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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CLINTRIALS RESEARCH INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 62-1406017
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
11000 Weston Parkway
Cary, North Carolina 27513
(Address of Principal Executive Offices)
(Zip Code)
ClinTrials Research Inc. 1999 Long-Term Incentive Compensation Plan
(Full Name of Plan)
Jerry R. Mitchell, M.D., Ph.D.
Chairman of the Board, President and Chief Executive Officer
ClinTrials Research Inc.
11000 Weston Parkway
Cary, North Carolina 27513
(Name and Address of Agent for Service)
(919) 460-9005
(Telephone number, including area code for agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed Maximum Amount of
Title of Securities Amount to be Maximum Offering Aggregate Offering Registration
to be Registered Registered(1) Price Per Share(2) Price Fee
- ---------------- ------------- ------------------ ----- ---
<S> <C> <C> <C> <C>
Common Stock, $0.01 Par Value 1,500,000 Shares $3.719 $5,578,500 $1,472.73
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933 as
amended (the "Securities Act"), this registration statement also covers an
indeterminate number of additional shares that may become issuable pursuant to
the anti-dilution adjustment provisions of the Plan.
(2) Pursuant to Rule 457, the offering price is estimated solely for the purpose
of calculating the registration fee on the basis of the average of the high and
low prices for the Common Stock on the NASDAQ National Market System on December
6, 1999.
The Index to Exhibits appears on sequentially numbered page II-8.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are incorporated by reference in this
Registration Statement. In addition, all documents subsequently filed by
ClinTrials Research Inc. (the "Company," the "Registrant" or "ClinTrials")
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"), prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
(a) The Company's Annual Report on Form 10-K pursuant to the
Securities Exchange Act of 1934 for the fiscal year ended December 31, 1998
filed with Securities and Exchange Commission (the "SEC") on February 19, 1999;
(b) The Company's Quarterly Report on Form 10-Q pursuant to the
Exchange Act of 1934 for the quarterly period ending March 31, 1999 as filed
with the SEC on April 29, 1999;
(c) The Company's Quarterly Report on Form 10-Q pursuant to the
Exchange Act of 1934 for the quarterly period ending June 30, 1999 as filed with
the SEC on August 5, 1999;
(d) The Company's Quarterly Report on Form 10-Q pursuant to the
Exchange Act of 1934 for the quarterly period ending September 30, 1999 as filed
with the SEC on November 2, 1999;
(e) The description of the Company's shares of Common Stock, par
value $.01 per share (the "Common Stock"), contained in the Company's
Registration Statement on Form 8-A filed under Section 12 of the Exchange Act of
1934, effective November 22, 1993.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION.
The Company's Restated Certificate of Incorporation, as amended to
date, provides for indemnification of directors and officers to the fullest
extent permitted by the Delaware Law. Specifically, no director of the Company
will be personally liable for any expense, liability or loss arising from any
alleged action or inaction in an official capacity as a director or officer or
in any other capacity while serving as a director or officer.
Section 145 of the General Corporation Law of the state of
Delaware (the "Delaware Law") empowers a Delaware corporation to indemnify any
persons who are, or are threatened to be made, parties to any threatened,
pending or completed legal action, suit or proceeding whether civil, criminal,
administrative or investigative (other than an action by or in right of such
corporation), by reason of the fact that such person is or was an officer,
director, employee or agent of such corporation, or is or was serving at the
request of such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interest, and, for criminal proceedings, had no reasonable cause to believe his
conduct was unlawful. A Delaware corporation may indemnify officers, directors,
employees or agents in an action by or in the right of the corporation under the
same conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation
in the performance of his duty. Where an officer, director, employee or agent is
successful on the merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him against the expenses which such
officer or director actually or reasonably incurred.
Under its Restated Certificate of Incorporation and in accordance
with Section 145 of the Delaware Law, the company will indemnify any person who
was or is a party to or is threatened to be made a party to, or is involuntarily
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or
was a director or officer of the Company or is or was serving (during his or her
tenure as director and/or officer) at the request of the Company as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection with such action, suit or proceeding.
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The Restated Certificate of Incorporation of the Company provides
that the Company will pay for the expenses incurred by an indemnified director
or officer in defending the proceedings specified above in advance of the final
disposition, provided that, if the Delaware Law (or other applicable law) so
requires, such person agrees to reimburse the Company if it is ultimately
determined that such person is not entitled to indemnification. The Company's
Restated Certificate of Incorporation also provides that the company may, in its
sole discretion, indemnify any person who is or was one of its employees and
agents to the same degree as the foregoing indemnification of directors and
officers.
