<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE
REGISTRANT [ ]
------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(3)(2))
PAREXEL International Corporation
(Name of Registrant as Specified in Its Charter)
[NAME OF PERSON FILING]
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which filing fee is calculated
and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
PAREXEL LOGO
-------------------------------------------------------------------
195 West Street, Waltham, Massachusetts 02451
Telephone: 781-487-9900
Fax: 781-487-0525
October 7, 1999
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of
PAREXEL International Corporation (the "Company") to be held at 10:00 a.m.,
Eastern Standard Time, on Thursday, November 11, 1999, at the Museum of Our
National Heritage located at 33 Marrett Road, Lexington, Massachusetts 02420.
At this meeting, you will be asked to:
(i) elect two Class I directors for three-year terms;
(ii) amend the Company's 1995 Stock Plan (the "Plan") to increase the
number of shares currently reserved for issuance under the Plan by
800,000 shares; and
(iii) ratify the selection of PricewaterhouseCoopers LLP as the Company's
independent auditors for the fiscal year ending June 30, 2000.
The Board of Directors unanimously recommends that you vote FOR each of
these proposals.
Details regarding each of the matters to be acted upon at this meeting
appear in the accompanying Proxy Statement. Please give this material your
careful attention.
Whether or not you plan to attend the meeting, please complete, sign and
date the accompanying proxy card and return it in the enclosed postage prepaid
envelope. It is important that your shares be voted whether or not you attend
the meeting in person. If you attend the meeting, you may vote in person even if
you have previously returned your proxy card. Your prompt cooperation will be
greatly appreciated.
Very truly yours,
/s/ Josef H. von Rickenbach
Josef H. von Rickenbach
President, Chief Executive Officer and
Chairman
<PAGE> 3
PAREXEL LOGO
-------------------------------------------------------------------
195 West Street, Waltham, Massachusetts 02451
Telephone: 781-487-9900
Fax: 781-487-0525
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 11, 1999
To the Stockholders of PAREXEL International Corporation:
Notice is hereby given that the annual meeting of stockholders of PAREXEL
International Corporation, a Massachusetts corporation (the "Company"), will be
held at 10:00 a.m., Eastern Standard Time, on Thursday, November 11, 1999, at
the Museum of Our National Heritage located at 33 Marrett Road, Lexington,
Massachusetts 02420, to consider and vote upon the following proposals:
1. To elect two Class I directors to the Company's Board of Directors, each
to serve for a term of three years and until his successor is elected
and qualified or until his earlier resignation or removal.
2. To approve an amendment to the Company's 1995 Stock Plan (the "Plan") to
increase the number of shares currently reserved for issuance under the
Plan by 800,000 shares.
3. To ratify the selection of PricewaterhouseCoopers LLP, independent
public accountants, as auditors for the fiscal year ending June 30,
2000.
4. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
Only stockholders of record at the close of business on September 15, 1999
are entitled to notice of and to vote at the meeting. All stockholders are
cordially invited to attend the meeting in person. TO ENSURE YOUR REPRESENTATION
AT THE MEETING, HOWEVER, YOU ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. You may
revoke your proxy in the manner described in the accompanying Proxy Statement at
any time before it has been voted at the annual meeting. Any Stockholder
attending the annual meeting may vote in person even if he or she has returned a
proxy.
By Order of the Board of Directors,
/s/ William T. Sobo, Jr.
William T. Sobo, Jr.
Senior Vice President, Chief Financial
Officer, Treasurer and Clerk
Waltham, Massachusetts
October 7, 1999
<PAGE> 4
PAREXEL LOGO
------------------------
PROXY STATEMENT
------------------------
October 7, 1999
This Proxy Statement is being furnished to holders of common stock, par
value $.01 per share ("Common Stock"), of PAREXEL International Corporation, a
Massachusetts corporation ("PAREXEL" or the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board")
for use at the annual meeting of the Company's stockholders to be held at 10:00
a.m., Eastern Standard Time, on Thursday, November 11, 1999, and at any
adjournments or postponements thereof (the "Meeting"), at the Museum of Our
National Heritage located at 33 Marrett Road, Lexington, Massachusetts 02420.
The Company's 1999 Annual Report, containing financial statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations for the fiscal year ended June 30, 1999, is being mailed
contemporaneously with this Proxy Statement to all stockholders entitled to vote
at the Meeting. This Proxy Statement and the form of proxy were first mailed to
stockholders on or about October 7, 1999.
The purpose of the Meeting is:
1. To elect two Class I directors to the Company's Board of Directors,
each to serve for a term of three years and until his successor is
elected and qualified or until his earlier resignation or removal.
2. To consider and vote upon a proposal to amend the Company's 1995 Stock
Plan (the "Plan") to increase the number of shares currently reserved
for issuance under the Plan by 800,000 shares.
3. To ratify the selection of PricewaterhouseCoopers LLP, independent
public accountants, as auditors for the fiscal year ending June 30,
2000.
The Board has fixed the close of business on September 15, 1999 as the
record date (the "Record Date") for the determination of the Company's
stockholders entitled to notice of, and to vote at, the Meeting. Accordingly,
only holders of record of Common Stock as of the close of business on the Record
Date will be entitled to notice of, and to vote at, the Meeting or an
adjournment thereof. As of the Record Date, 22,255,960 shares of the Company's
Common Stock were issued and outstanding. The holders of Common Stock are
entitled to one vote per share on any proposal presented at the Meeting.
Stockholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a stockholder's right to attend the Meeting and vote in person.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (1) filing
with the Clerk of the Company, before the taking of the vote at the Meeting, a
written notice of revocation bearing a later date than the proxy, (2) duly
executing a later dated proxy relating to the same shares and delivering it to
the Clerk of the Company before the taking of the vote at the Meeting or (3)
attending the Meeting and voting in person (although attendance at the Meeting
will not in and of itself constitute a revocation of a proxy). Any written
notice of revocation or subsequent
<PAGE> 5
proxy should be sent so as to be delivered to PAREXEL International Corporation,
195 West Street, Waltham, Massachusetts 02451, Attention: Clerk, at or before
the taking of the vote at the Meeting.
The persons named as attorneys in the proxy are officers of the Company.
All properly executed proxies returned in time to be counted at the Meeting will
be voted and, with respect to the election of the Board, will be voted as stated
below under "Election of Director." Any stockholder submitting a proxy has the
right to withhold authority to vote for the nominee to the Board by so marking
the box provided on the proxy.
In addition to the election of two Class I directors to three year terms,
the stockholders will consider and vote upon proposals to amend the Company's
1995 Stock Plan and to ratify the selection of auditors, all as further
described in this Proxy Statement. All proxies will be voted in accordance with
the instructions contained therein, and if no choice is specified, the proxies
will be voted in favor of the matters set forth in the accompanying Notice of
Meeting.
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to establish a quorum for the transaction of business at the Meeting. Votes
withheld from the nominee, abstentions and broker non-votes are counted as
present or represented for purposes of determining the presence or absence of a
quorum. A "non-vote" occurs when a broker holding shares for a beneficial owner
votes on one proposal, but does not vote on another proposal because the broker
does not have discretionary voting power and has not received instructions from
the beneficial owner. Directors are elected by a plurality of the votes cast by
stockholders entitled to vote at the Meeting. All other matters being submitted
to stockholders require the affirmative vote of a majority of shares present in
person or represented by proxy at the Meeting. An automated system administered
by the Company's transfer agent tabulates the votes. The vote on each matter
submitted to stockholders is tabulated separately. Abstentions are included in
the number of shares present or represented and voting on each matter and,
therefore, with respect to votes on specific proposals, will have the effect of
negative votes. Broker "non-votes" are not so included.
Where a choice has been specified on the proxy with respect to the
foregoing matters, the shares represented by the proxy will be voted in
accordance with the specification. The shares will be voted FOR the matter in
question if no specification is made.
The Board knows of no other matter to be presented at the Meeting. If any
other matters are properly presented for consideration at the Meeting (or any
adjournment or postponements thereof), the persons named in the enclosed form of
proxy and voting thereunder will have the discretion to vote on such matters in
accordance with their best judgment.
2
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of September 15, 1999 (unless
otherwise indicated) (i) by each person who is known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) by
each current director of the Company, (iii) by each executive officer of the
Company named in the Summary Compensation Table and (iv) by all current
directors and executive officers of the Company as a group. Unless otherwise
indicated below, to the knowledge of the Company, all persons listed below have
sole voting and investment power with respect to their shares of Common Stock,
except to the extent authority is shared by spouses under applicable law.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENTAGE OF SHARES
NAME OF BENEFICIAL OWNER OWNED(1) BENEFICIALLY OWNED(1)
- ------------------------ ------------------- ---------------------
<S> <C> <C>
Wellington Management Company, LLP(2).................... 2,819,500 11.1%
75 State Street
Boston, MA
The Joseph Eagle 1989 Settlement Trust(3)................ 1,445,166 5.7%
Portman House
32 Hue Street
St. Helier, Jersey JE1 4HH
Josef H. von Rickenbach(4)............................... 196,508 *
Werner M. Herrmann(5).................................... 98,861 *
A. Dana Callow(6)........................................ 94,579 *
James A. Saalfield(7).................................... 65,130 *
Patrick J. Fortune(8).................................... 33,164 *
Serge Okun(9)............................................ 16,832 *
A. Joseph Eagle(10)...................................... 10,350 *
William T. Sobo, Jr.(11)................................. 31,142 *
James M. Karis(12)....................................... 36,916 *
Barry R. Philpott(13).................................... 22,300 *
Paule Dapres, M.D.(14)................................... 28,708 *
All executive officers and directors as a group (11
persons)(15)........................................... 634,490 2.5%
</TABLE>
- ---------------
* Less than 1% of the outstanding Common Stock.
