Document:

exv10w5

 

Exhibit 10.5

D.R. HORTON, INC.

2008 PERFORMANCE UNIT PLAN

1. PURPOSE. The purpose of the D.R. Horton, Inc. 2008 Performance Unit Plan (the “Plan”) is to
provide senior management employees of D.R. Horton, Inc., a Delaware corporation (the “Company”),
and its Affiliates with incentive compensation based upon the level of achievement of financial
and other performance criteria. The Plan will enhance the ability of the Company and its
Affiliates to attract and retain individuals of exceptional managerial talent upon whom, in large
measure, the sustained progress, growth and profitability of the Company depends.

2. DEFINITIONS. As used in the Plan, the following terms shall have the meanings set forth below:

     (a) “Affiliate” shall mean (i) any Person that directly, or through one or more
intermediaries, controls, is controlled by, or is under common control with, the Company or
(ii) any entity in which the Company has a significant equity interest, as determined by the
Committee.

     (b) “Award” shall mean a right to a payment under the terms of the Plan.

     (c) “Board” shall mean the Board of Directors of the Company.

     (d) “Bonus Unit” shall mean an Award granted pursuant to this Plan, the value of which on any
given date shall equal the Fair Market Value of one Share as of such date.

     (e) “Change in Control” shall mean the occurrence of any of the following events:

     (i) a merger, consolidation or reorganization of the Company into or with another
corporation or other legal person if the stockholders of the Company, immediately before
such merger, consolidation or reorganization, do not, immediately following such merger,
consolidation or reorganization, then own directly or indirectly, more than 50% of the
combined voting power of the then-outstanding voting securities of the corporation or
other legal person resulting from the such merger, consolidation or reorganization in
substantially the same proportion as their ownership of voting securities of the Company
immediately prior to such merger, consolidation or reorganization;

     (ii) the Company sells all or substantially all of its assets to another corporation
or other Person, or there is a complete liquidation or dissolution of the Company;

     (iii) a change in the composition of the Board such that at any time a majority of
the Board shall have been members of the Board for less than twenty-four months, unless
the election of each new director who was not a director at the beginning of the period
was approved by at least a majority of the directors then still in office who were
directors at the beginning of such period (but in no event by fewer than three such
directors);

 

 

     (iv) any Person (other than (x) the Company or (y) Donald R. Horton, Terrill J.
Horton, or their respective wives, children, grandchildren and other descendants, or any
trust or other entity formed or controlled by any of such individuals) acquires
“beneficial ownership” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) of 50% or more of the outstanding voting securities of
the Company; or

     (v) the Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule
14A (or any successor schedule, form or report or item therein) that a change in control
of the Company has occurred.

     (f) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (g) “Committee” shall mean the Compensation Committee of the Board, which shall consist of two or
more Outside Directors.

     (h) “Covered Employee” shall mean a Participant who is a “covered employee” within the
meaning of Code Section 162(m) and the Treasury regulations promulgated thereunder with respect to
any Performance Period.

     (i) “Fair Market Value” shall mean, with respect to any relevant date, the closing price of
the Shares on such date (or, if such date is not a trading date, the immediately preceding trading
date), as reported on the New York Stock Exchange or such other primary national exchange on which
the Shares are listed. In the event the Shares are not listed on an exchange as described in the
previous sentence, Fair Market Value with respect to any relevant date shall be determined in good
faith by the Board.

     (j) “Outside Directors” shall mean “outside directors” within the meaning of Code Section
162(m) and the Treasury regulations promulgated thereunder.

     (k) “Participant” shall mean any Senior Executive who is selected by the Committee (or in the
case of Senior Executives who are not Covered Employees, any Person or committee empowered by the
Committee to make such selection) to receive an Award under the Plan.

     (l) “Performance-Based Compensation” shall mean amounts satisfying the applicable
requirements imposed by Code Section 162(m) and the Treasury regulations promulgated thereunder
with respect to that term.

     (m) “Performance Period” shall mean one or more fiscal years of the Company, including
multiple year periods, or any other period selected by the Committee, as to which an Award may
be earned.

     (n) “Person” shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization, or government
or political subdivision thereof.

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     (o) “Senior Executive” shall mean any executive officer of the Company or any other officer
of the Company or any of its Affiliates serving as a region or division president or manager or
in another senior management position.

     (p) “Share” shall mean a share of the Company’s common stock, par value $0.01, subject to
adjustment as provided in Section 4.

     (q) “Stock Incentive Plan” shall mean the Company’s 2006 Stock Incentive Plan, as amended from
time to time.

     (r) “Target Award” shall mean an Award expressed as a target number of Bonus Units that may be
earned in accordance herewith if certain performance criteria are achieved in such Performance
Period. The maximum amount payable pursuant to any Award granted hereunder shall be two (2) times
the number Bonus Units subject to the Target Award.