In addition, the Restated Certificate of Incorporation of the
Company provides that the company may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
company, or is serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against and incurred by such
person in such capacity, or arising out of such person's status as such whether
or not the Company would have the power or obligation to indemnify such person
against such liability under the provisions of the Delaware Law.
The Company has entered into indemnification agreements with each
of its directors. Each such Indemnification Agreement provides for
indemnification to the fullest extent permitted by Delaware Law and additionally
permits advancement of expenses to such director. If it is later determined that
the director is not entitled to indemnification, the director agrees to
reimburse the Company for such expenses.
Each Indemnification Agreement further provides that in the event
of a change in control of the company, the determination of the director's
rights to indemnification and the director's standard of conduct, as well as the
evaluation of the reasonableness of amounts claimed by the director, may be made
by a special, independent counsel who is retained by the director and approved
by the Company (such approval not to be unreasonably withheld) and who has not
otherwise performed services for the director or the Company.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS.
The Exhibits to this Registration Statement are listed in the
Index to Exhibits on Page II-8 of this Registration Statement, which Index is
incorporated herein by reference.
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ITEM 9. UNDERTAKINGS.
The Company 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. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective 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;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934
that are incorporated by reference 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 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 a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
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4. The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the 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.
5. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to partners, directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a partner, director, officer or
controlling person of the Company in the successful defense of any action suit
or proceeding) is asserted by such partner, director, officer or controlling
person in connection with the securities being registered, the Company 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 Act and
will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cary, State of North Carolina, on December 9, 1999.
CLINTRIALS RESEARCH INC.
By: /s/ Jerry R. Mitchell, M.D., Ph.D.
Name: Jerry R. Mitchell, M.D., Ph.D.
Title: President of ClinTrials Research Inc.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jerry R. Mitchell, M.D., Ph.D. President, Chief Executive Officer and December 9, 1999
Jerry R. Mitchell, M.D., Ph.D. Chairman of the Board
/s/ S. Colin Neill Senior Vice President and Chief Financial December 9, 1999
S. Colin Neill Officer
/s/ Irwin B. Eskind Director December 9, 1999
Irwin B. Eskind
/s/ Richard J. Eskind Director December 9, 1999
Richard J. Eskind
/s/ Edward G. Nelson Director December 9, 1999
Edward G. Nelson
/s/ Roscoe R. Robinson, M.D. Director December 9, 1999
Roscoe R. Robinson, M.D.
</TABLE>
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
4.1 Restated Certificate of Incorporation of the Company, as
amended (Incorporated by reference to Exhibit 3.1 of the
Company's Registration Statement on Form S-1 No. 33-
69568, filed with the Securities and Exchange Commission
under the Securities Act of 1933, on September 29,
1993).
4.2 Bylaws of the Company (Incorporated by reference to
Exhibit 3.2 of the Company's Registration Statement on
Form S-1 No. 33-69568, filed with the Securities and
Exchange Commission under the Securities Act of 1933, on
September 29, 1993).
4.3 1999 Long-Term Incentive Compensation Plan
5.1 Opinion of Harwell Howard Hyne Gabbert & Manner, P.C.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Harwell Howard Hyne Gabbert & Manner, P.C.
(contained in Exhibit 5.1)
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Exhibit 4.3
CLINTRIALS RESEARCH INC.
1999 LONG-TERM INCENTIVE COMPENSATION PLAN
1. The Purpose of the Plan. This 1999 Long-Term Incentive Compensation
Plan (the "Plan") is intended to provide an opportunity for individuals
performing services for Clintrials Research Inc., a Delaware corporation (the
"Corporation"), including officers, key employees, and directors of the
Corporation and its subsidiaries, as subsidiaries are defined in section 425 of
the Internal Revenue Code of 1986, as amended (the "Code") (its "Subsidiaries"),
to acquire shares of the Corporation's common stock ("Stock"), to obtain
additional compensation based on appreciation of the Stock and/or to be rewarded
for achieving certain performance goals. The Plan provides for the grant of
incentive stock options, as defined in section 422 of the Code ("Incentive Stock
Options" or "ISOs"), stock options not qualifying as Incentive Stock Options
("Non-Qualified Stock Options" or "NQSOs") (collectively "Options"), stock
appreciation rights, as defined in paragraph 5 ("Stock Appreciation Rights" or
"SARs"), and Restricted Stock, as set forth in paragraph 6, as an incentive to
service or continued service with the Corporation and to aid the Corporation in
retaining and obtaining key personnel of outstanding ability. The Plan also
provides for Performance Shares, as set forth in paragraph 7, and Performance
Units, as set forth in paragraph 8, as an incentive to reach certain performance
goals. As used herein, "Incentives" refers to Incentive Stock Options,
NonQualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares and Performance Units.
