-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LQNydwCSlIZgC89ZE+UeOQoNxm5DNyt1yjwBVAbdwkbZYIxsHbtH5bAGcPxdy6OW AuzdN4Co7IYekhgVaBJSbQ== 0000950144-98-011521.txt : 19981016 0000950144-98-011521.hdr.sgml : 19981016 ACCESSION NUMBER: 0000950144-98-011521 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19981015 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUINTILES TRANSNATIONAL CORP CENTRAL INDEX KEY: 0000919623 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 561714315 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-65743 FILM NUMBER: 98726411 BUSINESS ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: RIVERBIRCH BLDG STE 200 CITY: DURHAM STATE: NC ZIP: 27703-8411 BUSINESS PHONE: 9199412000 MAIL ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: STE 300 CITY: DURHAM STATE: NC ZIP: 27703-8411 S-3 1 QUINTILES FORM S-3 1 As filed with the Securities and Exchange Commission on October 15, 1998 Registration No. 333-_______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------- QUINTILES TRANSNATIONAL CORP. (Exact name of registrant as specified in its charter) 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
================================================================================================================================== 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 - ---------------------------------------------------------------------------------------------------------------------------------- Common Stock, $.01 par value per share. . . . 1,209,784 $42.25 $51,113,374 $15,078.45 ==================================================================================================================================
(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. ================================================================================ 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. 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. 2 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: 3 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. 4 6 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 5 7 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. 6 8 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. 7 9 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. 8 10 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. 9 11 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. 10 12 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. 11 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.
Shares Beneficially Shares Shares Beneficially Owned Prior Being Owned After Name To Offering (1) Offered Offering (1) - ---- --------------- ------- ------------ Number Percent Number Percent ------ ------- ------ ------- 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 *
12 14
Shares Beneficially Shares Shares Beneficially Owned Prior Being Owned After Name To Offering (1) Offered Offering (1) - ---- --------------- ------- ------------ Number Percent Number Percent ------ ------- ------ ------- 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 *
- -------------------- * 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 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 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 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 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 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 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 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 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 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 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 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 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 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 EX-4.04 2 TERMS OF REGISTRATION RIGHTS/CROSSBOX 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. EX-4.05 3 TERMS OF REGISTRATION RIGHTS/CLINDATA 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. EX-4.06 4 TERMS OF REGISTRATION RIGHTS/DATA ANALYSIS 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 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. EX-4.07 5 TERMS OF REGISTRATION RIGHTS/SIMIREX 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), 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. EX-4.08 6 TERMS OF REGISTRATION RIGHTS/ROYCE 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. EX-4.09 7 TERMS OF REGISTRATION RIGHTS/QED 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 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. EX-4.10 8 TERMS OF REGISTRATION RIGHTS/H2V 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. EX-4.11 9 TERMS OF REGISTRATION RIGHTS/FORDHAM 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. EX-5.01 10 OPINION OF SMITH ANDERSON 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. 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. EX-23.01 11 CONSENT OF ERNST & YOUNG 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 EX-23.02 12 CONSENT OF PRICEWATERHOUSECOOPERS 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 EX-23.03 13 CONSENT OF KPMG 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 -----END PRIVACY-ENHANCED MESSAGE-----