<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 17, 1997
REGISTRATION NO. 333-
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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)
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<S> <C>
NORTH CAROLINA 56-1714315
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
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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.
AMY J. MEYERS, 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(1) OFFERING PRICE(1) FEE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share.... 779,054 $83.6875 $65,197,081.00 $19,756.69
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(1) 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 October 10, 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.
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<PAGE> 2
PROSPECTUS
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QUINTILES TRANSNATIONAL CORP.
779,054 SHARES
COMMON STOCK, PAR VALUE $.01 PER SHARE
---------------------
The shares offered hereby (the "Shares") consist of 779,054 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) Intelligent
Imaging, Inc. ("Intelligent Imaging") (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. The Company has previously filed a Registration Statement
on Form S-3 (File No. 333-28919) with respect to certain shares issued in the
Innovex Transaction.
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. The Shares may be
sold from time to time 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 October , 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 , 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, proxy
statements 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 Reports on Form 10-Q for the fiscal quarters
ended March 31, 1997 and June 30, 1997;
(3) Quintiles' Current Reports on Form 8-K dated February 7, 1997,
March 5, 1997, August 29, 1997 and October 17, 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 contained or 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 statements set forth herein or in the 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 has experienced such concentration in 1997 and is
likely to continue to experience such concentration in future years. The loss of
a major project or 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
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barriers. Quintiles has a transnational organizational structure, comprised of
three service groups performing 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 January 1, 1997, Quintiles has completed
several 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. 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
United Kingdom (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 Contract Research Organizations, 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
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continue, 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 57.0%, 60.1% and 58.6% 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 Intelligent
Imaging who 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 being offered 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 STOCKHOLDER (2)
Barrie S. Haigh.......................... 4,624,993(3) 12.6 736,085(4) 3,224,993(5) 8.7
FORMER INTELLIGENT IMAGING STOCKHOLDERS (6)
Edward Gastineau......................... 38,673 * 19,336 19,337 *
John Ceccoli............................. 38,673 * 19,336 19,337 *
Richard Gastineau........................ 8,594 * 4,297 4,297 *
</TABLE>
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* Less than one percent
(1) Based on 36,688,029 shares of Common Stock outstanding as of September 30,
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 stockholder listed under this heading received shares on November 29,
1996 in connection with the Innovex Transaction.
(3) Includes 462,185 shares held by Mr. Haigh's wife Stella D. Haigh, and an
aggregate of 212,184 shares held by the Barrie Haigh Children's Settlement
No. 1 and the Barrie Haigh Children's Settlement No. 2. From November 29,
1996 until July 31, 1997, Mr. Haigh served as Vice Chairman of the Board of
Directors and Chief Customer Officer of Quintiles.
(4) Such shares may also be offered from time to time by Stella D. Haigh, the
Barrie Haigh Children's Settlement No. 1 or the Barrie Haigh Children's
Settlement No. 2.
(5) Mr. Haigh's beneficial share ownership total after the offering takes into
account 763,915 shares registered under a previously filed Registration
Statement on Form S-3 (File No. 333-28919), of which 100,000 shares have
been sold.
(6) The stockholders listed under this heading received shares on August 28,
1997 in connection with the Intelligent Imaging Transaction.
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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, at prices then prevailing, in
negotiated transactions or otherwise. 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) privately negotiated 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. The Selling Stockholders and the brokers and dealers
through whom sales of the Shares 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. 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.
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; or (ii) as to
the Shares offered by the Selling Stockholders who are former stockholders of
(A) Innovex, December 31, 1997 and (B) Intelligent Imaging, August 28, 1998.
The Company shall pay its own legal and accounting fees, all registration
and filing fees attributable to the registration of the Shares, any 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 and their
officers, directors, employees and agents, and each person who controls any
Selling Stockholder, 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 in certain
circumstances 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.
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 and the supplemental consolidated financial statements of the
Company incorporated herein by reference from the Company's Current Report on
Form 8-K dated October 17, 1997 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon included therein and
incorporated herein by reference which, as to the years 1995 and 1994, are based
in part on the reports of other independent auditors. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
8
<PAGE> 10
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........................................ $19,756.69
Legal Fees and Expenses..................................... $10,000.00
Accounting Fees and Expenses................................ $ 7,500.00
Printing and Related Expenses............................... $ 1,500.00
Miscellaneous Expenses...................................... $ 243.31
----------
Total........................................ $39,000.00
==========
</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. 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> 11
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) -- Supplemental Agreement to Registration Rights Agreement
filed as Exhibit 4.04 hereto
4.06(6) -- Supplemental Agreement No. 2 to Registration Rights
Agreement filed as Exhibit 4.04 hereto
4.07 -- Terms of registration rights granted by Quintiles to
stockholders of Intelligent Imaging
4.08 -- Letter Agreement dated August 11, 1997 between Barrie S.
