UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PAREXEL INTERNATIONAL CORPORATION
(Name of Issuer)
Common Stock,$.01 Par Value
(Title of Class of Securities)
699462107
(CUSIP Number)
Jeffrey S. Hurwitz
Covance Inc.
210 Carnegie Center
Princeton, New Jersey 08540
Telephone: (609) 452-4440
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
Copy to:
Creighton O'M. Condon
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
April 28, 1999
(Date of Event which Requires Filing of this Statement)
-------------------------------------------------------------------------------
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
<PAGE>
CUSIP No. 699462107
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Covance Inc.
-----------------------------------------------------------------------
I.R.S. Identification No. 22-3265977
-----------------------------------------------------------------------
(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
---------------------------------------------------------------
|_| (b)
---------------------------------------------------------------
(3) SEC Use Only
----------------------------------------------------------
(4) Sources of Funds (See Instructions) OO
-----------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
|_|
-----------------------------------------------------------------------
(6) Citizenship or Place of Organization Delaware
-----------------------------------
- ------
Number of (7) Sole Voting Power 4,992,311*
Shares ----------------------------------
Beneficially -----------------------------------------------------
Owned by (8) Shared Voting Power
Each ---------------------------------
Reporting -----------------------------------------------------
Person (9) Sole Dispositive Power 4,992,311*
With -------------------------------
- ------ -----------------------------------------------------
(10) Shared Dispositive Power
----------------------------
-----------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
-----------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
|_|
-----------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
19.9% of the Issuer's common stock (see footnote)
-----------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions) CO
----------------------------
- --------
* Pursuant to a certain stock option agreement dated as of April 28, 1999
between Covance Inc. ("Covance") and PAREXEL International Corporation (the
"Issuer") (the "Option Agreement") and described in Item 4 of this Schedule 13D,
upon the occurrence of certain events specified in the Option Agreement, Covance
may acquire up to 19.9% of the issued and outstanding shares of common stock of
the Issuer at the time of exercise. Since the exact number of shares of
Issuer common stock for which the Option may become exercisable cannot be
determined until the time of exercise, 4,992,311 shares of common stock
purchaseable was used for purposes of this report and is a number equal to 19.9%
of the shares of Issuer common stock issued and outstanding as of April 27,
1999. The Stock Option Agreement is included as Exhibit 4.1 to this Schedule
13D and incorporated herein by reference.
<PAGE>
CUSIP NO. 699462107 SCHEDULE 13D
Neither the filing of this statement on Schedule 13D nor any of its
contents shall be deemed to constitute an admission by Covance Inc. that it is
the beneficial owner of any of the Common Stock referred to herein for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Act"),
or for any other purpose, and such beneficial ownership is expressly disclaimed.
Item 1. Security and Issuer
This statement on Schedule 13D relates to the Common Stock (the "Issuer
Common Stock"), $.01 par value per share, of PAREXEL International Corporation,
a Massachusetts corporation (the "Issuer"). The principal executive offices of
the Issuer are located at 195 West Street, Waltham, MA 02154.
Item 2. Identity and Background.
The name of the person filing this statement is Covance Inc., a
Delaware corporation ("Covance").
The address of the principal office and principal place of business of
Covance is 210 Carnegie Center, Princeton, NJ 08540. The principal business of
Covance is the provision of clinical research and development services to the
worldwide pharmaceutical, biotechnology and medical device industries.
Set forth in Schedule I attached hereto is a list of each of Covance's
directors and executive officers, as of the date hereof, their respective
citizenship and the name, principal business and address of any corporation or
other organization in which their employment is conducted.
During the past five years, neither Covance nor, to Covance's
knowledge, any person named in Schedule I to this Schedule 13D, has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). Also, during the past five years, neither Covance nor, to
Covance's knowledge, any person named in Schedule I to this Schedule 13D, was a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or state securities laws or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds.
Pursuant to an Agreement and Plan of Merger dated as of April 28, 1999
(the "Merger Agreement") among Covance, the Issuer and CCJ Holding Corp.
("Merger Sub"), and subject to the conditions set forth therein (including
applicable stockholder and regulatory approvals), Merger Sub will be merged with
and into the Issuer in accordance with the Merger Agreement (the "Merger"). At
the effective time of the Merger (the "Effective Time"), the Issuer will
<PAGE>
CUSIP NO. 699462107 SCHEDULE 13D
become a wholly owned subsidiary of Covance and each share of the Issuer Common
Stock, $.01 par value per share ("PAREXEL Common Stock"), other than shares held
in the Issuer's treasury, owned by Covance or any wholly owned subsidiary of
Covance or of the Issuer, or held by stockholders of the Issuer who exercise
their appraisal rights under Massachusetts law, will be converted into the right
to receive 1.184055 shares (the "Exchange Ratio") of Covance's common stock,
$.01 par value per share ("Covance Common Stock"). The description of the Merger
and the Merger Agreement contained in this Schedule 13D are qualified in their
entirety by reference to the copy of the Merger Agreement included as Exhibit
2.1 to this Schedule 13D and incorporated herein by reference.
