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As filed with the Securities and Exchange Commission on March 21, 2000
Registration No. 333-92983
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PAREXEL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 8731 04-2776269
(State or other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation organization) Classification Code Number) Identification
Number)
195 WEST STREET
WALTHAM, MASSACHUSETTS 02451
(781) 487-9900
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
JOSEF H. VON RICKENBACH
PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN
PAREXEL INTERNATIONAL CORPORATION
195 WEST STREET
WALTHAM, MASSACHUSETTS 02451
(781) 487-9900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
WILLIAM J. SCHNOOR, JR.
HEATHER M. STONE
TESTA, HURWITZ & THIBEAULT, LLP
HIGH STREET TOWER, 125 HIGH STREET
BOSTON, MASSACHUSETTS 02110
(617) 248-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF SHARES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
SHARE(1)
<S> <C> <C> <C> <C>
Common Stock, $.01 par 1,256,829 $11.66 $14,654,626.14 $3,868.83
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
(2) Previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
<PAGE> 2
The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell these securities and we are not
soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
SUBJECT TO COMPLETION
MARCH __, 2000
1,256,829 SHARES
PAREXEL INTERNATIONAL CORPORATION
COMMON STOCK
___ Some of our stockholders are selling 1,256,829 shares of our common
stock and we will not receive any of the proceeds from the resale of the shares.
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INVESTING IN OUR COMMON STOCK IS RISKY. PLEASE SEE RISK FACTORS BEGINNING
ON PAGE 6.
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___ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------
THE DATE OF THIS PROSPECTUS IS MARCH ___, 2000.
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SUMMARY
___ Because this is only a summary, it does not contain all the information
that may be important to you. You should read the entire prospectus, especially
the risk factors, before deciding to invest in our common stock.
PAREXEL
OUR BUSINESS
___ We are a leading contract research, medical marketing and consulting
services organization. As a contract research organization, we provide a variety
of services to the pharmaceutical, biotechnology, and medical device industries
around the world. Our services include overseeing the clinical studies of
pharmaceutical products in humans and helping our clients introduce new products
to the public.
OUR SERVICES
___ Our primary objective is to help clients rapidly obtain necessary regulatory
approvals and start selling their products. Over the past sixteen years, we have
developed significant expertise in disciplines supporting this strategy. Our
service offerings include:
* managing clinical studies and trials required for regulatory approval
of new products;
* managing data and results of clinical studies and trials;
* analyzing the results of clinical studies and trials;
* marketing products to the medical community;
* clinical pharmacology; and
* consulting, training and publishing.
___ We believe that our key competitive strengths are our ability to provide all
of our services on a global basis and our experience in many important
therapeutic areas.
___ We complement the research and development functions, as well as the
marketing functions, of pharmaceutical, biotechnology and medical device
companies. Through our high-quality clinical research and medical marketing
services, we help clients maximize the return on their significant investments
in research and development. We help our clients reduce the time and cost of
clinically testing their products and launching those products into the
commercial marketplace. Clients can avoid the fixed costs associated with
maintaining the capacity and infrastructure to clinically test and launch
products with their own staff by hiring us to undertake some or all of these
services. Clients do not need to staff to peak periods. They can benefit from
our technical resource pool,
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broad experience with many different types of diseases, global network of
offices that can obtain regulatory approval of a product in various countries at
once and other advisory services. We focus on shortening the time it takes a
client to introduce its new products to the public.
___ We are headquartered near Boston, Massachusetts and have more than 44
offices in 29 countries. We employ approximately 4,580 individuals. We operate
in the major health care markets around the world, including the United States,
Latin America, Japan, Germany, the United Kingdom, France, Italy, Spain, Sweden,
Australia, Israel, Norway, Holland and Eastern Europe, including Russia, Poland,
the Czech Republic, Lithuania and Hungary.
OUR MARKET
___ Our industry derives substantially all of its revenue from the
pharmaceutical and biotechnology industries. We believe that the following
trends will cause the contract research organization industry to continue to
grow:
* the worldwide research and development expenditures for new drugs,
including amounts spent on services of the type we offer, has grown
substantially in recent years as a result of pressures to develop new
drugs for an aging population and for the treatment of life
threatening diseases and chronic disorders;
* many pharmaceutical companies, in an effort to remain competitive in
their industry, have used contract research organizations to minimize
the costs associated with introducing new products to the public and
increase the number of products that they are able to introduce;
* pharmaceutical and biotechnology companies want to maximize profits
from a drug by pursuing regulatory approvals in numerous countries at
once, rather than sequentially, by hiring contract research
organizations with global capabilities;
* pharmaceutical and biotechnology companies are increasingly hiring
contract research organizations to take advantage of their regulatory
expertise, data management capabilities and presence in jurisdictions
around the world with complex regulations; and
* the biotechnology industry has grown, increasing the demand for
expertise and services provided by outside sources, including contract
research organizations.
If these trends do not continue, the contract research industry may not continue
to grow.
OUR STRATEGY
___ We attribute our success to our efforts to:
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* expand our knowledge of regulatory approval processes and the
pharmaceutical and biotechnology industries by acquiring other
contract research organizations and by growing internally;
* refine our processes, procedures and infrastructure to more
efficiently offer our services to our clients; and
* expand the variety of services we can make available to each client.