Haigh and Quintiles
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 Coopers & Lybrand L.L.P.
23.03 -- Consent of KPMG
23.04 -- 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.
(6) Exhibit to the Company's Registration Statement on Form S-3 (Registration
No. 333-28919), as amended, as filed June 30, 1997 and incorporated herein
by reference.
II-2
<PAGE> 12
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 (1)(i) and (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> 13
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 October 17, 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 October
17, 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/ 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
</TABLE>
II-4
<PAGE> 14
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
Director
/s/ CHESTER W. DOUGLASS
- -----------------------------------------------------
Chester W. Douglass
/s/ JOHN G. FRYER Director
- -----------------------------------------------------
John G. Fryer
/s/ PAUL KNOTT Director
- -----------------------------------------------------
Paul Knott
Director
- -----------------------------------------------------
Lawrence S. Lewin
/s/ ARTHUR M. PAPPAS Director
- -----------------------------------------------------
Arthur M. Pappas
/s/ LUDO J. REYNDERS Director
- -----------------------------------------------------
Ludo J. Reynders
Director
- -----------------------------------------------------
Richard H. Thompson
</TABLE>
II-5
<PAGE> 15
EXHIBIT INDEX
<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) -- Supplemental Agreement to Registration Rights Agreement
filed as Exhibit 4.04 hereto
4.06(6) -- Supplemental Agreement No. 2 to Registration Rights
Agreement filed as Exhibit 4.04 hereto
4.07 -- Terms of registration rights granted by Quintiles to
stockholders of Intelligent Imaging
4.08 -- Letter Agreement dated August 11, 1997 between Barrie S.
Haigh and Quintiles
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 Coopers & Lybrand L.L.P.
23.03 -- Consent of KPMG
23.04 -- 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.
(6) Exhibit to the Company's Registration Statement on Form S-3 (Registration
No. 333-28919), as amended, as filed June 30, 1997 and incorporated herein
by reference.
<PAGE> 1
EXHIBIT 4.07
7.4 Registration Rights.
(a) Registration. If at any time, or from time to time, during
the period ending on the first anniversary of the Closing Date, Parent
[Quintiles] shall determine to register under the Securities Act any of its
Common Stock, either for its own account or for the account of a security holder
or holders, in a registration statement covering the sale of such securities to
the general public (except with respect to any registration filed on Form S-8,
Form S-4 or any successor form thereto), Parent will use its best efforts to
include in such registration statement (and any related qualification under blue
sky laws) and in any underwriting involved therein, up to 50% of the shares (the
"Registrable Securities") of Parent's Stock delivered to the Stockholders
pursuant to this Agreement specified in a written request or requests, made
within 15 days after receipt of notice of such public offering to the
Stockholders, and Parent will use its best efforts to have such registration
statement declared effective by the SEC. The registration rights set forth in
this Section 7.4 shall expire one year from the Closing Date. To the extent that
the Registrable Securities are to be included in a registration statement under
this Section 7.4, Parent may elect, in its sole discretion, to include such
Registrable Securities in a separate registration statement which covers only
the Registrable Securities.
(b) Underwriting. The right of the Stockholders to participate
in an underwritten registration pursuant to this Section 7.4 shall be
conditioned upon the Stockholders' participation in the underwriting
arrangements required by this Section 7.4, and the inclusion of the
Stockholders' Registrable Securities in the underwriting to the extent requested
shall be limited as provided herein. The Parent (together with all Stockholders
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 Parent. Notwithstanding any
other provision of this Section 7.4, if the managing underwriter(s) advise(s)
the Parent that marketing factors require a limitation of the number of shares
to be underwritten, then the Parent shall so advise the Stockholders
participating and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among the
Stockholders (and any other participants in such registration, including the
Parent) 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
<PAGE> 2
excluded from the underwriting by reason of the underwriters' marketing
limitation shall be included in such registration. To facilitate the allocation
of shares in accordance with the above provisions, the Parent or the
underwriters may round the number of shares allocated to any Stockholder to the
nearest 100 shares. If any Stockholder disapproves of the terms of the
underwriting, such Stockholder may elect to withdraw therefrom by written notice
to the Parent 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 90 days
after the effective date of such registration, or such other shorter period of
time as the underwriters may require.
