<PAGE> 1
As filed with the Securities and Exchange Commission on October 15, 1998
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)
North Carolina 56-1714315
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4709 Creekstone Drive
Riverbirch Building, Suite 200
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 200
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
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed Proposed
Title of Each Class Maximum Maximum
of Securities Amount to Offering Price Aggregate Amount of
to be Registered be Registered Per Share(1) Offering Price(1) Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share. . . . 1,209,784 $42.25 $51,113,374 $15,078.45
==================================================================================================================================
</TABLE>
(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 8, 1998 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
Quintiles Transnational Corp.
1,209,784 Shares of Common Stock
The shareholders listed inside are offering to sell 1,209,784 shares of
Quintiles common stock. The selling shareholders obtained their shares when we
acquired one of seven different companies, including Crossbox, Ltd., ClinData
International (Proprietary) Limited, Data Analysis Systems, Inc., Simirex, Inc.,
The Royce Consultancy plc, QED International, Inc, and H2V S.A., and when we
acquired certain business assets from Richard J. Fordham.
The selling shareholders may offer their Quintiles shares through public or
private transactions, on or off the Nasdaq National Market, at prevailing market
prices, or at privately negotiated prices. We will not receive any part of the
proceeds from the sales.
Quintiles common stock is listed on the Nasdaq National Market under the symbol
"QTRN". On October 14, 1998, the last reported sale price of our common stock
was $49.875 per share.
================================================================================
You should consider carefully the risk factors beginning on
page 2 before making a decision to purchase our stock.
================================================================================
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is October __, 1998.
<PAGE> 3
About Quintiles
Quintiles is a market leader in providing full-service contract research, sales,
marketing and health care policy consulting and health information management
services to the global pharmaceutical, biotechnology, medical device and health
care industries. Supported by our extensive information technology capabilities,
we provide a broad range of fully integrated contract services in order to
accelerate the time from discovery to peak market acceptance of a new drug or
medical device.
Risk Factors You Should Consider
================================================================================
In addition to the other information provided or incorporated by reference in
this prospectus, you should consider the following factors carefully in
evaluating us and our business. You should also refer to "Forward Looking
Statements" on page 19.
================================================================================
Dependence on the Pharmaceutical and Biotechnology Industries
Our revenues depend on the research and development and sales and
marketing expenditures of the pharmaceutical and biotechnology industries.
To date, we have benefited from the tendency of companies in those
industries to hire outside organizations to conduct large clinical
research and sales and marketing projects. If these industries experience
a general market decline or begin to reduce their propensity to outsource
those projects, our operations and financial condition could be materially
and adversely affected.
Management of Growth
We have grown rapidly over the past 10 years. We believe that our
continued growth may place a strain on our existing operational, human and
financial resources. In order to manage our growth, we must continue to
(1) improve our operating and administrative systems, (2) attract and
retain qualified management, professional, scientific and technical
personnel and (3) assimilate differences in foreign business practices and
overcome language barriers.
Under our transnational organizational structure, a holding company
manages the operations of our service groups which perform complementary
functions. To date, this structure has successfully supported our growth.
We recently completed a number of acquisitions, and we cannot assure you
that our operational structure will continue to be effective. Failure to
effectively manage our growth could result in a material adverse effect on
our operations and financial condition.
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<PAGE> 4
Risks Associated with Acquisitions
We have completed numerous acquisitions both within the United States and
internationally over the last several years and in 1998. In addition, we
are currently reviewing many acquisition candidates and continually
evaluating and competing for new acquisition opportunities. Acquisitions
involve numerous risks, including:
-- difficulties and expenses incurred during the acquisition;
-- integration of the acquired companies' operations and
services;
-- diversion of our management's attention from other business
concerns;
-- potential loss of the acquired companies' key employees;
-- the risk that acquired companies will not perform as expected;
-- Year 2000 risks of the acquired companies;
-- additional risks of assimilating differences in foreign
business practices and overcoming language barriers (for
acquisitions of foreign companies);
-- potential losses resulting from undiscovered liabilities of
acquired companies that are not covered by the indemnification
we may obtain from the sellers; and
-- expenses related to acquisition negotiations that are not
completed.
We cannot assure you that we can continue to successfully integrate into
our operations our past acquisitions or those we complete in the future.
Furthermore, we cannot assure you that we will either successfully
complete future acquisitions or that our completed acquisitions will
contribute favorably to our operations and future financial condition. The
realization of any of these risks associated with acquisitions could
result in a material adverse effect on our operations and financial
condition.
Risks Relating to Contract Sales Services
Outsourced contract sales services, or hiring outside organizations to
perform sales and marketing projects, is a relatively new industry in some
countries where we operate. We believe that this industry emerged because
of regulatory agencies' actions to place cost containment pressure on
pharmaceutical companies. As a result, large pharmaceutical companies
began to outsource their sales and marketing activities incident to
product launches (which typically require deployment of large numbers of
sales personnel for a relatively short amount of time). Many countries,
including the United States, have a low level of market penetration for
outsourced sales and marketing services. Thus, all companies in this
industry are subject to the risks inherent in a new or emerging industry,
including:
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<PAGE> 5
-- an inability to attract and retain customers;
-- changes in the regulatory regime;
-- an absence of an established earnings history;
-- the availability of properly trained personnel; and
-- any unforeseen costs and expenses.
Competition
Since we offer an extensive range of services, we face a broad range of
competitors. Some of our competitors compete against us only with respect
to a single service or group of services, while others may compete across
a broader portion of our service lines. Our competitors generally fall
within the following categories:
Contract Research: traditional contract research organizations; the
in-house research and development departments of pharmaceutical
companies; universities; and teaching hospitals; consulting firms,
including boutique firms specializing in the healthcare industry and
the healthcare departments of large consulting firms.
Contract Sales: in-house sales and marketing departments of
pharmaceutical companies; contract sales organizations in countries
where we operate; and consulting firms offering medical
communications services.
Factors that affect our ability to compete include:
-- the highly competitive nature of the market for contract
research services;
-- our competitors' expansion into other areas in which we
operate;
-- increases in competition, which may lead to price and other
forms of competition that could have an effect on our profit
margins;
-- consolidation within the pharmaceutical industry, compounded
by a trend among pharmaceutical companies to limit outsourcing
to fewer full-service global organizations; and
-- the trend towards consolidation among the providers of
contract research and contract sales services, which could
result in greater competition among the larger contract
research and contract sales providers for customers and
acquisition candidates.
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Loss or Delay of Large Contracts
Most of our customers can terminate our contracts upon 15-90 days' notice.
In the event of termination, our contracts often provide for fees for
winding down the project. Still, the loss or delay of a large contract or
the loss or delay of multiple contracts could adversely affect our future
net revenue and profitability.
Variability of Backlog
We report backlog based on anticipated net revenue from uncompleted
projects that a customer has authorized. A number of factors may affect
our backlog, including:
-- the variable size and duration of projects (some are performed
over several years);
-- the loss or delay of projects; and
-- a change in the scope of work during the course of a project.
We cannot assure you that the backlog we have reported will be indicative
of our future results.
Risks of Cost Overruns on Fixed Price Contracts
Most of our service contracts have either a fixed price, a fixed price
with variable components or a fee-for-service subject to a cap. Under this
structure, we bear the risk of cost overruns. Underpricing of contracts or
significant cost overruns could have a material adverse effect on us.