___ Our service philosophy involves a flexible approach which allows our clients
to take advantage of one or many of our services. We believe that our expertise
in conducting scientifically demanding trials and our ability to coordinate
complicated global trials in many countries at once gives us an advantage over
our competitors. We continue to devote significant resources to improving our
methods of conducting clinical trials and developing sophisticated information
systems to allow us to more effectively manage our business operations and
deliver services to our clients.
OUR CORPORATE INFORMATION
___ We incorporated our company in The Commonwealth of Massachusetts in 1983.
Our principal executive offices are located at 195 West Street, Waltham,
Massachusetts 02451 and our telephone number is (781) 487-9900.
We have registered PAREXEL as a service mark.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
___ Some of the statements in this prospectus relate to future events or our
financial performance, and are identified by words like may, will, should,
expects, scheduled, plans, intends, anticipates, believes, estimates, potential,
or continue, or the negatives of these words. These statements are only
predictions. Our actual experience may be very different. We cannot guarantee
future results, levels of activity, performance, or achievements. You should not
unduly rely on these forward-looking statements, which apply only as of the date
of this prospectus. We are under no duty to update any of the forward-looking
statements after the date of this prospectus.
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RISK FACTORS
___ An investment in our common stock is very risky. You should carefully
consider the following risk factors, in addition to the remainder of this
prospectus, before purchasing our common stock. This prospectus contains
forward-looking statements that involve risks and uncertainties. If any of the
following risks actually occur, our business would likely suffer.
CUSTOMERS MAY CANCEL OR DELAY WORK UNDER THEIR CONTRACTS WITH US AND OUR
REVENUES MAY DECLINE
Generally, our clients can terminate their contracts with us upon sixty
days' notice or can delay the work under those contracts. Our clients can
terminate or delay their contracts for a variety of reasons, including because:
* their products fail to satisfy safety requirements;
* their products have unexpected or undesired clinical results;
* the client decides to cancel a particular study, perhaps for economic
reasons;
* not enough patients enroll in the study;
* not enough investigators agree to participate in the study; or
* there isn't enough of the drug because production or formulation
problems cause shortages of the drug.
In addition, we believe that drug companies may proceed with a smaller
number of clinical trials if they are trying to reduce costs. These factors may
cause drug companies to cancel or delay contracts with contract research
organizations at a higher rate than in the past. If we lose a large contract or
many contracts or if clients cancel or delay work under their contracts, our
revenues and financial performance could suffer.
OUR OPERATING RESULTS HAVE FLUCTUATED IN THE PAST BETWEEN QUARTERS AND YEARS AND
MAY CONTINUE TO FLUCTUATE IN THE FUTURE, CAUSING THE TRADING PRICE OF OUR STOCK
TO DECLINE
It is possible that our results of operations in one or more future
quarters may fall below securities analysts' and investors' expectations. If
that happens, the trading price of our stock is likely to decline.
In addition, our quarterly operating results have varied in the past, and
will continue to vary in the future. These variations can be caused by:
* the amount of new business we receive in a particular quarter or year;
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* the timing of significant projects - when they are started, cancelled,
accelerated or delayed;
* exchange rate fluctuations that we experience between quarters or
years;
* the types of services we offer in a particular quarter or year;
* when we open new offices;
* when we incur internal expansion costs;
* when we incur costs to integrate acquisitions and the amount of those
costs; and
* when we incur startup costs to introduce new products and services.
In addition, most of our operating costs can not be reduced quickly.
Therefore, when we complete work under our contracts, or when clients
accelerate, delay or cancel contracts our operating results can vary
substantially between reporting periods.
We do not believe that period-to-period comparisons of our operating
results are meaningful and you should not rely on these comparisons as
indicators of our future performance.
WE DEPEND ON A SMALL NUMBER OF INDUSTRIES AND CLIENTS FOR ALL OF OUR BUSINESS
AND THE LOSS OF THIS BUSINESS WOULD CAUSE OUR REVENUES TO DECLINE
Our revenues depend on pharmaceutical and biotechnology companies' research
and development expenditures. Our revenues could decline if:
* our clients experience financial problems or are hurt by a recession
or other market-wide event;
* our client base becomes smaller because of consolidation in the drug
or biotechnology industries; or
* our clients reduce their research and development expenditures.
Furthermore, we have benefited to date from the increasing tendency of
pharmaceutical companies to hire contract research organizations to perform
clinical research projects. If this trend slows or reverses, we would have fewer
contracts and our revenues would decrease. In fiscal 1999, our five largest
clients accounted for 44% of our consolidated net revenue, and one client
accounted for 20% of our consolidated revenue. For the three months ended
December 31, 1999, our five largest clients accounted for 46% of our
consolidated net revenue, and one client accounted for 22% of our consolidated
revenue. Our revenues could decline if a significant client stopped doing
business with us.
IF WE CAN NOT MANAGE OUR EXPANSION, OUR OPERATIONS COULD BE DISRUPTED
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Our business has expanded substantially, particularly over the past few
years. This may strain our operational, human and financial resources. In order
to manage expansion, we must:
* continue to improve our operating, administrative and information
systems;
* accurately predict our future personnel and resource needs to meet
client contract commitments;
* track the progress of ongoing client projects; and
* attract and retain qualified management, sales, professional,
scientific and technical operating personnel.