(1) The number of shares of Common Stock deemed outstanding includes: (i)
25,255,960 shares of Common Stock outstanding as of September 15, 1999; and
(ii) shares issuable pursuant to options held by the respective person or
group which may be exercised within 60 days after September 15, 1999
("presently exercisable" stock options), as set forth below.
(2) Ownership is stated as of June 30, 1999, as reflected in a Schedule 13G
filed by Wellington Management Company, LLP ("Wellington") with the
Securities and Exchange Commission. Wellington is a
3
<PAGE> 7
registered investment adviser. Wellington has shared power to vote or direct
the vote of such shares and has shared power to dispose or direct the
disposition of such shares.
(3) The Joseph Eagle Settlement Trust (the "Trust") has sole power to vote such
shares and sole power to dispose of such shares. All voting and investment
power with respect to any securities held by the Trust is vested in the
trustees. The trustees of the Trust are Edward James Noel and Raleigh
Nominee Limited (formerly Contra Nominees Limited). The sole shareholder of
Raleigh Nominee Limited is LSI Holdings Limited. A. Joseph Eagle, a
director of the Company, is not considered a beneficial owner of the Trust.
(4) Includes 94,500 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(5) Includes 6,875 shares of Common Stock issuable pursuant to presently
exercisable stock options. Includes 91,986 shares of Common Stock owned by
Sawema Investments Ltd., a Caymans Island corporation and the sole
shareholder of Sawema Trust, of which Dr. Herrmann is currently the sole
beneficiary.
(6) Includes 79,997 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(7) Includes 54,498 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(8) Consists of 33,164 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(9) Consists of 12,832 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(10) Includes 1,000 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(11) Includes 27,750 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(12) Includes 35,750 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(13) Includes 20,250 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(14) Included 27,000 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(15) Includes 393,616 shares of Common Stock issuable pursuant to presently
exercisable stock options.
4
<PAGE> 8
ELECTION OF DIRECTORS
In accordance with the Company's Restated Articles of Organization, the
Company's Board is divided into three classes: the Class I, Class II and Class
III directors. Each director is elected for a three-year term of office, with
one class of directors being elected at each annual meeting of stockholders. The
Class I directors' terms will expire at this Meeting. Each director holds office
until his successor is elected and qualified or until his earlier death,
resignation or removal. The nominees for Class I directors are Patrick J.
Fortune, Ph.D. and Prof. Dr. Med. Werner M. Herrmann. The information below sets
forth for each member of the Board, including the Class I nominees to be elected
at the Meeting, such person's age, principal occupations during the past five
years and certain other information.
All shares of Common Stock that are entitled to vote and are represented at
the Meeting by properly executed proxies received prior to or at the Meeting and
not duly and timely revoked, will be voted at such Meeting in accordance with
the instructions indicated in such proxies. Shares represented by all proxies
received by the Board and not marked so as to withhold authority to vote for the
nominees to the Board will be voted (unless a nominee is unable or unwilling to
serve) FOR the election of the nominees named below. The election of the
directors will be determined by a plurality of the votes cast at the Meeting.
The Board knows of no reason why the nominees would be unable or unwilling to
serve, but if such should be the case, proxies may be voted for the election of
other persons.
CLASS I DIRECTORS: TO BE ELECTED AT THE 1999 ANNUAL MEETING OF STOCKHOLDERS
PATRICK J. FORTUNE, PH.D., 52, was elected a director of the Company in
June 1996 and is a member of the Compensation Committee of the Board. Mr.
Fortune is President, Chief Operating Officer and a director of New Era
Networks, Inc. From 1995 to 1999, Mr. Fortune was Vice President, Information
Technology and Chief Information Officer of Monsanto Company. From 1994 to
October 1995, Mr. Fortune was President and Chief Operating Officer, Chief
Information Officer and a member of the Board of Directors of Coram Healthcare
Corporation. From 1991 to 1994, Mr. Fortune was Corporate Vice President,
Information Management at Bristol-Myers Squibb. Prior to that, Mr. Fortune was
Senior Vice President and General Manager of Packaging Corporation of America, a
subsidiary of Tenneco and held several management positions with Baxter
International, Inc., including Corporate Vice President, Vice President,
Research and Development and Vice President, Information Services.
PROF. DR. MED. WERNER M. HERRMANN, 58, is a Senior Vice President of
PAREXEL and was elected a director of the Company in April 1991. Dr. Herrmann
founded a Berlin-based provider of clinical and biostatistical and clinical data
management services in 1982, which was acquired by PAREXEL and renamed PAREXEL
GmbH Independent Pharmaceutical Research Organization. Prior to 1982, Dr.
Herrmann was head of the Psychiatry and Neurology Branch, Department of
Experimental and Clinical Pharmacology, Institute for Drugs, Federal Health
Office, Berlin, Germany, from 1979 to 1982. Dr. Herrmann is a Full Professor at
the Department of Psychiatry, Free University of Berlin.
5
<PAGE> 9
CLASS II DIRECTORS: TERM EXPIRES AT 2000 ANNUAL MEETING OF STOCKHOLDERS
JAMES A. SAALFIELD, 52, was initially elected a director of the Company in
January 1993 and is a member of the Audit Committee and the Stock Option
Committee of the Board. Mr. Saalfield is a retired general partner of Fleet
Venture Partners I, II, III and IV and was managing general partner of Dean's
Hill L.P. from 1995 to 1996. He is managing general partner of The Still River
Fund and The Still River Fund II and President of The Still River Management
Company. Mr. Saalfield served as the senior vice president of Fleet Venture
Resources, Inc. and senior vice president of Fleet Growth Resources, Inc. from
1985 to 1993.
SERGE OKUN, 53, was initially elected a director of the Company in November
1997. Mr. Okun is President and Chief Executive Officer of PST International and
President of BMTS. Prior to his positions at PST International, Mr. Okun held
several senior management positions including Corporate Executive Vice President
and Corporate Senior Vice President at Dun & Bradstreet in addition to various
senior management positions at IMS International and A.C. Nielson Company, two
companies constituting Dun & Bradstreet's Marketing Information Services
Division. At IMS International, Mr. Okun held several positions including
President, Chief Executive Officer, Senior Vice President, President IMS
America, President IMS France and General Manager IMS Canada. At A.C. Nielson
Company, Mr. Okun was President and Chief Executive Officer. Mr. Okun is a
director of ADIDAS AG and several privately held companies including MediMedia,
BMTS and Fin'Objects.
A. JOSEPH EAGLE, 52, was initially elected a director of the Company in
March 1998. Mr. Eagle is President of the Company's Medical Marketing Services
Division and Managing Director of PAREXEL MMS Europe Limited, formerly PPS
Europe Limited, which was acquired by the Company in March 1998. Prior to 1985,
Mr. Eagle served as Marketing Director of Ciba Geigy UK Ltd. and was a Vice
President of both Pfizer Asia Management Centre and Pfizer Africa Middle East.
Prior to his service at Pfizer, Mr. Eagle was a product manager at Wellcome
International.
CLASS III DIRECTORS: TERM EXPIRES AT 2001 ANNUAL MEETING OF STOCKHOLDERS
JOSEF H. VON RICKENBACH, 44, co-founded PAREXEL in 1983 and has served as a
director since then. Prior to his involvement with PAREXEL, he was European Area
Manager with ERCO (now ENSECO), Inc., a diversified testing and technical
consulting company. Mr. von Rickenbach has worked for Schering-Plough, Inc. and
3M (East), a division of Minnesota Mining and Manufacturing, Inc. Mr. von
Rickenbach received an M.B.A. from the Harvard University Graduate School of
Business Administration and has an undergraduate degree from the Lucerne College
of Economics and Administration.
A. DANA CALLOW, JR., 47, was elected a director of the Company in June 1986
and is a member of the Audit Committee, Compensation Committee and Stock Option
Committee of the Board. Mr. Callow is the Managing General Partner of the
general partner of Boston Millennia Partners Limited Partnership, a venture
capital firm. He is also a general partner of Boston Capital Ventures
International Limited Partnership, Boston Capital Ventures Limited Partnership,
and Boston Capital Ventures II and III, each a venture capital firm. Mr. Callow
is a director of ILEX Oncology, Inc.