(c) Expenses of Registration. In connection with the
registration pursuant to this Section 7.4, Parent shall bear the expenses
relating to registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursement of counsel for Parent and blue sky fees and
expenses. The Stockholders shall bear the expenses relating to underwriting
discounts, selling commissions, stock transfer taxes and fees and disbursements
of their counsel.
(d) Information by Holder. The Stockholders whose Registrable
Securities are included in any registration shall furnish to the Parent such
information regarding such Stockholders, the Registrable Securities held by them
and the distribution proposed by such Stockholders as the Parent may request and
as shall be required in connection with any registration, qualification or
compliance referred to in this Section 7.4.
(e) Indemnification.
(i) The Parent will indemnify each Stockholder with
respect to which registration, qualification or compliance has been effected
pursuant to this Section 7.4 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
<PAGE> 3
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 Parent of the Securities Act or any rule
or regulation promulgated under the Securities Act applicable to the Parent in
connection with any such registration, qualification or compliance, and the
Parent will reimburse each such Stockholder 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 Parent 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 Parent by an instrument
duly executed by such Stockholder and stated to be specifically for use therein.
(ii) Each Stockholder will indemnify the Parent, each
of the Parent's directors and officers, each underwriter, if any, of the
Parent's securities covered by such a registration statement, each person who
controls the Parent or any such underwriter within the meaning of Section 15 of
the Securities Act, and each other such Stockholder 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 Parent, such Stockholders, 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
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 Parent by an instrument
duly executed by such Holder and stated to be specifically for use therein.
(f) Transfer of Registration Rights. The registration rights
in this Section 7.4 are not transferable by any Stockholder.
<PAGE> 4
(g) Delay of Registration. No Stockholder 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 7.4.
(h) Suspension. The Stockholders agree that, upon receipt of
any notice from the Parent 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 Parent might require additional disclosure of
material, non-public information by the Parent in the registration statement
provided for in this section as to which the Parent believes it has a bona fide
business purpose for preserving confidentiality or which renders the Parent
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 (A) such registration statement,
any amendment or post-effective amendment thereto, or any document 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 (B) the prospectus issued under
such 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, the Stockholders will forthwith discontinue disposition of the
Registrable Securities pursuant to such registration statement until the
Stockholders' receipt of copies of prospectus supplements or amendments prepared
by or on behalf of the Parent, and, if so directed by the Parent, the
Stockholders will deliver to the Parent all copies in their possession of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice.
<PAGE> 1
EXHIBIT 4.08
CHIMNEYS
WINTER HILL
COOKHAM DEAN
BERKSHIRE SL6 9TN
Dr. Dennis Gillings
Chairman and Chief Executive Officer
Quintiles Transnational Corp.
Suite 300
Riverbirch Building
4709 Creekstone Drive
Durham
North Carolina 27703
USA
Dated 11th August 1997
Dear Dennis
I write to confirm my resignation from all offices and positions of employment
I hold with regard to Quintiles Transnational Corp. ("QTRN") and its affiliates
including but not limited to my directorships of QTRN and Innovex Limited and
their respective subsidiaries. Although my resignations are tendered and
accepted today they shall be treated as having taken effect as of the end of
31st July 1997 ("the Effective Date") on the terms set forth in this letter.
1. EMPLOYMENT ARRANGEMENTS - I represent and warrant that the sole agreement
relating to employment, compensation, benefits and pension provision which I or
any of my affiliates, including my wife, have with or involving QTRN or Innovex
or any of their respective subsidiaries or affiliates is the employment
agreement between myself and QTRN dated 29th November 1996 ("the Employment
Agreement"). The Employment Agreement is hereby and shall be cancelled and
terminated by mutual consent on and with effect from the Effective Date save for
Sections 4.5., 6, 7, 8, 9, 12 (save to the extent the said section 12 is
modified by this letter of agreement), 13, 14, 15, 16 and 17 of the Employment
Agreement ("the Retained Provisions") which shall remain in full force and
effect and the Retained Provisions shall be deemed to be incorporated herein by
reference. For the avoidance of doubt the Deed of Non Competition made between
us dated 29th November 1996 shall remain in full force and effect.