In addition, we recently divided our contract research services business
into discrete operating units. If we cannot properly manage these new business
units, it will disrupt our operations.
We will face additional risks when we expand our foreign operations.
Specifically, we may find it difficult to:
* assimilate differences in foreign business practices;
* hire and retain qualified personnel; and
* overcome language barriers.
If an acquired business does not meet our performance expectations, we may
have to restructure the acquired business or write-off the value of some or all
of the assets of the acquired business. If we fail to properly manage our
expansion, our revenues and profitability could decline.
IF WE ARE UNABLE TO MAKE ACQUISITIONS IN THE FUTURE, WE MAY NOT BE ABLE TO
SUSTAIN OUR GROWTH RATE
We rely on acquisitions to sustain our growth. We have made a number of
acquisitions and will continue to review future acquisition opportunities. We
may not be able to acquire companies on favorable terms. In addition, we face
several obstacles in connection with the acquisitions we undertake, including:
* we may have difficulty and will incur expenses when we acquire
companies and combine those companies' operations, services and
products with our own operations;
* our management may not be able to pay attention to our other business
concerns; and
* we could lose some or all of the acquired company's key employees.
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WE RELY ON HIGHLY QUALIFIED MANAGEMENT AND TECHNICAL PERSONNEL WHO MAY NOT
REMAIN WITH US
We rely on a number of key executives, including Josef H. von Rickenbach,
our president, chief executive officer and chairman. We maintain key man life
insurance on Mr. von Rickenbach. We have entered into agreements with
non-competition restrictions with our senior officers. However, we do not have
employment agreements with most of our senior officers and if any of these key
executives leave our company, we may not be able to run our business
effectively. In addition, in order to compete effectively, we must attract and
maintain qualified sales, professional, scientific and technical operating
personnel. Competition for these skilled personnel, particularly those with a
medical degree or a Ph.D., is intense. We may not be successful in attracting or
retaining key personnel.
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WE MAY NOT HAVE ADEQUATE INSURANCE AND MAY HAVE SUBSTANTIAL EXPOSURE TO PERSONAL
INJURY CLAIMS
Clinical research services primarily involve testing experimental drugs on
human volunteers. Providers of these services could be liable if patients who
participate in the study, or who use a drug approved by regulatory authorities
after the clinical research has concluded, die or are injured. The drug may have
adverse side effects or the physicians may administer the new drug improperly.
Sometimes, these patients are already seriously ill and are at risk of further
illness or death. We may not have enough cash to pay damages or pay large
amounts of costs to defend ourselves from a claim that is outside the scope of
the indemnities that we receive from our clients or our insurance coverage. Our
cash reserves could be exhausted if our clients do not indemnify us in
accordance with the terms of our agreements or if we do not have enough
insurance to cover the claim. We may not be able to continue to obtain insurance
in the future on acceptable terms.
OUR STOCK PRICE IS VOLATILE AND COULD DECLINE
The market price of our stock fluctuates widely in response to
quarter-to-quarter variations in:
* our operating results;
* securities analysts' earnings estimates;
* the market conditions in our industry;
* the prospects of health care reform;
* changes in government healthcare regulations; and
* general economic conditions.
In addition, the stock market experiences significant price and volume
fluctuations that are not related to the operating performance of particular
companies. These market fluctuations may cause our stock price to decrease. Our
common stock has historically traded at a relatively high price-earnings
multiple, due in part to securities analysts' expectations of our continued
earnings growth. Therefore, our stock price could quickly decline by a large
amount if our earnings do not meet those analysts' expectations or if those
analysts change their expectations. If you buy our stock, you must be willing to
bear the risk that our earnings and stock price will fluctuate.
OUR BUSINESS DEPENDS ON CONTINUED COMPREHENSIVE GOVERNMENTAL REGULATION OF THE
DRUG DEVELOPMENT PROCESS
We could lose new business contracts if governments relaxed their
regulatory requirements or simplified their drug approval procedures, since
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these actions would eliminate much of the demand for our services. In addition,
if we couldn't comply with any applicable regulations, the relevant governmental
agencies could terminate our ongoing research or disqualify our research data.
Recently the United States government has implemented more extensive regulations
of the drug development process. In Europe, governmental authorities are
coordinating common standards for clinical testing of new drugs, leading to
changes in the various requirements currently imposed by each country. In April
1997, Japan legislated good clinical practices and legitimatized the use of
contract research organizations.
WE FACE INTENSE COMPETITION
We primarily compete against in-house departments of drug companies, full
service contract research organizations, and to a smaller extent, universities
and teaching hospitals. Some of these competitors have larger capital, technical
and other resources than we do. We generally compete on the basis of:
* our previous experience;
* our experience with specific diseases;
* the quality of our services;
* our ability to organize and manage large-scale trials on a global
basis; o our ability to manage large and complex medical databases;
* our ability to provide statistical and regulatory services;
* our ability to recruit investigators and patients;
* our ability to integrate information technology with systems to
improve the efficiency of contract research;
* our international presence with strategically located facilities;
* our financial strength and stability; and
* the prices we charge for our services.