2. Stock Subject to the Plan. The maximum number of shares of the
common stock, $.01 par value, of the Corporation (the "Stock") which may be
issued hereunder shall be a total of 1,500,000 shares of Stock, which may be
either authorized and unissued Stock or Stock held in the treasury of the
Corporation, as shall be determined by the Board of Directors of the
Corporation. If an Option or SAR expires or terminates for any reason without
being exercised in full, or if Restricted Stock or Performance Shares are
forfeited, the unpurchased or forfeited shares shall again be available for
purposes of the Plan. The number of shares which may be issued hereunder shall
not exceed 1,500,000 in the aggregate.
3. Administration of the Plan. This Plan shall be administered by the
Board of Directors or a committee appointed by the Board of Directors. As used
herein, the term "Committee" refers to such committee or, in the absence of
appointment of such committee, to the Board of Directors. The Committee shall
have full authority in its discretion to determine the eligible persons to whom
Incentives shall be granted and the terms and provisions of Incentives, subject
to the Plan. In making such determinations, the Committee may take into account
the nature of the services rendered and to be rendered by such persons, their
present and potential contributions to the Corporation and any other factors
which the Committee deems relevant. Subject to the provisions of the Plan, the
Committee shall have full and conclusive authority to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the respective to agreements related to
Incentives provided for herein (which need not be identical); to determine the
restrictions on transferability of Stock acquired hereunder (which
<PAGE> 2
restrictions need not be identical); and to make all other determinations
necessary or advisable for the proper administration of the Plan.
4. Options.
(a) Eligibility and Limits. Options may be granted to such
persons as are selected by the Committee. ISOs may, however, only be granted to
employees of the Corporation and its present or future subsidiaries. For
purposes of ISOs, the term "employee" shall be defined as any person who at the
time the ISO is granted to such person hereunder, is employed, as such term is
used in Section 422 of the Code and described in Treasury Regulation section
1.421-7(h)(1), by the Corporation or any Subsidiary of the Corporation. The
aggregate fair market value (determined as of the time an ISO is granted) of the
Stock with respect to which ISOs are exercisable by an individual for the first
time during any calendar year, taking into account ISOs granted under this Plan
and under all other plans of the Corporation and its parent or Subsidiary
corporations, shall not exceed the limit provided in Section 422 of the Code
(currently $100,000).
(b) Option Agreements. The terms and conditions of each Option
granted under the Plan shall be specified by the Committee and set forth in a
written option agreement ("Option Agreement"). At the time any Option is granted
under the Plan, the Committee shall determine whether said Option is to be an
ISO or a NQSO and the Option Agreement shall reflect the Option's status as an
ISO or a NQSO. The number of shares for which ISOs and NQSOs shall be granted
shall be determined by the Committee in its sole discretion and set forth in the
Option Agreement, subject to the provisions of Section 4(a) above with respect
to the aggregate fair market value of the Stock for which an ISO may become
exercisable in any calendar year and subject to the provisions of Section 2
above as to the total number of shares which may be granted under the Plan. At
the time any ISO granted under this Plan is exercised, the certificates
representing the shares of Stock purchased pursuant to said ISO shall be clearly
identified by legend as representing shares purchased upon exercise of an ISO.
(c) Option Price.
(i) ISOs. With respect to an ISO, the option price
per share shall in no event be less than 100% of the fair
market value per share of the Stock (as determined in good
faith by the Committee) on the date the ISO is granted. If the
employee owns more than 10% of the total combined voting power
of all classes of the Corporation's stock or of the stock of
its parent or Subsidiary, the option price per share shall not
be less than 110% of the fair market value per share of the
Stock (as determined in good faith by the Committee) on the
date the ISO is granted.
(ii) Non-Qualified Options. With respect to a NQSO
the option price per share of a NQSO shall not be less than
80% of the fair market value per share of the Stock (as
determined in good faith by the Committee) on the date the
Option is granted.