This statement on Schedule 13D relates to an option granted to Covance
by the Issuer to purchase shares of Issuer Common Stock upon the occurrence of
certain events as described in Item 4 below.
Item 4. Purpose of Transaction.
(a) - (b) As described more fully in Item 3 above, this statement on
Schedule 13D relates to the Merger of Merger Sub with and into the Issuer, with
the Issuer becoming a wholly owned subsidiary of Covance. In addition, Covance
will assume certain of the Issuer's stock plans and stock option agreements as
of the effective time of the Merger (the "Effective Time").
The Merger Agreement contains representations and warranties on the
part of Covance, the Issuer and Merger Sub, and the consummation of the Merger
is subject to closing conditions, including, without limitation, approval by the
stockholders of Covance and the Issuer. The Merger Agreement also contains
covenants regarding the activities of the parties pending consummation of the
Merger. Generally, each of the parties must conduct its business in the ordinary
course consistent with past practice. In certain circumstances, upon a
termination of the Merger Agreement a cash termination fee and expenses are
required to be paid.
The foregoing summary of the Merger is qualified in its entirety by
reference to the copy of the Merger Agreement included as Exhibit 2.1 to this
Schedule 13D and incorporated herein by reference.
As an inducement to Covance to enter into the Merger Agreement, Covance
and the Issuer entered into a stock option agreement dated as of April 28, 1999
(the "Stock Option Agreement"). The Stock Option Agreement grants Covance an
irrevocable option (the "Option") to purchase, under certain conditions, up to
19.9% of the issued and outstanding shares of Issuer Common Stock at the time of
the exercise at a purchase price of $31.19 per share (the "Option Shares"),
subject to adjustment in the event of changes in the Issuer's capitalization.
Covance may exercise the Option, once and only once, in whole or in part, at any
time after the occurrence of an Exercise Event (as defined below); provided
however, the Option will terminate and be of no further force or effect upon the
earliest to occur of (i) the consummation of the Merger and (ii) nine (9) months
after the occurrence of an Exercise Event
<PAGE>
CUSIP NO. 699462107 SCHEDULE 13D
(unless prior thereto the Stock Option will have been exercised in respect to
all Option Shares) and (iii) the termination of the Merger Agreement other than
a termination that gives rise to an Exercise Event. An "Exercise Event" means
the termination of the Merger Agreement under any circumstances where a Company
Alternative Transaction Fee, as defined in the Merger Agreement, (i) has become
payable by the Issuer to Covance or (ii) would become payable by the Issuer to
Covance if within nine months of such termination of the Merger Agreement,
the Issuer enters into a definitive agreement with any third party with respect
to a Company Acquisition Proposal, as defined in the Merger Agreement or a
transaction with respect to a Company Acquisition Proposal is consummated by any
third party.
The foregoing summary of the Option is qualified in its entirety by
reference to the copy of the Stock Option Agreement included as Exhibit 4.1 to
this Schedule 13D and incorporated herein by reference.
(c) Not applicable.
(d) In accordance with the Merger Agreement, immediately following the
Effective Time, Covance will increase the number of directors serving on its
Board of Directors from eight to thirteen, eight of whom will be directors
appointed by Covance and five of whom will be appointed by the Issuer. In
addition, in accordance with the Merger Agreement, immediately following the
Effective Time, the current Chairmen of Covance and the Issuer will serve as
Co-Chairmen of Covance, the current Chief Executive Officer of Covance will
serve as Chief Executive Officer of Covance and the current Chief Executive
Officer of the Issuer will serve as President of Covance.
(e) - (f) Other than as a result of the Merger described in Item 3
above, not applicable.
(g) Not applicable.
(h) - (i) Other than as a result of the Merger described in Item 3
above, not applicable.
(j) Other than as described above, Covance currently has no plan or
proposals which relate to, or may result in, any of the matters listed in Items
4(a) - (j) of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) - (b) If the Option becomes exercisable, Covance will have the
right to acquire up to 19.9% of the issued and outstanding shares of Issuer
Common Stock at the time of exercise. Since the exact number of shares of Issuer
Common Stock for which the option may become exercisable cannot be determined
until the time of exercise, 4,992,311 shares of Issuer Common Stock purchaseable
was used for purposes of this report and is a number equal to 19.9% of the
shares of common stock issued and outstanding as of April 27, 1999. Based
<PAGE>
CUSIP NO. 699462107 SCHEDULE 13D
on the shares of Issuer Common Stock issued and outstanding as of April 27,
1999, if Covance exercises the Option, it would have sole voting and dispositive
power over such shares, and such shares would constitute approximately 17% of
the issued and outstanding Issuer Common Stock after giving effect to the
exercise of the Option.