3. AWARDS.

     (a) The Committee may determine and designate Senior Executives who shall be Participants
for any Performance Period. With respect to each such designated Participant, if any, the
Committee shall establish: (i) a Target Award (including the target number of Bonus Units subject
thereto) for the Performance Period; (ii) the performance criteria for the Performance Period
with respect to the Target Award; and (iii) whether the Award is intended to satisfy the
requirements for Performance-Based Compensation. For any Performance Period, determinations
required for Awards intended to qualify as Performance-Based Compensation shall be made within
the time necessary to comply with such requirements. Designation as a Participant for any
Performance Period shall not entitle any Senior Executive to the right to be designated as a
Participant for any other Performance Period.

     (b) The performance criteria to be established with respect to any Awards shall be based
upon any one or more of the following measures, applied to either the Company as a whole or to
any business unit, region, division, or subsidiary, either individually, alternatively, or in any
combination, and measured either monthly, quarterly, annually, or cumulatively over a period of
years, on an absolute basis or relative to (including ranking to) a pre-established target, to
previous years’ results, or to a designated comparison group, in each case as specified by the
Committee: (i) cash flow (before or after dividends), (ii) earnings per share (including, without
limitation, earnings before interest, taxes, depreciation and amortization), (iii) stock price,
(iv) return on equity, (v) equity improvement, (vi) stockholder return or total stockholder
return, (vii) return on capital (including, without limitation, return on total capital or return
on invested capital), (viii) return on investment, (ix) return on assets or net assets,
(x) market capitalization, (xi) economic value added, (xii) debt leverage (debt to capital) or
access to capital, (xiii) gross or net revenue, (xiv) sales, net sales or closings, (xv) backlog,
(xvi) inventory, land or lot improvement or reduction, (xvii) asset turnover, (xviii) income,
pre-tax income or net income, (xix) operating income or pre-tax profit, (xx) operating profit,
operating profit before adjustments or increases to cost of sales, net operating profit or
economic profit, (xxi) gross margin, operating margin or profit margin, (xxii) return on
operating revenue or return on operating assets, (xxiii) cost of sales, (xxiv) cash from
operations, (xxv) operating ratio, (xxvi) operating revenue or return on revenue, (xxvii) market
share improvement,

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(xxviii) sales cancellations, (xxix) dividend or dividend yield, (xxx) general, selling and
administrative expense improvement or containment, or (xxxi) customer service. Such goals may be
particular to a line of business, region, division, or other unit or may be based on the Company
generally or any Affiliate.

     To the extent consistent with Code Section 162(m) (or, alternatively, to the extent that
Code Section 162(m) is not intended to apply to a particular Award), the Committee may
appropriately adjust any evaluation of performance under the above performance criteria to
exclude any of the following events that occur during a Performance Period: (i) litigation,
claims, judgments or settlements; (ii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results; (iii) non-cash charges related to
impairments, write-offs or asset valuation; (iv) corporate overhead charges; (v) accruals for
reorganization and restructuring programs; (vi) adjustments related to deferred tax assets; and
(vii) any extraordinary, unusual, non-recurring or non-comparable items (A) as described in
Accounting Principles Board Opinion No. 30 (or any successor provision), (B) as described in
management’s discussion and analysis of financial condition and results of operations appearing
in the Company’s Annual Report to stockholders for the applicable year or years, or (C) publicly
announced by the Company in a press release or conference call relating to the Company’s results
of operations or financial condition for a completed quarterly, annual, or multi-year fiscal
period. The Committee also may take into account normalization related adjustments to the
performance criteria if necessary to provide a relevant and consistent comparison to the
performance criteria of the Company’s peer group or other comparison group or metric.

     (c) Notwithstanding the grant of any Award and related performance criteria pursuant to
Section 3(a), but subject to Section 6, in the sole discretion of the Committee, the amount
payable to a Participant in respect of such Award may be adjusted, at any time prior to payment
of the related Award, either to increase or decrease the value of such Award, as follows:

     (i) the Committee may adjust an Award for individual performance on the basis of such
quantitative and qualitative performance measures and evaluations as it deems appropriate;

     (ii) the Committee may make such adjustments as it deems appropriate in the case of
any Participant whose position with the Company has changed during the applicable
Performance Period; and

     (iii) the Committee shall have the discretion to adjust performance criteria and
the methodology used to measure the determination of the degree of attainment of such
criteria;

provided, that to the extent required to qualify as Performance-Based Compensation, any Award
designated as Performance-Based Compensation may not be adjusted under this Section 3(c) or
otherwise in a manner that increases the value of such Award. Subject to Section 6, the
Committee shall retain the discretion to adjust such Awards in a manner that does not increase
the value of such Awards, at any time prior to the payment thereof.

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     (d) To the extent that an Award is intended to be Performance-Based Compensation, prior to any
payment thereof, the Committee shall certify in writing the extent to which the performance
criteria have been satisfied and the amount payable as a result thereof.

     (e) In general, Awards earned under the Plan shall be payable in cash; provided, however, that
the Committee, in its sole discretion, may elect to satisfy payment of any Award earned under the
Plan in whole or in part by the delivery of a number of Shares or Share Units equal to the number
of Bonus Units earned under the Award. Any Shares or Share Units delivered in settlement of an
Award under the Plan shall be granted as fully vested Restricted Stock or Restricted Stock Units
pursuant to Section 8 of the Stock Incentive Plan, shall not be subject to the minimum vesting
period set forth in Section 8(c) of the Stock Incentive Plan as permitted by the terms thereof
regarding the payment of earned compensation, shall be subject to all other applicable terms and
conditions of the Stock Incentive Plan, and shall reduce the number of Shares available for
issuance under the Stock Incentive Plan in accordance with Section 5 thereof.

