<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 10, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
QUINTILES TRANSNATIONAL CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NORTH CAROLINA 56-1714315
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
</TABLE>
4709 CREEKSTONE DRIVE
RIVERBIRCH BUILDING, SUITE 300
DURHAM, NORTH CAROLINA 27703-8411
(919) 941-2000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
DENNIS B. GILLINGS, PH.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
QUINTILES TRANSNATIONAL CORP.
4709 CREEKSTONE DRIVE
RIVERBIRCH BUILDING, SUITE 300
DURHAM, NORTH CAROLINA 27703-8411
(919) 941-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:
GERALD F. ROACH, ESQ.
CHRISTOPHER B. CAPEL, ESQ.
SMITH, ANDERSON, BLOUNT,
DORSETT, MITCHELL & JERNIGAN, L.L.P.
2500 FIRST UNION CAPITOL CENTER
RALEIGH, NORTH CAROLINA 27601
(919) 821-1220
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
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===========================================================================================================================
PROPOSED PROPOSED
TITLE EACH CLASS MAXIMUM MAXIMUM AMOUNT OF
OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED BE REGISTERED PER SHARE* OFFERING PRICE* FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share.... 1,214,305 $60.75 $73,769,028 $22,354.25
===========================================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee, based
upon the average of the high and low prices of the Common Stock on The Nasdaq
National Market on June 3, 1997 in accordance with Rule 457(c).
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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
- -------------------
QUINTILES TRANSNATIONAL CORP.
1,214,305 SHARES
COMMON STOCK, PAR VALUE $.01 PER SHARE
---------------------
The shares offered hereby (the "Shares") consist of 1,214,305 shares of
common stock, par value $.01 per share (the "Common Stock"), of Quintiles
Transnational Corp., a North Carolina corporation ("Quintiles" or the
"Company"), which are owned by the selling stockholders listed herein under
"Selling Stockholders" (collectively, the "Selling Stockholders"). The Shares
were acquired by the Selling Stockholders pursuant to business combinations
between the Company and (i) Innovex Limited ("Innovex"); and (ii) Butler
Communications Inc. (and companies affiliated with Butler Communications Inc.)
("Butler") (collectively, the "Transactions"). The Common Stock issued in the
Transactions to the Selling Stockholders was issued pursuant to exemptions from
the registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"). In accordance with the terms of the Transactions, the Company
has agreed to register the Shares for resale by such Selling Stockholders.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE COMMON STOCK.
The Shares may be offered from time to time by the Selling Stockholders
after the date of this Prospectus. The Company shall pay all expenses of
registration incurred in connection with this offering, except that each Selling
Stockholder shall pay any commissions, discounts, or other fees payable to
broker-dealers in connection with any sale of the Shares, as well as legal and
accounting fees and expenses incurred by the Selling Stockholders. None of the
Shares have been registered prior to the filing of the Registration Statement of
which this Prospectus is a part. The Company will not receive any of the
proceeds from the sale of the Shares by the Selling Stockholders.
The Selling Stockholders have not advised Quintiles of any specific plans
for the distribution of the Shares covered by this Prospectus, but it is
anticipated that the Shares will be sold from time to time primarily in
transactions (which may include block transactions) on the Nasdaq National
Market of The Nasdaq Stock Market (the "Nasdaq National Market") at the market
price then prevailing, although sales may also be made in negotiated
transactions or otherwise. The Selling Stockholders and the brokers and dealers
through whom sales of the Common Stock may be made may be deemed to be
"underwriters" within the meaning of the Securities Act, and their commissions
or discounts and other compensation may be regarded as underwriters'
compensation. See "Plan of Distribution."
The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol "QTRN." On June , 1997, the last reported sale price of the Common
Stock was $ per share.
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 June , 1997.
<PAGE> 3
AVAILABLE INFORMATION
Quintiles is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by Quintiles may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at the Commission's
regional offices located at 7 World Trade Center, New York, New York 10048 and
Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois
60661-2511; and copies of such materials may be obtained from the Public
Reference Section of the Commission, Washington, D.C. 20549, at prescribed
rates. Copies of such materials may also be obtained from the web site that the
Commission maintains at http://www.sec.gov. Quotations relating to Quintiles'
Common Stock appear on the Nasdaq National Market and such reports and other
information concerning Quintiles also can be inspected and copied at the offices
of The Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006-1506.
The Company has filed with the Commission a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act with respect to the Shares
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain portions of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 340-23520)
pursuant to the Exchange Act are incorporated herein by reference:
(1) Quintiles' Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(2) Quintiles' Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1997;
(3) Quintiles' Current Reports on Form 8-K dated February 7, 1997 and
March 5, 1997;
(4) the description of Quintiles' Common Stock contained in its
Registration Statement on Form 8-A as filed with the Commission on April
11, 1994; and
(5) all other documents filed by Quintiles pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Shares.
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Prospectus 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 statement so modified shall not be deemed to
constitute a part of this Prospectus except as so modified, and any statement so
superseded shall not be deemed to constitute part of this Prospectus.
The Company will provide without charge to each person, including a
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of any such person, a copy of any and all of the documents which are
incorporated herein by reference, other than exhibits to such information
(unless such exhibits are specifically incorporated by reference into such
documents). Requests for such information should be directed to the Company,
4709 Creekstone Drive, Riverbirch Building, Suite 300, Durham, North Carolina,
27703-8411, Attention: Corporate Secretary, telephone number (919) 941-2000.
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FORWARD LOOKING STATEMENTS
Information incorporated by reference herein contains various "forward
looking statements" within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act, which statements represent the Company's
judgment concerning the future and are subject to risks and uncertainties that
could cause the Company's actual operating results and financial position to
differ materially. Such forward looking statements can be identified by the use
of forward looking terminology, such as "may," "will," "expect," "anticipate,"
"estimate," or "continue" or the negative thereof or other variations thereof or
comparable terminology. The Company cautions that any such forward looking
statements are further qualified by important factors that could cause the
Company's actual operating results and financial position to differ materially
from the forward looking statements, including without limitation considerations
described in connection with specific forward looking statements, factors set
forth in this Prospectus under the caption "Risk Factors," and other cautionary
elements specified in documents incorporated by reference in this Prospectus.
