Deferred Compensation Plan for Non-Employee Directors



 Exhibit 10.209 
  

	
	 PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
  
 DEFERRED COMPENSATION
PLAN FOR NON-EMPLOYEE DIRECTORS


  
 Amended and
Restated Effective January 1, 2005 








	
	 PHARMACEUTICAL PRODUCT DEVELOPMENT, INC.
  
 DEFERRED COMPENSATION
PLAN FOR NON-EMPLOYEE DIRECTORS


  

	I.	NAME AND PURPOSE 

  
 The name of this plan is the Pharmaceutical Product Development, Inc. Deferred Compensation Plan for Non-Employee Directors (the
“Plan”). Its purpose is to provide members of the Board of Directors of Pharmaceutical Product Development, Inc. (the “Company”) who are not also employees of the Company with the opportunity to defer (i) cash compensation
earned as a director and (ii) shares of Company stock received upon the lapse of restrictions on restricted stock of the Company. The Plan is intended and designed to comply with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and to be an amendment and restatement of the predecessor plan, the Pharmaceutical Product Development, Inc. Deferred Compensation Plan for Directors (the “Prior Plan”) whose terms were frozen and
grandfathered under prior law effective as of December 31, 2004. 
  

	II.	EFFECTIVE DATE 

  
 The Plan shall be amended and restated effective as of January 1, 2005. 
  

	III.	PARTICIPANTS 

  
 All non-employee members of the Board of Directors of the Company (“Directors”) shall be eligible to participate in the Plan. Any such Director who elects to
participate in the Plan is hereinafter called a “Participant.” Any individual who participated in the Prior Plan as of December 31, 2004 shall automatically become a Participant in this Plan as of January 1, 2005. The Company
will establish for each Participant one or more unfunded deferred compensation accounts, as specified in Articles V and VII. 
  

	IV.	DEFERRAL OF CASH COMPENSATION 

  

	 	A.	On or before December 31 of any year, each Director eligible to participate shall be entitled to make an irrevocable election on the form established from time to time by the
Committee (hereinafter the “Cash Compensation Deferral Agreement”) to defer receipt of all or a specified portion of the cash compensation otherwise payable (whether or not otherwise deferred) from the Company for the following calendar
year. Such election shall remain effective only for such following calendar year, and separate elections must be made with respect to each subsequent calendar years. The term “cash compensation” as used herein shall mean compensation paid
to Directors by the Company for services rendered to the Company as a Director in the form of either annual retainer or meeting fees. 

  

	 	B.	For the first calendar year that a Director becomes eligible, a Director must complete, execute, and return to the Committee a Cash Compensation Deferral 


 

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 Agreement within 30 days after the Director becomes eligible; provided the Director has not participated
in any other nonqualified deferred compensation plan that is an account balance plan maintained by the Company. Elections under the Prior Plan with respect to cash compensation payable in the 2005 calendar year, which were made on or prior to
December 31, 2004 (or, to the extent applicable, prior to March 15, 2005, pursuant to the transition rules applicable to Code Section 409A), shall be recognized under the terms of this Plan in accordance with rules adopted by the
Committee in lieu of being recognized under the terms of the Prior Plan. 
  

	 	C.	Directors may elect to defer receipt of up to 100% of their cash compensation. 

  


	V.	CASH COMPENSATION DEFERRAL ACCOUNTS 

  

	 	A.	Separate Cash Compensation Deferral Accounts shall be established and maintained for each Participant reflecting the amount deferred by the Participant in the Plan with respect to
each separate plan year. 

  

	 	B.	At the end of each calendar quarter an amount equal to the Participant’s deferral for such quarter shall be credited to the appropriate Cash Compensation Deferral Account of
such Participant to reflect the cash compensation otherwise payable during periods ending in that calendar quarter but deferred pursuant to the Plan by the Participant. Interest will be credited to the Participant’s Cash Compensation Deferral
Account as of the last day of each calendar quarter based upon the balance in the Participant’s Cash Compensation Deferral Account on the first day of such quarter after reducing that Cash Compensation Deferral Account to reflect any
distributions or withdrawals from such Cash Compensation Deferral Account during such quarter and after crediting the Cash Compensation Deferral Account with fifty percent of the deferrals for such calendar quarter. Interest for each calendar
quarter shall be based on the three month London Interbank Offered Rate (or similar index designated by the Committee) plus 1.5%. 