     (f) Subject to the above, Awards shall be paid as soon as practicable after the Performance
Period, and if possible by the 15th day of the 3rd month following the end of the year in which the
Participant becomes entitled to such Award payment, but in any event no later than the last day of
the calendar year following the year in which the Award is earned, except to the extent that a
Participant has made a timely election to defer the receipt of such Award in the manner specified
by the Committee pursuant to a deferral arrangement with the Company or any of its Affiliates. A
deferral election shall be deemed timely if received no later than the last day of the calendar
year preceding the calendar year in which the Performance Period commences, except (i) with respect
to any Award with respect to a Performance Period of at least 12 consecutive months, in which case
such election shall be made not later than 6 months before the end of the applicable Performance
Period (so long as such election is made before the Award becomes both substantially certain to be
paid and readily ascertainable), and (ii) with respect to a person who first becomes a Participant,
which person may make such election within 30 days after first becoming a Participant and which
election shall apply only to amounts paid for services to be performed after the date of such
election. Any deferral election shall comply with the requirements of Code Section 409A so as to
avoid the imposition of any taxes or penalties thereunder. For Awards that do not constitute
Performance-Based Compensation, the Compensation Committee may establish rules and procedures for
advance payment of all or a portion of such Awards, or such other payment arrangements as it deems
desirable or appropriate.

4. AWARD LIMITATIONS TO COVERED EMPLOYEES. Notwithstanding any other provision of the Plan to the
contrary, the maximum number of Bonus Units that may be granted under any Award to any Covered
Employee in any one fiscal year of the Company shall not exceed 500,000 Bonus Units, and the
maximum number of Bonus Units that can be earned or paid out with respect thereto, if all
performance criteria under the Award are satisfied, is two (2) times the number of such Bonus
Units. The maximum number of Bonus Units that may be granted in any one fiscal year to any one
Covered Employee and the number and kind of Shares used as the basis for determining the value of
Bonus Units shall, to the extent consistent with Code Section 162(m) and the Treasury regulations
promulgated thereunder, be proportionately or equitably adjusted (in a manner determined by the
Committee) to reflect any reorganization,

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reclassification, combination or exchange of shares, repurchase of shares, stock split, reverse
stock split, merger, consolidation, spin-off, dividend or other distribution of securities,
property or cash (other than regular, quarterly cash dividends), or any other event or transaction
that affects the number or kind of Shares outstanding. Prior to the payment with respect to any
Award designated as intended to satisfy the requirements for Performance-Based Compensation, the
Committee shall certify in writing the attainment of the performance criteria and any other
material terms.

5. ELIGIBILITY; PRORATIONS.

     (a) Persons employed by the Company or any of its Affiliates as Senior Executives in a
Performance Period prior to the establishment by the Committee of the Target Award for such
Performance Period are eligible to be Participants under the Plan for such Performance Period
(subject to (b) below, whether or not so employed or living at the date an Award is paid). A
Senior Executive is not rendered ineligible to be a Participant by reason of being a member of the
Board.

     (b) The Award applicable to a Participant under the Plan for a Performance Period shall be
prorated over the Performance Period or the Participant shall be ineligible for an Award, as the
case may be, in the following events:

	 	 	 	 	 	 	 	 	 
	 

	 	(i)
	 	ceasing to be a Senior Executive,
otherwise than by dismissal, during the
Performance Period, including ceasing to
be such due to death, retirement,
resignation, or leave of absence
	 	—
	 	prorate as of the date of
ceasing to be such, to the
nearest half month
	 
	 	 	 	 	 	 	 	 
	 

	 	(ii)
	 	disability for more than three
months in a Performance Period
	 	—
	 	prorate as of the last day
of the third month of disability
	 
	 	 	 	 	 	 	 	 
	 

	 	(iii)
	 	disability for three months or less in a Performance Period
	 	—
	 	no reduction in applicable Award
	 
	 	 	 	 	 	 	 	 
	 

	 	(iv)
	 	dismissal, with or without cause,
during or after a Performance Period by the Company or any Affiliate
	 	—
	 	no Award

If a Change in Control occurs during any Performance Period, the foregoing provisions of this
Section 5(b) shall not apply to any such event occurring on or after the Change in Control.

6. CHANGE IN CONTROL. Within fifteen (15) business days following a Change in Control, each
Participant under the Plan during the Performance Period in which the Change in Control occurs who
is in the employ of the Company at the time of the Change in Control shall be paid an amount equal
to (i) the Award the Participant would have earned for such Performance Period, assuming continued
achievement of the relevant performance goals at the rate achieved as of the end of the calendar
month immediately prior to the calendar month in which the Change in Control occurs, multiplied by
(ii) a fraction, the numerator of which is the

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number of days in the Performance Period which have elapsed as of the Change in Control, and the
denominator of which is the number of days in the Performance Period. The Committee, or a
successor compensation committee of the surviving corporation that meets the requirements of Code
Section 162(m) and the treasury regulations promulgated thereunder, shall make the certification
described in Section 4 prior to any payment pursuant to this Section 6. Amounts payable pursuant
to this Section 6 shall not be subject to downward adjustment by the Committee, notwithstanding
the provisions of Section 3(c).