THE COMPANY
Quintiles is a leading provider of full-service contract research, sales
and marketing services to the global pharmaceutical, biotechnology and medical
device industries. Quintiles, through the use of its extensive information
technology capabilities, provides a broad range of fully-integrated contract
services in order to accelerate the time from discovery to peak market
acceptance of a new therapy by offering traditional contract research services
as well as contract sales and marketing services. In addition, Quintiles
provides health economics and healthcare policy consulting and disease and
health information management services to support the growing information needs
of the healthcare industry. The Company's principal executive offices are
located at 4709 Creekstone Drive, Riverbirch Building, Suite 300, Durham, North
Carolina 27703-8411 and its telephone number is (919) 941-2000.
RISK FACTORS
In addition to the other information contained or incorporated by reference
in this Prospectus, prospective purchasers should consider the following factors
carefully in evaluating the Company and its business. See also "Forward Looking
Statements."
DEPENDENCE ON CERTAIN INDUSTRIES AND CLIENTS
Quintiles' revenues are highly dependent upon the research and development
and sales and marketing expenditures of the pharmaceutical and biotechnology
industries. Quintiles has benefited to date from the growing tendency of
pharmaceutical and biotechnology companies to engage independent outside
organizations to conduct large clinical research and sales and marketing
projects. Quintiles' operations could be materially and adversely affected by a
general economic decline in these industries or by any reduction in the
outsourcing of development or sales and marketing expenditures. Quintiles has in
the past derived, and may in the future derive, a significant portion of its net
revenue from a relatively limited number of major projects or clients. In 1996,
ten clients accounted for approximately 48% of Quintiles' consolidated net
revenue. As pharmaceutical companies continue to outsource large projects and
studies to fewer full-service global providers, the concentration of business
could increase. Quintiles is likely to experience such concentration in 1997 and
in future years. The loss of any such client could materially and adversely
affect Quintiles.
MANAGEMENT OF GROWTH
Quintiles has experienced rapid growth over the past 10 years. Quintiles
believes that its sustained growth places a strain on operational, human and
financial resources. In order to manage its growth, Quintiles must continue to
improve its operating and administrative systems and to attract and retain
qualified management, professional, scientific and technical personnel. Foreign
operations may involve the additional risks of assimilating differences in
foreign business practices, hiring and retaining qualified personnel, and
overcoming language barriers. Quintiles has a transnational organizational
structure, comprised of three operating divisions performing
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complementary functions with a holding company performing management functions.
While this transnational structure has successfully supported Quintiles' growth
to date, Quintiles recently has completed a number of acquisitions, and there
can be no assurance that this structure will continue to be effective. Failure
to manage growth effectively could have a material adverse effect on Quintiles.
ACQUISITION RISKS
Acquisitions involve numerous risks, including difficulties and expenses
incurred in connection with the acquisition and the assimilation of the
operations and services of the acquired companies, the diversion of management's
attention from other business concerns and the potential loss of key employees
of the acquired companies. Acquisitions of foreign companies also may involve
the additional risks of assimilating differences in foreign business practices
and overcoming language barriers. Since February 1996, Quintiles has completed
six acquisitions, both within the United States and internationally. There can
be no assurance that Quintiles' past and any future acquisitions will be
successfully integrated into its operations. Quintiles reviews many acquisition
candidates in the ordinary course of business, and Quintiles continually is
evaluating new acquisition opportunities. Given the CRO industry consolidation
which is occurring, Quintiles expects to continue to evaluate and compete for
suitable acquisition candidates. There can be no assurance that Quintiles will
successfully complete future acquisitions nor that acquisitions, if completed,
will contribute favorably to Quintiles' operations and future financial
condition. Although Quintiles performs due diligence investigations on each
company or business it seeks to acquire, there may be liabilities which
Quintiles fails or is unable to discover for which Quintiles, as a successor
owner, may be liable. Quintiles generally seeks to minimize its exposure to such
liabilities by obtaining indemnification from each seller, which may be
supported by deferring payment of a portion of the purchase price. However,
there is no assurance that such indemnifications, even if obtainable,
enforceable and collectible (as to which there also is no assurance), will be
sufficient in amount, scope or duration to fully offset the potential
liabilities arising from the acquisitions.
RISKS RELATING TO CONTRACT SALES SERVICES
Outsourced contract sales services is a relatively new industry outside the
U.K. Quintiles believes that the contract sales industry emerged in the 1980s,
primarily in the U.K., because of regulatory cost containment pressure on
pharmaceutical companies. As a result, large pharmaceutical companies began to
outsource their sales and marketing activities incident to product launch. There
is a relatively low level of market penetration for outsourced sales and
marketing services in most other countries, including the United States. As
such, companies in this industry are subject to all of the risks inherent in a
new or emerging industry, including an inability to attract and retain clients,
changes in the regulatory regime, an absence of an established earnings history,
the availability of adequately trained sales representatives and additional and
unforeseen costs and expenses. There can be no assurance that Quintiles will be
able to market successfully its contract sales and marketing services outside
the U.K.
COMPETITION; INDUSTRY CONSOLIDATION
The market for Quintiles' contract research services is highly competitive,
and Quintiles competes against traditional CROs, the in-house research and
development departments of pharmaceutical companies, as well as universities and
teaching hospitals. In sales and marketing services, Quintiles competes against
the in-house sales and marketing departments of pharmaceutical companies and
small local contract sales organizations in each country in which it operates.
Quintiles also competes against consulting firms offering healthcare consulting
services, including boutique firms specializing in the healthcare industry and
the healthcare departments of large firms. Expansion by these competitors into
other areas in which Quintiles operates could affect Quintiles' competitive
position. Increased competition may lead to price and other forms of competition
that may affect Quintiles' margins. Consolidation within the pharmaceutical
industry, as well as a trend by pharmaceutical companies to limit outsourcing to
fewer organizations, has heightened the competition for contract research
services. As a result, consolidation also has occurred among the providers of
contract research services, and several large, full-service providers have
emerged, including Quintiles. If these consolidation trends continue,
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they may result in greater competition among the larger contract research
providers for clients and acquisition candidates.