6
<PAGE> 10
DIRECTORS' COMPENSATION
Non-employee members of the Board receive $1,500 per day of in-person Board
meetings (with no more than one $1,500 payment being made for any one day and no
more than $7,500 per year for each director). Non-employee directors are also
reimbursed for their reasonable out-of-pocket expenses incurred in attending
meetings. There are no family relationships among any of the executive officers
or directors of the Company.
Until September 1998, under Part II of the Company's Amended and Restated
1995 Stock Plan (the "1995 Plan"), non-employee directors of the company were
eligible to receive an annual formula grant of Non-qualified Options. Part II of
the 1995 Plan provided for the automatic grant of an option to purchase up to
15,000 shares of Common Stock on the first business day of July of each year to
each non-employee director depending upon attendance by such non-employee
director at meetings of the Board and committees thereof during the prior year.
The exercise price of Non-qualified Options granted under Part II is 100% of the
fair market value of the Company's Common Stock on the date of grant as defined
in the 1995 Plan. Non-qualified Options granted to non-employee directors
pursuant to Part II of the 1995 Plan were transferable to family members or
other persons for estate planning purposes. All Non-qualified options granted
under Part II are exercisable in three equal vesting periods unless a change of
control of the Company occurs in which case they become fully exercisable
immediately.
In September 1998, the Board voted to amend the 1995 Plan to eliminate Part
II. Accordingly, since that time, all option grants to non-employee directors
have been made under Part I of the 1995 Plan according to a discretionary
arrangement and without the automatic annual formula grant to non-employee
directors. During the fiscal year ended June 30, 1999, non-employee directors
were granted options to purchase 80,000 shares of Common Stock in aggregate. The
options granted to non-employee directors vest in three equal installments
commencing on the first anniversary of the date of grant, unless a change in
control of the Company occurs in which case they become fully exercisable.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board met fifteen times and took action by unanimous written consent
twice during the fiscal year ended June 30, 1999. The Board has a standing Audit
Committee, Stock Option Committee and Compensation Committee. The Audit
Committee, which oversees the accounting and financial functions of the Company,
met three times during the fiscal year ended June 30, 1999. Messrs. Callow and
Saalfield are the current members of the Audit Committee. The Stock Option
Committee of the Company, which reviews and approves option grants and
administers the Company's stock option plans, met once and took action by
unanimous written consent five times during the fiscal year ended June 30, 1999.
Messrs. Callow and Saalfield are the current members of the Stock Option
Committee. The Compensation Committee of the Company, which reviews and makes
recommendations concerning executive compensation, met four times and took
action by written consent once during the fiscal year ended June 30, 1999.
Messrs. Callow and Fortune are the current members of the Compensation
Committee.
7
<PAGE> 11
During the fiscal year ended June 30, 1999, all of the Company's directors
attended at least seventy-five percent of the total number of meetings of the
Board and at least seventy-five percent of the total number of meetings of all
committees of the Board on which they served.
EXECUTIVE OFFICERS
Executive officers serve at the discretion of the Board on an annual basis
and serve until their successors have been duly elected and qualified or until
their earlier resignation or removal. The current executive officers of the
Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- ---- --- -----------
<S> <C> <C>
Josef H. von Rickenbach......................... 44 President, Chief Executive Officer and Chairman
of the Board
William T. Sobo, Jr............................. 42 Senior Vice President, Chief Financial Officer,
Treasurer and Clerk
Barry R. Philpott............................... 50 President, PAREXEL Consulting Group
A. Joseph Eagle................................. 52 President, Medical Marketing Services
Paule Dapres, M.D............................... 55 Executive Vice President
</TABLE>
WILLIAM T. SOBO, JR. is responsible for all financial activities of the
Company as well as corporate development and administrative activities in North
America. Prior to joining PAREXEL in 1987, Mr. Sobo was a supervisor at Coopers
& Lybrand in the emerging business/middle market group and also served as the
controller for a regional financial consulting firm. Mr. Sobo is a Certified
Public Accountant and received an M.B.A. from Boston University and a B.S. from
the Wharton School at the University of Pennsylvania.
BARRY R. PHILPOTT is responsible for the general management of PAREXEL's
Consulting Group as well as the coordination of corporate development and
administrative activities in Europe. Prior to joining PAREXEL in 1993, Mr.
Philpott served in several senior management positions with EG&G Inc., a
diversified technology company based in Massachusetts, most recently as General
Manager of its Worldwide Optical & Analytical Division. Previous to this
position he was the President and Managing Director of EG&G Applied Research
Corp.
PAULE DAPRES, M.D. is responsible for the largest segment of the Company's
clinical research services business unit. Prior to joining PAREXEL in 1992, Dr.
Dapres served in several senior management positions at Schering Plough, Inc.
Dr. Dapres received her M.D. degree from the University of Paris.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company served as a member of the Compensation
Committee (or other Board committee performing equivalent functions or, in the
absence of any such committee, the entire Board of Directors) of another entity,
one of whose executive officers served as a director of the Company.
8
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
annual and long-term compensation paid or accrued by the Company for services
rendered to the Company, in all capacities, for the past three fiscal years by
its Chief Executive Officer (the "CEO") and the four other most highly
compensated executive officers other than the CEO, in each case whose total
salary and bonus exceeded $100,000 (collectively, the "Named Executive
Officers"). The Company did not grant any restricted stock awards or stock
appreciation rights or make any long-term incentive plan payouts during the
fiscal years 1999, 1998 or 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------- ------------------
AWARDS
NAME AND FISCAL OTHER ANNUAL SECURITIES ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION UNDERLYING/OPTIONS COMPENSATION
- ------------------ ------ --------- -------- ------------ ------------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Josef H. von
Rickenbach........... 1999 $350,000 $ 0 $19,849(2) 8,750 $11,972(3)
President, Chief 1998 350,252 35,938 5,124(2) 60,000 7,412(4)
Executive Officer 1997 255,208 160,626(7) 4,302(2) 0 9,945(9)
and Chairman
James M. Karis......... 1999 $264,000 $ 0 -- 5,300 $10,138(10)
President, Worldwide 1998 264,231 104,000 -- 30,000 7,664(5)
Research Operations 1997 115,455 44,000 -- 15,000 3,000(6)
and Chief Operating
Officer
Barry R. Philpott...... 1999 $213,525 $ 10,032 $19,766(2) 3,850 $17,885(6)
President, PAREXEL 1998 214,955 27,461 13,264(2) 30,000 19,392(6)
Consulting Group 1997 193,860 97,334 9,305(2) 0 15,509(6)
William T. Sobo,
Jr. ................. 1999 $225,000 $ 15,000 -- 4,550 $ 3,000(6)
Senior Vice
President, 1998 225,252 17,500 -- 30,000 11,791(8)
Chief Financial
Officer, 1997 175,000 73,750 -- 0 3,618(6)
Treasurer and Clerk
A. Joseph Eagle(11).... 1999 $213,525 $ 0 $23,652(2) 3,850 $19,217(6)
President, Medical 1998 172,563 0 18,693(2) 0 15,531(6)
Marketing Services
</TABLE>
- ---------------
(1) Includes commissions, if any.
(2) Automobile allowance.
(3) Includes $3,000 in contributions to defined contribution plan and $8,972
for unused paid vacation.
(4) Includes $3,000 in contributions to defined benefit plans and $4,412 for
unused paid vacation.
(5) Includes $3,000 in contributions to defined benefit plans, $1,298 for
unused paid vacation and $3,366 for relocation expenses.
(6) Contributions to defined benefit plans.
9
<PAGE> 13
(7) Amount includes $70,000 earned in fiscal 1996 but paid in fiscal 1997.
(8) Includes $3,000 in contributions to defined benefit plans and $8,791 for
unused paid vacation.
(9) Includes $3,087 in contributions to defined contribution plans and $6,858
for unused paid vacation.
(10) Includes $3,000 in contributions to defined contribution plan and $7,138
for unused paid vacation.
(11) Mr. Eagle began employment in March 1998. His reported salary for 1998 is
based on a full year of employment.
EMPLOYMENT AGREEMENTS
The Company and James M. Karis are parties to a letter agreement of
employment dated December 30, 1996. On July 2, 1999, Mr. Karis terminated his
employment with the Company. At the time his employment was terminated, Mr.
Karis' annual base salary was $264,000. Pursuant to the terms of the agreement,
the Company will continue to pay Mr. Karis' base salary for six months from the
date of termination.
The Company and Barry R. Philpott are parties to a letter agreement of
employment dated July 6, 1993. Mr. Philpott's current annual base salary is
L130,000 (approximately $214,000). The Company may terminate Mr. Philpott's
employment upon two months' notice and upon payment of severance benefits equal
to one month's base salary per full year of service, with a maximum payment
equal to six months' base salary.
Dr. Herrmann entered into a letter agreement of employment with the Company
effective July 1, 1997 which was amended on April 1, 1998. Dr. Herrmann's
current annual base salary under this agreement is $103,110 . In addition, Dr.
Herrmann and PAREXEL GmbH are parties to an employment agreement dated June 30,
1993 and amended effective July 1, 1997 and April 1, 1998. Dr. Herrmann's
current annual base salary under this agreement is of approximately DM 160,000
(approximately $87,456).