The contract research organization industry contains several hundred small,
limited-service providers and several large, full-service contract research
organizations with global operations. We compete against large contract research
organizations, including Quintiles Transnational Corporation, Covance Inc., and
Pharmaceutical Product Development, Inc., for both clients and acquisition
candidates. In addition, we compete for contracts because of the growing
tendency of drug companies to do business with a small number of preferred
service providers and because the increased merger activity in the
pharmaceutical industry has decreased the number of pharmaceutical companies.
WE MAY LOSE BUSINESS OPPORTUNITIES BECAUSE OF HEALTH CARE REFORM
Many governments have tried to control growing health care costs through
legislation, regulation and voluntary agreements with medical care providers and
drug companies. In the last few years, the U.S. Congress has considered several
comprehensive health care reform proposals. The proposals were intended to
expand health care coverage for
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the uninsured and reduce the growth of total health care expenses. While the
U.S. Congress did not adopt any of the proposals, members of Congress may raise
similar proposals in the future. If the U.S. Congress approves any of these
proposals, or if governments outside of the U.S. adopt similar measures, drug
and biotechnology companies may react by spending less money on research and
development. If this occurred, we would have a smaller number of business
opportunities.
WE ARE SUBJECT TO CURRENCY TRANSLATION RISKS THAT MAY EXPOSE US TO LOSSES
We derived approximately 43% of our net revenue for fiscal 1999 from
operations outside of North America. In the six months ended December 31, 1999,
we derived approximately 42% of our net revenue from operations outside of North
America. Our revenues and expenses from foreign operations are usually
denominated in local currencies. We are therefore subject to exchange rate
fluctuations between those local currencies and the United States dollar. To the
extent that we cannot shift this currency translation risk to other parties, we
could experience losses. We do not currently hedge against the risk of exchange
rate fluctuations.
OUR CORPORATE GOVERNANCE STRUCTURE MAY DELAY OR PREVENT AN ACQUISITION BY
ANOTHER COMPANY
Our articles of organization and by-laws contain provisions that make it
more difficult for a third party to acquire, or may discourage a third party
from acquiring us even if the acquisition would be favorable to our
stockholders. These provisions could limit the price that investors might be
willing to pay in the future for shares of our stock. In addition, our board of
directors may issue preferred stock in the future without stockholder approval.
If our board of directors issues preferred stock, the holders of common stock
would be subordinate to the rights of the holders of preferred stock. We benefit
from our board of directors' ability to issue the preferred stock. This ability
gives us flexibility to do acquisitions quickly. However, our board of
directors' ability to issue the preferred stock could also cause our stock price
to decline. It could make it more difficult for a third party to acquire, or
discourage a third party from acquiring, a majority of our stock. We currently
do not intend to issue any shares of preferred stock.
USE OF PROCEEDS
We will not receive any proceeds from the selling stockholders' sales of
our stock. The principal purpose of this offering is to give our selling
stockholders the flexibility to decide when to sell their shares.
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SELLING STOCKHOLDERS
The following table summarizes information about the ownership of our stock
as of March 17, 2000 and the number of shares that each of the selling
stockholders intends to sell under this prospectus. We have assumed, when
calculating the numbers in the table, that all of the shares that each selling
stockholder intends to sell all of the shares offered under this prospectus. As
of March 17, 2000, 25,329,158 shares of our common stock were outstanding. An
asterisks means that the number is less than 1%.
<TABLE>
<CAPTION>
SHARES OWNED BEFORE SHARES OFFERED PURSUANT SHARES OWNED AFTER
THIS OFFERING TO THIS PROSPECTUS THIS OFFERING
--------------------- ----------------------- ----------------------
SELLING STOCKHOLDERS NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT
- -------------------- ------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Dr. Herve Laurent.................. 75,302 * 37,651 * 37,651 *
5 Avenue Rodin
75116 Paris, France
Comir.............................. 44,410 * 22,205 * 22,205 *
27, Avenue Etienne Audibert
Z.I.B.P. 30169
60305 Serlis, France
Philippe Conquet................... 73,185 * 36,593 * 36,592 *
12, rue de Madrid
75000 Paris, France
Finanval........................... 6,671 * 3,336 * 3,335 *
38, rue de Bassano
75008 Paris, France
Clarendon Trust Company LTD........ 1,195,166 4.7 1,157,044 4.6 38,122 *
(Joseph Eagle 1989 Settlement)
Sir Walter Raleigh House
48/50 Esplanade
St. Helier
Jersey JE1 4HH
United Kingdom
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Total: 1,394,734 5.51% 1,256,829 4.96% 137,905 *
</TABLE>
None of the selling stockholders has had any relationship with us in the
past three years other than what we have described below.
PharMedicom
Dr. Herve Laurent, Comir, Philippe Conquet and Finanval acquired their
shares when we acquired Groupe PharMedicom S.A. on March 31, 1999. As part of
the acquisition, we signed a registration rights agreement with the PharMedicom
shareholders. We agreed to register 99,785 of
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the 199,568 shares we issued to the PharMedicom stockholders as part of the
acquisition.
We recently released 19,956 shares of common stock that we issued to the
PharMedicom stockholders but were holding in escrow. We will continue to hold an
additional 29,936 shares in escrow until March 31, 2000. We used these shares to
secure the PharMedicom stockholders' obligations to indemnify us for any breach
by the PharMedicom stockholders of the terms of the share acquisition agreement.