Impact of the Year 2000 Issue
Our Year 2000 Program
We have established a Year 2000 Program to address the Year 2000 issue,
which results from computer processors and software failing to process
date values correctly, potentially causing system failures or data
corruption. The Year 2000 issue could cause disruptions of our operations,
including, among other things, a temporary inability to process
information; receive information, services or products from third parties;
interface with customers in the performance of contracts; or operate or
communicate in some or all of the regions in which we do business. Our
Year 2000 Program is directed by the Year 2000 Executive Steering Team,
which is comprised of our Chief Information Officer and representatives
from regional business units, together with legal, quality assurance and
information technology personnel. We have established a Year 2000 Program
Management Office, staffed by consultants, which develops procedures and
instructions at a centralized level and oversees performance of the
projects that make up the program. Project teams organized by service
group and geographic region are responsible for implementation of the
individual projects.
Our Approach
The framework for our Year 2000 Program prescribes broad inventory,
assessment and planning phases which generally guide our projects. Each
project generally includes launch, analysis, remediation, testing and
deployment phases. We are in the process of assessing those systems,
facilities and business relationships which we believe may be vulnerable
to the Year 2000 issue and
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which we believe could impact our operations. Although we cannot control
whether and how third parties will address the Year 2000 issue, our
assessment also will include a limited evaluation of certain services on
which we are substantially dependent, and we plan to develop contingency
plans for possible deficiencies in those services. For example, we believe
that among our most significant third party service providers are
physician investigators who participate in clinical studies conducted
through our contract research services; consequently, we are developing a
specialized process to assess and address Year 2000 issues arising from
these relationships. We do not plan to assess how our customers, such as
pharmaceutical and large biotechnology companies, are dealing with the
Year 2000 issue.
As we complete the assessment of our systems, we are developing plans to
renovate, replace or retire them, as appropriate, if they are affected by
the Year 2000 issue. Such plans generally include testing of new or
renovated systems upon completion of the remedial actions. We will utilize
both internal and external resources to implement these plans. We
anticipate completing the assessment for all business critical systems
during 1998, and we plan to take appropriate action with respect to those
systems during 1998 and 1999. Until we have completed our remediation,
testing and deployment plans, we believe it is premature to develop
contingency plans to address what would happen if our execution of these
plans were to fail to address the Year 2000 issue.
Our Systems
Our computing infrastructure is based on industry standard systems. We do
not depend on large legacy systems and do not use mainframes. Rather, the
scope of our Year 2000 Program includes unique software systems and tools
in each of our service groups, especially our contract research service
group, embedded systems in our laboratory and manufacturing operations,
facilities such as elevators and fire alarms in over 70 offices (which
also involve embedded technology) and numerous supplier and other business
relationships. We have identified critical systems within each service
group and are devoting our resources to address these items first.
Our Progress
Our strategic healthcare communications services are less dependent on
information technology than our other services, and we expect to complete
all phases of the program with respect to those services in 1998. We
expect to address most systems relating to our healthcare consulting
services in 1998, with completion expected in early 1999. We also expect
to address most of our contract sales systems in 1998, with a few critical
items to be deployed in 1999. Our contract research services utilize
numerous systems, which we must address independently on disparate
schedules, depending on the magnitude and complexity of the individual
system. We anticipate that critical deployment of these systems (or
migration to replacement systems where necessary) will occur primarily in
1999. We expect to complete the core components of our Year 2000 Program
before there is a significant risk that internal Year 2000 problems will
have a material impact on our operations. We are in the process of
estimating the total cost of the program. At this point we believe that
the costs of addressing the Year 2000 issue will not be material to our
operations and financial results; however, we do not know whether this
will be the case.
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Year 2000 Risks
We face both internal and external risks from the Year 2000 issue. If
realized, these risks could have a material adverse effect on our
business, results of operations or financial condition. Our primary
internal risk is that our systems will not be Year 2000 compliant on time.
The magnitude of this risk depends on our ability to achieve compliance of
both internally and externally developed systems or to migrate to
alternate systems in a timely fashion. The decentralized nature of our
business may compound this risk if we are unable to coordinate efforts
across our global operations on a timely basis. We believe that our Year
2000 Program will successfully address these risks, however, we cannot
guarantee that this program will be completed in a timely manner.
Our beliefs regarding the cost and timing of addressing the Year 2000
issue are based on numerous assumptions of future events, including the
continued availability of certain resources, the ability of our project
teams to meet their deadlines and the cooperation of third parties. We
cannot guarantee that costs of the Year 2000 Program will not be material
or that we will be able to successfully complete our Year 2000 Program in
a timely manner, and actual results could differ materially from our
expectations as a result of numerous factors, including the availability
and cost of personnel trained in this area, the ability to locate and
correct all relevant computer codes, unforeseen circumstances that would
cause us to allocate our resources elsewhere and similar uncertainties.
Notwithstanding our Year 2000 Program, we also face external risks that
may be beyond our control. Our international operations and our
relationships with foreign third parties create additional risks for us,
as many countries outside the United States have been less attuned to the
Year 2000 issue. These risks include the possibility that infrastructural
systems, such as electricity, water, natural gas or telephony, will fail
in some or all of the regions in which we operate, as well as the danger
that the internal systems of our foreign suppliers, service providers and
customers will fail. Our business also requires considerable travel, and
our ability to perform services under our customer contracts could be
negatively affected if air travel is disrupted by the Year 2000 issue. In
addition, our business depends heavily on the healthcare industry,
particularly on third party physician investigators. The healthcare
industry, and physicians' groups in particular, to date may not have
focused on the Year 2000 issue to the same degree as some other
industries, especially outside of major metropolitan centers. As a result,
we face increased risk that our physician investigators will be unable to
provide us with the data that we need to perform under our contracts on
time, if at all. Thus, the clinical study involved could be slowed or
brought to a halt. Also, the failure of our customers to address the Year
2000 issue could negatively impact their ability to utilize our services.
While we intend to develop contingency plans to address certain of these
risks, we cannot assure you that any developed plans will sufficiently
insulate us from the effects of these risks. Any disruptions resulting
from the realization of these risks would affect our ability to perform
our services. If we are unable to receive or process information, or if
third parties are unable to provide information or services to us, we may
not be able to meet milestones or obligations under our customer
contracts, which could have a material adverse effect on our business and
financial results.
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Dependence on Key Executives and Personnel
We rely on a number of key executives, including Dennis B. Gillings,
Ph.D., our Chairman of the Board of Directors and Chief Executive Officer.
We maintain key man life insurance on Dr. Gillings in the amount of $3
million. The departure of any key executive could have a material adverse
effect on our operations or financial condition. In addition, our
performance depends on our ability to attract and retain qualified
management and professional, scientific and technical operating staff, as
well as our ability to recruit qualified representatives for our contract
sales services. We cannot assure you that we will be able to continue to
attract and retain qualified personnel.
Potential Liabilities
Potential Liabilities Arising From Contract Research Services
We contract 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 during testing. It is possible
third parties could claim that we should be held liable for losses arising
from any professional malpractice of the investigators with whom we
contract or in the event of personal injury to or death of persons
participating in clinical trials. We do not believe we are legally
accountable for the medical care rendered by third party investigators,
and we would vigorously defend any such claims. Nonetheless, it is
possible we could be found liable for those types of losses.
Since we have Phase I clinical trial facilities, we also could be liable
for the general risks associated with a Phase I facility. These risks
include, but are 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.
Potential Liabilities Arising From Other Services
We also could be held liable for errors or omissions in connection with
the services each of our service groups perform.