7. OTHER CONDITIONS.

     (a) No Person shall have any right to be selected as a Participant for any Performance
Period or, except as provided in Section 10, to receive an Award under the Plan. There is no
obligation for uniformity of treatment of Participants under the Plan. Awards under the Plan
may not be assigned or alienated.

     (b) Neither the Plan nor any action taken hereunder shall be construed as giving to any
Participant the right to be retained in the employ of the Company or any Affiliate.

     (c) The Company or any Affiliate shall have the right to deduct from any Award to be paid
under the Plan any federal, state or local taxes required by law to be withheld with respect to
such payment.

     (d) No segregation of any moneys or the creation of any trust or the making of any
special deposit shall be required in connection with any Awards made or to be made under the
Plan.

     (e) This Plan is not intended to and shall not preclude the Board from adopting, continuing,
amending or terminating such additional compensation arrangements as it deems desirable for
Participants under this Plan, including any thrift, savings, investments, stock purchase, stock
option, profit-sharing, pension, retirement, insurance, bonus or other incentive plan.

     (f) No Participant shall have any rights as a stockholder of the Company with respect to any
Award hereunder unless and until said such Award is settled by the delivery of Shares in
accordance with the terms and conditions of the Stock Incentive Plan.

8. DESIGNATION OF BENEFICIARIES. A Participant may designate one or more beneficiaries to receive
all or part of the Award which may be made to the Participant, or may be payable, after such
Participant’s death. A designation of beneficiary may be replaced by a new designation or may be
revoked by the Participant at any time. A designation or revocation shall be on a form to be
provided for this purpose and shall be signed by the Participant and delivered to the Company or
Affiliate employing the Participant prior to the Participant’s death. In case of the Participant’s
death, an Award with respect to which a designation of beneficiary has been made (to the extent it
is valid and enforceable under applicable law) shall be paid to the designated beneficiaries at
the time such Award would have been paid to Participant, if Participant were still alive. Any
Award granted or payable to a Participant who is deceased and not subject to such a designation
shall be distributed to the Participant’s estate at the time such Award would have been paid to
Participant, if Participant were still alive. If there shall be any

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question as to the legal right of any beneficiary to receive an Award under the Plan, the amount
in question may be paid to the estate of the Participant, in which event the Company or its
employing Affiliate shall have no further liability to anyone with respect to such amount.

9. PLAN ADMINISTRATION.

     (a) The Committee shall have full power and discretion to administer and interpret the Plan
and to establish rules for its administration. In making any determinations under or referred to
in the Plan, the Committee shall be entitled to rely on opinions, reports or statements of
officers or employees of the Company and its Affiliates, and of counsel, public accountants and
other professional or expert Persons.

     (b) Except to the extent prohibited by applicable law, the Committee may allocate all or any
portion of its responsibilities and powers to any one or more of its members and may delegate all
or any part of its responsibilities and powers to any Person or committee selected by it; provided,
however, that the Committee may not allocate or delegate any portion of its responsibilities in
connection with or relating to Covered Employees or Performance-Based Compensation. Any such
allocation or delegation may be revoked by the Committee at any time.

     (c) The Plan shall be governed by the laws of the State of Delaware and applicable Federal
law.

10. MODIFICATION OR TERMINATION OF PLAN. The Board may modify or terminate the Plan at any time,
effective at such date as the Board may determine; provided that no modification or termination
may, in the absence of written consent to the change by the affected Participant (or, if the
Participant is not then living, the affected beneficiary), adversely affect the rights of any
Participant or beneficiary in respect of any Target Award established prior to the date such
amendment or termination is adopted by the Board.

11. SHAREHOLDER APPROVAL. No Award may be paid hereunder to any Covered Employee until the
material terms of the Plan are disclosed to and approved by the shareholders of the Company. Such
approval must be in a separate vote by the holders of a majority of the shares of the Company
present, or represented by proxy, and entitled to vote, at a duly constituted meeting of the
Company’s stockholders in accordance with the laws of the State of Delaware.

8exv10w1

 

Exhibit 10.1

PAREXEL INTERNATIONAL CORPORATION

2007 STOCK INCENTIVE PLAN

1.      Purpose

          The purpose of this 2007 Stock Incentive Plan (the “Plan”) of PAREXEL International
Corporation, a Massachusetts corporation (the “Company”), is to advance the interests of the
Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons
who are expected to make important contributions to the Company and by providing such persons with
equity ownership opportunities and performance-based incentives that are intended to align their
interests with those of the Company’s stockholders. Except where the context otherwise requires,
the term “Company” shall include any of the Company’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder (the “Code”) and any other business venture (including,
without limitation, joint venture or limited liability company) in which the Company has a
controlling interest, as determined by the Board of Directors of the Company (the “Board”).

