
distribution, or a combination of awards paid under the MIP.



WITHHOLDING TAX



The Company withholds any taxes required by law from all MIP awards.



EFFECTIVE DATE



The MIP is effective July 1, 2004 and shall remain in effect until terminated
by the Company.



VALIDITY



In the event any provision of the MIP is held invalid, void or unenforceable
the same shall not affect in any respect whatsoever the validity of any other
provision of the MIP.



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APPLICATION LAW



The MIP shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.



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