Measures to Reduce Risk From Potential Liabilities.
We attempt to reduce risk from potential liabilities through:
-- contractual indemnification provisions with customers and
investigators;
-- insurance maintained by us, our customers and our
investigators;
-- various regulatory requirements, including the use of
institutional review boards; and
-- the procurement of each volunteer's informed consent to
participate in a study.
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You should note several aspects about our contractual indemnifications.
First, they generally do not fully protect us against some of our own
actions, such as negligence. Second, the terms and scope of each
indemnification vary from customer to customer and from trial to trial.
Finally, the financial performance of any of these indemnities is not
secured. As a result, we bear the risk that the indemnifying party may not
have the financial ability to fulfill its indemnification obligations.
Our professional liability insurance covers the worldwide territories in
which we operate and includes drug safety issues, as well as data
processing errors and omissions. We can offer you no assurance that we
will be able to maintain this insurance on terms acceptable to us or that
this insurance will cover all of our losses. We caution you that our
financial condition could be materially and adversely affected if we were
required to pay damages or bear the costs of defending any claim (1)
outside the scope of or in excess of a contractual indemnification
provision, (2) beyond the level of insurance coverage or (3) in the event
that an indemnifying party does not fulfill its indemnification
obligations.
Effect of Government Regulation
Our contract research business benefits from the extensive governmental
regulation of the drug development/approval process, particularly in 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, the agency governing this process. We believe the
level of regulation is generally less burdensome outside the United
States. Still, European countries are attempting to establish common
standards for clinical testing of new drugs. This trend has caused changes
in the various requirements currently imposed by each country. Some of the
changes under consideration in the United States and elsewhere include
mandatory substitution of generic drugs for patented drugs, relaxation in
the scope of regulatory requirements or the introduction of simplified
drug approval procedures. These and other changes in regulation could
decrease the business opportunities available to us. In addition, any
failure on our part 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 us.
Uncertainty in Healthcare Industry and Possible Healthcare Reform
Changing political, economic and regulatory influences in the healthcare
industry 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 these companies, which could
decrease the business opportunities available to us. We cannot predict the
likelihood of healthcare reform legislation being enacted or the effects
such legislation would have on our operations.
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Exchange Rate Fluctuation Risks
We derive a large portion of our net revenue from our operations outside
the United States, as illustrated by the following table:
% of Net Revenue from
Year Foreign Operations
====================================================
1997 50.0%
----------------------------------------------------
1996 57.0%
----------------------------------------------------
1995 60.1%
====================================================
Factors associated with international operations, including changes in
foreign currency exchange rates and uncertainties relative to regional
economic circumstances, could significantly affect our operations and
financial results. Exchange rate fluctuations between local currencies and
the U.S. dollar create risk in several ways, including:
-- Foreign Currency Translation Risk. The revenue and expenses of
our foreign operations are generally denominated in local
currencies.
-- Foreign Currency Transaction Risk. Our service contracts may
be denominated in a currency other than the currency in which
we incur expenses related to such contracts.
We try to limit these risks through exchange rate fluctuation provisions
stated in our service contracts, or we may hedge our transaction risk with
foreign currency exchange contracts or options. Despite these efforts, we
may still experience fluctuations in financial results from our operations
outside the United States, and we cannot assure you that we will be able
to favorably reduce our currency transaction risk associated with our
service contracts.
Variation in Our Quarterly Results
The results of our 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;
-- the completion of acquisitions;
-- the completion or commencement of significant contracts;
-- changes in the mix of services offered; and
-- foreign exchange fluctuations.
Because of these factors, we believe that you should not rely on quarterly
comparisons of our financial results as an indication of our future
performance.
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Volatility of Our Stock Price
The market price of our common stock has been and may continue to be
subject to wide fluctuations. Factors affecting our stock price may
include (1) variations in operating results from quarter to quarter, (2)
changes in earnings estimates by analysts, (3) market conditions in the
industry and (4) general economic conditions.
Use of Proceeds
The selling shareholders will receive all net proceeds from the sale of their
shares. We will not receive any proceeds from the sale of the shares.
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<PAGE> 13
Selling Shareholders
The selling shareholders obtained their shares when we acquired one of seven
different companies, including Crossbox, Ltd., ClinData International
(Proprietary) Limited, Data Analysis Systems, Inc., Simirex, Inc., The Royce
Consultancy plc, QED International, Inc, and H2V S.A., and when we acquired
certain business assets from Richard J. Fordham. Pursuant to the terms of each
acquisition, we agreed to register certain amounts of each selling shareholder's
shares for resale by the selling shareholder. We are registering this Common
Stock to permit public secondary trading in the shares. The selling shareholders
may offer and sell the shares from time to time pursuant to this prospectus, as
further discussed under the caption, "Plan of Distribution."
The following table sets forth important information about each selling
shareholder as of October 14, 1998.
<TABLE>
<CAPTION>
Shares Beneficially Shares Shares Beneficially
Owned Prior Being Owned After
Name To Offering (1) Offered Offering (1)
- ---- --------------- ------- ------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Former Crossbox, Ltd. Shareholders
Michael F. Parker (2) ......................... 23,581 * 7,070 16,511 *
Georgiana W. Bronfman (3) ..................... 23,581 * 7,070 16,511 *
Hampshire Investment Company (4) .............. 23,581 * 7,000 16,581 *
Former ClinData International (Proprietary)
Limited Shareholders
Hermanus G. Luus (5) .......................... 41,293 * 41,293 0 *
Robert Schall (6) ............................. 41,293 * 41,293 0 *
Theodorus P. Erasmus(7) ....................... 41,293 * 41,293 0 *
Former Data Analysis Systems, Inc. Shareholders
James N. Arvesen (8) .......................... 85,320 * 15,000 70,320 *
Richard W. Johnston (9) ....................... 85,320 * 9,000 76,320 *
Aditya K. Jha (10) ............................ 41,429 * 16,000 25,429 *
David L. Schellenberg (11) .................... 41,019 * 5,000 36,019 *
Walter J. Farrar (12) ......................... 19,738 * 8,880 10,858 *
Stephen A LoSardo (13) ........................ 19,738 * 9,184 10,554 *
Cynthia K. Yule (14) .......................... 1,903 * 950 953 *
Sharon L. Behrends (15) ....................... 869 * 434 435 *
John L. Badolato (16) ......................... 7,662 * 3,831 3,831 *
David R. Stokar (17) .......................... 3,576 * 1,788 1,788 *
Former Simirex, Inc. Shareholders
Peter Bernardo (18) ........................... 383,273 * 63,240 256,793 *
Loretta Bernardo (19) ......................... 383,273 * 63,240 256,793 *
Former Royce Consultancy PLC Shareholders
Harold W. Clark(20) ........................... 581,170 * 581,170 0 *
Ian C. Hogan (21) ............................. 83,024 * 83,024 0 *
</TABLE>
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<TABLE>
<CAPTION>
Shares Beneficially Shares Shares Beneficially
Owned Prior Being Owned After
Name To Offering (1) Offered Offering (1)
- ---- --------------- ------- ------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Former QED International, Ltd. Shareholders
Richard Johnson, M.D. (22) .................... 392,640 * 129,571 263,069 *
Robert Blink (23) ............................. 130,880 * 43,190 87,690 *
Former H2V S.A. Shareholders
Alain Volle (24) .............................. 63,070 * 22,070 41,000 *
Henri Vincent (25) ............................ 7,403 * 2,590 4,813 *
Pierre Henriot (26) ........................... 7,403 * 2,590 4,813 *
Former Owner of certain business assets
Richard J. Fordham ............................ 4,013 * 4,013 0 *
</TABLE>
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* Less than one percent
(1) Based on 76,765,856 shares of Common Stock outstanding as of September 30,
1998, and the same number of shares outstanding after the offering.