2.      Eligibility

          All of the Company’s employees, officers, directors, consultants and advisors are eligible to
receive options, stock appreciation rights, restricted stock, restricted stock units and other
stock-based awards (each, an “Award”) under the Plan. Each person who receives an Award under the
Plan is deemed a “Participant”.

3.      Administration and Delegation

          (a)   Administration by Board of Directors. The Plan will be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be
the sole and final judge of such expediency. All decisions by the Board shall be made in the
Board’s sole discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the
Plan made in good faith.

          (b)   Appointment of Committees. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a
Committee of the Board to the extent that the Board’s powers or authority under the Plan have been
delegated to such Committee.

          (c)   Awards to Non-Employee Directors. Discretionary Awards to non-employee directors
will only be granted and administered by a Committee, each member of which is an “independent
director” as defined in Section 4200(a)(15) of the NASDAQ Marketplace Rules.

4.      Stock Available for Awards

          (a)   Number of Shares; Share Counting.

                         (1)      Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be
made under the Plan for up to 2,000,000 shares of common stock, $.01 par value per share, of the
Company (the “Common Stock”). Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares. 

                         (2)      Fungible Share Counting. Subject to adjustment under Section 9, (A) any Option
Award made under this Plan shall be counted against the share reserve specified in Section 4(a)(1)
as one share for each

 

 

share of Common Stock subject to such Award and (B) any Restricted Stock Award or Other Stock
Unit Award made under this Plan shall be counted against the share reserve specified in Section
4(a)(1) as two shares for each one share of Common Stock underlying the Award. To the extent a
share that was subject to an Award that was counted as one share is returned to the Plan pursuant
to Section 4(a)(1), the share reserve will be credited with one share. To the extent a share that
was subject to an Award that was counted as two shares is returned to the Plan pursuant to Section
4(a)(1), the share reserve will be credited with two shares.

                         (3)      Other Share Counting Rules. Other Share Counting Rules. For purposes of
counting the number of shares available for the grant of Awards under the Plan, (i) all shares of
Common Stock covered by SARs shall be counted against the number of shares available for the grant
of Awards; provided, however, that SARs that may be settled in cash only shall not be so counted;
(ii) if any Award (A) expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the result of shares of Common Stock
subject to such Award being repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or (B) results in any Common Stock not being issued (including as a
result of an SAR that was settleable either in cash or in stock actually being settled in cash),
the unused Common Stock covered by such Award shall again be available for the grant of Awards;
provided, however, in the case of Incentive Stock Options (as hereinafter defined), the foregoing
shall be subject to any limitations under the Code; and provided further, in the case of SARs, that
the full number of shares subject to any stock-settled SAR shall be counted against the shares
available under the Plan regardless of the number of shares actually used to settle such SAR upon
exercise; (iii) shares of Common Stock tendered to the Company by a Participant to (A) purchase
shares of Common Stock upon the exercise of an Award or (B) satisfy tax withholding obligations
(including shares retained from the Award creating the tax obligation) shall not be added back to
the number of shares available for the future grant of Awards; and (iv) shares of Common Stock
repurchased by the Company on the open market using the proceeds from the exercise of an Award
shall not increase the number of shares available for future grant of Awards.

          (b)   Sub-limits. Subject to adjustment under Section 9, the following sub-limit on the
number of shares subject to Awards shall apply:

                         (1)      Section 162(m) Per-Participant Limit. The maximum number of shares of Common
Stock with respect to which Awards may be granted to any Participant under the Plan shall be
1,000,000 per fiscal year. For purposes of the foregoing limit, the combination of an Option in
tandem with an SAR (as each is hereafter defined) shall be treated as a single Award. The
per-Participant limit described in this Section 4(b)(1) shall be construed and applied consistently
with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder
(“Section 162(m)”).

5.      Stock Options

          (a)   General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as
hereinafter defined) shall be designated a “Nonstatutory Stock Option”.

          (b)   Incentive Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be
granted to employees of PAREXEL International Corporation, any of PAREXEL International
Corporation’s present or future parent or subsidiary corporations as defined in Sections 424(e) or
(f) of the Code, and any other entities the employees of which are eligible to receive Incentive
Stock Options under the Code, and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or
any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock
Option is not an Incentive Stock Option or for any action taken by the Board pursuant to Section
10(f), including without limitation the conversion of an Incentive Stock Option to a Nonstatutory
Stock Option.

          (c)   Exercise Price. The Board shall establish the exercise price of each Option and
specify such exercise price in the applicable option agreement; provided, however, that the
exercise price shall be not less than 100% of the Fair Market Value (as defined below) at the time
the Option is granted.

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          (d)   Duration of Options. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Board may specify in the applicable option agreement; provided,
however, that no Option will be granted for a term in excess of 8 years.

          (e)   Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including
electronic notice) approved by the Board together with payment in full as specified in Section 5(f)
for the number of shares for which the Option is exercised. Shares of Common Stock subject to the
Option will be delivered by the Company following exercise either as soon as practicable or,
subject to such conditions as the Board shall specify, on a deferred basis (with the Company’s
obligation to be evidenced by an instrument providing for future delivery of the deferred shares at
the time or times specified by the Board).