PPS Europe Limited, a subsidiary of the Company, and A. Joseph Eagle are
parties to a letter agreement of employment dated April 17, 1998. Mr. Eagle's
current annual base salary is L130,000 (approximately $214,000). The Company may
terminate the agreement and Mr. Eagle's employment upon twelve months notice and
upon payment of Mr. Eagle's salary, bonus and other benefits until the
expiration of such twelve month period. The agreement terminates immediately in
the event Mr. Eagle is terminated for cause.
In addition, on October 20, 1998, the Company entered into executive
severance agreements with each of Messrs. Philpott, Karis and Sobo. Under the
terms of the agreements, if the Company terminates the executive's employment
without "cause" (as defined in the agreement) or the executive terminates his
employment for "good reason" (as defined in the agreement) during the period
beginning 9 months prior to
10
<PAGE> 14
and ending 18 months following a "change of control" of the Company, as defined
in the agreement, each of Messrs. Philpott, Karis and Sobo would be entitled to
receive specified severance benefits. If employment is terminated prior to a
change of control, the executive would be entitled to receive a lump sum cash
payment equal to the salary such executive would have received between the date
of termination and the change of control, assuming he had remained employed by
the Company through the change of control, plus a lump sum cash severance
payment equal to twelve months of his monthly base salary, at the highest
monthly base salary rate in effect for such executive in the twelve month period
prior to the termination of employment, plus the maximum annual bonus that could
have been payable to such executive during the year in which the change of
control occurs. If employment is terminated following a change of control by the
executive for Good Reason or by the Company without Cause (both as defined in
the agreement), the executive officer would be entitled to receive a lump sum
cash severance payment equal to twelve months of his monthly base salary, at the
highest monthly base salary rate in effect for such executive in the twelve
month period prior to the termination of employment, plus the maximum annual
bonus that would have been payable to such executive during the year in which
the change of control occurs. In addition, in either event, the executive is
entitled to accelerated vesting under incentive compensation, stock option and
benefit plans of the Company, and for a period of twelve months following the
change of control, insurance coverage substantially similar to the coverage each
executive had been receiving prior to any such termination.
On October 20, 1998, the Company and Josef H. von Rickenbach, the Company's
President and Chief Executive Officer, entered into an employment agreement for
a term of three years. Such three year term is automatically renewed for
successive three year terms unless either the Company or Mr. von Rickenbach
notifies the other party not less than 90 days prior to the automatic renewal
date. The agreement provides for a current annual base salary of $350,000 and a
bonus target of not less than the amount by which $560,000 exceeds his
then-current base salary for such fiscal year. In addition to termination as a
result of non renewal by either party, the agreement may be terminated by the
Company immediately for cause, as defined in the agreement, by Mr. von
Rickenbach upon a material breach of the agreement by the Company, or upon death
or disability. In addition, the agreement may be terminated at the election of
either the Company or Mr. von Rickenbach without cause at any time upon sixty
(60) day prior written notice. In the event of termination by the Company for
death or disability or for any other reason other than for cause, or by Mr. von
Rickenbach for a material breach of the agreement by the Company, Mr. von
Rickenbach would be entitled to receive a lump sum payment of his then-current
base salary through the end of the term of the agreement, plus bonus payments in
the amount equal to the greater of his target amount for such year or the actual
amount he received in the prior year. All options would become fully
exercisable. In addition, if Mr. von Rickenbach terminates his employment during
the period beginning 12 months prior to and ending 18 months following a change
in control, as defined in the agreement, and such termination is for one of the
approved reasons set forth in the agreement, Mr. von Rickenbach would be
entitled to receive a lump sum payment equal to his then-current base salary for
the balance of the term of the agreement plus a lump sum payment of bonus for
each year through the end of the term of the agreement. In addition, all options
would become fully exercisable. In all cases, vested options would remain
exercisable for the period after termination as specified in the respective
option agreements.
11
<PAGE> 15
The executive officers of the Company are bound by the terms of a Key
Employee Confidentiality and Invention Agreement, pursuant to which confidential
information proprietary to the Company obtained during the term of employment by
the Company may not be disclosed by the employee during or subsequent to such
term of employment, and pursuant to which the employee agrees not to compete
with the business of the Company during and for one year subsequent to the term
of employment.
OPTIONS AND STOCK PLANS
Option Grants.
The following table sets forth information concerning options granted
pursuant to the 1995 Plan during the fiscal year ended June 30, 1999 to the
Named Executive Officers as reflected in the Summary Compensation Table above.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL OPTIONS VALUE AT ASSUMED ANNUAL
NUMBER OF OR SARS RATES OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES IN EXERCISE OR TERM(1)
OPTIONS/SARS FISCAL BASE PRICE EXPIRATION -----------------------
NAME GRANTED YEAR(2) PER SHARE(3) DATE 5% 10%
- ---- ------------ ------------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Josef H. von
Rickenbach......... 8,750(4) 1.4% $21.31 1/26/07 $91,479 $227,149
James M. Karis....... 5,300(4) 0.8% $21.31 1/26/07 $55,410 $137,587
Barry R. Philpott.... 3,850(4) 0.6% $21.31 1/26/07 $39,205 $ 97,349
William T. Sobo,
Jr................. 4,550(4) 0.7% $21.31 1/26/07 $47,569 $118,117
A. Joseph Eagle...... 3,850(4) 0.6% $21.31 1/26/07 $40,251 $ 99,945
</TABLE>
- ---------------
(1) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation of the
Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission (the "Commission") and do not reflect the Company's estimate of
future stock price growth. Actual gains, if any, on stock option exercises
and Common Stock holdings are dependent on the timing of such exercises and
the future performance of the Company's Common Stock. There can be no
assurance that the rates of appreciation assumed in this table can be
achieved or that the amounts reflected will be received by the individuals.
(2) Based on an aggregate of 648,700 shares subject to options granted in the
fiscal year ended June 30, 1999 to employees of the Company.
12
<PAGE> 16
(3) The exercise price per share was equal to the fair market value of the
Company's Common Stock as defined in 1995 Plan.
(4) Exercisable in two installments with 1,000 options vesting in 90 days and
remaining options vesting in one year from grant date.
Option Exercises and Fiscal Year-End Option Table. The following table
sets forth certain information concerning options granted to the Named Executive
Officers, including (i) the number of shares of Common Stock purchased upon
exercise of options in the fiscal year ended June 30, 1999; (ii) the net value
realized upon such exercise; (iii) the number of unexercised stock options
outstanding as of June 30, 1999; and (iv) the value of such unexercised options
at June 30, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED,
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END(2)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Josef H. von
Rickenbach............. -- -- 91,500 77,250 $348,600 --
James M. Karis........... -- -- 34,250 71,050 -- --
Barry R. Philpott........ 6,500 $ 62,578 18,750 40,100 $ 14,525 $14,525
William T. Sobo, Jr...... 10,000 $185,625 26,250 38,300 $ 58,100 --
A. Joseph Eagle.......... -- -- 1,000 2,850 -- --
</TABLE>
- ---------------
(1) Amounts disclosed in this column do not reflect amounts actually received by
the Named Executive Officers but are calculated based on the difference
between the fair market value of Common Stock on the date of exercise and
exercise price of the options. Named Executive Officers will receive cash
only if and when they sell the Common Stock issued upon exercise of the
options and the amount of cash, if any, received by such individuals is
dependent on the price of the Company's Common Stock at the time of such
sale.
(2) Value is based on the difference between the option exercise price and the
fair market value at June 30, 1999, the fiscal year-end ($13.313 per share
as quoted on the Nasdaq National Market) multiplied by the number of shares
underlying the option.
Stock Plans. The Company currently maintains three stock ownership plans:
the Second Amended and Restated 1995 Stock Plan, the 1995 Employee Stock
Purchase Plan and the 1998 Non-Qualified, Non-Officer Stock Option Plan.
Second Amended and Restated 1995 Stock Plan. The Second Amended and
Restated 1995 Stock Plan (the "1995 Plan") was adopted by the Board of Directors
of the Company on September 14, 1995 and approved by the stockholders on
November 3, 1995. The Board of Directors twice approved amendments to the 1995
Plan: (i) on July 8, 1997, which amendments became effective upon shareholder
approval on
13
<PAGE> 17
November 13, 1997, and (ii) on September 24, 1998. The 1995 Plan currently
authorizes the grant of Stock Rights to acquire 2,438,334 shares of Common
Stock.
The 1995 Plan provides for the grant of incentive stock options to officers
and other employees of the Company and the grant of non-qualified stock options
and stock awards to employees, consultants, directors and officers of the
Company. The 1995 Plan is administered by the Stock Option Committee of the
Board of Directors. The Committee has the authority to determine the persons to
whom Stock Rights shall be granted (subject to certain eligibility requirements
for grants of ISOs), the number of shares covered by each such grant, in respect
to ISOs, Non-qualified Options, and Purchases, the exercise of purchase price
per share, the time or times at which Stock Rights shall be granted, and other
terms and provisions governing the Stock Rights, including the nature of such
Stock Right as an ISO, Non-qualified Option, Award, or Purchase, as well as the
restrictions, if any, applicable to shares of Common Stock issuable upon
exercise of Stock Rights. In addition, the Committee has authority to determine
the duration of each option, which generally is not more than eight years from
its date of grant, or in the case of any ISO granted to an employee owning more
than 10% of the total combined voting power of all classes of stock of the
Company or any Related Company, not more that five years from its date of grant.