Pursuant to the rules of the Commission, certain shares of the Common
Stock that 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) Includes 2,358 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(3) Includes 2,358 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(4) Includes 2,358 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(5) Includes 4,129 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(6) Includes 4,129 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(7) Includes 4,129 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(8) Includes 8,532 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Dr. Arvesen is
President and a director of Innovex DAS, Inc., a wholly-owned subsidiary
of Quintiles.
(9) Includes 8,532 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Mr. Johnston is
Vice President, Operations and a director of Innovex DAS, Inc., a
wholly-owned subsidiary of Quintiles.
13
<PAGE> 15
(10) Includes 4,142 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Mr. Jha is Vice
President, International of Innovex DAS, Inc., a wholly-owned subsidiary
of Quintiles.
(11) Includes 4,101 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Mr. Schellenberg is
Vice President, Market Research of Innovex DAS, Inc., a wholly-owned
subsidiary of Quintiles.
(12) Includes 1,973 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Mr. Farrar is Vice
President, Software Development of Innovex DAS, Inc., a wholly-owned
subsidiary of Quintiles.
(13) Includes 1,973 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Mr. LoSardo is Vice
President, Advanced Technologies of Innovex DAS, Inc., a wholly-owned
subsidiary of Quintiles.
(14) Includes 190 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(15) Includes 86 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(16) Includes 766 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(17) Includes 357 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(18) Includes 172,473 shares acquired in connection with the acquisition which
are held by Mr. Bernardo's wife, Loretta Bernardo. Also includes 38,327
shares held in escrow pursuant to the terms of the acquisition, which
escrowed shares may be sold only upon distribution to Mr. Bernardo and
Loretta Bernardo under the terms of the escrow. In the offering, Mr.
Bernardo and Loretta Bernardo each are selling 63,240 shares. Mr. Bernardo
is Chief Operating Officer and a director of Simirex, Inc. and is Vice
President and a director of Simirex International, Ltd., both wholly-owned
subsidiaries of Quintiles.
(19) Includes 172,473 shares acquired in connection with the acquisition which
are held by Mrs. Bernardo's husband, Peter Bernardo. Includes 38,327
shares held in escrow pursuant to the terms of the acquisition, which
escrowed shares may be sold only upon distribution to Mrs. Bernardo and
Peter Bernardo under the terms of the escrow. In the offering, Peter
Bernardo and Mrs. Bernardo each are selling 63,240 shares. Mrs. Bernardo
is Senior Director and Chief Financial Officer and a director of Simirex,
Inc. and is President and Treasurer and a director of Simirex
International, Ltd., both wholly-owned subsidiaries of Quintiles.
(20) Includes 58,117 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(21) Includes 8,302 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(22) Includes 39,264 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Dr. Johnson is
President and serves on the board of directors of QED International, Inc.,
a wholly-owned subsidiary of Quintiles.
14
<PAGE> 16
(23) Includes 13,088 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow. Mr. Blink is Vice
President and serves on the board of directors of QED International, Inc.,
a wholly-owned subsidiary of Quintiles.
(24) Includes 6,307 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(25) Includes 740 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
(26) Includes 740 shares held in escrow pursuant to the terms of the
acquisition, which escrowed shares may be sold only upon distribution to
the selling shareholder under the terms of the escrow.
Plan of Distribution
Methods of Offers and Sales
The selling shareholders may sell the shares at various times in one or
more of the following transactions (which may include block transactions):
-- on the Nasdaq National Market;
-- in negotiated transactions;
-- through put or call transactions related to the shares;
-- in connection with short sales of Quintiles stock; or
-- in a combination of any of the above transactions.
The selling shareholders may sell their shares at market prices prevailing
at the time of sale, at prices related to the prevailing market price or
at negotiated prices.
If any selling shareholder uses broker-dealers, such broker-dealers may
receive commissions or discounts from the selling shareholders, or they
may receive commissions from the purchaser for whom they acted as agent or
to whom they sell as principal (or both). There is the possibility that
the selling shareholders and the broker-dealers (who effect sales) may be
deemed to be "underwriters" under the Securities Act, and their
commissions or discounts regarded as underwriters' compensation. Because
of this possibility, the selling shareholders must comply with the
prospectus delivery requirements of the Securities Act.
Each selling shareholder has agreed to notify us upon entering into an
arrangement with a broker-dealer for the sale of shares through any one
or more of the following methods:
15
<PAGE> 17
-- a block trade
-- a special offering
-- an exchange distribution or secondary distribution
-- a purchase by a broker or a dealer
Once we receive such notification, if required, we will file a prospectus
supplement pursuant to Rule 424(b) of the Securities Act describing: (1)
the broker-dealer's name; (2) the number of shares involved; (3) the
commissions paid to the broker-dealer; (4) the discounts given or
concessions allowed to the broker dealer; (5) a statement that the
broker-dealer did not conduct any investigation to verify the information
contained in or incorporated by reference in this prospectus (if
applicable); and (6) other material facts of the transaction.
The selling shareholders also may sell all or a portion of the shares in
open-market transactions in reliance on Rule 144 under the Securities Act,
provided that they can satisfy the requirements of that rule.
The selling shareholders' rights to be included in this registration
statement and prospectus are not transferable. Nevertheless, we may permit
certain donees, such as charitable organizations, who may receive shares
from a selling shareholder after the date of this prospectus, to sell
their shares under this prospectus. Any such donee may sell the shares in
accordance with the terms described in this plan of distribution. We will
not receive any of the proceeds from such sales.
Duration of Resale Period Under This Prospectus
We anticipate that the registration statement shall remain effective as to
each selling shareholder group until the earlier of (1) the date when all
of the shares included in the registration statement have been distributed
to the public; or (2) the date as set forth in the table below with
respect to each group.
Selling Shareholder Group Termination of Offering
============================== ====================================
Crossbox, Ltd. May 31, 1999
ClinData International May 26, 1999 (the date the selling
(Proprietary) Ltd. shareholders' shares become eligible
for resale under Rule 144 of the
Securities Act)
Data Analysis Systems, Inc.* 120 days following the lapse of the
pooling restriction (which is
expected to occur in early 1999)
Simirex, Inc.* October 8, 1999
The Royce Consultancy, plc* August 24, 1999 (the date the
selling shareholders' shares become
eligible for resale under Rule 144
of the Securities Act)
QED International, Inc.* October 12, 1999
16
<PAGE> 18
Selling Shareholder Group Termination of Offering
============================== ====================================
H2V S.A. October 9, 1999 (the date the
selling shareholders' shares become
eligible for resale under Rule 144
of the Securities Act)
Richard J. Fordham October 31, 1999
- ---------------------
* Certain of the selling shareholders may not sell (or otherwise reduce
their risk relative to their shares) for a certain period of time as
required by the pooling of interests accounting rules. The restricted
period ends once we have published financial statements covering at
least 30 days of our operations combined with each pooled or merged
company. Thus, the selling shareholders may be unable to immediately
sell all or any of the shares.