          (f)   Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:

                         (1)      in cash or by check, payable to the order of the Company;

                         (2)      except as the Board may otherwise provide in an option agreement, by (i) delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax withholding or (ii)
delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions
to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;

                         (3)      when the Common Stock is registered under the Securities Exchange Act of 1934 (the
“Exchange Act”), by delivery of shares of Common Stock owned by the Participant valued at their
fair market value as determined by (or in a manner approved by) the Board (“Fair Market Value”),
provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock,
if acquired directly from the Company, was owned by the Participant for such minimum period of
time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is
not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

                         (4)      to the extent permitted by applicable law and by the Board, by (i) delivery of a
promissory note of the Participant to the Company on terms determined by the Board or (ii) payment
of such other lawful consideration as the Board may determine; or

                         (5)      by any combination of the above permitted forms of payment.

          (g)   Substitute Options. In connection with a merger or consolidation of an entity
with the Company or the acquisition by the Company of property or stock of an entity, the Board may
grant Options in substitution for any options or other stock or stock-based awards granted by such
entity or an affiliate thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options contained in the other
sections of this Section 5 or in Section 2. Substitute Options shall not count against the overall
share limit set forth in Section 4(a), except as may be required by reason of Section 422 and
related provisions of the Code.

          (h)   Limitation on Repricing. Unless such action is approved by the Company’s
stockholders: (1) no outstanding Option granted under the Plan may be amended to provide an
exercise price per share that is lower than the then-current exercise price per share of such
outstanding Option (other than adjustments pursuant to Section 9) and (2) the Board may not cancel
any outstanding option (whether or not granted under the Plan) and grant in substitution therefore
new Awards under the Plan covering the same or a different number of shares of Common Stock and
having an exercise price per share lower than the then-current exercise price per share of the
cancelled option.

          (i)   No Reload Rights. No Option granted under the Plan shall contain any provision
entitling the optionee to the automatic grant of additional Options in connection with any exercise
of the original Option.

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6.      Stock Appreciation Rights.

          (a)   General. A Stock Appreciation Right, or SAR, is an Award entitling the holder,
upon exercise, to receive an amount in Common Stock or cash or a combination thereof (such form to
be determined by the Board) determined by reference to appreciation, from and after the date of
grant, in the fair market value of a share of Common Stock. The date as of which such appreciation
or other measure is determined shall be the exercise date.

          (b)   Grants. Stock Appreciation Rights may be granted in tandem with, or independently
of, Options granted under the Plan.

          (c)   Exercise. Stock Appreciation Rights may be exercised by delivery to the Company
of a written notice of exercise signed by the proper person or by any other form of notice
(including electronic notice) approved by the Board, together with any other documents required by
the Board.

7.      Restricted Stock; Restricted Stock Units.

          (a)   General. The Board may grant Awards entitling recipients to acquire shares of
Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price (or to require forfeiture of such
shares if issued at no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable restriction period or
periods established by the Board for such Award. Instead of granting Awards for Restricted Stock,
the Board may grant Awards entitling the recipient to receive shares of Common Stock to be
delivered at the time such shares of Common Stock vest (“Restricted Stock Units”) (Restricted Stock
and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).

          (b)   Terms and Conditions. The Board shall determine the terms and conditions of a
Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue
price, if any.

          (c)   Stock Certificates. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless otherwise determined by
the Board, deposited by the Participant, together with a stock power endorsed in blank, with the
Company (or its designee). At the expiration of the applicable restriction periods, the Company
(or such designee) shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a manner determined
by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the
event of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective
designation by a Participant, “Designated Beneficiary” shall mean the Participant’s estate.

          (d)   Limitations on Vesting.

                         (1)      Restricted Stock Awards that vest based on the passage of time alone shall be zero percent
vested prior to the first anniversary of the date of grant, no more than 33-1/3% vested prior to
the second anniversary of the date of grant, and no more than 66-2/3% vested prior to the third
anniversary of the date of grant. Restricted Stock Awards that vest upon the passage of time and
provide for accelerated vesting based on performance shall not vest prior to the first anniversary
of the date of grant. This subsection 7(d)(1) shall not apply to (A) Awards granted pursuant to
Section 10(i) or (B) to a maximum of 50,000 shares of Common Stock with respect to which Restricted
Stock Awards may be granted.

                         (2)      Notwithstanding any other provision of this Plan, the Board may, in its discretion, either
at the time a Restricted Stock Award is made or at any time thereafter, waive its right to
repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify any part or
all of the restrictions applicable to the Restricted Stock Award, provided that the Board may only
exercise such rights in extraordinary circumstances which shall include, without limitation, death
or disability of the Participant; estate planning needs of the Participant; a merger,
consolidation, sale, reorganization, recapitalization, or change in control of the Company; or any
other nonrecurring significant event affecting the Company, a Participant or the Plan.

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8.      Other Stock-Based Awards.

          Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, shares of Common Stock or other property, may be
granted hereunder to Participants (“Other Stock Unit Awards”), including without limitation Awards
entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other
Stock Unit Awards shall also be available as a form of payment in the settlement of other Awards
granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise
entitled. Other Stock Unit Awards may be paid in shares of Common Stock or cash, as the Board
shall determine. Subject to the provisions of the Plan, the Board shall determine the conditions
of each Other Stock Unit Award, including any purchase price applicable thereto.

9.      Adjustments for Changes in Common Stock and Certain Other Events.

          (a)   Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this
Plan, (ii) the number and class of securities and exercise price per share of each outstanding
Option, (iii) the share- and per-share provisions of each Stock Appreciation Right, (iv) the
repurchase price per share subject to each outstanding Restricted Stock Award, (v) the share- and
per-share-related provisions of each outstanding Other Stock Unit Award and (vi) the share counting
provisions of Section 4(a)(2), shall be appropriately adjusted by the Company (or substituted
Awards may be made, if applicable) to the extent determined by the Board.

          (b)   Reorganization Events.

                         (1)      Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation
of the Company with or into another entity as a result of which all of the Common Stock of the
Company is converted into or exchanged for the right to receive cash, securities or other property
or is cancelled, (b) any exchange of all of the Common Stock of the Company for cash, securities or
other property pursuant to a share exchange transaction or (c) any liquidation or dissolution of
the Company.

                         (2)      Consequences of a Reorganization Event on Awards Other than Restricted Stock
Awards. In connection with a Reorganization Event, the Board shall take any one or more of the
following actions as to all or any outstanding Awards on such terms as the Board determines: (i)
provide that Awards shall be assumed, or substantially equivalent Awards shall be substituted, by
the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a
Participant, provide that the Participant’s unexercised Options or other unexercised Awards shall
become exercisable in full, and will terminate immediately prior to the consummation of such
Reorganization Event unless exercised by the Participant within a specified period following the
date of such notice, (iii) provide that outstanding Awards shall become realizable or deliverable,
or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such
Reorganization Event, (iv) in the event of a Reorganization Event under the terms of which holders
of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in
the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to a
Participant equal to (A) the Acquisition Price times the number of shares of Common Stock subject
to the Participant’s Options or other Awards (to the extent the exercise price does not exceed the
Acquisition Price) minus (B) the aggregate exercise price of all such outstanding Options or other
Awards, in exchange for the termination of such Options or other Awards, (v) provide that, in
connection with a liquidation or dissolution of the Company, Awards shall convert into the right to
receive liquidation proceeds (if applicable, net of the exercise price thereof) and (vi) any
combination of the foregoing.

                         For purposes of clause (i) above, an Option shall be considered assumed if, following
consummation of the Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the

-5-

 

Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or
an affiliate thereof), the Company may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be received upon the exercise of Options to consist
solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof)
equivalent in value (as determined by the Board) to the per share consideration received by holders
of outstanding shares of Common Stock as a result of the Reorganization Event.

                         To the extent all or any portion of an Option becomes exercisable solely as a result of clause
(ii) above, the Board may provide that upon exercise of such Option the Participant shall receive
shares subject to a right of repurchase by the Company or its successor at the Option exercise
price; such repurchase right (x) shall lapse at the same rate as the Option would have become
exercisable under its terms and (y) shall not apply to any shares subject to the Option that were
exercisable under its terms without regard to clause (ii) above.

                         (3)      Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Company’s successor and shall apply to the cash, securities or other
property which the Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common Stock subject to such
Restricted Stock Award. Upon the occurrence of a Reorganization Event involving the liquidation or
dissolution of the Company, except to the extent specifically provided to the contrary in the
instrument evidencing any Restricted Stock Award or any other agreement between a Participant and
the Company, all restrictions and conditions on all Restricted Stock Awards then outstanding shall
automatically be deemed terminated or satisfied.

10.     General Provisions Applicable to Awards

          (a)   Transferability of Awards. Awards shall not be sold, assigned, transferred,
pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by
operation of law, except by will or the laws of descent and distribution or, other than in the case
of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the
life of the Participant, shall be exercisable only by the Participant; provided, however, that the
Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant
to or for the benefit of any immediate family member, family trust or family partnership
established solely for the benefit of the Participant and/or an immediate family member thereof if,
with respect to such proposed transferee, the Company would be eligible to use a Form S-8 for the
registration of the sale of the Common Stock subject to such Award under the Securities Act of
1933, as amended; provided, further, that the Company shall not be required to recognize any such
transfer until such time as the Participant and such permitted transferee shall, as a condition to
such transfer, deliver to the Company a written instrument in form and substance satisfactory to
the Company confirming that such transferee shall be bound by all of the terms and conditions of
the Award. References to a Participant, to the extent relevant in the context, shall include
references to authorized transferees.

          (b)   Documentation. Each Award shall be evidenced in such form (written, electronic or
otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition
to those set forth in the Plan.

          (c)   Board Discretion. Except as otherwise provided by the Plan, each Award may be
made alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.

          (d)   Termination of Status. The Board shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other change in the employment or
other status of a Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.