The exercise price per share of Non-qualified Options and ISOs granted
under the 1995 Plan cannot be less than the fair market value of the Common
Stock on the date of grant, or, in the case of ISOs granted to employees holding
more than 10% of the total combined voting power of all classes of stock of the
Company or any Related Company, 110% of the fair market value of the Common
Stock on the date of grant. The number of shares of Common Stock which may be
issued pursuant to the 1995 Plan as Awards or Purchases may not exceed 20% of
the total number of shares of Common Stock issuable pursuant to the 1995 Plan.
If an ISO optionee ceases to be employed by the Company or any Related
Company other than by reason of death or disability, no further installments of
his or her ISOs will become exercisable, and the ISOs shall terminate after the
passage of 60 days from the date of termination of employment (but not later
than their specified expiration dates), except to the extent that such ISOs
shall have been converted into Non-qualified Options. If an optionee dies, any
ISO held by the optionee may be exercised, to the extent exercisable on the date
of death, by the optionee's estate, personal representative or beneficiary who
acquires the ISO by will or by the laws of descent and distribution, at any time
within 180 days from the date of the optionee's death (but not later than the
specified expiration date of the ISO). If an ISO optionee ceases to be employed
by the Company by reason of his or her disability (as defined in Section
22(e)(3) of the Code), the optionee may exercise any ISO held by him or her on
the date of termination of employment, to the extent exercisable on that date or
at any time within 180 days from the date of termination of employment (but not
later than the specified expiration date of the ISO).
Non-qualified Options generally are subject to such termination and
cancellation provisions as may be determined by the Committee. Non-qualified
Options granted to non-employee directors will terminate, to the extent not then
vested, when such non-employee director ceases to be a member of the Board. To
the extent vested, the Non-qualified Option may be exercised within 270 days of
the date the optionee ceases to be a member of the Board. Such Non-qualified
Options granted to non-employee directors shall terminate entirely
14
<PAGE> 18
after 270 days have expired. Upon a Change of Control (as defined in the 1995
Plan), any then-unexercisable portion of an Option granted to non-employee
directors shall become immediately and fully exercisable.
Stock Rights may be granted under the 1995 Plan at any time prior to
September 14, 2005, unless the Board of Directors votes to terminate the 1995
Plan sooner. As of the Record Date, options to purchase 1,943,919 shares of
Common Stock were outstanding under the 1995 Plan, of which 576,881 shares were
then exercisable and 256,055 shares remained available for grant.
Options are granted to non-employee directors under Part I of the 1995 Plan
at each regularly scheduled board meeting (approximately 4-5 times per year).
The amount of options granted to each non-employee director at each board
meeting will be dependent upon the number of board and committee meetings
attended by that director during the period commencing on the day following the
prior regularly scheduled board meeting up to and including the regularly
scheduled board meeting at which the options are being granted. The exercise
price of all option grants to non-employee directors shall be the fair market
value of the Company's Common Stock as defined in Section 14(D) of the 1995 Plan
(i.e., the last reported sale price for the Common Stock on Nasdaq on the last
business day preceding the date of grant).
On October 1, 1999 the Board of Directors approved an amendment to the 1995
Plan to increase the number of shares eligible to be issued pursuant to the 1995
Plan by 800,000, subject to shareholder approval at the November 11, 1999 annual
meeting of shareholders. In addition, the Board of Directors amended the 1995
Plan to (i) limit the grant of Awards and Purchases to 20% of the shares subject
to the 1995 Plan, (ii) fix the minimum exercise price of Non-qualified options
at the fair market value of the Company's Common Stock on the date of grant and
(iii) prohibit the re-pricing of options under the 1995 Plan.
In fiscal year ended June 30, 1999, non-employee directors were granted
options for 80,000 shares of Common Stock in aggregate. The options granted will
vest in three equal annual installments.
1995 Employee Stock Purchase Plan. The 1995 Employee Stock Purchase Plan
(the "1995 Purchase Plan") was adopted by the Board of Directors of the Company
on September 14, 1995 and was approved by the stockholders on November 3, 1995.
The 1995 Purchase Plan provides for the issuance of a maximum of 600,000 shares
of Common Stock pursuant to the exercise of nontransferable options granted to
participating employees. Presently, 165,743 shares are available for future
issuance under the 1995 Purchase Plan. The 1995 Purchase Plan is intended to
encourage stock ownership by all eligible employees of the Company so that they
may share in the growth of the Company and designed to encourage eligible
employees to remain in the employ of the Company. It is intended that options
granted pursuant to the 1995 Purchase Plan will constitute options pursuant to
an "employee stock purchase plan" within the meaning of Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code").
The 1995 Purchase Plan is administered by the Stock Option Committee. All
employees of the Company, except employees who immediately after the option was
granted would own five percent or more of the Company's voting stock, whose
customary employment is more than 20 hours per week and for more than five
months in any calendar year are eligible to participate in the 1995 Purchase
Plan. To participate in the 1995 Purchase Plan, an eligible employee must
authorize the Company to deduct an amount (not less than
15
<PAGE> 19
one percent nor more than ten percent of a participant's total compensation)
from his or her total compensation, including base pay or salary and any bonuses
or commissions, generally during six-month periods from September 1 to the last
day of February and from March 1 to August 31 of each calendar year (each a
"Payment Period"), but in no case shall an employee be entitled to purchase more
than 1,000 shares in any Payment Period. Any excess is refunded to the employee
to the extent the 1,000 share limit is exceeded. The exercise price for the
option for each Payment Period is 85% of the lesser of the average market price
of the Common Stock on the first or last business day of the Payment Period. If
an employee is not a participant on the last day of the Payment Period, such
employee is not entitled to exercise his or her option, and the amount of his or
her accumulated payroll deductions will be refunded. An employee's rights under
the 1995 Purchase Plan generally terminate upon his or her voluntary withdrawal
from the plan at any time or upon termination of employment. To date, options to
purchase 434,257 shares of Common Stock have been exercised pursuant to the 1995
Purchase Plan. As of September 15, 1999, 967 employees were participating in the
1995 Purchase Plan. Unless terminated sooner, the 1995 Purchase Plan shall
terminate on September 14, 2005.
1998 Non-Qualified, Non-Officer Stock Option Plan. The 1998 Non-Qualified,
Non-Officer Stock Option Plan (the "1998 Plan") was adopted by the Board of
Directors of the Company on February 26, 1998 In January 1999 the Board of
Directors of the Company approved an amendment to the 1998 Plan to increase the
number of shares issuable under the 1998 Plan to 1,500,000 shares of Common
Stock.
The 1998 Plan provides for the grant of non-qualified stock options to
employees and consultants who are not officers or directors of the Company. The
1998 Plan is administered by the Stock Option Committee of the Board of
Directors, which consists of two directors. The 1998 Plan was adopted by the
Board in order to provide the Company with the ability to offer stock options to
employees of potential acquisition candidates as part of the Company's overall
acquisition strategy. The stock options would be granted in order to provide an
incentive for such employees to continue their employment after such an
acquisition and aid the Company in retaining the key qualified and important
employees. The Plan also allows for the grant of options to existing employees
of the Company. However, according to the terms of the Plan, no options may be
granted to officers or directors of the Company.
Subject to the provisions of the 1998 Plan, the Stock Option Committee has
authority to select the optionees and determine the terms of the stock options
granted, including (i) the time or times at which stock options shall be
granted; (ii) the number of shares covered by each grant; (iii) when the stock
option becomes exercisable; (iv) the exercise price per share; (v) whether
transfers of options to family members or other persons for estate planning
purposes will be permitted; and (vi) the restrictions, if any, applicable to
shares of Common Stock issuable upon the exercise of stock options.
Stock options may be granted under the 1998 Plan at any time prior to
February 26, 2008, unless the Board of Directors votes to terminate the 1998
Plan sooner. As of the Record Date, options to purchase 725,256 shares of Common
Stock were outstanding under the 1998 Plan, of which 318,576 shares were then
exercisable and 709,960 shares remained available for grant.
16
<PAGE> 20
Federal Income Tax Consequences. THE FOLLOWING DISCUSSION OF UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF THE ISSUANCE AND EXERCISE OF OPTIONS GRANTED
UNDER THE 1995 PLAN, THE 1995 PURCHASE PLAN AND THE 1998 PLAN, AND OF CERTAIN
OTHER RIGHTS GRANTED UNDER THE 1995 PLAN, IS BASED UPON THE PROVISIONS OF THE
CODE AS IN EFFECT ON THE DATE OF THIS PROXY STATEMENT, CURRENT REGULATIONS, AND
EXISTING ADMINISTRATIVE RULINGS OF THE INTERNAL REVENUE SERVICE. IT IS NOT
INTENDED TO BE A COMPLETE DISCUSSION OF ALL OF THE FEDERAL INCOME TAX
CONSEQUENCES OF THESE PLANS OR OF THE REQUIREMENTS THAT MUST BE MET IN ORDER TO
QUALIFY FOR THE DESCRIBED TAX TREATMENT.