Costs and Indemnification
We will pay our 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 with the preparation of the registration statement. Each
selling shareholder will pay his, her or its own legal fees. The selling
shareholders will pay any selling discounts and commissions and stock
transfer taxes applicable to a sale of shares.
We have agreed to indemnify certain of the selling shareholders and their
officers and directors, and each person who controls such selling
shareholder, in certain circumstances against certain liabilities,
including liabilities arising under the Securities Act. The same selling
shareholders have agreed to indemnify us and our directors and officers
and each person who controls us in similar terms.
17
<PAGE> 19
Where You Can Find More Information About Quintiles
We file reports, proxy statements and other information with the SEC. You may
read and copy any of these materials at the SEC's public reference room in
Washington, D.C. You can also find our SEC filings on the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" in this prospectus the
information we file with them. This means that we can disclose important
information to you by referring you to those documents. Any information we
incorporate by reference is considered part of this prospectus, and any
information we later file with the SEC will automatically update and supersede
the information in this prospectus.
We incorporate by reference and refer you to the documents listed below:
1. Our Annual Report on Form 10-K for the fiscal year ended December
31, 1997;
2. Our Quarterly Reports of Form 10-Q for the fiscal quarters ended
March 31, 1998 and June 30, 1998;
3. Our Current Reports on Form 8-K dated February 2, 1998, February
4, 1998, February 26, 1998, February 26, 1998 (as amended March
20, 1998 on Form 8-K/A), March 20, 1998, April 22, 1998 and July
22, 1998;
4. The description of our Common Stock contained in our Registration
Statement on Form 8-A, filed with the SEC on February 28, 1994 and
amended on April 11, 1994; and
5. All other documents we file with the SEC pursuant to Section
13(a), 13(c) or 15(d) of the Exchange Act of 1934 after the date
of this prospectus and before the end of this offering.
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following:
Investor Relations
Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 200
Durham, North Carolina 27703-8411
(919) 941-2000
You should also note that the SEC considers this prospectus to be part of a
registration statement filed with the SEC (Registration No. 333-_____). Since
this prospectus omits certain portions of the information provided in the
registration statement, we also refer you to that document.
================================================================================
You should rely only on the information incorporated by reference or provided in
this prospectus. We have not authorized anyone to give you different
information. The selling shareholders will not make an offer of these shares in
any state where the offer is not permitted. You should not assume that the
information in this prospectus, or any supplement, is accurate as of any date
other than the date on the front of those documents.
================================================================================
18
<PAGE> 20
Forward Looking Statements
We make statements in this prospectus and in the documents incorporated by
reference that fall within the definition of "forward looking statements" found
in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. You can identify these statements by our use of words like
"may," "will," "expect," "anticipate," "estimate," or "continue" or comparable
terms and phrases.
Forward looking statements represent our judgment about the future and are not
guarantees of our future performance. Certain risks and uncertainties could
cause our actual operating results and financial position to differ materially
from our projections, including the considerations described in connection with
specific forward looking statements, factors discussed in this prospectus under
the caption "Risk Factors You Should Consider" and other cautionary statements
you may find in this prospectus and in the documents we incorporate by
reference. Therefore, we caution you not to place undue reliance on forward
looking statements. Such forward looking statements represent our estimates and
assumptions only as of the date of this prospectus.
Legal Matters
Our lawyers, Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., will
issue a legal opinion concerning the legality of the selling shareholders'
shares. Smith Anderson lawyers own in the aggregate approximately 4,319 shares
of Quintiles stock.
Experts
Ernst & Young LLP, independent auditors, have audited our consolidated financial
statements included in our Current Report on Form 8-K dated March 20,1998 and
our Annual Report on Form 10-K for the year ended December 31, 1997, as set
forth in their report, which is incorporated by reference in this prospectus.
Our consolidated financial statements are incorporated by reference in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
19
<PAGE> 21
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. The selling shareholders will not
bear any of these expenses.
SEC Registration Fee..................................... $15,078.45
Legal Fees and Expenses.................................. $15,000.00
Accounting Fees and Expenses............................. $15,000.00
Printing and Related Expenses............................ $ 1,500.00
Miscellaneous Expenses................................... $ 421.55
----------
Total......................................... $47,000.00
==========
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 in any of the foregoing capacities;
II-1
<PAGE> 22
provided, however, that a corporation may not indemnify or agree to indemnify a
person against liability or expenses such person may incur on account of
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-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 of the North Carolina Business Corporation Act, (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.
Exhibit
Number Description of Exhibit
- ------ ----------------------
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 Terms of registration rights granted by Quintiles to the Crossbox, Ltd
selling stockholders
4.05 Terms of registration rights granted by Quintiles to the ClinData
International (Proprietary) Ltd. selling shareholders
II-2
<PAGE> 23
4.06 Terms of registration rights granted by Quintiles to the Data Analysis
Systems, Inc. selling shareholders
4.07 Terms of registration rights granted by Quintiles to the Simirex,
Inc. selling shareholders
4.08 Terms of registration rights granted by Quintiles to the Royce
Consultancy, plc selling shareholders
4.09 Terms of registration rights granted by Quintiles to the QED
International, Inc. selling shareholders
4.10 Terms of registration rights granted by Quintiles to the H2V S.A.
selling shareholders
4.11 Terms of registration rights granted by Quintiles to Richard J. Fordham
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 PricewaterhouseCoopers LLP
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 Power of Attorney (included on the signature page hereof)
- ---------------
(1) Exhibit to the Company's Registration Statement on Form S-1,
as amended, (Registration No. 33-75766) as filed with the
Commission, effective April 20, 1994, and incorporated herein
by reference.
(2) Exhibit to the Company's Registration Statement on Form S-3,
as amended, (Registration No. 333-19009) as filed with the
Commission, effective February 21, 1997, and incorporated
herein by reference.
(3) Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 as filed with the
Commission on March 25 1996, as amended on May 16, 1996 and
incorporated herein by reference.
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 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
II-3
<PAGE> 24
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the 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
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 of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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 Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 25
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 15, 1998.
QUINTILES TRANSNATIONAL CORP.
By: /s/ Dennis B. Gillings
----------------------------------
Dennis B. Gillings, Ph.D.
Chairman of the Board of Directors
and Chief Executive officer
II-5
<PAGE> 26
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 15, 1998 in the capacities indicated.
Signature Title
/s/ Dennis B. Gillings Chairman of the Board of Directors and
- ------------------------------------ Chief Executive Officer
Dennis B. Gillings, Ph.D.
/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
Rachel R. Selisker (Principal accounting and
financial officer)
/s/ Robert C. Bishop Director
- ------------------------------------
Robert C. Bishop, Ph.D.
Director
- ------------------------------------
E.G. F. Brown
/s/ Vaughn D. Bryson Director
- ------------------------------------
Vaughn D. Bryson
/s/ Chester W. Douglass Director
- ------------------------------------
Chester W. Douglass, Ph.D.
/s/ Lawrence S. Lewin Director
- ------------------------------------
Lawrence S. Lewin
/s/ Arthur M. Pappas Director
- ------------------------------------
Arthur M. Pappas
/s/ Ludo J. Reynders Director
- ------------------------------------
Ludo J. Reynders, Ph.D
/s/ Eric J. Topol Director
- ------------------------------------
Eric J. Topol, M.D.
/s/ Virginia V. Weldon Director
- ------------------------------------
Virginia V. Weldon, M.D.