LOSS OR DELAY OF LARGE CONTRACTS; FIXED PRICE NATURE OF CONTRACTS
Most of Quintiles' contracts are terminable upon 15-90 days' notice by the
client. Although the contracts typically provide for payment of certain fees for
winding down the study and, in some cases, a termination fee, the loss or delay
of a large contract or the loss or delay of multiple contracts could adversely
affect Quintiles' future net revenue and profitability. Contracts may be
terminated for a variety of reasons, including the failure of a product to
satisfy safety requirements, unexpected or undesired results of the product, the
client's decision to forego a particular study or insufficient patient
enrollment or investigator recruitment. Quintiles contracts with investigators
who undertake to recruit large numbers of patients in many of its studies. There
can be no assurance that Quintiles will always be able to satisfy recruitment
targets, particularly in large studies for which there is little precedent. In
addition, most of Quintiles' contracts for the provision of its services are
fixed price or fee-for-service subject to a cap. Since Quintiles' contracts are
predominantly structured in this manner, Quintiles bears the risk of cost
overruns. Underpricing of contracts or significant cost overruns could have a
material adverse effect on Quintiles.
DEPENDENCE ON PERSONNEL
Quintiles relies on a number of key executives, including Dennis B.
Gillings, Ph.D., its Chairman of the Board of Directors and Chief Executive
Officer. Quintiles maintains key man life insurance on Dr. Gillings in the
amount of $3 million. The loss of the services of any key executive could have a
material adverse effect on Quintiles. In addition, Quintiles' performance
depends on its ability to attract and retain qualified management and
professional, scientific and technical operating staff, as well as its ability
to recruit qualified representatives for its contract sales services. There can
be no assurance that Quintiles will be able to continue to attract and retain
qualified personnel.
POTENTIAL LIABILITY
In connection with its provision of contract research services, Quintiles
contracts with physicians to serve as investigators in conducting clinical
trials to test new drugs on human volunteers. Such testing creates risk of
liability for personal injury to or death of volunteers, particularly to
volunteers with life-threatening illnesses, resulting from adverse reactions to
the drugs administered. Although Quintiles does not believe it is legally
accountable for the medical care rendered by third party investigators, it is
possible that Quintiles could be held liable for the claims and expenses arising
from any professional malpractice of the investigators with whom it contracts or
in the event of personal injury to or death of persons participating in clinical
trials. Quintiles also could be held liable for errors or omissions in
connection with the services it performs. In addition, as a result of its Phase
I clinical trials facilities, Quintiles could be liable for the general risks
associated with a Phase I facility including, but not limited to, adverse events
resulting from the administration of drugs to clinical trial participants or the
professional malpractice of Phase I medical care providers. Quintiles believes
that its risks are reduced by contractual indemnification provisions with
clients and investigators, insurance maintained by clients and investigators and
by Quintiles, various regulatory requirements, including the use of
institutional review boards and the procurement of each volunteer's informed
consent to participate in the study. The contractual indemnifications generally
do not protect Quintiles against certain of its own actions such as negligence.
The contractual arrangements are subject to negotiation with clients and the
terms and scope of such indemnification vary from client to client and from
trial to trial. The financial performance of these indemnities is not secured.
Therefore, Quintiles bears the risk that the indemnifying party may not have the
financial ability to fulfill its indemnification obligations. Quintiles
maintains professional liability insurance that covers worldwide territories in
which Quintiles currently does business and includes drug safety issues as well
as data processing errors and omissions. There can be no assurance that
Quintiles will be able to maintain such insurance coverage on terms acceptable
to Quintiles. Quintiles could be materially and adversely affected if it were
required to pay damages or bear the costs of defending any claim outside the
scope of or in excess of a contractual indemnification provision
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or beyond the level of insurance coverage or in the event that an indemnifying
party does not fulfill its indemnification obligations.
DEPENDENCE ON GOVERNMENT REGULATION
Quintiles' contract research business has benefited from the extensive
governmental regulation of the drug development process, particularly in the
United States. In Europe, the general trend has been towards establishing common
standards for clinical testing of new drugs, leading to changes in the various
requirements currently imposed by each country. Quintiles believes that the
level of regulation is generally less burdensome outside the United States. From
time to time legislation is introduced in the U.S. Congress to substantially
modify regulations administered by the Food and Drug Administration ("FDA")
governing the drug approval process. Changes in regulation in the United States
or elsewhere, including mandatory substitution of generic drugs for patented
drugs, relaxation in the scope of regulatory requirements or the introduction of
simplified drug approval procedures, could decrease the business opportunities
available to Quintiles. In addition, the failure on the part of Quintiles to
comply with applicable regulations could result in the termination of ongoing
clinical research or sales and marketing projects or the disqualification of
data for submission to regulatory authorities, either of which could have a
material adverse effect on Quintiles.
UNCERTAINTY IN HEALTHCARE INDUSTRY AND POSSIBLE HEALTHCARE REFORM
The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the pharmaceutical, biotechnology and
medical device industries. Numerous governments have undertaken efforts to
control growing healthcare costs through legislation, regulation and voluntary
agreements with medical care providers and pharmaceutical companies.
Implementation of government healthcare reform may adversely affect research and
development expenditures by pharmaceutical, biotechnology and medical device
companies which could decrease the business opportunities available to
Quintiles. Management is unable to predict the likelihood of healthcare reform
legislation being enacted or the effects such legislation would have on
Quintiles.
EXCHANGE RATE FLUCTUATIONS
Approximately 56.5%, 59.2% and 57.0% of Quintiles' net revenue for the
years ended December 31, 1996, 1995, and 1994, respectively, were derived from
Quintiles' operations outside the United States. Quintiles' operations and
financial results could be significantly affected by factors associated with
international operations such as changes in foreign currency exchange rates and
uncertainties relative to regional economic circumstances, as well as by other
risks sometimes associated with international operations. Since the revenue and
expenses of Quintiles' foreign operations are generally denominated in local
currencies, exchange rate fluctuations between such local currencies and the
U.S. dollar will subject Quintiles to currency translation risk with respect to
the reported results of its foreign operations. Also, Quintiles may be subject
to foreign currency transaction risks when Quintiles' service contracts are
denominated in a currency other than the currency in which Quintiles incurs
expenses related to such contracts. Quintiles limits its foreign currency
transaction risks through exchange rate collars stated in its contracts with
clients or Quintiles hedges the transaction risk with foreign exchange contracts
or options. There can be no assurance that Quintiles will not experience
fluctuations in financial results from Quintiles' operations outside the United
States, and there can be no assurance Quintiles will be able to contractually or
otherwise favorably reduce its currency transaction risk associated with its
service contracts.