A. Incentive Stock Options (individually, an "ISO," and collectively,
"ISOs"). The following general rules are applicable under current United States
federal income tax law to ISOs granted under the 1995 Plan:
1. In general, an optionee will not recognize any income upon grant of
an ISO or upon the issuance of shares to him or her upon the exercise of an
ISO, and the Company will not be entitled to a federal income tax deduction
upon either the grant or the exercise of an ISO.
2. If shares acquired upon exercise of an ISO are not disposed of
within (i) two years from the date the ISO was granted or (ii) one year
from the date the shares are issued to the optionee pursuant to the ISO
exercise (the "Holding Period"), the difference between the amount realized
on any subsequent disposition of the shares and the exercise price will
generally be treated as capital gain or loss to the optionee.
3. If shares acquired upon exercise of an ISO are disposed of and the
optionee does not satisfy the Holding Periods (a "Disqualifying
Disposition"), then in most cases the lesser of (i) any excess of the fair
market value of the shares at the time of exercise of the ISO over the
exercise price or (ii) the actual gain on disposition, will be taxed to the
optionee as ordinary income in the year of such disposition.
4. In any year that an optionee recognizes ordinary income on a
Disqualifying Disposition of shares acquired upon exercise of an ISO, the
Company generally will be entitled to a corresponding federal income tax
deduction.
5. The difference between the amount realized by an optionee as the
result of a Disqualifying Disposition and the sum of (i) the exercise price
and (ii) the amount of ordinary income recognized under the above rules
generally will be treated as capital gain or loss.
6. An optionee may be entitled to exercise an ISO by delivering shares
of the Company's Common Stock to the Company in payment of the exercise
price, if the optionee's ISO agreement so provides. If an optionee
exercises an ISO in such fashion, special rules will apply.
7. In addition to the tax consequences described above, the exercise
of an ISO may result in an "alternative minimum tax." In general, the
amount by which the value of the shares received upon exercise of the ISO
exceeds the exercise price is included in the optionee's alternative
minimum taxable income. A taxpayer is required to pay the higher of his
regular tax liability or the alternative minimum tax. A taxpayer who pays
alternative minimum tax attributable to the exercise of an ISO may be
entitled to a tax credit against his or her regular tax liability in later
years.
17
<PAGE> 21
8. Special rules apply if the shares acquired upon the exercise of an
ISO are subject to vesting, or are subject to certain restrictions on
resale under federal securities laws applicable to directors, officers or
10% stockholders.
9. If an ISO is transferred by will or by the laws of descent and
distribution, and such ISO is exercised by the optionee's estate or by the
distributee(s) of such estate, such exercise is treated in the same manner
as if the ISO had been exercised by the optionee. Consequently, neither the
estate nor the distributee(s) will recognize ordinary income upon exercise
of the ISO, provided the optionee was an employee of the company either at
the time of death or within three months before such time. The exercise of
the ISO may result in alternative minimum tax.
B. Non-Qualified Stock Options. The following general rules are applicable
under current federal income tax law to options granted under the 1995 Plan
which do not qualify as ISOs, and to all options granted under the 1998 Plan
(individually, a "Non-qualified Option", and collectively, "Non-qualified
Options"):
1. In general, an optionee will not recognize any income upon the
grant of a Non-qualified Option, and the Company will not be entitled to a
federal income tax deduction upon such grant.
2. An optionee generally will recognize ordinary income at the time of
exercise of the Non-qualified Option in an amount equal to the excess, if
any, of the fair market value of the shares on the date of exercise over
the exercise price. The Company may be required to withhold income tax on
this amount.
3. When an optionee sells the shares acquired upon the exercise of a
Non-qualified Option, he or she generally will recognize capital gain or
loss in an amount equal to the difference between the amount realized upon
the sale of the shares and his or her basis in the shares (generally, the
exercise price plus the amount taxed to the optionee as ordinary income).
4. When an optionee recognizes ordinary income attributable to a
Non-qualified Option, the Company generally will be entitled to a
corresponding federal income tax deduction.
5. An optionee may be entitled to exercise a Non-qualified Option by
delivering shares of the Company's Common Stock to the Company in payment
of the exercise price. If an optionee exercises a Non-qualified Option in
such fashion, special rules will apply.
6. Special rules apply if the shares acquired upon the exercise of a
Non-qualified Option are subject to vesting, or are subject to certain
restrictions on resale under federal securities laws applicable to
directors, officers or 10% stockholders.
7. If a Non-qualified Option is transferred by will or by the laws of
descent and distribution, and such option is exercised by the optionee's
estate or by the distributee(s) or such estate, at the time of exercise
either the optionee's estate or the distributee(s) of such estate generally
will recognize ordinary income in an amount equal to the excess, if any, of
the fair market value of the shares on the date of exercise over the
exercise price.
18
<PAGE> 22
8. In general, the gratuitous transfer of a vested option will be
treated as a "completed gift" and the value of the option at the time of
transfer will be subject to federal gift tax, for which an annual exclusion
may apply. Gifts in excess of the annual exclusion will generally be
counted toward the optionee's unified credit exemption equivalent. The
transfer of an unvested option is generally not treated as a completed gift
until the option vests. accordingly, with respect to such a the transfer,
the value of the option at the time the option vests will be subject to
federal gift tax. As the donor, the optionee generally will be liable for
any federal gift tax. When the donee exercises the option, the optionee
generally will recognize ordinary income in an amount equal to the excess,
if any, of the fair market value of the shares on the date of exercise over
the exercise price.
C. Stock Awards and Purchases. The following general rules are applicable
under current federal income tax law to Awards and Purchases (each as defined
below) under the 1995 Plan:
1. Under current federal income tax law, persons receiving Common
Stock under the 1995 Plan pursuant to an award of Common Stock ("Award") or
a grant of an opportunity to purchase Common Stock ("Purchase") generally
will recognize ordinary income equal to the fair market value of the shares
received reduced by any purchase price paid. The Company generally will be
entitled to a corresponding federal income tax deduction. When such shares
are sold, the seller generally will recognize capital gain or loss.
2. Special rules apply if the shares acquired pursuant to an award or
purchase are subject to vesting, or are subject to certain restrictions on
resale under federal securities laws applicable to directors, officers or
10% stockholders.
D. Options Granted under the 1995 Employee Stock Purchase Plan. The
following general rules are currently applicable under current federal income
tax law to options under the 1995 Purchase Plan:
1. The amounts deducted from an employee's pay under the 1995 Purchase
Plan will be included in the employee's compensation subject to federal
income tax. In general, no additional income will be recognized by the
employee either at the time options are granted pursuant to the 1995
Purchase Plan or at the time the employee purchases shares pursuant to the
1995 Purchase Plan.
2. If the employee disposes of shares purchased pursuant to the 1995
Purchase Plan more than two years after the first business day of the
Payment Period in which the employee acquired the shares, then upon such
disposition the employee will recognize ordinary income in an amount equal
to the lesser of:
(a) the excess, if any, of the fair market value of the shares at
the time of disposition over the amount the employee paid for the
shares, or
(b) the excess of the fair market value of the shares on the first
business day of the Payment Period over the option price.
In addition, the employee generally will recognize capital gain or
loss in an amount equal to the difference between the amount realized upon
the sale of shares and the employee's tax basis in the shares
19
<PAGE> 23
(generally, the amount the employee paid for the shares plus the amount, if
any, taxed as ordinary income).
3. If the employee disposes of shares purchased pursuant to the 1995
Purchase Plan within two years after the first business day of the Payment
Period in which the employee acquired the shares, then upon disposition the
employee will recognize ordinary income in an amount equal to the excess,
if any, of the fair market value of the shares on the last business day of
the Payment Period over the amount the employee paid for the shares.
In addition, the employee generally will recognize capital gain or
loss in an amount equal to the difference between the amount realized upon
the sale of shares and the employee's tax basis in the shares (generally,
the amount the employee paid for the shares plus the amount, if any, taxed
as ordinary income).
4. If the employee disposes of shares purchased pursuant to the 1995
Purchase Plan more than two years after the first business day of the
Payment Period, the Company will not be entitled to any federal income tax
deduction with respect to the options or the shares issued upon their
exercise. If the employee disposes of such shares prior to the expiration
of this two-year holding period, the Company generally will be entitled to
a federal income tax deduction in an amount equal to the amount which is
treated as ordinary income as a result of such disposition.
20
<PAGE> 24
STOCK PERFORMANCE GRAPH
The Stock Price Performance Graph set forth below compares the cumulative
total stockholder return on the Company's Common Stock from November 22, 1995,
the date of the Company's initial public offering, through June 30, 1999, with
the cumulative total return of the Nasdaq U.S. Stock Index and the Nasdaq Health
Services Index over the same period. The comparison assumes $100 was invested on
November 22, 1995 in the Company's Common Stock, in the Nasdaq U.S. Stock Index
and in the Nasdaq Health Services Index and assumes reinvestment of dividends,
if any.