  

	VI.	[RESERVED] 

  

	VII.	DEFERRAL OF RESTRICTED STOCK 

  

	 	A.	For purposes of this Article VII, the following terms shall be defined as follows: 

  
 Common Stock. “Common Stock” shall mean the common stock of Pharmaceutical Product Development,
Inc., $0.10 par value per share. 
  
 Restricted
Stock/Restricted Stock Award. “Restricted Stock” or “Restricted Stock Award” shall mean a share of restricted Common Stock that was granted to a Director under a Stock Plan. 
  
 Restricted Stock Deferral Agreement. “Restricted Stock
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 the receipt of shares of Common Stock upon the lapse of restrictions on Restricted
Stock Awards. 
  

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 Restricted Stock Unit/RSU. “Restricted Stock Unit” or “RSU” shall mean
units of deemed investment in shares of Common Stock in accordance with Article VII of the Plan. 
  
 Restricted Stock Unit Account/RSU Account. “Restricted Stock Unit Account” or “RSU Account” shall mean the record of a
Participant’s interest in this Plan represented by the number of RSUs related to shares of Restricted Stock deferred hereunder, adjusted for distributions, withdrawals, and other similar activities as provided in the Plan. 
  
 Stock Plan. “Stock Plan” shall mean collectively the
equity incentive plans adopted by the company from time to time or under which the Company has Restricted Stock Awards outstanding, and individually, such equity incentive plan governing any particular Restricted Stock Award. 
  

	 	B.	The provisions of this Article VII shall apply to all deferral elections made in compliance with this Article VII. All Directors who receive a Restricted Stock Award under a Stock
Plan of the Company after the effective date of this Plan whose agreement provides that the recipient may elect to defer the receipt of such Restricted Stock Award are permitted to make deferral elections with respect to such Restricted Stock Awards
under this Plan by following the provisions of this Article VII. 

  

	 	C.	Eligible Directors who elect to defer Restricted Stock Awards must enter into an irrevocable Restricted Stock Deferral Agreement, in the form approved by the Committee, which
provides for the exchange of shares of Restricted Stock for Restricted Stock Units. A Restricted Stock Deferral Agreement must be filed: (i) within 30 days of the date that a Restricted Stock Award is granted, provided that the earliest that
any restriction imposed on any portion of such award shall lapse is at least 13 months from the date that the Restricted Stock Award is granted; (ii) pursuant to the terms of Section VIII.C, treating the date that any restriction imposed on any
portion of a Restricted Stock Award first lapses as the original time of payment; or (iii) in the event that neither (i) or (ii) applies, prior to the date that a Restricted Stock Award is granted. 

  

	 	D.	Each Restricted Stock Deferral Agreement shall set forth: (a) the number of shares of Restricted Stock to be deferred; (b) the date of grant of such shares of Restricted
Stock; (c) the date or dates on which the restrictions imposed on such shares of Restricted Stock lapse; (d) the date on which the Restricted Stock Units credited to the Participant’s Restricted Stock Unit Account shall become
payable; and (e) whether distribution of the Restricted Stock Units shall be in installments or in a lump sum; and (f) any other item determined to be appropriate by the Committee. Participants agree to execute any form that may be
required by the Company’s stock transfer agent with respect to book-entry or certificated shares. If the shares are not held in book-entry format by the Company’s stock transfer 

  

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 agent, eligible Directors deferring Restricted Stock Awards must also tender the certificates for the
shares of Restricted Stock with respect to which the Restricted Stock Deferral Agreement is being entered into at the time the Restricted Stock Deferral Agreement is tendered. 
  

	 	E.	The effective date of the deferral of Restricted Stock hereunder is the close of business on the business day on which the Committee, or its designee, receives the Restricted Stock
Deferral Agreement, and if the shares of Restricted Stock are not held in book-entry format, the certificates for the shares of Restricted Stock, along with any properly completed and executed stock powers that may be requested by the Committee.