To Covance's knowledge, no shares of Issuer Common Stock are
beneficially owned by any of the persons named in Schedule I.
(c) Neither Covance, nor, to Covance's knowledge, any person named in
Schedule I, has effected any transaction in the Issuer Common Stock during the
past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer
Other than as described herein and in the Merger Agreement and other
agreements contemplated thereby, to Covance's knowledge, there are no contracts,
arrangements, understandings or relationships (legal or otherwise) among the
persons named in Item 2 and between such persons and any person with respect to
any securities of the Issuer, including but not limited to transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Item 7. Materials to be Filed as Exhibits
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger dated as of
April 28, 1999 among Covance, Inc., CCJ
Holding Corp. and PAREXEL International
Corporation (Incorporated by reference to
Exhibit 2.1 to the Covance's Current Report
on Form 8-K filed on May 4, 1999).
4.1 Stock Option Agreement, dated as of April
28, 1999, between Covance Inc., as grantee,
and PAREXEL International Corporation, as
issuer (Incorporated by reference to
Exhibit 4.1 to the Covance's Current
Report on Form 8-K filed on May 4, 1999).
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: May 20, 1999 COVANCE INC.
By /s/ Jeffrey S. Hurwitz
---------------------------------
Name: Jeffrey S. Hurwitz
Title: Corporate Senior Vice
President
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Name Business Address Principal Occupation or Citizenship
Employment
---- ---------------- ----------------------- -----------
<S> <C> <C> <C>
Christopher A. Covance Inc. Chairman of the Board, President U.S.
Kuebler 210 Carnegie Center and Chief Executive Officer
Princeton, NJ 08540
Robert M. Baylis Covance Inc. Director U.S.
105 Rowayton Avenue
Rowayton, CT 06853
Van C. Campbell Corning Vice Chairman U.S.
One Riverfront Plaza
Corning, NY 14831-0001
Irwin Lerner Covance Inc. Director U.S.
210 Carnegie Center
Princeton, NJ 08540
J. Randall GTE Corporation Executive Vice President - Human U.S.
MacDonald 1255 Corporate Drive Resources and Administration
Irving, TX 75038
Nigel W. Morris Capital One Financial President and Chief Operating U.K.
Corporation Officer
2980 Fairview Park Drive
Suite 1300
Falls Church, VA 22042
Kathleen G. Northwestern Memorial Executive Vice President and U.S.
Murray Corporation Chief Operating Officer
251 E. Huron
Feinberg Pavilion
3rd Floor - Room 708
Chicago, IL 60611
William C. Covance Inc. Director U.S.
Urghetta 210 Carnegie Center
Princeton, NJ 08540
Richard J. Covance Inc. Corporate Senior Vice President U.S.
Andrews 210 Carnegie Center and President of the Client
Princeton, NJ 08540 Relations Group - Europe
Michael Giannetto Covance Inc. Corporate Vice President and U.S.
210 Carnegie Center Controller
Princeton, NJ 08540
Charles C. Covance Inc. Corporate Senior Vice President U.S.
Harwood, Jr. 210 Carnegie Center and Chief Financial Officer
Princeton, NJ 08540
Jeffrey S. Hurwitz Covance Inc. Corporate Senior Vice President, U.S.
210 Carnegie Center General Counsel and Secretary
Princeton, NJ 08540
Paul H. Sartori, Covance Inc. Corporate Senior Vice President, U.S.
Ph.D. 210 Carnegie Center Human Resources
Princeton, NJ 08540
James D. Covance Inc. Corporate Senior Vice President U.S.
Utterback 210 Carnegie Center and President of the Client
Princeton, NJ 08540 Relations Group - North America
and Asia
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name Business Address Principal Occupation or Citizenship
Employment
---- ---------------- ----------------------- -----------
<S> <C> <C> <C>
Michael G. Covance Inc. Corporate Senior Vice President U.S.
Wokasch 210 Carnegie Center and Group President, Early
Princeton, NJ 08540 Development Services
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger dated as of
April 28, 1999 among Covance, Inc., CCJ
Holding Corp. and PAREXEL International
Corporation (Incorporated by reference to
Exhibit 2.1 to the Covance's Current Report
on Form 8-K filed on May 4, 1999).
4.1 Stock Option Agreement, dated as of April
28, 1999, between Covance Inc., as grantee,
and PAREXEL International Corporation, as
issuer (Incorporated by reference to
Exhibit 4.1 to the Covance's Current
Report on Form 8-K filed on May 4, 1999).