[SHAREHOLDER RETURN GRAPH]
<TABLE>
<CAPTION>
November 22, 1995 June 30, 1999
<S> <C> <C>
PAREXEL International Corporation $100 $138.32
Nasdaq U.S. Stock Index 100 267.83
Nasdaq Health Services Index 100 105.03
</TABLE>
The stock price performance shown on the graph above is not necessarily
indicative of future price performance. Information used in the graph was
obtained from The Nasdaq Stock Market, a source believed to be reliable, but the
Company is not responsible for any errors or omissions in such information.
21
<PAGE> 25
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
Overview. The Company's executive compensation program is administered by
the Compensation Committee and the Stock Option Committee of the Board of
Directors (the "Compensation Committee" and "Stock Option Committee,"
respectively, and "Committees," collectively). Pursuant to authority delegated
by the Board of Directors, the Compensation Committee establishes each year the
non-equity compensation of senior management, reviews, as appropriate, other
compensation standards of the Company and administers the Company's 401(k)
Savings and Retirement Plan. The Stock Option Committee, pursuant to authority
delegated by the Board of Directors, establishes each year the equity
compensation of senior management, reviews, as appropriate, equity compensation
standards of the Company, and administers the Company's 1986 Incentive Stock
Option Plan, 1987 Stock Plan, 1989 Stock Plan, 1995 Stock Plan, 1995 Purchase
Plan and 1998 Non-Qualified, Non-Officer Stock Option Plan.
The members of the Compensation Committee and the Stock Option Committee,
who are currently non-employee directors, bring expertise in matters relating to
executive compensation to their service on the Compensation and Stock Option
Committees gained through their experience on other Boards of Directors of
public and private companies. The current members of the Compensation Committee
are A. Dana Callow, Jr. and Patrick J. Fortune. The current members of the Stock
Option Committee are Mr. Callow and James A. Saalfield.
Procedure for Establishing Compensation. At the beginning of each fiscal
year the Committees establish the annual compensation for the Company's
executive officers based, in part, on recommendations of the Company's Chief
Executive Officer. The Committees review the recommendations, taking into
account the following factors: (i) external market data; (ii) the Company's
performance; (iii) the individual's contribution to the Company's success; and
(iv) the internal equity of compensation levels among executive officers. In
addition, in determining fiscal 1999 compensation levels, the Compensation
Committee and the Stock Option Committee reviewed recommendations from a
compensation consulting firm, including a survey of cash compensation and stock
option awards at similar companies.
Deductibility of Executive Compensation. In general, under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), the Company
cannot deduct, for federal income tax purposes, compensation in excess of
$1,000,000 paid to certain executive officers. This deduction limitation does
not apply, however, to compensation that constitutes "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code
and the regulations promulgated thereunder. The Committees have considered the
limitations on deductions imposed by Section 162(m) of the Code, and it is the
Committees' present intention that, for so long as it is consistent with the
Company's overall compensation objective, substantially all tax deductions
attributable to executive compensation will not be subject to the deduction
limitations of Section 162(m) of the Code.
Elements of Executive Compensation. The Company's compensation policy for
executive officers is designed to achieve the following objectives: (i) to
enhance profitability of the Company and align management's long-term interests
with those of the stockholders; (ii) to reward executives consistent with the
22
<PAGE> 26
Company's annual and long-term performance goals; (iii) to recognize individual
initiative and achievement and (iv) to provide competitive compensation that
will attract and retain qualified executives. Compensation under the executive
compensation program is comprised of cash compensation in the form of salary and
performance-based bonuses, long-term incentive opportunities in the form of
stock options and various benefits, including medical, savings and insurance
plans available to all employees of the Company.
An executive officer's compensation package includes: (i) base salary,
which is based upon the overall performance of the Company and external market
data, (ii) annual performance-based compensation, which is based upon
achievement of pre-determined financial objectives of the Company and individual
objectives, and (iii) long-term incentive compensation, in the form of stock
options, granted with the objective of aligning executive officers' long-term
interests with those of the stockholders and encouraging the achievement of
superior results over an extended period. In addition, the compensation program
is comprised of various benefits, including medical, savings and insurance plans
and the Company's 1995 Purchase Plan, which are generally available to all
employees of the Company.
Base Compensation. Base salaries for executive officers are targeted at
competitive market levels for their respective positions, levels of
responsibility and experience. In setting base cash compensation levels for
executive officers, the Compensation Committee generally takes into account such
factors as: (i) the Company's past financial performance and future
expectations; (ii) the general and industry-specific business environment; (iii)
the individual executive officer's base compensation in the prior year; (iv)
periodic published surveys of base compensation at comparable companies; (v)
corporate and individual performance and (vi) recommendations from a
compensation consulting firm. The Compensation Committee's review of the
foregoing factors is subjective and the Compensation Committee assigns no fixed
value or weight to any specific factors when making its decisions regarding the
salary of executive officers.
Performance-Based Compensation. The Company's performance-based
compensation policies are designed to reward executive officers when the Company
meets or exceeds pre-determined goals and are also based on various
non-financial objectives such as ability to recognize and pursue new business
opportunities and initiate programs to enhance the Company's growth and success.
Performance-based cash compensation is generally awarded based on formulas
established by the Compensation Committee at the time salaries are fixed. Bonus
formulas for each executive officer are based on the Company's achieving
specified objectives set forth in the Company's annual operating plan.
In establishing performance bonus formulas for the Company's executive
officers, the Compensation Committee considered: (i) the annual base
compensation of each individual; (ii) individual performance; (iii) the actual
performance of the Company as compared to projected performance under the
Company's annual operating plan; (iv) the projected future performance of the
Company; (v) the general business environment; and (vi) periodically published
surveys of performance compensation at comparable companies. The Compensation
Committee's review of the foregoing factors was subjective and the Compensation
Committee did not assign a fixed value or weight to any specific factors when
making its decisions regarding the salary of executive officers.
23
<PAGE> 27
Stock Options. Long-term incentive compensation, in the form of stock
options, allows the executive officers to share in any appreciation in the value
of the Company's Common Stock. The Board of Directors believes that stock option
participation aligns executive officers' interests with those of its
stockholders. When establishing stock option grant levels, the Stock Option
Committee considered the existing levels of stock ownership, previous grants of
stock options, vesting schedules of outstanding options, the current stock price
and recommendations from an independent consulting firm. Stock options granted
under the Company's stock plans generally have an exercise price equal to the
fair market value of the Company's Common Stock on the date of grant. Stock
options granted to executive officers in fiscal year ended 1999 become
exercisable in four equal annual installments.
In awarding stock options, the Stock Option Committee generally reviews:
(i) the overall compensation package of each executive officer; (ii)
periodically published surveys of stock option awards at comparable companies;
(iii) individual performance during the fiscal year in question; (iv) past
financial performance and future expectations; and (v) recommendations from an
independent consulting firm. For new executive officers, the Stock Option
Committee also considers the general and industry-specific business environment
and the expected contribution of the executive officer to the Company over the
short and long term.
In the fiscal year ended June 30, 1999, each executive officer of the
Company was awarded non-qualified stock options. In the aggregate, the executive
officers were granted options to purchase 32,750 shares of Common Stock.
On October 20, 1998, the Company entered into executive severance
agreements with Messrs. Sobo, Karis and Philpott, executive officers who report
directly to Mr. von Rickenbach. Under the terms of the agreements, if the
Company terminates the executive's employment without "cause" (as defined in the
agreement) or the executive terminates his employment for "good reason" (as
defined in the agreement) during the period beginning 9 months prior to and
ending 18 months following a "change of control" of the Company, as defined in
the agreement, each executive officer would be entitled to receive specified
severance benefits. If employment is terminated prior to a change of control,
the executive would be entitled to receive a lump sum cash payment equal to the
salary such executive would have received between the date of termination and
the change of control, assuming he had remained employed by the Company through
the change of control, plus a lump sum cash severance payment equal to twelve
months of his monthly base salary, at his highest monthly base salary rate in
effect in the twelve month period prior to the termination of employment, plus
the maximum annual bonus that could have been payable to such executive during
the year in which the change of control occurs. If employment is terminated
following a change of control, by the executive for Good Reason or by the
Company without Cause (both as defined in the agreement) the executive officer
would be entitled to receive a lump sum cash severance payment equal to twelve
months of his monthly base salary, at his highest monthly base salary rate in
effect in the twelve month period prior to the termination of employment, plus
the maximum annual bonus that would have been payable to such executive during
the year in which the change of control occurs. In addition, in either event,
the executive is entitled to accelerated vesting under incentive compensation,
stock option and benefit plans of the Company,
24
<PAGE> 28
and for a period of twelve months following the change of control, insurance
coverage substantially similar to the coverage each executive had been receiving
prior to any such termination.