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<PAGE> 3
(d) Date of Grant. For purposes of this section 4, the date
the Option is granted shall be the date on which the Committee has approved the
terms and conditions of a Option Agreement evidencing the Option and has
determined the recipient of the Option and the number of shares covered by the
Option and has taken all such other action as is necessary to complete the grant
of the Option.
(e) Option Term.
(i) ISOs. No ISO shall be exercisable after the
expiration of ten years from the date it is granted. No ISO
granted to an employee who at the time of grant owns more than
10% of the total combined voting powers of all classes of the
Corporation's stock or of the stock of its parent or
subsidiary shall be exercisable after the expiration of five
years from the date it is granted.
(ii) NQSOs. The term of any NQSO shall be set by the
Committee and set forth in each Option Agreement.
(f) Payment. Payment for all Stock purchased pursuant to the
exercise of an Option shall be made in cash or, if approved by the Committee
either at the time of grant or at the time of exercise, by delivery of Stock of
the Corporation at its fair market value on the date of delivery, or a
combination of cash and Stock. Such payment shall be made at the time that the
Option or any part thereof is exercised, and no Stock shall be issued until full
payment therefor has been made. The holder of an Option shall, as such, have
none of the rights of a stockholder.
(g) Nontransferability of Options. Options shall not be
transferable or assignable except by will or the laws of descent and
distribution and shall be exercisable, during the holder's lifetime, only by
him.
(h) Termination of Employment or Death. Except as provided
below, an Option may not be exercised by a holder who was an employee upon
receipt of the Option unless he is then, and continually after the grant of the
Option has been, an employee of the Corporation or one of its subsidiaries. Upon
any termination of employment of the holder by reason of disability, within the
meaning of section 422(c)(7) of the Code, the holder may not exercise an Option
later than twelve months after the date of such termination of employment. If
the holder of an Option dies, such Option may be exercised (to the extent that
the holder shall have been entitled to do so at the date of his death) by a
legatee or legatees of the holder under this last will, or by his personal
representative or distributees, at any time during the twelve-month period
following his death. Notwithstanding this subparagraph (h), no NQSO may be
exercised after the expiration of the term provided for in section 4(e) and
specified in the Option Agreement relating to that particular NQSO and no ISO
may be exercised more than ten years after the date on which its was granted.
For purposes of this subparagraph (h), employment of a holder of an Option shall
not be deemed terminated so long as the holder is employed by a parent or
Subsidiary of the Corporation or by another corporation (or a parent or
subsidiary corporation of such other corporation) which has assumed the Option
of the holder in a transaction to which section 424(a) of the Code is
applicable.
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(i) Limited Right of Exercise. An Option may be exercised
during the Option term as to the full number of shares covered by the Option if:
(1) a tender offer or exchange offer has been made for shares of Stock, provided
that the corporation, person or other entity making such offer purchases or
otherwise acquires shares of Stock pursuant to such offer; (2) the stockholders
of the Corporation have approved a definitive agreement (the "Agreement") to
merge or consolidate with or into another corporation pursuant to which the
Corporation will not survive or will survive only as a subsidiary of another
corporation, or to sell or otherwise dispose of all or substantially all of its
assets; or (3) any person or group (as such terms are defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act")),
becomes the holder of 50% or more of the outstanding shares of Stock. If any of
the events specified in this subparagraph (i) have occurred, the Option shall be
fully exercisable: (x) in the event of (1) above, during the term of the tender
or exchange offer; (y) in the event of (2) above, within a 30-day period
commencing on the date of approval by the shareholders of the Agreement; or (z)
in the event of (3) above, within a 30-day period commencing on the date upon
which the Corporation is provided a copy of Schedule 13(d) (filed pursuant to
Section 13(d) of the Act and the rules and regulations promulgated thereunder)
indicating that any person or group has become the holder of 50% or more of the
outstanding shares of Stock or, if the Corporation is not subject to Section
13(d) of the act, within a 30-day period commencing on the date upon which the
Corporation receives written notice that any person or group has become the
holder of 50% or more of the outstanding shares of Stock.
(j) Guarantees and Loans. The Corporation is hereby authorized
to guarantee or make loans to the holder of an Option to enable him to exercise
such Option. Any loan made or guaranteed herein shall be in such amount as
determined by the Committee but shall not exceed the exercise price of the
Options being exercised by the holder. Any loans made or guaranteed shall be
with full recourse against the borrower, shall be secured by the Stock received
from exercise of the related Option, shall provide for a market rate of interest
and shall contain such other terms and conditions acceptable to the Committee.