/s/ David F. White Director
- ------------------------------------
David F. White
II-6
<PAGE> 27
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- ------ ----------------------
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 Terms of registration rights granted by Quintiles to the Crossbox, Ltd
selling stockholders
4.05 Terms of registration rights granted by Quintiles to the ClinData
International (Proprietary) Ltd. selling shareholders
4.06 Terms of registration rights granted by Quintiles to the Data Analysis
Systems, Inc. selling shareholders
4.07 Terms of registration rights granted by Quintiles to the Simirex, Inc.
selling shareholders
4.08 Terms of registration rights granted by Quintiles to the Royce
Consultancy, plc selling shareholders
4.09 Terms of registration rights granted by Quintiles to the QED
International, Inc. selling shareholders
4.10 Terms of registration rights granted by Quintiles to the H2V S.A.
selling shareholders
4.11 Terms of registration rights granted by Quintiles to Richard J. Fordham
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 PricewaterhouseCoopers LLP
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 Power of Attorney (included on the signature page hereof)
- ---------------
(1) Exhibit to the Company's Registration Statement on Form S-1,
as amended, (Registration No. 33-75766) as filed with the
Commission, effective April 20, 1994, and incorporated herein
by reference.
(2) Exhibit to the Company's Registration Statement on Form S-3,
as amended, (Registration No. 333-19009) as filed with the
Commission, effective February 21, 1997, and incorporated
herein by reference.
(3) Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 as filed with the
Commission on March 25 1996, as amended on May 16, 1996 and
incorporated herein by reference.
II-7
<PAGE> 1
EXHIBIT 4.04
Terms of Registration Rights Granted to the
Crossbox, Ltd. Selling Shareholders
8.3 Registration Rights. If, at any time after completion of the transaction
contemplated hereby, the Purchaser shall file a registration statement with the
Securities and Exchange Commission which in form is suitable for inclusion of
shares owned by the Private Placement Participants, then the Purchaser shall
notify each Private Placement Participant. Subject to underwriting arrangements
(if any) each Private Placement Participant may include up to 30% of his or her
Consideration Shares in such registration statement by completing and signing
the Purchaser's notification form and returning it within ten days of the date
of the notice. If the Purchaser has not filed such a registration statement by
15th October 1998 and afforded the Private Placement Participants the
opportunity to have such Consideration Shares included thereon, then the
Purchaser shall file by such date (or, if there exist on or about such date
circumstances which would entitle the Purchaser to issue a suspension notice
after effectiveness as described below, as soon as practicable after such
circumstances cease to exist provided the Purchaser notifies the Private
Placement Participant of the delay and provided further that such delay in
filing shall not extend beyond 15th December 1998) a registration statement on
Form S-3 with respect to 30% of the shares received by each Private Placement
Participant (less any included in any prior registration) and thereafter use its
reasonable best efforts to cause the registration statement to be declared
effective by the Securities and Exchange Commission and to remain effective
until 31st May 1999. Quintiles shall provide each of the Private Placement
Participants a reasonable supply of prospectuses included in any registration
statement covering Consideration Shares pursuant to this Section. All expenses
in connection with any registration pursuant to this clause shall be borne by
the Purchaser, except that all selling discounts and commissions. if any, and
stock transfer taxes, if any, and all fees and disbursements of counsel, if any,
for the Private Placement Participants shall be borne by the Private Placement
Participants. Except in the circumstances described above the Purchaser may
delay or suspend any such registration statement by notice to the Private
Placement Participants 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 practically unable to comply with
the published rules and regulations of the Securities and Exchange Commission as
in effect at any relevant time); provided, however, that the Purchaser shall not
issue such a suspension notice for any period during which the Purchaser's
executive officers are not similarly restrained from disposing of the shares in
the Purchaser's Common Stock. Upon receipt of any suspension notice, Private
Placement Participants will discontinue disposition of any shares pursuant to
the registration statement until the suspension is lifted. The registration
rights contained herein are not transferable.
<PAGE> 1
EXHIBIT 4.05
Terms of Registration Rights Granted to the
ClinData International (Proprietary) Inc. Selling Shareholders
6.9 Registration Rights
If, at any time after completion of the transaction contemplated hereby, the
Purchaser shall file a registration statement with the Securities and Exchange
Commission which in form is suitable for inclusion of shares owned by the
Private Placement Participants, then the Purchaser shall notify each Private
Placement Participant. Each Private Placement Participant may include up to 25%
of his Consideration Shares in such registration statement by completing and
signing the Purchaser's notification form and returning it within 10 days of the
date of the notice. If the Purchaser has not filed such a registration statement
by 31 October 1998 and afforded the Private Placement Participants the
opportunity to have shares included thereon, then the Purchaser shall by such
date use its best efforts to file a registration statement on Form S-3 with
respect to 25% of the shares received by each Private Placement Participant and
thereafter use its reasonable best efforts to cause the registration statement
to be declared effective by the Securities and Exchange Commission. All expenses
in connection with any registration pursuant to this section shall be borne by
the Purchaser, except that all selling discounts and commissions, if any, and
stock transfer taxes, if any, and all fees and disbursements of counsel, if any,
for the Private Placement Participants shall be borne by the Private Placement
Participants. The Purchaser may delay or suspend any such registration statement
by notice to the Private Placement Participants 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
practically unable to comply with the published rules and regulations of the
Securities and Exchange Commission as in effect at any relevant time); provided,
however, that the Purchaser shall not issue such a suspension notice for any
period during which the Purchaser's executive officers are not similarly
restrained from disposing of the shares in the Purchaser's Common Stock. Upon
receipt of any suspension notice, Private Placement Participants will
discontinue disposition of any shares pursuant to the registration statement
until the suspension is lifted. The registration rights contained herein are not
transferable, other than to the heirs of any of the Sellers upon the death of
such Seller.
<PAGE> 1
EXHIBIT 4.06
Terms of Registration Rights Granted to the
Data Analysis Systems, Inc. Selling Shareholders
7.6 Registration Rights
(a) The Purchaser shall use its reasonable best efforts to (i) file by
December 31, 1998 a registration statement on Form S-3 (or another applicable
form of registration statement if Form S-3 is unavailable to the Purchaser)
under the Securities Act with respect to fifty percent (50%) of the shares of
Purchaser Common Stock to be issued to each Shareholder in connection with the
Merger (the "Registration Statement"), and thereafter to cause the Registration
Statement to be declared effective by the SEC as to resales by the Shareholders;
(ii) cause the Registration Statement to remain effective for not less than one
hundred twenty (120) days; and (iii) cause the shares of Purchaser Common Stock
to be issued in the Merger to be approved for listing on the National Market
System of the Nasdaq Stock Market on or before the date the Registration
Statement is declared effective by the SEC. No Shareholder shall, or shall be
entitled to, resell any such shares in reliance upon the Registration Statement
after the passage of such 120-day resale period.
(b) Notwithstanding subsection (a) above, the Purchaser shall not be
required to take any action with respect to the registration or the declaration
or continuation of effectiveness of the Registration Statement following notice
to the Shareholders 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 reasonable 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 reasonably 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 SEC 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 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. Upon receipt of a
Suspension Notice from the Purchaser, the Shareholders will forthwith
discontinue disposition of all such shares pursuant to the Registration
Statement until receipt from the Purchaser 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 Shareholders will deliver to the Purchaser all
copies in their possession of the prospectus covering such shares current at the
time of receipt of any Suspension Notice. In no event shall the period of
suspension pursuant to a Suspension Notice extend for more than 90 days (unless
the Purchaser's executive officers are similarly restrained from disposing of
shares of the Purchaser's Common Stock for a longer period), and following such
period of suspension the Purchaser shall cause the Registration Statement to
remain effective for not less than 45 days.