VARIATION IN QUARTERLY OPERATING RESULTS
Quintiles' results of operations have been and can be expected to be
subject to quarterly fluctuations. Quarterly results can fluctuate as a result
of a number of factors, including the timing of start-up expenses for new
offices, acquisitions, the completion or commencement of significant contracts,
changes in the mix of services offered and foreign exchange fluctuations.
Quintiles believes that quarterly comparisons of its financial results should
not be relied upon as an indication of future performance.
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VOLATILITY OF STOCK PRICE
The market price of Quintiles' Common Stock has been and may continue to be
subject to wide fluctuations in response to variations in operating results from
quarter to quarter, changes in earnings estimates by analysts, market conditions
in the industry and general economic conditions.
USE OF PROCEEDS
The Shares being offered hereby are for the account of the Selling
Stockholders and the Company is not selling any of the Shares. Accordingly, the
Company will not receive any proceeds from the sale of Shares. See "Plan of
Distribution."
SELLING STOCKHOLDERS
The Selling Stockholders are former stockholders of Innovex and Butler that
received the Shares in connection with the Transactions. The following table
sets forth certain information as of the date of this Prospectus. All of the
Shares held by the Selling Stockholders may be sold pursuant to this Prospectus.
The Shares are being registered to permit public secondary trading in the Shares
and the Selling Stockholders may offer the Shares for resale from time to time.
See "Plan of Distribution."
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES SHARES BENEFICIALLY
OWNED PRIOR BEING OWNED AFTER
TO OFFERING(1) OFFERED OFFERING(1)
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NAME NUMBER PERCENT NUMBER PERCENT
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FORMER INNOVEX STOCKHOLDERS (2)
Barrie S. Haigh (3)...................... 4,724,993 13.5 588,916 3,961,078 11.3
Stella D. Haigh (4)...................... 4,724,993 13.5 62,815 3,961,078 11.3
Barrie Haigh Children's Settlement No.
1...................................... 131,092 * 31,092 100,000 *
Barrie Haigh Children's Settlement No.
2...................................... 181,092 * 81,092 100,000 *
Paul Knott Trust No. 1 (5)............... 28,503 * 28,503 0 -
Paul Knott Trust No. 2 (5)............... 28,503 * 28,503 0 -
Lloyds Development Capital Limited....... 127,204 * 127,204 0 -
David Stack (6).......................... 31,923 * 11,971 19,952 *
David Stack Family Limited Partnership
(6).................................... 8,000 * 8,000 0 -
David F. White (7)....................... 89,981 * 39,904 50,077 *
David F. White Trust (7)................. 11,971 * 11,971 0 -
FORMER BUTLER STOCKHOLDERS (8)
Jean B. Bender........................... 14,287 * 14,287 0 -
Robert B. Butler......................... 47,623 * 47,623 0 -
Sally T. Butler.......................... 47,623 * 47,623 0 -
Lani M. Hashimoto........................ 7,144 * 7,144 0 -
Penny E. McCann.......................... 23,812 * 23,812 0 -
Bryan P. McIntyre........................ 35,717 * 35,717 0 -
Sonja M. Stephenson...................... 14,287 * 14,287 0 -
Robert F. Wolfe, Jr...................... 23,812 * 23,812 0 -
</TABLE>
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* Less than one percent
(1) Based on 35,094,171 shares of Common Stock outstanding as of June 9, 1997
and the same number of shares outstanding after the offering. Pursuant to
the rules of the Commission, certain shares of the Common Stock which a
person has the right to acquire within 60 days pursuant to the exercise of
stock options are deemed to be outstanding for the purpose of computing the
percentage ownership of such person but are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.
(2) The stockholders listed under this heading received shares on November 29,
1996 in connection with a share exchange with Innovex.
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(3) Includes 462,185 shares held by Mr. Haigh's wife Stella D. Haigh, 131,092
shares held by Barrie Haigh Children's Settlement No. 1 and 181,092 shares
held by Barrie Haigh Children's Settlement No. 2. Pursuant to this
Prospectus, Mr. Haigh may sell 588,916 shares, Stella D. Haigh may sell
62,815 shares, Barrie Haigh Children's Settlement No. 1 may sell 31,092
shares and Barrie Haigh Children's Settlement No. 2 may sell 81,092 shares.
Mr. Haigh is Vice Chairman of the Board of Directors and Chief Customer
Officer of Quintiles. Mr. Haigh also serves on the Nominations Committee of
Quintiles' Board of Directors.
(4) Includes 3,950,624 shares held by Mrs. Haigh's husband, Barrie S. Haigh.
Also includes 131,092 shares held by Barrie Haigh Children's Settlement No.
1 and 181,092 shares held by Barrie Haigh Children's Settlement No. 2.
Pursuant to this Prospectus, Mrs. Haigh may sell 62,815, Barrie Haigh
Children's Settlement No. 1 may sell 31,092 shares and Barrie Haigh
Children's Settlement No. 2 may sell 81,092 shares.
(5) Dr. Paul Knott, Senior Vice-President, International Strategic Development
and Director of Quintiles is a beneficiary and serves as a trustee of the
trusts selling shares pursuant to this Prospectus. Dr. Knott also owns in
his own name 24,549 shares.
(6) Includes 19,952 shares subject to presently exercisable stock options and
8,000 shares held by the David Stack Family Limited Partnership. Mr. Stack
is the President of Innovex (North America) Inc., a wholly-owned subsidiary
of Quintiles.
(7) Includes 10,672 shares held by Mr. White's wife, and 11,971 shares held in a
trust of which Mr. White is a trustee. Mr. White is Chief Executive Officer
of the Innovex Division of Quintiles. Pursuant to this Prospectus, Mr. White
may sell 27,933 shares and the David White Trust may sell 11,971 shares.
(8) The stockholders listed under this heading received shares on June 2, 1997
in connection with the Company's acquisition of Butler.