The determination of whether loans are to be made or guaranteed shall be made by
the Committee.
(k) Construction of ISOs. All ISOs to be granted hereunder are
intended to comply with section 422 and 424 of the Code, and all provisions of
this Plan and all ISOs granted hereunder shall be construed in such manner as to
effectuate that intent.
(l) Other Provisions. The Option Agreements authorized under
this Plan shall contain such other provisions, including, without limitation,
restrictions on the exercise of Options, as the Committee may deem advisable.
Any Option Agreement related to ISO's shall contain such limitations and
restrictions upon the exercise of such ISOs as shall be necessary in order that
such ISOs will be Incentive Stock Options as defined in Section 422 of the Code,
or to conform to any change in the law, which provisions shall control any
inconsistent or contradictory provision of the Plan.
5. Stock Appreciation Rights.
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(a) Eligibility. A SAR may be granted to such persons as are
determined by the Committee.
(b) SAR Agreements. Each SAR shall be evidenced by a SAR
agreement ("SAR Agreement"). Each SAR Agreement shall provide that an SAR shall
entitle the grantee to receive upon exercise the excess of (a) the fair market
value of a specified number of shares of the Stock at the time of exercise over
(b) a specified price which shall be determined by the committee and set forth
in each SAR Agreement but in no event shall it be less than 80% of the fair
market value of the Stock at the time the SAR is granted. The determination of
the fair market value of shares of Stock at the time of grant of a SAR shall be
made by the Committee in good faith. The determination of the fair market value
of shares of Stock at the time of exercise of a SAR shall be made in accordance
with rules adopted by the Committee or, in the absence of such rules, by the
Committee in good faith. A SAR may be granted in connection with all or any
portion of a previously or contemporaneously granted Option or not in connection
with an Option.
(c) Term. The term of each SAR shall be determined by the
Committee and shall be specified in each SAR Agreement.
(d) Termination of Employment or Death. Except as provided
below, SARs granted to an individual who is an employee on the date of grant
will be exercisable only during his employment by the Corporation or one of its
Subsidiaries. Upon any termination of employment by a grantee by reason of
disability within the meaning of subparagraph 4(h) hereof, the grantee may not
exercise the SAR later than twelve months after the date of such termination of
employment. If the grantee of a SAR dies, the grantee's legal successor shall
have the right to exercise the SAR during the lesser of its term and a period of
twelve months commencing on the death of the grantee. SAR may contain such other
limitations with respect to the time when such rights may be exercised as the
Committee may determine, and such limitations may vary.
(e) Nontransferability of SARs. SARs shall not be transferable
or assignable except by will or the laws of descent and distribution, and shall
be exercisable, during the grantee's lifetime, only by him.
(f) Payment. Upon exercise of a SAR, payment shall be made in
cash or Stock (at fair market value on the date of exercise) as provided in the
SAR Agreement or, in the absence of such provision, as the Committee may
determine.
(g) Other Provisions. The SAR Agreements authorized under this
Plan shall contain such other provisions, including, without limitation,
restrictions on the exercise of SARs, as the Committee may deem advisable.
6. Restricted Stock.
(a) Eligibility. Restricted Stock may be granted to such
persons as determined by the Committee.
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<PAGE> 6
(b) Awards. An award of Restricted Stock shall consist of
Stock granted and issued to and registered in the name of a employee and subject
to the terms of a stock restriction agreement ("Stock Restriction Agreement").
For purposes of determining the number of Shares subject to a stock award, the
Committee may value the Shares at a discount to reflect the various restrictions
and limitations set forth in the Plan and the applicable Stock Restriction
Agreement.
(c) Vesting; Lapse of Restrictions.
(i) An employee shall vest in any Shares awarded and
the restrictions on the transferability of any Shares awarded
shall lapse, in accordance with the schedule determined by the
Committee and set forth in each Stock Restriction Agreement
or, if earlier, on the date of the death, disability or
retirement of the employee. Notwithstanding the foregoing, the
Committee may accelerate (i) the vesting of any stock award or
(ii) the lapse of restrictions on any Shares awarded.