  

	 	F.	Until the date specified in the Participant’s Restricted Stock Deferral Agreement as the date on which restrictions on the shares of Restricted Stock will lapse, RSU’s
credited to such Participant’s Restricted Stock Unit Account upon the deferral of such shares of Restricted Stock shall remain subject to forfeiture under the provisions of the Stock Plan and any related Restricted Stock Award agreement in the
same manner as the shares of Restricted Stock deferred hereunder. The RSU’s will be subject to restrictions identical to the restrictions on the shares of Restricted Stock deferred hereunder, and the restrictions on the RSU’s shall lapse,
if at all, at the same time and in the same manner that the restrictions on the shares of Restricted Stock would have lapsed had the participant not made a deferral election. 

  

	 	G.	For each Participant electing to defer Restricted Stock, upon the effective date of the deferral, a RSU Account will be established by the Company, reflecting one RSU for each
Restricted Stock share deferred hereunder. A subaccount representing cash equal to the earnings credited to the RSU Account with respect to dividend equivalents and interest thereon as calculated pursuant to Section V.B hereof, will also be
established, unless the Participant has elected to receive earnings attributable to RSU’s currently, and not on a deferred basis, pursuant to Section VII.J hereof. Earnings will be credited to the Participant’s cash subaccount as follows:
on each date on which the Company pays a dividend on its Common Stock, an amount equal to such dividend will be credited to the Participant’s Account with respect to each RSU. Then, an additional amount will be credited to the
Participant’s cash subaccount to reflect earnings pursuant to Section V.B hereof to reflect earnings on the dividend equivalents from the time they were credited to the cash subaccount hereunder. 

  

	 	H.	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 Article VII, then the Committee may make appropriate adjustments
to the number of Share Units credited to any RSU Account. The determination of the Committee as to such adjustments, if any, shall be binding and conclusive. 

  

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	 	I.	Restricted Stock Units shall be distributed in the form of Common Stock. Distributions from a Participant’s RSU Account and related RSU cash subaccount pursuant to Article VIII
hereof will be computed as follows: with respect to the Participant’s RSU Account, one share of Common Stock will be distributed for each RSU credited to such RSU Account; and with respect to the Participant’s RSU cash subaccount, cash in
the amount credited to such subaccount will be paid to the Participant. 

  

	 	J.	A Participant may elect to receive earnings attributable to the Participant’s RSU cash subaccount currently, and not on a deferred basis, by indicating such an election on the
Participant’s Restricted Stock Deferral Agreement. If such an election is made, the Participant will receive in cash on each date on which the Company pays a dividend on its shares of Common Stock an amount equal to such dividend with respect
to each RSU in the Participant’s RSU Account. Such payment shall be made in lieu of crediting any amount to the Participant’s RSU cash subaccount pursuant to Section VII.G hereof, and such Participant’s RSU cash subaccount will be
deemed to be “zero” for all purposes under the Plan. 

  
 VIII. Method of Distribution of Deferred Compensation 
  

	 	A.	At the time a Participant executes each separate Cash Compensation Deferral Agreement or Restricted Stock Deferral Agreement, the Participant shall duly designate, execute, and file
with the Committee on that Cash Compensation Deferral Agreement, Restricted Stock Deferral Agreement, or other appropriate form designated by the Committee, the date upon which the entire amount of the applicable Cash Compensation Deferral Account
and/or Restricted Stock Unit Account shall become payable. A Participant may designate separately with respect to each Cash Compensation Deferral Account and/or Restricted Stock Unit Account that payment of each such Cash Compensation Deferral
Account and/or Restricted Stock Unit Account shall commence upon the (a) a date certain specified by the Participant that is at least two (2) years following the effective date of the deferral related to that Cash Compensation Deferral
Account and/or Restricted Stock Unit Account but not more than 10 years following the Participant’s termination of service as a Director, or (b) the earlier of the date certain specified by the Participant in subsection (a) above and
the date of the Participant’s termination of service as a Director for any reason. Notwithstanding any in this Section VIII.A to the contrary, in the case of any Participant who was a “key employee,” no distribution shall be made
before the date which is six (6) months after the date of separation from service (or, if earlier, the date of death of the Participant). For purposes of this section, the distribution restriction set forth above shall apply during a given
calendar year with respect to any Participant who is identified as being a “key employee” (as defined in Code Section 416(i), without regard to paragraph (5) thereof) during the twelve month period ending on September 30th
of the immediately preceding calendar year. 