8
<PAGE> 10
PLAN OF DISTRIBUTION
The Shares offered hereby by the Selling Stockholders may be sold from time
to time by the Selling Stockholders, or by pledgees, donees, transferees or
other successors in interest. The decision to offer and sell the Shares, and the
timing and amount of any offers or sales that are made, is and will be within
the sole discretion of the Selling Stockholders. The Shares may be sold from
time to time on the Nasdaq National Market, or otherwise at prices and at terms
then prevailing, or in negotiated transactions. The Shares may be sold by one or
more of the following methods, without limitation: (a) a block trade in which
the broker-dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers;
and (d) face-to-face transactions between the Selling Stockholders and
purchasers without a broker-dealer. In effecting sales, brokers or dealers
engaged by the Selling Stockholders may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive commissions or discounts from
the Selling Stockholders in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers and any other participating brokers or dealers may
be deemed to be "underwriters" within the meaning of the Securities Act, in
connection with such sales. In addition, any securities covered by this
Prospectus that qualify for sale pursuant to Rule 144 under the Securities Act
might be sold under Rule 144 rather than pursuant to this Prospectus.
Upon the Company being notified by a Selling Stockholder that any material
arrangement has been entered into with a broker or dealer for the sale of Shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplemented Prospectus will
be filed, if required, pursuant to Rule 424(c) under the Securities Act, setting
forth: the name of each such broker-dealer; the number of Shares involved; the
price at which such Shares were sold; the commissions paid or discounts or
concessions allowed to such broker-dealer(s); where applicable, that such
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus, as supplemented; and other
facts material to the transaction.
The Company anticipates that the Registration Statement shall remain
effective until the earlier of (i) the date on which all of the Shares included
in the Registration Statement have been distributed to the public; and (ii) as
to the Shares offered by the Selling Stockholders who are former stockholders of
Innovex, until December 1, 1997, and as to the remaining Selling Stockholders
until June 1, 1998.
In accordance with the terms of the Innovex transaction, the Selling
Stockholders who are former stockholders of Innovex are limited to offering no
more than 500,000 Shares in any 90 day period.
Because of the restrictions imposed by pooling of interests accounting
rules, and notwithstanding the effectiveness of the Registration Statement,
current affiliates of Quintiles, including directors and executive officers
(such as certain Innovex Selling Stockholders), and those former Butler
stockholders who were affiliates of Butler or who have become affiliates of
Quintiles, are prohibited from selling or otherwise reducing their risk relative
to the Shares that they hold until Quintiles has published consolidated
financial statements covering 30 days combined operations of Quintiles and
Butler.
The Company shall pay its own legal and accounting fees, all registration
and filing fees attributable to the registration of the Shares, all legal fees
and filing fees relating to state securities or "blue sky" filings, the filing
fee payable to The Nasdaq Stock Market, and all printing fees incurred in
connection herewith. Each Selling Stockholder shall pay his, her or its own
legal and accounting fees and any other expenses incurred by the Selling
Stockholder. Any commissions, discounts or other fees payable to broker-dealers
in connection with any sale of the Shares shall be borne by the Selling
Stockholder selling such Shares.
The Company has agreed to indemnify the Selling Stockholders in certain
circumstances, against certain liabilities, including liabilities arising under
the Securities Act. Each Selling Stockholder has agreed to indemnify the Company
and its directors and officers against certain liabilities, including
liabilities arising under the Securities Act.
There can be no assurance that the Selling Stockholders will sell any or
all of the Shares offered by them hereunder.
9
<PAGE> 11
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for the Company by Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan,
L.L.P., 2500 First Union Capitol Center, Raleigh, North Carolina 27601.
EXPERTS
The consolidated financial statements of the Company incorporated herein by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table shows the estimated expenses of the issuance and
distribution of securities offered hereby.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee........................................ $22,354.25
Legal Fees and Expenses..................................... $10,000.00
Accounting Fees and Expenses................................ $ 7,500.00
Nasdaq Listing Fee.......................................... $ 4,286.10
Printing and Related Expenses............................... $ 1,500.00
Miscellaneous Expenses...................................... $ 359.65
----------
Total........................................ $45,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Sections 55-8-50 through 55-8-58 of the North Carolina Business Corporation
Act permit a corporation to indemnify its directors, officers, employees or
agents under either or both a statutory or nonstatutory scheme of
indemnification scheme of indemnification. Under the statutory scheme, a
corporation may, with certain exceptions, indemnify a director, officer,
employee or agent of the corporation who was, is, or is threatened to be made, a
party to any threatened, pending or completed legal action, suit or proceeding,
whether civil, criminal, administrative, or investigative, because of the fact
that such person was a director, officer, agent or employee of the corporation,
or is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. This indemnity may
include the obligation to pay any judgment, settlement, penalty, fine (including
an excise tax assessed with respect to an employee benefit plan) and reasonable
expenses incurred in connection with a proceeding (including counsel fees), but
no such indemnification may be granted unless such director, officer, agent or
employee (i) conducted himself in good faith, (ii) reasonably believed (1) that
any action taken in his official capacity with the corporation was in the best
interest of the corporation or (2) that in all other cases his conduct at least
was not opposed to the corporation's best interest, and (iii) in the case of any
criminal proceeding, had no reasonable cause to believe his conduct was
unlawful. Whether a director has met the requisite standard of conduct for the
type of indemnification set forth above is determined by the board of directors,
a committee of directors, special legal counsel or the shareholders in
accordance with Section 55-8-55. A corporation may not indemnify a director
under the statutory scheme in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the corporation or
in connection with a proceeding in which a director was adjudged liable on the
basis of having received an improper personal benefit.
In addition to, and separate and apart from the indemnification described
above under the statutory scheme, Section 55-8-57 of the North Carolina Business
Corporation Act permits a corporation to indemnify or agree to indemnify any of
its directors, officers, employees or agents against liability and expenses
(including attorney's fees) in any proceeding (including proceedings brought by
or on behalf of the corporation) arising out of their status as such or their
activities that were, at the time taken, known or believed by the person to be
clearly in conflict with the best interests of the corporation. The Company's
bylaws provide for indemnification to the fullest extent permitted under the
North Carolina Business Corporation Act, provided, however, that the Company
will indemnify any person seeking indemnification in connection with a
proceeding initiated by such person only if such proceeding was authorized by
the Board of Directors of the Company. Accordingly, the Company may indemnify
its directors, officers and employees in accordance with either the statutory or
the non-statutory standard.