(ii) Unless otherwise determined by the Committee,
upon termination of an employee's employment with the Company
or any Subsidiary for any reason other than death, disability
or retirement, all Shares awarded to an employee as to which
the vesting requirements have not been satisfied shall be
forfeited and shall not be delivered by the Company. The date
of an employee's termination of employment for any reason
shall be determined in the sole discretion of the Committee.
(d) Certain Restrictions. Each employee awarded Restricted
Stock shall be the beneficial owner of any Shares issued by the Company in
connection with an award of Restricted Stock. Except for the risk of forfeiture
and the restrictions on transfer which may apply to certain Shares (including
restrictions relating to any dividends or other rights), the employee shall be
entitled to all rights of ownership, including, without limitation, the right to
vote such Shares and to receive cash or stock dividends thereon.
(e) Other Provisions. The Restricted Stock Agreements
authorized under this Plan shall contain such other provisions as the Committee
may deem advisable.
7. Performance Shares.
(a) Eligibility. Performance Shares may be granted to such
persons as determined by the Committee.
(b) Award. Awards under this Plan shall be granted to an
employee in the form of Performance Shares and such awards shall be subject to
the terms of a Performance Share Agreement ("Performance Share Agreement"). Each
Performance Share shall be deemed to be equivalent in value to one share of
Stock. The award of Performance Shares under the Plan shall not entitle the
recipient to any dividend or voting rights or any other rights of a shareholder
with respect to such Performance Shares. The Committee may substitute other
forms of awards (such as restricted shares) for Performance Shares in its
discretion.
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(c) Right to Payment of Performance Shares. An employee shall
have no right to receive payment for any part of his Performance Shares and all
of his Performance Shares shall be forfeited unless he remains in the employment
of the Corporation at all times from the date of grant of the awards through (1)
the time period determined by the Committee as set forth in the Performance
Share Agreement; (2) his or her normal retirement, (3) death or (4) total
disability, whichever may come earlier. The Committee may, if in the opinion of
the Committee circumstances warrant such action, approve payment of any or all
of Performance Shares which would otherwise be forfeited as a result of an
employee failing to remain in the employment of the Corporation for the required
period.
(d) Performance Criteria. The extent to which an employee
receives payment of all or part of the Performance Shares in an award grant
shall be determined by the Committee based on performance criteria set forth in
the Performance Share Agreement. The extent to which any of the performance
criteria will affect an employee's payment may vary according to his assigned
responsibilities during the award term. However, a portion of the payment of an
award for every employee will depend on performance against the Corporation's
objectives. The Committee shall have the right to approve different performance
criteria for each Agreement.
(e) Form and Timing of Payment. No payments will be made to
employees prior to the end of a time period set forth in the Performance Share
Agreement (except in the case of termination of employment through death,
retirement, total disability, or under such circumstances as the Committee deems
acceptable). Payments shall be made to the holder of Performance Shares wholly
in cash or wholly in an equal number of Shares, or partly in cash and partly in
shares in such proportion as the Committee deems appropriate.
(f) Other Provisions. The Performance Share Agreements
authorized under this Plan shall contain such other provisions as the Committee
may deem advisable.
8. Performance Units.
(a) Eligibility. A Performance Unit may be granted to such
persons as are determined by the Committee.
(b) Award. A Performance Unit may be exercised in whole or in
part as provided in the performance unit agreement ("Performance Unit
Agreement") and, subject to the provisions of the Performance Unit Agreement, a
Performance Unit shall entitle an Employee to receive, without any payment to
the Company (other than required tax withholding amounts), cash, Stock or a
combination of cash and Stock, based on the degree to which performance
standards established by the Committee and specified in the Performance Unit
Agreement have been achieved. Such performance standards shall cover such period
as may be specified by the Committee. The performance standards may be based on
earnings or earnings growth, return on assets, equity or investment, regulatory
compliance, improvements of financial ratings, achievement of balance sheet or
income statement objectives, or any other objective goals established by the
Committee, as the
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case may be, and may be absolute in their terms or measured against or in
relationship to other companies comparably, similarly or otherwise situated.
Each Performance Unit Agreement shall specify the number of Performance Units
granted.
(c) Exercise. The time and method of exercise of Performance
Units shall be determined by the Committee and specifically set forth in the
Agreement, provided, however a Performance Unit will expire no later than the
earlier of ten years from the date of grant.