* * *
(e) Indemnification
(i) The Purchaser will indemnify each Shareholder, each of
such Shareholder's directors and officers, and each person who controls a
Shareholder within the meaning of Section 15 of the
<PAGE> 2
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, 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, and the Purchaser will reimburse each
Shareholder 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 conformity with information furnished to
the Purchaser by a Shareholder in writing expressly for inclusion in the
registration statement.
(ii) Each Shareholder will indemnify the Purchaser, each of
the Purchaser's directors and officers, each person who controls the Purchaser
within the meaning of Section 15 of the Securities Act, and each other person or
entity including securities in such registration and each controlling person
thereof 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 and all such directors, officers and 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 conformity with information
furnished to the Purchaser by such Shareholder in writing expressly for
inclusion in the registration statement.
(iii) Promptly after receipt by an indemnified party of notice
of the commencement of any action, such indemnified party will, if a claim
thereof is to be made against the indemnifying party pursuant thereto, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which it
may otherwise have to any indemnified party. In case such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with any other indemnifying party,
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party.
(f) Transfer of Registration Rights. The registration rights in this
Section 7.6 are not transferable by any Shareholder, except to his or her
respective estate upon death.
<PAGE> 1
EXHIBIT 4.07
Terms of Registration Rights Granted to the
Simirex, Inc. Selling Shareholders
7.4 Registration Rights
(a) The Purchaser shall use its reasonable best efforts to (i) file by
October 31, 1998 a registration statement on Form S-3 (or another applicable
form of registration statement if Form S-3 is unavailable to the Purchaser)
under the Securities Act with respect to 33% of the shares of Purchaser Common
Stock to be issued in connection with the Exchange (the "Registration
Statement"), and thereafter cause the Registration Statement to be declared
effective by the SEC as to resales by the Stockholders on or before the date the
Purchaser publishes the Pooling Financials; (ii) cause the Registration
Statement to remain effective until October 8, 1999 (the "Resale Period"); and
(iii) cause the shares of Purchaser Common Stock to be issued in the Exchange to
be approved for listing on the National Market System of the Nasdaq Stock Market
on or before the date the Registration Statement is declared effective by the
SEC. No Stockholder shall, or shall be entitled to, resell any such shares in
reliance upon the Registration Statement after the passage of the Resale Period.
(b) Notwithstanding subsection (a) above, the Purchaser shall not be
required to take any action with respect to the registration or the declaration
or continuation of effectiveness of the Registration Statement following notice
to the Stockholders 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 SEC 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 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 included in 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, however,
that the Purchaser shall not issue such a Suspension Notice for any period
during which the Purchaser's executive officers are not similarly restrained
from disposing of shares of the Purchaser's Common Stock. Upon receipt of a
Suspension Notice from the Purchaser, the Stockholders will forthwith
discontinue disposition of all such shares pursuant to the Registration
Statement until receipt from the Purchaser 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 Stockholders will deliver to the Purchaser all
copies in their possession of the prospectus covering such shares current at the
time of receipt of any Suspension Notice.
* * *
(e) Indemnification
(i) The Purchaser will indemnify each Stockholder, each of
such Stockholder's directors and officers, and each person who controls a
Stockholder within the meaning of Section 15 of the Securities Act against all
expenses, claims, losses, damages, or liabilities (or actions in respect
thereof),
<PAGE> 2
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, 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, and the Purchaser will reimburse each Stockholder 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 conformity with information furnished to the Purchaser by a
Stockholder.
(ii) Each Stockholder will indemnify the Purchaser, each of
the Purchaser's directors and officers, each person who controls the Purchaser
within the meaning of Section 15 of the Securities Act, and each other person or
entity including securities in such registration and each controlling person
thereof 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 and all such directors, officers and 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 conformity with information
furnished to the Purchaser by such Stockholder.
(f) Transfer of Registration Rights. The registration rights in this
Section 7.6 are not transferable by any Stockholder.
<PAGE> 1
EXHIBIT 4.08
Terms of Registration Rights Granted to the
Royce Consultancy, plc Selling Shareholders
7.4 If, at any time after completion of the transaction contemplated hereby, the
Purchaser shall file a registration statement with the Securities and Exchange
Commission which in form is suitable for inclusion of shares owned by the
Private Placement Participants, then the Purchaser shall notify each Private
Placement Participant. Each Private Placement Participant may include up to 100%
of his or her Consideration Shares in such registration statement by completing
and signing the Purchaser's notification form and returning it within ten days
of the date of the notice. If the Purchaser has not filed such a registration
statement by 31st October 1998 and afforded the Private Placement Participants
the opportunity to have shares included thereon, then the Purchaser shall by
such date file a registration statement on Form S-3 with respect to 100% of the
shares received by each Private Placement Participant and thereafter cause the
registration statement to be declared effective by the Securities and Exchange
Commission. All expenses in connection with any registration pursuant to this
clause shall be borne by the Purchaser, except that all selling discounts and
commissions, if any, and stock transfer taxes, if any, and all fees and
disbursements of counsel, if any, for the Private Placement Participants shall
be borne by the Private Placement Participants.
The Purchaser may delay or suspend any such registration statement by notice to
the Private Placement Participants 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 would 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 practically unable
to comply with the published rules and regulations of the Securities and
Exchange Commission as in effect at any relevant time); provided, however, that
the Purchaser shall not issue such a suspension notice for any period during
which the Purchaser's executive officers are not similarly restrained from
disposing of the shares in the Purchaser's common stock. Upon receipt of any
suspension notice, Private Placement Participants will discontinue disposition
of any shares pursuant to the registration statement until the suspension is
lifted. The registration rights contained herein are not transferable.
<PAGE> 1
EXHIBIT 4.09
Terms of Registration Rights Granted to
QED International, Inc. Selling Shareholders
7.4 Registration Rights
(a) The Purchaser shall use its reasonable best efforts to (i) file by
December 31, 1998 a registration statement on Form S-3 (or another applicable
form of registration statement if Form S-3 is unavailable to the Purchaser)
under the Securities Act with respect to thirty-three percent (33%) of the
shares of Purchaser Common Stock to be issued to each Stockholder in connection
with the Exchange (the "Registration Statement"), and thereafter to cause the
Registration Statement to be declared effective by the SEC on or before the date
the Purchaser publishes the Pooling Financials; (ii) cause the Registration
Statement to remain effective until the date one year from the Closing Date; and
(iii) cause the shares of Purchaser Common Stock to be issued in the Exchange to
be approved for listing on the National Market System of the Nasdaq Stock Market
on or before the date the Registration Statement is declared effective by the
SEC.
(b) Notwithstanding subsection (a) above, the Purchaser shall not be
required to take any action with respect to the registration or the declaration
or continuation of effectiveness of the Registration Statement following notice
to the Stockholders 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 SEC 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 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. Upon receipt of a
Suspension Notice from the Purchaser, the Stockholders will forthwith
discontinue disposition of all such shares pursuant to the Registration
Statement until receipt from the Purchaser 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 Stockholders will deliver to the Purchaser all
copies in their possession of the prospectus covering such shares current at the
time of receipt of any Suspension Notice. In no event shall the period of
suspension pursuant to a Suspension Notice extend for more than 90 days (unless
the Purchaser's executive officers are similarly restrained from disposing of
shares of the Purchaser's Common Stock for a longer period); and following such
period of suspension the Purchaser shall cause the Registration Statement to
remain effective for not less than 45 days (even if such 45-day period would
extend beyond the first anniversary of the Closing Date).