  

	 	B.	The Participant shall make a separate election of one of the following forms of payment for the distribution of the balance of each of the Participant’s separate Cash
Compensation Deferral Accounts and/or Restricted Stock Unit Accounts: 

  

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	 	(i)	Lump Sum. In the event a Participant elects a single sum payment with respect to a given Cash Compensation Deferral Account and/or Restricted Stock Unit Account, the amount
of the Participant’s Cash Compensation Deferral Account and/or Restricted Stock Unit Account shall be paid on the first business day coinciding with or next following the January 1 or July 1 immediately following the distribution date
election made in accordance with Section VIII.A. The Participant shall receive a single sum cash payment equal to the amount credited to his Cash Compensation Deferral Account and/or the number of Restricted Stock Units credited to his Restricted
Stock Unit Account. 

  

	 	(ii)	Installments. In the event a Participant elects installment payments with respect to a given Cash Compensation Deferral Account and/or Restricted Stock Unit Account, the
Participant shall receive the amount credited to his given Cash Compensation Deferral Account and/or Restricted Stock Unit Account in ratable semi-annual installments payable over a period of 5 years. Such semi-annual installments shall commence as
of the first business day coinciding with or next following the January 1 or July 1 immediately following the distribution date election made in accordance with Section VIII.A, and be payable throughout the installment period to the
Participant as of the first business day coinciding with or next following each January and July 1 thereafter. In the event that the distribution restriction set forth in Section VIII.A applies, then the commencement of any installment payment
shall be delayed and the amounts otherwise payable shall be paid pursuant to the terms of the installment payment election after the six (6) month delay. 

  

	 	C.	A Participant may change his elections under Section VIII.A or Section VIII.B above at any time by duly completing, executing, and filing with the Committee his new election in an
appropriate form designated by the Committee with respect to a given Cash Compensation Deferral Account and/or Restricted Stock Unit Account; provided however, (i) that for any such change of election to be effective, twelve
(12) months must pass between the first day of the first month following the date on which the Participant duly makes the change of election and the date on which distribution of any portion of such Cash Compensation Deferral Account and/or
Restricted Stock Unit Account is first to become payable after taking the change of election into account, and (ii) any such change of election with respect to any distributions other than upon death, Disability, or Unforeseeable Emergency (as
hereinafter defined) must defer the first payment from such Cash Compensation Deferral Account and/or Restricted Stock Unit Account for at least five (5) years from the date such payment would otherwise have been made pursuant to the
Participant’s then current deferral election. In the event a Participant has not made an election under Section VIII.A or Section VIII.B, then the Participant shall be treated as having elected to receive his distribution upon termination from
service under Section VIII.A above and having elected the form of payment of a lump sum under Section VIII.B above. 

  

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	 	D.	At any time a Participant may withdraw all or any fixed dollar portion of any of the Participant’s Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts by
duly completing, executing, and filing with the Committee the appropriate form designated by the Committee establishing that the Participant has incurred an unforeseeable emergency (an “Unforeseeable Emergency”). An Unforeseeable Emergency
is a severe financial hardship to the Participant resulting from (i) an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Code Section 152(a)) of the Participant, (ii) loss of the
Participant’s property due to casualty, or (ii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Amounts distributed with respect to an emergency may not
exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through
reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship), or by the cessation of deferrals under this
Plan. The Committee, in its sole and absolute discretion, shall determine whether the Participant has suffered an Unforeseeable Emergency justifying a withdrawal and the amount of any such withdrawal, pursuant to the terms of this section.


  

	 	E.	Notwithstanding the foregoing provisions of this Article VIII, upon a Change in Control, the Plan will (i) continue without change, or (ii) if the Board of Directors of
the Company so elects in its sole and absolute discretion, be terminated and each Participant’s Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts shall be distributed as a lump sum within 60 days following the election
to terminate the Plan. Provided, however, any such election by the Board of Directors of the Company to terminate the Plan and distribute each Participant’s Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts shall be made
within the 30 days preceding or the 12 months following the Change of Control event, and distributions shall be completed within 12 months of the Change of Control event. Upon payment under this Section VIII.E, the obligation of the Plan and the
Company to the Participant shall be fully satisfied and completely discharged, and the Participant shall be permanently barred from further participation in the Plan. For purposes of this Plan, a “Change in Control” shall be deemed to have
occurred only upon a “change in ownership,” “change in effective ownership,” or “change in ownership of substantial assets” (as such concepts are defined for purposes of Code Section 409A), summarized as follows:


  

	 	(i)	a “change in ownership” occurs on the date that any one person, or more than one person acting as a group acquires ownership of the stock of the Company that, together
with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company; 

  

	 	(ii)	a “change in effective ownership” occurs on the date that either (i) any one person, or more than one person acting as a group, acquires (or has


  

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 acquired during the 12-month period ending on the date of the most recent acquisition by such person or
persons) ownership of stock of the Company possessing 35 percent or more of the total voting power of the stock of the Company; or (ii) a majority of members of the Company’s Board of Directors is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors prior to the date of the appointment or election; and 
  

	 	(iii)	a “change in ownership of substantial assets” occurs on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value (i.e., the value of the assets determined without regard to any liabilities associated
with such assets) equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. 

  

	 	F.	Notwithstanding the foregoing provisions of this Article VIII and the elections made by a Participant thereunder: 

  

	 	(i)	if any distribution or withdrawal under the Plan to a Participant shall violate any securities laws, loan covenants, or other similar legal or contractual requirements, then such
distribution or withdrawal shall be deferred until the condition no longer exists, and the Participant’s Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts shall continue to accrue interest and have investment returns
measured in accordance with the terms of this Plan until such date; and 

  

	 	(ii)	with respect to any Participant, an acceleration of the time or schedule of any distribution or withdrawal under this Plan shall be allowed with respect to any situation permitted
under Code Section 409A and the regulations thereunder. 

  

	 	G.	Any amounts debited from a Participant’s Cash Compensation Deferral Account and/or Restricted Stock Unit Account by reason of a distribution, withdrawal, or otherwise under
this Article VIII, shall be debited from such Cash Compensation Deferral Account and/or Restricted Stock Unit Account as the case may be, and such other accounts, subaccounts, or other allocations in the same proportion that the amount in all of the
Participant’s Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts has been credited at the time such debit is made, as determined by the Committee. 

  

	 	H.	Notwithstanding any provision herein to the contrary, consistent with the transition relief provided in Section XI.C. of the preambles to the Proposed Regulations under Code
Section 409A, with respect to the Restricted Stock Award granted in January 2005 that is scheduled to vest beginning in January 2006, the vesting dates shall be 

  

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 treated as the original time of payment and each applicable Director shall be provided an opportunity to
elect, prior to December 31, 2005, a new time and form of distribution from among the available options under Section VIII.A. and B. If such an election is made, an RSU Account shall be established and administered in accordance with such
election and in accordance with all other provisions of the Plan regarding RSU Accounts. In addition, at the time a Director makes a special distribution election under this Section VIII.H., the Director shall also make an election as to the payment
of related earnings as provided in Section VII.J. 
  

	IX.	[RESERVED] 

  

	X.	DISTRIBUTION UPON DEATH 

  
 Notwithstanding anything contained in Section VIII.A or Section VIII.B to the contrary, if any Participant dies before receiving all amounts
credited to each of his Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts, the unpaid amounts in the Participant’s Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts shall be paid on the first
business day coinciding with or next following the first January 1 or July 1 immediately following the Participant’s date of death in the form elected pursuant to the terms of Section VIII.B, to the Participant’s beneficiary or
beneficiaries in accordance with the last effective beneficiary designation form filed by the Participant with the Committee. Each Participant shall file with the Committee a form indicating the person, persons, or entity who is to receive the
Participant’s benefits under the Plan if he dies before receiving all the balances in his Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts. A Participant’s beneficiary designation may be changed at any time prior
to his death by execution and delivery of a new beneficiary designation form. If a Participant has failed to designate a beneficiary or no designated beneficiary survives the Participant, payment shall be made in a lump sum to the Participant’s
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. A beneficiary who fails to
survive a Participant by at least 10 days shall be deemed to have predeceased the Participant. 
  