The Compensation Committee approved the severance agreements for the
mentioned executive officers in appreciation of the contributions each such
executive officer has made to the Company over the last several years and in
anticipation of the expected contributions of each such executive in the years
to come. The Compensation Committee approved such severance arrangements with
the belief that they are standard among its competitors and other companies of
similar size, promote management stability and continuity and help to ensure
that the executive acts in the best interest of the Company and its shareholders
in considering potential business combination transactions.
CEO Compensation. Generally, Mr. von Rickenbach, the Company's President
and Chief Executive Officer, may participate in the same compensation programs
that are available to the Company's other executive officers and his
compensation is reviewed annually in accordance with the policies applicable to
other executive officers as described above. Mr. von Rickenbach's base salary
for fiscal year 1999 was $350,000 pursuant to the terms of his employment
agreement.
On October 20, 1998, the Company and Josef H. von Rickenbach, the Company's
President and Chief Executive Officer, entered into an employment agreement for
a term of three years. Such three year term is automatically renewed for
successive three year terms unless either the Company or Mr. von Rickenbach
notifies the other party not less than 90 days prior to the automatic renewal
date. The agreement provides for a current annual base salary of $350,000 and a
bonus target of not less than the amount by which $560,000 exceeds his
then-current base salary for such fiscal year. In addition to termination as a
result of non renewal by either party, the agreement may be terminated by the
Company immediately for cause, as defined in the agreement, by Mr. von
Rickenbach upon a material breach of the agreement by the Company, or upon death
or disability. In addition, the agreement may be terminated at the election of
either the Company or Mr. von Rickenbach without cause at any time upon sixty
(60) day prior written notice. In the event of termination by the Company for
death or disability or for any other reason other than for cause, or by Mr. von
Rickenbach for a material breach of the agreement by the Company, Mr. von
Rickenbach would be entitled to receive a lump sum payment of his then-current
base salary through the end of the term of the agreement, plus bonus payments in
the amount equal to the greater of his target amount for such year or the actual
amount he received in the prior year. All options would become fully
exercisable. In addition, if Mr. von Rickenbach terminates his employment during
the period beginning 12 months prior to and ending 18 months following a change
in control, as defined in the agreement, and such termination is for one of the
approved reasons set forth in the agreement, Mr. von Rickenbach would be
entitled to receive (i) a lump sum payment equal to his then-current base salary
for the balance of the term of the agreement or (ii) twice his then-current base
salary, plus a lump sum payment of bonus for each year through the end of the
term of the agreement. In addition, all options would become fully exercisable.
In all cases, vested options would remain exercisable for the period after
termination as specified in the respective option agreements.
The Compensation Committee approved the above employment agreement and
considers the above arrangement with Mr. von Rickenbach to be in the best
interests of the Company and its stockholders. The
25
<PAGE> 29
Compensation Committee considered Mr. von Rickenbach's intimate and thorough
knowledge of the Company's business methods and operations and consider
retention of his services materially important to the preservation and
enhancement of the value of the Company's business. Also, the Compensation
Committee approved the above employment agreement with the belief that such
arrangements are standard among its competitors and other companies of similar
size, promote stability and continuity in the office of Chief Executive Officer
of the Company and help to ensure that the Chief Executive Officer acts in the
best interest of the Company and its shareholders in considering potential
business combination transactions.
Respectfully submitted by the:
<TABLE>
<S> <C>
Compensation Committee: Stock Option Committee:
A. Dana Callow, Jr. A. Dana Callow, Jr.
Patrick J. Fortune James A. Saalfield
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy whereby all transactions between the
Company and its officers, directors and affiliates will be on terms no less
favorable to the Company than could be obtained from unrelated third parties and
will be approved by a majority of the disinterested members of the Company's
Board of Directors.
Patrick J. Fortune, a director of the Company, was an executive officer at
Monsanto Company until March 31, 1999. The Company earned net revenues of
approximately $25,300,000 for fiscal 1999 in connection with clinical trials
management and biostatistical analysis as well as other drug development and
consulting services provided to G.D. Searle & Co., a subsidiary of Montsanto
Company.
RATIFICATION OF SELECTION OF AUDITORS
The Board has selected the firm of PricewaterhouseCoopers LLP, independent
certified accountants, to serve as auditors for the year ending June 30, 2000.
PricewaterhouseCoopers LLP has served as the Company's auditors since 1992. The
Board recommends a vote FOR ratification of this selection.
It is expected that a member of the firm of PricewaterhouseCoopers LLP will
be present at the Meeting, will have an opportunity to make a statement if so
desired and will be available to respond to appropriate questions from the
Company's stockholders.
The ratification of this selection is not required under the laws of the
Commonwealth of Massachusetts, where the Company is incorporated, but the
results of this vote will be considered by the Board in selecting auditors for
future fiscal years.
26
<PAGE> 30
OTHER MATTERS
The Board does not intend to bring any matters before the Meeting other
than those specifically set forth in the Notice of Annual Meeting and it knows
of no matters to be brought before the meeting by others. If any other matters
properly come before the Meeting, it is the intention of the persons named in
the accompanying proxies to vote such proxies in accordance with the judgment of
the Board.
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities Exchange Commission.
Officers, directors and greater-than-ten percent stockholders are required by
SEC regulation to furnish the Company will all Section 16 forms they file.
Based solely on its review of the copies of such forms received by it, the
Company believes that during the fiscal year ended June 30, 1999 all of its
officers, directors and greater-than-ten-percent stockholders complied with all
Section 16(a) filing requirements.
STOCKHOLDER PROPOSALS
The Company currently intends to hold its 2000 Annual Meeting of
Stockholders during November 2000. Proposals of stockholders intended for
inclusion in the Proxy Statement and form of proxy to be furnished to all
stockholders entitled to vote at the Company's 1999 Annual Meeting of
Stockholders must be received at the Company's principal executive offices not
later than June 7, 2000. The deadline for providing timely notice to the Company
of matters that stockholders otherwise desire to introduce at the 2000 Annual
Meeting of Stockholders of the Company is August 18, 2000. In order to curtail
any controversy as to the date on which a proposal was received by the Company,
it is suggested that proponents submit their proposals by certified mail return
receipt requested. Such stockholder proposals should be submitted to PAREXEL
International Corporation, 195 West Street, Waltham, Massachusetts 02451,
Attention: Clerk.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company, and in
addition to soliciting stockholders by mail through its regular employees, the
Company may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have Common Stock registered in the
names of a nominee and, if so, will reimburse such banks, brokers and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket costs.
Solicitation by the Company's officers and employees may also be made of some
stockholders in person or by mail, telephone or telegraph following the original
solicitation. The Company may retain a proxy solicitation firm to assist in the
solicitation of proxies. The Company will bear all reasonable solicitation fees
and expenses if such a proxy solicitation firm is retained.
27
<PAGE> 31
1462-PS-99
<PAGE> 32
PAREXEL INTERNATIONAL CORPORATION
PROXY FOR 1999 ANNUAL MEETING OF STOCKHOLDERS - NOVEMBER 11, 1999
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned Stockholder of PAREXEL International Corporation, a
Massachusetts corporation, revoking all prior proxies, hereby appoints Josef H.
von Rickenbach and Karyn C. Finamore and each of them, proxies, with full
power of substitution, to vote all shares of Common Stock of PAREXEL
International Corporation which the undersigned is entitled to vote at the 1999
Annual Meeting of Stockholders of the Company to be held at the Museum of Our
National Heritage, 33 Marrett Road, Lexington, Massachusetts on November 11,
1999 at 10:00 a.m., local time, and at any adjournments thereof, upon matters
set forth in the Notice of Annual Meeting of Stockholders and Proxy Statement
dated October 7, 1999, a copy of which has been received by the undersigned, and
in their discretion upon any other business that may properly come before the
meeting or any adjournments thereof. Attendance of the undersigned at the
meeting or at any adjourned session thereof will not be deemed to revoke this
proxy unless the undersigned shall affirmatively indicate thereat the intention
of the undersigned to vote said shares is person.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF
NO DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE
PROPOSAL IN ITEMS 2 AND 3.
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE
1. To elect two (2) Class I Directors to serve for three year terms.
NOMINEES: Patrick J. Fortune, Ph.D.
For Withheld
/ / / /
Prof. Dr. med, Werner M. Herrmann
For Withheld
/ / / /
2. To approve a proposal to amend the 1995 Stock Plan to increase the number
of shares of Common Stock available for issuance under the plan by
800,000 shares.
/ / For / / Against / / Withheld
3. To ratify the selection of PriceWaterhouseCoopers LLP as auditors for the
fiscal year ending June 30, 2000.
/ / For / / Against / / Withheld
MARK HERE / /
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
THIS PROXY SHOULD BE DATED AND SIGNED BY THE STOCKHOLDER(S)
EXACTLY AS HIS OR HER NAME APPEARS HEREON AND RETURNED PROMPTLY
IN THE ENCLOSED ENVELOPE. PERSONS SIGNING IN A FIDUCIARY CAPACITY
SHALL SO INDICATE. IF SHARES ARE HELD BY JOINT TENANTS OR AS
COMMUNITY PROPERTY, BOTH SHOULD SIGN.
Signature: Date
------------------------------- ----------------
Signature: Date
------------------------------- ----------------