Sections 55-8-52 and 55-8-56 of the North Carolina Business Corporation Act
require a corporation, unless its articles of incorporation provide otherwise,
to indemnify a director or officer who has been wholly successful, on the merits
or otherwise, in the defense of any proceeding to which such director or officer
was a party. Unless prohibited by the articles of incorporation, a director or
officer also may make application and obtain court-
II-1
<PAGE> 13
ordered indemnification if the court determines that such director or officer is
fairly and reasonably entitled to such indemnification as provided in Sections
55-8-54 and 55-8-56.
Finally, Section 55-8-57 of the North Carolina Business Corporation Act
provides that a corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee or agent of the
corporation against certain liabilities incurred by such persons, whether or not
the corporation is otherwise authorized by the North Carolina Business
Corporation Act to indemnify such party. The Company's directors and officers
are currently covered under directors' and officers' insurance policies
maintained by the Company.
As permitted by North Carolina law, Article XI of the Company's Articles of
Incorporation limits the personal liability of directors for monetary damages
for breaches of duty as a director provided that such limitation will not apply
to (i) acts or omissions that the director at the time of the breach knew or
believed were clearly in conflict with the best interests of the Company, (ii)
any liability for unlawful distributions under N.C. Gen. Stat. Section 55-8-33,
(iii) any transaction from which the director derived an improper personal
benefit, or (iv) acts or omissions occurring prior to the date the provision
became effective.
ITEM 16. EXHIBITS
The following documents (unless indicated) are filed herewith and made a
part of this Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <C> <S>
4.01(1) -- Specimen Common Stock Certificate
4.02(2) -- Amended and Restated Articles of Incorporation, as amended
4.03(3) -- Amended and Restated Bylaws
4.04(4) -- Registration Rights Agreement dated as of November 29, 1996
among Quintiles and the Shareholders of Innovex
4.05(5) -- Amendment to Registration Rights Agreement filed as Exhibit
4.04 hereto
4.06 -- Terms of registration rights granted by Quintiles to
shareholders of Butler
5.01 -- Opinion of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P. regarding legality of securities being
registered
23.01 -- Consent of Ernst & Young LLP
23.02 -- Consent of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, (included in Exhibit 5.01 hereto)
24.01 -- Powers of Attorney (included on the signature page hereof)
</TABLE>
- ---------------
(1) Exhibit to the Company's Registration Statement on Form S-1 (Registration
No. 33-75766) as filed February 28, 1994 and incorporated herein by
reference.
(2) Exhibit to the Company's Registration Statement on Form S-3 (Registration
No. 333-19009) as filed December 30, 1996 and incorporated herein by
reference.
(3) Exhibit to the Company's Annual Report on Form 10-K as filed with the
Commission on for the fiscal year ended December 31, 1995 and incorporated
herein by reference.
(4) Exhibit to the Company's Form 8-K dated November 22, 1996, as amended, and
incorporated herein by reference.
(5) Exhibit to the Company's Form 8-K dated March 5, 1997 and incorporated
herein by reference.
II-2
<PAGE> 14
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers and 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 end of the estimated
maximum offering range may be reflected in the form of the prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% 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 (a)(1)(i) and (a)(1)(ii) of this section
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 Securities 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, each 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.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act 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.
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 Act 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 and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Durham, State of North Carolina, on June 10, 1997.
QUINTILES TRANSNATIONAL CORP.
By: /s/ DENNIS B. GILLINGS
------------------------------------
Dennis B. Gillings
Chairman of the Board of Directors
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Dennis B. Gillings and Rachel R. Selisker and
each of them, each with full power to act without the other, his true and lawful
attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments to this Registration Statement on Form
S-3 and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully for all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons as of June 10,
1997 in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ DENNIS B. GILLINGS Chairman of the Board of Directors and Chief
- ----------------------------------------------------- Executive Officer
Dennis B. Gillings
/s/ BARRIE S. HAIGH Vice Chairman of the Board of Directors and
- ----------------------------------------------------- Chief Customer Officer
Barrie S. Haigh
/s/ SANTO J. COSTA President, Chief Operating Officer and
- ----------------------------------------------------- Director
Santo J. Costa
/s/ RACHEL R. SELISKER Chief Financial Officer, Executive Vice
- ----------------------------------------------------- President Finance, and Director (Principal
Rachel R. Selisker accounting and financial officer)
/s/ ROBERT C. BISHOP Director
- -----------------------------------------------------
Robert C. Bishop
/s/ VAUGHN D. BRYSON Director
- -----------------------------------------------------
Vaughn D. Bryson
/s/ CHESTER W. DOUGLASS Director
- -----------------------------------------------------
Chester W. Douglass
/s/ JOHN G. FRYER Director
- -----------------------------------------------------
John G. Fryer
</TABLE>
II-4
<PAGE> 16
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------- -----
<C> <S>
/s/ PAUL KNOTT Director
- -----------------------------------------------------
Paul Knott
/s/ LAWRENCE S. LEWIN Director
- -----------------------------------------------------
Lawrence S. Lewin
/s/ ARTHUR M. PAPPAS Director
- -----------------------------------------------------
Arthur M. Pappas
/s/ LUDO J. REYNDERS Director
- -----------------------------------------------------
Ludo J. Reynders
/s/ RICHARD H. THOMPSON Director
- -----------------------------------------------------
Richard H. Thompson
</TABLE>
II-5
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<C> <S>
4.01(1) Specimen Common Stock Certificate
4.02(2) Amended and Restated Articles of Incorporation, as amended
4.03(3) Amended and Restated Bylaws
4.04(4) Registration Rights Agreement dated as of November 29, 1996
among Quintiles and the Shareholders of Innovex Limited
4.05(5) Amendment to Registration Rights Agreement filed as Exhibit
4.04 hereto
4.06 Terms of registration rights granted by Quintiles to
shareholders of Butler
5.01 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P. regarding legality of securities being
registered
23.01 Consent of Ernst & Young LLP
23.02 Consent of Smith, Anderson, Blount, Dorsett, Mitchell &
Jernigan, L.L.P. (included in Exhibit 5.01 hereto)
24.01 Powers of Attorney (included on the signature page hereof)
</TABLE>
- ---------------
(1) Exhibit to the Company's Registration Statement on Form S-1 (Registration
No. 33-75766) as filed February 28, 1994 and incorporated herein by
reference.
(2) Exhibit to the Company's Registration Statement on Form S-3 (Registration
No. 333-19009) as filed December 30, 1996 and incorporated herein by
reference.