The PharMedicom stockholders have sole authority to hold, dispose of or vote all
shares that we hold in escrow.
We currently employ Dr. Herve Laurent and Philippe Conquet.
We treated the acquisition of PharMedicom as a purchase for financial
accounting purposes.
PPS
The Eagle trust acquired all of its shares when we acquired PPS Europe
Limited on March 1, 1998. We issued a total of 1,928,408 shares of our common
stock to the Eagle trust as part of the acquisition. In the past, we registered
771,346 shares of common stock that we issued to the Eagle trust as part of the
acquisition. We are now registering an additional 1,157,044 shares of common
stock that we issued to the Eagle trust in connection with the acquisition.
Mr. A. Joseph Eagle, the beneficiary of the Eagle trust, was a director of
PPS and some of its subsidiaries prior to the acquisition and remains a director
of PPS and some of those subsidiaries today. Mr. Eagle is currently our
president of medical marketing services and is a member of our board of
directors.
We treated the acquisition of PPS as a pooling of interests for financial
accounting purposes.
General
Each of the selling stockholders acquired his shares from us in order to
hold them as an investment. Since the selling stockholders may want to be able
to sell their shares at any time, we agreed to file a registration
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statement on Form S-3 with the Securities and Exchange Commission to permit the
selling stockholders to sell their shares to the public from time-to-time in the
future. We agreed to keep the registration statement effective until the selling
stockholders sell all of the shares or until August 31, 2000, whichever is
earlier. We will prepare and file amendments and supplements to the registration
statement to keep it effective until the selling stockholders sell all of their
shares or until August 31, 2000, whichever is earlier.
We have agreed to bear all of the expenses in connection with the
registration and sale of the shares, other than underwriting discounts and
selling commissions and the fees and expenses of the selling stockholders'
counsel and other advisors. We agreed to indemnify the selling stockholders for
some of the losses that they may incur when the sell their shares under the
registration statement. Similarly, each selling stockholder agreed to indemnify
us and our officers and directors for some of these losses that we might incur
under the registration statement.
It is the Securities and Exchange Commission's opinion that indemnification
of officers, directors or other controlling parties for liabilities incurred
under the Securities Act is against public policy and any contract or
arrangement granting this indemnification is unenforceable.
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DESCRIPTION OF CAPITAL STOCK
We currently have 50,000,000 shares of common stock and 5,000,000 shares of
preferred stock authorized.
COMMON STOCK
As of March 17, 2000, 25,329,158 shares of our common stock were
outstanding and were held of record by 138 stockholders.
Holders of our common stock have one vote for each share on all matters
that we submit to a vote of stockholders. Holders of our common stock do not
have cumulative voting rights, which means that holders of a majority of the
shares of common stock may elect all of the directors standing for election.
Holders of our common stock are entitled to receive dividends, if any are
declared by our board of directors, after we satisfy any preferential dividend
rights of any outstanding preferred stock. If we liquidate, dissolve or wind up,
holders of our common stock are entitled to receive our net assets, after all of
our debts and other liabilities are paid and after holders of preferred stock
receive all the payments that they are entitled to. Holders of our common stock
do not have preemptive, subscription, redemption or conversion rights. Our
outstanding shares of common stock are fully paid and nonassessable. If we issue
preferred stock in the future, the rights, preferences and privileges of holders
of our common stock may be negatively affected by the rights of the holders of
shares of preferred stock.
PREFERRED STOCK
Our board of directors can, without stockholder approval, issue up to
5,000,000 shares of preferred stock, including all of the dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption,
redemption price and liquidation preferences of those preferred shares. If we
issue preferred stock, it may have the effect of delaying, deferring or
preventing a change of control of our company. We do not have any shares of
preferred stock outstanding and we have no present plans to issue any shares of
preferred stock.
MASSACHUSETTS LAW AND OUR ARTICLES OF ORGANIZATION AND BY-LAWS
We believe that we have more than 200 beneficial stockholders and are
subject to Chapter 110F of the Massachusetts General Laws. This law is an
anti-takeover law. In general, this statute prohibits a publicly-held
Massachusetts corporation from engaging in a business combination with an
interested stockholder for a period of three years after the date the person
became an interested stockholder, unless:
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<PAGE> 18
* our board of directors approves the transaction that causes the
stockholder to become interested;
* the interested stockholder acquires 90% of our outstanding voting
stock at the time it becomes an interested stockholder; or
* the business combination is approved by both our board of directors
and the holders of two-thirds of our outstanding voting stock,
excluding shares held by the interested stockholder.
An interested stockholder is a person who owns, or at any time within the
prior three years did own, 5% or more of our outstanding voting stock. A
business combination includes a merger, a stock or asset sale, and other
transactions resulting in a financial benefit to the interested stockholder. We
may at any time elect not to be governed by Chapter 110F if a majority of our
stockholders vote to remove us from the law's coverage, but that amendment would
not be effective for twelve months and would not apply to a business combination
with any person who became an interested stockholder prior to the adoption of
the amendment.