In consideration of QTRN entering into this agreement, I will act for a period
of twelve months commencing on 1st August 1997 and ending 31st July 1998 ("the
Consultancy Period") as a self employed consultant to advise and assist QTRN
and its subsidiaries generally in relation to their respective businesses and
in particular in relation to the maintenance and enhancement of customer
relationships on the terms of a separate consultancy agreement (containing
appropriate confidentiality provisions) to be entered into between us. I will
devote up to two days in each calendar month as required by QTRN to such
consultancy and QTRN will not pay me
<PAGE> 2
a consulting fee or give any other consideration beyond entering into and
performing this agreement but will reimburse me for expenses incurred in
performing my duties as a consultant. Except as specifically set forth herein,
I covenant and warrant that neither QTRN nor Innovex nor any of their
respective direct or indirect subsidiaries or affiliates have or shall have any
obligation whatsoever to provide me or my affiliates including my wife
directly or indirectly, now or in the future, with any remuneration, pension
contributions, compensation or other consideration including, but not limited
to any amounts accrued as at the date hereof.
QTRN will pay to the trustees of a pension scheme nominated by me the sum of
208,000 British Pounds by no later than 18th August 1997.
2. MUTUAL RELEASE - QTRN on behalf of itself and each of its subsidiaries
confirms and warrants to the best of QTRN's knowledge, that none of them has
any claim right or entitlement of any nature whatsoever against me which is due
now or may become due in the future which is not set forth herein. QTRN on
behalf of itself and each of its subsidiaries hereby releases me from all
claims, rights, debts, liabilities, demands, obligations, promises, costs,
expenses and action of whatever kind or nature and howsoever arising whether
known or unknown, fixed or contingent, whether in law or in equity which any of
them have had, may now have or may hereafter have against me arising under or
out of my or Stella Haigh's terms of employment with QTRN, Innovex Limited or
any of their affiliates, including but not limited to any claims under the
Employment Agreement or any other employment, compensation, benefit or pension
arrangement or the termination thereof. Provided always that the foregoing
release shall not apply to any obligation herein specifically stated to
survive this letter of agreement.
I hereby confirm and warrant to the best of my knowledge, that neither I nor any
person or persons acting on my behalf, or my affiliates including my wife, have
directly or indirectly any claim right or entitlement of any nature whatsoever
against QTRN or any of its direct or indirect subsidiaries or affiliates which
is now due or may become due in the future which is not set forth herein. I
hereby release QTRN and each of its subsidiaries and their respective officers
and employees ("the Released Parties"), and warrant that I have the authority to
grant such release, from all claims, rights, debts, liabilities, demands,
obligations, promises, costs, expenses and actions of whatever kind or nature
and howsoever arising whether known or unknown fixed or contingent, whether in
law or in equity which I or any of my affiliates, including my wife, have had,
may now have or may hereafter have against the Released Parties or any of them
arising under or out of my or Stella Haigh's terms of employment with QTRN,
Innovex Limited or any of their affiliates including but not limited to any
claims under the Employment Agreement or any other employment, compensation,
benefit or pension arrangement or the termination thereof (a "Relevant Claim").
Provided always that the foregoing release shall not apply to any obligation
herein specifically stated to survive this letter of agreement. I hereby warrant
that no third party will or is entitled to make any Relevant Claim on my behalf
or for my direct or indirect benefit, or the benefit of my affiliates including
my wife, nor is any third party a transferee or holder of any Relevant Claim and
I agree to indemnify and hold
<PAGE> 3
harmless QTRN and each of its subsidiaries and affiliates from any Relevant
Claim made by a third party.
Nothing in this letter of agreement shall waive any right which I might
otherwise have to be indemnified by QTRN or Innovex for matters arising from or
relating to my service as a director or officer of QTRN or Innovex or to be
covered by any directors' and officers' and directors' insurance policy as
contemplated by Section 4.8. of that certain Sale and Purchase Agreement dated
as of 4th October 1996 among, inter alia, QTRN and me.
3. SHARE TRADING - I hereby undertake and confirm that I will enter into a
mutually acceptable agreement with QTRN relating to my compliance with "pooling
of interest" restrictions.