(3) Exhibit to the Company's Annual Report on Form 10-K as filed with the
Commission on for the fiscal year ended December 31, 1995 and incorporated
herein by reference.
(4) Exhibit to the Company's Form 8-K dated November 22, 1996, as amended, and
incorporated herein by reference.
(5) Exhibit to the Company's Form 8-K dated March 5, 1997 and incorporated
herein by reference.
<PAGE> 1
EXHIBIT 4.06
QUINTILES TRANSNATIONAL CORP.
TERMS OF REGISTRATION RIGHTS GRANTED BY QUINTILES TO SHAREHOLDERS OF BUTLER
7.2. Registration Rights.
(a) As used in this Section 7.2, the following terms shall have the
following respective meanings:
(i) "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities
Act;
(ii) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time;
(iii) "Holder" shall mean any Stockholder holding Registrable
Securities;
(iv) "Registrable Securities" shall mean the shares of Common Stock
of the Purchaser issued to certain of the Stockholders pursuant to
Section 1.1 above and the Plan of Merger;
(v) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing with the Commission a
registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration
statement;
(vi) "Registration Expenses" shall mean expenses, except Selling
Expenses, incurred by the Purchaser in complying with subsection (b)
hereof, including without limitation with respect to registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Purchaser, and blue sky fees and
expenses, in the event of the registration provided for in subsection
(b) below;
(vii) "Registration Statement" shall have the meaning set forth in
subsection (b), below;
(viii) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the
time;
(ix) "Selling Expenses" shall mean all expenses except Registration
Expenses, including, without limitation, all underwriting discounts,
selling commissions and stock transfer taxes applicable to the
securities registered by any Holder and all fees and disbursements of
counsel for any Holder; and
(x) "Suspension Notice" shall have the meaning set forth in
subsection (c)(i)(B), hereof.
(b) Subject to Subsection (c) hereof, the Purchaser shall (i) use its
best efforts to file by August 1, 1997 a registration statement under the
Securities Act with respect to the Registrable Securities (the
"Registration Statement"), and (ii) thereafter use best reasonable efforts
to cause such Registration Statement to be declared effective by the
Commission under the Securities Act.
(c) Notwithstanding the foregoing, (i) the Purchaser [Quintiles] shall
not be required to take any action with respect to the registration or
declaration of effectiveness of the Registration Statement following notice
to Holders (which shall be made to the Representative, and to each
Stockholder as provided in Section 9.7) from the Purchaser (a "Suspension
Notice") of the existence of any state of facts or the happening of any
event (including without limitation pending negotiations relating to, or
the consummation of, a transaction, or the occurrence of any event which in
the opinion of the Purchaser might require additional disclosure of
material, non-public information by the Purchaser in the Registration
Statement as to which the Purchaser believes it has a bona fide business
purpose for preserving confidentiality or which renders the Purchaser
unable to comply with the published rules and regulations of the Commission
promulgated under the Securities Act or the Exchange Act, as in effect at
any relevant time) which might reasonably result in (1) the Registration
Statement, any amendment or post-effective amendment thereto, or any
document
<PAGE> 2
incorporated therein by reference containing an untrue statement of a
material fact or omitting to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or (2)
the prospectus issued under the Registration Statement, any prospectus
supplement, or any document incorporated therein by reference including an
untrue statement of material fact or omitting to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (provided that,
for not less than two continuous periods of two weeks, ending not later
than November 30, 1997, no Suspension Notice shall be issued or in effect
with respect to the Registrable Securities); and
(ii) upon receipt of a Suspension Notice from the Purchaser, the
Holders will forthwith discontinue disposition of the Registrable
Securities pursuant to the Registration Statement until the
Shareholders' receipt of copies of prospectus supplements or amendments
prepared by or on behalf of the Purchaser, together with a notification
that the Suspension Notice is no longer in effect, and, if so directed
by the Purchaser, the Holders will deliver to the Purchaser all copies
in their possession of the prospectus covering such Registrable
Securities current at the time of receipt of any Suspension Notice.
(d) Underwriting. In the event that a registration pursuant to this
Section 7.2 is for a registered public offering involving an underwriting,
the Purchaser shall so advise the Holders. In such event, the right of the
Holders to registration pursuant to this Section 7.2 shall be conditioned
upon the Holders' participation in the underwriting arrangements required
by this Section 7.2, and the inclusion of the Holders' Registrable
Securities in the underwriting to the extent requested shall be limited as
provided herein.
The Purchaser (together with all Holders proposing to distribute their
securities through such underwriting) shall enter into an underwriting agreement
in customary form with the managing underwriter(s) selected for such
underwriting by the Purchaser. Notwithstanding any other provision of this
Section 7.2, if the managing underwriter(s) advise(s) the Purchaser in writing
that marketing factors require a limitation of the number of shares to be
underwritten, then the Purchaser shall so advise the Holders participating and
the number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among the Holders (and any
other participants in such registration, including the Purchaser) thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders (and such other participants) at the time of
filing the registration statement. No Registrable Securities excluded from the
underwriting by reason of the underwriters' marketing limitation shall be
included in such registration, and any such excluded shares will be otherwise
included in the Registration Statement. To facilitate the allocation of shares
in accordance with the above provisions, the Purchaser or the underwriters may
round the number of shares allocated to any Holder to the nearest one hundred
(100) shares.
If any Holder disapproves of the terms of the underwriting, such Holder may
elect to withdraw therefrom by written notice to the Purchaser and the managing
underwriter. The Registrable Securities so withdrawn shall also be withdrawn
from registration, and such Registrable Securities shall not be transferred in a
public distribution prior to ninety (90) days after the effective date of such
registration, or such other shorter period of time as the underwriters may
require.
(e) Expenses of Registration. All Registration Expenses incurred in
connection with the registration pursuant to this Section 7.2 shall be
borne by the Purchaser. Unless otherwise provided in this Section 7.2, all
Selling Expenses relating to securities registered on behalf of the Holders
shall be borne by the Holders of such securities pro rata on the basis of
the number of shares so registered.