	XI.	EFFECT OF DISABILITY OF PARTICIPANT 

  
 Notwithstanding anything contained in Section VIII.A or Section VIII.B to the contrary
(except for the distribution restriction described in subsection (iii) of Section VIII.B that will continue to apply), in the event of the Disability of a Participant, all amounts credited to each of the Participant’s Cash Compensation
Deferral Accounts and/or Restricted Stock Unit Accounts, and remaining unpaid on the date of the onset of the Disability, shall be paid to the Participant on the first business day coinciding with or next following the first January 1 or
July 1 immediately following the Participant’s date of the onset of the Disability in the form elected pursuant to the terms of Section VIII.B. For purposes of this Article XI of the Plan, “Disability” shall mean (a) the
inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or
(b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a
period of not less than three (3) months under the long-term disability plan of the Company. 
  

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	XII.	BENEFIT PLANS 

  

	 	A.	With respect to any benefit plan under which a Director’s contribution is based on the Director’s compensation, the amount of the Participant’s contribution to any
such plan shall not take into account the amount of the Participant’s compensation deferred under this Plan unless otherwise so specifically provided in such plan. 

  

	 	B.	No amount distributed to a Participant from a Participant’s Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts under this Plan shall be deemed to be
compensation with respect to a Participant’s entitlement to benefits under any employee benefit plan established by the Company for its Directors unless otherwise specifically provided in such plan. 

  

	XIII.	PARTICIPANT’S RIGHTS 

  
 Establishment of the Plan shall not be construed to give any Participant the right to be retained in the Company’s (or an
affiliate’s) service or to any benefits not specifically provided by the Plan. A Participant shall not have any interest in the deferred compensation and earnings credited to his Cash Compensation Deferral Accounts and/or Restricted Stock Unit
Accounts until such accounts are distributed in accordance with the Plan. All amounts deferred or otherwise held for the account of a Participant under the Plan shall remain the sole property of the Company, subject to the claims of its general
creditors and available for its use for whatever purposes are desired. With respect to amounts deferred or otherwise held for the account of a Participant, the Participant is merely a general creditor of the Company; and the obligation of the
Company hereunder is purely contractual and shall not be funded or secured in any way. At its discretion, the Company may establish one or more grantor trusts to assist the Company in accumulating the funds needed to meets its obligation under the
Plan. 
  
 In case the claim of any Participant or beneficiary for benefits under
the Plan is denied, the Committee shall provide adequate notice in writing to such claimant, setting forth the specific reasons for such denial. The notice shall be written in a manner calculated to be understood by the claimant. The Committee shall
afford a Participant or beneficiary whose claim for benefits has been denied 60 days from the date notice of such denial is delivered or mailed in which to appeal the decision in writing to the Committee. If the Participant or beneficiary appeals
the decision in writing within 60 days, the Committee shall review the written comments and any submissions of the Participant or beneficiary and render its decision regarding the appeal all within 60 days of such appeal. 
  

	XIV.	NON-ALIENABILITY AND NON-TRANSFERABILITY 

  
 The rights of a Participant to the payment of deferred compensation as provided in the Plan
shall not be assigned, transferred, pledged, or encumbered, or be subject in any manner to alienation or anticipation. No Participant may borrow against his Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts. No Cash
Compensation Deferral Account and/or Restricted Stock Unit Account shall be subject in any manner to anticipation, alienation, sale, 
  

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 transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, whether voluntary or
involuntary, including any liability which is for alimony or other payments for the support of a spouse or former spouse, or for any other relative of any Participant. 
  
 XV. STATEMENT OF ACCOUNT 
  
 Statements will be sent to Participants within sixty (60) days after the end of each calendar quarter as to the balance in their Cash
Compensation Deferral Accounts and/or Restricted Stock Unit Accounts as of the end of such calendar quarter. 
  
 XVI. ADMINISTRATION 
  
 The
Administrator of the Plan shall be the Benefits Administrative Committee of the Company or any successor committee (the “Committee”). The Committee shall have authority to adopt rules and regulations for carrying out the Plan and to
interpret, construe, and implement the provisions thereof. Any decision or interpretation of any provision of the Plan adopted by the Committee shall be final and conclusive. 
  