The Massachusetts Business Corporation Law generally requires that
publicly-held Massachusetts corporations have a classified board of directors
consisting of three classes as nearly equal in size as possible, unless those
corporations elect not to be covered by the statute. We have elected not to be
covered by the statute and have adopted separate classified board provisions in
our articles of organization.
Our by-laws include a provision that makes Massachusetts General Laws
Chapter 110D, Regulation of Control Share Acquisitions, inapplicable to us. This
statute provides that any stockholder of a corporation subject to this statute
who acquires 20% or more of the outstanding voting stock of that corporation may
not vote the stock unless the other stockholders of that corporation vote to
allow the shares to be voted. Our board of directors could amend our by-laws at
any time to subject us to this statute.
Our by-laws require that stockholders meet notice provisions to nominate
someone to serve on our board of directors. To be timely, a notice by a
stockholder must be given between 60 and 90 days prior to a scheduled meeting.
If we give less than 70 days' notice of the date of the meeting to the
stockholders, a stockholder will have ten days to give the notice.
The stockholder's notice of nomination must include information about the
stockholder, the nominee and any beneficial owner involved in the nomination. We
may require any proposed nominee to provide additional information that is
reasonably required to determine the proposed nominee's eligibility.
Our by-laws provide that stockholders seeking to bring business before a
meeting of stockholders must provide us with timely notice in writing. To be
timely, a
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<PAGE> 19
stockholder's notice must be delivered to our principal offices between 60 and
90 days prior to the scheduled meeting. If we give less than 70 days' notice of
the date of the meeting to the stockholders, a stockholder will have ten days to
give the notice. The notice from the stockholder must describe the proposed
business to be brought before the meeting and include information about the
stockholder making the proposal and any other stockholder known to be supporting
the proposal. The by-laws require us to call a special stockholders' meeting if
stockholders holding at least 33-1/3% of the our common stock request one.
Our articles of organization eliminate the personal liability of our
directors as permitted by the Massachusetts Business Corporation Law. In
addition, our articles of organization indemnify our current and former officers
and directors against all liabilities and costs of defending an action or suit
if they are involved in the suit because their positions with us. However, we
cannot indemnify any person if a court finds that the person did not act in good
faith.
If a majority of our board of directors approves, the holders of a majority
of each class of our stock can vote to sell, lease or exchange all or
substantially all of our property and assets or to merge or consolidate our
company. If a majority of our board of directors does not approve the
transaction, the holders of at least two-thirds of each class of stock must
approve the transaction.
The notice provisions, the board of directors' ability to issue preferred
stock, as well as the provisions Chapter 110F of the Massachusetts Laws
discussed above would make a proxy contest or a change of control more
difficult. These provisions could also discourage a third party from making a
tender offer or otherwise attempting to obtain control of our company, even
though such an attempt might be beneficial to us and our stockholders. In
addition, our articles of organization and by-laws are designed to discourage
someone from accumulating large blocks of our stock in order to have that stock
repurchased by us at a premium. As a result, these provisions could reduce the
temporary fluctuations in the market price of our stock caused by such
accumulations. Accordingly, stockholders could be deprived of opportunities to
sell their stock at a temporarily higher market price.
TRANSFER AGENT AND REGISTRAR
Our transfer agent and registrar for our common stock is BankBoston, N.A.
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<PAGE> 20
PLAN OF DISTRIBUTION
The selling stockholders may sell their shares for their own accounts. We
will not receive any proceeds from this offering. The selling stockholders will
pay brokerage commissions or other charges and expenses that they incur when
selling the shares.
The selling stockholders are not subject to any underwriting agreement. The
selling stockholders, or anyone who receives shares from the selling
stockholders through a gift, donation or other transfer, may sell the shares
covered by this prospectus. The sales may be made in the over-the-counter
market, on the Nasdaq National Market, or on any exchange on which the shares
are listed. The shares may be sold by one or more of the following means:
* block trades where a broker or dealer will sell all or a portion of
the selling stockholders' shares as agent or principal;
* purchases by a broker or dealer as principal, after which the broker
or dealer will resell the shares for its account pursuant to this
prospectus;
* ordinary brokerage transactions and transactions where a broker
solicits purchasers; or
* in negotiated transactions.
The selling stockholders may sell the shares at market prices, at prices
related to the market prices or at negotiated prices. The selling stockholders
may sell shares to or through broker-dealers, and these broker-dealers may
receive underwriting discounts, concessions, commissions, fees or other
compensation from the selling stockholders or purchasers of the shares. Under
the federal securities laws, any broker-dealers that participate with the
selling stockholders in the sale of the shares may be underwriters and any
commissions they receive and any profits they receive on the sale of the shares
might be considered to be underwriting compensation.
We intend to keep this prospectus effective until August 31, 2000. We may
suspend the selling stockholders' rights to sell shares under this prospectus.
We will inform the selling stockholders that the rules under Section 16 of
the Securities Exchange Act that prohibit anyone from manipulating stock prices
may apply to their sales in the market. We will give them with a copy of these
rules if
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<PAGE> 21
they request them. We will also inform the selling stockholders that they need
to deliver a copy of this prospectus to the buyer when they sell shares.
Some of the shares may be sold under Rule 144 rather than in reliance on
this prospectus.