(f) Registration Procedures. In the case of the registration,
qualification or compliance effected by the Purchaser pursuant to this
Section 7.2, the Purchaser will keep each Holder advised in writing as to
the initiation and conduct of the registration, qualification and
compliance and as to the completion thereof. The Purchaser shall use its
best efforts to keep the Registration Statement effective for such period
which the Purchaser shall determine in its reasonable discretion is not
adverse to the best interests of the Purchaser; provided, however, that
under no circumstances shall the Purchaser have any obligation to keep the
Registration Statement effective after May 31, 1998.
<PAGE> 3
(g) Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Purchaser such
information regarding such Holder or Holders, the Registrable Securities
held by them and the distribution proposed by such Holder or Holders as the
Purchaser may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Section 7.2. Each Holder shall notify the Purchaser as promptly as
practicable of any inaccuracy or change in information previously furnished
by such Holder to the Purchaser or of the occurrence of any event as a
result of which any prospectus included in the Registration statement
contains or would contain an untrue statement of a material fact regarding
such Holder or such Holder's intended method of distribution of the
Registrable Securities or omits to state any material fact regarding such
Holder or such Holder's intended method of distribution of Registrable
Securities necessary to make the statements therein, in light of the
circumstances then existing, not misleading, and promptly to furnish to the
Purchaser any additional information required to correct and update any
previously furnished information or required so that such prospectus shall
not contain, with respect to such Holder or the distribution of such
Registrable Securities, an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of
the circumstances then existing, not misleading.
(h) Indemnification.
(i) The Purchaser will, if securities of the Purchaser other than
the Registrable Securities are included in the securities as to which
such registration, qualification or compliance is being effected
pursuant to this Section 7.2, indemnify each Holder with respect to
which registration, qualification or compliance has been effected
pursuant to this Section 7.2 and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of
the Securities Act, against all expenses, claims, losses, damages, or
liabilities (or actions in respect thereof), including any of the
foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation
by the Purchaser of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Purchaser in
connection with any such registration, qualification or compliance, and
the Purchaser will reimburse each such Holder and each such underwriter
and each person who controls any such underwriter for any legal and any
other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or
action, provided that the Purchaser will not be liable in any such case
to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Purchaser by an instrument
duly executed by such Holder and stated to be specifically for use
therein.
(ii) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected pursuant to this Section
7.2, indemnify the Purchaser, each of the Purchaser's directors and
officers, each underwriter, if any, of the Purchaser's securities
covered by such a registration statement, each person who controls the
Purchaser or any such underwriter within the meaning of Section 15 of
the Securities Act, and each other such Holder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
will reimburse the Purchaser, such Holders, such directors, officers,
persons, underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each
case to the extent, but only to the extent, that such untrue statement
(or alleged untrue
<PAGE> 4
statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with written information furnished to
the Purchaser by an instrument duly executed by such Holder and stated
to be specifically for use therein.
(i) Transfer of Registration Rights. The registration rights in this
Section 7.2 are not transferable by any Holder, except by law or upon the
death or incompetence of such Holder.
(j) Delay of Registration. No Holder shall have any right to obtain
or seek an injunction restraining or otherwise delaying any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 7.2.
(k) Standoff Agreement. Each Holder agrees, in connection with any
public offering of the Purchaser's securities, that upon the request of the
Purchaser or the underwriters managing an underwritten offering, such
Holder shall not sell, make any short sale of, loan, grant any option for
the purchase of, or otherwise dispose of any Registrable Securities (other
than those included in the registration) without the prior written consent
of the Purchaser or such underwriters, as the case may be, for such period
of time (not to exceed one hundred twenty (120) days) from the effective
date of such registration as may be requested by the underwriters; provided
that the officers and directors of the Purchaser who own stock in the
Purchaser also agree to such restrictions.
<PAGE> 1
EXHIBIT 5.01
SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P.
Lawyers
2500 First Union Capitol Center
Raleigh, North Carolina 27601
Phone: 919-821-1220
Fax: 919-821-6800
June 10, 1997
Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 300
Durham, North Carolina 27560
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Quintiles Transnational Corp. (the "Company"),
in connection with the preparation of a Registration Statement on Form S-3 (the
"Registration Statement") to be filed by the Company with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
relating to the registration of 1,214,305 shares (the "Shares") of the Company's
common stock, par value $.01 per share ("Common Stock"), which have been
included in the Registration Statement for the respective accounts of the
persons identified in the Registration Statement as Selling Stockholders. This
opinion is furnished pursuant to the requirement of Item 601(b)(5) of Regulation
S-K under the Act.
We have examined the Amended and Restated Articles of Incorporation, as
amended, and the Amended and Restated Bylaws of the Company, minutes of meetings
of its Board of Directors, and such other corporate records of the Company and
other documents and have made such examinations of law as we have deemed
necessary for purposes of this opinion. We also have relied upon a certificate
of an officer of the Company, dated of even date herewith, relating to the
Registration Statement.
Based on and subject to the foregoing and to the additional qualifications
set forth below, it is our opinion that the Shares are validly issued, fully
paid and nonassessable.
We hereby consent to the reference to our firm in the Registration
Statement under the heading "Legal Matters" and to the filing of this opinion as
an exhibit to the Registration Statement. Such consent shall not be deemed to be
an admission that this firm is within the category of persons whose consent is
required under Section 7 of the Act or the regulations promulgated pursuant to
the Act.
This opinion is limited to the laws of the State of North Carolina and no
opinion is expressed as to the laws of any other jurisdiction.
The opinion expressed herein does not extend to compliance with federal and
state securities law relating to the sale of the Shares.
Our opinion is as of the date hereof, and we do not undertake to advise you
of matters which might come to our attention subsequent to the date hereof which
may affect our legal opinion expressed herein.
This opinion is rendered solely for your benefit in connection with the
transaction described above and may not be used or relied upon by any other
person without our prior written consent in each instance.
Sincerely yours,
SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P.
By: /s/ Christopher B. Capel
----------------------------------------
Christopher B. Capel
<PAGE> 1
EXHIBIT 23.01
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Quintiles
Transnational Corp. for the registration of 1,214,305 shares of its common stock
and to the incorporation by reference therein of our report dated January 29,
1997, with respect to the consolidated financial statements and schedules of
Quintiles Transnational Corp. included in its Annual Report (Form 10-K) for the
year ended December 31, 1996, filed with the Securities and Exchange Commission.
Ernst & Young LLP
Raleigh, North Carolina
June 10, 1997