* * *
(e) Indemnification
(i) To the extent permitted by Law, the Purchaser will
indemnify each Stockholder against all expenses, claims, losses, damages, and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of
<PAGE> 2
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, 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, and the Purchaser will reimburse each
Stockholder for any legal and any other expenses as 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 conformity with information furnished to
the Purchaser by a Stockholder.
(ii) To the extent permitted by Law, each Stockholder will
indemnify the Purchaser, each of the Purchaser's directors and officers, each
person who controls the Purchaser within the meaning of Section 15 of the
Securities Act, and each other person or entity including securities in such
registration and each controlling person thereof 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 and all such directors,
officers and persons for any legal or any other expenses as 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 conformity with information furnished to the Purchaser by
such Holder.
(f) Transfer of Registration Rights. The registration rights in this
Section 7.4 are not transferable by any Stockholder.
<PAGE> 1
EXHIBIT 4.10
Terms of Registration Rights Granted to the H2V S.A.
Selling Shareholders
8.4 Registration Rights. If, at any time after completion of the transaction
contemplated, hereby, Quintiles shall file a registration statement with the
Securities and Exchange Commission in respect of shares of the same class as
those owned by the Private Placement Participants, then Quintiles shall notify
each Private Placement Participant. Each Private Placement Participant may
include up to 35% of his or her Consideration Shares in such registration
statement by completing and signing Quintiles' notification form delivered
within ten days of the date of the notice from Quintiles. If Quintiles has not
filed such a registration statement by 16 October 1998 and afforded the Private
Placement Participants the opportunity to have shares included thereon, then
Quintiles shall by such date use its best efforts to file a registration
statement on Form S3 with respect to 35% of the Consideration Shares received by
each Private Placement Participant and thereafter use its reasonable best
efforts to cause the registration statement to be declared effective by the
Securities and Exchange Commission as promptly as possible. All expenses in
connection with any registration pursuant to this section shall be borne by
Quintiles, except that all selling discounts and commissions, if any, and stock
transfer taxes, if any, and all fees and disbursements of counsel, if any, for
the Private Placement Participants shall be borne by the Private Placement
Participants. Quintiles may delay or suspend any such registration statement by
notice to the Private Placement Participants 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 Quintiles might require
additional disclosure of material, non-public information by Quintiles in the
registration statement as to which Quintiles believes it has a bona fide
business purpose for preserving confidentiality or which renders Quintiles
practically unable to comply with the published rules and regulations of the
Securities and Exchange Commission as in effect at any relevant time); provided,
however, that Quintiles shall not issue such a suspension notice for any period
during which Quintiles' executive officers are not similarly restrained from
disposing of the shares in Quintiles' Common Stock. Upon receipt of any
suspension notice, the Private Placement Participant will discontinue
disposition of any shares pursuant to the registration statement until the
suspension is lifted. The registration rights contained herein are not
transferable.
<PAGE> 1
EXHIBIT 4.11
Terms of Registration Rights Granted to Richard J. Fordham
Schedule 5 --- Consideration Shares
Clause 1.1
If, at any time after completion of the acquisition of the Business, QTRN shall
file a registration statement with he Securities and Exchange Commission which
in form is suitable for inclusion of the Completion Shares or deferred
Consideration Shares, then QTRN shall notify the Seller. The Seller may include
all or any part of the Completion Shares or the Deferred Consideration Shares in
such registration statement by completing and signing the QTRN notification form
and returning it within ten days of the date of the notice. If QTRN has not
filed such a registration statement by 31 October 1998 and afforded the Seller
the opportunity to have all such shares included thereon, then QTRN shall by
such date use its best endeavors to file a registration statement on Form S-3
with respect to all such shares and thereafter use its reasonable best endeavors
to cause the registration statement to be declared effective by the Securities
and Exchange Commission. All expenses in connection with any registration
pursuant to this section shall be borne by QTRN, except that all selling
discounts and commissions, if any, and stock transfer taxes, if any, and all
fees and disbursements of counsel, if any, for the Seller shall be borne by the
Seller. QTRN may delay or suspend any such registration statement by notice to
the Seller 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 QTRN might require additional disclosure of material, non-public
information by QTRN in the registration statement as to which QTRN reasonably
believes it has a bona fide business purpose for preserving confidentiality or
which renders QTRN practically unable to comply with the published rules and
regulations of the Securities and Exchange Commission as in effect at any
relevant time); provided, however that QTRN shall not issue such a suspension
notice for any period during which QTRN executive officers are not similarly
restrained from disposing of shares in QTRN Common Stock. Upon receipt of any
suspension notice, the Seller will discontinue disposition of any shares
pursuant to the registration statement until the suspension is lifted. The
registration rights contained herein are not transferable and shall terminate
the earlier of 31 October 1999 with respect to the Completion Shares and 31
March 2001 with respect to the Deferred Consideration Shares, or the time at
which such shares are sold, transferred or it is determined that the Deferred
Consideration Shares are not issuable.
<PAGE> 1
Smith, Anderson, Blount Dorsett
Mitchell & Jernigan L.L.P.
EXHIBIT 5.01
OFFICES MAILING ADDRESS
2500 First Union Capitol Center P.O. Box 2611
Raleigh, North Carolina 27601 Raleigh, North Carolina
27602-2611
-------- --------
TELEPHONE: (919) 821-1220
FACSIMILE: (919) 821-6800
October 15, 1998
Quintiles Transnational Corp.
4709 Creekstone Drive
Riverbirch Building, Suite 200
Durham, North Carolina 27703
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 1,209,784 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 shareholders.
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 examination of law as we have
deemed necessary for purposes of this opinion. In our examination, we have
assumed the genuineness of all signatures, the authenticity of all documents as
originals, the conforming to originals of all documents submitted to us as
certified copies or photocopies, and the authenticity of originals of such
latter documents. In rendering the opinion set forth below, we also have relied
upon a certificate of an officer of the Company whom we believe is responsible.
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.
<PAGE> 2
October 15, 1998
Page 2
The opinion expressed herein does not extend to compliance with
federal and state securities law relating to the sale of the Shares.
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.
Our opinion is as of the date hereof, and we do not undertake to
advise you of matters that 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.
/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 1,209,784 shares of its common stock
and to the incorporation by reference therein of our report dated January 26,
1998, with respect to the consolidated financial statements of Quintiles
Transnational Corp., included in its Current Report (Form 8-K) dated March 20,
1998 filed with the Securities and Exchange Commission and in its Annual Report
(Form 10-K) for the year ended December 31, 1997 filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Raleigh, North Carolina
October 14, 1998
<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' Annual Report on
Form 10-K for the year ended December 31, 1997 and Current Report on Form 8-K
dated March 20, 1998.
/s/ PricewaterhouseCoopers LLP
McLean, Virginia
October 15, 1998
<PAGE> 1
EXHIBIT 23.03
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Quintiles Transnational Corp. of our report dated July 24, 1996,
with respect to the audited combined financial statements of the Innovex
Companies for the year ended March 31, 1996, which report is included in the
Current Report on Form 8-K of Quintiles Transnational Corp. dated March 20, 1998
and as an exhibit to the Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
/s/ KPMG
Reading, England
October 15, 1998