Our common stock is quoted on the Nasdaq National Market under the symbol
PRXL. On March 17, 2000, the last reported sale price for the common stock on
the Nasdaq National Market was $9.00 per share.
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<PAGE> 22
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the public reference facilities maintained by the
Securities and Exchange Commission:
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 5000 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. Chicago, Illinois 60661
20549
Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the Securities and Exchange Commission, 450
Fifth Street, N.W., Washington, D.C. 20549 or by calling the Securities and
Exchange Commission at 1-800-SEC-0330. Our Securities and Exchange Commission
filings are also available to the public from the Securities and Exchange
Commission's website at http://www.sec.gov.
The Securities and Exchange Commission allows us to incorporate by
reference the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filing we
will make with the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act (File No. 000-22667):
1. Our annual report on Form 10-K for the fiscal year ended June 30,
1999.
2. Our quarterly report on Form 10-Q for the quarter ended September 30,
1999.
3. Our quarterly report on Form 10-Q for the quarter ended December 31,
1999.
4. Our current report on Form 8-K, dated July 2, 1999.
5. Our current report on Form 8-K, dated August 19, 1999.
6. Our current report on Form 8-K, dated November 9, 1999.
7. Our current report on Form 8-K, dated January 31, 2000.
8. Our current report on Form 8-K, dated March 1, 2000.
9. Our description of common stock, $0.01 par value per share, contained
in our registration statement on Form 8-A dated November 21, 1995,
including any amendments or reports we file to update this
description.
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<PAGE> 23
We will provide a copy of any of the information that is incorporated by
reference in this prospectus, not including exhibits, to any person, without
charge, on request.
Requests for copies should be directed to PAREXEL International Corporation,
Attention: Investor Relations Department, 195 West Street, Waltham,
Massachusetts, 02451, telephone number (781) 434-4118. Our world wide web site
is http://www.parexel.com.
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission. You should rely only on the information or
representations we provided in this prospectus. We have not authorized anyone to
provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus is accurate as of any date other than
the date on the front of the document.
LAWYERS
The validity of the shares of common stock offered under this prospectus
will be passed upon for us by Testa, Hurwitz & Thibeault, LLP, Boston,
Massachusetts.
EXPERTS
Our consolidated financial statements as of June 30, 1999 and 1998 and for
each of the three years in the period ended June 30, 1999 incorporated by
reference into this prospectus, except as they relate to PPS Europe Limited,
have been so included in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
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<PAGE> 24
========================================= ===================================
You may rely only on the information
contained in this prospectus. We have
not authorized anyone to provide
information different from that 1,256,829 SHARES
contained in this prospectus. Neither
the delivery of this prospectus nor sale
of common stock means that information PAREXEL INTERNATIONAL
contained in this prospectus is correct CORPORATION
after the date of this prospectus. This
prospectus is not a offer to sell or
solicitation of an offer to buy these
shares of common stock in any
circumstances under which the offer COMMON STOCK
solicitation is unlawful.
-------------------------
TABLE OF CONTENTS
PAGE
----
---------------------
PROSPECTUS
Summary............................. 2
Special Note ....................... 5 MARCH __, 2000
Risk Factors........................ 6
Use of Proceeds..................... 11 ---------------------
Selling Stockholders................ 12
Description of Capital Stock........ 15
Plan of Distribution................ 18
Where You Can Find More Information. 20
Lawyers............................. 21
Experts............................. 21
========================================= ===================================
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<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is an estimate of the expenses we will pay in connection with
the sale of the common stock offered:
<TABLE>
<S> <C>
SEC registration fee ............................... $ 3,868.83
Nasdaq additional listing fee ...................... $10,498.62
Legal fees and expenses............................. $20,000.00
Accounting fees and expenses ....................... $15,000.00
Miscellaneous ...................................... $10,000.00
----------
Total ................................... $59,367.45
==========
</TABLE>
We will bear all expenses shown above. All amounts are estimated, other
than the Securities and Exchange Commission registration fee and the Nasdaq
Additional Listing fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 6 of our articles of organization provides that we will indemnify
each person who is or was a director or officer of our company, and each person
who is or was serving or has agreed to serve at our request as a director or
officer of, or in a similar capacity with, another organization against all
liabilities, costs and expenses reasonably incurred by any of these persons in
connection with the defense or disposition of or otherwise in connection with or
resulting from any action, suit or other proceeding in which they may be
involved by reason of being or having been such a director or officer or by
reason of any action taken or not taken in such capacity, except with respect to
any matter as to which the person shall have been finally adjudicated by a court
of competent jurisdiction not to have acted in good faith in the reasonable
belief that his or her action was in the best interests of our company. Section
67 of Chapter 156B of the Massachusetts Business Corporation Law authorizes a
corporation to indemnify its directors, officers, employees and other agents
unless such person shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that such action was in the best
interests of the corporation.
Reference is hereby made to Section 10 of the registration rights agreement
filed as Exhibit 4.3 to this registration statement and Section 9 of the
registration rights agreement filed as as Exhibit 4.5 to this registration
statement, for the respective descriptions of indemnification arrangements
between our company and the selling stockholders, pursuant to which the selling
stockholders are obligated, under certain circumstances, to indemnify directors,
officers and controlling persons of our company against certain liabilities,
including liabilities under the Securities Act.