(d) Compliance with Securities Laws. To the extent required by
Rule 16b-3(e) under the Exchange Act or otherwise provided in the Agreement, the
Committee shall have sole discretion to consent to or disapprove the election of
any Employee to receive cash in full or partial settlement of a Performance
Unit. In cases where an election of settlement in cash must be consented to by
the Committee, the Committee may consent to, or disapprove, such election at any
time after such election, or within such period for taking action as is
specified in the election, and failure to give consent shall be disapproval.
Consent may be given in whole or as to a portion of the Performance Unit
surrendered by the Employee. If the election to receive cash is disapproved in
whole or in part, the Performance Unit shall be deemed to have been exercised
for Stock, or, if so specified in the notice of exercise and election, not to
have been exercised to the extent the election to receive cash is disapproved.
(e) Other Provisions. The Restricted Stock Agreements
authorized under this Plan shall contain such other provisions as the Committee
may deem advisable.
9. Adjustments.
(a) Adjustment Upon Stock Dividend. The number of shares of
Stock which may be granted under an Option, SAR, Restricted Stock, Performance
Share or Performance Unit Agreement, the number of shares covered by each
outstanding Option, SAR, Restricted Stock or Performance Share Agreement, and
the price per share in each outstanding Option or used in determining the amount
of payment upon exercise of each outstanding SAR or Performance Share, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a subdivision or combination of shares or the
payment of a stock dividend in shares of Stock to holders of outstanding shares
of Stock or any other increase or decrease in the number of such shares effected
without receipt of consideration by the Corporation.
(b) Adjustments upon Merger. If the Corporation shall be the
surviving corporation in any merger or consolidation, recapitalization,
reclassification of shares or similar reorganization, the holder of each
outstanding Option shall be entitled to purchase, at the same times and upon the
same terms and conditions as are then provided in the Option, the number and
class of shares of Stock or other securities to which a holder of the number of
shares of Stock subject to the Option at the time of such transaction would have
been entitled to receive as a result of such transaction, and a corresponding
adjustment shall be made in connection with determining the value of each
outstanding SAR and Performance Shares. Upon a merger or consolidation in which
the
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Corporation is not the surviving corporation, the surviving corporation shall
substitute another Option with equivalent value for an outstanding Option in a
transaction to which section 424(a) of the Code is applicable and shall
substitute another SAR, Restricted Stock, Performance Share with equivalent
value for an outstanding SAR, Restricted Stock, Performance Share.
(c) Additional Adjustments. In the event of any such changes
in capitalization of the Corporation, the Committee may make such additional
adjustments in the number and class of shares of Stock or other securities with
respect to which outstanding Options and Stock Appreciation Rights are
exercisable and with respect to which future Options and Stock Appreciation
Rights may be granted as the Committee in its sole discretion shall deem
equitable or appropriate, subject to the provisions of this paragraph 9.
(d) Dissolution or Liquidation. A dissolution or liquidation
of the Corporation shall cause each outstanding Incentive to terminate.
(e) Change in Par Value. In the event of a change of the
Corporation's shares of Stock with par value into the same number of shares with
a different par value or without par value, the shares resulting from any such
change shall be deemed to be the Stock within the meaning of the Plan.
(f) Limited Rights upon Corporate Restructure. Except as
expressly provided in this paragraph 9, the holder of an Incentive shall have no
rights by reason of any subdivision or combination of shares of Stock of any
class or the payment of any stock dividend or any other increase or decrease in
the number of shares of Stock of any class or by reason of any dissolution,
liquidation, merger or consolidation or distribution to the Corporation's
stockholders of assets or stock of another corporation, and any issue by the
Corporation of shares of Stock of any class, or securities convertible into
shares of Stock of any class, shall not affect, and no adjustment by reasons
thereof shall be made with respect to, the number or price of shares of Stock
subject to the Incentive.
(g) Effect of Incentives on Company's Capital Business
Structure. The existence of the Plan and the Incentives granted pursuant to the
Plan shall not affect in any way the right or power of the Corporation to make
or authorize any adjustment, reclassification, reorganization or other change in
its capital or business structure, any merger or consolidation of the
Corporation, any issue of debt or equity securities having preferences or
priorities as to the Stock or the rights thereof, the dissolution or liquidation
of the Corporation, any sale or transfer of all or any part of its business or
assets, or any other corporate act or proceeding.