 XVII. AMENDMENT AND TERMINATION 
  
 The Plan may, at any time, be amended or modified by the Board of Directors of the Company.
The Board of Directors of the Company may terminate the Plan and distribute all benefits accrued hereunder only: (i) if the termination is in connection with a Change in Control pursuant to the terms of Section VIII.E., within 12 months of a
corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A); or (ii) if all nonqualified deferred compensation plans that are account balance plans
maintained by the Company are terminated, no payments are made within 12 months of the termination of the Plan (other than those that would have been paid absent the termination), all payments are made within 24 months of the termination of the
Plan, and the Company does not adopt another nonqualified deferred compensation plan that is an account balance plan for a period of five (5) years following the date of the termination of the Plan. No amendment, modification, or termination
shall, without the consent of a Participant, adversely affect such Participant’s right to receive amounts previously accrued in his Cash Compensation Deferral Accounts and/or Restricted Stock Unit Accounts. Furthermore, unless explicitly
provided otherwise, no amendment, modification, or termination of this Plan shall affect the Prior Plan whose terms were frozen and grandfathered under prior law effective as of December 31, 2004. 
  

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 XVIII. GENERAL PROVISIONS 
  

	 	A.	Notices. All notices to the Committee hereunder shall be delivered to the attention of the Secretary of the Committee. Any notice or filing required or permitted to be given
to the Committee under this Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Committee at the principal office of the Company. Such notice shall be deemed given as of the date of delivery or,
if delivery is made by mail, as of the date shown on the postmark or the receipt for registration or certification. 

  

	 	B.	Controlling Law. Except to the extent superseded by federal law, the laws of the state of North Carolina shall be controlling in all matters relating to the Plan.


  

	 	C.	Gender and Number. Where the context admits, words in the masculine gender shall include the feminine and neuter genders, the plural shall include the singular, and the
singular shall include the plural. 

  

	 	D.	Captions. The captions of sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning of construction of any of its provisions.


  

	 	E.	Action by the Company. Any action required or permitted by the Company under the Plan shall be by resolution of its Board of Directors or any person or persons authorized by
resolution of its Board of Directors. 

  

	 	F.	Facility of Payment. Any amounts payable hereunder to any person under legal disability or who, in the judgment of the Committee is unable to properly manage his financial
affairs may be paid to the legal representative of such person or may be applied for the benefit of such person in any manner which the Committee may select. 

  

	 	G.	Withholding Payroll Taxes. To the extent required by the laws in effect at the time amounts are deferred or deferred compensation payments are made, the Company shall
withhold (from other compensation in the case of deferrals) any taxes required to be withheld for federal, state, or local government purposes. 

  

	 	H.	Severability. Whenever possible, each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law (including the Code), but if
any provision of the Plan shall be held to be prohibited by or invalid under applicable law, then (a) such provision shall be deemed amended to, and to have contained from the outset such language as shall be necessary to, accomplish the
objectives of the provision as originally written to the fullest extent permitted by law and (b) all other provisions of the Plan shall remain in full force and effect. 

  

	 	I.	No Strict Construction. No rule of strict construction shall be applied against the Company, the Board of Directors, Committee, or any other person in the interpretation of
any of the terms of the Plan or any rule or procedure established by the Company or Committee. 

  

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	 	J.	Successors. The provisions of the Plan shall bind and inure to the benefit of the Company and its Affiliates and their successors and assigns. The term “successors”
as used herein shall include any corporation or other business entity which shall by merger, consolidation, purchase, or otherwise, acquire all or substantially all of the business and assets of the Company and successors of any such corporation or
other business entity. 

  
 XIX. UNFUNDED
STATE OF THE PLAN 
  
 Any and all payments made to the Participant pursuant to the Plan shall be made only from the general assets of the Company, or at the discretion of the Company, such payments shall be made from a grantor trust established by the Company.
All accounts under the Plan shall be for bookkeeping purposes only and shall not represent a claim against specific assets of the Company. Nothing contained in this Plan shall be deemed to create a trust of any kind or create any fiduciary
relationship. 
  
 IN WITNESS WHEREOF, Pharmaceutical Product Development, Inc. has
caused its corporate seal to be hereunto affixed and has caused its name to be signed hereto by its Chief Executive Officer and attested by its Secretary, pursuant to due authority of its Board of Directors as of this 1st day January, 2005. 
  


			
	By:	 	 /s/ Fredric N. Eshelman


	 	 	 Chief Executive Officer
 Pharmaceutical Product
Development, Inc.



  
 (Corporate Seal) 
  
 Attest: 

 

	
	 /s/ B. Judd Hartman


	Secretary

  

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