          (e)   Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant. Except as the Board may otherwise provide in an Award, for so
long as the Common Stock is registered under the Exchange Act, Participants may satisfy such tax
obligations in whole or in part by delivery of shares of Common Stock, including shares retained
from the Award creating the tax obligation, valued at their Fair Market Value;

-6-

 

provided, however, except as otherwise provided by the Board, that the total tax withholding
where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum
statutory withholding obligations (based on minimum statutory withholding rates for federal and
state tax purposes, including payroll taxes, that are applicable to such supplemental taxable
income). Shares surrendered to satisfy tax withholding requirements cannot be subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements. The Company may, to the
extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due
to a Participant.

          (f)   Amendment of Award. Except as otherwise provided in Section 5(h), the Board may
amend, modify or terminate any outstanding Award, including but not limited to, substituting
therefor another Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that
the Participant’s consent to such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially and adversely affect the
Participant.

          (g)   Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.

          (h)   Acceleration. Except as otherwise provided in Section 7(d), the Board may at any
time provide that any Award shall become immediately exercisable in full or in part, free of some
or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

          (i)   Performance Conditions.

                         (1)      This Section 10(i) shall be administered by a Committee (the “Section 162(m) Committee”)
approved by the Board, all of the members of which are “outside directors” as defined by Section
162(m).

                         (2)      Notwithstanding any other provision of the Plan, if the Section 162(m) Committee
determines, at the time a Restricted Stock Award or Other Stock Unit Award is granted to a
Participant, that such Participant is, or may be as of the end of the tax year in which the Company
would claim a tax deduction in connection with such Award, a Covered Employee (as defined in
Section 162(m)), then the Section 162(m) Committee may provide that this Section 10(i) is
applicable to such Award.

                         (3)      If a Restricted Stock Award or Other Stock Unit Award is subject to this Section 10(i),
then the lapsing of restrictions thereon and the distribution of cash or Shares pursuant thereto,
as applicable, shall be subject to the achievement of one or more objective performance goals
established by the Section 162(m) Committee, which shall be based on the relative or absolute
attainment of specified levels of one or any combination of the following: (a) earnings, (b)
revenues, (c) expenses, (d) stock price, (e) achievement of balance sheet or income statement
objectives, (f) total shareholder return, (g) cash flow, or (h) backlog, and may be absolute in
their terms or measured against or in relationship to other companies comparably, similarly or
otherwise situated. Such performance goals may be adjusted to exclude any one or more of (i)
extraordinary items, (ii) gains or losses on the dispositions of discontinued operations, (iii) the
cumulative effects of changes in accounting principles, (iv) the writedown of any asset, and (v)
charges for restructuring and rationalization programs. Such performance goals: (i) may vary by
Participant and may be different for different Awards; (ii) may be particular to a Participant or
the department, branch, line of business, subsidiary or other unit in which the Participant works
and may cover such period as may be specified by the Section 162(m) Committee; and (iii) shall be
set by the Section 162(m) Committee within the time period prescribed by, and shall otherwise
comply with the requirements of, Section 162(m).

                         (4)      Notwithstanding any provision of the Plan, with respect to any Restricted Stock Award or
Other Stock Unit Award that is subject to this Section 10(i), the Section 162(m) Committee may
adjust downwards,

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but not upwards, the cash or number of Shares payable pursuant to such Award, and the Section
162(m) Committee may not waive the achievement of the applicable performance goals except in the
case of the death or disability of the Participant.

                         (5)      The Section 162(m) Committee shall have the power to impose such other restrictions on
Awards subject to this Section 10(i) as it may deem necessary or appropriate to ensure that such
Awards satisfy all requirements for “performance-based compensation” within the meaning of Section
162(m)(4)(C) of the Code, or any successor provision thereto.

11.      Miscellaneous

          (a)   No Right To Employment or Other Status. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as giving a Participant
the right to continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

          (b)   No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to such Option are adjusted as of the date of the distribution of the dividend (rather than
as of the record date for such dividend), then an optionee who exercises an Option between the
record date and the distribution date for such stock dividend shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such
Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of
business on the record date for such stock dividend.

          (c)   Effective Date and Term of Plan. The Plan shall become effective on the date on
which it is adopted by the Board, but no Award may be granted unless and until the Plan has been
approved by the Company’s stockholders. No Awards shall be granted under the Plan after the
completion of 10 years from the earlier of (i) the date on which the Plan was adopted by the Board
or (ii) the date the Plan was approved by the Company’s stockholders, but Awards previously granted
may extend beyond that date.

          (d)   Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time, subject to any required stockholder approval under any applicable
legal, regulatory or listing requirement.

          (e)   Provisions for Foreign Participants. The Board may modify Awards or Options
granted to Participants who are foreign nationals or employed outside the United States or
establish subplans or procedures under the Plan to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.

          (f)   Compliance With Code Section 409A. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the Board, at the time of
grant, specifically provides that the Award is not intended to comply with Section 409A of the
Code.

          (g)   Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts,
excluding choice-of-law principles of the law of such state that would require the application of
the laws of a jurisdiction other than such state.

-8-

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