10. Termination and Amendment of the Plan. The Plan shall terminate on
the date ten years after adoption of the Plan by the Board of Directors, and no
Incentive shall be granted under the Plan after that date, but Incentives
granted before termination of the Plan shall remain exercisable thereafter until
they expire or lapse according to their terms. In addition, the Board of
Directors may terminate the Plan at any time. The Plan may be modified and
amended by the Board of Directors, the Committee or the Corporation's
stockholders. Notwithstanding the foregoing, no
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such termination, modification or amendment without the consent of the holder of
a Incentive shall adversely affect his right under such Incentive.
11. Indemnification. In addition to and not in limitation of such other
rights of indemnification as they may have as directors or as members of the
Committee, members of the Board of Directors and the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorney's fees and court costs actually and necessarily incurred, in connection
with the defense of any action, suit or proceeding, or in connection with any
appeal thereof, to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any
Incentive granted thereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Corporation) or paid by them in satisfaction of a judgment in
any such action, suit or proceeding, except in relation to matters as to which
it shall be adjudged in such action, suit or proceeding that such Committee or
Board member is liable for negligence or misconduct in the performance of his or
her duties; provided that within sixty (60) days after institution of any such
action, suit or proceeding the Committee or Board member shall, in writing,
offer the Corporation the opportunity, at its own expense, to handle and defend
the same.
12. Rule 16b-3. Notwithstanding any provisions herein to the contrary,
Incentives granted to executive officers or directors of the Corporation shall
be granted in such a manner, shall contain such terms, and shall be exercised as
may be required in order to ensure that such Incentives comply with Rule 16b-3
under the Securities Exchange Act of 1934, as amended.
13. Shareholder Approval. This Plan is subject to the approval of the
holders of a majority of the outstanding shares of common stock of the
Corporation.
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Exhibit 5.1
Opinion of Harwell Howard Hyne Gabbert & Manner, P.C.
December 10, 1999
ClinTrials Research Inc.
11000 Weston Parkway
Cary, North Carolina 27513
Ladies and Gentlemen:
We have acted as special counsel to ClinTrials Research Inc.(the
"Company") in connection with the registration of the Company's 1999 Long-Term
Incentive Compensation Plan (the "Plan") pursuant to a registration statement on
Form S-8, as filed with the Securities and Exchange Commission (the
"Registration Statement"). This firm hereby consents to the filing of this
opinion as an exhibit to the Registration Statement and with agencies of such
states and other jurisdictions as may be necessary in the course of complying
with the laws of such states and jurisdictions regarding the offering and sale
of the stock in accordance with the Registration Statement.
This Opinion Letter is governed by, and shall be interpreted in
accordance with the Legal Opinion Accord (the "ACCORD") of the ABA Section of
Business Law (1991). As a consequence, it is subject to a number of
qualifications, assumptions, exceptions, definitions, limitations on coverage
and other limitations, all as more particularly described in the Accord, and
this Opinion Letter should be read in conjunction therewith.
We have examined originals, or certified or photostatic copies of such
statutes, records, regulations, certificates of the officers of the Company and
of public officials, and such other information as we have deemed necessary for
purposes of rendering this opinion.
In stating our opinion, we have assumed: (i) that all signatures are
genuine, all documents submitted to us as originals are authentic, and all
documents submitted to us as copies conform to authentic original documents; and
(ii) that the parties to such documents have the legal right and power under all
applicable laws, regulations and agreements to enter into, execute, deliver and
perform their respective obligations thereunder.
On the basis of such review, but subject to the limitations expressed
herein, we are of the opinion, as of the date hereof, that the securities being
registered by the Registration Statement will, when issued in compliance with
the Plan and sold as contemplated under the Registration Statement, be legally
issued, fully paid and non-assessable.
Our opinion herein is limited solely to the laws of the United States
of America and the corporate law of the State of Delaware. In rendering the
opinion set forth herein, we have relied upon the documents referenced above and
have made no independent verification or investigation of factual matters
pertaining thereto or to the Company.
Very truly yours,
/s/ Harwell Howard Hyne
Gabbert & Manner, P.C.
HARWELL HOWARD HYNE
GABBERT & MANNER, P.C.
<PAGE> 1
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in this Registration Statement
(Form S-8) pertaining to the 1999 Long-Term Incentive Compensation Plan of
ClinTrials Research Inc. of our report dated February 1, 1999, with respect to
the consolidated financial statements and schedule of ClinTrials Research Inc.
included in its Annual Report (Form 10-K) for the year ended December 31, 1998,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Nashville, Tennessee
December 10, 1999