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<PAGE> 26
ITEM 16. EXHIBITS.
Exhibits:
4.1* Specimen certificate representing the common stock (filed as
Exhibit 4.1 to the Registrant's Registration Statement on Form
S-1 (File No. 33-97406) and incorporated herein by reference).
4.2* Share Acquisition Agreement between and among PAREXEL and the
stockholders of Groupe PharMedicom S.A., dated as of March 31,
1999 (filed as Exhibit 2.2 to the Registrant's Quarterly Report
on Form 10-Q for the Quarter Ended March 31, 1999 (File No.
0-27058) and incorporated herein by reference).
4.3* Registration Rights Agreement dated as of March 31, 1999 by and
among PAREXEL and each of the stockholders listed on Schedule A
thereto (filed as Exhibit 4.1 to the Registrant's Quarterly
Report on Form 10-Q for the Quarter Ended March 31, 1999 (File
No. 0-27058) and incorporated herein by reference).
4.4* Share Acquisition Agreement dated as of March 1, 1998 by and
among the Company and the former stockholders of PPS Europe Ltd.
(filed as Exhibit 4.5 to the Company's Current Report on Form 8-
K/A dated March 1, 1998 and incorporated herein by reference).
4.5* Registration Rights Agreement dated as of February 27, 1998 by
and among the Company and the former stockholders of PPS Europe
Ltd. (filed as Exhibit 4.4 to the Company's Current Report on
Form 8-K/A dated March 1, 1998 and incorporated herein by
reference).
5.1* Opinion of Testa, Hurwitz & Thibeault, LLP. 23.1 Consent of
PricewaterhouseCoopers LLP.
23.3* Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit
5.1).
24.1* Power of Attorney (included as part of the signature page to
this Registration Statement).
- ----------------------
*previously filed.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating
II-2
<PAGE> 27
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
(d) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will
be governed by the final adjudication of such issue.
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<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 2 to the Registration Statement on
Form S-3 to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Waltham, Commonwealth of Massachusetts on this 20th of
March 2000.
PAREXEL INTERNATIONAL CORPORATION
By: /s/ William T. Sobo, Jr.
William T. Sobo, Jr.
Senior Vice President and Treasurer
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title(s) Date
- --------- -------- ----
* President, Chief Executive Officer March 20, 2000
- --------------------------- and Chairman (principal executive
Josef H. von Rickenbach officer)
/s/ William T. Sobo, Jr. Senior Vice President and Treasurer March 20, 2000
- --------------------------- (principal financial and accounting
William T. Sobo, Jr. officer)
* Director March 20, 2000
- ---------------------------
A. Dana Callow, Jr.
* Director March 20, 2000
- ---------------------------
A. Joseph Eagle
* Director March 20, 2000
- ---------------------------
Patrick J. Fortune
* Director March 20, 2000
- ---------------------------
Werner M. Herrmann
* Director March 20, 2000
- ---------------------------
Serge Okun
*By: /s/ William T. Sobo, Jr.
William T. Sobo, Jr.
as Attorney-in-Fact
II-2
<PAGE> 29
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.1* Specimen certificate representing the common stock (filed as Exhibit
4.1 to the Registrant's Registration Statement on Form S-1 (File No.
33-97406) and incorporated herein by reference).
4.2* Share Acquisition Agreement between and among PAREXEL and the
stockholders of Groupe PharMedicom S.A., dated as of March 31, 1999
(filed as Exhibit 2.2 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended March 31, 1999 (File No. 0-27058) and
incorporated herein by reference).
4.3* Registration Rights Agreement dated as of March 31, 1999 by and among
PAREXEL and each of the stockholders listed on Schedule A thereto
(filed as Exhibit 4.1 to the Registrant's Quarterly Report on Form
10-Q for the Quarter Ended March 31, 1999 (File No. 0-27058) and
incorporated herein by reference).
4.4* Share Acquisition Agreement dated as of March 1, 1998 by and among the
Company and the former stockholders of PPS Europe Ltd. (filed as
Exhibit 4.5 to the Company's Current Report on Form 8- K/A dated March
1, 1998 and incorporated herein by reference).
4.5* Registration Rights Agreement dated as of February 27, 1998 by and
among the Company and the former stockholders of PPS Europe Ltd.
(filed as Exhibit 4.4 to the Company's Current Report on Form 8-K/A
dated March 1, 1998 and incorporated herein by reference).
5.1* Opinion of Testa, Hurwitz & Thibeault, LLP. 23.1 Consent of
PricewaterhouseCoopers LLP.
23.3* Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1).
24.1* Power of Attorney (included as part of the signature page to this
Registration Statement).
- ----------------
*previously filed.
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<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated August 17, 1999 relating to the
financial statements, which appear in the 1999 Annual Report to Shareholders,
which is incorporated by reference in PAREXEL International Corporation's Annual
Report on Form 10-K for the year ended June 30, 1999. We also consent to the
incorporation by reference of our report dated August 17, 1999 relating to the
financial statement schedule, which appears in such Annual Report on Form 10-K.
We also consent to the references to us under the headings "Experts" in such
Registration Statement.
PricewaterhouseCoopers LLP
March 21, 2000
Boston, Massachusetts