I shall sell no more than 1,500,000 shares of Quintiles' common stock prior to
31st December 1997. QTRN shall register with the US Securities and Exchange
Commission such additional shares (if any) and waive such contractual
restrictions (if any) as are necessary for me to sell or otherwise dispose of
1,500,000 shares of Quintiles' common stock. The registration of such shares
will be governed by the terms and conditions of Section 2.6. (save that QTRN
shall have no obligation under that Section to effect an underwritten offering;
make itself available for due diligence or provide representations and
warranties to the Seller or any third party), Section 4(a) and Section 7 of the
Registration Rights Agreement, dated as of 29th November 1996, among, inter
alia, QTRN and me.
I shall refrain from disposing or causing or permitting the disposition of any
shares in QTRN held or controlled by me other than in a transaction brokered or
otherwise facilitated primarily by Goldman, Sachs & Co. or Morgan Stanley or
any of their respective affiliates, except with the consent of QTRN which
consent will not be unreasonably withheld or delayed.
Until such time as the number of shares in QTRN which I hold beneficially or of
record constitutes less than 5% of the total number of shares of QTRN then
outstanding, I shall notify QTRN promptly in writing in advance of each
transaction with respect to QTRN's shares made by me or on my behalf, and, prior
to taking such action I shall consider in good faith QTRN's input with regard to
such action, it being understood and agreed that the parties will co-operate in
good faith efforts to coordinate the orderly marketing of my shares.
Until I am able to reduce my holdings below 10%, I understand that I will be
allowed to trade under the de minimis exception to pooling restrictions 100,000
shares per pooling period plus any other shares under the limitations not taken
up by other affiliates.
QTRN confirms that I am released from any restriction on selling shares imposed
by any registration rights agreement to which I and QTRN are parties to the
extent necessary to enable me to sell 1,500,000 shares of Quintiles' common
stock as set out above.
<PAGE> 4
4. COMPANY PROPERTY - QTRN agrees to transfer to me at no cost the following
items of company property on or as soon as reasonably practicable after the
Effective Date:
(a) The facsimile machine located at my home; 01628481119
(b) The business telephone located at my home; 01628483172
(c) 3 mobile phones [having the numbers: 0802 797079, 0802 209309, 0370 1968]
5. MOTOR CAR - I agree to purchase from Innovex Limited a Mercedes 500 SL
motor car having the registration number BSH 999 for 55,000 British Pounds by
no later than 18th August 1997.
6. GENERAL - I confirm that I have taken independent legal advice on the terms
of this letter of agreement, that I am not relying on QTRN or any employee or
agent thereof for legal or other advice, and that this letter of agreement is
intended to create binding and legally enforceable obligations between us.
Each of us hereby undertakes to the other that each of us and our respective
affiliates will do all such matters and things and execute all such documents
(if any) as are necessary or appropriate to better effectuate the agreement set
out herein.
Please indicate your agreement to the terms of this letter by arranging for
signature of the attached copy of this letter on behalf of QTRN its affiliates
and subsidiaries.
Yours sincerely,
/s/ B. S. Haigh
BARRIE S. HAIGH
Agreed in the terms set out above.
Signed
/s/ Dennis Gillings
Dennis Gillings
For and on behalf of Quintiles Transnational Corp.
its affiliates and subsidiaries
<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
October 17, 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 779,054 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 have been validly issued and
are 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.
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/ SMITH, ANDERSON, BLOUNT, DORSETT,
MITCHELL & JERNIGAN, L.L.P.
<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 779,054 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 of Quintiles
Transnational Corp. incorporated by reference in its Annual Report (Form 10-K)
for the year ended December 31, 1996 and our report dated October 14, 1997 with
respect to the supplemental consolidated financial statements of Quintiles
Transnational Corp., included in its Current Report on Form 8-K dated October
17, 1997.
Ernst & Young LLP
Raleigh, North Carolina
October 14, 1997
<PAGE> 1
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of Quintiles Transnational Corp. ("Quintiles") on Form S-3 of our report dated
May 15, 1996, on our audits of the consolidated financial statements of BRI
International, Inc. as of November 30, 1995 and 1994, and for the years then
ended, which report is included as an exhibit to Quintiles' Current Report on
Form 8-K dated October 17, 1997.
Coopers & Lybrand L.L.P.
Rockville, Maryland
October 17, 1997
<PAGE> 1
EXHIBIT 23.03
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
on Form S-3 (dated October 17, 1997) of Quintiles Transnational Corp. of our
report dated July 24, 1996, with respect to the financial statements of the
Innovex Companies included in the Current Report on Form 8-K of Quintiles
Transnational Corp. dated October 17, 1997.
KPMG
Reading, England
October 14, 1997
